THE OTAGO DAILY TIMES FRIDAY. DECEMBER 13. 1929. THE CONTROL OF GOLD RESERVES.

Otago Daily Times, Issue 20899, 13 December 1929, Page 10

THE OTAGO DAILY TIMES FRIDAY. DECEMBER 13. 1929. THE CONTROL OF GOLD RESERVES.

It was to bo anticipated that the Commonwealth Bank Bill introduced by thp Labour Government in Australia would meet with considerable criticism in the Senate, in which Chamber the Government is in a distinct minority, and it will be seen this morning Unit the Senate has .amended the Bill in a somewhat important respect. This measure for the control of gold reserves represents a new departure, and, though it may not as yet mean interference by politicians vitb banking policy, is no doubt viewed with 11 good’ deal of suspicion as likely to lead in that direction. The Bill proposes to give authority to the Commonwealth Bank to require returns to be made by any individual or institution that may hold gold and to requisition either the whole or part of such gold. It also proposes that, acting upon the advice of the bank authorities, the Federal Treasurer may withhold authority to export gold. Mr Theodore said’, in introducing the measure, that the

matter was urgent because of the exchange position, and because of the attack that was being made on the gold reserve of the Commonwealth Bank. Individuals and institutions found it cheaper to export gold themselves, and at present the Commonwealth Bank had no power to refuse gold, and the authorities were apprehensive of what might happen if the demands for it continued. It was not distinctly known, declared Mr Theodore, how much gold was held in private banks and by other institutions, but it was believed to be approximately forty-four millions. He claimed that the Bill would strengthen the Commonwealth Bank enormously and would give facilities for dealing with the foreign exchange position. The Federal Treasurer added that a proposal for the control of the exchange rates, of which there had been rumour, had never been contemplated. Objections to the provisions of the Bill have been numerous. The Melbouvn Chamber of Commerce has protested that the mobilisation of the gold reserves of the trading banks is neither necessary nor desirable in Australian conditions, and that a change so radical would not only tend generally to hamper banking business, but might be injurious to the credit of the Commonwealth and the States, besides disturbing public confidence. The Chamber has also expressed the earnest hope that if any gold is demanded from the banks under the amended Act it will not be used for purposes of note inflation. In a speech in the Federal House of Representatives last week Dr Earle Page, the former Treasurer, expressed the view that the danger of an embargo on the export of gold lay in the fact that it might bo made the basis of a tremendous inflation of the note issue, as had been suggested by a number of the Labour members. Under the heading “ A Politically Controlled Currency ” the Sydney Morning Herald argues: “Mr Theodore has based his Bill in part on the representations of the directors of the Commonwealth Bank that the exchange situation is like a ship on an uneven keel, and that every means must be taken to restore the balance. The unevenness is the result of a reduction in the return of our exports coinciding with an inability to secure external loan money. The means proposed by the Bill, if they do restore the balance, will do so by abandoning the gold standard. So we shall proclaim to the world that we pay for the goods that we have contracted for not on due date, but on a date which suits the convenience of the Commonwealth, and that, as to any future purchases, those may be made not as the common people of the Commonwealth desire, but as the Treasurer of the Commonwealth shall determine. He has taken power to be the arbiter of the import trade of the Commonwealth.” It is conceded that any course involving even a temporary departure from the operation of the gold standard will adversely affect the credit of the Commonwealth overseas, yet the Bank Bill, says the Sydney Morning Herald, by giving the Treasurer power to prohibit any individual exporting gold, gives the Treasurer power to withdraw the gold standard from Australia. In its comments on the Government proposals the Melbourne Argus is moderately critical. It suggests that, as long as a Commonwealth Bank Board of the present type is in command and the Federal Treasurer follows the Board’s advice, the administration of the amended Act may be expected to proceed on sound lines. But it is conceivable, it points out, that the personnel of the Board may in time be radically changed, and important changes of policy may be embarked upon, and this marks the difference between the position in Australia and that in most other countries in which the gold reserves have been placed under the control of a central institution. The whole of the directorate of the Board in Australia is subject to appointment by the Ministry, and the Board may therefore become the plaything of politics. The commercial banks are naturally diffident in entrusting such wide powers to a Ministry whose policy is by no means clear. The amended legislation makes no provision for the control of exchanges. “As long as the commercial banks held substantial gold reserves,” says the Argus, “and had the right to export, they could use gold as a last resort to replenish their funds in London. The new Act takes away this right, except in so far as it may be granted by the Commonwealth Bank, but no responsibility is placed on the Commonwealth Bank to provide the necessary exchange on London in a period of difficulty.”

