LYTTELTON HARBOUR BOARD.

Press, Volume LXV, Issue 13377, 19 March 1909, Page 9

LYTTELTON HARBOUR BOARD.

t E T-VYLOR AND THE SINK- * T - ING FUND.

„ THE EDITOR OF "THE PRESS." c -Mv Mend. Mr Friedlander, too *™ h - His lettel in r f*ue of the lGth inst. is more «v for a display of frelins than ft He declares I made a vicious attack upon him on tlOth inst., at th.* matins of the * Board Tho-o who read the that meet in- will have to ad,V<it mv remarks were free from t aalitio.; attributed by Mr Friedi Not a word was uttered by Zt fully warrants! by tho facts I *Ld and I neith. r felt nor express- "? r vicious K-plitii: towards the •»?* n C.ti H bo that Mr Fried?Sa hw '*ni«y.jd his « »ay with ■"sir* of tlit' Harbour Board so long gPto challensc the ritfhtnoss of his *Let as a member of the Board or as &„ of the Finance Committee h.>S,Tan act of sacrilege. I do not *!£,, to cloud the issue. I raised by a 'Ttodf of ™ rfls . or b - v a tira<U% of «SJ abuse of Mr Fru-dlaml,r. The 'h facts should afford th.« public whose -gnsts are involved ample- evidence ZiKvA to judge whether Mr * nodSLfrr or myself have, right on our side Tthis controversy. The controversy Lolvcs principles too important to be !X an occasion for vituperation, as ft Fmdlandpr seeks to make it. \[? contentions at the Harbour Board -rting on tl,<? lOth March wore as JLre:— That no member of tho Board feuld borrow its funds, or be. interestJftom a business point of view in tho jjttstnwnt of such funds; that propor•ff offered by a member of the Board '• jerurity for loans should not bo ftlned by another member of tho that the public should havo &a informed thafc tho Board had fcwaitiiiu investment; that tho (a«J should have had tho largest posliUe choice of securities. It seems ftjt my contentions have upset tho "Si*PJ> r family" conditions which havo jjf years been a feature of the Lytteljoß Harbour Board methods of doing jqjJBMS. -When speaking at tho Board meeting Itirefiilly adhered to the- question of jeUie policy. It has remained for Mr friedlander to challenge, his own integI lmve- before mc the official filo referring to all tho Harl«nr Board mortgage investments. The Hα tell their story without a shadow of Tiolent feeling, and I think tho plain documentary evidence will enable a joend public judgment to bo formed. Early in 1907 the Board consulted its elicitor, Mr George Harper, as to whether it could legally invest its genetil funds in tramway debentures at 4} per cent, interest. On March 16th, 1907, Mr Harper advised that any portion, of tho amount standing to tho credit of the general account could bo -transferred to create a special renewal fund, and then invested in any securities the Board might determine. The Beard at its meeting on the 10th April, • 1807, transferred £15,450 to the credit rf b fund to be called the Lyttelton .'■lfarbotir Board special renewal fund, uA thp resolution embodied this stipuItion: —"That such sum when approfriated to such fund be invested on ..iach securities as the Board, may by resolution from time to time deter- '' nine." Mr Fricdlander says in his letter: —"At the time the Harbour • Board decided to alter its policy at its mfeting in March, 1907, and invest its surplus funds upon freehold securities, as recommended by the Finance Committee, of which I was chairman," etc. It should be noted that the Board a month Mot than the date given by Mr "Eriedlanrl-er had not yet decided to toaeh freehold securities, as is proved br the rcolution I qonte as passed by tie Board