OUR READERS’ OPINIONS

Gisborne Times, Volume LXXIII, Issue 12092, 3 November 1933, Page 3

OUR READERS’ OPINIONS

THE COMPANIES; BILL. (To the Editor.) Sir, —The Government is. to/be congratulated on having, brought down for Parliamentary consideration a Companies . Bill which J s so comprehensive in its provisions and yet withal eliminates practically all outlie objectionable features of the.; present, Act and its amendments. The gentlemen comprising the investigation and advisory •• commit teo deserve the thanks of the. country- for the very excellent work' they have accomplished. For the reason that the work .must, of .necessity -have keen highly specialised the ‘wisdom of the Government. ..n pursuing* the. couff.o it did, is o.xempiiiled in the very nature of the proposed . legislation and the time of Parliament would clearly be und'uly wasted if the Till had I ren referred to’ a '-’elect- ; f .nmmittec.-' The best Polect'C'emmitfee' was one ot the‘type appointed - by the Government. •' •

That the measure- should receive vevv careful stodv bv all mefnbe rs of' Parliament in 'it« committee stage U undoubted, for while in the main, the provisions are excellent, and by follqwing the English-Act make for better 'co-ordination-, there is one clause in particular which deserves and requires very, close attention. Tt onay be assumed that the great majority of our neople realise that industries, other than those of purely farming character, must be created if we arc to maintain even a semblance of national character.

r riio question of what method °f creniiiv conditions favorable to industrial development need not he,_ considered at the moment.' One thin so 5 s fundamentally necessary and that i s the provision (A capital for . establishment and production. The first -aim should be to develop- those industries which will use indigenous or so mi-in-digenous base products. Clause 34;} of the proposed measure has evidently-been' devised in order to prevent the. sale of bonds of the character of those offered and sold bv what, is termed the ‘hawking method’' Unquestionably there have been serious abuses in this method of raisin? capital and eon son uently the clause has been drafted in terms practically the same as those -embodied’ in the English Act. If, would appear that fho committee has failed to realise the vast.lv differing conditions pertaining to England and New Zealand. The strength of industrial undertakings in England undoubtedly lie s in the fact of the wide participation of the small investor. The access to recognised investment- facilities is much easier in England than it can possibly ho in New Zealand, wiITT its more widely distributed settlement. The past experience in New Zealand shows that a- very great proportion of investment capital comes from the man on the land. The time will assurcdlv come when these conditions will again operate. Such being the ease, 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 he his office? To assume that a. properly authenticated si ia re salesman may legitimately cali on a. townsman at his office lor the purpose of selling shares anp. bp prohibited from interviewing a farmer in his sitting room for the same purpose, is not only unfair hut d*seriminatorv. If if is unfair to thofarmer, it. is equally unfair to the person residing in a town who has money to invest and whose circumstances preclude him or her discussing investments during the ordinary working day. Quite apart from the foregoing' coU'side rat ions, the need' for investmentoutlet 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 t 0 make conditions of share offering, by door to door methods, such that only authenticated servants of properly constituted companies are employed, and that in each and every ease the prospectus of the company be clearly •set out and the selling a gen t himself, and nob the company for whom Le acts, be subject to a heavy fino R lie fails to produce such .prospectus when offering shares or bonds for sale.

With such excellent work evidenced in. the clauses of flic Bill as -a whole, •it is clear that Parliament can safeguard the investor of small sums without creating monopolistic conditions and hampering industrial development. Yours faithfully, .1. PEARCE- LUKE. Wellington. October 27.