GOLD RESERVES.

Auckland Star, Volume LXX, Issue 78, 3 April 1939, Page 6

GOLD RESERVES.

USE IN EMERGENCY,

SIR COLIN FRASER'S VIEWS

The view that special efforts should be made by the Australian Government to acquire and hold as far as practicable geld won in the Commonwealth to establish a reserve for an emergency was advanced by Sir Colin Fraser, president of the Australian Mines and Metals Association, at the annual meeting last week.

Sir Colin said it was interesting to note that, in a world in which restrictions against the purchase and holding of gold were widespread and in which nearly every Government was doing its utmost to prevent private ownership and higher prices of the metal, the price rose again last year and, expressed in sterling, actually reached a record price. In numerous commodity markets restrictions on production wore being imposed in order to maintain prices, whereas in gold restrictions were being rigidly enforced against private consumption in order to keep the price down.

Where there were restrictions on use there could not be an oversupply against real demand. In many countries the greater part of the much-advertised stocks of gold held by Governments and central banks would disappear overnight into private hands if the credits and currencies nowadays created in such prodigious amounts and in many cases with such little consideration for facts were made convertible into gold.

Sir Colin quoted the following extract from a German semi-official publication of recent date:—" ... the possession (by Germany) of a supply of gold available for disposal without reference to overriding cover requirements once more proved its value during the month of European crisis, when an extra volume of urgently required imports was paid for by exports of gold. . . ."

"This prompt? the question.'* lie added, " 'What is Australia's gold reserve for an emergency?' ' Whether we should, from our production resources commence to establish such a reserve is a question demanding serious consideration,"