I.—7b

34

21. And you think the matter of considerable importance?—l think it worth considering. 22. You have seen this Exhibit C ; you see this recovery here—additions to open lines, locomotives, and so on : do you think there is anything illegitimate in that recovery ?—No ; I have not the least reason to think so with regard to that—none whatever. 23. Mr. Fisher] Have there been recoveries in previous years? —Yes. 24. Then, the fact of there being recoveries this year is not unusual or unprecedented, is it ?— No. 25. Mr. Fife was asked this question on Saturday: " Did the fact of the transfer of material affect the railway receipts for the year, which were £1,227,327, or the expenditure for the year, which was £857,190?" Mr. Fife said, "It affected neither." Do you agree or dissent from Mr. Fife's opinion ? —These transfers did affect the railway receipts. They went to the credit of the railway vote in the Consolidated Fund, and therefore reduced the net expenditure appearing in the Treasury statement of receipts and expenditure for the year. 26. Do you say that in giving his opinion twice, as he did, Mr. Fife was wrong?—l think he had in his mind the Working-expenses Account of the Railway Department. That is a different thing altogether from the Treasury statement of receipts and expenditure of the Consolidated Fund. 27. Mr. Fraser] A question was asked of Mr. Warburton whether, in view of a future contingency such as happened in February last, it would not be advisable to give the Auditor a discretionary power to exceed the amount of " unauthorised expenditure " in order to avoid the raising of money by the sale of stores. He was asked that question by Mr. Seddon, and I will ask the same question of you ?—ln connection with the subject of the control of the public expenditure by an independent officer responsible to Parliament, such as the Controller and Auditor-General, it is difficult to determine the extent to which control should go. If strict laws are enacted by Parliament with a view to an efficient control, cases will inevitably arise in which it will be alleged that inconvenience has resulted through an exercise of the control imposed by Parliament. On the other hand, if the laws relative to control are to be set aside whenever it is alleged that public convenience should be the first consideration, it is conceivable that such a state of things might result as would call for a return to a strict and rigid control. I think there could be no effective control were any discretionary power placed in the hands of the Controller. The effect, if discretionary power were given him to allow the law to be broken whenever it was alleged by the Treasury that public convenience would otherwise suffer, would be to make the Controller a party to an act of administration outside the law which might or might not subsequently receive the approval of Parliament. The undesirability of the Controller and Auditor-General being placed in such a position is, I think, obvious. 28. Mr. Montgomery] The evidence you have given about the net expenditure shown in the Financial Statement relates solely to the Treasury accounts ? —Certainly. 29. And the Railway accounts are kept on an entirely different system, and are not embodied in the Financial Statement: is that so?— That is so. 30. Does this sum in the Financial Statement—the £849,923 —represent actual, or even net, expenditure apart from other extraneous matters? —That sum represents the net expenditure under the vote. The gross expenditure was £1,037,888, the recoveries amounted to £187,964, and the difference between these two sums is represented by the figures you have just quoted. (Mr. W. W. Tanner, Chairman.) G. J. Clapham sworn and examined. 31. The Chairman] What is your name ?—George John Clapham. 32. What position do you hold ?—Accountant to the Public Works Department. 33. Mr. Fraser] You have seen this printed document, 8.-22, 1898 ?—I have seen it, but have not had a chance of reading it through. 34. Have you charge of the stores ?—I have not. 35. Who has charge of the stores?— The Head Storekeeper, Mr. Young. 36. Turn to page 5 of 8.-22, 1898: do you see near the head of the page the item " 11th March, 1898, 19,294 silver-pine sleepers, £2,411 155."?—1 do. 37. Will you explain the meaning of this entry?— This account was not made out by me. 38. Is it signed by you ?—The mode of printing does not show plainly what was in the original document. 39. Do you know anything about the transaction ?—Not the preparation of the account. 40. Who would ? —Mr. Felton's signature is on the paper. He would make that out. 41. How could he make the entry " 11th March, 1898"?— I could not say. The entry was made when the document reached me. 42. You say you do not know anything about that entry ?—No. 43. Some one in your department must have made the entry in your books ?—Yes. 44. Can you tell me who made it ?—lt was made by one of the clerks in the office. That is simply noting the recovery of money from the Railway Department. That is a paper showing " Working Railways Dr. to Public Works Department." The money was due to the Public Works Department. 45. When was it due ?—I do not know any particular time when it was due. 46. Does the entry not show when it was due ?—That would be the date on the voucher—the date of service. 47. Will you explain what you mean by date of service? —This printed document purports to be a copy of a voucher in the ordinary form. The words "date of service " would be in print over the date shown on the voucher. 48. This entry would show that these sleepers were delivered to the Working Railways on the 11th March, 1898?— Yes, that is what that account would show.