INDIA'S HEAP OF GOLD

King Country Chronicle, Volume XXVI, Issue 3447, 24 March 1932, Page 2 (Supplement)

INDIA'S HEAP OF GOLD

W.ILL. IT BE DISGORGED ?

ACCUMULATIONS OF A CENTURY.

All down the ages India has been a sink for the precious metals, but few of us recognise how enormous her accumulations of gold have been during the course of the present century. Fortunately, the figures of this movement have been collected and set out by Mr Joseph Kitchin, a wellknown authority on gold production and consumption, in a paper read by him to the Royal Institute of International Affairs in February, 1930, and published by it in a volume entitled "The International Gold Problem." From a table appended to the paper we learn that from 1835 to 1889 India's net imports of gold, added to her own production of the metal, amounted to £134,000,000, which was increased from 1890 to 1899 by £27,600,000. After that the pace quickened, owing to the country's growing prosperity, as will be seen from the record of the following fiveyear periods:— 1900-4 £31.4 millions 1905-9 - 50.2 millions 1910-14 95.7 millions 1915-19 50.5 millions 1920-24 103.6 millions 1925-29 90.9 millions

This gives a total of £584,000,000 and we can bring the record up to date with about £12,000,000 imported in 1930, and in the first three-quarters of 1931, making £596,000,000 in all. But this is not quite the whole story; for Mr Kitchin omitted from his figures an amount, estimated at sums ranging up to £20.000,000. illicitly imported into India in 1920, at a time when South African exports were prohibited, except under license, and Indian imports were restricted. £600,000,000 WORTH.

Here, then, we have the enormous total of over £600,000,000 worth of gold absorbed during less than a century by a comparatively poor country, and used, in Mr Kitchin's opinion, chiefly in the form of jewellery and ornaments, ear-rings, nose-rings, bracelets, and toe-rings, or anything which a woman can place on her body. He considers it a mistake to suppose that India takes large amounts for hoarding, though he admits that some of the princes have very large hoards. Here, then, we see a ready made goldfield, with no trouble, expense and delay involved by mining and refining, with a mass of gold in it equal to more than seven years' total production of the metal, which has lately been running at a rate of about £83,500,000 a year. Is this goldfield going ito flood the bullion market, relieve all fears of immediate gold scarcity, and increase the embarrassments of those countries that are still on the gold standard? RUSH TO EXPORT.

It has made a beginning sufficiently substantial to indicate great possibilities. Since the pound, and with it the rupee, were released from the gold standard, gold that used to be priced at, roughly, 85s per ounce, now fetches prices ranging in the neighbourhood of 120 s. Poverty and depression being as rife in India as in most other countries, the temptation to its inhabitants to turn hoards and ornaments into rupees is strong, and has led in the last three months of 1931 to the export of more than £24,000,000 of gold. As to whether, and how far, the movement will continue, opinion is divided. There is said to be a pause in it at the moment, though even on that point there is doubt. Those who question its continuance point to the conservative habits of the Peninsula's inhabitants, the big margins demanded by dealers,, and the difficulty of finding a fiorm of investment, agreeable to their_ sentiments and prejudices, for those who part With their gold. Those who expect the movement to continue argue that the pressure of hard times, and the handsome profit to be gained, will win the day. ' In the meantime the sums shipped provide India with a timely aid in remitting to meet her sterling obligations and help to support the exchange value of the pound. If they grow to really great amounts, and, if, as is possible, the Indian sellers replace a considerable part of them with purchases of silver, the effect on world trade and the general price level may be striking and beneficial. j