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Tuesday, 1st September, 1868.
The Committee met pursuant to adjournment.
Present:—Major Atkinson, Mr. Cargill, Mr. Carleton, Mr. Rolleston, and Mr. Tancred.
Minutes of previous meeting read and confirmed.
Mr. FitzGerald was recalled, and the following questions were submitted to him:—
| 1. | By the Chairman.] It has been asserted that the Treasury has no knowledge of the undertaking alluded to by you as having been come to between yourself and the Colonial Treasurer as to the repayment into the Public Account of the sum of £24,431 18s. 2d., which was allowed by you to be placed in deposit: is there any record on this subject, and can you give the Committee any corroborative evidence of the statement you made?—If there were no such understanding, I am not aware why any part of the money was repaid. Secondly, if that money was intended to be operated upon, I cannot understand page 165 why the Treasury sent in a second requisition. Thirdly, I consider that the undertaking with me was accurately described by Mr. Fitzherbert in his Financial Statement in the following words:—"Outside, however, these figures, there have been transactions to which I must refer, and which indeed are of a character deserving special explanation. I need, perhaps, scarcely inform the Committee (for the question has been raised in various forms from time to time) that the use of money in deposit with the Government has insensibly grown up into a habit in New Zealand, and, however the exigencies of the public service may have induced the custom, it is one which I shall not pretend to uphold, and the Government has accordingly decided to propose its discontinuance. There are, indeed, certain deposits of a current character which may, I think, be fairly employed as a working balance, whilst there are others of such a character as to require that they should be held aloof in trust. The practice, however, has not hitherto been in accordance with this opinion, and considerable sums belonging to Intestate Estates and other funds have been, from time to time, employed for the purposes of revenue. As an instalment of reform of this abuse, and in anticipation of legislative action being taken, I have to state that I have caused the following refunds to be made from the Treasury, viz:—
With regard to this understanding, I should wish to state that Mr. Woodward would recollect, and Major Richardson would also recollect, that the question of how the large deficiency in the Public Trust Fund was to be made up was a matter of constant discussion between the officers of the Treasury and the Comptroller for many weeks, and that in all those discussions this deposit in the Bank (£24,431 2s. 2d.) was invariably spoken of as one of the assets making up that deficiency. I should be within the mark if I said it was so spoken of at least twenty times, and during the whole of that time, extending over some months, no hint was ever dropped as to the existence of any second fund. The Treasurer therefore always spoke as if it was a settled thing that this sum would be repaid into the Public Account. |
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| 2. | Is there a written memorandum referring to that understanding?—There is a note on the requisition made at the time that the money was drawn for the purpose of being placed in deposit. I speak from recollection, and should wish to he allowed to verify this statement. | ||||||||||||||||||||||||||||||||||||
| 3 | By Mr. Tancred.] Is there any correspondence with the Government on this subject?—There is not, other than the remarks in writing on the requisition. | ||||||||||||||||||||||||||||||||||||
| 4 | By the Chairman.] When did the conversations you mention take place?—They occurred at different times during the whole yesr, both before and after Mr. Fitzherbert left.
Mr. Woodward, Assistant Treasurer, was then recalled, and the Comptroller's evidence being read to him, the following questions were submitted to him:— |
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| 5. | Does your recollection confirm the statement of the Comptroller as to the frequent conversations which took place in respect of this deposit (£24,431 2s. 2d.), and the understanding which prevailed between the Treasurer and the Comptroller on the subject?—I have simply to say that such conversations did take place, in which a sum of £24,000, spoken of in round numbers, was treated as an asset of the Trust Funds, and those conversations of which I speak were held about the month of January, 1868, and often subsequently. I cannot say from memory whether any such occurred previous to Mr. Fitzherbert's departure. In June, 1867, a sum of money was deposited, of which it is said that there was then an understanding that it should be repaid; of this understanding I know nothing. My conversations with Mr. Fitzherbert led me to believe that the money was placed in deposit that it might be available when required for the purposes of the several deposits—in other words, that it should not be spent as deposits had previously been spent. | ||||||||||||||||||||||||||||||||||||
| 6. | By Mr. Carleton.] Under what denomination were these funds, which were in reality trust funds, charged?—As a deposit account. | ||||||||||||||||||||||||||||||||||||
