THE EVIDENCE.

Star (Christchurch), Issue 4789, 5 September 1883, Page 4

THE EVIDENCE.

[FBOJC OUB SPBCIAL GOBBESPONDBNT.J The evidence taken by tho Dargaville Allegations Committeo is not very voluminous. The pri-jc'pal witnesses examined were— Mr Dargaville, Major Atkinson, Mr D. M. Luokie, Mr Gavin, the Paymaster-General, Mr Knight, Actuary of the Insurance Department, and Mr Foßter Goring, Olerk to the Executive Oouncil. Mr Dargaville summed up hi* oharge in connection with tho Insurance Department thus : — Mr Dabgavillb : I now propose to refor briefly to the written statement I handed in, and to give my reasons for making it. First, "That the Government lent £225,000 of Trust Funds, over which the Treasurer haß control, to tha Bank of New Zealand, without security, for a term of yeare." That has been established by the evidence aubmitted, the <torm of yoars being two years in this instance, and if a transaction of this kind could be entered into for two years in the dieoretion of the persons who advised it and completed it, there is nothing to provent them entering into it for a muoh longer term, Bay five or ten years, for a million or two, in a manner not contemplated .by the law. I think that almost goes without saying, in view of the Beotions I have read from th-) various Aots prescribing definitely the manner in which these funds should bo invested, and that before any investment is mado on Ordor in Oounoil Bhall have been first obtained. In the present instance, no Order in Council appears to have been obtained "thereby giving an undue advantage to one banking establishment closely allied to the present Administration." It did not oppoar to me to be necessary to call evidence to prove that ; it is so self-evident. The alliance of the banking establishment referred to with the present Administration will be eeen in two ways, firstly from the correspondence of Mr Murdoch, the

