Sunday, 27 September 2015

Waratah - could there have been Australian gold on the Waratah?

The principal export from Australia to the United Kingdom, 1909, included gold bullion - 1 914 079 pounds sterling; Silver bullion - 43 842 pounds sterling. The average annual export of gold fell from 
8 396 113 pounds sterling 1902 -1906, 
to 
4 036 214 pounds sterling in 1909.

In 1909, the total amount of gold produced by Australia and Tasmania equated with 2 957 789 fine ounces (roughly 101 tons), valued at 12 563 889 pounds sterling.
 The following chart shows that the price of gold did not fluctuate between 1903 (the boom in Australia) and 1909. One can hardly call 1909 a 'slump' year.

1912
$20.67
1897
$20.67
1882
$20.67
1911
$20.67
1896
$20.67
1881
$20.67
1910
$20.67
1895
$20.67
1880
$20.67
1909
$20.67
1894
$20.67
1879
$20.67
1908
$20.67
1893
$20.67
1878
$20.69
1907
$20.67
1892
$20.67
1877
$21.25
1906
$20.67
1891
$20.67
1876
$22.30
1905
$20.67
1890
$20.67
1875
$23.54
1904
$20.67
1889
$20.67
1874
$23.09
1903
$20.67
1888
$20.67
1873
$22.74
1902
$20.67
1887
$20.67
1872
$23.19
1901
$20.67
1886
$20.67
1871
$22.59
1900
$20.67
1885
$20.67
1870
$22.88
1899
$20.67
1884
$20.67
1869
$25.11
1898
$20.67

The Sydney Morning Herald, Monday 6 September, 1909. 

THE GOLD RESERVE COMMITTEE.
The committee appointed by the LondonChamber of Commerce to inquire into thenecessity of increasing the reserve of gold inthe Bank of England, and to whose recommendations we have already made reference in this column, was one of great weight and influence.
In 1907, gold-rich colonies such as South Africa and Australia had no choice but to contribute gold to the Bank of England, caught up in heavy American borrowing. This trend continued through to and including 1909.

(1909) Gold is largely shipped from Australia 'under option', that is, it may be carried in a vessel to the terminal port of its voyage, or it may be diverted at some intermediate port according to the business requirements of the consignee. In this way Australian gold shipped to order of London bankers may be diverted. In fact, the large consignments of gold made to India and to South Africa, have not been made in satisfaction of claims of those countries on Australia, but in satisfaction of English claims, and have merely been consigned to the countries named by order of the London bankers, whose clients (the British Government) required large sums of gold in the countries named.

This extract illustrates that the commonwealth colonies such as Australia and South Africa were in effect minions of Great Britain. London banks acting on behalf of government had the power to dispose of colonial gold assets as they saw fit.

The average gold assets held in Australian banks, for the quarter ended 30 June, 1909:
26 302 843 pounds sterling (211 tons) - a combination of coins and bullion bars. 
Compare this figure with the amount held in banks during the gold boom year of 1903: 
20 021 609 pounds sterling (roughly 24% less).
It seems contradictory that there were considerably larger gold reserves in Australian banks in 1909 compared with 1903, which after all was the 'boom' year for gold production and export. This paradox suggests that not all gold was exported and Australian banks were accumulating reserves. The question is this: how much were they allowed to sell for export profit and how much was sent to banks in London? 
Although the general export of gold had slowed by 1909, in June another discovery of rich gold deposits was reported from the rocky terrains of the Tanami Desert, about 200 miles from Hall's Creek in Western Australia and 450 miles southeast of Wyndham.
A new gold rich deposit discovered in 1909. Not a bad year at all.
Australia, being commodity-producing member of the commonwealth was not in a position to decide how much gold was for export and profit in 1909. The above data illustrates very clearly that gold reserves in Australian banks increased between 1903 and 1909, but that the London banks were in a spot of bother with the Americans and needed significant amounts of gold from Australia - a sort of colonial loan. No wonder colonies wanted independence!!
The Waratah need not have been transporting 'export' gold. She could very well have been transporting gold, relocating from Australian banks to London banks for the above reasons. There was more than enough of it to account for 105 tons on the Waratah's fatal voyage - and oh yes, enough left over for vessels such as the Kildonan Castle.
Remember the case of the Republic which was secretly transporting gold !




https://books.google.co.za/books?id=5Uy20CDWknwC&pg=PA853&lpg=PA853&dq=gold+bullion+reserves+in+australia,+1909&source=bl&ots=xv2NYV1N78&sig=ozVPXqfpWsA-OTohe4ixHVtGgb0&hl=en&sa=X&ved=0CCkQ6AEwAmoVChMIkuXy68uXyAIVhpeACh0RWwHg#v=onepage&q=gold%20bullion%20reserves%20in%20australia%2C%201909&f=false

1 comment:

Mole said...

Jolly interesting stuff, Andrew.