TRUST INQUIRY

New Zealand Herald, Volume LXXI, Issue 21916, 27 September 1934, Page 14

TRUST INQUIRY

lUr.. McARTHUR EXAMINED " FO. LAB." ASSOCIATION OPERATIONS IN DOMINION /( ORGANISING EXPENSES DENIAL OF BRIBERY [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Wednesday Evidence concerning the "Po. Lab." association, given in Sydney last Thursday before the Royal Commission which > inquiring into the activities of certain companies, is contained in reports in Australian newspapers to hand by the Wanganella. Mr. Justice Halse Rogers presided as Commissioner, Mr. W. W. Monahan, K.C., and Mr. J. B. Collier appeared as counsel assisting the commission, Mr. R. \tfindeyer, K.C., and Mr. B. Fuller for the Investment Executive Trust of New Zealand, Limited, and the Southern British National Trust, Limited, and Dr. F. Louat for three other compauies.

Examining Mr. J. W. S. McArthur, Mr. Monahan said: Among the memoranda there is one dealing with appropriations for the purposes of the ns*ociation. It says, "£IOOO if the party succeeds in preventing the report of the commission being tabled, etc." That deals/ with tho "Po. Lab." Association. Was £IOOO paid out to the asso - ciation? Witness: Not that I know of. It is your memorandum? —Yes. Witness* Explanation Mr. Monahan: Who is this "Po. Lab." Association? Witness: About nine months ago I said to Mr. Glover Clark, publisher and managing-director of Financial Publications, Limited, that we would have to organise some movement to resist these attacks that were being made upon us. Nothing was done for several months until July, when Mr. Glover Clark telegraphed mo that he should come to Sydney on very urgent business. When he came to Sydney he said he had reason to believe that a biased and hostile report was being brought down in New Zealand, which would be very damaging to the trust and de-benture-holders. He then said that he would endeavour to form an association with a view to interviewing electors in various constituencies throughout New Zealand. If he was to stop the report from coming down it would require an urgent movement, and he would require several men to help him. In that case he would undertake to do the work for £IOOO. His Honor: How could you stop the report coming down ? It was to be made to Parliament, was it not? Witness:. I don't know, but that was his suggestion to me. Sam to Meet Expenses His Honor: A' thousand pounds if the report was not presented to Parliament? Witness: Yes. ...... That was for expenses?— Yes. But what sort of expenses? We have all sorts of euphemisms sometimes?— The expenses of going around the various electorates and asking electors to apprdaeh their members of Parliament. Mr. Monahan: Who was "Po. Lab."? Witness: It was Mr. Glover Clark himself. He was forming the association. His Honor: Have you got your private code? t Witness: You mean private telegraph code? I will get it for you. Mr. Monahan: So you say that Po. Lab.",means Glover Clark? Witness: Yes. That is all right as regards the first half of the memorandum. It then says, "A sum o'i £SOO if the report, having been tabled, is discredited." Who was to g&t that £soo?—lt was part of the organising funds. , , ~ But the report having got to parliament House and been tabled ?—Mr. Glover Clark was to get £SOO and he was to carry out the work. I know nothing about the details. Who was to get £SOO ? —He was to get it. . , He could have nothing to do with having it discredited in the House, unless/he operated through members of the House?—l don'b know how he would operate. Nothing Connected With Bribery Mr Monahan: You are not so simple as that? Witness: I understand he was operating through electors. Members of the electorates could not discredit it in the House could they?— They were to approach their members. I understand you say there is nothing connected " with bribery in it? — Nothing at all. It was to bo for expenses' for Mr. Glover Clark. To induce people to approach their members to discredit the report?—We felt we were justified in doing anything possible to prevent a hostile report being tabled. His Honor: "Anything" is a wide term.

Mr. Monahan: Mr. Glover Clark already had £550 on this account? Witness: I don't think so. He has had £250, I think. There are two amounts here, one of £3OO, and another of £250. He had got £3OO on account of general expenses in Sterling Investments' books? —I don't knoiv about that. He got £250. Did he not get £3OO from Sterling Investments ?—r-That must have been previously. » Then he wanted some more and got £2so?—Yes.

Matter o! Receipt Mr. Monahan: Do you agreo with what T say ? Witness: If he got £3OO it must have been some time previously. He has not got it recently. r-onn 61 ". 6 is J i cheque in October last for ±.300-for general expenses. Expert opinion and travelling expenses?—' That is 11 months ago. Did you get a receipt from Mr. Glover Clark as to how that money was expended?—l could not say at this juncture. Have you got a statement from him how the £2.jo has been expended 9--! have not. Have you asked for any?— No. Do you intend to ask for any?—l do. • i. Glover Clark the man known PnW-1? 38 ?—Financial publications is known as that. Is he not Financial Publications?— tin. ls mana ß'Ug director. When you send a cable to him it g °f<V n name does it not? —Yes. ri ™ ab ,'J s J ust an °ther word for lalover Clark?—Yes. Did he ever form an association ?—I don t know. Do you say that seriously?—l left it entirely to him. . Mr. Monahan then read the following cablegram: "After long interview Po. Lab plan as previously discussed with you, mutual agreement reached. Case is being prepared by me. 'Po. Lab' advises presence necessary Well-

