GOLD BOOM

Evening Post, Volume CXVIII, Issue 21, 25 July 1934, Page 12

GOLD BOOM

RUSH OF COMPANIES

TRAPS FOR INVESTORS

(From "The Post's" Representative.) SYDNEY, July 19. With the price of gold, ranging to about £7.10s an ounce (Australian currency) it is not surprising that many new mining companies should have come into existence in all the States during the past few months. For some" time now there has been a boom in gold shares, so great that it has disorganised the business on the Sydney Exchange at least. Much of the buying and selling has been on a speculative basis, and this has given rise to a demand for Government action in: order to protect the public- There,are probably close on 200 mining companies registered on the Sydney Exchange today, and the number registered in Melbourne is 180. The monthly \ call liability must be close ;..on £200,000, and with many new flotations this is bound to increase. I If the flotation of gold-mining companies I meant !, increased production of gold i all would, be . .well, and Australia I would , soon be leading the world. Unfortunately, this is not .so. In i certain cases it is feared the forma-1 tfon of a company represents a waste of money, or the misdirection of private capital into a few1 pockets of the unscrupuV; dug. The New South Wales Government has promised to take some action in this matter, but so far has been slow to move; In the meantime various people have taken advantage of antiquated laws, and the flotation of new companies is likely to, go on. '■ New South Wales has been promised re-velations-as-far as one ,big. company is concerned, and it is known that detectives have been for some time. Even if no .legal" action is taken the Government might1 receive information that will induce it to alter the Companies Act. It has been pointed out that the Stock Exchanges have authority over all: ventures entered on their lists, and that they are responsible, to a certain extent, for their bona fides. There has not yet been established a system o£ critical expert investigation which would ensure that all investors have a fair chance of getting some return, at least, for their money, but action in this ■ direction is overdue..