GOLD RESERVES

Taranaki Daily News, 13 December 1932, Page 11

GOLD RESERVES

THE • RESERVE BANK. PROVISION FOR TRIBUNAL. The important question of the value to be given trading banks for gold, coin, or bullion paid to the Central Reserve Bank is the subject of a long clause in the proposed new legislation. The banks are required to transfer to the Reserve Bank in exchange for the equivalent value of bank notes of the reserve bank, or for credit with that bank, all gold coin or bullion owned by them. For the purpose of this section the equivalent value of gold coin- in bank notes- is based on gold at £3 17s IOAd per ounce. After stating that “whereas it has been contended on behalf of Ute several banks carrying on 'business in New Zealand that-any profits that may be derived by the Reserve Bank" from the sale of gold, coin and bullion transferred to it, and. whereas having regard to all the circumstances it may be contended that the Bank , or the Government of New ;Z.ealapd .is equitably entitled to ■ a proportion of. such profits,” the . .Bill proceeds to prescribe methods of deciding any difference of opinion. It states that profits which may be derived from the sale >d£ gold, coin and bullion shall either be credited to the depositing bank or apportioned between that bank and the general reserve fund as mutually agreed. Failing agreement, a special tribunal comprising the. Chief Justice, a person appointed by the governor of the Reserve Bank, and another appointed by the bank concerned shall decide the question. If the total of the reserve fund exceeds £1,000,000, any excess of profits from bullion payable to the bank shall be applied toward repayment of the Government’s contribution to the bank’s general reserve fund.