Chaos on 'Change

Hawke's Bay Herald-Tribune, Issue 72, 12 April 1937, Page 7

Chaos on 'Change

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FRANTIC DEALINGS Gold Shares and American Revaluation Rumours INVESTORS LOSE HEAVILY

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» (Eeceived 12, 8.45 a.m.) LCNDON, April 10. "Bad as the war," vras one broker's description of the market chaos which culminated in frantie ' dealings in the streets as "bears" scrambled to cover, following Mr Booserelt's denial that he intended to Tednce the price of gold. * The violence of the fluctuations is Ulustrated by the caso of West Wit'waters Rand? which were offered as low as £13 10/- on Friday and recover«d on the street to £15 1/3, compared with £17 12/6 a week ago. The rumours have been most costly and at one tiuie the market value over a wide xange of shares must have depreciated tens of millions. \ Not ohly apeculators but serious in-' vestors, whose nerves were unequal to the strain, were involved in heavy losses. There has been bitter criticism in the city of American methods, yet it is admitted that Mr Roosevelt achieved one of his maia purposes with remarkable economy and energy namely, to damp down speculation. A leading financial anthority told the Anstralian Associated Press that Mr Roosevelt uses a mouse to do the work of an elephant. He whispers "Down" and the market blindly follows without considering whether he has the power to enforce his wishes. Thc Financial Time.: considers that while the President's statement has not wholly nndone the damage, the world 's maTkets have probably been saved from panic. . The Monday out-

look is now much brighter and good gold shares should gradually recover though the long-term outlook is no longer clear. The market should now enjoy a respite from exchange fluetuations with the franc destined to settle down around 112. Commodity movements should also be less wild. The chief anxiety for weeks to come will be to avoid being caught with the wrong foot off the ground. The nervousness in the bullion market is by no means completely allayed. The exceptionally large amount of £14,200,000 world was sold on Saturday morning at a discount of threepence on American p&rity, indicating the nervousnesg of holders. The Times ' City editor considers that Mr Roosevelt's declaration should suffice to reassure the market that an important change in the American gold policy is not contemplated. Cotton resisted the panic, indicating that the statistical position is stronger than is generally believed. Consumption is good and the outlook appears moderately favourable. The sugar conference has fixed a free market at 3,170,000 tons. Hard bargaining over quotas is inevitable, the realisation of which, combined with selling in Paris led to the price declining by 2^d.