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Friday, 12 June 1903


That the report of the Select Committee 011 Commonwealth Coinage brought up, and ordered by this House to be printed, on 4th April, 1902, be now adopted.

I think I may be excused for entertaining the belief that this subject is a very important one, and the hope that the House will approach its consideration with some determination to come to a conclusion upon it. To me it is a very practical matter. It is one in which I have taken a personal interest for some time, and I have the further, excuse for the idea of its importance which I entertain, that the question of decimal coinage has been favorably considered for many 3'ears in the old country by business people of all shades of political opinion, by philosophers, and by publicists. Although the difficulties of making the desired change there have been so great, and the time of the Legislature has been so much occupied with other questions which demand its attention much more than do social and business reforms, it is generally acknowledged that there is a vast preponderance of opinion in the United Kingdom in favour of that change. The report to which we are inviting the attention of the House, proposes now to make a saving of some £35,000 per annum to the people of the Commonwealth, and, in doing so, to introduce a reform which, in itself, I believe will ultimately mean a saving of over £1,000,000 to the States and the people of this Federation. It will also be the means of facilitating the introduction of a still greater reform, which will yield even more beneficial results in the economical working of both the private and public affairs of the nation. I shall endeavour to prove that the adoption of the reform recommended by the Committee in regard to the money of the Commonwealth, would very much assist the acceptance of a similar reform in the mother country. The "inquiry which was made by the order of this House was one of the most impartial with which I have ever had to do, or of which I have ever read. In the first place, the honorable members to whom it was intrusted held opinions which at the time were totally unknown to each other. The House had only recently assembled, and it was impossible to arrive at any conclusion as to the views held by honorable members on such an abstruse subject as decimal coinage. The Committee was brought together in an almost haphazard fashion. It included some who had taken great interest in the question, and others who, while interested in it, had admittedly failed to give the subject any consideration. Having gone into it, however, it was found that the subject was a very engrossing one. I believe I am perfectly correct in saying that the whole of the members of the Committee became interested in it, and interested in the very best possible way. They became imbued with the desire to arrive at the truth of the matter, and to decide it in the best interests of the Commonwealth. 1 regret that the overtures which I made at the outset of the inquiry to secure the Treasurer as a member of the Committee did not meet with success. It had not been the practice in Victoria for Ministers of the State to take part in these inquiries, and for that reason the right honorable gentleman did not consider that he should become a member of it. In other States, however, Ministers take part in inquiries of this kind, and I am quite sure that if we had had the assistance of the Treasurer it would have vastly helped us in bringing up our report, and assisted us probably in carrying this matter to a legislative conclusion. I was hopeful that there would have been some reference to this subject in His Excellency the Governor-General's speech. Although the matter had not been dealt with in any way by the Government or in this House, it was suppos'ed that the keen outlook which the Treasurer has always maintained - both in State and Federal politics - for possible means of effecting savings would induce to regard this question in a practical way, I therefore thought it was extremely probable that we should have some intimation in the Governor-General's speech that the subject would be considered in some definite form by this House during the present session. We did not have the assistance of the right honorable gentleman in pursuing our inquiry, but I am perfectly sure that we shall receive from him that valuable help which his knowledge and position will enable him to give us in our endeavour to obtain from it some result which, if not in the full direction contemplated, will be attended, at all events, with profit to the community, and assist in introducing the .decimal system. The evidence obtained by the Committee, and the report based upon it, were secured in the most impartial manner that the members could devise. So far as I know, not one case occurred in which evidence was invited from men who were known to take a strong view either on one side or the other. It is a peculiar circumstance that in every case in which evidence was invited we did not, in the first instance, know the view which would be expressed by the witness. In most cases requests to give evidence were sent to the holders of offices, and not to persons - to associations rather than to individuals. We endeavoured, as far as we could, to obtain the opinions of people who, by reason of their position, were qualified to speak of the opinion of the community. There were many difficulties in the way of obtaining the opinions of some of these representative bodies, by whom we desired to be guided. For instance, when we applied to the Chamber of Commerce in the capital of one of the large States to place their views before us, we were met by the fact that the Chamber was probably divided in its opinions, or had not had an opportunity of discussing the matter so as to come to a decision as to the views that should be advanced before the Committee. Consequently we experienced considerable difficulty in securing the attendance of representatives of these bodies, from whom I must confess the Legislature should look for some light and leading in this matter. We had replies, however, from many of these bodies, and on the whole, as I shall be able to prove, by an analysis of the evidence, they were decidedly in favour of the adoption of the decimal system of coinage for the Commonwealth. The question of the currency, we must admit, was practically a new subject in the politics of Australia when taken up by the Committee. Still it was not altogether new. We had some trouble in regard to currency in the early days of the colonies, but it was not o£ such a nature that its history would assist us. It was a subject which necessarily had slept here for many years, because our currency was provided for us by the Imperial Government, and was satisfactory within the limits of its system. The whole question had never been a matter for legislative consideration, or one to which politicians had devoted more than a passing thought. Consequently we met with a very great confusion of ideas respecting the subject of the inquiry. As soon as it was said that we should consider the question of a Commonwealth coinage, many people went to the absurd length of attributing to the proposal another desire on the part of Australians to " cut the painter." That is a most ridiculous way of looking at the matter, but no doubt such opinions did exist. There were some slow conservative minds who looked upon the fact that the Commonwealth was considering the question of establishing a coinage of its own as suggesting some means of setting up a free and independent existence. Further than that, we were met with applications from persons whom, with no desire to say anything derogatory of them, I must describe as " cranks." We had applications from silver men, bi-metallists, and men believing in some form or other of State banks or paper money. We had to carefully steer clear of some of these idiosyncrasies, or the Committee would have been deluged with them. If anything of the kind did obtrude itself, we endeavoured to keep it out as much as we could, and there is very little evidence of it in our report. If we analyze the evidence we shall find that there is a preponderating body of fact and opinion sustaining the report. I chiefly value the opinions of the foreign residents of the Commonwealth, and I desire to call attention to the views expressed by some of them. These gentlemen - mostly foreign Consuls living in our midst - are not only practically acquainted with the decimal systems of currency which prevail in their own countries, but as merchants here have an intimate knowledge of the British system, and they have unanimously expressed the opinion that the Commonwealth should adopt the decimal system as the best on economic grounds, and as a forward movement in every respect. I will briefly quote the views of some of them, to show the tendency of their opinions upon the subject. Mr. Orlando Baker, the Consul for the United States, who resides in Sydney, concluded his evidence by saying -

