GOVERNMENT’S CLOSE CALL

Sun (Auckland), Volume III, Issue 756, 31 August 1929, Page 8

GOVERNMENT’S CLOSE CALL

More About Loan Embargo LABOUR SUPPORTS REFORM Investigation Evaded f THE SUN’S Parliamentary Reporter.) PARLIAMENT BLDGS., Friday. HAD it not been for a technical fault in the amendment moved by the Rt. Hon. J. G. Coates in the House of Representatives this afternoon the division bells might have rung out the new Government and rung in the old. It was the intervention of Mr. Speaker, who ruled Mr. Coates’s amendment out of order, that probably saved the L’nited Party, for, on the vexed question of the London money market transactions, Labour was showing an inclination to side with the Opposition. The question of Sir Joseph Ward giving the House details of the London money market transactions, and the reasons for his alleged embarrassment, were sought by Mr. Downie Stewart, ex-Minister of Finance, and by Labour men, Mr. H. G. E. Mason (Auckland Suburbs) first bringing it up.

The question came to light in the Imprest Supply Bill debate and the discussion lasted most of the afternoon and the House did not pass the Bill till 5.50 p.m., instead of adjourning at the usual time. Only the possiblity of there being no Imprest prevented Mr. Coates from moving an amendment to the Bill itself.

“I had not intended to refer to the subject again, but I think that there is an aspect which has not presented itself to the Prime Minister,” said Mr. Stewart. Statements by him were being telegraphed to the London “Times.” Those statements might be prejudicial to New Zealand. Mr. Stewart said he had before him an extract from “The Times” containing Sir Joseph Ward's statement that he had been prevented from going on the London market for two years. Mr. Stewart said that it was true that his own reply had also been cabled, but presumably the Prime Minister’*, amended 'statement, that he was not allowed to go on the London money market for 18 months, was also before the London financiers. It seemed to him that that might not be of any service to New Zealand. The Prime Minister had said that it was not' possible for him to explain the -whole position because the documents were confidential. Mr. Stewart’s answer was that there was nothing confidential or secret because the Prime Minister had removed the ban of secrecy by stating what was the alleged cause for his not being able to go on the London money market. There was one person to whom the information could not be refused, the person who was alleged to have signed the agreement. His statement was that no such undertaking had been given, but if it had been given it must have bean given by the present Prints Minister. Sir Joseph Ward: No, it was not. Mr. Stewart: Very -well then, it must keen given by his predecessor. The Prime Minister: Yes, it was. The onus is on the Prime Minister to prove it.” said Mr. Stewart. He urged Sir Joseph Ward to make a clear statement to the House. CABINET ETIQUETTE .. “ x am bound to say the attitude of the Prime Minister himself seems to be quite in line with the attitude he Jt as^,< r Ol)te f 1 ' vi th reference to Cabinet itself. said Mr. Stewart. “A perfectly new constitutional procedure is being established. The old rule that every Minister speaks for Cabinet and that Cabinet is jointly and severally responsible for the statements of Ministers is being abandoned. We saw only yesterday that one of the Prime Minister’s colleagues was abandoned and thrown overboard by him. That is a new precedent altogether. If a Minister speaks and says he is speaking for himself as an individual and Is not committing the Government in any way. well and good, but we have seen Minister after Minister disavowed by the Prime Minister and their statements negatived. The result is the public does not know whether Ministers make their statements on behalf of the Government or t hemselves ” The Prime Minister had said that he proposed to make Mr. Stewart his scapegoat, but he obviously had forgotten that scapegoats carry other people’s sins into the wilderness as well as their own. (Laughter.) The Prime Minister said that Mr. Stewart, as Finance Minister, had affirmed that he did nothing before the new Government's coming into officer in connection with borrowing requirements for this year. Sir Joseph flatly contradicted that. When he had come into office he had overhauled the papers in the Treasury regarding loans, and had found that negotiations had been going on for some time before Mr. Stewart’s resignation. These were for a £5,000,000 loan. Mr. Stewart: That is not correct. The Prime Minister: I found the records in the Treasury. Mr. Stewart: Put them on the table. SPLITTING STRAWS Sir Joseph said that he had had information from Home authorities to the effect that the money could not be advanced during the following year but would have to be raised during the year in which the loan was current. What was the use of the exMinister of Finance splitting straws? What had happened was that Mr. Stewart had been away electioneering and the Treasury could not get an answer to its inquiry, as to whether it should put a loan through. Mr. Stewart: That is clearly a misleading statement. The Leader of the Opposition, Mr. Coates, said that the Treasury did get an answer from Mr. Stewart as to its inquiry. The Prime Minister: I have looked at the files, and there is no answer to it. Mr. Coates: I think the right hon. gentleman will find the answer. Sir Joseph Ward contended that Mr. Stewart was so busy electioneering that he put electioneering first and finances of the country second. Negotiations for the loan were going on for some time before he came into office and the proposals to have two loans in one financial year did not emanate from him. When he came into office he had to take up the question of arranging the loans and lie fixed the amount for £7,000,000 because he considered £5,000,000 was inadequate, and he had to agree to not going on the London market for 18 months. It was the same stipulation that Mr. Stewart had been going to put in, and it was no use the Opposition members shaking their heads and saying “No,” because it was in the correspondence. Regarding Mr. Stewart’s statement about his relations with Cabinet. Sir Joseph said that a mistake had been made in issuing a licence for a brewery. It should have come before Cabinet. Mr. Stewart: No. The Prime Minister: The hon. gentlemen do not know what they did when they were in office because they zigzagged, and went anywhere. There was nothing wrong with the issuing of the licence, except that it should have come before Cabinet. It was a mere indiscretion bv the Minister, but. because of what Sir Joseph had told a denutation on Thursday th© House

