LOCAL BODIES' LOANS.

Auckland Star, Volume XLIII, Issue 250, 18 October 1912, Page 2

LOCAL BODIES' LOANS.

PARLIAMEWTABY INQTJIRT. EX-AUDITOR-GENERAL EXAMINED. (By Telegraph.—Preee Association.) WELLINGTON, Thursday. The committee appointed to inquire into the allocation of loans to local bodies tins afternoon examined Mr. J. K. Warburton, ex-Auditor-General, who baid he was for two and a-half years a member of the Advances Board in the local authorities branch, and was also for a number of years previously superintendent of the Board under the Advances to Settlers Act During all his experience in these official positions he had never known of any political preseure being made in connection with loans. Ho had seen no squandering of money on the part of th« Advances Board, every Loan being granted in accordance with tlie law. There had been no waste in carrying -on the affairs of the Department. It was not unusual for a board to do 'business 'by submitting a proposal to the members individually, and confirming the decision at the next meeting. This was done in the case of the ReiDiiera loan. He hud approved the proposal then, but if he had thought the procedure wrong lie would not have agreed to it. . Questioned by Mr. Lee, Mr. Warbufton said he approved of the letter of complaint which was sent to the Minister by the Board. In coming-to its decision, the BoaTd went upon the newspaper reports of what was aaid in the House. He wa3 quite satisfied with the general management of the department, and did not think any other department was better managed. Very little money was now held for investment. The Act did not direct the Bonrd as to the applications of which it should approve. To Mr. Craigie, he said that the Minister never attempted to use his influence in regard to any particular loan. In reply to Mr. Myers. Mr. Warburton stated that the £5,000 limitation waa im■posed owing to the fact that large loan? had been granted, and funds were low. He absolutely denied that any political influence had been brought to bear on the Board. Questioned by the Hon. J. Allen, Mr. Warburton admitted that in lending money for two or three years ahead they had to assume thnt the interest rate would not increase. When money waa plentiful they had either to make this assumption or lose the interest by letting it lie idle. The Valuer-General (Mt. F. W. Flanagan) said he was a member of the Advances Board for 12 months. No political influence had ever Been used on him in connection with loans, and political considerations had never been allowed to weigh with the Board. There was no discrimination between the local bodies to whom money was lent. If money was avaliable. and the security offered j #ood, loans were granted, hut there had beon no scruamlerin*; or waste. j In reply to the Minister, he said he! considered the Board was morally bound to lend money at the rate of interest pro- i visionally approved, even though in the j meantime the rate had gone up. j •"Henry Kem'ber (a member of the l Board), replying to Sir Joseph Ward, said be had never bern approached by a Minister regarding loans. There had been no favouritism whatever. If a loan of j £116,000 had not 'been granted to the' Timaru Borough Council the Bosrd would have made a loss of £1,000 owing to non-investment of money. He was the only independent member of the Board, and he felt thnt what was said in Parliament about political influence impugned . his honour. Kemuera, never received a penny before the election. THE ESinTESA LOAN. AN ELECTION INCIDENT. j WELLINGTON, this day. | Further reference to the Remuera loan ! was made at to-day's Parliamentary in- ! quiry. j Arnold Wilkins ( Foreman Inspector of • the Remuera Road Board), called by the Hon. Jas. Allen, said that on 13th December, when the general election was pro- [ ceeding, the chairman of the Road Board j (Mr. Cawkwell) addressed the men ern- j ployed on the. works, advising them to ; support the then Government, as, if tho ; Government went out. the money ad- . vanced would be very much reduced. No particular candidate was mentioned, but Dr. Pindlay, is member of the Government, was standing for election. At the conclusion of Mr. Cawk well's epeoah, in listening to which in the rain the men had become drenched, tlio chairman suggested that they should go home and be paid as if they had been working. It was not customary to pay men except for time worked, but 0:p Board agreed to the payment. Replying to Pir Joseph Ward, witness said Mr. Cr.vkwcll merely expressed hit) own opinion us to the wisdom of voting for the. Government. Answering « question by Dr. Newman, witness repented Mr. CnwkwellV statement that if the Government went out of power Joans would be reduced. •Sir Joseph Ward: A very wise thing to pay. That is just what has happened. The Chairman: Who put in the £5,000 limit? Sir Joseph Ward: That was before the ! election. Witness said that about six of the men on the works were in tho Pernell electorate. i Hugh Wilson (engineer of the Remuera Road Board) said Mr. Cawkwell told I him that he hud given the men a holiday ion pay, and that there would be no difficulty about arranging for payment. Hon. Jas. Allen: Did he say how it would be paid for? Witness: Well, it may have been in a joking way. He said "Sir John Find lay will pay for it." Witness added that two. men not at- work were paid that day. ;Pay so far ha& been charged to the Road Board. Hon. Jas. Allen: What were those two men doing? Witness: Canvassing. Hon. Allen • For whom ? Witness: Dr. Findlay. Sir Joseph Ward: Do you suggest that Mr. Cawkwell did it at the reqnest of Dr Findlay? Witness at first replied that the chairman d d ndt do it from kindness of heart «£p U J? 0 <* u6stion was repeated he gave it a direct negative and £28,000 from the xS for. No pobtical influence of any kind was ueed to obtain the loan. 6IR JOSEPH WARD'S EVIDENCE. Sir Joseph Ward gave evidence. He said that in 1909 he prepared a system to provide for advances to local bodies op to a million a year, and legislation

to this effect was passed in 1900. He gave his reasons for making the change. It was necessary to expand the system whereby money might be advanced to local bodies, at the same time removing some of the burden of loss of capital from the Government. When the State Guaranteed Advances Act was introduced it was intended that it Should apply to boroughs, as well as to bodies. In going through the records he could find no division or statement against that proposal by any member. Sir Joseph proceeded to read from a debate on the bill, but was ruled out of order. He dissented from this ruling. He emphatically denied the suggestion of political influence in connection with loans, and. regarding statements' made this morning concerning Dr Findlay, he wished to have Dr Findlay recalled to give evidence, also Mr Cawkwell.