THE WALTER GUTHRIE COMPANIES.

Otago Witness, Issue 2242, 18 February 1897, Page 23

THE WALTER GUTHRIE COMPANIES.

THE APPOINTMENT OF LIQUIDATORS. SOME OF THE AFFIDAVITS.

In connection with the application recently 1 heard befo-e Mr Justice Williams in Chambers for the appoiutment of Mr W. R. Cook as liquidator of Walter Quthrie aud Co. aud the allied companies the following affidavits were filed :—: — The affidavit of William Boyce Buller, assistant inspector of the Bank of New Zealand, dated the 17th December, 1896, is as follows :— 1. Pursuant to special instiuctioni in that behalf given to me by the oaid bunk 1 have for sonic time past been engaged in investigating on behalf of the «aid bank the history, position, and affairs of Walter Outline and Company (Limited), the New Zealand Pine Company (Limited) (hereinafter refened to by m* »s the Pine Company), the Coloninl Hardware, Wood wars, and Implement Company (Limited) (h'-miuatter referred to by me > as thn Colonial Company), the Southland Farmers' , Implement and Eauiueering Company (Limited) ! (hereinafter referred to br me as the hniithlsind i Company), the Dunedin Timber ami Hardware i Company (Limited) (hereinafter referred to by me ! as the Dunedin Timber Company), the City Sawj milling Company (Limited) (hereinafter referred i to by me ub the City Sawnnlling Company), nil of j which ure companies iucoiporated under "The Companies Act, 1882," and incidentally of a business) carried ou at Gore in the »aid colony under the style of the Gore Timber and Hardware Company (hereinafter referred to by me as the Gore Timber Coinp«iny). I 2. For the purposes of my investigation the said ' companies have from time to time furnished me with baUnce sheets, statements, and other information. 3 In and prior to the year 18S9 the firm of Walter Guthrie and Company was carrying on business at Invercargill an hardware, timber, and general merchants, under the style of Walter : Guthrie and Co. ! 4. In or about the in->nth of March <".f the year 1 1889 the Pine Company was foini'd with a nominal capital of £50,000, divided into 10,000 shares of £5 each, for the put pose, inter alia, of purchasing, acquiring, carrying on, aud working two sawmills and a large buth arc* in Southland, then under an agreement dated the Bth day of March, 1889, for the sale thereof from the said firm of Waller Guthrie and Co., Jihn Cordingley Oulbeck, and the said Walter Guthrie to James Ewart Ilanimh, as trustee for the company. 5. The said agreement was carried into effect (5 In or about the month of February, 1890, Walter Guthrie < and Company (Limited) w*b formed, with a nominal capital of £100,000, divided into 100,0'K) ahares of £1 each, for the purpose, inter alia, of purchasing or otherwise acquir- | ing the bubiness of ironmongers, merchant*, manufacturers, and importers then carried on by j the i.aid firm of Walter Gutbrie and Co. in Invercargill, and all or any of the real and personal pro. I perty belonging to the said firm in connection | with the Baid business and to undertake all or i any of the liabilities of the said firm in relation to ! such business, and for that purpose adopt and J cany into eflVct an agreement dated the '28th day of January, 1890, and made between the said firm of the one part and George William Brodrick on behalf of the company of the other part. 7. The said last-mentioned agreement was carried into effect. 8. In or about the month of May, 1892, the Colonial Company was formed, with a nominal capital of £50,000, divided into 50,000 shares of £1 each, for the purpose, inter alia, of carrying on business as hardware merchants, woodware, and implement manufacturers, timber nfttchants, sawmill proprietors and timber growerSj iron- , mongers, general merchants and importers of i merchaudiue of every description. j 9. The bußines-s carried on by the Colonial Comt pany has been carried on at Invercargtll chiefly as | hardware, woodware, and implement merchants. | 10. In or about the month of March, 1893, the Southland Company was foimed. with a nominal capital of £50,000, divided into 50,000 shares of £1 each, tor the puipose, inter alia, of carrying on business as woodware and implement manufacturers, engineers, timber merchants, sawmill pro1 prietors, timber grower^, hardware merchants, ; general merchants, and importers of morchandise ' of every description. I 11. The business carried on by the Southland i Company has been carried on at Invercargill, chiefly as implement manufacturers and eagineers. 12 In or about the month of January, 18?3, the , Dunedin Timber Company was formed, with a ' nominal capital «t £20,000, divided into 20,000 shares of £1 each, for the purpose, inter alia, of carrying on business as hardware merchants, woodware and implement manufacturers, timber merchants, sawmill proprietors and timber growers, ironmongers, general mei chants, and importers of merchandise of every description. 13. The buxineis carried on by the Duuedin Timber Company has been carried on at Dunedin, chiefly as timber and hardwire merchants. U. In or about the month of December. 1893, the City Sawmilling Company was formed, with a nominal capital of £25,000, divided into 25,000 shares of £1 each, for the purpose, inter alia, of carrying on business aa hardware merchants, woodware aud implement manufacturers, timber merchants, sawmill proprietors and timber growers, ironmongers, general merchants, and importers of merchandise of every description. 15. Ths business carried ou by the City Sawmilling Company has been carried on at Dunedin chiefly as timber merchants. 16. The business of the Gore Timber Company w»b, until its gale to Walter Guthrie and Company as hereinafter set out, carried on by Sir Robert Stout, Walter Guthrie, and George Mondy in partnership, but since the said sale it has been carried on by Walter Guthrie and Company (Limited). 17. The only one of the said several companies which has issued shares t > the public is Walter Guthrie and Company (Limited). j 18 All the said companies are by reason of shareß held by on« or more of them in the other or others of tbcm, intercalated with each other. The paper writings now produced to me and marked W B 8., No 1. are copies of the li3t of shaieholderain each of the said companies as supplied to me by the secretary of Walter Guthrie i and Company (Limited), and showing the names I of the said shareholders and the numbers of the shares held by them respectively, aud the amounts paid or credited s*i paid-up thereon. 19. The tai i Walter Gutbrie was either by himself, or in association with others, the promoter, and has throughout been one of the directors of each of the said incorporated companies. Until Walter Guthrie and Company (Limited) was ordered to be wound up he was the managing director of that company. 20. At the time of the formation of the said company of Walter Guthrie and Company (Limited), the firm of Walter Guthrie and Company, whope business and liabilities connected therewith that company was formed to take over, was heavily indebted t>» th- said bank. 21. Shortly after the formation of Walter Guthri* and Company (Limited) certain arrangements weie made with regard to the indebtedness of the said firm to the said bank, and in pursuance of those arrangements Walter Guthrie and Company (Limited) i?sued mortgage debentures for a sum of £45,100, and these debentures were accepted by the said bank in l eduction of an ' equivalent portion o£ the indebtedness of Walter 1 Guthrie and Company (Limited) to the said bank, ' and of the debentures so accepted £2»,000 worth were transferred to and bpcame the property of the Bank of New Zealand Estates Company (Limited), hereinafter referred to by me as the Estates Company. In further pursuance o' the said arrangements the indebtedness and liabilities of the said firm to the said bank were assumed by the said company, which thereupon became debtor to the said bank in respect thereof in lieu of the said firm.

