“A GRAVE MISTAKE”

Evening Star, Issue 21315, 20 January 1933, Page 8

“A GRAVE MISTAKE”

DESPITE INCREASED BUSINESS STOCK EXCHANGE CHAIRMAN'S VIEWS Notwithstanding the expected rise in the price of gold of 20s an ounce, increased business in shares between New Zealand and Australia, and the transfer to New Zealand of a large sum of money from dividends which had been kept in the Commonwealth, Mr Harman Reeves, chairman of the Dunedin Stock Exchange, maintains , that the Government has made a grave mistake, from a national point of view, in raising the rate of exchange. Before this morning’s call at the Stock Exchange Mr Reeves gave stockbrokers his views, and he later repeated them in interview with the ‘ Evening Star.’ The Government’s action would mean an appreciation in the value of gold of about 20s an ounce, said Mr Reeves. Naturally that would help the. gold mining companies very considerably and cause an appreciation in the best gold mining shares. It would also increase business between New Zealand and Australia in stocks and shares. In the past business had been more or less hampered by the high rate of exchange against Australia. Now that the rate between the two countries had been very considerably reduced the prospects were much improved, as a large number of Australian bank shares and other shares were, held in New Zealand. In addition, a considerable amount of dividends from bank shares had been allowed to remain in Australia by the New Zealand holders owing to the past high rate of exchange. Most of that money would now bo brought into New Zealand.

The rise in the exchange rate on London' would improve shares in stock and station companies, _ frozen meat companies, and exporting companies. But notwithstanding all that, Mr Reeves said he considered, from a national point of view, that the Government had made a grave mistake.