Que /r312 N levar
drill
Mr Querrill HKGD
01615
cc Mr Snodgrass PDTD
Mr Shakespeare MCD Mr Ure
SAD
Mr Daunt SED
Reference
HKG 102/1
RECEIVED
17 MAY 1978
DESK OFFICER
INDEX
Thr.
PA
NO. 51
REGISTRY
Action Taken
све
19
See (17
ISSUE OF NUMISMATIC COINS IN DEPENDENT TERRITORIES
1.
The Cayman Islands, BVI, Turks and Caicos Islands all make substantial revenue out of numismatic coin issues and we would be loathe to curtail this valuable revenue earning enterprise. However, one must face the fact that whilst the Cayman Islands might be able to face and survive a collapse (or severe recession) in the coin market leading to a demand for larger scale redemption, the Turks and Caicos Islands and BVI could not because they are grant-aided and have no reserves. HMG, as the administering power could then be faced with having to pick up the difference between the face (or redemption) value of the coins and their intrinsic value, that is if the latter was less than the former. The assumption at the end of paragraph 3 is not, therefore, correct in the cases of BVI and Turks and Caicos Islands.
2.
If we issue the circular as proposed, we are in effect, as far as grant-aided territories are concerned, taking a gamble that the numismatic market will not collapse. The risks are minimal, I agree, and probably much if not all of the redemption value would be covered by intrinsic value of the coins themselves, so I do not think we should worry ourselves unduly about the Bank of England's fears, but at the same time we cannot say, as does the draft, that in most cases territories could cover the liability when in fact we know that the grant-aided ones could possibly be faced with difficulties. I prefer the last part of paragraph 3 to read:
"Such collapse is probably inconceivable
but even if
the inconceivable happened, we assume that non-grant- aided territories themselves would have adequate resources to meet the liability, even when specific cover is not provided."
3. I think we should consult ODM Finance Department because of their responsibility via the Treasury to the PAC for the proper management of grant-aided budgets and the risk that we might be left to pick up the check.
CODE 18-77
S$ 10/76
Anh
Dal
West Indian and Atlantic Department K223
4954
D K
15 May 1978