; 22. On or about the 2HJ day of August, 1893, as appeared liy tho agreemt-nt of that date herein- , after refer; ed to, j (a) Walter Guthrie and Company (Limited) had I become further indebted to the said Dank ou overdraft, and the Pine Company and the Colonial Company were also respectively | indebt-d to the said bank on overdraft. Walter Guthrie and Co. (Limited) and the Pine Company were also respectively indebted to the bank on drafts accepted by them respectively ou account of goods purchased in England and America. (6) Walter Guthrie and Co (Limited), the Pine Company, the < olonial Company, and the partnership which carried ou the Gore Timber Company were reciprocally indebted on bills between them as follows :—: — Walter Guthrie and Co. (Limited) to Colonial Cou.pauy, £5703 3s 8d ; Walter Guthue and Co. (Limited) to Pine Company, £419 ss7d-jetsl22 9s 3d. Colonial Company to Walter Guthrie and Co. (Limited), £32SS4g 7d ; Colonial Company to Pine Company, £6133 13s 10d— £9426 ISs sd. Pine Company to Walter Guthrie and Co. (Limited), £6499 18s 8d ; Pine Company to Colonial Company, £2013 6s lid— ,£Bsl3 5s 7d. Gore Timber Company to Pine Company, jC 1 436 10s 4d: Gore Timber Company t> Colonial Company, £701 18s 4d— £2138 8s Bd. (c) The shareholders in the Pine Company were as follows :—: — Sir R.bert Stout „. 1069 Walter Guthrie _ 27.15 Gonrge Mondy 88 William Alexander Sim ■ 40 Joneuti Stock 10 Margaret White Guthrie 1 (d) The Pine Company itself held, either directly or in the nßineß of others, Il'',I I , 000 shares iv the Colonial Company. Kich of theru the said Sir Kobert Stout, Walter Guthrie, and George Mondy held 100 shares iv the Colonial Company— that is to nay, the Piue Company and the said Sir Robert Stout, Walter Guthris, and George Mondy held amongst t"em 10,300 shares out of the total issue of 10,fi05 shares of that company, and the Colonial Company in turn held 10.11S shares out of the total issue of 10,623 share* of the Southland Company. 23. On the o"ate hwt mentioned the agreement of August 21, 1893, of which a copy Is exhibited with my affidavit tiled in the taitl acti< n. No. 2545, was enteiud into between the tthareholders in the Pine Company, the partners in the Gore Timber Company, the Pine Company, Walter Guthrie and Company (Limited), the Colouial Company, the Southland Company, the said bank, and the Katateb Company. 24. By the said agreement of August 21, 1893. it was agreed, amongst other things, that the Pino Company shareholders aud the partners in tha Gore Timber Company should sell to Walter Guthrie and Company (Limited) their oharea in the said Pine Company aud the business of the Gore Timber Company for £80.000. This agreement was carried into effect, and th« said sum of £80 000 was satisfied by mortgage debentures of an equivalent nominal amount, forming part of a new issue of debentures by Walter Guthrie aud Co. (Limited), for the purpose of giving effect to the provisions of the said agreement. 25 By the caid agreement of August 21, 1893, the Estates Company agreed to surrender the mortgage debentures of Walter Guthrie and Company (Limited) issued to it as before-mentioned andtoconvertthe name and certain other indebtedness into mortgage debrtntures of the said new is^ue. And this agreement was carried into effect. 2b'. By the agreement of August 21, 1893, the said bank »Iho agrend to accept debentures of the said new issue for the amouut of the indebtedness to it of the Pine Company, W»lt>-r Guthrie and Company (Limited), and the Colonial Company respectively ; and also for the amount of the reciprocal "indebtrdness between companies as set out in paragraph 22 of this my alhdavit, and this agreement was carried into effect. 27. By the said agreement of August 21, 1893, agreements were made : (a) Permitting rach of them the said Walter Outhrie and Company (Limited), the Pine Company, the Colonial Company, and the Southland Company, h~reinnfrer collectively referred to by me as the said four companies, to overdraw its account with the said bank to an extent not exceeding at any time in the case of each company the sum of £301)0. (&) For advances to Walter Guthrie and Company (Limited) for the purchase of goods in England and America to an amount not exceeding in the case of goods purchased in England au avarage of £3000 per month, and in the case of gno^s purchased in Americ* an average of £500 per month. (c) Prescribing the mode in which the lastmentioned credits should be drawn for and accepted. 28. For securing the advances mentioned in the lai*t pieceding paragraph of this my affidavit debentures of the said new issue of the nominal amount of £25,000 were hypothecated to the said bank. 29 In order to give effect to the provisions of the s»id agreement of August 21, 1893, mortgage debentures of the nominal amount of £223,006 have been issued by Walter Guthrie and Company (Limited), aud the»e debentures were by virtue of the said agreement of Aujru*t2l, 1893, and a supplementary agreement dated September 11, 1893, and by a debenture trust deed the debentures themselves charged or Recured upon all the property and assets of the said four conipanie". 30 The limits of advance* prescribed as set forth in paragraph 29 of this my affidavit were from time to time exceeded ; and in order to provide security for the exce«B indebtedness, each of th-m— the said Robert Stout, Walter Guthrie, G«orge Mondy, the Baid bank, the Estates Company, and others— out of the debentures issued to them respectively contributed a quota to be held by the "aid bank. 31. The said bank and Estates Company now hold of the said new issue of debentures the following :— By the bank — Accepted in lieu of indebtedneos £80,000 Held under hypothecation or by way of security £52,100-£132,100 By the Estates Company — Accepted in lieu of indebtedness £37,600 Accepted as purchase money for property Bold to Walter Guthrie... £3,500-£173,200 Leaving a balance held by others of £50,000 Total £223,2U0 32 The paid bank on May 30 laßt demanded payment of the paid excess indebtedness,-then due from each of the .said four company's, and same not being paid, the said bank on Jun« 4 last nerved on each of the said companies a demand in terms of section 143 of "The Companies Act 1882." 3'! On December 10, 1896. a petition by the said bank was filed to have Walter Guthrie and Company wound up by the court, and on October 30 following an order was made that the same should be wound up by the court. 34 On December 15, 189 r >, petitions by the said bank were filed to have the Pine Company, the Colonial Company, and the Southland Company wound up by the court, and these petitions are now pending. 35. The above-mentioned action, No. 2545 (8ank of New Zealand v. Walter Guthrie and Co., Limited, aud Others), was commenced on November 10, 1896, and the other actions above-men-tioned were commenced pn December 14. 1896. 36. As a result of my investigations of the history, position, and affairs of the several companies above-mentioned I say that the management of the said companies has been improper, and that such improper management is of such a character that it ought to be investigated by this court. Amongst other acts which 1 describe aB improper acts of management are the following, that is to say — , (a) For the purposes of the balance sheet of the said Pine Company ending on the 30th day of September 1893 the assets of that com-

