THE BANKING ENQUIRY.

New Zealand Times, Volume LVIX, Issue 2875, 18 July 1896, Page 3

THE BANKING ENQUIRY.

Mr Watson Called to the Bar of the House and Questioned. OUT STILL REFUSES THE INFORMATION. He anil his Counsel Hold that it is his Duty to Remain Silent, The Premier Moves that Hr V/alsoa be Fined £SOO. 'Hid Kvldcnci) Sub-committoo rnit ymtorcla y morning, when a diaenssion took plane with reference to the notices of motion given b> Air OuinnoHH on the previous dav relating to Waiter Guthrie anti Co. and other companies. Mr Montgomery moved to the effect that the Huh-committeu, in the absence of proof of the connection of the company referred to in the motion with the subject of the tin fjuiry, could not recommend that evidence was required at present. After Home discussion Mr Guinness was asked if he had any evidence to offer to connoct l lie company referred to with the matter the committee wan enquiring into. Mr G (/1 NNtHH replied that he had not at present, but would be prepared in a day or two. The Premier pointed out that no such objection had been raised to Mr Hutchison's notices of motion. Ho bad not been naked whore was his proof. Mr HoTCiiisotf Haid there wan a difference between the two noticea. Mr Montgomery said that the sub-com-mittce wanted some evidence to show that the company mentioned had any connection with the subject of the enquiry, before they could recommend the motions to the General Committee. After further discussion, Mr Montgomery’s motion was carried. The General Committee then resumed. Before the minutes wore confirmed, the MiNißXH.it of Lands asked why the notices of motion given by Mr Guinness had not been included in the minutes. After an explanation from the Secretary, on the motion of the Premier the minutes were amended ho as to include Mr Guinness’ notices. The Minister of Lands objected to being called upon to give proof of the relevancy of the evidence when notices of motion wore given. A discussion hero took place with reference to the order of business, after which the committee decided on the motion of Mr Guinnkbh to proceed to deliberate on the question of Mr Watson's refusal to answer certain questions on the previous day. On resuming, the Chairmanenquired if Mr Watson was present, and on the latter answering in the alUrmativo, the Chairman said the committee had decided to give Mr Watson another opportunity of answering the question asked on the previous day, and ho (the chairman) was asked to put the question, “ What are the names of the persons and corporations in whoso favour such writing-off took place, and the amount of each ?"

Mr Watson regretted to have to repeat bis former answer ; having regard to the terms of Lin appointment and the declaration of secrecy ho must doolino to give the information. Tho Chairman then directed that Mr Watson's answer bo taken down and road over to him. Tho answer was as follows: — Having regard to tho terms of my appointment and declaration of secrecy which I made us an officer of tho Bank, 1 must doolino to givo any information regarding individual accounts whatever, either past or present. In doing ho I am acting on tho advice of the Bank's counsel, and, further, I consider it is my duty to tho Hank and tho Colony to decline to givo such information.’’ Mr Hutchison thou moved that tho com* mittoo deliberate, which was agreed to. On Mr Watson withdrawing, he asked if ho would bo wanted again that day. Tho Chairman replied that he would not. Mr Skddon : * k Very likely ; when we will want you wo will send for you." On tho committee resuming, the Premier gave notice to move that Mr Harper, late manager of the Bank of Now Zealand at Invercargill, bo summoned as a witness. On tho motion of Mr Montgomery it was decided that tho Evidence Committee should have discretionary power, from time to time, to order that such documents as have boon produced bo printed for tho information of tho committee. The committee adjourned at 1.15 until 11 o'clock this morning.

