LIVELY DAY IN PARLIAMENT

Dominion, Volume 22, Issue 288, 31 August 1929, Page 12

LIVELY DAY IN PARLIAMENT

CRUCIAL DIVISION NARROWLY AVERTED OPERATIONS ON LONDON MONEY MARKET DEMAND FOR PRODUCTION OF FILES A division which might have threatened the Government’s retention of the Treasury benches was narrowly averted in the House of Representatives yesterday, when, to secure the passage of the third Imprest Supply Bill, the Leader of the Opposition allowed a technicality to prevent the feeling of the House being tested on the refusal of the Prime' Minister to table the much sought-after correspondence relating to London loan transactions. Both Reform and Labour speakers demanded that the matter be cleared up in the interests of the present and the former Ministers of Finance, and some warm words were uttered in the course of the many exchanges of the debate, which lasted for several hours. The closing incident was the intimation of Mr. Coates that he would take a further opportunity of ascertaining the views of the House on the subject. ,

The question was broached by Mr. 11. G. R. Mason (Labour, Auckland Suburbs)., who said that in his opinion the matter should be cleared up. He hoped that the Prime Minister would withdraw his accusations unreservedly. The Prime Minister: No, I cant do that. . , , Mr. Mason said there appeared to be no ground whatever for blaming the ex- ' ‘Minister of Finance, and he appealed to > the Prime Minister’s sense of fairness to retract his statements. To allow the position to remain as at present was entirely unsatisfactory. A charge had been made, but the evidence had been withheld. If the evidence was so confidential that it could not be disclosed then it was a pity the Prime Minister had made the charge which had been driven home to the hilt. , . Mr. W. E. Barnard (Labour, Napier) supported the appeal. He said it. would be unfortunate if the matter were allowed to rest where it was, because there must be doubts in the minds of the people ■ A New Aspect. ‘‘l had not intended to refer to the matter again, but I think there is an aspect which has not presented itself to the Prime Minister,” said the Hon. W. D. Stewart (ex-Minister of Finance). That was the fact that statements uttered by him were being telegraphed to the London “Times.” Those statements

might be prejudicial to New Zealand.” Mr. Stewart said he had before him an extract from the London “Times” setting forth Sir Joseph Ward’s statement that he had been prevented from going on the London money market for two years. Mr. Stewart said it was true that his own reply had also been cabled, but presumably the Prime Minister’s amended statement that he was not allowed to go on the London money market for eighteen months was also before the London financiers. It seemed to him that that might not be of any service to New Zealand. The Prime Minister had said that it was not possible for him to explain the whole position, because the documents were confidential. Mr. Stewart’s answer was that there was nothing confidential or secret, because the Prime Minister had removed the ban of secrecy by stating what was the alleged cause for his not being able to go on the London money market. There was one person to whom the information could not be refused, and that was the person who was alleged to have signed the agreement. His statement was. that no such undertaking was given, but if it had been given it must have been given by the present Prime Minister. *

The Prime Minister: No, it was not. Mr. Stewart: Very well, then. It must have been given by his predecessor. - The Prime Minister: Yes, it was. Mr. Stewart: The onus is on the Prime Minister to prove it. Continuing, Mr. Stewart urged Sir Joseph Ward to make a clear statement "to the House. If statements were going to continue to appear, in London papers suggesting that New.'Zealand was in a position that no other Dominion was in the Prime Minister should make clear how that position arose. The Prime Minister had referred to commitments . made by his predecessor. Mr. Stewart repeated his previous assertion that the way had been kept entirely free and open to Sir Joseph Ward; and that the only information sent to London by the Treasury was for the purjfose of facilitating loan operations if he wanted to borrow. New Procedure Constituted. “I am bound to say the attitude of the Prime Minister himself seems to be quite in line with the attitude he has adopted ■ with reference to Cabinet itself,” continued Mr. Stewart. “A perfectly new constitutional procedure is being estab-' lished. The old rule that every Minister speaks for the Cabinet and that Cabinet is • jointly and severally responsible for statements of Ministers is being abandoned. We saw only yesterday that one of the Prime Minister’s colleagues was abandoned and thrown overboard by him. That is a new precedent altogether. If a Minister speaks and says he is speaking for himself as an individual, and is not committing the Government in any way, ' well and good. But we have seen Minister after Minister disavowed by the Prime Minister, and their statements negatived. The result is the public do not know whether Ministers make their statements on behalf of the Government.” The Prime Minister had said, Mr. Stewart continued, that he proposed to make Mr. Stewart his scapegoat, but he obviously forgot that scapegoats carried other people’s sins into the wilderness as well as their own. (Laughter.) If the Prime Minister wanted to borrow in London in January instead of April for the year’s transactions, he bad a perfectly free hand to do as he saw fit. He ought to make that clear to the House. Replying, the Prime Minister said that Mr. Stewart as Finance Minister had affirmed that he did nothing before the new Government’s coming into office in connection with the borrowing requirements for this year. Sir Joseph Ward flatly contradicted that. When he had come into office he had overhauled the papers in the Treasury regarding loans, and had found that negotiations had been going on for some time before Mr. Stewart’s resignation. These were for a £5.000.000 loan. Mr. Stewart: That is not correct. The Prime Minister: I found the records in the Treasury. Mr. Stewart: Put them on the table. “Splitting Straws.” Sir Joseph Ward repeated that he had found the documents in the Treasury, and he had had information from the Home authorities to the effect that the money could not be advanced during the following year, but would have to be raised during the year in which a loan was current. What was the use of the ex-Minister of Finance splitting straws? What had happened was that Mr. Stewart had been away electioneering and the Treasury could not get an answer in the affirmative to its inquiry as to whether it should put the loan through. Mr. Stewart: That is clearly a misleading statement. The Leader of the Opposition (the Right Hon. J. G. Coates) said that the Treasury did get an answer from Mr. Stewart as to its inquiry. The Prime Minister: I have looked at the files and there is no answer to it Mr. Coates: I think the right hon. gentleman will find the answer Sir Joseph Ward contended that Mr. Stewart was so busy electioneering that he put electioneering first and the finances of the country second. Negotiations for a loan were going on for some time before he (Sir Joseph) came into

office, and the proposal to have two loans in one financial year did not emanate from him. When he came into office he had to take up the matter of arranging the loan, and he fixed the amount for £7,000,000 because he considered £5,000,000 was inadequate, and he had to agree to not going on the London market for 18 months. It was the same stipulation that Mr. Stewart had been going to put in, and it was no use the Opposition members shaking their heads anti saying “No,” because it was in the correspondence. Mr. Stewart: Put it on the table. The Prime Minister: Put you on the table! (Laughter.) Reform members made requests to the Prime Minister to put the correspondence on the table, and finally one taunted him with, “You’re not” game.” Sir Joseph Ward: I’m game for anything. (Laughter.) That Brewery License.

Regarding Mr. Stewart’s statement about his relations with Cabinet, Sir Joseph Ward said that a mistake had been made in issuing a license for a brewery. It should have come before Cabinet. Mr. Stewart: No.

The Prime Minister: The hon. gentlemen do not know what they did when they were in office, because they zigzagged and went anyhow. Mr. F. Langstone (Waimarino) : Had they a brewery in the Cabinet? Sir Joseph Ward: You have one over there. (Laughter.) “They zig-zagged into the brewery,” was the contribution of Mr. R. Semple (Wellington East). The Prime Minister said that there was nothing wrong with, the issuing of the license except that it should have come before Cabinet. It was a mere indiscretion by the Minister, but because of what Sir Joseph Ward had told a deputation on Thursday, the House was to have a diatribe from Mr. Stewart on Cabinet etiquette, and it was mixed up with a loan transaction. If Mr. Stewart could not discriminate between a dispute over an arrangement for a loan and the issue of a license for a brewery he was not fit to hold office.

