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small, in fact, that it only needed two of the so-called " independents " to vote against the Government to put it out of office. Reference is made to this state of affairs at various places in the notes of the proceedings. For instance, Mr. Lysnar was asked, as appears at page 494* : — Now, I think your position as a member of Parliament at that time was very strong indeed ?—(Answer by Mr. Lysnar) It was fairly strong, but I think it is stronger to-day. Let us hope so. At that time, if you voted against the Government, out it went in 1923 ?—(Answer by Mr. Lysnar) With another one. Without the other one, I suggest? —(Answer by Mr. Lysnar) No, it Wanted two. At any rate, there were only two ? —(Answer by Mr. Lysnar) There would be no difficulty in getting two. Financial Position in 1923. It is well known that a rapid and alarming fall in the price of New Zealand's products caused a serious financial depression, which increased during 1921, continued in 1922, and was still acute in 1923. To enable a proper opinion to be formed of the actions of certain persons whose conduct has to be considered in connection with the facts and circumstances referred to us, a proper understanding must be obtained of the general financial position in New Zealand at the latter part of 1923, and of the financial position of the shareholders in Mr. Lysnar's company, and of the guarantors of that company's account with the National Bank. We therefore set out some extracts from the notes of proceedings, which we think show the financial stringency which at that time existed was quite as acutely felt in Poverty Bay as elsewhere in New Zealand. At page 901 of the notes of the evidence it was suggested, by way of question to Mr. Lysnar, that matters in the Poverty Bay district were not then as happy financially as they are to-day —meaning 1925. Mr. Lysnar's answer to that was " Absolutely." A further question was put to him, " And that in that year, 1923, people in this district were, to use a colloquialism, very hard up ? " Mr. Lysnar's answer was, " So were the banks." Mr. Lysnar stated (as mentioned on page 63 of the notes) as follows : — At that time we were in the teeth of stress and trouble, and there was difficulty in getting money. That applied not only to the Dominion but to the whole world. It is, however, perfoctly plain that the bank preferred Vesteys' account than the unfortunate Poverty Bay Company with 537 farmers behind it. In March, 1923, Mr. Lysnar was negotiating with Mr. Carney, the representative in New Zealand of Armours' Company. At page 120 Mr. Lysnar, when asked about this matter, answered : — It depended on the terms. We make no bones about it: we were prepared to do a very great deal to try and meet the requirements of the bank and avoid the harassing position likely to occur if the bank called up the share-money at that period. Referring to this same transaction, Mr. Lysnar, at page 442, was asked— What date was it that you suggested the advance of £340,000 ? —I think it was on the 27th March, 1923. Mr. Jolly was pressing us hard at the time. And at page 443 — It was to avoid calling up capital at a dangerous time, which would cause great hardship, that you went to Armours I—That is so. Mr. Jolly refers, at page 606, to a matter which will be mentioned later —namely, the talk of purchase by Mr. Lysnar's company of the Taruheru works. At page 606 Mr. Jolly is asked — A matter that seems important to the Commission is this : what you thought about Mr. Lysnar's proposals for his company to buy out Yestey's works. There are two or three points of view, and we want to know about it ?—My candid opinion is that Mr. Lysnar was either putting up a bluff to gain time and try to lead me to change my position as far as selling the works was concerned, or, alternatively, that it was a drowning man grasping at a straw.

* The page numbers in this report refer to the typewritten folios of the minutes of evidence, which are not printed.