THE INDICTMENT OF TEE MINISTRY".

Temuka Leader, Issue 2076, 24 July 1890, Page 3

THE INDICTMENT OF TEE MINISTRY".

delivered by Mr Hutchison, H,R, in the House of Representatives, July 8,1890.) (Continued.)

Do not honourable members remember the meeting in Auckland when the chairman of directors presented his report ? There wore ugly rumours current as to the stability of the bank. The chairman of directors then was the Hon. Sir 3?. ■Whitaker., and he was also then, and as he is still, Attorney-General in the present Administration, I am hot going to indulge m any phantasies. X will deal; with facts. We are here to speak the truth—impugn it whoso listeth; and I say that that honourable gentleman was at that date deeply indebted to the Bank of New Zealand. I will not say that the amount of his ererdraft ; was £40,000 or any other' sum, because some Minister may get up and say it was not so, because the amount was a little larger or a little smaller* as the case might be; but I will Bay it was a very, very heavy amount, , and an amount which has never to this day. been discharged, and, if the Government will appoint a Committee— for which I hope to give aome further reasons later on—to inquire into the transactions of the Government with the Bank of New •I Zealand during the past three years, F j take upon my self the onus of proving that what I say is absolutely correct. Here, then, we have at this double erisis—a crisis with the colony and a crisis with the bank—the chairman of directors the Attorney-General of the present Ministry, a power in politics, one who bad been the Premier of the colony before, and one who, from his great ability and long experience, exercised no doubt a great deal of weight in the councils of the Ministry. What wa? done? As X h ay P ? al -’ loan could hot bp raised ; no assistance could be looked for from tliat soqrce ; but a perfectly abnormal state of finance was created for tfip emergency. Authority was obtained by the Colonial Treasurer to float upwards of £840,000 of deficiency bills. This "Z onita an abnormal state of things, th*e normal amount being £700,000; ind although the maximum of _ i B 4OOOO was reduced before the of the colony was made ▼S on the 31st March for presentation I fflS M a ol'ieffoienpy Wllß I ®« reason wb* these I lnf a w-re floated was to buy minted m To be accumulated in the ■ g °*L 8 of the colony ?No; to fill the I C £ of the Bank of New Zealand. I tk e Geyetnment to meet this

charge, if they can, before a Committee, or before any other tribunal they choose to erect. The loan was floated in June, 1888. As I took occasion to say last session, it was floated at a sacrifice of £IOO,OOO, by reason of the more favourable circumstances haying been lost in the earlier part of the year, when if there had been no bungle, it might have been more successfully floated. It was floated also, I regret to say, under circumstances of such gross misrepresentation of facts as would by the rules of any Court of law,—had the case been that of a private company, —have entitled the subscribers to have their allotments of scrip set aside. The loan was floated, as I have said, at an indirect loss ©f £IOO,OOO, and at a direct expense besides, of over £IIO,OOO in discounts and expenses. That loan must have cost the colony 10 per cent, the first year. r i he gross proceeds, amounting to £1,955,000, went into the Batik of New Zealand. The crisis, so far as the colony was concerned, was over. But the crisis in the affairs of the bank continued, though for a time ■ somewhat relieved by the assistance of our loan. Then a curious thing occurred. I have referred to the meeting early in 1888, aad to the disclosures which the directors must have known were inevitable. It was considered necessary to strengthen the position of the bank in various ways, one of which was by representing the contrary of what what must be taken to have been known by some to be coming. I charge the Government with having interfered, through the Agent-General in London, by endeavouring to bolster up the credit of the bank and deceive the public. If the Government will not give the Committee I suggest, I ask them to allow any man they choose to name not connected with themselves —the honourable member for Lincoln or the honourable member for Waipa, to go over the file of telegams to the Agent-General in the latter part of 1588 and the beginning of 1889, and say whether or not the Government of the colony did not employ the AgentGeneral to assure the public of London that the position of the Bank of New Zealand was sound- That the position of the bank then was sound is what we all know was not true : the disclosures since made show that without any doubt. Those who make representations are responsible for.the facts they allege, or are equally liable for representing what they do not know to be true. Now let us see how the Ministry were aiding the bank with money. There was in 1889, according to the Public Works Account of that, year, in round numbers, one and a half milliens, the proceeds of this Twomillion Loan, lodged in the bank. To anticipate somewhat, I have here a little table, which I think would be rather interesting to the public were it added to those accompanying the [Financial Statement, or those which may yet be issued with the Public Works Statement. It is a table of four lines only- It indicates the percentage of money in the Public Worfes Fund which was uninvested, or the “ free money,” as the Colonial Treasurer, in his Financial Statement would call it.

