THE 1902 LOAN.

Evening Star, Issue 12258, 27 July 1904, Page 7

THE 1902 LOAN.

ALLEGED DIVERSION OF PROCEEDS AND INVESTMENT IN STOCK. [FIIOJI OtTR PAr.LIAMKNTARY RKFORTEE.] WELLINGTON, July 27. Thcro was an unusually lengthy debate yesterday over the Imprest Supply Bill in connection with the item £50,000, invested in 3 per cent, stocks by the Loan Agents in London after the million and tlireo-quarterji loan wa.s floated, and which was provided for among the items of unauthorised expenditure. Tho matter was raised bv the Leader of tho Opposition, and tho main contributors to the discussion were Messrs J. Alien, W. Frascr, Taylor, and Hemes. These speakers protested that, in investing loan n l mey u m 3 pcr cellt - Ncw Zoi'Md stocks, ••hey had acted as speculatore. and in an illegal manner, and it was insinuated that gentlemen holdinc such responsible positions m London would never so act unless instructed by the Colonial Treasurer. After the criticism had proceeded for several hours Mr Seddon declared that he had never constilted the Loan Agents on tho transaction. They had acted on their own initiative under the powers delegated to them as loan agents. He knew nothing of the transaction till it was completed, but as Treasurer he entirely approved of tho course taken, and defended it aa in the best interests of the colony. A HOSTILE AMENDMENT.

Mr Massey, in pursuance of an intimation niado at an earlier stage of the proceedings, nioved as an amendment to the second reading of tho Bill—'-That tho return of unauthorised expenditures be. referred to the Public Accounts Committee for investigation and report, such report to bo laid before tho House within fourteen days." It was no reason for objection to the proposal 'because it was establishing a precedent. He was willing to concede that the loan agents were men of integrity, but that was no reason why on explanation should not be insisted on for what tho Opposition regarded as an improper transaction. "We are charged with injuring tho credit of the colony by making up this matter." He declined, hov.-orcr, to bo considered as a mere voting midline. He and those on his side of the House had been sent there to do their duty as intelligent men, and when such transactions' a.s that under •onsideraiion were disclosed an emphatic: protest would he lodged. The greatest injuiy that had been done to the colony during tho past six months was by the Government concealing, covering up, and making mystery in regard to tho financial operations of" the treasury. such as tho transaction under consideration, where there ought to have been no concealment. Reuter had refused to continue to receive long cables from the J romier, who had consequently to send hem to tho Agent-General for distribution through the London papers. . The Premier said he could not accept the amendment except in a hostile spirit. Was -to Leader of tho Opposition prepared to let him (Mv Seddon) reply and go to a division forthwith?

Mr M.issoy replied in the affirmative. *Mr \\. Russell, however, prevented the suggested arrangement from being carried into effect by intimating th;<t he desired te make a few remarks. Ho said that he could not.understind why-any member could not agree with Mr Massey's'sugtrcstion, or why any Government should treat as bottle a motion of the nature just moved He declared that the first dutv of Parliament was to look after the finance, which could only bo deno by a careful investigation of everything appertaining to fin.ince. It was itciT duty to see that the finance of the eolony was prudent and economical. An investigation before thy Public Accounts Committeo was one of the methods of securina this. °

The Premier declared that (ho Opposition ue-ircd to damage the Loan Aironts. and to put the Government in a false 'position. He repeated that lie had r.ot bean consulted iihoui, the matter until after it had taken Place. Ihe Loan Agents had acted in the best interests of the coionv. and wove perfectly right in what thsv had done. He had full confidence in them and in the course they took. There was no warrant for sond'ng tho unauthorised expenditure before a committee. If thev look away th« powers of the Government under the Public Revenues Act tho amendment would be justified; but the Government had only exercised one-third of their powers under that Act. It was proposed that the Public Accounts Committee should investigate what had been spent. Ho asked whether any sett-respecting Government would ever sink to so low a. position as to permit such a thing. Mr Scddon went on to say that had he been a tactician and wished to evade cuscossiou, he would have accepted the amendment, and that would have meant that during the Financial Debate, while tho matter was before the Committee, no member dare say a word about anv single item in tho unauthorised expenditure return. He did not want to avoid discussion, ana therofore opposed ihe amendment. He also pointed out that the monev had to bo voted by the House, and he asked how, in tho face of that, the Opposition could sav that the Government had refused information. Tho Colonial Treasurer had never been taken before a coniniittcc and called ui-ori to explain how overv item of the unauthorised expenditure was made up. Attached to the return of unauthorised expenditure was the Auditor-General's certificate that the money had been expended on the purposes slated in the return. He had no mea until receiving details that tho Loan Agents intended to purcha/o any of the stock, but members knew the critical position of the money market at the time the loan was raised, and they could realise that unusual steps m : ght have been necessary. Nothing had been done that was not open and above-board. Touching on the point of referring the matter to the Public Accounts Committee, the Premier said that, if he had a committee of men whom he could trust, and who were desirous of assisting the progress of the coionv, ho would have been pleased to consult that committee on any matter of finance; but lie had found that information given to that Committee confidentially had been made public by those hostile to the Government in a manner calculated to injure tho credit of tho colony. Renter had never refused to take Government, messages, but 'Tho Times' had altered them. There had been no necessity to cable, there being nothing happening which would particularly interest our kin in England. Ho pointed out the necessity cabling the Agent-General when the colony had been misrepresented, as it wimctimes was, so that the real state of affairs could be made known through the colonoy's responsible officer.

