TREASURY PROBLEMS

Taranaki Daily News, 10 June 1932, Page 12

TREASURY PROBLEMS

DEVELOPMENT OF FORGERY.

AN INTERNATIONAL MENACE.

The Treasuries of the world are in the throes of one of the moat serious problems they have ever had to deal with in connection with their currencies; says a .'London paper. The art of print; ing and photography has been perfected io such an extent in recent years that forgeries of securities and notes have heep developed on ap jpternt)t4onal scale hitherto undreamt of. ~ The Kreuger bond forgeries and other forgeries of notes on the,Continent have awakened every Treasury tb a realisation of the serious danger inherent in the Not only.ar? the dangers great; bui the maintenance of large staffs to inspect notes in circulation is proving very costly. . . . , • - Partly in consequence of the extensive forgeries of notes of small denomination. on the Continent last year, Germany has reverted to the issue of silver coins to a considerable extent, Indeed, ,in 1931, she was the largest ■ buyer of silver for coinage purposes; 25,000,000 ounces were used, and there have been subsequent substantial pur; chases. ... ...

- The authorities believe .that the fear o? forgery in connection with note issues will drive-many countries back to silver currency, although it will be only as a token coinage. They predict within a few years a boom in silver. In the past ten years many countries have abandoned silver as a currency, or have debased their coinage. Its price has fallen to a low level. Ou a gold basis it is less than a shilling an ounce, compared with the high level of 33 7-16 d. in 1925. The cause of the fall has been an effort to save money on currency by various Governments. They have reduced the silver content of their coins, thus’ making them purely of token value.

The British Government Jed the way in this movement —in 1920 —when the price of silver was 7s. an ounce and the coinage was debased to the extent of 40 per cent. This policy was followed by many other/countries. _ • The linking of the rupee to. gold in 1927 rendered the greater part of the silver stocks of the Indian Treasury redundant and heavy sales of Indian silver have taken place every ' year. Large quantities have also been released by Indo-ffihina and Siam, which have also linked their currencies to gold.

The heavy fall in the price of silver and of other metals with which it is found in mining has resulted in a substantial falling-off in production in the past year or two. The average world output for the three years to 1930 was, roughly, 240,000,000 ounces. Last year it was 195,000,000 ounces, and this year it is expected that it will be reduced, to 140,000,000 ounces. The world’s stocks of the metal, including a large amount which has been melted down as the result of demonetisation, are approximately 400,000,000 ounces.