AMERICAN SPECULATION.

New Zealand Herald, Volume LXVI, Issue 20219, 2 April 1929, Page 7

AMERICAN SPECULATION.

"WELTER OF INFLATION."

PRECAUTION BY BANKS

In the flood of speculation which has overwhelmed the United Stales stock markets recently, stops have been taken by some oii the leading coticenis to prevent their shares from becoming involved as counters in the welter of inflation. With a vkw to checking the speculative fever front extending to bank shares, and partly because of one or two. incidents in which tlie stock ot' a financitl institution figured, some of the largest banks in the United States have withdrawn their shores from the stock', exchange, lists. On the question whether tho stock, market developments would find a reflex in Canada, the remarks of the president, Sir John Aird, at the recent annual meeting of the Canadian Banli of Commerce, are worthy of note. The president, while not prepared to s:.y whether a similar course oil withdrawal from quotation would bo advisable in Canada, said he thought thai;, although the situation in that country was sounder than in the United States, the time for a halt had come, and he declared that b an *f and financial house:; should do all m their power to restrain the speculative tendency within reasonable bounds Sir John added "It is -o remember that a rise ;in mlces /lock markets does not m itselfi.crease t e wellth of a country, Insofar as it is erne to inflation of credit, it amounts simply, to i revaluation on paper, largely made to LSSion of ".vhat the iutu.o mj l.rinc If these anticipations are realised. 11l foes well, but i!oo often nhe reveisa is the case. The supply of credit from the banks should fc»!> based, not on■ me J® anticipations of future wealth, but on that which is actually in exigence, and which can be utilised for the increase, of bank reserves. On this basis JM a sound expansion of bank ere lit ta.u| place.*'