SHAKEN CONFIDENCE

Evening Post, Volume CVIII, Issue 120, 16 November 1929, Page 12

SHAKEN CONFIDENCE

KXNDOK AKD XEW YORK

SHAREBJROKER'S COMMENT

*■- ■■.'■"■ .- (Specia^to-"The Evening Post.") '••$, ' DUXEDIN, This Day. Air. J. AVHaggitt, a Dunediu share- . broker, ivhd'.Jias just returned from a visit to the UnitedI.States and England, in the course o£ fan-' -interview, stated that throughout^'the. Avorld lousiness An the 6tock exchange-this j- ear had indeed been fitful, "a fact, \viiicli: 'Was attributable to many causes'/",;-."I»-.the first place there was a drog^in-,"metal'prices and the uncertainty ot;the- rubber- market, as well as the ivoi-kers'.' Jack- of support in various industries.'''^Thess features had all helped to Jshake' ;the confidence of the investor. :S ,-- .' ' '•'..-■'■. ■>'' "While th|. London Stock Exchange was experiencing a-dull'time during and following on Jfhe.lastjgeneral election,. New York was %eirig: 'swept by an extraordinary wave*9f;speoulati6n which had culminated a 4e>y, weeks ago in the biggest crash experienced for many years. This had a remajk^My: disturbing effect on the finances ofjitlie world: .;It.::6ame about chiefly -throjfjglij.jthfeipubliqityigiyen to exchange traa^acJEuSns^ jnVth'e J?reSs, x\which featured tlse: .'phenG'menal Vctiyities>'fpllowing the dealings :of five or. six million shares a day.i;.,">-•-'. - -:. .. .-'.-".- '■-.'. .. , The market/,y ; asv still -, further excited by a systenf,: of Bp'readingj: around tipping sheets. Tlje/e'^iheets^iivere eagerly sought by speculatgr&->lf.oEtiines*.wei:e made oversight. But-iEtomethiti^ had" to go, sooner or later. $Z*':*.'£fk.:.:v':. :''■■>.:'... ■ Xine time§:ojt oivten ,the'purchaser paid down usually.'lO^pert cent. ■of the value of the investnteiit,^ aad the broker carried the balance'^natil;'the .re-sale, the broker lodging thejscript;vwif:h v liis banker as a security. ■51-»^p»;'- '■£>;!•:-'.' As a resSlt;-v.thes6' "brokers' loans ran into huge n^ucfes.^ Call money rates to supply brok^Es'.-Jloaiis- rose in New York to 9 per certti^er, annum. This attracted capital frthß'al}-over the world, and, because of Jttaj* shrinkage of its gold reserve, the1 $ank;o£ England raised the bank rate -fct.6% per cent. This had had the effect of cheeking-the export of capital from Great Britain. Since then cabled advice had come to hand of- a redaction to 6 per cent., arid steadier conditions prevailed in the money market.