SAFETY OF INVESTMENT

Nelson Evening Mail, Volume LXIII, 27 July 1929, Page 2

SAFETY OF INVESTMENT

(To the Editor?

! Sir, —Wo notice with interest an account. in several newspapers of an address by Air AL H. Wvnyard at the Commercial Travellers’ Club, Auckland, wherein lie suggested that a committee of business men he 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. AVe would like to know who would he responsible for the investors’ moneys in case of the failure of an investment made on the advice of such a committee. Does he propose that the Government should guarantee eaeli investment made under liis scheme? Let us realise our unfortunate and disastrous experiences as investors in this country. Some time, back All* 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 advisable 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 Afinister of Railways and Public AVorks, lie expressed* an opinion that we had struck what appeared to be n good thing, as large quantities of material would he required for roads in our market area. This, naturally, gave us confidence to proceed as no better assurance could he 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 he 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., hut before the machinery arrived 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 hut, 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 lookingfor investments in other countries, and 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 changes will not be made in existing conditions which will place their investments in jeopardy. Unfortunately, for the good name of this country from an investor’s point of view, the result of the forcing into liquidation of our company hv the late Government is not limited t.o the confines of New Zealand as capital was subscribed in London. It can he readily realised how the acts of the late Government. caused untold damage to the investors’ faith in this country, Doth here and abroad. Is it not the duty of the present Government to remove the stigma, caused by the acts of the late Government, which exists in the eyes of the investors? We would be pleased to know how Ah* Wvnyard would overcome this and similar troubles except by compensating the investors for the losses caused by such acts. We are. etc., J. BELCHER & CO., Per J. D. Holmes, D. 5.0.,, Chairman of Directors. Wellington, 2fith July.