"FROZEN" SHARE PRICES

Auckland Star, Volume LXXIII, Issue 235, 5 October 1942, Page 5

"FROZEN" SHARE PRICES

It is difficult to see what purpose would be served by Government action to "freeze" security price indefinitely, states the Sydney Morning Herald editorially. An active securities market provides a service not merely for individual private investors, but also for life assurance companies and other organisations with large investments, and not least the central bank. The market has already been brought under a fairly severe control, with price limits which are subject to periodical revision. Speculation is dead, and has. In fact, never been a factor in the Australian stock market since the beginning of the war. Few organisations are so strictly regulated as the Stock Exchange has been by its own members, and there is no reason to doubt the statement of the chairman that war-time restrictions have been fully observed. From price limits that may be periodically adjusted, subject to the Treasurer's approval, to prices that are fixed permanently, may appear a small step. In fact, however, if prices move to the limit and stay there, the volume of business is likely to become so small that the Stock Exchange could no longer carry on. Bond business alone could not support the present organisation, and a true "open market" for securities would no longer exist.