TNAG-0717-FCO40-914-Banking-and-monetary-matters-in-the-Dependent-Territories-is-1978 — Page 139

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as those of the dependency.

In five of the nine dependencies surveyed, if there is disagreement, and no coins are issued in a

particular year, the issuing authority is precluded from making a

contract for a coin issue with another company. There is also the question whether the royalties currently received are in fact adequate Section 9.2(4)

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How redemptions would appear

9.6(1) If the market should deteriorate, how would the resulting

pressures appear so far as the issuing authorites in the dependencies

were concerned? A fall in value to below face value would be likely

to affect specimen coins first. As more of these will have been

issued locally (eg, in the case of BVI) these will tend to be used

like ordinary coins by local residents. Larger denomination specimen

and proof coins might find their way back from abroad carried by collectors who are also tourists or by tourists who have received/

bought them from collectors, and would be used for paying hotel bills,

etc. If this was no more than a trickle, it would be tolerable.

9.6(2) It is more likely, however, that dealers familiar with the

market would buy up large numbers of coins at a discount from individual

collectors, perhaps through advertisements etc., and try to dispose of

them in bulk. Individual purchases that could be effected by such

coins (including of property) could, of course, be limited by the

legal tender limits. In the Caymans and BVI, for example, these limits have been increased to accommodate $100 gold coins. But legal

tender limits are mandatory on a recipient of coins only to the extent that he is bound to accept them in discharge of an obligation up to

the legal tender limit. He is not, therefore, obliged to accept

coins to a face value in excess of that limit, but he may, at his

option, do so. This limit is not, moreover, normally taken to apply

to deposits with banks. Dealers might in the first instance seek to

obtain the face value equivalent of their consignments of coins by

setting up bank deposits locally, presenting the coins personally or freighting them. Banks would be likely to redeem through the issuing

authority (where one exists) coins of too large a denomination for

their normal commercial requirements. They are normally subject only to minimum redemption amounts by a currency authority. If there was

no currency authority, the banks would have to resort direct to the

government concerned. Failure by the banks to obtain value from the

issuing authority would be reflected quickly in a refusal to acquire