GOLD RESERVES

Hokitika Guardian, 6 December 1932, Page 7

GOLD RESERVES

THE PRICE TO BE PAID

COMMENT BY' MR J. BEGG

DUNEDIN, December 2. Speaking to a reporter to-day, Mr James Begg said that a mild quarrel appeared 'to have developed between the Government and the trailing banks regarding the price to be paid for the gold reserves when these are *m,usferred to the proposed central reserve bang. “The quarrel is interesting,” Mr Begg said, ‘‘in the respect that the gold belongs t° neither of the contending parties,but to those customers of the banks Who have placed -it ip, their custody. The banking moratorium, which has enabled the banks from 1914 onwards to discharge their debts m notes instead of in cash, has permitted them to hold their customer’s gold de-po-its during this period, and it is now proposed by the banks to 4-ell this gold at an increase of approximately 50 per cent, on what they paid for it. Much of this gold has been placed in the banks by depositors in the ordinary courte of business, and they have been repaid in notes, which represented only a fraction of the gold placed on deposit. It would almost seem that under the banking legislation, the dice have been loaded against the depositor in favour of the banks.”

Mr Begg went on to say that why the proposed reserve bank should be enabled to acquire its stock Of gold from the trading banks at a fraction of its present value required 'some explanation, especially; ag the reserve bank would be privately owned. It was presumably impossible to-day to trac e the depositors to whom this g°ld really belonged, but it might be suggested that the most equitable manner of dealing with the surplus value inherent in the gold under, our present depreciated currency would be to allow it to be taken by the Government, as representing the whole of the people, in relief of taxation.