THE GOLD STANDARD ACT.

Hokitika Guardian, 22 July 1925, Page 4

THE GOLD STANDARD ACT.

The restoration of the gold standard ill Britain was subject to conditions which were defined hy legislation. The hanking supplement ol “The limes' explains that the obicef ot the Oold

standard Act is in facilitate the i - turn t*> (fie "old standard atcer an interval ol ten years, and it provides that for the time being the Bank ol England shall lint he obliged to pay notes in gold com; that the holders oi ( orrcncy notes shall not. he entitled to obtain sovereigns; that the Bank of England alone shall have the right to take gold to the Mint for coinage; Inti that, so Imi" as these conditions exist tiie hank shall he under a statutory obligation to sell gold at the mini

price in the lornt ol bars containing approximately -188 ounces ot line gold. The purpose is Lo prevent the public from frittering away the country’s gold reserves in domestic payments for which notes are equally valuable, and lo restrict the use of gold to Inreign

I >:* y nifii t s in which it is essont ini. I’nder t Ilf 11 1 'll t Inn s lII' must countries “old Imllion ran lie converted into lc";iI 1 .■ i><!;• r, mid it i- liy virtue of' i In., Imi ly c ommon nrranoemout that “old lias lift oiiio tin' international standard and modiimi ol cx('luni"o. Kveii when a country suspends the "old standard liy proliihitin," exports except tinder license, it nevertheless lias to make its payments abroad in ;j;old. At present tlie amount of noto riirrenov ill liritain is approxima lely e -100,000,000, while tlio total Hold stool; is little more than C 1n0.000.000. Obviously, tli ere In re. free eonvertihility of the note issue is, for the present at any rale, a physical impossibility and the restrictions are therelnre necessary. Until the end of the year, when tlie embargo on "old expires, a license will l-.e required beloro gold can he shipped out of the country.