GOLD MINING AND EXCHANGE RESTRICTIONS

Otago Daily Times, Issue 23703, 10 January 1939, Page 5

GOLD MINING AND EXCHANGE RESTRICTIONS

TO THE EDITOR Sir,—Almost every industry in New Zealand has expressed its views on the exchange restrictions, and how it affects it, but I have as yet not seen a published statement of the associated gold mining interests. It is probable that in these days ot organisations, gold mining interests, having no active collective voice, have had many of their pressing needs overlooked. The industry is one of the most sensitive in New Zealand to economic changes, and therefore it should have an alert political bureau. Every tariff put on imported goods, every licence granted to help to build up a trade and compulsory increases in wage or trading charges is all extra hardship on the gold mining industry. Therefore the new exchange restrictions are bound to act detrimentally to the production of gold. Gold is sold on a world market, and if purchases have to be limited to the local market, naturally the prices must be higher. The recent regulations, however, produce a new angle from which to view the gold export tax. While the 25 per cent, exchange was an artificial export subsidy, the 12s 6d an ounce export- tax had a slender reason for its existence. Now that the high exchange is no longer artificial, but rather artificial restrictions have to be imposed to keep it from going higher, that slender reason for the tax is absolutely gone. Under the natural law of things, if there was either a great rush to import foreign goods, or take wealth abroad, gold miners would meet a good demand for their product, for it is the world's only free trade commodity—no country puts an import tariff on it entering its boundaries. The New Zealand gold miner, however, is not going to reap the full benefit of this position now that the exchange restrictions have been put OI It is quite unfair to have the double grievance of export tax combined with the recer. 1 one, so 1 would suggest that the industry press for either one to be lifted off its back. That is: (1) Abolition of the gold tax, or (2) the money derived from gold sales abroad be exempt from the exchange pool, and allow it to be sold to the highest bidder. Such bidder would be free to leave .he country with his money, or import what he liked subject of course, to the authorised duties. It is not unreasonable that such a privilege should be awarded to gold production, for it has now in the face of real rising costs to bear an export tax as well, while other industries all went free of the latter impost Now that Britain threatens to restrict the importation of agricultural products it is not very clear how we can hope for much room for expansion in that domain But the market for gold remains unlimited and international. The price of it in goods and services must continue to appreciate while the world tendency of nations to endeavour to be self-sufficient in other goods remain, their dominating policy. Australia, Canada, and South Africa have put no specie. l hurdle in the way of increasing gold production, and their rising exports of gold have been of great assistance to them economically —I am. etc.. Miner