PUBLIC ACCOUNTS INQUIRY.

King Country Chronicle, Volume VII, Issue 516, 9 November 1912, Page 3

PUBLIC ACCOUNTS INQUIRY.

LOANS TO LOCAL BODIES. REPORT OP COMMITTEE. The chairman of the Public Accounts Committee (Mr J. B. Hine) submitted the report of the committee on Wednesday night on the inquiry into the operations of the State Guaranteed Advances Office, as follows: — 1. The loss sustained by the local authorities branch of the New Zealand State Guaranteed Advancsa Department sines its inception up to August 31st, 1912, was bewteen and £23,000, and wai incurred owing (a) to the board's difficulty in finding immediate investments for funds at the credit of the loans to local authorities account, and (b) to the remission of 10s per cent, allowed to cover the department being insufficient to cover expenses and loss of interest whilst the moneys remained uninvested. 2. The commitments on March 31st, 1912, were £B2O 320, and the commitments on September 16th, 1912, were £65,131. 3. The available means and unexhausted loan authorities at March 31st, 1912. were as follows: —Credit in bank, etc., £163,643; unexhausted loan authorities, £778,u00. 4. The available means and unexhausted loan authorities at September 6th, 1912, were:—Credits at bank, etc., £27,550; debits, £30,000; the debits exceeding the credits by £2450; unexhausted loan authorities, £825,000.

"The committee's finding was in regard to the superintendent's letter, written on behalf of the Advances Board, alleging that statements were made in the House of Representatives on September 28th, 1912, to the effect that loans had been granted by the board to local authorities under political influence, and with a view to influencing the general eleciton of last December. No evidence was submitted substantiating the superintendent's written statement, and the committee consider that the members of the board were ill-advised in accepting the head-lines in the press reports as sufficient grounds for writing to the Minister in charge of the Advances Department in the terms used in the letter. The committee's recommendation Was that the evidence has led to committee to the conclusion that insufficient control was exercised in administering the loans to local authorities, especially in committing the department to advances three years ahead, an action which the committee is advised was contiary to law. Your committee, therefore, strongly recommends a change in the personnel of the Advances Board. —J. B. Hine, chairman." AN AMENDMENT.

Mr Hanan moved as an amendment to the report that the evidence taken by committee, and the records of the department, conclusively proved the following:—l. Tnat no political or other influence was at any time used to influence the board. 2. That the members of the board were justified in asking for an inquiry into grave leflections on their probity and administration. 3. That no discrimination on political grounds had been made in granting or refusing of a loan to a local body in any electoral district. 4. That no losses had been sustained through want of security; the losses amounting to £23,000 incurred were due to the board's difficulty in finding immediate investment for the funds at credit; to the remission of 10 per cent, allowed to the department. being insufficient to cover expenses and loss of interest whilst moneys remained uninvested. 5. The losses were a mere trifle compared with those made under the old loans to local bodies system. 6. That the commitments made for payments of instalments extending over a period of years were in accordance with regulations under the Act. 7. That had the post office fulfilled its promise made in June last to lend the Government £1,500,000 there would have been more than sufficient to meet all engagements. It was agreed that discussion on the motion and amendment should be taken after the second reading of the State Guaranteed Advances Amendment Bill. THE DIVISION LIST.

The amendment was rejected by 39 votes to 28. For the amendment (28) : Atmore, Buddo, Buxton, Colvin, Glover, Hanan, Craigie, Davey, Ell, Forbes, Hindmarsh, Isitt, Laurenson, McCallum, Mac Donald, McKenzie, Myers, Parata, Payne, Poland, Rangihiroa, Robertson, Russell, Ssddon, Sidey, R. W. Smith, Ward, Witty. Against the amendment (39): Allen, Anderson, Bell, R. H. Bollard, Clarke, Dickson, Escott, Fisher, Fraser, Guthrie, Harris, Lang, Lee, Malcolm, Mander, Massey, Dr. Newman, E. Newman, Nos'worthy, Okey, Pearce, Pomare, Reod, R. H. Rhodes, Scott, F. H. Smith, Statham, Sykes, G. M. Thomson, Veitch, Wilkinson, Wilson, Young. Pairs: Noes: J. Bollard, Hunter. Ayes: Carroll, Brown. CONDEMNED UNHEARD. Sir Joseph Ward, speaking immediately afterwards, declared that the division was significant. Probably 75 per cent, of those who went against the amendment had never read the evidence and had condemned the board unheard. Every member of the board denied on oath that political influence was attempted. He had taken out a statement showing that mora money was voted by the board to electorates represented by members then in Opposition than to electorates then supporting the Government. Looking at this and at the division which condemned the board, people could not call this a Parliament of justice. Mr Myers pointed out that men of long and honourable careers were being condemned on not one title of evidence. Members should feel proud that the Public Service included men of such high character instead of placing stigma on them. He expressed the hope that the Minister of

Finance would be content to pass the report and finding, but delete the recommendation,of the committee. TO GET RID OF THE BOARD. Mr Fisher declared that the wording of the recommendation did not throw any stigma on the personnel of the board. Opposition members: Then what is it there for? Mr Fisher: To get rid of the board. (Opposition laughter). I consider the board as at present constituted should be abolished. At 4,30 a.m. Mr Massey appealed to members to close the debate and place the responsibility of the result of the report on the Government. "There has never been a more direct attempt at Tammanyism in this country than what has been attempted tonight," said Mr Mac Donald. "The Government has struck a blow at the safety of the Civil Service, and, in order to justify themselves, are prepared without hesitation to make a cowardly sacrifice of public servants." (Ministerial cries of dissent.) Mr Hine replied, and the report was adopted by 36 to 26.