4
issuing authority, is more than enough to match the face value of the
coin.
The survey revealed that programmes promoted by the US
companies have been less satisfactory. Significant factors in
persuading many dependencies to contract with these companies rather
than with e.g. the Royal Mint have been the companies' alleged control
of the North American market and their ability and willingness to mint
large quantities of coins, sufficient to meet in full the orders placed
by the public by a specified date (the "subscription method" of sales).
Consequently a territory's total earnings as forecast by the US companies
are normally much larger than those estimated by the Royal Mint; but
royalty receipts from the US companies have on average been only 15% of
the face value issued and the bullion content of the coins is generally
low. It can be argued that in these cases royalties are too low in
relation to the likely profits of the promotional companies, although it
is appreciated that territories are unlikely to be able to negotiate
better terms while existing contracts are valid. All in all, from the
point of view of the redemption liability of the issuing authority the
practice adopted by the Royal Mint is to be preferred.
It was found that the circulation of dependencies' numismatic
coins grew by 720% from US$7.63 mn. in 1972 to about US$55 mn. at the
end of 1977. This figure is estimated to grow to about US$75 mn. by
the end of 1978. Because of their "subscription method" the US
promotional companies might in time create a glut which would spread
from new issues to "secondary" trading in old issues. The argument of
any one individual territory that it is not "over-doing" its own issues
carries little weight since many other countries are also issuing and
promoting sales of their own coins.
The future course of gold and silver prices is an important
factor in many coin issues. The value of the bullion content of