I.—lla.

W. POTNTON.]

33

The circular reads: " New Zealand State-guaranteed Advances Office, Advances to Local Authorities Branch, Wellington. —Sir, —It is provided, as you are no doubt aware, by section 70 (a) of the New Zealand State-guaranteed Advances Act, 1909, that the rate of interest charged on loans to local authorities under that Act ' shall be the same as the rate at which the money was raised '; and by No. 6 of the regulations published on pages 423 and 430 of the New Zealand Gazette, 1911, that the Board's provisional approval of any such loan 'shall not be deemed-to constitute' any agreement between the Board or Superintendent and the local authority, or shall affect in any manner the right of the Board to refuse to grant the loan, or its right to impose any conditions on the grant thereon. And lam reminding you of these provisions because the moneys which are authorized by the Act and its amendment to be raised to provide funds for such loans cannot now be raised at a lower rate than 3f per cent., and the rate of interest on all such loans provisionally granted at a lower rate than 3| per cent, must be increased accordingly. I regret that I should in these circumstances have to 'inform you that although the loan of £ , applied for by your , was provisionally approved at the rate of 3A per cent., the Board is unable finally to grant it at a lower rate than 3J per cent., and to ask you to be good enough to let me know whether your desires to proceed with the loan at the increased rate. —Yours obediently, J, W. Poynton, Superintendent." Some replied and some did not. That is the explanation in regard to the Te Awamutu Board's loan. It is the custom of the clerk whose duty it is to send out such circulars to make a mark with a blue pencil on the page showing that the circular was sent out. He has given a certificate that that circular was sent out. I now produce a return asked for by the Hon. Mr. Allen, showing total amount of loans which have been provisionally approved but have not been finally granted. [Return put in—Exhibit J.] Some of the counties replied to the circular and some did not, but they are all marked down at 3f per cent. 1. Dr. Newman.] Mr. Poynton, how much money was lent to Harbour Boards finally approved in this list? —You have it stated there. 2. One hundred and twenty-three thousand seven hundred and fifty pounds? —Yes. 3. Seventy-eight thousand pounds was lent to the Wairoa Harbour Board. Who represented the district? —Sir James Carroll. 4 And the Motueka Harbour Board, who represented that district?—l am not sure whether that is in Nelson or in the Motueka district. If it is in Motueka, then the Hon. Mr. McKenzie. _ 5. In regard to Wairoa, you said that the engineer's report was hostile to this? —No, I did not, 6. Or adverse?—No, the engineer's report was highly favourable. 7 After you had refused the loan, who were the two persons who came down and interviewed vou?—l could not say now. One was, I think, the Clerk of the Board. I cannot remember his name, but he sent the letter as Secretary of the Board. The Clerk was very clear in his reasoning, and convinced me that I had misjudged the position, and I told him to put the position m writing and it would be submitted to the Board for reconsideration. _ 8 Did you think that the fact that the railway was going through there was going to increase the trade of the harbour?—No, I was not looking at that at all; I was looking at the burden on the district. He assured me that if the.railway went through there the land would rise more than £10 an acre, and therefore a rate of Id. in the pound would be insignificant. The railway would increase the value and decrease the burden. ' „, ,•. .. . 9 Why were loans refused for electricity when loans were granted for gas f—Electricity is more a luxury than gas. There were more demands for electricity than for gas, and if.we had done that it would have meant that the big bodies would have come m as well as the little ones. Both electricity and gas were refused at first. 10. Was there any principle guiding you in the matter?— No. When we first started lending we wanted all the money we could get for roads and bridges, thinking it would be all required At that stage we refused gas loans. Later when we had money and did not get it out quickly enough we decided to entertain gas loans. Later on again, when the money was short we refused them. There were three distinct stages in dealing with gas loans. At first we refused them secondly we entertained them, and thirdly we declined them There was no discrimination. il In regard to Harbour Board loans, what Minister signed the approval for the Wairoa loan? —Mr Carroll initialled it. _ ~ , ~ 12. Are the members of this Board paid for their work?-Yes, two of them-the two outside members, Mr. Warburton and Mr. Kernber. ~ „ IRn ~M„ Tr am W.r f>f.(\ 13. What do they get?— Mr. Warburton is paid £150 a year and Mr. Kernber £250. 14 For this work?—No, they deal with advances to settlers and advances to workers Three different classes of applications are dealt with on the same day. First come the local authorities loans thpn the settlers', and then the workers'. •■,,■,,• loans then the se considerable time then you got a telegram from Sir John Findlay, and then the letter from Sir Joseph Ward?-It was not a letter; it was a minute on the telegram lfi Did thit have the effect of speeding up things J —JNo. 17' Why was there Hud this delay for months previously?-Through the fault of the Remuera Board itself. It had not its papers in order. The loan had been provisionally approved the May Previously, and had the papers been in order the loan would have been granted m June 7 18 In regard to the Remuera loan of £47,000, the Board neglected to consider it at he next meeting?-It was not before the Board. The clerk had not brought the papers before the Board When these telegrams were forwarded 1 handed the papers over to the clerk and he omitted to bring them up at the following meeting. The Board had not heard of it till I sent am nute round to the members explaining the position, and it was approved by them then.

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