STATE LOANS.

Dominion, Volume 6, Issue 1568, 11 October 1912, Page 9

STATE LOANS.

PARLIAMENTARY INQUIRY. MR- POYNTON'S STATEMENT. INTERESTING QUESTIONS AND ANSWERS. MORE ABOUT Ji'EMUERA. The Public Accounts Committed of tho Houre of Representative;; yesterday con--1 tinued its inquiry into the administration of the Slate Guaranteed Advances Department under past Governments. Mr. J. B. lline presided. There were also present'the Hon. Jns. Allen (Minister for Defence), Sir Joseph Ward, Messrs. JO. Newman, J. Hunan, A. 11. Myers, J. Cruigie, E. P. Lee, 0. V. Penrce, and Dr. A. K. Newman. Sir Joseph Ward directed attention to a. report in The Dominion of u> remark ho had jnado oji the previous day. He stated that tho report was capable of an interpretation which should not go unchallenged. Ho was reported-as having said that he would not care about being tho Minister who had to take the responsibility of refusing loans. He made no such statement. What he did say was that ho would not euro to be the Minister who had to take the responsibility ot advancing a loan without the board. In his time as Minister he had refused scores ot loans. Ho would refuso a loan at any time if ho thought it was right. Mr J. W. Poynton (Superintendent of tho Advances Department) put in si return asked for by Sir Joseph Ward on tho previous dav, showing the amounts lent by the Department prior to 1910, and those advanced after that year. ... Sir Joseph Ward continued Ins crossexamination of Mr. J. W. Poynton, who said that lie could not give the exact amount advanced under the old Loans to Local Bodies Act. He gave the amounts advanced under the new system, and to a number of boroughs and other local bodies, and the purposes tor which the loans were intended. The Hon. Jus. Allen pointed out that the whole of this information was contained in a return which had been laid before the House. . Sir Joseph Ward said Hint, the return had not boon laid on the table when ho spoke recently in the House on the subject of the Advances Office. To further questions, Mr. Poynton replied that the Borough of Tiinaru had a population of 11,280, and the loan advanced to it worked out at about .£lO per head: The loan'made to the town district of Pukekohe, which had a population of 629, worked ont at ,£lB per head. Tho amount'advanced to counties during tho period of 25 years for which the old loans to local bodies system was in operation was ,£1,300,090, an averago of- .£OO,OOO a year. Under the advances system, counties had been advanced .£685,510, an averago of about .£300,000 a year. ; A Protest Recorded, The Hon. James Allen said that an obvious misstatement was going on. record. The last-mentioned amount was only that of final approvals of loans. Sir Joseph Ward: That does not got over the fact that tho amount finally approved was ,£605,510. Mr. Allen said that this was obviously misleading, and asked that his protest bo recorded. Sir Joseph Ward said that ho did not think anyone had the right to put on record a protest against his question. Mr. Allen: It is misleading. Sir Joseph Ward: The misleading is on your side. Mr. Lee said that from tho statement mado by Sir Joseph Ward it would appear that tho payments made to counties amounted to .£1)05,510. Sir Joseph Ward; That is not so, I said finally approved. To another question, Mr. Poynton said that the amount actually paid over to counties was £441,055, roughly ,£105,000 a year. The amount paid to boroughs under tho old system was ,£732,021, averaging about £25,000 a year.. The amount advanced to boroughs since the inception of State guaranteed advances was .£1,020,740, or about a year. Sir Joseph Ward went on to question Mr. Poynton regarding amounts advanced to other bodies under the old and now systems, when the Hon.. Jns. Allen protested that the amounts 6tated should be exact and not mere estimates. Air. Poynton concurred, stating that tho exact information required could bo provided in a return. The Hon. Jas. Allen said that he wished the return to show the amounts advanced to local bodies under tho old system during the last two years, in which it was in full oporntioA. It was unfair to lake an average of loans for the twonty-fivo years of the old system, because the amount of loans had increased. Sir Joseph Wnrd said that tho comparison was not unfair. He proposed to "o on oath and state that during the last two years of the old system county councils and other local Iwdies were unable to obtain anything Jikorho amounts they wanted. It was agreed that a return should be furnished showing advances made .under the old system for twenty-five years, and during 1308 and 1009, and advances mado under the new system. It was agreed that Mr. Poynton's approximate estimates of the amounts should be deleted from the evidence. ' A Question Disallowed. Sir Joseph Ward now proposed to put a question to Mr. Poynton about a statement mado by tho Minister (tho Hon. Jas. .Allen). , The chairman said that he could not permit a question about a Minister to be put to n. Department officer. Mr._ Hanan: Wait' till yon hear the question. .' Sir Joseph Ward asked whether the statement of the Minister, published in The Dominion of September 3, that of tho .£2,152,000, the sum of .£1,011,700 had gone to boroughs and j;G08',000 to counties, was correct. The chairman ruled that the question could not be put. ' Mr. Hanan said that tho ruling was most absurd. Any court of law .Sir Joseph Ward accepted tho ruling. Ho went on to snv that he only wanted to point out that Mr. Allen in the House made a-statement that official authorities had gone to local public bodies when lliev had not. Tho chairman: I cannot, allow this conversation. Tho Hon. Jas. Allen: If you like, T will make a statement now of exactly what I did sny. Sir Joseph Ward: I presume I can call Mr. Allen and put him on oath? The Minister and chairman'both replied in the affirmative. THE LETTER FROM THE BOARD. REMOVING AN IMPRESSION. Mr. Allen now referred to the letter read in the House recently, in which the State Advances Board asked for aii inquiry into allegations of political influence. "Oil September 30," he. said, "you, as superintendent, addressed a letter to mo ?'•'—Yes. Air. Allen said that flic letler covered a resolution by the board regretting statements mado in the Hou.-e of Representatives on the Saturday morning preceding. What statements were referred to? ; Mr.. Poynton: Statements that money had been lent during election year. Mr. Allen: When; did you' get that from?—ln the press. Mr. Allen: Show them to mo in the press. Mr. Poynton mentioned reports in several local papers. Mr. Allen asked to he shown, in any paper, the specific words referred to. lie asked, further, whether specific words were before the board when it passed its resolution. Mr. Poynton: We had no particular words. Statements wore made in the press, and half a dozen persons stuck me up and spoke about the way in which we had squandered uionc-v. Mr. Allen: What specific: slnlcmenU were before the board when you addressed Hie letler to me? Mr. Poynton: No specific words, but tho general charges. . He quoted headlines _ from Tin: Dominion: "S'.ale Lending," "A Record of Squniideriiie," "favoured Boroughs." "Purine Klerlion Year." Mr. Allfi: 1' fint what My member of Parliomni'i said?

