COMPANY PROMOTION

Evening Star, Issue 22350, 28 May 1936, Page 7

COMPANY PROMOTION

PROTECTION OF THE PUBLIC GOVERNMENT TAKING CAUTIOUS LINE [From Our Parliamentary Reporter.] WELLINGTON, May 27. An intimation that tho_ public will bo protected from exploitation as far as tho promotion of companies is concerned was given in the House by the Prime Minister (Mr Savage) when the report of fho Selection Coimnittee_ on the Whakatano Paper Mills Limited Water Supply Empowering Bill was discussed. The Bill gives power to the Whakatano Paper Mills Limited _ to take water from the Whakatano River and confers upon the company other incidental powers. During the course of an involved dis,enssion whether tho Bill should bo debated at this stage, it was pointed out that a selection committee on a private Bill had no power to deal with the merits or demerits of the measure. Tho Prime Minister said that the House had some responsibility in the matter. Before the Bill was passed it should he ascertained beyond doubt that the company or persons to whom authority was given were capable of carrying out the provisions of the Bill. “ I am amidships at the moment,” he said, “ but it is just as well that one should understand tho nature of the company, all about the nature of the proposals, and tho people who are expected to carry out tho provisions of the Bill. Somebody will have to satisfy me and everybody else that everything is all right and that foundations for'tho exploitation of the public ar,e not being laid.” Air Savage said there had been toomuch of that sort of thing in tho past, and the closing of tho gate when the horse had gone. What he was saying was without reflection on anybody, hut there was a lot to he explained before he would support the provisions contained in the Bill. • Air Wright (Independent'member for Wellington Suburbs) said the committee found everything all right as far as the Bill was concerned. Whether the company was a strong one was another question. All the committee had to do was to consider the water rights of Whakatane Borough, and everything was found to he in order. Tho member for Tauranga (Air Burnett), who was in charge, had been fair in every way. He did not think it was the business of the committee to inquire into the strength of a company. The Leader of tho Opposition Air Forbes agreed with tho Prime Alinistcr that there was a certain amount of responsibility attaching to tho flotation of largo proposals. He know nothing of the character of the company involved, but there had been a good deal of doubt expressed whether the industry to be established could lie made profitable. People had to lie safeguarded against placing money in concerns owing to optimistic representations being made. That had been tho experience of the past, and the Government was wise to close the door before the horse got out. Tho proposals would have to be carefully examined. If it wpro found that the company had a reasonable 'chance of success, then it should lie allowed to go ahead. The House should not lay itself open to criticism by allowing the legislation to proceed without it being chocked. Tho ATinister of Finance, Air Nash, suggested that the Bill be returned to the committee for further inquiry. It should ke ascertained that, in the event of the Bill being passed, tho promoters would bo able to carry out its provisions. Sir A. Hansom (National, Pahiatua) expressed the view that the Bill should be referred to tho Industries and Commerce Committee, so that evidence could bo obtained from the Forestry Department in respect to paper mills and wood pulping. It was of considerable importance that such an industry should be satisfactorily established. The Minister of Works (Air Semple) expressed the opinion that the investing public should bo protected as far ns possible by the Government, which should use the institutions that it possessed to make scientific investigation into the success or failure of companies. There were skeletons in the cupboard galore in respect of all manner of wildcat schemes. The Government efid not wish to see the investing public ruthlessly fleeced by company promoters who only considered their “ cut.” Tho Minister of Education (Air Fraser) pointed out that, even if the Bill were passed now, there were other difficulties to he surmounted. It would be unfair to prejudge the company concerned. Everybody was hoping that the forest products would be utilised for wood pulp and other associated industries. It would be a great thing for tho country; therefore it behoved the Government to see that a mistake was not made. Tho industry should be started on a sound basis. Air Burnett: “ AVe have no objection to the Bill_ going before another committee. AVe court every' investigation into the ramifications ,of the Bill.” Continuing, he said the company’s representatives had spent weeks in AA reJlington before different departments of the Government explaining the provisions from every angle. After further discussion consideration of the report was deferred and the Bill referred to the Industries and Commerce Committee.