pany appear to hfivn Yen wtitten up !n value by the .sum of £4500 bej ond wh&C they had been valmd at fur the purposes of the said agreement of the 21st duy of August -» preceding. This sum was credited to profit and loss As by the agreement last mentioned Walter Guthrie and Co. (Limited) had acquired th« shares held in the Pine Company by the former oUareholders therein, the effect of so enhancing the aeaats of the »aid Pine Company and cnriying the enhanced amount to the credit of profit and loss was to add to the profits of Walter Guthrie and Co. (Limited), and by thosa means a dividend w^as paid by Walter Guthrie and Co. (Limited), whereas, irrespective of those means itx earnings would not have enabled it to pay such dividend. (6) For the purposes of the balance sheet of the said Pine Company ending the 31st clay of March 1891 the assets of the said Pine Company appear to have been written up in value by the further sum of £5500, which w»8 credited -o profit and loss, as was done witn the £45' X) before-mentioned, and by those means a dividend was again paid by Walter Guthrie and Co. (Limited) ; whereas, irrespective of such means, it* earnings would not have enabled it to pay such dividend. (c) The assetß of all tha said companies havu from time to time been shown for the purposes of baUnce sheets at largely inflated values, and have been improperly written up. (d) The accounts of the said companies inter se have been S'l stated as not to show the true position of such companies. (c) Surticiont provisiou for depreciation has not been made in thecase of the said, Pino Company, whose principal asset consists of bush, giii- 1 no writiug-v-off appear to have been made for bush cut from its bush areas, nor has any sinking fund been established to meet such depreciation. (/) Kuflicient provision has not been made for bad or doubtful debts iv tho case of the said companies as a whole, aud the said several companies as a whole have made a loss ot over £19,000 within the last two years. 37. Since the year 1891 inclusive up to the 31sfc day of Match, 1595, the total losses to the debit, of profit »nd locs made by Walter Guthrie and Co. (Limited) uud thr said several other companies in tliH course of carrying on their businesses have together amounted to £45,313 ISs Btt, but I believe that if their accounts be properly made up the loss will be »hown to have amounted to over £57,0(10. 3S. In consequence of the premises it is impoitant that any person who is appointed a liquidator of any of the said companies should be a person who .has in no way been connected with tho management of the said companies or any of them. William Richard Cook, tha provisional • fljcial liquidator of Walter Guthrie and Co. (Limited) is such a person. 39. The said William Richard Cook is a fit and pioper person to be appointed and act as provisional official liqui 'ator of the above-mentioned companies His business is to act as a liquidator, and he has offices and a large staff of clerk*, some of whom are expert accountants, in the chief centre* of the colony, and has_ agents iv many other placet, and if cape ially qualified and competent to wind up hirge businesses. He has acted aB receiver and provisional official liquidator of Walte,r Guthrie and Company (Limited), and prior to that had investigated the position and affairs of that aim the said other companies. He is not a customer of the said bank, and is entirely independent of it. ,40 The Pine Company, the Colonial Company, and th« Southland Company are by reason particularly of their liability for the debenture* of Wai cr Guthrie and Co. (Limited) insolvent,. The asiet* of those companies and of Walter Gu lirie and Co. (Limited) hay« recently been valued on behalf of the bank. Mr R. B. Martin, Jun., a surveyor and expert in bush, valued th.« said Pine Company's bush areas and sawmills, and Mr W. 11. Cook and experts employed by him valued the assets of the said other companies. The said WilUarn Richard Cook alsti investigated the -balance sheets iv addition to myself. And I say that the result of sucu valuations and investigations shows that tins assets of the said four companies arc totally inadequate to oatisfy the nominal amount of thsaid debentures, without interest. 41. It is in my opinion expedient and desiiable for the protection of the securities of the said debenture-holders that a receiver should w. appointed in the said actions of tho assets an 1 usinessea of the Pine Company, the Celoni^ Company, and the Southland Company raw tivelv, and the said William Richard Cook is i> my judement a fit and proper person to act. ;t such receiver. 42. It is in my opinion desirable and expedient that the businesses of the Pine Company and the Southland Coo'pany should be earned on with a view to the sale thereof as going loncerns. The Colonial Company's business has for tho past two years been in course of liquidation by gradual realisation, and it in in my opinion desirable and expedient that its business should continue to be so carried on for a short period with a view to a sale and as a mode of realising its assets. In an affidavit dated December 16, W. B. Buller, after getting out that Mr W. H. Breut has nince the beginning of April been secretary of Walter Guthrie and Co. (Limited), and of al'ied companies, went on to say: — It has been the practice of Walter Guthrie and Co. (Limited) and allied companies to make up their annual balanco sheets as up to the last day of March in each year. The said bank was desirous of obtaining the balance sheets of Walter Guthrie and Co. (Limited) and the allied companies for the year en ling March, 1896. and applied for the same to Walter Guthrie and Co. (Limited), but the said balance sheets were not ready for delivery until the beginning of November last, when copies of the same were handed to the said bank. The said Walter Horace Brent was concerned in, if he was not tbe person ultimately responsible for, the preparation of the balance sheet of the said several companies for the period ended Maroh-31 last. * . , The said balance sheets have been examined, and as a result of such examination I say that is is desirable that there should be a further investigation in the matter of the winding-up of Walter Gutbrie and Co. (Limited) and the allied companies, with reference to the circumstances con nected with the preparation of such balance sheets, and with reference to the statements therein set forth, and the materials on which tue same were based. I have recently seen for the first time timo the document hereto annexed and marked W. 8.8 , No. 4, also purporting to be the profit and losh account of Walter Guthrie and Co. (Limited) for the year ended March 31, 189(5, and I am informed and believe that the said William Horace Brent; stated that the said exhibit marked W.B 8., No. 3, was intended for the public, whereas the account, he stated according to said exhibit, W. 8.8., No. 4, was intended for private information. I say, in view of the premises and of the allegations made by me in my affidavit of this date, already sworn and filed in the matters abovementioned, there are acts of management of the said several companies, and acts connected with, the preparation of their accounts, that call for investigation, and which the said bank desires to have investigated, and that it is not fit and proper that anyone who has in any way been concerned in the matters to be inquired into should be a liquidator of any of the actions brought by the Baid bank against any of the said companies. Annexed hereto and marked W. B. 8., No. 3, is a copy of the profit and loss account of Walter Guthrie and Co. (Limited) for the year ending3lst March 1896, as handed to the said bank. W B. 8., No. 3— The profit and loss account of Walter Guthrie and Co. for the year ended Man* 31, 1896. Dr. 1895-March 31. To charges, wage*, interest, and bad debts £23,018 2 f Cr. 1895— March 31. By balance ... „, «, w JE3.211 1 9 By gross profit (including interest. Ad

