UNUSUAL CASE.

Dominion, Volume 7, Issue 2111, 31 March 1914, Page 6

UNUSUAL CASE.

LIBERALS & A NEWSPAPER

FRAUD ALLEGED

REMARKABLE STORY IN COURT.

An unusual fasci of geneial intfl.fesj; i?' at JifcSent taftjjig its tifturao through tV Siiirreuio Court in Wellington., it congCrns the fetation of a newspapci' c.uhH < pftuy, and involves a munbeif'..of n:flega-. tio.ns. Tiip Dla.iiitilF in the action is 'flionja.s Artlnif fcibyd ppji, and the"■de* are iPetar HfiycS, ftifciiltrly C»jnjniSssioi.ier "oj Tiflxos., and .Jpseph M'Cluggago, a Sti'atfpro! resictent. WafnHlf allcgps fcliat 1» lvfts induced by ijjisrepresentaMon.s f.p inwst ,111 a cpni= pany. w;as ilo.a.ted" io : r;iu'i a.. Whaiigajci newspaper. knoNVU as • tlio '- "jS'oFtlrqrii .and jie clafiH'Sj.. datnages for lAsseg a&g.ed to have TbfttfiV , -. Unstained as*the. fesuTt. pf tlio trails^■ i ■ ■djfttfen. His Hohpur Mf.. Dvis-tice. Wwarts k hearing thocase:. .aitf. i .&:. ; W» ■I?:l.air aiipoars for the plaiittv/f., and 'Bfr. F. J5. Pethwiek for tlie tkfonit&iits. Jlio. hearing was cenvmeneofl yesti3i-i|a;y i! .irfqi;u-. ■uig, and tfftu on vfttil j lafe: |n Wo ttfte'rflocrH , , the Aljegatlons ana the. Cia.lm. Taking tho s.meme.nt . " Wtyt 1* is therein alleged' i'by %s 'that"'' tte. Kprtisentations o.f Hoyos .iild M'Ghiggage, resijecfiijg flic -ttotstion of the equipaiiy, were false , :a"!i ; d.lTaU'dulens in that (i y«r.y large uUiiiber of shares lioWers did npfc yty anytMiig '{$('■ the. , ■shares-, hut that the shares"werfe (iii" traud of the plaintiff and other -coirtik"" .itutmgshai.eliold.ers of to ■.co'uipgnyV' issued, .or UujpoTtcd. to be issued., aS tO% jjakUiiß.. '-■■ J n , tlii s . tesject, thp" a s ) ltiaH «a issiied gif t \« Jl^abo ' Geoigo Wader,. K Mfer, C> Bv EiUSseJli'Hiaiinilton'eilme.r, Malt Magifei Peter Hey;cs ( ibnd Joseph M'ClUggage. 11l prder.to |i,aufc&-feb; ■ to -talM shares iivtlie: cfinpiiiy; ':&,do. ftndanta had represented, that #10 ne-\vs.-hai>ef..:liact licon taigh.fc ..fe : £gi3; ilfts ■ahotit £.r-flO, : whiciv latkr. sum reisfesoiited, -squaring up <if 'ddbls pf -Bj'de,' ■the jtfevioHs owner, at tho rate'of (is. Blithe-£-.. ..This..ou;aay i TVhero thecapiM >vas-.£iOO'H, wou.l'4' hayo 'left. ' ■rPßghly, 0m .foiy.£hA general Of tim ponipaiiy.; Hut" fhes& •α-epresen-Wvoivs irere- said ifcp 'be false aiidii?audV ■ a:m<iffl|ts tofiillifo MtfSfj Vs.. (3.d,had beeir ■H'a'id' : to'H'cv"^'' : ' in purpbrt«d 'the. neiyspapiv"' :and becauso, pf the -Mxti re'' ~ »'*as aotufillyavail. • aWo, .Of this latter .ainount £500. \va s l-onrpsentod, by the shares subsiirib.ed for by the p!ain:tit. letiugroii the iepre- ■ Sentatjons of.Heycs. a«d SEChig^go■Cos barf paid £409, amd:.hiiftalso:.rctU.iT(v ea to the.company a:::.bp.ii.u $ of £iuO Y ivlpeli had been voted hini'. The...shares ever .§mc& had beijrt) Worthless, or :ikr* ' \ $0. t By tcasQu-.of ife" 'walfit " feu fees. „ «ip whole,' ' :pf *eari« '. the etoda of the .assets,bt ■the; ttimpiSiy■ Gp;s «=hegn:c:oin, pelled to. sell hie. shares at £62 lij's- ' .Hft toft «h» sos* £*37 JBsi .JiotiS' for the wmtytf .flbo aiifl ' 8 te ..cent, iilterest, oil mpny.pai3 vii ' by fern, aiifl .fifthef arjcUfe ' retef as'the ■d&eiii'Jiihi viiStatcrhehf -io.f tiiefancß, fn tlm , s pu. : rie p ; ( tjieit /statement of deteufia dcfe.iidaiit:s; mi that (Jos Iraci , tlio coinpaiiy m 1911,. a n| tliat. they £ffie dcfeudiuM h?d. ''soraß tMtaSfh ,¥hey. allegedpuiicha§o price, :S.iid ; den.ied,Jth'at tljej ftad Wade; tlip :repre.seWfeitibns : 'aJleged.ag.aiiißt tteitt m.:frrdor;4liinduce ■(JpxisAo.w'tn'lca shards. thafein M 9 .fieyes lla.