OFF GOLD

Manawatu Standard, Volume LIII, Issue 27, 29 December 1932, Page 7

OFF GOLD

SOUTH AFRICA’S DECISION.

PROTECTION OF GOLD RESOURCES.

POLITICAL CRISIS DEVELOPING. (United Press Association—By Electric Telegraph.—Copyright.) CAPETOWN, Dec. 28. The South African Government has gone off the gold standard. The announcement to relieve the Reserve Bank of its obligation to redeem notes in gold was timed at midnight, but was known in London early in the afternoon. The official reasons for the change are the uncertainty resulting from the political situation leading to abnormally heave purchases of exchange. In order to prevent a crisis of the first magnitude it is essential to take immediate steps to protect the gold resources. Trade will feel an immediate benefit as the maintenance of the gold standard is making the country bankrupt. It is expected that the export subsidies will l>o continued for a few months to meet the commitments incurred. The political crisis is now expected to develop rapidiv. MINISTER’S EX PL A NATION. PURPORT OF NOTICE. Received December 29, 9.3 d a.in. CAPETOWN, Dec. 28. dir N. C. lTavcnga, Minister of Finance, explained the purport of the Government notice as follows: “We are virtually off gold. The banks will quote rates for exchange on the new basis. The circulation ot gold internally ceases. The Union is now in circumstances similar to those of Holland, which is a gold country without gold as legal tender internally.

“The position is disappointing as there is no relief for the primary producers in respect of exports.’’ General Smuts describes the position as dislocated and prophesies that the end is at hand. He appeals to his supporters to remain steadfast, implying that lie is not prepared to follow Judge Roos.

THE NEWS IN LONDON. SERIOUS LOSSES BY PRODUCERS LONDON, Dec. 28. South Africa’s decision in respect to sold is the subject of much comment in financial and editorial -columns. It is taken to mean that the first step to the abandonment of the gold standard, which most commentators suggest would be advantageous to the whole Empire. The Daily Express says that though South Africa bv remaining on the gold standard saved £600,000 a year in interest on her £50.000.000 loans in London, her wool and fruit producers suffered serious losses. If the South African pound comes to sterling level the revenue of the Rand cold mines will probably be increased, bv £20,000.000. half of which will probable he taken in taxation to meet the Budget deficit of £7,000,000.

EFFECT ON STOCK EXCHANGE. SHARES MARKED DOWN. (British Official Wireless.) Received December 29, 11.50 a.m. RUGBY, Dec. 28. Great interest was displayed on t.ho London Stock Exchange in the developments which took place following the meeting of the South African Cabinet. South African mining shares were marked down, but there was little selling.