Mr. E. J. Howard (Christchurch South) : It sounds' like beer in bricks. The Prime Minister said in reply to Mr. Stewart, who asked him if he could not go on the London market next month if he wanted to, that he could not, because of the arrangement made by Mr. Stewart. “A Scanty File.” Mr. Stewart asked Sir Joseph Ward if he could produce a certificate from the |Treasury to the effect that he had not answered its communications. “I am trying to be fair to the late Minister of Finance,” said the Prime Minister, “but I have never seen such scanty files as this one Mr. Stewart: You said you would sell loans over the counter like pounds of tea. The Prime Minister: So I would if the necessity arose. No, there is no use the Leader of the Opposition shaking his head. There is nothing like shaking your head and trying to look wise. What is the use of talking? Mr. Coates: What is? The Prime Minister: I negotiated, and I followed up the negotiations and finished them. The late Minister of Finance did not finish them. He ought to have. (Loud Reform laughter). He neither started them nor finished them. The cable correspondence shows that negotiations were going on for a £5,000,000 loan, and proposals for a conversion operation during the time Mr. Stewart was Minister of Finance. Mr. Coates: Do you suggest the Prime Minister is not notified of such arrangements. The Prime Minister: I do not know what sort of arrangements you had! Mr. Coates: Look over the files. The Prime Minister: I have looked over them until I am sick. Mr. Coates: Have another little look. (Reform laughter.) Mr. Barnard: Let the House have a look. Secret Transaction. The Prime Minister: I cannot do that. Had the member more experience he would understand that. If this correspondence were tabled we would place ourselves in the position of not being able to carry on negotiations for a future loan. The transactions have to be as secret as it is possible to keep them. Mr. Barnard: But the transactions are past now. The Prime Minister: You must trust the responsible people who are in office and redognise the ordinary rules that apply. Those rules are not made by me. What is suggested is not done, and has never been done. Mr. J. Bitchener (Waitaki) : A secret service ? The Prime Minister: There are men high up at the other end of the financial world whose names are mixed up with the transactions, in the strictest confidence, of course. Yet we are asked to place all this correspondence on the table of the House! If we did that we dare not put our noses into London again. The member for Napier is not sure of his ground in making such a request. . “But I .want to be sure of it,” interjected Mr. Barnard. The Prime Minister: Very well, what I am telling you is right. It is I to-day; someone else to-morrow. The transactions must be secret. The correspondence cannot be tabled in the House. Mr. Mason: We don’t want all the files: we want one specific one. The Prime Minister: I know what you want, but you are not going to get it! Sir. Speaker: Order ! Order ! The Prime Minister: The member is asking for something he is not entitled to get. He has to take the word of men of responsibility. \ “Would you not refer the correspondence to a secret committee of the House?” suggested Mr. Stewart. The Prime Minister: The matter is not of sufficient importance. (Loud Reform laughter.) The late Minister of Finance was electioneering and was not attending to the routine of the Treasury. Reform members : Oh. no ! The Prime Minister: That is my firm opinion. Mr. Bitchener: That is only your opinion. . “Oh, there is another chirp, retorted the Prime Minister, “but I have seen the documents. There is hardly one of them signed by the late Minister of Finance. Mr. Coates: You are making it very difficult. The Prime Minister: I made it as easy as I knew how. I did not say one word reflecting on the honourable member. They created a boom and tried to terrorise me because they knew I could not

place confidential documents on the table of the House. What happened was that probably Mr. Stewart received a letter, no doubt from Dunedin (laughter.), enclosing, perhaps, a cutting from a London paper, and stating: “Here, Dowme Stewart, here is something to get on to Ward.” (Loud laughter.) “Mr. Stewart had gone so far as to advise the Government as to how a Cabinet should be conducted, but he could reserve his advice until he was again in the Treasury benches. “In the meantime,” said the Prime Minister, "he is over there and we are over here; that is the difference. (United laughter.) "The Whole Story.”

Mr. D. Jones (Mid-Canterbury) contended that the matter should not be allowed to rest where it stood. In dealing with the period of the alleged embargo of eighteen months the Prime Minister had said: “So I put it in; you were going to.” “There,” added Mr. Jones,'“is the whole story.” , , _ The Prime Minister: I know what I said. , . . . . .u Mr. Jones: But this point is worth emphasising. , . T The Prime Minister: I know what 1 said. You must not try to twist things. Mr. Jones said there were rumours abroad in financial circles in New Zealand to-day that London was afraid of the Prime Minister’s policy, and that their interests there submitted proposals to Sir Joseph Ward as to how far he should go. . The Prime Minister: That is not corleMr. Jones: lam only stating what is abroad. The Prime Minister said he put the qualification in debarring us from going on the London market. , The Prime Minister: I did not. . Mr. Jones: The Prime Minister did. He knew what the late Minister of Finance was going to do. The Prime Minister: The correspondence shows it. Mr. Jones contended that if no arrangements were made over the £5,000,000 loan, then the late Minister of Finance gave no undertaking to London. The Prime Minister, however, said the undertaking had been given, and the House should therefore know the nature of it. The Prime Minister had said: So 1 put it in; you were going to.” t The Prime Minister (indignantly) : I said something before that. Mr. Jones: I don’t remember it, although I took a careful note of what yoti said Why, the Prime Minister accused the late Minister of Finance of electioneering in Dunedin. The Prime Minister: So he was.

An Unfair Attack. Mr. Jones: The late Minister of Finance has made it clear that during the election he received in Dunedin a telegram from the Treasury, and emphasised that there was no hurry about the proposals, and that January was sufficient time to float the loan. Yet the Prime Minister gravely reflects on the Hon. v\. D. Stewart by saying he was electioneering when he should have been attending to this loan. The Prime Minister has been very unfair to the member for Dunedin West in stating that he was more interested in electioneering than in the finances of the country. It was a very unfair attack. It was a matter for judgment entirely as to whether the loan should have been floated in January.” Mr. Jones repeated that the Prime Minister had said he had put in a stipulation for the eighteen months. . The Prime Minister: You are making an unfair extract from my speech. Mr. Jones: Why is that unfair? The Prime’Minister: Because you are only quoting a portion of what I said. I did not say that, yet you have repeated it three or four times, and you are an unfair man. Mr. Speaker: Order! Order! Mr. Jones asked Mr. Speaker whether the Prime Minister was entitled to refer to him as an unfair man. Mr. Speaker: I do not think the language is unparliamentary.

