Seventh Day—Friday.

On the court resuming at 11 o'clock,

Mr Chapman mentioned that he did not [unclear: a] to reexamine Mr Anderson.

John Fisher was then called, He said [unclear: a] he was manager of the Ward Farmers' [unclear: ass] tion since the inception thereof. He could [unclear: a] say that anyone had defined his duties to [unclear: ta] A definition might be in the articles of [unclear: ass] lion, but he was not prepared to say. The [unclear: out] officer? of the association were the [unclear: manager] director, the secretary, the directors, and [unclear: s] clerks. Mr Ward was the managing [unclear: dirc] and as such initiated the policy of the [unclear: comp] arranged the finance, and acted the part [unclear: the] managing director usually did, Necessary all matters of policy came before the [unclear: mana] director, and he arranged all matters of [unclear: fin] He could not give any more information [unclear: to] was contained in the books. By "carrying, the policy of the company" he meant do" what business he could, and getting as [unclear: m] out of it as he could. Mr Ward was [unclear: ab] great deal from Invercargill, and the [unclear: man] of the association performed his duties [unclear: du] his absences. A chairman would be form [unclear: a] appointed during his absences.

His Honor: There is definite [unclear: provision] that in the articles of association.

Mr Solomon: I shall come to that [unclear: pres] your Honor, No such appointment was [unclear: ma]

Witness continued: He believed that it [unclear: a] provided in at tide 88 of the articles of [unclear: ass] page 75 [unclear: a] to appoint one of the directors to be [unclear: duty] managing director during the absence he managing director, but he could not say [unclear: a] that was done he, however, know that [unclear: ing] Mr Ward's absences mr Green acted as [unclear: irman,] and he looked on him as deputy [unclear: aging] director. The minutes did not say [unclear: s] a deputy manager was appointed. If no [unclear: uty] was appointed it was very probable [unclear: is] he (Mr Fisher) did the work attendant [unclear: on] the position. But a managing director, [unclear: no] if at a distance, might be able to attend his duties, to a certain extent, and he be-[unclear: ed] that Mr Ward did so when away from [unclear: ercargill.] He was not prepared to say that was in touch with the affairs of the association all the time. He did not think the [unclear: aaging] director would be in touch at all [unclear: rh] all the details of those affairs. As a [unclear: tter] of fact, Mr Ward was never in touch [unclear: h] all the details. Probably, as a matter of [unclear: s,] witness during Mr Ward's absences took [unclear: his] own shoulders all the duties of managing [unclear: director.]

Mr Solomon: so that so far you acted as manager, and, to put it your way, partially as [unclear: aging] director. We have heard from Mr [unclear: derson] that you also acted as secretary. Is [unclear: t] true?

Witness: Well if Mr Anderson says so. I [unclear: er] took particular notice of what the duties secretary were. Continuing, witness said [unclear: t] he attended the meetings of directors [unclear: i] took the minutes. The secretary was not [unclear: vented] from being present, but he did not and the meetings, because it was not necessary, as he (witness) took the minutes. The [unclear: eles] of association provided that all bills. [unclear: ques,] drafts, and promissory notes were to signed by a director or a manager of one of branches after the same had been authorised writing by the managing director. He (wi[unclear: s]) was neither a director nor a branch manager; he was manager of the head office, [unclear: he] signed the cheques on a letter of autho-[unclear: y] by the managing director that he (witness) [unclear: ould] sign cheques. That authority was given the first day of the association's inauguration, [unclear: l] he did not know if any cheques, except in absence, had been signed by directors He [unclear: i] signed the balance sheets, and he thought was a usual thing that balance sheets of a [unclear: pany] were signed by the manager of the [unclear: pany.] If it was the case that the articles association provided for the balance sheets [unclear: ng] signed by two directors and countersigned the secretary he expected he had known of but he had entirely forgotten it if it was the [unclear: e.]

Mr Solomon: You were manager, managing [unclear: director,] director, and secretary?

Witness: You can have it that way.

[unclear: You] took a share in the audit?-I don't think

When Mr Hannah came to go through the books for the audit he was given certain figures, he asked if they were correct, you told him they were correct, and he made his audit accordingly?-You had Mr Hannah here; he had never been in court before, and you hamoezled him, and gave him questions he did not understand.

Will you deny that Mr Hannah asked you about certain figures when making his audit, and you said there were correct?=I will not deny it, but I have no knowledge of it so far as my memory goes.

Examination continued; With reference to the subdivision of the amounts representing goods in store and afloat and book debts, witness did not know what information the auditor had to go on, but he went through the details. Witness made the subdivision He would not swear against Mr Hannah that he (witness) had told him that the subdivision was correct, but he had no recollection of having told him anything of the sort. He did not know that Mr hannah had any vouchers for the £16,000 in the produce account he would not deny the truth of the auditor's statement that he had had no store intormation, but he would not say that he did not have any such information from the stores he did not bear all Mr Hannah's evidence, for he saw that Mr Solomon was turning him inside out, and he got sick of it. He did not remember Mr hannah asking him about £18,000 and £6500 being debited to Brooks and Connells. Mr Hannah would have the entries in the journal to show that they were correct. He did not remember Mr Hannah asking him if they were correct He had no recollection of having told him that they were correct or that the accounts were all one.

Mr Solomon: Do you contradict Mr Hannah-he swears positively?-I have given my answer, and really I cannot take the matter any further. If you want a couple of hours in which to pull yourself together I am quite willing to go on answering.

Never mind my pulling myself together. Don't you trouble yourself about that, you have enough to do without it. You must put it further than that you don't recollect?-No. I have not the slightest recollection.

Mr Ward also has sworn here that he was told the same thing by an officer of the association-either by you or Mr Auderson?-I do not think Mr Ward has sworn anything of the sort. Have you the minute of his evidence?

If you say he did not admit it, I won't bother about it.-I do not think it is correct all the same.

Do I understand you to say that you did not interfere with the audit at all?-No; I never interfered with the audit at all, so far as I can recollect. Mr Hannah was there to do his duty, and if he liked he could have challenged anything.

page 76

Mr Solomon: So you were only acting as manager, managing director, director, and secretary, that is all. I thought we could have proved you were auditor as well; but apparently that is not clear.

Witness' examination continued: He attended the meetings of directors, with, perhaps, very few exceptions, and kept the minutes An to the item £3000, be did not think the directors were consulted before that money was given to Hr Ward. The directors bad free access to the books—the books were there to denote what bad been done, but the hooka were not taken into the meetings of directors, and the state of Mr Ward's account, so far as he could remember, was never referred to in the meetings of directors Or officially brought before the directors If it bad been done it would appear in the minutes, and from the statement that there was no such minute he should gather that the state of the accost was not brought officially before the directors.

Mr Solomon: Please answer my question, Was there at any time dimug the whole existence of this institution any statement ever laid before the directors from which they could gather that Mr Ward was largely indebted to the association?—Yes. They could gather it from the books.

Do you not understand the question?

His Honor: Please answer the question—Yes or No,—and afterwards give your explanation.

Witness: I do not know that officially it ever was put before them, but the books were at the directors' disposal. I said that from the first.

Mr Solomon: Not at all.

Witness continued: He could not say that a document on the subject had been put before the directors. The books were at their disposal, but had not been taken into the meetings, and be did not think the directors were referred to them.

Mr Solomon: Is it not the fact, Mr Fie her, that not only were the directors never taken into confidence as to the conditions of Mr Ward's account and the affairs of the association, but that, in addition to that, a regular system of concealment was adopted, by means of which the real slate of affairs was concealed, not only from the public and the shareholders, hut even from your directors themselves?—No, I do not think so Mr Solomon.

Witness continued: He did not think what was done amounted to a system of concealment. In the prospectus it was stated, "The company now submitted to the public does not include the Ocean Beach Freezing Works. These will be carried on by Mr Ward quite independently as hitherto."

Mr Solomon: Now is it not the fact, although that is the rase, that the company immediately found the money for Mr Ward to finance the whole of bis transactions in the freezing works?—Not entirely at all.

Well, at any rate, they found money [unclear: a] extent of hundreds of thousands of [unclear: pou] Oh, no! Pardon me one moment. The [unclear: company] took the agency of the Ocean [unclear: bea] it would any other agency that [unclear: a] financing from time to time. It came [unclear: the] the evidence of Mr Ward and Mr [unclear: ander] when they were examined, and in Mr [unclear: a] report, that the company financed the [unclear: a] Beach Company to the extent of £[unclear: 21] but, as against that you entirely forget [unclear: a] they received £219,000.