THE LEGISLATIVE COUNCIL'S COMMITTEE. The Legislative Council Banking Committee have decided on the following issues as tho basis of their enquiry Bank ok New Zealand.—To enquire into —l. Tho position of tho Bank at tho date when the Colony assisted by the guarantee of two millions. 2. Tho information disclosed when the Bank applied for assistance in 3894, and whether prior to that date tho Bank had applied for Government assistance. Tho fullness and accuracy of the information supplied. 3. Tho circumstances leading up to the bank legislation or connected therewith, the connection therewith of the president, general manager, directors, officers and agents of the Bank of New Zealand and the Colonial Bank. 4. When such assistance was asked, and what further information was disclosed before Parliament was a&ked for further assistance in 3895. 5. The bal-ance-sheets of tho Bank for tho year 1803 and since ; their fullness and accuracy. 0. How was tho price paid for the goodwill of tho Colonial Bank arrived at? How far have the estimates of benefit to tho Bank of New Zealand from the purchase of the Colonial Bank been realised? 7. The appointment of tho president and general manager of tho Bank of New Zealand, and their connection with the Colonial Bank, or their connection with any of the constituents of tho Colonial Bank, or with the banking legislation of 1893, 1894 and 1895. 8. The properties remaining in the possession of tho Bank on the establishment of i tho Assets Company, a statement of their estimated value at that date, and of such properties still held by tho Bank, and their present value. 9. Tho management of tho Bank oinee 1894—how far tho estimates of earnings since 1895 have been realised up to date, and how far those estimates can be relied on as to future earning*. 10. Tho present position of tho Bank’s Australian business. Bank op New Zealand Estates Company .—To enquire into— l, Date of establishment. 2. Circumstances loading up to its formation, and its thou position. 3. The several valuations of its assets. 4. Its debenture transactions. 5. Its balance-sheets, their fullness and accuracy. G. The progress made, the earnings and tho result attained in the realisation of the assets of the Realisation Board. 7. Proposals for future administration and estimates of probable roeulU, and as to when the winding-up of the realisation may bo anticipated. Auckland Agricultural Company.— Similar enquiries so far as necessary. Colonial Bank.—To enquire— l. “When wore negotiations opened with the Bank of Now Zealand for the sale of tho Bank s business and by whom ? 2. When did the Government first become aware of such negotiations ? 3. What was the position of the Colonial Bank at such date ? 4. The balance-sheets since 1893. 5, Tho several valuations of the assets of tho Bon* at tho time of first negotiations for sale and since; their fullness and accuracy. 6. The amounts written off since 1894 ; what led to such writings-off, and whether other amounts should have been written off ? 7. Whether full and accurate information was supplied by the directors, officers and agents of tho Bank when Parliament authorised tho pnrchase? 8. Who supplied the information on which tho contract for sale and purchase, dated 18th October, 1895, was drawn? 9. ■Who was responsible for the preparation of the lists of debts and accounts marked A, B, C 1). 10. Who drafted tho Bill Bank of New Zealand and Banking Act, 1895, and Hinder whoso instructions?

