THE SECRET HISTORY OF THE LOAN BILL.

Otago Witness, Issue 1905, 25 May 1888, Page 16

THE SECRET HISTORY OF THE LOAN BILL.

(Feom Oub Own Cobbespondent.) Wellington, May 21. The following " secret history of the Loan Bill " has been published here, and lam informed that it is authentic :— " Although it was well known before the session that a Loan Bill would be introduced to remedy the verbal defect which rendered the act of last year inoperative, it was not supposed it would be brought in, or at all events carried beyond the preliminary stages before the delivery of the Financial Statement, It was understood that the Government were not pressed for money, but had made financial arrangements which rendered it possible for them to carry on works without further borrowing until the latter part of the year. The Loan Bill, therefore, was looked upon as one of the ordinary bills of the session, which would come on in due course with other financial bills, and would be subject to discussion in the ordinary way. The whole question of the proposed new loan, in fact, was held to be reopened by the failure of the act of last session, and many members on both sides were strongly of opinion that, in view of the falling off in the revenue, and low rate of the colony's credit in London, the amount of the loan ought to be reduced to the actual amount of liabilities already incurred. A large section of the Holise, irrespective of parties, were in favour of putting- a stop to further borrowing altogether, and simply making proprovision for sums already borrowed, but not brought to account. The House, therefore, was completely taken by surprise by the Premier's announcement that the Loan Bill was to be brought in and passed through all stages at once, notwithstanding that no Financial Statement had been delivered and no provision made for meeting the increased charge attendant upon the raising of the loan. There was no time for any deliberation or organisation among the opponents of borrowing, who thus found themselves in the first week of the session face to face with the question of passing or rejecting a Loan Bill, without any information as to the position of the finances or proposals of the Government as to public works. The position is asserted to be without any precedent in our Parliament, no Government having ever before asked the House to take such, a step. The nearest case to it in analogy was that of the first session of 1879, when the Grey Ministry brought in and carried a five million loan bill, although no Financial Statement had been held. It is contended, however, that that case differed from this in an important respect. The Grey Ministry had been defeated, and had asked for and obtained a dissolution, and the Loan Bill was brought in and passed, with the consent of the victorious Opposition, as an urgently necessary financial measure, pending an appeal to the country. In the present case the Ministry were established in office with the whole session before them, and no public reason has been disclosed for any urgency regarding the Loan Bill. Members, therefore, were staggered by the announcement of the intention of the Government to suspend the Standing Orders and carry the bill through all stages. It was regarded as a coup d'etat of a most pronounced' description, and most members were somewhat at a loss as to how to proceed under such conditions. "The opponents of borrowing, nevertheless, determined on a line of action, though there was no time for proper concert. Mr Scobie Mackenzie gave notice of an amendment on the second reading of the Loan Bill, and a large ; body of members who had previously supported the Government resolved to support his amendment. It was deemed only fair to the Government, however, to acquaint them with this resolution, and accordingly Mr Fulton sought an interview with the Premier and informed him that he must not count upon his (Mr Fulton's) support to the Loan Bill, or that of other members who shared his views. Upon this the Premier requested Mr Fulton to come into his private room, where he was engaged in conversation with him for about a quarter of an hour. What passed there is not definitely known, but on emerging from the Premier's office Mr Fulton at once communicated with those who had determined with him to vote for Mr Mackenzie's amendment. He told them that the Premier, having bound him to the strictest secrecy, had made a disclosure to him which convinced him that the immediate passing of the Loan Bill was a matter of absolute necessity. He told members that he was powerless to open his lips as to the nature of the disclosure which the Premier had made known to him, having pledged his word not to do so ; but he affirmed that after that disclosure be felt compelled himself to vote for the bill, and he advised them to be guided by him. He mentioned that the ■Premier had made it a question of personal confidence, and had appealed to the cordial and long-sustained relations existing between them, and earnestly dwelt on the consequence to himself of being abandoned by his oldest and most trusted political friends. Mr Fulton acknowledged that he bad been unable to resist this appeal, and with characteristic loyal generosity he pleaded the Premier's cause for him with the other members as forcibly and eloquently as he could have done himself. So successful was he that without the slightest inkling of the nature of the disclosure which the Premier had made to him, but upon the bare faith of his word that it would be sufficient to convince them if they knew it, they consented to support the Loan Bill. They then communicated with Mr Mackenzie the result of Mr Fnlton's interview with the Premier. It was suggested that be should withdraw his amendment. Mr Mackenzie, however, having given notice of it, and having been assured of support for it from various quarters, felt bound to proceed with it, although without the assistance of

