H.—Bo

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proposal were reduced into writing by Mr. Lysnar in his own handwriting on the 27th March, 1923. Armours were to have certain pre-emptive rights in respect of killing stock in the works up to at least half the capacity of the works. Mr. Carney said that his principals in Chicago refused to take up the proposition. He also said that he had received a cable to that effect. A copy of Mr. Carney's cable to his principals, and their cabled reply, were promised to be produced to the Commission, but it has since been explained to the Commission that these documents were either mislaid or destroyed some time ago. In the absence of the copy of the cable which was said to be sent to Chicago, and in view of the fact that no cable from Chicago has been produced, there is only the memory of Mr. Carney to rely upon. Intimation was given by the Chairman of the Meat Board that the Meat Board would not favourably entertain the proposal. There was another interview between Mr. Lysnar and Mr. Carney. There is a difference of testimony as to what the precise proposals were. The matter, however, has its importance lessened in view of Mr. Carney's statement that even if Mr. Jolly had favourably entertained any proposal to consider any guarantee of the overdrawn account of Mr. Lysnar's company with the National Bank, he would have had to cable to America asking for authority. Late in October, 1923, Mr. Carney went to Gisborne, and, at Mr. Lysnar's request, went to Mr. Lysnar's house, and there discussed the possibility of Mr. Carney's firm helping Mr. Lysnar's company in respect of finance. Mr. Carney's version is that for the money "We were to get the works." He says that the sum that was mentioned was £225,000. He says that after discussing the finding of the money by Armours that proposal was dropped, and Mr. Lysnar then made a proposal that Armours should find £75,000, Sims-Cooper £75,000, and Borthwick and Co. £75,000, making a total of £225,000 ; and it is in respect of that that the answer "We were to get the works " was given. Mr. Lysnar disputes, first of all, that the Gisborne proposition was in respect of a sale, and says that no such large sum as £225,000 was under discussion. We are of opinion that Mr. Lysnar did not contemplate selling the works to either Armours, or to Sims-Cooper, Borthwick and Co., and Armours. Apparently there has been confusion in Mr. Carney's mind, especially in view of what it is alleged that he told Mr. Jones, the Chairman of the Meat Board, about the transaction. Whatever the proposition may have been, it appears quite clear from the evidence that Sims-Cooper's representative refused to entertain it, and a wire was despatched on the 29th October to Mr. Lysnar by Mr. Carney stating that SimsCooper's representative was not agreeable, and that the entire matter would have to be dropped. Mr. Lysnar wired on the same day that he would ring Mr. Carney up at 5 o'clock the next morning, and the evidence shows that Mr 4 Lysnar did, from the North Island, ring up Mr. Carney at Christchurch. Mr. Carney refused to agree to whatever Mr. Lysnar's proposals were, and the incident closed. Mr. Richmond mentions (see page 1219 of the notes) other negotiations in Napier in February, 1923, when he, together with Mr. Carney, met Messrs. Witters, Coop, and Lysnar, and there was then a proposal that Messrs. Armours should advance a sum of money in order to pay off the National Bank, thus relieving Mr. Lysnar's company of the stress upon it through the action of the bank. Mr. Richmond thinks the security then discussed was merely for the works, and that the " Codrington " was not mentioned on that occasion. Mr. Richmond's recollection of the Gisborne interview was that something in the vicinity of £225,000 was mentioned on practically the .same lines as the February-March transaction, which means the question was—would Armours, Chicago, agree to advance on mortgage. That proposal was turned down. He also speaks of a proposed arrangement at Gisborne by which Messrs. Borthwich and Sims-Cooper and Armours were to find certain moneys. He says that all the proposals were in the shape of an advance by way of mortgage, or in connection with taking up preference shares. He said, further, that he was not sure as to the amount of the preference shares. In our opinion Mr. Lysnar, in February and March, 1923, did negotiate with Mr. Carney in the hope of raising for his company a loan from Armours of Chicago