S. AFRICAN CRISIS

Hokitika Guardian, 30 December 1932, Page 5

S. AFRICAN CRISIS

CHAOS PREVAILS RESERVE BANK CANCELS RATES (Omted Press Association—By Electric Telegraph—Copyright.) (Received Dec. 30th., at 9.40 a.m. CAPETOWN, December 29. Utter chaos prevailed to-day in banking, and commercial circles. The reserve bank, which fixes tiie rates, announced this morning that all rates had been cancelled, while the post office continued to issue money orders at 40 per cent., up to a limit' of one hundred pounds. Long queues formed, and the offices were crowded at noon when a peremptory order was issued confining business to the Union and the Protectorates. A complete stagnation of trade ensued.

The crisis is due to the reserve bank refusing to the commercial banks to cover overseas owing to the automatic termination of the purchase of gold output at the old standard rate. Pending an arrangement for the marketing of the output being disoussed, jthe unsatisfactory 'Wanking; position will continue.

Judge lvoos declared emphatically today that if General Smuts continues to put (party before country the present government will continue. SHARE BUSINESS PARALYSED. (Received Dec. 30th, at 8 a.m.) tyONDON, December 29. Th© “Daily Express” city editor says that the buying and' selling of gpld mining shares between London and Johannesburg is paralysed. There has been' a boom in shares at Johannesburg but there was a temporary setback in London where the banks are unable to estimate the value of' ithe South, African pound. The decision of mining companies to sell gold to the reserve bank is natural, as the producers cannot be expected to accept currency which .is likely to depreciate. The South African mines may insist on being ,paid at the present price of gold in sterling, which will bring the South African pound down level with sterling. The mines will not he obliged to sell to the reserve bank, but can sell •to the Bank of England, or any other buyer. This will decide the value of the 'South African pound.