BOND COMPANIES

Ashburton Guardian, Volume 55, Issue 107, 15 February 1935, Page 7

BOND COMPANIES

THE INCORPORATION BILL. .v •' MEASURE PASSES THE HOUSE. . (Per Press Association.) WELLINGTON, February 14. In the House of Representatives to,day the lit. Hon. J. G. Coatep moved the second reading of the Companies (Bondholders Incorporation No. 2) Bill. He said the measure was intended to remove the difficulties that had been encountered by bond-issuing companies, and emphasised that the State, by setting up a Commission, undertook no responsibility for any projects submitted to it, Mr W. Nash (Lab. Hutt) said the provision compelling companies to give information to the Commission was most important. He could not, however, understand why the sittings of the Commission should be in private. He thought that there was a good case for sittings being in public He also thought that provision should be made for an appeal to the Supreme Court oh a point of law. The amazing thing in the Bill was thd indictment 4 of private enterprise. He considered that the Government should haVe acted earlier after it was informed of the way the people of the Dominion rveie being fleeced. That was the reason why publicity should he given to th'e proceedings of the Commission. He went on to show the huge brokerage and management charges that had been made by some companies, and contended that the prices paid for land by some of these companies had placed the Dominion in the position it was to-day. * Bolder Measure Suggested. Mr G. H. R. Mason (Lab., Auckland Suburbs) said the Bill was a great convenience in disposing of the tangle into which these companies had got. The Bill, howeyer, would not stpp swindles, but merely removed the difficulties of bond-issuing companies. He considered that the bondholders, not the companies, should have to pay the cost of incorporation. He thought that .more should be done to protect small investors than was contained in the present Bill. He would like to see a much holder Bill that would make impossible some of the things that had been happening in recent years. Mr F. Langstone (Lab., Waimarino) also considered that the scope of the Bill should be widened, and expressed the opinion that before any bond-issu- . ing company was allowed to operate, it should have to go before some tribunal to prove conclusively that its venture was worth while.

Mr Coates, replying, said that provision was made for an appeal to the Supreme Court on a point of law before the Commission made its decision if a difficulty arose. The second reading was carried, and the committee stages were proceeded with immediately. ' The Hon, W. Downie Stewart (L., Dunedin West) asked if there was any opposition to the Bill, the question, being prompted by a notice of motion given in another place that when the Bill reached that place it should be referred to a joint committee of both Houses. , Mr Coates, in reply, said he thought the matter mentioned in another place deal with the present Bill. Mr M. J. Savage (Labour, Auckland West) asked to what extent the Bill dealt with the McArthur group, and if it in any way conflicted with the promise Originally made that after the investigation by the auditors their report would go to the Supreme Court, and that that Court would direct any further proceedings. Mr Coates said that possibly one or McArthur’s companies might he affected, hut otherwise it in no way affected McArthur’s other activities. The Penal Clause. Mr F. Langstone (Labour, Waimarino) asked that the clause providing for the sittings of the Commission to he in private should he amended. The sittings should he open to the public and the Press to avoid any suspicion being raised in the public mind. It was in the public interest that the sittings should be public so that people would know what 1 was going on and it would have a good effect on other companies. He thought it was not a good precedeht for Parliament to set. Mr J. W. Miinro (Labour, Dunedin North) suggested that the sub-clause referring to the penalty for publication of a report of the Commission’s proceedings should-read: “A fine not exceeding £100,” instead of fixing the fine definitely at £IOO. Mr Coates said there was a greater chance of amicable settlements being reached’ if the sittings were held in private'. The Commission could publish a report if it desired. The fine was fixed at £IOO to * prevent others from publishing a report. Mr Munro moved as an amendment that the penalty clause should read: “A, fine not exceeding £100.” The amendment was lost by . a large majority. Argument among legal members or the House took place on the question of an appeal on a point of law, members urging it should be made clear that any interested party should have the right of appeal. Mr Coates agreed to have the clause reviewed and, if necessary, the amendment could he made in another place. The Bill was reported from committee without amendment, read a third time and passed. '