G.F. 323
CONFIDENTIAL #
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At present metal and minting prices they would cost £1.13 million.
Based on the maximum reductions in the requirement for 10 cent and
$1 coins if the new 20 cent and $2 coins had been introduced (see Appendix 4) and on the assumption that the face value of the coins
bought would remain unchanged, the number of coins of the range we
propose would have been as follows:
Denomination
5¢
10¢
20%
50¢
31
$2
Average Number Bought
(Millions)
6.7
4.7
9.3
25.3
5.4
10.8
They would have cost £0.63 million, an annual saving of £0.5 million.
But this understates the real value of the benefits because no allowance
has been included for reduction in cost of insuring and transporting the
coins to Hong Kong and storage costs. As has been mentioned earlier this
last cost element is now substantial and is likely to grow as the demand
for coins increases. The annual savings quoted, which are based on the
average of the last three years, take no account of increases in the
demand for coins which on past experience are certain to take place.
85.
It follows, on the assumptions used, that to replace the $1
and 50 cent coins and introduce new 20 cent and $2 coins would cost of
the order of £3.6 million. Against this must be set the metal value of
the 50 cent and $1 coins which on these assumptions would be replaced.
At current prices they would be worth £3.7 million, to which should
be added the metal value of the displaced 10 cent coins, £0.7 million,
a total of £4.4 million. That is to say, there would be a once-for-all
profit from the changeover, because the scrap value of old coins withdrawn
would exceed the cost of the new coins put into circulation.
These figures
tend to overstate the once-for-all profit because it is certain that not
all of the old type 50 cent and $1 coins will be returned. However, there
is no way to estimate the actual number of coins which will be returned.
CONFIDENTIAL
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