SHARE PRICE RISES PACE INFLATION

Press, Volume CIII, Issue 30626, 17 December 1964, Page 23

SHARE PRICE RISES PACE INFLATION

(New Zealand Press Association)

AUCKLAND, December 16. In the last 10 years the rise in the overall level of share prices has more than compensated for the effects of inflation, the chairman of the Auckland Stock Exchange, Mr J. S. Rutherfurd, said today.

While share prices rose 86 per cent, the purchasing power of the pound fell 25 per cent, he told the annual meeting of the Exchange. Many intelligent investors had realised this and protected themselves accordingly, but the point was worth making to others as it should have much wider application, Mr Rutherford said. National policies of full employment and redistribution of wealth coupled with a sharply rising level of income, had brought a profound change in the public attitude towards equity investment. The national private income had risen from £2OO million in 1939 to £1334 million in 1963 and a large proportion of this extra income was being earned by what might be terined a “middle class” group.

It was this group from which the greatest flow of

investment funds was coming, said Mr Rutherford. While this flow of new investment had been generated to a large extent by the profit motive, an equally important consideration bad been the serious erosion of capital caused by inflation. ' This problem was not new —but its impact on the general public had been most pronounced in the post-war years and particularly over the last decade. The serious consequences for people dependent on fixed capital were obvious.