Did they receive that £219,000?—[unclear: Ess] of it, excepting £200, or something [unclear: like] It was subsequently paid.

Mr Ward's losses on freeter?—They [unclear: a] been paid.

Oh ! that is part of the £55,000?—[unclear: at] the association is concerned they [unclear: ba] paid. What I was going to say was this [unclear: a] rotated just now the Ward Association [unclear: exp] about £150,000 accommodation to the [unclear: a] works. You might as well tell a man [unclear: a] arranged for an overdraft of £1000, [unclear: a] has had a turnover of £40,000, that [unclear: the] has given him £40,000.

Witness continued: The directors [unclear: kn] Ocean Beach business was done [unclear: thro] association. The directors were not[unclear: a] aware of Mr Ward's account more than [unclear: a] account of any other person, He did [unclear: not] whether the directors saw the books or he [unclear: a] (witness) was very seldom in the [unclear: pub] of the company.

Further examined: The account was [unclear: a] the books as "freezer account" [unclear: simply] convenience, The effect of this was not [unclear: a] secret from the directors the fact [unclear: a] freezing work was being carried on [unclear: the] plated plainly "transfer to J. G. Ward? [unclear: a] the directors had access to all the books [unclear: a] wished. In the ached dies of the [unclear: balat] brought before the directors nothing was [unclear: a] from which they could trace the freezer acid [unclear: acid] No statement of details was ever brought [unclear: a] the directors.

Mr Salomon; If this operation of [unclear: clu] freezer account on June 30, [unclear: transferr] Mr Ward, and reopening it on July I [unclear: a] been adopted the directors would [unclear: a] able to see the state of the account on [unclear: a] at the schedules?—Yes, they would.

Whatever the object might have been, [unclear: a] not the first instance of what 1 call a [unclear: a] concealment by which the state of [unclear: aff] hidden from the directors?—No; I [unclear: a] think it is at all.

But it had that result?—Yes.

It kept from the directors [unclear: informal] would otherwise have gone before them [unclear: a] has been the result.

Further examined: Mr Anderson, the [unclear: a] tary, would know that Mr Ward's [unclear: acc] never brought officially before the [unclear: direction] I was more than probable, however, [unclear: th] page 77 [unclear: a] told the directors of his position, This [unclear: a] strike witness as another illustration of [unclear: ealment] The books ware in the office; although the directors were never invited [unclear: a] at them, they were at liberty to do so [unclear: hey] desired.

[unclear: Mr]Solomon: Now then, on the 30th June, [unclear: a] we come to the £21,000 manipulation, [unclear: need] not weary everybody with It. It was [unclear: abcquee] for £15,000 nod £6000, drawn on [unclear: a] 30th June, paid into the bank to credit of Ward's account, and taken out on the 1st [unclear: a] When was it first decided to adopt that [unclear: a]?—I believe 1 got an intimation from the [unclear: nager] the bank at Invercargill that I was [unclear: a] to draw on Mr Ward's account tothe [unclear: a] of £21,000.

[unclear: did] you know that it was drawn out next?—Probably I did, but 1 cannot tell you [unclear: a] what happened.

[unclear: a] you know the object?—know that it re[unclear: a] Mr Ward's account by £21,000.

[unclear: have] you any doubt as to the object of the manipulation? Do you not know perfectly [unclear: a] that the object was to reduce the state of [unclear: a] balance at the bank over balance day la must ask the bank officer.

[unclear: was] not the effect to decrease the bank over-[unclear: a] by £21,000?—That is the effect.

And that went out upon your balance day?—[unclear: a]; that is so.

The consequence was that on balance day the [unclear: a] appeared £21,000 more than it really [unclear: as]— No; it appeared £21,000 less.

It appeared £21,000 less than it really was?—[unclear: a] it was exactly the amount stated on that [unclear: a].

It was exactly the amount stated on that day, [unclear: educed] the account by £21,000 of the amount was the day before and the day after?—That 10 the effect.

In reply to further questions. witness said he [unclear: a] not say that the effect was to conceal the me state of affairs from the shareholders The feet was to reduce Mr Ward's bank account, [unclear: a] not give anybody instructions to make [unclear: a] in the books with regard to the £21,000. [unclear: a] would probably put a cheque through for [unclear: a]21,000 and credit Mr Ward with the amount, [unclear: a] the cashier would debit Mr Ward. He [unclear: tought] it probable that he had some conversion with Mr Birch about the transaction, [unclear: a] could not draw the cheque without having [unclear: a] a conversation with him.

Mr Solomon: Would you deny that Mr Birch [unclear: a] you that this was to be a loan by Mr Ward [unclear: ver] balance day of £21,000?

Witness: I can only tell you what I recollect, [unclear: a] I have no recollection of anything of the [unclear: ind].

Now we will come to the 1894 balance sheet. [unclear: the] same performance was gone through again a 1894. When did you first become aware that [unclear: a]35,000 on that day was to be placed to Mr Ward's credit?—1 got my information from Mr Birch.

Was that a verbal communication or written?—Verbal.

Just tell me what he fold you.—1 was to bo permitted to draw £35,000

Did he tell you on this occasion Mr Ward was lending £35,000?—No

Are you sure?—I have no recollection of it whatever.

Did you tell him that this money would be in reduction of Mr Ward's account?—I have no recollection of what I drew the money for.

Can you tell me if Mr Birch knew that Mr Ward owed any snob sum as this to the association at that time?—Mr Birch knew he owed the bank a large amount, I don't know that he knew the exact amount.

In reply to further questions, witness said Mr Birch knew perfectly well that Mr Ward bad no other source of income outside of the association, Large sums were paid by the association to the bank on Mr Ward's behalf. The bank credited these to Mr Ward, and they must have known that large sums were running up. They knew that he was a large shareholder in the company. His calls alone were £8000, and were debited to his account with the bank. Witness believed the bank knew that Mr Ward had not paid for these shares. He also believed that Mr Ward told the bank, The bank knew Mr Ward's position precisely up to March of the previous year, as they bad his balance sheet. They also knew Mr Ward's transactions in the interval between himself and themselves, and they knew what his arrangements were with the association. The arrangements were pet out in the agreement between the association and Mr Ward. Mr Birch rover asked him a word as to the state of Mr Ward's account. It did not strike witness that if Mr Birch thought Mr Ward owed large sums of money to the association he (witness) would have heard some' thing about it.

His Honor said it occurred to him, as to the back's knowledge, that the bank knew Mr Ward was carrying on the frying works on bis own account. The bank would also know that they were not finding the money, and they would be almost certain to inquire as to who was financing him with respect to the freezing works. If cheques were passing between the association and Mr Ward it would be reasonable for the bank to infer that the association were financing him for the freezing works, and, if so, that there was always a possibility of his becoming indebted more or less.

Mr Solomon said that that was what he was trying to get from Mr Fisher, But the question of whether the bank did or did not know was apart from the question of right and wrong. (To witness?) This is a letter that Mr Birch wrote to Mr Mackenzie on the 5rd September 1895:—

page 78

Dear Mr Mackenzie,—Befora this reaches you Mr Davidson's report on his investigation of the affairs of the Ward Farmers' Company will be in your hands, and you will see by it that terrible disclosures have come to light. The day Mr Davidson appeared an engagement was made with Mr Fisher for half-put 7 in the evening, and half an hour before that time the latter came along to the bank and made a confession of his crimes which fairly staggered me The amount owing to the association by Mr Ward is a perfect revelation, and fully explains why I could never keep the account down. The outcome now is that instead of Mr Ward being a rich man, as he led me to believe, and I always thought, he has lost every shilling, and is something like £30,000 behind besides, Fisher ownsup to being 75,000 sacks of oats short of my warrants (exclusive of the 80,000 sacks attached to the British bill for £30,000), and says he baa lied and deceived me hand rods and hundreds of times during the past five gears: in fact, be says the truth has not been in him, This is a nice confession for a man holding the position he does, and from one I had the greatest respect and trust in. It is truly appalling to me. and is the rudest shock I have ever experienced in my life. My own opinion is that we could put Fisher, Anderson, the directors, the auditor, Ac., in gaol over this, to me, huge swindle, if necessary. You, of course, will know what is best to be done, and therefore I await your directions before moving further. Withvery much regretat the outcome of things," I am, &c.,

C. A. Birch.

Now, so far as this is concerned, Mr Fisher, the part bo which I am referring is this: Do you or do you not say that so far as you knew what Mr Birch says there is true or not—thst the state of Mr Ward's account was a revelation to him?

