HOUSE OF REPRESENTATIVES

New Zealand Times, Volume XXXVI, Issue 8262, 26 October 1912, Page 6

HOUSE OF REPRESENTATIVES

The House met at 2.30 p.m. SHOPS AND OFFICES. The Prime Minister gave notice to introduce a Bril to amend the Shops and Offices Act. LIFE INSURANCE. Tho Government Life Insurance

Amendment Bill was introduced and read a first time. LMPBEST SUPPLY GOVERNMENT FIRE INSURANCE. DEPARTMENT’S POLICY DISCUSSED. The House went into Committee of Supply to consider an Imprest Supply Bill tor £745,900. Tho schedules to tho Bill made provision for the following payments:— First Schedule. £ Consolidated fund 500,000 Public works fund 200,000 Opening up Crown lands for settlement account 6,000 National endowment account 2,000 Land for settlements account 1,000 State forests account 1,000 State coal mines account ... 15,000 Scenery preservation account 1,000 Wellington-Hutt railway and road improvement account 500 Railwavs improvement account . 3,000 Waihou and Ohinemuri rivers • improvement account ... 1,500 Total £731,000 Second Schedule. £ State Firo Insurance, account 1,500 Government Accident Insurance account ROOO State Fire Insurance account 1.5000 Public Trust Office account... 3,000 New Zealand State-guaran-teed Advances account— Advances to Settlers Branch account 2,000 Advances to Workers branch account 200 Advances to Local Authorities branch 200

Total £14,900 GOVERNMENT CLIENTS.

Mr H. G. Ell (Christchurch South), asked what was the attitude of the Advances Department in regard to State fire insurance? Ho quoted figures to show tho reductions in insurance rates on the inauguration of tho State Department. It had resulted in a saving of £130,000 a year to the people of the Dominion. Did the Advances Department now insist on clients insuring with the State Office, or could mortgagors insure with whom they liked ? Tho Minister of Finance said the Advances Department issued a circular to those who borrowed’, from the Government tolling its clients that they must insure their buildings, and that preference must be given to the State Fire Insurance Office.

Mr Ell asked for an explanation of tho circular. Was the mortgagor left free and unfettered to insure where he liked? The Minister of Marine said mortgagors had always been free to insure wherever they pleased. The only thing that had been done was that the State Fire Insurance Department had issued circulars through the State Guaranteed Advances Department and had gathered in business in that way; but there had never been any possibility of the State Guaranteed Advances Department tying up the business of any of its clients to the State Fire Insurance Department. He had always understood that the Advances Department had that power, but he found they had not. Mr L. M. Isitt (Christchurch North) said the State should compel its clients to insure with tho State Firo Office, , Dr Newman (Wellington East) asked what was the positian now compared to the position when the present Govemmeriir took office.

Mr A. H. Hindmarsh (Wellington South) said mortgagees could inkist on mortgagors insuring in any particular office. Tho State should compel mortgagors to insure with the Government department provided tho fees wear? the same as outside offices. Mr J. B. Hine (Stratford) said the State should insist that the State Fire Insurance Office should receive the business of the State Guaranteed Advances Department, CAN INSURE ANYWHERE.

The Minister for Finance said he desired te see the State Fire Insurance Department a success. He quoted the schedule to the State Guaranteed Advances Act to show that it was provided that tho mortgagor must insure in the State Fire Insurance Office or other reputable insurance office to be from time to time approved by the Minister. If any other office was not “playing tho game” with the State office he would not approve of a mortgagor doing business with it. Ho had that power. The Act was perefctly clear. He could not lay down a dictum that tho clients of the department must insure with the State Fire Office. ; Mr Ell: Your predecessors did. Mr Allen: They did not. Mr Ell: I will give you the authority directly. _ Mr G. W. Forbes (Hurunui) said it was necessary for the State to put all tho business possible in the way of the State Fire Office. Mr T. M. Wilford (Hutt) said the statement made by tho Minister of Finance clearly snowed the position the Government intended to take up. He intended to move when the opportunity presented itself to strike out from the schedule of tho State Guaranteed Advances Act, quoted by tho Minister, the words “or other reputable insurance to be from time to time approved by him.” Mr E. H. Clark (Chalmers) said tho Government should insist on the State business going to tho State Fire Office. Mr G. V. Pearce (Patea) said that would destroy co-operative societies, and the farmers would resent it. Mr H. Atmore (Nelson) contended that everybody who received cheap money from tho Government should be compelled to insure with the TJtate office. THE ODD AND THE NEW. Mr Q. Daurenson quoted documents issued by the State Guaranteed Advances Hoard showing that under the late Government the board informed its clients that they would require in the event of accepting tho board’s offer, to forward a State Fixe Insurance policy, but tho present Government had had a new form prepared informing olien** that they would have to forward a fire insurance policy “preferably in tho State Fire Insurance Office. ’ Government had insisted that clients should insure with the State Office, wuiio the new Government said, “We prefer you to insure with the 9tax« Office, but you can go where you like.” The Minister of Marine repeated that the State Fire Department had for years issued circulars to all mortgagor* under the State Guaranteed Advances Act stating they must insure with the Government. In the past the State Fire Office had played a game of bluff. They had bluffed 'everybody. It ’•as illegal. At tbo same time ho thought the department should receive all the business of the State Guaranteed Advances Department. It should be compulsory. At present all tho clients of tbo Government could borrow where they liked. Mr Hindmarsh: I say that is not right. I ask you to get Mr Salmood’s

