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Hokitika Guardian, 11 October 1930, Page 4

There has '.been of late a great de flation in the share market, in most countries. Those 1 who had money invented in | what were co.nsidoied hitherto gilt-edged securities, have discovered a drop in capital values o" anything up to fifty j>er cent. Some banking shares in Australia are the most notaible. Folk who bought in at the higher range, of prices hitherto prevailing are, therefore the poorer because fo the drqp in values. A £IOO invested a couple of years ago, even at a twenty-five pound drop, would not return more than £75 no a. and it is not dear that the bottom has been touched. Where securities mast be realised for business or other purposes, there is no certainty about price, because buyers are not forth coming always Sellers therefore have to make the price attractive to secure the favour of those prepared to speculate. The prcjseht ctomdition of the share market means that the so-calWl capitalist, the. man who has put aside his savings in soeui'ittefi to bring him. ait income on his capital, is in jeopardy; The slump iii pi’ices means that ft p-efebbtage Of his savings has gUnOj a.iid it, will be suing time fcfllowhip ft i-feturfl til fiof mal conditions before he curl hope that his scrip Will relutil to tilt l value he pul-chased it l ! t)i* wheit putting a Way h‘.3 savings. Hit sacrifice is thus ft very present one. So with tire land-owner who. actiuired his Ibroatl acres at boom prices, he, too., has realised that his seettritv in the land values has fallen; and if lie has the land encumbered' with a mortgage the proceeds of which hdptd to gain possession of Ihe land, he now possessor a middy mortgage on which ho must go on paying interest. Vet 1 his land is not the value he. one/, thought it was, but he has to pay at the old rate He docs so as long ,*».« he can always hoping for the tide to turn in his favour, blit if .he is unable to wait for file favouring time, he ton must sacrifice bis money, and Ins work over and above the mortgage, arid’ leave the security to the mortgagee. There are cases where I he mortgagee is landed with a. propel ty which will not realise what was advanced on it in the good times, and lie too as a capitalist, for she time being, must be prepared to make bis personal scarifies. Oases such as these quoted, the de-rating of values whether land or iscrip, instance how capital is being lost. Property of most kinds suffers in the same way. It te d’fficulb, in fact impossible, to realise the cost .price of buildings if rushed on to the market, and again saciilices iniist be iiiadd. So -With the producer, he is getting less and. Less for 1,i.; produce. All his capital is invested in his farin, and he has the tamo iaiicl and stock, and the hue jit Id of crops, but lie is not getting the reward he formerly did for .ns labour. His sacrifice Is less income, and in few instance there can be a corresponding saving in expenditure. Bui-the end i« the same. capital JR contracting and making the general position tighter and with w>s moimy to go round, there is less employtmm an 1 less wag's, and so we arrive- at the crux of the present -finanma. piooler.i facing the country.