Witness: I cannot be responsible for Air Birch's eexpressions, I have already Maid it was inevitable that Mr Birch must have known that Mr Ward owed large sums of money.

Further questioned witness said that he had an interview with Mr Birch, but did not say that Mr Ward was ruined. He thought that Mr Ward wan pretty far behind, but did not consider him ruined. There was a question whether be could pay his debts, but at the time it was not in witness's mind a serious question. It was shortly before Mr Ward's return from England that witness thought Mr Ward might be unable to pay his debts. Witness thought he might be from £20,000 to £25,000 behind. That was only witness's assumption. He had not made a minute calculation. He would not say he knew that Mr Ward owed the association £20,000 more than be could pay, If Mr Ward had said that he could pay the £55,000 he owed altogether he (witness) would have accepted the statement. Mr Ward had assets amounting to more than the £55,000, but witness could not get at them. He believed there was an unregistered mortgage over the properties. He believed that before Mr Ward went to England he was perfectly good for any amount that he owed, but that in the interval his position weakened. Various things had happened to cause that weakening. There were [unclear: ver] consignments on Mr Ward's own [unclear: acc] connection with the freezing works. [unclear: who] did not know that Mr Ward made any [unclear: all] on the freezing works up to 1895, [unclear: bur] association had drawn upon Connell or [unclear: ec] to a certain extent, and during Mr [unclear: won] absence there were drawbacks to the [unclear: exe] £9000, which witness had to meet, [unclear: addi] weakened the association's position, [unclear: thi] this was association business it was [unclear: a] connected with Mr Ward. If [unclear: witt] membered rightly, there were a [unclear: tremend] of shipments on Mr Ward's account—he [unclear: a] on the freezer account. He had not [unclear: sa] he found Mr Ward's position weakened, [unclear: a] believed it was not so strong as before I interest account was tunning up, and [unclear: hos] perties were not increasing in value, [unclear: action] helped to weaken his position.

Witness was strongly of opinion [unclear: the] Ward, while in England, had gone [unclear: bet] £20,000 to £25,000. All the financial [unclear: of] tions in the country bad been weakened [unclear: ac] time; Mr Ward's own position was [unclear: wea] and that had an effect on the Farmers' [unclear: a] tion, If Mr Ward had sworn that it [unclear: a] covered during his absence that his [unclear: losses] £25,000, which afterwards turned out [unclear: a] nearer £50,000, he must have been [unclear: a] stood. Witness did not understand Mr [unclear: a] in the same way as Mr Solomon. [unclear: when] Mr Ward in Wellington after his [unclear: a] he did not tell him in the interim had made actual losses of between £[unclear: a] and £25,000, but that he had come conclusion that his (Mr Ward's) [unclear: a] was not so strong by that amount, and [unclear: a] indebtedness was getting too heavy. [unclear: a] reckoned that Mr Ward's properties had [unclear: a] depreciated in the interval. Nelson [unclear: a] shares had depreciated, his earning [unclear: a] gone down, and he had lost his salary [unclear: a] a year as managing director of the [unclear: ocean] works. He could not say anything [unclear: a] Ward's evidence before the judge in [unclear: a] last year, when he said he first beard of oflosses from witness on his arrival in [unclear: Welling] he If Mr Ward bad sworn sohe (witness) [unclear: a] not contradict him. If witness on that or had said that be knew what losses [unclear: h] made is the interval he would have [unclear: state] was not true.

Mr Solomon: We don't require any [unclear: a] to tell us that, Mr Fisher.—(Laughter.) [unclear: a] you tell me, please, is it true or not [unclear: tro] you then said that losses to the extent; £25,000 had been made?

Witness said be believed it was true [unclear: a] he nor Mr Ward knew what the losses [unclear: a]in 1894 in connection with the freezer recognised the circular (produced) that [unclear: a] dressed in February, 1895, to the [unclear: a] the association. The statement made [unclear: a] that Mr Ward had not been [unclear: spec] page 79 [unclear: n] purchases of sheep was correct. They [unclear: ad] not been buying sheep at that time, [unclear: for] was he, far as witness recollected, [unclear: lling] mutton, but, as a matter of fact, there [unclear: were] enormous quantities of sheep in England, [unclear: a] on their way there, which had not been accounted; so that the losses could not have [unclear: been] ascertained at that time. It had taken the [unclear: uidator] with a staff of accountants and clerks [unclear: over] 12 months to go through these things. How to earth then, could he answer them in five [unclear: inutes]? Farther questioned an to how the [unclear: 55,000] of the association's debts which Mr [unclear: ward] had taken upon his own shoulders was [unclear: was], witness could only remember the one [unclear: them] of £7000.

Mr Solomon: Mr Ward in his sworn statement [unclear: said] that when the debts of the association were [unclear: ound] to be £55,000 he took the responsibility [unclear: on] his own shoulders. Was it true that this [unclear: £55,000] were losses of the association, as Mr Ward says, and that he took the responsibility of them his own shoulders?—Witness: I [unclear: a] not understand that they represent losses it all.

I am asking you about what Mr Ward has [unclear: worn] to.—I do not know what was passing through Mr Ward's mind, and therefore do not know.

That is not an answer to my question. If Mr Ward has sworn that the £55,000 which he We the promissory note for were debts of the association which he took upon his own shoulders, is it true?—I do not think it is inferred in it.

His Honor: If Mr Ward swore that it is true you do not commit yourself to saying that Mr Ward did make the statement, and the statement might be capable of quite a different construction.

Witness: I do not see how it can possibly be correct,

Further questioned! witness said that if Mr Ward, knowing it did not represent entirely the losses of the association, swore it was the losses of the association, it would not be correct; but he did not think Mr Ward ever had made such [unclear: a] assertion. Witness could not say what item other than the £7000 Mr Ward had taken upon his own shoulders, but be knew that Mr Ward had taken upon himself a large amount of responsibilities, and he also became responsible for a lot of business which might have come to the association and have accrued to losses to the association.

Mr Solomon: Can you point me to one shilling outside of the £7000 that Mr Ward took upon his own shoulders?

Witness; I do not know that I can.

I want to know bow the £55,000 was made up?—You have got a great deal more information about that than I have, for you have the books.

Can you tell me how that amount was made up? You met Mr Ward in Wellington, did you not?—I think so.

And you told him about the £56,000?—Yes, I believe I did, What time do you refer to?

When you went to Wellington to see Mr Ward.—I did not go to Wellington to see him; I only saw him when passing through Wellington.

You saw biro in Wellington?—Yes.

And you told him what bis position then was?—Yes.

Witness continued: He concluded while Mr Ward was in England that his (Mr Ward's) position bad weakened to the extent of £20,000 or £25,000. He did not tell that to the directors, and did not think it his duty to do so. He did not know when the directors were told, but it was his impression that they were told. Mr Ward may have told them. They were not told officially at the meeting held an hour before the meeting of shareholders, because if they had then been told officially it would have been minuted and there was no such minute. He was not prepared to say that a single word was said about it at the meeting, and had no distinct recollection of attending the meeting, though he might have been there He thought he bad told Mr Ward the conclusion he had arrived at, and that this was mentioned to him In Wellington. Witness did not go to Wellington to see Mr Ward about thin, but saw him when he (witness) was on his way to Auckland in connection with entirely other business.

Do you mean to say that on so vital a question in connection with the affairs of the institution you cannot say positively whether you told him that or not?—I cannot say positively as to anything I said two years ago.

Witness continued: He could not say absolutely whether he was present at the meeting or not. He could see nothing had been stated officially about Mr Ward's affairs at the directors' meeting, but he could not say the directors did not know of them.

Mr Solomon: Does it not strike you as a very strange Hate of affairs that this knowledge should be in your breast and in Mr Ward's breast, and that it should not have been brought before the directors or before the meeting of shareholders?—No, not if Mr Ward considered himself in a position to pay.

But you did not consider him in a position to pay?—I am not the man who owed the money.

At any rate, we have the bald fact that it was not brought forward?—It was not officially brought forward.

At the shareholders' meeting, was there the slightest indication given to the shareholders that this state of affairs existed?—I do not think so.

You were present at the shareholders' meeting, as manager?—Yes.

page 80

Did you not think it necessary that it should be stated?—Not If Mr Ward considered be could pay the money.

