PROTECTION FOR INVESTORS.

Taranaki Daily News, 29 July 1929, Page 2

PROTECTION FOR INVESTORS.

(To the Editor.)

Sir, —We notice with interest an account in several newspaper of an address by Mr. M. H. Wynyard at the Commercial Travellers’ Club, Auckland, wherein he suggested that a committee of business men be set up in order to advise investors what to invest their money in so that the large sum of uninvested monies now in the country could become available for business purposes. We would like to know who would be responsible for the investors’ money in case of the failure of an investment made on the advice of such a committee ? Does he propose that the Government should guarantee each investment made under his scheme ? Let us relate our unfortunate and disastrous experiences as investors in this country. Some time back Mr. J. Belcher started a business of obtaining gravel from the Waipa River and selling it, chiefly to local bodies, in the Waikato and adjoining districts. The business developed and a company was formed, but before being finalised it was considered, in the interests of the prospective shareholders, to obtain the opinions of the Ministers in charge of the Government Departments whose operations affected the business. During an interview with the last Prime Minister, who was Minister of Railways and Public Works, he expressed an opinion that we had struck what appeared to be a good thing, as large quantities of material would be required for roads in our market area. This, naturally. gave us confidence to proceed, a no better assurance could be had than that from those in charge of the Governmental administration of the country. Could the proposed committee give a better assurance? We doubt it, as there would be nothing to prevent the same treatment being meted out to other investors as was our lot to receive. Our company went ahead, and ordered the necessary machinery, provided a railway siding and other plant, etc., but before the machinery arirved the Government made such a drastic increase in the rail freights that in the end the company was forced into liquidation, and most of the men employed went on to the relief works in the district. Before the company went into liquidation the late Government was approached to modify the drastic alterations in rail freights so as to allow the company to exist, but, in spite of promises, nothing was done. There was no need for the drastic alterations made, and the desired results to the Railway Department have not been achieved, but a national loss has resulted.

Is it any wonder that the investor in New Zealand is looking for investments in other countries? Those who do not desire outside investment are waiting for definite assurance that interference by the Government in business is to be curtailed to the utmost, and drastic charges will not be made in existing conditions which will place their investments in jeopardy. Unfortunately, 'for the good name of this country from an investors' point of view, the result of the forcing into liquidation of our company by the late Government is not limited to Hie confines of New Zealand, as capital was subscribed in London. It can be readily realised how the acts of the late Government caused untold damage to the investors’ faith in this country, both heie and abroad. Is it not the duty of the present Government to remove the sti'-'iiia caused bv the act of the late Government, which exists in the eyes of investors? We would be pleased to know how Mr. Wynyard would overcome this and similar troubles except by compensating the investors for the losses caused by such acts.—We are, etc. , J. BELCHER & COY, per J. D. Holmes, D. 5.0., Chairman of Directors. Wellington, July 27.