THE ROYAL SHOW,

That the first Royal Show to be held in Southland would be a success appears to have been the firm conviction of the directors of the Southland Agricultural and Pastoral Association, and of the members of the various committees which shared the responsibility for making the multifarious arrangements that were necessary. The event has justified their most sanguine anticipations. Tile Royal Show has been, in fact, an unqualified success, and it must be a source of gratification to all Southlanders to know that in a district so relatively sparsely populated, and so far removed from the main centres, an ambitious undertaking of this kind can be carried out on as large a scale as in the north, and can attract exhibitors and visitors from all parts of New Zealand. The people of Southland have a loyal and unwavering faith in their district, and a true Scottish reverence for their own institutions, and they have for many years felt perfectly confident that if the Royal Show were held at Invercargill it would not be any weakling effort. Certain difficulties had to be overcome, however, before the show could be attracted to Southland, and possibly many northern people were rather dubious, even when the entries totalled over 2000, whether the allocation of this important fixture to the southern extremity of the South Island could he regarded as entirely desirable. It has boon amply demonstrated this week that, the Southlanders’ faith was not misplaced, for the stock exhibited was representative of most parts of the Dominion, and public patronage was extremely wholehearted. The

entries were not only very numerous, but of a high order, and it is pleasant to find so many Southland breeders sharing with other competitors the places of honour on the prize lists. The arrangements for the comfort and entertainment of those who travelled long distances to attend the Royal Show appear to have been eminently satisfactory, especially when - it is remembered that in a town of the size of Invercargill a sudden invasion of two thousand to three thousand visitors makes the problem of accommodation one of some embarrassment. Altogether the Royal Show has been a memorable event for Southland, and the Southland Agricultural and Pastoral Association and the people of Southland are to be congratulated on a remarkably fine achievement.

