RETURN TO GOLD BASIS.

New Zealand Herald, Volume LXII, Issue 19008, 4 May 1925, Page 9

RETURN TO GOLD BASIS.

SHIPMENTS FROM LONDON* / • •' / * PUZZLE AS TO DESTINATION. AUSTRALIAN EXCHANGE RATES, * By Telecraph—Press Association—Copyright. (Received 6.5 p.m.) A. and N.Z. LONDON, May 2. City experts are puzzled as to the destination of yesterday's shipments of gold, which has not been announced. The financial correspondent of tha Daily Telegraph says: "Yesterday's gold movement from the Bank of England totalled £414,000, and there was an offset in a small purchase of bars valued at £IO,OOO. Rumour associated Australia with one of the purchases. It i 3 true that it pays to send gold to Australia, but there was some doubt on the market whether the Australian banks had yet intervened. There is no doubt, however, that a small amount went to New York, with further shipments to Holland and Switzerland." The Financial News, in commenting on a report from Melbourne to the effect I that the Associated Batiks of Australia are considering a revision of the exchange rates, recalls the remark of tha Chancellor of the Exchequer, Mr. Winston Churchill, during his Budget speech, that so far as the Empire was concerned there would be unity of action. The paper says: "If there is no arrangement with Australia and the other Dominions not to encroach upon the gold reserves, unity of action is certainly not complete." The article points out that Australian sterling is at present at a large premium over British sterling. This,' without doubt, constitutes a menace to Britain's gold reserves, it says, as the shipment of gold from London to Australia will, roughly, cost only 33s per cent. This is cheaper than shipping gold from America. The inference is that, unless the premium, on Australian sterling over British ster- • ling comes down to such a point as to make it unprofitable to ship gold, almost undoubtedly such shipments will taka jplace out of Britain's reserves. FINANCES OF EMPIRE. POSITION IN AUSTRALIA. STABILISATION OF EXCHANGE. A. and N.Z. SYDNEY. May 2. The Federal Treasurer, I)r. Earle Page, in an interview, said the return to a gold basis was another testimony to the financial srength and resources of the Empire. The return to a free export of gold must have a great influence in stabilising exchange. It would be interesting to see its effect on prices, said Dr. Page, in view of tho fact that during the last few months the Australian pound has been at a premium in America. As a result of this the return to a gold basis should not cause much fluctuation in price levels.