REPORT OF PUBLIC ACCOUNTS COMMITTEE

Evening Post, Volume LXXXIV, Issue 112, 7 November 1912, Page 3

REPORT OF PUBLIC ACCOUNTS COMMITTEE

, "INSUFFICIENT CONTROL." At this stage the House commenced consideration of the report of the Public • Accounts Committee on the enquiry- it had made into 1 , the allocation of State guaranteed loans, the effect of which was published in The Post yesterday evening. The full report was. as under:— t The Public Accounts Committee, which" was directed to enquire fully into all loans paid, or- applied for, or-provision-ally or finally approved for, local authorities Under the New Zealand State-guar-anteed Advances Act since its inception, j and,, to report on the losses made (if any) i since the Act came into operation, the J commitments, and the available meanu and unexhausted lqan authorities as' at the 31st March, 1912, and the 16th September, 1912, also to report on the letter of the Superintendent of the New Zealand- State-guaranteed Advances department of the 30th September, 1912, to the Minister of Finance, has the honour to report as follows :' — (1) The loss sustained by the Local Authorities Branch* of the New Zealand State Guaranteed Advances Department since its inception- up to the 31st August, 1912, was between £22,000. and £23,000, and was incurred owing^-(a) To the board's difficulty in finding immediate investments for the funds at credit of the' Loans to Local Authorities Account ; and (b) To the remission of 10s -per cent, allowed to the • Department^ being insufficent to cover expenses and loss of interest whilst the moneys remained unin- . vested. ' ' - (2) The commitments, 'on' the 31st March, 1912, were £820,320; and the commitments on the 16th September, 1912, were 6651,310. (3) The available means and unexhausted loan authorities at 3lst March, 1912, were as follow:— Credits in bank, etc., £163,643 ; Unexhausted loan authorities, £778,000. (4) The available means and unexhausted loan authorities at the 16th September, I£J2, were as follow :-±Credfts at bank, etc., £27,550; debits, £30,000; debits exceeding , credits, £2450; unexhausted loan authorities, £825,000. * THE FINDING. ' _ In regard to the Superintendent's letter, on' behalf of the Advances Board, -alleging that statements were m'ado in the House of Representatives on the 28th September,, 1912, to the effect that loans* had been granted by the board to local authorities under political influence, and with a view to influencing the General Election of last December : No evidence was submitted substantiating ,the ■ Superintendent's written statement, and the committee consider that the members of the board were ill-ad-vised in accepting headlines in the Press reports as sufficient grounds for writing to. the Minister in' charge of the Advances Department in the terms used 'in the letter. CHANGE IN PERSONNEL. The evidence has led the committee to the conclusion that insufficient control was exercised in administering, the loans to local authorities, especially in committing the Department to advances three years ahead, , an action which tho committee is advised was contrary to law. Your committee, therefore, strongly recommends a change in the personnel of the Advances Board. \ AMENDMENT MOVED. Mr. fianan moved an amendment to the report of the committee in order to justify the action of the board and denying specifically the existence of political, influence in connection with the operations of the' board, j He contended that, if the, committee had desired to be fair, that 'statement should have been included', in the report of the committee. Upless such • a resolution was passed there would remain a reflection pa the meitibm 'of the board. The' report ought also 'to have stated that jio losses had occurred through the lending operations of the board. , He went on 1 " to deClare that the statements made <by newsr papers in reference to the charges made against the Department had been proved to be untrue. '""BITTER PARTY' SPIRIT.'-' ' •Mr. Isitt said that if -he did not know that the report was the outcome of fche political heat he would feel ashamed and humiliated, but, recognising that in the report - they had very little more than an- ebullition of biUer party spirit, he should feel' that the report was far from being a stricture. To him it appeared to be more a stricture on the men who issued it. It' was a dastardly attempt on the' part of the men who had uttered political' slanders, 'hi support of which they had never offered one jot or tittle of' evidence. Again and again the Government' had charged the 1.-ltc Government with political bribery and conuption, and the evidence, in support of that charge -had not boen forthcoming.' • He contended that the Minister of Finance had displayed hostility towards the members of the Advances Board which vfci'not juitified, and -that all that had

