Evening Post. THURSDAY, SEPTEMBER 6, 1934,

Evening Post, Volume CXVIII, Issue 58, 6 September 1934, Page 12

Evening Post.

THURSDAY, SEPTEMBER 6, 1934,

SPREADING THE NET

After Test cricket has ceased to occupy the chief place in our overseas news and while most of the news relating to matters of possibly not inferior importance continues to be dull or distressing, we are indebted to the Press Association and a New South Wales Royal Commission for the liberal compensation that they are providing.. The Royal Commission is inquiring into the operations of 17 companies, in some of which New Zealand is keenly interested and may even, if she so pleases, take a parental pride. But the interest that New Zealand is taking in the detailed reports that reach us from day to. day is not merely a selfinterest based .on financial grounds. The information that they supply is intrinsically valuable for the light that it sheds on the mysteries both of high finance and of human nature, and the incidental entertainment is in these dull days a pearl beyond price. For those, who are getting in this way i their first introduction to the mysteries of high finance the light may j sometimes be too strong, the trans-1 actions too intricate, for perfect visibility and comprehension. Dark as the poet says "with excess of light," they may be as completely baffled as many of those who without any lighf at all but what the lamp of faith supplied put up their moneys and have not all yet got it back. But for the most part the essentials are clear enough, and the humour of parts of the story as brought out before the Commission is perfect. The very names of some of the associated companies give such satisfaction to the disinterested reader that they may well have carried conviction to a hesitating investor. The first four names on the New Zealand Commission's list are as follows:— The Investment Executive Trust of New Zealand, Limited, the Sterling Investments Company (N.Z.), Ltd., ihe Investment Securities Association, Limited, and the British National Investment Trust, Limited. There may be no inspiration in these names but they all sound a note of solid confidence. The same may be said of the Southern British National Trust, Limited, and the British National Trust, Limited, which are given lower places on the list, because they were incorporated at a later date and in Australia. If the mutual resemblances of some of these names might be considered objectionable'as likely to confuse, the intimate relations subsisting between the whole family is a sufficient answer. Farms and Farmlets, Limited, and the Pacific Exploration Company, Ltd.} are names •with a. little more imagination in them, the latter perhaps with a little too much.

It is, however, among the twelve additional companies reported yesterday to have been added to the investigation list that the most attractive names are to be found, namely, Freeholds, Limited, Liberty Motors Corporation, Limited, the Beulah Land Company, Limited, and Modern Homes, Limited. For pride of place it might be hard to choose between Modern Homes, Limited, with its pleasant suggestions of up-to-date domestic bliss, and the British Medical Trust, Ltd., which is mentioned in our report from Sydney today. Though the last-mentioned company appears to belong to Australia, its confidence in New Zealand is such as to commend it to the sympathetic attention—we do not say the business confidence—of New Zealanders. Our authority for this statement is Mr. C. G. Alcorn, who in the length of his innings before the Commission and in the number of "boundaries" that he has scored, is proving himself a Bradman. Alcorn then explained his association with the British. Medical Trust. He said Mclnnes and Major Jarvie were also interested. He believed Mclnnes sold some shares to a man and his wife at Thirroul for £2000, and he understood that £400 brokerage was paid. Mr. Monahan: The British Medical Trust invested £1500 in Amalgamated Buildings in a certain. New Zealand town? Alcorn: Yes. . Tho Commissioner: I understand the £1500 was for a picture theatre. Did you regard that as a proper investment? Alcorn: I was surprised. And those who followed Mr. Alcorn's evidence with the attention that it deserves will have realised that it takes a good deal to surprise him. ■ .. ,

Another point on which we are indebted to fhe same witness is his explanation of the true inwardness of the Pacific Exploration Company, Limited. It is a private company which, was registered in May, 1932, with the Sterling Investments Co. (N.Z.), Ltd., as the holders of all its 10,000 shares except one, but Mr. Alcorn and Mr. T. R. McArthur have each since taken over ten of

these shares. It was very unfavourably introduced to the New Zealand public by the Barton Commission with the remark that "there is evidence that the object of this Company was to procure and finance the building of a somewhat luxurious sea-going yacht." The scope of its principal object, as declared in the memorandum of association is certainly magnificent: "To seek for and secure openings for the employment of capital in the Pacific or in any other part of the world." The company is specifically empowered "to carry on as farmers, dairymen, and .as butchers and sausage manufacturers," but though it may also "produce, construct, charter,' or hire wharves, ships, etc,"' there appears to be no mention of exploring. Arid'as Mr. McArthur has registered the yacht in his name on the books of the Royal New Zealand Yacht Squadron at Auckland, and has made affidavit that it belongs to him, Mr. Barton and his fellow-Commissioners drew the ill-natured inference that we have quoted. Now let us turn to Mr. Alcorn's evidence as reported yesterday and see how a plain tale has put them down. '

Alcorn also said that the- yacht purchased by the Pacific Exploration Company had been sold to McArthur in consideration of a transfer of debentures through sonic of the associated companies. It had been the Pacific Exploration Company's idea to go in for exploration in the Pacific, but the company had been unable to do that.

. . . Mr. Monahan asked Alcorn to explain what became of the £50.000 that was paid by the Investment Executive Trust of "New Zealand for debentures in the Sterling Investments Company. He also asked whether any of it went to reconditioning tho Pacific Exploration _ Company's yachts Alcorn said that the Sterling Investments Company took up 10,000 shares in tho Pacific Exploration Company, but when the Investment Executive Trust's business grew so rapidly McArthur recognised tho impossibility of conducting exploration work. He therefore took over the yacht for his private use.

Mr. McArthur's original idea was "to go in for exploration in the Pacific" and add his name to those; of Magellan and Dampier, Cook and Vancouver and all the rest, but his other business prospered so amazingly that he had to give it up. The simple faith of Mr. Alcorn is one of the best tilings .that this unfortunate business has produced. Despite this discouragement we are pleased to see that the Commission is sticking to its job. Its further inquiries have resulted- in a report which says that twelve more companies should be added to those already under, investigation, and the necessary Order in Council, as Mr. Coates informed the House yesterday, has been already made. If'the inspectors do their work as well as the Commissioners the best will be made of a bad job. ■