WELLINGTON NEWS

Hokitika Guardian, 31 March 1926, Page 4

WELLINGTON NEWS

MR GROUNDS’ DEFENCE. (Special to “ Guardian.”) WELLINGTON, March 29. Mr William Grounds. Chairman of the Daily IVodtieo Control Hoard, has issued a statement as a counterblast to the speeches made by the deputation which waited on the Prime Minister to protest against absolute control. Mr Grounds says the Board is not proposing to disrupt and disorganise the marketing machine, and yet the f.o.b. buyer is to be obliterated. Mr Grounds says. The only point is that under regularisation of supplies and supervision there will he less room for the speculator, for the man who comes between the producer and the consumer reaps profits without rendering adequate service to either party. When on a low market;—created by unregulated dumping—it is possible for financial interests to buy £250.000 worth of produce al' about 1 a7s per civt. store it. and later.sell at from 18.8 s to 2255. thereby reaping a profit of approximately £(10,000 to 070,000 it can hardly lie contended that perfection lias been reached.”

This paragraph shows how little Mr Grounds knows of market operations. Tt is safe to say that there is not a commodity market in which speculators do not find a place. They are to lie found in the metal markets, the wheat market, the cotton market, the wool market, the silk market, the jute market. the tea market, the coffee market, and every other market. The .speculator buys in a low market, declares Mr Grounds, and one may well ask does Mr Grounds expect a speculator to buy in a high market? Is it not when prices are low and the market depressed that everyone desires to see a buyer conic in. The speculator stops in and busy, and his very action sets the market tending upwards, for be imparts a certain amount of confidence. Almost- from time immemorial futile efforts have been made at various times to eliminate the speculator, hut he still survives, because he is a necessary and important factor in the mechanism of every market. The f.o.b. buyer bias been associated with the Dairy Produce trade of New Zealand since its inception, and at the outset the factories were eager to do business with him because be relieved them of all risks. He made a profit, sonic-' tirfies large, sometimes small, but bo was entitled to his profit beeaue lie had rendered service for it. Sometimes the speculator made a loss and occasionally a heavy loss. What Mr Grounds, in effect, suggests is that the Control Board should take the place ol the speculator and quite a number of people think that the Board is not competent to do so. If the Board’s scheme applied only to the co-operative companies file objections may not have been so forceful, hut all the proprietary factories are covered hv the scheme, and the proprietors think, and rightly so. thn< they can do better for themselves than ever the Board can do for them. But absolute control will not come into force. There is time for a good many tilings In happen before August Ist and the happenings may come sooner than is anticipated and prove .sensational. .Mr Grounds takes credit for eo-ordinating insurance and reducing freights hv £12(1,(100. hut lie fails tu state that without the powers conferred by the Act. this would have bceii impossible. It stands to reason

then, that if the same powers were invested. in the Dairying Division of the Agricultural Department, the officers could have obtained the same result at a. much less cost to the producers. HANK SHARES. Trade restrictions of one kind and another, and the Mortgage Extension Act. and the Rent Restriction Act and other legislative interferences with trade, commerce and industry, have caused investors to abandon the'usual channels of investment and seek other sources. For some time mortgages of real estate were not regarded with favour by investors, although there is a better disposition to invest in such securities now. For these reasons Stock Exchange business has been good. There are, however, fashions even in such investments, and to-day bank shares stand foremost in the estimation of investors, and there is a reason for this. Compared with the pre-war period the demand on the banks for accommodation have increased enormously, mainly because of the higher prices of commodities. To meet this growing demand the banks generally have increased their capitals, and the issue of new shares has proved very attractive to investors. The result lias been that hank shares have steadily advanced and this may he illustrated by giving a. lev: quotations. Thus a year ago Rank of Australasia shares were quoted at £l-1 2s and they now stand at £l4 fis fid, Rank of New South Wales shares have risen from £4l to £43 Ids, Union Rank shares from £l3 IPs (id to £l4 18s fid, and Rank of New Zealand shares from 52s 3d to fiOs. Investors have found it profitable, to extend their operations, and the shares of purely Australian hanks arc now dealt in. This is a pity for this country can do with all the available capital. but the conditions must be made acceptable to investors.