THE BANK OF NEW ZEALAND. PROCEEDINGS IN THE HOUSE. A WASTED NIGHT.

Evening Post, Volume L, Issue 52, 29 August 1895, Page 4

THE BANK OF NEW ZEALAND. PROCEEDINGS IN THE HOUSE. A WASTED NIGHT.

The whole of yesterday afternoon practically, after the 3 o'clock adjournment, was ooonpiod in an angry diBOUHBion as to whether the Standing Orders should bo suspended to permitof the Bank BUI going through last night. The report was not ready till just before 4 o'clook, as there had been various alterations in it up to the last moment, and it was not till 4.15 p.m. that the Premier oonld secure the adjournment of the debate to permit Captain Busßell, on behalf of the Committee, to produce a copy of the report, without the appendices, and snbJßot to correction. Thiß waß read by the Clerk, as published by us yesterday. First, the reading was listened to in absolute silence, members straining their ears to hear, bnt presently, as one statement attar another was made, they were received with gasps. The proposal to free the second milBon elioited cries of dissent, and another outburst followed the paragraph which oovers up theproposal to purchase the Colonial Bank and the proposed call on the shareholders. As soon as the report was read members sprang up on all sides, and a most angry feeling prevailed. Mr. Lexnach wanted to know if the Committee had inspeoted the Bank's books, or had merely relied on the statements of officers, and Captain Russell and the Premier both said the Committee had considered only the written statements, balanoe-o— eets, and statements of officers, and did not consider they would have been doing right in inspecting the books or prying into the affair of customers, whereupon Mr. Larnaoh said the Premier didn't know what he was talking of. Then there were all sorts of objections and queries from Mr. G. Hntohison and others, and the Premier warned the House that the member for Patea would do anything to cause delay or prevent a deoision being come to. Still the storm continued, Mr. Mitohelson firmly reiterating that if the evidence were not with the report he would move an amendment. , Season was only partially restored by a serviceable little speeoh by Mr Wi Pere, who told his Pakeha friends that it would be wiser for them to cease talking and hear the report read, and then they might be in a position tc talk. By 4.30 the Premier was fairly at bay, and he told the House that the report was unanimous, and that now, for the first time in the history of the colony, the true position of the Bank's affairs was re. vealed. This was met with cries of derisioi and "Yon said that before" from the troublesome wing of the Government Party but no further speeches could be made, anc so the adjournment was agreed to at 4.35. Members rushed out of the lobbiei olamouring for oopies of the report, whicl were not forthcoming, as the Governmem Printing Office staff, which had been work ing day and night compassing the printing and making the varied alterations, could no' Sst oopies up in time. Presently the atten on of members, who were thronging ronnc the Premier in the main lobby, waß direotec to the fact that the report appeared in ful in the Evining Post, which had beei brought to the Library just before, anc there was an immediate rush for the papers in which members were Boon immersed, anc much wonderment was expressed. Sooi afterwards copies of the report oame up, bu no appendices. * Long before 7.30 p.m. the lobbies opening on the various galleries were thronged witl people, and when the doors were openec there was a wild scramble for seats, an< large numbers could not get inside at all Lady Glasgow waß one of the spectators and nearly every financial institution wai represented. When the Speaker took the ohair the Pre mier had to tell the House that the repor was not yet completed, and he moved ah ad journment to 8.30. Bnt again there v.a strenuous opposition, which came mos markedly from Government benohes. Mr. Mitohelson, amidst applause, Bug gested an adjournment till 2.30 p m. to-day and many members supported this, Mr. _ Maokenzie angrily telling Ministers tha members were not to be had this time as ii *94, and must be given time for consideration In the midst of the disoussion " The. Ban! of New Zealand and Banking Bill" wa brought down by Governor's Message. After that the Colonial Treasnrer dia olaimed any intention to force matters, ani said Government desired members to b fully informed, so that they might aot witl individual responsibility. Then the adjournment was agreed to, an< in the interim the Bills and the complet report were oiroulated. On resuming at 8.30, the Premier aai< Ministers had decided that, with the tenßioi that now existed, and seeing that the com plete report and Bill had now been oirou lated, the Treasurer should move the seconc reading in an explanatory speech, upon whicl the adjournment of