been proved against them was that they had granted loans three years ahead. That was all. He hoped that the members, of the* board would not be persecuted because they had dared to protest against the treatment to which they had been subjected. HOW THEY VOTED. • Mr. Hanan's motion to amend the report was lost by 39 to 28. The division list was as follows : — For the amendment (28) : — Atmore. Buddo, Buxton, Colvin, Craigic, Davey, Ell, Forbes, Glover 4 Hanan, Hindmarsh, leitt, Laurenson, M'Callum, Mac Donald, M'Kenzie, Myers, Parata, Payne. Poland, Kangihiroa, Robertson, Russell, Seddon, Sidey, R. W. Smith. Ward, Witty. Against the amendment (39) : — Allen, Aiiderson. Bell. R. F. Bollard, Bradney. Buchanan, Buick, Clarke, Dickson, Ebcott, Fi6her, Fraser, Guthrie, Harris, Herdman,^srries, Hine, Lang, Lee. Malcolm, Mander, Masaey, Dr. Newman, B. Newman, Nosworthv, Okey, Pearee. Pomare, Reed, R. H." Rhodes, Scott. F. H. Smith, Statham, Sykes, G. "M. Thomson, Veitch, Wilkinson, Wilson, Young. Pairs : — Noes, J. Bollard and G. Hunter. Ayes, Sir J. Carroll a.nd J. V. Brown. CONDEMNED UNHEARD. Sir Joseph Ward said that 75 per cent, of the members who had voted had not read, the evidence, and they were condemning the board unheard. Responsible heads of Departments and members of the board had declared that no attempt had been made to exercise political' pressure in Tegard to the issue of loan**, and yet the House practically declared, as a result of the division that had' just taken place, that political influence had been exercised. That wae a very deplorable and regrettable thing. Such an action had been the beginning of a Government's downfall. He had. he said, prepared a return which showed that more loans had been granted to districts represented by the Government than had been granted to districts represented by the present Opposition, and yet the members concerned had by their votee put it on record that they were of opinion that political influence had been exercised. Further, he wanted to know how rates could be struck to pay interest if, a£ was proposed by the Bill, j the ( rate of interest varied from year to year. The result would be the cessation of important public works until the necessary security had been arranged for. He objected to the attempt that had been made to injure the reputation of members of the board, who had merely carried out the law passed by Parliament, without political influence. MINISTER OF FINANCE. The Hon. J. Allen contended that the rating security given by a local body I would be sufficient to ensure the payment of interest on the loan, and that the board had been acting illegally, against its own regulations, in committing the Dominion to loans two or three years in advance. PERMANENT OFFICERS ' SHOULD > BE UPHELD. Mr. G. W. Russell 1 contended that it should be the duty m Minister* to up* held in- the highest confidence the permanent officers' of the Department. Which members 6f th« Advances Board were, to be removed; in accordance with the recommendation of the committee? Why should the board suffer as a whole if only one or two, member* were under condemnation ? "SPLEEN AND VENOM." Mr. R. M'Callum said that underlying the report was a. concentration of spleen and venom, and if . things • went on as they 'were going he tad no desire to stay in' Parliament There was shame and (disgrace in the way that' high pub-lic-offioiale had been attacked. Mr. Myers appealed to the . Minister for. Finance to consider what was : being done in the carrying of such, a. re-> port as was submitted to the House. He contended that "it 'would result in those concerned losing their positions and 'have a stigma upon their honour for ever. ANOTHER. AMENDMENT. Mr. R. W. Smith to the party spirit pervading 'the finding of the committee. He offered to lodge a cheque for' £50 with the Speaker (and he subsequently handed it up) which h"e would' -forfeit, if it were covered, to a charitable' purpose, providing any member of the Acif&ncee Board had acted* illegally. He then moved the following, amendment : That effect be not given to the rej commendations of the committee until' ' the question at. issue, had been subemitted to' a Supreme Court Judge ■ fpr his decision. , Mr. Witty seconded the amendment. To his mind) ' it seemed that the Government were determined to have blood. '.At 1.30 a.m. Mr. Hindmareh arose to continue the debate. He had known the head- of the Department for twenty years, he said, and" for simplicity of conduct arid loyalty he had few peers. He had no . option but to writ© the letter he did to the Minister. , "PERFECTLY HARMLESS." •The Hon. F. M. B. Fisher said the resolution of the committee did not cast any stigma upon the board. 'Mr. R,. M'Kenzie: What is it there for? Mr. Fisher: To get rid of the board. The resolution was really perfectly harmless. Speakinf in the early hours of the morning the Minister said he had 'never suggested or imagined that any political influence "had been ujsed by members of the board, but he did consider that in the interests of the country the administration of the ■ Department should be put on a different footing. Frankly he did not believe that there would be any stains cast upon the characters of the members of the board. He was not satisfied, however, that the board was competent to distribute £5,000,000 of the money of the country. BREAKING DAY. Grey dawn broke over the House before' the debate came to an end, and the electric light fought hard for supremacy with the natural forces outside. Rain fell in, torrents, and it. was singular that the gallery 'set apart for ladies was occupied by a few, interested spectators. Tjhis was at 4.30 a.m., and it was also worthy of , remark that there was quite a' reasonable attendance of membeis, who listened with' full attention to the speech delivered by the Prime Minister in support of the Bill. He remarked, , inter alia, that the idea, of the Government was to take out two of -the members of the Advances Board; and put in their place two good business men. / Before the clock - struck -five it was evident that " the' Opposition had or- | gahised a stonewall by way of protest against the report of the committee, to which it took such strong exception. ATTACK OJv THE' MINISTER. Mr. J. A. Hanan spoke of the manner, in which Mr. J« W. Poynton had advanced himself from- the position of a miner until lie was appointed Public Trustee. He was the man who had built up that ofl'.ce. 'The Bon. .Dr. Pomare: At the expense of the Maori! Mr. Hanan declared that lie had conducted Cases in tho Magistrate'? Court nnd thp iSupi'ehie Court, but he had never Been a lawyer browbeat and bully a witness in the way the Minister of Finance had Mr. Poynton. LEGAL OPINION POSSIBLY WRONG. Sir Joseph Ward again hpoke at conskbra,ble length. He biticl that many I meh in their private capacity were often

