t— Hα.

J. W. POYNTON.]

27

think the £20,000 application was gone, and the £30,000 lapsed. I think the papers asked to be sent in have been since sent in, and a mistake has arisen as to the rate. 51. Whose mistake was it? —The mistake was in the papers. The clerk in filling up the form lias made it 3| per cent, instead of 3J per cent. 52. Supposing what you say is correct that there is a moral obligation to find the money for the provisionally approved loans at 3| per cent., will that increase the demand that we have to make upon the Post Office for money at 3i per cent. ?—No, I have given you a return showing the loans at 3| per cent. 53. You put in a return showing the amount of liabilities for loans to which we are already committed. Are those loans granted or provisionally approved? —Some are provisionally approved and some are granted. 54. Have you got the return in which the commitments are £651,000 on the 16th September —is that for loans finally approved or not? —That would be for loans finally approved. 55. What other responsibility is there in addition to that for loans finally approved at 3J per cent, from the Post Office? —The return has been put in this morning, but I have not looked at it. 56. Will it be a larger responsibility? —No. The loans at 3J per cent, were either finally approved, lapsed, or paid over. 57. I want those finally approved. Taking out those lapsed or rejected, there will still be many provisionally approved, but not in these commitments, and you say that morally we are to get the money from the Post Office at 3| per cent. Will that increase the liability? —As far as the return goes, all those that have been applied for at 3| per cent, have either been finally granted, lapsed, or paid over. 58. All of them?— Yes. 59. You are quite sure of that?—l put in the return this morning signed by the clerk. 60. I want the provisionally approved loans. Are there loans provisionally approved and not yet finally approved which we are morally responsible for at 3J per cent. ? —No, because they would all have lapsed next month. None were returned after the 14th November, and they must have either lapsed or been finally approved. 61. Are there at the present moment any loans provisionally approved, at 3| per cent, which have not been finally approved?— The return is, "Amounts, giving dates, rates, and balances of loans finally granted but not yet paid over; also balances of amounts finally granted and finally paid over at 3J per cent, and 3f per cent." 62. That return does not deal with provisionally approved loans, does it?— Yes. 63. Where are the words "provisionally approved"? —No, it does not refer to provisionally approved loans, because there are no provisionally approved loans at 3J per cent, now in existence. I shall supply the Committee with a statement in regard to loans provisionally approved but not granted at 3£ per cent., but it will be nil. 64. It will be nil? —Yes, it will be nil. I might say, sir, I put that in one of the requests I gave to the clerk, and he told me there were no loans at 3 1 - per cent, provisionally approved and not finally approved. Therefore he left it out of the return. 65. Now, with regard to the Post Office: an arrangement was made with the Post Office to provide all this money for finally approved loans?— Might I say, sir, that we broke off in the middle of the correspondence, and I w r ould suggest that the whole of the minutes be read. The memo, from Mr. Robertson dated the 3rd January, 1912, was minuted on to the Secretary, Treasury, "Arrange accordingly. What about lands-for-settlement funds as to rate? —J. G. Ward, 6/1/12." Then, on the 10th January, 1912, I sent this memo.: "Right Hon. Minister of Finance. —Lands for Settlement : Funds are included in my minute. See words underlined in red. 3| per cent, all round (except for amounts already granted to local authorities at 3J) as suggested by the Post Office should be approved. —J. W. Poynton." " Appd.—J.G.W., 11/1/12." Then a letter was sent to the Secretary, General Post Office, on the 11th January, 1912, as follows: "Interest on Post Office funds: The Right Hon. the Minister of Finance has approved of your proposal that in future all loans to the Treasury shall be at the rate of 3f per cent, except for amounts required to satisfy loans already granted to local authorities at 3| per cent. No further loans will be granted at that rate. —J. W. Poynton, Secretary to the Treasury." That completes the correspondence and the minutes. 66. There is a memorandum on the 15th February, 1911, from the Secretary of the Post Office to the Postmaster-General? —Yes; the letter says,— " 15th February, 1912. "Subject: Interest on Post Office Funds. " Memorandum for the Hon. the Postmaster-General. "It was recently decided by the Minister of Finance that all loans to the Treasury should be at the rate of 3$ per cent., except for amounts required to satisfy the loans already granted to local authorities at 3J per cent. The Treasury recently renewed debentures for £194,200, and claim that they must receive the amount at 3J per cent., as it is a renewal of an old loan. I consider that this is a breach of the agreement that loans should be at the rate of 3f per cent., and I would recommend that the Minister insist on receiving that amount. As I have frequently explained, the margin between the interest earned on the investment of our funds and that credited to depositors is too narrow, especially considering that we carry over 2-} million of inscribed stock upon which only 3-per-cent. interest is paid. The matter is a very important one, as it is of the utmost consequence that the Post Office Savings-bank, for the financial reputation of the Dominion, should show a small margin of profit every year. Great public uneasiness would result if there were at any time even a small deficiency. " D. Robertson." "Secretary, Treasury.—For report.—J.G.W., 15/2/2 "