"E. A.. SMITH."

Dominion, Volume 3, Issue 867, 13 July 1910, Page 4

"E. A.. SMITH."

DISCUSSION IN HOUSE. PRIMS MINISTER'S STATEMENT. SOME INTERESTING CRITICISM. In the House of Representatives yesterday afternoon, Sir Joseph Ward made his promised statement regarding the connection of tho London firm of E. A. Smiijh and-Co. with tho Now Zealand Government, Ho said, that a fow months' ago statements had been made in a certain section of tho New Zealand newspaper press that reflected upon tho honour and integrity of tho High Commissioner, tho Hon. W. P. Reeves,-and upon the honour,of Sir W. Kennaway", of the High Commissioner's office. In theso criticisms there was an underlying imputation of wrongdoing against the Government and himself particularly. The' Prime Minister! said that Mr.. E. A. Smith was appointed an officer in .the Agent-General's office in 1872 or 1873, by the late Dr. Featherston, and ho held the position until Sir Dillon Bell and Sir Julius Vogel dealt with it. Ho read a letter from Sir Julius Vogel to;. Mr. . Smith,' dated September 20, 1880. This letter intimated tho severance of Mr. ■ Smith's "long and faithful'connection-.with .tho Department," and the' fact that if he started as a shipping agent tho Government would give -him its business. A letter from the then Premier (Sir John. Hall), dated , December 4, 1880,' confirmed the appointment as shipping agent. There were also letters'from the 'lAgeiit-Gcneral (Sir F. D. Bell) regarding tho change in Mr. E. A. Smith's position, tho compensation paid him for loss of. office,.; and. the fees' he was to receive as shipping agent. The Opposition papers had been asking who. had appointed Mr. E. A. Smith, and now they had it. . : -Summary of Correspondence. The Prime Minister then read a quantity of correspondence. •' On September 3, 1906, Sir J. G. Ward cabled-to the High Commissioner asking whother' ; E.,A. Smith had been authorised to announce himself as' the shipping • agent of the Government of New Zealand.-Ho also-asked: "Is ho employed by you, and is he. authorised to arrange passages to navvies and others?" Tho High Commissioner replied that E. A., Smith had for many years.-'been'-the-: authorised • -shippingagettt;.for,;the New...-. Zealand.; .Govern-. ment,'-and.h'ad ; been referred to as suchin official- documents, "and Edward Kennaway taking, on business in tho name;of 'E. A. Smith employed by mo arrange reduced.passages;ipr persons, approved Iby me." .

■ On January 28' the Government' forTrtirded newspaper clippings on the subject (presumably those appearing in The Dominiok, "The Press," and the "Otago; Daily Times," wliich had commented freely in the latter part ...of: January),'asking for a.full statement,, of the; whole position regarding ~this;'| firm. /..;■', ■■'■'•' .-.-.;

Fforh this.it appears that Mr. Smith had iri\January, 1881, accepted an offer by Sir Juliiiß-Vogel'to conduct. \ the! busings ojf shipping agent'to thc.Agen|:t' General's and was allotted a. room, iu tho AgenWseneral's office. In 1896 took, Mr, E. M. Kennaway into i/partnership,. and: the business was carried on as "E> A. Smith?', iri-1890 Mr. Smith retired'from, business, and : "tho shipping:work of the NewrZeaknd Goverrimeiit was carried on by Mr. E. M. Kennaway." The report goes on to say tliat .in September, 1906, the Government was advised that Mr. KenEawayjjwas carrying on Smith's business. ?.■:!.-•

f; Bonuses to the Firm.; > The ..total aniount.of. bonuses paid in respect of' assisted passengers to "E. 'A. Smith!'' were:—l9o6, £674; 1907, £525 ;,!1908, £814. As to tho fees for shipping of freight, the firm received £690 in. 1906, £649 in 1907, and £554 ih_ 190.5.-\"The amount roceivod. from this. office', by ■E. A. Smith for bonuses and shipping-freight-fees during •■. tho years 1906'; 1907, and 1908' amounted respectively to £1164, £1052, and £1169.;, In addition to the above ■figures'. received from the shipping companies the commission of 16s.' on each passenger booked' ■by him, which,; according to. tho bonus amount received from, this office, should' havo amountedi-respectively to some £1895, £1612, :and £2459 for the vears 1906, a 907, and-1908 respectively."

