Chapter Six

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WARD WAS OUT, his ministerial career apparently at an end. There was speculation he might even surrender his seat. But he had some scores to settle before he left. He sought and, with the Ministry’s backing, gained leave from the House to speak in self-defence. On the evening of 16 June he launched an onslaught against his critics. Many were unnamed, but Stout, Duthie and Dr Newman received special mention. The press got its share too. He told them they might get rid of Ward for a month, or even a year, but they would hear from him again. He realised he had fallen into enemy hands at the time of the banking legislation. Having gone out of his way to help the banks he now seemed to be the merger’s principal casualty. Three months was much too short a time to sort out his affairs, especially when others were being treated more leniently. The ‘chief conspirators’, besides Stout, Duthie and Newman, were solicitors named Tolhurst, Stead, MacGregor and Hall. Stout, for whom Ward had once felt loyalty, but who had turned against Ward over the succession in 1893, received particular attention. Ward insinuated that he was behind some of the anonymous articles about the Ward Farmers’ Association accounts in the Evening Press. Ward insisted that he was the victim of political malice and not of carelessness, let alone dishonesty on his own part. The ‘upper crust’ of society were attacking the Ministry through him.

It was an uncharacteristically bitter speech. Using privilege Ward named names and recklessly attributed business and political motives. His manner suggested paranoia. It was not long before Stout was goaded to reply. Seddon was then happy to compound the accusations. He reminded people that thousands had benefited from the bank merger, and the Treasurer was the only man seemingly ruined by it. Those who had attacked and vilified Ward had now accomplished their object: Ward and his family ‘were practically on the street’. The whole business was persecution by people whose real target was the Seddon Ministry.1

Those most in the firing line claimed to be shocked by these accusations. The Herald called Ward’s contribution ‘surely the most injudicious and absurd speech ever delivered, in the House’.2 But Williams’s judgment was so harsh that it was wise of the Ministry to launch a counterattack. On the 17th there were signs that the strategy was working: Ward received a telegram signed by more than a hundred constituents expressing ‘unabated confidence’ in him. On the evening of the 18th he spoke again in the House, this time in defence of the Ministry. He had recovered his equilibrium and ‘was at his best—clear, pleasant and earnest in his exposition of the Government’s actions’. When he sat down he received loud applause. It was certainly plain that the Ministry could ill afford to be without him.3

Wisely, Ward decided to go south immediately. He knew the importance of interpreting the news to his constituents before others placed a less kindly stamp upon it. He wrote an appreciative letter to Seddon for his loyal support, pledging his own in return.4 Then he and Theresa made their way to the ferry. Boarding the ship was an emotional experience. Ministers and MHRs were there, plus several departmental heads. An onlooker said there was ‘much handshaking and expressions of sympathy’.5 While reporters noticed that Ward pointedly said goodbye to colleagues ‘only for the time being’, the Member for Awarua’s future seemed murky at best.

The Ministry no doubt hoped for a wave of sympathy from the public, but they cannot have anticipated its magnitude. When the Wards arrived in Dunedin they were met by a crowd of 2000. An address of welcome was delivered by the local Knights of Labour6 and Ward replied from a carriage window. He reminded them that many local merchants would have been ruined but for the bank merger. As the Wards drove away in a cab they narrowly escaped a shunting train in Rattray Street. The crowds freed the horses and bystanders dragged the cab to the Grand Hotel where Ward again addressed them and was cheered.7 There was a larger reception in Invercargill. About 3000 were waiting for the train. There was a ‘perfect rush of individuals personally to greet him’ and it took the Wards ten minutes to get to a cab at the station door. The Liberal associations of Southland presented him with addresses, expressing the fervent hope that his absence from the Ministry would only be temporary. Ward responded emotionally with some lines from Scott:

Breathes there a man with soul so dead,

Who never to himself hath said

This is my own, my native land.

Then he gave them the political message. Having failed in their attacks on the Ministry, the Government’s opponents had decided to turn to the private affairs of a minister. They knew Ward to be a strong man: sink him and they might drown the Ministry as well. He assured them he would be back, even if it took him three, five or ten years.8

There were further speeches at the Invercargill Club Hotel and then when they reached Bluff and were greeted by half the population of the town, yet more comments. By now the crowds were groaning at the mention of the names Stout, Duthie and Newman.9 Like Franklin Roosevelt in the 1940 election campaign, who laced his campaign speeches with references to his enemies, Ward had found his Martin, Barton and Fish. Southland, too was in a mood to personify its enemies.

The enthusiasm for Ward disconcerted the Government’s opponents, especially the Times, which now stepped up the attack. Letters hostile to Ward were printed thick and fast, and on 2 July an editorial repeated gobbets of Williams’s judgment. But the harder Ward’s opponents fought, the more people came to his defence. The News tried its hand at some shrewd analysis:

As to the large losses sustained by the Association—roughly speaking £100,000 in 3.5 years—it is not insinuated even by his enemies that Mr Ward or his relations have benefitted an iota; the great bulk of the money has undoubtedly gone into the pockets of the wage-earners and farmers of Southland. This of course is not satisfactory to the shareholders of the Colonial Bank, but, we would ask, if Mr Ward is to blame are not the directors and those charged with the control of the Bank a great deal more culpable? If it is true that Mr Ward was rashly speculative, why, in the name of commonsense, did the Bank literally shower money upon him to carry on?10

