LOANS TO LOCAL BODIES.

Taranaki Daily News, Volume LV, Issue 116, 2 October 1912, Page 5

LOANS TO LOCAL BODIES.

THE FINANCIAL POSITION. A DEPARTMENTAL PROTEST. DEBATE IN THE HOUSE. By Telegraph.—Press Association. Wellington, Last Night. The following memorandum has been forwarded to the Minister of Finance:—

The New Zealand State-guaranteed Advances Office- Advances to Settlers Branch, Wellington, September 30, 1012. --Memorandum for the Hon. the Minister of Finance, Wellington:—At today's meeting of the New Zealand Stateguaranteed Advances Office Board, the following resolution was passed: "This Board regrets the statements made in the House of Representatives last Saturday morning, to the effect that loans have been granted by it to local authorities under political influence, and with a view to influencing the general election of last December (1911). No loan has been granted by this board to any loeal authority under any pressure whatever. The only considerations influencing the board in granting loans were: (1) Was the money required for necessary works (irrespective of the class of local body 1 applying for the loan)? (2) was the security sufficient? (3) were funds available?" The board asks that a copy of this resolution be sent by the Superintendent to the Hon. the Minister in Charge of the Department. The board further respectfully asks that: (1) A copy of the above resolution be sent to the press; (2) a tribunal to be set up as soon as possible to investigate the charges of political influence made against the hoard. In forwarding the above, I would point out that the objection to the board lending to boroughs has no weight, for these reasons: (a) There was no power given to the board to discriminate amongst different classes of local authorities; (b) had the board done so and accumulated funds while certain classes of bodies entitled to them were refused loans it would have been properly condemned for: (1) Favoritism, (2) losing mouey through having funds uninvested while local authorities were refused loans; (3) breaking the law by assuming powers it did not possess. No proper application by any local body was refused, so long as funds were available.—(Signed) J. W. POYNTON, Superintendent." In the House of Representatives this 1 afternoon, Mr. Wilford gave notice to ask the Prime Minister if he will immediately cause an enquiry to be held in regard to the grave allegations of the Minister of Finance in relation to alleged political influence re the granting of loans to local authorities by the State-guaranteed Advances Board, and if he will request a Judge of the Supreme Court to hold such enquiry in open court, with the press present, so that the public may judge'for themselves whether there is anything in the serious charges of jobbery and corruption levelled by the Minister of Finance against the board, the members of which are of high character; and if he will not order a public enquiry will he repeat the statements made against the board outside the House of Parliament, so that members of the board may have an opportunity, through the courts, of proving their innocence of the serious and damaging indictment made under the shelter of Parliamentary privilege against them? _ Sir J. G. Ward gave notice of a motion for a return giving full details of the loans granted to boroughs, county councils and other boards, together with the rate of interest, etc.

ATTACK BY SIR J. G. WARD.

AN ENQUIRY DEMANDED,

Tn the House in the evening, Sir Joseph Ward raised a question of breach of privilege in connection with an article in the Dominion newspaper yesterday, which he declared contained a statement absolutely contrary to fact. It was, he said, a singularly remarkable thing that reflection should be cast on the State-guaranteed Advances Board and public officers by a Minister of the Crown. The charge was calculated to injure the credit of the country. He hoped that the Minister would a<*ree to refer the matter to the Public Accounts Committee. If that did not satisfy the Prime Minister, he would be willing to agree to a committee nominated from the other side of the House, or to an enquiry by a Judge. He averred that counties, road boards and town boards had received as much in one year as others had in three years. The article m the Dominion had implied that a htate institution was, at last, election, used for political purposes. In the Prime Minister's constituency a board had received more per head of population than had Timaru. Two boroughs in the Minister for Railways' district had received loans. Was that, he asked spoils to the vanquished? Money had gone to Onehunga, New Plymouth', Waitemata and Eden, all of which were represented by his political opponents. Members of the Government were endeavoring to convey the impression that councils and road boards had been starved, and available money squandered for political purposes. There was not a tittle of truth in the statement. Counties a»d road boards had received more in the pa.st two years than they could under the old system in fifteen years. A board in his electorate had been refused a loan. He wanted the matter to be cleared up under oath, and if the charges were proved the officials concerned should be swept out of office. ■He moved that a breach of privilege had beeri committed by the Dominion hi the publication of the article dealing with loans to local authorities, and that the same be referred to the Public Accounts Committee, with power to call for persons and papers, and to enquire into all matters in connection with the said loans.

Mr. E. McKenzie seconded the motion. _ Mr. James Allen hoped the Prime Minister would accept that portion of the motion relating to an investigation of the affairs of the' Loans to Local Bodies Department. His grievance was that the previous Ministry had entered into a policy of plunge. He had to face £650,000 of commitments, which he had not. made, and there was nothing comin« in. All that was available on Soptenv her 10 was £27,550. He did not desire to shelter himself behind the Department. It was not their fault. The Department had to carry out the law but who made the law?" His complain? was that the previous Minister of J'inance had approved of £2.831,000 in two years. The result was that these bodies were now coming to him for the money, and he could not give it to them. Rich 'boroughs like Timaru should not come on the State, while the State was losing on the transaction. The charge he made was against legislation, and the effect of that legislation. Payments to bodies just before elections had an unwholesome effect, and may have affected the elections. He quoted a letter from the State-guaranteed Office regretting the statements made in the House. Mr. Wilford suggested that an enquiry be held by a Supreme Court Judge. He asked if the Minister would take the responsibility of vetoing the board. Mr. AFen said that he would if he

it right to do so, or if he had not "the money. Mr. Russell quoted figures to refute the charges that boroughs had received all the loan monies. He mentioned that more than half the population of the counties resided in "boroughs. He agreed that the opening up of the back-blocks was the very life-blood of the country. Mr. Massey said that the debate had been a great waste of time. Sir J. G. Ward knew that there was no breach of privilege in the article quoted, and had merely used it as a peg to hang the latter part of his motion on. He (Mr. Massey) opposed that part of the motion, but he approved of referring the whole of the State-guaranteed affairs to the Public Accounts Committee. The figures quoted by Mr. Allen on Saturday morning were absolutely correct. He declared that our credit had been seriously affected by some of the loans granted recently, and the work of settlement was at a standstill. He hoped, before the session ended, that he would be «b]e to make better provision for back-blocks loans than had been the case in the past. Mr. Massey mentioned that one borough bad obtained a loan of £BO,OOO, the greater part of which remained in the bank on fixed deposit. He suggested that Sir J. G. Ward should drop the breach of privilege part of his motion. He was quite willing to afford an enquiry into the working of the Guaranteed Advances Department. Mr. Isitt said that the Government had staked its position on the statement that the Advances Department had been used to corrupt electorates. Mr. Fisher said that after twenty-one years of office the Liberal Government had left a rotten financial position in the country. The first time an Opposition member had -asked for an inquiry it hail been unreservedly granted. He said that he believed that for the past 21 years public money had been used for political purposes. Mr. Laurenson contended that the late Government had been attacked by innuendo, and the public now wanted that innuendo justified. Sir J." G. Ward having replied, he withdrew his motion on the Prime Minister undertaking to refer the whole matter to the Public Accounts Committee for full investigation. The motion was carried, and the House rose at 1.20 a.m.