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The Story of Coins

by Joseph Yam, Chief Executive, Hong Kong Monetary Authority

(Speech at St Paul's College Speech Day)

December 1994


Having once been a student of St. Paul's, I am particularly honoured and happy to be back here to address a Speech Day gathering.

When preparing for this speech I did wonder what I should appropriately talk about today. In my official capacity I am constantly in touch with bankers and businessmen. Chances are that what we talk about would centre around business and profits. The atmosphere in where I work is in great contrast to the austere and academic environment of our school. Yet it seems inappropriate for me, as Chief Executive of the Hong Kong Monetary Authority responsible for monetary affairs in Hong Kong, not to talk about money even on an occasion as this one. So I decided that I should tell you a story about money.

This story concerns the new coins that we have issued recently. There is in fact quite a lot of interesting information about our new coins. I would like to share with you some of this information, together with some of my own reflections and experience on the exercise of issuing the new coins. I hope students would find them useful as they progress through their careers after school.

We started issuing new coins from the beginning of 1993. The $5 and $2 coins were the first ones introduced. The other denominations followed, ending this November with the issue of the new $10 coin. There are seven new coins in total. Let me start the story from the time when we designed the new coins.


As you know, the coins that we have been using before the new coins were introduced all have the head of the Queen on one side. This is because Hong Kong has been a British Colony and coins are often taken as a symbol of sovereignty. These coins will obviously create a problem in 1997 when sovereignty is to be reverted to China. In accordance with the provisions in Sino-British Joint Declaration, "Hong Kong currency bearing references inappropriate to the status of Hong Kong as a Special Administrative Region of the People's Republic of China shall be progressively replaced and withdrawn from circulation". In other words, coins with the head of the Queen cannot ride on the "through train". There is likely to be disruption to members of the public if there is no smooth transition for our coins. And this is clearly undesirable.

We have therefore a few years ago explored how this problem could be resolved. The objective must of course be to try and replace the coins with the head of the Queen on them, quickly and smoothly, by coins which can survive 1997. This would involve depoliticizing the coins by replacing references which are colonial in nature by a design acceptable to Britain before 1997 and to the China after 1997. The bauhinia, which is the Hong Kong flower, came to mind.

Reaching agreement on this was not easy at all. On the one hand, we were trying to get Britain to agree on the removal of a reference to British sovereignty before 1997. On the other hand, we were trying to convince the Chinese to accept a depoliticized design for our coins, to be circulated through and beyond 1997. Furthermore, we also need agreement on allowing coins with the head of the Queen not yet withdrawn from circulation to continue to circulate for a time after 1997 in order not to cause disruption to members of the public.

But we managed. And the reason why we managed is that we had a sense of purpose in what we were trying to do. The objective was clear, there was cooperation, there was give and take, while important principles were maintained. There was sincerity to try and understand each other and to build up trust. Achieving is not about winning an argument but about getting things done.

I do hope that when in future you encounter difficulties in your work you would sit back and ask yourselves what is the objective of what you set out to do; what are the principles which you must not concede; whether you are approaching the problem with sincerity; whether you are playing too much politics; whether you are building up conspiracy rather than trust. If you can do so, then I can guarantee you a higher success rate.

Turning back to the story of our coins, we had to resolve another problem when designing the coins. Discussions involving the references to sovereignty had to be carried out discreetly, whether you like it or not. Leaks could be counter-productive. We therefore could not involve professional artists in the design of the coins. In the end we had to copy a photograph of a bauhinia for the design. And for the Chinese characters on the denomination of the coins, I had to copy those myself by hand from calligraphic publications. I very much blamed myself for not paying more attention in art classes when I was in school. Otherwise the design of the coins could have been more artistic.

This is of course just one example of how we inadvertently miss valuable chances when we were young. We thought that many of the things around us were superfluous and therefore of no concern to us. As a result, later in our lives we regret our inadequacy in many things.


The second act of our story concerns the actual minting of the coins. We needed to resolve one problem way at the beginning. This is to ensure that we can distinguish between the new coins and the old coins by machine, rather than by hand, in order to facilitate the withdrawal of the old ones.

