THE HARBOUR LOAN MYSTERY.

Dominion, Volume 3, Issue 846, 18 June 1910, Page 4

THE HARBOUR LOAN MYSTERY.

The mystery surrounding the draft loan prospectus prepared in London by someone without the authority of the Harbour Board deepens. At last night's meeting of the Board, the matter again came up for consideration, and a letter on the subject was read from the general manager of the National Bank. It was a very surprising letter from more poiuts of view than one. It would seem from it that it is a common thing in preparing loan prospectuses to sign the name of the chairman of a local body to statements and figures he has never seen, on the assumption that his signature will be forthcoming at some future time. This- may be so. It certainly seems to us a very curious way of doing business—rather risky, too, we should imagine, should an error be made, and the chairman concerned refuse to endorse it. The point, however, which appears to have been overlooked is 'that the chairman in the present case would never have had the opportunity of seeing the certificate. to which . his name had been attached until weeks after the prospectus was issued.and the loan rnised. • The draft prospectus was prepared in June, and it was on June-28 that Mr. Macdonald cabled to the Harbour Board in the following terms:—

"StHONGI.Y T7RGE Call Bowd together at once, and instruct National Bank arrange for half million immediately in terms of their cable, Jnno 2Sth, Anso-, MJTELY necessary take advantage present conditions money market, and eecure strong finance Board." What chance would* ' ,the chairman have had of scoing ffhnfc his name was attached to had Mr. Macdon* aid's suggestion been carried out? Here is the Bank's cablegram ■ referred to, and it emphasises this point: — "Financiers will take .£500,000 at £9S. Wellington Harbour Board .to pay stamps and givo them tlie option further J2500.00U, terms to be arranged. To he ISSUED WITHIK FOBTNIOHT; 25 per CCJIt. to bo paid allotment, 25 per cent, middle August, 25 per cent, niiddlo September, 23 per cent, middle October. Full halfyearly dividend to be paid January 15 next. Ask Wellington Harbour v .Bi>a.rd to authorise Macdanald conclude 'transaction and approve prospectus on their behalf. Present' easy monetary conditions are not expected to continue long." When yon have considered its terms, will you be good enough to instruct us. Yours faithfully, (Signed) JOSEPH GIBSON STOTT, Manager. Then there is another point. The Bank suggests that Mil. Hacdonald should be authorised 'to conclude the transaction, and approve the prospectus on behalf of the Board. Who then started the transaction? .No one was authorised to do so. Surely it is not a common thing for brokers, or bankers, or any-' one else to act without authority in preparing draft prospectuses for half-million loans? And who gave the brokers in the present case the "impression" they were stated/to be under that Mr. Wilfokd's signature would be forthcoming, seeing that Me. Wilford had not been consulted about' the loan prior to the draft prospectus being prepared? So much is left in doubt that we are not surprised that the Board should regard the information contained in the letter of the General Manager of the National Bank as incomplete. Some heat appears to have been introduced into the proceedings yesterday. Me. Macdonald was first amused and then apparently became angry and threatening. This sort of thing is quite out of place. The Board has a plain duty to perform. It must get to the' bottom of this very curious business. Personal recriminations, however, will not help matters.