GOLD RESERVES.

Auckland Star, Volume LXIV, Issue 257, 31 October 1933, Page 11

GOLD RESERVES.

'.As'a practical dealer in gold and currency the self assurance with which Mr. J. T. Grose, of the Associated Banks, states that what is sauce for, the public of New Zealand should not be expected to be considered sauce, for the banks, leaves me almost speechless with astonishment. I refer to his statement that the Associated , Banks have attempted to obtain a premium on their gold reserves from the Government. The cold fact ip, that if the Government had not passed legislation allowing the Associated Banks to repudiate the contract expressed on their paper currency they would not have any gold to ask a premium on. I do not pretend to know anything of banking or high flanance, but I do know quite a lot about practical currency and its effect on the common herd. I know that Government legislation has forced the unfortunate "hard hit by the depression" public to place thousands of sovereigns in the banks for par value, when, if it had not been for the existing legislation, they could have received within a few per cent of true value from private dealers. The public have been forced to take their share of the depression depreciation, and it will be nothing short of a scandal if the banks are allowed to make any profit by it. Who has paid to enforce the prohibition on the export of sovereigns? And who will profit by the English silver (or what is left of it), worth approximately 25 per cent more than the Associated Bank's depreciated pound notes? Practical currency in New Zealand is such a farce that I make no apology for being knocked speechless by it. Possibly the general silence on the subject so obviously needing rational attention is accounted for by the general public being affected in the same way as I am, but it's high time that somebody made a move. The farce of trying to prohibit the export of silver instead of converting it, and applying the profits to unemployment must have cost the Dominion tens of thousands, and benefited Australia at our expense a like amount. Mr. Grose says the banks "held the gold as their property." This is••• a misrepresentation of fact. The biggest proportion of the gold is the property of the depositors of the Associated Banks, held purely and simply by the Government legislation allowing the banks to pay. in their depreciated pound notes, instead of gold. If this protection was withdrawn to-morrow every sane depositor would draw this money and turn it into gold, and obtain the true value for himself, and the'banks would have lHtty or no gold to bargain for. It is other people's money they av.e asking a profit on, not their own. F. HAMILTON.