TNAG-0765-FCO40-969-Minting-of-coins-for-Hong-Kong-1978 — Page 171

Treasury Chambers

Parliament Street London SW1P 3AG

Telex 262405

Telephone Direct Line 01-233 3682

Switchboard 01-233 3000

B V White Esq

FRD

Foreign & Commonwealth Office

LONDON SW1

HKK 138/1

2 1 JUN 1978

Great George Street

RELEVET

31

KA

HKGD (Mr Thompson)

Ave spoke

At least Marb will give the Blye some Ammunition town should the need ano. I com still bryny MFF 090/10 to get some reacha foo

the Toy with regard to the Meeting ing of gold come.

Your reference

ur reference

AEF 24/625/01

Date

26 April 1978

An 26/14

DECK OFFICER INDEX

RE

PA

[Action Teken

See (15

HONG KONG COINAGE

I am

Thank you for your letter of 18 January seeking advice on replies to questions on the Royal Mint's monopoly under the Hong Kong Coinage Order-in-Council. sorry we have taken so long to reply.

We appreciate Hong Kong's situation and think the following points show that the advantages of the Mint's monopoly are not entirely one-sided:-

i. The Hong Kong Treasury buys coins from the Royal Mint at a price which is lower than the Royal Mint charges the UK Treasury; this is because certain of the overheads of running Llantrisant are borne by the UK coinage alone and not charged to commercial work.

ii. Some large Mints are able to cut their prices at times when there is a low domestic demand so as to fill their spare capacity, however these Mints do not provide any long term assurances that capacity will always be available. Thus security and stability of supply cannot be guaranteed; if there was a high domestic demand in the country concerned they would almost certainly not be prepared to supply to Hong Kong, and in any case could not offer favourable delivery.

iii. It is not simply a question of employment. The Llantrisant factory was built with a capacity to produce the Hong Kong coinage on the assumption that this would be a continuing requirement. If the Royal Mint were not required to supply the Hong Kong coinage regularly then it would need to find other ways of filling the capacity. If the Hong Kong Treasury then were to require coins from the Royal Mint at a time of high domestic demand and/or high demand from other overseas customers, the Royal Mint could not guarantee to offer the sort of delivery at present offered or to supply the coins on the present favourable financial terms.

/в

We hope that these points will help Hong Kong justify the continuation of the present arrangement if they are publicly questioned on this matter.

RH ARNOLD