NEW CURRENCY

Rotorua Morning Post, Volume 2, Issue 569, 28 June 1933, Page 5

NEW CURRENCY

("Post" Special Gommissioner.")

A DEGIMAL SYSTEM CHANGE MAY BE SUGGESTED BY SPECIAL SUBCOMMITTEE - MANY ADVANTAGES

Wellington, Tuesday. .It .is expected that the committee which was set up to make recommendations to. the G'overnment ori the proposed new issue of. coins will be presenting its report shortly to the .Minister of Finance .(the Rt. Hon. J. G. Coates), and .it will not be surprising if the committee favoui's soane f orm j of the deeimal system. Now that South' Africa has adopted a deeimal coinage, New Zealand and ; Australia are the only .'Dominions I Which are adhering to the English pound, and it has been suggested that with. the issue of a new coinage, this Dominion might find it convenient to switch' over. One br4two schemes have been placed before the committee, and it is reliably stated that they have been supported .in influential quarters. Advaritages Pr'oved It is. argued by thb advocates of th'e chan'gse that the advantageS of tb'e de'ciirial system' haVe been clearly prbved b^.th'e Unitfed' States, Cariada, Fi-ance 'ari'd now Sorith 'Africa, and that all* that is required ' is a fairminded approa'ch. Thfey eontend that the only feasonable query that can be raised is Whether the transition is possible . ,and in ariswer tb this they assert that, in view bf the fact that. New Zealarid has 'decidbd cn a new silver coinage, a rare opportunity is presented for ihtrodiicing a deeimal of metri'c syStbiii in place of the cu;m•bersome 12-pehce-one-shilling, 20-shillinigs-bne-pound system. Ingehious Proposal Perhaps the most attractive and ingenious proposal which has been placed before the committee is one which seeks to make our standard coin the "crown," or the equivalent of five shillings under the present system Under this s'ch'eme, the "crown" would be equal tb four to the English pound with the exchange rate at par, and as London is our clearing house fori by far the greater part of our international transactions, we would not be troi^bled with unwieldy 'calculatibns when it came to buying or selling overseas. Furthermofe, it is pointed out, the "crown" or five shillings is a most convenient starting point for an internal conversion, as this basis would be clear to all, and the lower fractions would be quickly grasped. It is proposed that the divisions of the "croWn" should be as follows. — "Half-crown," "quarter-crown," 10 "cents," or ' "pence," 5 "cents" or "pence,'* onei "cent" or "penny." The lowest coin would be a hundredth' part of the "crown" aiid would be approximately one half-penny in value. The machinery of the change-over has not been lost sight of hy those in favour of the new system. They suggest that, when the new coins are minted (and there would be-no need for secrecy or suddenness iri bririging about the change), an act of Parliament would be passed making them legal tender. Facilities would also be given for the conversion of the present coins into the new, and it is proposed that the banks asd the post offiees assist in the work. Naturally it would take some time for the conversion to be completed, .but it would not take^as long as most people imagine, as ihe velocity of silver is fairly rapidl Further. more the only coins of the present sysytem which would not he readily interchangeable, would be the penny and the half-penny.

Difficulties With Pence So far it has been plain sailing, but when it comes to the penny and the half-penny, there is a difficulty as the penny is equal to 1.66 "cents" and the half-penny to 0.83 "cents." However, the ohstacle is met by converting the penny at two cents and the Half-penny at one cent. This means a small loss on these coins, but it would he compensated for by the Government selling the present Coin in England, where the half-crown is worth 3/l| in New Zealand moriey. The value of the florin, shilling, etc.; has also been correspondingly enhanced by the depreciation of the exchange rate. There will also be a substantial profit to the GdVemment on the , change-over as the iritrinsic value of the neW coins will riot be nearly as 1 great as the facd value. This is always the case With token anoney. The corivefter will gain only when he presents less than ' threepence,' so a person wbuld not have the opportunity of Triaking much ori. the transactioh: Of course one could present twopence at a time at the various places of conversion, but it would be an arduT ous process for which there would have to be a debit fbr hoot-leather. For amounts larger than a "crown" it is proposed th'at there should be "five-crown," . "ten-crown" and "twenty-crown" notes, etc., and it is also suggested that the "crown" itself should be paper money. Government's Attitude Whether the Government would adopt the suiggestiori of a deeimal coinage system is another matter, ahd there are a number of matters to be considered before such a scheme could be' pri't into operation. If such a reboiriirieridation comes forward from the' committee, the Miriister of Finance would be wise to investigate the South African experience, arid also" to take the business and coffiiliercial community into his confidence. From an accou'ntaney poirit of View, the deeimal System has everyth'ing in its favour; but for the retaiier who, has to rerinai'k all his stock, including his •bargain lines, at such prifcbs as 2s 11 Jd, there would seem to be difficulties iri the ;way. Custqm and practice die hard, and an alteration in the routine of buying 'and selling is not a matter to he lightly undertaken.

The conversion rate would be: — Present Coin New Coin One pound 4 crowns Ten Shillings 2 crowns Half-crown 50 cents Florin (34d) 40 cents Shilling (12d) 20 Cents Sixpence (6d) 10 cents Threepence (3d) 5 cents