MONETARY POLICY

Dominion, Volume 29, Issue 150, 20 March 1936, Page 12

MONETARY POLICY

Investors Show Signs Of Alarm AUCKLAND REACTIONS Dominion Special Service. Auckland, March 19. Considerable sums of money were being remitted quietly from New Zealand to other countries for investment as a result of the Government's proposed monetary policy, stated several batik directors and others interested in finance when interviewed to-day. The opinion was expressed that the announcement made on Wednesday by the Prime Minister, Hou. M. J. Savage, concerning the readjustment of mortgages and the restoration of equities in land and homes had caused alarm and would stimulate the flight of capital from the country. “Mostly this money is going to Australia and South Africa, but I know ot one particularly large sum that was .remitted to England recently in spite of the adverse exchange rate," said one financial adviser. "The Governments policy, carried into effect, cau leave no field for safe and remunerative investment in this country. The policy of soothing syrup cannot be expected to be devoured by’ a keenly-alert business community.” A further drop in prices for industrial shares has occurred. The barometer of financial opinion, the investment market, reveals the unfavourable light in which every fresh indication of the Government policy is viewed On the Auckland Exchange to-day milling shares showed no improvement, while Wilson's Cement touched 37/6. compared with the peak of 48/- in February. The weakness spread to fertiliser shares, accounting for Farmers' Fertiliser moving below par. Of eight sales in New Zealand industrials, only one, in Farmers’ Trading, was not made at a lower'price. The fact that. Australian stocks are again hardening will probably cause a further movement of capital across the Tasman. The atmosphere of uncertainty about the Government’s plans has heightened investors' fears. Holders- of industrial stocks are far from confident, and manyprice concessions have been forced from them. Buying support has been affected by an extensive withdrawal of orders. Although hoping for the best when Parliament opens, the market apparently is preparing for the worst.