As the days wore on, more and more Southlanders accepted this line of reasoning. They were worried people. A total of 1750 families had been trading with the association which the judge now seemed to have consigned to liquidation. None of its competitors paid such good prices for stock. Even shareholders of the Colonial Bank, who had seen a deal acceptable to the liquidators whisked from under their noses, were apprehensive about the future of their investments. Ward turned this apprehension to advantage. He kept saying that the vendetta being waged against him was the work of the Dunedin ‘upper crust of the wealthy and financial classes’. To a newer region composed more heavily of borrowers, this had sinister overtones. Williams, who was one of the Dunedin elite, and who was a substantial moneylender himself,11 personified the group that Southland was now up against. The pious rectitude implicit in his judgment looked as though it could have a price tag which they would have to pay. Ward was their defender against threatening outside forces. Meetings in Invercargill and Winton expressed confidence in him. A poem written in mid July and later pasted into the Ward Family Clipping Book, captures some of the mood of the time:

Though hungry wolves their venom vent,

And hound you down to their content,

When every poisoned arrow’s spent

You’ll be the Star of Southland.

There’s Newman, Stout, and Duthie who,

With jaundiced eyes, your actions view,

And fain would head a howling crew

To hang the Star of Southland.

Misfortunes came, both great and small,

But soon you will surmount them all,

And be proclaimed from pole to pole,

The brilliant Star of Southland.

A lustrous life by cloud unmar’d,

And deathless fame shall yet reward

The just and gen’rous J. G. Ward,

The matchless Star of Southland.12

Bookshops in Invercargill ordered hundreds of copies of Ward’s Hansard of 16 June, mailing them out at sixpence a time.13

Back in Wellington Seddon prepared a low-key budget. His Ministry had lost all but McKenzie and Cadman from the original Liberal line-up, and with the election only months away he needed to regain the initiative. He seized on the promised banking inquiry. If the Opposition tactic until the election was to throw mud about Ward, Seddon would fling some back. First, he rejected the notion of a Royal Commission headed by a judge. ‘What? A Tory judge to sit upon ministers?’ asked the incredulous McKenzie when that idea was first suggested by the Opposition.14 Instead Seddon set up a parliamentary select committee with the widest terms of reference to probe banking matters back into the 1880s. He appointed himself to the committee. The Opposition complained about this procedure before the committee had even met: their problem was that their political objects in calling for the inquiry did not quite tally with the Premier’s in agreeing to it. Seddon took charge from the first. He called for information about individual accounts, seemingly with the intention of studying Stout’s connection with the teetering Dunedin company, Walter Guthrie and Co., which also did business in Southland. When these were refused by William Watson, president of the directors of the Bank of New Zealand, Watson was deemed to be in contempt of Parliament and detained by the Sergeant at Arms. When it was eventually decided that accounts were confidential, Seddon had won an important point. If he could not see accounts he wanted then the Opposition could not see Ward’s.

Every available public seat was filled throughout the hearings. One reporter described the scene: ‘The proceedings bristled with interesting contretemps …. At one time [these] took the form of a duel between the Premier and Mr George Hutchison, and at another the Minister of Lands and Mr Montgomery [MHR for Ellesmere] would indulge in an angry altercation, whilst the Premier would now and again vary the business by a passage-at-arms with Mr Chairman.’15 The proceedings turned into a huge diversion from Ward and his predicament. Editors who sought more specific political grist from the parliamentary mill grew angry. On 30 July the Times labelled the committee’s conduct ‘scandalous’; McKenzie was denounced for his ‘coarse abuse and gross attacks’.16 The hearings continued throughout August and most of September as well, and by the end of that month the Opposition’s patience had reached breaking point. McKenzie and Hutchison came to blows over a remark by the latter. ‘The Premier’s knowledge of the fistic art, which he has not forgotten since the days of the West Coast, came in handy, and it was fortunate that he was on the spot, as the light weights of Mr Ward and Mr Graham [the Committee’s chairman] were of no use in the scrimmage, and they were cast aside as though they were pygmies in the hands of a giant,’ noted one reporter. Accounts of the spat reached The Times, in London.17

By this time the press and public were crying for mercy. The committee which met in all for fifty-seven days produced a report of nearly 700 pages, one of the largest of its kind in the history of New Zealand politics. It revealed practically nothing that was new. The bank merger was endorsed; Ward, who had sat through most of the hearings, was cleared of accusations that he had endeavoured to influence the merger negotiations; and copious evidence was presented to show that he had not benefited from any ‘writing off of his debts.18 With the election only weeks away, reference to Ward’s finances were beginning to look old hat, an issue that had been done to death. The Premier had proven more effective at protecting Ward than Ward himself was ever able to be.

Over the months there had been speculation as to whether Ward would recontest Awarua. He told the Herald that he would stand ‘if clear of my troubles’19 but these showed little sign of abating. Liquidators were approved for the J. G. Ward Farmers’ Association on 23 June. Unless Ward could find assistance from somewhere he might have to declare bankruptcy and, should this occur, his seat would be declared vacant. During October Ward was busy looking for credit to enable a restructuring of his affairs. The rest of Invercargill watched him keenly. The manager of the Invercargill branch of the Bank of New South Wales noted in his report to his inspector in Wellington:

It has leaked out that Mr Walter Henderson and Mr John Batger, produce manager and auctioneer respectively of the NZ Loan and M. Co here have resigned and propose starting business. I have a strong suspicion that they are negotiating with the liquidator of the J. G. Ward Farmers’ Association to take over what business remains. That Mr Ward and Mr A. Lee Smith are secretly advising and supporting Henderson and Batger and will ultimately join them as partners, and that financial arrangements have been made with the National Bank, as Messrs Ward and Smith were seen going and coming out of that bank several times last week.

