ARRESTED BROKERS RELEASED BY ORDER OF GOVERNMENT

Star (Christchurch), Issue 18985, 3 February 1930, Page 1

ARRESTED BROKERS RELEASED BY ORDER OF GOVERNMENT

Probable Crash Would Have Shaken The Financial Stability Of Canada. (United Press Association.—By Electric Telegraph.—Copyright.) (Received February 3,11 a.m.) VANCOUVER, February 1. Canada this week watched an amazing financial drama in which a threatened wreck loomed so widespread that the highest law officers of the Dominion were obliged to come to the rescue of highly-placed people whom they had just attacked.

In one forenoon five of the leading brokerage houses were raided and eleven principals were arrested. Colonel William Price, Attorney-Gen-eral for Ontario, directed the battle against alleged dishonest bucketing brokers, who have scores of branches throughout the country. He closed these up and asked the Stock Exchange to expel the mining operators who last year alone handled more than £40,000,000 of public moneys. For one day, the Stock Exchanges 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 readmitted 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, and the. unprotected stocks of thousands of small holders would be wiped out, and in the case of criminal Court charges against brokers finally not being proven, 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 Ontario’s action in seizing the offices and bank accounts of the accused brokers. Manitoba’s prosperity is entirely dependent upon a stabilised wheat price. Two of the leading brokers were carrying millions of bushels of wheat on a margin in the Winnipeg market. Their bank accounts were seized on the day when wheat reached the lowest point of the season. Noon on Friday saw a situation where 10,000,000 bushels of wheat would have been dumped on the market within an hour. The Premier of Manitoba (the Hon John Bracken) 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 the Liverpool cables announcing a two cents advance overnight. The week finished with the Government leaders having come to the realisation that some business is sometimes too big to be disciplined without far-reaching and unexpected results.