WELLINGTON NEWS

Hokitika Guardian, 9 December 1929, Page 2

WELLINGTON NEWS

SHARE HAWKING. (Special Correspondent.) WELLINGTON, Dec. 8. At tlip annual meeting of the Wellington Stock Exchange held early in the week the Chairman stated that the share-liawker was still in evidence, and would continue in evidence until the N.Z. Companies’ Act .was amended on the lines of the English Act. He stated that the Stock Exchanges of the Dominion lvad made representations to the Government on the matter but no action has yet been taken. This has been a thorny matter with the Stock Exchanges, and that some amendments of the Act is necessary will be readily admitted. The main restriction put on sharehawkers. and share-pushers in the English Act are: (1) The prohibition of persons going from house to house offer ing shares, for subscription or purchase by the public; and (2) the prohibition of making offers in writing of any shares for purchase to any member of the public, unless the latter is a person whose ordinary business or part of his ordinary business it is to buy or sell shares, whether as principal or agent, or unless such offer is accompanied by a written statement containing the particulars required by the section. There are important differences between these restrictions and it would seem that the share-pusher is not as seriously restricted as the share hawker. In the case of share-hawking the prohibition extends to offering shares for subscription as well as for purchase, whereas in the case of share-pushing the restriction is confined to offering shares for purchase. The provisions in the case of share-hawking are aimed at all shares but an exception from the provision against share-pushing is made in the case of shares which are quoted on any Stock Exchange. While shares may not be hawked to the public or any member of the public, if it is his ordinary business, or part of his ordin-

ary business, to buy or sell shares whether as principal or agent. The discrimination against the share- 1 pusher is not nearly so severe as against the share-hawker, and this seems reasonable. Share-pusher is a derogetarv term, but what is a sharebroker other than a share-pusher, at least out here. The average stockbroker when instructed to sell shares goes the round of other brokers 1 offices and tries to quit the shares and he may ii tcrview some of his clients whom he thinks may be interested. Then there is the company promoter, and this has developed into a regular business’during the last few years, who must do his utmost to get the pu'oi" to subscribe for the shares that he is interested in issuing. Some of :N.'© company promoting organisations <*:.;• pin men rgularly to sell shares generally on a commission basis and these are share-hawkers. These hawkers are not interested in the proposed company and as a rule know very little about it, and they, make up for lack of knowledge by indulging in extravagent though plausible statements.

The share-hawkers’ only interest is earning his commission. In the U.S. all promotion houses have their salesmen, they are part of the regular staff and highly trained. The American system of flotation is different to the British. The matter bristles with a good many difficulties nevertheless amendment of the Companies’ Act is badly needed . ..

Within the past four or five weeks quite a number of prospectuses have been issued .especially in Wellington and the aggregate capital required by these new companies runs into many thousands of pounds. Investors have a good choice and generally speaking all the ventures are reasonable proposals and not capitalised. The Chairman of the Wellington Stock Exchange suggested that in view of questionable ventures being submitted to the public it was desirable that members of the Exchange should endeavour to educate the public in investment principles, but what those principles are he did not say. It is doubtful whether sharebrokers have any guiding principles. They buy and sell stocks, debentures, bonds am shares as directed by clients and there are no principles involved in this beyond integrity and that can be said of sharebrokers. Investment principles are more or less foreign to the average sharebroker and it is doubtful if any one of them can define what is meant by investment principles, or any such principles. There are certain unwritten rules one of the most important being “spread your risks.” , In London and other places there are advocates of investment on a geographical basis, which is what investment companies do. There is no such chance here and therefore investment companies in N.Z. are not wanted just not or at least they are not the proverbial “long-felt want.” Investment for income is or ought to be the objective of an investor but in recent years other considerations have superimposed themselves to the disadvantage of investors. With a good many of the investors there is a touch of the speculative fever, and recently this class of speculation has received a few nasty knocks.