If the world be progressive, it seems to me that it is only a mutter of time when all nations will adopt the decimal system for counting money ; and if Australia would maintain her reputation as a leader in progress, I think she will throw off the pounds, shillings, and pence system, and adopt a currency based upon the decimal system

Monsieur G. Biard D'Aunet, Consul-General for France, said -

The Government of the Commonwealth could make a trial in this direction, and if the experiment succeeds, which appears probable, it would open the way to the reform of the British monetary system, which is desired in the general interests of international commerce.

Monsieur W. L. Bosschart, Consul-General for the Netherlands, replied to the question whether he thought the decimalization of money should precede the decimalization o weights and measures -

Yes. The two changes would really mean only one change of system, the blessing's and boons of which would soon be recognised. I most sincerely recommend them for the good of Australia.

Mr. Stanford,Vice Consul for the United States, residing in Melbourne, gave a description of the benefits of the decimal system. He said that the change is one which could be initiated at any moment without inconvenience, and would have no disturbing effect upon our trading relations with Great Britain. One gentleman, a merchant in the city, whose name I do not now recall, told the Committee that he was in Australia when the Austrian system .of coinage, which was a heterogeneous one like our own, was changed to a decimal system. He said that there was a little friction at first, which lasted for a few months, but that after that time no one felt any great inconvenience, and before the end of the year every one was glad that the change had been made, and would not hear of returning to the old order of things. Similar evidence was given with regard to the introduction of the change in Italy. American witnesses when asked if there was any idea in America of improving the system, or of going back to some other, said that it was the natural and best system, and could not be improved, so that there is not the slightest idea of adopting any other, or of altering the existing system in any respect. Three of the witnesses examined before the Committee had no views to offer on the subject, two of them being called to give evidence of a technical character. Eight were opposed to any change, three were in favour of a change, but thought that the Commonwealth should await the action of England, and thirty-one were in favour of the adoption of a decimal system. Of those thirty-one, seven favoured the adoption of any decimal system whatever, because they thought any decimal system better than the present. But the general opinion was that if we adopted the decimal system we ought to retain the sovereign as our standard. Thirteen witnesses held that view, while five advocated the adoption of the 10s. unit, and four others the adoption as the unit of a coin worth 4s. 2d. - the American dollar unit. Therefore the weight of evidence was in favour, not only of the adoption of the decimal system, but of the adoption of the decimal system which the Committee recommended. When the Committee had finished taking evidence there was considerable difference of opinion amongst its members as to what system should be recommended. The evidence was very carefully weighed, and a great deal of discussion, both formal and informal, took place before a decision was arrived at. Some of the witnesses, several of them trained men, reported very strongly in favour of a ten-shilling unit, with the retention of the sovereign as a coin of the value of two such units. Calculations could then be made in sums of ten shillings, and the unit would be divided into ten shillings, and each shilling into ten pennies. The shilling would therefore be retained at its present value and under its present nomenclature, but there would be a far greater disturbance in the bronze coinage than the Committee would like to see made. A great deal is to be said in favour of the adoption of the American dollar unit. There is on the other side of the world a very large nation, whose people are destined to become even still more numerous and powerful, and they have adopted the dollar worth 4s. 2d-, as their unit. This coin must necessarily dominate more or less the American trade, while our trade with America, as the two peoples speak the same language, and have much in common, and for other reasons, must necessarily increase year by year.

Mr O'Malley - They have the dollar in Canada also.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - Canada has been forced by its nearness to the United States to accept the coinage of that country, so that money coined in the United States passes current in Canada. The Committee had seriously to consider whether these facts would not justify the recommendation of the American dollar as the unit for our coinage. The adoption of that unit would make no disturbance in the value of our halfpenny coinage, and it is very desirable to make no change, inasmuch as stamps, tramfares, and many small articles are largely bought for small copper coins. When we looked further into the matter, however, we found that, in view of the position of the British sovereign, the wide-world respect which it has won, its great history and traditions, there would inevitably be a strong resistance to its abolition here, and that the adoption of any other unit would greatly diminish the chance of getting a decimal system adopted in Great Britain. The Committee, therefore - rightly, I think - finally decided to recommend the sovereign as the unit, and to decimalize it down to its one-thousandth part. That would give the most workable money system the world has yet devised. Under that system, a florin would be the coin of account. I noticed in the minds of some of the members of the Committee that there was a disposition not to recognise the florin as the coin of account for fear of the popular prejudice against the adoption of a silver basis. But it will be seen that the basis recommended is not a silver, but a gold basis. In my opinion, it is inevitable that the florin - the tenth part of the pound - =will become the coin of account. The honorable member for North Sydney has pointed out that the American dollar, which is the unit of the United States coinage, is hardly ever seen in that country, and that the halfdollar, because of its size and convenience, is the coin which is most carried. There are very good reasons for adopting as the coin of account the coin which is in general use in everyday transactions.

