NO CO-OPERATION

Evening Post, Volume CXVIII, Issue 34, 9 August 1934, Page 8

NO CO-OPERATION

THE MCARTHUR GROUP

ALLEGATIONS OF BIAS

_ Difficulties met with by the Commission in obtaining the co-operation of certain companies in the pursuit of its inquiries; aro referred to in tho report.' ■' .: ,

"All tho timber, plantation, and bond-issuing companies havo assisted us in our inquiries, and have given us all the information wo require, except the group controlled by J. W. S. MeArthur and Ms associates/ the report states.

"All the investment trusts have responded to our invitation to co-operato with us and give us information, except the Me Arthur group. .

'' The New Zealand Investment Trust, Ltd., of Wellington, instructed its solicitors, secretary, and a director to appear before us; they gave us. all tho information we required, and; ofr fered to disclose all details q£ their portfolio of investments to" any indo--pendent auditor ( of standing^ whom we chose to nominate, and to'permit him to report to us. ,;■■ ■• ,: ■ '

"Wo approached the Investment Executive Trust of New Zealand, Ltd., in the same spirit, with the same request for amicable co-operation,, and we received from their solicitors, Messrs^ Hampson and Wiseman, of* Auckland* a letter dated May 21, 1934, containing tho following, under the heading 'New Zealand Eedwood Forests, Ltd.': —

The fact that this inquisition is sought by your Commission compels us to state in clear and unequivocal torms that our client company will not disclose to a hostile, biased, and interested Commission, which has been declared to be not a judicial tribunal, the business of this company of four years ago or today.

"Under the heading 'Investment Executive Trust of New Zealand, Ltd.,' in the .sanie letter, the writers say:—

It is clear that as your Commission desires to discredit Mr. McArthur as chairman of directors of New Zealand Eedwood Forests, Ltd., different treatment cannot bo expected to ho accorded to Mr. McArthur, as managing director of the Investment Executive Trust of New Zealand, Ltd. We are instructed by this company that it adopts tho same attitude as New Zealand Eedwood Forests, Ltd.

"The writers of this letter arc the solicitors who acted for tho parties who made application to the Supreme Court recently for a writ ,of prohibition against this Commission of Inquiry. "Our present order of reference does not authorise us to inquire into the nature and effect of the transactions Wo have' referred to herein, except to establish general principles. After the judgment of the Full Court was delivered, counsel for tho Crown (Mr. J. B. Callan, K.C.) advised us, inter alia, that—

. . . the Commission is a Commission .set up merely for tlic purpose of searching for and suggesting remedies to evil"; which tho Government ljolicves to exist; that it is not the purpose- of the Commission to ascertain -which companies or individuals have been following undesirable practices, or, alternatively, which companies or individuals have entirely clean hands. It docs not, however, follow that tho Commission is not to inquire into tho doings or misdoings of individual companies. On tho contrary, no Commission can intelligently suggest remedies unless it knows sufficiently the nature of the evils and abuses to be prevented. And it cannot know the nature of evils or abuses in tho nbstract. It has to make their acquaintance in concrete facts and happenings. For this reason, and this reason only,_it is forced to inquiro into the affairs of individual companies. A DIFFICULT TASK.

■ [tln thesocircumstances wo .have had a difficult task in shaping our policy and procedure towards the affairs of the two groups of companies referred to. Tlieso companies have, through their solicitors, refused to codporalo with us on any amicablo basis, and have, in our opinion, watched ovcry move we made witli a view to attacking our procedure and securing at least delay by a further application to the Court."

"In the affairs of theso companies the linp between inquiries which lie within the limits of the proper exerciso of our power and inquiries which transgress those limits cannot bo drawn with precision. In many instances it seems to us that their propriety could be determined only by reference _to the motives and objects underlying each- particular lino; of -inquiry. "Furthermore, we submit that the matters properly within tho scope, of our order of roferenco. tend, as to moral gravity ami urgency, to be overshad-

owed by tho issues raised by tho facti herein set but. '

'' Theso issues, in our opinion, call for immediate further inquiry and action in the interests of tho , debentureholders in particular, and of the community in general." '"■] ■

"Our legal position under the 'Commissions of Inquiry Act, 1908J- as in-' terproted by the Full Court is so deli-; cate (in relation to disaffected cpmpan-. ies) that wo aro reluctant to pursue such further inquiries under our existing powers. •.'.'-'