Completed Transactions. Proceeding, Mr. Jones said the House and the country expected the Prime Minister to be fair to the former Minister of Finance. “Can there be any secrecy in regard to loan proposals that have been completed?” asked Mr. Jones. “My answer is ‘No.’ The I rime Minister admitted this when, in replying to the suggestion of the late Minister of Finance that the correspondence should be referred to a select committee, he said that the matter was not of sufficient importance. That is entirely a matter for the House. We on this side of it hold that the matter is of sufficient importance, and I think the House holds that it is, also.” In regard to the Prime Minister’s statement concerning the financial interests involved in the lloan transaction, Mr. Jones said that surely that was not to be a barrier to the production of the relevant correspondence. The Minister of Health (Hon. A. J. Stallworthy) : You cannot treat confidential papers in that way in ordinary business transactions! Mr. Jones: The Prime Minister has given us nearly half of the papers on the file in connection with another matter. The Minister of Health need not shake his head. I know. The papers were referred to in this House the other day, and when I asked to have a look at them the Prime Minister said I would only want to make a copy of them. The Prime Minister: That is why I would not show them to you. Mr. Jones: I would have made a copy, with the permission of the Prime Minister, of course. At all events, the House ought to know the details of this particular matter. If the late Minister of Finance gave an undertaking and saw the files up to a certain date, there is no reason why he should not see the whole file (Hear, hear), even if the House cannot, although I think the House is entitled to the information. The House ought to know what the financial position in London is, as we have to make extensive arrangements for further borrowing. The Prime Minister: We don’t conduct our business by giving way to suspicions whether you or others make them. Mr. Speaker: Order! Order! Mr. Jones: I consider the charge against the late Minister of Finance is a very grave one. In fairness to him the House is entitled to the production of the file. The House has no knowledge as to whether we can get money from London within the next eighteen months. We will be passing legislation on the subject, but ■we do not know whether the finance is available. Mr. W. L. Martin (Labour member for Raglan) said he would like -to see justice done in the matter to the late Minister of Finance. Action Wrongly Attributed. “I want to ask the Prime Minister now to agree to have this matter definitely cleared up,” said the Leader of the Opposition (Right Hon. J. G. Coates). The Prime Minister had made the allegation that Mr. Stewart had in some way interwith or controlled Sir Joseph Ward’s borrowing in London. The implication was that Mr. Stewart had taken some action that had prevented the Prime Minister from going on the London market for eighteen months. “I say no such action can be attributed to my colleague, the ex-Minister of Finance,” said Mr. Coates.

The Prime Minister: I say it can. Mr. Coates: That is just the point. The Prime Minister says it can, I say it can not, Mr. Stewart says it can not. The House and the country should know who is right and who is wrong. It might be that the Prime Minister has put a wrong interpretation on what appears on the files, but it is certain be has been misinformed. He was not prejudiced from going on the London money market in the way he has suggested. The Prime, Minister suggested I was not aware of the communications that passed between the Treasury and London. That is incorrect. On many occasions —not daily perhaps, but at frequent intervals—my colleague informed me by telegram of the information from time to time received from London concerning the possibilities of floating a loan there. This is a question that ought to be cleared up. It is not quite fair. I know how careful and how meticulous my colleague was. lam going to ask the Prime Minister to agree to have the matter definitely ’cleared up. Whether it can be done by the Prime Minister and Mr. Stewart meeting and discussing the files together Mr. E. J. Howard (Labour, Christchurch South) : Why not refer it to the Public Accounts Committee?

Mr. Coates: That has been suggested, but I do not want to go that far. However, it is a most unfair position and is getting us nowhere. I am confident Mr. Stewart made no arrangements which would prevent him or his successor from going on the London money market for two years, or, as was stated later, 18 months. The matter ought to be cleared up, and I put it to the Prime Minister in a perfectly fair spirit. If there is a misunderstanding it should be removed. If one or other of the two gentlemen _is correct, I am sure the other will give way. It is a conflict of opinion that can be settled. Either the present Minister of Finance or the ex-Minister is mistaken, and we desire the matter should be cleared up in the interests of all concerned. Arbitration Suggested. Mr. Howard made a plea that the matter should be referred to the Public Accounts Committee. “Why not submit the matter to arbitration?” asked the Leader of the Labour Party. He suggested that Sir Joseph Ward and Mr. Stewart should be parties to the arbitration, and that he (Mr. Holland) should hold the scales evenly between them. Mr. J. A. Nash (Reform, Palmerston) told Sir Joseph Ward that it was felt on the Reform benches that a great injustice had been done to the late Minister of Finance, and in the circumstances the matter should be cleared up. ■ Position of Ministers.

There was a keen stirring of interest when the Prime Minister rose to reply. “AU Ministers take a special oath when they become members of a Ministry,” he said. “They take that oath in the presence of the Governor-iu-Council. As far as confidential matters are concerned they are in a position which is an entirely different category from that of an ordinary member of Parliament. It has been suggested that the matter should be referred to the Public Accounts Committee. Why not refer it to any committee if that theory is right? Every day matters of grave confidential responsibility are brought before the active Ministers of the Crown. They are not even taken to a Cabinet meeting. I know in my own political career I have frequently had delicate matters brought to me by people politically opposed to me. Is there any committee of the House you could refer the matter to and expect members not to talk about it among themselves afterwards? Mr. Nash: You doubt our honour? Mr. J. McCombs (Labour, Lyttelton): If it was confidential, why did you mention it in the first place?

The Prime Minister: I have never known a Treasury matter to be referred to the Public Accounts Committee.

Mr. Stewart: Didn’t you, in 1912? The Prime Minister: I never have in my public career. Why should I be put in a position being judged by an inquisition?

Mr. Mason: Why should Mr. Downie Stewart be placed in a position of being judged by you? The Prime Minister (warmly): Well, you look after him if you think that! I have my responsibilities, and I know what they are. The Leader of the Opposition spoke about telegrams that passed between him and the late Minister of Finance in connection with the loan negotiations. Not one of those telegrams is on the file.

Mr. Coates: I think there are two or three on the Treasury file. The Prime Minister: Well, there are none on this particular matter. I will look again, but I am speaking with a fair knowledge of the files.” Searching the Files.

In order to make the circumstances clear, the Prime Minister recalled that the general election was held in November 14. Mr. Stewart was away from Wellington from that time until December 10. when the new Government took office. ‘The day after we took office the first thing ! did was to go through the files to see how we stood regarding loans,” continued Sir Joseph Ward. “I found Mr. Stewart had not been initialling or signing any communications going to and fro. I saw the correspondence to and from London, and I saw correspondence suggesting conversion operations. It was suggested that a £5,000,000 loan should be carried out during the year, in which the existing loan was current. Strong reasons were given for that course. It was a new thing to me. When I cabled to Loudon, I took exception to five million as being insufficient. The present seven million in London will be no more than sufficient to carry us on till the normal time. I pressed for the loan being seven millions instead of millions, and I also arranged for a certain amount of conversation. I got the loan on satisfactory lines. Having arranged the country’s finance for 18 months ahead, I naturally lay back, and until 18 months are up, I cannot negotiate on the London money market. Mr. P. Frasc'r (Labour, Wellington Central) : Why not? The Prime Minister: Because it is barred.

Mr. Fraser: Who barred it? The Prime Minister: I told the House before. Mr. Fraser: You barred it. The Prime Minister: I did not. Mr. Fraser: You are indulging in mys-tery-mongering. The Prime Minister: The seven millions was given us on the condition that we did not go on the London market until ■ the end of the 1929-30 year. That was the condition that also applied to the five million pounds loan. Reform voices: No! The Prime Minister: Then you don’t know what’s on the files. . . Mr. Coates made an. interjection, whereupon the - Prime Minister turned sharply on him, declaring, ‘You can’t understand plain English 1” Sir Joseph Ward repeated that the terms of the five million loan being negotiated were that New Zealand should not come on the market for 18 months. Mr. Stewart: That is not so. The Prime Minister: I tell you it is so. Because the late Minister of Finance says I am wrong, and the cherubs round him echo it, they want to put me in the position of turning out confidential files. Why should I respond? Mr. Coates: Are you prepared to meet Mr. Stewart? The Prime Minister: I am prepared to do what I think is right, and nothing else. The House is quite welcome to refer the matter to the Public Accounts Committee, but I won’t be there. I won’t be a party to altering the system that has been in operation ever since we have had a constitution. Honourable gentlemen are not going to make use of me, and I want them to clearly understand it. „ , x » Position Always Protected.

