INTERESTING STORY

Ashburton Guardian, Volume 54, Issue 256, 10 August 1934, Page 3

INTERESTING STORY

THE COMPANY INQUIRY.

SECRET MISSION TO AUSTRALIA.

(Special to the " Guardian.") WELLINGTON, August 9

Telephonic communication between the heads of several Governments, ship to shore wireless messages in code from officials to Ministers, a secret mission to Australia and endless searching and analysis of files and documents are only some of the elements of the intriguing story revealed by the partial lifting of the veil of secrecy from the investigations which led to the sensational disclosures in, and drastic action by, Parliament last night. iOne extraordinary feature was the compactness of the shroud which concealed the activities of the authorities until the moment arrived for the taking of simultaneous action by the five Governments concerned. So well was the secret kept that the announcement to the House created as much surprise as would have followed the dropping of a bombshell from the public gallery, and so well was the "coup" planned and executed that each of the three steps decided upon •—presentation of an int.jri.ai ieport, passage of legislation, and appointment of investigating inspectors—was carried out within the 16 hours during which ordinary commercial houses are not open for business.

Origin of inquiry. The origin of the inquiry dates back to the setting up of the Commission appointed by the Government w> inquire into thi methods of company promotion in New Zealand. Before that, comments on the subject by Professor H. Belshaw, of Auckland, had attracted some attention. The appointment of a Commission was in redempr tion of a promise made when the Companies Act of 1933 was under consideration. Under their warrant the eommissicre's quickly gathered t.;gobhcr information from every accessible source, including the Treasury, the Companies Office, Industries ami Commerce Department, Stamp Duties Department, and various other channels and quarters in which inquiries and discussions had from time to time taken place on matters affecting the promotion of companies. The commismissioners had before them a mass of material from other countries which had experienced similar difficulties. This included a special memorandum of the Hatry scandal, prepared by I>i. If.. M. Campbell. Starting from the basis of this, collection of facts and figures, the invesfixators inquired, into the affairs of upwards of, if not more than, 100 companies, and presumably in the course of these investigations certain features , in connection with the promotion and management of companies came under notice.

-Wita the prosecution of these examinations came greater interest in the affairs of particular concerns, and with the unravelling of details the need for urgent inquiry in especial directions apparently was emphasisel. Then followed careful searching of documents and the discovery of connecting links in the financial chain with, which the commissioners were then concerned.

The Interim Report. The closing of certain doors on endeavours to obtain further information, and an excursion, into the fields of litigation served to delay the inquiry, and the hand of the Commission was forced in the direction of presenting an interim report to the Gov-ernor-General, and suggesting another form in which the investigations could be carried on. From the Gover-nor-General the report went to th& Prime Minister, and the Minister of Finance, and from the time of. itsreceipt by Ministers until the passage of legislation by Parliament last night there was a series of swift developments. The drafting of the special legislation sought by the commissioners was put in hand immediately, because some time and consideration were* required for preparation of the terms of the measure which to-day reached the Statute Book. ; As soon as the draft of legislation was approved the question of seeking co-operation from Australian Governments was gone into. Under instructions from the Government, Mr A. D: Park (Secretary to the Treasury) and Mr J. S. Barton (chairman of the ■ Commission) left for the Commonwealth, the fact of their departure, as well as the character of their mission, being carefully withheld from the public. In Australia the officials conferred either personally or through the Federal authorities at Canberra with the Governments of New South Wales, Victoria and South Australia. Throughout the visit, from the time of departure of the intern-colonial steamer to the date of their return to Wellington, Messrs Park and Barton were in constant communication with the New Zealand Government, code messages being used on every occasion in the process. It is reported that the official code books of the New South Wales department were extensively thumbed. While at sea the officials employed wireless as a means of communication. Co-operati!on Arranged. With co-operation successfully arranged, the problem of providing for the taking of simultaneous action by the five Governments concerned had next to be overcome. Each assembly, of course, was in parliamentary session, and each had its own legislative programme to carry through. Some time, therefore, "was required for the selection and arrangement of a suitable date for the presentation of legislation. Actually, these negotiations occupied over one month. The remainder of the time was taken up inputting the finishing touches 'to details of the legislation, in the tentative selection of inspectors, formulation of in- , structions for the new inspectors, issuance of advices to banks, and

preparation of Orders-in-Council. With all these particulars completed, Wednesday was selected for the tabling of the Commission's report and the submission to and passage by the House of emergency legislation, coincident with similar legislative action in the Australian Parliaments. Anxi'ous Moiments. Strangely enough Mr Forbes momentarily forgot the time of presentation of the report. The House yesterday was to adjourn at 4.30 p.m. until 7.30 p.m. and Mr Speaker had actually left the chair before the omission was realised and steps taken to remedy it. It was necessary for Mr Speaker to return to the Souse to enable the formalities of presentation to be gone through. These were anxious moments feT the Minister of Finance, because the passage of subsequent legislation was dependent to some extent upon members having gripped the essentials of the Commission's recommendations during the three hours' adjournment. Other preparations beside those connected with the enactment had to be made in the . early afternoon. .Warrants for the appointment of the four inspectors were prepared in readiness for signature immediately the measure was passed and as the Bill contained provision giving full authority to telegraphed appointments, Messrs Griffin and Vickery two of the chosen inspectors, were dispatched to Auckland by the 3 p.m. express yesterday. They received notice of their appointment by telegram after the House rose, and thus were armed with the required power to launch their investigations to-day. Another requirement to be attended to last night was the sending out of notifications to all branches of banks operating in New Zealand, warning them when they opened for business at 10 a.m. to-day to refuse applications for the transfer of balances.

Throughout yesterday and again to-day, Mr Coates discussed developments with the Australian authoriti j s by means of the trans-ocean radio telephone.