The Waikato Times AND THAMES VALLEY GAZETTE. THURSDAY, NOV. 10, 1892.

Waikato Times, Volume XXXIX, Issue 3180, 10 November 1892, Page 2

The Waikato Times AND THAMES VALLEY GAZETTE.

THURSDAY, NOV. 10, 1892.

Equal and exact justice to all men, Of whatsoever stato or persuasion, religious or political.

'L'iik commercial trnde.ncy of the is to carry on all kinds of business liy means of limited companies, the capital being mainly subscribed by those who have very little, if any knowledge of the particular business involved, but who are in search of a profitable investment for their spare cish. These people of necessity judge largely of the bona fides of a concern by the names of those which figure at the head of prospectuses and advertisements. In many cases they subscribe on the strength of their knowledge of the fact that a business has been successfully conducted by the man who has disposed of it to the company and that he takes the position of manager or managing director, and further is content to take a substantial portion of the sale value in shares at par. Presuming that only a fair price is paid, the public have good reasons to expect favourable results ; more capital with the same skill to handle it can be reasonably expected to yield larger profits than hitherto shown by the books. In the case of starting new businesses by means of companies, the ordinary in-

vestor depends mainly upon the statements put forth by the promoters, qualified by the repute of the men who have the business in hand. Unfortunately were the history of the public companies of the world compiled in a bulky volume, many pages would be taken up in relating how frequently the temptation ot the power to do evil has wrecked reputations and the fallen ones escaped just retribution for their misdeeds, either of commission or omission. There is possibly a moral distinction between the case of a man who through want of proper vigilance allows those he represents to be robbed and he who knowingly permits the funds under his control to be misapplied, or connives at false statements of affairs being put forth and benefits monetarily by his turpitude. In either case, however, the unfor-

unate shareholders are the sufferers,

Examples of both descriptions of delinquency we have depicted have been very numerous of late at this

md of the world, more particularly

in regard to the financial institutions of Melbourne and Sydney. The bursting of the bubble in the former city led to the exposure of a state of affairs which those most prone to only see the dark side of

human nature in its commercial dealings would have declared impossible. Unfortunately most of

the delinquents have escaped the punishment their misdeeds merited, mainly for the reason that they had involved themselves in the common ruin, and it was nobody's business in particular to set the wheels of the law in motion. The recent revela-

tions if they have done nothing else have established the fact that it is quite time the legislatures stepped in and appointed an officer of Government whose duty it should be to bring public company-delinquents to trial, as it is that of the commissions of police to securc the punishment of more vulgar criminals. It has been urged that if additions were made to the criminal code and the machinery of the law renovated in order to reach these men with tolerable certainty there svould be

difficulty in finding men willing to undertake the responsibility o^

directors. We do not believe this for one moment, but men who from want of natural capacity and time to devote to the business would be replaced to a large extent by those who would be both able and willing to earn tiie douceurs voted to them hv confiding shareholders. A man of ordinary capacity with honest intentions would have nothing to fear, provided the law were properly drafted. So vast are the interests involved that it is of the utmost importance that fine or imprison-

ment should, even more certainly, follow on the misdeeds of directors than does the hangman's rope that of the murderer. Every man who is capable of appreciating the gravity of the question will have

learnt with satisfaction that the two men mainly responsible for the failure of the Australian Banking Company have been reached by the law, and have received sentences of seven and five years' imprisonment with hard labour, respectively. Conspiracy to rob was clearly established against them ; the case was too glaring to be passed over. Unfortunately, however, those guilty of less striking offences, under the existing law, 100 often escape. This should not be, and prosecution should as certainly follow misdeads as the night the day. The almost helpless shareholder should be protected by the full strength of stringent legislation and a vigilant executive.