; Letter: from Mr. Reeves. - The 'correspondence read by the Prime ■Minister contains the text, of .a letter from Mr-VRedves, dated September 18, 1906, in which Mr. Kennaway's succession to': the 'Smith business is clearly set OUt. : .~-.. '.' ''

the Prime Minister, Mr. Reeves,- on;. March 24, 1910, stated that he had been •; informed by the High Commissi6ner;>thai Sir,; Joseph.. Ward, obtained 'from him'a memorandum stat-, Ing the facts'and.the conditions of the smployment of Messrs. E. A. Smith and E. M. Kennaway as shipping agents for the Government. He (Mr. Reeves) assumed that tho request for tile '"-memorandum was the result of at-" . ticks which had lately appeared in; the newspapers upon' Mr; E. M. Kennaway's business connection ; with the Sigh Commissioner's office. ■ Ho 'had' not seen any of these attacks himself, and did not know their drift, but from questions put to him 1 by a London Correspondent of several' of tho papers,. he gathered that it was insinuated that Kennaway's employment- by the office -, was designedly kept secret. He had been told also . from another quarter that his earnings, as a shipping agent had been criticised as unfair, and ; extravagant. Doubtless a good deal had been made out of his relationship to itlie late- permanent < secretary. Prom' one point of view it might seem uncalled for in him to intervene in this matter, at all.- -'It might : save him some, annoyance personally perhaps if he did not.

After detailing the position as regards the establishment of the firm of "E. A. Smith," Mr. Reeves in his lef> ter went on to say that Mr. Seddon certainly knew that Mr. Kennaway' was connected with tho firm. As regards tho profits of tho firm, ho said that they were only moderate during the first eight or nine years after Kennawiy joined Smith.

Assisted Emigration. In 1903 came the revival of the policy of the assisted emigration and the steady demand from the colony for population. It was necessary, if New Zealand were to compete with other colonies for emigrants, that it should pay a bonus to agents as other colonies did, and do. Ultimately it was decided that only £1 ,per head should be paid on' third-class passengers, and that of this the Government should only pay 4s;, the remaining lGs. being found by the shipping companies. For secondclass passengers the Government wore to-pay 75., but the number of secondclass passengers was, if he remembered lightly, always relatively very small. He assorted "that this arrangement was not only fair but highly advantageous to the Government. "It resulted in this, that New Zealand got emigration-agency work done for loss than what it cost the agents.

Whon he (Mr. Reeves)'hia'do this arrangement he fancied that most" of these bonuses would- be earned. .'by country agents. In tlio event it turned out that they were chiefly earned by E. M. Kennaway. So far as ho could ascertain, however, this camo about in a perfectly fair and natural way, and not through any kind of trickery or collusion. For, ■ ' the . three years .1906, : .;1907„-: : ; ,ai}dv'..; 1908 ;.thoro., vwas a sort •of ■ boom -. in : :*' emigration, --'which-, put'a -'gdo'dj doal.'of money into the pockets of tlio'agents. Kcnnabo did work for his.money, and worked very, hard indeed. Unless passages wero booked he got nothing. Ho assorts, and lie (Mr. Hooves) "saw no reason to doubt him, that very often not more than 10 par cent, of a large batch :bf inquirers, would,, .ultimately go to Now Zealand. For tliis. ; lo. I por cent, he was paid by us 4s'.'a head. Ho had cross-examined him, arid Dcliovcd him when ho ' says that tho 'Government •money ho got in this way* did not pay •the expenses of getting it. ; J)uring the three busy years above,.referred to ho received in emigration bonuses from the Government sombthiiig liko £500 a ■year on'the average.- This was an extremely cheap rato. • ; "'■ Profits not MadeiOut of.'.the Covern- "'■, ■;.-. :; ,'-. -'■ ** 1 ? , rt".:,.;.-:.v '..It may. be said, that,...oven,-after allowing an average...of yearly, £2000 a year for office. expenses, .his net profit during the three" 'busy years ; waa very considerable. That'was,'so, but (1) the profit was not made out 1 of'the Government, but out of, the ...shipping companies; (2) it was made;,out of an'uncertain and very, fluctuating.,business which might at any moment be severely restricted,"and' which from "the./last "months oi "1908 began Ho'"be very much cut down.- ■ <:■:••:>, :■■■'-' *■- ■■<'.