Tn consequence of severe pressure on our space this morning, “ The Rural World,” “ The Wireless World,” and “Music Notes ” are held over for insertion in to-morrow’s issue. The Dunedin Railway Station had the distinction yesterday of having three official carriages standing on the rails at the one time. The Minister of Lands W. Forbes) came up from Invercargill in what is termed an old Ministerial car, and attached to that carriage was the car usually used by the Minister of Railways (Mr W. B. Taverner). The Governor-General travelled from Invercargill in this carriage, and alighted at Dunedin, Then there was the luxuriously appointed car used by the general manager of railways (Mr H. H. Sterling), in which he returned north last night. Mr Sterling has an official car for the South Island and one for the North Island, and the estimated cost of them is £IO,OOO, although it is alleged that this cost has been considerably increased. It was rather puzzling when the mid-day express steamed out of Dunedin to understand why the carriage in which Sir Charles Fcrgusson had come from Invercargill went with it —empty—to Christchurch. It is understood, however, that it is to bring Mr Taverner back from Christchurch on Saturday. The postal authorities advise that the steamer Manuka, which is due at Bluff on Sunday from Melbourne, is bringing 21 bags of Australian mails and 10 parcel receptacles for Dunedin. The mail is expected to reach the General Post Office on Sunday night. The steamer Mataroa, which arrived at Wellington on Wednesday night from London, brought an unusually heavy mail for New Zealand, consisting of 1380 bags of letters and 1210 parcel receptacles. ' The Tahiti, due at Wellington on Monday from San Francisco, is bringing 250 bags of English, American, and Canadian mails and 135 parcel receptacles for Dunedin. The mail is expected to come to hand on Tuesday afternoon., and the parcel portion on Wednesday. At the meeting of the Otago Land Board on Wednesday a number of applications for preference blocks on the Rosebery settlement were considered. The applications were declined, the board not being prepared to consider preference applications without competition. A counterfeit shilling is the latest addition to the spurious coins in circulation in Christchurch (reports our special correspondent). It was passed over the counter of a tobacconist’s shop yesterday morning. This is the first instance that any counterfeit coins other than florins and half-crowns have been detected in circulation. The coin, which bears the date 1919, is an imitation of the New Zealand coinage, and judging by its worn appearance it has already had a fair amount of handling. Inspected in a good light the coin shows several features which mark it as a “ dud,” but in tramcars and dark shops it could easily be mistaken for a genuine coin. It has been perfectly made, and there is nothing in the casting to arouse suspicion. It is, however, lighter in colour and lighter in weight. There is little difference in the ring of the coin compared with that of a genuine one. "We are not opposed to the establishment of secondary industries and have not taken a hostile attitude,” said Mr H. T. Merritt, president of the Auckland Chamber of Commerce at a meeting of the council of the chamber (says our special correspondent). The council approved of a letter forwarded to the Auckland Manufacturers’ Association in which it was stated that the chamber had never opposed a measure of fair and economic protection for young and growing industries which hnight be economically pursued in the Dominion. A supplementary Gazette issued last night (says a Press Association telegram from Wellington) contains amended regulations under the Naval Defence Act. “Wo are not ashamed to sing ‘God Save the King.’ We’ll sing ‘God Save the King’ always,” remarked the leader of the Opposition (Mr J. G. Coates) at an election meeting at Eastbourne on Tuesday night, after stating that the Reform Party stood for God,-King, and country. “Who is afraid?” queried a member of the audience. “ There are men in the country who won’t or don’t,” continued Mr Coates. “If they don’t like this country with our imperialistic or Empire notions, then they may find a happier place. I don’t know, but I very much doubt it."—(Applause.) Mr Coates added that this was a Christian country, and while it was too much to expect unanimity in religious belief, yet the Reform Party stood for maintaining freedom of Christian worship. The Reform Party believed in helping to preserve peace through the League of Nations, but though it might be necessary to alter the defence system, the country must be prepared not for aggressive but for defensive action should that be necessary.— (Applause.) The engagement of Squadron-Leader Kingsford-Smith, the Australian aviator, to Miss Mary Powell, of Hawthorn, Melbourne, was announced on November 28. Squadron-Leader Kingsford-Smith’s and Miss Powell’s was a shipboard romance, which started on the Aorangi, in which they travelled to Auckland and Australia from America a few weeks ago. Miss Powell was a Geelong Grammar School girl. She has travelled extensively and spent some months in America. She is a niece of Mr H. W. Gepp, chairman of the Australian Development and Migration Commission. Miss Powell’s engagement ring is a square cut diamond solitaire. She wore it for the first time at a supper party to celebrate her engagement given by her sister, Mrs Tom Paterson, at her home at Caulfield. The date of the wedding has not been decided, but it will not take place until SquadronLeader Kingsford-Smith flies the reconditioned Southern Gross back to Australia from England about the middle of next year. There was a clean sheet at the City Police Court yesterday. Concerning the insurance of the Graf Zeppelin, Dr J. P. Whetter, who has just returned to the Dominion from a trip to England, tells an interesting story. When those responsible for the airship decided to fly across the Atlantic, the greatest difficulty was experienced in getting insurances arranged. American and German companies and groups would not touch the proposition, but eventually an English company undertook the risk. The rate was very high, and as the airship returned safely the company made a good profit. However, when the same company was approached for insurances to cover the proposed Polar trip, it refused, and at the moment there is every chance that the ship will fly uninsured.

