THE MONEY MARKET.

Auckland Star, Volume LX, Issue 200, 24 August 1929, Page 4

THE MONEY MARKET.

GOLD FROM AUSTRALIA

(Received 11 a.m.)

MELBOURNE, Friday.

Gold coin valued at a million sterling has been shipped to London by the Commonwealth Bank o£ Australia. It has been sold to the Bank of England, and will assist in building that bank's gold reserve, which has recently been steadily depleted by Continental powers. The '"Daily Express" says: "Gold from the Commonwealth Bank will certainly help to strengthen the Bank of England's position against autumn demands. On several occasions in the past the situation has been saved by the receipt of gold from unexpected sources. It seems as if it is happening again. The market is consequently more hopeful that an increase in the bank rate will be avoided."

AT THE OLD STAND

WORLD'S CHIEF BANKER

Discussing the outflow of gold from the Bank of England, the "Economist" of June 29,. said:— "The truth of the matter is that London is back- in its old position as a free gold market, and the world's banker. London is opeu to' supply gold' on demand, and circumstances at the moment are such as to induce other centres to ask for gold." The distinction referred to by the "Economist" is certainly accompanied by many problems. With speculation still disturbing monetary conditions in U.S.A., European finance still in. .the melting pot as long as the Reparations issue remains unsettled, and Britain's own industrial affairs in a difficult condition, the Governors of the Bank of England must be having a strenuous and anxious time. The following table shows the position of the bullion holding in recent monthly periods, together with the rate of exchange between London and New York: — Exhange rate Coin in hand. New York, £ London. February 21 ... 154,501,000 4.85 u /i» March 21 156,594,000 4.85J April 25 159,059,000 4.85 1 V 32 May 23 107,575,000 4.841 June 20 1G5.333,000 4.84-7ss J U I V 18 100,504,000 4.85V5 5 August 22 . ... 143,045~,000 ' 4.54"/ 3 ;

From the foregoing it will be seen that there has been an exceptional drain of gold from the bank, and since June the holding has been reduced by over £25,000,000. So far the bank has refrained from raising its rai,e as a protective measure. Some weeks ago London financial journals explained that the bank authorities looked upon the exodus of gold as being due to temporary causes, but as will be seen it still continues. Although the state ot sterling dollar exchange would permit ot the profitable export of gold from London to New York, (the outflow to that source had not at latest advices been great, and it is understood; the Reserve Bank authorities of U.S.A) have taken steps to discourage the import of gold from London.

LOW INTEREST RATES.

INVERCARGILL LOAN,

(By Telegraph.—Own Corresponderat.)

DUNEDIN, this day.

The Borough of Invercargill claims the distinction of being the first municipality in the Dominion to acquire a loan in recent years, at an interest rate of 5% per cent. The loan was for several thousands ot pounds. The transaction was put through in three days. It is considered particularly creditable, since it is understood that other and larger local bodies are paying 5& per cent. '."

THE CANADIAN DOLLAR.

(Australian Press Assn.—United Service.) (Received 10 a.m.) MONTREAL, August 23. The Canadian dollar is quoted to-day at 4.88 to the £ sterling.