SILVER COIN

Hokitika Guardian, 6 August 1931, Page 2

SILVER COIN

AUSTRALIAN STOCKS GONE. MAY BE IN NEW ZEALAND. SYDNEY, July 23. The stocks of silver held in the vaults of the Commonwealth Bank are exhausted, and the Treasury officials profess complete ignorance as to the reason. There has been an extraoidinary demand for silver coin during the last two months, and all the banks have been sending out S.O.S. calls to the Treasury. Of course, with conditions as they are to-day, there are fewer banks accounts, and there has been a notable contraction in the number of cheques issued. It is quite possible that silver is being used as a medium of exchange more now than ever before. But even if that were the ease, Large quantities of silver should be returned to the banks. That such is not the case leads to an assumption that many people are hoarding silver, They may hold the belief that seeing it is more physically substantial than paper money, silver would have a greater value in tho event of a financial collapse.

It is pointed out that if silver is hoarded people have a poor idea o; its actual value. The real value of a shilling, for instance, is 2MI in the existing monetary system. Proportionately, paper money might be of fur greater value were the financial system to break down altogether. Of course, an actual breakdown is not I eared by those who are in close touch with the situation, hut there are many ignorantpeople. who still fear the woist, and they think they are wise in hoarding silver rather than entrusting it to the banks. Tile police have unearthed many cases where silver has been hoarded, but this is not an oilVn.-e, and there is no suggestion that it should be made so. There are a number of authorities who say that the disappearance of silver coin in Australia is no mystery to them. I liev insist that it has gaio to Now Zealand, and they point to the fact that several cases have been reported where attempts have been made to smuggle coin into the Dominion. It is considered that for every case discovered there must have been a score of cases undetected. It is said that many nervous folk have transferred the whole of their capital to New Zealand, and tlie annual return of the Bank of New Zealand certainly suggested that there had been some big moves in that direction. It is suggested that before long New Zealand will be flooded with Australian coin.

Normally a supply of silver coin having a currency value of about £IOO,OCO is kept on hand nt the Commonwealth Treasury, but this, with another £120,000 worth of silver coins recently minted, has been distributed among the various banks to meet current demands. As tho shortage is still pronounced the coins must have gone somewhere out of circulation,