;.'; Mr.'Reeves also-. referred to the change proposed, which he did, not ■ condemn, but which, at first at least, would not prove so. profitable as some : people appealed to think. .., ; - :

STATEMENT BY;-THE PRIME MINISTER.

'..' REPLY TO CRITICISM. ALLEGATIONS OF MYSTERY AND .'.-.: :- ; ;.,::. SECRECY ■''• -, ..When; .the Prime Minister had concluded/reading the- documents he- went oii':.t6; say that the new' Department ;whiehi;had 'been' .established- would cost .£l6o9:ij'er'■: aiinunf, ""including'' £50 ' for rent..--In:,.addition thero would -bo incidental charges' for .office work, etc., "which 'he .estimated,- at from £250 to £300 y per, annum.' ..".';," .'' Mr. Massey •.:■ Is tho xsommißskm. to .stop;altogether?.:./; ;.,./ , ■";. ■■:.: .'■•'-, Sir Joseph:-No;: they go on as befdre.-.',■:.'■' ...'.■.'.".*'•','.;.';'--:"'• -.;.'".,•,'."." '■ "•■

'■..''The Prime' : Minister'(continuing)"said tliat tho shipping companies paid 16s. and;..tho Government_4s;, in.tho.way of commission. This.4s. >as in the nature if a bonus'intended :ttf'cover the payment of expenses of other agencies, etc. The new Department would receive the 16s. from the shipping companies, and in addition the; bonus of 4s. on each passenger who' a'ctually left London for New Zealand.,

Mr. Allen: "Will the Department got the commission on the shipment of goods?

Sir Joseph: All commission formerly paid will go to the new office. ~

Resuming, Sir Joseph said that Mr. •Donne: and-Mr. Hamer wore sent Home for economical reasons at this end, arid' principally in connection with the new ; Department at Home. No exceptionhad, ever been taken at the way in which'ithe work was carried on at'the': High; Commissioner's office. Tho-new' Department was established entirely objec£ of getting any proht 'that;, was'to be got out of it. for'the. [Government, itself. Theio was novei any. application from iho Agent-General or High.. Commissioner to effect .a. change. The recent change,'was : made; as a result of a suggestion..which' 'ho, made after his second last'Vi'sit l 'to'-Eng-; land; Be did not' want : to> introduce! into this matter any question between the press of New Zealand and himself, excepting to say : that until -last month he was never informed of'anything .that suggested, that Mr. Kennaway was a partner in the firm of "E. A. Smith." For himself ho would not;have objected, but rather should' have fori Mr. Kennaway was one : * of • tho most: honourable men one could, drop across.

"Absolutely Baseless." ; '■An-■' imputation which ;had .''necrj in-' directly levelled at the integrity of the ex-High Commissioner and Sir Walter Kennaway -was baseless. Canada,, Victoria, Tasmania,-' and tho Commonwealth carried out-.j-'a . similar system, as also 'did the Honjo Government, where Crown agencies ;'wer© concerned. For the information of ■ Mr. Buchanan, ho would like' to!; say that Mr. Don-no's salary was to'.beV£7oQ per annum. In connection with Lthe whole matter.,. a suggestion had; however, been made of secrecy, of "mystery, and of impropriety. This cHt-icism could only bo directed at one person;.-it was not the Government that;jvas intended. So long as.ho could remember, the administration of the office''"at-Homo had never been interfered with. :.• If the Agent-General or High I Commissioner wanted a change. in system from the commission basis to.;the employment of : aii independent:staff, lie. should have re.quired :to,.have: got ..authority from the 'Government.-''lt was'statekl in tho correspondence that the whole ;of tho .Government business was to'«bV given -to "E. A. Smith" if ho started in tho commission business in London at that time. 'Thero had been no alteration since that time until the whole system was altered.