Mr Watson - If the florin were chosen as the coin of account, very large figure columns would be required for account books.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - Not such large figure columns as are required where the franc is the coin of account. A millionaire in France who counted his wealth by francs would be a mere nobody in Australia. The Committee, in recommending the adoption of the florin as the coin of account, took the happy mean between the American and. the French systems. Another reason for the adoption of the florin is that it isthe coin in general recognition in the Pacific, where we hope to see the influence of the Commonwealth become dominant. It is the dollar of the Pacific. Our two-shilling' piece is exported in large quantities to the islands, where it is used as the money of account, and also for the purposes of currency. Altogether, it will be seen that the florin, which was introduced, as honorable members are aware, as the first step in the decimalization of the English system, is probably the most convenient coin in the world, both as a unit of currency and as a unit of money account. A further argument in favour of the decimalization of the sovereign is to be found in the fact that quite recently the Peruvian Government adopted the British sovereign as the basis of their new coinage. In the last report of the Deputy-Master of the Mint, which we had not received prior to the drafting of the report now before honorable members, the following statement occurs : -

A law was passed on the 13th December, 1901 , for the establishment of a gold standard, the unit to be the Peruvian gold pound, a coiu 2-2 millimeters in diameter, weighing 7 '9S8 grammes and eleven-twelfths fine, identical with the English sovereign. Silver and copper coins issued under the law of 14bh February, 1863, and article 7 of the law of 30th December, 1872, are to be fractional parts of the pound at the 'rate of 10 sols to the pound. Gold is to be unlimited tender, silver being restricted to 100 sols and copper to 10 cents.

Further than that, I see that a similar coinage has been adopted in Ecuador. The point I wish to impress upon honorable members, is that if these countries, existing within what may be called the trade dominions of the United States, prefer to adopt the English sovereign and decimalize it, there must be some virtue in the system in favour of which the Committeehave reported. I see that virtue displayed in three ways. First of all, we have the world-wide integrity of the British sovereign, and the world-wide knowledge and appreciation of it. It has been said that people far away in the East, in China and India, and in Egypt, put away sovereigns or hide them in the earth for years ; and whatever may happen to disturb the values of currencies, the British sovereign is always worth its weight in gold. In the second place, the tenth part of the British sovereign is the most convenient, as the largest silver coin of account or currency, and when it is further decimalized by tenths and hundredths it furnishes coins which will answer all reasonable requirements. The lowest coin is somethingless in value than thefarthing. Although we do not use farthings very much - and I hope we shall never have occasion to do so - they are found to be of great value in the economics of the poor in the old country. Ecuador and Peru have shown themselves to be appreciative of the value of the sovereign by adopting it as the gold standard of their currency.

Mr O'Malley - They do most of their trade with Great Britain and Europe.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - But the United States does a great trade with them, and as there is Monroism in trade as well as in politics they must look forward to doing a large trade with the United States. If, in the face of this fact, they favour the adoption of a different coinage, there must be some inherent advantage in the sys-' tern adopted over that of the United States. There is a large profit to be derived from the legitimate issue of silver tokens of currency - I am not considering in this connexion what might be done by an unscrupulous Government. To obtain the profit that is to be legitimately made, we must coin money strongly differentiated from that of Great Britain, because it must be made so distinct from the coinage of Great Britain that it will not go back to the old country to be redeemed. We must take the responsibility of renewing the currency as it wears down, and also stand behind it if the circumstances of the world at any time demand that we should redeem it. Therefore if we want to get the profit, and it is just and reasonable that we should, we must distinguish our coins from those issued by the Imperial Government. This brings me to the question of the system which we should adopt. I think that it is generally conceded that the decimal system is the most natural and the best in the world, and there can be no better time than the present for adopting this system in the Commonwealth. The time for adopting a new coinage is at the beginning of our national career, and the decimal system is undoubtedly the best. If we start our coinage upon the same basis as that of England, we shall have very little opportunity of adopting anything else, unless Great Britain initiates the change. We could adopt the proposed new system without an}' fear of trade friction with Great Britain, and we might very well take the step contemplated in consideration of the profit likely to be derived, and in view of the advantages to be conferred upon the nation. The reference to the Select Committee was extended, at the instance of the honorable member for South Australia, Mr. V. L. Solomon, to include gold within the scope of the inquiry. Personally I did not intend to include gold, because, as the inquiry has since proved, there was no necessity for us to enter into the existing relations with regard to the gold coinage. However, the Committee went into the question, and, as I have previously stated, decided to report in favour of the retention of the sovereign and of maintaining the existing relations between Australia and the Royal Mint in connexion with the branches of that establishment in our midst. Many other points with regard to gold cropped up. The branches of the Royal Mint in Australia are kept going by guarantees furnished by three of the States Governments; £15,000 is contributed by New South Wales, a like amount by Victoria, and £20,000 by Western Australia. This money is advanced by the States Treasurers to carry on the work of the Mint, and when the year's work is completed, the Mint authorities return any difference of receipts over expenditure to the States Government which has indemnified it. In Victoria, also in New South Wales, some slight profit is made, but in Western Australia there is a loss, and the net result is a loss to Australia. It is inevitable that' under the Constitution the Commonwealth Government shall take the place of the States Governments in their relations with the Royal Mint. Then we have to consider the question whether the Mints could be so managed as to obviate loss to the Australian people. The loss incurred in the past has been something substantial, because it is only quite recently that any profit has been made. One of the points that seemed to demand some further inquiry was the large export of minted sovereigns to other parts of the world, notably to America, which, in some years, reaches £5,000,000. These sovereigns are exported to the United States, and on arrival are required by the law of that country to be put into the melting pot and reduced down to their original form of molten gold. This seems to be a piece of altogether unnecessary extravagance. In the coinage of sovereigns, every 100 ozs. of gold yields only 45 ozs. of coin, the other gold having to be re-melted and re-coined. This trouble might be well compensated for in the case of sovereigns , which are to have their legal life of eighteen or nineteen years, but it seems absurd to go to all the present labour and expense in order to send sovereigns to foreign countries where they are immediately melted down. I believe that the Mint authorities have recommended a form of gold bar, weighing about 10 ozs., for export purposes. In every piece -of gold out of which sovereigns are stamped, there is a large quantity of waste in the interspaces between the discs. The weighing of the sovereigns by an automatic machine further reduces the coin ultimately produced. The sovereigns are automatically discharged, those which are too heavy or too light being separated from those which are of the proper weight. The proportion of ' coins which have to be returned to the melting pot and the waste, make up the large percentage. Improvements in machinery are reducing this proportion, but results so far have not reached any better average than 45 ozs. of coin for every 100 ozs. of gold. If we wish to obtain the profits that are derivable from a silver token coinage in our midst, Great Britain will probably tell us that we shall have to make good the inevitable depreciation of our gold currency. We have it on the authority of bankers, and other gentlemen of experience, that the condition of our gold coinage is anything but satisfactory ; that, in fact, as much as 50 per cent, of the gold currency is below the limit of tolerance. I do not say that we should begin by restoring the present gold coinage to its proper condition, but some system should be agreed upon between ourselves and the authorities of the Royal Mint, for restoring the coins now in circulation to the limit of tolerance, and we should afterwards be charged with the average loss of gold. A large number of these gold coins do not go into ordinary circulation, because I believe that in one case alone hundreds of thousands of them are put into a vault in one of the banks and kept there as a sort of guarantee fund in connexion with the balance operations of the banks. In 1889 the British Government found its gold- coinage in much the same condition as that of Australia at the present time, and it was then estimated that it would cost £650,000 to restore it to a satisfactory condition. I think we shall find that quite a relative proportion of that sum will' be required to bring our gold coinage up to the standard. From the details supplied by the Master of the Mint, it is apparent that, having once placed our gold coinage in a proper state, we can thereafter maintain it in a satisfactory condition for about £3,000 per annum. The Committee had also to consider whether it was desirable to establish one central Mint for the Commonwealth, in lieu of the three existing Mints, and whether we ought not to obtain our silver coins from Great Britain, at any rate at the beginning. The Committee finally decided in favour of obtaining the silver coinage from Great Britain, leaving the establishment of a central Mint open to further consideration hereafter. I think it is inevitable that the expense of maintaining the three Mints - none of which are working at their full capacity - must be considerably in excess of that required for the maintenance of one Mint capable of performing the whole of the work. I know it is said that these Mints - and particularly the one at Perth - are of great value to the gold producers.

