Greymouth Evening Star. AND BRUNNERTON ADVOCATE. SATURDAY, SEPTEMBER 28, 1929. SHARE SPECULATION

Greymouth Evening Star, 28 September 1929, Page 6

Greymouth Evening Star. AND BRUNNERTON ADVOCATE. SATURDAY, SEPTEMBER 28, 1929. SHARE SPECULATION

T HE strength of the London financial market is revealed by the comparative calm that followed the crash of the Hatry companypromoting syndicates. The effects on the Stock Exchange are reported not to be serious, apart from the

concerns controlled by, or intermixed with, the Hatry group. The prompt action of the Exchange committee in postponing the monthly settlement of accounts in transactions connected with the Hatry enterprises, had a beneficial effect, ancl in the interval, it should be possible to prevent a slump in general values caused by investors’ nervousness. Huge losses have been incurred, and must-be borne by somebody, but the general tone of the market should make early recovery. The rise in the Bank of England rate was not unexpected. The heavy export of gold from London caused expectation that some such inducement was desirable to attract, or retain, money in London, and the effect of the rise has probably been already discounted. Dearer money will not help indus-

tries, blit the best is being made of prevailing circumstances. The Bank Directors have not acted hastily, and will take action in reducing the rate as soon as it is advisable.

The legal aspect of the Hatry group’s dealings is not, at present, a matter for comment, as fraud charges have been made against the four principals, and until the trial is over, their guilt or innocence must not be publicly discussed. Unlike some other company promoters who have failed, Hatry and his associates made no attempt to evade justied, and are, apparently, giving assistance to the investigating accountants to make clear the ramifications of the group. Their main company, Corporation and General Securities, Ltd., specialised in the flotation of loans for British municipalities and industrial combines, and the publicity methods won confidence from investors, eager to get rich cpiick. For many of the shareholders, there need be little sympathy. They should have realised that they were gambling, and that high returns are rarely safe, except to the favoured few who £ ‘ get in on the ground floor.” Some investors in the companies floated by the Corporation are to be pitied, but many must have hastened to speculate in concerns obviously over-capitalised. During the past few years, there has been an orgic of share speculation in Britain, the issue of shilling ordinary shares in industrial companies, attracting a class which had hitherto kept aloof from company investments. In most cases, these shares were bought to sell as the market quotations rose, and such rises were “encouraged” by promoting syndicates. Whilst the boom was on, large sums were gained by the far-seeking or lucky. The slump was inevitable and before the Hatry crash, prices of many ‘‘favourite” stocks and shares had dropped considerably, and many of the poorer investors must have been hard hit. Similar financial bubbles have floated and burst before, and will probably be ever in evidence, for the lure of rich returns, robs investors of their prudence, or develops their greed. The lesson to be derived from recent developments in the Homeland and in Wall Street, should not be lost on New Zealanders. Share speculation is becoming increasingly popular in this country, and some of the recent investors will be lucky if they get their capital returned intact. Investment in sound concerns is to be encouraged, especially when national industries are being fostered, but the share buyer must always remember that he is unlikely to get something for nothing, and that the concerns that promise him a lot for little may not be able to fulfil their benevolent intentions. Stocks and shares investment are matters for the expert, and the genuine investor can always obtain excellent advice from these whose integrity and intelligence need not be questioned.