REPORT OF THE FINANCE COMMITTEE:

Daily Southern Cross, Volume XVII, Issue 1286, 17 April 1860, Page 1 (Supplement)

REPORT OF THE FINANCE COMMITTEE :

* 8. Your Committee consider tho item «et . down on 'account of Government House is not an asiet of such a nature as to be depended upon in the framing of the Provincial Estimates, inasmuch as certain allotments of land have already been transferred to the Province from tho General Government, and other allotments have been agreed upon to be transferred in further liquidation thereof. 7. That the sum of £25,925 18s. M. has become due from the Harbour trust to the Province subsequently to the year 1858, and prior to that period and since January Ist, 1858, the sum of £11,600 has been spent, on Harbour Works ; whether the latter sum be due from the Harbour tiust to the Province is a disputed question, which your Committee do not undertake to decide. That it appears from the statement supplied that £1,666 12s. lid. is due from theiCity trust to the Province. That none of these amounts can be treated as imnio diately available assets. 8. Your Committee have devoted much attention | to the statement of assets and liabilities, dated 11th November 1856, whioh has been taken as a test of the transactions of the Government. They regret being obliged to state that they have in many instances been unable to ascertain which of the assumed liabilities have had to be actually ducharged. Referring to item "Public | Works, liabdities under contract, £8000," they have to observe that they have not been able to obtain a complete statement of those contracts, without which they could not proceed to examination of the Touchers. 9. They find however that the present Government has not had [to discharge the liabilities of £1000, set down for Rifles ; of £1100 or thereabouts out of tho £5000 set down for assisted passages j and of £500 for a powder magazine ; also, that £2000 out of the £4000 advanced for assisted passages, has been or has to be repaid, the sums still due Jttfipe»vii\g ( in the v Statement dated Deceinberinst,TLBs9,'-a* assets. "*<» That the return of liabilities and available assets, prepared by i!heir accountant, Mr. Reid, which shows the deficiencies of cash required to meet the liabilities of the 31st December, 1859, to be £37,586 9s. Cd., may be considered for practical purposes a sufficiently close approximation to the real 'Financial position of the Province. To these liabilities however must be added those incurred on account of tho fire block, the amount of which your Committee have not had the means of ascertaining. It is also to be observed that the sum of £3,514 9s. 6d., due on account of immigration bonds and promisBory notes, is not treated in that account as an immediately available asset, inasmuch as the whole is not yet due, and as it might be unwise to press for immediate repayment of what has already fallen due. 10. With regard to the City and Harbour Trusts debts, your Committee desire to refer the Council to the evidence of the Provincial Treasurer on tho 22nd February, 1860, which expresses that the amount due from the City Trust to the Provincial Government is payable from the proceeds of the Debentures ; on reference however to the City Trust Account it will be seon that £1,666 12s. lid. is the balance of that account for transactions extending from the beginning of 1858. and of that sum a very small proportion only is covered by the Debenture Act. 14. In regard to the £14,839 Bs. 7d. owing to the Oriental Bank, it is in evidence that the manager might press the Government at any time for repayment ; but that there is a tacit luiderstanding that the Bank will not press for repayment until the sale of the City Debentures, or at least until they should have been offered for s»le in London, which is in fact tantamount to allowing the debt to remain for about six or seven months.

Dealings with ths Bank. 12. The dealings of the Provincial Government have been with the Oriental Bank since February, 1858. In the course of the evidence in relation to Banking it has been stated that the reasons for the transfer of the Provincial account from the Union Bank of Australia was the refusal of reasonable accommodation, imputed to political feelings on the part of the manager. But jour Committee are of opinion that no grounds have been shown beyond Dr. Pollen's unsustained assertion, and Mr. Lusk's statement of what Dr. Pollen had told him. Nothing had been adduced to shew that the Manager in that cap«city has shewn bias, favour, or disfavour, either to the present or to any other Provincial Government. 13. Your Committee after careful enquiry are of opinion that with reference to the Superintendent's letter to the Chairman (March 19, 1860), Mr. Kennedy, the Manager of the Union Bank, has made no statement which can be considered as incorrect. 14. Your Committee find that the highest amount advanced to any former Government by the Union Bank, appears, from Dr. Pollen's evidence, to have £611 7 3s. 4d. To the present Government, on Mr. Kennedy's and Dr. Pollen's amended evidence, £5, 0il 13s. 8d ; and that the highest amount advanced by the Oriental Bank to the present Government was £21,498135. 15. That the advances made by the Oriental Bank to the Provincial Government have been iu part covered by the Deposit of Debentures, which the Superintendent was empowered to issue for trust purposes only, and respecting which the following instructions were given to the Manager, by the Superintendent, in his letter dated 27th February. 1860, viz.: " the pioceeds of the sale, however made, shall be placed to the credit of the Provincial Government account, with the Auckland branch of the Oriental Bank. Sums in Bxcest of Votes. 16. Your Committee report a statement -supplied by their Accountant During the last four years, the following sums have been expended in excess of votes. In the sum set against 1859 is included all the ascertained amounts due on the 31st December, which are not covered by Votes of Council.

