The Banking Bill.

Hastings Standard, Issue 145, 14 October 1896, Page 2

The Banking Bill.

[By Telb:graph.]

(From our Spcrial (.'orrexpondent.)

Wellington, This clay. After an unsuccessful attempt on the part of the Leader of the Opposition to have separate debates on the Banking Committee's report and on the Banking Bill and the refusal of a request bj Mr Puthie for an extension of the time limit, The Premier opened the debate at 3 p.m yesterday by moving the second reading of the Bank of New Zealand and the Banking Act Amendment Bill. Pie said these banking matters had been foreshadowed in the Governor's speech at the opening of the session, and there had been a strong feeling throughout the country that the banking question required further investigation. After the Select Committees of Enquiry had been set up it was predicted that their deliberations would prove futile, but he contended that the results of their deliberations had been most beneficial. At the present juncture he did not propose either to defend or to accuse. He wished to say, however, as to information given to the Government in 1894 regarding the position of the Estates Company, that in his opinion Mr John Murray had not wilfully withheld from Ministers information he was possessed of. It may have been that he refrained from giving information owing to doubts as to the valuation. Both Committees had found that the Bank was now in a thoroughly sound condition, and that under ordinary conditions the colony would not be called on to pay anything of the guarantee they had given. That was a matter for congratulation. Coming to the provisions of the Bill, the Premier explained that it was not proposed to make changes in the management until March next, as during the general election campaign banking matters could not expect to receive much consideration, and that it was undesirable to make the changes till after the half-yearly meeting of the Bank in February. As it was not proposed to lower the responsibility of the Government of the day in regard to the Bank, he thought Government should have the appointment of the Chairman of the Board, who was to have the power of veto. There was a feeling in the minds of members of the House Committee and of some of the directors of the Bank that there should be a change in the office of general manager. The salary had been reduced from £1750 to £1250, which was the highest salary paid to any Civil Servant in New Zealand; but if the House thought a higher salary should be paid the amount could be increased before the Bill passed. Clause 10, dealing with overdrafts, was introduced because it had been felt that in the past companies of which the directors of the Bank of New Zealand were directors had been unduly favored by that institution. In Committee he intended to move that the salary of the Colonial Auditor, which was now £1750, be reduced to £1250. It could not be denied that the present occupant of the office of President was entitled to compensation for the loss of office, and it was proposed to give him the amount of a year's salary—namely, £2,250. Clause 13, which allowed of the transfer of accounts in the " B " list to the Bank of New Zealand, was the most debateable clause in the Bill. Serious injury was being done to persons whose accounts were in the " B " list under the present mode of liquidation, and he urged that the change proposed would be to the advantage of the Bank of New Zealand, and in the interest of the Colonial Bank's shareholders. Sir Robert Stout's main point was that the losses of the Bank of New Zealand were due to the fall in land values. The loan companies, with most careful and prudent management, had incurred heavy loss from this cause, yet neither Committee had touched that point. The Bill proposed to give the Government five out of the eight directors, which was to be deprecated as having a tendency to create a feeling that the political element was to be continued in the bank. He spoke strongly against tbe pro-

posal in clause 11 to void the contracts with certain officers of the bank. It was as immoral for the Parliament of New Zealand to cancel contracts deliberately entered into without compensation as it would be for a private employer to break an agreement under the name of reorganisation. The Bill struck a blow at the security of the tenure of office of all those employed in the bank. Tie saw no objection to clause 14, provided that the Bank of New Zealand did not pay too much for the accounts they took over. Clause 17, empowering the Governor-in-Couneil to prescribe forms of returns and balance- ; sheets, was objected to as utterly childish, and it would have no effect whatever. The colony could not dictate to a foreign bank how it should make up its balance-sheet. Another clause which would give no guarantee as to the stability of a bank was that which compelled banks to keep their assets in the colony equal to their liabilities. Finally Sir Robert urged that the Bank should be disassociated from its political surroundings. Mr G. Hutchison contented himself by reading his minority report which the Banking Committee refused to receive. He protested against the haste with which the Bill was being forced on the attention of the House. He did not approve of the inci'eased representation on the Board, holding that a smaller Board than that proposed would do better work. He held that Mr Watson should go to a jury to decide whether he had been guilty of such misconduct as justified his engagement being cancelled. He strongly opposed the clause dealing with the Bank's balance-sheet. At the evening sitting " Riccarton " Russell took up the banking debate. Mr Duthie followed and then Mr J. G. Ward made a telling speech. A number of other members also spoke to the measure, including the Hon J. McKenzie. It was four this morning before the Committee stage of the Bill was reached, and since then the House has been worrying over the details of the measure, The main alterations made so far are the increasing of the General Manager's salary from £'1250 to £1750; reducing the directors from eight to seven ; making the proportion of Government representatives in the ratio of four to three ; increasing the salary of the directors from £250 to £4OO ; and by 24 to 21 striking out clause 10, which provides against an overdraft to officers of the bank or to any company of which a director or officer is a director. The clause voiding the contract with the President, the auditor, and officers of the bank proved the real bone of contention. At 9 a.m. an adjournment for an hour for breakfast took place. On resuming, the Premier said he was willing to amend the clause so as to provide a year's salary for Mr Watson, who, he recognised, was entitled to compensation. Those who most strongly opposed the clause contended that Mr Watson was being made a scapegoat to placate public opinion. Eventually clause 11 was restricted to the President and the auditor, and it was agreed that in the event of the former ceasing to be continued in the bank's employ he shall be offered without prejudice a sum equal to one year's salary in full satisfaction of any claim he may have against the bank or the colony, provided that in the event of his not accepting such payment it shall not be a bar to any claim on his part. By 31 to 21 clause 14, dealing with the liquidation of accounts in the " B" list, AVtxs rejected.