One proposal was to use difference sizes or shapes. But with six different sizes for the old coins and seven additional different ones for the new coins, there will altogether be 13 coins of different sizes or shapes. This would cause a lot of confusion and inconvenience to members of the public, in particular those who cannot see. Further, there were serious doubts as to whether the slot machines could handle so many different coins.

An alternative was to use different alloys for the new coins but retaining the same size and shape for each denomination. Different alloys have different conductivity. This would enable the old coins to be sorted out for withdrawal. So we decided to use this approach, in view of the fact that this would involve the minimum of disruption to users.

But this caused another problem with the slot machines. Some of them could not accept coins of different alloys even though the size and weight were the same, unless the machines were modified. And as always, it takes time to have them modified. So, to the extent that we could, we gave people time and of course adequate samples to set the machines. Even then, there were still problems with some of the slot machines, and members of the public were getting somewhat annoyed.

When this happened, no one showed any understanding about the complexity of the issue. As far as members of the public were concerned, the coins were issued by the Hong Kong Monetary Authority, and we must therefore take the blame for any problems. This is understandable. But for us, we were not interested in putting the blame on anyone. We wanted to resolve the residual problems as soon as possible so as to minimize inconvenience to members of the public. After consulting experts, we quickly decided to change the metal composition of the new one dollar coin which was the most troublesome one. This did the trick, but it does mean that some unissued coins had to be destroyed. A small number of the troublesome ones had in fact been issued and are now circulating. If you can locate them, my advice to you is to keep them as a collectors item.

Thus we need to face problems head on. We need to pay attention to resolving them rather than spending time and energy to apportion blame. Demonstrating that the problem was not your making does not help resolving it. But quickly resolving the problem, in good faith, involving all those concerned and working as a team, will obviate the need to blame and to defend against blame.


Anyway, all the seven new coins have now been issued, the latest being the bi-metal ten dollar coin issued last month. In fact, at the beginning of this year, we issued a commemorative $10 coin made of gold. As this was a limited issue, demand was expected to be great. I was approached by quite a number of friends and relatives with the request that I reserved one for each of them as they might not be successful in the ballot. What a request! I hope you believe me if I tell you that I had to take part in the ballot myself. I was lucky enough to get two out of a token of four applications submitted by myself, my wife and my two understanding parents; and I certainly paid for them, just like everybody else.

If you don't believe me, then I would ask you the following questions. If the head of the Hong Kong Monetary Authority do not stick by the rules, how could there be credibility in what he does? How could he gain the confidence of the people of Hong Kong, and how could his organization attain the recognition of the international financial community necessary for Hong Kong's development as an international financial centre? How could the organization obtain the trust from the community in managing Hong Kong's reserves of over $300 billion? Integrity is of utmost importance in any job.


The public's response to the issue of the new coins was overall not bad. But there was no lack of adverse comments. For example, after the issue of the new ten dollar coin, we heard people say that it was ugly, it would cause inflation and it was too heavy.

The fact that some have found the coin ugly could, as I said earlier, be attributed to my lack of an artistic sense and I gladly accept the criticism. The comment about the coin being inflationary was a little unfair. It is up to the consumer to decide whether and how much to spend. The ten dollar coin is not capable of thinking itself. It cannot urge the consumer to spend more money and cause higher inflation. But we nevertheless had to explain patiently and objectively why the coin was not inflationary.

As to whether or not the coin is too heavy, I would like to tell you that the life of a ten dollar bank note is only less than two years. It would be cost effective to have it replaced by a coin which lasts much longer. If we do not do so, we would be wasting tax payers' money. Some however still did not accept that this is good enough reason for having a coin instead of a banknote. In the end, I had to resort to a little sense of humour and say that when compared with two $5 coins instead of the $10 bank note, the ten dollar coin is a lot lighter.

In life, one must be prepared to accept criticisms, whether they are right or wrong. And one should always respond, if this is called for, with objective analysis. This is particularly so when one is holding public office. You are actually not entitled to any temper at all. You cannot afford to say that people are foolish even if they are. You will sometimes just have to swallow it with a sense of humour. And life will go on.

I hope you have found this story of coins interesting. It is true in all respects and this is the first occasion I talk about it in public. I hope my reflections and experience in it will be useful to you in your new encounters with society after your graduation from school.

Thank you for listening to me.

Last revision date: 1 August 2011
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