Sir,—

Comptroller's Office, 1st September, 1868.
I beg to correct a statement in my evidence given to the Committee to-day. There is no note upon the requisition of the 27th June; but I appear to have entered the contents of that page 167requisition in my accounts separately from all others, under a special heading, "Permanent Charges issued under doubtful sanction of law," and to have appended to the entry the following note:—
"N.B.—These sums were issued under a special requisition, in compliance with the wish of the Colonial Treasurer, in order that the money might be lodged at interest at the Bank."

I have, &c.,

To the Chairman of the Committee of the Dunedin Reserve.

James Edward FitzGerald, Comptroller.

The Chairman also submitted to the Committee the Assistant Treasurer's history of the transaction, as forwarded from the Colonial Secretary's Office, and read as follows:—
The history of this transaction, as far as I am personally aware of it, is as follows:—A little before the termination of the Financial Year 1860-67, Mr. Fitzherbert determined, as far as practicable, to secure the sums deposited with the Government from being used for current expenditure, by taking them out of the ordinary bank balance, and placing them where they would be available whenever they might be required. A list was accordingly prepared of the balances of the Deposit Accounts as they stood on or about the 31st of March, which was the latest date to which they could be made up. After several conversations between Mr. Fitzherbert and the Comptroller, this list was reduced to the items afterwards mentioned by Mr. Fitzherbert in his Financial Statement, the total of which amounted to £24,431 2s. 2d., and that sum was withdrawn from the Public Account on 29th June, and placed in the Bank of New Zealand as a fixed deposit, in the name of the Colonial Treasurer, for three months.
There are two things important to be noticed here:—1st. For several vears a sum of £6,000 had been placed as a fixed deposit in the Bank, to represent (especially) the Intestate Estates Account. In 1864 this "dropt out" and got absorbed with all other funds; but in January, 1866, Mr. Fitzherbert determined to replace it, and as the account was larger than it had previously been, £6,000 was placed in deposit for a year, which deposit was renewed when it fell due in January, 1867. 2nd. Under "The Comptroller's Act, 1865," it was, to say the least, exceedingly doubtful whether the control then established had any operation except in respect of revenue (clause 8) and proceeds of loans (clause 9). The inference I draw from this circumstance is, that Mr. Fitzherbert desired to make these Deposit Accounts safe by the deposit which ho made, an inference that is entirely consistent with my remembrance of what took place. The first-mentioned sum of £6,000, having been really withdrawn from the Treasurer's balance for nearly eighteen months, escaped his memory (and mine) at the time the £24,431 2s. 2d. was deposited, otherwise I am perfectly satisfied that the amount would have been reduced, and only £18,000 deposited.
I-know nothing whatever of the "understanding" referred to by Mr. FitzGerald, but I am quite clear that Mr. Fitzherbert considered that he was only carrying out the object with which the deposit of £24,000 was made. It is undeniable that the £6,031 18s. 9d. formed part of the sum deposited; and while I would not for a moment [unclear: opugn] the correctness of Mr. FitzGerald's statement as to what he considered the "object" of that deposit to have been, I repeat that my understanding (and I think I am justified in saying Mr. Fitzherbert's also, as I gathered my impressions from conversations with him) was, as I have stated above, that the money should be available when required for its original purpose, which in the case under discussion was the repayment of the rents of the Dunedin Disputed Reserves.
As a matter of fact, the money was temporarily paid out of the Colonial Treasurer's balance because the deposit did not mature until the 29th of September, and the money was paid in on the 24th of the month. If therefore it be technically true that the Treasury used money that had been issued, for "other votes," it was only for five days, with the certainty of the money being replaced at the end of that time.
I must respectfully differ also from the impression conveyed by Mr. FitzGerald's memorandum, that the Treasury led him to believe that this precise sum of £24,431 2s. 2d. was repaid to the Public Account. I have a very distinct impression that it was several times mentioned that there was £24,000 in deposit in the Bank. It is highly probable that Mr. FitzGerald. did understand that to mean £24,431 2s. 2d., but I meant two sums that together amounted to £24,399 3s. 5d. The amounts, by an accidental coincidence, are so very similar that it need not excite surprise that one should be taken for the other.
I venture to add that the £24,399 3s. 5d.—thus eventually (in January and March, 1868) paid to the Public Account—was not money improperly diverted from other uses, but money that had been act apart for this particular purpose.
29th August, 1868.

J. Woodward.