McARTHUR CO.

Hawke's Bay Herald-Tribune, Volume 81, Issue 48, 19 November 1937, Page 3

McARTHUR CO.

-Press Association.)'

Prolit . oi £28,347 on. £3512 Property BILL BEFORE HOUSE

(By Telesraph-

WELLINGTON, Last Night. In the House to-day, moving the second reading of the Companies (Special Liquidation) Extensions Bill, the Minister of Finance, Hon. Walter Nash, stated that the bill referred to the First Mortgago Freehold Security Company of New Zealand, Limited, one of the McArthur companies for which under the Bill the Public Trustee is to aet as liquidator, as in the case of other ' companies in the group. Mr Nash j stated that there were only two directors of the company specified in the Bill, Mr C. T. Alcorn and a Miss Alcorn. The company was aotbang but an agency for robbing people who did not understand what they should do with their savings. It was linked up to some extent with a number of other companies which had been already dcalt with. It had issued debentures to some 82 people and its original nominal capRal was £1000. Then it was increased to £10,000 of five £1000 shares and 100,000 shilling •shares. The ac'tual subscribed capital was £1205 and only £25 was paid up. The company then proceeded to issue debentures to the extent of £100,000. In all 764 debentures were sold, bringing in £19,100. Another company, Investments Security, Limited, was next organised to sell debentures ftnd it received about £1200 commission. The Minister proceeded to deal with the ramifications of this and associated companies in their dealing with a property bought for £3512 by the wife of a man who promoted the original company. The profit was £28,347. The Minister declared that something should be done to safeguard the saviu/js of the people, particularly from a person who went from door to door selling debentures. He thought the best course was Ior people with normal savings to leave their money in the Post Office Savings Bank. Those with larger amounts should invest in Government or local body securities or, if they wished for o'ther forms of investment, they should consult their bankers or stock exchange brokers. This did not mean that every Becurity on the stock exchange was sound, but that the crooked work of the type he had outlined would not have been possible if the people concerned had first thought of consulting a banker or stock exchange tiroker. Rt. Hon. J. G.^Coates said the whole business was regrettable, but it was .doubtful if the Government could have •foreseen what was going to happen. 'The legislation before the House was the final scene in a very unpleasant experience. Hon. A. Hamilton discussed the j trustee operations and said there had j been a bit of a mix-up between all the j private and public trustees. 'it would i be a good thing if they could originate j Bome scheme to regulate trusteeships in the interests of invest'ors. ' The Bill was read a second time and ipassed through the Committee stages ■without amendment.