NO FOUNDATION.

Taranaki Central Press, Volume IV, Issue 305, 9 December 1936, Page 6

NO FOUNDATION.

Flight Of New Zealand Capital. Press Association—Copyright. Auckland, Dfecember 8. In his animal address to members of the Auckland Stock Exchange, the chairman, Mr John Frater, referred to reports which had been circulated regarding an alleged flight of capital from New Zealand to Australia. The statement macle that the stock exchange had been made the medium of transferring large sums of money abroad had little or no foundation. If there was any adverse balance it was due to Australian investors, attracted b.v the higher rate of interest ruling in Government securities to reinvest in Commonwealth loans. New Zealanders as a whole were very loyal to their own country and the average investor was no exception. It a brokI er placed before a client tire particulars of two other overseas, in most leases the client would choose the I New Zealand security. However, I with most of our wealth coming from ! the land the scope for invest nient. ! here, particularly in industrials, was ; very limited, and for many years i New Zealand had been a large invesi tor in Australian securities. | This investment of savings in se- ; curities referred io had paid ns handI somely. New Zea 1 ;:ml had reaped a ' rich harvest from Australian investI ments. Every' time a leading Aus--1 tralian concern declared a dividend a very large percentage of the amount I paid came over to this country. j Overseas buy ing was no more pro- ; nounced than it was, say, three years ago, and -any funds going out for inis purpose must be more' than counter ' balanced by the large inflow of -live .(lends. Because a lair propor'ion ol i the sales reported daily were in Aus i tralian stocks it did not follow thai I they’ represented purchases Iron I Australia. A large percentage con j sisted of transactions between loca i holders.