the debate would bi moved. They must not meantime see thi patient die. The Bank was jnst solvent and they muiit provide that nothing wa done to injure it. Government intended nex day to issue the Order-in-Counoil makinj the notes of the Bank of New Zealand legs tender. To do this it was necessary tha the assets in the colony shonld exceed thi liabilities in the oolony, and this was so This would make things secure, and givi the House time to consider the matter. Thi Government, oolleotively or individually was not responsible for the difficulties whiol had arisen. Ministers were only anxious t remove these difficulties. Mr. Mitohelson urged that the speeoh oi the second reading be not made to-night, a. otherwise members might make speeohe damaging to the Bank. He approved of thi proposed Order-in-Counoil. The Premier said that if other member, than the Treasurer spoke, the responsibility must be with themselves, and not with thi Government. Beyond what was contained in the report nothing damaging to the in stitution oonld be established. The House then went into Committee t< permit the introduction of the Bill. Mr. G. Hutchison urged the Premier t< postpone the seoond reading speeoh, other wise he would have to raise various points Captain Bußsell hoped there' would be n< Party wrangle over this matter. It was to< serious. He therefore urged the Premier t< let memberß sleep on the matter before ttu second reading Bpeeoheß were made. If th< Treasnrer spoke, and other members fol lowed him, it might lead to an angry feeling Let them to-morrow consider the qaestioi calmly and judicially, and in the best in terests of $he country, and not in any Part] spirit.' The Premier appealed to Captain Knssel -to use his influence to prevent members re quiring the House to adjourn without t statement of the position being made by th< Treasurer, in justice to the Committee anc to the country. An explanation by the Treasurer, who was acquainted with the positioi in all its bearings, would be received wel by the House and by the oonntry. It wai only under these oiroumstanoes he ooulc refuse an otherwise reasonable request. Thi position and the interests at stake were un paralleled in the history of the colony. Mr. Bell objeoted to the Treasurer, th< most skilful advocate in the Honse, speak ing unanswered. Mr. Ward was so fitted t( propound his view as to carry conviotion whether right or wrong. Members were noi here as directors of the Bank of New Zea land, but aa directors of the oolony of New Zealand. (Applause.) Dr. Newman said the Treasurer woulc make a partisan speeoh of an hour, and any' one who differed from him would be sagged (Cries of " No.") Mr. Ward wiahed tS of Sate a public feeling by the report of his speeohet and by leading artioles in papers, while members on the other side of the House were to be gagged. (The Premier—" You can ge on. ) The Treasurer deprecated the Party tone being introduced. Mr. Mitohelson himself had suggested that the Bill should be introduced witn a saoond-reading speeoh, and the House should then adjonrn. He did not propose to make a partisan speeoh, but to exphun the proposals, some of which were intricate, and of suoh a nature that members oonld not understand them without explanation. « Mr. G. W. Enisell said that one, i) not more, of the Australian -Banks had been doing its best to injure the Bank of New Zealand and pull it down The Treasurer's speech would be given with a sense of responsibility, and the Committee had been a responsible and representative one. Mr. T. Maokenzie warmly contradicted the aoonsation ag&inet the Australian Banke, but sat down suddenly with the remarl ihat the speaker was not worth notioe. Mr. Allen considered more harm would be done by making the Treasurer's speeoh than by leaving it alone. The Premier said if it went to the oountrj that the House refused to permit the seoond reading, it would have a detrimental effeot on the Bank, and he preferred to take all members said and go on with the second S^tStTvS*^ * lvm i ? 0 to the country with tie Bill like Mahomet's coffin. Mr. Buohanan said so far the proceedings had been conducted outside of any Party •pint. There were strong reasons why the Treasurer should explain the Bill, but, admitting .this, he thought the Premier was committing a grave mistake in insisting on it, and running the gravest risk of having members who did not understand, and oould not be made to understand by the Treasurer savins: things whioh would be seriously etamwng. Members oould only follow the Treasurer by careful perusal of the Mr. buthie regretted the Premier would not afford those opposed to the Bill time but as he would not, let them get to work* get a speeoh or two over, and let them tret Some. Mr. Bell said Mr. Bussell's remarks might be construed as applying to him, but he had had no communication with any banking institution, and anything 