from other companies) £20,778 0 5 Balance „ 1.02S 14 8 21,806 It. 1 . £'25,018* 2 9 W. B. 8., No. I— Profit and lobs account for the year emlcd Maich 31, 1896. JJr. lS9ti-March 31. To general charges, wages, &c. ... j£S,OS9 4 11 To interest 0,374 0 9 To bad debts 2,003 17 9 Gore Timber aud "Hardware Company, loss, March a 1, 189b" 252 4 4 £16,tjS9 7 9 Cr. 1895-March 31. By balance £3,211 7 8 IS96— Mfrch.3l. By gross profits ... £9,315 19 6 Left from 1595, goods account 54 0 0 Pine Company (net profit March 31, 189(3) 3,099 5 11 £12,449 5 5 Balance 1,028 14 8 13,478 0 1 £16,(389 7 9 The affidavit of W. H. Brett (exhibit D of Mr Cook'n affidavit) read as follows -.—. — That I have and kept a careful diary each day, showing time- I have been present at the company's offices ; al=o the time Mr Cook bai been present. That since date of my appointment I nave been present at the oflice for the full number of working hours each day, *vith the exception of four days in Duncdiu on business of the company. That since .uy appointment Mr Cook has been very little on the premise', and has been absent 16 days altogether— at one time for 11 days on end. That duiing the rest of the time Mr Cook has not been al the company's office more than on an average half an hour per djy to my knowledge, That this continued absence and want of attention to the business have seriously hampered same. That njy time has been fully occupied engaging men, supervising stock-taking, making out stock sheet for tendering purposas, attending to correspondence, aud attending to insurance matters, assisting accountants, and interviewing customer* who, having received deniands for piy nient of accounts, wish to explain their position and make arrangements for settlement. That, as I must act jointly with Mr Cook, many arrangements have fallen through and country customers returned home, as they could notTafford the time to wait for Mr Cook, thus causing serious delay — possibly loss in thecollecuon of the book debts That, on or about November 26, I had a discussion with Air Cook re the disposal of the large stocks held by the company, when as we differed in our views, it was mutually agreed that each should put his ideas into writing, and then endeavour to come 10 some amicable arrangement. That on Friday, November -7, I fully tixpicted my views in writing, and asked Mr Cook for his, as arranged, but could not get same, Mr Cook Baying that as I had all the information to hjuid, which he had not, it was better to see my letter and then give it serious attention, and with a view to falling in with my views, if he deemed them advisable, and, if not, to give me lrig views and reasons for same. i That, on receipt of my letter, Mr Cook wrote me on Saturday, November 28, saying that the matter was of so much importance that he wished ! to think it over until .Monday, November 30. That on Tuesday, December 1, I received a reply, dated November 30, intimating that he was unable to agree •with my views, and that he was strongly of opinion that the business should be closed and tenders called for the large stock held. That the stock is still untouched, and cannot be sold by tender for about two months yet, when It will have remained on the premises over four months, during which time, had my views been acted on, nearly half could have been sold to have realised considerably more than landed cost and expenses of selling, besides supplying tho allied companies, especially the Colonial Company, with their requirements. That large shipment?, suitable to Walter Guthrie and Co.'s stock, and specially indented for sorting up same, were refused and thrown on the bank's hands. That I am informed and believe the bank handed over these bhipments to Mr Cook's firm for Bale, and that that firm dieposed of a considerable number of lines, which were in urgent request in the markoi. to rival houses, when the two Dunedin houßes for whom part of the shipments were specially indented were completely out of stock of such lines, and were prepared to pay a higher cash price than thus obtained. lam also informed and believe that the balance of the said shipments have been taken into the Colonial Company's stock, thus resuscitating a company which was being intentionally run down with a view to being absorbed by the larger comnany. This action no doubt relieved the bank, but at the expense of the other debenture-holders, it being certain that, when the company is disposed of by tender or otherwise, the balance of such shipments then on haud will not realise more than —say, 8s to 10s in the pound. That no good business man would advocate the closing of a large concern like Walter Guthrie and Co , with its assorted stock of everyday and seasonable goods, and at the same time keep open and replenish a company like the Colonial Company, whose saleable everyday lines had completely run out, and which was only kept going Jroin the stocks of the parent company. That Mr Cook, instead of jointly investigating »ccouuts with me as my Colleague, has, fiom his Dv»n firm's office, written me numerous aud lengthy letters on business connected with the company, which business could be more quickly and satisfactorily explained by a joint investigation of the books and documents in the company's possession. That I have reeeuted this waste of time, which is fully occupied, and have more than once requested Mr Cook to avail himself of my services to jointly investigate the books, but without success. More coula thus be explained in an hour than by weeks of correspondence. That I am informed, and believe, that Mr Cook is acting in a similar manner to the manager of the Pine Company and Southland Company, causing them annoyance and waste of time trying to explain in writing that which would be selfevident by personal perusal of the books and vouchers in each company's possession. That some consignment goods were delivered without authority by men employed by us, who were satisfied about the bona fides of the transaction, but had omitted to get instructions from the liquidators. That Mr Cook, without consulting me, got a report from these men, and used that report in an attempt to saddle me with the responsibility of delivery, but was unsuccessful, rs those men have written me expressing regret that thtir letter r-bould have been capable of being misconstrued, and stating clearly that they had no instructions from me. That, in ray opinion, this is not the way in which one liquidator should treat another, and can only be with one object, and is certainly not in the interests of the liquidation. James Collins, of Invercurgtll. pawmiller, in his affidavit (exhibit A of Mr Cook's affidavit) declared : 1. That I have been connected with sawmilling for a number of years, during the la»t seven of which I have acted in the capacity of (1) inspector >nd (2) manager of the New Zealand Pine Company (Limited), hereinafter referred to by me as the Pine Company. 2. That about beven years ago an arrangement was come to by the principal sawmillers and timber merchants in Canterbury, Otago, and Southland to sell timber, wholesale and re'aiJ, at fixed prices. In my opinion this arrangement has resulted beneficially to both employers and employees. 3. That on January 12 inst. William Howes, Ihe representative of the provisional official liquidator, hereinafter referred to as the liquidator, verbally intimated to me that he should Ignore the wholesale and letail fixed prices already referred tr>7 aiH would sell timber in the ©pen maikbt at what it would fetch. And lam of opinion that if the atuiueiiicnt as to liices 13 broii<.u L>y the sawinilleis in boutuLiud

the result would bo most disastrous to the Piue Company. 4 That since the liquidator assumed control of the Piue Company gross neglect has, in my ! opinion, been displayed by his representative in j attention to correspondence, and I have complained of such neglect by letter to such liquidator, but no attention has been paid to my complaint, and that as a result of such neglect, great anuoyance has been caused to customers and great loss resulted to the Pine Company. 5. That I have been instructed by the liquidator to sell for cash only, and in tny opinion this has resulted aud must in future result in much loss, inasmuch as timber merchants invariably buy wholesale and keep their timber ftom six to twelve months, and in some ca j es much Inngei, in their yards. The great advantage of giving terms in such cases is shown by the fact Hi it the aggiugite of bad debts made by the Pine Company for the period from March, 1895, to the date ot the appointment of the liquidator does not exceed the sum of £50. 6. That losses on contracts have been caused by the action of the liquidatoi in not paying wages accrued due before the date of the order for liquidation, inasmuch as the men will not now « oik for the same wage, and much dissension has been caused amongst the employees in consequence of not getting all their money. 