AMAZING FINANCE DRAMA

Taranaki Daily News, 4 February 1930, Page 9

AMAZING FINANCE DRAMA

GOVERNMENTS IN DILEMMA THREAT OF CANADIAN CRASH LAW OFFICERS CAPITULATE By Telegraph—Press Assn.—Copyright. Vancouver, February I. Canada this week watcheu an amazing financial drama in which a threatened wreck loomed so widespread that the highest law officers of the Dominion were oblige. 1 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 arrested. Colonel William Price, the At-torney-General for Ontario, directed the battle against alleged dishonest bucketing brokers who have scores of branches throughout the country. He closed these and asked the Stock Exchange to expel mining operators who last year alone handled more than £40,000,000 of public money. For one day the Steck Exchange operated without these brokers. Overnight, however, the Ontario Government feared a financial crash that would rock the Dominion, and early on Saturday it -was announced that the accused brokers would be re-admitted to the exchange. The Attorney-General was forced to capitulate to a definite threat that with the accused traders prohibited from trading there would be a panic, the unprotected stocks of small holders would be wiped out, and in case of criminal court charges against the brokers finally not being proved, these 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 and protested violently against the Ontario action in seizing offices and bank accounts of accused brokers. Manitoba’s 'prosperity is entirely dependent upon a stabilised wheat price. Two leading brokers were carrying millions of bushels of wheat on a margin on the Winnipeg market. Their bank account seizures occurred on the day when wheat reached the lowest point of the season. Noon on Friday saw a situation where 10,009,000 bushels of w’heat would have been dumped on the market within an hour. The Premier of Manitoba announced that the resources of the entire Government would step into the market to stabilise the situation, for he feared a panic that would have carried the price away under three shillings. On Saturday morning the Ontario police released enough of the brokers’ money to bolster the wheat market, and the crisis passed with Liverpool cables announcing a two' cents’ advance overnight. The week finished with the Government leaders coming to the realisation that some business is sometimes too big to discipline without far-reaching and unexpected results./