GAMBLING OR BROKINGWHICH?

Auckland Star, Volume XLI, Issue 64, 16 March 1910, Page 8

GAMBLING OR BROKINGWHICH?

(By a Mining Investor.) "It is just killing the goose that lays the golden eggs," remarked a brc_er of considerable experience, after referring to the vagaries of business on the Stock Exchange, as illustrated in the fluctuations of the market for shares in the Old Hauraki Company. "The public is clean off it," he added, sorrowfully, "but 1 do not wonder, for they have no chance the way business is transacted now." In these few words is expressed the cause of the lack of support given to mining at the present time by the people of Auckland. There is no hiding the fact that reaJ brokers, who act for their clients, and live on the commissions only; are becoming scarcer. Jobbing in shares and over-selling has grown to such an extent in recent years that the public has been disgusted, and money does not now go to mining shares. In the first pla<:e, it is worthy of note that it is the "public" that is denominated as "the goose that lays the golden eggs." There was a time when speculators on the Exchange had a fair chance of making a little, but nowadays if,a mine gets on gold and reports a f few hauls of picked stone, the shares do at first move up a little, but immediately afterwards the jobber starts over-selling by the thousand, and naturally prices drop. The outside buyers then imagine tbere is something wrong with the mine, and at once sell at a loss. The jobber, in due course, covers up at about half the price at which he sold shares he did not possess, and thinks he has made money, forgetting, as the old broker remarked, that driving'off the public means in the end, the death of his business. It Ls no unusual thing to hear men complain that when Old Haurakis were 3/6 they got -transfers for shares they had purchased a month or six weeks before at 6/6. It might naturally be asked why they do not demand the transfers earlier, but the explanation of that also is beautifully simple. The client often pays his broker the next day and does not trouble about his transfer. The broker thus has •the use of the cash for a month or six weeks, as he does not require to pay for the shares until the transfer is handed in. Of course, any client can demand his transfer, and register his shares, but comparatively few do so, preferring to leave them in the name of the broker, who is therefore in a posiition to traffic with these shares. The whole system is thoroughly unsound from a business point of view, and so long as clients, will not demand transfers promptly, just so long can -the market be rigged, -and their own shares used to bring down prices. The principal safeguard is for the pub- | lie to deal with genuine brokers, and it |is needless to state that such firms still exist — gentlemen who consider their I clients' interests, and who do not, if I they get an order for a big parcel, buy ! first for themselves, and then fill the I client's order at a higher figure. The whole trouble arises from a system that is slipshod in the extreme, and a custom that allows brokers ito also be speculators on their own account. In justice, however, to the broker, it should be explained that there are also quite a num•ber'of .people outside the Exchange who indulge in a "flutter" in the shape of selling a few thousand shares they do not possess, in the hope of replacing them at a lower figure, and making a few -pounds, but it must be plainly evident that the general public has little chance against such practices. ItVould seem as if the only remedy as far as jobbers are concerned is for the Government to exercise some supervision, and in. the event of discovering that a registered broker is speculating on his own account, decline to renew his license. If such a course were adopted, the Exchange would in time consist to a greater extent of genuine brokers, and tho jobbers would be out of the way of tbe speculator. Then, when the public once more realised that the brokers were not jobbers, or over-sellers, confidence might be restored, and the "goose that lays the golden eggs" would once more frequent the floor of the Exchange.

In a further appeal on behalf of the memorial to the late Sir James Hector, K-C.M.G., M.D., F.R.S., Mr. Martin Chapman, K.C., Wellington, hon. treasurer, states: —"Dear —The committee have obtained from the Government' a subsidy of £1 for .-1 up to £500. The subscriptions already to hand amount to £453 10/6, being £46 9/6 short of the £500. It is desired, if possible, to obtain the whole £500 from the Government,'but to do so on the present vote the above further sum of £46 9/6 must be collected before the 31st March, 1910, when the vote will lapse. The committee • would be glad to receive any additional contributions subscribers may like to make, and to receive new subscriptions. The committee wish to point out that every £1 subscribed before 31st March, up to the sum of £500, produces a further £1 subsidy from the Government." The tender of Wingate and Co., at £7 4/9 per ton, was accepted by the Harbour Board yesterday, subject to approval by the engineer, for the supply of 240 tons steel bars. Other tenders were as follows: John Burns and Co., £7 576; Briscoe and C 0.,. £7 9/4i;..Buthie and Co., £7- 11/; John Chambers and Sons, £7 15/8; R. S. Lamb and Co., £8 12/6. •