SURPRISE IN LONDON

Wairarapa Times-Age, 8 December 1938, Page 7

SURPRISE IN LONDON

EFFECT MAY BE FAVOURABLE TO STOCKS. SOME DANGERS PERCEIVED. (Independent Cable Service.) LONDON, December 7. The "Financial Times” says that the New Zealand currency measures gave a fresh shock to the London market in Dominion stocks. The surprise was all the greater because Mr Nash, last October, denied reports that restrictions wore imminent.

Quotations were not greatly affected but jobbers widened prices as a precaution against possible selling. Some observers are of the opinion that the measures are definitely favourable to stocks, since sterling will now be conserved for loan purposes. The "Financial News,” in an editorial under the heading, “Financial Savagery,” says that nobody denies that the Government has carried out much useful and constructive social work. The trouble is that it has persistently refused to cut its coats according to the cloth.

After remarking that the restrictions are probably the best device at hand and that the service of the external debt can now be considered fairly secure the editorial adds that the danger is .hat the Savage Government may now consider itself free to pursue an unsound financial policy without fear of the consequences. Dealings in exchange with New Zealand today were on a very restricted scale and no public rates were quoted. These conditions are not expected to last long, however. The banks today were waiting for the position to clarify and when fuller information arrives it is anticipated that business will proceed on a scale different from that prevailing recently.