some 20, members on his own. side, whom he had previously counted upon. ' On the Opposition side there were nearly 30 members. Though without any, recognised leader in the Hcnse, the party impulse was to vote against the Loan Bill not only because it was a Government Measure! but also because it had been thrust upon them as a surprise, and in a manner which/they deemed a violation of their right to scrutinize all money bills with the utmost deliberation provided for by the forms of Parliament. Maiiyof them, too, were sincerely opposed to the bill upon principle, believing that in the, present state of the country no further borrowing ought to be authorised. There was still every pro. bability then, even after the decision of perhaps 20 members on the Government side,, of the amendment being supported by 30 or 40 Opposition and Independent members. After "considerable discussion, however, a disinclination manifested itself, on personal grounds, in some of the Opposition members, to support any amendment moved by Mr Mackenzie. Eventually, it was resolved to consult Sir Robert Stout, who was in Wellington on professional business, as to /what course the party should pursue. It has previously been stated that during his visit to ! Dunedin just before the session the ' Premier ! had an interview with Sir R. Stout lasting several hours. Accordingly, after some delay, Sir Robert Stout conveyed to the party a recommendation that they should not support Mr Mackenzie's amendment, but should vote for the Loan Bill, and this recommendation was forthwith adopted. It left the Government in the position of having carried the Loan Bill only by the assistance of the Opposition ; but on the other hand it entailed on the Opposition the discredit of having been instrumental in passing the Loan Bill against their political convictions, and of having failed to perform their legitimate constitutional functions." The Evening Press, commenting on this subject, says : — " Such is the secret history of the carrying of the notorious Loan Bill of 1888 by a majority of 65 against 7 in the first week of the session, and in the absence of any publio information whatever as to the necessity for the loan or capability of the colony to meet the charges of it. The bill was carried by the secret influence of the Premier of the colony operating in one direction, and the secret influence of the ex-Premier, who was defeated at the general election last year, operating in another direction, both influences tending to forward the same end and assuredly impelled by the same motive and operating in concert. It is one of the most astonishing things ever done in the politics of New Zealand, and it raises an uncomfortable doubt as to whether parliamentary government as carried out in this colony is not a greater danger than a despotism could be." All three local papers comment very strongly on the extraordinary statement made by Sir F. Whitaker on Friday that the failure to pass the Loan Bill would drive the colony into the Insolvency Court. SIR R. STOUT DISCLAIMS ADVISING THE OPPOSITION. I have just had a conversation with Sir R. Stout who assures me that he had nothing whatever to do with the action of the Opposition regarding the Loan Bill, and that neither did they consult him nor did he adviVe them. He expressly authorises me to contradict most positively the statement which has found publication with regard to his own conduct in the matter. A STORM BREWING. A well-informed correspondent gives me a version which differs slightly from that which I sent you from the Evening Press, but agrees hi e&sentials. He concludes by saying : — " It ia whispered that the secret reason for the, haste was due to a desire to help the Bank of New Zealand. An evening newspaper blurted out the alleged fact, and Sir Frederick Whitaker'a extraordinary lapse in the Council seemed only too surely to confirm it. The Opposition now freely declare that they were sold in the matter, and it is thought that there will be trouble over it yet. Such is the way important questions are decided in the House. The Council then took up the running, and Mr Waterhouse with an amendment similar to Mr Mackenzie's nearly succeeded in getting the Loan Bill delayed. Sir F. Whitaker is reported to be anything but comfortable over the expressions he used." On the other hand, although I have received such positive assurances from several quarters that the "secret history" is authentic, I have the strongest grounds for believing that the Fulton phase of the talo is nearly as mythical as the Stout part of it. That an interview between Mr Fulton and Sir H. Atkinson did take place is perfectly true, but I think you will find, when the whole truth is known (as it will be shortly), that all tho sen national tale about the deeply mysterious secret communication from the Premier is purely imaginary, aud that the Ministerial party supported the loan as an act of loyalty and good faith due to the Government they had placed in office, and partly as an act of common constancy, as they had voted for the Loan Act last year. I deem it necessary, however, to give you the whole story, as there is a tremendous uproar brewing over it for to-morrow, when a lengthened aud acrimonious discussion is expected. I may add that the account of the Loan Act blunder and its effects which I sent to you when the matter first, came out was a perfectly accurate one, and that there is no such financial emergency as has been alleged; but it is manifestly important to get the loan floated as soon as possible, and it was never dreamed that there would be any opposition to the mere correction of a clerical error.