WELLINGTON NEWS

Hokitika Guardian, 8 September 1931, Page 6

WELLINGTON NEWS

RESTIVE INVESTORS. f

(Special Correspondent)

WELLINGTON, September 5

Investors the whole world over -appear to have been seized with and not without a certain amount of reason. The alarm originated with Australia. After toying with inflation, scolding the banks and allowing the economic position to drift from bad to worse, tlie Commonwealth Government was forced to take definite action, and the committee, of which Professor D. Copland was chairman; recommended drastic action to which the Commonwealth and State Governments consented.

One of the principal feature of the accepted plan was the voluntary conversion of the interest debt amounting to £556,000,000, carrying varying rates of interest to a common low level interest rate of 4 per cent, and the largest holders of these securities such as Banks and insurance companies promptly accorded the plan their support by conceding their holdings. The conversion scheme has proved a wonderful success and has revived confidence in Australia, which also earned the admiration of the world.

In New Zealand the Inter-Political Committee has been examining into the economic conditions of the country and is now in the third week of hearing evidence. This has given the busybodies plenty of time and opportunity for setting afloat wild and absurd rumours. It is believed by some investors that the New - Zealand Govern neni will he obliged to follow the /sample of Australia and convert its in tore-,, loans.

The rumour appears to have originated among Australian holders of Nev Zealand securities, and it would surprise the man in the street if he but knew what large blocks of New Zealand Government securities have been acquired by Australian investors, win' also through local brokers applied for debentures 'offered for sale over the Treasury counter. When the Committee began its sittings these outside investors with their unhappy experience in Australia began to imagim a great deal and became scared. Government securities have been forced or the market and as there were few buyers prices declined. It is absurd to suppose that the In-ter-Party Committee will submit any ; thing of a drastic nature in their proposals for the general election is to-: near for that, , That is bound to be a majority and a minority report, the latter by the Socialist members of the Committee who will endeavour to show an unwonted zal for the nebulous standard of living of the worker. Th minority report will he framed in sue'; a way as to catch votes at the elec) -

There is no reason to believe that an effective plan to deal with the economic situation will emanate trom the Committee,.-. Such_a plan is not to be expected just yet, l>u next year when we hav drifted to the verge of national bankruptcy the n w Government, whatever its political colour, will h ave to face a very; serious position and

anic legislation may he ’ the outcome: We have been toying with the matter like Australia, though for a different reason. Austalia is ruled by Cover - •nents ru'ed by irresponsible junter c outside of Parliament and have been made to toe the mark by their masters Here drift has been inevitable because of power being vested in a minority Government.

The General Election will cause a shuffling of the politcal cards, and whether we will be favoured with a strong Gov. rnment or be forced t' submit to the affiliation of a Socialis* Government time alone will tell. Tlieris uncertainity in the air, everyom is feeling it and uncertainty is the prolifiin breeder of lack of confidence. A good many things have been happening' in the Dominion that should and would not have happened hut for tlrs lack of confidence. It is safe to pre L cflet til at there will he no conversion loan in the Dominion based ,on tin! Australian plan, and investors appear to he taking alarm over a bogey of their own invention.