Finance Public & Private
Protecting the Investor
MUCH has been said and written of late concerning the protection of the investor, especially in the matter of appeals for fresh capital. Reference was recently made in the Press to the formation of a new company, hacked by a combination of the principal Trust Companies, the new concern having for its object the protection oi investors and shareholders and the terms of the official announcement stated : " The Association of Investment Trusts has been formed to develop protective and constructive powers which have gradually been acquired during the last 50 years by the Trust Companies and to provide a central organization through which they can speak with one voice when interested in any particular problem or default.'
It has been further suggested by the Socialist Party that the State should exercise an actual control over new capital flotations, while it was even asserted in one quarter quite recently that a Committee for that purpose was under course of formation under the auspices of the Bank of England, but this report I am in a position to contradict, and I am glad to do so, for I consider that the Bank has quite sufficient responsibility on its shoulders in the matter of controlling the credit and the currency systems of the country without undertaking the task of protecting investors.
Moreover, while I fully realize the desirability of the shareholder being protected in every possible way by sound company laws and their efficient administration, and while, no doubt, much can be done by increased vigilance on the part of such bodies as the Committee of the Stock Exchange, the joint stock banks—whose names usually appear on the prospectuses—and by such associa. tions as the one just referred to, I believe that the greatest protection of all is to be found in a greater vigilance on the part of the public themselves, and it is on that aspect of the matter that I will venture to make a few comments to-day. I trust that in doing so readers of the Spectator will forgive plain speaking, knowing that the intent, at all events, of the writer is to serve their interests.
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