was to have a diatribe from Mr. Stewart on Cabinet etiquette, and it was mixed up with the loan transaction. If Mr. Stewart did not discriminate between a dispute over an arrangement for a loan and the issue of a licence for a brewery, he was not fit to hold office. “I negotiated.” said Sir Joseph, “and I followed up the negotiations and finished them. The late Minister of Finance did not finish them. He ought to have. He neither started them nor finished them. Cable correspondence shows that negotiations were going on for a £5,000,000 loan, and proposals for a conversion operation, during the time Mr. Stewart was Minister of Finance.” Mr. Coates: Do you suggest that the Prime Minister is not notified of such arrangements? Sir Joseph: I do not know what sort of arrangements you had. Mr. Coates: Look over the files. Sir Joseph: I have looked over them until I am sick. Mr. Coates: Have another little look. Mr. W. E. Barnard (Napier): Let the House have a look. KEPT SECRET Sir Joseph: I cannot do that. Had the member more experience, he would understand that if this correspondence were tabled we would place ourselves in the position of not being able to carry on negotiations for a future loan. Transactions have to be as secret as it is possible to keep them. Mr. 11. G. R. Mason (Auckland Suburbs: We don’t want all the files. We want one specific one. Sir Joseph: I know what you want, but you are not going to get it. Mr. Speaker: Order! Order! Sir Joseph: The member is .asking for something he is not entitled to get. He has to take the word of men of responsibility.’ “Would you not refer the correspondence to a secret committee of the House?” suggested Mr. Stewart. The Prime Minister: The matter is not of sufficient importance. Mr. D. Jones (Alid-Canterburj) contended that the subject should not be allowed to rest where it stood. In dealing with the alleged period of the embargo of 18 months, the Prime Minister had said:—“So I put it in; you were going to.” “There is the whole story,” said Mr. Jones. The Prime Minister: I know what I said. Mr. Jones: But this point is worth emphasising. The Prime Minister: I know what I said. You must not try to twist things. Mr. Jonos said there were rumours abroad in financial circles in New Zealand today that London was afraid of the Prime Minister’s policy, and that the interests there submitted proposals to Sir Joseph Ward as to how far he should go. The Prime Minister: That is not correct. Mr. Jones: I am only stating what is abroad. The Prime Minister said that he put a qualification in debarring us from going on the London market. The Prime Minister: I did not. Mr. Jones: The Prime Minister did He knew what the late Minister of Finance was going to do. The Prime Minister: The correspondence shows it. VERY UNFAIR Mr. Jones considered the charge against the late Minister of Finance very grave. In fairness to him the «Y as e ™ itleci to tlie Production P/tke file. The House had no knowledge as to whether New Zealand would get money from London within the next 18 months. I want to ask the Prime Minister now to agree to have this matter deSSi, tel £ ? leared up,” said Mr. Coates. the Prime Minister had made an allegation that Mr. Stewart had in some way interfered with or controlled Sir Joseph Ward’s borrowing in London. The implication was that Mr. Stewart had taken some action that had prevented the Prime Minister from going on the London market for 18 months. No such action could be attributed to the ex-Minister.” The Prime Minister: I say it can. Mi'- Coates: That is just the point. a he Prime Minister says it can. I say it cannot, and Mr. Stewart says it cannot. The House and the country should know* who is right and who is wrong. The Prime Minister suggested, that I was not aware of communications that passed between the Treasury and London. That is incorrect. On many occasions, not daily perhaps, but at frequent intervals, my colleague informed me by telegram of information from time to time received from London concerning the possibilities of floating a loan. Air. E. J. Howard (Christchurch South): Why not refer it to the Public Accounts Committee? Mr. H. G. R. Mason (Auckland Suburbs) also made a strong plea to the Prim© Minister that he should not let the subject rest where it was, even if it were confidential, as the Prime Minister had said. Sit Joseph Ward had gone too far for there to be a stopping place. “ I WON’T BE THERE” “Are you prepared to meet Mr. Stewart r asked Air. Coates. Sir Joseph: 1 am prepared to do ■what I think is right, and nothing else. The House is quite welcome to refer the subject to the Public Accounts Committee, but I won’t be there. I won’t be a party to altering a system that has been in operation ever since we have had a constitution. Honourable gentlemen are not going to make use of me, and I want them clearlv to understand it. Sir Joseph corrected the statement that the whole of the £7,000,000 loan was in England. The whole of the money was put on deposit there at a higher rate than New* Zealand had to pay for it. However, it was deposited at call and drawing on it had recently begun. Air. Stewart said that durincr the election campaign he had warned Sir Joseph that if he were going on the London market he would have to keen the conversion operations in mind. Sir Joseph, however, said that he knew all about tl t. and did not need a reminder. The Prime Minister had accused Air. Stewart of electioneering and neglecting his duties as Minister. “It was quite true that I was electioneering.” continued Mr- «toi rar t

