HKK 138
RECEIVED IN REGISTRY NO. 51
4 AUG 1978
DESK OFFICER
REG-STRY
INDEX
PA
Action Ten
233-4069
No
al
DW A Blye Esq OBE JP
CLS
Secretary for Monetary Affairs
Government Secretariat HONG KONG
3 August 1978
29
HONG KONG COINAGE
1.
22
I was
Thank you for your letter CK5/2241/47 III of 4 July. indeed mindful that I owed you a reply to your earlier letter. I apologise for this but, as I am sure you will appreciate, the questions you raised necessitated considerable discussion here. I had h ped for an opportunity to talk the questions over with you either during my visit to Hong Kong or yours here.
However, unfortunately neither proved practicable.
2. The Treasury have provided the following three reasons why, in their view, the monopoly has benefits for you.
i.
The Hong Kong Treasury buys coins from the Royal Mint at a price which is lower than the Royal Mint charges the UK Treasury; this is because certain of the overheads of running Llantrisant are borne by the UK coinage alone and not charged to commercial work.
ii. Some large tints are able to cut their prices at times when there is a low domestic demand so as to fill their spare capacity, however these fints do not provide any long term assurances that capacity will always be available. Thus security, and stability of supply cannot be guaranteed; if there was a high domestic demand in the country concerned they would almost certainly not be prepared to supply to Hong Kong, and in any case could not offer favourable delivery.
The
If
iii. It is not simply a question of employment. Llantrisant factory was built with a capacity to produce the Hong Kong coinage on the assumption that this would be a continuing requirement. If the Royal Mint were not required to supply the Hong Kong coinage regularly then it would need to find other ways of filling the capacity. the Hong Kong Treasury then were to require coins from the Royal Mint at a time of high domestic demand and/or high demand from other overseas customers, the Royal Mint could not guarantee to offer the sort of delivery at present offered or to supply the coins on the present favourable financial terms.
13.