The Secretary to the Department of the Treasury has forwarded, for advice, the following memorandum:

By Royal Proclamation dated 28 July 1916, it was ordained that where any person brings gold bullion to any of the branch mints, the Deputy Master may, during the continuance of the present war and for a period of one year thereafter, instead of delivering out gold coin to that person, make payment for the bullion in such manner as may be provided by Regulation.

2. With reference to this Proclamation, the Secretary of State for the Colonies on 29 July 1916, cabled that the Governments of New South Wales, Victoria and Western Australia are being asked to issue Regulations providing that payment for bullion at branch mints may be made by cheque after communicating with the Government of the Commonwealth of Australia.
3. On 3 August 1916, a telegram was forwarded to the Premier, Western Australia, referring to the Proclamation and stating 'there are national reasons why Commonwealth Government should at once obtain control of all gold produced in Australia and we ask that Regulation be immediately passed by the State'. The necessary Regulation was passed by the Executive Council of the State of Western Australia and gazetted on 7 August 1916.
4. The Deputy Master of the Perth Mint was advised by telegram on 12 August 1916, as follows:

Government of Western Australia has passed Regulation authorising you to pay for all gold deposited with Mint by cheque instead of in gold coin. Gold will belong this Department. Sub-Treasury will Credit to account styled Commonwealth Mint Account at Commonwealth Bank £100,000 to be operated on by two Mint officials named by you. Apply to Sub-Treasury for further sums as required. Commonwealth Bank will take delivery of coin on behalf this Department.

5. Owing to a misunderstanding, the banking arrangements were not at first accepted by the Deputy Master of the Royal Mint, Perth, who arranged for the opening of an overdraft account at the Commonwealth Bank by means of which he made payment by cheque to the persons who lodged gold at the Mint. The banking arrangements were however finally settled in accordance with the telegram quoted.
6. It will be noticed that it was claimed by the Treasury that the object of the Proclamation and amended Regulation was to give the Commonwealth of Australia control of the gold output, but in a letter dated 4 August 1916, from the Governor of Western Australia he states: 'I have also received a telegram from the Secretary of State for the Colonies intimating that the object of the Royal Proclamation is to enable the Commonwealth Government to secure control of the coinage output'. It is contended however that the control of the coinage output also implies control of the gold production because the only methods of dealing with gold bullion deposited with the Mint are either by converting the bullion into gold coinage or the sale of the bullion to manufacturing jewellers and others.
7. On 18 August 1916, the Deputy Master, Royal Mint, Perth, was informed as follows:

Treasurer approves your selling to manufacturing jewellers at £3.17.10 1/2 per ounce standard portion of gold bullion lodged for conversion into sovereigns. Please pay proceeds into Commonwealth Mint Account at Commonwealth Bank.

8. As the price paid by the public for gold was the same as the Mint pays to the person lodging the gold, the Commonwealth Mint Account was thus reimbursed the amount expended in the purchase of the bullion.
9. The Gold Producers' Association was permitted on 22 February 1919 to export in gold coin all gold won by members of the Association and deposited with the Mints so that they might receive the benefit of the world's gold premium.
10. On 20 March 1920, the Deputy Master, Royal Mint, Perth, was instructed as follows:

Treasurer has approved of Mints charging fl per standard ounce premium on gold sold to manufacturing jewellers, dentists and others. Please arrange accordingly and credit premiums to separate accounts in your books.

The amount of the premium is varied from time to time on instructions from the Treasury. It was arranged with the Gold Producers' Association that the gold thus sold at a premium should be considered as being provided from gold deposited by members of the Association to whom it is intended the premium will be paid. As the premium is fixed on the world's price for gold, the Gold Producers' Association is thus placed in the same position as if they had actually exported the gold sold by the Mint.

11. On 16 April 1920, the Deputy Master of the Royal Mint, Perth, was requested at the close of each quarter, commencing 30 June next, to pay to the Commonwealth Sub-Treasury Perth, the total amount of the premium collected during that quarter. At the same time, the Sub-Treasury was instructed to pay the amount to the Gold Producers' Association.
12. On 24 April 1920, the Deputy Master of the Royal Mint, Perth, replied in the following terms:

As a general rule, all moneys received by way of revenue in connection with the receipt of gold are payable to the State Treasury under the Perth Mint Act. The relevant clause of the Act is as follows:

From and after the day on which the aforesaid yearly payments shall commence, all sums by way of fees, dues, or charges lawfully received or collected at the Perth Branch shall be from time to time accounted for and paid over by the deputy master, or other proper officer of the said Branch, to the said Colonial Treasurer, to be by him paid into the Consolidated Revenue Fund of the Colony.

13. In reply, the Deputy Master was informed that it is considered that the premium is not a 'fee, due or charge' within the meaning of the Perth Mint Act 1895, but is merely an additional charge for gold sold for and on behalf of the Commonwealth Treasury.
14. The Deputy Master then submitted the question to the Crown Solicitor of Western Australia. The following is a copy of the case submitted to the Crown Solicitor, and of his opinion:

Royal Mint, Perth, W.A. 15.5.20

Commonwealth Treasury raises question whether gold is being obtained from the Mints for purposes not legitimate.

Deputy Master replies (11.12.19) that a premium might be charged on gold sold so as to discourage smuggling out of Australia.

25.3.20: Commonwealth Treasury requests charge of £1 per ounce as premium on gold sold to jewellers etc.

Various requests from time to time as to alteration of premium.

16.4.20: Commonwealth Treasury asks that sum received as premium on gold be

paid to the Commonwealth Sub-Treasury, Perth.

24.2.20: Deputy Master suggests that proposal to pay premium to Commonwealth may be contrary to Perth Mint Act, and requests legal opinion supporting the proposal.