Ward seemed ‘sanguine’ that he could compromise with his creditors without going through the court.20

Ward was sufficiently confident at the beginning of November that something would turn up to declare on 13 November that he would recontest Awarua at the election scheduled for 4 December. This time, however, two opponents emerged, the more serious being Cuthbert Cowan, who had long been associated with Southland Frozen Meats. Cowan was old, honest and by his own admission ‘not given to demonstrativeness’.21 He was no match for Ward, and when the Court of Appeal overturned SFM’s 1895 damages victory over Nelson Brothers, much of the wind went out of Cowan’s sails. Ward, on the other hand, campaigned like a demon. He had well-placed friends, too. The mayor of Invercargill reminded an audience that a defeat for Ward would be against the interests of Southland. Ward’s campaign meetings became benefit rallies. At one a supporter presented a cheque for £450, telling the audience that Ward’s misfortunes ‘were caused by his being too trusting, giving too much time to the public welfare and devoting too little to his private interests’. Ward politely refused to accept the money. When protests rose from the hall, a committee of three trustees was established to handle the money and raise more for the Ward family.22

Ward’s most vociferous enemy had become the Southland Times, which printed anonymous letters against him and on election morning carried a hostile editorial that raked over old coals. The tactic failed to work. Ward outvoted Cowan by 1836 votes to 1051.23 Next door in Mataura, however, the crusty curmudgeon, Richardson, who was shortly himself to go bankrupt, won back his seat at young McNab’s expense. In Invercargill the mercurial Kelly, once a supporter of Ward’s who had drifted away from the Ministry and into the hands of organised Labour and the Prohibitionists, beat the official Liberal candidate. Elsewhere, Seddon’s campaign, shrewdly angled towards the cities, paid off. McKenzie’s Fair Rents Bill and Seddon’s Old Age Pensions Bill, both of them only under active contemplation, gave Government supporters much to discuss. In Auckland and Wellington the Ministry gained seats which offset some of their losses in Christchurch, Dunedin and Southland. Seddon hung on to office, but it was his closest call. His overall margin was eight seats. When the Opposition claimed a ‘moral victory’, the old master announced that they could have one of those every time—so long as the results stayed the same.24 Ward’s friends were still in high places.

Over the summer Ward had much to consider. Comments about his problems were arriving home again from abroad. Williams’s judgment quickly reached London where Ward had so recently been a celebrity. The London Financial Times referred to ‘this sordid narrative’, and the Scotsman felt that the reputation of New Zealand was unlikely to be improved by the washing of this ‘dirty linen’. The editor was pessimistic about a country where ‘extravagance, jobbery and an eagerness to push private interests have been rampant’.25 Nearer to home the Australian Bulletin was more philosophical, noting that in the newer colonies where money was scarcer, ‘this pecuniary kind of sinkage’ seemed more common. It compared Ward’s collapse to that of Australian politicians, Sir Henry Parkes, Sir George Dibbs, Sir Samuel Griffith and Sir Thomas McIlwraith, whose business affairs had all run into difficulties.26 Some of the words used were hurtful. ‘Jobbery’ and ‘swindle’ were not words Ward would use of others, and he found it painful to have them used of him. In the bosom of his family there was a strong desire to fight back. How much energy would be required was not yet clear, however. Savouring his election victory and his re-election to the Bluff Harbour Board in the New Year, Ward hoped that the worst was past. Others felt the same way. Lord Glasgow told the Colonial Secretary in January 1897 that in his opinion Ward’s affairs ‘will now be allowed to drop’.27

More sober reflection could not dispose of several unpleasant, and as yet unresolved problems. The judge’s refusal to allow the Ward Farmers’ Association to be sold as a trading entity meant that the liquidators were having to pull it to bits. In the process the organisation’s value was collapsing, and Ward’s equity slowly evaporated with every move the liquidators took. Association shareholders were now more exposed to the possibility, even probability that they would be called upon to pay shares of the residual debt. And in the unlikelihood that they would be able to pay up all the shortfall, Colonial Bank shareholders were beginning to worry too. A Wellington accountant by the name of Victor Maurice Braund had been watching events closely, and protested at the appointment of liquidators for the Colonial Bank early in 1896.28 Then he offered his services to the banking committee, claiming to be an ‘expert’, but was rejected. His self-importance slighted, Braund set out on the sterile mission of pursuing Ward and the directors of the Colonial Bank until his dying day in 1927.

