CANADIAN BROKERS.

New Zealand Herald, Volume LXVII, Issue 20480, 4 February 1930, Page 11

CANADIAN BROKERS.

DRAMA OF FINANCE.

STABILISING THE MARKETS, HOW PANIC WAS AVERTED. By Telegraph—Press Association—Copyright. VANCOUVER. Feb. 2. The peopl6 of Canada in the past week have watched the amazing financial drama in which the threatened wreck loomed so largely that the highest law officers of the Dominion were obliged to come to the rescue of highly-placed people they had just attacked. In one forenoon five leading brokerage houses were raided and .11 principals were arrested. Colonel William Price, Attorney-General for Ontario, directed the campaign against the alleged dishonest "bucketing" brokers who have scores of branches throughout the country. Ho dosed up and asked the Stock Exchange authorities to expel mining operators who last year alone handled more than £40,000,000 of the public's money. For one day the Stock Exchanges operated without these brokers. However, the Ontario Government feared a financial crash which would rpek the Dominion, and early on Saturday it was announced that the accused brokers would be readmitted to the Exchange. The Attorney-General was forced to capitulate to the definite warning that were the accused traders prohibited from trading there would be a panic, the unprotected stocks of thousands of small holders would be wiped out, and in case the criminal charges against the brokers were not proven those speculators, large and small, would have good cause for legal redress against the Government of Ontario. ;

Curiously enough the Government of Manitoba also found itself in a desperate position. It protested violently against the Ontario Government's action in seizing the offices and bank accounts of the accused brokers.

The prosperity of Manitoba is entirely dependent upon a stabilised wheat price. • Two of the leading brokers were carrying millions of bushels of wheat on margin in the Winnipeg market.. The seizure of their bank accounts occurred on a day when wheat had reached the lowest point of the season. At noon on Friday the situation" was that 10,000,000 bushels of wheat would have been dumped on the market within an hour. The Premier of Manitoba, Mr. J. Bracken, announced that the entire resources of the Government would be put into the market to stabilise the situation, for he feared a panic would have carried, the price far below three shillings. On Saturday morning the Ontario police released enough of the brokers' money to bolster the wheat market, and the crisis passed when Liverpool cablegrams announced an advance of two cents overnight. The week finished with the Government leaders realising that some bus'iness some- . times is too big to be disciplined without far-reaching and unexpected .results.