| 7. | By the Chairman.] Can you give the Committee any account of the sum of £6,000 which was omitted from the Colonial Treasurer's Statement? For what purposes was it deposited, and, when it matured, to what account was it paid?—I wish to correct my statement that it was first deposited in January, 1867. It had been deposited in January, 1866, and was intended to secure the moneys belonging to Intestate Estates. When this deposit matured in January, 1867, the money was again page 166 deposited at interest in the Bank of New Zealand in three sume of £2,000 each. There was more money due to the Intestate Estates. At the time of Mr. Fitzherbert's Statement, the money had been out of the Treasury upwards of a year and a half. When it finally matured, it was paid in to the Public Trust Funds, and was part of the sum of £24,000 to which I have referred. This was in March, 1868. It was deposited for the period of a year from January, 1867. I cannot at this moment explain why it appears as maturing in March. The sum of £6,000 appears in the Public Account as Bank deposit in the year 1865-66, and I believe in 1866-67, when it appears in the sum of £30,431 2s. 2d. |
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| 8. | By Major Atkinson.] Will you explain how the accounts of 1866-67 show the sum of £6,000 on either side of the account, if this sum had not passed into the Treasury as stated above?—It passed through the account by a cheque being given on the special deposit, which cheque was immediately redeposited to the same account. | ||||||||||||||||||||||||||||||||||||
| 9. | By the Chairman.] (To Mr. FitzGerald.) Have you any remark to make after hearing Mr. Woodward's statement. Mr. Woodward has stated that in the conversations. mentioned by me, a sum of £24,000 generally was spoken of. That sum could have had only one meaning in my mind, because I was aware of only one sum deposited, and the Treasury know that I had no knowledge of any other deposit. A question was raised during Mr. Woodward's evidence as to Trust moneys not being payable to the Public Account under the Comptroller's Act. I wish to state that such moneys were not so payable by law, and were paid in against my protest, so strongly expressed that I at last informed the Treasury by letter that I would only allow this style to continue to the next Session of Parliament, and if Parliament should make no alterations in the law, I must recur to its strict interpretation. I could not prevent the Treasury paying in money if they wished it, but I could prevent the moneys being drawn out. I consider, therefore, that whatever the strict interpretation of the law may have been at that time, the Treasury were bound in honor and good faith by an arrangement which they or their actions induced the Comptroller to acquiesce in. As to the policy of the step so taken by Mr. Fitzherbert, it had my cordial concurrence, and it was adopted with a view to the legislative action which ultimately legalized it. I interpret, therefore, the words in Mr. Fitzherbert's Financial Statement, " in anticipation of legislative action," to mean the passing of the Public Revenues Act, which was then in type, and one clause of which made its action retrospective to the 1st of July, and by which all Trust funds in the Treasurer's hand became part of the Public Trust Fund. Mr. Fitzherbert, therefore, was then proposing to the House to read a Bill for the first time which was to enact that these moneys should have become a part of the Trust funds two months before the time he was then speaking; but, had that Bill never passed, I should still consider that the Treasury were bound in good faith, by their own interpretation of the Comptroller's Act, that it should be considered to extend to the Trust moneys. | ||||||||||||||||||||||||||||||||||||
| 10. | By Mr. Carleton.] Is there any correspondence on the subject going on at the present time? —There is.
On motion of Mr. Carleton, Mr. FitzGerald was thanked for his attendance. The following questions were then submitted to Mr. Woodward. |
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| 11. | By Mr. Carleton.] On referring back to your evidence (20th August), I find the words "after the passing of the Public Revenues Act, Mr. FitzGerald called on the Treasury to pay this deposit (£24,000) into the Public Trust Fund. There was £30,000 in the Bank. I have no doubt that the amount of £24,000 was paid back in full to the Public Account:" I presume you mean £24,000 in round numbers?—I do. The exact sum paid in was £24,399 3s. 5d., composed of two sums of £18,399 3s. 5d. and £6,000 respectively. | ||||||||||||||||||||||||||||||||||||
| 12. | In other words, you paid back the whole sum of £24,431 2s. 2d. less £31 18s. 9d.?—That is the case; both the similarity of the sums and the difference are accidental. | ||||||||||||||||||||||||||||||||||||
| 13. | Will you explain what you mean by saying that the difference is accidental?—I mean that we did not intentionally pay back £31 18s. 9d. less than the given sum. | ||||||||||||||||||||||||||||||||||||
| 14. | Do you desire to send in a written statement for the information of the Committee?—I have already furnished Mr. Stafford with a written statement, my history of the transaction. |
On motion of Mr. Carleton, Mr. Woodward was thanked for his attendance.
On motion of Mr. Carleton, Resolved, That the Chairman be directed to call for the papers furnished to the Hon. Mr. Stafford by Mr. Woodward, bearing upon the question referred to the Committee.
On motion of Mr. Carleton, Resolved, That the Chairman be directed to call for Mr. FitzGerald's present correspondence with the Government.
On motion of Mr. Carleton, Resolved, That the Committee adjourn till Wednesday, the 2nd day of September, at 10 o'clock a.m.