Overriding all other considerations at the beginning of 1897 was Ward’s fear of bankruptcy. During January he spent much time with Lee Smith, his brother-in-law Walter Henderson and his partner in the Invercargill and Suburban Tramway Company, John Batger, devising ways of avoiding bankruptcy. The problem became more urgent when the National Bank finally decided not to extend credit to them. Ward’s personal debt to the Colonial Bank amounted to about £80,000. There was his personal overdraft of about £7000; the advance of £16,000 against the Nelson Brothers shares which came through late in 1895; his promissory note for £55,150; and a yet undetermined number of earlier guarantees that he had given to the Colonial Bank. Set against these were some personal securities such as various freehold and leasehold properties, the former already well mortgaged, some life insurance policies, the 1600 shares in Nelson Brothers and several properties belonging to Theresa which were already held as securities by the bank.30 Inasmuch as it was possible to value these assets they seem not to have exceeded £4000. The discrepancy seemed enormous, but a sense of realism was apparent at the Bank of New Zealand. Henry Mackenzie no longer saw any point in pursuing the promissory note for £55,150 and on 11 February disclaimed any interest in it.31 There was not much sense in chasing moonbeams. This gave Ward’s friends a more realistic chance of rescuing him.

On 4 February, through the Dunedin law firm of Smith, Chapman & Sinclair, John Batger dispatched an offer to purchase Ward’s private estate— all assets and liabilities held either by the liquidators or the Bank of New Zealand—for the sum of £8500. The sum would be paid in instalments, and the liquidator’s costs would also be paid if an application for court sanction proved necessary.32 Besides their previous employment with Loan and Mercantile and their association with Ward in the Tramway Company, Batger and Henderson were in partnership with an accountant called Frank Morrah. Between them they had been buying and selling land, and in Henderson’s case, lending money to settlers for some years. In 1894 the three of them made a substantial purchase of land in the Waiau district. It was now on the market again, and in August was to produce a tidy capital gain.33 Henderson and Batger had means, and so entwined were their affairs with Ward’s, and his in turn with others, that several people were now keen to help extricate Ward from his difficulties.34

The official liquidators of the Colonial Bank welcomed Batger’s offer, and the Bank of New Zealand agreed as well. The offer was much more than could now be realised from Ward’s assets. By 24 February everything had been agreed upon, subject only to the sanction of the judge. A date for a hearing was fixed for 5 April.35 For a time, however, Ward’s personal affairs were submerged by ripples emanating from the release of the report of the official liquidators of the Colonial Bank. Published in full by most southern newspapers, the report revealed detail about the twenty-one year career of the Colonial Bank, its policy of easy credit, its substantial number of bad debts, and the lack of information contained in its reports to shareholders. Ward’s affairs began to be seen within the larger picture. The spotlight moved, some wanting a ‘calling to account’ of the Colonial Bank’s adrninistrators.36 Not only the bank directors, but its officers, too, were implicated in the report. What gave edge to this situation was that William Watson and Henry Mackenzie, formerly of the Colonial Bank, were now president and general manager, respectively, of the restructured Bank of New Zealand. Watson testily denied any responsibility for irregularities alleged to have occurred,37 but Mackenzie obviously saw the finger pointing at him. To everyone’s surprise he sought, and was granted, permission to retire from the Bank of New Zealand on 11 February. On the same day he sent a long letter to the New Zealand Times giving his version of the Colonial Bank’s career.38 Mackenzie made it clear that shareholders of the Colonial Bank were now going to suffer much more because the court had not allowed the Ward Farmers’ Association to be sold as a going concern. He pointed out that so long as the association was trading, Ward’s promissory note of £55,150 had backing to a value of at least £42,000. Court-enforced liquidation was destroying the value of those securities. There was an implied—though nowhere stated—criticism of Mr Justice Williams’s judgment of June 1896, which had removed all options except liquidation of the association, and which had greatly thereby increased the liability of the shareholders of the Colonial Bank. Mackenzie did not seek to minimise the ‘extremely speculative manner’ in which the association had conducted its business, nor did he fail to mention the shortage of the oats as a factor in its insolvency. He ended with a plea to be cross-examined in court as to his conduct while in the employ of the Colonial Bank.

Early in March Mackenzie was granted his wish. A flood of information poured forth, and it wasn’t long before some were suggesting a full Supreme Court inquiry into the conduct of the Colonial Bank. The release of the report of the official liquidator of the J. G. Ward Farmers’ Association on 20 March made this inevitable. The association’s annual reports were carefully dissected; Ward’s personal trading account revealed in detail; and the suggestion was made that Ward’s personal trading losses had been transferred across to the association. The official liquidator, W. R. Cook, proffered four causes for the association’s collapse: insufficient capital from the beginning; imprudent advances; the absorption of what capital the association possessed by Ward’s own business; and an overall trading loss on shipments abroad. Cook’s report on the association caused a stir. The Dunedin Evening Star, & paper friendly to Ward, wrote: ‘The record from first to last is a most extraordinary one, and it is difficult to conceive anything more fatuous than the conduct of the business of the Association, unless it be that of the Bank, whose accommodating policy allowed such conduct to be pursued for more than three years at the expense, ultimately, of the Bank’s own shareholders.’39

Ward was angry at Cook’s report. The inference, missed by few, was that he was largely responsible for the collapse of the association and had been a willing party to the regular falsification of the accounts. He was stung into indignant retaliation and sought along with Fisher, Anderson, and Hannah (the association’s auditor) an opportunity to be heard in court. A date of 15 July was set down. Meantime, however, Ward’s personal affairs were before the court in another case. On 5 April, the day before Parliament met in early session to vote supply before Seddon left to attend Queen Victoria’s Diamond Jubilee celebrations in London, Batger’s application to purchase Ward’s estate was back before Mr Justice Williams. Much hung on the decision. If the judge refused permission, there was little option but for Ward to declare bankruptcy. With the support of the official liquidators of both the Colonial Bank and the Ward Farmers’ Association, Ward’s counsel, B. C. Haggitt, made a case for liquidating Ward’s asset which would produce more for the liquidators than they could hope to realise upon Ward’s securities. A committee of shareholders of the association, however, opposed the application. Represented by W. C. MacGregor, one of the Otago lawyers who had earlier been attacked by Ward, and who was later to be Solicitor General and a North Island judge, they pronounced the proposed purchase to be what it clearly was—a device to keep Ward out of bankruptcy. Williams had not had an easy time since his judgment of the previous June, and this time took the precaution of consulting the Court of Appeal judges before giving his decision.40