general manager of the bank, with the Government at the time the present agreement between the bank and the Government was made, namely 1880. Mr Murdooh speaks there of the disadvantage to the bank of having to hold coin to provide for any reduotion or withdrawal of the Government balanoes ia what he calls the " very conceivable event of a hostile Ministry coming into power." That oorrespondenoe, and particularly that expression, ooupled with the faot that the present Premier was only a short time ago a director of the bank aud ia now a shareholder in it, as well as being standing counael for the bank — theee foots, and the well-known amity of the bank to keep these hon gentlemen in office — warranted me in stating that the banking establishment is closely allied with the preaent Administration. Further, " that Parliament has not yet been informed of the transaction." It will be seen from the sub- seotion of section 20 ot the Aot of 1878, that the intention of Parliament was that partioulars of these transactions should bo laid before Parliament within 80 days after the opening of eaoh session. It is then bo evidently the intent and meaning of the Aot that Parliament should be made aware of these investments, that I hold I was perfeotly justified in adding to my statement : " that Parliament hts not yot been informed of the transaction," although Parliament has now been in session two or three months. I bave nothing more to add to those words. I hold that an extraordinary and unprecedented transaction has been entered into with this partioular bank, whereby an undue advantage haß been given to the bank, and that Parliament should have been made aware of the transaction in due oourae, which has not been done. I say, further, it was done in a manner not contemplated by the law, but with the concurrence and approval of the Treasurer, who ia, therefore, responsible for it. In the course of the Committee's proceedings, Major Atkinson made the following reply i — Hon Major Atkinson : Then, sir, I submit Mr Dargaville has entirely failed to prove hia one, " that the Government lent the aum of £225,-000 of the Trust Funds." Bir, the Government have lent no such sum. I ask the speoial attention of the Oommittee to that. Mr Dargaville has not made any attempt to prove that the Government have done bo. Secondly, " that the Treasurer had control over it," As a matter of faot, the hon gentleman haa not given the slightest evidence tbat the Treasurer bad control of it, and, in faot, the Treasurer has no oontrol over it. The third count, " that Parliament haa not yet been informed of the transaction ;" evidence iB before the Oommittee that by law Parliament will not be informed of this particular transaction until the annual report of the Government Insuranoe Commissioner is aubmitted, with which the Treasurer or the Treasury has absolutely nothing whatever to do. The whole of the insurance business is by law conduoted separately from the Treasury. The Treasurer nevor sees the accounts, and knows nothing of the funds any more than the Commissioner ohooees to tell him. It is entirely under the oontrol of the Commissioner and the Auditor- General by law. That is all I wißh to say. I ask tho Oommittee, before I oall witnesses, whether the hon gentleman has not absolutely failed to prove any one of the three allegations he has mado. Whatever may be the finding of the Committee in that respeot, I submit, as this ia a very grave oharge, which ought to have boen proved definitely on every point, whatever may be the deoision of the Oommittee, I shall ask the Committee to examine witnesses in order to show how these transactions arose. These transactions did not originate under the present Government. They hare been going on for years, and they are perfectly regulated and right. But before I call anybody, I ask the Oommittee to say whether this oharge is proved or not. I submit I might go away without calling any evidenoe, because there is none against me. Before anybody should be oalled upon for his defence, you muat deoide that there is evidence in support of the charge. Is there any evidenco in support of this oharge P I submit not, on either of three points ; that the Government lent this money, whioh is not the faot ; no member of the Government had anything to do with it ; the money is not under the control of the Government in any way. Then it bas not been reported to Parliament ; that is beoauße there iB proper provision made by whioh it will be bo reported at the proper time. I ask the deoision of the Oommittee on those three points. It aeems to me perfectly clear that there has been no evidenoe whatever produced to prove either of those points. The two extracts from Mr Luckie's evidence show his opinion of his independence from the Treasurer's control in making deposits with the Bank of New Zealand. Hon Major Atkinson: What is your position ? I am Government Iniuranoe Commissioner. Were any inauranoe moneys at the Bank of New Zealand on fixed depoait when you took office P Yes ; I have given a list of how mueh. On Feb. 28, 1879, there waa £74,0C0. I was appointed on Feb. 26. Did you continue to make fixed deposits from time to time P Yes. Did you consider it necessary, under the law, to consult the Minister of the day whenever you made a fixed deposit ? No, I did not. What was the date of ths firßt deposit made by the Department ? Feb. 19, 1878. What was the amount you had on fixed deposit on March 25, 1879 ? £49.000. What was the amount on Sept. 30, 1879 ? £70,000. With reference to the sum of £225,000 now on deposit at the Bank of New Zealand, did you oonsult me before you made it p Yes ; I came to see you. Why ? Because I wanted to aee whether I oould get any advioe from you with respect to other investments, Treasury bills and the Uke. Were you compelled by law to get my approval bofore you made this depoait ? Not acoording to the law as I read it, and as I have acted upon it. If I had declined to give you my advice on the question what would you have done ? If I had no other means of investing the money, I should have put it in the Bank on deposit, inaßmuoh as I Bhould have lost 3 per cent at asyrate if I had allowed it to remain on account ourrent, and the interests of the office demanded that I should cecuro a better rate than that. That is to say, if you were authorised by law to deposit the money, it was dono without my assent ? Provided I had the concurrence of the Controller and Auditor- General, who must countersign any cheque with me before it becomes a valid transaction. You can make a deposit of this sort without provioualy consulting the Treasurer p Yes. Haß the Treasurer anything to do with the custody of insurance moneys or with the accounts ? Nothing whatever. Mr Montgomery : You stated that you " believed " the deposits could only be made with the Bank of New Zaaland; the fixed deposits? Yes. How did you arrive at that opinidfi? I understood there was a banking arrangement by which I could only deposit at the Government bank. Did you consult the Treasurer aB to whether you could deposit with auy other bank than that one ? I did epeak about it to the Treasruer ; yes. What was his reply ? I don't remember exactly, but I think we found that it could not be legally done. I suggested, I bolieve, that we might give something to the Oolonial Bank, but that fell through. Ido not remember how. And you got tbat opinion from the Treasurer ? I tbink so. Did you got it from tbe Auditor-General ? No. I did not discuss it witb tho AuditorGeneral. Did you eay you conferred with the Treasurer as lo the deposit of this large sum of £225/00, and he approved of it? It was not necetsary to have hie approval. I desired it for the Bake of tho interest, and ho thought it would bea judicious deposit. c— - - ■ ■ ■ =