NEW PROVISIONS

New Zealand Herald, Volume LXXII, Issue 22047, 1 March 1935, Page 11

NEW PROVISIONS

ASSOCIATE DIRECTORS APPOINTMENT AND DUTIES OTHER CLAUSES MODIFIED METHOD OF REPAYING LOANS [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON. Thursday Authority to the board of management to appoint associate directors is the most important provision in a series of Government amendments to the Mortgage Corporation Bill circulated w T hen the measure was under consideration in committee to-day. A new clause states that the board may from time to time as it thinks fit define districts within New Zealand and may appoint for any such district one or more suitable persons to be associate directors to the corporation. The functions of associate directors shall be to ad vise tho board on any matters submitted to them by the board, either in relation to the general policy of the board or with respect to any matters particularly affecting the business of the corporation within a district. Another amendment relates to the clause stating that the amount borrowed by tho corporation and for the time being outstanding shall not exceed 15 times the sum of the subscribed capital and the amount to the credit of the general reserve fund. Tho amendment adds, after the word "outstanding," the words "including the amount of .stock issued by the corporation pursuant to sectipn 38," which relates to stock issued to the Crown in consideration of mortgages transferred to the corporation. A further provision permits any moneys available for investment by building societies to be invested in securities issued by the corporation. The method of repaying loans in securities of the corporation is limited by another amendment. In its original form the pertinent clause stated that payment should bo made in securities bearing interest at a rate not less than the rate of interest payable on securities last issued before the date of the mortgage. Tho amendment provides that payment should be made in securities "of the last issue made to the public" before tho date of the mortgage. In the case of mortgages transferred to the corporation from the Crown it was originally provided that payment should be made in securities bearing interest at the rate payable on tho first issue of securities by tho corporation. Another amendment provides for payment in such cases in securities of the first issue. HOLDERS OF SHARES LIMITATION IMPOSED f MINISTER AGREES TO CHANGE f [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON. Thursday An amendment of the clause in the Mortgage Corporation Bill dealing with the allotment of the original capital of the corporation was moved in the House of Representatives to-night by Mr. It. A. Wright (Independent— Wellington Suburbs), with the object of limiting holders of shares to British citizens resident in New Zealand. "It may be bad enough for shareholders in New Zealand to be in the concern," he said, "but it would be ten times worse to admit shareholders from outside."

The Minister of Finance, Mr. Coates, said the amendment would debar companies from taking up shares. He could see no wrong in companies doing so if they so desired. Mr. R. McKeen (Labour —Wellington South): If the banks subscribe for shares they will eventually gain control.

Mr. Coates: Would the banks be investors in bonds? That is the question.

Mr. W. E Parry (Labour —Auckland Central) said no private investing company should be permitted to hold a share. The Minister considered that Mr. Wright did not have that in mind, but that he was more concerned lest shares should be held by persons outside New Zealand. The Minister said he would be prepared to accept the amendment if it were altered to permit companies registered or operating in New Zealand to take up shares. Mr. Wright agreed to that course and later in the debate he elaborated his amendment to allow any company or corporation incorporated in New Zealand or any company incorporated outside New Zealand, but having a place of business in New Zealand to take shares in the corporation. The amendment was agreed to and read into the bill. SAVINGS BANK DEPOSITS AMOUNTS BEARING INTEREST LIMIT EXEMPTIONS CANCELLED [BY TELEGRAPH—SPECIAL REPORTER] WELLINGTON, Thursday A notice iu to-night's issue of the Gazette cancelling exemptions from limitu of interest bearing deposits in the Post Office Savings Bank was explained to-night by the Minister of Finance, Mr. Coates. The Minister said that when reductions were made in 1928 in the maximum amount on which interest was payable, whereby the maximum was reduced from £SOOO to £2OOO, certain exceptions were made, particularly in the case of non-mercantile bodies, such as trustee savings banks and other registered societies. In view of the surplus of funds now deposited in the Post Office Savings Bank, it was necessary to withdraw these exemptions.