During the weeks before Williams’s judgment was given the association’s liquidators sought and were granted permission to call on £4 per share from shareholders of the association who held unpaid share capital. In all, 721 people, most of them Southlanders, were on the list. It was clear that many would be made insolvent, particularly the association’s principal shareholder, J. G. Ward. If the judge were to agree to Batger’s proposal, then the liquidators of the association had some chance of making a successful call on Ward. If Williams declined, then others would have to shoulder the association’s shortfall. Williams’s judgment came, at last, on 25 May 1897. He declined Batger’s application. Once more the written decision that was flashed around the country was extremely damaging to Ward. Williams said that in ordinary circumstances he would have approved an application such as Batger’s: to do so would probably benefit the shareholders. But he went on to say:

If the evidence brought forward discloses prima facie the existence of grave commercial irregularities to which the debtor, whose debt is proposed to be compromised, was a party, and if the effect of the compromise would probably be to assist the debtor to escape bankruptcy and so prevent his conduct from being further inquired into and adjudicated upon by the proper tribunal, I do not think the compromise should be sanctioned by the Court. To sanction a compromise in such circumstances would be for the court to allow itself to be made an instrument to protect persons guilty of commercial irregularities from the legal consequences.

As he had with the Smith-Reid proposal, Williams labelled Batger’s offer an attempted ‘hush up’. He had consulted the other judges, he said, and ‘a majority’ concurred with him.41

To an even greater extent than the Smith-Reid judgment, this verdict laid Williams open to the charge that he was more interested in having Ward dragged through the courts come what may, than he was in protecting the shareholders, or the people of Southland. His earlier decision had, in the name of morality, forced liquidation on the association, reducing its, and Ward’s securities in the process. This new judgment not only hurt Ward, but would cost others dearly. Ward’s business associates, principally Batger and Henderson, would now have to buy out their partner or arrange some alternative backing; the solvent shareholders of the association would have to dig deeper into their pockets at the behest of the liquidators, and Ward’s own creditors now stood to lose money as his estate was wound up. Many would suffer while the judge pursued his moral and/or political goals.

It would be wrong to say that Mr Justice Williams acted improperly, let alone maliciously, in his treatment of Ward. But his pious rectitude must be seen in its wider context. If Ward’s business and political career prior to 1896 had any central direction it was Ward’s passionate championing of Southland, and especially Bluff, against Dunedin. Southland had undoubtedly benefited from Ward’s capacity to get credit from the struggling Dunedin-based Colonial Bank. Bluff’s port operations had increased rapidly, and Port Chalmers slowly lost its earlier preeminence.42 A judge who had close links with the Dunedin commercial community, who was based there, and who himself was involved in money-lending cannot have heard anything good about Ward, or been inclined to believe it if he had. Williams seemed determined, in a personal way, to bring Ward down, to stop him from roaming at large through the business world, as he had said in 1896. Ward was now, without any formal trial having taken place, ‘guilty of commercial irregularities’. Was there something of the Dunedin elite in all of this?43 The people of Southland, and even the ‘little people’ of Dunedin had thought so in 1896. After the Batger decision, dismay, slowly warming into indignation, swept Southland. Lee Smith told a public meeting that Ward was the victim of the ‘grossest persecution that any man in the colony had ever been subjected to’; the Acting Premier, Jock McKenzie came very close to contempt of court when he declared that Ward would have received better treatment from the court if he had been a ‘Tory’.44

It was now clear that Ward’s bankruptcy could not long be delayed. On 4 June Williams ordered the Bank of New Zealand to produce to the official liquidator of the Ward Farmers’ Association all the books of accounts of the association, and of Ward’s with the Colonial Bank. These were then available for inspection for one month. On the same day Williams fixed the date of 12 July for examination of Ward, Fisher, Anderson, Hannah and Birch. A few days later the judge also agreed to an application from the Colonial Bank’s liquidators to have former officers of the bank, specifically the chairman, George McLean, examined 45 Ward, meantime, had sought advice from his Dunedin solicitors, Smith Chapman & Sinclair. It is clear from a speech he made on 23 June that he knew bankruptcy was imminent46 The legal options as they affected his seats in Parliament and on the Southland Harbour Board were his principal concerns. The advice Ward received from F. R. Chapman and Theophilus Cooper, both of them later to be North Island judges, was that the only way of preserving his elected positions was to resign them, to file a petition in bankruptcy, and then to contest the by-elections that would result from the vacancies. The law stated that an elected member losing his seat as a result of bankruptcy could not then recontest it. So long as Ward resigned his elected positions before becoming bankrupt, the fact of his subsequent bankruptcy did not prevent him from contesting, and, if winning, holding the elected positions once more. This advice was confirmed by that of an Invercargill solicitor, T. M. Macdonald.

