TNAG-0765-FCO40-969-Minting-of-coins-for-Hong-Kong-1978 — Page 13

- 8.

promotional companies involved with the dependencies. It has been

compiled primarily from published sources but also from correspondence, etc., outside the immediate context of this survey. No attempt has been made to contact any of the companies (except the Royal Mint) as

this might have provoked an unwelcome reaction.

5.4

The advantages of this development for the issuing country

are evident. The sale of numismatic coins provides for some small

states a substantial proportion of revenue in the shape of royalties

without, at first sight, any risk (cf. postage stamp sales in

Leichtenstein, Monaco, Pitcairn, etc.) Nor is any substantial cost

or work involved: in most cases the promotional company undertakes

to bear all the cost of minting, transport, marketing, etc. (see

Section 8.4). As the coins are usually sold at a premium above face

value to overseas customers the risk of adding to the local money

supply is considered minimal. The attraction has been especially

strong for the UK dependencies, several of which have to rely

extensively on budgetary and development aid from HMG.

5.5

The attraction has not, of course, been one-sided. The

promotional companies have been quick to appreciate the sales potential

of "colonial" coins. Subject to the approval of the Secretary of

State and of the Palace, UK dependencies may issue coins bearing the Queen's effigy, although we are aware that at one time the Lord

Chamberlain's Office expressed concern that the Crown should not be

exploited for commercial purposes by private mints. This feature clearly appeals to a substantial proportion of the US market. The British Monarchy retains a strong sentimental value which can be exploited commercially, and the visible reminder of the links with the Crown may also inspire confidence in the coinage of otherwise little-

known territories. These links are made much of in the advertising literature See Annex 6 (4) and (5)7 and it is, perhaps, significant

that, out of the 25 countries that contracted with Paramount in the year to June 1976, fourteen were Commonwealth countries, many of which

continue to use the Queen's effigy on their coinage.

5.6

In many respects the dependencies seem to offer an easy target for the company salesmen. The local administrations frequently lack the time and expertise to assess the implications of issuing

numismatic coins and (especially, doubtless, when pressed for a quick reply) are prepared to put considerable confidence in their advice. Not surprisingly, the strongest inducements are the prospective royalty