Sessional_Paper_1929 — Page 194

186

IV.

Stamps on blank transfers to become invalid for registration purposes after a certain period except on payment of a penalty.

12. A tentative proposal of this nature drawn up by the Hon. Mr. Breen giving two alternative forms of the proposal, is annexed (Annexe D). Provision is made for a blank transfer at a nominal fee for hypothecation purposes in the case of approved financial institutions, which would have to be named in the blank transfer.

13. The following criticisms have been made on this proposal:-

(a) Shares would vary somewhat in value according to the dates of the stamps.

(b) The approval and disapproval of financial institutions would be a difficult

and invidious task.

(c) Loans by friends would be hampered. Ex hypothesi, hypothecations should not pay transfer duty, but the effect might be that hypothecations to friends would entail transfer duty.

(d) The practice under which an owner leaving the Colony deposits his shares in a bank here with a blank transfer attached, so that he can telegraph out for a loan or to sell the shares, would be interfered with. (But the owner could leave a power of attorney).

(e) Inconvenience would be caused in carrying over arrangements, if the

transfer stamp were just running out.

14. Apparently it was intended that the approved financial institution in such a case should always be able to treat the hypothecation transfer as a sale transfer by adding stamps up to the ad valorem transfer duty. This right would be necessary in order to give the financial institution power to realise its security, but if there were collusion between the financial institution and the owner of the shares the hypothecation transfer could in fact be treated as an ordinary blank sale transfer, but with immunity from the penalty duty. Perhaps, therefore, it would be necessary to provide, under sanction of a fine, that the financial institution (a) should not use the hypothecation transfer as a sale transfer except in bona fide realisation of its security, and (b) that the financial institution should cancel the hypothecation transfer on satisfaction of the particular loan for which it was made. Evasion would still be possible and would be difficult to discover and prove.

We would have to rely largely on the financial institution. The Committee does not recom- mend the adoption of this proposal.

1928

V.

Late registration fees.

15. Charge late registration fees. This is the proposal of the bill of October, A copy of the bill is annexed (Annexe E). The scale there is :-

After 1 month.

3 months

31

6

.50 per $100 1.00 2.50

55

}}

55

12

5.00

22

""

35

25

Several of the objections to proposals III and IV apply to this proposal also. The Committee does not recommend its adoption.