on April 10th. Mr Friedlinder has supplied the cue to this discrepancy. Ho says the Board on April 10th left the question of finding absolutely safe investments in the hands of the Finance Committee, which, for ill practical purposes, seema to have con,fisted <}f its chairman, Mr Friedlander. He further says in his letter:—"Tho latter (Finance Committee) gay© no mltrnctions how to proceed to place the nmney out, and the matter was thus fcft in my hands as chairman." let l«ter on in his confession Mr Friedlandei protest* that he could not nave Wten any unfair advantage of his position as chairman of tho Finance Committee to influence tho investment of -the Board's funds, because of the lynx- ■ tj*A business men who as his colleagues I ra tbo Finiinco Committee, protected [ aim from oven a desire to commit imt poprieties. Does Mr Friedlander see i tne point? He in one breath says the ««W members of tho Finance Committee awl the Board in full assembly Jfwe all alert to see, that nothing havlßjEeven an appearance of evil should JWir, and in the next breath he wails ibe«oathy of both the Finance Com'S.u naA - tno Board, which he says '-, Wt the matter of investment of the ; 'fcjj'ey in my hands as chairman." «8 picture of my frionrl Mr Fried- , Jwr, fired with "nmbition on April i ™\ 1307, to find a suitable freehold , as an investment for this ' i£; ' ' sravo 'y determining to do all *w»!iaduty which ho charses the r*e» Committee and the Board with £"*,. •''"•ked, is pathetic. Casi- ' Ul ' ,Ie rcm «'ned on duty when w*committee- and Board had fled the "jr. May I nsk Mr Friedlnnder fo how, if the Finance Committee "Art c .'■*"' neglected to give any , fl ** tnic t'on<i how to proceed to jilace out," they can have so fully ,W»«ea tho public interest as ho sub- :*§*% s«ys they did? J*»* slthmigh Mr Friedlander did not «2™i bo flounders badly in his facts. ;*_P oß rd did not, nt its meeting on ?»U 10th, 1907, "lenve the matter Mhe hands of the Finance Commit- . The Board passed the following "potion on that date, viz.:—" It was "j* , .™ that the question of recomS*w; in what securities the sum of j*i«o now standing at fixed deposit ;«l*?* credit of Renewal Insiirmico W«hoiild be invested, bo referred to S**in»nce Committee for considerag>wd report." It will be noted that f**nedlander is entirely wrons in nsy™? fhnt the Board" decided in *° * nvcst ' ts funds in free>eniritip« It hnd not done so 2j °? pril lOtn, l oo '- " s tne gitttion shows. It seems perfectly &?i'« ro ? 1 r Friedlander's lettor of £16th inst , that ho hnd decided, in 2j*n. 1907. that the Board's funds j*W n<? im-psted in mortgages, even • M> Board had not so decided ; and that it was Mr Friedlander I who counted. Tramway tlebeniAd' to fluctuation in JrJ't wann<T interest at 4i r>er cent., • "J* w had in ab"ndnnoe; but the *!~* *t the wheel, ,, burdened by his (PjJ rPS Pon<;ibilitv " as cliatrmnn of iJJ'jnnnre Committee for finding «nfn investment " (I I"°*° j*ncdlnnder's own wordsV Inid S** Mother course by which he was j£"|iJH»d to steer. absence of a policy on the part jj™* Board, the chairman of the &7j~* Committee developed his own. jj-*J*il 17th, l>oo7, the secretary wrote (jjf'orge Harper, as follows:—"The would like to know if this i£g~" could be lent on mortgage." Mr Friedlander, explain this jJJJS* nc y.in your letter: Why did JJt?* solicitor require to be asked. $sUsn 17th, 190 "' whether tho |i^ c °uld be invested on mortgage, jjg*»s true, as you say, that " the , Qecided to alter its policy at its