Mr Fowler - If one central Mint were established, the Western Australian gold would probably find its way to Great Britain. A great deal of it does now. .

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - Yes, a great deal of it does now. But if sufficient gold were not supplied at the central Mint to enable it to undertake all the coinage which could profitably be undertaken, it would pay the Commonwealth better to purchase the requisite gold in Western Australia, and to incur the risk involved in transferring it to Melbourne or the Federal capital, or wherever the central Mint was established. In proof of that statement, I would invite the attention of honorable members to the cost involved in the production of the three Mints at present in existence relatively to the cost of the output of the Mint in Great Britain. I have no desire to touch upon details, but I wish to explain that in Great Britain the charges include many items which are not considered in the working expenses of the Australian Mints. For example, in the working expenditure upon our Mints, no charge is made for rent or interest upon the buildings occupied, the construction of which cost £60,000 or £70,000 ; whereas in Great Britain a sum of £12,000 is. set down as a payment to the Board of Work's for the use of the buildings and taxes - : £10,000 evidently representing interest -upon the construction of the buildings occupied by the

Mint, and the balance whatever taxation those institutions have to pay. In 1900, I find that in round figures the cost of the Mint in Great Britain was £84,160, whereas the cost of the three similar institutions in Australia was £47,019 - a difference of £37,141. In Australia, the Mints produced approximately 13,000,000 gold pieces, whilst in Great Britain they produced 10,000,000. But in this connexion it must be remembered that Great Britain also produced 41,000,000 silver pieces, 51,000,000 copper pieces, 25,000,000 colonial coins, and supervised the minting of 54,000,000 coins, which were struck at what is known as the "Royal Mint," Birmingham. Honorable members, therefore, will see that, relatively to its cost, the Mint in Great Britain performs much more work than do the three Mints in Australia. Of course, the fact must be considered that the whole coinage in Australia is in gold, which is the most expensive form of coinage that can be undertaken. But even allowing for that fact, the difference is very much greater than it ought to be. It is necessarily caused by the smaller quantity of work which is done by each of the three Australian institutions compared with that which would be accomplished if one Mint only were in existence. In the first instance, the report of the Committee recommends that we should take advantage of the facilities offered to Canada and other British possessions to obtain their currency coins either at the Royal Mint or at one of the Birmingham institutions under the charge of the Royal Mint. According to the Deputy-Master of the Royal Mint, the Government of Canada has expressed the wish to erect a mint for the coinages which they require, which have hitherto been executed there, and which have not been very extensive. Honorable members will recollect that I account for the limited extent of the Canadian currency coined in Great Britain, by the fact that the American token coinage is current in Canada. The DeputyMaster adds -

They also desired to coin sovereigns, and in this case the new mint will have to be a branch of the Royal Mint.

