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more from customers.
They might indeed seek from the issuing
authority assurances about redemption before agreeing to acquire such coins in bulk.
9.6(3)
The large-scale return of numismatic coins to their country of issue, for use as legal tender means of payment or, possibly indirectly, for redemption, could, of course, have an inflationary impact. But to the extent that they were redeemed quickly against foreign exchange this effect would probably be negligible.
9.6(4) The mere knowledge that attempts were being made to redeem numismatic coins in bulk would be damaging to the issuing authority and indeed to the territory. But this would be mitigated, of course, if payment was made for them without hesitation by the issuing
authority. Admittedly, there would be an array of additional hindrances available to such an authority. Some of these are described below (Section 10).
10. POSSIBLE COURSES OF ACTION
10.1(1) The main risk for the dependencies is clearly that of
redemption, in cases where a backing fund is not held or when it is insufficient. Not all the courses that might be undertaken to mitigate or, preferably, to remove that risk will be applicable to those
territories which have contracts and legislation which permit them to maintain a full backing fund; but it cannot be excluded that they will
wish to change their procedure too (and thus make additional funds
available for other purposes).
10.1(2) Two main categories of action appear: first, those that seek to remedy or improve upon past performance; secondly, those that
seek to provide adequate safeguards for the future. By concentrating
on the second category it should be possible to determine the solutions
best adapted for the first, although there will be constraints:
(1) Action for the future will be limited by the existence of
contracts binding issuing authorities into the medium term.
A number of territories are party to contracts with
promotional companies which extend to 1980 and beyond (see
Annex 3); and unless amendments, if considered desirable,
can be introduced on mutually agreed terms, it would
probably not be possible to conclude new contracts with
other partners until the old ones expire.