COMPANIES' BILL

Rotorua Morning Post, Volume 3, Issue 676, 31 October 1933, Page 6

COMPANIES' BILL

J. PEARCE'

LUKE.

(To the Editor) Sir, — The Government ia. to be congratulated on having brouight down for Parliamentary considera'tion a „ Companies' Bill which is so comprehensive in its provisions and yet withal eliminates practically all of the objectionaible features of the present Act and its amendments. The gentlemen comprising the investigation and advdsory committee deserve the thanks of the country for the very excellent work they have accomplished.' For the reason that the work must of necessity have been ■highly specialised the wisdom of the Government, in pursuing the course it did, is exemplified in the very nature of the proposed legislation and the time of Parliament would clearly be unduly wasted if the Bill had been referred to a Select Committee. The best Select Committee was one of th'e type appointed by Government. That the measure should receive very careful study by all members of Parliament in its committee stage is undoulbted, for while in the main, the provisions are excellent, and by following the English Act make for better co-ordination, there is one clause in particular which deserves ' and requires very close attention. It may be assumed that the great majority of our people realise that industrdes, other than those of purely farming character, must be created if we are to maintain even a semblance of national character. The question of what method of creating conditions favourable to industrial development need to be considered at the moment. One thing is fundamentally neeessary and that is the provision of capital for establishment and production. The first aim should be to develop those industries which will use indigenous or semi-indigenous base products. Clause 343 of the proposed measure has evidently been devised in order to prevent the sale of bonds of the character of those offered and sold by what is termed the "hawking method." Unquestionably there have been serious albuses in this method of raising capital and consequently the clause has been drafted in terms practically the same as those embodied in the English Act. It would appear that the committee has failed to realise the vastly differing conditions pertaining to England and New Zealand. The strength' of industrial undertakings in England undoubtedly lies in the fact of the wide participation of the small dnvestor. The access to recognised investment facilities is much easier in England than it can possibly be in New Zealand, with its more widely distributed settlement. The past experience in New Zealand shows that a very great proportion of investment capital comes from the man on the land. The time will assuredly come when these conditions will again operate. Such being the case, how is it possible, as the clause in the Bill proposes, to differentiate between the oifice of a business man and the. house of a farmer, which must of necessity he his oifice? To assume that a properly authenticated share salesman may legitimately call on a towns-man at his oifice for the purpose of selling shares and be prohibited from interviewing a farmer in his sitting room for the same purpose, is not only unfair but discriminatory. If it is unfair to the farmer it is equally unfair to the person residing in a town who 'has money to . invest, and whose circumstances preclude him or her discussing investments during the ordinary working day. Quite apart from the foregoing considerations, the need for investment outlet is insistent and will undoubtedly igrow if only for the reason that the majority foelieve in our ultimate emergency into nationhood. Surely the correct course to follow is to make conditions of share offer■ing, by door to door methods, such that only authenticated servants of properly constituted companies are employed, and that in each and every case the prospectus of the company be clearly set out and the selling agent himself, and not the company for whom he acts, be subject to a heavy fine if he fail to produce such prospectus when offering shares or bonds for sale. With such excellent work evidenced in the clauses of the hill as a whole, it is clear that Parliament can safeguard the investor of small sums without monopoldstic conditions and hampering industrial development. — T am. p.t.o...