COAL FOR TRAWLERS.

New Zealand Herald, Volume LIX, Issue 18189, 7 September 1922, Page 7

COAL FOR TRAWLERS.

NEW SOUTH WALES INQUIRY. MR. JOHN PAYNE INVOLVED; REPORT OF COMMISSIONER. Tho report of the commissioner who inquired into a coal contract made by tho management of. the New South Wales State trawlers shows that Mr. John Payne,, formerly member for Grey Lynn, and at the time of • the contract private secretary to the then Chief Secretary, Mr. Dooley, was involved in the matter After reviewing Mr. Summergreene's appointment as, manager of the industry? the report states tha,t when ho took charge there was an existing three months' contract for the supply of coal to tho trawlers made by the Stores Supply Committee with Howard Smith, Limited. This was renewed for a further three months ended December 31, 1920. Mr. Summergreene was anxious to arrange for the coaling to be done at Sydney, on the ground that it would save expense. From a business point of view the idea was probably a good one, and with this object in view Mr. Summergreene consulted Mr. John Payne, at that time private secretary to the Chief Secretary (Mr. Dooley). After consultation with Mr. Payne, the report continues, Mr. Summergreene decided ,to. call for tenders for coal, and accordingly twice inserted advertisements in the morning press. Had particulars been asked for they could not have been supplied. In regard to the advertisements, a letter was" written by Howard Smith, Limited, but no record of it could be found; neither was there a record of any of the letters of the Whitmore Company.' Mr. Summergreene evidently forgot another tender which he received, as he stated.that he had only received one tender, and he. probably forgot Howard Smith's letter.

Contradictory Evidence. After referring to the making of the contract in which the company was repraseated by Messrs. Suttor and Newby, said the Government by Messrs. Summergreene and Payne, the commissioner proceeds to say: 'Mr. Payna's evidence is contradicted in material points by Messrs. Suttor and Newby, and in* view of certain other evidence in regard to the testing of. the coal, it is <clear that Mr. Payne's evidence cannot be relied upon. If a true account could have been obtained of what actually took place between Messrs. Summergreene, Payne, Suttor/and Newby at the interview it would have, been of material assistance to the inquiry. Tbu j question of the intimacy between thesß people prior to the signing of the agreement ijequires consideration. It may be accepted as a fact that Mr. Summergreene had seen, but; did not know 2 Mr. Suttor before, and he had not previously seen Mr. Newby. Regarding Mr. Payne's and Mr. Suttor's knowledge of each other, their evidence makes it difficult to accept the testimony that their only interview in.regard to the supoly of coal was that on September 16, 1820." Mr. Summergreene and Mr. Payne, the. report proceeds, both say that they 'knownothing about contracts,, but tnis cannot be accepted as reliable, as Mr. Summergreene had considerable business experience in the capacity of a master butcher. Mr. Payno, according to his evidence, bad .had considerable business experience in connection with film contracts and taking up leases, etc., in New Zealand. The agreement for the sjJe of 750 shares in the Thompson-Payne Company by Mr. Payne to Mr. Bullough (one of the directors of the Wbitmore Company) is apparently- a well-drawn document, and does not disclose the want of legal or business knowledge on his part. Neither of these gentlcment, who say they know nothing about contracts, considered ii necessary to consult anyone before the agreement vraa signed. Yet between them they arranged, a contract, involving the Government in the purchase of up to 12,000 tons of coal ner year for five vears, at a cost at the time of over £84,000, without regard to the great, increases which have taken place since under the agreement. It is,.din> ~.,,■•■ cult to imagine that a temporary officer j. in the Government service, assistedl bv another temporary officer,. could, without authority, have such unlimited powers of •■ • expenditure. The agreement, however, received Ministerial approval after • a minute had been addressed to Mr. Dooloy. Chief Secretary and Acting-Premier Ir>; this minute Mr. Summergreene stated that tenders had been, advertised for the supply of the coal, and only one reply from a firm able to supply it received. • Contract One-sided. ■ The conclusion is drawn; continues this '. commissioner, that at the time the agree-. ; . ment was made Mr. Summergreene had .•■ no authority to make it. It is one-sided and altogether in favour of the contractor. Under it the Government is hound to accept approximately 10,000 to 12,000 tens of coal for five years whether it was wanted or not. x No steps were taken to ascertain the status "of • deposit was required from it in connection with the agreement, and its position was unquestionably such as to demand , : - that a deposit should have been obtained. , s According to the evidence this was .tn* it had had in connection■,; with coal. As soon as the contract was complete the company made an agreement with Messrs. Gibbs Bell, for the supply to them of the necessary coal, and Messrs. Gibbs, Bell made rangement with the colhery. • Mr. Gibba is aT large shareholder in the coUiery, and . . receives a salary for special work- (for . securing trade), and also has the right to accept' commissions, as well. Unfortunately Mr. Gibbs was in America ana could not be examined. The Wbitmore ; Companv was to pay Gibbs,. Bell. : and Co. 25s* 6d net, showing a profit of 2s 9d. a ton, out of which they agreed ;to pay ; Mr. J. H. Newby 3d a ton commission, The Tyldesley Company received' from Gibbs, Bell, and Co. what they received ■■- fropi the" Whitmore .Company, .of. whicli C, the Tyidesley Company had to pay Gibbs, Bell, and Co. Is 6d a ton commission, 6d a ton being for Mir.. Gibbs and- Is a ton .; for Mr. Newby. . _ , : - ~, ,r \Vith regard to the price of similar or better coal at the time the agreement was made," the commissioner -reports, "the evidence shows that the price paid under 1 the agreement was too high by something in the vicinity, of 6s a ton, which <fti- rs " tons to £18,000." ;/ , ,The agreement, nays the commissioner, provides for the passing on of:'ratl','increases, but not for any falls, and it was ''"- Messrs. Summergreeno and Payne's duty to see that the "fall" clause was insejted. in the agreement. The evidence shows . that a five-years' contract- should not have been made, particularlv at the time this agreement was executed, more especially as it only provides for .rises. '';' Touching upon the question' of the test- ■' ing of the coal, the" commissioner's conclusion m that there was no test at all prior to the agreement being signed, and Mr. Payne's evidence on that question was unreliable, • < Summarised the findings are-.—That the circumstances surrounding the contract show such gross negligence as to * raise a suspicion as to whether it was due to negligence only; that at the time the v contract was made coal of equal or superior iquality could have been purchased at 6» ; per ton less. > -■» - v . As a result of this inquiry the Puhljo . Service Board recommended &*■&"*%£ tion of Mr. Mr. Payne's employment, it was statea, had ceased on April 22 last.