I have since ascertained that Canada has already established a Mint for the coinage of gold, but I cannot find that any steps have been taken for the coinage of silver there. There is a vast difference of opinion amongst those who are considered experts upon this question, as to the quantity of silver currency required for Commonwealth purposes. Mr. Coghlan, the Government Statistician of New South Wales, estimates it at something over £1,000,000 ; Mr. Von Arnheim, of the Royal Mint, Sydney, at £1,000,000; Senator Walker at £1,500,000 ; Mr. Henry Gyles Turner, who is well known in Melbourne, at £1,700,000 ; and other authorities at £2,000,000. Personally, I think the amount is in excess of £2,000,000, and I base my opinion upon the quantity of loose money which the Australian people carry in comparison with those elsewhere. Another test is to be found in the fact that the regulations under the German Imperial Act to prevent overissue are based on 15 marks (15s.) per head. That would be equivalent to about £3,000,000 for the Commonwealth. In making that estimate as the basis of an Imperial Act, great care would naturally be taken to insure accuracy. If we assume that the amount required would be £2,000,000, I find, on the basis that 66 shillings may be minted out of every pound troy of silver - which was that fixed by Lord Liverpool's cele- brated letter in 1815 - we should require 606,060 lbs. troy weight of silver. This, at 2½s. per ounce - which is to-day's quotation for silver - would cost £73 1,059. If we allow the sum of £30,000 for the coinage of this silver, the cost will be increased to £761,059. That would cover both the cost of the silver and of the coinage. A coinage currency of £2,000,000 would, according to the figures of experts, represent more than 40,000,000 pieces of money. In Australia we can coin 5,000,000 pieces of gold for about £15,000, notwithstanding all the processes involved in coining, checking, weighing, and remelting it. Great Britain, however, coins 120,000,000 for an expenditure of about £84,000. About half of those 120,000,000 coins consist of three-penny and six-penny pieces. These are struck off almost as rapidly as are brass buttons and, of course, it necessarily follows that there are fewer rejected pieces as they come down in the scale of value. The rejected pieces of gold average about 15-31, those of Imperial silver 3'33, those of Colonial silver 1 '55, and those of copper 1 per cent. The first issue of such a coinage, therefore, would provide the Commonwealth with £2,000,000, less the first cost, namely, £761,059. That would leave a gross profit of £1,238,941.

Mr Spence - Is that under the present system?

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - It does not make the slightest difference under which system it is. If we add to the gross profit I have mentioned, the net profit on bronze coin, which would be, approxirnatety, £31,059, it will be seen that there would be a total profit on the adoption of this system of currency by the Commonwealth of £1,270,000. Although we have allowed £30,000 for coinage, we do not propose that we shall coin this ourselves. That estimate of cost was decided by referenceto results obtained at the Royal Mint. If we employed others to carry out the work for us in the first instance - and I think that the Committee's proposal that we should do so is a wise one - we should have to allow for charges which the Royal Mint imposes for supervision or for the work of coining. We should have to allow for interest in respect of the silver advanced for coinage purposes, and for something in addition to the labour cost.' If the work were done by Birmingham firms, for example, they would certainly require something more than the working cost of doing this minting for us. After careful consideration of the figures, I have put this down at £70,000. That leaves £1,200,000 as the original profit or seigniorage of the Commonwealth, which at 3 per cent, would give £36,000 per annum. When the Committee was considering if this large profit, or seigniorage, should be funded some of the conservative witnesses suggested that there was no necessity for the adoption of any such course. I think that Senator Walker, . who may be considered a careful authority, expressed that opinion ; but I do not feel satisfied that we can look forward complacently to the maintenance of the existing ratio of value between silver and gold. We have to look forward to possible upheavals in the relative values, and to trouble in regard to metallic coinage generally. The safest course would be to fund this difference, and use only the annual interest, which might be added at once to the consolidated revenue. In support of this suggestion, I would in-vite the attention of the House to a statement which appears at page 42 in the annual report of the Deputy Master and Comptroller of the Mint for 1901. I confess that I cannot clearly understand certain figures which are given there in regard to the coinage of silver at Calcutta and

Bombay. If the figures are as they appear to me to be, they show a profit of £4,500,000. That, however, I think, must be wrong.

Sir George Turner - Perhaps the honorable member has applied the wrong decimal.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - No ; the figures are plainly given, and I shall read them to the right honorable gentleman. The receipts of the Bombay Mint for 1900-1 were 32,779,064 rupees, that represents £3,277,906, while the expenditure was £12S,072. At the Calcutta Mint the receipts for the same year amounted to 14,S10,320 ' rupees, and the expenditure to 1,044,80.1 rupees. I cannot help thinking that those receipts were swollen by the sale of some silver coined in previous years. It is utterly impossible that such results should be shown on the extent of the work done. But I wish specially to point out the statement made by the Deputy Master, with regard to the profit derived from this Goinage. He sets forth in a footnote that -

The net profit of the rupee coinage was transferred to the Gold Reserve Fund in the accounts of the Government of India.

This shows that they have taken care in India to guard against any possible dislocation of the currency by reason of an altered relative value between the two metals. I think the Commonwealth would act wisely if it adopted the same course. It must also be remembered that with a silver currency we should have to provide for the wear and tear of coin from year to year. My own opinion is that for many years after the establishment of the system it would not be necessary for us to take that matter into account in calculating what we . were likely to obtain each . year. I think the natural increment in the demand for our currency, if silver did not materially advance, would be sufficient to pay all losses experienced in the restoration of worn coin. In England in the year 1897-8, the loss in this respect was £28,563 ; in 1898-9, £55,313 ; in 1899-00, £27,457 ; in 1900-1, £31,129; and in 1901-2, £23,419. That gives an average of £33,000 per annum. The coin which we should issue, however, would be new ; some twelve years would elapse before it would begin to wear to a point at which it would be necessary for us to reritew it. After the lapse of some years we should probably require to expend £4,000 per annum in the restoration of silver coinage. I have already referred to the probable expenditure of £3,000 per annum which we should be called upon to pay in making good the wear and tear in respect of gold coinage, so that we should have a total outlay of about £7,000 per annum in respect of coinage restoration. That would be about the average on the present figures of population and currency.

