MANAWATU EVENING STANDARD AND POHANGINA GAZETTE. TUESDAY, JULY 30, 1901. TWISTING THE LAW.

Manawatu Standard, Volume XL, Issue 7068, 30 July 1901, Page 2

MANAWATU EVENING STANDARD AND POHANGINA GAZETTE.

TUESDAY, JULY 30, 1901. TWISTING THE LAW.

GTJAEANTEED LAHGEST IN THE DISTEICT.

Or late years a disregard has been shown by the Government for the administration of the law as laid down by Parliament in connection with the financial affairs of the colony, and no session., passes by without flagrant instances of this being brought before Parliament by the Auditor-General. To avoid this publicity the Government iast session rushed through, the House the notorious Public Revenues Act, but instead of its effect being to diminish the publicity so many questionable transactions of the Treasury have attained, the' reverse appears to be the case. This desirable publicity also has another result, viz., to reveal to the reader something of the methods obtaining in the legal department" of the Ministry, and if private firms had to use such questionable opinions in the transaction of their business, they would soon find themselves astray when the test of a Supreme Court, action was applied. As an instance we will quote the dispute which occurred in connection with the repayment of the principal and interest'• on- the £500,000 Bank of New Zealand preferred shares. It will bo remembered that in 1896 the Govern, ment took up £500,000 shares in the Bank of New! Zealand, on which a dividend of 5 per cent had to be paid, but the Bank last year found that it could more profitably re-purchase, those shares than employ the capital in other channels. That repurchase was completed and the amount, together with £5657 10s 6d interest, was paid over to the Government. Now, section 8 of the Act of 1895 provides that if the Bank repurchase those shares" at a price equal. to the nominal iiniouht. thereof, plus the amount of all dividends accrued and unpaid iv respect thereof up to the time of the payment of such. price. ... . All moneys received shall be paid tc the Public Trustee." Notwithstanding the clear and'explicit wording of the section the Treasury proposed only to pay the £500,000 over to the Public Trustee, and to.increase the ordinary revenue by £5657 10s 6d, by. the amount of alldividends accrued and- unpaid in. respect thereof up to the time.of.the payment." In accordance with the law tlie-Auditor-General protested against (he diversion of. these trust funds, and his protest could not be overruled unfess the Solicitor-General advised the Governor to,-take that extreme course. No sane person could believe that an officer of such standing, whose professional reputation was at stake, could overcome the plain direction contained in the Act, but it was managed nevertheless. Dr. Fitchett, Solicitor-General, was equal "to the occasion. In the course of a lengthy memorandum he 'states:—

".The Banking Act is, in the language of the Interpretation Act, to receive such fair, large, and liberal construction as-will best insure the attainment of the object of the Act according to its true intent, meaning, and spirit. Applying this rule, section 8 is, I think, to be read as if the words 'to the extent of the total capital sum represented by all the securities issued under sectiou 7 hereof were inserted between 'such shares

shall' and 'be paid to the Public Trustee.' On this construction all rc-purchase-money (including accrued and -unpaid dividends), and all interest thereon, would remain with the Public Trustee until the total amount iiMiis hands was £500,000, but everything beyond that amount would be payable to the Consolidated Fund. In this way the £5,657 10s 6d of accrued and unpaid dividends, and also all interest earned, on the half-million lying in the Public Trustee's hands, will be available towards meeting the interest on the securities during their currency, and at their maturity they will be redeemed by him with the half-million which ho holds for tho purpose."

To show how ridiculous the contention is, we have only to point out that section 8 distinctly states that a price equal to the nominal amount of the shares[£soo,ooo], phis the dividends accrued and unpaid, is the price of repurchase, and afterwards prescribes that' " all moneys received" shall be paid to the Public Trustee., If the system initiated by the new Solicitor-General is to obtain, there will be no need for Parliament to amend faulty legislation—all that will be necessary is to hand the law over to the Solicitor-General, who will " read in " the necessary words and so end the trouble. .