On 8 July Ward took his adversaries by surprise. He wrote letters resigning his elected positions and later in the day filed a petition in bankruptcy 47 That evening the News carried a long letter explaining his actions to his constituents. He told them he had ‘used every possible effort’ to extricate himself from his difficulties, but that forces outside his control had prevented him from succeeding. He was ‘compelled to seek the protection of the [Bankruptcy] Court’. He listed his achievements during his ten years as Awarua’s Member, mentioning in particular the growth of the port of Bluff, and told his constituents that he was placing his future in their hands. ‘Whatever course they elect to follow I will have pleasure in falling in with. If it be your wish that I should again contest the seat, my services are at your disposal.’48 The speed with which a series of supporters’ meetings took place at Waikiwi, Bluff and Winton suggests that close friends had been tipped off in advance about the resignation.

For some time now Ward had been feeling thoroughly bloody-minded. Amongst his enemies Stout, Duthie and Newman had long since lost pride of place. Mr Justice Williams, whom Ward believed to be in league with Judge Denniston and other political opponents49 together with the top business brass of Dunedin and their lawyers, as well as the newspapers who quoted them with evident approval, had made Ward quite paranoid. In his view their actions were the result of political pique or regional rivalry, or some combination of both. In pushing his business to the limit Ward saw himself engaged in heroic enterprise on behalf of his region in much the same way that Vogel had pursued his ‘heroic’ borrowing on a national scale. Sticklers for accounting perfection might look askance at his operations; he saw himself as doing no more than other companies had, or should have done, to develop their regions. He was a risk-taker by conviction and admission. He was not a crook, and deeply resented the imputation that he was. ‘That I have made mistakes goes without saying,’ he wrote to Reeves, ‘but that I have done anything dishonest or to benefit my own family personally I defy anybody to show’.50 If he had failed to reveal all to the shareholders of the association he had been acting in their best interests. Their ends justified his means. The full truth would only have dismayed them, and might have undermined the region. Their minds were not as large as his. Their horizons often began and ended at the farm gate. His encompassed provinces and nations. Many a close friend recognised this quality in him, and his adversity only bound them all more tightly together.

Ward read the mood in Southland and had little doubt about the outcome of the by-election set down for 5 August. He decided to talk to Southland through the court examination that opened in Dunedin during the campaign. He used the proceedings before Mr Justice Williams to signal he was in a fighting mood. He insisted his examination be held in public. The Ward Version, by now fairly familiar, spilled out of him. He’d had little to do with the running of the association since its inception; the business practices were the same as used by many companies; mistakes he had made were done with the best interests of Southland at heart; when things went wrong in 1895 he took personal liability with his promissory note, though he could probably have avoided doing so; and the people who had pursued him all the way to the court were, for the most part, the people who benefited most from the bank merger. Nevertheless, proceedings did not go all Ward’s way. He was forced by a diminutive Saul Solomon representing the official liquidators of the association to concede mistakes, and occasionally, as Ward was turned on the spit, the audience in court would laugh at his evasions.51

Back home the sight of a Jewish Dunedin lawyer cross-examining their man who, with his Advances to Settlers Act had struck hard at usurious interest rates, struck an anti-Semitic chord, and won Ward more friends. When the Otago Daily Times printed a full transcript of Ward’s cross-examination intending it for the widest circulation, and the Southland Times told its readers that Ward’s exit from politics was in ‘the interests of public morality’,52 suspicions were confirmed: Ward’s enemies were intent on using every effort to defeat him at the poll. In the Southland Daily News, however, Ward had an enthusiastic champion which gave prominence to his version of events. The outcome of the by-election was never in much doubt. Despite being absent in Dunedin for most of the preceding weeks, Ward excited a great deal more interest than Cuthbert Cowan, his opponent. In a larger turnout than at the general election Ward was re-elected by 2041 to 913. A majority of 785 had grown to 1128. It was a mandate of grand proportions that spoke louder than any words from a judge. Several booths he had lost in 1896 reversed their results, and at seven booths Cowan’s vote failed to reach double figures. When they arrived home at Bluff to a rapturous reception, two bands followed the Wards up the hill to their home. So pleased was she with the election result that Theresa pasted the newspaper clipping in the centre page of her clipping book faithfully kept during the last decade. No further entry would be made in that book: she would start another. Hannah Ward Barron, too, as young Vincent later recalled, was ‘tremendously proud’ of her Joe.53

Ward was now back among his Liberal colleagues with a renewed mandate. For months they had all been at sixes and sevens over the revelations concerning their former Treasurer. Mark Cohen of the Dunedin Evening Star, who was a leading Liberal and later to be a Member of the Legislative Council, wrote to Reeves after Mackenzie’s cross-examination in March that he thought the ‘very ugly blots’ about Ward would take ‘ages to live … down’, and that ‘our mutual friend’ might have to quit public life.54 After the second Williams blast in May 1897 another leading Liberal told Reeves that he thought Ward ‘politically dead’, although he pointedly noted that Williams had been granted a sabbatical leave, something which was to be relevant to the speed of Ward’s rehabilitation.55 Charles Wilson, MHR for Wellington Suburbs and involved with the New Zealand Times, thought Ward’s decision to contest the by-election a ‘mistake’ that would ‘injure’ the Government.56 However, throughout his misfortunes Ward had one very well-placed supporter in Jock McKenzie. The Acting Premier sent a full report to Seddon in June telling him that ‘there is a strong feeling of reaction against Williams’ decision … as to the offer made by Batger and Henderson’, and praising Ward, ‘who keeps up his spirits exraordinarily well considering the worry he has in connection with his affairs’.57 An affectionate relationship existed between the fifty-nine-year-old, burly Scot, and the dapper forty-one-year-old Irishman. The two were soon discussing ways in which McKenzie could help in Ward’s financial rehabilitation. McKenzie was to play a key role in his political recovery as well.