Well, we have beard the secretary say he was only nominally secretary, and that he had no responsibility, and we have heard Mr Ward say he was so much away that he could not go into the detail What, then, were your responsibilities as maungnr?—I think I bad a good dual of responsibility. I waft manager of the company.

And what steps did you take to inquire if Mr Ward was able to pay the money?—Well, shortly afterwards he did pay it.

Oh, again we come to the £55,150.—It was paid to the association, anyhow.

Further examined: It was after the shareholders' meeting that witness beard of Mr Davidson's report on the affairs of the association being presented to the bank, The fact that witness and Mr Ward did not tell the shareholders the position of matters was not a concealment, but it certainly did not make the position plain to them. The shareholders and the directors could not know at that time that Mr Ward was £25,000 behind, and there was no reason why they should know, if Mr Ward could pay the amount Even in a bank's business it was not stated to the shareholders that so-and-so owed so much. and that be could pay it. He did net know that such a thing would even be intimated to the directors.

Mr Solomon: Now, as to this £21,000 again. I forgot to ask you if your directors were told about it?—No.

Was there anything submitted to the directors by which they could gather that the £26,000 then put down as the overdraft to the Colonial Bank was not the ordinary overdraft?—It was the overdraft on that day.

But was there anything to show the directors that, whereas the balance sheet showed an overdraft of £26,000, it was on the day previous £47,000, and on the day after £47,000?—There was nothing in the balance sheet to show that,

Was there anything anywhere else to show them?—The books.

But the books were not submitted is not customary to submit them. I did not submit them.

And who else could?—Any of the officers.

The books, then, were not submitted to the directors, and there was nothing in the balance sheet, so bow could the directors who ran the institution gather that while the item was £26,000 on one day, it had been £47,000 on the day previous, and was to be £47,000 again on the day following?—They had the books of the company.

And they were not submitted to the directors?—No; but they were available.

They were not submitted?—They were not submitted.

And is that not a further item in the plea conceal meat, that prevented even your directors from knowing the true state affair?—I cannot say that it is, That [unclear: chi] was paid, Mr Solomon.

Now we come to the balancing day of Is You have told us what happened then [unclear: a] balance was manipulated by £35,000 for [unclear: a] day again. Was anything stated to the [unclear: dis]tors about that?—If it it not in the [unclear: minute] would not be

After looking at the minutes, witness [unclear: a] there was nothing in the minutes with [unclear: refe] to the matter, the fact of Mr Ward's [unclear: acc] being manipulated to the extent of £35,000 [unclear: a] not reported to the directors. He did [unclear: a] think it ought to have been reported when cheque was paid.

Mr Solomon: Now I want to you at [unclear: a] the debentures. In January, 1895, [unclear: £50] worth of debentures were placed in Mr [unclear: Wa] hands a to dispose of He sold £40,000 wort. £20,000 to the Bank of New Zealand [unclear: f] £20,000 to the Colonial Bank?

Witness: That is so.

I suppose he reported to you that be had [unclear: a] that?—Sure to.

Did you give any instructions as to [unclear: a] entries were to be made in the books?—Sc [unclear: a] I recollect, I had never been in any [unclear: a] cern that had kept a debenture account, [unclear: a] was pot very conversant with it. Mr [unclear: Anden] was absent at the time, and the [unclear: bookke] were making up these books. Two entries [unclear: a] been placed to our credit in the bank [unclear: a] They would probably ask me what they As I told you, I was totally unconversant [unclear: a] how a debenture account was usually and I would say with regard to those [unclear: pro]of debentures, "Put them to Mr Ward's [unclear: a] until we understand how the account should [unclear: a] opened."

In answer to further questions, witness [unclear: a] Mr Anderson came back in May Witness [unclear: a] not know that he absolutely spoke to Mr [unclear: a] son until the end of the financial year, and [unclear: a] they set off a different debenture accounts Mr Ward's own account. The account, [unclear: a] simply been put to Mr Ward's credit [unclear: a] porarily.

Mr Solomon: In the balance of 1895 [unclear: a] drew another draft of £35,000 at Mr [unclear: v] request?

Witness; Yes.

To whose credit did you place that [unclear: a]—To the credit of Mr Ward.

Why?—lt was for Mr Ward.

Explain that, please. How did you [unclear: a] was for Mr Ward?—It was for Mr Ward [unclear: a] way; It was the proceeds of a draft [unclear: a] under a letter of credit that the bank [unclear: a] received. I had never seen that [unclear: letter] credit. It was intimated to me that it letter Mr Ward had arranged. I drew [unclear: a] put it to Mr Ward's credit, and intimated: I page 81 Mr Vigers At the time, 1 thought it a very strange thing that they should have a letter or credit when I had not heard am thing about it; and I paid the matter could not go forward. If there is anything wrong about it, you must settle it with him. That was done, and Mr Ward took the debt over.

I understand that you mean that that was no much money Lent to the association by Mr Ward?—I did not say that. So much money. paid to the association by Mr Ward.

Witness, in reply to further questions, said he did not part with oats of the association for that draft. He gave a warrant for the oats, but he bid no right to do so an it turned out.

Mr Solomon: On balancing day the bank account was reduced by £30,000, and it was treated as if Mr Ward had paid the money to the Mediation?

Witness: That is so.

On the same day Mr Ward's account was further reduced by two sums—£18,000 and £6500?—That is so.

Did you give instructions that that should be done?—I think it is almost certain that I did

Witness, further questioned, said be treated Mr Ward's account as one account. If Mr Ward had been in credit £15,000. and Brooks and Connell had been in debit, be would have transferred the account to Brooks and Council.

Mr Solomon: You owed these people £18,016?—Witness: That is so.

You owed Connell and Co. a larger amount than £6500 P—That is so.

And after giving credit for this £30,000, Mr Ward owed you £24,000?—Something like that.

Now, you say you treated these three accounts as our, did you really think you did not owe the money to Brooks?—I did not think that.

You knew you owed the money to Brooks?—Yes.

And you knew you owed the money to Concell?—Yes.

You knew that Ward owed money to the association, How, then, were these three accounts treated as one?—I considered that these accounts had been drawn and bad origin Dated miner Mr Ward's personality. The whole of the grain, wool produce, and that had been entirely on account of Mr Ward.

But you knew that the debts were owing?—Yes.

However the accounts were originated, you knew that these three facts existed. Your association owed that money to Brooks, Did not the effect of debiting that amount to Brooks and Co. prevent it being shown in the balance sheet that they were creditors to that amount?—do not know about preventing, but the thing would not be shown.

Did you not make that entry? If you had not made that entry it would have appeared in the balance sheet?—Yes. it would have been shown under "sundry creditors."

To that amount?—Yes,

You knew you owed the money all the time?—Yes.

Why did you not show it?—I have given you my reason

Give me your reason again?—I treated the three accounts as one

Do you mean to say that you understood at that dare that they were one account?—That that were working in one.

How do you mean? Will you repeat that again?—I mean that I might have done all the transactions under one name in these accounts.

Do you swear, Mr Fisher, that in June, 1895, you thought Brooks and Co. were realty Ward?—I do not mean that, 1 know that Brooks and Co are not Ward.

Do you mean to say that Brooks and Co. and Connell and Co. and Ward were a partnership?—No.

Well, what did you understand to be the state of affairs on the 30th June, 1895?—I menu that the whole of the three accounts were being worked by the association as one account. How was that P They were all kept separately in the books?—Like a lot of other accounts, they were kept separate for convenience' sake.

Did Mr Ward say they were to be one account?—Mr Ward had told me that the transactions in London and the losses sustained by him were to be on his own account, Practically that is what it amounted to. That does not exactly put it. As a mutter of fact, if large amounts came to debit and the association was not in a position to bear them, Mr Ward considered it to be his duty and advisable to take them on his own shoulders.

Did be ever take these on his own shoulder?—He took all the grain account

Did he ever take this over?—He has not done so now.

And on the day after the balance sheet you showed the correct statement again Transferred the amounts.

Did you tret any instructions to do so?—None whatever.

Did you tell Mr Ward you had done it?—Not till long afterwards

Do you think that was strange?—I do not think so.

Did you tell the directors?—I did not. I thought it was a right thing to do and I did it.

Would you do so again?—Yes, I would do exactly the same thing again, and if you want an authority for it I refer you to Mr Cook.

Mr Solomon: You need not trouble about Mr Cook. You are dealing only with me.

Witness: I will give you the information if you like.

Mr Solomon: You can give it to your own advisers. I want to ask you again, Mr Fisher, page 82 what you mean when you say that on the 30th June, 1895, you considered these accounts to be one?

