D.—No. 1

•stated that it was irregular altogether to have made out the warrant in favour of himself and Mr. Reynolds individually, and that he would issue a new warrant in favour of the contractors. He on the same day handed me the second warrant and receipt, saying he had recalled the first one, and requested me to give him up the first warrant, which I declined to do, as it had been before the Auditors. By Mr. Dic7c.~] —In reference to Voucher 738, Clutha Coal Field £1000 —can you give us any further information ? I can give no further information. I may state with reference to this voucher fhat the warrant was presented while I was confined to bed unwell, and as I could not sign a cheque the warrant was presented to the Bank either by the Superintendent's clerk or by the accountant, with an explanation of the circumstances, and the money was paid and the cheque afterwards given. I do not however think that I would have objected to give the cheque on explanation of the object, as the lessee of the Clutha Coal Field had shortly before asked me to use my influence to get the materials from Great Britain as early as possible. By the Speaker."] — How do you know that the sum was wanted for the Clutha Coal Field? I made inquiry both of the Superintendent and the Accountant on my return to the office, and when I gave the cheque for the amount. By JUr. Tarlton.~\ —Do you remember any other instance in which warrants have been paid without your having first given a cheque for the money ? I think that in a few other instances money has been paid by the Bank on the Superintendent's warrant in my absence. By Mr. Dick.] —The voucher attached to the warrant states it to have been for the purchase of a Bill of Exchange from Messrs. Paterson and Co. Is it customary for the Government to purchase bills on home, and are there no funds in the hands of the Home Agents ? The Home Agents certainly had no funds in their hands for the purchase of the plant of the Clutha Coal Field, nor for any other purpose than Immigration. Ido not remember any instance of the Government purchasing bills on home, nor am I aware of any previous occasion that the Government had for making a purchase to the extent of £1000. Do our Agents at home never pay for anything but Immigration without a remittance ? Yes, they have been instructed to pay a bookseller's account for books furnished for the schools, and an account duo to Blackwood for the Agricultural Journal; but Ido not remember any other instances. I wish to explain that the funds in the hands of the Home Agents were to be devoted to Immigration, as the sources of these funds were remittances made to them, and debentures sold by them expressly for the purpose of Immigration, and sums paid by immigrants towards their passages. Do you know on whom the Bill or Bills of Exchange were drawn, or did you see them or know anything about them ? Ido not know. lam unable to give any further information than what the voucher affords. I did not see the Bills of Exchange, possibly for the reason I have already stated, that I was confined to my bed ; the Superintendent called at my house, but I was too unwell to see him. Is it the usual custom to remit by bank draft ? lam not aware of any custom in the matter, as the purchase of the plant for the Clutha Coal Field is the only instance, so far as I remember, of the Government ordering goods from Britain, except in the instances already mentioned. Why did you not afterwards insist upon getting the third of exchange, and attaching it to the voucher ? It did not occur to me, nor was it suggested by the Auditors. By Mr. Walker.] —Paragraph No. 4 in the Auditor's Report states a discrepancy between the balances in the cash-book and the Bank-book, amounting to £1073 15s. 4d. Can you explain how this occurs ? The whole of this sum was in the hands of the Superintendent at that time ; but what, I observe, the Superintendent states in explanation of this discrepancy is substantially true as to the state of balances at other times. The Auditors state in their evidence apparent discrepancies at various times, once as high as £1800. Were the amounts involved in these discrepancies always in the Superintendent's hand, or are they to be accounted for in any other way ? The discrepancies occur during the whole time between 30th September, 1859, and 30th June, 1860. If there were any such discrepancies, they must have been apparent and not real, and caused in this way. For the public convenience, I have been obliged, much against my inclination, to advance sums of large amount in payment of wages before any warrants were issued, and merely upon the certificates of the heads of Departments. In paying the wages the course followed was this : Schedules were produced to me stating the names and sums due to each labourer, the sums were added up in pencil, and such of the labourers as did not appear for payment were scored out, and a warrant obtained for the amount of actual payments, the difference being returned to me. This practice exists even yet, but not to the same extent as formerly. The foregoing statement refers to labourers paid here (Dunedin) ; but in the case of those engaged at Invercargill, large sums had to be remitted, as is still the case. But since the appointment of a Government agent at Invercargill, he is debited with the sums remitted, which I pay on a letter of general authority from the Superintendent, who issues warrants when the accounts are transmitted by the agent. , * Mr. Tarlton.] —In what way did the Superintendent obtain the balances from you? The Superinterident obtained the money from me in two sums, upon an urgent statement that he had omitted to draw money from the bank during bank hours, and would repay on the following day. In the first instance, as he did not pay on the following day, I obtained a Bank cheque dated the day after the day I got it. On presenting that cheque to the Bank I was told there were no funds. In the second instance he told me that he was about to settle a £9000 transaction with Mr. Jones, and •on getting the money would repay bosi sums. I happened to go into his room shortly before, and saw Mr. Jones in conversation with him, and did not doubt his statement. The money was not repaid then, but has, since the Auditors' first report, been repaid to me, except a balance of about £116 sterling. The Speaker.] —Will you state the respective amounts borrowed, and the dates of lending ? £486 and £600, in February and March last. 3

9

CASE OE MR. MACANDREW.