Mr Bamford - But it would not be incurred for twelve years after the introduction of the system.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - That liability would not occur in respect of new coinage until that period had elapsed. The average life of silver coin is about thirteen years. The honorable rnembei will recollect how often we used to see coins in a very good state of preservation which had gone all round the world, perhaps, and had been coined 50 or 60 years before. Mr. Wardell, the Bullion Master-of the Mint, says in his evidence that the Commonwealth is not justified in commencing a coinage with this enormous seigniorage. He was cross - examined on that point, while other witnesses were approached in regard to it, and I think the Committeewere quite satisfied that Mr. Wardell was over scrupulous, and rather pedantic, in this matter. In my opinion the Mint officials generally are extremely conservative. As England commenced with a proportionate ratio of thirteen to one, between gold and silver they consider that it would be radically wrong to commence with a different ratio. Other witnesses like Senator Walker informed us that with ari honest Government behind it, that seignorage was quite the proper thing. This profit is taken by Governments such as that of Great Britain, and utilized by them. Great Britain the year before last passed nearly £1,000,000, representing the profits derived from coinage, into the Exchequer. Last year a further addition of about £500,000 was made in this way, while the average for the last twelve or thirteen years has been something like £500,000 per annum. The profits show a tendency to grow larger, because the price of silver has been steadily coming down. I do not think there is any probability of the Government of the Commonwealth ever incurring the risk of an over issue of silver coin. An over issue of silver coin is one of those curses which always come back to roost, and every country that has over-issued has experienced that result in a very bad form. If it is desired to guard against such a possibility, the lawyer's maxim of ex aimndcmti cauteld ought to be adopted. A safeguard is offered to us in the principle which has been adopted by Germany. "Under the German Imperial Act it is provided that the Mint authorities shall not issue token money except in exchange for gold; they issue it to the banks and other private institutions in exchange for gold. When a Mint issues its silver only in return for gold there can never be an over issue. The financial corporations will never apply for silver unless there is some special trade demand for such coinage ; and if they have to purchase it with gold they will take only sufficient to satisfy their requirements when there is any danger of it dropping. If we fund the difference or seigniorage, and issue currency money only in exchange for gold, we shall not run any risk. With our English reputation" behind us, and with the high standard 'of financial morality exhibited by the Governments of the States, there is no possibility of danger. The question of coining silver was considered years ago by politicians in these States. It was raised in the first instance, I think, by one of the Premiers of Victoria, and a correspondence was carried on by Premiers of New South Wales. The Treasurer himself took part in this correspondence. The price of silver dropped. At this time the Colonial Governments, having experienced an actual loss in the coinage of gold, could not understand why they should continue to coin it at a loss, while Great Britain was exhausting her energies in pouring out silver at a profit ; they naturally demanded that some of the profits should come to them. The correspondence, which is interesting, will be found as addenda to the report. Prom the first the British Government recognised-as an honest British Government always will do - that it had no claim to the seigniorage which was made on the quantity of silver currency used in the Australian States. But they were confronted with many grave difficulties. They realized that they could not give each of the States the right to coin silver, and they had to consider which should be given that privilege. If it ' had been proposed to give it to Queensland, for example, Western Australia would naturally have objected, and if it had been suggested that it should be given to Victoria, New

South Wales would have opposed such a proposal. They remitted the question from time to time to Australian statesmen, and requested them to come to some agreement under which the colonies could establish one coinage system, and divide the profits amongst themselves. There was the further great difficulty of so distinguishing the coinage turned out in Australia from that coined in the mother-land that it would be possible to saddle the State issuing the coinage with the responsibility of restoring it as it wore out. That was the gravest difficulty of all, and it constitutes the chief reason why we should have a currency for the Commonwealth. It was thought that the difficulty might be met by having a mint mark ; that we should be able to coin half-crowns, and place upon them some distinguishing mark by which it would be possible to tell that they had been coined in Australia. But honorable members will recognise that those marks would be oblitera'ted in many instances ; that the half -crowns, by the issue of which we had made Is. 3d. 'per coin might be redeemed at1s. or1s. 2d. each in England, and that we might go on re-coining them and continually making Is. 3d. per coin. The Imperial Government could not face a set of circumstances in which that would result. No way out of the difficulty could be seen, but when federation was approaching, the suggestion was made, that as the Commonwealth Parliament would have power to deal with questions of coinage and currency, the whole matter should be allowed to stand over for the consideration of the Legislature. The Federal Parliament has met, and honorable members are now invited by the report of the committee to consider whether we should not have the profits to be derived from the currency ; if so why we should not have a system, and if we are to have a system, why it should not be a decimal one. Still the advantage of a profit I look upon as the very least of the advantages to be secured, though I regard it as a great lever in commanding attention to the importance of the subject svhen addressing popular audiences. But there is a great disturbance throughout the country because it is proposed to spend . £30,000 upon establishing a neeessai-y institution, and the public mind is similarly agitated whenever any other expenditure is talked of. Surely then an opportunity to save £30,000 by any means by which it may be honestly and justly saved, should command attention. If only to increase the national sentiment we should have a coinage of our own. The sentiment of America, in many respects, centres more round the dollars and the dimes than round the stars and stripes, and a national coin, with a national emblem upon it, must contribute as much to national sentiment as does the national flag. The great advantage to be gained by the adoption of the decimal system is the saving of trouble which it brings about in every department of trade and commerce - in buying and selling, in calculating, in bookkeeping, in accountancy, in insurance, and in professional work. An instrument which produces the best results with less labour than is necessary to produce them in any other way must add to the national wealth, whether that instrument be an intellectual one like the differential calculus or a material one like a sewing machine. The decimal system of coinage is something partaking of the nature of both. It is a system by which we buy and sell, count, and regulate our affairs in the smallest space of time, with the least trouble, and with the least chance of error. The chances of error when, the decimal system is employed are much fewer than under our present system, and the troubles of the Minister for Trade and Customs would have been much lessened if the merchants whom he has persecuted for their small mistakes had been allowed to utilize the decimal system. Various estimates have been made of the saving in the national education bill which would follow from the full adoption of the decimal system ; but I am unable to deal now with the application of that system to weights and measures, because it was not part of the subject referred to the committee for investigation. In the opinion of some skilled experts, however, the full adoption of the decimal system in our schools would save two years' schooling in every child's career, while no skilled witness has estimated the saving to be less than one year. Surely such a saving would greatly reduce the education bill of the country, and would be still larger than the gains of seigniorage or the profits upon the first issue of the coinage. The chief reason for which I advocate the adoption of the decimal system is that it is a simple one, and will save one to two years' schooling to every child in the community. I. do not know if honorable members have ever compared the simple arithmetic text-books which are used in the junior forms of our State schools with similar books used in America. If they have, they will know that, whereas in our text-books the children commence to deal first with questions of enumeration, and then go on to problems in figures, and, later, to the pence, shillings, and pounds tables, and so to problems in money, in the American books they deal first with questions of enumeration, and then go directly to the consideration of problems of money, because under the decimal system there is no difference between a money problem and a figure problem. In America a child proceeds from the enumeration of figures to problems involving money, and so on to other problems, right up to the highest scientific calculations. Having pointed out some of the advantages of the decimal system, I know that I shall be asked by many what objections can be raised to its adoption. I shall try to review a few of these objections, and endeavour to briefly answer them. The main objection is that the adoption of the decimal system would mean the disturbance of our present condition. Honorable members know what it means to alter the state of affairs to which people are accustomed. Objection on that score has been taken to every reform which has been advocated from the very dawn of civilization. What we are used to we regard as satisfactory. If we had always slept on boards, a board would be held to be as comfortable to us as a feather bed. But any one who brings his mind to bear upon the two systems must inevitably be led to the conclusion that the decimal system is the better. Then he must ask the question - " That being so, why should we not adopt it ? " Here we are met with a further objection, which I hardly like to call the " Yes, Mr. Chamberlain " objection, but which is largely founded upon the idea which that phrase suggests - I refer to the opinion that in this, as in other matters, we should await and obey the dictation of the Imperial Government. Now, in a matter like this, which has nothing to do with our loyalty to Great Britain, an objection like that should have no effect. If a reform is good for us, all we have to ask ourselves is can we adopt it without any serious disadvantage to our trading relations with the mother country.

