Evading supply


M E L B O U R N E .


Thursdav. 31st August 1865
There is very naturally much speculation in political circles here as to the next move upon the Minis terial chess-board, but the opinion which very decidedly predominates, now that his Excellency the Governor has at length found himself compelled to join the anti-ministerial side of the game, is that the Ministry are very nearly, if not quite, checkmated, and that their resignation may be looked for at a very early date. There is an ominous silence too on the part both of the ministry and of the journal which is usually regarded as their organ, that in itself seems to be significant of the fact that Messrs M’CulIoch, Geo Verdon and Co have by this time pretty well exhausted the resources of their would be coercive policy with reference both to the Upper House and the Governor himself, and that they must either beat a hasty retreat back into the old paths of Constitutional Government or make way for others who are more scrupuious as to abandoning those paths in obedience to the wishes of a headlong majority. In the meantime the payment of the Civil servants seems as distant as ever, and it is generally considered that. whatever prospect the Ministry may have had of obtaining a loan from the banks for the purpose of carrying on the business of the country previously to the publication of his Excellency’s message to the two Houses-and it is said that an application having that object in view was addressed to those institutions before the date of that message-their chances of success in that attempt are now so small as to be quite out of the range of probability. Should the present state of things last much longer, it is very clear that a very large amount not only ot inconvenience but ot real distress will be created amongst the numerous class of small tradespeople in the suburbs who are dependent in so large a measure upon the custom of the Government officers for their support, and that, as a natural consequence, Mr Commissioner Noel will have a busy time of it before many months are over. With reference to the loan question referred to above, I hear that the managers of the several banks appealed to by the Ministry had an interview with the Treasurer this afternoon; but, although it is rumored that the banks have declined, under existing circumstances, to make the advances asked for, the actual result of the interview remains uncertain.

Sydney Morning Herald
Monday 4 September
The Rangatira steamer brings papers to the 31st

ultimo from Melbourne


The Argus of that date … remarks, in reference to the Parliamentary crisis yesterday, the Legislative Council took into consideration the Governor’s message in reference to the present political crisis, and adopted an address in reply thereto the address gives a history

of the circumstances which, led to the “deadlock,” and throws upon the Assembly the entire responsi-

bility of the existing state of affairs. it elicited but little discussion, and was passed after an exhibition of

the faintest opposition on the part of Mr Cole The negotiation entered mto by the Ministry with the

banks, a proceeding distantly alluded to by Mr. M’Bain during the sitting of the Legislative Assembly yesterday afternoon, and as mysteriously admitted by j

Mr M’Culloch to be a fact, appears to have taken this form. A letter, signed ” G F. Verdon, . has been

forwarded to each of the regular banking institutions of Melbourne, asking whether they would be prepared to allow the Government a cash credit to a certain sum, subject to interest, and to an arrangement to be approved and consented to by the Governor

In COUNCIL, that the Government might be enabled to pay the civil serrants pending the passage of the Appropriation Act. An answer was requested by noon this day, Thursday. The date of these letters is antecedent to that of the Governor’s message. Rumour

has it that one only of the banks-the London Chartered Bank- has exhibited any willmgness to close with, these extraordinary terms

The first case (says the Argus) in which a defendant in an action for debt has pleaded impecuniosity

is a civil servant on account of the stoppage of the supplies, was heard before the magistrates at the

Emerald Hill Police Court yesterday, but it is not Improbable, if public payment is suspended much

longer, that many similar cases will shortly have to be recorded. John Sullivan, who stated that he was

in the civil service (in what department did not

transpire), was summoned by lames Cullen, a house

agent, for the recovery of £5 5s, for use and oocupation of a dwelling-house. Defendant admitted the

justice of the claim, and said he should have satisfiedthe debt had the payments due to him from the Government been made in ordinary course, but in consequence of the moneys due to him having been withheld, he had not the means wherewith to pay his rent. In answer to Mr Whiteman, one of the presiding magistiates, defendant said he expected to be able to

pay the sum claimed within a month, as he anticipated

the Government would have paid him by that time. The Clerk of the Court, and the inspector of police

present, expressed a hope that the stipend of the civil servant would not remain unpaid for more than

another month as, in that cast, the jocularly remarked, they might both be placed m the position of

Mi Sullivan Mr Whiteman said he hoped the defendant would get the money due to him in a month, and he should make an order for the payment of the amount claimed at the expiration of that time. 