Ward still had many hurdles to cross. On 29 July he wrote to members of the Lake County Council soliciting their support for his re-election to the Bluff Harbour Board. If returned to the Board he would ‘value the position not only for its sake, but for the purpose of showing the world that there were those who yet had confidence in [me] and who in the hour of trial had not deserted [me]’. On 10 August Ward visited Queenstown where he sought, and received, the support he needed. So angry was one member of the Lake County Council, however, that he promptly resigned his seat declaring Ward not to be a fit person to represent the district.58 After receiving a legal opinion the Bluff Harbour Board seated Ward at their meeting on 17 August 1897. Of concern to a wider audience than Southland was the fact that Ward had been re-elected to public office while still an undischarged bankrupt. His critics pointed out that the period of bankruptcy was one where the bankrupt was at the beck and call of the Official Assignee and consequently in no position to give his individual attention to his constituents’ interests. Moreover, there was the question raised by others: should someone unable to look after his own affairs be entrusted with those of others. In the ensuing controversy people overlooked the fact that the New Zealand law was not identical to the English Bankruptcy Act 1883 which forbade a bankrupt from seeking election. When it became clear that Ward had seemingly exploited this loophole, his local critics reluctantly agreed to leave the matter to Parliament and the judiciary to settle.59

‘Ward’s imbroglio’, as the Times called it, soon took centre stage when Parliament reassembled at the end of September soon after Seddon’s return from London. Ward met with ministers and addressed his Liberal colleagues. He was anxious to forestall any moves to close the loophole retrospectively, and promised them that if they agreed to seat him he would not exercise the privileges of a Member for six months while he ‘straightened out’ his affairs. Caucus debate raged for two hours and eventually ministers succeeded in preventing a move to legislate immediately, gaining support instead for a compromise. At 2.30 pm on 28 September Ward was escorted to the table by his friends, Jock McKenzie and Arthur Morrison, MHR for Caversham, and took the oath. Seddon then moved to establish a Committee of Privilege consisting of eight members, including himself. Ward briefly addressed Parliament, speaking of the way he had been pursued, and asserting that he was back in Parliament ‘in vindication of a principle, and one that I have and will fight for’.60 At its first meeting on 1 October the committee with its inbuilt Government majority selected the Prime Minister (as he was now called following the Imperial Conference) to chair it.61 No doubt in possession of the same legal advice as Ward, Seddon moved that a bill known as the Awarua Seat Inquiry Act 1897 be introduced. The Bill referred a decision on the legality of Ward’s re-election to the Court of Appeal, but brought the New Zealand law relating to bankruptcy into line with the English law for all future cases involving Members.

The Opposition had wanted the courts to decide on Ward’s fate, the Southland Times preferring that the matter be left in the hands of Mr Justice Williams!62 They were somewhat disconcerted when the Court of Appeal quickly declared Ward entitled to be in Parliament.63 While the Times sniffed that ‘some victories are more disastrous than a defeat’,64 the News praised Ward for his ‘moral and physical courage’. Back in Parliament one of Ward’s closest friends pinned a big note to his vacant seat reading ‘HON J. G. WARD’.65

Ward’s victory was at some political cost to the Ministry. Seddon’s championing of Ward led to criticism in caucus from several so-called left-wing MHRs. When it was announced that supporters of Ward might leave the caucus if his critics were not brought to heel, the left wing was expelled and the Government’s whips had an anxious few weeks ensuring a majority on government business for the rest of the session.66

While Ward had much to thank his ministerial colleagues for in Wellington, his friends and former business associates were at work on his behalf in Invercargill with the Official Assignee. Henderson, Lee Smith and another friend, William Craig, had a series of meetings with representatives of the official liquidators of the Colonial Bank and the Ward Farmers’ Association. Observers from the Bank of New Zealand and Ward’s new personal bankers, the Bank of New South Wales, were also present. Details of Ward’s family furniture were tabled; it was worth £140 without Theresa’s piano and some paintings done by her and her sister. When it was suggested by one of his friends that the furniture might be presented to Theresa, Ward declined, saying that he wanted no personal favours. He was requested to give details of his legal costs which, he said, amounted to £900. When given a chance to speak, Ward’s friends usually asked for more time to allow him to recoup his position. Ward, as he had told a meeting in Winton on 2 August, was determined to ‘repay every sixpence’.67

