JURY DISAGREE

Hokitika Guardian, 16 November 1929, Page 6

JURY DISAGREE

,- ON i'll AT) D CHARGES

IN QUARTERLY DIVIDENDS CASE

(By Telegraph—Per Press Association.)

IK VEItCA 11GILL, November 15.

Hearing of the charges of false pretences against David Neilson Johnston was resumed in the Supreme Court today. The accused, who pleaded not guilty, and who. was represented -by ALii C. J. L. White, of' Dp nodin, wasthe. representative in New Zealand lor Quarterly Dividends Ltd. and National House Purchase Ltd., and it was in connection with money accepted on behalf of these organisations that the charges were laid. The accused-gave evidence. He said that he was a- married man, with two children, living at Dunedin. He had served in both the Boer War and the Great War. As a result of ill-health he had had to give up his work as a trained masseur, and take up the occupation of selling Bibles. He said that the schenfe had been brought to his notice by a member, but he had waited until the visit of the promoter, Wm, Taverner, to New Zealand. He had attended a meeting addressed by. Taverner, over which the previous witness, - Moil 1 ; had piesided. Moir, as chairman, had said that the scheme had great possibilities, and after hearing Taverner*, address, (witness Trad joined the organisation. -.He ha 4 become Secretary of New Zealand, after twenty other mem’had been suggested for the post.but had refused it. He himself lmd had implicit faith, in tha scheme' until the. hearing r ipfth<? Lowi^r'Court,i when he had heard the evidence of the Government Actuary. JJfelstill -bedibvtedimcitlie .schema; Jp.ift would like to hear the evidence of an actuary of equal calibre as the Government Actuary, as he had been assured that the scheme had been submitted to actuaries of \the highest standing. In fact, he had been, assured that the company would send out an actuary to testify. The Crown Prosecutor, Mr McAllister, objected to.that evidence as being ...subsequent to the charges laid against the accused, and the objection was upheld. ; ...

Proceeding, witness said that his, wife and' his two daughters were subscribers to the scheme, one of his daughters paying her contribution out of-her, salary. .They were still paying,, and still believed in'the scheme. When liddressing meetings,' he had" said that' two and a-lialf years was a fair average computation for the waiting periods for, loans. The scheme had been in operation since September of 1920, and until 1925 a reward was offered to anyone who could show that the scheme was fraudulent. Companies had been registered in New Zealand in 1928. He himself received no salary for his services, but he was on the same footing as any other • member of the organisation, who received x.l for every four members enrolled. j

Cross-examined by tlie Crown Prosecutor, the accused said that he had told people whom he had canvassed that they would reach the £5,000 class in about seven and a half years, but lie certainly had not told them that they Avpuld - dr.aw;., dividends! .op the £sooo.The mhn in Zealand was Tft the £3ooo’ blitsS, "but lie was drawing dividends on £4OO. He did not know that Taverner was the controlling force of the organisation. He repeated that he simply implicitly believed in the scheme. Although this was so, he would not continue to enrol members until lie had received actuarial support of his belief. He bad read a leading article in the “ Evening Star” of Dunedin in which there •was quoted an extract from London “ Truth ” severely criticising Taverner. Still lie had believed in tlie scheme. He had also read in New Zealand “Truth” strictures passed on Taverner by English judges, but bad still retained bis belief. He had been with -Taverner in Wellington when be had been btuCstioned by a detective in the police station there, and on the conclusion of the interview, the detective bad shaken bands with Taverner, and.had wished him well. Under these circumstances, he felt that he could he excused for ignoring the newspaper articles. It was a fact that lie had received a loan of £3OO from Taverner’s companies to pay, for a shipment of Bibles which had gone astray, and for which witness had accepted the Responsibility? Witness had enrolled one thousand members in the organisations. He bad received a commission of 5s a member. Apart from his communication with Taverner, witness had not taken any steps in New Zealand to make enquiries concerning the soundness of the scheme. After the proceedings in the lie had shown the Government Actuary’s report to an accountant in Dunedin,' who had stated that he could not set himself up as an authority against a man possessing such high qualifications as a Government Actuary. 'Since the prosecution had been commenced, be lfad accepted money posted to him, but bad not solicited any deposits. At a meeting lie had held at Waimate, it bad been condemned by the Mayor and the President of the Retailers’ Association. He considered that lie knew as much about the financial aspect of tlie scheme as did these men, whom lie did not consider as experts.

Further evidence was called for tho defence, after which Mr White, in addressing the court, said that he would emphasise- to them the fact that his scheme had hoen in operation sinco 1920 under the very noses of the financial experts of the world, and yet this was the first criminal proceeding in connection with it.

Proceeding, Mr "White said that the question before the jury was mil as to the soundness or otherwise of Hie ’companies, but whether the deleiulant was a criminal. He fore the jury could (iud that, (bey bad Lo be satisfied on the four following points:—(l)'That the accused bad made definite and unequivocal representations as to an existing, or past statement, the tact of there being a future promise not being sufficient. (2) That flic representations if made were false. (J) 'flint accused. by making such statements, intended to permanently deprive people of their money, realising that in the end lie was practically’ stealing their money. (■!) That the statements if made were false. He bad already slated that one would have thought the -7/ r Crown would have stamped out the companies, if false, to prevent their continuing to delude the public, but be would go further. Not only had the Crown not thought it lit to act in this way, but it had virtually encouraged the continuation of the scheme by allowing the companies to register in New Zealand. Then, again, the Police Department, although it had bad the promoter of the scheme, Taverner, in New Zealand, and, in fact, bad inter- . viewed him, it allowed him to return, to England without prosecution. As to the soundness of the company, it bad been shown that the company was prepared to send out one of the world's financial. experts to assist counsel for tlie defence. This had been denied the accused, said Mr White, on ac•count of the manner in which the case .had been precipitated by the Crown. Counsel referred to the fact that the accused was a depositor and that his wife and daughter were depositors also mud that they were all paying into the .scheme. The jury retired at ,4.35, and they returned at 9.10, when the Foreman r-announccd that they were unable to agree on any of the six points. A new trial was ordered for Monday.