THE GOLD STANDARD

Ashburton Guardian, Volume XLV, Issue 10385, 2 May 1925, Page 5

THE GOLD STANDARD

AN AUSTRALIAN VIEW.

RESOURCES OF THE EMPIRE. LITTLE PRICE FLUCTUATION. (Per Press Association—Copyright.) (Received This Day, 9.45 a.m.) SYDNEY, This Day. Dr. Earl Page, Federal Treasurer, interviewed, said the return to the gold basis was another testimony to tlie financial strength and resources of the Empire. The return to the free export of gold must have a great influence in establishing exchange. It would be interesting to note its ettect on prices, especially in view of the tact that during the last few months the Australian pound had been at a premium in America. Consequently the return to a gold basis should not cause much fluctuation in price levels. THE NEW EXCHANGE RATES. AUSTRALIAN BANKERS CONFER. Australian bankers conferred with the object of fixing a new exchange rate owing to the altered conditions caused by the return to the gold standard, but failed to reach an agreement. It is understood the chief difficulty is to arrive at a margin for buying and selling satisfactory to all parties. It is believed an agreement shortly will be reached. MOVEMENTS OF SPECIE. PURCHASES FROM LONDON. LONDON, May 1.. Great interest has been aroused in the first gold movements recorded by the Bank of England since 1916. Bullion purchased amounted to £297,000, plus sovereigns, £IOO,OOO. The destinations were Switzerland, Holland, India, and Egypt. The first-mentioned took £291,000 in bars and coins for the purpose of strengthening the gold reserve of the Swiss National Bank. India took 87,000 sovereigns. DOLLAR ALMOST AT PAR. (Received This Day, 10 a.m.) NEW YORK, May 1. The sterling is now quoted at 4 dollars 84| cents, compared with par of 4.866. ADVANTAGE TO NEW ZEALAND. VIEWS OF ASHBURTON MEN. That reversion to the gold standard will be of advantage to New Zealand was emphasised by an Ashburton exporter of primary products, and two bankers, to-day. The exporter stated that the return to a gold basis was of considerable importance to primary producers, and would make for more stabilised business. The rate of exchange, which up till the present had been a very heavy handicap to the exporters of the Dominion, was likely to fall considerably. The rate at present was £4 per £IOO onu a 06-days' draft on London, and this amount had to come out of the exportable product. The rise in the dollar exchange rate would cause a fall in prices, particularly in American products. . . Time was required for arriving at a decision as to when the new exchange would operate, stated one or the bankers. Only two of the banks operating in New Zealand were controlled from Wellington, the rest from Australia or London. Advice would have to be awaited from the head offices. There would certainly be a fall in the rate, but as regards the\ decline between New Zealand and Australia, he did not think it would amount to more than 10s per cent. He considered the " Sydney . Morning Herald's'' estimate of £2 per cent, for shipping gold was high. Notes were legal tender in the Dominion until January 10. 1926. It remained to be =een whether the Government would repeal this Act or allow the time to run its full course. In any case, he did not believe the gold standard was intended to be acted upon internally. "The matter which affects Ashburfmv most is the exchange rate on London," said another prominent hanker. "I do not think there will be a great fall in this. Even if free export came into force, it is not expected there will be large transhipments of gold from London. It is questionable whether we in the Dominion want large stocks of o-old, for these may become a nuisance, as America has found. The benefit of the easing of the exchange rates will he mure indirect than direct, and will show itself in a gradmrl steadying of finances throughout the civilised world."