<£ OAVittecl tlie :P3pef, -had civgagefl ik>x ■ati a ,sala ; ry. of, .£•s .'"woekiy ■ ■a* lflMiagijig ed.ttorj- '-and, that ; part . of the twins of the engagement was ■' tliat Cbx shoitlcL take ijp: '0$ glares at ■■£1 each, ftud ishpuid.pa'y £iQO as pufeliise prfoe pil :tljp-;si!|ai:es..; Cox had had bm|le'; : g;::ascertai.iii and cltcl ascertain,; t'ltg ciriumfitahces, end lie :becanie a iivit'h .3. full Iciiiiwledgb'pf. , . !itl. : iM ..eircuinstaiifieSi 'lliey denifed" tliaj;: , 'tliey fed hiailo .aii.y : fliey denied ihat 6e;rtam moiiey hi.il becii. paid to #%$ ■in.'.p.urcliase .of the : bij,<ii." ÜBjs,, and iaM-tihata .s:uni.:p'f. £686 '7s, ■Qtl. Mti ;bee» )&$ -i» liini tcsiwct. of labilities fljeurjfeJ:i^,eonn ; esfion with tho ■■basinets;, JjeyeS ; 6pl!t*iho : bu3iiie:ss ;tp a trustee -in cpnsicfefa' ticii of 2SJW: :?i'iaresj the Sstmv ■pwijif |q take over ujl ivab'iTi'ties... It was dejiiied; that : Ccx"'s : sliares hscA bQcomft' " ivor'thless; or nearly 50.,. ;and, it ed, ttat tljc.suTivel 40?ipi, ferwijicii the shares had. hpfciv ; s;p.ld;-..:did not xe•p:res,e".n.t liie'b,■fiijt' 'iijarke.t'valii'e. ' The ■s.ate ; t.\,yas.. pnly par-fc.pf .a ■lajtger .traiißitc.few %itii :.Fraiic-is 3lMitt.6r, wjyp : bpiip;nt SnsiiMss, snwj at %$■ a. ivuiivber of atcpuirts ■ArithfCox; ''ivhpjjii'd. 'tis iicepuiiji to-;Maiii-. def;:f6r''certafh '§uius inipipperly 'draiwn f.j : s»"thb 'Jjiisiness. py.f.ti'ida.irte ,, fuHfosr Uirtd lost £0 JOs , ,, pf ■ii.ijd been ptherwi.se injufe'd.. lp 'ttio ■altcfiiiative t<v this- liist^jijoirtipiied , line pf defencis, defendants : s"ta : ted: tli.at if 'Coy Tiiad: |dStjt liall bcen'throiigjl had' ■niaH.agfli'ne!it iii having tfeecpt'pd Aio'ney ■. privately to riift;the papef fir. th© liqiipr 4utc.re§.t'sj 'iij: jitf WRii'iJijdipiirtljjsly iii.'si's'ted , :iii fh.o piEjioiidi'tiiir.o: df ,£IOOO on 'tIJQ ■■■■pifi-61ja.se of a :lino'.tvpa iriacliino, and iti liayiftg clr.awn: o'xp.cnsfti?. : i|i: esces.s. ;bf iwii.at the' , :l);lsfiiess" cbuTiJ .afford. It- w_as :fitrtlicr ■ stated ihiit al'lcgatwus cjf representation h'a'd 1 beeii : nia'd,p to . tlio flf tiip .poii»r)aiijr y Xnit tliat, tfpo.il irtve.siijgiitipn;. they ivere iVitlir. ■drawn anil ri.'r^iogfeed : ' i f:p:r , by OesV' .Jl ■■■ tivrre. had bebii; :: any !iii : src.pi:Csen'tat.io}l .(wliieji. wnis . deniect) oo.i ■ ■ cpuld have|ii :];9il; 'By i]\i ''detay iii yrp-. ceeji.iivg. hp;,i';ad ■emlia.rra.ss.ed itlie d.cifcnd■pjyts iii; tliciF, defeiicc. L'lbcpa|s ; .Cither Bound tho Paper* Tin .■his oii:J;liiip' : p;f ,the caso for .p'l»«j-' tiff., -Mh : .B.la:ir ; stii'£ocl •that, spine ■yeiti* ago. Sir ■■■Jo'Sep)i Ward jiad a .:ftri@.'te ' secretary, jiftjrtcrl jpran : t£ Hyfa, sVlio^ile-' s'ted to (tqiiduct a. iioSsiiaper, 'J.'hovro«!ilt 'was 1 Ihit. 'a' iJiijHtbcri ef W<Jli«|t:oH iiiciiibe/s ~bf.. the- i/iberal .purity (ij.irt.iiceil fiim. into tb.e .Adyptaifii" Hj'tie, ...liavveyc'.r., ;]iail : .bfien iinable; '.