WAR AND FINANCE

Taranaki Daily News, Volume LV, Issue 178, 14 December 1912, Page 1 (Supplement)

WAR AND FINANCE

STOCK EXCHANGES IN A PANIC. London, October 16. Somebody is making money, no doubt, in these Jays of uncertainty, but thousands are losing on all hands. The heedless little gentlemen who say "Forward" and "Halt" to the armies of the Balkans have 'brought disaster upon innocent homes in Germany, in France, in England, even in America.

Last Saturday the Exchanges of Europe were in a state of panic. The London Stock Exchange was demoralised, and Paris brokers had seen nothing like it since the outbreak of the war with Germany in 1870. In many markets prices fluctuated recklessly by points at a time, so much so that it became a matter of extreme difficulty to follow them at all. London, moreover, could no longer say with pride that all the liquidation was coming from the Continent. London and the provinces, as well as Paris and Berlin, were turning out stock on the market. Consols again fell heavily. From £73 10s they dropped to £72 18s 9d, a new low record price for the security in its present form. Although Wall Street was closed in celebration of Columbus Day, American market dealers marked down prices by dollars at a time, and Canadian Pacifies were completely demoralised. Amid scenes of the wildest excitement they "slumped," and ultimately closed with a loss of B>/ 2 on the day and 18 on the week. Such favorites as Rio Tintos and Do Beers were offered with the utmost freedom. Heavy falls were likewise suffered in the foreign bond market.

It was noticeable that many foreign bonds quite outside the area of tbe Balkan group were pressed for sale, probably by small French investors, who were being frightened out of their holdings by fear of European complications. The' Stock Exchange is now once more under control, though stocks have not by any means recovered themselves. The small" investor, who is the real backbone of the market, has reappeared, and a considerable amount of investment business has been done. There must, of course, be further liquidations, but there is not much probability of another panic. The unfortunate small investors, who are such a potent evidence of the thrift of France, were hard hit. They hold, many foreign bonds, and the all-round panic struck them full. The Bourse was completely demoralised. The collapse was worse than in 1882 and lS'J.'i. Feverish liquidation continued in an almost unbroken stream. Xo one ventured to buy. and olferings fell Hat. meeting with no response. When the market opened a perfect avalanche of selling orders descended upon the brokers, and there was demoralisation in all departments.

Russian funds, in which, millions of Francs have been invested by humble Frenchmen, were quoted three francs lower than at the beginning of the dayV business, owing to the gloomy telegrams foreshadowing the possibility of Russia and Austria being involved in a Halkan upheaval. Servians and Turks "slumped" in sympathy, and Bulgarians were simply unsaleable. Sensational losses were aNo recorded in the various oil share*, which have recently reached inHated prices on Ihe Paris market. The losses on Ihe Pai'is Bourse up to and including Saturduv were estimated at Clli.lllKUKMt. The Stock Exchanges of Berlin. Krankfurt-on-MiUne. and Hamburg were thrown into a state of wildest alarm. Investors declined to give the slightest credence to ollicial and semi-ollicial assurances that the war would be confined to Turkey and the Balkans, and dumped their shares on the market in the terrorstricken conviction that all Europe is on the, brink of a conflagration. The Bourse at St. Petersburg was also badly affected, and financial journalists have got to ''oldest inhabitant" stage in their search for adequate superlative-. One of them says: "The Berlin Bourse has passed through days of terror such as the present generation had never before experienced." • At Vienna there was the same state of .'fillings, and the Premier tried/ to check by «^^ that