OVERSEAS FUNDS

New Zealand Herald, Volume LXXVII, Issue 23699, 4 July 1940, Page 11

OVERSEAS FUNDS

RETURNS BY HOLDERS FORMS NOW AVAILABLE EXTENT OF INVESTMENTS f The forms on which New Zealanden are required before July 31 to make returns of all overseas securities or currency held by them were available in Auckland yesterday. Further supplies are coming to hand and will be obtainable from all post offices and trading banks. There are three forms, issued under regulations 6 and 7 of the Finance Emergency Regulations, 1940 (No. 2), gazetted recently. The first of these applies to regulation 6, dealing with foreign currency. Details must 'be given of all foreign currency, comprising banknotes, postal notes or money orders of any country other than New Zealand and promissory notes and bills of exchange payable otherwise than in New Zealand currency, owned by or held at the disposal of the person making the return. » Ho must give the town and country where it is situated and the bank or other person, if any, by whom it is held. This is apparently the section which covers bank balances abroad. The person making the return is required, in accordance with the regulations, to sign a statement offering the currency for sale to the Reserve Bank. Foreign Securities

On the same form persons entitled to assign or procure the assignment of any right to receive outside New Zealand, in respect of any credit or balance at a bank or with any other person, payment in a foreign currency, must supply details. Although the intention of the forms has not been fully elucidated this section would appear to cover dividends accruing in the future from securities held abroad. A third section of the form requires particulars of currency or righls held on behalf of another person. Tho second form deals with foreign securities, which, as provided in regulation 7, may be transferred to the Reserve Bank by the Minister of Finance at what he considers not less than market value, if he is of the opinion it is necessary to strengthen New Zealand's financial position. Owners of bonds, Treasury bills or stock issued by an overseas Government are required to give details on this form of the type of security, rate of interest, value, wliere payable, where situated, by whom held, whether any overseas liability exists and the date acquired. Similar particulars are required for overseas debentures, stocks and shares of companies, debentures and stock of local authorities and other local government bodies, and in the case of shares the amount- paid up is to be given.

Extension ot Time Similar information to that sought in the second form must be supplied on a buff form by persons who, while having custodj" of foreign securities, or having a legal or equitable interest in them, are not the registered owners and are not able to sell or transfer them.

The forms were originally to have been returned within 14 days, but owing to the delay in issuing them, the time has been extended until July 31: They are to be sent to the chief cashier of the Reserve Bank. No documents, cheques or currency are to be forwarded. ; • Persons in close touch with" the investment market said yesterday that it was impossible to give any accurate opinion of the extent of New Zealand holdings of overseas currency and securities.

It was pointed but. however, that considerable sums could not be made available without very drastic disorganisation of business enterprises. Dominion insurance companies, for instance, which had large holdings in certain overseas countries, were m most cases compelled by the laws there to liquid assets amounting to considerable amounts in these countries. The withdrawal of these assets could only be achieved if they closed down their operations overseas. In addition they had to have large sums available for the payment of claims, especially in these times of difficulty in transferring money. Similar considerations applied for other concerns. Dividends from Australia

The majority of New Zealand overseas share holdings were in banking and industrial concerns in Australia, it was stated. It was thought that up to half the capital in some large Australian companies was held in New Zealand. One sharebroker considered that; there must be over £1,000,000 available annually from New Zealand holdings in Australian stocks and shares. Together with cash balances, this should be sufficient to settle any unfavourable trade balance with Australia for a considerable time without interfering with securities. He doubted whether Australia would permit large quantities of shares held there fromNew Zealand to be thrown on the market, with a depressing effect which would operate to the detriment of its own investing public. Next, to Australian, it was stated, British securities probably constituted the greater part of New Zealand overseas holdings. Amounts invested in America and most other countries were comparatively small.