WARD BANKRUPTCY

West Coast Times, Issue 10532, 16 July 1897, Page 3

WARD BANKRUPTCY

[Peb United Press Association.]

Dunedin, July 15. The public examination of Hon. J. G-. Ward by the liquidators of the Ward Farmers Association commenced to-day. Messrs T. M. M'Donald aud J. Solomon appeared for the liquidator, Messrs F. R. Chapman and Theu. Cooper for Mr Ward, and Mr Galloway for Mr J. A. Birch, late of the Colonial Bank. By consent of all the parties the examination was public, Mr Ward's counsel stating his client had desired to be publicly examined since the appearance of the liquidators' report. Hon. J. G. Ward was then examined. In 1892, the ytiar the Association was formed, he gave his position in March, but he could not give the exact position in November. When the Association took over the business the assets wore £103,671. If a liability of £127,000 was set out in the Bank books he would not dispute it. Counsel desired witness to say whether the statement made iv a letter replying to an attack in the Evening Press was true, namely that with one small exception the property was free and unencumbered, when there was an unregistered mortgage to the Colonial Bank. Witness declined to answer with ".yes "

or " no " and after a long discussion wit-

ness said the position of accounts had altered between the date of balancing and the date of the letter. He regarded his position at the time as undoubted, the Association having received the backing of an English firm. "Witness explained the arrangement as to the Association's account and his own account and as to his taking up shares. He was in a position to pay for the whole of the shares in 1594. He took up 5000 but ,paid no deposit. He took them up to strengthen the As- ' sociation. Had he gone to the shareholders and said he had taken up 5000 for nothing (which was not true) it might have wrecked the Association. The whole of his securities were at the back of the Association. As a matter of fact he had paid for th« whole of his shares. The Association never took over the freezing works. -s. He denied that there was any system in use to conceal his transactions. In June 1893 he was indebted to the Association £21,000. He gave cheques for £16,000 and £5000 to pay off his account with the intention of re-drawing these cheques a few days later. This would reduce the overdraft to that amount. He had no recollection of carrying out the transactions personally. He did not know for a fact that, that the Bank knew why the thing was done but inferred there was a knowledge. He did not remember consulting the directors of the Association at the time. He did not think it improper. In 1894 the transaction was repeated at the instance of Mr Birch, the Bank manager, who wrote to Mr M'Kenzie, general manager, that it was intended to do it, Birch saying silence gave consent. Mr M'Kenzie forwarded a letter to witness with a memo saying he had replied as he could not, adding that he had no objection to Mr Ward wiring that he had no objection to the matter being arranged ; he did not wire to Birch. Looking at matters now witness, would not repeat the transaction. Whatever j the intention may have been he did not intend to deceive ; the result was that shareholders were deceived. Witness then replied to 'a question abou,fc debentures. The £40,000 realised should have gone to the debenture account but was temporarily placed to the credit of witness's private account. It was not concealed, as any person counectedwith the Association could have seen the state of his private account and have seen the £40,000 ought not to have been there, The eif ect was to conceal the gtate of his account though that was not the intention, the tiufch being the person 'who made the entries did not know what

the things were foi*. He really owed _— the Association £54,000 but "according to ttie papers placed before him the Association was indebted t& him £16,000. The Association drew on (jonnell for 4530,000 whie.h amount, he understood? was placed to his ci"edit, reducing his indebtedness by that sum. Witness was not responsible for thut only the person who did it. Witness denied that Fisher, the manager of the Ward Association, continually drew against persons with whom there had been no business. Instances given by the liquidators ihad been investigated. ' 'As itf appeared jthat Mr Solomon desired to. examine, witness concerning matters not specially mentioned by the liquidator, the Court adjourned for a day to permit of a Hat of these being supplied. Mr Ward said between Nov. 29, 1892, > and Dec. 2nd of the same year his overdraft stood at £85,073, but in the interval between March 1892 and (?) there had >* been enormous expenditure on the freezing works for which he afterwards got £50,000. In addition to that the Bank books show his discounts on Nov. 2^th,' sjniounted to £13,318 4nd British ' bills at that date against stock was taken credit for £9714. If the figures supplied were correct that was certainly his position. At the same time he was liable on certain guarantees. One of these was £1500 for the Hokonui Coal Railway Coy, but finally

he was liable for the £5000 with others, He was liable for £10,000 on the Southland Rope Coy. He was not prepared to dispnte his total liabilities direct and contingent at the date mentioned were £127,000 odd, hut thought; it only right, side by side with that, they should place his assets. Take for instance the Hokonui j railway. It was valued for the purposes of liquidation as worth Is iv the £ but the liquidators had already obtained 10s for it. At all events he (Ward) understood considerable assets had been obtained already from that source. It was not a fact that irrespective of any contingent liability on guarantees his direct liability to the Colonial Bank on November 29 was £107,000. British bills were included therein and they amounted to £9000. Suppose the assets were over £103,000 and in the interval there had been enormous expenditure for which the Colonial Bank hold assets. He could not dispute that he owed the Bank £99,000 at November 29 but as a matter of fact he had not know of these assets. One property was mortgaged to Ifenyon's trustees for £2000. The greater portion of the rest of the pi-oper ties "fie had were subject to an unregistered mortgage hold by the Colonial Bank. On November 29 it was a fact as. stated in his letter to the New Zealand Times in September, 1893 that his properties were then unmortgaged and unencumbered. His opinion was the letter to giva a mortgage was in the hands of the Bank, but if it were his properties at that date were not actually mortgaged to the Bank. There was a difference of 12 months in the periods referred to in the letter and the account referred was the Farmers Association. He was then out of business himself.