FINANCES IN WAR

Press, Volume LXXV, Issue 22892, 13 December 1939, Page 12

FINANCES IN WAR

NEED FOR CAUTION; SEEN SUPPORT FOR NEW LOANS URGED SMALL INVESTORS* PART ITHE PRESS Special Service.l AUCKLAND, December 12. “The threats of war, which were subsequently realised, with an increasing fear of Government interference, have all tended to make the broker’s task more arduous in the year drawing to a close,’’ said Mr Peter Savage chairman of the Auckland Stock Exchange, in his address at the annual meeting. After referring to the Government’s first loan issue, Mr Savage said; “It should not be forgotten that it is a large number of small investors investing their hard-won savings who are the backbone of any sharemarket These more than any other are easily frightened. ' This country is now at war, and as too heavy taxation must ultimately defeat its own ends and destroy initiative, large sums will need to be raised by loan. When the time comes, it will be the duty of everyone according to his means to support any loan the Government may offer to the public for the purpose of giving lull effect to the country’s war effort. In the meantime, suggestions of default, repudiation, and interest-free money, such as have been made during the last year, do nothing but destroy the confidence of the very investor whose support will be so essential to the saccessful flotation of any loan when the time comes.” Discussing share prices, Mr Savage said, “I feel I should conclude with a note’ of warning. The accumulation of moneys ordinarily invested by merchants in stock, augmented by lands left in this country by overseas exporters, and the increased volume of Government - spending necessary in lime of war, will tend to push prices of commodities and shares dangerously nigh, until 1 such time as the surplus is mopped up in Government loans. A counter to this danger has already been launched in Great Britain by the Issue of Government savings certificates, and the position in this country will need to be' carefully watched."