meeting in March, 1907, and invest its surplus funds on freehold security?" It is not clear whether the chairman referred to in the secretary's memo, to Mr George Harper was Mr or Mr Friedlander; but if it was Mr I.anren.son, will Mr Friedlander place his hand upon his heart and say he did not suggest or prompt the enqtiiry heing made re the "mortgage security? Mr Friedlander still remained on deck. The following is the reply of the Board's solicitor:— ''Opinion :—I am of opinion that the Harbour Board can invest any sum or any part of any sum for the time being standing to the erodit of tho Special Henewai Fund on mortgage of land, but as tho Board is in the position of a trustee of the fund, it should, before investing the money, obtain from a person competent to value, instructed independently of the owner of the proix»rty, a report of the value of tho property, the valuer certifying in such report that the amount of tho loan does not exceed two equal third parts of the value of the property, as stated in tho report, and that the loan is made under his advice. Acting on such a report the Board, as in tho case of ordinary trusteee. would not be held responsible if tho property should not realise the amount of tho loan.--George. Harper. 17th April, 1907. The Chairman, Lyttelton Harbour Board, Christchurch."

If any doubt could exist as to whether tho Board, the Finance Committee, or the real controller of both, was engineering this policy of investing the Board's funds on mortgage securities, it is removed by an interesting minuto endorsed upon Mr Harper's opinion by tho secretary of the Harbour Board, as follows:—"'I obtained this opinion in consequence* of Mr Hugo FriedJnnder (of Finance Committee) raising the question.—C.H.W. 13-1-07." Mr Friedlander says in his letter of the 16th inst. :—"lf I bad wanted to hide anything in connection with tho loans I would not have placed written records amongst the Board's papers to enable such a passionate pilgrim of platitude and Pecksniffian Puritanism to make u.«e of them." May I point out to my angry friend that the written records moet necessary to enable the public to .judge tho value of his actions and protestations of innocence were not placed there by himself, and further remind him that once thero even tho chairman of the Finance Committee could not remove or destroy them, or prevent any member of the Board fro© from Mr Friedlander's influence from giving the public access to what belongs to them.

Tho records on the file continue to disclose- how successfully Mr Friedlander discharged tho "great responsibility" of finding "absolutely safe investmente' , for the Board. The Finance Committee met on April 24th, 1907, and on May Ist, 1007, presented the following recommendation to the Board, viz. : — "Lyttelton Harbour Board.—Report No. 36 of the' Finance Committee. Present—Messrs Georce Laurenson, H. Quane, F. Graham, H. Friedlander, Hon. G. J. Smith. R-β investment of tho special fund, £15,450, for renewals, etc., of the wharves, sheds, etc.: — Your committee recommend that the investment of the above special.fund be left in the hands of the ohairmaa of the Lyttelton Harbour Board and the chairman of the Finance Committee, with power to act, in accordance with the terms and conditions set forth in Mr George Harper's opinions, dated respectively the 16th March and 17th April, 1907.—Hugo Friedlander, Chairman of the Finance Committee. Harbour Board Room, 24th April, 1907."

The Board adopted the recommendation of the Finance Committee on May lst/ 1907, yet tho Board does not even then say the money is to be invested on -mortgage securities. The Board left the investment to the chairman of tho Board, and Mr Friedlander, as chairman of tho Finance Committee, with power to act.

No public announcement was made that fcho Lyttelton Harbour Board was prepared to advance £15,450 on mortgage at 4J per cent. The public had no chance of submitting securities. The Board was not afforded any choice of securities.

Mr Friedlander says in his letter of the 16th inst. that at that time (March, 1907) "very large sums of money were invested or seeking investment at from 4£ per cent, to 5 per cent, interest." He makes this allegation to justify tho advance to the land syndicate of which he was a member. But tliat is anticipating tho records. One thing is clear: that whatever large sums of money may have been seeking investment at from 44 per cent, to 5 per cent., tho general public had no chance of knowing that the chairman of the Board and the chairman of the Finance Committee, Mr Friedlander. had power to invest over £15.000 of public money at 41 per cent. in May, 1907. Mr Friedlandor still remained on deck. The renort of the Finance- Committee, signed by Mr Friedland«r as chairman, authorising the investment of £15,000, was adopted by the Board on May Ist, 1007; and, as though by magic, Mr Hugo Friedlander's "great responsibility" for finding "absolutory safe- investments" for the Beard vanishes. On the very same day, viz.. May Ist, IDO7, tho following letter was received by the secretary of tho Harbour Board:—

• "Christchiirch, N.Z., Ist May. 1907. The Chairman, Lyttolton Harbour Board, Christchurch. Dear Sir, —On behnlf of tho Karaka .band Company. Limited, T beg to apply for a loan of £10,000, and am prepared to pay any reasonable valuation fee to have the property valued if the application is entertained. The nronerty consists of 7800 acres situated within twenty-two miles, of Auckland city, and has only been recently purchased for a sum of about £32,000." Trusting yon will iavourably consider this application.—l remain, yours faithfully. George G. Stead, ncr J. P., Director Karaka Land Co.. Ltd."

