STOCKS FALL AGAIN

Press, Volume LXXII, Issue 21826, 4 July 1936, Page 15

STOCKS FALL AGAIN

AEW ZEALAND ISSUES IN LONDON EFFECT of MR SAVAGE’S explanation __ “INVESTORS’ CONFIDENCE /C u DISTURBED” pSBSS A® SOCIATIO,, ~ cOI,TarGHT J (Received July 3. 10.15 p.m.) LONDON, July 3. “Mr Savage's explanation has not resolved the discord aroused by his original overtures, which seem indistinguishable from threats,” says the “Financial News.” ‘The market certainly finds them synonymous, for yesterday's collapse of prices wa s even more violent than Wednesday. “Mr Savage apparently means business, but we are confident that it is he, not the bondholders, who W UI ‘think again.’ No New Zealand politician, least of all a Labour politician, intent on launching ambitious and costly social schemes dare face the complete closure of the London capital market. Naturally Mr Savage is asking for relief Naturally, too. the bondholders will refuse, and there.we may hope, the “tt/cay 1 editor of "The Times” savs’ “There were further declines in New’ Zealand issues, ranging up to four points. It is not surprising, in view of yesterday’s stir, that Mr Savage explained his original statement This should somewhat reassure‘stockholders, as apparently it indicated that his original remarks were primarly intended to show his supporters that the Government aimed at implementing its election “Every debtor is entitled to seek relief from onerous interest by mutual agreement, although he must furnish proof of inability to pay interest. There have hitherto been no suggestions that New Zealand is in such a plight. Although the particulars provided for the loan of April 30 were distinctly reassuring, the Minister should be aware that the mere announcement that he is seeking concessions must disturb investors’ confidence. As New Zealand’s credit stood exceptionally high, her stocks were regarded as the best class of security, affording great advantages to New Zealand.’ The city editor of the “Daily Mail says: “The market anticipated Mr Ravage’s qualification, but felt that something further^ was required to lectore confidence." “Need Not Be Frightened” The “Financial Times” says: “Mr Ravage dearly does not realise the fact on which all stock Exchange business rests —that a bargain is a bargain. Challenge this, r-'d credit immediately wobbles. Mr Savage’s viewpoints are hopelessly distorted in regard to the cheapness of money in the world's financial centres. Money yield governs prices. When Mr Savage appreciates this point the bother he has aroused will die down. Holders of New Zealand Government stocks, therefore, need not be frightened by the suggestion which springs from well-intentioned but dangerous ignorance, and which is advanced without due appreciation of the fact that credit goes hand in hand with a strict regard for the fulfilment of obligations.”