GOLD “HELD UP”.

Taranaki Daily News, 29 January 1921, Page 11

GOLD “HELD UP”.

TRADERS FORCED TO SELL TO THE BANK. . NATIONS EAGER FOR GOODS Plenty of gold is ready in Holland, Belgium, Scandinavia, and France for buying British goods (says the Daily Mail). But trade is hampered, British merchants declare, because the Government though it would allow the gold to come into the country, will not allow it to go out. If exported, gold would fetch in the United States at Wednesday’s price, £5 17s per fine ounce Instead of selling at this price, the trader is compelled in effect to sell to the Bank of England (almost the only 7 buyers in this country at present) at 35 per cent, below the United States price.

Merchants blame the Treasury and the Bank of England for a short-sighted policy, which, they declare, is preventing much trade. SALE AT 35 PER CENT LOSS. Some weeks ago a large Glasgow firm sent goods to the Baltic State of Esthonia in exchange for £BOO,OOO worth of gold. After considerable negotiation with the Treasury it was permitted to import the gold, which was sold to the Government and deposited at the Bank. Certain firms, believing that the gold must again be released for export, are; sending goods, but they are leaving the gold in Reval, the capital of Esthonia, in the custody of the bank until the day of free trade in gold arrives again. In that town are 20 tons of Russian gold, wanting to be exchanged for British goods. Not only would Continental gold pass through England if the gold export embargo were removed, but at least £2,000,000 worth of gold would be exported which is now idle here in the vaults of banks and firms dealing in precious metals. -Much gold jewellery would also be sold by private persons and by manufacturers who are always ready to transform antiquated jewellery and gold articles, manufactured in days when gold was cheaper, into saleable metal.

“REEKING WITH GOLD,” Gold would also flow readily enough from Holland, which one big merchant described as “reeking with gold.” In financial circles the gold export embargo is also denounced as a restraint on trade and one reason why the rate of exchange with the United States remains so high. If gold could be sent freely to the United States at the present export price of 1775. a fine ounce the price of food would come down again. The embargo on the export of gold from this country does not affect the gold-producing mines of South and West Africa. When the latter were threatened with the embargo they responded by a threat to send their gold direct to the United States. The Government thereupon gave way, and, on the understanding that the whole product of the mines is sent to this country for refining, permits it to be re-exported to the United States.