17. In regard to the expenditure of money without previous appropriation by Council, your Committee desire to draw some marked distinctions which have not been sufficiently attended to. It is tiue that all Superintendents have done bo, but the question ii of circumstances and of degree. It cannot be reasonably maintained that Colonel Wynyard, the first Superintendent, was guilty of misappropriation of the public funds, in expending them oil the public service, during the period which elapsed between his own election and the pairing of the first Appropriation Bill ; because had he refrained from to doiffg, no- Government whatever could have been carried tip.. Nor can the expenditure without a previous "Vote of Council by Superintendent Brown, for the maintenance of the Hospital, the Gaol, and the Police,— for the health and the safety of the Citizens, (the larger official salaries being stopped &t the time) be considered as a misappropriation. Nor can trifling payments in excess of votes for the purpose of completing withoVit delay public works, which had already been sanctioned by the Council, be coniidred as a misappropriation. Nor can the continuation, during the early part of the Financial year, of the expenditure on account of the establishment sanctioned by Council for the preceding year, be considered as a mis-approp' nation 5 although the proper coune to pursue, would be.to take a vote of credit from the Council, > until a fresh Appropriation Act should be passed. But your Committee invite attention to the new feature that has been introduced by the present Superintendent, in taking large sums of money which had been voted for specific purposes, ,and "spending them, arbitrarily, upon other purposes for which they had not been voted; thus acting in defiance, both of the law and of the Council, and as if) what appears practically to be the case, there were no accountability what ever. Your Committee expreis themselves in strong terms concerning this practice, which aniounts to disposing of the public revenue at pleasure ; an evil which in their opinion has reached such an alarming magnitude mto demand the interference of the General Government. , [,

General Bemarlt. < „ 18. Your Committee 'are of opinion, that, for the purpo»eof Buppplying fuller'information to the Council, quarterly returns of the revenue and expenditure, show; ing also the. Eumi voted on behalf o! the different works and establishment (as in the, comparative statements of Mr. Porter), should be regularly made out. 19. That fuller information ought to have been afforded to Audit Committees ; for, although »uoh Com mitteei would probably, have obtained from the Government any, information, they asked for, it does not follow, that they.muit have knpwn , precisely and explicitly what information they ought to aak for.

20. That in the opinion of your , Committee, tho offices of Provincial Secretary or Chief Clerk, of Provincial Trenaurer, and of Commissioner of Waste Lands, ought not to bo held by the tame individual. 21. That the present financial difficultie» of tho Province are due to the general' derangement of the whole system of Provincial Government, caused by the Goun- ' cil having partly abdicated their functions, and by the assumption of undue power by the Superintendent. Also, by the neglect to furnish full and explicit accounts, making clear all the monetary transactions of the Government ; tho result of which was that difficulties wore loft concealed, and that members of Council, i from their ignorance of tho financial position of the Province, have voted sum* which they might not have allowed, had they been made fully aware of the state of affairs. Also, by the entering into Contracts of large amount 'without the sanction of the Council. I ha, by the facilities which have been afforded through the liberal advances of the Oriental Bank, without any guarantee. 22. That money cannot be readily borrowed, unless on high terms, without the guarantee of tho General Government. That, supposing money could be raised under sanction of the Council by tho unrestricted sale of City and Harbour Endowments, your Committee would not feel justified in recommending a sacrifice of the Trust proper!^. That your Committee are unable to recommend the adoption of any means for relieving the Province from its present embarrassment, excepting a long courso of severe economy. 23. That, in fairness to the creditors of the Province, their accounts should bear interest at 10 per cent, upon tho amount of their accounts, from the day on which they became, or may become payable. Hugh Carmeton, Cliairman. Committee-room, March 29,^1860.

OUO. . . AIM u .857 340 12 858 12,168 17 859 14,305 15 I G 2 9