PRODUCE AND MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXIII, Issue 48, 26 February 1927, Page 11

PRODUCE AND MARKET REPORTS FROM DAY TO DAY

SMALL INVESTORS

TREND OP THEIR INTERESTS

"Evening Post," 26th February. J There is an interesting footnote to the recent remarks of the chairman of the Wellington Harbour Board (Mr. M. Cohen) on the board's recent issue of debentures. In 190S the board was empow-' ered by Parliament to borrow up to £1--000,000, but it did not require all that money at once. Instead it obtained authority to raise it as required, and it did raise £250,000 locally in 1920 at 5V 2 per cent., issued at par. Again-, if obtained authority to raise another quarter of a million, in May, 3924, but it did not do more than set out in February, 1925, to invite the public to. subscription for £150,----000. It took time about this, for there was no particular hurry for the money; besides, no good purpose was served in raising a lot of money before its expenditure was necessary. . Debentures to the amount of £150,000 of the second £250,000 authorised were put on the market, and a very large proportion of them were sold "over the counter" by the board itself. The policy pursued appears to have been for the board to spread its authority to borrow, maintaining a certain relationship with its ex- ■ penditure. ... ■ -.— .- Enter the small investor. .No • reference was made to him in: Mr. Cohen's remarks; nevertheless he appears to have been impressed by the fact that 5% per cent, with the security the Wellington Harbour Board had to offer was rather mpre attractive than the higher rates going in some other ventures calling for capital. Such rates were offering when the board's first £250,000 was put on the market, and went up to 8 per cent. Large sums in the aggregate too were furnished by small and thrifty capitalists and some were lost in concerns that accepted deposits and had tb» take shelter under the moratorium. Offering much . higher rates ..of interests than the' banks and savings banks, such concerns attracted considerable sums, but they were not compelled to furnish safeguards for protection of depositors against time of trouble. Still, the banks and savings, banks rates _ not being sufficiently alluring, practically impregnable as is the nature of the security, many investors of moderate means turned to public bodies' loans. Some of these appear to have been more popular than others, and the Wellington Harbour Board seems to have been among the favoured; ies.~ During, the past two years it has raised £150,000 required by the sale of a little' lot here, a fair-sized parcel there, not- only in Wellington, but in various parts of the Dominion. There were 224 subscribers for this last £150,000 of debentures. Those subscribers average an individual subscription of £650 each. But when it came to amounts applied for under that average it was found that there were 162 investors of less than £650 each; and but 62 who applied for above £650, and the latter were all for high amounts in sums of say, from - £5000 to £6000 each. It is evident from these ■ figures that investors of., moderate means will have to be recognised in' the disposal of what might be termed giltedged local body or other securities giving a reasonable rate of interest. .The subscriptions' received by the board since the £150,000 asked for was. furnished-by subscribers, it is understood, have reached between £10,000 and £12,000, and applications are still coming in.