“but duiing the campaign I received a telegram from the Treasury stating that our London advisers were of the opinion that the market was likely to harden and that therefore we should borrow our next year's requirements without waiting until next year and make a further instalment of conversions. No amount, however, was mentioned. Almost immediately I telegraphed to the Treasury that the proposal was highly important, because it involved a complete departure from our previous practice of never borrowing more than the one year's requirements. My opinion was that Cabinet should be consulted and I inquired as to how long I had to make the decision. The reply was that while the London advisers were apprehensive, the position was not likely to become disadvantageous so long as the question was settled in January. Therefore I decided to wait until after the election. MR COATES SEEKS INFORMATION Speaking again. Air. Coates said that he understood Sir Joseph Ward to say that he was prepared to allow the whole matter to go before the Public Accounts Committee, intimating that at the same time he would not appear before that body. Was that the position? he asked. He did not want to press the matter unduly. He considered the matter of sufficient importance to warrant it being referred to the committee. He again asked whether the Prime Alinister would agree to the question going before the committee. The Prime Alinister: I have said what I mean and I don’t require to repeat it. Air. Coates: .That is that the matter will go before the committee? The Prime Alinister: I thought you understood it before. I will repeat it in the same language if you wish it. Mr. Coates: Aj*e you agreeable to the matter going before the committee? The Prime Minister: You make your own speech. Mr. Speaker: Order, order. Mr. Coates: I am quite able to do that. Quite frequently I do. I will make another suggestion. Will the Prime Minister confer with the late Alinister of Finance, whom he must agree we can trust on Treasury matters, with a view to the issue of a joint statement or separate statements. I see the Prime Alinister has not met me on that. Very well, as this matter should be cleared up, I propose to test the feeling of the House. Air. Coates then moved that the question be referred to the Public Accounts Committee with instruction to report on the question of loans and conversion in London in January last, with a view to informing the House as to the tacts thereof, and as to whether any undertaking was given not to go on the London money market for IS months, by whom it was given, and the reasons for it. Mr. Speaker said that he would have to rule the amendment out in its present form, as it contained a direction to a select committee. Would the Leader of the Opposition take out the words in question? Air. Coates: If the Prime Alinister will agree to some modus operandi. Air. Speaker: I will have to rule it out in its present form. Air. Coates: Very well, sir: I shall have to move an amendment to the Bill.

The LeacYer of the Labour Party, Air. H. E. Holland: 1 i carry this there will be no imp supply.

Air. Coates: All r; I will tak another opportunity.