GOLD RESERVE

Hokitika Guardian, 7 May 1931, Page 3

GOLD RESERVE

SIR R. GIBSON OPPOSES SHIPMENTS. (Australian Press Association.) CANBERRA, May 6. , f An event unique in the annals of : the Federal Parliament occurred today, when Sir Robert Gibson, Chairman of the Commonwealth Bank Board appeared at the bar of tbe Senate give the Bank Board’s view of the Commonwealth Bank Bill, under which the Ministry seeks to ship large quantities of gold overseas. Members of the Ministry and the House of Representatives crowded the Scat,* to hoar Sir R. Gibson’s statement. He said the Board was in continuous communication with the Bank of England, which had no direct financial relations with the Governments of Australia. He confidently believed the Bank would do anything in its power to help Australia, either by influencing the market in London in her favour, or helping his Board. The amount of gold held in Austi"'lin as a reserve against, the note issue, proceeded Sir R. Gibson, was £15.150,000. The total of unfunded de’-ts owed by Australian Governments in London was £38.075,000, of which £5,000.000 was due,to the hill market, £2.950,000 to the Australian trading banks, £25.125.000 to the /Commonwealth Bank. From inquiries made in London, it would he, very .difficult ;; 1a discount, the Australian bills fhUjh'r due at an early date,: dr, if it coiiH be done, it would .!*? at a comparatively high rate of interest. ■ : . •' ! ,■; ■ ■ I

Sir Robert emptipsised ■that! the ?Commonwealth cbnld make no Cir D-p. ■■shipments of gobj to London witbe-f i cfluciiie- tli«' statutory reserve. TUc fact that the note issue would 1 he inndenunt.ely supported would create uneasiness, anil loss of 'faith. value of th<» Australian note would depend entirely upon the co'ifid'Mue of the people and the ahilitv of D" people to redeem the notes in some form or another. The country had mi instance, of what a loss of faith meant quite recently, altliou<rh in that, case the Government Savings Bonk was hacked by ample reserves. There was the same lack of faith in fiduciary issues. On, ..the other hand. ■n< gold reserve ' •had' a psyehofogicn 1 value, and created confidence in the ’minds of the people and those who handled the notes.

SIR R. GIBSON’S STATEMENT

CANBERRA, May 6

Sir It. Gibson added that live, millio ' pounds worth of bills were falling due on Jung 39th and there wa s a danger of default. He read a letter to the Treasurer. wherein he stated the Commonwealth Bank had already shipped .five, millions worth of • gold to meet the needs of Government prior to .March 30th. We thought if the country must default, it would bo pre. ferrable default in Australia, not to the people overseas.

Senator Barnes asked.—Would you •regard alternative to be a further shipment of gold. Gibson replied.—Undoubtedly.