Witness: I have already given you my explanation, and I cannot enlarge on it.

Mr Solomon: 1 must ask you again.

Witness: I cannot tell you any more than I did

Mr Solomon: Tell me again.

Witness: I do not know how to explain it any plainer.

Mr Solomon: We must try to get an explanation, It is a very important matter. Let tell you that these three items arc the principal gravamen of the whole thing, that the liquidator suggests that this in a deliberate falsification of the balance sheet, and I want your explanation of it.

Witness: have already given it as far as I can.

Mr Solomon: Give us it again, What did you understand on the 30th June, 1895, to be the condition of these three accounts?—I have already told you, and I cannot enlarge on it now.

Mr Solomon; Answer me again. If you have already told me, I must ask you to tell me again. What did you understand to be the condition of the three accounts on the 30th June?

Witness: I can only repeat exactly what I have already said.

His Honor: Let us have the details of how the accounts stood in the books on that day, and work it out.

Witness: The position stood thus: Brooks and Co. stood in credit £18,000; Connell and Co. stood in credit an amount exceeding £6500. Mr Ward stood in debit—

Mr Solomon: Let us get the exact amount.

Witness: I say an amount exceeding £6500. I think it was £11,000, Mr Ward stood in debit £24,000. I considered that the whole things were worked in one, and I transferred Brooks and Co. to the credit of Mr Ward. The result is that Brooks and Co,'s credit disappeared, and sodid Mr Ward's debit.

Why did you take £6500 out of the £11,000?—Because it did not matter.

You squired Mr Ward's account except about £16?—That was the effect of it.

His Honor; What has occurred to me is: If they are the same account, if they are all worked together as one, you would have debited Mr Ward's account in addition to these. If Mr Ward was taking on himself the liability of these accounts, the £18,000 and the £6000, the proper transaction would be not to credit him with these, would it not?

Mr Solomon (to witness): The fact was that on that day your association owed Connell and Co. £11,000, and your association owed Brooks and Co. £18,000?

Witness said that was so, and Mr Ward owed the association £24,000. Witness did not know any arrangement or agreement of any sort that Mr Ward was responsible for payment of the debts due by the association to Connell and [unclear: a] and to Brooks and Co. He was aware[unclear: a]the association owed that money to [unclear: a] people.

Mr Solomon: I want to know what [unclear: exa] tion you have to give of why you did not [unclear: a] it in the balance sheet.

Witness: I treated the three accounts one.

In what sense do you mean?—Mr Ward [unclear: a] given it to you in his evidence that the [unclear: lo] shipments were to be at his risk if any [unclear: a] occurred.

Further examined, witness said that [unclear: a]treating the three accounts as one he [unclear: p] Ward's account back again for the convex [unclear: a]of bookkeeping. At balancing time [unclear: a] Ward's accounts were focussed [unclear: t] Witness did not say that Mr Ward was if the money, but ho was at the back [unclear: of] account, and if any loss had occurred Mr [unclear: a] would have stood it. He (witness) [unclear: had] said he knew that Mr Ward was behind. What he said was that it [unclear: a] assumption, and as it had turned out [unclear: a] wrong. Witness treated the three [unclear: acc] one on bin own responsibility. Thu [unclear: risk] Mr Ward took was from the very [unclear: comm] ment of the association's career [unclear: wit] English business. Witness did not think [unclear: at] duty to toll the directors that he had [unclear: to] the three accounts as one. He die personally take them into his confident [unclear: a] he did not think there was anybody [unclear: else] them. Mr Ward was away, and there [unclear: a] nobody else to tell them.

Mr Solomon: Could the directors [unclear: a] know that you owed Connell and Co. and [unclear: a] and Co. £24,000 more than appeared balance sheet?

Witness: The books were open to them—[unclear: a] But if they looked at the books they [unclear: co] have told in this instance They could [unclear: a] told that it had gone to Mr Ward, and [unclear: a] balance day there was £24,000 less [unclear: that] admit there was?—The books showed it.[unclear: a]

But you never submitted them [unclear: a] directors, and never told them [unclear: amount] matter, and how could they possibly [unclear: a]that the association owed £25,000 on [unclear: to] A alone more than was shown in the [unclear: a] sheet?—By looking at the books.

But you admit they never inspected [unclear: a] I do not think they did.

Have you ever heard of their [unclear: in] I them?—I have not.

And there were no other means of [unclear: a] out?—Only through the books.

There is another item in the 1895 balance I want to refer to. When you came to [unclear: a] profit and loss for 1895 somebody [unclear: der] that Mr Ward should forgo £1500 that [unclear: a] entitled to for salary and rentals?

Witness replied that as Mr Ward [unclear: a] in the colony at the time he (witness) [unclear: £55] page 83 have decided that. In the ordinary course of business, the amount was first credited and then debited. Witness was answering morestraight forwardly than Mr Solomon anticipated. When interrupted he was just about to say that he inferred that there was a debit and a say He was also about to explain that when they came to June 30, the bookkeepers, on finding the debits to charges or produce, would place such items to whatever charges they ware entitled to be borne by and debit them to Mr Ward Witness said that he wan Id ant Mr Ward to forgo these sums; whereupon the two items were credited back inthebooks and debited to Mr Ward. That was done, he believed.

His Honor: I see in the profit and loss account salary and wages paid is put down at £4886 16s 5d. Does that item include the £1500?

Mr Solomon: It ought to have been taken out of that, your Honor, but was not. Instead of being credited to charges it wan debited to the goods account.

Witness continued: Article 101 of the articles of association provided for the declaration of dividends. When the dividend for 1895 was estimated Mr Ward was out of the colony, and it at that time he owed the association something estimated like £54,000.

Then you say that you made up your mind to ask Mr Ward to forgo this £1500?—Yes, and I got him to do it.

Witness repeated that it was merely his private assumption that Mr Ward was behind tothe amount of £25,000. but he was afterwards good for the whole £55,000.

When he actually owed you £55,000, of which accordingto your own admission he was only good for £30,000, was it a proper thing to enter that £1500 as profit and divide it up as dividends?—It is not what I thought, but what I did.

Did you at that moment divine that the Colonial Bank for its own purposes was going to let Mr Ward off that £55,000?—They did not do so. We got paid.

Oh, that promissory note again. It is time, I think, that was dropped; that farce has been kept up long enough?—But we got paid for it, and if you refer to the bank book you wilt see that it was.

The plain fact of the matter is, is it not, that at the end of 1895 the Colonial Bank found that Mr Ward owed the association £55,000, and found at the same moment that the association owed them £55,000, and instead of taking the association's indebtedness they [unclear: ook] Mr Ward's promissory note for that amount?—That is not how I should put it. It was not so to my mind. The way I would put it is this: Mr Ward owed the association £55,000, and if the Colonial Bank, or any other body, or any other man likes to come along and take over Mr Ward's account it has nothing to do with the first man.

The effect so far as the Colonial Back is concerned is to wipe out his debt, and the bank are the happy possessors of his promissory note?—Yes, The bank now rank on the estate in respect to that promissory note. Consequently Mr Ward discharged his debt, and I. therefore, say that I rightly treated that £1500 as profit. I am not prepared to say whether Mr Ward knew it was so treated before the balance sheet, nor have I the slightest recollection of having told him so.

Witness continued: He did not know whether he told Mr Ward about it before the balance sheet was signed or not. He held Mr Ward's attorney, and he knew that Mr Ward would not draw back from anything he (witness) had done. He could not say within a year when it was that he had told Mr Ward, He knew about it, but he did not tell any of the directors or anybody else. It was not his duty to do so. They would have found out for themselves by looking at the books and seeing that the entering of the salary was reversed. They bad saved £1500, and had quite a right to show it as an asset.

Further examination elicited the fact that the £1500 wan not debited to the goods account but was placed to the credit of that account as a profit on goods. It was shown as a prolit, because it was £1500 saved. He had no recollection of why the charges were not reduced, but that £1500 would have made no difference to the charges.

Mr Solomon: The balance sheet shows that salaries and wages amounting to £4086 were paid?—Yes.

Did you pay that amount?—I think we did. Witness referred to the books to show how the amount of salaries was made up.

Mr Solomon: Is that £1500 taken off? Amongst the items setting out the charge for salaries for that year is this item "J. G. Ward £500"?—That is so, but there is no thousand pounds there.

Never mind that We won't bother about the balance. We will deal in the meantime with the £500, Did he get that salary?—No, he waived it.