It will thus he seen that in 1887 there was only a small percentage uninvested. The Government of that day had invested the whole of the available funds, less 11 per cent.—a reasonable sum to hold at call. But in 1888, 53 per cent.; in 1889,31 per cent.; and in 1890, 48 per cent, remained uninvested. The last three amounts uninvested will be observed to have been large amounts : the first was over £412,000, the next was over £525,000, and the last was over £587,000— moneys for which the colony was paying interest, but which the Goyernment left uninvested, obtaining no profit or return from the ' Bank of New Zealand, Will the Treasurer, or his deputy see that these data are annexed to the Financial Statement, or the Public Works State ment, for the information of thocolony? The figures are all taken from documents issued by the Colonial Treasurer. New we come to the conversion scheme of Iffit year. It did not promise much of a gain in the way of ready money to the bank, but it meant what banks like the circulation of coin. I would remind honourable gentlemen that the amount which had to be raised last year was only £388,000, and it is quite clear that temporary proyieion [ might have beep xpad<p foy thas, if it \yere desirable to postpone U larger conyersiop of outstanding loans. The Government, however, determined to raise a Iqah whiph vfopld include £8,3 07.3QQ, Whigh W t h ,e glance of tee lo§n, palled the * tenfortiesfrom the fapt thM* tecy could be redeemed at any time after ten years from the Ist September, 1888, up to the Ist September, 1918. It was arranged that tenders should be invited to be sent in by the 25 th October last year. Now, I wish to refer for a few minutes to §oseteing that W^' ourahle member |6r South , has this 4ftp'rhpo,u referred to what the Postmaster-General the other day claimed to be the sanction or agreement of the Public Accounts Committee of last session to the advance of tbe sum of nearly £5,000 to meet the debentures of the New Plymouth , Harbour Board which were to come

due on the Ist November last—about a week after the date when the tenders for the conversion of the loan were to be accepted. It will be necessary to refer somewhat to the New Plymouth Harbour Board. It will be remembered that in the session of 1888 the Colonial Treasurer, from his place in this House, stated that the future of the Board with reference to its interest payment s in London raised a “ serious question,” and that this House should “ consider and determine ” whether the necessities of the Board should not be relieved by advancing against its income, because otherwise the • Board would be compelled to stop payment and might involve the colony. He introduced in that year a Bill called “ The Harbours Bill”—but why not “The New Plymouth Harbour Bill ” I do not know. It proposed to assist the New Plymouth Harbour Board by capitalising the perpetual-lease rents and deferred-payment land payments in the Provincial District of Taranaki, to which the Board was entitled, so as to enable it to meet its interest for three or four years: the proceeds could not possibly cover a longer term. The House unequivocally condemned the proposal and said it would have none of it-—that it was dangerous to interfere in such a matter,, Tet, during the recess which followed, the Colonial Treasurer advanced to the Board sufficient money to enable it to meet the halfyearly interest due in May, 1889. (To he continued.)

OnSlsfc Total Not Percentages March. Fund. invested. not inverted. 1887 £1,012,439 £111,344 11 per cent. 1888 773,975 412,749 53 ., 1889 1,368,926 525,367 31 „ 1890 1,224,736 587,833 48 „