■.lα Dialed a '.Bdecpss of- lii.s yeirture, aiitlflihd' Furthotr fina;nce : 4 p, ; feiit : oi : £f<o- > frqni ffrancis JMndeiij l MsP-i ■glviiig^lr, ; Jirtiider as 'security' ;ft JSijl rif §al.6' -dver ■t]iß'-ptoj! fns ; t*:6 v lifp ■cifiS:lfor £500 eiwh;, ta.nte, :1.009j ii.nd; Msh.d.ei,:' heing.. ihe ,; oiily secured credita!:., in, Jem 'estate;, ■bpcajiio 11)0 iipSesspf of tilvft jipwispapfef. We Public''Jni:siieo''ini:d(2Ttopk tlics-cicar-.iiig 'UP *!. Hydros: :a'tews, IVut \VCi'O «ojisf:lefsb:lo debts , ■ancl.iiq 'assets' ■t.Vie i.nise.ciiJiCtl crcditqrSv)Ve.i'O 'in fair .Wily tp losf> aM; their njonfey., ..ftter /Hijyes; iyvas , then Ooiiiliij.'ssionfir :of iaxes,. ■and, aptiivg in Ijclvalf pf .sithe.r.s', lie : set crtit to resciie tho "Nojtjicrii Advocate" frptfv tlio haiwls qf the , JJefoEiii ..party,, fife l)ro.o«;ccl'.ed. to fltfaj ■a,.Gpiijna.ny4iiipng',. . ■ tijv.tain. ..hieijjbe.i's :.of ,the' 'li.vb.c'i:ii.l: party., .arid, .acting as. Agont of tlm. .jn'ppp.ied v .afereed' fe.fiiy Ms. 'in tho. £ ori. v tlie;. : anMHi;t' -tif jns. bill of salp f(ir.ti!a assets.'in' crtaiftv Sign-". ;dof i:«ati ■jtefeetf ;./tp ,a^epb.- ; . 4le:Jy|ati; ' ■ . Jifi'iid.eil ta HeyoS* :as pni.iy, the jilant , .sjid v-jiiio , .■iiYsu.fan'eo. . policy for ioOO,, ..life a'tliftT pprioj.' id Hyije'fi '■Widow. ~ $■.'.•. ttj9 Prjomtfters: and: Si'r' . jVth Blair \vtinjb-.6n -jttt ,'tli'a| .iiM;plaijitifl;, Vox, hiid: ;beeh. <;uga;RQil ; to/(jin-' ; . ■■ ■ ■4«ct tho .paper. ti\'o.iiee^sarS' : ' : catiians : bemg. J;liat,. ; he- iyft!st:pQ6se:ss.:; ' '<■ t)» goodvrill of. : Sif . :;

that ho mist invest £500 in the company. Ill'company with Heyes, plaintiff had had au interview witli Sir. Joseph Ward, who was then Prime Minister, and,' after some conversation, Sir Joseph •Ward proposed that, in order to keep the goodwill of the paper clean, .the .company should pay all secured creditors 6a. Bd. in the £, through the Public Trustee. In duo course the company was registered, Heyes being shown ■ a3 thohdlder of £500 worth of shares, H'Cluggago of. £250 worth, and plaintiff of £500 worth. The first directors had been Peter Heyes, M'Cluggage, John Plimmerj the late Arthur Lodder, and the plaintiff. The paper continued its way for about two yesvra. Then Heyes, upon various pretexts, commenced to draw "large sums out of the working account, and also issued to Mander a promissory note for £250 in the name of the company, this being the balance of thp ; purchase- money. During two years no money had been provided to plaintiff to finance the paper, and, as the /Wellington office of tho company made periodical demands upon the earnings,' the manager's suspicions were' aroused. Hβ was ■ a director of the company, but had received no adi vice -to attend directors' meetings. The Editor Crows Alarmed. In January, 1912 (said Mr. Blair) Cox demanded that the-directors ehould meet at Whangarei and explain why, with a'capital of £4000 (half of which. had not Deen accounted for) it was necessary to penalise the business by transferring certain sums. to Wollington! The defendants Hoyes and M'Clug* gage, with John Plimmer, visited Whaiigarei in response, to Cox's demands; 'Mr. W. J. Napier (an Auckland lawyer) accompanied them, and an .informal meeting was held. Mr. Napier did {ill the talking, and assured Cox that, when.tho balance-sheet was issued, he. would see where the capital had gone, and that all would-, be well. :Cox was passed a vote-, of thanks for hisexcelJent work, was taken by. the defendants to afternoon tea and dinner, patted on tho back and successfully hoodwinked. The annual meeting of the company was held in March following, and the ; promised balance-sheet was is- .