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163. What, then, was the position of the Public Works Fund? Had they the money and had they the stores ?—They had neither money nor stores. They had an amount due to them from the Railway Department on account of the sale. 164. This £15,000 which had been paid back : would that show as a liability of the railways at the end of the year? —I do not know. The Auditor can never be sure what the liabilities are. I presume the department would include, if it took the stores, that debt as a liability. 165. What was the effect of this transaction ? Was it similar to the previous one as regards the transfer of borrowed money from the Public Works Fund to the Consolidated Fund, assuming that the Public Works Fund was borrowed money ?—No. It was dissimilar in this respect: that the goods did not at once go back. In all other respects it was similar. 166. It was dissimilar in this respect: that the Working Railways had the money and goods as well?— Yes. 167. Were there two transfers from the Public Works Fund to the Working Railways of £15,000 each, one of the 2nd March, and one of the sth March ?—Yes ; they are stated in the papers: Dr. Consolidated Fund from the Cr. Public Works Fund, first of all in page 3, 8.-22, 1898, in Mr. Gavin's memorandum of the 9th September. Then, on page 1, there is Dr. Public Works Fund, Cr. Consolidated Fund. On page 4, there is Dr. Consolidated Fund, Cr. Public Works Fund. 168. Will you look at page 10 of this printed statement (8.-22, 1898) at the Credit Account? Do you notice there a proposed transfer of permanent-way material to Public Works Department of £20,000 ?—Yes. 169. Is that part or one of the transfers actually referred to ?—That, I understand, is a statement of the financial position of the Railways, or estimated position of what the Railways will be at 31st March, 1898. This is a statement of what the Railways propose to take in. 170. Then these two transfers —the one for £20,000 and the proposed one for £15,000 —probably referred to the two of £15,000 that have been passed, and not to any fresh ones ?—I think those two probably refer to the two transfers. 171. On page 12, there is a letter from Mr. Gavin, in which there is this paragraph : " There seems to me, in the light of the transactions which last year resulted in the vote for Working Railways being credited with no less a sum than £187,964 14s. as against an estimate of £23,603 "?—Yes. 172. These £187,964 are credits that go to the Railways ? —Yes. 173. Does that sum include the two transfers of £15,000 each from the Public Works Fund to railways for stores ?—Yes. 174. Can you tell me what the balance of it is made up of ?—The additions to open lines contributed 175. That is from the Public Works Fund ?—Yes, the additions to open lines, Vote 90, £117,839 3s. Bd. ; permanent-way, Vote 89, £11,580; Midland Railway, Vote 83, £12,000; Land for Settlement Account, £1,680. Then there were transfers from Westport Harbour Board, New Zealand Midland Railway Account, refund of revenue and sundry votes, £26,861 7s. lid.; recoveries in cash for sale of old material, and various services rendered, £18,004 2s. sd. : total, £187,964 14s. 176. Can you tell us what this £117,000 addition to open lines means?—lt means for stores transferred, stock, machinery, gas-lighting plant for cars, rolling-stock, and various work done on sections. That is taken to be in the ordinary course of business. 177. Does that £117,000 contain any transfers similar to the two of £15,000 that we have been speaking of ?—One of the two is in that. 178. Are there any others in it?— There is a previous transfer of stock of £13,908 7s. 9d. I do not remember the date. 179. Did you inquire into that one ?—No ; I do not think so. 180. Have you any reason to suspect that that is similar to the other two ?—No; the office would not have passed it if it had any reason to think so. 181. In giving your evidence you gave as a reason for delay in reporting to the House that, owing to a more serious question cropping up, you considered this not so important, and therefore held it over ? —Yes; I considered it unimportant until the 9th September—between the 9th and 15th September —when the Audit Office became aware that the transfer passed on the sth March in respect of which the Audit Office imposed upon itself the obligation to report to Parliament had gone back, according to the vouchers, on the 11th March. 182. You spoke of three requisitions that came up for your approval, and you refused to pass them ?—They were requisitions of the Paymaster-General, in which there was imprest money —in which there were vouchers for imprests required for payments to be made during a period for which there was no vote. 183. Why did you refuse to pass those requisitions ?—Because I was satisfied it was illegal to pass them. 184. And your refusal was overruled ?—Yes. 185. How ?—By Order in Council under section 53 of the Public Revenues Act. 186. I should like you to be a little clearer with regard to the £50,000 " Unauthorised " that came back from the Public Works Fund to the Consolidated Fund ?—Yes. 187. It did not go, I understood you to say, to the reduction of the "Unauthorised"?—No; because, although it removed from the " Unauthorised" the expenditure out of the Consolidated Fund, it substituted the same amount as expenditure chargeable to the Public Works Fund. The Public Works Fund had no vote for such a transfer, and therefore could not transfer it back except as a charge against " Unauthorised expenditure." 188. The Public Works Fund charged it as " Unauthorised " ? —Yes. 189. And therefore it limited the amount of " unauthorised expenditure " by that amount ? — Yes, by £50,000.