The Hon. W. D. Stewart said that during the election campaign he had warned Sir Joseph Ward that if he were going on the London market he would have to keep the conversion , operations in mind. Sir Joseph, however, said he knew all about them and did not need the reminder. The Prime Minister had accused Mr. Stewart of electioneering and neglecting his duties as Minister. “It was quite true that I was electioneering,” said Mr. Stewart, “but during the campaign I received a telegram from the Treasury stating that our London advisers were of opinion that ithe market was likely to harden, and that therefore we should borrow for our next year’s requirements without waiting until next year, and make a further instalment of conversions. No amount, however, was mentioned. Almost immediately I telegraphed to the Treasury that the proposal was highly important because it involved a complete departure from our previous practice of never borrowing more than the one year’s requirements. My opinion was that Cabinet should be consulted, and I inquired as to how long I had to make a decision. The reply was that while the London advisers were apprehensive the position was not likely to become disadvantageous so long as the matter was settled in January. Therefore I decided to wait until after the election. It was obvious that if we were to borrow in . January it would show that the loan transactions were greater than would otherwise be the case, and this would have lent itself to misconstruction. I knew there was plenty of time to consult Cabinet and make a decision. As soon as the election was 'over I saw that we were going out, and when I reached Wellington I consulted the Treasury and Cabinet, and Cabinet agreed that if we were to cable to London then making our borrowing arrangements for next year any incoming Minister of Finance might reasonably complain that tlus decision was a wrong one

and that he did not agree with our London advisers, but preferred to wait until April or May and take the chance of the market remaining good. It would have been most unfair to him had I cabled to London settling the matter straight away.” Mr. Stewart said that the day the Reform Administration went out of office he warned the Treasury officials to stand by, and in the evening he had asked the Prime Minister whether he had seen those officials, and the Prime Minister said he had not The following day he had advised the Treasury that it was important to see the Prime Minister at once and let him know what the position was. The Prime Minister saw the officials next day and then made his statement in the House. Mr. Stewart said he placed that information on record to show how anxious he was that the Prime Minister should be apprised of the situation at the earliest possible moment. In regard to the Prime Minister’s statement concerning the five million loan, Mr. Stewart said that a few days before the Reform Party went out of office he had been advised by the Treasury that if the new Minister of Finance desired to go on the London loan market it would be advisable to send forward the material for the prospectus. That was done, but it did not commit the present Government, because the Prime Minister could have recalled the documents a long time before they reached London. Treasury had been advised to draw the attention of the Prime Minister to those facts as soon as they took control. For Sir Joseph the position had been protected in every way. The Prime Minister now said he was not entitled to go on the London market again for eighteen months. He (Sir Joseph Ward) must have given some undertaking to that effect. Mr. Stewart did not think he had. If he desired to go on the market in, say, three months time, although he might find the advisers adverse to that course, he thought the Prime Minister would be able to get the money unless, of course, he had already given an undertaking not to borrow within the period. Nothing the previous Minister of Finance had done would cause the imposition of an embargo. A Sharp Passage. Mr. Jones said he had felt that it was his duty to bring the matter before the Government in view of the rumours in financial circles in Wellington. The Prime Minister had given a good deal of confidential information to the House, and Mr. Jones said he could see no reason why all of it should not now be divulged. Why should the balance of the information be withheld? he asked. Surely the Prime Minister in fairness to himself and in fairness to the Reform Party should agree to clear the matter up once and for all.

The Minister of Justice (Hon. T. M. Wilford) : Does the bon.. member intend to apologise for spreading that rumour, which, in my opinion, is a wilful and deliberate Mid-Canterbury? Mr. Speaker: Order! Order! Mr. Jones: It ill becomes the Minister of Justice to suggest that something he would do I would do. I resent his remark. I resent it exceedingly. I have heard the rumour from another quarter—

Mr. Wilford: Why repeat it? Mr. Jones: I hope I shall never be guided by your judgment. Mr. Speaker: Order! Order! Mr. Jones: I cannot see why the Minister of Justice as a legal man should object to the matter going before a committee.

Mr. Wilford: I am discussing the rumour. Mr. Jones: Ah, yes, but we will leave the rumour alone. Will you agree to the suggestion I am making? A voice: He is not under cross-examina-tion. A Final Plea. The Leader of the Opposition said he understood the Prime Minister to say he was prepared to allow the whole matter to go before the Public Accounts Committee, intimating that at the same time he would not appear before that body. Was that the position? he asked. He did no want to press the matter unduly. “Sit down, then,” called out a United member. \ Mr. Coates said he considered the matter of sufficient importance to warrant its being referred to a committee. He did not say that the Prime Minister had deliberally misrepresented the Reform ministry, although Sir Joseph had not been over-generous in some of his references to himself. Mr. Coates again asked whether the Prime Minister would agree to the matter going before the committee. The Prime Minister: I have said what I mean, and I don’t require to repeat it. Mr. Coates: That is, that the matter will go before the committee. The Prime Minister: I thought you understood it before. I will repeat it in the same language if you wish it. Mr. Coates: Are you agreeable to the matter going before the committee? The Prime Minister: You make your own speech. Mr. Speaker: Order! Order! Mr. Coates: I am quite able to do that. Quite frequently I do. I will make another suggestion: Will the Prime Minister confer with the late Minister of Finance, whom he must agree we can trust' on Treasury matters, with a view to the issue of a joint statement or separate statements? I see the Prime Minister has not met me on that. Very well, as this matter should be cleared up, I propose to test the feeling of the House.” Opposition Amendment. Mr. Coates then moved: That the question be referred to the Public Accounts Committee with an instruction to report on the quesion of the loans and the conversions in London in January last with a view to informing the House as to the facts thereof, and as to whether any undertaking was given not to go on the London money market for eighteen months, by whom it was given, and the reasons for it. Mr. Speaker said he would have to rule the amendment out in its present form, as it contained a direction to a select committee. Would the Leader of the Opposition take out the words in question? Mr. Coates: If the Prime Minister will agree to some modus operandi. Mr. Speaker: I will have to rule it out in its present form. Mr. Coates: Very well, sir, I shall have to move an amendment to the Bill. The Leader of the Labour Party: If you carry this there will be no Imprest Supply. T -* Mr. Coates: All right. I will take another opportunity. Prime Minister Firm.

Before the Bill was passed Mr. Coates renewed his requests that the matter either be referred to the Public Accounts Committee or that the Prime Minister and the late Minister of Finance confer on the subject. “I have made my decision quite clear,’ said the Prime Minister. “I repeat it. I decline to refer this matter to the Public Accounts Committee. That is what I stated before. I say it again now. I decline to do it on the very broad ground. In the history of New Zealand matters of this kind have never been treated in that fashion. Ido not propose to make an exception now.” Mr. Coates: Will you let Mr. Stewart confer with you? The Prime Minister: I give the same reply to that. Mr. Coates: What is that? The Prime Minister: I thought I made the first matter very clear. With ordinary judgment the Leader of the opposition ought to know what it is. Mr. Coates: According to you I never have any judgment. United members: Hear, hear. “There is no use fooling about it,” said the Prime Minister as Mr. Coates proceeded. “There is no fooling,” retorted Mr. Mr. Coates said he would take another opportunity of testing the feeling of the House, and the matter dropped. “UNFAIR IMPUTATION” STATEMENT BY SIR FRANCIS BELL Reference to the matter of the London loans was made in the Legislative Council, which sat last night to consider the