-. sued. Cox was unable to attend the meeting,, and did not secure a copy, of tho /balance-sheet until long after the meeting was over. To the surprise of the shareholders at the meeting, tho balance-sheet sot forth that. the company',had not bought the business if rom Mr. Mander, . but from Heyes/ ' for '£2500, and that, . uiider some agreement! ;tho company was liable to Mr. Mander for of ■ tho purchase money,'£6B6 to. Heyes, and £500 to thoßank of New South Wales for'an ■advance: to-either Hoyes or Hydo. A warm discussion took place at the meet. - ing,. Mr. John Plimmer, who was ono of the original tlireqtors, repudiated the agreement, and moved that legal advice should.bo taken on the validity of tho documents. ■■•■■•.. ! Things Become Warm. .As.'-matters, had: begun to get warm {continued Mr. Blair) Heyos got to work to reap in the,epoils. He dispatched Mr. J. D. Sievwright to Whai.garei to see the property, and to introduce the balance-sheet to Cos. When .Cox; saw the /balance-sheet he was greatly surprised, for not only,had thewhole of the £4000 disappeared, but the document made put that nearly £700 was Btill due .to Heyes, £250 to 'Mr. Mander, and £500. to the Bank of New South' Wales. : Ho found-that the company wae'bankrupt. He pointed out the iraud to Sievwright, who was in reality there for the defendants, and then Joaned with Messrs. Mander, Gilmer, Maguire; (three shareholders),"and tho auditor of the company'in applying to tho-Supreme Court for an inspection of tho company's affairs. .' Heyes and M'iCluggag9, : however, persuaded Gilmer and Maguire to withdraw their ■' affidavits 4}'onijJ,he ; .Courty-.'and the application ta'procefedJskThen the defendants;, acting : as', directors' of the company, ■, mortgaged ithe'nesets'of the : company to Sievwright for.- £2000, and proceeded > to' pay -the disphted claims , in .the-balance-sheet.: ' ':•'-. ■. .Crave Allegation. ( Plaintiff , was. dismissed from his posi-, tiori as managing-editor (said Mr. Blair), and 'J. D. Sievwright was the person who was allocated the pleasant work, of going • to and putting him out. Sioywright/ was appointed manager find took" possession : of the company's property. , . By the issue of debentures and. loading the company with, false, debts,' the value of the snares 'was re'duced to. 2s. 6d., and the plaintiff now claimed from defendants' the difference in value (-£437), with; interest and damages. There was fraud from beginning to end of the transaction, books were faked, and the pa'.rer was left high and dry on'the rocks of bankruptcy. ' ■: Where did the Money Co? Continuing, Mr. Blair said that Cox, .yho for some time had resided in Foilding, aud was by occupation a journalist, was unfamiliar with company business, and this was his first experience of the acquisition -oi. ehares. .His complaint against Heyes and M'Cluggage was that he had, acquired shares in the "Northern Advocate" through the position having been falsely represented to him. ~ They Tiad said; that the, property would ' cost approximately.£lsoo, and'.