I Mr. Poynton said that tho newspaper statements wero in reference to what had been said by members. The .Minister had referred to transactions' immediately beforo the election. Mr. Hine had said "Diabolical," and Mr. Masscy had como ill with other approval of the statements. Mr. Allen: What aro the press reports of statements made by a member of Parliament that you complain of? Mr. l'oynton: Statements were Hindu that money was squandered during election year. Mr. Allen: Who made that statement? Mr. l'oynton: Mr. Jtossey spoke of squandering, Hie chairman (Mr. Hine) said "Diabolical," and you specified certain dates before the election. Mr. Allen: That is what you eomplnlu of?— Yes. .Mr. Allen-.Were these words before tho board when it passed ito resolution?— No. The board, he coutiriued, had seen the sensational headlines, and desired to remove the impression which seemed to obtain in the House that the Iward hail squandered public money for purposes of iiirliieiicing elections. Mr. Allen: I want to know what statement you gave to the board for the purpose of getting them to pass this resolution. "Very Much Excited." Mr. Poynton: I said that statements had been made by members Unit wo bad squandered money. They were very much excited about what they had seen in the press. Mr. Allen: Then you had no statement before you from the press upon which this resolution was passed. Mr. l'oynton: There was something on Thk Dominion 'wards about it, and there were the sensational headlines and statements made by the newspapers that tho money luul been squandered. An impression had got about that wo wero a" lot of tools who had lent ourselves for political purposes. Mr. Allen: What had the board before them ? Mr. Poyiiton: They had the statements made in the House. 'Mr. Allen:.Did you realise that this was a reflection on members of the House? Mr. Poynton: We did not intend it to bo a reflection. Mr. Allen: Did you realise that it was a reflection on the Minister? Mr. Poynton: No; 1 did not intend it. Jlr. Allen: Did the board realise it? Mr. l'oynton: No; they wished to remove the impression that existed ' undoubtedly in the House in the minds of a great aiiany members. Mr. Allen: Then had the. board no intention of reflecting on any member of Parliament? Mr. Poynton: None whatever. They wished for an inquiry to remove tha im. pression which appeared to exist with many members of tho House. To further questions Mr. Poynton stated that when tho board passed its resolution all its members were present except the Public Trustee who was ill. The members present were Messrs. Flanagan (Valuer-Goiierni), Kcniber, Warbmton, and witness. Mr. Allen: You wero in the House when the debate took place?— Yes. Had I made any charge against the Advances Board for local authorities :-— No. Did I make any suggestion that they had been used politically?— You made no suggestion but the statement that I ho money which has been spent—but tho impression that, undoubtedly existed in your mind or that I thought existed in your mind, was a_strong implied suggestion that the members of tho board"hud lent themselves to it. Mr. Allen asked why, if there was a suggestion, it should be applied to the board. Mr. Poynton: Because the board had everything to do with these loans except final approval. Mr. Allen: Can the board grant a loan without tho approval of the Minister?— No. Another question put by Mr. Allen was: .Would the Minister oo justified in refusing a loan?— Yes. , Would it be his duty to refuse a loan if he thought it right to do so?-It vould. In every instance the Minister has to sign?—ln every instance to complete a •transaction. The Honour of the Board. If any suggestion were made, vhy do you imply that it wns tv suggestion against the board?— Seeing that the board uiupts these papers, and forwards tl.em to Ihe Minister for recommoa.larijn, ai-il he signs them or approves them, and that they do not como to him until the last, then the suggestion that tho money had been used for political influence during that year was a very strong suggestion against tho honour of tho board. The impression undoubtedly existed in the minds of prominent members of tho Houso that loan moneys had been lent for political purposes, and that was a grave reflection on the board. Mr. Allen: Would the suggestion, if it were made, apply equally to the Minister as to the board, or more so?