PRICE OF GOLD

New Zealand Herald, Volume LXXIII, Issue 22435, 3 June 1936, Page 9

PRICE OF GOLD

LOWEST FOR TWO YEARS CURRENCY DISTURBANCES EFFECT ON SHARE VALUES The price of gold in London is now at its lowest point since August, 1934, following a fairly consistent fall in the past month. A record price of £7 9s 4d a fine ounce was recorded on March 6, 1935, tho current rate being £6 19s 3d. The range of prices in the past four years is as follows: — Highest Lowest £Bd £ s d 1932 6 10 8 5 84 1033 0 14 8 5 18 0 1931 .. .. ..7 3 3 6 6 H 1035 7 9 4 6 10 91 1936 (to date) '..714 ■ 619 3 The recent crisis in the franc and the general weakness of the gold bloc currencies apparently have been responsible for the fall in the price of gold. The price of gold varies with the value of sterling in relation to currencies based on gold and it tends to rise when sterling is weaker and to fall when sterling appreciates. From recent cabled advice, it is now generally accepted that there will be a mild devaluation of the franc. What effect this will have on the price of gold is not clear at present. Devaluation of the franc may be a prelude to a stabilisation of currencies, in which case it is assumed that the new value of gold will be recognised and that it will be fixed about £7 sterling an ounce. The future of gold is of considerable importance to the mining industry, as the high price in recent years has stimulated production and given rise to the flotation of many new producers. Several of these new ventures obviously could not continue if gold declined to any extent. At present gold shares arc dufl, a reflection of tho drop in the price of the metal.

SUPPLIES OF MILK DISTRIBUTION IN ENGLAND BLOW TO CHEESE INDUSTRY Criticism of the methods adopted by the Milk Marketing Board in England In regulating supplies to factories and the consequent blow to the home cheese industry was levelled by Mr. G. T. Barhani, chairman of directors of the Express Dairy Company, Limited, at the annual meeting in London last month. In his opinion, the cheese industry should have been subsidised, while the board should have retained the principle of buying milk on a minimum and maximum basis. "The main disagreement with the board has always been that we think they were wrong at the beginning in encouraging unlimited production of milk, with a total disregard for the surplus likely to accrue," continued Mr. Barham. This they did by allowing farmers to market just as much milk as they liked to produce. "At the inception of the scheme, the board apparently overlooked the possible effect on the home cheese industry, with a result that several hundreds of farmers, who had been making cheese for generations, discontinued doing so, and either sent their milk into the nearest factory or availed themselves of a market that enabled them to obtain the same price as a liquid milk sender," added Mr. Barham. "They thereby obtained a price several pence a gallon above what they really needed to keep them on their feet. • "The board endeavoured to put this right in their next contract by creating a subsidy, which should have been done in the 'first instance. As a result, irreparable damage has been done to a home industry, and I doubt whether farmhouse cheese-making will ever come into its own again. This is a great pity, especially when so many attempts are being made to revive home industries."

SELFRIDGES NEW ISSUE To provide for the expansion of business Selfridge's (Australasia), Limited, a Sydney chain store company, is issuing 41,131 additional £1 shares, thereby increasing paid capital to £IBO,OOO. It is intended eventually to extend operations outside New South Wales.