EFFECT OF NEW LEGISLATION

Southland Times, Issue 23389, 22 December 1937, Page 4

EFFECT OF NEW LEGISLATION

NEW ZEALAND SHARE MARKET STATE INTERFERENCE IN BUSINESS CONDEMNED (Special to The Times) DUNEDIN, December 21. “This year, which promised so well, has had many disappointments and has been a difficult one for brokers and their clients,” said Mr Harman Reeves, chairman of the Dunedin Stock Exchange, at the annual meeting today. “Losses by speculators in metal shares in Australia and New Zealand over the last six months,” he said, “must run into a very large sum. The proposals in England for extensive rearmament and the expectation that the expenditure of millions would create a boom in all departments of trade and commerce sent metal and industrial shares to high levels on the Stock Exchange of London. The collapse a few months ago on the New York market started a fall and for some months now there has been an almost continual downward trend. “The share market in New Zealand, ’ Mr Reeves continued, “has undoubtedly been overshadowed by the fear of what new Government legislation would be brought in. There is a lack of confidence caused by continual interference by legislation with private enterprise arid an apparent determination to make everybody and every business subservient to the State. I am a strong believer in private enterprise. I believe that the greatness of the British Empire was built up through private enterprise. Government interference today in every enterprise in this country is restricting the flow of capital into trade, the manufacturing industries and all kinds of business enterprise.

GOLD-MINING INDUSTRY “The outlook for the gold-mining industry is not promising,” Mr Reeves stated. “What with the gold tax imposed by the previous Government and not yet removed and the shorter hours and higher wages introduced by the present Government there cannot be more than a few companies able to pay their way, let alone return their shareholders anything in the way of dividends. Some of the dredging companies whose claims have been thoroughly prospected should be profitable ventures and these will get to work in the coming year.. “Shares in the chain store companies,” he said, “have, like most other companies, had a severe drop in value in the market, but as the oldest of these companies are comparatively young the future should show profit to those who venture to purchase in the soundest concerns at the present price. Australian bank shares, and shares in many of the leading industrial companies in Australia, which have fallen in recent months, should be attractive at present prices. One can only sincerely hope that the incoming year will bring a solution of many international difficulties and lead to a resumption of the upward tendency in industry and a consequent activity in the share market both here and overseas.”