advised by their lawyers, and wrOnfjly advised. Although he had a very high opinion of the Solicitor-General, he would uot accept his opinion as to the legality of the board's action without having that opinion further verified. , Mr.' H. G. Ell fiaid that the Department had stood the test of years. It had assisted 33,000 settlers and 7000 working men. Mr. Pearce : Can the hon. gentleman refer to the general work of the Department? Mr. Speaker ruled that Mr. Ell must confine his remarks to local bodies. At 6.45 a.m. a division was taken on Mr. Smith's amendment, which was defeated by 37 votes to 26. AN INTERLUDE. Mr. J. Payne (Grey Lynn) continued tho discussion, and moved an amendment — "That the report be not given effect until the Bouse has passed legislation dealing -with the matter." MR. SPEAKER SEEKS A REST. A few minutes ♦ before 7 a.m. Mr. Speaker interrupted the member for Auckland, and said, " I have sat in this chair since 10 a.m. yesterday, and ask leave to put the Chairman of Committees in. my -place." "Hear, hear," said several members. Mr. speaker left the Chamber, and Mr. Lang assumed his place. MR. GLOVER'S GRATITUDE. Mr. Glover wandered on in painfully sincere ton^ after 7 a.m. , to the • accompaniment of fervent "Amens" from the Government benches. Mr. Wilson (Taumarunui) rose to a point of order when Mr. Glover persisted in referring to his " abiding faith" in this country. What, he asked, had Mr. Glover s " abiding faith " to do with the question at issue. "The hon. member has that peculiar way of expressing himself," was Mr. Speaker's only comment. The House roared with laughter, but Mr. Glover continued, and concluded by wishing "peace, happiness, contentment, and prosperity to you, Mr. Speaker." Mr. Payne's amendment was defeated by 37 votes to 24. MR. HINE COMPLAINS. BITTERLY. Jfl 7.20 Mr. Hine rose to raply. He complained bitterly of the "poisonous attack which had been made on the Minister of Finance." The division on the motion for the adoption ,of the report was" taken at 7.30 a.m. • The report 1 was adopted by m votes to. 26. BILL IN COMMITTEE. The Bill was committed Clause 10 giving priority advances to workers to £300 was struck out on the voices. ' Mr. Ell moved an amendment to the schedule which would haVe the effect of confining the insurance of ' all mortgagees to the State Fire Office. The Minister opposed the deletion of the words, "or other reputable office" (which would effect Mr. Ell's purpose). He said that the carrying of Mr. Ell's amendment would in cases damage the State Fire Office. Mr. Ell reminded the Minister in charge of the "Department (the Hon. F. M. B. Fieher) that a few days ago he had 1 stated that in his 1 opinion all State insurance (including mortgages from the Advances Department) should go to the State Office. Here was an opportunity for him to assert that opinion. He could blow hot and cold. When the bel}""rang for the division, Mr. Fisher left • the Chamber and- did not record a vote on Mr. Ell's amendment, which was lost by 33 votes to 21. Mr. Hindmarsh moved another amendment which would* compel persons .obtaining loans from the State Advances Department to insure with the State FLre Office "if so required by the Superintendent." The motion to read Mr. Hindmarsh's amendment (which w,as subsequently put as a new clause) was defeated by 35 votes to 20. MR. FISHER'S ATTITUDE., Mr. El^ noting that Mr. Fisher had this time voted with the majority, smiled facetiously and, called the attention of the Chairman to the fact that Mr. Fisher's name was, not- recorded on the first division list ! The Billi was. reported. On the motion for the second reading Mr. Ell again referred to Mr. Fisher's statements, and to the fact that his name was not recorded on the first division list. He was in the Chamber before the bell rang and if he had paired he could make the explanation. Mr. Fisher made an ' explanation in a few woi'ds. "I "could nbt vote against my colleagues," he said,, "and I did not vote at ..all. If I was in the position of -my colleagues as a whole I would have the matter as I said. I still retain my individual opinion." The Bill was read a third time and the House rose at 8.30 until 9.30 a.m.