INVESTMENTS

Evening Post, Volume CX, Issue 140, 11 December 1930, Page 12

INVESTMENTS

PBOSPECTS OF NEXT

YEAE

NATIONAL INTEREST BILL

'"Evening .Post," 11th December. But brief reference was made in ''The Post." last evening to the speech of Mr. E. ■R. Smith, chairman at the annual meeting of the Dominion Stock Kxchange. Mr. Smith covered a fairly -wide range of topics in his remarks, which the "Otago Daily Times" reported in full. In moving the adoption of the annual report of the Stock Exchange, the chairman first reviewed the 'investment situation. He said: "The world depression has naturally been reflected on the exchange during the j-'ear, and it would be idle to pretend that business has been up to the normal standard. The fall in the value of all shares lias been very pronounced, and need not be dwelt upon. The prospects for the coming year do not yet, in my opinion, disclose the silver lining that we are al.l looking forward to expectantly. Owing to. the large sums of money that the Dominion has invested in Australia during the last few years, we are very closely linked with the Commonwealth's markets, and therefore deeply interested iii.the problems that at present confront its people. Interchange of business is, however, as you are all aware, almost prohibited by the heavy ruling rates of bank exchange. That the flow of money to Australia has been checked is in itself not undesirable, as it should result iv our local investments and industries receiving more support than in the past. "EAT, DRINK, AND BE MERRY." "One does not like to comment on the lesson to be learned from our neighbours and the position they have reached as the result of extravagant borrowing and unproductive expenditure, except to point out that the leaders of our' Government do not seem to be capable of profiting by the; example, and their slogan would appear to be 'Eat, drink, and be merry, for to-morrow, we die.' This is exemplified by the fact that during the last sis months they have quietly borrowed over £9,000,----000, a large proportion of which is being spent on -non-productive works. Thus, notwithstanding the gloom overshadowing all primary industries, our already huge interest bill is being greatly increased." WAR DEBT MORATORIUM. ' The chairman also reviewed the international monetary situation, particularly mentioning the proposal (not emanating trom Great Britain) of a war debt moratorium; Possibly the idea originated in the United States. Great Britain would continue to pay its debts, but possibly America is in the anomalous position of holding the largest gold reserve in the ■world, is also receiving about £85,000,000 annually for war debts alone, and yet presents the spectacle of growing unemployment which it is suggested is due to the impoverished Continent being unable to buy America's ' goods. It is ■' possible, therefore, that if such a moratorium were agreed to a world recovery mHit comjr about, and, if so , Kew Zealand -would, ot .course, share in it. Mr. Smith expressed regret that the proposed new Companies Act for New ZeaJand (based on the British Act) was not put through at the last session of Parliament, and that it. is now delayed until next year. The safeguards and restrictions, that it will provide are, still urgently required for the'protection of the public, notwithstanding the lessons of the last few years. The share hawkey is still free to canvass the country from house to house, and prospectuses may be .issued which provide,for a minimum subscription that is entirely inadequate, and foreshadows failure. The Dunedin Exchange had frequently, warned the public to be guarded, and to make , due inquiry before investing in new enterprises. He desired to repeat that warning. The annual report and balance-sheet, of. the Dunedin Exchange were adopted.