—No, not with the procedure that has obtained for the past twelve or eighteen months, when, the Minister has never attended the board. The whole- responsibility of provisionally approving loans would rest moro with the board than -with tho Minister. Mr. Allen: Has tho board more to do with it than tlio Minister when final approval rests with the Minister?— Final approval has never been refused by the Minister yet. The Remuera Loam. Mr. Allen next questioned Mr. Poynton about the telegram (published in The Dominion-yesterday) which was sent to Sir Joseph Ward by Sir J. G. Fimllay on November 2, 1911, in connection with an application by the Remuera Road Board for a loan of .£84,000. The first fact elicited was that the date of the telegram was about five weeks beforo that of tho general election. Mr. Poynton stated that tho reply sent on the same day by Sir Joseph Ward was prepared by a clerk. Tho latter part of the message was added by Sir Joseph Ward. Referring to tho concluding sentence of the message:—"Cannot adyanco -.£IO,OOO, but. ns debentures for amount of loan authorities will be forwarded on Monday, that should bo quite satisfactory." Mr. Allen asked: "What authority had you for saying that tho board would approve on Monday " Mr. Poynton: When everything was in order wo always approved. . Mr. Allen: You raado up your mind that tho board would approve on .Monday?—We always did when everything was in order. In further examination, Mr. Poynton stated that when tho board met on the following Monday its clerk overlooked the Remuera loan. Later the clerk came to him about it "in a state of agitation," and it was arranged that the file relating to the loan should be sent round to tho other members of the Iward for signature. The file was sent round with a note: "Will you be kind enough to each express your approval of this tile so that the required payment of -£10,000 uioy l>e made without delay?" Mr. Allen: Who signed that?—l signed it. - ' The Round-Robin Principle. Mr. Allen: Is it usual for you to do your business on tho round-robin prin-. ciple? Mr. Poynton: It has been done in other Departments—the Government Insurance Department and the Public Trust Office. When something urgent is overlooked it is sent round. Mr. Allen: Even though you meet cvri-y week?—liven though we moot every week. Mr. l'oynton went on to 6tate in answer to further questions that tho lean was approved by the Minister on November 7, and another Remuera loan on December 1. Mr. Allen: On what day did the election take place?— The first ballot on December 7. After answering some detailed questions by Mr. Allen about the operations of the Department, Mr. Poynton stated that the Department had cash avnilable amounting to .£7OOO. Unexhausted loan authorities • totalled .£S:>3,OOO. About .0300,000 would have to be raised to meet commitments for amounts required this year. Mr. Allen: And what have I got to meet my own commitments ;- Mr. Poynton: That is o inntler for your own consideration. To another question, lie said that the amount required this vear would lie -t-'ua.OOO. 'Mr. Allen: I have to find alwiit Jtllllll.■00(1 out of the J»25,000, and out of what remains have lo find the whole of my own commitments. To other questions, Jlr. Poynton replied thai J.'L'.'iO.OOO would be required next year and .£IOO,OOO in the y>ar following to inert, reiiiwitni"U'-, A vrhsl w runccmcnt had been wndo that tho money

should In. obtained from tho I'ost oIHlc Mr. Allen: At .T. per ci'iil.? Mr. l'oynton: "Xo." lie added that- in November Inst thi> rale of interest hud been raised from ilj to 3J per cent;. Tie would furnish n return to show how much nf the money was available :it lIS per cent. A Moral Obligation. To further questions, Mr. l'nynton said that in his opinion a moral cibligalion rested on the Minister lo grant at .1! per cent, loans which Intel been previously approved prior to iVovembcr. It would intliel a hardship on the local bodies lo refire the>e loans. Home of the loans required in tfll.'t and Wit would be required at :ij per cent, lie could not sity until ho got "the return what the amounts were. Asked liv the Minister lo state specifically whether the I'ost Ollice would agree to give tile money required for these loans ill 31 per cent., Mr. i'oynlon replied: "Yes, these approved up lo November." The Post Office tile, ho added, would show details of the arrangement entered into. Sir Joseph Ward snii.l Hint ho had exempted State advances loans when pri-aiit-ing an increased rate lo Ihe Tost Ollice. Thi) committer adjourned at 1 p.m. until 10.110 a.m. oil Tuesday next.