A HARBOUR BOARD LOAN.

Otago Witness, 1 June 1910, Page 11

A HARBOUR BOARD LOAN.

MYSTERIOUS PROCEEDINGS IN LONDON.

AN ERRONEOUS PROSPECTUS. (From Our Own Correspondent.) WELLINGTON, May 26. Practically the whole business community of Wellington has been talking to-day about a discussion regarding a recent abortive attempt to float a Wellington Harbour Board- loan in London. The discussion arose out of a motion passed on April 27—" That this board, in committee, requests the board at its next meeting to inquire into the correspondence laid on the table of the board and the circumstances surrounding the issue of a prospectus for the raising of a loan of £500,000 on the London market during the year 1909." ■The secretary then read a number of documents, including the following letter from Mr Wilford to Mr James Coates, general manager of the National Bank of New Zealand, Limited, dated Februaiy 22, 1910:—"I have been shown a prospectus prepared in London, to which is attached a certificate purporting to be signed by me as chairman of the Wellington Harbour Board certifying to certain figures relating to the board's finances. This certificate is undated', and is addressed to the National Bank of New Zealand." The writer further stated that he had not signed any such certificate, and asked for confirmation. Mr Coates wrote under date, February 23, 1910 : —" In reply to your letter of 22nd inst., in reference to a confidential prospectus prepared in London relative to a loan proposition for £500,000 on account of the Wellington Harbour Board, I beg to say that I have already written to our London office inquiring as to the certificate attached to sam'e, and which purported to be signed by yourself as chairman of the board. \ Meantime, I have pleasure in confirming that no such document, nor indeed, any document, was furnished by you to the bank relating to the above proposition." The manager of the National Bank of New Zealand. Wellington, wrote as follows, under date, June 29, 1909, to the secretary of the Harbour Board :—" We are this morning in receipt of the following cablegram from our London office : ' Wellington Harbour ; interviewed financiers ; result is Macdonald recommends following; financiers will take £500,000 at £9B, Wellington Harbour Board to pay stamps and give them the . option further £500.000, terms to be arranged : to be issued within fortnight; 25 per cent, to be paid on allotment, 25 per cent, middle August, 25 pev cent, middle September, 25 per cent, middle October; full half-yearly dividend to be paid January 15 next, and Wellington Harbour Board to authorise Macdonald conclude transaction and approve prospectus' on their behalf ; present easy monetary conditions are not expected to continue long.' When you have considered its terms will you be good enough to instruct us.— Yours faithfully (signed) Joseph Gibson Stott, Manager'." The following telegram (unsigned) was sent through Renter's Telegram Company, dated London. June 28, 1909, and addressed to " Wilford. Wellington ": " Strongly urge call board together at once and instruct National Bank arrange for half million immediately in terms of their cable June 28; absolutely necessary take advantage present conditions money market and secure strong finance for board." Mr H. E. Nicholls, secretary to the Harbour Board, writing under date July 7,1909, to the manager of the National Bank, said : " I now have to inform you that the board?»at its meeting yesterday resolved as follows :—' That the National Bank of New Zealand (Ltd.) be instructed to cable its London office that the Hon. T. Kennedy Macdonald is in no way authorised to represent the Wellington Harbour Board fibancially, and that the offer conveyed by the bank's cable of June 28 be declined, the board not reauiring money at present.' I shall be obliged, therefore, if you will acquaint your London office by cable of the above resolution at your earliest convenience." MR MACDONALD EXPLAINS. Following the nroduction of this correspondence -a lengthy discussion took place.

The Hon. T. K. Macdonald, in response to a request by a member oi the board, said his advice was sought by the National Bank in London, and a broker was introduced to him. He spoke weil of the board, its finances, the harbour, and the members. He understood from the broker that they would formulate certain facts and send them out to have them confirmed, and he knew no more, than that a draft of a prospectus which was, he believed, drafted by the brokers, was received by him some days afterwards. It was marked " proof—private, not for circulation," the idea being that it was to be sent by the brokers to the bank in Wellington to be examined. Mr Plarkness : It is in print. Mr Macdonald : It never was printed. Mr Harkness.: I have seen it. Mr Macdonald : Where, may I ask ? Mr Harkness : I have seen it. Mr Macdonald : May I ask where Mr Harkness has KP r ~ r ' ? Mr Harknes? .jot it from London.

MR WILFOBD'S POSITION. ! Mr T. M. Wilford, M.P.. explained! that when he was chairman of the board he was authorised to raise a loan of j £200,000, and he commenced negotiations with Mr Coates, of the National Bank. He had not replied to the unsigned cablegram from London. He. however, called the board together. The cablegram only spoke of a half million loan, and said nothing about the terms, so : he instructed the secretary to get details from the bank. When he had the details he told the board that it would be madness to go in for such a proposal because the money would have to be placed in •N'se harbour fund account, and would j

only earn 4 per cent., while the board would be paying per cent, on it. Every member would bear him out in that he then asked the board to pass a resolution and cable it to England that nobody was authorised to raise any money for the board, that Mr Macdonald was in no way authorised to represent the board, and, further, that the board declined to continue the negotiations for the £200,000 loan. The board approved of all he said, and decided not to borrow any money. No money was borrowed while he was chairman. When Mr Harkness showed him the prospectus with the alleged certificate it was the first time he had ever seen it. He understood that the prospectus had never been in New Zealand until Mr Macdonald brought it out. Mr Macdonald had now told them that it was prepared by the brokers from information partly supplied by him. . _ Mr Macdonald : No, I supplied nothing. Mr Wilford : Well, then, prepared after a conversation with yourself. It was a very clumsy document. It was not dated. It said : " Copy of a letter from the chairman and Government nominee on the board to the National Bank." A STRANGE "SIGNATURE."

Mr Wilford then read Mr Cpates's statement that the bank had received no such letter from him, and repeated his own denial of it. The document purported to be signed by T. M. Wilford, and that was curious. He could not believe that Mr Macdonald prepared the document because he would know better than to add loan proposals to revenue to show the revenue of the board. Before the name T. M. Wiliord appeared the word " signed," showing that it purported to be a copy of some document. , Mr Nicholls would bear him out in the statement that he always signed " Thomas M. Wilford." The whole thing was an extraordinary jumble, and if he had made out such a thing and sent it to the bank, they would never have sent it to London. Every member of the board could endorse his statement, which was the same statement that he made when the matter first came before the board. Neither Mr Macdonald nor anybody else had applied to him to be accredited to represent the board in England. The only time that Mr Macdonald raised the question was at the Finance Committee, and the committee decided that nothing should / be done. Mr Wilford further said that he felt that, he had been somewhat unfairly treated in the press about this matter. Insinuations that something that was unfair had been done by him had been put into sub-leaders in a certain paper during the late election, and he thought that was hardly fair. Every member of the board knew, and Mr Nicholh knew that nobody had been more careful than himself to see that everything tho' was done in connection with the board's finances was reported to the board. During further discussion Mr Macdonald said that neither he nor Mr Wilford had done anything to be ashamed of. Mr Wilford interjected that he had never given Mr M'Donald any authority.

This Mr Macdonald admitted. He had never said that Mr Wilford had given him anv authority. Pending further information from the National Bank in London, the matter was allowed to drop, without the moving of any motion.