SHILLING SHARE BOOM

Nelson Evening Mail, Volume LXIII, 5 August 1929, Page 2

SHILLING SHARE BOOM

LONDON CITY SCANDAL CONTRACTS DISHONOURED LONDON, 23rtl July. The shilling share boom, with the slogan “Money for Nothing,” has been responsible for an unprecedented city scandal involvim; an estimated loss of .€10,0.00,000.

This is being revealed, says the. "Daily News," by the increasing number of instances in which underwriters have failed to meet their liabilities in certain of last year's issues.

Such dishonouring of contracts does incalculable, harm to London's traditional prestige in meeting losses. Happily it arises from institutions outside the Stock Exchange and Lloyd's, which have paternally disciplined their members whose word, as ever, is their bond. The trouble is due to the mushroom so-called issuing houses arising from the shilling share boom, when the rush of speculators sent up shares to amazing heights.

When the public appetite disappeared many underwriters, some even already bankrupt, were revealed, as men of straw and were unable to pay for the shares with which they were saddled. This resulted in companies being crippled through the deprivation of promised capital, causing the sale of factories and the whittling down of the value of'shares which had been properly taken up. Legal redress is impossible, owing to the companies' rights being ill-defined. The Stock Exchange is now seeking means to prevent a repetition of such dishonouring of contracts.