In support of ray assertion that we can adopt the decimal system without any such disadvantage, I would point out that Canada has a coinage which differs more from the English currency than that of Australia would differ, and yet Canadian businessmen tell us that they experience no difficulty in trading with Great Britain. I, as an experienced business man, trading with the United States, know that there is less difficulty in dealing with invoices and statements coming from America, with the amounts set out according to the American monetary system, than there is in dealing with invoices and statements from Great Britain. One knows whether an American invoice is right or wrong merely by looking at it. There is no need to take up a pencil to make a calculation to ascertain its correctness. I cannot see any reason for anticipating obstacles to the freest and fullest trading between the Commonwealth and Great Britain if we adopt a currency slightly different from that of the old country.

Mr Bamford - There is a possibility of ISngland herself adopting thedecimal system.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - I intend to refer to that. Yery many people speak and write upon this subject without being able to fully understand the arguments advanced on each side, and the adoption of the system is frequently condemned for reasons . which really show no objection to it at all. For instance, one of the writers in the daily press asks how, in England, would people understand a quotation of Australian butter at 25 cents per lb. ; or, supposing we had adopted the decimal system, how would our people here understand a quotation of butter in England at 12½d. per lb. *! The man who asks a question like that should ask himself another question - " How is it that business men who buy goods from the United States or from countries like Germany understand the quotations sent to them, and how is it that foreign merchants understand our quotations?" An American merchant never finds any difficulty in doing business with England, although the monetary systems of the two countries are different. Of course, a person who has nothing to do with trade, -if he were suddenly asked what the price of a pair of gloves costing 3s. 6d. , in English money would be in the American currency, would be puzzled by the question ; but in actual trade relations there is no difficulty. What we have most to fear is the friction which will be created amongst our own people by the change. An argument that used to be advanced against the decimal system as adopted in France, and which appeared, I think, in the first edition of theEncyclopcedia Britannica, but has since been dropped, was embraced in the statement that, if an article were quoted at 1-25 francs per lb., a poor person who wished to purchase½ lb. would be victimized, because, since there is no exact binary division of such a sum which could be expressed in the coinage, be would be compelled to pay about½d . more for thearticle than its exact price. The fallacy of such an objection has often been exposed and ridiculed. If an article were quoted in a Melbourne shop at 12½d. per yard, the person buying half-a-yard would probably be required to pay 6½d. for it. It is notorious that articles are frequently quoted in drapers' shops at prices like1s.11¾d. a yard, for which, of course, the purchaser of half-a-yard must pay Is. But prices will always accommodate themselves to the money system prevailing in the country, providing that that system offers anything like the necessary facilities, and the decimal system gives a greater variety of subdivisions than any other. The chief objections to the system were very ably expressed by Mr. Thodey, the commercial editor of the 'Argus, than whom I do not think any one more capable could be found to summarize the arguments for and against the proposed change. But some of the witnesses examined by the committee raised very strange objections. Mr. Wardell, for instance, asked a very strange question, which was repeated by others, and therefore requires an answer. He asked how the wife of a mechanic, unacquainted with the decimal system, could satisfactorily performher marketing under that system! But what do French women and- American women know about the decimal system in the abstract ? In America the children solve these questions while they are at school, because they get toy money ; and a practical experience of the coins used under the decimal system would soon teach any person, however uneducated, its possibilities. I might very well ask - What does the wife of an English mechanic know about the quarto-duodecimo-vicesimal system under which she does her marketing ? Of course, she never even heard the term. People learn how to spend their money to the best advantage by practical experience, and in that way they would soon learn to use the coins of a decimal system. A contributor to thi Sydney Daily Telegraph, who is a very able writer upon commercial questions, objects to the proposals of the committee because they disturb the existing value of the penny, and that is without doubt the most serious drawback to the system now advocated. If, however, we desire to decimalize our monetary system we must disturb something. We might disturb a great deal, but we could not' disturb much less than is proposed by the committee. No difference whatever is made . until we get down below the sixpence. The present sovereign is maintained at its full value ; the' half-sovereign is preserved; the twoshilling piece is also to retain its present value under the name of florin; the shilling is preserved under the name of halfflorin ; and the sixpence under the name of a quarter florin. Below that the coins have to be altered, because they do not very closely approach the values of the coins which have to be substituted under the decimal divisions. After a very careful consideration of the interests of the poorer classes, and of the buying classes generally, it was decided to adopt the four-mil piece, which is only 4 per cent, less valuable than a penny." The same writer complains that the system proposed by. the committee does not divide the coins