AN EVENTFUL NIGHT IN THE HOUSE. MB WATSON’S REFUSAL TO ANSWER THE COMMITTEE'S QUESTION. ' Wfaon tho Houho of Representatives mot at 7.30 p.m. yesterday, Tho Speaker road a letter from Mr Watson asking that in tho event of bis being called to tho Bar of tho Honao ho might be allowed to have tho assistance of counsel, and that Mr Cooper bo heard in bis behalf. Ho also read a letter from Mr Cooper asking that ho might bo heard on Mr Watson’s behilTho Premier moved that Mr Watson bo called to tho Bar, and asked by Mr Speaker ■why he refused to answer tho questions submitted to him, and whether ho persisted in that refusal, and that Mr Cooper bo hoard in his bobalf. The Premier wont on to say that it was a question whether witnesses wore to sot this House, which represented the people of New Zealand, at defiance, and bo asked both sides of tho Honso to uphold and protect its privileges. Tho House was tho ruling power, and should insist _ on_ what it had decided on being earned into effect. If tho House did not uphold its position every banking witness would refuse to answer the game question ; and It might bo taken for granted that a similar course would bo taken by tho officers of the Colonial Bank. In defying this House they wore defying the people of Now Zealand j their privileges were assailed, and he bad no hesitation in saying that Mi Watson would inform the House he would persist in hia refusaL It meant that those witnesses refused to give evidence that could be demanded from them in tho Supreme Court; but the declaration of secrecy simply meant secrecy as between clients and tho general public, and if the House did not uphold its dignity they wore doing wrong to, themselves and the people of Now Zealand. This action on the part, of Mr Wafcson was premeditated, and it was the talk of street corners several days ago that tho Government would be set at naught. This merely a case of history repeating itself, and a similar case occurred in 1890, which was recorded in the Journals of the House, on page 281, of that year, when the president of the Bank refused to produce certain documents endpapers to a Parliamentary committee. At that time the Bank of Now Zealand was more powerful than the House, and the question now was wore they, the representatives of the pcoplo, to say that the Bank was more powerful than tho people of the Colony. Unless tho House insisted on answers being given to the questions submitted, tho enquiry would be nothing bnt a hollow and futile sham, and ho hoped there would be few mom* bora who would not support his motion. The reason given for tho refusal was a declaration of secrecy, but such declaration, ho urged, had no effect as - between the Bank and a committee of the House, and it was never intended it would shield a bank director or offioa: from doing whnt was necessary in iho interests of justice and of tho Colony. Another reason was that it was in the inteicMtß of the Colony tho reply should be withheld, but it was not for an official of tho Bank to say he could best conserve the interests of the Colony. No matter what might happen to the Bank the responsibility rested

with the ITous« : they had v;t v.p the committee, and made the order of reference with their eyes open, and it was not for the president of the Bank to say it was not in the interests of the Colony, which interests he would conserve. Another reason was that it was not in the interests of the shareholders that such information should be disclosed. The Legislature had protected the shareholders, who were interested in having tho satisfaction of knowing who had lost their money. Three millions of money bad been lost, while dividends wore declared. Others were drawn into the net,and now came the startling revelation that the whole of tho capital and reserve lurid had been lost for years, and now they refused to aay who had these writings-off, whether tho directors or tho friends of directors. They would toll that to no one, and it was for tho House to Insist on that information being given. From beginning to end ho only desired to do what was just to the Colony, and the House should not bark that desire. They could strengthen the position of tho Bank if this enquiry was made complete, and if not there would always bo a doubt in tho minds of tho people and the possibility of loss in tho future. Tho Leader of the Owosition said the members on that side of the House had always taken up the position that it was extremely injudicious to enquire into tho accounts of clients of the Bank, and be believed it v/ould bo most injurious to tho Bank to carry out such a procedure. He admitted it was the duty of all the members of the House to see that its privileges were maintained, but this was a privilege which, be behoved, bad never been claimed by any Parliament in the world, and ho did not think tho Parliament of Now Zealand bad any right to take such a privilege to itself. Technically, however, a breach of privilege had been committed, and ho had no alternative but to vote for the Premier’s motion. Mr G. Hutchison said they wore there to assort the dignity of Parliament, and to give the gentleman in question an opportunity of being heard. No precedent, lie believed, could be found for a witness who was contumacious being heard through counsel, although he quoted a case in which such a person had had tho assistance of counsel. Ho submitted there should be no intervention between tho witness and tho House, bat he would say nothing moro except that they v'ould by such a course bo establishing a precedent, which might in future bo found to bo very inconvenient, Mr 'T. Mackenzie contended that Mr Watson was the mouthpiece of tho shareholders, and in their interests and in the interests of the Colony he refused to give information which he thought would imperil the future success of that institution. It was at tho instigation of tho Premier that tho Inst penny hud been drained from the pockets of the shareholders. The action of the Government in the matter now under enquiry would imperil tho institution. It required more than money to bo a success—it required custom; bat tho effect of this investigation would bo that, although they might find out where the lost money had gono to, it would interfere with the success of tho institution. As to tho privileges of tho House, ho was glad Air Watson had sufficient backbone to conserve the interests of tho people who had placed him iu hia position.

