DRAIN ON BRITISH GOLD

Wanganui Chronicle, Volume 83, Issue 1, 3 January 1939, Page 7

DRAIN ON BRITISH GOLD

THE SEPTEMBER CRISIS

RESERVES NOW CONSIDERED ADEQUATE RECENT COMMERCIAL TRENDS [By Telegraph—Prefie Association—Copyrirhtl Received Dec. 31, 6.30 p.m. LONDON, Dee. 31. A rough measure of the extent of the pressure on sterling and the drain on gold during the September crisis is revealed by the official disclosure ot the Exchange Equalisation Accounts. The gold holding on September 30 was £151,000,000, at a gold price of 140 s, compared with £298,000,000 at March 31. This confirms the market estimates of the effect of Continental owners transferring hot money to New York in August and September There has been additional further loss in gold since, owing to recent repatriation due to international uncertainties, probably to the extent cl £50,000,000. However, the net gold exports since September 30 were only £7B- - while the authorities intermitr tently bought gold from hoarders and also acquired probably £IS,OUO,UOc worth newly-mined South African gold. Accordingly, it is estimated that the exchange account holds appreciably above £100,000,000 of gold. However, the real defences of the pound are centred in the Bank of England gold, which is still roughly £538,000,0ut), as at March and. September. It is thus believed that the gold reserve is adequate for any unforeseeable circumstances, except a major war. Moreover, the value is increas able by £50,000,000 at the current gol” price of nearly 150 s. The stock markets ended an uncomfortable year cheerful in all departments. Commodity markets improved, tin and rubber are stronger owing to American buying, butter has improveu in tone since tne holidays, but the market is not very active. Bradford correspondents encouragingly survey the wool prospects' for 1939.