or Mr Sherrott’s opinion. I challenge you to get it. 3lr Fisner said the superintendent of the department waa present, and he was quite sure he would say the department had never had power to insist on the business going Lo the State. Mr Wilford said the iiXiister had got all round his question without answering it. Why, in the circular issued *n 1911

Mr Fisher i Who by? Mr Wilford: The State Guaranteed Advances Office. Vv o find these words: ”1 shall bo glad to Earn whether you accept the board’s offer. If so, you will require to furnish the State Fire Insurance cover iu my official name as mortBiigec." iu a later circular it was stated that mortgagors, if they accepted, the board’s oiler, would require _to furnish a quarter-day insurance policy, proierably in the State Firo Insurance Office. Mr It. McCallum (IVairau) referred to tho circular requiring that the business should be placed with the State or some other reputable office. The Minister would not bo liable to damage or defamation for disapproving of any office. Mr T. Buxton (Temuka) agreed that borrowers from the State should insure with the State institution.

Mr A, Harris (Waitemata) said surely it was the duty of the Government to support a State department which was started for the benefit of the people. Mr Lauronson said when the State lire Insurance Bill was passed nine years ago, among those who voted against it were -Messrs J. Alien, W. C. Buchanan, W, F, Massey, F. Mander, W. Fraser, A. L. Herdman, J. Duthie, B. H. Rhodes, and T. Mackenzie. (Laughter.) This included five present day Ministers. Sir Joseph Ward said when tho State Fire Office was started there was a strong movement on th© part of other officers to kill it from the jump. They were trying to preserve tho business already held by them ; they lowered tho rates, and tried to make the business of the State unpayable from the start. The Government laid it down that with all business given from th© lending department, the insurance was to bo put with the State biro Department, .and ho had no hesitation in saying that bad that not been done, the State Fire Insurance Department would have gone down. Tho struggle that had gone on between fire offices and the department was historical, and every effort was made continuously In Parliament to get tho Government to compel the State Advances to release everybody in regard to insurance. Supposing anyone controlled large sums of money for lending and also controlled an insurance business, would he not bo the quintessence of a fool if he did not place tho businesses side by side? He was not sure it would be a wise thing to pass a law that tho State Fire Insurance was to bo tho only office. It had to refuse a great many risks, and ho did not believe in compulsion, namely that it was mandatory on tho State Office to take all risks. The State Insurance Department should have th© right of refusal of the insurance upon any pre- , Hisses that tho State Guaranteed Advances made advances on. That was th© way to build up tho office. He was very sorry to hear the department had refused Government business to th© extent of vtIO.OOO to <£12,000 a year. Mr Hindmarsii Wiuwa to know whether any member of tho Cabinet had issued a circular to the Public Trust Office or Advance© Office, stating that clients need not insure with the State Fir© Office.

Mr Allen: Ido not know about that. Mr Hind marsh said if such a circular had been issued it had shown a deliberate design on the part of the Government to destroy the State Fire Office^ Mr Allen subsequently said that preference was to bo given to tho State Office by both departments. Mr J. Robertson (Otaki) said if th© State Fire Insurance Office had been Eutting up a ‘‘bluff” for years it would avo been, discovered long ago ond exposed by the private companies. The Trim© Minister said he wanted the documents quoted by members that alibeirnocm laid on. the table. An inquiry would be made ns to how they came into possession of members of the House. Mr Laurenecn asked whether it was to b© laid down. in. the Hone© that whan a member got the copy of a document which anyone could get, there wag to be an inquiry as to how he got it. This was one of tho most extraordinary things he had ©vetr heard.

The Prime Minister, ■ shortly after 7.30, intimated that ho had arranged for the Legislative Council to sit at 8 o’clock to deal with tho Bill; if they could not get it through, they would sit the next morning, but that would possibly delay the Governor signing the measure. In replying to a question, from Mr W. D. S. MacDonald, the Hon. J. Allen said they wore opening the defence service absolutely to the primary schools and hoped the members of tho junior cadets would pass examinations and become officers in tbo senior cadets; then if they liked to join the service they could and would bo encouraged to do so. THOSE DOCUMENTS. On the motion for tho third reading Mr Daurenson explained that he had got the documents previously referred toby simply ringing up the Stafb Guaranteed Advances Department and asking far them. Had he not a right te got public documents from a public office? Mr Massey: Through the Minister. Mr Daurenson: IV hat a change is hero! Contrast this with your declarations on this side of the House. There was a time when you declared the direct opposite. The Bill was read a third time and passed without further discussion.