THE GOLD MYTH

Taranaki Daily News, 8 January 1932, Page 9

THE GOLD MYTH

HEIRLOOM JEWELLERY. NO FORTUNES TO BE MADE. People who have old-fashioned jewellery were very much interested when they read in the cable news the other day that the gold-hoarders were unloading now that gold in London was topping £6 an ounce, instead of the customary four guineas or so, and that the Hatton 'Garden furnaces were having a busy time melting up old jewellery and trinkets. More than one Aucklander, says the Star, had a brilliant idea, and hoped to be able to turn his old family trinkets into cash and so help to meet the staggering bill the income-tax people will be sending in next month. Great was the surprise of some of these gold-sellers when they found that in Auckland one could only get the customary price. For old gold, that is old jewellery, gold teeth and so on, the usual price in Auckland to-day is £3 an ounce for 18 carat, £2 an ounce for 15 carat, and £1 10s for 9 carat. It would take a good deal of old-fash-ioned brooches, pins, rings, etc., to make enough to help much in satisfying the income-tax commissioner’s imminent bill. The demand for gold for manufacturing purposes is very much more limited than most people would imagine, and as one would find it very difficult to take gold out of the country there is not much incentive to melt down all those old family heirlooms. It, is strange what a fascination the subject of gold has for the man in the street. Gold and diamonds are two subjects on which people like to dwell, and speculate. But recent world events have shown that countries like America and France may hate their coffers bulging with gold, and still be in a bad way. Gold is only of use when one can use it for making things or as a means of appreciate the truth of the old illustration of the man on a desert island who found a chest full of gold. The dream of his life had come true, but when it was realised he would rather the chest had been full of tinned meat. If one asks why gold still jogs along at the same old price in New Zealand when London price is hovering round about £6 one is told that the London figure is for virgin gold, ■while the New Zealand, price is for old jewellery, ~ or other ornaments. Virgin gold in New Zealand follows the London price, and at the present time it will naturally gravitate to where the market is .so favourable. There is very little dealing in virgin gold as far as the jewellery trade is concerned.

People interested in the jewellery trade are wondering what will happen if the price of gold in London keeps to its present level. The actual quantity of gold turned into jewellery is probably less than the public would imagine, and most manufacturers would have a fair stock on hand, so the position of the British manufacturers would not be immediately affected, but eventually the trade must be affected, and probably the worst feature of the gold position is that no one seems to know when it will come back to normal. Those who remember the good old days when one could jingle a sovereign or two in hie pocket wonder where they and the half-sovereigns have gone to. No doubt they are reposing safely in the bank strong-rooms. During the Great War some timid people who thought the end of all things mundane was at hand actually put away all the sovereigns and halfsovereigns they could gather—they were doing exactly what the ignorant old peasant women used to do when they preferred the stocking to the bank. When the war ended and the world was still functioning'these hoards of gold coins gradually came out of hiding. Paper money was so much handier than heavy gold tha.t people had learned to prefer it, and if gold were to come back into circulation to-morrow it is pretty sure that no one person in a thousand would ask for it when cashing a cheque at the bank..

That there are still some sovereigns about was proved the other day in Auckland. A family wishing to make a • golden present on the occasion of a golden wedding went to a bank and asked for a score or so of sovereigns. They got them without any demur, and presented them accordingly. Probably the bank knew its customer, and. knew that the sovereigns would find their way back to the bank —as they.naturally did. Some people have an idea that the mysterious Chinese are great gold buyers, but that is a fallacy as far. as Auckland is concerned. When sovereigns passed current no doubt the Chinese sojourner used to lay by a stock, which he would take with him when he went back to China, but he does not deal in the precious' metal in that rather attractively furtive way public opinion credits him with. And he knows just as well as the banker what gold is worth. The story of the. Chinese who was willing to give anything up to 30s for a sovereign is a myth.