Mr J. Allen said that if the Public Accounts Committee were not to" b° trusted, the best thing to do would be to discharge them at once. The members were to be trusted if they were told a. thing in confidence. The Premier was merely drawing a red herring across the scent. He did rot want to send the return to the Committee. I'ne reason for asking that the return should be to referred to was that tic Law had been broken, in that the return of unauthorised oxpenditufe was not laid on the tab.e until about twenty (instead of ten) days after the House met, and it included items which had never before appeared there, bosides which the transactions by the loan Agents were illegal. The Minister of Railways said that Mr Duthio had charged the Premier with defying the House m this matter. This was nob the case, and he asked members to relieve themselves from the bfli?f that something was being withheld; The House should accept the statement of the Treasurer that, the, Loan Agents had complained against financial information baing <nven that was detrimental to them in London If disclosures of confidential matters that came to the Treasury from time to time wero made, it would mdirectlv do much injury to the colony as a whole. The Loan Agents bad very responsible and very tickto do as the eolonj'a financial

officials in London, and he was satisfied that they would not have taken the course they did if it had not been in the best interests of the colony. The Opposition had discovered a mare's nest, and there was no justification for the storm that had been raised, There were hundreds and hundreds of things in connection' with the financial work of the colony which, if disclosed, wou'.d be most damaging. The strongest business in, the world could not be run successfully if its financial hand were periodically being shown. The Loan Agents were men of integrity and experience, and would never have taken the course they did unless it was for the benefit of this country. It bad been stated that a loss of £3,000 had resulted on the loan. The stock of the colony was continually rising and fa'Jing—even British Consols hail gone down in recent years—owing to extraordinary conditions over which there was no control. To say, however, that there was a loss of £3,000 was to say that our stock would never rise. There was r.o necessity to sell the stock at the lower price. Instead of carping and condemning the Treasurer, there should be congratulation that the colony had come through the financial upheaval so well. Personally ho approved of the ppsition taken up by the Loan Agents as being in the best interests of the co.ony. Messrs Rutherford and Graham appealed .r> the House to come to a division, and not to waste further time on the discussion.

Mr Bedford expressed the opinion that the length of the debate was due to the stubbornness and obstinacy of the Premier in refusing to give information sought beyond saying that what had been done was in tho interests of the community. Tho member for Bruce had frequently asked whether the transaction by tho Loan Agents was carried out with tho*cognisance of the Government, and the Premier declined to answer till after the amendment had been moved.

Mr Herdman contended that the diversion of moneys raised for public works to the purchase of 5 pcr cent, debentures was illegal and impjojier. The Premier was afraid to allow thessarchliglit of criticism to he thrown on 'the transaction by the Public Accounts Commitcc.

On a division the amendment, was negatived by 40 votes to 22. "

For the Amendment (22).—Messrs A;tken, James Allen, Barber. Bedford, 801-ard, -ard, Buchanan. Duthie, Harding, Hardy dcrdmau, Herrics, Kirkbride, Lang, MaiiJer, Massey T. Mackenzie, Moss. R«id, Russell. Taylor. J. 0. Thomson, Vile. Agamst the Amendment (40).—Messrs E. G. Allen. Arnold, Baume, Bennet, Carroll Ulyin Ell, Field, Fisher, Flatman. A. U. D. I< raser. Graham, Hunan, Heke. Houston. Jennings, Kidd, Luurenson, Lawrv, .Major, M'Gowan, R. M'Kenzie, M'Lachlan M:Uar.Mills, Parata, pens, Remington, Rutherford, Seddon, Sidev. Smith. Steward, •\vines, Ward, Wilford, Willis, Witheford, iVitty, Wood. Pans.—For the Amendment: Messrs Alison, W. Eraser, Rhodes, Lewis, Lethondgc. Against the Amendment: Messrs M'Nab, Hall-Joue?, Davey, Hogg, Duncan. In committee, Tho Minister of Railways said that tiie Hutt Railway improvement and straightening wodd be carried out expeditiously and .vithout my dislocation of passi>n«or or goods traffic. l °