evenly, one into the other ; that, in fact, it does not provide for a binary division under which each coin would be exactly half the value of the one immediately above it. Theoretically that system is right, and one of the best witnesses who appeared before the Coinage Commission in England, Mr. Frederick Hendricks, proposed a system practically the' same as that which we are now advocating, except that when he got below the florin in the silver coinage he proposed a 40 - mil piece, a 20 - mil piece, and a 10 - mil piece, thus providing for the binary division of the smaller silver coins. In copper coins, he proposed four-mil, two-mil, and one-mil pieces. No doubt his system is the best for an ideal currency under which the sovereign is retained ; but when it comes to be regarded practically, it must be seen that the 40-mil piece would not correspond with any coin in our present system. Although Mr. Hendricks' system is I theoretically much better than that proposed by the committee, and would be the best to adopt if we had no history, and were dealing with a perfectly new set of circumstances, we think that the modifications, proposed by us would make the. new system more convenient of application in so farthat it would prove less disturbing. So far as the smaller copper coins are concerned, it might perhaps be desirable to strike more than we have recommended. I acknowledge that, in this respect, some reconsideration is desirable. I do not think we shall require the one-cent piece for the purpose of currency, and if we do not coin it, except as a curiosity, we shall want a. three-cent as well as a two-cent piece in order that we may be able to make up every variety of change in connexion with the use of ten-cent pieces. To adhere to the present system, in view of the fact thatwe have a favorable opportunity of adopting a better one, would be to place ourselves in a position similar to that which would have been occupied by Europe if it had continued to use the Roman numerals instead of adopting the Arabic system of notation. I think it was Macaulay who suggested that a greatamount of interest might be caused by representing the present multiplication table in Roman numerals, and it would, no doubt, be verv interesting to see an attempt madeto multiply MDCCCXXXIV. by XIX.' I cannot imagine how the Romans worked out their sums, because it seems impossible, without .the use of the Arabic system, tocarry out such calculations as we have to make. I have read a statement regarding a gentleman in China, who, by using numerals in the alphabet instead of the signs which, have been availed of there for so many years, succeeded in teaching blind Chinese to read within a shorter space of time than that occupied under the old system by Chinamen in the full possession of their sight. Under the decimal system of coinage, we should be able to do more work with less energy and at less cost. It is said that we. should await action on thepart of England ; but did we wait for England in regard to the ballot, or the adoption of the Real Property Act. If we wait for England to take action, and if I have the honour to remain a member of this House for so many years that I become its father, I dare say those who are then sitting here will see a tottering old man moving; an annual motion with regard to decimal coinage, and being met with the rejoinder - " Wait for action on the part of England." I do not think we should wait for England to take the initiative. We are not likely to gain any time by doing so, but, on the other hand, if we make a start in what we believe to be the right direction, we may give strenuous assistance to those who are advocating the adoption of the decimal system in the old country, and thus more rapidly bring about an Imperial reform. If the decimal system is ever adopted by Great Britain, it will be upon the lines advocated by this report. No other has been supported in Great Britain, 'and the only alternative to such a system would be something after the nature of the universal currency scheme, which was recommended at the Convention which met in Paris in 1867. After a very protracted discussion on that occasion, it was resolved to recommend the use of the French franc as a universal standard of currency. Of course this coin differed from the English sovereign and the American half-eagle, and the Convention necessarily came to nothing. When the subject was considered in America, Mr. Dunning, a gentleman who seems to know a good deal about the subject of coinage, suggested that the difference between the Prench 25-franc piece and the British sovereign, amounting exactly to 88-hun- dredths, should be met by the reduction of the English sovereign by44hundredths, and the increase of the French 25-franc piece by 44-hundredths, bringing each to the same value. I believe that he also suggested that the British sovereign might be changed to only half the extent indicated, and that the other half might be retained as seigniorage, such as is claimed in respect to the Prench 25- franc piece, but not in connexion with the British sovereign. Then it was proposed that the Americans should change their half-eagle to the extent necessary to bring the three systems into accord. Nothing was done, but if anything is ever done in the way of arriving at an international standard of currency, it will be in the direction of Mr. Dunning's suggestion, because it is useless to expect that the United States, with its possible 100,.000,000 inhabitants in the near future, will give up its large currency to adopt any other system, or that the Latin races, with hardly less people, will abandon theirs. If we follow the recommendation of the committee, and a. universal currency is afterwards adopted, we shall suffer no more disability than if we adhere to the present coinage. I believe the committee have in their report afforded the House an opportunity of doing something practical, and that their recommendation is in the direction of progress, enlightenment, and economy. Therefore I have great pleasure in submitting it for the consideration of honorable members.

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