7. That siucethe appointment of the liquidator, and in consequence of the action takcu by him, the volume of bueiness done has very greatly decreased — that orders have been canceled freely as the result of circulars issued by the liquidator peremptorily demanding cash, which circulais | have, to ipy knowledge, given great offence to good customers,. 8. That in m> opinion the liquidator, "William Richard Cook, does not ami cannot, in consequence of his other appointments in similar capacities, devote the time necessary to a proplr liquidation of the Pine Company. That he Ins only beeti to tho office in person three times since his appointment, and that in consequence I am affoided no opportunity for personal interviews with him, which are highly necessary and would result in a great saving of time t> me I h.ive intimated verbally to him the desirability of tegular personal intei views and inspections by him of the Piue Company's business, but no notice has been taken thereof. 9 That the manner in which the business of the Pine Company is neglected, iv consequence of the inattention of the liquidator, may be instanced by the fact that tramway material ordered by tho Pine Company through Guthrie and Co. has been lying in Guthrie and Co.'s store in Invercargillfor fully a month undelivered, though repented applications have been made therefor 10. That the course of action generally pursued by the liquidator in connection with the business of the Pine Company and the neglect and general inattention di»playcd by him have, in ruy opinion, alreii'ij caused gre.it lo«, and mus>t result iv furthei 'ud serious loss to the liquidation. The affidavit of John M&calisler, of Inver- ' cargill, solicitor (exhibit C of Mr Cook's affidavit) for W. Wood and Co., Christchurch, ' alleged thet the Southland Farmers' Implement and Engineering Company held certain . goods, valued at £2000, as agents for Wood and Co., who in turn are agents for John Fowler and Sons, of Leads ; that in Jauuary last h8 wrote several letters to the liquidator ! asking to be supplied with a Iht of all goods in the company's possession belongiug to his clients ; th&t, getting no satisfactory reply, he had cancelled all agencies held by the company in respect to his clients, at the same time notifying the liquidator tfiat application in the matter would be made to the Supreme* Court In an affidavit dated January 26, \Y. B. '■ Buller repeats the allegations contained iv I bin previous affidavit, with regard to the I qualifications of W. K. Cook as a liquidator ; ! that he is advised that the duties of getting in and realising the assets of Walter Guthrie and Co. will not devolve on tho official liquidator, except perhaps as a formal party, but on the court iv the action brought by the bunk sgaiust the s&id comuauy and others for the purpose of enforcing the charge created by the company's debentures and executing the trusts of the debenture trust deed ; and that, in hia opinion, it would be prejudicial to the effective discharge of the duties and functions of the official liquidator if more than one be appointed, and especially so if anyone who has beeu an officer of Guthrie and Co. be appointed one of the liquidators. W. B. Buller, in his affidavit of February 5, says that having been shown and read certain affidavit!) in reference to the bank's application for the appointment of W. 11. Cook as official liquidator, ho asserts on behalf of tho bank that " I am quite satisfied that the charge made against the s&id William Richard Cook by the lirst-mentiorjed affidavits are unfounded, snd that the said bank is still of opinion that; the said William Richard Cook is a fit and proper person to be appointed sole official liquidator of the said company, and still desires that he should be so appointed." The affidavit of Charles Macandrew Howison, manager for the City Sawmilling Company (exhibit B in Mr Cook's affidavit), says th».t the provisional liquidator of Walter Guthrie and Co. (Limited) promised to give him the first offor of certain goods indented for his company by Walter Guthrie and Co. (Limited), and that he was piepared to take s&nia aud pay net earn ; that the said goods were sold to various other poople without giving him the opportunity of purchasing ; tbat ho did not know at what price all these goods were i sold, but he did know that 60,000 laths were : Bold at equal to 18s 6d per thousand, and that \ he offered 27s per thouaaud for the same laths ; that he particularly wanted all the goods in question, and had orders waiting, so that his ! trade was disorganised thereby, causing him to purchase the goods elsewhere at advanced prices to keep his trade going, such being stable lines in his trade ; and tbat t'- cement and laths were sold to his rivals iv t who were thus benefited at hia expense, o Jdes causing him to break faith with customers, resulting in his beiDg deprived of their order* for timber and other building materials. j Mr Cook, in his answering affidavit, filed | February 5, said :—: — 1. I b'xve read the documents of which copies are now produced to me and inaiked respectively A, B, C, and D. 2. The Baid documents were, I am informed and believe, shown to and left with Messrs Kenyon and Hoskinc, the solicitor having the carnage of j the proceedings in the seveial matteis above j mentioned, as being copie-i of .itliilavits which the above-named Walter Guthrie had obtained for the purpose of i>iug on the application to be made on the sth of February, ISD7, for the appointment of sn offici.il liquidator of Walter i Guthrie aud Co. (Limited). 3. As to the third paragraph of the affidavit, of which a copy is now produced and maiked A, being the affidavit of Jimes Collins, deposing that I verbally intimated to hiu that I should ! ignore the wholesale and letail fixed ]irice3 re- I feired to in his affidavit, and would sell timber J in the open market at what it would fetch, I say that the impression intended to be con\c., e<l by that statement is. eironeous. The facts aie that ths New Zealand Pine Company (Limited), hereinafter referted to U'<j Pino Company, had been in the hubil suppljing timber to the tvso Dune un companies known a* the City Milling Company (Limited) and the Dunediu Timber and Hardware Company (Limited). On my appuintinent aa receiver and , liquidator of the Piue Company I «as informed that three shipments of timber had beeu ordeiod by the two Dunedin companies from the Pine Company, to he sent to Dunedin. The two Dunedin conipan es are two of the companies interconnected with the companies ;i'»r>\e mentioned in manner lefcrred toby Wiuunu 15m ro L'uller in hia affidavit awoiu and tiled in ihe above inatteid

'on the 17th December, 1896. I had investigated the affairs of the said two Dunedin companies shoitly befoie my appointment as receiver ,tud liquidator of tho Piue Company, and so I thoroughly knew their financial position. Their financial position was such that 1 was. not justified in parting with goods of the Pine Company to them on credit, and I therefore gave instructions that the said shipments were not to be delivered to them without payment for the same being made in ca^h. The said Dunediu companies did not pay cash, and in consequence the timber was not delivered to them, and iv the meantime remained in the custody of the Otago Harbour Board. As the Harbour Bo*rd required the timber to bo taken away, and their charges would accumulate while the timber was ou their hands, it w.