10 -
"the world's first limited edition set of legal tender collectors'
bank notes". (This appears to neglect the special Canadian issue
of unnumbered $1 legal tender notes for collectors to mark the 1967
Centennial.) The notes are identical in all respects to currency in
circulation, except for the colour of the serial number and the
existence of a date. Depending on the success of this programme, Paramount and its associates may make approaches to the dependencies to make similar issues; and the Solomon Islands are in fact making a
similar issue to mark the introduction of their national currency in
October 1977.
6. UK PRACTICE WITH REGARD TO COINS
6.1
In this country the issue of coins is quite sharply
differentiated from the issue of notes, mainly for historical and
institutional reasons. If we were starting from scratch it is quite
likely that the treatment of coins, particularly the method of accounting for them, would be closely linked, if not identical, with that of notes.
In modern thinking both types of currency are indistinguishable in their
purpose. Both are tokens to which value is attributed by legal
enactment making them "legal tender" in the country to which the enactment applies. So far as the general public is concerned they
differ only in their composition and manufacture: coins, made of
metal or metal alloys, are capable of lasting a long time and are used
for small change and low value transactions, while notes, made of
paper, have a shorter life and are used for high value transactions.
Both together now comprise a fairly small proportion (20%) of the UK's total money supply (M2), and this is usual in economically developed countries where the use of cheques and credit transfers to effect
payments and of "bank money" in various forms as a liquid financial asset and savings medium predominates. Coins alone account for only
6% of physical currency and only 1% of M.
M3•
6.2
Coins do, of course, considerably ante-date notes. There is
no need to go far back into history, but the Royal Mint, a Government
department, has for centuries held a monopoly for issuing legal tender
coinage in this country. Coins originally had mainly an intrinsic value: the value attributed to them rested chiefly on the value given
them by their precious metal content, whose amount and purity was in
effect guaranteed by the Mint and thus by the Crown. Latterly the
"token" element and the legal tender validity attributed by legal
enactment have become far more important.
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