GOLD SHIPMENT.

Auckland Star, Volume LXI, Issue 33, 8 February 1930, Page 9

GOLD SHIPMENT.

BUILDING RESERVES. > Australia Sending £7,000,000 to London. MEETING OBLIGATIONS. I (United P.A.—Electric Telegraph—Copyright) SYDNEY, February 7. Sir Robert Gibson, chairman of the i Commonwealth Bank, announced t to-day that the bank is shipping £7,000,000 in gold to London immedij ately, for the purpose of building up reserves to meet overseas obligations. This amount, together with £10,000,1 000 in gold shipped' overseas since ' July, makes £17,000,000 in gold ship- ; ments. I Sir Robert pointed out that these ship- ; ments in no way impaired the gold [ reserves held against the note issue, ; which to-day stood at 43 per cent. i The board of the_ bank was carefully watching the position, and, if the national needs demanded, further shipments of gold could be provided, and still leave the gold reserve against the note issue unimpaired. The whole movement was directed to meeting accrued or accruing obligations. Sir Robert Gibson emphasised that Australia was sound, and would overcome her present difficulties. Australia's abnormal prosperity had led to extravagance, but those responsible for the country's stability were co-operating in this direction, and he had every confidence that the position would right itself. The great disparity on the London stock market between Australian securities and those of the other Dominions was not justified, and those who had the courage to purchase Australian securities at the market values of to-day would probably have reason to congratulate themselves later. Meantime it was necessary that imports should be kept down to the minimum until the position was completely adjusted. ECONOMY AXE. Federal Loan Council Makes Drastic Cuts. LUXURY SCHEMES DROPPED. (Received 11 a.m.) SYDNEY, this day. . The Loan Council meeting at Canberra agreed to further drastic reductions in the loan expenditure by the Commonwealth and States. Members will report to their respective Governments and meet again in a fortnight. The States originally.planned to borrow £43,000,000. This is already cut by 30 per cent and now the economy axe chops it down to about £25,000,000. All luxury schemes are to be abandoned and Mr. E. G. Theodore, Federal Treasurer, insists that a rigid self-imposed discipline will have a tremendously good result in the eyes of the overseas investors. The council endorsed Mr. Scullin's assurances that Australia will promptly and regularly meet her obligations. A PESSIMIST. I LITTLE HOPE OF LOAN. (Received 1.30 p.m.) LONDON, February 7. Australian exchange promises to remain precarious until the next export season, says a newspaper writer. Failing further borrowing in London or New York more gold shipments will be almost essential to prevent drastic depreciation of the Australian pound. It is difficult to foresee the successful issue of an Australian loan in London, and short term borrowing will merely postpone the evil day. SECURITIES FIRMER. WELCOME REASSURANCES. LONDON, February 7. The newspapers give prominence to the statements made by Mr. J. H. Scullin and Mr. E. G. Theodore at Canberra regarding Australia's financial position. The "Morning Post's" financial writer states that the reassurances regarding the security of the Australian loan aiid exchange position caused Australian securities to become distinctly firmer. Both Australian and Indian stocks became as difficult to buy at the quoted prices as they had been difficult to sell previously.