<» necessary that I should effect a prompt sale. The two Dunedin companies, knowing tins, expected to be able to obtain the timber at a less price than it was their usage to be charged by the Pine Company. I gave instructions that if the companies did not tako it for ca-di, or if Mr Collins did not tiud some other outlet for it, it would be necensaiy to dispose of it in the open market. My instructions merely iela.ted to these shipments, and L did not contemplate inteifurmg further or otherwise with the sawmillerb' aruiiMiiii" ' refeired to by Mr Collins. Kventually aii.ui£ements \scro m.i'lc with the two Dunedin companies under which they rook the saul shipments I know of no othoi instance in which it was suggested that the tanff prices should lie ignored 4 Keferri'i™ to poagrapli No. 4 of Mr James Collins'i aflidivit, in which he depose-, that, in his opinion, sunce 1 a=siuued contiol of the Pine Company gross neglect has b'-en displayed by my representative in attention to correspondence, and that lie has c unplaincd of sucn neglect, by letter to me, but no attention has been paid to such complaint, and that as a result of biich ne^loct great annoyance has beeu caused to pustuineis, and great loss has resulted to the Piue Company, ' siy that on m\ arrival in Invercargill ou the 22nd December last, immediately after uiy appointment as receiver and liquidator, I received the letter of which the following is a copy :— "Invercargill. N.Z., December 22, lS9'i. "To the Provisional Liquidator of the N.Z. Pine Company (Limited). "Sir,— l respectfully request tbat I get instructions bow to proceed with the business of this company. It haa been the custom here that all correspondence should leceive prompt attenti"n, particularly that in connection with mills. At pre-eut such is uot tho case, owing to chauge in deliveiy of mail. There is also payment of men's wages and seveial other masters en which I would like definite instructions.— Yours ie<pectfully, "Jap Com.i.ns, " Secretary of N.Z. Pine Company." On the same day I had au inters lew vrith Mr Collins, and discussed matters, connected with the Pine Uomp.my. At that intei view he stated that he wished to open all correspondence himself. 1 objected to this, and insisted on doing so mjMelf, and theuceforvyaid caused all letters to be brought to my othce. The said James Collins has chafed at this. My mode ot dealing with all letters is to peruse them immediately, to give instructions thereon where necessary, aud to send the letters and instructions on at once tn the Pine Company'- office, wheie I employ Harold liovds, my own employee, as a repiesen-t-itive to beo that my instructions are carried out. 5 I had no letter of complaint from the said James *'olli&s, unless the letter set forth m the pi ecetling paragraph can be so described. I have received no letter complaining of neglect to correspondence, and I have never been informed of any such annoyance or great loss as the said James Collins deposes to. 6. 'I he said James Collins is a member of, or otherwise interested in, a firm of Collins and Roff, timber ineicbants, doing business iv owercargi'.i, ami orders intended for the Pine Company had baeii intercepted by the s*id James Collins and executed by the said firm of '"ollins and Roff. The copy of letters now produced to me (and marked E, F, (x, H, I, and X) are true copies of letters jj&neived by me on this subject. In addition to showing the prudwice of my opening all letters myself, the said exhibits support my foregoiuK statement as to the intercepti in of orders. 7. As to the fifth paragraph of the said James Collius'a affidavit deposing that ho has been insti ucted by me to sell for cash only, I say this is false, except under the circumstances hereinbefore mentioned in the case of the said two Duuedin companies, and with whose affairs I was, as hereinb 'fore stated, well acquainted by reason of recent investigations. As a matter of fact, the business of thr Pine Company has not been conducted on a cash basis, but has been run by Mr Collins .ou the usual and ordinary credit basis. S As to the sixth paiagraph of the said James Collins's affidavit, that losses on contracts have been caused by the action of the liquidator in not paying wages accrued due before the date of the order for liquidation,, I say that I was advised by my eolicitor that I was not justified in paying any debt?, whether wages or otherwise, which had accrued due before the date of the presentation of the netition for winding up, which is the date the said James Collins must refer to, as there has as yet been uo order for liquidation, and I therefoie did not pay the wages referred to. If there have been any losses on contracts or dissension amongst the employee* I have not heard of such losses or dissension, aud if such had existed to the knowledge of the said James Collins it was his duty to so inform me ; but he never did 30, except in so far as the letters of which copies are vow produced to me marked "L" aud "M." may be said to describe dissension. i). As to tho seventh paragraph of the said Jame« Collins's affidavit, in which he deposes that since my appointment and in consequence of the action t-»ken by me thu volume of business done has very greatly decreased, and that ordeis have been cancelled fieely as the result of the circulars i&sued by mc; pcemptorily demanding cash, I say that the volume of busineas has not decreased through any action of laiue, and I deny that it ha*, as stated by the said Jauie* Colliu3, very greatly decreased. If there is any appreciable decrease inl)Uaiuesd done since my appointment it may fairly be attributed to the following causes :-(l) To the closing of the mills for holiday* from the 24th December to the 4th January; (2) to the small demand ,for timber by the two Dunedin companies in consequence of my refusal to supply same to them on ciedit ; (!!) to the absence of the tiavisller from his duties since the ISth December last, which, 1 am informed, was in consequence of six weeks' hoi iday granted to him by the said James Collins ; (1) the execution by Collins and Koft of orders inlet c:ptcd as before deposed to. I further say that the form of the circular sent out by iue wan prepared by my solicitor iv Invercargill The ciicular was .sent out with a statement of accounts to the date of tho winding-up petition, and the document now produced to me anJ mniked "N" is ,1 copy of the said ' circular. The sending o'lt of the circular was essential In the discharge of my duties as liquidator, and I say it did not to my know ledge cause the cancellation of any order?, and if it did the said James Colliua has never sn informed me. This circulai was followed by another in the form " O" now pioduced to nip 10. Ac to the t-ighth paragraph of the said •Tames Collins'a affidavit, in which he deposes to his opiniou that I do not and cannot in consequence of my other appointments in similar capacities de\ote the time ntcessary to a proper liquidation of the Pine Company, I say that I have not jet appointed to liquidate the Pine Company, and mv other appointments do not preveut me ftom giving full and necessary attention to to the carrying on of the Pine Company's business as i have beeu authorised to do. The statement that I have oalv beeu to the Pine Compauj'h oflice in puisou three times since my appu'ntiut nt ii obso'ii'ilvincoiie-t. On several oc.-a'-ions when I c.'ll-il Mr Collins his been sbset.t, and that for l»r ,^i»y period", sometimes for on<' or moie d*j ■> at a timo, and that, without hia having advised me of his intention to be so absent. Jf tho said James Collins wanted to see me on any occasion lie could easily have clone so, ai my ofhee is central and i= within a stone's tbiow of the Pine Company's olfii-e ; but he lias ntvur yet called upon me nnr even cmimuniciled with iiie hy telephone. I have since my appointment jilare-l on" of my own employee-;, the said Hair.ld Koyd-i, in tin- Tine Conip-iny'i oil) -c to see my iusmiehoiis l.vi iod < lit, ml 1 have ul\va\ i bueu iv atliiKUi.ii; «c my oivu UUC'. 1 and exercised