Imprest Supply Bill No. 3 as an urgent measure. When the Bill had been read the first time the Right Hon. Sir Francis Bell rose and said: “In common with other Ministers of the late Government, 1 am suffering under an imputation of unfairness to the present Government by reason of the suggestion that the late Minister of Finance entered into a form of obligation which prevented the present Government from borrowing on the London market for— first it was said two years, and then eighteen months. Whatever there is exists —and there must be something, of course, which the present Government has construed to mean restraint upon borrowing—whatever there is is not verbal it must be in writing.” He said that advice from the High Commissioner was necessarily confidential when dealing ■with matters of finance, and was not disclosed except to the Treasury, which gave the result of that advice.. What communications came from this end must be in writnig, and thus there was some document which had been construed by the present Government as reflecting a restraint. That there was no direct statement to that effect could not be the case In the second case, no such obligation as stated'could have been entered into without the knowledge of the late Government. If an obligation was entered into by Mr. Stewart to that effect he must have known it There must .have been some phrases in some document which had been construed as effecting an obligation. Sir Francis Bell was satisfied that the phrase had been co “® tr £ e because Mr. Stewart and the late Government were scrupulously careful tha nothing done after the ejection in any way affected the financial arran p ement of the new Government. Nothing ha been done in secret . Proceeding, Sir Francis Bell said he did not, of course,, impugn the veracity « thA present Government m its sta rnmt but the document supposedly creating an obligation could not be secret but assuming that it was ’b e n o a£d that was Mr. Stewart, whe> was responsible for whatever phrase had been so misconstrued. There was no obhga tion that could have been created by M . Stewart without the knowledge of his colleagues; he was not the man to do it If some phrase appeared which had been so construed, it was ungenerous no to show it to Mr. Stewart. On that fabric had been erected the imputation upon the honour and faith of the past Governor Francis Bell said he ? did not wish to delay the passage of the Bill, but he desired as a member of the late govern ment to refute the imputation a ß alnst . honour and good faith. He emphasised that there had been a grave mistake. If the document was produced, as some day it must be, then it would be found that the construction that had been placed on the assumed phrase was laa °"® ct ’ and there was no obligation whatever created bv the late Government or the late Minister of Finance which in any wav affected the financial ? of the present Government in London. The Leader of the Council (Hon. T. K Sidey) said that all he eould say was that he would be P leased ( , f to g ?° n s? r y an t c h i s purport of the remarks of Sir Francis Bell to the Finance Committee. He thought that was all he could do in the cI Th“ S BiII Ce waß put through its second and third readings. GUARANTEE FUND PROTECTING THE PUBLIC

SELF-IMPOSED TAX BY

LAWYERS

Provisions for the creation of a fund bv means of a levy on the legal profession of New Zealand, for the purpose of ensuring the public against defalcations by its members, are contained in the Law Practitioners’ Amendment (Solicitors Fidelity Guarantee Fund) Bill, which was considered by the Legislative Council yesterday. In moving the second reading of the Bill, the Hon. T. K. Sidey, as AttorneyGeneral, said the Bill provided for the establishment of a fund for the purpose of reimbursing persons suffering pecuniary loss through the misappropriation of funds by solicitors. The Bill was not a measure which was being promoted by the Government, but was purely voluntary on the part of the profession. They felt that defalcations reflected upon the whole profession, and they were prepared to tax themselves against loss to the public. . _ “I believe the public has gained a wrong perspective of the extent to which defalcations have taken place simply because of one or two illustrations which ;ake place now and again,” said Mr. Sidey. “When you consider the large number of .solicitors who have been engaged in practice in this country and the enormous »amount of trust funds that have been committed to their care, the number who have proved false to their trust are exceedingly few. Black sheep are found in every walk of life. It is a voluntary effort to protect the public in the manner I have said.” Mr. Sidey said that a somewhat similar Bill had been introduced last year. The objection raised then was the New Zealand Law Society was given practically a blank cheque to do with it whaf it liked and that there were no limitations whatever upon the powers that would be given.. That objection could not be raised in respect of the present Bill, in which there were certain limitations. One was that the provisions did not relate to any solicitor who was simply in employment or who was in a public office; it applied only to those solicitors who were practising on their own account or were in partnership with others. The Bill further differed from last year’s in that a certain limitation was imposed upon the extent to which levies or subscriptions might be imposed. Proceeding, Mr. Sidey said that during the last ten years defalcations totalled approximately £37,482, an average of £3748 per annum. Regarding what might be expected from the Bill, there were 1740 solicitors in New Zealand; excluding those in the public service and qualified clerks, there would be about 1500 who would come under the Bill. On the proposed levy of £5 a sum of £7500 would be produced, which figure was just about double the average which had been lost by defalcations during the last ten years. Thus it would be seen that a more than liberal allowance was being made for any possible contingency that might arise. While there might have been a difference of opinion among the local law societies with regard to the present Bill, Mr. Sidey assured the Council that absolute unanimity with regard to the Bill had been reached by those societies and the parent body. The Right Hon. Sir Franciss Bell described the Bill as a great reform by which an honourable profession fined itself to ensure the public against those members of the profession who were unfortunately disgraced. Mr. Sidey had been more enterprising than himself, because although he (Sir Francis Bell) supported the Bill last year, he had not undertaken it for the Government. The profession, he said, had long desired to do what was provided for in the Bill for the name and honour of that profession. The Hon. W. H. Mclntyre (Nelson) said there was objection to the Bill, and he believed there were members in the House who were not in favour of it. The Hon. Sir Thomas Mackenzie (Otago) : The more foolish they. Mr. Mclntyre said it did not seem fair that an honest lawyer should have to pay for the dishonest lawyer. However, some of his objections of last session had been met in the present Bill. Because of its benefit to the community he would not oppose it, but he thought that legal practitioners who objected to it should have he opportunity of giving evidence before the Statute Revision Committee. The Hon. T. S. Weston (Wellington) raised the question of the possible inadequacy of the fund to meet defalcations. He agreed with the previous speaker that the Bill should be referred to the Statute Revision Committee so that such details could be considered.

Mr. Sidey said here was ample provision to meet the possibilities of the future. The sum of £30.000 would be provided

in one year. It was not unreasonable to ask that the Bill should be referred to the Statute Revision Committee, but the chairman of that committee had stated in a prior consultation that he considered such would not be necessary. In addition. a further opportunity would he provided in the Lower House to have the Bill referred to the Statute Revision Committee. The Bill passed its second reading.

SLANDER ALLEGED MEMBER'S WAR RECORD QUESTION OF PRIVILEGE REMARKS BY HON. H. ATMORE Alleging that the Minister of Education (Hon. H. Atmore) had slandered his war record, Mr. A. M. Samuel, Reform member for Thames, raised a question of privilege in the House of Representatives yesterday. The charge turned on a lobby reference to Egypt, and although the motion was fully debated, no finality was reached, the discussion being adjourned until Tuesday.

Mr. Samuel moved that a breach of privilege had been committed, inasmuch as lie had been slandered by the Minister of Education. “After the sitting last night the Minister passed me in the lobby, and in response to a jocular remark by me he said he would tell the people something about me in Egypt,” said Mr. Samuel. “I consider that was a direct reflection on my military career, and it could not be taken otherwise. I am going to ask this House to have the matter debated. As far as my military record is concerned, it is open for the world to see—my medical history and my military history. ■ If one is going to he open to insult and slander by any other member of this House, Parliament will soon become a place that is unfit to live in. It is a distinct breach of privilege, and not only reflects on me. I am a married man with a family, my children have to live after me, and I am not going to have any imputation of that kind made by any member of the House. If it had happened outside the House I would know how to deal with it, but as it happened in this House the only recourse I have is to bring it up as a matter of privilege.” Mr. Speaker asked Mr. Samuel to frame his motion so as to avoid the use of the word slander. Mr. Samuel then moved that a breach of privilege had been committed inasmuch as the Minister had reflected on his military career by the words used. Mr. Atmore’s Version. The Hon. H. Atmore: I am rather surprised and considerably amused to hear the member for Thames, who above all others makes imputations, who accused me last evening of literary piracy Mr. Speaker: Order! Order! Mr. Atmore: Surely, Mr. Speaker, a certain amount of latitude is to be allowed in a matter of this nature. Giving his version of the Incident, Mr. Atmore said that Mr. Samuel had been standing in the lobby with the Leader of the Opposition (Right Hon. J. G. Coates) and several other members. Passing him, Mr. Atmore said: “Hullo, Samuel.” Mr. Samuel replied: “Don’t be too hard on me when you reply.” Mr. Atmore said that, chaffingly, he replied: “I’ll tell you something about Egypt.” “Why should he assume that something about Egypt should be discreditable?” demanded Mr. Atmore. Mr. W. L. Martin (Labour member for Raglan): Perhaps it was the way you said it.

