SHARES DEPRECIATE.

Horowhenua Chronicle, 30 April 1937, Page 5

SHARES DEPRECIATE.

PANIC CONTINUES ON STOCK EXCHANGE. "IT SIMPLY DOESN'T MAKE SENSE ! " POLITICIANS BLAMED FOR COLLAPSE (By Telegraph-Press Assn.-Copyriglit) Received Friday, 1 a.m. LONDON, April 28. President Roosevelt's slogan of 1333: "The only thing we have to fear is rear itself" is peculiarly applicable to the present state of the markets which have deteriorated beyond reason. They opened weaker after the worst day of the year. The present atmosphere is that no such rumour is too silly to gain credence. Investors in a state of fright leaving their money in the banks and are even turning their shares into casn at a loss and are asking whether the present setback —which must have reduced the market capitalisation of securities by over £1,000,000,000 —is not a prelude to a new slump. "Such fears are based on tne failure to grasp the elements of the situation," one of the most experienced stockbrokers told the Associated Press city editor. "We can't have a slump With a 2 per cent, bank rate, £100,000,000 defence loan and a constant stream of excellent company reports and trade statistics. It simply doesn't make sense. The stock exchange cannot indefinitely languish while industry is humming. The reaction may be both sudden and rapid. When the rearmament money begins to talk it will talk loudly." The Daily Mail tersely advises investors to keep their stocks and their heads. The Board of Trade statistics show the biggest jump in retail sales on record. While President Roosevelt and Mr. Neville Chamberlain can claim the doubtful honour of starting the present malaise, the technical character thereof cannot be overemphasised. The initial declines placed a severe burden on the market machinery which had a snowball effect, forcing operators to turn their saleable stock • into cash in order to meet obligations incurred in other markets, while even those who have come out unscathed are reluctant to assume fresh commitments thus depriving the markets of their normal cushions. Such a major slide cannot pass without effecting the short term economic activity. The bug of healthiness in the long term .r outlook is indubitable. The Financial News expresses the firm conviction that new peaks of activity and prosperity will be reached in the next two or three years, a view in which responsible city men and industrialists concur. It is hoped meanwhile that the politicians will spare the delicate mechanism of finance further shocks and do their best to restore the shaken confidence. Lord McG-owan, at Imperial Chemicals' annual meeting, declared: "With the widespread tendency'"" of rising commodity prices and rearmament there is no reason to anticipate a decline in the activity of 1937, but while there is no fear the volume of home trade will diminish, it is difficult to contemplate the export markets with equal confidence. Economic nationalism is restricting foreign trade, while some Dominions, notably Australia and New Zealand, with greater home production of foodstuffs and a stationary population may have reached the maximum export of primary produce. ' 'Britain may, therefore, have to produce goods she now buys outside England. Industry should, therefore, encourage research, improve efficiency and strenuously endeavour to maintain foreign trade.