TRANSFER OF CAPITAL

Taranaki Daily News, 16 February 1933, Page 5

TRANSFER OF CAPITAL

LONDON TO DOMINION. RESTRICTION BY THE BANKS. j Action is being taken by the New ’Zealand banks to restrict the transfer of funds from London to the Dominion, according to unofficial, intimation given to Auckland stockbrokers during the past week. It is stated that the banks have declined to negotiate brokers’ drafts, just as similar action was .taken recently to check capital movements from Australia; to New Zealand. From inquiries made at Auckland banks it was learned that a cautious policy was observed in buying London exchange. It was poihted out that every case was treated on its merits, although the requirements of the exporter ware facilitated. One official said that the banks would not accommodate any transaction which savoured of prhfit-taking, and the speculator received no consideration. The banks sought all particulars of cases involving the transfer of capital. Some degree of restriction was ; necessary, especially at the present time, when the export season was at its' height, in order to prevent heavy accumulation of London funds. ' “The banks are.no doubt entitled to limit gambling on exchange, but to check all transfers of capital hinders legitimate movements and lessens the scope of business on the stock market,” said a leading broker. “Such shares as Waihi,' Blackwater, Loan. and Mercantile and New Zealand and River Plate have sale in London, and business can usually be done by the New Zealand seller. The banks now refuse to negotiate this business. It means simply that share valued will be governed by the domestic demand as both .Australian and London buying orders cannot now be covered.” Two instances, illustrative of the policy adopted by the banks were quoted. In one case, a retired Indian Government official living in New Zealand wished to transfer upward of £lOOO held in English securities. It was some days before he could convince the bank that he wished to buy property in New Zealand, and that the transaction was not speculative. The business was negotiated. No satisfaction could be obtained by another man who wished to bring to New Zealand about £3OOO held in one of the English banks. It was stated that the London branch of the New Zealand bank refused to facilitate the transfer when approached by the English bank. The view was expressed that the banks were acting, in unison in the matter. Representations have been made to the Associated Banks, but no reply has so far been received. . .