VANISHED GOLD

Dominion, Volume 14, Issue 96, 17 January 1921, Page 6

VANISHED GOLD

WHEN WILL IT RETURN? For over six years the river of gold which carries all the world’s argosies of trade on its bosom has ceased to flow'. It has been conserved at its source, and that is why the ordinary man never sees a sovereign nowadays. He gets merely scraps of paper—honourable scraps, if rather insanitary, states the Auckland “Star.” A leading financial man in the city was asked if gold would soon return to circulation, and the familiar coins of pre-war days replace the bank notes which now' form our currency. “Not for a long, long time,” ha said. The return of the sovereign is indefinitely postponed because it has too much work io do elsewhere.” And he went on to explain that it was just as well that sovereigns did not appear in circulation at this juncture, because with the fluctuations of trade and values throughout the world thqre would be a race to acquire and to hoard them, thus curtailing the work »n the commercial world that the sovereign had to do. The Unified States absorbed great quantities Of gold during the war. Train loads of it came from Ottawa and Vladivostok to pay for the munitions Great Britain and Russia bought. The immediate effect was an inflation of currency, easy credit's, trade expansion, wild extravagance, and the inevitable reaction from which America is now suffering. Nevertheless, because Great Britain has had a world trade, and is settling herself to win it back, she must sooner or later recover her gold, and then there will be a reflurn to .normal in the use of it. Meanwhile, liowever, general circulation of the precious commodity must naturally be restricted, and paper money issued as against gold reserve must take its place. "Sovereigns are not likely to be in general circulation again in New Zealand for a long time to come,” said the authority questioned on the matter. “Their return depends on so many unknown factors in' trade and finance that he would be a wizard indeed who could make an accurate forecast. But that need make no difference to the ordinary man. His’ notes are just as good as gold for all purposes, and he has the assets of the country behind them.”