Saturday 9 September 1865
THE correspondence between the treasurer and the banks relative to the accommodation solicited by the former, has been published, but adds little to our previous knowledge of the circumstances. It would appear, however, that the London Chartered Bank acceded to the request without hesitation, the application being dated on the 29th ultimo, and the reply acceding thereto, on the 30th. In fact, the confidence reposed in the Governor by the manager, would be somewhat remarkable, if we did not know that Mr McCulloch is one of the directors of the London Chartered Bank. The other banks sought information, as to the probable amount of the cash credit required, the time for which it would be needed, and the method in which repayment would be made. None of this information is deemed necessary by the complying bank. The manager of the Colonial Bank very pertinently remarks “As I am not aware that any Act of Parliament exists, empowering the Governor in Council to raise loans, I will thank you to inform me whether such power has been, conferred on his Excellency in his Commission or Instructions from the Crown?” To which Mr Verdon, with a simplicity which would be amusing if the subject were not such a serious one, replied :-“In reference to your third question, I would observe that I am not aware that there is any Act of Parliament which forbids such an arrangement as that we propose, and which is necessary in order that one of the chief duties of every Government mav be fulfilled.” A reply which reminds us of the country justice who discharged a prisoner accused of stealing a pump handle, because he could find no Act of Parliament which provided a punishment, for stealing pump handles, the managers of the Bank of New South Wales was also desirous to know whether, the Governor and the Executive Council have the power to borrow money in the manner proposed; to which Mr Verdon very, curtly replied : “If the Government did not believe that they possess the power of making an arrangement upon which the first duty of Government, the maintenance of the public credit, is dependent, it would not have been my duty to have addressed you.”

The following is the joint reply of tho five banks by whom the accommodation. :-was refused: 

Melbourne, 4th September, 1865. – The Honorable the Treasurer of Victoria. Sir, Begging reference to the correspondence with the several banks parties to the railway loan contract, on the subject of a proposal to open cash credits to the extent of the funds available at the credit of the public account for the purpose of enabling the Government to make payments and conduct the public business without the intervention of the Commissioners of Audit, we, whose names are subscribed, on the part of the banks which we represent having given so important a question due consideration feel ourselves compelled to decline acceding to your request. 2 —Anxious as we are to maintain the Constitution, support the Government, and promote the public interests, by any means in our power, yet, under a conviction deliberately arrived at, after having taken the best advice within our reach, that we cannot legally afford tho accommodation applied for, we feel it to be our duty respectfully, but firmly, to state, that we cannot comply. We have the honor, to be, Sir, your obedient servants,-For the Bank of Australasia, (signed) J. J. FALCONER. for the Union Bank of Australia, (signed) J. CURTAYNE, Manager. For the Bank of New South Wales, (signed) J. BADCOCK, Manager. For the Bank of Victoria, (signed) J. MATHESON, General Manager. For the Colonial Bank of Australasia, (signed) ADAM BURNS, General Manager. True copy-A.H, 5 | 9 | 65.
We are informed by the Age, that the Government have no present intention, of attempting to withdraw the public accounts from the non-complying banks.


Bendigo Advertiser 

Friday 15 September 1865

The Argus says : –
The preliminary steps were taken on Wednesday to test the legality of the course pursued by the

Government and the London Chartered Bank, with reference to the public funds. The Supreme Court will to-day (Friday) be moved for leave to file a criminal information against George Verdon, George Higinbotham, and John Bramwell, for conspiring ” with one Charles Darling,” to deal with the public account in a manner not provided for by law. Mr Ireland, Q.C., and Mr Wood have been retained on behalf of the mover in this matter. Confession of judgment was made yesterday by the Government in the third action for £40,000 brought against them by the London Chartered Bank. Judgment was signed about noon, for the sum named, and £7 Is 4d costs.
It is reported that, as a reward for the accommodation rendered to the Government, the London

Chartered Bank is to have the “lion’s share” of the public account guaranteed to it for the next two years


The Goulburn Herald and Chronicle Saturday 16 September 1865 
(From the Melbourne Herald.)
The plot thickens. The crooked way that leads indirectly but surely to the overthrow of constitutional government in this country, is definitely and avowedly entered upon by the McCulloch ministry and their obsequious followers. These misguided people think that they will be able to retrace their steps at a future day. They deceive themselves; just as every delinquent does, when he first deviates from the path of duty, of integrity, and of honour.
The way back to the course of constitutional rule, which the country will insist upon, when it fully comprehends the nature of the situation into which it has been led, will be the path of political destruction to the authors of the present mad outrage against law, order, and legitimate government. Mr. McCulloch and his colleagues do not seem to perceive this now; but they will realize it with terrible distinctness a short time hence. Meanwhile the course of proceeding on the part of the ministry, which Sir Charles Darling has sanctioned, is essentially the commencement of a revolution. It is wholly subversive of that well-balanced conduct of public affairs, which is the very essence and spirit of parliamentary government. The beginnings of such matters are like the letting out of water. There is no knowing where, how, or when they may stop, or whether they can be safely brought to a close at all, without resort to desperate remedies. And if we for our own part do look forward hopefully to the certain restoration of constitutional government in this country at no distant day, it is because we have full reliance on the moderation, sound sense, and true love of rational freedom, which are the characteristics of our community, rather than upon the power or capacity of the McCulloch ministry to retrace their steps. The country will doubtless recover its accustomed mode of political rule. But the return will be made over the crushed McCulloch ministry.