Will Mr Frierllander t«ll the public in detail hcrr the Karaka Land Company put in its explication for a £15,000 lonn on Mny Ist, 1007. seeing that the Hnrbour Board decision to lrave the investment of that sum to the chairman of the Board and himself was not arrived ar until +he nfternoon of the day on which the Land Company applied. Meantime Mr Fried'ander still remained on deck —a model of prompt business methods and chivalrous public idonls. . ,r ~ ■ , Not a moment was lost. Mr Friedlander mustered his Finance- Committee, miH on the very sp.me dny. May Ist, 100". it wa« resolved: —"That t»e Board ask tho Company (the Karaka Lend Comnnnv) to set Mr Lambie to value +he property, and that in dome so he be asked to associate himself with some reliable person in Auckland." The records ore not, clear whether the "Board did ask the Company to employ M:- Lnmbie to vahip the'Karaka Estate Cf mpnny's proffered securities, but the Bonrd referred to in the resolution quoted Drobably meant "the chairman of the Board," who was empowered to set for the Board with Mr Friedlander. But that immaterial, because tho chairman of tbe Finance Committee was still on deck, and on May 3rd the following reply was sent to Mr Stead, n< a director of the Karaka Land Company : — '•Lyttelton Harbour Board Office. Christchurch, 3rd May, 1007. G. G. Stead, Esq., Director Karaka Land

Company, Limited, Christchurch. Dear Sir, —Ho proposed loan from Lyttelton Harbour Board's 'special renewal fund': In reference to your letter of the Ist inst. applying for a loan of £10,000 ca the property owned by the Karana Land Company, Limited, at Auckland, also that your Company arc prepared to pay any reasonable valuation roe to have the property valued if the application is entertained. I am directed by the chairman of the Lyttekon harbour Board to suggest that your Company should ask Mr John Lamoio to vahie the property in question, ami in doing so he be requested to associate himself with some reliable person in Auckland. The Chairman desires it to 7>e clearly understood that should the report be favourable or otherwise, the Lvttelton Harbour Board are not to bo "called upon to pay any portion of the expenses in connection with the valuation. Should the loan be fav>mrabU- entertained, the interest tne»'?m would be at the rate of 4 J per cent.. payable half-yearly at the Bank * f New Christchurch, free <">f exchange. I am. dear sir, yours faithfully, C. Hood Williams, secretary and treasurer."

It is worthy of note that the rate of interest was fixed at \\ per cent., but not by the Board.

On May 22nd, 100". Mr Lambic reported, concluding his report as follows: —''On a forced sale basis I estimate the value of the Karaka estate at £o per acre, and I have no hesitation in recommending the application of the Karaka Land Company, Ltd., for a loan of £15,000 on the security

of tins property, Apart from the fact that I informed the Board that I had wired to the Valuation Department, Auckland, to know tho Government valuation of the Karaka estate, and found it was £2 17s 6d an acre on the date of Mr Lambio's report, I have not challenged tho value of the security. I have, and do, challenge the- policy by which one member of the Harbour Board borrows money from tho Board, and .another member of the Board values the security. Such a policy is indefensible, and even if tlie estate was worth ten times the amount of the advance, the policy which I objected to on purely public grounds would not be justifiable.

On June oth the Board adopted the Finance Committee's report of same date, .recommending that a loan on mortgage at 4i per cent, be granted to the Karaka Land Company for three years. In his recent letter in your columns Mr Friedlander modestly refers to his connection with the Karaka Land Company as follows:—"I was interested about that time in a joint stock company." The following Tetter will indicate how modost Mr Friedlander was, and suggests that his influence in the Karaka Land Company-was as great as it was on the Lyttelton Harbour Board. Hβ n-as on deck with both bodies so far as finance was concerned.

