THE BANKING INQUIRY.
(BY TELEORAPH.) Wellington, Taeadny. The sab-committee of the House Banking Committee met this morning at 10 o'clock. Mr Cooper watched the proceedings on behali of the Bank of New Zealand, nnd Mr S&muels as counsel for Mr J. G. Ward. - 11l WBB -resolved that the proceedings of the Bub-committee be reported to the general committee from time to time. The committee then proceeded to discuss the notices of motion by Mr Hutchison on the question of producing documents, It was resolved that the lists of wiltlngaoff date back to 188S only. The general committee met at 11 .o'clock. The Premier said he had received a oammnDlcßtion from the Speaker intimating that Mr Watson had paid the fine of £500 yesterday. The Chairman reported that since last meeting he had received a letter from Sir Robert Stout.— The letter wan not read. The committee proceeded to deliberate as to the order in which witnesses ahonld be called, When the committee resumed Mr William Booth was called and supplied with copies of the balance-sheets,—Ex-amined by the Premier the witness said he was a director of the Bank of New Zealand since 1894 and of the Estates Company as long. He produced the balance-sheet of the bank for 188 S. He had no knowledge of the balance-sheet ; had not Been it before. At that time the capital web £1,000,000, the reserve fund £500,000, the balance on the profit and loBS aocount £60,861, and assets over liabilities £1,568,081. | Mr Watson here explained that thebooke had been kept in a enrlous sort of way. On his examination he had stated that the amounts written off amounted in 1888 to £216,000. He had since found that the real figures were £216,885. Mr Booth, re-examined: He had no personal knowledge of the writings off. The auditors at the time were Messrs Pierce and J. N. WHsod. Mr Pierce had since d|ed, The ISB9 balance-sheet included the accounts of the London office tip to the 31st January. The capital was £1,124,874, the balance on the profit and lobs account £58,449, and assets over liabilities £1,213,323. The reserve fund «eemed to have disappeared. Twenty' five thousand new £10 Bhares were leaned at £7 paid up, realising £174,824. The amount written off was £100,565. The Premier: "There was a total written off in twnlve months of £825,000 ? " Witness: "Yes." The reserve fund was used between ISSB and 1890, and. then written off with other bad debts,' The total written off waa £1,169,555. la 1890 the capital wbb £1,125,000, the assets over liabilities £1,224,783. There did not appear to have been any Increase of share capital, nor was there any writing down of share capital. No reserve fund was created, The writings off were £1,169,554, The Premier: "That makes a total writing off, together with the loss of the reserve fnnd (£500,000), of £1,095,920. Witiaesß ; ''That wonld Include the reserve fund, which disappeared, wlthla that amount." Mr Gibbs told him he had some dlfficnlty in tracing the arrangement of accounts up to 1594. There was no trace of the suspense acconnt as a separate item. The auditors who signed these balancesheets were Messrs Wilson, Scott, and Brown, who were all in Auckland, and could be summoned to give evidence. " He believed the £50.0,000 was in '-.'that £1,124.874. In 1891 the capital was £890:853, the balance of profit and loss £59,522. There wbb a new reserve fnnd in this balance-sheet) of £21,000, whioh was taken out of the £59,522. The amount) carried to new reserve fund was £20,000. There was a dividend at the rate of 5 per cent absorbing £21,250, carried forward £15,272, written off £18,949. The dividend in 188S of 7 per cent absorbed £35,000 ; in 1889 the 7 per cent dividend absorbed £33,063 ; in 1890 there was no dividend ; in 1891 the 5 per cent dividend absorbed £21,250; in 1890-91 the eapjtel was lessened to the amount of £217,16'/. The Premier: 'fThat (a o lopa of capital of over £200,0,00. Whera <M it goto?" Witness : "Ib is quite evident it has been absorbed in the large earn written off in 1890." Tbo Premier t How did It get baok in 1891? ■Witness: "The difference between 1890 and 1891 is that it disappeared from the balance>sheet." The balancesheet was signed by Messrs Edwin Waterbouse and T. Sneatb, Greshamattest, London. The head office waa transferred to London on July 22ad, 1890. The balance of asseto over liabilities, including the capital in '1890, was £957,312, less atnonnt of dividend paid, £21,250. After paying outside liabilities the amount left would be £936,105. No antpense apconnt was shown in 1891, In 1892 the eapltsi was £000 000, It was well, however, to oali attention to the fact i t iat an interim dividend was paid on September 30th, 1891. The position in 1892 was : Amount to credit of profit and loss £78,830, Interim dividend paid in September, 1891, £22,500, at the rate of 5 per cent, assets over lia« bilitles £933,330 ; that left, after money dfabroprlatad in dividends had been paid, £#53,33\? assets over tfabilitjes, including additions made to the reserve fund of £15,000, raising "it from £20,000 to £35;000. The writings off for' '1892 ainannrjjd to £20,198 TheVe were two half-yearly dividends paid in 1892 -the first on September 3Qth, 1891, £22,500, and the second' on March 51st, 1892,' the same amount. The balance-sheet for 1802 was signed by the same directors as