GOLD RESERVES

Dominion, Volume 24, Issue 66, 11 December 1930, Page 11

GOLD RESERVES

Anglo-American Move

HOPE OF AGREEMENT France’s Sound Position (Rec. December 10, 9 p.m.) British Wireless Rugby, December 9. Considerable attention is being paid in business circles both in London and New York to the hope expressed by the President f the Board of Trade, Mr. William Graham, that American and British financial authorities will be able to arrive at an agreement as to the use of gold reserves, which will provide, on a sound basis, a great credit structure, and so minister to common recovery. “That necessarily depends on the central banks,” says Mr. Graham, “but the British Government is alive to the difficulties of the situation.” The city editor of “The Times” discourages tiie view that an event of importance is impending, and although rumours were current in New York yesterday the Federal Reserve Board remained silent. New York Reports. New York bankers are reported as having declared that they saw no hope of any distribution of gold through the capital market until the political conditions of Europe are more stable.. "The Times” points out that America holds about one-half the world’s gold stock, acquired in a perfectly legitimate way. “This will not be reduced unless her trade balance becomes an adverse one, which would compel her to export gold for payment, or if she embarks upon an active foreign lending policy which would give borrowers the right to draw gold from America. “America has in part largely increased her foreign lendings this year compared with last year, but this has made very little difference to her gold stock, which is nearly £30,000,000 higher than it was a year ago. She has lent relatively little to Europe, probably because there Is a dearth of really good borrowers. France, Not America. Britain, being more adventurous in foreign finance and having more vested interests concerned in lending money abroad, has been careful, but much of her lending has proved unwise. France and not America has been the principal taker of gold in the world market since the spring of 1927, and she has ample gold reserves with which to undertake a large foreign business if she desired. But American finance does not feel the necessary confidence in foreign borrowers.