Gold for Central Bank

Dominion, Volume 27, Issue 70, 15 December 1933, Page 13

Gold for Central Bank

Sir, —There seems little doubt from Mr. W. S. Wilson’s letter in your issue o£ December 13 that he does not fully appreciate or understand the position affecting the banks’ gold. He says: “First of all the gold belongs to the people who were not allowed to use it owing to Government proclamation.” Generally speaking, people who are not acknowledged experts on the subject they may be discussing cannot safely be dogmatic, and it would have been more appropriate tor Mr. Wilson to have said that the view he expressed was his opinion—and then it would have been a case of his opinion against that of such experts as Sir Francis Bell, who, after full and careful consideration of the question, stated unequivocally that “in law and in fact the gold is the absolute property of the banks, and the State has not and never bad any right or title to any part of it-” . Mr. Wilson writes as if he is under the impression that all the gold to be taken over will or may be made available to the Reserve Bank as a backing for note issues. He is now informed that no question or objection has been raised, by those concerned, as to that portion of the value of the gold which will be made available to the Reserve Bank that is, the face value of the gold. The portion of the value of the gold to which the banks’ protests refer represents the premium on their gold——which it is the intention of the Government to take from the banks without recomyense. This amount is to be credited to the Public Account. . . Does Mr. Wilson really imagine that this way of “getting things done” will strengthen public confidence in the permanence and security of their economic life? —I am, etc., PERTINAX. Wellington, December 14.