ECHO OF THE SLUMP.

Taranaki Daily News, 20 October 1922, Page 4

ECHO OF THE SLUMP.

COMPANIES IN DIFFICULTIES HELP BY LEGISLATION. BETTER TIMES AHEAD. By Telegraph.—Frees Association, Wellington, Last Night. In the House to night, the Hon. E. P. Lee moved the second reading of the Companies Amendment Bill. He explained that it was well known that there were several companies in the Dominion which were in financial difficulties because one or two obdurate creditors were pressing their claims to the great detriment of the business of the companies. The Bill provided a method by which compromises could be made, the whole of these arrangements being in the hands of the Court. The Premier said there were several companies handling primary Products which, though solvent, were in difficulties through the slump. He was pleased to say, however, that a change had come over the scene, for things were improving, and if given the opportunity these companies would recover. There was a danger of these companies being forced into liquidation by one or two obstinate creditors, and there was no other way than to come to Parliament and ask for what amounted to a moratorium. A similar thing had been done in Australia and acted well. The interests of creditors were__safeguarded by the Court. Mr. T. M. Wilford (Lender of the Opposition) contended that the Bill did not do what the Premier thought it did. So far as he could judge the Court could settle the position of a company on the sole ground of “public interest.’ and not take into consideration the position of interests of shareholders or creditors, and that was not right. He appreciated the need to keep large institutions in which the public placed trust from falling, and he was prepared to go a long way to prevent anything like a commercial crash, as they ha<done in the past when they passed what had been called “panic” legislation. 'Still, it .was his duty to look at this Bill from all points and think out how it might affect possible cases. He thought the Bill should be amended in committee. He particularly wished the Minister to say in what position it placed those depositors who recently had been induced to take up debentures in companies. . Mr. R. McCallum (Wairau) favored the Bill, because by helping companies it helped the primary producers, but he (lid not think it should continue for a longer period than two years. .By that time things would come right Mr. Massey said he thought one year would be sufficient. Mr D. Jones (Kaiapoi) said there was no need for panic. This pill was merely a matter of breathing time. Confidence was being rapidly restored as the position of the stock market improved and that improvement would soon be reflected in the Dominion’s finance. The Minister, in reply, said he would move an amendment limiting the operation of the Act. to Qecember 31, 1923, and to give the Court power to stay proceedings against -companies if thought necessary. The House then went into committee on the Bill, which was reported with, amendments suggested by the Minister. The Bill was read a third tune and passed.