A.—3b

8

When Mr. Banks says that Makea Daniela sent him a written statement of the moneys he had received, and that it was this fact that induced him to sign the statement, it is equivalent to saving that M. Daniela had made a false return to him, for he had already said that he did not know that the Paymaster had Council money in his possession when he signed that statement. That this was the case I do not doubt, for Mr. Banks has also said that when M. Daniela returned 6s. 7d. as the amount of the dog-tax for that year, he accepted it as a true statement. The Court is of opinion that the following matters are proven by the evidence :— (1.) That in September, 1896, Makea Daniela received $35| on behalf of the Arorangi dog-tax. (2.) That he issued a financial statement in 1896-97, and did not account for this money, but did account for another sum of 6s. 7d. (3.) That he obtained the auditor's certificate to that statement by representing that he had only received the 6s. 7d. . (4.) That whereas it is alleged by M. Daniela that he could not pay the money now m dispute into the bank by reason of its being Chili coin, he nevertheless made no report to the Council that he had moneys the property of the Council in his hands, which he had been unable to pay into the bank. (5.) That in a letter addressed to Sir James Prendergast by Mr. Scard, who was then the Auditor, it is stated that during the financial year 1895-96 Chili money was received by the bankers, but in consequence of an objection made by the Council, the bankers were instructed not to receive money after that date excepting always in British currency. If this be true it is a remarkable fact that M. Daniela, who was Clerk of the Council, made no record in the Council minutes of this fact. The Court has no reason to believe that any such objection was made by the Council to the Chili dollar, which is still preferred by the Maori inhabitants of this group. (6.) That it is claimed that the $35-1 i s part an d portion of the $1,082 which M. Daniela was unable to pay into the bank, and which he also claims was, with the approval of the Resident, used to pay for the labour and material incidental to the supply of piles for the Avarua wharf. Now, during the civil action for the £35 45., admitted by M. Daniela to be the balance of the $1,082 still in his possession, he was questioned by the Court why he had not followed his ordinary custom and charged 10 per cent, for the conversion of this Chili money into British coin. He replied, " I never thought of that way out of the difficulty." Now this answer is clearly untrue, for in an abstract of the Paymaster's accounts, in the hand-writing of his clerk—now in possession of the Court—it will be noticed that in every instance 10 per cent, has been deducted for exchange. (7.) In the before-mentioned abstract the amount of Arorangi dog-tax shown as being m the hands of the Paymaster in September, 1896, is £3 4s. Now, if this is identical with the $35J the sum should be shown as £3 11s. A deduction of 10 per cent, would indeed reduce the amount by 75., but the moment this 10 per cent, was deducted the money should have been paid into the bank ; there was no longer an excuse for keeping it in the hands of the Paymaster. These remarks apply to every item in the abstract. If M. Daniela used this money, as he asserts, for the purpose of converting it into British coin, by what right does he charge exchange on it ? (8.) In the Victoria Road case Makea Daniela twice stated on oath that the $1,082 were derived from the fees and fines of the three Arikis' Courts of Rarotonga : how then does it happen that this dog-tax is now found to be part of that sum ? How can a Court give credence to such contradictory statements ? (9.) That M. Daniela fraudulently withheld his books from the Auditor when the latter was specially employed to examine into the state of his accounts, and thereby contributed to the defeat of the audit. (10.) That it is an unpleasant fact that the Council were never informed that the Auditor had been unable to audit the books of the Paymaster, by reason of the fact of the confusion thereof, the want of a cash-book, or, indeed, any books, and the fact that counterfoil receipt-books had not been used, though the Paymaster was in possession of the same. (11.) In the State paper A.-4 1898 of the New Zealand Legislature, it is noticeable that a copy of the financial statement does not appear to have been sent to His Excellency the Governor as had been the rule in previous years. All that was done on this occasion was to forward the reference made to the statement in Tinomana's address to the Council. By this arrangement the remarks of the Auditor did not reach His Excellency. , (12.) That the fact that the Auditor did not make a written report on the Paymaster s accounts after he had been employed to audit the same, and had failed to do so, must be regarded by the Court as confirmatory of other evidence showing that the utmost care was taken to prevent the people of the Cook Islands from forming a true and correct idea of the dishonesty or incapacity of Makea Daniela. (13.) That the only reason given to explain the extraordinary retention of this money in the hands of the Paymaster for fourteen months, as alleged in the case set up for the defendant, is that it was difficult to change the money into British coin. This explanation is not worthy of credence, for in the abstract made twelve months before the date on which this money is alleged to have been paid to the bankers, the 10 per cent, had already been deducted from the $35|.