ington short, notice. Essential uso of funds, therefore suggest supply me preliminary £250 immediately. Credit my account, National Bank of New Zealand, Limited. You advise method transmission to me. New Zoaland Redwood Forests, Limited, position clearing. Expect developments. Will advise you as soon as possible. (Signed) Guidance." Mr. Monahan (quoting): "After long interview To. Lab' plan as previously discussed with you, mutual agreement reached." What does that mean. Mutual indicates more than one? Witness: T have not the faintest idea, unless they were members of electorates. His Honor: Did that come to you? Witness: Yes. Did you telegraph back as to what the mutual agreement was? —No. It was not intelligible ?—No. Mr. Monahan: There was a very intelligible bit in the next sentence was there not? Witness: I understand he was interviewing certain members ho was getting into the association. You mean to say that, without knowing what the cable was about, you sent him another £250? —Yes, thj\t was arranged. He was to carry out the arrangements. What was the position that was clearing as regards Redwood Forests? —We were coming to some arrangement as to Redwood Forests carrying on the sale of debenture's in India. Charging the Amount Mr. Monahan: Whom were you going to charge this £250 to? Witness: It was intended to charge it to Sterling Investments What had it to do with Sterling Investments? —It was helping the trust. It was really a clearing house? —It was helping the trust. Do you suggest that Sterling Investments was to get any particular benefit from this? —Tho trust was interested in Sterling Investments and therefore Sterling Investments should help the trust.

I give you one more opportunity. Do you seriously tell His Honor that "Po Lab" is some association of constituents? —I understood it to be a group of electors.

Did you ever understand that it might mean one of the parties in Parliament?—l never thought it would become that. Mr. Monahan: The letter you received from Mr. Clover Clark says: "I might work up a case. They say they would bo able to put up a cood barrage." A barrage could only be put up in Parliament, co ':1 it not? Witness: 1 suppose so. The letter goes on: "The most interesting matter to report on is that 'Anchor' rang me up to-day." Who is "Anchor?"

Mr. McArthur replied that it might be one of two persons. He supplied the names to His Honor, who remarked, "They mean nothing to me." Witness said the persons named were not connected with any of the companies in which he was interested. "Anchor" and "Polecat"

Mr. Monahan: Did Mr. Glover Clark arrange with you what person was to be indicated by "Anchor?" Witness: He indicated a certain group.

The letter goes on: " 'Anchor' disclosed the following plan: He is to enter into an arrangement for five years, at a stated salary, with our friend of 'Polecat' fame." Who is that? —I don't think it would be fair to give the name.

The name was written down and supplied to His Honor.

Mr. Monahan: The letter says: " 'Polecat' has received instructions immediately to start organising a plan of attack, which-will culminate in three years, a long term which I anticipated, and didn't particularly relish. The first step is to put 'Po Lab' on the Treasury benches and keep them thore by the group which holds the balance of power." Do you still say "Po Lab" is not- a political party? Who is going to bo put on the Treasury benches? Witness: The "Po Lab" organisation. His Honor: Come, Mr. McArthur. Mr. Monahan: Do you realise you are on oath? Witness: I do.

Then what was meant ?-rI think it was partly the Labour Party and partly the Country Party. That was what I understood, but I do not know any individuals. What is tho group that holds the balance of power?—l don't know. I can't remember. Copy of Letter Refused Dr. Louat said that when Mr. Monahan first raised this matter he caused the records in the Trust Building to be searched, but could find no copy of the letter. Later, when ho asked Mr. Monahan for a copy, it was refused for some reason he did not know. Tho result was to put him and Mr. McArthur at a disadvantage. Mr. Monahan: I accept responsibility for the refusal. Often we get more truthful evidence if people are not ready. Questioned again by Mr. Monahan. Mr. McArthur said: "I still say I was not interested in any party getting into Parliament."

Referring again to the letter, Mr. Monahan quoted a passage giving the names of many New Zealand newspapers, which the writer of the letter said "Anchor" was able to control. Witness: I don't think any man controls all those newspapers.

Another passage in the letter quoted by Mr. Monahan said that tho writer had left an anonymous person with the impression that Mr. McArthur would co-operate with him, but added that Mr. McArthur could get out of the arrangement if he wanted to. There was also reference to a meeting arranged for August 15. His Honor: Did you arrange to meet somebody on August 1G r* Witness: No. I was going to New Zealand about the middle of August. Questions by Commissioner Asked by His Honor the reason for all the secrocy in his transactions, Mr. McArthur said his primary motive was to prevent his opponents in New Zealand from misconstruing his actions. His Honor: Do you think they could have made representations that would be anything like as damaging as the evidence that has come before this Commission ? Witness: Well, the books have not been kept up. His Honor: And the business methods ?

Witness: Some of the methods were the object of criticism, but our intentions were honourable. We desired to build up a concern with a larue amount of capital. These methods include those mentioned in the letter road this morning. You don't suggest that they meant anything but bribery ?—I can only say there was no intention of bribing politicians. Ilis Honor suggested that Mr. McArthur should take home the letter and that, if at any timo beforo the Commission concluded its sittings, he could assist His Honor to draw any inference other than that it was a scheme of bribery to prevent the report to the New Zealand Government from gettiug before Parliament, he was to put the evidence beforo him. Mr. McArthur: I will do that. Your Honor.