RODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXXIX, Issue 96, 23 April 1940, Page 12

RODUCE & MARKET REPORTS FROM DAY TO DAY

CONTROL"

.\ no; bonus issues

AUSTRALIAN INVESTMENT

*• ; \ "Evening Post," April 23. ?-Tiie close control of private investment under amended regulations issued by the Commonwealth Government is the subject of comment by. the Bank of Australasia m its April summary. , l;>The regulations, it may be repeated, ■jj&ovide for Treasury consent to _ the raising of new secured loans by individuals or partnerships, if their aggregate amount exceeds £5000, in any iperiod of 12 months. Existing mortgages may be extended or renewed provided there is no change in Jhe, parties, the amount, or the interest rate; but if the rate is under 4| per •teat., it may be raised to that level. The consent of the Treasury will also. /Have to be obtained for all increases in /the nominal capital of a company totalling more than £2500 in any period of 'prie year. Issues of authorised capital are also subject to the same control. &' Interest rates allowed by individuals land'corporations on new deposits and 1 loans arid renewals are fixed jat■;!£ per cent; but building societies tare' permitted to pay certain higher grates 6n amounts lodged for more than jihree months. Interest rates charged •*iby •' banks on existing advances were -.•fixed under a previous regulation at spates not exceeding those ruling at .August 31, 1939: ' . a ■ The regulations are intended to i^cheek the use of national resources feupon projects which are not likely to 5 help Australia to develop its maximum viriilitary strength, arid to assist. the to divert unused resources ftowards the war effort; \ i?D : ;v^PROPOSALS REJECTED.- ■. ■/ fc The; Commonwealth Treasurer, Mr. fiP/G.-Spender, recently has explained pthat "if unrestricted competition is Sallowed for resources; supply costs arid sprices will rise, and whUe neither the, I, Government nor anyone else', will .get pall the labour or materials thesy re- :^, quire the economy will'be, dislocated Wanid)the community in 'general -will be s^worse off. "With rihe .rapid" growth of *;X>ur.. war undertaking, which extends Sand:.makes moreiurgent the;■.: Govern-. |; merit's: need for all' kinds of resources,' |i;the regulations; will -have; to be applied ItWitb. increasing1 severity. V J;!; "Already Jit has- ;been, found ,neces-/f-^ary .to reject 'proposalswhich would Hinpt have expanded essential in--H'diistry,': assisted the/ exchange, position, or done" janyttiing .more.I:than duplicate existing facilities : which are ■ already '••' adequate!" ; Recently, he " said, he had refused permission for capital issues \iritendecP;; to: finance the ' establishment of new retail businesses, , chain; 'storesi: cash order -t companies, hire-purchase finance companies, 'and ' various ariiiiserhent undertakings. The strictest contrpl. would; be exercised. : , :-^\B^£^^\AB^K.[\';[] •■■•■;; Issues of 'bdriusshajres. based upon a revaluation of assets or. capitalisation of goodwill, could mot, unless j there were special circumstances to warrant 1 it, be permitted at a time like the present, Mr. Spender said,^'adding that x "such transactions serve no '■■■ major national purpose and have the effect of needlessly widening the investment market.; Other proposals have had to be rejected because: they would have led to the unnecessary importation of materials, or equipment from nonsterling countries. "It is vital also that we should keep k post-war necessities in view. The curtailment of defence works and the release of men froni the fighting services. will create a major problem of * re-employment. Secondary industries, whether producing for the home mar- „ ket or for export, will be experiencing competitive pressure at a time when international considerations may liniit

V the .extent to which tariff protection ' can be given tot them. .Under, such V conditions,'some industries which' had

sprung up or expanded under war conditions might faie very .badly.'' :

- f Mr. Spender said he had directed the -. advisory board \ dealing with these problems specially to consider , the state of employment in particular branches of industry, v .