AN EASING TONE.

Star (Christchurch), Volume LXVI, Issue 20364, 23 July 1934, Page 9

AN EASING TONE.

Election Effects on Share Market in Australia. EXCHANGE REVIEW. Conditions on the Australian stock exchanges, apart from heavy speculation in goldmining shares, were less active in June, says the market review of Messrs Byron. Moore. Day and Journeaux, of Melbourne. The unpromising seasonal outlook and the approaching elections were factors which to some extent had disturbed the high degree of confidence that had been prevailing for many months. “In normal times,” says the review, “ an election period usually influences quiet conditions, but on this occasion the issue involved, namely ‘Nationalisation of Banking,’ is one which directly concerns investment funds, and consequently some nervousness may be experienced as the election date approaches. It is possible that prices will weaken ' sufficiently to make many stocks attractive buying to hold, and investors would be well advised to hold funds liquid for the time being so as to be in a position to take advantage of any serious recession in quotations which may take place. “ The dry conditions throughout most parts of Australia, particularly the wheat belt in North-Western Victoria, are causing considerable concern, and although there is yet time for good rains to redeem the position, the immediate outlook is somewhat discouraging.

“ With the approach of June 30, the balancing date for most companies, stock-taking has been in progress, which to some extent has affected trading conditions. It is anticipated, however, that most companies have experienced a better year, and with the release of accounts mostly favourable during the next two or three months, the expected fall in quotations, through seasonal and political influences, may be arrested.

n “We consider investors would be j well advised to retain their investments Q ’ because it seems unlikely that the present Government will be defeated, and when this doubt is finally removed 0 market conditions should undergo a change for the better. “ All bank shares have experienced a ’ weak market during the past month, ' and with the approach of the elections it is probable that further weakness G may develop. Nevertheless, we strongly advise holding, and should prices des cline much further investors should f take advantage of the weakness and f acquire banking investments on parp ticularly favourable terms because it is evident that quotations will sharply *' respond should the Federal Party be f defeated at the coming elections. ELEVEN POINTS. ! National Bank of Australia s Defends Present System. f In presenting the “ Case for the Banks," the National Bank of Aus--1 tralia states that if proposals for nationalisation be put into operation they would break down an organisation of society which, whatever its faults, has brought enormous benefits to all classes of the people, says the “ Sydney Sunday Sun.” Detractors do not object to the present system because of its ability, honesty, utility, stability and sufficiency, but because of its stalwart opposition to unbridled inflation. a They regard the banks as the central feature of productive and com- * mercial activities of the nation, and think that if they could gain control : over that central feature they would | control most of the surrounding sec--1 tions. ? Consequently the}” could make any 1 changes they wished in the present S3 r stem. „ * Eleven Paints. ! The bank analyses its position as follows : » 1- There are 71,879 shareholders of ' the trading institutions. 2. Average capital is £528 per sharej holder. ) 3. Net earnings in the past year or , so have been lower than interest rates [ on Government and municipal securities. , 4. Profit shown in the last balancesheets is £1,966,637, or 2.87 per cent on shareholders’ funds. The average divi- . d.nd on shareholders’ funds was 2.1 S : per cent. 5. Reduction of i per cent in interest charges would represent £1,430,000, or an amount almost equal to the last ; dividend. 6. The main credit system of the | country is largely independent of the banker, who is in a secondary position. 7. Banks can create limited credit, but experience shows that more evils ; result from excessive use of credit than from restriction. 8. The modern credit system makes available supplementary capital for canning on business activities. 9. There are 750.000 depositors in Australia. They have primary control over their money. 10. A bank cannot force a borrower to accept a loan. Neither can it reduce advances as and when it likes. 11. The banks do not control the business life of the community. The bulk of traders and producers are under no obligations t » the banks. MINING. Reports and Returns on Operations.

On July 5. the Stafford Company reported:—Caulking of dredge pontoon proceeding rapidly. stacker ladder superstructure timbers will be ready when pontoon launched. Excavation launching pond to 6ft nearing completion. Gin top of gravel bed exposed, carrying good gold values. Material stacked on site of first “ run ” on dredge. A message to Melbourne from Stafford (>?.Z. ) on July 12 reports that the pontoon of Stafford Cold-dredging N.T-. was launched successfully. Installation of machinery will now* proceed. Golden Sawn. For the twelve working days ended July 9. 313 tons of ore were treated for a return of £l3lO. realisation estimated at £7 2s per oz. Mabaktpawa. The return for last week was 6 2oz. Brian Born. The mine report states that the return was lOoz 3t?wt for 127 hours* work. Gillespie's Beach. DITNEDIN. July 23. The return for Gillespie's Beach is 350 z 9dwt for 127 i hours. Okarito. DITNEDTX. July 23. The Okarito return for 124 hours is 30oz lldwt. i