This was charged up?—£ think I explained at the commencement that it ought to be put up, and then it was afterwards reversed. I got it reversed afterwards.

You knew Mr Ward had not his salary for the year?—Yes.

And here it appears that he did get the salary for the year?—That appears so; I do not know that it is so.

Witness continued: He did not prepare the detail schedules; the clerks did, and up to June 30 they put every debit, debiting the charges with Mr Ward's salary, and when the £1000 was afterwards reversed they should have been taken out. If the amount of salary had page 84 been struck out, this could not have happened, bub it would not have made a scrap of difference—ultimately the result would have been the same.

Mr Solomon: I will try and show you whether it is so or not. You are not going to get out of it in that way. Is not this the Tact: that if you bad reduced the charges by this £1500, tin you should have done that would have shown that you could only bring out that profit you made by reducing your changes by £1500?—And what would have been the difference?

The difference would have been that the shareholders and the public would have known what the Fact really was, that in order to make the profit you had reduced your charges, whereas in the way you did it you led the public to believe that your charges remained the same this year as last, and that the net profit was made I do not see that it makes a scrap of difference; the result was exactly the same.

Supposing you yourself looked at two balance sheets of a company. One year you looked and said, "Hulloa, these people have made £5000 this year and their charges are £5000—after deducting the £5000 charges they have made £5000." You look at the balance sheet next year and pay, "Here we are again; these people have again made £5000, their charges are still £5000; their business is just the same as it was lust year." But supposing when you looked at the balance sheet again, instead of finding these people had made £5000. you find that the profits are £5000, and the other charges are £3500. you would then say as I think any reasonable person would, "It is true you show £5000 profit, but to do that you had to reduce profits £1500 would not say anything of the sort. I would see they had made £5000 and should be satisfied with that.

Further examined: In the matter of the £1500 the balance sheet did not show an absolute untruth. The result of the entry of £500 salary was to show the salaries at that amount more than they were, but the sum was waived. It was not the fact that it was not shown; it was shown in the journals. The £1500 was treated as a gross profit, which it was. Money saved was money made. The Amount was taken credit for in the item "Profit on merchandise and produce sold, £5500." He did not know that the amount should have been shown as a reduction in charges. He had before stated that he got Mr Ward to forgo the £1500. What he meant by that was that the amount was included in the balance sheet, and that witness afterwards got Mr Warden consent to the transaction. He held a power of attorney from Mr Ward, and although he did not require Mr Ward's consent he mentioned the matter to him as a matter of courtesy He did not think he got Mr Ward's consent before the balance.

Mr Solomon: You have told us that [unclear: you] up your mind to auk Mr Ward to give [unclear: hi] sent, you have told us that you did [unclear: sa] to do to and got him to do it, and yet [unclear: a] us that you cannot say whether you said [unclear: a] thing to him before the balance.

Witness: That is not the point at all [unclear: a].

Did you not tell me you had made up [unclear: a] mind to ask him ?—Yes. I said this: I Mr Ward and I got him to do it. Whit [unclear: a] say was that I could not tell you whet [unclear: her] him that before the balance sheet or not.

His Honor: The question you are [unclear: disci] just now is these amounts that were [unclear: cre] Ward from Connell account. As 1 [unclear: a] stand it the association had a credit of [unclear: £11] and that £6000 of that wan credited [unclear: a] Ward on the ground that these three [unclear: acc] were into one That is what 1 [unclear: underst] to say, Mr Fisher.

Witness: I beg your Honor's [unclear: pan] thought you were speaking to Mr Solomon: His Honor: 1 understand you to [unclear: a] Fisher, that the reason why the sum of [unclear: £] due to Brooks and £6000—part of that [unclear: a] Connell—was credited to Mr Ward just [unclear: a] the balancing day?

Yes! your Honor.

And so you credited £18,000 from [unclear: br] Co.'s account to Mr Ward, and you [unclear: a] dited £6000 to Mr Ward, Why did [unclear: a] credit the whole of the £11,000?—It. [unclear: a] make any difference if the whole three [unclear: a]were treated as One.

If you treated the whole three as [unclear: a] were you not logical in the treatment [unclear: of] why credit part and not the whole?—I see that it makes any difference. It is [unclear: a] the same result.

Why did you transfer them back again [unclear: a] removed the account for the [unclear: conve] bookkeeping

If you treated them as one account, [unclear: a] see why you should remove a part of the [unclear: a] and not the whole. If Mr Ward was [unclear: a] to be credited with £6000 he was entitled [unclear: a] credited with £11,000.—That is so.

That is so; and you did not do it?—[unclear: a]

Mr Solomon: The result of that is [unclear: a] you had credited the whole of Connell [unclear: a] you would have then shown that Ward £4500?

Witness: His account would have [unclear: a] credit to that extent.

It would not have done to show that [unclear: a] to have brought Mr Ward's name in. [unclear: a] have done was to wipe Mr Ward's name [unclear: a] That would have made no difference. [unclear: a] Ward is not wiped out yet.

I did not say he was, and I am [unclear: a] glad to have this opportunity of [unclear: say] very difficult to wipe out as brave a [unclear: a] Ward is. Now, Mr Fisher, we will [unclear: come] produce account. Look at article [unclear: 110] articles of association. What that says [unclear: a] page 85 The directors shall cause true and complete [unclear: caunts] to be kept of the stocks, effects, re-'[unclear: pts], expenditure," and so on. You knew [unclear: it] there was such an article?—I expect I [unclear: i], Mr Solomon. I did not know the articles by heart.

You kept a complete account of your stocks? I think we did fairly well.

[unclear: in] reply to further questions witness said [unclear: i] schedules gave a pretty accurate account of [unclear: i] stocks. Each account stood on its own [unclear: sis]. The association did not keep what [unclear: tinsel] called a stock book. It was his duty [unclear: see] that there was an account of the stocks [unclear: pt]. Probably it was one of the things in [unclear: ich] he bad failed in his duty.

Mr Solomon: Did you not keep an account

Witnees: We did not keep a stock book and [unclear: ck] list, so far as I know.

Did you keep anything to show the amount stocks in hand?—You have the schedules.

They ware only made at the end of the year? Exactly, and from taking stock.

Did you keep any lists of stocks?—I do not [unclear: ink] so.

None at all [unclear: ?]—No.

Mr Solomon: Did you have no accounts to [unclear: ow] what stocks you had in hand?

Witness: Do you mean statements of all we [unclear: ceived] and all we sent out? Mr Solomon: Yes. Witness: We did not.

Why?—I cannot tell you. We did not do it. Now, in June, 1895, what amount of oats of [unclear: i] sorts and kinds whatever did you have in [unclear: ock]?—I cannot tell you.

Did you not take stock?—The storeman [unclear: would] be sure to count the bags and let me now, and I would probably count them my-[unclear: lf]. I do not recollect. There was sufficient [unclear: eck] in hand to cover the accounts.

Were your own stocks separated from the [unclear: er] people's?—They were not kept in sepa-[unclear: irte] stores.

Had you anything to show which was yours [unclear: ad] which was other people's?—I think so. I [unclear: Ddot] tell exactly how the storeman did.

Can you tell me what quantity of oats you [unclear: id] in hand of all sorts, of your own and of [unclear: her] people's, in June, 1895?-About 92,000,

Where did you get that from?—I know I got [unclear: je] information at the time. I may have got it [unclear: v] telephone from the different stores.

Did you get stock lists made up?—I did not.

This is an account 1 have had taken out, Mr [unclear: Vher] (document produced to witness), show-[unclear: jg] the purchase of produce between June and [unclear: Agust] and the sales. I suppose you may [unclear: scept] my word that these figures are correct. [unclear: hey] have been carefully taken from the books [unclear: y] an accountant. This shows that 3000 sacks [unclear: ere] purchased more in these three months [unclear: n] were sold. Mr Davidson was sent down by the bank to make a report. Mr Davidson conferred with you, did he not?—Yes, to a certain extent.

Now that was in August, 1895. At that time, I think, Mr Fisher, you had granted warrants to Brooks and Co. for 22,700 sacks of oats?—Probably so. I cannot recollect the quantity.

Mr Solomon: Look at this and see.

Witness: I am not going to say absolutely it was so.

Mr Solomon: I must get an answer. I am not going to take a probability in this case.

Witness: I cannot say any more.

Mr Solomon: You must look at the books and find out.

Witness: I cannot.

Mr Solomon: Why not?

Witness: I do not know where to look.

Mr Solomon: You were the manager of the company. You should know.

