PRICE OF GOLD

Evening Post, Volume CXXXIX, Issue 136, 11 June 1945, Page 3

PRICE OF GOLD

VITAL ROLE IN WAR MACHINE

LONDON, June 9.

The Treasury has announced that the price at which gold will be bought in London and in any part of the sterling area has been advanced by 4s 3d a fine ounce to 172s 3d. The announcement adds that the increase has no bearing en any question of exchange policy or exchange rates. The Associated Press financial writer says that the upward revision of Treasury's buying price for gold in London or for delivery at any pprt in the sterling area should not be regarded as merely a post-VE Day bonus for Empire gold producers, however welcome it may be to those on the marginal line. It is a footnote of historical interest and economic importance to the recent story of gold as a sinew of war. The time has not yet come properly to appraise the contribution made by gold to the Allies' warwaging capacity in cash and-earry before lend-lease.

It is no longer a secret that Britain had scraped the bottom of the barrel when lend-lease completely altered the munitions supply outlook. When Britain and the Empire stood alone tha gold in London was worse than useless in the face of the threat of enemy invasion. Virtually the entire gold stock was moved from London. At one moment there was £150,000,000 to £200,000,000 worth of gold on the sea; £1,000,000,000 worth was temporarilystored at various1 naval bases and elsewhere and moved during the war to destinations, for conversion into munitions or payment for other vital.needs. Naval vessels from corvettes upward played their part in the transport of gold, while the "Queen" liners added, to their wartime achievements bycarrying fantastic quantities. How successfully the job 'was done is shown by authoritative . estimates that the total loss in transit was £500,000,. or Is a £100 sterling. The salvage of all-but £80,000 sterling from the £2,000,000 sunk in the Niagara made a useful contribution.

The light now thrown on gold's vital role in feeding the Allied^war machine, particularly in the early 'critical period, has prompted much discussion in London financial circles of its importance. Wartime experience, 'reinforcing previous lessons, carries its own moral, which London financial circles think will not1 b« > without effect on Bretton Woods or similar machinery. There is-no question of restoring the free ~gol<i market in London or gold arbitag* facilities. The revised price amount* to the passing on. of savings in., costs, of shipping and insurance to Empire producers.