GOLD VALUATION

Evening Star, Issue 23352, 23 August 1939, Page 7

GOLD VALUATION

GUARANTEED PRICE URGED PETITION BEING CIRCULATED WHAT WOULD BE A SATISFACTORY RATE ? That if the price of gold was pegged at a satisfactory level in New Zealand activity in mining and related industries would increase is claimed by the sponsors of a petition now being circulated which prays the Government to guarantee a fixed valuation. Not only would mining benefit, but it is claimed that finance generally would be more stabilised, while employment in the heavy industries and related transport operations would reflect revived confidence. The petition will be presented to Parliament. “We pray,” the petition states, “ that the guaranteed price per ounce of fine gold shall be not less than the equivalent of what a free consignment of gold (ignoring shipping and export charges) would command in New Zealand currency. This price we now consider should be £lO 4s 4d. as shown below:— £ s. d. London price an ounce fine gold 7 8 7 Add statutory exchange, 25 per cent. 1 17 2 Add extra exchange as shown by price of representative stocks, 10 per cent 0 18 7 Actual value of gold in New Zealand currency to-day £lO 4 4

“ Your petitioners contend that as New Zealand lias a Reserve Bank of its own the mining industry should not bo charged with the cost of shipping gold to London, but that such charges should fall on the Reserve Bank if and when it exports the gold it buys.

“ We further contend that this exporting industry is harshly singled out for an export tax, which undoubtedly falls heavily on the marginal claims, and prevents many now enterprises being undertaken.”

ESTIMATED PRICE QUESTIONED. Mining men this morning claimed that the above valuation of £lO 4s 4d an ounce is open to question. In the first place the additional exchange of 10 per cent is not allowed at present, because there is no free market for the metal in New Zealand, while the gold export duty of 12s 6d an ounce and standing charges, such as insurance, shipping, and smelting have not been allowed for

Gold as shown above is a lino ounce, but alluvial gold won by dredging and sluicing concerns in Otago assays an

average of only 96 per cent, purity. Some companies regularly wa.sh-up au assay of 98 per cent., but other concerns fall as low as 95 per cent. It was contended that a more correct valuation of the New Zealand price of gold would be between £8 4s-£B_Bs. Estimating the London price at £7 8s 7d, exchange to be added in practice is about £1 15s 4d an mince, but off that has to be deducted export duty of 12s 6d and standing charges of 3s 6d an ounce.

“ Although the petition may be welcomed by the Government,” said one raining man, “ the consistent failure of petitions asking for the removal of the export duty does not augur favourably. If the price of gold could be stabilised at a satisfactory level, whatever that will be, it would be of considerable benefit to the industry.”