INVESTMENTS IN NEW ZEALAND

Dominion, Volume 19, Issue 47, 19 November 1925, Page 10

INVESTMENTS IN NEW ZEALAND

Sir,—lll your issue of yesterday, November 17, your special correspondent at Auckland gives views of some prominent financial authorities some of which are “the private mortgagee has practically ceased to exist, the private investors had turned their-at-tention to the Stock Exchange, where sound investment securities were to be had in abundance.” Another authority was quoted as saying “It was' a basic principle that capital ‘had to be made available for primary industries,” as if it was a favour to do so. The first authority must have been a sharebroker, as his views do not coincide with Sir Harold Beauchamps, who <1 the previous day had stated in an*intcrview that it was difficult to obtain more than 5 per cent, on good share investments. The views quoted above ignore the fundamental facts of New Zealand finance. England is a great manufacturing country and stocks and shares in industrial companies offer the chief opportunity for investment there, mortgage ’or land occupying a very unimportant position. New Zealand, on the other hand, is a farming country, and the great bulk of her exports are obtained from the land, manufacturing occupying a very minor place. Consequently the great bulk of investments in New Zealand must be in mortgages on land. Writing from memory, the returns show that about 200 millions are invested on mortgage in New Zealand. A calculation of Stock Exchange investments would show that the whole of the money invested in industrial securities would be a much smaller sum. A great deal has been made out of the losses of mortgagees, but I venture to state that if details could be obtained showing the proportion of loss sustained by genuine invctnors on first mortgage fas apart from, second mortgages and those taken in exchange transactions!, the smallness of the percentage would surprise the general public. ,

Anyone who remembers the loss sustained by the investor in industrial investments in the past (to name only timber and cement companies ten years ago, farmers’ co-operative concerns five years ago, and freezing companies in the present day) would also be very chary of taking his money out of a comparatively safe investment like a first mortgage on land, and trusting it to the hazardous fortunes of industrial Vicissitudes. —I am, etc., ROBERT A. WILSON, Marton, November 18.