“It will take more than the member for Thames to frighten me,” declared Mr. Atmore. “This is simply a party trick. The only words I used were that I would tell him something about Egypt Was that slandering him by associating his name with Egypt? If it is a slander to connect his name with Egypt, he must know something that I don’t. The whole thing is farcical. When I connect his name with Egypt he says it is a slander. Why?”

The Hon. W. D. Stewart (Reform, Dunedin West) : What do you mean by Egypt?

“A Lying Rnrnonr.”

Mr. Atmore: I had heard some humorous references to Egypt, in regard to him. I was chaffing him. He resurrected a lying rumour, made by a man in Nelson whose cloth should have prevented him from making it. He made it in the Nelson paper on the eve of the election. It was about something that had happened months before, but the people of Nelson knew the whole of the circumstances, and they gave me 600 votes more than I had ever had before. I am not concerned with Mr. Samuel's opinion, or the opinion of the gentleman who started the lying rumour in Nelson. If the motion is put to the House, the House should be in possession of all the facts. That was the answer given by the people of Nelson, who knew me all their lives. Mr. Samuel: What has that to do with it? Mr. Atmore: There were a lot of Samuels in Egypt in earlier times. If the member for Thames says there is something libellous in connecting Samuel with Egypt, lie evidently thinks there is something wrong when he seeks to invoke the forms of the House.

Mr. Samuel (warmly) : I want it thrashed out. You are not game enough to face it. At the instigation of Mr. Speaker, Mr. Samuel withdrew the last phrase. “How many rounds are there going to be?” inquired Mr. F. Langstone (Labour, Waimarino). Mr. Atmore said he was prepared to refer chaffingly to Egypt again. If Mr. Samuel knew something slanderous that happened there, Mr. Atmore said he did not. Mr. Samuel: More insinuations. Mr. Atmore: He wants the whole House to protect him from the word Egypt. What an absurdity? I have nothing to retract. I mentioned the name of Egypt, and I am prepared to do it again. If he wants to take offence, let him. Courses of Action. Mr. H. E. Holland (Leader of the Labour Party) thought it would be.a pity if a general wrangle developed in the House. The matter resolved itself into whether the words were used as alleged, and, if so. whether they constituted a breach of privilege. On that point Mr. Holland said he was prepared to be guided by Mr. Speaker, and he asked for an indication of the course to be followed. Mr. Holland suggested the matter might be referred to a select committee. Mr. Speaker explained that it was for the House to decide whether a breach of privilege had been committed, except in prima facie cases. Personally, he was unable to tell the significance of the words. There were three courses open. The matter could be decided by vote, it cpuld be referred to a committee of privilege. or the debate could be adjourned until the House had had time to think the matter over. Prime Minister’s Suggestion. “It looks to me as if there is not very much in this.” said the Prime Minister (Right Hon. Sir Joseph Ward), who suggested to Mr. Samuel that, having heard Mr. Atmore’s explanation, he should drop the matter. ' Mr. Samuel: He has aggravated it. .

Sir Joseph Ward: You have the assurance of the Minister that he meant nothing by it. Mr. Samuel: I have not had that assurance. „ Sir Joseph Ward: The House has. Mr. Samuel: I have had further sinister references. Sir Joseph Ward: This looks like marine a mountain out of a molehill. If a reflection has been made it should be cleared up. If it is referred to a committee it will come to the same position in the end. ... . ■ Mr. Samuel: It could be ventilated there. Sir Joseph Ward: I don’t see any reason for ventilating it at the committee, I think the matter should rest m it stands. , Mr. E. J. Howard (Labour, Christchurch South) : Let the Minister withdraw any imputations. Sir Joseph Ward: The Minister says he made the remark in a jocular sense. What more can you want? I think the whole thing should be allowed to drop. Mr. Samuel: He said he would say it again. Let him say it outside. Matter Carried Further. “I entirely dissent from the Prime Minister’s reading of the incident,” said Mr. P. Fraser (Labour, Wellington Central). “While I accept the Minister’s assurance that he made the remark jocularly last night, he departed from that jocose manner this morning and seemed to use something more sinister. I think that between now and Tuesday they should see whether they cannot adjust the matter. I think this debate should be adjourned until Tuesday to enable the two members to come together in a friendly way. I make that suggestion.” Sir. H. G. R. Mason (Labour, Auckland Suburbs) moved an amendment that the debate should be adjourned until’ Tuesday. It would be unfortunate to adjourn the debate, thought Mr. D. Jones (Reform Mid-Canterbury). He said he did not know what had passed on the previous evening, but it was certain Mr. Atmore had that morning made insinuations and carried the matter a great deal further. If Mr. Atmore retracted and expressed regret the position would end. United Party chorus No! No! Mr. D. McDougall (United, Mataura): Not on your life! “Nothing to Retract." Mr. Jones: The “Noes” from the United Party back benches indicate they are supporting the Minister in his attitude. I think the Minister might have cleared up the matter in a manner this House was entitled to expect. Mr. Atmore: I have nothing to retract. Mr. Jones: In that case, I am in favour of the adjournment. “I was present when the remark was made last night,” said Mr. Coates. “For the life of me, I can’t say whether the Minister had any sinister meaning or not in his remark. It was unfortunate. All the member for Thames asks is a clear statement from the Minister that there was no sinister meaning, I think that is a fair thing to ask for. The member for Thames has a record of which any man might be proud. The Minister ought to say that as far as he knows he can applaud Mr. Samuel's military record. If he does that, that will be the end of it Mr. F. Waite (Reform, Clutha) thought the matter should be cleared up as early as possible. “I share the same room as Mr, Samuel, and he has shown me in the last fortnight several letters he has received, intimating to him Mr. Speaker intervened, but Mr. Waite said he was making the explanation for a specific reason. Mr. Atmore was directly connected by Mr. Samuel with those letters. Mr. Speaker asked whether Mr. Waite could so connect Mr. Atmore. . “No, Sir,” replied Mr. Waite. “I am simply putting the point of view of the member for Thames, and if this campaign is to be persisted in, that should be cleared up, and if the letters continued to come in

Mr. Speaker again intervened, and Mr. Waite sat down.