a close supervision over all business of the Pine Company. 11. As regards the ninth paragraph of the said James Collins's affidavit, iv winch he depose* that tramway material ordered by the I'ine Company through Guthrie and Co. had neen lying iv that company s btore in luvercargtll f r fully a mouth, undelivered, though repeated applications had been made therefor, I say the fact» are that Mr Brent and I as receivers and liquidators of Walter Guthrie and Co. (Limited) agreed that no sales from the stock of that compiiiy should be made until the stock sheets of tha^, company were com- , pleted. The tramway material referred to (it 1 consisted of some iron dogs) was not actually 1 required until the end of lust weok, as the Pine Company on being informed of the stock-taking had intuuaced they could d>> without it for a time, and then when an appli -ation was made for it to ■ the receivers aud liquidators of Walter tiuthrie , and Co. (Limited) an order was at once given for the delivery of the material. The matter is duly recorded in the minute book kept by th« receivers and liquidators of Walter Guthrie and j Co (Limited.). I 12. The conduct of the said Jame<" Collins and others of the employees of the above-mentioned empanie* has exhibited a determined effort to impede me in carrying ou my duties as receiver , and liquidator This conduct has been more ' marked on the part of the said James Collins since 1 diseoveie'i, as the fact, if, that -«fter the winding-up petition had been presented against the Pine Company, he with knowledge of that fact gave up to his firm of Cull i us mid (loft certain ' proimssoiy lmtes belonging to the Pine < Vmpany .11 piuivnt of a cheque of the Pin" Company for £100 which had been dislioiriU'ed in c uisequence ■ of the petition, and then t 1 cover up the irinsaction he caused it to be antered m the I'ine Compmiy's books undur datt> of the Ist December, ■ 1S!)B. I have u'so disisoveied, as the fact is, that , on the 18th D-cember, lSSiri, h -sold to his s-ud firm an engine boiler and other (;oods for £84 18s. 13. In consequence of my discovery nf the inter1 cepten orders and the giving up of the piomissory notes as hereiubefotc deposes to, I should have 1 dismissed the si.rl James Collins on fie spot but, , for the tei ms of the order liniui gmy power*. I j nevertheless t>everelv remonstrated witu him. By reason of the premises, tho said Jumes Collins bears me no goodwill. 14. As to the affidavit of which a copy is now produced to me and marked " B," being the alfii davit of Charles Macandrew Howison, I say that ! ths goods ieff-red to by him weie not lundled ; by me as provisional official liquidator of Walter 1 Guthrie and Co. (Limited), as »ugge»tr<J by the ,s»id Charles Macandrew Howison, and I'uever made any pioinisc to «ive him the first ffer of °ame. The facts connected with these sjoods are , tbat they, with other goods, were indented by J Walter Outline and Co (Limited) froiu»abr >ad, , and were shipped to New Zealand, and drafts for their cost wriv accepted by the Cauk of New Zealand against the goods, aud the bank therefore held the bills of lading aud ship .ing documents for Kiime. The said W Her Horace Brent and I, as leceiver? and liquidators of Walter Guthrio and Co (Limited) refused to pay the drafts. The bank thereupon became entitled to sell the goods. Th-y placed the, <am« in tho bauds of Mr llowes, manager of the firm of Cook and Giay, at luver- , cargill, with instructions to sell at a price that 1 would cover the cost and exuen»es so that the bask should not lose The good < were therefore sold by aud 011 account of xhu Bank of iSew Zea- ■ la-'.d. 15. As to the third paragraph of the affidavit of which a cop\ i- n iw produced to ins and marked " C," beini; the of John Macaltster, solicitor, of £nverc*rgill, and a brothc of the 1 manager of the Southland farmers' Implement Company (Limited) above mentioned, he formeily did solicitor's business for some or one or ; other of the several companies above mentioned, , and was nominated by my ?(S-liquidator, Walter Horace Brent, to be solicitor for t.ue liquidator* of j Walter (.uthrie and Co (Limited), but I declined i to concur in appointing him. I declined to supply j the said .Tohu Macalister with the information he requested, because, 111 my opinion, as he was claiming fo- good<i consigned, he ought 10 have, aud if his desire to obtain the information was bona fide couM most readily have furnished me with h statement of the good' consigned, and then requested me to account for them either in goods or the proceeds thereof If 1 could have placed implicit confidence in the booksrof the Southland F->rme.rs' Implement Company I alight have given the information without lirat asking what goods were claimed In mv opinion, however, from mv investigations into the books of not only the said Southland C mpmy, but of the j other companies above-mentioned, the said books 1 are not to be relied upoi.. 1 1(3 As to Mr M 'calißter'« complaint in his j letter to me ot the 25th January, that I had not I replied to his letter of the 23rd Jauuary, I say I that kucli complaint was not bona fide. The 23* d January w,is a Saturday. The letter of that date was not delivered till 5 o'clock in the I afternoon, and noy reply to it was sent on Mon- | day, the 25th, and was wrttteu before I received 1 Mr Macalistrr's letter of that, date. ' 17. As to the statements in the said affidavit of Walter Horace Brent (of which the p*per ' writing now produced to me and marked "D" I is a copy), that he has kept a careful diary each . day showing the time he was present at the offices of Walter Guthrie and Co. (Limited), hereinafter referred to as Guthrio and Co., and also the time I was present, and as to his btate- ■ ments of the time during which I have "lieeu at j the office and premises of Gu'hrio and Co., I say that the said statements of the said Walter Horace Brent are inaccurate. . I will only notice the absence of 11 days on end to 1 which he refers As a matter of fac r , it was for ; 10 day*, two of which were Sunday*, and the reason of such absence was that I was in Dunedin .at the request of lles-rs Kenyou and Hosking, solicitor*, in connection, inter alia. with the proceedings in- relation to Guthrip and , Co. and its asuociated companies, which led up to my appointment as receiver ami liquidator, of the Piue 1 'ompAny, the Southland .Farmers' Implement aud [engineering Company, and tho Colonial Hardware, Woodware, aud Implement Company. 'I he occasion referred to was the occasion on which the said Walter Horace Brent says he was absent for four days. There has not to my knowledge, and if there has been there need not have been, any hampering, serious or otherwise, of business connected with Guthrie and Co. by njason of what the said Walter Horace Brent describes as my absence and want of att"ntiou. I haveal*ays been within telephonic communication with him. and if any business has require-) my presence 1 have been present to do it. Although the said Walter Horace Brent passed my office several times each day on his way to the bank and elsewhere, he has never yet called on me, ueither has he once conunuuicated with me by telephone. I have had to call on him in every instance on which it was necessary for us to do business together. As to his statement that bis time has been fully occupied in, amongst other matters, encasing wii, supervising stocktaking, and making out stock fheets, I say that the men engaged were engaged by the said WaUer Horace Brent and myself jointly in oui; a"t. The .said Walter Horace Brent nominated the whole of the men from the old employees of Outline and Co., wit£ the exception of, Mr D'Arey, whom I insisted should he appointed on my behalf for stocktaking, and Mr ViHce, whom I likewise appointed to act on my I behalf 111 thecouutinghouse. Thesupervisionof tho 1 stocktaking waschi. fly iv the hands of Mr Miller until he loft, and after that in tae .hands of Mr I D'Arey I know of no stock sheets tbat Mi Brent I has made out. as theso are made out. by the men ' employed. I fmther say that it was arranged between tirf at the outset that Mr. Brent should occupy Mr Outline's late room iv Guthrie and Co.'s counting house and look after internal business. 18 As to the said Walter Horace Bienfc's statements that many arrangements have fallen through and that country cunlo'iners returned home without waiting fo h<»o mf, I have Dever been iuforniei by the .■■aid Walter > Horace Brent or anjune else that any such iccuunice has taken place, aud I therefore do uot believe it ever did. 11) As to his statements respecting the discussion and correspondence with reference to the disposal of stocks, the corre«pot/dfince has been Hid before his Honor the Judge and already been | dealt with by his Honor. Th? said Walter Horace ' Bient's statement that had hi-. (Waltei Horace Brest's) view-, ou that subject been acted ou , nearly half of the stocks could have been sold, is