Witness: Show me the warrants and I will tell you. Approximately, I believe that is correct.

Mr Solomon: Approximately; that will do us. At the same time you had given warrants of oats to Ceonell and Co. for 39,000 bags?

Witness: We'll say approximately that was correct, too.

Approximately that is correct; and against the grain railage account you had given warrants to the bank at the same time for 35,000 sacks of oats?—I suppose it would be about that.

And on the ordinary account you had given warrants for 12,000 bags of oats in connection with Wilson Hall?—That would be about it.

So far, that is 110,299 sacks of oats that you were supposed to hold for others. At the same time you had given drafts to the Bank of New Zealand on account of Robert Brooks and Co. for 16.000 bags of oats?—I think so.

Making 126,000 bags of oats that you were supposed to hold for other persons?—That is so.

Now, taking these figures—if you cannot accept the figures, I shall have to ask you, Mr Fisher, to go through the books. I do not know if you are prepared to accept them or not. These figures show that between the June balance day and this date you had purchased 3000 sacks more than you sold—I could not say but I believe that probably that would be all right.

Did you tell Mr Davidson how many sacks of oats you really had in hand?—I think that Mr Davidson satisfied himself.

That you had in hand 35.000 sacks?—If Mr Davidson says we had only 35,000 sacks, he is wrong.

How many had you?—Something over 70,000.

Of course you understand you had given, besides this, warrants for 80,000 sacks, but that is debatable ground. That is the 80,000 sacks for which you had given warrants, to Coanell and Co. Does that interfere with your calculation as to your having something over 70,000 page 86 sacks?—I do not think so. When I say there were 70,000 bags, I believe that.

Can you tell me, Mr Fisher, whether all the oats warrants that I have referred to—Brooks and Co.'s, Connell and Co.'s, the grain rail age account, and Wilson Hall's account, and the Bank of New Zealand's—when they came into existence?—I do not quite catch yon.

We will take them one by one, then Take the warrant for Brooks and Co.'s 22,000 sacks. When Was that given?—Some months before. Before June?—I think so. Yes. And Connell and Co.'s?—Some months before too.

And the grain railage account, of course was?—Yes.

Wilson Hall's account. When was that warrant given?—I do not remember giving that warrant at all.

And the Bank of New Zealand's, when was that purchase?—Is that Brooks and Co.'s? Yes.—Some time before Jane. So, according to you, you had in stock in August something between 70,000 and 80,000 sacks of oats?—So far as I recollect that is the case.

According to you, if Mr Davidson says you only had in store 35.000 sacks of oats, will you contradict him?—I certainly would.

Did you tell him how many you had?—Mr Davidson got his information, I believe, for himself.

From whom?—Direct from the store. Did you tell him anything about it yourself?—I believe I did. I believe he discussed it with me.

Did you tell him you had enough in store to meet the warrants that were out?—I think I told him I had not enough.

Take down these calculations. You had warrants out for 126,000 sacks of oats, and you only had, according to yourself, 70,000 or 80,000 sacks in store?—In June I think I had 90.000.

Take it at anything you like; we are leaving out the 80,000 sacks. Such a trifle as that we will not bother about. We will deal with the rest. Putting it your way, you were supposed to hold oats of other people to the extent of 126,000 sacks?—I did not say oats of other people—oats we had a right to handle and deal with.

You had pledged these oats [unclear: ?—]Yes. And were 36,000 sacks short, according to your own showing?—Something like 35,000 sacks.

And had taken credit for advances against goods afloat and in store to the extent of £25,000, hadn't you?—Whatever is in the balance sheet.

And those would be ashore also?—No; they would have been shipped.

Were they all shipped, or were any supposed to be in store?—Any that were in store are included in that.

What did become of those oats?—They [unclear: w] there when 1 gave the warrants originally, [unclear: w] had been used and the money paid into [unclear: cred]

And the people who held your [unclear: war] thought that there were oats in your [unclear: stoi] represent them?—They would think so.

And as a matter of fact they were there?—No; they were short.

Under those circumstances you would have oats of your own at all?—That does follow.

Why?—The 92,000 included;what was own.

I am only speaking now of moneys you [unclear: t] borrowed and given oats warrants for? [unclear: I] come to your oats in the meantime. You [unclear: I] credit, in addition, for 16,000 sacks of [unclear: oaf] the produce account?—Certainly. They [unclear: i] our own.

So, although you owed other people [unclear: 12C] bags of oats, and only had 92,000 to pay [unclear: was] you took credit out of this 16,000 to yourse as well P—I do not say that. The 16,000 [unclear: 1] ours. As a matter of fact, the whole of oats were ours to handle.

How do you mean?—As a money-[unclear: riij] basis. It was not a question of having sold [unclear: a] belonging to other people. A lot of the [unclear: a] belonged to ourselves.

But if you had oats in respect of which [unclear: c] gave warrants to other people, if you sold [unclear: i] oats the moneys realised would have to [unclear: i] their credit?—It did so, or it went to [unclear: what] account was entitled to it.

But it could not go to your credit. If gave a warrant for 10,000 sacks to a man, [unclear: a] it not mean that you have 10,000 sacks to [unclear: a] it with?—That is what we ought to have.

You hold those oats on account of tbe [unclear: pel] to whom you bad given the warrant, and [unclear: if] it ought to pass to credit.—And who would the proceeds?

The person for whom you hold the oats.—[unclear: j] said just now we should debit those people held the warrants.

Take an instance. If you give a [unclear: warm] the Colonial Bank for 10,000 sacks of oats, [unclear: r] you sell those oats you take back the [unclear: wk] and give the money?—Yes.

So you hold the oats on behalf of the [unclear: bul], But if we paid some third party for the [unclear: a] are they not our own?

Certainly not.—Whose are they?

The bank's. What do you give the warm for?—For advance.

So you say you can get advances from Colonial Bank in respect to 10,000 sacks, Warrants for them, sell them, and put money into yonr pockets?—I do not say [unclear: it] say if I buy 10,000 sacks of oats I [unclear: debt] produce account with the price of them borrow money from the bank over them, [unclear: !] not owe the bank for them. When I sell [unclear: s] I debit the produce account.

page 87

You admit that at that time you had 30,000 [unclear: or] 40,000 sacks of oats less than you had issued [unclear: Warrants] for, and at the same time you main-[unclear: brain] you could treat all the oats in store as your [unclear: own]?—No. I do not say so at all. A lot of the oats that we gave warrants for were our own, and some were our clients'. And there was no distinction?—In the books there was.

And there is no record in the store. They were not earmarked?—If a man sent in oats to the store the storeman would know which was which.

Where were your oats to come from if there were not enough to satisfy other people?—I cannot make it plainer. You hate not got the-hang of the thing at all. When the Colonial Bank came down and ascertained the position we were 35,000 sacks short, and I have told you where they had gone. What you are talking about is absolutely misunderstandable.

And yet you contend that, although you were short by 35,000 sacks in the store, you had other oats belonging to yourselves?—Decidedly so. It is a pure matter of bookkeeping and you know it.

It is a very simple thing to create assets in [unclear: that] way?—It is nothing of the sort. You understand the position perfectly well.

I understand perfectly. It means that you pretended to have oats there and you had not?—That is not so.

Witness, in further examination, said they made a loss of several thousands of pounds and simply debited it to produce account, and it was usual to do so. The effect would be to swell the produce account to the extent of that loss.

Mr Solomon: It amounts, does it not, to creating an asset to that extent?

Witness: Not necessarily if you had not got the oats there.—(Laughter) There was not an oat against the £400 item, and the effect would be to create a corresponding asset in the books. Mr Solomon knew perfectly well that it was not the fact that losses were pnt to the produce account, and so created an asset. It all depended what stocks of your own there were in hand at the time. The warrants being our did not affect the produce account. He could only repeat that they were 35,000 sacks short at that time. He did not know of the shortage till Mr Davidson came down to Invercargill. He repeated that the amount of warrants out did not affect the produce account at all. There was no use arguing the point with Mr Solomon, because he would not grasp it.—(Laughter.) At about the same time Mr Ward made a loss of £593 on tallow, which was debited to the goods account, but that was subsequent to the June balance. It was so debited by the bookkeeper, but it would not have been there long.

Mr Solomon intimated that as this transaction took place in September, 1895, be would not pursue the inquiry in reference to it further.

