TNAG-0717-FCO40-914-Banking-and-monetary-matters-in-the-Dependent-Territories-is-1978 — Page 14

DRAFT (22. 3.78)

TO OFFICERS ADMINISTERING GOVERNMENTS OF

OVERSEAS DEPENDENT TERRITORIES

NUMISMATIC COIN ISSUES IN THE DEPENDENT TERRITORIES:

Report of the Bank of England Dated 26 January 1978

Introduction. The following is a summarised version of the

Report which was drawn up after analysing information from governments

and central monetary institutions of certain overseas territories and

after consultation with the Royal Mint.

In the context of the Report the term "numismatic coins" is

used to describe those coins minted and issued primarily for collectors

and investors but which remain legal tender in the country of origin.

They are not intended for normal circulation within the territory of

issue, but are mostly sold directly to overseas customers. The coins

are usually struck in precious metals and carry distinctive designs (not

incorporated in everyday circulatory coinage) which frequently

commemorate notable events or personalities. The quality of their

finish is superior to that of circulatory coinage and is produced to two

standards

and "proof"

"brilliant uncirculated" (otherwise referred to as "specimen")

see Annex I: Glossary of Terms. Although such coins are

not for use in normal commercial transactions it is an essential part of

their definition that they should have legal tender status.

The principles of currency issue in dependent territories.

Redeemability or convertibility of both notes and coins of a local

currency in terms of an external currency (originally sterling, now more

usually US dollars) has traditionally been regarded as a fundamental

condition of issue that is essential for confidence in the currency of

dependent territories. Even though the power to surrender notes and

coins for redemption has been confined in practice to the commercial

banks, and even though the power of individual holders of local currency