A Missing Letter. In fairness to Mr. Beeves and himself ho would like to say that he had never received tho letter referred to in a report by Mr. Palliser, dated September, 1908. There was no such letter on the records. Ho had no doubt that Mr. Reeves had "posted'it,'"but it had never reached this: country,.or it would bo on record. In addition, lie might say, but it was besido the' point, that ho' (Sir Joseph) was not in New Zealand at the time when it should havo been received. As l'egards_<an imputation that ho had mado misstatements on tho point, ho wished to say, firstly, ■ that lio never at any tirrio mado any misstatement; secondly, that ho had no object in trying to cover anything up; and, thirdly, if ho had had full information from tho Agent-General, ho would in his interest, as well ' as his own, put it on record. Mr. Reoves had acted a thoroughly honourable part from the beginning, and the- same could bo said of Mr. Kennaway. Everything had been exaggerated, distorted, and cast a very unfair reflection. Why had it been done? It could not havo -been made for anything else- but political purposes. There was some talk of tho enormous savings that would bo mado, but it would be found that tho result would bo that tbp Dopartment would pay its way, but tho profits would not bo so large as was suggested. Tlioro was absolutely nothing to warrant all that talk about mystery and secrecy ; it was all so very far-fetched, oven for political purposes. In connection with the business of tho High Commissioner's office, ho would like to say that ho had never heard of a dishonourable, thing, and the same was the case in regard to Mr. Kennaway. He declined to bolievo that they attempted to keep anything away from tho public, for as Mr. Reoves said thousands knew that Mr. - Kennaway was attached to this firm. It was not his intention to deal with tho statement that tho late Mr. Seddon know. He'(Sir Joseph) did not know personally. Tho question never arose in his

time. Even if it had been known Itherowas nothing connected with it so far as tho Government was concerned that required to bo adjusted. -Ho would movo that the- correspondence-bo laid on tho tablo and printed.

OTHER SPEECHES.

COMMENTS BY MR. MASSEY. "GOVERNMENT" HAD NOT-BEEN SUFFICIENTLY CANDID." Mr. Massey, Leader of the Opposition, referring ' first to tho l J rimo Minister's charge against Opposition papers of exaggerating' afld misrepresenting tho facts in connection with tho case, said he had an opportunity of reading a good many newspapers, and tho Wellington "Post,"-which was nob an Opposition paper, " had lengthier articles on the matter than any of tho Opposition papers. The Prime Minister had spoken for a long time, and a great deal of what ho had read was hardly to tho point, and might well have been omitted. At the samo time I a great deal of information : was given which should have been given to Parliament long ago. Had'it been given much trouble would have been saved. Reviewing tho correspondence, Mr. Massoy said there appeared to have been an understanding between Mr. Smith and Sir-Julius Vogel that part of the shipping business. would be given to the firm of E.- A.' Smith. In tho course of time E. A. Smith retired from the firm, and his place was taken by Mr. E. M. Kennaway, so. that .the namo appearing in tho .High Commissioner's office had not represented E. A. Smith at all, but Mr. E. M. Kennaway, and Mr. Kennaway had been for many years an. important official in the Commissioner's Department. That was tho point of tho wholo matter. . The Government had not been sufficiently candid. When did the Government inform- Parliament that E. A. Smith had ceased to exist and Mr. Kennaway had taken his place? . What's In a Name? , A member: What's in a name?- .. Mr. Massey: There is a great deal in a name .in this case, considering tho financial consideration involved; Continuing, Mr. Massey said it appeared that not only' did" "E." A. Smith", get commissions >n emigrants, but he got .commissions on, freights on thousands of tons of stores ' sent to the' Public Works Department and other Departrtfents. Ho would like to know how much this' cost'.'' ■

The. Primo.. Minister:. The information was contained in the report of' tho High Commissioner read.