Mr Earnsuaw demurred to tho prosecuting speech of the Premier. Ho urged that MrWatHon had simply taken up a position which ho believed was in the intorests of the Bank, and it was only right that when he appeared at the Bar of the House he should have tho assistance of counsel. Mr Hooa said he cast no reflection on Mr Watson, who could not bo regarded as a free agent. Ho represented the Bank and in that position was defying the Parliament and tho people of tho Colony. If gentlemen connected with tho Bank thought proper to defy a committee of the it would be no good to set up committees in future, and ho urged that Mr Watson had more right to refuse to answer a legitimate question than tho poorest petitioner who enmo before any select committee. Ho was glad there wore only two members who had expressed approval of Mr Watson’s action in infringing the privileges of tho House. MrT. Mackenzie : More power to him, Tho Speaker said he did not think any hon member should make such a remark, and ho called upon him to withdraw it. Mr Mackenzie : That is tho feeling I had in tho matter, and I decline to withdraw. The Speaker said if the hon member would not withdraw, it would bo for tho House to deal with him. Tho hon member knew the penalty for disobeying the chair, viz., that ho should name him and call upon the Loader of tho House to move for his suspension. Ho hoped the hon member would not place him under that necessity, butfjif bo did do so he {the Speaker) would discharge his duty. Mr Mackenzie : I withdraw the remark, but X would like to say this — Tho Speaker ; You must not justify it at all. Mr T. Mackenzie : It was in the heat of my feelings it was done. The incidontthen closod, and Mr G. W. Bussell resumed tho debate, and urged that this was not a broach of privilege. Tho Premier, lie said, had not given any authority to show that ny banker could bo called upon > to disclose tho private accounts of his customers, and ho asked were they going to lay it down &a a procedentthat details ot customers’accounts must be disclosed before n Parliamentary committee. If tho House insisted on dragging out the information now being sought, it would be tho greatest blow that could be •given to the Bank of Now Zealand. Major Steward quoted May’s Parliamentary Practice to show that tho House had power to enforce answers to questions, and cited cases in which witnesses who refused had been called to tho Bar of tho House of Commons, and, in one case, sent to Newgate Prison. Mr Collins asked whether Mr ‘Watson was guilty of a wilful refusal to give evidence, as he merely said ho could not give tho evidence asked for, being sworn to secrecy. Mr Guinness quoted from Cushing, an American authority on Parliamentary practice, to show that a witness before Parliament could not plead his oath of secrecy as a reason for refusing to give evidence. He contended there was no doubt Mr Watson was committing a breach of privilege. The Premier, in reply, stated that on a certain committee a session or two ago a witness refused to givo evidence on the ground that it would involve his informant in trouble, and Mr G. W. Bussell, the chairman of the committee, held that unless he gave tho information he would be looked up. That was sufficient reply to Mr Bussell’s remarks. Ho (the Premier) was deeply pained at having to take up this position in regard to Mr Watson, but the House must, in the interests of the country, insist on # its privileges being maintained. He disclaimed the imputation that ho was a prosecutor or a persecutor, but he asked why should the committee be refused information which was contained in tho banking records. Surely what had appeared in the public prints of tho Colony, and had been supplied to the shareholders, no man bad a right to deny to a Parliamentary committee. This was not a party question, but a question whether Parliament was to assert its position and be supplied with the information it had been directed to ask for. Tho Propijop’s motion was carried on the voices. MR WATSON AT THE BAR.

