LOANS FOR WAR?

Dominion, Volume 33, Issue 68, 13 December 1939, Page 10

LOANS FOR WAR?

Need Seen To Maintain Confidence SMALL INVESTOR Dominion Special Service. AUCKLAND, December 12. ‘•Threats of war, subsequently realized, together witli .increasing tear of Government interference, have all tended to make tlie brokers’ task more arduous in the year fast drawing to a close,” stated Mr. Peter Savage, chairman of the Auckland Stock Exchange, in his address at the annual meeting. After referring to the Labour Government's first loan issue. Mr. Savage said: “It should not be forgotten that, it. is the large number of small investors, investing their hard-won savings, who are the backbone of any sharemarket. These more than any others 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 ditty of everyone, according to iiis means, to support any loan the Government may offer to the public for the purpose of giving full 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 past year, do nothing but destroy the confidence of the very investor whose support will be so essential to the successful flotation of any loan when the time comes.” Discussing share prices, Mr. Savage said: “I feel I should conclude with a mite of warning that accumulation of moneys ordinarily invested by merchants in stock, augmented by funds left, in this country by overseas exporters. and the increased volume of Government spending necessary in time of war, will tend to push prices of commodities and shares dangerously high, till 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 io be carefully watched.”