THE GOLD STANDARD

New Zealand Herald, Volume LXIX, Issue 21377, 29 December 1932, Page 7

THE GOLD STANDARD

SOUTH AFRICA ACTS / SUSPENSION ANNOUNCED EXCHANGE PURCHASES (PROTECTING RESERVES CRISIS IN POLITICS ; By Telegraph—Press Asa,ociation—Copyright '/(Received December 29, 1.15 a.m.) CAPETOWN, Dec. 28 ■ The Government announcement to reUeve the, Reserve Bank of its obligation to redeem notes in gold was timed for midnight, but it was known in London early this afternoon. The official reason is the uncertainty resulting from the political situation leading to abnormal heavy purchases of exchange. In order to prevent a crisis of the first magnitude it was essential to take immediate steps to protect gold resources. Trade will feel an immediate benefit, as the maintenance of the gold standard was ' making the country bankrupt. It is expected that the export subsidies will be continued for a few months to meet commitments incurred. A political crisis may develop rapidly. Under, the terms of its statutory char- ! l er .the Beserve Bank of South Africa was given the sole right of note issue for 25 years on condition that its notes were redeemable on demand in gold at the office of-issue. According to . the latest ivailable return, notes in circulation on October 21 to £6,153,000. At that date the bank held £7,232,000 in gold coin and bullion. , . I—.—: ——- COMMENT IN LONDON advantageous to empire INCREASED MINES REVENUE (Received December 28, 9.45 p.m.) LONDON, Dec. 28 The South African gold decision is the eubject of much comment in the financial and editorial columns of the newspapers. It is taken to mean the first step to the abandonment of the gold standard, •which most writers suggest would be advanageous to the whole of the Empire. The Daily Express says that although South Africa, by remaining on tlie gold standard, saved £600,000 a year in interest on her £80,000,000 loans in London, her \vocl and fruit producers suffered serious losses.. If the South African pound comes to sterling level, the Rand gold mines revenue will probably be increased by '£20,000,000, of which half will probably >• be taken in taxation to meet the Budget deficit of £7,000,000.