TNAG-0717-FCO40-914-Banking-and-monetary-matters-in-the-Dependent-Territories-is-1978 — Page 56

-5-

(iii) The survey revealed that this was not the case

with programmes promoted by the US companies.

In at least two cases no attempt had been made to set

aside any royalties as a backing fund they have

simply gone into currency revenues. Amounts of

royalty received from the US promotional companies

have on average been only 15% of the face value

issued. It can be argued that in these cases

royalties are too low in relation to likely profits

and the dependencies are at a disadvantage when

dealing with companies contracted with several

territories and which are able to play one territory

off against another.

(iv) It was found that the circulation of dependencies

numismatic coins grew by 720% from US$7.63mn.in

1972 to about US$55 mn. at the end of 1977.

This figure is likely to grow to US 75 mn. by the end

of 1978. By virtue of their subscription method of

sales the US promotional companies could in time

create a glut which would spread from new issues to

"secondary" trading in old issues. The argument of

any one individual territory that it is not "over doing"

its own issues carries little weight since many other

countries are also issuing and promoting sales of their own coins.

At present no-one is monitoring the market as a whole.

(v) The future course of gold and silver prices

in an important factor in many coin issues. The

bullion content of dependencies' coins minted in

precious metals is in the range of 24% to 850% of

face values. If we consider the gold price alone, we

know that there is an underlying world demand for

NOTHING TO BE WRITTEN IN THIS MARGIN