'". Mr. Massey said "E. A. Smith" draw 16s. from the shipping companies and 4s. from tho New. Zealand Government, making one pound in all on each emigrant, in; addition to" commissions on freight. He desired to quote from letters which had appeared in the press. One correspondent in an Auckland paper said-Jus had written to the High Commissioner, and tho answer came back signed "E. A. Smith." He also paid tho passage money to "E. A. Smith,", and thero wore hundreds who had done the same. Another, correspondent w»ote to tho same, effect.

In answer to an interjection by "the Prime Minister, Mr. 'Massey, said that the man who conducted" the business in'tli'e'time of Sir John Hall was known by his real name, but the man who had .beoii conducting it lately was not known .by..his own name, and peoplo wanted to know why

', ; , Mr. Massey Reads Letters. ,;_Mr; Massey -road another letter re-fletvod-byvan intending emigrant from the High Commissioner's office, in ivhifch' it "Was stated that "Mr. E. A. ■bmithj" shipping agent of the New Zealand Governiriont, has been authorised, abovo conditions, to arrange -passages for you at :tho abovo reduced faros," and the emigrant was .instructed.' .to cominunicato with "Mr. ..Srnitb';'' v "The : passage money must bo liaid tp.-Miv. E.' A'. Smith," Went on the ■letter, ; ,''and;until .he '. receives the deposit berths Cannot bo reserved," Tho letter showed that "Mr.. Smith"" not only received commissions, but he had actually the" handling, of tho money, himself. .

, The Primo Minister: Tiio High Commissioner or Agent-Genoral has never been' shipping .agent for New Zealand from the-beginning till now. ' Mr. Massey replied that the arrangement seemed to him a very wrong one. He had the impression- from the Prime "Minister's: remark's .that Mr. Hall-Jones had denied : tliat-the'.Smith firm bad been appointed as Government shipping agents. , j The Prime Minister;, I did not moke that statement.

Mr. Massey: I think there is something on record to tho effect that the Primq Minister knew nothing of tho arrangements- between tho . High Commissioner and Mr. Kennaway. ' Sir Joseph Ward: Perfectly true.

Prime Minister's Contradictions. Mr. Massey: I don't think that that squares with tho, statement made today. The Prime Minister had stated in a newspaper interview—read by Mr. Massey—that the firm had nothing to do with, the. High Commissioner, and that its offices. were quite apart from any of the Government offices. He had stated that he did not know, nor, ho thought, did any member of the Government know', that Mr. E. M. Kennaway was "E. A. Smith." That did not square with what they bad just heard.'

The Prime Minister: It is not the High Commissioner'b trouble- now, it's my trouble.

Mr. Massey: It doesn't matter whose troublo it is." Tho.blame must be put on tho right shoulders, and the Prime Minister must take his share of the responsibility. Mr.. Massey quoted from the letter of Mr. Reeves in 1906 in which the position of Mr. E. M. Kennaway was explained. The letter set forth how, by gradual process, Mr. Kennaway became "E. A. Smith." Mr. Massey contended, that Parliament should have been informed of tho position at tho time, and should have known exactly what was being done. Mr. Kennaway had borne out Mr. Reeves's statement that tho' Government had been fully cognisant of tho position. He had stated in an interview that there was no secret about the jposition, and that it was a "puerile, vu'lgur, silly colonialism to think there was any secrecy about it." Ho thought it was a vulgar impertinenco on the part of Mr. Kennaway to mako such a statement in regard to the -people-from whom ho was receiving, indirectly perhaps, a very good income.

The Government's Responsibility. There seemed to bo no doubt that tho Government know, or should havo known, everything that was going on regarding Mr. Konnaway's appointment, and they should have informed Parliament and tho country. Many people might think at first sight, perhaps, that it mado very littlo difference wliother_"E. A. Smith" should receive, commissions or not, but anyone with ordinary business cxperionco would know that though the commissions wero paid by the shipping companies), they were paid indirectly by the people who camo hero, and by the taxpayers ofthis country.