Witness, examined in reference to the Bluff storage account, said that goods belonging to other people were stored there in addition to their own goods. There were no credits in 1894-5 in respect to that account, but the explanation was this: To that account was debited all the charges paid at the Bluff, and, therefore, it was entitled to storage earned in ordinary circumstances. He believed what was done was this: that the storage on both their own goods and those of other people was credited to the produce account, and at the end of the year the produce accouut was debited with the storage of the whole lot, and redebited with the wages that had been paid out. The Bluff store stood them in £1000 for charges. They took the produce account, in as an asset. The produce account was entitled to bear the charge of the grain just as it would bear the charge for railage. The putting of the £1000 to the debit of the produce account would increase the assets of the association by that amount. For the 1895 balance sheet he had got his information of the amount of stock there was from the storeman. He had put down as an asset the actual amount standing to the debit of the produce account.

Mr Solomon: That could not possibly be an asset?—If the oats were there to represent it, it wac

What steps did you take to find out that you bad the oats?—I took the information from the storeman.

He told you how much you had?—He told me we had enough to cover the amount; I do uot know the exact amount.

You had more than £16,000 worth of oats, irrespective of the question of the warrants for oats? Did these oats belong to yourselves for the purposes of the balance sheet?—Yes; that is so.

Do you know the price they were taken in at?—The current price.

What was that?—I cannot tell you.

Do you swear you had a total amount altogether?—Yes; I believe we had.

Will you swear you had?—I will not swear we had.

Will you swear you had even 16,000 sacks of oats in the store altogether?—Yes; there is no question about it.

In Juue?—No question about it at all.

Let me tell you what Mr Birch says: "Fisher owns up to having 75,000 sacks of oats short to meet the warrants, exclusive of the 80,000 sacks attached to the British bill." That is dated 3rd September. Is that true?—I do not think so.

Will you contradict Mr Birch?—I cannot accept the responsibility of what Mr Birch writes.

You won't say it is not true or incorrect?—I would not say absolutely, but I don't think it page 88 is. I will not contradict Mr Birch, but I do not believe the statement is correct, all the same.

Now, Mr Birch also says that at that interview you admitted to him you had lied and deceived him hundreds of times during the last five years. Do jou contradict that?—Yes.

He also says that you said the truth was not in yon. Will you swear you did not say that?—I have no recollection of it.

If Mr Birch swears that you admitted to him that the truth had not been in you will you contradict him?—Mr Birch is at liberty to say what he likes.

You have got to answer my question. Will you contradict him on oath?—I think I would.

Yon think you would?—Yes.

Say yes or no?—I have no recollection of using any such words.

I want an answer "yes" or "no"?—I cannot give an answer to what happened or did not happen two years ago.

Then you will not contradict Mr Birch, if he swears that?—If he takes the responsibility of swearing that, I think he would take the responsibility of swearing anything.

Will you contradict him?—I cannot say I would, because I do not know what happened.

I do not suppose we can take it further than that. I want to call your attention, Mr Fisher, to a statement of yours, which I suppose was made upon oath before the Legislative Council. You were examined by the hon. chairman—I do not know who that was—about these oats to show what your opinion was of the oats you held in store?—Yes.

The honourable chairman says this: "Was there any security for this draft?" This is your reply: "Well, the position was this: that the dratt was not issued at all upon any coloiiial security, but it was iesued upon the basis of this presumed credit in London, and subseqnently, or immediately after this draft was rawn, Mr Vigers, the officer who conducted the negotiations un behalf of the bank, asked if I bad oats in store, and what quantity. I replied that we had 80,000 bags in store. He asked for a warrant for that quantity, and I gave a warrant. I had very considerably in excess of 80,000 in store at the time. The balance over and above the 80,000 were held on behalf of outside clients, to whom we had after-wards to deliver them." I want to draw your attention to that.—Yes.

"The balance over and above the 80,000 were held on behalf of outside clients, to whom we had afterwards to deliver them. One's actions are sometimes controlled by the exigencies of the moment, and some time after I had given it I concluded that in giving it I had probably made a mistake, because of not niaking the position exactly clear. The bank held at that particular time warrants as special custodians for other people to an almost Similar extent, or something in excess of 70,000 sacks, and I inferred that in giving one [unclear: we] rant for 80,000, the desire of the bank was [unclear: t] get one concrete warrant for all the oats [unclear: hel] and that the other warrants previously [unclear: he] would, of course, be cancelled. I did not [unclear: mtf-] that clear to Mr Vigers—in fact it never [unclear: strut] me at the time that I told Mr Vigors [unclear: that] had 80,000 bags of oats in store, which [unclear: was] absolutely and positively correct. I had [unclear: mcrjj] than 80,000 sacks, but, as I say, the bank [unclear: was] aware that I had 80,000 sacks of oats at [unclear: the] time, because they held special warrants for [unclear: ip] almost similar amount." Now, I want to [unclear: drsj] your attention to this question and [unclear: answsi] The question is: "Which did not belong [unclear: fl] the association?" and your answer on [unclear: ottfl] was thfs: "Which did not entirely belong [unclear: ib] the association. We held them as [unclear: warehouse] men for the bank for advances? "—Witness Yes.

Now, you swear there you held the whole [unclear: of] that 80,000 sacks of oats as warehousemen? That is right.

How can you possibly say when you held [unclear: til] whole of the oata that you had in store [unclear: metfC] as warehousemen that you had the right [unclear: :*] take credit for them as an asset of your [unclear: owtt]—I cannot make it plainer than I have [unclear: door] So much of these oats were oats we [unclear: advance] against to farmers; so much was our own [unclear: tw] we paid for. The warrants for them the [unclear: bea] held the whole lot on their own account, [unclear: s] course, but there was so much of our own [unclear: s] eluded. I cannot make it plainer, and do [unclear: a] see how I could if I were to talk for 12 montt a

Is it true, as you swore, that you held [unclear: that] 80,000 sacks of oats as warehousemen?[unclear: -] think so; perfectly true.

Mr Cooper: They were held for advances.

Mr Solomon: Certainly for advances?—[unclear: W] piss: I think that is perfectly true.

And yet you say you were entitled to [unclear: tw] them as your own asset?—Certaiuly, if [unclear: the] were our own oats held for the bank. I [unclear: caoub] make it plainer than that. There is a different between bookkeeping and the oats being there

Mr Solomon: Yes, that is exactly what [unclear: w] say; there is a difference between [unclear: bookkeeping] and the onts being there.

There is one thing I want to draw your [unclear: atta] tion to. You wer asked this: "You [unclear: stat] you knew an account of £55,150?" and [unclear: ya] answered "Yes." That, of course, was [unclear: ft] Ward's account you were referring to?—Yes. [unclear: i]

"And you stated that that was the [unclear: amount] owing to the association?—Yes." "How [unclear: h] that arisen—from a longer account, or what?[unclear: -] It was over a period of perhaps two years [unclear: tha] it had arisen to that extent." "During the [unclear: la] 12 months it had increased very largely [unclear: previa] to the 30th of June; is that true?—Yes, £7000." Is that true?—I think perfectly [unclear: true].

Do you swear that Mr Ward's account [unclear: si] creased during the last 12 months £7000?—[unclear: T] me the dates?

page 89

From June, 1894, to June, 1895. The fact is that the account to the debit of Mr Ward is the [unclear: name] in 1894 as in 1895?—Yes, but it might [unclear: have] gone down.

Witness continued: When he said it had [unclear: increased] within 12 months they might see he [unclear: was] speaking in round figures. A large proportion of Mr Ward's lossers had been created by [unclear: Carswell's] business from the oats bought of Qarswell in 1893. The £7000 he believed was S[unclear: part] of the £27,000. The association took up a linees, on the representations of the Colonial Bank, which involved an outlay of £30,000. This was a statement made by witness in his Evidence before the Legislative Council. The business he referred to was Carswell's. The stock was £10,000. and the goodwill £5000 in shares and £17,000 of oats. This was fought by Mr Ward for the association—he forgot which. The oats would go into the grain account, but he did not recollect. He Knew tbe history fairly well. The association did Dot pay Carswell for them, but Mr Ward did, and the oats were afterwards worked through the association. Mr Ward lost on oats Ethat were sent Home, and that was one of the [unclear: reason] why he bought the business. It was understood that the profits on oats sent Hume should go to the association and the losses to Mr Ward, but he did not think that underrstanding was brought before the directors.

Mr Solomon said be had now closed his questions on the produce account, and suggested an adjournment. He would continue Mr Fisher's examination till lunch hour tomorrow.

At 4.25 p.m. the court adjourned till 10.30 hext (Saturday) morning.