RESERVE BANK GOLD

New Zealand Herald, Volume LXXVI, Issue 23272, 15 February 1939, Page 9

RESERVE BANK GOLD

BASIS OF VALUE WRITING-UF POSSIBILITY EFFECT UPON ACCOUNTS The steps recently taken in revaluing the gold stocks of the Hank of England have foenssed attention upon the possibility of similar action by the authorities in New Zealand. The gold holding of the Reserve Bank of New Zealand at the date of the latest return is shown at £2,801.791, the amount having remained steady at this level since 19.'J.3. In that year the bank's average holding of gold was valued at £2.859,000, compared with £-1,352,000, tin* value held in September, 193-1, when transfers of gold from the trading banks were completed soon after the inauguration of the Reserve Bank. This gold was purchased from the trading banks on the basis of £;t 17s lOjd, New Zealand currency, a standard ounce. Between September, 1934, and April, 1935, gold of a nominal value of approximately £1,500.000 was sold at the market price of over £7 sterling an ounce, the transactions realising a profit of about 100 per cent, which, in accordance with the Act, was credited to tho Consolidated Fund. If the bank's present gold holding of £'2,801.791 were written up to the current price of gold there would be an equally large paper profit. As sovereigns would be worth in New Zealand to-day, were their export permitted, something over £2 apiece, the new valuation would be at least £5,603,582. Such a revaluation would be one method by which the Reserve Bank could substantially increase its reserve / - against its note issue and other demand liabilities. This the bank, by law, is required to maintain at not less than 25 per cent, although at the written request of the directors the Minister of Finance is empowered to suspend this requirement for a maximum period of 30 days, which can be extended in response to further requests by periods of 15 days at a time. In the bank's last return issued last week the ratio had fallen to tho record low point of 25.074 per cent. QUOTATIONS FOR WHEAT LONDON AND LIVERPOOL HOLIDAY IN AMERICA LONDON. Feb. 13 Wheat.—Cargoes are easier and parcels are dull. Futures.—London: .March, 23s 2d a quarter; May, 23s 3d. Liverpool: Old contract, March, 4s 6Jd a cental; May, 4s 7jd. New contract, March, 4s 3„d; May, 4s old; Julv, 4s GJd. CHICAGO, Feb. 13 The American wheat markets were closed today which was observed ,as a holiday. IMPORTED CHEESE BRITISH REGULATION LONDON, Feb. 13 The Minister of Agriculture, Sir Reginald Dorman-Smith, announced in the House of Commons to-day that the Merchandise Marks Act penalised tho sale in Britain of imported cheese described as Cheddar, or Cheshire, unless the country of origin was marked. Such a marking could only follow the formal application by those interested lor an inquiry by a Standing Committee. lIEMP AND TALLOW LONDON QUOTATIONS The Department of Agriculture has received the following cablegram from the High Commissioner for New Zealand dated February 10: — Tallow. —The market is very quiet. Present spot quotations are: —Mutton: Good, 21s to 21s 6d; fair, 16s 6d to 17s. Beef: Good, 18s; fiiir, 16s to 16s 6d. Mixed: Good, 18s; fair, 16s to 16s 6d; gut, 14s to 15s 6d. Mutton: Dark to dull, 15s to 16s 6d. Beef: Dark to dull, 14s to 15s 6(1. Hemp.—The Manila market is quiet and easier; "K" grade sold for Feb-ruary-April shipment at 18s. Sisal: Tho market it quiet. No. 1 sold for Feb-ruary-April shipment at £l6 15s; AprilJune shipment, £l6 17s 6(1. New Zealand: An offer of "rejected" was above buyers' ideas. Quotations are nominal. BRADFORD MARKET

ALL GRADES FULLY FIRM LONDON, Feb. 13 On the Bradford market all grades of tops are fully firm. Business is fair. OVERSEAS INVESTMENTS Towards the end of last year Mr. C. J. Green Stock and Sharehroker, was requested by the head of one oi the largest enterprises in New Zealand to draw.up a list of twelve leading Australian Stocks and twelve Dominion Stocks covering Insurance, Banking, Breweries and General Industrials showing the market price of each on the date of compilation of the list and the market price twelve months previously, The result was startling. In the caso of Australians the loss in value was from 10 per cent to 40 per cent," whereas the Dominion Stocks had shown practically 110 loss in most cases and appreciation in value in the balance. The real reason was, of course, that the Australian Stocks had been at boom prices and grossly over-valued, wherea?, by reason of propaganda and neglect by investors of their own market, the Dominion Stocks had been at low prices. The investor to-day who is not led away by herd psychology, and who does not allow himself to be influenced b.v unfounded fear, has, in Mr. Green's opinion, a wonderful opportunity of investing in sound New Zealand Stocks at prices which will show a better return and much more chance of capital appreciation than can possibly be found in any of the overseas investments that are at present so popular with the majority.

That this is contrary to the expressed opinion of many of the scaremongers who are abroad to-day is not a reason for doubt, and the next talk by Mr. Green to be published in these columns will be directed specially to reasons which should cause investors to pause before joining with the fear-driven mob who are neglecting their own sound Stocks and rushing to buy inflated overseas investments.

Your money is as safe in New Zealand as it is anywhere in the world, and it will pay you to keep it here.— P.J3.A.