1 he said was not inspired by any such institution. Mr. (i. Hutchison contended that the making of the Bank of New Zealand's notoß i? 3 "*/ V ? ne Bank's position was not within the Note Issue Aot. The Bill had not even schedules attached to it, and they should ___-__3t ~ d Othor **F BtB > be * or ° thß second reading was proceeded with, and he would use the forms of the House to seoure t This speeoh, delivered with studied impressiveness, brought up the Colonial Troa■nrer with the statement that he would be guided by the Law Officers of the Crown _ the matter of the note issne guarantee II Was merely the 'assets in the oolony which had to exoeed the in the oolonv and this was so by _32>450,000, and even if" they deduotod the deficit in the Assets Company, there was still an excess of assets Bo far he had not gone into the position of the note issne declaration— (Mr. G. Hntohison—"The Premier has")— but from his knowledge of the institution he was satisfied that the Bank oonld fulfil the conditions of the declaration required. The aohedule of properties was a small matter. The Committee had got through an amount of work which he had believed to be impossible. Mr. ttutohison should net give ntteranoe to exSToutside*** *° «W W*-

Mr. Hone Heke said that the Treasurer oould rattle ont figures like a machine, and unless members had perused _ the Bill it would be impossible to follow him. There was further discussion, during whiob Mr. G. Hutohison protested against the colony guaranteeing every note of the Bank of New Zealand. " Fou may protest, retorted tho Premior, " but we will do it." Dr. Newman also protested, and wanted to know what furthor surprises were in storo ; and the Treasurer challenged him to move a resolution for the winding-np of tho Bank. Mr. Duthie considered it very serious to pledge the oolony to-day for another .£500,000 of the note issue. At what stage would they stop— ,£10,000,000? The Premier said the Government, by being prevented from going on with the measure, waß foroed to the guarantee of the note i6sue. The Bank, aooording to toe returns, was in a better position to make the neoeiisary declaration than any other Bank in the colony. The debate oontinued, and Mr. Bell aconsed Government of holding a pistol to the head of the House. To guarantee Treasury (fold for the note issue would be a cruel wrong to the oolony. He questioned, the necessity. The Bank was again driving the House and the Government at the point of a pistol. Mr. Dnthie oonld not believe the necessity for further committal of the oolony. The Treasurer said one of the difficulties was that the Bank had too muoh money whioh it oould not profitably utilise. It was beoanse the Bank had these large sums of money that precautions must T>e taken, unless they were to allow things to get into a serious position in the oolony. As to last year's guarantee, under Bimilar oiroumstanoes he would do the same thing again. Had they not done it they would have lost muoh more than .£2,000,000, and members would have an opportunity of bringing about thiß year a state of things whioh would prove that. Last year they had prevented a Tory serious disaster to the colony, which would have extended to other powerful institutions outside the oolony. (Mr. Bell — "You need not trouble yourself about them.") They would have to trouble. The disoussion lasted till the supper adjournment, and during that interval a speoial Gazette was issued, proclaiming the notea of the Bank of New Zealand to be legal tender within the oolony. Members, however, did not become aware of the faot. On the Honse resuming, Mr. Earnshaw moved that the Chairman leave the ohair, as a protest against giving further assistance to the Bank of New Zealand. Mr. G. Hutohison hoped steps would be taken to prevent the issue of a proclamation, as it would mean that after Tuesday next the Treasury would require to hold .£438,000 in gold to meet the notes. The proclamation would not make the notes legal issue outside the colony, and in Australia and Fiji, for instance, demand would be made on the Bank. The Treasurer Baid the Bank had a surplus of assets over liabilities of .£593.366. The assets en the 19th inst. waß .