D.—No. 1

20

PAPERS RELATIVE TO THE

as petty cash. It is clear, therefore, that the sum of £523 6s. Id. ought to have been deposited at the Bank and drawing interest, as the sum of £500 in the hands of the Accountant was the utmost amount authorized to be kept out of the Bank as petty cash. Besides this extra £523 6s. Id., the Treasurer had the balance of the Road money in his hands, amounting to £853 4s. Bd., and the Education Board money, amounting to £105 12s. 3d. Whether the Treasurer abstracted any portion of the balances for his private use cannot be determined; but, in withholding from the account at the bank so large a sum as £523 6s. Id. at the time when the Accountant held £500 as petty cash, the Treasurer has exposed himself to suspicion. It remains next to consider the charge that the Superintendent had the use of the moneys found deficient on the 30th June, 1860, knowing them to be public funds. The Provincial Treasurer insists that the loans to tho Superintendent came from the Provincial Treasury ; that the Superintendent knew it; that he remonstrated with him at the time, and told him that he could not give them otherwise than from that source. Here wo must inquire whether the Provincial Treasurer had an object to gain in making these assertions; for ho could scarcely suppose it any mitigation of his offence that the moneys he had abstracted were lent to his official superior, with a view, it might be suspected, of entangling that officer and gaining his own selfish ends. And here the Treasurer's evidence furnishes a clue to his proceedings. Wo find that he feared to treat the loan as a private transaction, lest he should be unable to force the refund from the Superintendent. The Committee of the Provincial Council maintain the complicity of the Superintendent on the grounds that the Treasurer supports his charge by a circumstantiality that carries conviction of the truth ; yet, with the exception of the broad assertion that he told the Superintendent that the moneys were public moneys and could be no other, the whole of his circumstantial evidence goes scarcely more than to prove —what His Honor does not deny —that money was lent. What is not known, and cannot it seems be now proved, is, that the Superintendent positively knew, or had been warned, that the loans came out of public funds. Here the bare assertion of the Treasurer cannot be taken, after his own admission that he believed, if he had treated tho loan as a private transaction, he would have been kept out of the money. The Superintendent, in his public address to the colonists of Otago, solemnly avers that any transaction he may have had with Mr. McGlashan was not in his capacity of Provincial Treasurer, and did not involve any funds at the time in his hands as such. And here, he adds, it may be proper to state that the Provincial Treasurer is a solicitor in private practice, and, as such, with moneys of clients passing through his hands ; and also that he was Treasurer to one or two public bodies (Road and Education Boards), with sometimes considerable funds in his hands. The Superintendent here evidently wishes to draw a wide distinction between moneys belonging to the Provincial account and those belonging to the Road and Education Boards. The latter he would not treat as public moneys at all; and would seem to hint that the money lent to him was taken out of those funds. But these were as much public moneys as those belonging to the Provincial account; and if the only difference between the Treasurer and the Superintendent were, which of these funds the money was abstracted from, there would be no essential difference in question. The offence of him who, in violation of a public trust, appropriated either of them to his own private use, is unquestionable. It seems from the foregoing, that the inquiry is narrowed to this: Can it be shown from facts established, and from the Superintendent's own evidence, that he must have been morally sure that he was receiving public moneys for his own private use. First, as to the total amount borrowed. We have seen that on tho 28th of February, 1860, the amount outstanding was £486 13s. 4d. About the 10th of March following, Mr. McGlashan lent the Superintendent a further sum of £600 in cash. Mr. McGlashan recollects giving it him from the following circumstances : He happened to go to the Superintendent's office, but finding Mr. John Jones there, he immediately retired. In a short time the Superintendent came into the Treasury office in a great fluster, and said he was just settling a £9000 transaction with Mr. Jones ; that it was inconvenient for Mr. Jones to pay him the money that day ; that he was to do it " to-morrow;" that he needed £600 that day, and that if he did not get it he would suffer a heavy loss ; that if Mr. McGlashan would give him that sum, both it and the previous sum of £400 odd would be repaid the next day, when to a certainty he would be in ample funds. Mr. McGlashan believed his statement and gave him tho money, —and as it was to be repaid the next day, and Mr. Jones was still with him, lie got no voucher for it. The Superintendent did not pay it the next day, and stated in excuse that some papers to pass between him and Mr. Jones had not been completed. This excuse he several times repeated. Some time afterwards (Mr. McGlashan cannot say how long) he got a cheque from the Superintendent for the sum, dated 10th March ; but Mr. McGlashan states that it is not the date on which he received the cheque. The impression on his mind is, that the Superintendent got the money on the date of the cheque, viz., 10th March, on which day a sum of £600 was received by Mr. McGlashan for Education purposes on the Superintendent's warrant. And here it may be observed that Mr. McGlashan kept no private account at the bank, and that the Superintendent was aware of it. Mr. McGlashan states that ho kept his private funds in the office, and that he had generally £50 or £100 of his own in the chest. On reviewing the evidence up to this point, it is found that the Superintendent in his letter to the Governor states that he had for years been finding the means for making up the Provincial Treasurer's deficiencies. In the month of June, 1859, the Superintendent assisted him with a loan of £500, holding, as collateral security, Mr. McGlashan's cattle for sale. This loan was repaid by Mr. McGlashan in November, 1859. On the 28th February we have seen that the Superintendent owed the Treasurer £486 13s. 4d. Now could the Superintendent on the 10th March following reasonably suppose that the Provincial Treasurer could, under these circumstances, at a moment's notice and at the public offices, lend £600 in cash out of his private funds ? But further, it is found, that, apparently on the day on which the money was advanced, and at the time when the Treasurer held a