The Commissioner of Police (Mr W. It, MTlveney) has directed the members of the Police Force throughout the Dominion that court proceedings are to be taken under the provisions of the Arms Act against any person purchasing or selling fireworks capable of destructive effect by way of explosion unless the purchaser or seller has acted under a police permit. Ho desires that the public shall take warning accordingly. The Mayor (Mr R. S. Black) forwarded yesterday the following telegram to the manager of the Jubilee Institute for the Blind, Auckland:—-" On the occasion of your annual prize-giving Christmas party I desire to wish all present a very enjoyable time and a bright and happy New Year. Dunedin citizens congratulate the institute on the splendid work done to help our afflicted friends. May the good work continue and .receive the practical sympathy of all.’' Under the will of Mrs Helen Baird, of Otahuhu, who died on December 2, in her ninety-fourth year, the missionary societies of the Presbyterian Church of New Zealand will benefit to the extent of £6OOO, while bequests of £IOOO each have b.een made to St. John’s Church, Papatoetoe, and to the Presbyterian Women’s Missionary Union connected with that church. The individual bequests are £IOOO to each of the following:—New Zealand Presbyterian Indian Mission. New Zealand Presbyterian New Hebrides Mission, New Zealand Canton Mission, Auckland Presbyterian Social Service Association, Presbyterian Maori Mission, Presbyterian Home Mission, Presbyterian Women’s Mission connected with Si. John’s Church, Papatoetoe, and St. John’s Church, Papatoetoe. In addition, there are a number of private bequests. In order to assist the young people to pay for new bathing sheds at Monkey Beach, Mrs J. Morgan has given a twonight entertainment in the Town Hall at Port Chalmers, Good houses were secured both evenings. The improved bathing facilities will be available for the school holidays. A chimney fire in the block of buildings occupied by Messrs Reddells, Ltd., at the corner of Stuart street and Moray place, claimed the attention of the City Brigade shortly after 6 p.m. yesterday. No damage was done. Many plants and flowers have been later than usual this season (says the Auckland Star), but the pohutukawa is comparatively early. The first bloom in the Albert Park this year has just appeared on one of the trees on the sunny northern slopes, and. judging from the number of buds on the trees there wiil be a wonderful show of crimson this Christmas. With the disappearance of the pohutukawas on the cliffs round the shores of the harbour, people have • been realising more and more what a beautiful tree it is, and hundreds have been planted in and around Auckland. Although not altogether suitable for street planting, owing to the fact that evergreens make the pavement too wet in winter, the pohutukawa has been planted in a number of streets round about the city. Particulars of the will of Joseph Cooper, of Taihape, a farmer, and a bachelor, have just been disclosed (says a Press Association from Taihape). The estate, of approximately £13,000, invested in sound securities, is placed on trust in perpetuity, the annual income to be divided in ■ stipulated proportions among the following institutions:—Anglican Children’s Home (Palmerston North), Anglican Girls’ Home (Karori, Wellington) , Anglican Boys’ Home (Lower Hutt), Salvation Army Boys’ Home (Island Bay), Salvation Army Girls’ Home (Owen street, Wellington)', Presbyterian Boys’ Home (Berhampore, Wellington), Presbyterian Girls’ Home (Island Bay). Methodist Orphanage (Masterton). Children’s Home (Hunterviile). The sole executors are Mr Thomas Kincaid, solicitor, and Mr Henry Nurrell, law clerk, of Taihape. Wide provisions are made for inevitable changes in the executoremp and administration.

Messrs H. Allchurch and Co. aucJw ee Sf’ T i maru - advertise in this issue tnat they have received instructions to otter a prosperous fruit, confectionery, and ice-cream business as a going concern on Wednesday next at % 2 o’clock. Those desirous of having electricity installed in their houses should consult the otewart Electrical' Company, 171 Rattray street. Time payments arranged from 2s 6d a week.—Advt. W. V. Stunner, G.A.0.C., D.SOI optician. Consulting room, 2 Octagon Dunedin. Most modern scientific equip, ment for sight testing.—Advt. . A ;- P' lakale * and W E. Bagley. dentists, Bank of Australasia, corner of Bon “ jJHP Rattray streets (next Telegraph Office) Telephone 12-359 —Advt Christmas Jewellery.— Compare our values. Just landed, large selection Diamond Rings, Reliable Watches. Jewellery and Silverware.—Peter Dick, the most reliable jewellers, watchmakers, and opticians, 490 Moray place, Dunedin.—Advt.