Evening Post. THURSDAY, JUNE 18, 1896. WHAT THE BANKING LEGISLATION MEANT.

Evening Post, Volume LII, Issue 21, 18 June 1896, Page 4

Evening Post. THURSDAY, JUNE 18, 1896. WHAT THE BANKING LEGISLATION MEANT.

♦ That the whole of the Banking legislation had for its real end the saving of the Colonial Bank, of the J. G. Ward Association, the Honourable J. G. Wabd himself, and the erstwhile directors and General Manager and Chief Inspector of that Bank, seems now obvious. The design, if it existed, has apparently been so far successful. The Colonial Bank has been saved, as far as it was possible to save it, and Messrs. Watson and Mackenzie have apparentlybeen rewarded by being appointed to their present positions. Whether the directors of the Colonial Bank have yet to explain their conduct remains to be seen. Mr, Wabd has been saved for the present from bankruptcy, but not from insolvency and discredit. If the scheme had been carried out in its entirety, there would have been an amalgamation of the Colonial Bank with the Bank of New Zealand, instead of a sale, and we should have had none of these exposures. For there can be no doubt that a soheine for amalgamation was matured, and, but for the fact that, by some mistake, a clause was inserted in the Bank Act making it impossible for the liquidators to make compromises without the sanction of the Court, all would have been arranged long ago, and the deception would have been kept up to the end, and the public would have known nothing about the peculiar balance-sheets of the J. G. Ward Association, or the mysteries of the " oats draft" and its effect upon the Colonial Bank dividend. As for the mystery of the £55,160 wiped off the account of the J. G. Ward Association, it cannot be said

that it has vanished. It has, on the contrary, become deeper than ever. It is perfectly obvious that the whole truth has not come out, and it probably never will come out until the Parliament that has been hoodwinked with regard to it does its duty and probes the whole affair to the bottom. Judge Williams was evidently puzzled by it, and Mr. Wasd's " explanation " was as unsatisfactory as his explanations usually are. We cannot help having a suspicion that Mr. Wabd's promissory note for £55,160 partook very much of the nature of the " oats draft," and that it was never intended to be used for any legitimate purpose. We have no desire to overstate the cSse against Mr. Wabd, but there can be no doubt of this— that during the course of the Banking legislation his position in relation to the Colonial Bank, both directly and through his Association, has been such that it was impossible for him to prevent his action as a member of the Government responsible for that legislation from being influenced by his position in relation to the Colonial Bank; and not even certificates from the directors and other officers of the Bank of New Zealand will convince the public to the contrary. The use of the testimonials from Messrs. Watson and Mackenzie we consider an affront to the intelligence and common sense of the community. There is no doubt of this— that Mr. AVaed's whole fortune, and his reputation, not merely for integrity and honour, but for ordinary prudence and ability as a business man, were at stake ; he must have known that his reputation as a busine-ss man could not survive the exposure to the public gaze of the management of his own company, with its remarkable balance-sheet as signed by himself. He must have known that the condition of the affairs of the Colonial Bank was such that its disclosure would be a serious matter for Messrs. Watson and Mackenzie, as well as for the Directors, and he knew that no single individual, with the exception probably of Mr. Watson, was so largely responsible for the Bank's position as himself. He must have known that failure to pass the Bill of last session would mean that the Colonial Bank must go into liquidation, and that if the Bank of New Zealand did not purchase it or amalgamate with it, then there would be no £78,000 for goodwill, and the enraged shareholders would think of nothing but vengeance. He must have known that his own fate, financially or otherwise, if not the fate of the Government, depended upon the passing of that Bill, and that if it did not pass, he and his company must have landed in the Bankruptcy Court. And, in addition to all that, he must have felt that the inevitable disclosures as to the inner workings of this complex financial mechanism must open the eyes of the public, with the result that it would attribute motives, reasons, and objects for the legislation for propping up the Bank of New Zealand and for the appointment of Mr. Watson to the position of President, other than those advanced in the Legislature, Nothing can now convince the greatfbodyof the thinking section of the public (we do not include Seddonian Liberals in that category) that the Watson appointment was not made in the interests of the Colonial Bank, of the J. G. Ward Association, of the Hon. J. G. Wabd, and of the Seddon Government. As for ourselves, we confess that we suspected it from the first, but now we feel assured of it. No man, not even Mr. Wabd himself, had more to lose in reputation by the ruin of the Colonial Bank than Mr. Watson. During last session that gentleman must have felt much more concern for the Colonial Bank than for the Bank of New Zealand, because he is believed to have been largely responsible for the position of the former, whilst he was not in any way responsible for the latter. There is' no escape for Mr. Wabd from these facts and the conclusion that he has not been true to his public trust is inevitable. He has had to face the fact that he is bankrupt in estate, and he must also face the equally obvious fact that he is bankrupt in political reputation. Even the most blatant Liberal must now see that Mr. Wabd's reputation and popularity were without substance or foundation. To all who were open to conviction, the exhibitions of incompetence during* last session, especially during the Tariff debates, were enough to show how flimsy were his pretensions to financial ability and knowledge. It was said even then that he had gone up like a rocket and come down like a stiok. But ndw it is no longer necessary to speak in metaphors — the literal facts are more eloquent and expressive. It is to be' remarked, however, that the characteristics shown in his methods of conducting the affairs of the country are the same as those disclosed in the conduct of his own business— the same Teckless plunging as long as the means can be financed. As long as the Colonial Bank found the money, the Managing Director of the Association plunged away ; and as long as the long-suffering taxpayer continued to provide the funds, the late Managing Director of the Treasury doubtless plunged also. The day of disclosure has come, because the Colonial Bank's capital has come to an end, and another day of reckoning is at hand. Not even the miraculous balancesheets and the " oats draft " of the Association could stay the inevitable, nor can all his seizures of sinking funds and bogus surpluses avert the coming exposure of the financial position of the country.