THE BANKING QUESTION.

Cromwell Argus, Volume XXVII, Issue 1374, 27 August 1895, Page 5

THE BANKING QUESTION.

[from our Wellington correspondent] Tne J3ank of New Zealand had the floor of the House on Friday 16th inst. To use a favorite expression of the Treasurer's, Government had found bed rock at last, and members are in a stite of funk over the ill-advised, hasty, panic legislation of last year. Both the Premier and Treasurer acknowledged that the astute John Murray had jockeyed them when, at his instance, they consented to advise Parliament to endorse a two million loan to put the bank on its legs. Government cannot now, by any special pleading, do otherwise»than take the whole responsibility "of what the cost to the colony that sorry piece of legislation may eventually be. The opposition last year asked for a committee of investigation such as Government has itself now set up ; it was refused and the debate on Friday was not whether there should or should not be a committee, but as to the composition of it. The Premier had named himself and two other Ministers in the Lower House, and the only available Minister in the Upper House, and there was naturally a very strong feeling of dissatisfaction at this ; for, as Ministers had primarily been the means of setting up such an undesirable partnership between the colony and the bank, it was considered they were not the proper sort of persons to sit on the jury to try the issues. The inclusion of the Hon. G. M'Lean, a director of the Colonial Bank, was also looked on and spoken of with grave disfavor. Members said it was not right that the director of a rival institution should have the right to have the secrets of an opposition bank disclosed to him, apart from other considerations, such as the rumors of amalgamation which, were floating in the air. Moreover, some members argued that the committee was neither numerous nor representative enough, and the whole debate arose out of an amendment by Mr G. J. Smith that the number of members should be increased from 6 to 10; and this, if carried, meant that an equivalent number should be appointed in the Upper Chamber. But the debate wandered away very wide of *,his, and the merits of a state bank, the question of amalgamation, and other extraneous subjects were aired with more or less wisdom and discretion for some hours. A few new lights were shown on hitherto obscure points. The Premier told the House that the first intimation Ministers had of the bank's trouble was on the Monday previous to the Friday when the Government brought the bills down. But Mr Ward said Government had no knowledge that the Bank would require assistance more than.a fortnight before that time; and Mr Uutibie asserted that he hiew that Mr Murray had instructions by cable from the directors in London, and had communicated with Ministers

IN AMPLE TIME for them to have made a full investigation. This statement of Mr Duthie's is corroborated by others, therefore it is evident that Government temporised with the impending crisis last year until it was too late to make the necessary investigation into either the Bank's or the Asset Co.'s positions. This is what Ministers are now compelled to do in spite of themselves, and they have to seek the help of the Opposition to find out the real condition of affairs. The Premier in bis speech dropped, for once, his fluster, and his manner had a significantly serious tone about it. He said the position of the bank was such that it might be necessary to trench on the second million ; that the injudicious speeches made by some members might bring about a feeling of insecurity ; and there might arise an urgency. He was anxious that the committee should get to work at once—on the following day, Saturday—if his resolutions were not carried nothing could be done until the following Thursday. He was willing to give way as to have 8 members on the committee, but it was of the utmost importance that something should be done at once. The directors of the bank had a report ready, and the committee could deal with this without delay. He admitted that Mr Murray had kept back from ministers information concerning the Estates Co. which should have been

supplied, and the Premier was .evidently very much in earnest, when, towards the close of the debate, he said he would be glad "if he could undo some of the wrong that had been done." THE COLONIAL TREASURER contrved to make one of the most indiscreet speeches in the debate. He acknowledged the committee should be larger and more representative than that proposed by the Premier; he told the House that one of the troubles they had was the re-investment of the second million, so as to give a reasonable return for the 4 per cent. At present it wa3 barely earning 3 per cent. Government might have taken some of it for its own public requirements, but had only accepted LIOO.OOO under the Lands Improvement Scheme. Events have proved that the bank could not get 4 per cent, for this money. The property of the Assets Co. must be written down to the proper value, and the question was how to fill up the gap thus caused. The; country must do this, or let the bank work out its own destiny. This speech from Mr Ward's lips finished his bubble reputation as a financier. He has persistently endeavored to damage all lending" institutions, and is now brought face to face with a Frankenstein he and his fellow ministers have built. He opened his mouth and shut his eyes, and took what John Murray presented, and now he has found that his government has on hand more big estates to burst up than even Mr Jock M'Kenzie can settle the unemployed on, or Mr Reeves invent Larbor bills to further harass the social pest. Another feature in this alliance FOR BETTER AND FOR WORSE between was pointed out by Mr Allen. Of the million and half loan Mr Ward took so much credit for, there is still a million not yet lent to settlers. It is on deposit in the R.JN.Z. "But," said Mr Ward, "it is available." " Available ! " retorted Mr Alleq, " what if the Bank closed its doors ?" The Treasurer made no reply, but his face spoke, volumes, as it did when he was bowled out a week before by Sir Robert Stout with the Canadian tariff. And besides this other million there are the balances of the departments lodged with the bank—the P.O. funds, the insurance and trust balances amounting to perhaps another quarter of a million, all in the safe keeping of this wonderful institution so that its total liabilties to the colony at the present moment must be in the neighborhood of 3£ millions. The only grain of comfort in the whole wretched business is: that the directory, has the strongest men to be found in Wellington < on it; that their interests are so small that they can have no object in disguising the naked truth; that they have had a year to investigate the affairs of the bank and Estates Co., and by this time they know somewhere near the true state of affairs and therefore their report will not be in any way colored. That is the best security the colony has; all previous reports were furnished by local managers, each of whom was naturally anxious that his branch should show a rosy list of assets against overdrawn accounts. It will be some sort of consolation to know the worst, and if it is nothing more disastrous than writing off the L 900,000 of share capital ana calling up the other million, shareholders are still liable for—why, then those who are not shareholdors may breathe freely and thank heaven they are not the proud possessors of bank scrip.