BIG PROFIT IMPOSSIBLE

Taranaki Daily News, 14 September 1934, Page 7

BIG PROFIT IMPOSSIBLE

MINTING OF SILVER COINAGE MINISTER OF FINANCE EXPLAINS. REPLY TO MR. C. A. WILKINSON. STATEMENT SAID TO BE “ABSURD.” (By Wire—Parliamentary Reporter.) Wellington. Last Night. A statement made by Mr. C. A. Wilkinson (Ind., Egmont) that the Government in arranging for the minting of New Zealand’s silver coinage had thrown away at least £1,000,000 was described as absurd by the Minister of Finance, the Rt. Hon. J. G. Coates, when speaking in the House of Representatives to-day. “I am sure Mr. Wilkinson or any other member does not seriously suggest that this Government or any other Government would deliberately forgo £1,000,000 if it could be legitimately obtained,” said the Minister. Mr. Coates said Mr. Wilkinson had seized upon the comments of the Controller and Auditor-General, Colonel G. F. C. Campbell, but the statements made by that officer were merely to the effect that if arrangements could have been made to repatriate old coin at its face value the profits would have been in the neighbourhood of £750,000 for each £1,000,000 of new coin. The comment, however, was an idle one because such an arrangement could not be made, and the Audit Department Was aware of this fact.

The circumstances surrounding the previous redemptions in respect to Australia, the Irish Free State and South Africa were fully explained in 1931 by the British Government, said the Minister, these being effected out of coinage profits no longer available. No action was taken by New Zealand at that time, but at the beginning of 1933, when great difficulty was being experienced in keeping silver coinage in the Dominion; the Government came to the conclusion that the only effective remedy was the establishment of a distinctive silver coinage. BRITISH MINTS INQUIRIES. Inquiries to the British Mint included one whether in the present circumstances the Mint could make any offer in regard to the redemption of British silver.- The reply was that no application could be made for redemption as it would involve the Imperial Treasury in a total expenditure of approximately £1,500,000, and although this had been granted to Australia it had been refused to Rhodesia.

The Minister added that the Royal Mint did, however, offer to undertake the recoinage of all Imperial and Australian silver circulating in the Dominion without charge, except the cost of dies and artists’ fees and to allow New Zealand the profit arising out of the sale of the surplus bullion due to the fact that the silver content of portion of the old coin was higher than that of the new coinage. The committee recommended that the British Mint’s offer be accepted, and this motion was moved by a representative of the Chambers of Commerce and seconded, by an Audit Office representative. The net difference between the cost of reminting the silver available in the Dominion by the New Zealand concern and the cost, including freight, of having it done at the Royal Mint was £lBO,OOO.

Dealing with the question of sending Australian coin back to the Commonwealth, the Minister said that after the negotiations the Commonwealth Government offered to accept the repatriation of its silver coin at the rate of about £25,000 a year. It was pointed out that this was of little use to the Dominion, as it was essential to have a complete change-over as sOon ■ as possible, and thereafter to take steps to prevent the circulation of Australian silver coin within the Dominion. MELTING DOWN BALANCE. Australia was asked to take £250,000 at face value during one financial year, leaving New Zealand to melt down the balance of the Australian silver coin circulating in the Dominion. The Australian Government replied that it had no fund from which a sudden and heavy withdrawal could be financed. Consequently the proposal would necessitate a vote against the year’s Budget, and for that reason could not be considered. The Minister said he thought it would be clear there was no possibility of obtaining the large profit that admittedly could have been made if it had been possible to arrange for the redemption of Australian and Imperial silver at face value. Although these Governments had made profits in the past out of coin in circulation in New Zealand, these profits had been spread over a long period of years, and when the question of redemption had been raised neither Government had any fund out of which coin circulating in New Zealand could be redeemed. The House could readily understand the refusal of these Governments to further burden their taxpayers to provide the required amount of profit for New Zealand.

“Any suggestion of forcing redemption upon these Governments by allowing silver to be sent back through private channels for trade or exchange purposes was, of course, impossible,” added Mr. Coates. “No Government in any part of the British Empire would do such a thing to another member of the British Commonwealth. I may add that in financial matters the British Government, in particular, has always treated this Dominion generously. The suspension of payments on all debts due to the British Government for war and other purposes is an indication of this fact.”