-that'the' capital of the company, would bo £4000, »nd had mentioned; that various reputedly wealthy men. were concerned in the company—namely,. Hamilton Gilmer, A. Maguiro, Robert Hannah, and tho defendant M'Cluggage. , The same statement in. detail was made to Cox by Heyes in. the presence of Sir Joseph Ward. "Apparently," Mr. Blair went on, "none or Cox's money reached the company at all. He paid it to Hoye-Sj and it will ho for Heyes to say what he did with it." It was remarkable that when - Cox wrote demanding some particulars of the financial position, instead of the information being sent by letter, three directors • and • an Auckland solicitor went to v )Vhangarei •to seo Cox. Long afterwards' Cox received a copy of the- balance-sheet, and ho then (with tho auditor and Mr. Mander) decided to visit Wellington, to investigate matters. Ho , notified the Wellington people that they were com;ing, and got a reply! back, to tho effect that, if ho absented himself from duty . without, leave, ho would ho dismissedNotwithstanding the notice,'they came to Wellington, and Cox was duly dismfssed. Counsel alleged that Hoyes • and M'Cluggage- wero in,, collusion. They were, closely associated, and hunted together in this and other fields. . If M'Cluggage had wished ho could have stopped Heyos from doing this," but M'Cluggage was equally a party with He'ycs. .:' ' .'.,.••. ■''.■' When Sir Joseph Ward's namo was mentioned a little later, His Honour remarked: "I don't ace that Sir Joseph Bad anything to do with;it." Mr. Blair: Oh, no, ho didn't, Your Honour. Nothing at all I "That.Entry Was a Forgery." Thomas Arthur Lloyd Cox, journalist, plaintiff in the case, then gave evidence. He said that at present ho-resided in Auckland. Ho had always been a journalist, and was not a business man. In 1909 he had about £800 or £900, which ho had saved out of wages. Ho heard that tho Whatigarei "Advocate" was to bo formed into a company, and saw'Mr.Mandor on tho subject. Mr. Mander told witness that ho had sold the paper to Hoyes. Witness called on Heyes, who was then Commissioner of Taxes. Heyes snid that ho was floating a company with a capital of £4000, and had 'bought the paper from Mr. Mander. at 10s. in tho £ on tho amount of his mortgage. Hoyes asked if witness would invest in tho company, if ho (witness) was .appointed managing editor. Merchants who had boon supplying the paper with goods wroto, asking witness to whom they were to look

for payment in the event of anything ftoing wrong. Witness replied that ho would be responsible. .When Hoyes, M'Cluggage, and Napier went to AVhangarei, Heyes remarked to t-ho. others on witness's loyalty to him, and added that ho would recommend tho directorate to. vote him a bonus of £100. "Witness said that he would take the amount out in shares. . This was dono. At the first mooting of the company Heyes presented a document, remarking, "This is tho formal agreement covering f,he purchase of tho paper from Mr. Mandor by myself,- and tho transfer to tho company." , No ono suspected dishonesty, and no ono read or examined the/agreement. There was a balancesheet presented at tho meeting, and thai, like, the agreement, was finessed. The minute-book now contained an entry: "Also a statement of advances to P. Heyes." The fact wae, continued the w.itness, that no such statement was presented or mentioned at tho 'meeting, and that tho entry was a forgery. Tho entry, moreover, was not in' tho book twelve months after tho meeting. "Threatened to Choko Him." / Mr. Pethi?rick: You don't feel very Ttindjy disposed towards Mr. Heyes? Witness: I could not after what ho has done for me. . Mr. ■■' Petheriak: Is that why you threatened to shoot him?