Mr. Holland said he was personally satisfied that no imputation could be made against the military record of Mr. Samuel. If the Minister, who did not deny using the words, and Mr. Samuel came together, Mr. Holland was sure the Minister would: withdraw any imputation that might have been thought to have been implied. Mr. A. Harris (Reform, Waitemata) thought that, as the matter would be given publicity, it should be settled at once without an adjournment. He asked Mr. Atmore to say he intended no imputation, and that he had merely spoken in a jocular mood. United voices: He has said it. Mr. Harris: He said that if there was something, the member for Thames knows it. Personal Honour Involved. “I have no wish to oppose the amendment,” said Mr. Samuel. “I am quite willing that this matter should stand over until Tuesday as long as we have the opportunity of thoroughly discussing it then. When the Minister spoke this morning and said his remarks were made in jocular fashion, I would have accepted it had he remained there, but he has further aggravated the position, and I now look upon the matter as one of personal honour. It is lowering the dignity of this House for him to call it party trickery, and to say that he is not going to be frightened by me. I might retort in the same way. This is a matter of personal honour, and I want my honour vindicated. If any charge is to be made against me, I welcome the fullest inquiry. The attitude of the Minister this morning very conclusively proves that in his opinion there is something to hide as far as my military career is concerned. There is nothing of the sort. He may be backed up by the back-benchers, most of whom have not been to the war, like the Minister himself

Mr. Speaker: Order! Order! Mr. Samuel: Very well, Sir. But I have an obligation to my family in this matter, otherwise I would not have bothered. I will accept the amendment that this stand over until Tuesday, so that this can be thoroughly ventilated. Mr. Langstone: Monday is washingday. “If you adjourn for six months, I cannot say more than I have said this morning,” said Mr. Atmore. “I object to Mr. Samuel’s statement about the war. My name was sent in in 1915, and I have nothing to regret in regard to my conduct. I object to Mr. Samuel posing, as an injured innocent. I can add nothing to what I have said. If Mr. Samuel cannot take a jocular remark he should not give them.” The Minister proceeded to ask whether any significance would have been attached to his remark if, instead of Egypt, he had mentioned Germany. Auckland, or Rotorua. “Why Egypt, if it did not - Mr. Fraser sprang to his feet, and loudly submitted that the Minister was entirely out of order. “This House should be protected from such stupid trifling.” he added. Mr. Speaker said he had allowed considerable latitude in view of the conciliatory speeches that had been made, but ne must now keep members strictly within the limits of the motion for the adjournment. . Mr. Atmore: I thank you for your protection. Mr. Speaker. (Scornful Reform laughter.) Mr. Howard said he found himself not in accord with his party on the matter, lie thought the question should go before a Select Committee. The motion to adjourn the debate until Tuesday was then carried.

SERIOUS ALLEGATIONS “POLITICAL JOBBERY” COLONEL MCDONALD’S ‘ CHARGE PALMERSTON NORTH SCHOOL §UILDING There was clashing of swords in the House of Representatives yesterday. The combatants were the Government member for Wairarapa (Col. T. W. McDonald) and the Reform member for Palmerston (Mr. J. A. Nash). The gage thrown down was the Campbell Street School in Palmerston North, and the methods adopted in its construction. Colonel McDonald alleged political jobbery’ in connection with the work, and Mr. Nash made a stout denial, adding a few facts about Colonel McDonalds past excursions into the realm of politics.

Colonel McDonald said lie understood that the Campbell Street School in Palmerston North had been reported upon by the local authorities as being unsuitable for the requirements of the district. The member for the district interested himself very much in this school, and advocated that it should be replaced by an up-to-date building. The education authorities, he believed, were quite satisfied that the school only required a few alterations, and that it would last for many years to come. Influence, however, was brought to bear, and it was decided that a new school should be erected in two parts. The infant department was first built, a grant of £5070 being made for the purpose. Before the contract was actually let, the grant was added to by no less than £3355, no fresh tenders being called. A Palmerston North contractor was the successful tenderer. For the main portion there were two tenders, the difference between them being very small so far as he knew. They were both Palmerston contractors. The Wanganui Education Board, which controlled the building, suggested that the school might be built on another system and even by day labour if necessary. According to the board’s estimate it could have been built for from between £lO,OOO to £12,000 less than it actually cost. However, the Hon. Sir Francis Bell, then holding the portfolio of Education, .did not approve straight away, and was invited by the member for the district to visit the school before tenders were called. “Slapped in the Face.”

Before very long, continued Colonel McDonald, Sir Francis Bell approved of the sum of £31,000 being spent on the school, a tender being accepted from a Palmerston contractor for that amount. The school was to accommodate 600 children. The then Director of Educa-

tion put up one of the strongest protests made by any head of a Department in New Zealand against the proposal to build the school. He was alleged to have said that if such a policy were approved by the Minister the total cost would be no less than £250,000, should similar schools under similar circumstances be granted amounts. What had happened? The Director was politically slapped in the face, and was told that the Minister

would please himself regarding the policy

of the Government. The next thing that / ' happened was that a Dunedin architect was appointed. lie had done some gooil work, but the question arose as to who should be clerk of works. The architect made a recommendation, but it was disregarded, and a Palmerston North man was appointed clerk of works, and carried out the work according to his own lights. That gentleman was a supporter of the member for the district. Mr. D. Jones (Mid-Canterbury): Are you insinuating corruption? Colonel McDonald: No, but I’m saying straight out that not only was he a supporter of the member for the district, but was also at one time chairman of the hon. gentleman’s political committee. Mr. Nash: What is his name? Colonel McDonald: His name is Fred Jackson. Do you deny the statements I am making? Mr. Nash: I certainly do. Colonel McDonald: I challenge you to prove that I am wrong. •Samples of Mortar. What had been the result? continued Colonel McDonald. The school had cost £45,000, and had hardly been erected before a new roof had to be put on, at a cost, with extras, of over £2OOO. Other alterations had from time to time been made and were still being made. The mortar was of most inferior quality. Mr. Nash: What did you do with the samples you took away?" Colonel McDonald: I had them analysed. (Loud Deform laughter.) Yes, I had them analysed. You don’t think there is any secret about that, do you? Mr. Nash: Oh, no secret. (Laughter.) Colonel McDonald went on to say that the building would never be suitable for the purpose for which it was intended. All through the piece the member for Palmerston North had appeared very much on the scene—too much, in his (Colonel McDonald’s) opinion, to get a reasonable return for the money expended.

Mr. Nash: Was that all you found out?

Colonel McDonald: I can give you a little more now that you want it, and you’ll get it, too. Mr. Speaker: Order 1 Order 1 Colonel McDonald : What was the next thing that happened? There were two beautiful acres of land near the school. The member for Palmerston came on the scene again and as Mayor of the town wanted to acquire them as a recreation ground.

Mr. Nash: I was not Mayor at. that time.

Colonel McDonald : You were Mayor ! Sir. Nash: I was not!

Colonel McDonald: You were Mayor at one time if you were not then.

“Political Audacity.” The member for Palmerston, he continued, got that land, although the education authorities wanted to cut it up and sell it at a price of easily £4OOO. Mr. Nash had said “No” and had brought pressure to bear, the Minister again coming into the picture. ' Mr. Nash: You are quite wrong. Colonel MacDonald: The land was sold for half its price, while a school costing £48,000 was built on another site which had to be paid for. The member had the political audacity to ask the Minister to give the land free, and he had nearly got it. A member : Why not? Mr. Nash: Did you not get a site at Silverstream the. other day? Colonel McDonald: You pushed the Minister until he agreed to purchase the land for the school. The building will not stand investigation. Public opinion will force the present Minister of Education, whether he wishes it or not. to hold a public inquiry into this, one of the worst public transactions ever perpetrated on the people of this Dominion in the way of school buildings. There is nothing in the country which will compare with this piece of political jobbery. There is nothing in this country or in any other part of the British Empire which will compare with it. Mr. Speaker: Order 1 Order I “Why is this Palmerston North so favoured?” asked Colonel McDonald. “I’ll tell you why. It was done for two rea*ons. One reason was to keep the honourable member in his seat in this House, and the other was to keep him out of the Reform Cabinet. That is the price that &NI Aft Mata $£ taM said-—•

Mr. S. G. Smith (New Plymouth) : Too dear.