5.5.20: Commonwealth Treasury says that no legal opinion in favour of proposal has been obtained but that the Melbourne and Sydney Mints have agreed to pay the premium to the Commonwealth.

13.5.20: Deputy Master intimates that he will refer to the Law Officers of the State for advice.

Gold bullion required by jewellers and others having since March 1920 been sold by the Perth Branch of the Royal Mint at £3.17.10 1 /2 per ounce plus a rate of premium which has varied in amount from time to time.

The Commonwealth Treasury requests that the sum received as premium should be paid to the Commonwealth Sub-Treasury, Perth.

Question submitted is: Whether in view of the Perth Mint Act and the Royal Proclamations, the sum in question is payable to the Commonwealth or the State?

Deputy Master.

I think the profit should go to the State.


(signed) F.L.Stow Crown Solicitor.

15. In advising the Treasury of the opinion referred to, the Deputy Master suggests that further correspondence, if any, on this subject, should be addressed by the legal advisers of the Commonwealth to the Crown Solicitor of Western Australia.
16. I shall be glad therefore if you will kindly consider the facts detailed and if you are of opinion that the position taken up by the Treasury is correct, it is requested that you enter into communication with the Crown Solicitor of Western Australia.

The questions for determination appear to be:

1. Is the bullion purchased by the Perth Mint held by the Mint for the Commonwealth? and
2. Do all moneys received for the sale of such bullion belong to the Commonwealth?

The terms of the arrangement entered into between the Commonwealth and the Perth Branch of the Royal Mint appear to be those set out in the Prime Minister's letter to the Governor-General, dated 1 September 1916, as modified by the terms of the minute of 19 September 1916, from the Secretary to the Prime Minister's Department to the Official Secretary to the Governor-General.

Those terms are as follows:

1. Gold bullion deposited is to be paid for by cheque drawn on an account to be opened for the Deputy Master by the Commonwealth Treasurer at the Commonwealth Bank;
2. Such cheques are to be signed by two Mint officers nominated by the Deputy Master, who will cause specimen signatures to be deposited with Bank;
3. Application is to be made by the Deputy Master from time to time to Commonwealth Treasurer for funds required to keep bank account in credit and an overdraft is not to be incurred;
4. Sovereigns produced from the bullion are to be handed to the Commonwealth Bank, which will be custodian thereof for the Commonwealth Treasurer, and will credit Commonwealth Mint Account with amounts equal to value of sovereigns received for the Commonwealth Treasury.

The agreement of the Deputy Master of the Perth Branch of the Royal Mint to the arrangement was notified to the Commonwealth in a letter, dated 23 September 1916, from the Governor of Western Australia to the Governor-General.

On 18 August 1916, a telegram in the following terms was dispatched to the Deputy Master:

Treasurer approves your selling to manufacturing jewellers at £3.17.10 1/2 per ounce standard portion of gold bullion lodged for conversion into sovereigns. Please pay proceeds into Commonwealth Mint Account at Commonwealth Bank.

The Deputy Master does not appear to have replied to that telegram, but appears to have acted in accordance with the terms thereof.

On 20 March 1920, the Deputy Master was requested to arrange that a premium of £1 per standard ounce be charged on gold sold to manufacturing jewellers and others, and to credit premiums to a separate account. No reply appears to have been made to that request, but it appears to have been complied with.

On 16 April 1920, however, the Deputy Master was requested to pay, at the close of each quarter, commencing on 30 June 1920, to the Commonwealth Sub-Treasury, Perth, the total amount of premiums collected during the quarter. The Deputy Master replied that he was unable to comply with that request as he considered he was bound by section 4 of the Perth Mint Act 1895 to pay the amount of the premiums into the Consolidated Revenue Fund of the State (letters dated 24 April and 13 May 1920).

In this view he was supported by the opinion of the State Crown Solicitor. Paragraphs 3 and 4 of the Deputy Master's letter of 13 May are as follows:

I agree that if the gold was sold for and on behalf of the Commonwealth Treasury the amount of premium might be payable to you, but I do not find in the correspondence any conclusive statement that the gold deposited at the Mint belongs to the Commonwealth. The Commonwealth claimed and obtained possession of the gold currency issued by the Mint, but that in my opinion is a different matter altogether.

Your references to the Commonwealth Mint Account in paragraph 4 of your letter are not understood. The whole of the proceeds from the sale of gold and silver bullion are paid into the Commonwealth Mint Account, but I am unable to see how this affects the question. Amounts in this account which are indisputably due to the revenue of the State are drawn and paid to the Colonial Treasurer. The premium on gold may or may not be due to the Colonial Treasurer.

I am unable to agree with the contentions of the Deputy Master.

Under the arrangement made between the Commonwealth and the Deputy Master the Commonwealth is, in my opinion, entitled unless it otherwise directs, to receive in sovereigns the whole of the bullion purchased by the Mint. The Deputy Master has no right to sell any gold purchased in pursuance of the arrangement unless authorised by the Commonwealth to do so; and if so authorised he holds the proceeds of the sale for and on behalf of the Commonwealth. Thus if the Commonwealth fixes the price at which gold may be sold to manufacturing jewellers and others, the excess of the price so fixed over the standard gold price cannot, I think, be deemed to be a fee, due or charge within the meaning of section 4 of the Perth Mint Act 1895.

In my opinion therefore—

1. the bullion purchased by the Deputy Master under the arrangement is held by him for the Commonwealth to be dealt with in accordance with the arrangement or as directed by the Commonwealth; and
2. any moneys received by the Deputy Master for the sale of such bullion should be dealt with by him as directed by the Commonwealth.

[Vol. 17, p.106A]