THE BANKING ENQUIRY.

Evening Post, Volume LII, Issue 94, 11 September 1896, Page 6

THE BANKING ENQUIRY.

The Banking Committee of Enquiry appointed by the House of Representatives resumed its investigations this morning, fig The examination of Mr. T. G. Macarthy was continued. He produced a statement showing that the number of accounts of the "Colonial Bank in Central Otago closed after being taken over by the Bank of New Zealand was seven, of the total amount of £11,277, the largest of these accounts being £10,000. There were only two accounts in Central Otago not taken over by the Bank their value being £76 8s 7d. To Mr. Montgomery— From what he had sepn of Mr. Mackenzie during his term of oflice as General Manager of the Bank, he had no fault to find with him. He could not get away from the opinion he had expressed yesterday. He did not doubt either Mr. Watson's or Mr. Mackenzie's honesty or ability, but he had a lack of confidence in them acting together — not that he at all doubted their honesty. He had a very high 'opinion of Mr. Watson's abilities, and generally had confidence in him as President of the Bank. He did not know any person at the present time whom he would prefer to see as President in place of Mr. Watson. It was desirable that the Bank of New Zealaud should take over the B list accounts at once with the cover provided. Owing to the discretion of the liquidators being limited, he thought injury might be done to some persons in the B list, and losses would be sustained which by careful handling might be avoided. Legislation to extend the power of the liquidators in this respect might be advisable. The present audit of the Bank was very certain, but he thought additional assistance should be given by the appointment of an Assistant Auditor. The system of conducting the Bank's business now adopted was a very safe one. He was certainly of opinion that it was undesirable for Banks to carry on the business of loan companies. Ho considered that the purchase of the Colonial Bank would increase the earning power of | the Bank of New Zealand by £30,000 a year or more, besides removing a serious competitor from the field. Unless some serious calamity occurred to the colon}' — assuming the Bank was well looked after under effi- | cient management — it v/as only a question of time before the Bank could get clear of its liabilities. It must, of course, take a long time — more than 10 years. He knew that the present enquiry was injuring the .Bank, but the final result of the enquiry, if the public were satisfied it was thorough and complete, might prove beneficial to it. To Mr. Hutchison — Since witness had been a director of the Bank of New Zealand no overtures had been made by the Board of Directors for the purchase of a Bank other than the Colonial Bank. The guarantee of tho £25,000 given by the Colonial Bank was not included in the cover given for the B and C lists. He was unable to say when tho £20,000 guaranteed by the Colonial Bank was advanced. He must decline to say when the advance was made. To the Minister of Lands — Witness, towards the close of the negotiations with the Colonial Bank directors, saw, owing to a statement by one of the directors, that the £20,000 advance was doubtful. That statement, however, put the Bank of New Zealand on its guard, and it obtained the guarantee. The amount A^as now paid off. Witness did not consider subordinate ofiicers of the Colonial Bank responsible for the position of the institution. It was the head office that was responsible for the policy of a Bank. It would have ' been a hard struggle for the Colonial Bank to carry on if the Bank of New Zealand had not purchased it. The Colonial Bank, however, was in a better position than the Bank of New Zealaud. He had not considered the question of the commercial part of the Ban!: of New Zealand being taken over by a company and the Bank itself made into a State institution. It was a question that would require serious consideration. It would be a serious thing for the Bank if it was to be made a political shuttlecock between tw6 contending parties. To the Premier — The Banking legislation was likely to prove disastrous to some of the Colonial Bank customers if the liquidators of the Bank were not given extended powers. Some of the account?, if nursed, would probably pay 20s in the £, but if the liquidators were forced to realise the holders would be made bankrupt, and suffer great hardship. The Colonial Treasurer had great power at present in regard to the Bank of New- Zealand, but he would prefer that further JJpower be given, to enable him to confer with the Directors regarding the Bank's affairs. Had he (witness) been a shareholder of the Colonial Bank, he would have thought tho widest thing to do was to sell the Bank. The purchase had proved a bargain to the Bank of New Zealand, but it would not have been such a bargain to any other Bank, owing to the other Banks not having branches everywhere, like the Bankjof New Zealand and the Colonial Bank. He thought it would be to the advantage of the Bank of New Zealand if the National Bank could be acquired, as its business could be worked with very little extra expense. He thought there were too many Banks in the colony — there had been too much accommodation given. He had been under the impression, though he had not looked up the matter lately, that some of the foreign Banks doing business in the colony had liabilities greater than their assets here. He • thought this ml most a matter for the consideration pf the Government. At this stage Mr. MacCarthy explained that there appeared to be a misapprehension in regard to a statement by Mr. Booth. Mr. Booth did not wish it to bo understood that from the first, prior to the agreement, the Directors of the Bank of New Zealand had determihed not to take over the accounts in the C list. This • concluded the examination of Mr. Macarthy, and the Chairman complimented him upon the very straightforward and able manner in which he had given his evidence. In this he thought hd would bo supported by the whole of the members of the Committee. The Premier objected. to the Chairman making any invidious distinction like this. He concurred in what had been said, but thgught it was not in good taste. The Chairman made a statement regarding an article which appeared in last night's Evening Post to the effect that he had refused to supply certain information to the press reporters. He had, he said, never refused to the press representatives anything that he could give them. At 1.30 p.m. the Committee adjourned till 11 o'clock on Monday, a motion by Mr. G. Hutchison to sit to-morrow being negatived.

Last night's fire alarm was groundless, Laving been given by some one who saw an unusual amount 'of smoke hanging about the National Hotel, Lambton-quay, and supposed the building to be on fire. Mr. W. P. Shortt will sell at bis mart, v Willis-street. tn.in«w«w anndries.