Mr Ward Recalled.

Joseph George Ward was recalled.

Mr Young: I would like to know if Mr Ward has been able to find the letter 1 referred to yesterday (a letter from Mr John Murray) ?—Witness: I have no such letter.

May I ask if you had such a letter ?—If I had such a letter I would have said so.

His Honor: I understand, Mr Ward, that this sum of £55,150 represented the balance due by you to the association on your current account with the association after deducting, of course, all sums which you had paid into your credit ?—Witness: That is so, sir.

And this balance against you was made up partly, I understand, of losses made in various shipments made by you ?—That is so.

Those shipments were made on your account not on the company's account ?—The shipment of grain to London were made in my name They were debited to me in the association account, so that the association practically were not making them on their own account.

If there had been profits they would have gone to your private account ?—No; they would not.

Do you mean to say that you were to bear the losses (if any) but not take the profits ?—The position was this : the shipments made to London, as far as grain was concerned, were made in my name, except in cases where they were made for and on behalf of farmers. The debits went to my account. I may further say that I did not know until after I was advised of the position in Wellington that these debits had been made at all.

Ought they do have gone to you ? Why should they have gone to you if the association in your absence used your name ? Why should they have been debited to you ?—My own wish was very well known that the association should not speculate on its own account. A great deal of commission business was carried on among its clients. I was anxious to avoid a speculative business so far as the association was concerned.

Supposing you bought a lot of oats and were debited with the price of them, and these were sold in London at a profit, surely that profit would be credited to you and not to the association ?—If the operation had been carried on for the purposes of my own private account that would have been so, but as a matter of fact that was not so.

I understand these operations were carried on on this basis : If there was a loss you were to bear it, and if there was any profit the company were to get it. That is the result, is it not?—That is as it has worked out. I may state that the whole of the sheep purchases made by the Ocean Beach Freezing Works were carried to that account.

These would be really on your own account?—Yes, on my own account. Very heavy losses were incurred, and they were debited to me.

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And if there had been any profits you would have got them ?—That is so.

Would that not have been the case all round ? The difference is this : I gave to the association, which I regarded as a trading concern, the whole of the commission business attached to the freezing works, amounting to about £2000 a year, and in consideration of their getting that, in which there was no risk, they carried on all the sheep purchases for the freezing works in my name. Either profits or losses in that account would have gone to or against me, but that was not the arrangement so far as grain was concerned.

The association then did not speculate in grain?—No, it practically did not. If there had been profits in grain the association would have got the credit, but unfortunately there were losses.

And you bore them ?—I bore them.

The bank seem to have relieved the association from these ?—I should like again to state with reference to the bank agreement which has been referred to, that I was not told by anyone that it was proposed to put that £55,000 in any particular list. I did not know that lists were to be prepared, and I had no knowledge of the intented operation between the banks. All I knew was that losses had been made, and when the investigation took place, showing that £55,000 was the amount, and I was advised of that. I believed that I would be able to reduce the amount to a very great extent myself. When I was asked to give a promissory note myself, I gave it.

The effect so far as I can see of putting the amount in the left hand column is to release the association from the amount but put the burden on yourself personally ?—That is so. I gave the promissory note bona fide under the belief that I would be able to meet a great portion of it. At that time I held £23,000 worth of shares in the association, which I cooked upon as being worth their face value, and £16,000 worth of shares in Nelson Bros, with a reserve of £9 upon each share.

But these were pledged ?—They come in now as part of my losses. The depreciation in properties that has taken place as the result of the troubles of the association has very materially reduced the earning power I had at that date, and the whole of my liabilities in the present position are very different to what they were then.

These transactions took place in October, and your affidavit states your position as at the time the bank went into liquidation in December. You say that in that time there was this depreciation ?—There has been a direct depreciation in the value of the shares alone since then of £37,000. My own opinion, at any rate, if my private affairs is that they were closely mixed up with the association, and a large business, such as that is, having become practically disorganised and written about and talked about, with the usual results, it has depreciated to such an extent that it has affected everything I have. My business, as a matter of fact, is entirely different to what I contemplated it would be at the time the promissory note was given. As an instance of depreciation in property, it is well known that the company had active opposition from another freezing works, in which about £40,000 has been lost in a very short time.