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certainly should have said so at once. I have seen no object in squandering the money; we have given everybody what they asked for, what they were thoroughly entitled to, and that is the only thing I know. According to the Act they were entitled to what they have had in every case, nothing over and nothing less. 6. Has there been on the Board any attempt at favouring loans to boroughs at the expense of County Councils? —No, there has been no favouritism whatever. We have granted the loans to the country, all the backblocks, for every cent they have applied for, and therefore we could not grant any more to them. If we had not granted to the boroughs—we will say Timaru, for instance, because there seems to be a vast amount of trouble over that in regard to political favouritism—we should have made a loss. We granted Timaru £116,000 out of £188,000 applied for by them, and if we had not granted it we should have lost £10,000 more than we did lose, because we had the money in the bank and could not get rid of it. We should have been very foolish not to have granted Timaru the £116,000 which we thought they were entitled to out of the £188,000 they applied for. 7. Was there any doubt as to the security in regard to the Timaru loan?— None whatever. 8. Have you at any time during your membership of the Board had occasion to find fault with anything in the direction of waste? —No, I have not seen any waste. 9. Have there been any losses made upon any advances to a borough, a County Council, a Road Board, a River Board, or any other Board that an advance has been made to I—Yes,1 —Yes, 1 think there has been a loss. 10. In what direction?—By granting money at what the Act says we should grant it—that is, the rate at which it is borrowed, which is not the cost of it. 11. What I want to know is this : has there been any loss upon any loan issued to any local body by the non-payment of interest or by the loss of security? —No, none whatever. 12. There has been a loss in not earning interest upon moneys waiting for investment? — That is so. 13. Amounting to about £23,000?—£22,000. That is about £9,000 a year. That is the only loss. 14. Do you remember at an early meeting of the Board a discussion taking place upon this question of the loss of interest ?—Yes, perfectly well. 15. Do you remember whether I undertook to have a vote provided upon the consolidated estimates for any loss that occurred in that way?—lt is some time ago now, but you said, as far as I remember, that it would be better to wait for a year or two before we did anything in that way, although we knew actually that a loss must take place. There must have been a loss, but you thought it better to wait a bit to see what the result would be. 16. Mr. Lee.] You mentioned loss just now on account of interest—£22,ooo. I understood you to say previously to that that on account of the framing of the Act there was some other loss? —No, not some other loss. In the Act it says distinctly that you must let the local bodies have the money at the rate at which the loan is raised, but the rate at which the loan is raised is not the cost of the loan. 17. Then there was a loss in that direction? —There must be a loss. That accounts for the £22,000 in not putting our money out. We could not put it out. We had money in the bank but could not put it out, and we lost interest in that direction. 18. Mr. Myers.] After the discussion took place in the House you saw the paper the following morning with the headlines " Political Influence " ? —Yes. 19. Did you consider it a reflection on the members of the Board?— Most decidedly I did. I considered it was a reflection especially upon me. I am the only independent member of the Board; I am the only man who gets my living outside the Board; and why should my character be taken away by saying that I was influenced by political purposes in putting this money into Timaru ? 20. You felt your honour was impugned?— Yes, I felt so, and I still feel so. 21. Without the slightest justification?— Yes, precisely —without any justification whatever. I never dreamed of political influence. I cannot possibly see now, and I have studied the thing as much as any man, how political influence can come about with the advances to local bodies. 22. Mr. Hanan.] You are a public accountant, Mr. Kember?—l am, sir. 23. What is the nature of your work in connection with accountancy in Wellington?— Every sort of accountancy. 24. Do j'ou act as accountant for big companies?—l act as accountant for big companies, small companies, individuals, secretaries of companies, and so forth—every class of accountancy in the City of Wellington—most of my clients, I may say, being what I should call a very conservative class. 25. It is stated in the opinion by the Solicitor-General, " The contract shouM be so worded that the rate of interest is determined from time to time at the date of the issue of the debentures by the local authority on the receipt of the loan or each successive instalment of it." Can that be done easily? —Well, that can be easily done provided the money is paid away at once, but if it is carried for three or four years it is a little difficult, I think, with exactly that wording. 26. In jour opinion a difficulty is involved? —I think it is a little involved, most decidedly. 27. Am I right in saying that the local authority would not know accurately and definitely the precise rate of interest it would be called upon to pay? —Yes, that is perfectly decided as to what they have to pay. 28. Now, as to striking a rate to meet the interest on these moneys, what would be the position unless something definite is laid down? —We are in the habit of acting according to instructions given by the Act. I think we have done the best we can in regard to the matter, and we have certainly kept within our bounds in putting out our loans at the then price at which the