—"To choke him?" Mr. Potherick: No. Threatened to shoot him ?r-"l did not threaten to shoot him." . Mr. Petherick: Wβ will see. Cox (after a pause): Not that I remember, anyhow. "To Sai/e Hamilton Cllmer." In reply to further questions in crossexamination Cox said that Heyes told him .that he floated tho company at tho request of Sir Joseph Ward to save the paper from getting into the possession of tho Opposition political party. Mr. Petherick: Did Heyes explain to you before you came in to tho business' that the paper had been kept going by money paid in by himself and others?. ■ Witness: No, ho told me nothing of the kind. ' Mn Petherick asked if, when Cox joined the company, he knew that there was a liability of £1500 to the Bank of New South Wales. ■ ■ • Witness:. No.' That £1500' was paid out of the company's money to save Hamilton Gilmer. Hyde owed the money to the bank, and Gilmer and Heyes backed him.' And this company's money was taken to save Hamilton Gilmer.' His Honour: Oh, I seo. The bank didn't take 6s. Bd. in the £. Witness.: .No; they were paid in full by Peter Heyes', with the "Northern. Advocate's" money. Mr. Pethorick: Hadn't you ample op-, portunity to find out the position of the bu3mes3? . Witness: Yes,'of the business;'but not of. the company.. Hadn't Mr. Heyes to find money to pay for- a linotype?—"l paid that money." There , were.sums of £150 forwarded by Cox to Heyes, and, Mr. Potherick asked if these 'were sent on. account of shares.;..-.-. Cos said that they were," and, after some further questioning round this point, His Honour said that it was quite, plain that this money was sent down before the company was actually formed—whilo it was yet in the air— and that the legal position wae that if the formation of the company had not come off the money would have had to be returned to Cos. ( ' : Mr. Petherick: Didn't you know that 2500 ehares were to go [to Heyes? '\ Witness: No. How could I gather, that? .". Mr. Pethcriok: You were supposed to bp a director, of, ;thQ/; company,., and, know.the memorandum of agreement.'' • His Honour: How; could anyone gather-thatrfrqn>r.this^mem.o.ran4fjm^ < . 1 . : , His Honour on Candour. Mr. Blair inter jeoted that it was tho> recognised practice to show which shares ■were contributory and which fully paid-up. ■'■,-•■ Mr. Pothorick: Not always. His Honour: It is usual. Mr. Petherick: I don't know tnat it is, Your Honour. His Honour: Well, if it isn't usual, I'll say it is ■honest. •. Mr. Petherick: Very well, Your /Honour. ' .' : His Honour: I don't know anything about the incorporation of companies, but I do hope that when they are floating them people are a little more candid about their transactions than has been the case here, as far as we can see J °At this stage Mr". Petherick (suggested to Cox that he "had very little knowledge of Mr. M'Cluggage." . Witness , : I know how deeply ho is , concerned in this—to my sorrow. _' ■ Mr. Petherick touched on tho visit of