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Hokitika Guardian, 27 August 1927, Page 2

Dk.w.ing further with the interesting subject just referred to regarding the European bankers’ visit to New York, beyond tile statement of Sir Josiali Stamp mentioned above, nothing i.s known of what- i.s taking or took place at the conference in New York. Some people in liondon consider that the meeting is not the outcome of Hie apse! which France caused to the British market when she withdrew a large amount of gold, or that it was arranged to assist. Franco in stabilising the franc. It is thought that it- has boon arranged Because America, contemplates an important change in her gold policy. A theory is that America is now realising that the accumulation of a tremendous amount of gold is not an umnixod blessing. Certainly America does not make as full use of it a.s another country would, and to the extent. that tin l amount exceeds the legal proporion of gold hat must lie hold against the note issue the money is earning no interest. This legal ratio is ■lO ]M'r cent.. But the present gold holding represents about 80 per coni. Why, then., America may ask, should this surplus gold he virtually sterilised ? It seems possible, talcing everything into consideration, that one result of this important conference will lie a shifting of part of America’s gold to other countries. though, as pointed out, the operation may bo found difficult-. In a sense this holding by America is an incubus, and America does not want it, to increase. It, i.s significant that, of the £18.350,0''0 of gold which Franco

su’d to America same time ago. representing tlk* amount lodged with the Bank of England ;■* lollatcral security lor a loan, only about £0,()l<0.B‘0O was actually shipped to the United Mates. The Federal Reserve authorities refused to take any more, and oven the Balance they regarded as “gold held abroad purchased limn a. fmeign correspondent.’’ which has not been, added to Hie reserves of America’s central hank. And so the matter of holding gold continues to lie a problem.