* * *
GOLD SHARE PROSPECTS
Those who bought gold shares as a war hedge are some- what disgruntled at the recent turn of events. South Africa, Rhodesia and Australia, in slightly differing formulae, have already announced their intention to appropriate the bulk of the excess proceeds of sales of gold above i5os. an ounce, and it is by no means certain that the other Empire producers, namely, West Africa and India, will avoid similar treatment. Thus, as a war hedge a bar of gold or a holding of dollars, assuming that the terms of acquisition were the same, turned out better than gold-mining shares. I must add that by gold-mining shares I mean the shares of well-proved pro- ducers, such as Crown Mines, Ashanti, or developing under- takings such as " Sallies," with adequate finance, since it is obvious, and should have been before War broke out, that developing undertakings with their financial and plant requirements still to be provided for must be badly hit.
On broad grounds, I see no objection to the gold-mining industry, which is fortunately placed in producing one of the sinews of modern war, being asked to bear excess profits taxation. The problem is how to apply the tax equitably and not to penalise enterprise unduly. It is obvious, for example, that, like every other industry, the gold mines are going to be faced by rising costs. Up to a point some of the South African mines will be able to counter higher costs by raising the average grade of ore milled, but this factor should not be left out of account in legislating for the industry. On the whole, although the speculative attractions of gold shares
(Continued on page
454)
FINANCE AND INVESTMENT
(Continued from page 452)
have been diminished, I regard the shares of the proved producers as good holdings. Many of them are now priced to give very reasonable yields.
Previous page
