CO129-350 - Public Offices - 1908 — Page 52

51

(2)

have fluctuated in past years.

tive

4.

it appears to us that there are two alterna-

Courses open to the Colonial Government the one to

sell the silver now redundant at the best price available.

in other words to cut the loss which has occurred.

The other course is to retain the silver in the hope that prices may improve and to pay whatever rate of interest may be necessary to provide such monies as may be required by the Colonial Government in lieu of those locked up in the silver. The latter course is of course to speculate, and this course if taken should in our opinion be on the respon-

sibility of the Colonial Government.

5. If the Colonial Government should desire to hold

the silver in the hope of better prices we shall be prepared to finance the operation for the present at least at Bank rate of interest varying. The rate at present is 246 and there appears to be no likelihood of a higher rate for some

time to come.

Taking the price of silver for the purposes of calculation at say 25d per ounce, the bullion value of the $780,000, now in question less cost of refining, would be approximately 260,500. A year's interest on this sum at say 4 which rate is probably a fairly safe one, as the average bank rate over a period of years in the past has been 3% would amount to 12,420 against which it must be borne in ind that one penny per ounce on the number of ounces of silver - 588,562-contained in the $780,000 is equivalent to £2,452. 6. 8, a sum slightly in excess of one year's interest on the money involved at a rate of interest which we have every reason to think would not be exceeded.

6.