These gentlemen indeed seem to have a presentiment of this kind; for, they shrink from making a plain avowal of the nature of the manoeuvre by which they have temporarily put themselves in funds. They took care to make no house in the Assembly last even ing, lest they should have to be the reporters of their own contemptible small cleverness in this matter. And in the Council, the poor old gentleman that acts as their representative there, had no explanation or communication to make on the subject. The arrangement, however, must not be kept from the public, on that account. And though ministers are ashamed to explain the trickster move, it is not for others to abstain from making known its precise character.

A lawyer’s small cunning furnishes the policy of evasion, by which ministers contrive to finger the hard cash, of which they stand in need so much at present, and the same shabby source of inspiration prescribes the means by which the evasion of the constitution is to be made to wear a legal aspect.

The sum of £10,000 is advanced on loan to the ministry by the London Chartered Bank. As soon as this is paid away in salaries, etc., and in order to prepare for a now operation of the same kind, the bank is to sue government for the recovery of the loan under the Act providing for the enforcement of claims against the crown, viz., the 49th of the 21st of Victoria. This Act enables the subject to sue the Crown and empowers the Supreme Court to give judgment in favour of the petitioner or plaintiff and against the Crown, in the same way, as in cases between subject and subject. By clause V. of this act, after judgment is given against the Crown, the petitioner or plaintiff receives a certificate from the proper officer of the court, which certificate sets forth that the petitioner has obtained judgment, order, or decree, as the case may be, in his favour, whereby such or such a sum was awarded to him. Clause VI. of the same act provides as follows, viz.:-” On receipt of such certificate it shall be lawful for the Governor to cause to be paid out of the consolidated revenue such damages as may under this act be assessed to or in favour of such petitioner, and also any costs which may be adjudged or awarded to him. by the said Court, and also to perform any decree or order, which may be pronounced or made by the said Court.” From these two clauses of the Act in question, it may be seen how the ministry propose to legalise their present proceeding. The bank will, as we’ve said, sue them for the £10,000 advanced by way of loan. The ministry will suffer judgment to go by default. The bank then having got judgment in its favour obtains the certificate referred to in Clause V. Armed with this certificate the bank proceeds to the Treasury which pays the amount, as authorised by the Governor, according to the pro visions of Clause VI., which we have above quoted.
And it is expected this operation, as long as Messrs. McCulloch and Co. think fit, will go on in a “vicious circle”-the bank loaning and suing, the ministry allowing judgment to be recorded against them, and the certificate for payment to be issued in favour of the bank, and the Treasury cashing this certificate for the bank. Nothing is very cunning , very adroit, very clever. But it is not statesmanlike nor sound policy. It is rather a marked instance of the small shabby scheming and degrading trickery of an Old Bailey lawyer. It is a low dodge and paltry expedient, a mean and contemptible device to which no high-minded man would stoop. And although Messrs. McCulloch, Higinbotham and Co. think they can go on repeating the trick long enough to exhaust the patience of the Legislative Council, they will find that such a game of thimble-rig will not be long tolerated by the public.
Looking at the moral aspect of the case, it is scarcely possible to find words strong enough adequately to denounce the combined folly and wickedness of the proceeding. What an example to come from the government!-an example of unscrupulous evasion of the letter and spirit of the law and of an over-reaching of the constitution, and for what ? Merely to satisfy the lowest and most contemptible personal motives-to gratify a wrong-headed and vindictive obstinacy and to secure, for a little longer, the hold of place and pay. An outcry has been deservedly raised against those who have been trying to evade the Land Act of this very ministry. And here is the same ministry now voluntarily furnishing an example of licentious disregard for the obligations of the law, which, it is to be feared, will bear fruit of a very deadly character no distant day. A country whose government sets an example of premeditated lawlessness, must lay its account with turbulence, violence, and a licentious disregard of all the obligations which bind society together. And if we escape the natural results of such evil example in high quarters, it will be a wondrous exception to the general rule, indeed, and one which we have no right to expect.


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