Home >> Dictionary Of Banking >> Abstract Of Title to Committee Of Inspection >> Bar Gold

Bar Gold

bank, bullion, oz and price

BAR GOLD. Much of the Bank of Eng land's stock of gold is not in the form of coins, but of bars, which, from an exporter's point of view, are often preferable, one reason being that the quantity lost by friction in transit is less in the case of bars than of coin. The Bank is bound to pay in sovereigns any amount of its notes that may be tendered, but if a bullion merchant prefers to take bars, the Bank raises no objection and usually charges the mint price of gold, i.e., 17s. 101d. per cz. ; should, however, the demand become sufficiently keen, the Bank may raise the price of bars (not raise the price of sovereigns, that it cannot do) to 0 1 7s. 11d. per oz., but it would not be worth while to increase it above this figure, for then an exporter would find it cheaper for his purpose to get sovereigns to be sent abroad, to till the place of which the Bank would be reduced to having some of its bars minted.

Any one has the right to take bar gold to the provided that the value is not less than 120,000, and have it coined at the rate of E,3 17s. 101-d. per oz. of standard gold, free of all expense of coining, but as a certain period must elapse before the bullion is turned into coins, during which time the owner of the gold would lose interest upon it. it is the practice to sell gold bullion to

the Bank of England. The price at which the Bank of England must buy all gold that is offered to it is 0 1 7s. Pd. per oz. By the Bank Charter Act, 1844, Section 4, " all sons shall be entitled to demand from the issue department of the Bank of England, Bank of England notes in exchange for gold bullion at the rate of ,63 17s. 9d. per oz. of standard gold Provided always, that the said Governor and Company shall in all cases be entitled to require such gold bullion to be melted and assayed by persons approved by the said Governor and Company at the expense of the parties tendering such gold bullion." The notes can, of course, be at once exchanged for sovereigns. The differ ence of 11-d. per oz. between the buying and the selling prices forms the Bank's profit. or rather its remuneration for the trouble of getting the bullion minted if required, and for the loss of interest upon the bullion before it is turned into coins.

Bar gold is a kind of international cur rency travelling about from one nation to another in settlement of exchange balances without ever being minted into any country's coinage, (See MINT PRICE.)