Tho Prime Minister: You can't expect it to be dono for nothing.. Mr. Massey: What I am objecting to is tho method of doing it.' There jiad been secrecy and mystery in connection with tho business. He asked-if there was one member of Parliament who, prior to last recess, had"'the ' very slightest idea of who was conducting this business for the Government. Mr.

Massoy referred to tlio return ,moveu for by tho Hoih T. Kennedy Macdonald in tho Legislative Council, following a visit paid by kirn to London. Mr. Macdonald asked for _ full particulars of the transactions with "E. A. Smith." Mr. Massey ventured to think that that was tho'first timo the name of tho firm was mentioned in Parliament, and that no one then knew of "Mr. Smith" except Ministers and Mr. Macdonald. The Prime. Minister: It is not so. Wo know no more than others.

Mr. Massey gave the. date of Mr. Macdonald's motion as' August '27, 1908. ■ •

Mr. Fishor: Two years after Mr Reeves's letter of explanation.

Information Refused. Mr. Massey: At that time the Government, must have had the ■wholo of tho information in their possession, lit reply to tho motion', Dr. Findlay said that it would necessitate a groat deal of timo and labour, and he could not see that tho country should bo put to the expense of tho return. For that reason tho Government could not sen thoir way to supply it. Owing to Dr. Findlay's opposition, the motion for the return was negatived. Information such as this, said Mr. Massey, .should ■bo given to Parliament without-its being asked for. Similar difficulties had arisen over and over, on account of tho unwillingness of tho Government to supply information to which members were entitled. What they had heard from tho Prime Ministor did not square up the difficulty in regard to "E. A. Smith." Ho thought that when the public saw what had taken place they would say that the Government Were to blame becauso they had allowed a most objectionable monopoly to take .place.

The Prime Minister: Sir John Hall was to blame, anyhow.

Mr. Massoy replied that it was painful to hear the Prime' Minister on various occasions try to shelter himself and his Government behind his predecessors, like Sir John Hall and Sir Harry Atkinson. Till Mr. E. M. Kennaway came to the position, 'there was very little money in,the business. Since then It had been exceedingly profitable, because a very wrong monopoly had been granted him.

If Satisfactory, Why Change? If tho arrangement had . been perfectly satisfactory, asked Mr. Massoy, why was it found -necessary now to make a'change? He saw no reason for any commissions in this business. Why should not tho Government arrango for certain not rates for freights and passages with tho shipping companies, and let_ those rates bo paid without commission or rebate? Tho roundabout system of Tebatos and commissions was not satisfactory, and should bo ended as soon as possible.

The' Prime Minister, referring to Mr. Maedonald's motion in tho Council, Bald that on a previous day Dr. Pindlay stated that the Government had no information that would enable the whole of tho return to be supplied. Tho information . asked • for under one heading could only bo obtained by sending Homo for it, but the rest of the return could be supplied in a fewdays. _ Tho Government had had no object in'keeping back any information.

Members at a Disadvantage. Mr, Fisher (Wellington Central) asked if tho papers road were in the possession of tho House or of tho Primo Minister. Members could not discuss the correspondence till they had copies. Tho Speaker ruled that tho documents wore in the possession of the Primo Minister, but if Sir Joseph quoted any document any member could move that it should bo laid on tho table.

Mr. Fisher then moved that, the papers read by the Prima Minister should bo laid on the table. .

. Mr. AVright (Wellington South) seconded tho motion.

Tho Primo Minister objected, that this, would mean two motions before tho House at once.

The Speaker ruled that Mr.-Fisher's' motion could intercept, a-s : 'members, woro at a disadvantage in not having access to tho papers. Tho Prime Minister: I propose to debate tho motion. (It was now 5.10 p.m., tho adjournment being at 5.30.) If he had been treated "politically decently" by Mr.' Fisher, ho would have laid all tho papers before, the House at 5.30.. Now ho would wait till Mr. Fisher's motion was passed. Othorwiso "it would_ be said that Mr. Fisher' had forced him against his'will to lay the papers on tho table. Ho would suggest to members on his side of tho Houso that they should do Mr. Fisher the courtesy and justice of debating his motion, and so teach him a lesson. The question had been who appointed "E. A. Smith," and tho answer was Sir John Hall.

