PRICE FOR GOLD

Poverty Bay Herald, Volume LIX, Issue 17954, 5 December 1932, Page 4

PRICE FOR GOLD

GOVERNMENT AND BANKS “AN INTERESTING QUARREL" ‘“A mild quarrel appears to have developed between the Government and the trading banks regarding the p-.wie to be paid for the gold reserves when these are transferred to the proposed Central Reserve Bank,” said Mr. James Begg, of Dunedin, when speaking to a reporter. “The quarrel is interesting,” Air. Begg said, “in this respect; that the gold belongs to neither of the contending parties but to those customers of the banks who have placed it in their custody. “The banking moratorium which has enabled the banks from 1914 onward to discharge their debts in notes' instead of in cash has permitted them to hold their customers’ gold deposits during this period, and it is now proposed by the banks to sell this gold at an increase of approximately 50 per cent, on what they paid for it. Aluch of this gold has been placed in the banks by depositors in the ordinary course of business, and they have been repaid in notes which represented only a fraction of the gold placed on deposit. “It would almost seem that under the hanking legislation the dice have been loaded against the depositor in favor of the banks.”

Air. Begg went on to say that why the proposed reserve bank should be enabled to acquire its stock of gold from the trading banks at a fraction of its present value required some explanation, especially as a reserve bank would be privately owned. It was presumably impossible to-day to trace the depositors to whom this gold really belonged, but it might be suggested that the most equitable manner of dealing with the surplus value inherent in the gold under our present depreciated currency would be to allow it to be taken by the Government as representing the whole of the people in relief of taxation.