COMPANIES BILL

Evening Post, Volume CXVI, Issue 104, 30 October 1933, Page 8

COMPANIES BILL

(To the Editor.) Sir —The Government is to be congratulated' on having brought down to 'P^ Momentary consideration a Companies biU which is so comprehensive hi us pioy sions and yet withal eliminates practicX all of the objectionable features of the present Act and its amendments The gentlemen comprising the investigation and advisory committee deserve the thanks of the country for the very excellent work they have accomplished. Forth! reason "that the work must of necessity have been highly specialised the wisdom of the Government in pursuing he course it did, is exemplified.in the veiy nature of the proposed legislation and the time of Parliament would clearly be unduly wasted if the Bdl had been referred to a Select Committee. Thebest Select Committee was one of tho type apnointed by the Government. That the-measure should receive very careful study by all members of Parliarant in its Committee stage is undoubted, for while in the main the provisions are excellent, and by following the English \ct make for better co-ordination, there is o'ue clause in particular which deserves and requires very close attention. It may be assumed that the great majority of our people realise that industries, other than those of purely farming character, must bo created if we are to maintain even a semblance of national character. The question of what method of creating conditions favourable to industrial development need not be considered at the moment. One thing is fundamentally necessary, and that is the provision of capital for establishment and production. The first aim should be to develop those industries which will use indigenous or semi-indigenous base products. Clause 343 of the proposed measure has evidently been devised in order to prevent the sale of bonds of the character of those offered and sold by what is termed the "hawking method." Unquestionably, there have been serious abuses iv this method of raising capital, and consequently the clause has been drafted in terms practically the same as those embodied in the English Act. It would appear that the Committee has failed to realise tho vastly differing conditions pertaining to England and New Zealand. The strength of industrial undertakings in England undoubtedly lies in the fact of the wide participation of the small investor. The access to recognised ment facilities is much easier in England than it can possibly be in New Zealand, with its move widely distributed settlement. The past experience in New Zealand that a very great proportion of investment capital conic? irmn (lio man on

the land. The time will assuredly come when these conditions will again operate. Such being the case, how is it possible, as the clause in the Bill proposes, to differentiate between the office of a business man and the house of a farmer,, which must of necessity be his office? To assume that a properly authenticated share salesman may legitimately call on a townsman at his office for the purpose of selling shares and be prohibited from interviewing a farmer in his sitting-room for the same purpose, is not only unfair but discriminatory. If it is unfair to the farmer, it is equally unfair to tho person residing in a town who has money to invest, and whoso circumstances preclude him or her discussing investments during the ordinary working day.

Quite apart from the foregoing considerations, the need for investment outlet is insistent, and will undoubtedly grow if only for the reason that the majority believe in our ultimate emergency into nationhood. Surely the correct course to follow is to make conditions of share offering, by door-to-door methods, such that only authenticated servants of properlyconstituted companies are employed, and that in each and every case the prospectus of the company be. clearly set out and the selling agent himself, and not'" the company for whom he acts, be subject to a heavy fine if he fails to produce such prospectus when offering shares or bonds for sale.

With such excellent work evidenced in the clauses of the Bill as a whole, it is clear that Parliament can safeguard the investor of small sums .without creating monopolistic conditions-and hampering industrial development.—-I am, etc.,

J. PEARCE LUKE.

WOULD-BE TAXPAYER.