Gold for Central Bank

Dominion, Volume 27, Issue 68, 13 December 1933, Page 11

Gold for Central Bank

Sir, —There seems to be a great amount of confused thinking on the above, subject, which should be plain to everybody. First of all the gold belongs to the people who were not allowed to use it owing to Government proclamation. The Government now decide to use this gold by creating what is to all intents and purposes a state bank, and may now seize the opportunity of putting money into circulation, using this gold for a backing, which was not taken adequate advantage of by the banks, when the gold was in their possession. . ~ _ The banks did not issue more than five millions of currency, which restriction contributed to the deflation which has adversely reacted on the whole community. This places the Government in a position to remove, to some extent, the adverse effects created by the policy of the banks, as the Government is allowed by international banking practice to issue, say, at least thirty million, pounds worth of currency against this amount of gold. ’■ ■ _ „ „ . ... The Rt. Hon. J. G. Coates gained in former years a reputation for getting things done; if he takes advantage of the power that is placed in his hands in this connection he will certainly add to that reputation. It appears to me that if Mr. Coates wisely uses the power placed in his hands, in the progressive development of this country, all classes of the community will be benefited, not excluding even the shareholders of the associated banks. —I am, etc., W. STUART WILSON. Wellington, December 9.