j. W. POYNTON.]

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113. The resolution was passed unanimously? —Yes. It was not intended to reflect on any one; the Board just desired to remove the impression. 114. All the members of the Board were present at the meeting with the exception of one? —Yes. 115. Who was that member?— The Public Trustee; and his deputy could not attend in his place. 116. And all the members present passed that resolution which you put in that letter?— Yes. 117. Mr. Craigie.] In regard to the repayments, I do not understand why portion goes to the Public Trustee —what does the Public Trustee do for the 1 per cent. ? —He' invests it in the Common Fund of the Office. The idea was that a sinking fund should be established for all funds borrowed by the Advances Office, and the Act contains a provision that every year 1 per cent. of the moneys borrowed must be handed over to the Public Trustee. It is not a wise provision. Supposing the Office borrows this year £1,000,000 of money for the Local Authorities Branch, during this year or at the end of the year £10,000 of that money has to be paid to the Public Trustee. If it borrows another £1,000,000 next year, £10,000 has still to be paid on this and £10,000 on the other, so that next year we have to pay £20,000; and if next year you borrow another £1,000,000 you have to provide £30,000. This money is kept by the Public Trustee and invested. There is a procedure which is rather troublesome by which we can get the money out and reinvest it again, but it has never been done yet. 118. Mr. Lee.] You have been asked by Ministers of Finance in the past as to their attendance at this Board on occasions : is not the Minister of Finance under the Act a member of the Board? —Yes, he is Chairman when he is present. 119. And taking the majority of the meetings, does the Minister attend or does he not?— He does not attend. I wish he would attend. 120. The Board has no objection to the Minister attending?— The Board would be glad if he would attend—he would see what goes on—but he has not the time. 121. The non-attendance of the Minister which has been accounted for is not to the credit of the Minister in any way, is it?—No, and it is not to his discredit. He does not attend, because he is too busy. I might saj' that during the ten years I was in the Public Trust Office there was never a Minister at the Board except on one day when we wanted a quorum.. 122. The Minister does not absent himself because he does not wish to take part in the proceedings?— No. I think if he had the time he would attend. Sir Joseph Ward, during the first year the Local Authorities Branch was in existence, was particularly anxious about it, and wanted to see the thing working smoothly. When he saw the thing working well he dropped away. He must have made considerable sacrifices to get there, but as far as the Board is concerned we would like to see the Minister present. He would be able to discuss the various loans. 123. In March last you issued a circular to the local authorities that in the case of provisional approvals there would be an increase in the rate of interest?—We called attention to what already existed in the Act, that the provisional approval did not bind us, and that there would be an increase in the rate of interest—that we could not get the money at 34 per cent. 124. Up to that time you had been paying for money for loans provisionally approved, and you had been finally approving them at the rate of interest at which they were provisionally approved ?—Yes. 125. Under what you thought was a kind of moral obligation?—We thought it was a moral obligation where they had entered into contracts and the local authority had done work ahead. 126. This moral obligation ceased in March?—lt ceased only because we had not the money. The moral obligation would have continued indefinitely if we had had the money, but when we could not get it we had to call attention to the regulations. 127. You were driven to inform them that you had increased the rate?— Yes. 128. Before that several local bodies had got money at a rate of interest less than the amount which your Department could get it for? —No, they never got any money at a less rate than the Department could get it. As soon as we were informed that we could not have any more money at 34, per cent, we raised the rate of interest to 3f per cent. 129. No money has been lent out, then, to local bodies at a lesser rate than what it has been borrowed by the Department at? —No. 130. Mr. Hanan.] Have you received letters from Ministers during the last two years dealing with requests made by local bodies for loans? —I would not swear that I did not get letters asking what was the position, but I repeat mv assertion that no letter or verbal communication has ever been received by me, or as far as I know any other member, with the intention of influencing the granting or refusing of a loan. 131. Did you ever receive a letter from Mr. Mvers during his term of office regarding a loan? —No ;I do not think I ever received a letter from any Minister. I would not say I did not. I may have received one. and turned it down and* minuted it on to the clerk, "What is the position? " and he would reply. 132. T see that on the file there is a letter from the present Minister of Finance regarding a loan to the Clutha district?— That had no bearing on the question of influencing me to grant a loan. 133. But there is the fact that you received a letter from the present Minister of Finance? — I remember receiving; a telegram from Mr. Mvers about the Hastings loan. It is on the file, and I referred to it, in mv memo. That is the only one I can recollect. 134. And then there is also one from Mr. Allen? —Yes. It is dated the 10th Sepetmber last, and it says, " Memo, for Superintendent, State-guaranteed Advances Office. —The Clutha County desires to borrow from the Advances Office £3,000 for the purpose of metalline: roads within the Clydevale Riding. I do not know whether their application has come to you. Could

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