While this tedious procedure of classifying creditors and establishing total debts went on, Ward and his friends were also engaged in a complex effort to secure his discharge from bankruptcy. The precise nature of the final arrangement that led to his release on 5 November 1897 may always remain obscure. On that date in the Invercargill Magistrates Court before Judge C. D. R. Ward, an application was made on Ward’s behalf by F. R. Chapman of Dunedin and John Macalister of Invercargill for an order of discharge from bankruptcy. Mr Justice Williams, fortunately, was away by this time. Saul Solomon was in court to protest on behalf of the official liquidators of the Colonial Bank, reminding Mr Justice Ward that in cases where a bankrupt had kept no personal books of accounts Williams had previously ruled that there should not be a discharge. Chapman was able to convince Judge Ward that Ward’s transactions could be adequately traced through the books of the Ward Farmers’ Association. The judge, in what was probably an implied criticism of Williams, granted the application, making pointed reference to some of the public accusations that had been made against his namesake (who was no relation): ‘There has been enough said in the press regarding such accusations. Those who have made them had an opportunity to come here and prove them, and have not done so, and I can only say I trust that these proceedings will show the futility of the accusations made elsewhere.’68

Less than four months after being forced into bankruptcy, a state Ward had dreaded ever since his triumphal return from London in 1895, he had extricated himself. And he was still in Parliament with the prospect, as the press kept saying, of one day regaining a seat in Cabinet. Those who had pronounced Ward politically dead had been altogether too premature with their obituaries. Many, of course, were surprised at the ease with which he emerged from bankruptcy, and some discussion of the process that enabled this is warranted. The story can be pieced together from known facts, plus a great deal of detail to be found among the records of the Bank of New Zealand and the Bank of New South Wales. Ward, as could be seen from the Smith-Reid and Batger proposals, still had friends with means. Moreover, by November, Henderson and Batger had received the money from their sale to the Crown of their land at Waiau. In addition to this there was the money that had been collected at various stages from the public by Lee Smith, John Sinclair and William Craig. This money was supplemented by the proceeds of a banquet attended by about 500 people in Invercargill on 16 September—the ‘Buncombe Bankrupt Banquet’, as the Times snidely labelled it. And besides all this, Hannah Ward Barron was still alive, although in failing health. Her personal guarantee to Ward of £5000 had earlier been released by the Colonial Bank. Theresa still had access to her share of the Golden Age Hotel in Bluff. Moreover, Theresa had been left several properties in Waihola by her late father. They produced rent and were unencumbered. At some stage, probably in September 1897, it occurred to Ward’s friends that Theresa might become the vehicle for rescuing her husband. If she could be helped sufficiently to clear Ward from bankruptcy, and then to buy back from the Official Assignee some of the properties of the Ward Farmers’ Association, then they could be used as security for mortgages, the money from which could be used to repay Ward’s benefactors and reestablish his business on the sound basis of long-term mortgage money. The sum needed to secure most of the properties formerly belonging to the association was £6000, which was less than Batger had earlier offered. By 5 November 1897 it had been raised.69

A very trying chapter in the career of Joseph George Ward had now closed. The final act excited little interest; indeed it seems almost to have been expected. Try as they might to push him out of politics, Ward’s indomitable spirit, his guts and determination to win through had beaten his enemies. Looking back on it all the surprising thing is how much noise was created when the charges that could be levelled at Ward lacked much substance. He had speculated with other people’s money, but he was not alone in that; he had consistently given a false impression of the finances of the association, but many, if not most struggling colonial enterprises in Australia and New Zealand found it necessary to do that; he had been a party, inasmuch as he regularly signed the association’s accounts, to deception of his shareholders; and, worst of all, he had been found out as a result of the banking crisis of 1894–5, a crisis that had very little to do with his making. From all the public dissection of his accounts and cross-examinations, no evidence of fraud was ever produced. It is clear that neither he nor his family ever benefited financially from any of the much-criticised actions that he had taken. Indeed, as many noted, his basic integrity had seen him take responsibility for more of the debts of the association than he needed to have done, and he suffered as a result. His activities had been motivated by a desire to promote his region, his party and his own political fortunes, and only in a general sense, the overall promotion of his own business interests, in which so many others also had an interest.

A few days after his discharge Ward received what was probably the fairest, and possibly the only verdict he got, from a jury of his commercial peers. The Mercantile and Bankruptcy Gazette wrote:

The Hon J. G. Ward’s discharge from the Bankruptcy Court should surprise no one. Outside of the very much talked-of liability to the Colonial Bank there was nothing of any particular importance in his private affairs. So far as the bankruptcy was concerned we see nothing in what has transpired to differentiate it from the ordinary class. It was one of those cases in which a man, in a rather large way, comes to grief from causes sufficiently plain to understand after they have developed but not always easy to guard against by anyone willing to accept risks in business which cautious men would avoid. Mr Ward’s connection with the Government naturally caused his affairs to be focussed under the public gaze. While we think that for many of the reprehensible practices adopted by the Association which bore his name he must be held technically responsible, we cannot shut our eyes to the fact that the examination into his affairs and that of the company cleared up a great many matters in which public opinion had been hostile. Of course every politician has hostile critics, but political opponents are not unbiassed judges, and many of those who differ from Mr Ward upon political questions will dissent from what we now say. We have watched pretty closely the various developments of the last three years, from the inception of the banking legislation to the discharge, and are of the opinion that Mr Ward comes out of the whole business, not blameless, but at least without dishonour.70

The Gazette guessed correctly. Many of Ward’s sternest critics never completely reconciled themselves to the disclosures of 1895–7. For the rest of his life—and even still today in Southland—the oats shortfall is linked to Ward’s rather than Fisher’s name. Some, like the obsessive Braund, pursued Ward for years to come with books and pamphlets in a futile effort to keep his past difficulties before the public. Time, however, was now on Ward’s side.