£7,805,879, and liabilities £5,214,006, and deducting the £1,800,000 of the Assete Company, there was still the balanoe given above. The defioienoy treated in the report of the Committee was when all the concerns were considered, and not the Bank itself. It was now approaohing midnight, and Mr. G. Hutohison and Mr. Heke, who spoke •gain, were interrupted with ories of " Question" and '• Time." The Colonial Treasurer condemned Mr. Hoke for endeavouring to keep on the disoussion till after midnight at the instigation of Mr. Hutchison, bo as to prevent the seoond reading being moved. The responsibility of anything which might arise must rest with Mr. Hutchison. At the latest date to which the figures oould be made np, and deducting the losses, the Bank had a dear surplus of aeaeta over liabilities of £340,460. They had wasted a great deal of time that night. They had a report whioh in its leading features was unanimously arrived at by some of the ablest men in the House, and it was desired that this report should be explained, but he had been designedly prevented from making thiß explanation. It waß to be very much regretted that a few members, whose action did not meet the conourrence of the majority of members on the other aide of the douse, should have taken up such an attitude. They had deliberately prevented him from giving the explanation which waß neoessary for members to take an unbiased view of the matter. Sir Bobert -Stout said that it was now past midnight, and as the Treasurer could no longer move the second reading he would say that Mr. Ward was correot in stating that there were ample assets over liabilities as required by the Bank Note Issue Act. and the Government had certainly power to ibbuo the proclamation. Mi. Allen having spoken, the Premier hoped that, midnight having passed, they would prooeed to business. They oould not now go on with the seoond reading. Let them accept the introduction of the Bill and fix a time for the seoond reading. Very little consideration had bees shown by members to the shareholders, and the agricultural and commercial communities. It waß fortunate that the Legislature had provided a safeguard, and that the Bank could ask for and obtain a proclamation. There had been little consideration shown Ministers. Mr. T. Mackenzie defended Mr. Heke, and Mr. G. Hutohison denied that there had been any compaot between himself and Mr. Heke. Mr. Duthie oontended tbat bad the Government not held up the Bank last year there would have been no disaster to the colony, and if it were dosed to-morrow there would be no such wide disaster as Ministers pictured. * Mr. Earnahaw was proceeding to Bay that none of the Labour organisations had approved the Banking legislation of last year, and on the Minister for Labour making some interjection, Baid that Minister Bhowed a laok of manners. The Minister called the attention of the Chairman (Mr. Guinness) to this, and the member had to withdraw the remark, substituting the expression tbat Mr. Beeves had 3hown a laok of oourteay. Mr. Heke also repudiated any collusion with the member for Patea. Last year a Minister wrote to him asking him to vote for what he knew to be wrong, because it was made a motion of want of oonfidenoe. Neither that Minister nor any other member would make him do or support what he conBidered. was not for the good of the country, and this was the reason for his stand against the passing of a measure of which members knew nothing. The Chairman oantioned Mr. Heke for repetition, which that member denied, and amidst laughter, Mr. B. M'Kenzie admonished Mr. Heke for his altitude on the question. Such blocking oonvinced him that native representation was not desirable, but Mr. B. Thompson spoke most highly of Mr. Heke, whom he had known from a boy, and who had shown great devotion to his constituents and marked ability. Mr. W. Hutohison protested against tho Note proclamation, and Mr. B. Thompson attributed the length of the disoussion to the Premier's announcement of his intention respecting the proclamation. Mr. Thompson demanded emphatically whether the oountoy was to be governed by the Bank ? He did not believ.e the country was dependent on the Bank, and thought it would be a very good thing if the Bank did dose its doors. Mr. Buddo added his voice to the ohorus against the proclamation, in spite of the sre?5 re ?? < £ coe o* I ? 11 leil ci ' Mn * opieß ot "Question." Mr. E. M. Smith got up next, the Premier begging him to sit down, while he vowed that he would talk if he ohose, and the House, now desperate, laughed oonsnmedly, while Mr. Smith went on to retort on Mr. Heke, who had reproved him roundly for interrupting. • ¥?£_?• Hutohison also had a last word, justifying hie'attitude as necessary to give the colony time to appreciate the position. From the Premier's announcement of the proclamation it was evident he had not intended to press the Bill that night. The Premier said he knew nothing as to the proclamation till that evening. Members were irrepressible, but just after 1 o dock a division was come to on Mr Earnahaw's motion that the Chairman leave the ohair, whioh was lost by 46 to 10. The Ayes" were— Hall- Jones, J. W. Kelly M'Nab, Heke, Lamaoh.T. Maokenzie, New! man, Buiok, Lang, Earnshaw. 