The Hastings Standard Published Daily. WEDNESDAY, MAY 20, 1896. THE BANKING BUSINESS.

Hastings Standard, Issue 21, 20 May 1896, Page 2

The Hastings Standard Published Daily.

WEDNESDAY, MAY 20, 1896. THE BANKING BUSINESS.

For the cause that lacks assistance, For the wrongs that need resistance, For the future in-the distance, And the good that we can do.

The Wellington papers have entered upon a warm discussion respecting the Bank Agreement which formed the basis of the sale of the Colonial Bank to the Bank of New Zealand. The discussion arises out of the peculiar "writing-off" of the sum of £00,233 from the accounts in the "C" list, the peculiarity of which was disclosed when the matter of appointing official liquidators came before Mr Justice Williams in Dunedin. It would be in the interests of all concerned if the absolute truth in relation to the Bank legislation of last year was made public. There is a deal of rumour floating about which we dare not focus in this column, and, although we believe much of it is grossly exaggerated, still it is damaging and calculated to disturb the confidence of the people in the honesty of Parliament and Government.

The singularity of clause 18 of the Bank Agreement on the face of it requires explanation, and the explanation, if given, will not and need not disclose private affairs that have no public interest. It will be remembered that the accounts of the Colonial Bank were, for the purposes of the Agreement, divided into four parts, and distinguished by the first four letters of the alphabet. The "A " list was swallowed by the Bank of New Zealand with pleasure, the " B " list and " C " list were not quite such savoury morsels, and were held back until the sour substanco in them could be squeezed out. The "I) " list was unfit for bank consumption, and was reserved for destruction by the liquidators. While the amounts of the " B " and " C " lists Avere given separately, the marginal sums which represented the estimated sourness in them was lumped together; but a separation was effected when the figures came before Judge Williams. It was then discovered that of the accounts on the " C " list more than half was bad, but this was not all, for we learned then for the first time that it was part of the agreement that the marginal sums in the " G " list were made a gift to the accounts against which they stood. In point of quality, the " C " list was inferior to the " B " list, and it may be urged on that account that those negotiating on behalf of the Colonial Bank were justified in writing-down the accounts to have them accepted by the purchasing bank. But this is not so, as the Colonial Bank indemnifies the buyer against any loss on the realisation of the " C " list, provided the writing down was agreed to.

If clause 18 of the agreement had no existence, then it would have been impossible to write off the marginal sums without the consent of the Supreme Court. Apparently the sacredness or liigh-standing of the owners of the accounts in the " C " list made it imperative that the writing-off should be effected without the inevitable exposure in a Court of Justice. Further, the operative character of the clause was not disclosed to Parliament or shareholders, and it was only by the persistency of some of the opponents of the liquidators nominated by the Directors of the Colonial Bank that caused the correct reading of the clause to be understood. There is an illUavour about the " C " list, and it is imperative that the public should be told the simple truth. We fail to sec how it can be withheld in the face of the highly coloured rumours that are floating about, and which are so damaging. There is bound to be some plain speaking 011 this subject during the session.