FLIGHT OF CAPITAL

Otago Daily Times, Issue 22835, 20 March 1936, Page 10

FLIGHT OF CAPITAL

LARGE SUMS LEAVING DOMINION LABOUR’S POLICY CAUSES ALARM (Special to Daily Times) AUCKLAND, March 19. Considerable sums of money were being remitted quietly from New Zealand to other countries for investment as a result of the Government’s proposed monetary policy, stated several bank directors and others interested in finance when they were interviewed today. The opinion was expressed that the announcement made on Wednesday by the Prime Minister, Mr M. J. Savage, concerning a readjustment of mortgages and the restoration of equities in land and homes had caused alarm and would stimulate the flight of capital from the country. “ Mostly this money is going to Australia and South Africa, but 1 know of one particularly large sum that was remitted to England recently in spite of the adverse exchange rate,” said one financial adviser. “ The Government’s policy when carried into effect can leave no field for safe and remunerative in vestment in this country. A policy of ‘ Soothing syrup ’ cannot be expected to be devoured by the keenly alert business community.” DROP IN INDUSTRIAL SHARES NERVOUSNESS OE INVESTORS. (Special to Daily Times) AUCKLAND, March 19. A further drop in prices for industrial shares has occurred. The barometer of financial opinion, the investment market, reveals the unfavourable light in which every fresh indication of Government policy is viewed. On the Auckland Exchange to-day milling shares showed no improvement, while Wilson’s Cement touched 87s fid, compared with a peak of 48s in February. The weakness spread to fertiliser shares, accounting for Farmers’ Fertilisers moving below par. Of eight sales in New Zealand industrials only one—in Farmers’ Trading—was not-- made at a lower price. The fact that Australian stocks are again hardening will probably cause a further movement of capital across the Tasman. The atmosphere of uncertainty about the Government’s plans has heightened investors’ fears. Holders of industrial stocks are far from confident and many price concessions have been forced from them. Buying support has been affected by an extensive withdrawal of orders. Although hoping for the best when Parliament opens, the market apparently is preparing for the worst.