PROSPECT OP CHEAP MONEY.

Gisborne Times, Volume VIII, Issue 694, 13 December 1902, Page 2

PROSPECT OP CHEAP MONEY.

Touching the question which is exercising the minds of the Borough Councillors, as to whether tiie present rate of interest is likely to decrease, some observations by ‘George H. Roberts, director of the United .States mint, and a recognised authority on the. world's gold production, arc very timely and interesting. Mr Roberts says thalthcoutputi.il the Transvaal mines this year will probably lie a.nouu U 7 and Unit, it may lie expected to increase as laborers can no 010 tained, until it reaches and perhaps exceeds the rate of production maintained when tlie war broke out, which was about £;!n i oim ; enM a year. lie is of the opinion that the production in North America this year will be larger than ever, while in the Australasian colonies there is also 1 Lively to be an increase; lie calculates that the world's output this year will probably reach £00,000.000, and may he expected to rise soon to £70,000.000, and probably to £80,000,000. Mr Rooerts states that the total stock of go I a in the world in monetary use is estimated at about £1, 0110,111111, n0n. but the total amount actually held as bank reserve is onlv about £100,000.000. I-le says that a large proportion of the new gold must lie added to the bankreserves. As iie points out, the effect of this would lie apparent on the rate of interest, and he adds tliat although the first- effects may be to lower interest rates, it is a well-known fact that low rates of interest tend to advance the value of all dividend-earning properties, and stimulates speculation, until the surplus reserves are exhausted. He further states that the peruiaftSut Jesuit- is not to lower the rate

of interest hut higher values for properties. lie addUthat to what extent this tendency may lx? modified by the new uses for gold, in the rehabilitation of the monetary system, and in the industrial development of hitherto backward countries remains to be seem With a total production of &?n,OOO,OP(i per annum, probably £sn,unu.onu, in his opinion, would lie available for monetary use. or about one-eighth of the sum now in the world's hank reserves.