DO PROSPECTUSES GIVE TRUE FACTS?

Star (Christchurch), Issue 18547, 22 August 1928, Page 14

DO PROSPECTUSES GIVE TRUE FACTS?

MEMBER ASKS QUESTION OF MINISTER IN HOUSE.

(Special to the “ Star. ”) WELLINGTON. August 21

“Has the Minister in Charge of State Forests done anything to protect the public from tree-planting companies which have obtained a large sum from the public?" asked Mr J. A. Lee (Auckland East), when the Forestry Report was submitted to the House of Representatives. The member declared that the average - prospectus was in no way warranted by the facts of the position, and, in view of the tremendous amount of money which was being invested in this industry from overseas, the matter had reached a stage at which the Dominion’s credit was involved. It was a frequent thing to see in the financial columns of the Press the signs of small investors who thought they had been getting a gilt-edged security trying in vain to sell it. Some of these companies had purchased land at too high a price to make a commercial success of their operations, but there was no doubt that other companies operating on low-priced areas, conducted on proper lines, would be able to succeed. Facts in possession of the public had caused some uneasiness, and he hoped the Minister, through his Department, with its knowledge of the situation, would take steps to ensure that the community was not exploited by company promoters. Mr Lysnar (Gisborne) did not think the Minister was called upon to take action in the direction indicated. If the Minister was wise, no action would be taken. There was plenty of legislation on the Statute Book, and ample provision was made for the protection of the public.

Mr R. W. Smith (Waimarino) thought it singularly unfortunate that at the very moment when the country was so troubled with unemployment and distress, members should be found speaking adversely of tree-planting companies. He could not help feeling that such members were not in a position to speak as they did. It would be wiser if they were to go to the Minister privately and point out that certain companies were not in a sound position. Mr Smith felt sure that the Minister, if approached, would make investigations and take any steps necessary to protect the public. The speaker knew of concerns that were a wonderful investment for a man’s children, and it was wrong that they should be attacked in wholesale fashion.

Mr Holland. Leader of the Opposi tion, said that everyone knew, that some of these companies were sound, but it was always found that “wild cat" concerns grew up side by side with legitimate companies, whenever enterprises that were likely to be profitable made their appearance. It was wrong to suggest that members should not rai.se their voices and that they should go privately to the Minister. To suggest that course of action was to suggest something that had never been done in the past. GENERAL LEGISLATION FORECASTED. The Hon O. J. Hawken stated that the Department did not wish to interfere in legislation controlling afforestation companies, but there was an amendment of the Companies Act in prospect, not applying to these companies in particular, but having to do with prospectuses. This might be brought down during the session. It was in preparation, but whether it could be introduced this session he was not quite sure. Turning to the question of probable returns from affores tation, the Minister stated that his Department had no real figures, but, if the production amounted to 50,000 to 80,000 feet per acre in forty years, this was about all that could be expected. The quickest growing tree was Pinus insignis, which came to maturity in thirty-five to forty years. This made it valuable for pulping. The average price in America for pulping wood was twelve dollars per cord, about 500 feet board measure. This would give a margin in New Zealand, even if the price was cut down to £2. The obiect in sending a Departmental expert to America was to see what use could be made of our native timbers for pulping. Hardwoods had too short a fibre, but there was a large quantity of tawa in the North Island which had hitherto been a by-product of. milling. but which, mixed with hardwood, might make good newsprint. The industry was not one for small concerns. It required large capital, and local consumption would not be sufficient to establish the industry. There would ueed to lie an export trade, and, if this was available, there was sufficient pulping wood in the Dominion to enable a profitable newsprint industry to be established.