THE PRICE OP GOLD.

Otago Daily Times, Issue 17685, 24 July 1919, Page 6

THE PRICE OP GOLD.

TO THE JSDITOE.

Sir, —At a time when some of our goldmining companies are languishing through the increased cost of production, without any corresponding increase of revenue, the remarks of the chairman and other shareholders at the annual meeting of theWaihi Gold Mining Company, held on the 26th May last, are worth recording. If combined action were taken, at least the embargo placed by our Government against exportation might be removed, as has been done in Australia.—l am, etc.,

G. A. Fenwick.

St. Clair, July 22.

The chairman of the Wailii Company (Mr A. M. Mitchison) referred to the' price of gold in the following terms: —"As you know, before the war the world m general, and England in particular, used to work on a gold basis. In London an ounce of pure gold used to bo worth approximately £4 5s in .Bank of England notes; or, to put it the other way, a Bank of England £5 note used to be really worth about 23£dwt of pure gold. You could obtain gold for export or for industrial purposes at this rate by producing the requisite amount of notes, and, on tlijj other hand, you could get notes for the gold. The present position is entirely different. Tou can still obtain notes for gold—if you have got any—but you cannot get gold for the notes. In fact, the nation is now working on the basis of an inconvertible paper currency, and that currecy is depreciated. The extent of the depreciation is a matter of opinion, but the fact of its existence is undoubted, and was explicitly recognised _in the first interim report of Lord Cunliffe's Committee. In other words, if gold wore allowed to be freely bought and sold, you could get more than £4- 5s of Bank of England notes for loz. The chancellor of the Exchequer is reported to have said: 'There is nothing in the report of Lord Inchape's Committee to suggest that producers of gold are not entitled to obtain for their produce the best price available in the most favourable market, and I am now considering in what maimer this can bo secured.' It is satisfactory for gold producers to hear that their title is admitted, but at the same time it. would bo more satisfactory if they were allowed to get what they are entitled to. At present they are not getting it, and there is still a possibility that, nowithsfcanding the consideration of the Chancellor, it will bo thought advisable for the national welfare to continue to prevent a perfectly free market for gold at the present time. If this should be so, then the penalisation of the gold industry will continue, and if for the public weal it is deemed necessary to penalise any industry, then it is common justice that the industry should receive compensation for the burden . which the State is artificially imposing. At all events, one thing is clear, and that is that if an industry is penalised without compensation its product will fall off, and any reduction of this output of gold will tend to increase the •extent of the present de preciation of the British and the other inconvertible currencies which have depreciated. Now, as regards the Waihi, wo have not been so adversely affected as other gold producers, because we also produce silver, and the rise in prico of the white metal has been altogether in our favour. Also, during the war I confess I have felt mast reluctant to voice any grievance or share in making any complaint, however well justified; but now that the war is at an end, I thins that wo, as well as other gold producers, are entitled to ask that, whilst artificial restrictions are not and whilst wo are not allowed to have a freo hand to do the best wo can with our product, then wo ought to have some compensation in the shape of a bonus on tho gold wo produce. It seems to be a matter of elementary justice; but I have also this to add: People in London are not accustomed to all tho features of a depreciated inconvertible paper currency, and I hope it is not going to last long enough for them to obtain an intimate knowledge of its varied charms—but tho symptoms it causes aro pretty obvious to anybody who has had any experience of it, and there is not tho slightest doubt but that a continuation of tho policy of penalising tho gold industry without giving compensation must tend to aggravate the disease and increase the evils."