TNAG-0717-FCO40-914-Banking-and-monetary-matters-in-the-Dependent-Territories-is-1978 — Page 125

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8.11(3)

The relative importance to each territory of royalty revenues may be judged from Table 6, where annual receipts are compared with the territories' total recurrent revenue derived from local sources. Because of the large fluctuations in royalty receipts from year to year no consistent pattern emerges; but the last column provides an indication of the relationship between royalties and recurrent revenue over the stated periods. Territories benefiting most in these terms are the Turks and Caicos Islands, BVI and the Cayman Islands, the first two of which are grant-aided. Although in the Turks and Caicos Islands

royalties were equivalent to about 10% of recurrent revenue between

1974 and 1976, in one year (1974) the figure was as high as 25%. Royalty payments to Tuvalu during the period 1977/78 may be expected to represent a sizeable proportion of recurrent revenue.

Redemptions

8.12 (1)

The liability for the redemption/conversion of numismatic coins handed in by the public to the respective issuing authority is discussed in Section 8.13. Here the concern is with quantifying the redemptions that have actually occurred hitherto.

8.12(2) From the replies received to other questions, it appears that only BVI (US$20,000) and the Cayman Islands (US$29,000) have so

far been required to redeem coins. It is important to note that all

redemptions so far have been of specimen, uncirculated coins: there

is no evidence of proof coins being redeemed in any territory. This is not surprising as proof coins are sold at a large premium above face value, while specimen coins may be purchased at, or near face value. The handing in of specimen coins, however, may be expected to continue especially in those territories where there are special coins for numismatic issues, differing from the ordinary circulatory

currency. In BVI and the Turks and Caicos Islands the US dollar is the legal tender currency, but for numismatic purposes a local currency (the "Crown" in the latter case), has been introduced at par with the dollar. The experience of the BVI shows that the local currency

coins are unacceptable to the public for ordinary circulation, partly

because there is little confidence in their value and partly because

they differ in size from their US dollar counteparts. We understand

that the BVI banks are, therefore, refusing to accept for circulation

purposes even low denomination coins from the BVI Treasury, although only 100 dollar coins have so far been handed in for redemption by the public through the banks, who in turn pass them to the Treasury.