TNAG-0717-FCO40-914-Banking-and-monetary-matters-in-the-Dependent-Territories-is-1978 — Page 41

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II. THE RESULTS OF THE SURVEY

(i) Attached at Annex II is a list of the

promotional companies who normally supply numismatic

coins to dependencies.

For the purposes of the

Report the firms at Nos. (1) to (5) will be understood

to mean the "ys promotional companies" and (6) and (7)

"UK companies".

(ii) There are fundamental differences between

the US and UK types of contract revealed primarily

in the treatment of royalty payments, pricing,

distribution limits, specifications and the policy

adopted towards formalised contracts. The approach

adopted by the Royal Mintis s more favourable to the

client. However, setting aside such factors as the

relative quality of the finished product and the

ability to meet delivery dates, a significant factor

in persuading many dependencies to contract with

the US companies rather than with the Royal Mint

has been those companies' control of the North

American market and their ability and willingness

to mint large quantities of coins. Consequently,

a territory's total earnings as forecast by the US

companies are normally much larger than those

estimated by the Royal Mint. From the point of view

of the redemption liability of the issuing authority

however the practice adopted by the Royal Mint is

to be preferred. In general royalty payments exceed

the face value of the coins and the intrinsic value

of the coins is high. As a result, even where royalties

are less than face value, the combination of royalties

with the calculation of the bullion value is more than

enough to match the face value of the coins.

/(iii)