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Hokitika Guardian, 17 June 1925, Page 2

Anotiii-.k import "I finance touched •i] oil l>y .Mr O'Uricii mi Monday niglit uax in relation to insurance. The Aleinhcr 1( i r Westland railed against the profits of insurance companies. and felt that the "hole business should he in the hands of the State. Insuraiwo e.impanies are composed of individual shareholders who put their money in as an investment to provide their livelihood. People who are thrifty do this wise thing, and the result is for their material benefit, lint an insurance rompanv no more than a hank ran sueeeed unless its management is sound. It has to iio business on profitable lines - nothing else will snlliee. Hut mistakes may he made, and have been made, and the shareholders have keen ktiovti to lose rlpdr money in stteh ventures. I lie Mate has stepped ill already and has dime useful work in regard to the regulation of rates, etc., hut there is a safety rate below w hi' 1 1 even the State may not tall, and business to he done piotilahly, iiiim he done within that margin. Those who do business with companies within the solely range are mi sure ground. The reckless Company might do inueh more business, and fail to meet its obligations, ami ihat would be a disaster far more .serious than dividend laying. What is needed in all these mailers is moderation. I Imre is a degree of control imposed mi all these companies by the amount of Ini.-iness offering and t lie safety line for business, if is due to the good management of the many llmin-lmig institutions in New Zealand, that all has been well financially with sllch lor a lung time past. Were it otherwise, the country would soon feel the oiled on its general finance. Bui New Zealand has flourished and business has offered, and it lias been manipulated profitably. The failure ol one insurance company would he a serious menace to the prosperity of the Dominion, so intimate and delicate are the connecting threads ol linaiue. ’I he tact that a trading house in Christchurch lately went under had in itself a. very disturbing influence, for it is never known where the failures are to end. Hanks and insurance companies profit from other peoples’ money, hut it. is only l»y the wise use of such money. And after all. the trader who has banking accommodation is using other peoples' money pro tern, and il he fails, though the hank or lending institution may he primarily liable, it is the other people who stand to lose if their money is not handled soundly. So we get down to the bottom of trade and the law of exchange. It is one helping the other, and one living on the other. Hut the outcome depends on the management and administration. and unless our financial institutions are well managed, the wholo credit of the country stands in jeopardy. There are. no cheap alternatives possible in any policy the Labor party can produce on this matter.