Export of Gold

Hokitika Guardian, 3 February 1922, Page 4

Export of Gold

CHARGES AGAINST BANKS. r i AN OFFICIAL REPLY. v —■; — 8 WELLINGTON, February 1. g Regarding a statement made in the rj House of Representatives that the ? banks had made a profit of over a mil- t lion on purchases of gold since the out- ( break of war, -Mr 'H. Buekleton, ehaii- , man of the Associated banks, described it as absolute nonsense. Had.the Parliamentary Committee which dealt with the matter asked the Links for information, said Mr Buekleton, it would have been willingly granted, but they did not do so, and accordingly the .members’ concerned had drawn entirely erroneous conclusions. Mr Buekleton reviewed the position since 1914, when the export of gold was prohibited. During that period, gold was purchased by the Band of England at £3 17s 9d per standard ounce, equal to J 1 about £4 4s 10d per fine ounce. If the ; export of gold had not been controlled j producers might ihave been able to find means of shipping gold outside the Umpire, to centres whose exchanges were suitable, and would -have obtained more than £3 17s 9d. While /the export of gold was prohibited, it was of course impossible for New /Zealand producer;s to obtain this advantage Whether apart /from the question of prohibition they could .have obtained shipping facilities which would have enabled them to export was doubtful. Even if it .had /been’,possible to ship increased .freight and insurance charges would have largely egten into the additional price obtained. There was also a danger of capture. The only country to ivhich gold could have been sent by New Zealand was the United States of America. Until the beginning of March, 1919, no profit could have been made .by shipment to America, as tlfc exchange gate between Britain and the United States was until the time stated kept at a fixed rate almost equal to par of exchange. So far as the bapks were concerned, there was no desire to make extra profit by buying gold for shipment to Sail Francisco. On the other hand, early in December, .1919, they were informed by their gold purchasing customers that they we,re prepared to handle bullion for them on a commission basis 'shipping the gold to San Francisco, realising on it there on behalf of ,the owners, and accounting to them for the proceeds at the rate of exchange current on the date when these proceeds were received, less a small commission charge. Almost all the gold handled by the banks since that date had been dealt with on this basis, so that producers had full benefit of the favourable rate of exchange. Mr Buekleton concluded: “If the newspaper reports are correct, that it . was stated in Parliament that the hanks made .a profit of between £I,OOO- - and £1,500,000 upon the sale of gold bought during the period when export was prohibited, and sold when the embargo was repioved, I c an on b’

characterise the statement as absolute nonsense. When the embargo was removed the bullion held by all the banks in Now Zealand was about £300,000.”