Mr.- T. E. Taylor: . (Christehurch North): There was no Kennaway then. The Primo Minister: Yes, he was, in tho High Commissioner's Office. If Mr, Fisher withdrew ■ his motion, he would ask permission to have, tho papers circulated.

Sir. Fisher's motion was withdrawn, and tho papers were laid on the table.

Mr. James Allen's Views. Mr. James Allen did.not agree- with the Prime Minister that there was no mystery about this matter. 'He referred to tho return asked for by tho Hon. Mr. Macdonald in the Tipper House some years ago. Mr. Macdonald had afterwards dropped tho matter, and ho would like to know how his mouth had been closed. Under the circumstances, it would have been more satisfactory if Mr. Kennaway had taken his own. name when ho took up tho business. This in itself, though not a serious matter, was significant when taken in conjunction with the fact that the Chamber had refused tho return asked for by Mr. Macdonald, and tho fact that Mr. Macdonald afterwards dropped tho matter. ' In view of tho fact that tho country was losing two thousand" a year, ho thought tho Prime . Minister ought to have known who E. A. Smith was, if he did not.

_. Continuing his remarks in the evening, Mr. Allen said that there was evirlonco in a cablo message from the High Commissioner to Sir Joseph Ward that Konnaway was "E. A. Smith." (Sir Joseph Ward: There is not.) There was no doubt about the meaning of the cablegram. Ho believed that communications to the Government from the High Commissioner camo in duplicate, one copy by each mail, and it was unfortunate that both copies of a letter to this effect had gone astray.

Mr. Fishor's Remarks. Mr. Fisher (Wellington Central) said thel'o was a firm in business in Wellington, which offered a spot cash tender for tho cast iron, axles, and other refuse of tho railway workshops throughout the Dominion'.. Their tender was not accepted, presumably because tho Government thought they could get a better -prico elsewhere jator on this- firm saw on the Wellington Wharf tho material they had tendered for addTosscd to-"E. A. Smith, London." Ho wished.to ask whether. "E. A.-Smith" was paid a commission on tho sale of this-material. . The dates .of two of tho shipments' were March, and. July, 1908... If tho Minister for Railways, .to whom he-'had pro' viously spoken; on .this...matter,, could tell the Houso the prico realised upon tho material at Homo, he, could tell him tho spot cash prico offered here. If the Minister could ircalisb 'a • hotter price at Homo, allowing for'.expenses, ho was, a smart business man, and entitled to credit, but if .'tho '.Government had lost on tho transaction the sooner they dropped "E. A.. Smith" and dealt locally the hotter.

Tho Hon. J. A. Millar: It was bofore I took over tho Department. Mr, Fisher said ho did not suggest

that there was anything WTong in the transaction, unless tho English price was less than tho prico offered locally. The Primo Minister denied that letters wero forwarded by tho High Commissioner to "E. A. Smith."

Mr. Russell In Defence. Mr. Russell (Avon) considered that tho whole matter had now been exploded. No unbiased member could say that tliero was anything'' in the various criticisms that had' been made. He read extracts from Tru: Dominion which lie denied.

Mr. Buchanan: How much business did E. A. Smith do with other countries?

Mr. Russell: I have no doubt but thai tho firm is on a fairly largo scalo and has transactions with other countries.

In conclusion, Mr. Russell said there was a great contrast between tho clear explanation' by Sir Joseph "Ward and the criticisms of 'tho -Opposition in their leading journal in this county.

