PREMIUM ON GOLD.

New Zealand Herald, Volume LXVII, Issue 20537, 11 April 1930, Page 7

PREMIUM ON GOLD.

RATE IN AUSTRALIA.

STIMULATING PRODUCTION.

[HV TELEGRAPH. —OWV COT!RESPONDENT. ]

WELLINTJTON. Thursday,

Gold in Australia, is worth £5 5s per cent, more than the ruling rate. This is owing lo tho adverse exchange rale. The chairman of (he New Zealand Associated Banks announced yesterday (hat be had received Ibe following letter, dated March 28, from the Royal Mini, Melbourne "1 have Hie. honour to advise that in accordance with arrangements made by tho Commonwealth Bank, a premium on newly-won gold deposited at Iho mint for sale to Iho Commonwealth Bank is at present being paid at the rate, of £5 5s per cent. This rate is subject lo variation from lime lo lime according to the ruling selling rale for telegraphic transfer lo Australia on Jyindon, jess the estimated total costs of shipment to London, namely, about 25s per cent. It, is hoped that the premium on gold now payable in Aus--tralia will be sufficient to induce iucroased consignments to this branch."

Apparently these arrangements have beeq made by the Royal Mint, Melbourne, with the Commonwealth Bank with tho object of increasing the production of gold in Australia. It would appear that the ultimate object is lo assist to adjust the present adverse exchange rate and trado balance against Australia, by exporting gold to London. At present the selling rate for telegraphic transfer from Australia on. London is £6 10s per cent., which is oqnnl to a. premium on gold of £5 5s per cent, payable by the Commonwealth Bank, plus 25s per cent., the cost of .shipment, to London. In the event of the telegraphic, transfer rale advancing, say, to £7 per cent., the premium on gold bought by the Commonwealth Bank would then be, £5 15s per cent. Conversely, if the rate were lowered to ,C 5 10s per cent., (lie premium on gold would be decreased to £4 6s per cent.

AMERICAN WHEAT CROP