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1105. You started by stating that there was no risk—that the security of the colony was mythical. Now, from the fact you have stated, have you not conclusively proved that there is a very great risk incurred by the colony in carrying on the business of the association as it has been carried on ?—I do not think I have proved anything of the kind. I have shown this : that we are getting 4f per cent, for one moiety of our investments with the Government, and 5 per cent, for the other moiety. That is a rate of interest which would just a little more than cover the cost of managing the association. But, beyond that, we have other investments to the amount of about £130,000, made by the Board, which yield 6-_- and 7 per cent.; and I hold that we ought to be investing nearly the whole of our funds at nothing less than 6or 6J per cent. I speak of what it is possible to get upon the authority of the last report of the Australian Mutual Provident Society, which says : " There seems little reason to suppose that any difficulty will be experienced for many years to come in maintaining a minimum effective rate of 6 per cent." 1106. Does that report refer to investments in the other colonies as well as in New Zealand, or does it refer to New Zealand only ?—lt refers to the whole of the five millions invested by the Society, wherever invested. That is shown in a table accompanying the report. 1107. Is Mr. Luckie's statement, as given in evidence, untrue, that the investments of the Government Insurance Association in New Zealand yield per cent ?—I do not think the average yield is h\ per cent. 1108. Is that statement correct or not ?—I should say it is incorrect. 1109. Then, is it also incorrect that the Government securities yield an average interest of £4 14s. lOd. to the association?—l should think that is about the all-round average. 1110. That is, about 4f per cent. ?—That is what I have said : and we cannot pay bonuses out of 4f per cent. 1111. Mr. Levestam.] You say that the Government make a profit out of the association by borrowing from them at a lower percentage ?—Do you not understand : the position has to be inverted ? I do not sh,y they make a direct profit; but certainly we make a loss through the investment of our money at such low rates. 1112. You say that the Government make a profit out of the association?—l say the Government cannot borrow 7 £500,000 in this colony, outside the association, at 4-J per cent., or at an average of 4f. 1113. If the Government has borrowed this money from the association, they must have borrowed it from the Board ? —No. 1114. From whom, then ?—I have already explained that we hold £359,000 worth of 41-per-cent, debentures, having a currency of seven years, which investment the department had made before the association came into existence. 1115. Then, that has only reference to past transactions—to the Government making a profit out of the association, or the association suffering a loss by the Government —that cannot be used as an argument as far as the present state of affairs is concerned?— The Board has steadily declined to deal with any security bearing less than 5 per cent, interest, because, as I have said, our valuations are based upon a 4-J-per-cent. calculation, and any investment which is not equal to 4J per cent, plus the cost of investment means a loss. 1116. You stated that money ought not to be invested at a less rate of interest than 6J per cent? —That is the minimum I should fix for the present time. The market-rate varies, of course. 1117. Then, if that is the minimum that you would fix, how is it that the Board has lent very large sums at 6 per cent. ? —My view is not paramount at the Board. I stated, on my first examination here, that the investment-side of the business of the association has not received the amount of attention it should have received. 1118. And still you advocate having a Board on which the policy-holders should be more strongly represented?— Yes; by one more member. 1119. I believe you have stated that the business-capacity of the Board was not very great?— I did not put it in those words. 1120. You said the defect was a want of business-capacity ?—Will you allow me to explain that I directed that remark to one particular individual, whom I thought I had sufficiently indicated.' He is not a member of the Board; he is the Manager, if I must speak plainly. 1121. The investments are made by the Board as a whole?— Yes. 1122. Has the Board made investments which were bad and unbusiness-like ?—To that I say decidedly, Yes. 1123. Then, if the Board has made unbusiness-like investments, it may do it again?—-The same Board might do it again ; but I did hope to get a better Board. It does not follow, because this Board has not proved a success, that another Board, properly and more carefully constituted, should fall into the same errors and make the same mistakes. But I will say this for the present Board, that I am confident, with the experience it has undergone, it will be more circumspect in all its future acts, if it continues to exist. 1124. You want an increased elective element on the Board?—l say that the gentlemen who compose the present Board have not developed the business-powers they possess, for the reason, principally, according to my view, that they have been dominated by a stronger will. 1125. You say they have been "dominated by a stronger will:" are you aware that the elected members, or the majority of them, voted on the Board when these unbusiness-like transactions were carried out ?—Yes ; and, for so having voted, the policy-holders themselves have effectually disposed of one of them. 1126. Very well; but you say in your evidence that you do not think there is much argument in this—-that the policy-holders do not know the Directors, because yourself and Mr. Bell have travelled to Dunedin to address the policy-holders ? —I do not attach much importance to the statement that the policy-holders are not likely to know whom they are electing to the Central Board, because, as is alleged, they must of necessity be all Wellington men. It should be borne in mind