WELLINGTON NEWS

Hokitika Guardian, 9 February 1926, Page 4

WELLINGTON NEWS

THE WOOL MARKET. (Special to “ Guardian.”) WELLINGTON, Kel.ruary 5. The London wool sales, the first of. thu series for the current year, opened on January 1!J and will close on February 9. This is a long spell and represents about twelve selling days. There was a-genera I expectation among wool brokers that London would show an improvement in values, but this was not realised and as the sales progressed there was a distinct drop in values of practically all descriptions. The Wellington wool sale which was held on January 22 and 211 was not affected bv the London position, and furthermore Continental buyers had fid I order books to work up to. but when they got to Dunedin and Invercargill their orders had apparently run out for at both sales the bidding was erratic, and the drop recorded in London is reflected in values. Those who have been hoping that the wool market would stabilise at about Wellington prices must be very disappointed. It is a question whether the wool market, can lie so regulated or controlled as to stabilise values, and the same doubt tnav be expressed as to all produce markets. There must be fluctuations from the verv nature of the conditions. Stability would be possible if the supply just about equalled the demand and both were constant. That is of course impossible. Tile demand cannot be regulated any more than the supply because there are a multiplicity ol (actors influencing both. It can be safely said that at the moment there is r. good demand for wool, bin those who want the staple can buy only limited supplies at intervals. That is obviously the position of Continental users of wool. At one time Germany was, an aggressive buyer ot wool, but that was when the paper currency was inflated. France. Italy and Belgium are still strong on paper currency, and when they succeed ill that they will sutler like Germany and Britain and have iheir unemployment troubles and dull trade. The wool market will continue to show fluctuations and no scheme of control or other expedient can prevent that. The Meat Control Board lias not been able to stabilise the price of frown mutton mid lamb, which show big value shrinkages as compared with a year ago. Even at the present prices wool is a good asset. INVESTMENTS.

in the past few years money has gone more into shares than in other form of investment. Prior to the war mortgages of real estate were much favoured by investors, then some stupid legislators stepped in and imposed a mortgage tax which gave a chock to sm'li investments. During the war

period there was the Kent Restrictions Act and the Mortgages Extension Act. The former act is still on the Statute Hook but the Mortgages Extension Act

was allowed to lapse last year. This class of legislation forced the investors to abandon lending on first mortgage of real estate, and they bad to search in other directions for suitable investments. The share market afforded some scope for this and for iho past three years or more excellent business lias been done on Stock Exchange securities. The -If per cent tax free Government bonds have been a much favoured investment by the large joint stock companies paying heavy income taxes. The investors among the public selected the better class of shares, that is offering the safest security and

a reasonable return in dividends and put their money into them. Even in respect to Stock Exchange securities Government control and interference tends to cheek business. Shares of meat coin panics are no longer a safe investment, for if they are not a sufficiently good security for a bank advance they are not good enough for the

average investor. Afany of the inclusLri;i 1 i ompnuic* are also com-idorcd imsitl’e In- investors because oi the danger of labour troubles. .Money like water will find its own level. Tile volume of acceptable securities offering in Xew Zealand has been insufficient to meet the demand of investors and so they have east around for new sources, and have found profitable investment ill the shares of Australian joint-stock companies. particularly Australian hanks, and it is perhaps no exaggeration to say that on an average about .€IOO,OOO per month is sent across the Tasman .Sea for investment in Australian securities. It is unfortunate that this should lie the ease for it must he obvious that the country can do with all this capital for development purposes. If the legislation of the country is of a character to wreck the confidence of investors. it is useless expecting them to invest in Xew Zealand securities.' AVe are hound to feel the effects of this if we should experience a slump in this country.