FUNDS TIED UP.

Auckland Star, Volume LXXI, Issue 94, 20 April 1940, Page 11

FUNDS TIED UP.

INVESTORS' TROUBLE. OVERSEAS SECURITIES. EFFECT OF NEW CONTROL. With funds tied up in Australian and other overseas securities, which are no longer quotable in the Xew Zealand stock exchanges, many Xew Zealand investors are in a quandary regarding the future disposal of their holdings. Although a considerable portion of the sum represented in such securities is regarded as a long-term investment, there remains a substantial amount which, in the normal course, is constantly changing hands. To discover that overnight the stocks and shares in which this money was Invested have lieeome unsaleable has been a severe blow to many people. Possible solutions of the problem arcbeing actively canvassed in local financial circles, and it is felt that the regulations should be modified at least to permit the unobstructed transfer within the Dominion of Australian and other overseas stocks, shares and debentures held here. Dominion's Assets Safe. While it i* recognised that there may be good reasons for prohibiting tran.} fers of funds to other countries in tinu of war. it is contended that there should lie complete freedom of transfer of overseas scrip already in the hands of N>v Zealanders. It is stated that there has been no reduction in recent months in the amount of such scrip held here; on the contrary there may have been a small increase in the total, and therefore the position of the Dominion in the event of any possible future mobilisation of its overseas assets has been in no way jeopardised. That there was a move to convert such securities into cash during the first six months after the import control regulations came into force in order to obtain funds for the purchase of additional imports, is not denied, but this ceased when the premium in the ''black market" made it more costly to resort to the sharemarket than to purchase Australian currency through other avenues. The continuation of the premium has since been an effective deterrent to the financing of imports to any marked extent by the realisation of funds iniestcd in share*. Branch Registers? Inquiries made regarding the probability of branch registers of overseas companies being established in Ne-.* Zealand, for the benefit of Dominion investors, revealed that such a development was considered unlikely except in the ca>e of companies and banks trading in the Dominion. Apart from the attitude of the majority of oversea* companies themselves, it was thoujrht that in the case of Australia, which is mi>; closely linked with Xew Zealand in investment activities, the Commonwealth Government would be opposed to the general establishment of such registers. A difficulty created by the blanketing nature of the New Zealand regulations was in connection with contracts entered but not completed, but this was removed this week by the announcement that the trading hanks had been authorised to pay cheques relating to such transactions and to transmit the scrip out of New Zealand for registration purpose*. It is not yet known whether [ resumption of business in overseas serin within Xew Zealand through the u*e of hanking channels for registration only . will be permitted by the Government.