GOLD!

Dominion, Volume 9, Issue 2793, 10 June 1916, Page 12

GOLD!

THE WORK OF THE SILVER BULLET BRITAIN'S STRONG HAND PREMIER POSITION OF THE ALLIES. "In one way or another, Great Britain is paying for its huge imports without resorting to the shipment of gold in excess of its receipts of that metal," remarked Mr. iiaruul iieaucnaiup at the annual meeting of tho Bank of New Zealand yesterday. ''America, since tlie beginning ot tiiis year, has not been able to attract gold or securities from don in such quantities as it had been doing lor some time previously, Roughly speaking, America's power to uemand gold or securities represented,- m-1915, about £280,000,000, of which .£&),01)0,000 was paid in gold, and .£200,000,000 insecurities, 'this year it is estimated that tho United States will have a balance in her favour of about £300,000,000, the whole of which it is thought may be scllied by means of securities.

"While it seems probable tliat a check will be placed on the withdrawal of gold from London, the output of the precious metal is increasing under the stress of war. The 'Statist'. (London) recently furnished particulars of the world's estimated output of gold in 1915, - and, from that journal tho following'figures of the output for each of the'past ten years hove been obtainedl9oo, ,£8;!,707,000; 1907, Ji5i,857,000; 1008, £90,995,000; 1909, £93,302,000; 1910, .£93,550,000; 1911. £94,839,000; 1912, .£90,077,000; 1913 £93,152,000; 1914, £92,059,000; 5915. >£96,915,000. • J' ear ' s Production was the highest in the world's history, the Hand furnishing the bulk of tho increase. The Australasian output was valued at £9,202,500 as compared with £9,024,300 in 1914; ami the tendency, for some years past has been in the direction of shrinkage.' The British Empire controls tho larger portion of the world's production of gold, to last year's total of £90,915,000, it contributed £59,615,000. Our ally, Russia, is also a considerable gold producer. I have no recent figures available of the production of Germany and Austria-Hun-gary, but in 1911 they contributed about 1 per cent, of the world's total yield as compared with about 5 per cent, contributed by Russia. This premier position must help tho Allies materially when the time conies for restoring trade and commerce, and reconstructing the financial iabne.

no'ii H f, ati f at! f 0 P"- to note that the Bank or England has maintained its reserves of gold at a high level, the amount held at May 1< being .£58,808,000. The Imuk rate Ims remained steady throughout the whole period of, the war at 5 per

"Whilo on the subject of British trade,' J. may appropriately, refer to a matter which appears to be commanding a'considerable share of attention in the Old Country at the present time, namely, the question of future Empire trade. A strong advocate for trade within the '• Empire with a view to the Empire's independence and self-sufficiency, has lately come to Iho front jii the person of the Preraier of the Commonwealth, Mr. W M Hughes; and his agitation seems to have made a strong impression and appears likely to bear some fruit. The liscal barnKsf 3 ' i • co , l ! rse > constitute the greatest obstacle, in the way of tho Empire, but oven that difficulty s ould be susceptible of adjustment bv iiiur of 01 Rr'f• i, s J" «Dd intelligent handnuvthin" flffrnK • c ? lo , nia , l 6ta tesmen. If ■Othl L„^ stlleniDff PMbably in no treat win t'l U , not .? * l ' eve lopmont« of sutetan determination of the war. 2? 0 w, olum. ing that, ; .m case of need, both Franco nf p send " olcl to the' Bank of England, it is interesting and instrucnfV 9° m P a ''° tlie relative gold strenth of Britain and her Allies with that of Germany We find that, excluding'gold in circulatmn, and m the hands Sf tho ba,nks, the figures are as follow:—- «£ British Empire 124,080,761 i'rance 200,611,000 '. i™f ta 187,175,000 Ital y 47,280,000 j r J ■ 559,152,761 trermany and Austria 122,259,000 Balance in favour of the Alli es " 436)893,761 "It has been pointed out by a prominent financial authority that, 'to realise ;the true significance of these figures, it must bo remembered, on tlie one hand, that the German banks (other than the, Keichsbankj are not. holding any gold, and that even ornaments havo been melted down to add to the Beichsbank's stock, while, on the other hand, tho Allies still lmve large sums which do not . show , in their returns, and they have not taken any drastic steps in the matter, such as tliose adopted by Germany. The chief ! drain on Britain's gold supply has emanated from tho States. This has resulted from her enormous adverso balance of trade. For the moment, however, this difficulty lias been settled, partly by means of . the sale of securities, ami "partly as a result of credits arranged by the Government, and by a syndicate of English banks. Another favourable factor is that the gold point, which before tho war stood at 483, is now about 477, the reason being the increased cost of insurance and freight. It was rather a curious feature of a very difficult situation that, ut tho time when the Bank of England was losing largo amounts of gold for American account, and tho position was growing serious, American bankers and financiers were as keenly desirous of stopping shipments of the precious metal as were English' bankers. They felt that a great influx of gold into the States would probably, if continued, le«d to an inflation which, by its effect on prices, etc., would prove detrimental to their trade ambition and prospects. It is not, therefore, surnuis- ' ing that credits were arranged, wifli comparative ease.'"