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to be a very defective and dangerous system or want of system. These valuers have then to be communicated with from Wellington, and sometimes a month or more elapses before it is decided whether a loan shall be granted or declined. 1052. With reference to the constitution of the Board itself, will you state to the Committee in what respect you think that capable of amendment ?—As is known, I proposed formally at the statutory annual meeting of the policy-holders that there should be a Board consisting of seven persons, four to be elected by the policy-holders and three to be nominated by the Government; the Board so constructed to elect its own Chairman. I think a Board so constituted would work very well. It has been said that the great bulk of the policy-holders throughout the colony would know nothing of the personal qualifications of the four members to be elected ; but the candidates themselves, the four men to be elected, whoever they were, would visit the different centres of the colony during the election, as was the case in the recent election. And indeed, Mr. Bell and myself, who were not candidates, at the request of policy-holders in the institution, went to Dunedin recently, at our own cost, to address the policy-holders there upon points connected with the management of the association. So that Ido not think there is very much in the statement that the policy-holders would not know whom they were electing. 1053. Do you think the change you speak of would popularize the association ?—I am confident it would do so. I believe that if it were known to those policy-holders who are opposed to this too-popular elective system as they term it, and if it were known even to members of the House who have expressed themselves- as opposed to the elective principle, that there exists in the Act legislative provisions of the most restrictive character, the constitution of the Board which I have suggested would not be objected to, for here the Government is safe-guarded in every possible direction. I have said at meetings of the Board, and to the Colonial Treasurer, that, so far as the interests' of the colony are concerned, it really would not matter if the Government had not a single representative at the Board, so well is every interest of the Government protected by this Act. There are provisions which enable the Governor to make regulations respecting the investment of the association's money, and he is authorized to take steps, if need be, for the effectual recovery of principal and interest in every case. Under section 65 the Colonial Treasurer has what is techincally termed his "right of inspection." He may step in at any moment and bring us to a standstill. Then, there are provisions relating to the periodic audits, which must be taken monthly and yearly by the Controller and Auditor-General, or by his officers. Then, under clause 67, the Governor shall at a stated time—so that it is mandatory—cause an investigation to be made into the financial condition of the affairs of the association by an actuary or actuaries. I mention this because many people are not aware that such restrictive provisions are to be found in the existing Act of Parliament. 1054. Under the Board you propose, would not the General Manager remain practically the carrier out of the instructions of the Board ?—He would be the chief executive officer, acting under directions from the Board. 1055. That would be practically the difference between the position of a manager under the Board you propose and of a manager who would act if the other resolution were carried of handing the affairs of the association back to the hands of the Government?— Yes. My belief and my desire is that under the Board which I have proposed the business of the association should be placed upon a purely business basis. I hold that it is at the present moment more or less subject to governmental or political control; and that evil—for I call it an evil—l think would be intensified if the institution went back to the Government. 1056. Do you look on the going back to the Government practically as meaning that there must be a Besponsible Minister of the Crown directing its affairs ? —lt would amount very nearly to that. Of course, it is impossible for me to say how much of the time of the Minister would be taken up—that is to say, how much time he would care to devote to the affairs of the association. But this I know: that, if he were to devote to the duties of the position as much time as the duties would legitimately demand, he would have little time to devote to his ministerial duties. One or other must suffer under such a combination of duties. 1057. What would be your opinion of an alteration of the system which would transfer the management of the association to a high statutory officer, he being a life-insurance expert, in place of a Board, such officer to be appointed by and responsible to Parliament ? Have you considered that point ? —The high statutory officer, whoever he may be, should be a man trained in the science of life insurance. That point has been well elaborated by Mr. Sprague, the leading modern English authority on life insurance, in a lecture recently delivered by him before the London Institute of Actuaries. 1058. Would not such an officer necessarily require the assistance of a Board of Advice on the subject of investment of the funds ?—Certainly, there should be a Board of Advice; but very much of the success of the institution depends on the qualities and character of the manager. Its prosperity must depend largely on the character of its chief officer. The Board should be composed as far as possible of men of large experience in regard to current rates of interest, the classes of security offered for investment, and so on, so that the security taken by the association may in all cases be the best obtainable. May I say that I have observed this: It appears frequently to be assumed that, because a man is what is known as a good business-man in his own line of business, that therefore he is necessarily and naturally qualified to become a member of a Board such as the Government Life Insurance Board. Now, I have found some of those gentlemen, who, otherwise may be regarded as good business-men, not at all the sort of men whom I should appoint for the carrying-out of such a function. Special qualities are required, and men should be selected for their special fitness. 1059. Will you say, then, what your opinion would be as to the fitness for such a position of a Board, consisting of, we will say, two or three of the highest officials here, who would be eligible