.ho rremior, rpcrking to tho tLird reading ot tne Bill, said that at :i juncture the Loan Agents exercised their own judgment for the moment. Tbe'oasli raised bv way ef loan, less the commission to the" Loan Agent.?, was paid into the Public Account there ¥M no ground for the charge practically made by certain, members that the fjorui Agents had been themselves investors and had unloaded their investment on the .o.ony itself. There vres no suspicion rn the part ot' the Government of -pant of r.tegnty or want of judgment on the part of these gentlemen. He blamed member? oF the Opposition for not coining to him and asking for mfonnution, instead of making to (he House statements of a character. To those who vaulted to for--c the colony into a larger expenditure en public works ho had to sa.v that over two millions had been spent last year whvb "2* i rat ~m or, e tl,an Uk c * ololl V «>»J'l "fiord. While there would be a, 'reduced public works expenditure next. year, there wculd be no rntrcncbinent in ' ward 'o reading the back block*.—(" Hear" hear " fiom country members.) There would be a reduction of the expenditure on public buildings, and m irepect to some of the iiriiiich rojlwavs there be a rpd"e----t-fin: bat -until members had the Public Works Estimates hefcro them lie simply had to say '" suspend your judgment." POINTS OF THE DEBATE. Amonci't the victims of bis deadly rhetoric, Mr .Smith included Mr Bedford. Air Smith said be bid been bunting all over the House for the Dunedin member. "Why didn't you ufo a microscope ?" a'ked Mr George Fisher. This was ¥r Fisher's only contribution to tho debate "Tho Executive carries on the business of the country for nine months of tie year, and we cannot criticise it except through the newspapers, and whoa we do criticise it the rest of the year we are told that it is not politic. If that is ?», then it is not politic for us to come hero at all "—MiTaylor.

"I have no confidence in our Loan Asente in London."—Mr J. Alien.

Mr Sneddon would lead one to believe, - ' said Mr Taylor, "that the Loon Aamtsbav* onlv one purpose, in lifc, and spend their whole time from year end to ytar ond in puzzbne.'. o-jt now methods of benefiting (he colony. - ' The action of the Government in connection with the £50.000 of New Zealand scrip purchased bv tho Lonn Agents cut of loan money placed in their hands appeal* to Mr favlor as rcsemblini? the action of a man who pawns bis coat in order to buv a new shirt.

I question whether there arc five members in this House who know who the co'onys Loan Agents are," raid Mr Taylor as a prelude to an attack on their methods of dealing with loan moneys.

The Premier said ho would not answer the charge, bnt wouM feel wire that when ho mentioned that the colony's Loin Agents were Mr Walter Kennaway, C.M.G.,°and the Hon. W. P. Reeves, 'everyone would feel satisfied that their methods were beyond rrproach.

Mr laylor expressed his readiness to admit that both the pentlemen named were above suspicion, and he challenged the Premier to disclose the correspondence that had taken place over this transaction between them and himself.

Mr T. E. Taylor: " The member for Bruce comes back to New Zealand from a holiday corrupted after hobnobbing with the financial magnates of England. Tht'se same people did all they could to corrupt the Premier, but they could not corrupt him—he is absolutely incorruptible." The Premier: "Do members take mo for a walking encyclopedia?" Mr Smith: " The information has been given livo limes over."

Mr Taylor (who had been complaining of the Premier's- lefusil to take the House into his confidence): " Well I hope in that case it has even been drummed into your head." That parly feeling regarding the Pahiatna election, which' takes place to-morrow, runs high was shown by au incident in the debate. The Opposition Leader read a telegram which had been received that dav stating that the Miniver of Lands and tbo Government Whip (Mr Hogg) were in the electorate- paving the muddy roads with promises. Such Government interference, be declared, was scandalous, and ho went on to say that the electors should be left to themselves in choosing their representative.

An Hon. Member: "What about Mr Bedford speaking thero on Sunday night?" Mr Massey disclaimed any responsibility for that.

The Premier: "Why /was Mr Vile-sent up to the district by you to try to fix up the split in the Opposition camp?" Mr Massey replied that Mr Vile lived in the electorate, and was consequently within his rights?. Later ofl the Premier said that tho Minister of Lands had to pass through Pahiatua on his way to Dannevirke, where the Government proposed to acquire the Tamaki block for closer settlement. Ho declared that Mr Vile, member for Manawatu, had gone up to the district to attempt to influence one of the Opposition candidates (Mr Bolton) to retire, and that another of these ctndidates (Mr Hawkins) had come to Wellington to consult the party. Mr T.-E- Taylor: The Premier is such a past master in the art of concealing and iidny;. that he would make *.. first-cUtEs

loan agent, but if ho is to go Home as High Commissioner, and become one of the colony's loan agents, it. will bo necessary to Mtopthis sort of speculation of loan moneys in 3 per cent, stock, because if a precedent of this kind is to be allowed it will lead to all kinds of questionable finance,"

Mr George Laurcnson: "No one represants Ishmael in this House better than Mr Taylor. His hand politically is against evefyone. The only point of difference is that Lshmael had a great weakness for drink, while the senior member for Christchurch has an antipathy towards it." Mr Taylor: "As a special pleader the member for Lyttelton is unequalled in this House. Ho has such a superabundance of charity that he prefers to take under his wing someone who has erred instead of taking him to task for improper transactions." Mr Taylor: " The tables attached to the Financial Statement ought to satisfy the silliest man in the country that everything in the country is just as it ought to be." " One of the most disinterested men in the country."—The Premier hits back at the senior member for Christchurch. Mr Lanreasori: " There was not a single atom of truth in the remark mado by the member for Bruce." Mr Speaker: " That statement cannot be allowed." Mr Laurenson : " Then let me say that it has not the slightest foundation in fact."