THE GOLD RESERVE
AN ECO NO All ST’S BELIEF
AUCKLAND, Nov. 6
The opinion that the gold supply held by the banks in New Zealand was performing no useful purpose, and was an expensive luxury that cost the country £3OO,UUO a year in interest, was expressed by Pro lessor H. Beisliaw, Dean oi the Auckland University School of Commerce, in an address on “Banking Change,” given at the luncheon oi the Auckland Creditmen’s Club. Professor Beisliaw said that, contrary to the common belief, New Zealand was not on the gold standard. Legislation passed in 1914 declared bank notes legal tender for any amount. Note issues must be backed by gold and securities, but the amount of gold covering was not stipulated. An important problem ot tho note issue was one of security, and the question was, “Is a gold cover needed:' ” Notes were lar more convenient than gold, and the question of convertibility was only of academic interest. Professor Beisliaw supported the scheme recently formulated that the New Zealand note issue should be covered by Government securities hypothecated to the Crown. This would provide adequate cover, and it was estimated that the saving in interest would enable the banks to reduce the overdraft rate by about li per cent. It would also do great service by freeing gold for use by the central banks of the world. The world was faced with a great gold shortage, and unless more gold was freed lor use by the central banks there was a probability of falling prices for years to come. He said that £6,300,000 worth of gold now sterilised in New Zealand could be put to far better use by the Bank of England.
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Hokitika Guardian, 8 November 1930, Page 2
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283THE GOLD RESERVE Hokitika Guardian, 8 November 1930, Page 2
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