Mr Watson was at once called to and appeared at the Bar of tho House, accompanied by his counsel, Mr Theo. Cooper, and conducted by tho Sorgeant-at-Arms. Replying to tho Speaker,who firstread the resolution passed by the House, Mr WATBONsaid ho had refused to answer tho question relating to the names of persons whose accounts had boon written off, and that he still persisted in that refusal—not in any spirit of contumacy or defiance, but because he believed ho was doing his duty. He had signed a declaration to do his best to conserve tho interests of tho Colony and of tho shareholders, and ho had also signed a declaration of secrecy. Replying to a question put by the Premier, Mr Watbon said it was on Tuesday afternoon last be was adyised by counsel not to give this evidence, and.the director decided on receipt of that advice not to give such evidence. By Mr tho other directors in coming ta that decision, but ho hod formed lus opinion in regard to it before ho received counsel’s advice. By Mr Hoao : He was acting as a free agent. Ho took no instructions from the directors. There were already indications that if such information was given tho custom of the Bank would fall away and the Colony would bo so injured. By Mr Montgomery ? Ho believed the officers of tho Bank of New Zealand would take similar action to himself. He knew nothing of tho intentions of tho Colonial Bank officials.

By Mr Allen : Ho believed it would bo against tho interests of tho shareholders to divulge this information. By Air T. Mackenzie i Ho belieyed tho conlidonco of the customers would bo weakened and tho success of tho institution imperilled. By Mr W. Hutchison : His appointment was by tho Government, and ho was not tho servant of tho directors.

By Mr McNab : His refusal to divulge this information was partly based upon tho belief that it would injure tho Bank. By Mr Stevens : Under the circumstances ho thought it would be bettor for tho shareholders not to have tho information.

By Mr Ward : Unless a particular item was in suit he wouldnotprodacotoaMagistrate or Judge details of any account sued for, Tho number of accounts written off was very numerous.

By Mr Flatman \ He did not think there wore very many customers who in the past had had their accounts written down.

By the Premier : The customers of tho Bank would, if those writinga-off were made public, conclude that such information might be made public in future, and would transfer their accounts to some bank where such a thing would not be likely to occur. He hod not been asked by tho committee to dis* close tho accounts of any customers other than those in which writings-off had taken plaoo. By Mr O’Began j Ho did not know there was any question of conduct involved, By Mr Bjjddo t On tho whole he did not think any serious loss would result if these customers whose accounts had been written down withdrew thoir accounts.

By i)r Newman : He had been advised he should not mention individual accounts. Ail other information ho was prepared to give. Mr Ward asked: l)o any of tho accounts written off include those of clients included in the bad rod donbtfnl list and reported upon by any inspector as bad, and were ifl the Bank's balance-sheet as good, or without any reference to their being bad or doubtful? Mr Watson t Tho writings-off undoubtedly were to accounts which at one time appeared as good in tho Bank’s balance-sheet. I have not looked into the past history of the Bank myself, X have confined myself to the work I had to do since I entered tne Bank in 1894. 1 really cannot my without reference whether ar*y officers or inspectors of the Bank reported these accounts as doubtful,and whether they had been carried on as good.

By Mr Ward: There bad been writinga-off sinco the appointment of the present directors. There might bo cases in which the Bank was carrying on businesses which were

insolvent, but in ovorv case provision had been made for possible loss. Air Ward submitted further (questions, which the Speaker ruled were wide of the subject matter in regard to which Mr Watson was at tho Bar.

Mr Hogg asked: Does the list of accounts written off include the name of any member of any committee of either House r The Leader of the Opposition objected to tho question, and the Speaker ruled that it 'had no bearing on the matter in connection with Mr Watson's presence. Replying to another question, Mr Watson said the general position of the Bank could be ascertained without the information asked for. He could not mention names or individual accounts, and could only give the amount in the aggregate. To Mr Collins : Hia refusal to answer the question was actuated by the lact that tho enquiry was to extend to the Bank’s business of tho present year, because it would have an effect on the business of the present year. counsel’s address. Air Theo. Cooper then addressed the House on Mr Watson’s behalf, pointing out that Mr Watson represented the interests of the Colony, tho shareholders and the customers, and that he was acting from a high sense of duty, and that he was justified in refusing to obey even tho mandate of the House of Representative?*. Ilia duties, Air Wataon considered, required him to submit even to punishment in justification of that refusal. It might bo that a technical bicach of privilege had been committed, but ho submitted it was not a substantial breach, or one that should be visited with any punishment. Ho referred to an analogous case in which the Government had made special regu-