\intrue. The available stock was of such a de scriotion that it would have been impossible to have tun the business for a month without buying fresh stock. !he said Walter Horace Brent and I jointly resolved that the s-tocks should bo taken. Thin was done upon my insistence, although the said Walter Horace Brent at iirat objected. 20. When 8p insisting I was aware that on previous occasions of stock-taking the values cf stock had been grossly inflated, and I therefore deemed it my duty, even from that point of view, to verify the exact position before offering I the stocks for sale. As one result of this stock- . taking I have found that, according to Guthrie ' and Co.'s own prices, the total amount of the ' stock is under £3!),000, whereas the fire insurance j on the same stock is maintained at £55,000. I 1 am informed by a letter addressed to the receivers I on t.he 28th January by J. Alves, who is manifest- ! ing the stock sheets, that they will be ready on the 6th February iust i 21. The large shipments re'erred to by Mr Brent as suitable to Guthrie and Co 's stock and xefused were the shipments hereinbefore referred ' to. None of them was taken for Guthrie and Co.'s stock, because the business of that, company was not being < - arried on. The shipments in question were, however, offered to the mamgers of the other ullied companies, and ome of them have been uken by them. Mr Brent's statement that the. balance of the said shipments have been ! taken into the Colonial Uompauy'a stock is a misstatement. The only goods so taken were those applied for by that company's mauager for the purpose of keeping its factory gtiing on for sorting up lirie-s. Hie whole of the goods taken were : and are readily saleable, and if the business were closed up by me I cuuld obtain 20a in the pound for them I 22. As to Mr Brent's statement that I wrote to him numerous and lengthy letters on the business of Guthrie and Co., whico could be more , quickly and satisfactorily explained by a joint 1 investigation of that company's ooks, I say I did so because I preferred to communicate with him in writing— first, because I preferred not to accept his verli.il statement* ; and next, because I do not accent the books of (.uthrie aud Co , and am no? prepared to accept them as books to be relied up. in. - 23. The type-copy letters contained in the 1 bundle marked "W" are copies of letter* which luve passed between the said Walter Horaca ■ Brent am 1 myself. 1 24. I refer particularly to that pare of the last mentii ned correspondence which relates to tho bills and promissory notes of Guthrie and To , of which billi and notes the said Walter Horace Brent alleges -he is a trustee. In hia letter to me of the 12th January he states that he has opened no account with the National Kank en behalf of any of the companies referred to, and that, as I may refer to an account of Messrs Stout, Mondv, and Sim, my letter has been forwarded to lhem for >epiy. I have ascertained that the said Walter Horace Itrcnt has at least two hanking accounts in which bills and notes of the various companies are dealt with. -" I say further that a large number of those billn aro in effect accommodation bills taken from farmers for the purpose of aiding the company's financing, inasmuch as the amounts for wh'eh they are t^ken are payable by instalments spread over a longer cuirency than the currency of the bills, and in consequence the dishonour of these bills has caused sjrave dissatisfaction arnoog the acceptois of the bills and enale-iS trouble to myself and staff 25. Under instructions from the Bank of Mew Zealand in July last year, and on its behalf, I made an investigation into the biminetis and atTa,h * of Guthrie and Co. and their allied "companies, and I found— (a) that for years a system of grossly inflating and appreciating assets had been pursued in rttock-taking. Stocks that had been obsolete for years had been taken in at full cost with appreciation added, and furniture that ha-l been in uso in the house of Mr Walter Guthrie had been put back into stock au'l taken into the .stock sheets at 'full value. (6) Thit the last balance sheets of the said several companies do not contain a true account of the position* of those companies by teas of thousands of pounds. 2fi. I say alfo that the said Walter Gnthrie, Walter Horace Brent, and others are aware that I know nf the facts stated in the last preceding pAiHgruph 27. In view of the matters stated in the last two preceding paragraphs and of the other matters hereinbe ore deposed to, I Bay i am justified in, acting with the greatest caution and circumspection, or a full inve-itigatiou of the traimactions and dealings of the said several companies will be frustrated. ' 28. The type copies of letters contained in the bundles marked respectively W, X, V, Z, now produced to me, are copies of correspondence connected with and supporting statements I have hereinbefore made. 29. I have prepared this affidavit in Dunedin without being able to refer to books and papers in Invercargill, which if I had I could exhibit in addition to the correspondence f exhibit herewith in corroboration of the statements I have made in this, my affidavit. Willi*m Howea, of Invercargill. manager for Cook and Gray, said in his affidavit; : — With regard to the three shipments of timber referreil to in the said William Richard Cook's affidavit, it was in reference to this timber only that, when the two Dunedin companies did not take delivery for cash and Mr Collins did not seem able to dispose of it elsewheie, I told him the timber would have to be sold promptly, and on his objecting that we might not be able to obtain the list prices, I replied that I did not suppose, under the circumstances, that the liquidator would consider himself bound by them. I say that the Baid Jam*s Collinss statement that "wing to the non-payment of wages accrued due before the date of the winding-up petition has cutsed losses on contracts and dissension among the employees is not the fact. The facts are that a large number of the mill hands »aw me early in January with respect to those wage*, and I explained the position to them, and advised them to club together and get a solicitor to bring their cases before the proper parties. They returned to me with Mr Hanan, a aolicitor, and expressed themselves as grateful to me for having explained the position. I confirm what the said William Richard Cook has deposed in his affidavit with reapect to the affidavit of Charles Macandrew Howison. I offered him -wo separate lines of the goods indented, but these he declined after unieasonable delay in replying. As to the 60 OGO laths referred to by the said Charles Macandrew Howison, I never received any offer of 27s per 1000, or I would have gladly takea it. The cement referred to by the said Charleß Macandrew Howison was sold in one line ex ship without loss to the bank. There was no obligation to sell any of the goods indented to the City Sawmilling Company rather than anyone else.

Referring to the exploits of Mr E. T. Hooley, the latest millionaire, the New Zealand Herald plaintively asks "is there no way of getting him to take an interest in Auckland." The collector of customs at Napier has received £1 as conscience money. 'This sum was forwarded to him in a letter in the following terms • " Enclosed money belongs to revenue for goods brought in vest pocket." The hospital returns for the past week are as follow : — Remaining from the previous week, 105 ; admitted during the week, 18 ; discharged, 24 ; total remaining, 99. Model yachtsmen will inspect with interest a boat named the Galatea, which is at present being exhibited in the window of Mr Charles Dickinson, tobacconist, High street, and which has just been imported from Home by Me Brittenden. This boat has been 6fcyled by the "Boys' Own Paper" as the " Triple Crowned Conqueror " owing to its having won the long distance match of the Serpentine Model Yacht Club thrice in succession. The measurements are:— L.W.L, 48 5; beam, 80; tonnage. H-76; rule, 1730; class, 15 tonj.