Mr.' Napier to Whangarei; He suggested that Mr. Napier was taken there to settle a difference between" properties' in the interests of the paper. His Honour; But you don't usually carry a. lawyer about to settlo things- in this way. )'Mr. Potherick: He was to bo tho peacemaker. His Honour:' Peacemaker 1 Peace- , maker I- The. legal profession is adopting an entirely new rolo! i Peacemaker! It's absurd I It's ridiculous 1 Mr. Potherick: It may be ridiculous, bub'it's a fact. His Honour: A- fact! I suppose Mr. Napier was taken there because ho had the gift of the gab, and would talk down this man who, also, has tho gift of the gab. • Whisky and Parodies on Hymns. Mr. Pethorick: What did Hoyes do at Whangarei? " . Witness: Chiefly drink whisky, and sing songs in tho back parlour' of tho hotel.' '•.'■'.■ . : Mr. Petherick: What else did he do? —"Nothing that 1 could see, but drink whisky." Mr. Petherick: Now that you've .vented your spite—givo us tho facts. — "Those 'are the facts." Mr. Petherick: Tell us what he actually did ?—"Nothing that I know except bring forth the royal demijohn, and sing parodies' on a hymn. His Honour: We've got tho whisky; now givo us tho books; ' Witness said that ho did not do tho books; there was a bookkeeper. ■ Mr. Petherick: Who engineered tho striko in the newspaper office? Who influenced' tho men fo cease -work? . Witness: That is for them to say. 1 did not. Mr. Potherick; You were in Whangarei when Mr. Sievwright took over?— "Yes, or course. "When I went out, he went-in." ."'. Mr. Petherick: And you tried to take the Staff with you?—"No, I did not. I had tho sympathy of the men because they know I had been deceived.. They offered to leave with me, but I told them to remain at work." Who Would be Suspicious? Answering. Mr. Petherick, witness said that, whilo the articles of association showed that no ono could becomo a shareholder without the consent of tho company Mr; Petherick himself had, .without suoh consent, becomo a shareholder for a few weeks in order to assist to complete tho fraud. "You, being a solicitor, ought to protect people," witness added. Mr. Petherick: You havo shown yourself to bo a very shrewd man Witness: I am going to bo shrowd in , future. Mr. Petherick: You havo shown that another man would havo to get up very early to get ahead of you. How is it that you got into this transaction you now condemn if it is all you say it is? Witness: I was told in the Prime Minister's room that reputable men

like Mr. John Pliiiimer—and Mr. Plimmer is an honourable man —and Mr. Hobert Hannah wero behind tho business. Who would bo suspicious? Mr. Petherick: You have been trying vory hard for somo time to "get" ■Mr. Heyes?—"No; I simply want my money back." Mr. Blair: Give, us tho money now, and wo will go no further. Mr. Potherick: Givo us one instance of misrepresentation by M'Cluggage. Witness: Verbally, or in writing? Mr. Petherick: Either. —"You know how tho confidenco trick is usually worked—one does all the talking, and tho other comes in at tho finish." Mr. Petherick: Givo us an instance. Witness replied that M'Cluggage was -in collusion with Heyes all through, and was present in Whangarei with Heyes and Napier, and heard Napier mako a statement which concealed the true position from him. The ease will bo continued at 10.15 this-morning.