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Bodies' Loan Account, in anticipation of the steps required by law to be taken by the Council under "The Loans to Local Bodies Act, 1886." From that point the correspondence drifted on to this question of the £50,000, and ended in the opinion of the Solicitor-General, which I quoted at the last meeting, being obtained. 62. Are there any papers in respect of the transfer of the £50,000 back to the Consolidated Fund and your refusal to agree ? —Yes ; they are here. 63. You consented, then, subsequently to the £50,000 being transferred back to the Consolidated Fund ?—Yes. 64. And then you refused to allow it to be again used as " Unauthorised "?—I refused to allow the amount of the transfer from the Consolidated Fund to be transferred back except as a charge to the Unauthorised Account, because there was no public-works vote for such a transfer back. 65. But, if I understand your evidence and the whole of the circumstances aright, you refused to allow it to be again used as " Unauthorised "?—I do not understand. I refused to allow it to be transferred - back except as a charge to the Unauthorised Expenditure Account. There is an appropriation for "unauthorised expenditure " of £100,000, and when the charges amount to £100,000 the provision is exhausted for " unauthorised expenditure." I refused to allow the transfer back from the Public Works Fund to the Consolidated Fund except as a charge to the Unauthorised Expenditure Account, for the reason that there was no vote for the payment or such a transfer from the Public Works Fund. 66. Is this the fact: that you consented to the transfer of the £50,000 to the Consolidated Fund, but it was impounded there because you refused to allow it to be used again as " Unauthorised "?—I cannot understand "used again as 'Unauthorised.' " 67. In reality, the view of the Government, at all events, was that the £50,000 was a loan to the Public Works Department, and when the Public Works Department had got over its necessities, whatever those necessities were, it wished to return the £50,000 to the Government from whom it was borrowed, but you set your seal upon it and would not allow the Government to have its use? —This is practically the explanation of the transaction which, I think, was given to me by the Colonial Treasurer, but—l speak subject to correction —I think he said we have committed a fault in our administration. Our administration has been in error ;we ought to have raised the money on our authority to borrow. I think he said that. I presume that the Colonial Treasurer would find out from the officers of the Treasury. I did not follow him on that point at all. My course was clear, and the Solicitor-General confirmed the legality of my decision. 68. Bt. Hon. B. J. Seddon] Do you recollect my saying that if we had known you were not going to allow that to be given back to " Unauthorised " we should not have advanced that £50,000 to the Public Works Fund ?—Yes, that is so. 69. That is the error—thinking it was in the Consolidated Fund itself ?—The mistake was made in not asking what the consequences would be. It was hastily assumed by the Treasurer that it could be taken back without becoming a charge as "unauthorised expenditure." 70. Mr. Fisher] If the £50,000 had been returned to the Government and again used as "unauthorised expenditure," would that not have been brought before Parliament in the ordinary course ? —I do not understand the words " used as ' unauthorised expenditure.' " 71. If the amount had been released from the Consolidated Fund and again classed as " Unauthorised, " would that not have appeared in due course in the accounts laid before Parliament?— Whatever was charged in the Unauthorised Account would have been brought before Parliament— what remained charged. 72. This being an unusual occurrence, why did you not report to Parliament that £50,000 had been transferred from " Unauthorised " to the Public Works Fund ?—I could not take exception to it. It was in accordance with the law. 73. You were not very definite in your evidence on Friday as to why you did not accept the suggestion of the Solicitor-General. You knew of the inability of the Eailway Department to meet the demands made upon it, and you knew that if you had acted upon the suggestion of the SolicitorGeneral you were still in a position to report the matter to Parliament. Were you not offered an indemnity and the concurrence of the Colonial Treasurer that the matter should be reported to Parliament?— Yes; but I have no discretion in the matter. lam a part of the statute. I should be liable under section 78 of the Public Eevenues Act. I could not anticipate Parliament granting me an indemnity for exceeding my authority. 74. You may answer this question in any way you please : Is it not the fact that if you had released this £50,000 there would have been no necessity for this inquiry, or for the transfer of the material from the Railway Department to the Public Works Department ?—I could not answer that. It is a matter for the Administration. 75. You were aware, I assume, that there was plenty of money—a large surplus balance—in the Treasury, and because of your refusal to release this £50,000, which unquestionably belonged to " Unauthorised," all this trouble and annoyance has arisen ?—What I did was in accordance with the law. 76. Were you not aware that the Railway Department was the only department that had exceeded its appropriation ?—I think there were other departments which exceeded their appropriations. I think the Appropriation Account will show that. I cannot speak surely on that point, but my impression is that there are other departments which exceeded their appropriations. 77. Was it not contemplated by the passing of the Public Revenues Act that contingencies— extraordinary circumstances—might arise which the Unauthorised Expenditure Fund was specially designed to meet? —As a general rule, I do not regard the Audit Office as required to take exception to, or as responsible for, any unauthorised expenditure, unless, of course, there should be an express statutory prohibition.