"SERIOUS SITUATION."

Auckland Star, Volume LXIX, Issue 221, 26 September 1938, Page 10

"SERIOUS SITUATION."

FALL IN LONDON FUNDS. INVESTORS REALLY NERVOUS. (From Our Own Correspondent.) WELLINGTON, Saturday. Reference to what he described as the situation developing through the depletion of the Dominion's London funds wae made by Mr. O. C. Mazengarb, National candidate tor the Wellington Suburbs seat, in en address to 80 electors at Stoke s Valley. Mr. Mazengarb said thai in the past year there hed been * drop of £7,500,000 hJ the sterling reserve, and an alarming feature was that nearly £2,000,000 had vanished during the period that the Social Security Bill had been under discussion. "It ie obvious, therefore," s*id Mr. Mezengarb, J'that this legislative enactment has made inventors really nervous, and ha* caused them to send their money elsewhere. Their fear Iβ increasing because the latest returns show that there ha* been another drop of £434,337, leaving us now with only £12.247,006 in sterling exchange.) "Nineteen millions of loan money are due for conversion In England in about a year's time. If we have the funds there, we will be able to call the tune with those Investor* who are unwilling to convert at a reasonable rate of interest; but if our sterling reserve w 'further reduced by flight of capital, or even if it remain* as at pnaent. we will be in a poor position to strike a bargain."