PAYMENT BY CANADA

Otago Daily Times, Issue 26638, 8 December 1947, Page 5

PAYMENT BY CANADA

BONUS TO GOLD-MINE OWNERS AMERICAN OFFICIALS CONCERNED N.Z.P.A.—Reuter—Copyright. Rec. 9 p.m. WASHINGTON, Dec. "6. Though no official protest has been registered, it was disclosed to-day that the United States, through a high State Department official, has protested orally to the Canadian Ambassador, Mr. Hume ’Wrong, against Canada’s plan to pay its mine-owners a premium of seven dollars an ounce for increased gold production. Washington officials are of the opinion that Canada's plan would have an inflationary effect on United States economy and might be a violation of the International Monetary Agreement, which set the world price at 35 United States dollars an ounce.

They ’ do not think that the bonus would constitute a basic increase in the price of gold but believe it would increase Canadian offerings, thus forcing the United States to buy more of the metal which it does not need. It is the Federal Treasury policy to accept all gold offered at the set price, because, if the United States suddenly ceased its purchases, there might be disastrous results in world trade, on the value of foreign currencies, and on the value of America’s own gold hoard at Fort Knox, in Kentucky. Officials are concerned lest Canada’s plan leads to subsidies in other gold producing countries, and whether it will necessitate the United States subsidising its own mineowners.