"Karaka Land Company, Limited.— Ashburton, 13th September, 1907.—The Secretary, Lyttelton Harbour Board, Christdhurch.—Dear Sir, Re Karaka Loan: This company has executed all necessary documents, and I think they are all in order. They have been sent to Mr Harper. Kindly ascertain from him promptly if you niav pay the cheque to mc; and, if in the affirmative, please pay same into Friedlander Bros., Ltd., account with Bank of Australasia, Christchu.reh. Send mo an urgent wire, which I should liko to have not later than half-past 11 a.m. to-morrow (Saturday), so that I can make use of the money and save two days interest. Yours truly, Karaka Land Company, Ltd., per Hugo Friedlander, Chairman." Air Friedlander blossomed into the chairman of the Karaka Land Company, Ltd., on September 13th, 1907. His modesty during the period or negotiations, whilst he was so burdened with anxiety to find absolutely good security for the Board, is remarkable. The treasurer to the Harbour Board hesitated to pay the Karaka Land Company's £15,000 into Friedlander Bros.' bank account without more formal authority, and consulted Mr Harper, who advised that the money could be paid to Friedlander Bros, if an order under the seal of the Karaka Land Company was forthcoming. The following telegrams explain themselves:— "Sept. 14, 1907. Hugo Friedlander, Ashburton. Urgent. Time sent, 11 a.m. Solicitor advise authority in letter not sufficient. Will pay money Friedlanders' account, Bank Australasia, upon receipt urgent telegram from Bank New Zealand, Ashburton, that it holds proper order under seal Company directing Board to do so. C. Hood Williams."

"Sept. 14, 1907. Lyttolton Harbonr Board, Christchurch. Urgent. Time finished, 11.41 a.m. Have handed Bank authority as requested. Hugo Friedlander."

" 14/9,"07. Time finished, 11.56 a.m. Urgent. C. Hood Williams, Christchurch. We hold Karaka Land Company under seal to pay £15.000 to credit Friedlander Bros, at Bank of Australasia.—For the Bank of New Zealand: Dignan. Received 12.5 p.m."

" 14/9/'O~, 12.30 p.m. H. Fricdlander, Ashburton. Have now paid in money to Frirdlnnder Bros, at Australasia. Hood-Williams."

The public may be left to decide whether I was justified in describing such a transaction as being of a character which should not bo permitted to recur, and which should not have been permitted to occur. _ With your permission, I will deal briefly with the other advances in tomorrow's issue.—Yours, etc., T. E. TAYLOR. Christchurch, March 18. p.S.—Mr Friedlandpr's brief note in to-day's issue does not touch the essence of the controversy, but any admission from him of having made even a slight error is welcome. —T. E. T. TO THE EDITOR OF "THE PRESS." Sir, —I desire- to congratu.ato Mr Friedlander, through your eo'umns, ou his noble effort of expression, O'il'™}ating in terming Mr Thomas Edward Tavlor "a passionate pilgrim of platitude" and Pecksniffian Puritanism." I hero not enjoyed anything quit* so much since Sir Joseph cut himself with the Second Ballot Bill! Surely a second broadside will not be required—poor Tommy must be quits dead now'! —-out why dismantle such patent armaments? If the batteries were onrv turned upon Sir Joseph Ward and, Mr'Massey, now! They might be called': "The. peerless pair of Parliamentary purveyors of puerile prattle, palaeozoic piffle, paroxysmio persiflage and posthumous poppy-cock- ,, ; or perhaps, "Perfervid perpetrators of paltry palaver and' picayune peccadilloes." That should do the deed; but even if not quite efficacious, if even only a. short period of unconsciousness ensued what a relief to the Dominion! And there is the. editor of "The Triad"— quite a number of Christchurch people would enjoy a bombardment of the editor of "The Triad," that purposeleas perpetrator of painful panegyrics! Hoping that Mr Friedlander will consider mv suggestion.—Yours, etc.. "KILLING XO MURDER."