SOUND SECURITIES

Otago Daily Times, Issue 23353, 19 November 1937, Page 4

SOUND SECURITIES

: HINTS FOR INVESTORS * i __ fROTECTION FOR SIMPLE FOLK » H <From Our Parliamentary Reporter? \ WELLINGTON, Nov, 18. } Hints for investors were given by the Minister of Finance (Mr W. Nash) when moving the second Reading of the Companies (Special Liquidation) Extension Bill in the House of Representatives to-day. The purpose of the Bill is to liquidate the First Mortgage Freehold Security Company of New Zealand, Ltd., which the Minister said had been associated with some particularly shady practices, and he emphasised that the public should be protected from exploitation of the Kind the company had practised. ' “ Some means should be adopted,” Mr Nash said, “to protect people fj-om the type of person who goes from door to door selling debentures as is done to-day. As soon as is conveniently possible this House should take steps to ensure that the person who is completely illinformed on these matters should receive some protection. I think we might agree that one thing people with small sums should do is tb put their money in the Post Office {savings Bank; secondly, the people sjiould invest in Government or local body securities, and if they something better I would advise them to consult their bankers ajbout any project that is put up tb them.” i People should not invest money otherwise, the Minister added, unless they did so through a recognised niember of the Stock Exchange. That did not mean that every security on the Stock Exchange was spund, but if those steps had been taken the kind of crooked work the Nirst Mortgage Freehold Security Company had practised would not have been done.

J “ Are we the people to say thait the Post Office Savings Bank should first preference in investi>nts? ” asked Mr J. G, Coates pposition, Kaipara) when making nild protest at the remarks of the nister. Mr Coates said he thought it there were other savings banks the country, including the Auckland Savings Bank, which were equally as sound as the State organisation. | “ I said other savings banks, too,” replied the Minister. [“ I would not like to say that giltsecurities are superior to deposits in the banks or certain industrial stocks,” Mr Coates said. “I think we should be satisfied so long the money goes into first grade investments, and those embrace all tfiose perfectly sound securities I h£ve mentioned. In any case I do not think the Minister is quite entitled to say that State investments are always the safest securities. Certainly they have the backing of the State and as such are safe, but why should we place State investments of everything else when, without doubt, there are other securities without the backing of the State that ate quite as sound. There are others which at least are equally as good securities.” sThe Leader of the Opposition (Mr >4 Hamilton) said that it was difficult to legislate to prevent a fool bung parted from his money. All the loopholes, however, should be closed wherever possible. The Minister stated in reply that there were loopholes still even under the existing law. While in England he had made certain investigations and had acquired a good deal of information which he would place before the House at a more convenient time. The Government might introduce legislation to achieve what the Leader of the Opposition had suggested.