WORLD FINANCE.

Taranaki Daily News, 28 January 1920, Page 5

WORLD FINANCE.

THE OUTPUT OF GOLD. A HOPEFUL STATEMENT. By Telegraph.—Press Assn.— Copyright. Received Jan. 27, 3.10 p.m. London, Jan. 22. The Times, in its annual financial review of the year 1919, says that as regards gold last year will take precedence over any year since 1813 for eventfulness. It, inter alia, confirmed the conclusion of leading economists in the nineteenth century that gold, despite its limitations, provided the most suitable basis of a sound currency system. These conclusions triumphed in the restoration, after five years, of a free market. In the sale of the current output, permission Was granted Australian producers to prove their contention that they were receiving less than market value, resulting in their disposal of 210,000 ounces, averaging 95s 9d for standard ounces.

The cause of the rise in the paper price of gold was shown to be the same as in the Napoleonic wars, when it reached 110 shillings a standard ounce—namely, the excessive issue of paper currency in relation to the supply of goods and gold. A tabulated statement shows the value of the world gold output last year was £75,000,000, of which the Transvaal provided £35,500,000, and the rest of the Empire £14,000,000, as compared with £96,800,000 for 1915, of which the Transvaal provided £38,600,000, and the rest of the Empire £20,100,000. The world's drop per cent, last year, compared with 1915, was twentytwo.

The experience of the gold industry in war time enrphasised the danger of attempting to limit the operation of the law of supply and demand. The article points out that the producers are wisely stimulating the largest possible output at present, as the existing high price of gold -will not be maintained. Consequently, decreased production may be regarded as checked, and an increase confidently anticipated in 1920, unless the unforseen happens. India was an important factor in the gold market during the second half of last year, owing to a favorable trade balance, the Indian Government recognising that it was cheaper to buy gold than silver. In order to meet the currency demands they prohibited the private importation of gold, despite the producers' protests, and on a basis of American exchange, and the price of silver enabled them to buy sovereigns at about 245, and recall them in the bazaars at a rate working out at 34s.—Aus.-N.Z. Cable Assn.