I.—lla.

26

[j. W. POYNTON.

22. Did you think the Post Office were led to understand that the provisionally approved loans were to* be granted at 3| per cent. ?—The Post Office may not understand the meaning between " provisionally approved " and " finally granted." 23. Does not the Post Office understand the meaning of the word " granted "?—Yes. 24. What does the word "granted" mean under the Act?—" Granted" means "loan granted." 25. Well, what is granted—is it after the Minister has finally approved?— Technically it is not granted, but, as I said before, there is a moral obligation to grant it and not disappoint the borrowing body. The local body takes its vote, and in many cases enters into contracts, makes all its preparations and gets estimates out, and then if you refuse to grant the loan it would be taking a big responsibility. 26. Then do you think the Committee can believe that the Post Office is bound to find the money at per cent, for provisionally approved loans ?—Yes. 27. Does the Post Office understand that?—l should think they do. 28. Mr. Pearce.] You do not mean to say that is the law?—No, it is not the law. There is nothing to prevent the Minister refusing to complete any loans provisionally granted at 3| per Cent. 29. Hon. Mr. Allen.] You would not submit to the Minister any loans provisionally approved before the 31st October at 3J per cent., would you?— Yes. 30. Did you do that to me with regard to Te Awamutu ?—I could not say. Some, I think, have been sent to you at 3J per cent. 31. Is this loan for Te Awamutu at per cent. : I want the provisional approval first? — At 3J per cent. i 32. What was the rate of interest submitted to me to approve —the rate of interest on the form where the Minister's signature has to go?— That is 3f per cent. 33. Is that the same as the provisional approval?— There is some second loan overlapping; there. There is a letter on the file which reads (18th June), " I have the honour, by direction of the Board, to write you stating that from the Engineer's report and estimate received it is found that the £20,000 loan provisionally approved of will not be sufficient to meet the case of the water-supply, streets-construction, sewerage, and lighting. Would you therefore kindly treat this as an amended application for the £30,000 loan at the new rate of interest —viz., 3f per cent. —made up as follows." 34. Is there any new application? —That is a new application. 35. Voted by the ratepayers?—lt is the Town Clerk. The rate was not sufficient to cover £20,000, and it was reduced to £19,830. 36. Would you not have to hold from the evidence you have given this morning that the provisional approval of this loan at per cent, was a moral commitment? —If they had gone to any expense in the matter or had let any contracts I should say it was, but if they had not there cannot be any commitment in the matter. Some of them, as a matter of fact, lapsed. Some put in an application and did not go any further, while others again go on and get plans out. 37. You said something about a £30,000 loan. For how much was the preliminary application in the case of this loan? —£20,000. 38. And that was provisionally approved, was it? —They asked for another loan on that. 39. Was that provisionally approved on the 2nd October, 1911? —Yes, and they afterwards asked for another loan. 40. Did you say that no expense had been gone to by this Board before the provisional approval?—l could not say. 41. Did you not get a letter from them on the 20th August to tell you about the result of the poll?— That is in August. That would not be at 3£ per cent. —that*would be at 3f per cent. The second application was made in June. If the poll was taken in August it would mean that the poll would cover the 3f per cent. 42. Now, you know the second application form, which comes in where the loan has been approved by the ratepayers?— Yes, the form is there. 43. And what is the rate of interest mentioned on the form attached to the file dated the 20th September, 1912?—1t is per cent. : that is a mistake. 44. Was not that what they put to the ratepayers?— No. 45. Was not that after the ratepayers' vote?—lt is a mistake then. 46. Whose mistake? —The mistake of the person who filled it up. 47. It is 3| per cent, there? —Yes. It has been underlined in pencil when checking it. 48. You quoted a letter in which you say there is a fresh application?— Yes. We sent them a copy of resolution on the 20th June. 49. What happened with this fresh application, as you call it, dated the 18th June? —A letter was sent on the 20th June as follows: "In reply to your letter of the 18th instant, I have to draw you attention to the fact that as the loan of £20,000 for water-supply, streets-construction, and sewerage purposes was provisionally approved on the 2nd October, 1911, such approval will lapse unless all the documentary evidence of the steps taken to obtain the loan is supplied to the Department before the 2nd October, 1912. I have also to point out that the Advances Board passed the following resolution on the 15th January, 1912, viz. : ' Resolved that in granting loans to local bodies preference be given to those to which loans have not already been granted. Ihe limit to remain £5,000, and rate to be 3| per cent.' Your Board's present" application for the amount of loan to be increased to £30,000 cannot therefore be entertained, and, moreover, the £7,500 for lighting would be declined under any circumstances, as no loans have ever been granted for that purpose." 50. Then, subsequent to that did you get that other application at 3J per cent, interest, which ycu say is wrongly put in?—l am afraid we are a little at cross purposes about this. I