GOING !

Grey River Argus, 9 October 1934, Page 5

GOING !

N.Z. GOLD RESERVE Holding Half Million Less WELLINGTON. October 8 The Reserve Bank has begun tn get rid of its gold. A decrease of £500,000 in the value of the gold-hehl by the Bank at the close of business on Monday, October 1, compared with the figure on the previous Monday, September 24, is shown by tine latest statement of nsseits and liabilities gazetted. The transfer of gold from Hie trading banks, in terms of the Reserve Bank Act. was completed during the week ended September 10. The value of the holding as shown in the fret urn to that date was £4,351-727 in New Zealand currency. It remained at thix figure until the return which appealed last niglv', showing the position on October 1. when it had fallen to £3,851,727.

The authority by which the Reserve Bank obtained possession of the go d held by the trading banks is con,'aired in section 15. sub-sect ions 2. 3 and 4. of the Reserve Bank of New Zealand Act.

By a proclamation gazetted on July £f» (he banks wore given -three months from August 1 in which to trai sfer their gold. The rate at which they did and tho progressive n’se i« the gold holding of the Reserve pank

are shown bv the' fart that while on Julv 31 the trading banks’ gold valued at £4,351.724, it fell to zer o <»’> September 19, when the Reserve Bank bad the lot, and then on October 1 the Reserve Bank’s god had lost value to Hie extent of a half million, being £3.851.727

The Reserve B«nk is not bound to maintain a metallic reserve. Any gold coin or bullion in its possession i q

counted as part of the reserve- against its rote issue and other demand liabilities; but it ranks no higher +’.-» r that purpose than sterling exchange <>r gold exchange as defined in the Act. The majority report of the Monetary Committee, published Tecently recommended that the gold should be sold abroad and the profits made available to the Consolidated Fund. No announcement has been made about the disposal of the gold. Th“ natural market for it would bo London. The possibility that i’t has been shpped there is strengthened by Hie fact that the sterling exchange held by the bank has increased £605,909 compared with the figure in the previous statement. That is not eonchi sivo evi’dencc, however, for if tlm go’d had been disposed of elsewhere in Europe—France, for example—the transaction would have been cleared through London. Tf the sale has been in London of Europe, obviously tho gobi wias shipped some weeks ago, and Hie adjustment of the balance sheet now simnlv means that the transaction’ has been completed.