CRAZY FINANCE.

Otago Daily Times, Issue 20964, 1 March 1930, Page 21

CRAZY FINANCE.

QUARTERLY DIVIDENDS, LTD. TRUTH ON A NEW ZEALAND CASE. WILLIAM TAVERNER’S CAREER. (From Odr Own Correspondent.) LONDON, January 16. “ New Zealand is to be congratulated on a manifestation of the efficiency of its administration of criminal justice, which is in striking contrast to the laxity which prevails here.” This is the opinion of Truth in regard to the conviction on charges of fraud of a local agent of Quarterly Dividends, Ltd., and National House Purchase, Ltd. It will be remembered that in sentencing Johnston to three months’ imprisonment, the New Zealand judge said that “ the tricky and deceptive deposit system ” of Quarterly Dividends and National House Purchase was “ a mere fraudulent bubble.” He added that the prisoner owed his position to the “ initial pernicious influence of a man at present beyond the jurisdiction of the court.” Taverner, to whom the judge thus referred, resigned from the managing directorship about 18 months ago with pension paid out of the depositors’ fund. In a lengthy article Truth gives the history of the National Old-age Pension Trust, which was started by William Taverner, who at that time —25 years ago—was secretary of the Spurgeon Memorial Sermon Society. “My impression of the man,” says the writer in Truth, “is that he began as a crank, though he degenerated into a crook. There is, indeed, no doubt that at the outset he believed in the practicability of his project, and he persuaded a number of well-meaning nonconformist ministers to support it. Criticisms in Truth convinced these gentlemen that the project, which was for the provision of pensions or. a contributory basis, was so utterly unsound that it could only end in loss and disappointment to a large number of confiding subscribers, and as Taverner was intractable they applied to the Court of Chancery for the winding up of the trust. It was in those nroceedings that a judge expressed the opinion that Taverner suffered from a chronic incapacity to speak truthfully, and that opinion has frequently been justified since then—e.g., in a case in March, 1928, Mr Justice Astbury declared that he did not believe a word of the evidence Taverner had given on oath. When an order was made for the winding up of the original trust, Taverner formed another, which in its turn was the subject of similar proceedings in 1912.

MIDDLE-AGE PENSION SOCIETY. “ Immediately afterwards Taverner tried another dodge by registering the Middle-age Pension Society, his object being apparently to avoid any further applications by disillusioned contributors to those Chancery judges who had spoken so strongly about the fundamental rottenness of the pension scheme. He only jumped from the frying pan into the fire. For the investigation of the finances of the scheme which took place only when somebody went to the trouble and expense of moving the court, there was now substituted the constant vigilance of the chief registrar of Friendly Societies, and Taverner, after some proceedings for minor irregularities, was eventually, in 1918, prosecuted and convicted on charges of fraud arising out of what was virtually his one-man management of the Middle-age Pension Society. The judge at Chester Assizes sentenced him to 15 months’ imprisonment, and in dismissing his appeal the Court of Criminal Appeal said that the punishment was, if any> thing, too lenient for a cruel swindle. DIVIDEND OF 80 PER CENT.

“ In 1020 Taverner, with the aid of a few of his dupes, attempted to register a proposed Mutual Aid Friendly Society, but the chief registrar refused the application on the ground that the so-called objects and the so-called benefits were a mere sham and the whole scheme fraudulent. And here comes what I regard as not the least scandalous part of the story. Taverner, whose cunning had grown with years of practice, discovered that though the new scheme was rejected as a swindle under the Friendly Societies’ Act, it could be established safely enough under the much more elastic code of the Companies’ Act. Quarterly' Dividends, Ltd., and National House Purchase, Ltd., two dummy private -companies, each with a trumpery amount of share capital, were used by Taverner as joint agencies ft.,the working of a financial hocus-pocu" much too complicated to describe in de tail. Suffice to say that it not only hold out the prospect of dividends of 20 per cent, per quarter, or 80 per cent, per annum, on deposits in Quarterly Dividends, but the prospect of loans from National House Purchase at 3 per cent, per annum for re-investment in the other company at 80 per cent. It sounds like lunacy, but a host of unsophisticated people have parted with their money, fondly imagining that they will eventually derive a huge return from Q.D. and N.H.P. A SANCTIMONIOUS KNAVE. “It is a proof of Taverner’s plausibility that in spite of all the exposures of his trickery and the conviction for fraud, he retained the confidence of a large number of his old dupes, many former members of the Middle-age Pension Society being enticed into the Quarterly Dividends ramp. Nearly all the dupes, both old and new, belong to small chapel congregations, and Taverner has always played up to their religious sentiments. Ho is, indeed, a sanctimonious knave of the first water, skilfully suffusing his propaganda, whether as a speaker or a writer, with pious phrases. The vast majority of the dupes are persons of humble means, who have put their small savings into the scheme, but there are also some who are fairly well to do, and who have made ‘ deposits ’ running into hundreds of pounds. According to a statement a few months ago in the ‘ official gazette ’ which the two companies issue from their headquarters at. Fishponds, Bristol, the * total value of transactions ’ —whatever that may mean—was £55,803 Ss 2d. It was also stated that during the last eight and a-half years 1 215,124 new units have joined.’ ” In conclusion, the writer says: “ Some of bis former associates in tbe management are still carrying on the scheme, but they will be well advised to heed what has happened in New Zealand. Even in this country moans may at last be found to bring to book those responsible for this monstrous imposition on simpleminded investors.”