MORE PANIC LEGISLATION.

Auckland Star, Volume LIII, Issue 249, 20 October 1922, Page 4

MORE PANIC LEGISLATION.

The latest moratorium appears in the passing of the Companies Amendment Bill, which Parliament put through its final stages laat evening. It is a measure making provision for bolstering up companies that in the ordinary course would be liable to the provisions of the bankruptcy law. If it appears to the Supreme Court that it would be contrary to the

interests of company, creditors, or public uhat it should be wound up, the Court may direct the creditors or a cja.ss of the creditors of an embariarfscd vompany to meet and consider a compromise. In the event of an agreement being arrived at by a majority representing three- ■ fourths in value of the creditors present, in person or by proxy ) the Court may bind all creditors or the class, and the company continue to operate. The I legislation is in keeping wiuh the confiscatory financial expedients that strew I the path of Reform. The Prime Minister had promised a statement, but his speech, beyond disclosing that there j were only two or three companies sadly lin need of assistance, added nothing to J the scant information that Parliament J already possessed. There is one safe- ; guard and one only in this latest depar- ; ture from the paths of normal commcr- | cial trading, and that is the extensive powers delegated to the Supreme Court. llf our judges interpret tlhe Act ill the I spirit of the bankruptcy law the danger j may prov e to be more apparent than 1 real, but it can at the best be accepted as significant of tho evils thnt foolish government interference with trade has j brougiht in its train. Just at the time that Parliament is hastily passing an Act which can only be judged by the most lenient as another chapter in the history of the Government's absence of financial nbility—an almost inevitable sequel to eariier chapters—the public is placed in possession of facts that demonstrate how disastrously some of the Government's earlier incursions into Bolshevik tinanco are working out. The Southland Farmers' Co-operative Association has just owned up to a loss of £90.000. Its paid-up capital is £05.000, and its uncalled capital £25,000, so that the whole of the capital —always supposing- that its 2.r>00 shareholders can be induced to pay up the uncalled £2n.OoO—is lost in one years operations. Now the reckless Irading that brought this about was only possible because the association had £152,000 on deposit which the unfortunate owners were prevented from recovering because of the Government moratorium on deposits. It i? not too much to say that the Government robbed these depositors of the chance of recovering their money. Mr. Masse y spok o last night of tho

insistence of "a email minority of obstinate creditors who arc threatening to force the companies into liquidation." Among this number possibly arc to be found some of the creditors of the Southland company whose claims amount to £52,000 and whom the chairman states may require to be paid any day. But these people as the. law stood had some remedy: the depositor had none. Whether the Act that it only requires the Legislative Council to adopt will in effect rob the creditors of the right to their money and treat their commercial contracts as dishonoured pieces of paper. as the moratorium did with the unfortunate depositors, remains to be seen. But -while we hear of "obstinate creditors" there is nothing said of the tardy debtors whose failure to pay the £213.000 that they owe has largely placed the Southland company where it is. Tt is remarVable how the business community continue to view with comparative equanimity the floundering of the Government of their choice from one unsound financial expedient to another. Xot only is it strangling by its failure to Mtwcf *if*ti"r the industry of tJu

country, the life-blood of which it has already largely drained, but also it is gaining for the Dominion an ununviable notoriety for cancelling 'by legislation any commercial agreement that in its folly it deems desirable and making the sanctity of contract a by-word.