LAWS TOO DRASTIC

Auckland Star, Volume LXXIII, Issue 44, 21 February 1942, Page 7

LAWS TOO DRASTIC

Restriction Of Share Dealing In Australia SHAREBROKERS' VIEWS Rec. 9.30 a.m. SYDNEY, this day. Sharebrokers believe certain facilities will be arranged to permit the negotiation of essential business, but just how it can be done is a matter for conjecture. They claim that under the present constitution of the Stock Exchange there has been no speculation meriting such drastic steps as those taken by the Government. The view is held that the banks will also suffer as many bank loans are secured by shares. Another interesting position, it is claimed, arises from the limitation of profits to 4 per cent. Shares listed at lower prices in companies which would be able to pay the limited 4 per cent would for all practical purposes be equal to the par value of stocks listed considerably higher. It is also pointed out that in the case of deceased estates it is often imperative to make certain sales of properties and stocks in order to meet commitments. Here the problem will be to find buyers and a suitable price since there will be no open market.

An earlier message said the finance regulations gazetted on Thursday brought to an end what is known as free trading on the Stock Exchange (which applies to all other Australian exchanges), which meant that business in Sydney, as elsewhere, was confined to Government securities. The volume of share trading carrying on in future will depend on the extent to which Treasury permission is granted for the sale of securities for specific | purposes. Members of the exchange consider it would be safe to settle for all share transactions effected to the close of business on Thursday. The call room at the Sydney Stock Exchange yesterday presented a deserted appearance. The afternoon scene was unprecedented in the history of the exchange.