'Ihe motion for the introduction of the mil was then carried on the voices, and nrogresß was reported. The Colonial Treasurer then took hie opportunity of speaking. They were faoe to taoe, he said, with a very serious crisis. The Committee had gone exhaustively into the question. The date of expiry of the Bank Note Issue Aot was 2nd September, and it was proposed in the Bmk of New Zealand Bill to extend this for 12 months. No man oould tell what would be the final reßult of such aorisis as tius. and they must provide that there should not be a panic to any institation while these matters were before the Houbb. The Bank of New Zealand had one of the best businesses Bonth of the Line rl"':..?. 1141 "?"" 1 * baa loßt money for years ) ■£" ajgouUto were not want of funds, but the attachment to it of the Estates Company and its apnearanoe in the balance-sheets. »,_ Crol £r er ;; But the z *"> ph* ot <*c Bank.) The Estates Company and the Agricultural Company show losses, and .i? B ?S 4 °L f t K B F* k were -£500.000. Ihe Bank held through these companies pro- 1 lerties and businesses being carried on at a I locs, and while these remained it was im- 1 lossible to make a profit. How to sever these oompanies from the Bank was the 'problem. This would b,ave compelled the directors of the Bank, who desired to do right, to disdose in the balance-sheet for the first time the true position on Friday next. No institution, no matter how muoh momeyithactin its ooffers, could have earned on under suoh oiroumstanoeß had the House not intervened, and this would have •ffeoted notonly the Bank but other iustitutwnßof the- oolony. The Government was £? ltte(1 i 7"J& not a*"*"* *11 this in the .Financial Statement, but had they stated ,what they then knew before setting up a 4/ommittee it would have brought disaster on the oolony. The losses and the deficit of .the Assets Company amounted to £1.100,000 To enable the Sank to be severed from the Asseto Company £2,734,000 would be required. This would enable the Bank to have a dean ihtet. The latest valuation of the estates was £1,879,000, leaving abont £40,000. The defioit which members would have to deal with would be £885,000. To enable the wiping off of the £8,734,000, they proposed to write off the share oapital of £900,000, and authorise the BeaUsation Board to issue debentures. They proposed to guaranteo this defioit, putting against it the calls and an annual torn of £50,000 a • year of profits, and the 'properties, thus exceeding the amount of guarantee. To help seoure this £50,000 profit the Bank would be freed from the Estates Company and its earning powers increased. The Bank wonld be given the whole of the colony's business, which h*d been costing £20,000 a year, and J3 £ I *'2SS£J' m ' for & Then, there wouia be £64,000 earnings of estates from the Realisation Board/anS to give the Bank f?^ L eanun £ Power it was provided that it might puroEase further business. Then i f ha B .? OO SS. mUIIOn of A Btoo k w»" to be re- J leased. There would be a further wnhur tl power by this of £15,000 a year. S?» jnest that the seoond million should be held iquid was no longer necessary to m«in^ n . fee Bank's credit whan the Estates Company vu sold. Than thtrs was to bt a saving of

4515.000 a year in tho management of tbe Bank— this had already been done. The total additional earning power or saving was .£132,000 ayear. Everyone must sympathise with the shareholders in their troubles. They were not responsible for the position, and they were shown consideration in lliu proposals. The reversionary interest in tho Hank belonged to tho shareholders, and to infuse spirit and hope in them they would be given an opportunity of repurchasing the money whioh tbe State was to put in. If they allowed the Bank to olose tho doorß it would not end thoro. He caloulated that the revenue of the colony would fall over a million a year if the Bank olosed. (Cries of dissent) Thero would be disorganisation of trade whioh would extend far beyond the colony. On the seoond reading he promised to more fully explain the proposals, but the Government was doing its duty in bringing down a scheme they believed would be eff eotive. If the House did not choose to accept that scheme that was for the House to say. Government was not going to force anyone to vote for it. Here the speaker was interrupted by tbe half-hour time limit, and the report of the Committee was acoepted. The House adjourned at 150 a.m., the Premier having intimated that Committees would not be required to sit to-day, so as to permit members to consider the Bank matters, and that the Becond reading of the Bank Bill would be taken at 2.30 o'olook to-day. In tbe Legislative Counoil, ' At 4.30 p m. the Hon. CO. Bowen bronght up the report of the Joint Committee. The Attorney-General said copies of the report would be in the hands of members later in the evening. He moved that the report be considered when the Bill dealing with the matter was before the Counoil. The Hon. Mr. Bowen, in anßwer to the Hon. S. Shrimski, said the report was a unanimous one. The Attorney-General assured the Hon. J. Rigg that members would be given sufficient time to disoues the question. The motion was then carried.