An Unfortunate Relationship. Mr. Hemes (Tauranga) said it was remarkable what extraordinary ignorance had been shown by Ministers in their own Departments. If ..any' special shipping, arrangement was- required, probably the arrangement with "E. A. Smith" as originally instituted by Sir John Hall was as good a one as could bo made. Ho-thought it was an improper 'thing, however, that-the business should havo been practically owned of latter years by the son of tho'man who was managing the High Commissioner's office. Ho did not say that thcro had been anything wrong, but tho position would not bo allowed by a private firm. The Primo Ministor had not dealt .sufficiently with this point. Mr T. E.. Taylor fChristchurch North) congratulated the Prime- Minister on what ho termed his absolutely complete reply to any suggestion that he. or any member of tho Government had any knowledge of anything improper in the relations with "E. A. Smith." He had a high opinion of tho integrity, of Mr.. Reeves, whoso letters, to his mind, entirely exonorated the Government. :

Mr. Buchanan (Wairarapa) .was ■ surprised that tho Prime Minister himself had not ossen tial information with •: re-' fcronco to. the offloo at hand. Ho' went on, to say that : a largo proportion of tho commission on' passages really came out of tho pockets' of tho taxpayers. . . Mr. AVright. (Wellington South) thought that Mr. Russell had forgotten tho past. When ho was member for Riccarton ho found .that ho could not on numbers of occasions support tho Government which ho' was flow commending for its rectitude. It might not be according to the mles of Parliament, but ho might mention that such woro Mr. Russell's views at that time that ho came to bo associated with- a word liko "wobbly." Ho thought that there were vory just grounds for tho belief that everything was not all right in regard to tho matter. Tho causo of the suspicion had largely been that certain statements made by Sir Joseph proved to bo inaccurate. . For instance, tho Prime Minister had stated..that,tho company had no connection with tho Home and that its offices were not located iiv the same building. According to. Sir Walter Kennaway,' this was, however, not tho case.-' The Primo Minister had also stated that he was not aware of the urraiigemwit with tho company, but Sir Walter Kennaway boro out. Mr. Reeves's statement that tho Government was cognisant of- it. Thoro were people who ■ nominated friends at Homo. Did "El. A. Smith" receivo a commission on such passages?

Another Statement by the Premier. The Primo Minister declared "that Uioro had been a' number of misrepre; sentations during tho debate. - Ho wished to 'statu'in reply i« 'Mr. Allen, that-ho could not tell from a cable which ho' received in 1906' in'reply to cm© of his own that Mr. Kennaway belonged to ."15. A. Smith.". When' ho", saM that tho linn had .nothing-to do: with tho High Commissioner ho stated what was a'fact. . It was true that.Smith and Company's .-offices . were in tho samo building as the Homo oflice,-but the firm's offices were separate, and they paid . the - rental themselves. Until he saw it in the press ho never heard anything about any alleged mystery. Ho had never at any time had a suspicion .or doubt as' to-tho manner in which the late High' Commissioner or his predecessor carried out their duties. It was hot true, as Mr. Allen had stated,-that tho.Government could ,havo, sayed £5000 'a .year, if it had conducted the business. There had been a' statement to the effect that Mr. Kennaway created tho name of. Smith to hide his identity, but he had now shown that that was not' a fact. Then, as to tho non-receipt of Mr. Reeves's letter in 1906 ro the arrangement - with the company. . When h<j heard that such a letter, had been pent lie questioned the secretary of the Cabinet on the subject, as he felt suro that he had not seen it, and ho found that it had.never been received, nor had any duplicate, which was usual, como to hand. The Scrap-iron Incident. He would noxt refer to tho extraordinary statement - with reference .to the scrap-iron. Ho found that. Mr. M'Villcy remembered the shipment mentioned by Mr. Fisher. - An offer- was made locally for tho.material, but it was not considered good enough. It was known that. a better price could bo obtained for it at-Homo, and- a : much hotter net.result,had, ,as-a matter bfj,fact, been obtained after payrnwit of all expenses. - . ,

In reply to Mr. Buchanaii, the Prime Minister said lie. had. not known that the office of "B. A. Smith"..was in the same building as the High Commissioner's office. He had never been in tho office of "E. A. Smith" in his life. In reply to Mr.. Wright, Joseph Ward stated that no commission was paid to '.'Smith" on tho. £10 paid by persons in New Zealand for emigration of relatives, from England. ■