WELLINGTON NEWS

Hokitika Guardian, 11 August 1931, Page 6

WELLINGTON NEWS

depression OF SHARES

(Special Correspondent.)

WELLINGTON, August 10.

The serious losses sustained by farmers has formed the theme of many speeches and the basis of a good many newspaper articles and letters to thEditor, and while it must be fully admitted that the pastoral industry has suffered very heavy losses we are apt to forgot that similar serious losses have been felt by other sections. The depression has fallen with a heavy hand on investors in Stock Exchange securities, and millions of paper values have vanished. Compared with twelveunonths ago the value of the shares of nine trading banks in Australia and New Zealand have depreciated by the enormous sum of £22,655,776, and examples of the shrinkage may be given^

Shares in the Bank of Australasia changed hands in July last year at £l2 2s 6d, and last week sellers were willing, to accept £8 13s, but as there were no buyers it means that a holder wishing to sell must accept Ess. But assuming that the price now is £8 13s, (there is a drop ot £3 9s" 6d a share. There are 900,000 shares of. £5 each ■fully paid up in the Bank of Australasia and the drop means an aggregate depreciation of £3,125,500. In 1929 the market value of the shares was £l4 15s, so that in the two years the shares have depreciated by £6 12s per share. The shares of the Bank of New South 'Wales are quoted to at about £24 15s a year ago they sold at £3B, and two years ago the market price was £sl 10s, so' tliat compared with last year there is. fall of £ls 15s per share, and’ compared with 1929 they have dropped by £27. ss, that is to say that in two . years the market value” has declined by more than 50 per cent. The Bank of New South Wales share capital consists of 375,000 shares of £2O each fully jpaid, so that over the twelve months the aggregate decline in the shares has been the. great sum of £5,156,250. A year ago Union Bank shares sold at £ll 10s and in 1929 at £ls. Their market price to-klay is £6 10s. As compared with last year there is a drop of ,£5 per share, and compared with two years ago the drop is £8 10s. Ibeie are 800,000“ shares and the aggregate decline is £4,000,000. Other \ banks show a depreciation also. The aggregate depreciation in the market value of the Australian Bank of Commerce is £1,131,600 ; on the Commercial of Australia approximately £2,800,000; on the National Bank ol New Zealand £1,500.000, and on the Bank of New Zealand £605,700. Tt should .be noted that during'the past two years all the banks except the Bank of New Zealand have reduced dividends, 1 and this has contributed to the fall in prices.

But the depression in: shares is not confined to bank shares but is spread over the whole Stock Exchange, list and industrial shares have been badly depressed. ■Some industrial shares arc practically,, worthless for no one -will buy them. The shares of Dalgety and Coy. arc today worth about £6 8s in the open market, a year ago they r 'were ; selling- at £ll 3s 6d and two years ago the price was £ls. Compared with last year they are down £4 15s 6d, and compered with 1929 they-are lower bv '£B"l2s. The market price ...of.'.l'CUoldsbrough, Mort find Go's shares’ tbj&ay 1 ; is- about ,19s 6d, a year ago they were worth 295, and two years ago they were selling at 50s. They are down by 9s 6d compared with last year and by 30s 6d compared with two years ago, Iwo years ago British Tobacco shares, were worth 495, to-day they.are hard to quit at 235, and N.Z. breweries have dropped from 70s 6d in 1929 to ‘2Bs 6d. The former declined 29s and the latter 425. These two-beer and tobacco —have been well supported by investors who clung to the belief that despite the depression the working t man would have his beer and the smoker his tobacco, but the turnover, of both concerns have dropped, and being ranked as luxuries the tax gatherer has demanded more of their shrinking profits. The outlook foi* beer and tobacco is not very good especially • the former. “Goodwills” which are by ‘ho. means an insignificant part oi the revenue "ill have t<f he cut, in any-.; case they, are, certain to figure in the next increase in. taxation.

Farmers have lost heavily, but thev are not alone, shareholders in all joint stock companies without exception have lost heavily. There is one company on the Stock Exchange list the shares of which are 10s each full paid up, and for which not more than Id per share is hid and that is just a sporting., offer.