previously. In 1893 the capital was £900,000, the reserve fnnd increased from £35,000 to to £45,000 i the balance carried forward, after providing for a dividend of .5 per cent, £19,161 ; assets over liabilities, including capital £900,000, was £964,161; the amount credited to the profit and loss account was £74.1(51 ; the 5 per cent dividend "absorbed £22,500; £10,000 was added to the reserve fond, and- the smqnnb written off was £13,531. The balanes-Bhpef) wa.3 signed by "tbo same *«uito 89 flifl previous one. The general managers we.ej For 18.88, Mr D. U Murdoch, wos succeeded on .Tune sth by Mr John Murray) Mr Tolbnrst was oppointed on Jonnaiy 15tb, 1889, and roßigned on October 23id following j on March 25th, 18.S0, Mr J. M. Butt was appointed' manager. r Whilo Mr Butt, took up Ws dntie'a as ".genera
manager the head office was remuvurt to London, and Captain Colbeck, Messrs Bute, W. S. Wilson, and Murray wore appointed attorneys to look after muttero. While Mr Bntit wdb in oharge Mr 'Holmes was appointed In London as general manager, and arrived in Auckland in March, 1891, with fall power of Attorney, cancelling the power given to the othera and replacing Mr Butt. Mr Holmes was recalled in June, 1894, and Mr Bntti and Mr Mlchie were associated , as general managers. Tbe head office was transferred from London to Wellington and the new Board cow in office wua created on September 26th, 1894. They were Measrs Johnston, M'Carthy, Bull, and Kennedy. The president wbb appointed by the Government on Ootobsr I2cb, 1894. The dlceotors in 1888 were Messrs James Williamson, J. B. Owen, J. M. Clark, Sir Frederick Whitakor, Messrs W. T. Taylor, W. S. Wilson, aad S. Browning. For 1889 the dlrectore were Messrs W. H. Colbeok, W. T. Taylor, W, S. Wilson, A. 8011, J. Mnrray, F. Peacock, and F. H. George. There was also a London Board composed of the Right Hon. Sir James Ferguson, the Right Hon. A. J. Mundella (both members cf Parliament)), the Hon. Sydney Carr, Mr Glyn, Sir Herculea Robinson, Messrs J. Alexander, Ewen, David Murray, and D. M. Stewart, manager in 1890. There were no reoords beyond those at the head office, which was in London. The attorneys conducted the businesa until the appointment of the London Board. The names of tbe London Board were Mr Richard H. IGlyn, Colonel Robert, Messrs Baring, J. and A. Ewen, the Eight Hon. Sir James Ferguson, Mesars E. Herbert, Fryson, Mundella, T. M. Stewart, and the London manager, Mr Henry B. M'Nab. In 1893 the directors wore the first five names as above, and the manager, Mr M'Nab ; in 1894 the same, with Mr C. G. T. Getmeyor, general manager, There were two separate Glyns, Sydney Carr Glyn being a membar of the celebrated banking firm who was on the Board in 1888 and 1889. In 1891 Mr R. H. Glvn was on the Board. On March 21st, 1894, the capital of the bank was £900,000. Only one half-yearly dividend was paid. The reserve fund was £45,000. After paying a dividend from September, 1893, to March 31st, 1894, at 5 per cent, absorbing £22,500, there was carried forward £37,779 ; the assets over liabilities £982,740, the profit and loss for the year was £60,239, out of which a dividend waa paid and a balance carried forward amounting to £37.779. The writings off in 1894 were £15,164. The Premier: "Have you the state-. ment prepared showing the position of tbe bank in June which was snbraitted to the Government?" Witness : "The next I have got is tbe 1895 balance-sheet, sbowing the position of tbe bank on March Slab that year." The Premier: "I want a statement of the position of the bank when Mr Mnrray came to the Government in June. 1 ' Witnesa : " Did he prepare and submit a statemant different from the balancesheet of 1894 ? " The Premier: "You show by yonr balance-sheet of March 31st tbe position of the bank, and in Jane tbe bank oame to the Government for assistance, and stated that the bank was in such a serlons position that nnless immediate help was granted they would have to pnt up their shutterß. I have no doubt you will he able to find the statement prepared by Mr Mnrray." Witness: "I think thera must have been some privatecommunication supplied from London to Mr Murray. We have no statement except that which came from London on March 31st, 1894. Whatever information came from London must have been by cable to Mr Murray. He must have the information." The Premier: "Yon have no knowledge cf the statement prepared by Mr Mnrray ? " Witness: "No, The head office was in London. He must have been instructed from London," The Premier : " But when yon search you will oee whether there was not a report prepared by Mr Hanna sbowing tbe position of the bank in June, 1894," Witness : " Was the statement left with the Government by Mr Murray or did he take ib away?" The Premier : "We ask yon to search diligently for these statements and bring them here to-morrow," Witness : " We have no knowledge of their existence, but we will search for them and make inquiries." The committee then adjourned till 11 o'clock on the following day.
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Bibliographic details
Hawke's Bay Herald, Volume XXXI, Issue 10361, 22 July 1896, Page 3
Word Count
1,781THE BANKING INQUIRY. Hawke's Bay Herald, Volume XXXI, Issue 10361, 22 July 1896, Page 3
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