THE WATERWORKS CONTRACT.

New Zealand Times, Volume XXXIII, Issue 5236, 4 January 1878, Page 5

THE WATERWORKS CONTRACT.

The committee appointed to make inquiries into certain alleged irregularities in connection with the Waterworks contract met yesterday afternoon in the Provincial Buildings. There were present—Councillors Hunter (chairman), Logan, Fisher, and Diver. The Chairman stated that it had transpired, from the evidence of Mr. Hester, that the two cheques dated October 19th and November 15th, for £2OOO and £IOOO, respectively, and which had been paid to Mr. Saunders on account of the main contract, had been signed by the Town Clerk, the late Mayor, and Councillor Moss. It had, been proposed that Mr. Hutchison should be examined that day, but he learned that that gentleman had gone on a visit to the Wairarapa. He suggested that Councillor Moss, who also signed the cheques, should be sent’for and requested to give evidence. A messenger was despatched for Mr. Moss, and also for a member of the committee (Mr. Macdonald), who it was also decided to examine that day if he were willing to give evidence. The messenger returned and stated that Councillor Moss was not at home, and that Councillor Macdonald promised to attend within a quarter of an hour. The examination of Mr. Chappel, a clerk in the employ of the Corporation, was then proceeded with. He stated, in reference to what had fallen from Mr. Macdonald on the previous day, that he was almost positive that ho had not taken any cneque to Mr. Macdonald’s office for him to sign. He had called upon him as to some business connected with ,the Reorganisation Committee. He had gone to Councillor Moss’s to get him to sign a cheque ; but, as far as witness remembered, the cheque was for a small amount for wages. Councillor Macdonald here entered theroom and stated that he had not the slightest objection to answer any questions which might be put to him. Councillor Fisher said perhaps Councillor Macdonald would like to make a statement. Councillor Macdonald said he had no such desire. He was not aware that he was called upon to defend himself. He was no party to the transaction ; neither did he know of any charge having been made against him. Councillor Macdonald then, in answer to Councillor Fisher, stated that he was aware, when he signed the cheque tor £2970, that it was for extras. The question never entered his mind whether it was correct or not. The certificate of the Engineer was attached to the cheque. He had a knowledge of contracts, and knew

that the decision of the Engineer was binding on both parties, and when he saw the signatures of the Mayor and Town Clerk he thought that was a sufficient guarantee for him to sign, especially considering the expression of opinion hehadgivenntteran.ee to at the first meeting of the new Council. ■ He thought the issue of the cheque was unjustifiable in the face of the stipulation in the contract that the certificate of the Engineer should remain fourteen days before the Council before the money was paid. He had not read the contract, nor did he think that any other members of the Council were acquainted with it, Mr. Saunders and himself were shareholders in the • Evening Argus. They were not jointly interested in the Kiwitea township. He was not connected with Mr. Saunders in any other business transaction. Councillor Fisher stated that it was within his knowledge that £2500 had been paid in the Crown Lauds office on the 7th December, the day on which the cheque was is uod, on account of land purchased in the joint names of Thomas Kennedy Macdonald, Joseph Saunders, and J. D. Baird, and asked Mr. Macdonald did his connection with that transaction induce him to sign the cheque ? Councillor Macdonald : Not in the slightest. They were not partners ; they were simply joint proprietors in a block of land in which a great many others held interests. Mr. Saunders had since parted with his interest to Mr. Baird. Had he for a moment imagined that there was anything wrong about the cheque for extras he would not only have refused to sign it, but would have written a memorandum upon it, and would have made enquiries. He did not think that the fact of his signing the cheque under the circumstances would cause his action to be regarded in an unfavorable light by any man holding honest views of his fellow-men, but there were people who always took prejudiced and jaundiced views of the action of others. He was not of opinion that Mr. Saunders should be called upon to refund the money till it was proved that the work had not been authorised. If the cheque had come out of his private purse he would have satisfied himself as to the absolute accuracy of the account; but the responsibility as to the accuracy of Corporation cheques rests with the officers, and he considered himself absolved from responsibility when he saw the signatures of the Mayor and the Town Clerk. If a Corporation cheque was presented to him for £20,000, signed by the Mayor aud Town Clerk, he would attach his signature. „ By Councillor Diver : He was under the impression that at the first meeting of the Council a resolution was passed to the effect that the Town Clerk aud Mayor were regarded as the parties who were to see to the genuineness of accounts, and that if their signatures were to a cheque that would alone justify any Councillor in signing it. By the Chairman : The cheque he believed was brought to his office to sign by someone connected with the Corporation offices, and he was certain that the certificate of the Engineer was attached to the cheque. He had signed many cheques, hut in every case, there was the accompanying voucher. There was no person in his office who could state positively what person brought the cheque. Mr. Saunders had no business transactions with him whatever. He was aware that Mr. Saunders held a number of Corporation contracts, but he was in no way connected -with him in such contracts, either directly or indirectly. By Councillor Fisher : For the land purchased on the 7th December Saunders gave Ms cheque for £BOO odd, and witness and Baird each gave a cheque for a similar amount. He was aware that the ; Council sat till late on the evening of the 6th December ; but he did not see anything unusual in the certificate being presented next morning. It had not been the custom to place certificates on the table of the Council. He knew there was a wide difference between claims for extras and those on the main account, but the investigation as to their correctness should take place in the Corporation offices. This concluded Councillor Macdonald’s examination, during which he frequently complained of the insulting manner in which Councillor Fisher had put his questions. The chairman had frequently to advise Councillor Fisher to confine himself to the questions, and to avoid making any offensive remarks. Mr. Page, accountant to the Corporation, stated that he was not aware that any resolution had been passed by the City Council in reference to clause 107 of the Municipal Corporations Act. [The following is the clause: — No monies shall be drawn out of the bank except by authority of the Council, and shall be paid by cheque signed by the treasurer, and countersigned by any two of such Councillors as the Council from time to time authorise to sign cheques.] He did not believe that any Corporation official was aware of the stipulation that certificates should be in possession of the City Council fourteen days before money could be paid on such certificates.

The Chairman said that appeared to be perfectly clear, for a glance at the various cheques issued would show that the rule had never been observed. Mr Page said the conditions of the contract were not lodged in the office, and, in answer to Councillor Diver, said he knew perfectly well that the certificate for extras had not been before either the Public Works Committee or the Council. They had received distinct instructions from the late Mayor to issue the cheque. Some discussion here ensued upon clause 107 of the Municipal Corporations Act, which enacted that no money should be drawn out of the bank without the authority of the Counc 1. Councillor Macdonald remarked that it was the practice for the accounts to be passed by the Public Works Committee ; so it appeared the clause had been constantly ignored. Mr. Page desired to correct Mr. Macdonald’s statement. The accounts were embodied in the reports of the Public Works Committee, without ever going before the Council, which came before the Council for adoption. No further evidence was taken, and the committee adjourned until the following (this) day.