SHIPPING GOLD TO LONDON.

New Zealand Herald, Volume LXVIII, Issue 20901, 17 June 1931, Page 9

SHIPPING GOLD TO LONDON.

MEETING TREASURY BILLS. NEW MEASURE AT CANBERRA. LIMIT OF £5,000,000. By Telcfrrnph—Press Association —Copy rich 1 (Received Juno 10. 8.15 p.m.) MELBOURNE, Juno 10. Tho Commonwealth Government has decided to introduce legislation authorising the'shipment of £5,000,000 in gold to meet the Treasury bills which mature in London at the end of dune. The new bill proposes to authorise the shipment of upwards of £5,000,000 of gold. It differs from the previous one rejected by the Senate, which gave the Federal Treasurer power to ship the whole gold reserve if he thought fit.

Attention has recently been concentrated upon the internal indebtedness of Australia, but tho expedients proposed for it, do not dispose of the problem of imminent liabilities abroad. There is the floating indebtedness in London, recently stated to be. £38,000,000; this includes £5,000,000 due to the Westminster Bank on March 31 and extended to September 30, while on .lime 30 I hero will tall due £5,000.000 of Treasury bills in respect oi which no official statement has been made since the Senate rejected the proposal to export gold. Commenting on the situation recently, tho Financial News said:— Sooner or later Australia must fund its floating indebtedness in London, and in just -16 months' timo will have to deal with tho 5J per cent. New South Wales loan, amounting to closo upon £13.000,000, which matures on November 1, 1932. In the following year nearly £10,000.000 will fall duo in London, also on New South Wales account. The internal problem is less pressing than the external. To deal with the latter, Australia must regain the confidence of tlio London market. When some genuine attempt is made to put her house in order, Australia will not find tho London market unsympathetic. Under the previous legislation the Government proposed to take possession of Ihe whole of the Commonwealth Hank's gold reserve, about £15.000.000, with a view to its shipment abroad to meet commitments. Attention was directed paiticularlv to tho liability under the Treasury bills, issued in the open market, and maturing on June 30, the 1 rime Minister declaring that the alternative to'shipment of gold was default. Complementary to the provision to deprive, the bank of its gold was a. provision imposing an arbifrarv limit upon the note issue of £60,000,000. When tho bill was before the Senate, it took tho unusual course of requesting Sir Robert Gibson, chairman of tho bank, to attend for the purpose of giving evidence. After hearing him, the Senate, on May 13. rejected tho bill by 21 votes to 4. During his evidence. Sir Robert Gibson said the Westminster Bank had agreed to accept bills flue in September for tho £5.000,000 owing to it. This amount comprises liabilities of three Stales —New South Wales. £2,950,000; Victoria, £1.382,000 and Western Australia, £668,000. According to the latest return, the Commonwealth Bank now holds £15,226,529 in gold coin and bullion, while tho notes issued amount to £50,653.426. tho ratio of gold to notes being 30.06 per cent. Reduction of the gold to £10,226,000 would, under the existing statutory requirement of a gold cover ot 25 per cent., involve a reduction in the note issue by £9,747,000.