D.—No. 1.

CASE OF MR. MACANDREW.

27

come into considerable funds) the Provincial Treasurer's account was put all right. Such was my impression on assuming office. It is possible that had my impression not been that now stated, I might have taken the step indicated by the Auditor-General, with a view to protect the public chest; although at the same time, my regard for Mr. McGlashan, with a very large and helpless family dependent upon him for support —my sense of his zealous and laborious services in Britain towards the interests of the Province, as the Secretary of the Otago Association, might have, and probably would have, prompted me to have protected and shielded him from ruin, even at a sacrifice of a strict sense of duty, —the more especially as I firmly believed that his professions to me of the most poignant regret at having been so far led as to tamper with the public money, were genuine and sincere; so much, so, that I felt assured of these moneys being perfectly safe in his hands for the future. I had not the slightest doubt when I took office and appointed Mr. Morris as my Auditor, that the balance would be correctly verified at the Audit. I admit that when prior to the June Audit Mr. McGrlashan revealed to me the state of aifairs, I ought to have action on the matter. So far lam to blame. My only excuse is that stated above. 10. On the 11th March, 1860, the Provincial Treasurer lent you £600 in cash. Respecting this loan I recall to your recollection the following facts: —You have stated in your letter to the Governor that you had for years been finding the means of making up the Provincial Treasurer's deficiencies. In the month of June you assisted him with a loan of £500, for which you took his acceptance. For this accommodation you stated to the Manager of the Union Bank that you held as collateral security cattle for sale belonging the Provincial Treasurer,' —thus showing the pecuniary difficulties in which the Treasurer was placed. The acceptance was discounted at the Bank, but was not retired before due. It was renewed, and paid on the 11th February, four days after maturity. At that date you owed the Provincial Treasurer £486 13s. 4d. Could you on the 10th March following reasonably suppose the Provincial Treasurer, under these circumstances could, at a moment's notice, and at the public offices, lend you £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 a time when he held a considerable balance of Education funds in his hands, your warrant fo.r £600 for Education purposes was issued to the Provincial Treasurer. The whole of these facts are against the conclusion which you seek to establish, viz., that the £600 was advanced from private funds. Have you any explanations to offer ? I was not aware that the Provincial Treasurer held a considerable balance, or any balance at all, of Education funds in his hands on 10th March, when he applied for £600 on account. Had I been so aware, the warrant would not have been given. The Treasurer, whenever he required money on account of Education sent a slip of paper into my room stating that the sum named thereon was required by him as Treasurer of Education Board, and, as a matter of course, I invariably signed the warrant without further inquiry (as Mr. Logan, my clerk, can testify). The fact of his having advanced to me a sum on the same day (if it was so) is a singular coincidence, but nothing more. It appears, however, from my cheque book, that there was no such cheque drawn by me then, but that it was throe weeks previous to that date; and here I may remark that, during tho months of February, March, and April, while I had a quarrel with the Union Bank, I had ceased drawing cheques for presentation, they were merely vouchers. As to my reasonably supposing that the Treasurer was in a position to advance this money at the time out of his private funds, it certainly does seem improbable now that the whole facts and circumstances of the case are disclosed. At the time, however, I did not give the matter much consideration, being aware that he had private funds passing through his hands Among others, I may state that he showed me an authority to draw on a client in Edinburgh for, I think, £500, which I offered to negotiate, but which, I presume, he negotiated otherwise. I also understood that moneys were being lent out at mortgage by Mr. McGlashan on behalf of clients. One person who, if I recollect rightly, told me that he had been in treaty with Mr. McGlashan in this way was Mr. Jones, of Jones and Williamson. Although not bearing very materially perhaps upon the point at issue, yet it may tend to show the little importance which I at the time attached to these comparatively large transactions with Mr. McGlashan, when I state that a very large proportion of the monetary transactions of the Province has for years been, and were still, passing through my hands. This will to some extent be best understood by stating that, at the period in question, I had over £28,000 under discount at the Union Bank, and about £8,000, I think, of an overdraft at the same time. I merely allude to this as indicative of the little importance which I attached to the sums at the time, and the small consideration bestowed upon them by me as to the sources from whence Mr. McGlashan derived them. Of one thing I felt certain, that he had got fairly before the wind when I took office ; and I had also good reason to believe that he had moneys of clients in his hands temporarily. Mr. J. McGlashan, examined. 1. You are the Provincial Treasurer? Yes. I have been so since January, 1854. 2. Have you received written instructions regulating your duties as Provincial Treasurer ? None as far as I recollect. 3. Have you given securities for the faithful discharge of the pecuniary trust confided to you ? Yes. 4. In whose custody is the bond ? In the custody of the Superintendent. 5. Was the cash balance in your hands as Provincial Treasurer regularly verified by the Board of Audit prior to the Provincial moneys being deposited at the Union Bank ? Yea. " Gala " Case. 6. Produce the voucher and warrant for the payment of £1712 on account of immigration per " Gala." Voucher and warrant put in accordingly. 7. This voucher should be supported by a reference to the contract under which the expense was incurred. Will you hand in the original contract ? It is in the hands of the Superintendent. 8. It appears on reference to Council papers (C) that the agents of the contractors (James Macandrew and Co.) for the conveyance of immigrants by the "Gala" were Messrs. Gladstone and Co? Yes. J y