WORLD SUPPLY OF GOLD

Evening Star, Issue 19798, 23 February 1928, Page 12

WORLD SUPPLY OF GOLD

WARNING BY DEPUTY MASTER OF MINT The report for 1926 of the Deputy Master and Comptroller of the Royal Mint (Colonel R. A. Johnson) contains a warning that “ unless wo are prepared to face a prolonged fall in commodity prices it is imperative to economise gold, both in regard to its use as a commodity and to its use as money!” The report states:— Reviewing present tendencies, it may perhaps be safely said that the suggestions for,the dislodgment of gold as the basis of the world f s currency, whether sound or unsound in theory, are not likely to bo put into practice in the immediate future. Gold, then, appears destined to continue in usefulness as a basis for international trade, and, that being so, it is not surprising that, with the growing demand consequent on the return to stabilised conditions by one country after another, the question of the probable amount of the output of the virgin metal in the immediate future—a most important economic factor—should be widely discussed.

The discovery of new fields is, of course, not an impossibility; but, in the absence of such an accession to the world’s stock of gold, the problem of economy in the use of the metal will certainly assume considerable importance. Production is hampered in some fields by the growing cost of labor and working expenses, especially where the metal is becoming more and more inaccessible. The recent developments in flying and the growing tendency to transport gold by air are encouraging factors, since the interest involved where long distances are in question is in itself a considerable item in the calculations of cost. Already gold has been conveyed by aeroplane over long journeys, and development in this service to cover gold-producing areas or a reduction" in the expense of alternative methods of transport might have the effect of reducing costs sufficiently to bring again into the work fields which at present are not a paying proposition. . . . It may well be that in the future the international gold exchange will bo served to an even larger extent than at present by gold in bars instead of in coin. The out-turn of gold by mines in the Union of South Africa in 1926 exceeded that of any previous year; but on the Rand the rise in working costs is regarded with apprehension. ... It is asserted that a substantial further rise would render it impossible to work many of the older mines. Meanwhile the Pretoria Mint continues to receive considerable quantities for conversion into sovereigns. It is to he noted that at present gold sovereigns circulate freely within the Union, and no less than £11,800,000 in gold coin was issued from the Mint in 1926, the greater portion of them being exported to England and the East. The coinage of so much gold in these times is itself remarkable, but even so the amount does not approach even a third of the South African output. . . . CANADIAN CHALLENGE TO U.S. In Canada gold mining has developed very rapidly in recent years, and the dominion bids fair to become the second largest producer in the world, unless the discovery of new fields should enable the United States to maintain their present position . . , In 1926 the total production of Canada was upwards of 35,000,000d01. In Australia the first ten years ot the century saw an average annual production of some 3,825,0000 z fine, while in the last five years the average has been less than 800,000 oz fine. In 1926, it is stated, the total of the metal from Australia dealt with at all the mints was about 850,0000 z gross, of the value of some £3,000,000, compared with 3,228,0000 z gross, valued at £1.1,800,000, during the first decade of the century. Referring to the new crown piece, the report states that “it is not anticipated that this piece will recover its lost vogue in circulation. Indeed, there is less chance of this than ever, now that the shopping sex have no pockets, owing to lack of material in which to conceal them.” It is explained that the ctown piece had not been previously authorised during the reign of King George V. as it was not popular in

circulation, and had become a source of embarrassment to banks. The report continues;—“Nevertheless, the silver crown is a historic piece in the tradition of British numismatics, and its absence in the present reign has been a groat disappointment to collectors, who have deplored the break in a long and especially interesting series. . Its authorisation will enable numismatists to add a King George V. crown piece to their cherished collections, and a noble link with the spacious past is thus retrieved from extinction, SUDDEN RUSH FOR PENNINES. After observing that during the years 1923-25 the mint censed entirely to strike pennies owing to the very large surplus of stocks held by bankers, tramway and gas companies, the report continues: —Up to the summer of 1926 enormous accumulations continued to exist. The banks alone in June, 1926, reported a net surplus of some £200,000. By late autumn, however, these excess stocks appeared to have disappeared, and demand for new coins came pouring in with ever-increasing urgency. No doubt, a larger circulation of pence had been rendered necessary by the increased charge for gas, and possibly by other aftermaths of the industrial troubles of the year. The demand for Christmas shopping was also a large contributory cause ot the demand, but this seasonal requirement might naturally have been regarded as merely temporary, to he relucted iu fresh accumulations in the New Year. The fact remains, however. that the demand for bronze com has been large, and continuously persistent ever since the late autumn of 1926. and the sudden clearing up of the difficult bronze situation is a further instance of the violent oscillations m the currency situation which occur from time to time in many countries without; any apparent explanation whatever. Nearly 100 tons (99.69) of pennies were required during the year. The number issued was 10,718,400; 8,407,200 halfpennies, weighing 46.91 tons, and 10.224.000 farthings, weighing 28.53 tons, were also issued. The total issue of bronze coin in 1926 was more than double that of tjie previous year. Referring to half-sovereigns, the report states;—The year of the return to the gold standard coincided with a large coinage of sovereigns at the mint at Home and overseas, but in 1926 this coinage was confined to the establishment in Australia and South Africa, and the total fell from 16-17 million pounds to some £14,000,000, in spite of the much increased output from Pretoria. Australia contributed some £2,500,000 only. Half-sovereigns were struck during 1926, only at the Pretoria Mint, the total exceeding 800.000 pieces, ft is well known that this piece is expensive to manufacture, and that its life, compared with that of the sovereign, is short. indeed, the cost incurred by the Home Government in the upkeep of hallsovereigns is almost identical per piece with that of the larger coin. Obviously, therefore, in the interests of economy, the circulation of the smaller denomination is a luxury which it is impossible to justify under present conditions. . . . J have therefore instructed Mr Pearson (of the Pretoria Mint) to discourage applications for half-sovereigns, and, in fact, dies for this denomination have not been furnished to Pretoria for the current year. No gold bullion was received from the Bank of England for coinage during 1926. and no gold coin was issued trom the Royal Mint. British coin is rapidly disappearing from circulation in Australia. It was anticipated that the amount tendered during 1927 would be much smaller than in 1926. In replacement of the British coin large requisitions for Commonwealth coinage were placed with the Melbourne Mint.