Colonel McDonald: They had to do something to pacify the honourable member. He cannot deny that statement. He knows it is true. Mr. Nash: There is no truth in it.

Colonel McDonald said that in fairness to the architect, he should say that he was a man of good reputation, and he had nothing to impute against him. However, nothing but a public inquiry would satisfy the people. Mr. Nash : Now, what else did you find out? Investigation Wanted.

Colonel McDonald: I find it is unreasonable to expect the teachers to teach in such a school. The rooms are too large. Ventilation is defective. The electric lighting reticulation was so bad that when it came to turning on the power the Power Board said it would be dangerous to turn it on, and when it was turned on it would not flow. The whole of the -system had to be taken out and put in again. The ceiling commenced to fall in in the infant room. Mr. Nash: Weren’t you afraid to go iii the building? (Laughter.) Colonel McDonald: They had to set to and take the whole of it down and put a new one up. Mr. Smith: Quite true. Colonel McDonald: Somebody says “Quite true.” I thank him. (Reform laughter.) If this sort of thing has been going on in one part of the Dominion, what has been happening in other parts? Goodness only knows what the position is. I hope that a thorough investigation is made into the whole circumstances of this case. Mr. Nash: The speech of the member for Wairarapa is of a most interesting nature Colonel McDonald: It must be. Sir. Nash: I would not like to call him a nosey-parker. It might be out of place, and in case it is I will withdraw it- • - , , Colonel McDonald: Nosey Nash.

Mr. Speaker: Order! Order! Mr. Nash continued that Colonel McDonald had given notice of- his visit to Palmerston. Mr. E. J. Howard (Christchurch South): You did not get the band out. (Laughter.) Met Some Friends. Mr. Nash said that he had offered the use of his car to Colonel McDonald, but the latter had preferred not to be under an obligation. Mr. Nash, however, happened to know that lion. member well and had offered his car because he knew that Colonel McDonald would take the first opportunity of charging .him in the House with not having the decency to meet him. Colonel McDonald had had a good time in Palmerston North, but unfortunately met some of Mr. Nash’s friends.

Colonel McDonald: I knew it. Mr. Nash: “The hon. member never dreamt of his questions coming back to me.” Mr. Nash went on to deal with "that famous school” which was a monument to the town and, as the member for Mid-Canterbury said, a monument to himself. It was a fine building and it might interest Colonel McDonald to know that the speaker had not had one school erected but quite a number. It was quite a wonder that he did not look at the others, and it was also a wonder that he did not examine the Girls’ High School when it was damaged in the recent cyclone. Mr. Howard : Which cyclone was that? Was it the member ’for Wairarapa? (Laughter.) Mr. Nash continued that the plans had been under consideration by the Wanganui Education Board for five years, and finally the board had asked him to see if they could be carried out. He had approached the Minister successfully in that respect. Regarding the clerk of works, he had been appointed by the Wanganui Education Board. A voice: Wasn’t he approved by the architect? Mr. Nash : Unfortunately ho was not approved bv the member for Wairarapa. Colonel McDonald: The recommendation of the architect was disregarded. Inquiry Welcomed. Mr. Nash said that the school was built at a time when it was hard to get material from the Old Country. The speaker said that he would welcome an inquiry by a committee, with Colonel McDonald at its head. Colonel McDonald "had been prominent in inquiries during the session. Mr. Nash asked what Colonel McDonald knew of the valuation of land in Palmerston North, and whether he knew the Government valuation of the land referred to. It was £l6OO. Colonel McDonald: That is not correct.

Ml". Speaker: Order I Order! Continuing, Mr. Nash said that he had not been Mayor at the time of the purchase of the land. Mr. Nathan had been. He himself would not have bought the land for £2OOO. but the whole matter had been between the Mayor and the Minister. Colonel McDonald: And the member for Palmerston North? . Mr. Nash: Negotiations were settled in the headmaster’s room of the Hokowhitu School.”

Colonel McDonald: How do you know if you were not there? Mr. Nash: I was at the school with the Minister. The mutter was taken out of my hands.

Mr. Smith: The hon. gentleman took the credit of getting the school.

Mr. Nash: I did not.

Fossicking. Mr. Nash continued that he had said openly that the borough had no right to buy the two acres of land nt the price mentioned. Colonel McDonald had spent three days in Palmerston North. A voice: Fossicking? Mr. Nash: Yes, fossicking. It would be interesting to know how long he spent in the public library looking up my past history.

Colonel McDonald: I found out the histry of the school. Mr. Nash went on to deal with the manner in which Colonel McDonald had made his investigation. Mr. Nash gave a sample of a telephone conversation which he alleged Colonel McDonald had had. He alleged Colonel McDonald had asked whether Mr. Nash owned land near the deviation, how much land there was, and 'what its value was. It was a bad thing for a member to go into another member’s district on such a crusade, and, thank God, Colonel McDonald had met with difficulty. Colonel McDonald: I never went there for that purpose.

Political Excursions. Mr. Nash referred to Colonel McDonald's habit of issuing challenges in the House, but was called to order, as Colonel McDonald pointed out. he was referring to a past debate. Mr. Nash said that there was no doubt that Colonel McDonald had lived for one thing during the last few years, and that was to get into Parliament. He would tell the House of an interesting event in the train just before the Patea election. Colonel McDon /’l had asked a friend of Mr.' Nash’s who was travelling if he knew anyone in Patea very well. The friend had replied that he knew a man who occupied a very high position. Colonel McDonald had asked whether the man spoke of was interested in the Reform Party and had been told that he was. Colonel McDonald thereupon had asked Mr. Nash's friend to send a telegram to that man, saying that Colonel McDonald was a personal friend of his and was offering himself as the Reform candidate. Rising to a point of order. Colonel McDonald claimed that he had been misrepresented. He had never, he said, been a candidate for Patea. Mr. Nash said that Colonel McDonald was not a credit to his electorate, but had to withdraw the remark.

Mr. Langstone: God forbid. (Laughter.) “A Bungler.” Mr. Nash concluded by saying that he hoped Colonel McDonald would continue bungling as he had been doing, as it would be the quickest way of working himself out of the doors of the House. L to sake a fiofsottal axjdanatioa.

Mr. Nash concluded by saying that he hoped Colonel McDonald would continue bungling as he had been doing, as it would be the quickest way of working himself out of the doors of the House. .Uuffiu to sake a eefsoaal

Colonel McDonald said that the Government valuation of the section was £2 730 at the time of sale. He had no recollection of the interview in the train and had been misrepre fated on all Points. . . Mr. D. G. Sullivan (Labour, Avon), who followed Mr. Nash, said he felt like a member of the jury. He did not know whether the member for Palmerston knew more about the member for AVairarapa, or the member for Wairarapa knew more about the member for Palmerston. However, he suggested that it would be a good idea if Mr. Speaker would sum up in judicial fashion. Mr. H. T. Armstrong (Christchurch East) : Gaol them both. (Loud laughter.) LEGISLATIVE COUNCIL The Legislative Council sat yesterday. The Associated Churches of Christ Propertv Bill (Hon. J. B. Gow) passed its third reading. The Bill provides for the establishment, of a trust to enable the Associated Churches of Christ to affiliate. The Right Hon. Sir Robert Stout gave notice of motion as follows: “That in the opinion of the Council considering the waste of food and means and the physical’and jnoral injury to the people caused by the consumption of alcoholic liquors, steps should be taken by the Government to discourage such consumption and to pass such a law as will prevent the Public Trustee being a brewer or vendor of such liquors.”