UNIVERSAL APPROVAL

New Zealand Herald, Volume LXXI, Issue 21874, 9 August 1934, Page 14

UNIVERSAL APPROVAL

RECEPTION BY MEMBERS AMAZEMENT AT REPORT COMMENTS BY MR. SAVAGE [BY TELEGRAPH —PRESS ASSOCIATION] WELLING TON. Wednesday The debate on tho second reading of the bill was continued after Mr. Coates had spoken. . The Leader of the Opposition, Mr. M. ,T. Savage, said it seemed hard to believe that such things were happening in the Dominion. Ho was amazed and hardly thought it possible. He had been asked already why action had not been taken sooner. It seemed to bti developing into a Hatry scheme. He could not raise his voice against tho passing of the bill. If that state of affairs was allowed to develop no investigation would bo possible. It was quite evident that while tlu> Government had not been saying anything it had been investigating, continued" Mr. Savage. The Government evidently believed it was impossible to yard "bunny" if it watched only one burrow, and had arranged for action to be taken in Australian States. Thu Government's cheque for £22,000,000 was a small matter compared with high finance of that sort. He saw nothing in the bill to which exception could bo taken. He thought the House could not do better than put the bill through so that investigation could be made and enable those affected to put their cards on the table. The Royal Commission was entitled to the thanks of the country. Mr. Savage said he could only hope that if any others were affected they would be treated in the same impartial way. Mr. D. G. Sullivan (Labour —Avon) asked the Minister if New Zealand law was on all fours with British and Australian legislation regarding investment trusts* Operations and Law Mr. H. G. Dickie (Government, — Patea) said that most members at some time or other had been approached by agents of trust companies, who quoted Scottish companies to show what fine results could be achieved, but the Auckland company rushed into business and issued huge debentures on a small capital. He was glad to sde the Government had taken action, and he hoped these compnnv nromoters would receive their deserts Mr. H. G. It. Mason (Labour—Auckland Suburbs) said there was nothing especially novel in the operation of those companies, and the swindle, if it was a swindle, was a classic form of company swindle. The Company Act did not prevent it. Those operations did not apparently conflict with company law. Such things had happened before, but on a smaller scale. Mr. H. M. Rushworth (Country— Bay of Islands) said he felt sorry for those people who would realise tomorrow morning that they had been robbed. He thought the scope of the bill should be widened to investigate the cases of people who had lost their equities in such companies. Mr. W. Nash (Labour —Hut*) agreed that tho scope of the bill should have been widened to make it impossible for any similar company to operate, especially when Parliament was not sitting. General powers should be taken to make it unnecessary to pass another bill should the occasion arise. It had also been suggested that Government auditors should have power to audit tho accounts of all companies.

Mr. W. P. Endean (Government — Parnell) said it was the duty of Parliament not only to suppress crime, but also to prevent fraud. Mr. F. Langstone (Labour —Waimarino) said he hoped there would now be a 100 per cent round-up, as so far the bill touched only petty matters, compared with what was going on Rapid Passage o 1 Bill

Mr. R. A. Wright (Independent— Wellington Suburbs) said the difficulty was that the Supreme Court was not willing to interfere with public companies unless a matter was very glaring. It was essential that the public should be educated in the buying of shares. It was hoped a scare would not be created and that investors in other companies would not take alarm. Mr. R. Semple (Labour —Wellington East) said that the Minister was to bo congratulated on his prompt action. Ho asked whether the Government would pass legislation immediately to prevent future swindles. Ho said no prospectus should be permitted to be issued until it had been investigated by an investigation board appointed by the Government.

Mr. J. A. Lee (Labour —Grey Lynn) said that action should be taken to prevent dummying. He commended tho suggestion of an investigation board. Mr. Coates, in reply, said the New Zealand legislation was practically on all fours with the English Act. He said the report was, after all, an interim report only. When the main report was received, he thought, it would be wiser to deal with the whole matter then rather than piecemeal now. The bill was read a second time, put through Committee without amendment, read a third time and passed The bill was later passed by the Legislative Council and was then sent to Government House for the GovernorGeneral's signature.