lations to preserve tho secrecy of the Bank to show the importance of keeping the business of the Bank from the public gaze, Tho regulations with regard to the audivor wore framed to render iu impossible for the names or amounts of individual accounts to be known, and he submitted it was tho imperative duty of the president al?o to present the names of individual accounts coming before the public. Those regulations showed the Importance which was considered to attach to secrecy between banker and customer, and the importance of such secrecy had been so kept in view by tho Legislature that if it was necessary to produce certain accounts in certain lists only a certified copy of that particular account was to be produced. It was an imperative duty on the part of Air Watson to refuse the information sought for. Ho was sure no such case had over been investigated in a Court of Justice, and lie had been unable to find any case whore a Court by a roving commission had over sought tc go through tho books of a banking institution. Mr Watson was willing to produce tho gross amounts written off in each year since 1883, but the very foundation of his position was attacked by tho question ho refused to answer, and ho honestly believed that if ho answered that question it would produce tho downfall of tho Bank of Now Zealand. He wished it possible to save that calamity, and that was why he refused to answer those questions. It was not the injury it would do to tho particular individual whose account was disclosed that was considered, but if once such an enquiry was allowed public confidence in the Bank was sapped and destroyed, and when the opinion gained currency that any public officer could be made to give evidence regarding any particular account, from that moment the confi ienoo of the public ceased, and no business man would any longer have an account in tho Bank of Now Zealand. Air Watson bad no desire to show disrespect to tho committee or the House, but ho considered above hia regard for the House it was his duty to avoid doing injury to an institution in which the Colony was so greatly interested. Since the enquiry had commenced accounts had begun to leave tho Bank, and two largo accounts had been taken away because the institutions could not leave the accounts there if there was the slightest suspicion they would bo open to enquiry by a Parliamentary committee. Mr Watson would refuse to answer this question ; he might suffer, but bo believed a crisis had arisen in tho affairs of tho Bank and of the Colonj r , and if Mr Watson did not act up to his high standard of duty thero would bo destruction to the and ruin to tho Colony. Tho House ought in tho interests of tho Colony and tho Bank to uphold Mr Wataon in his refusal, which proceeded only from the feeling that if this information was given ho would draw down upon the whole mercantile community ami the Colony the sufferings which must follow a financial crisis. Tho advice ho gave to Air Wataon had boon given by him and followed by Air Wataon in tho highest desire to conserve the best interests of the Colony, and ho had no desire in so refusing to set at naught the dignity of Parliament. The ramifications of such an enquiry as proposed in tho question put to Mr Watson wore endless ; and good or doubtful debts might bo converted into bad debts, and tho question was whether it was in the interests of tho Bank and the Colony that a Parliamentary Committee could have a roving conprpssiou to investigate the books of the Bank, Mr Watson had a high regard for the dignity of Parliament, hut he had a higher regard for tho importance of tho duties that wore castnpon him. Mr Wataon and his counsel then left tho chamber. proposed fine of .£SOO.

The Premier moved that Mr W, Watson having persisted in his refusal bo adjudged guilty of a breach of privilege, and the House orders him to bo fined in tho sum of .£SOO, and until such sum be paid he bo detained in tho custody of tho Sergcant-at-Arms. Ho contended that neither Mr Watson nor his counsel had put forward anything in extenuation of his offence, which had really been aggravated by liis still, refusing to answer the question put to him, and tho House had no alternative but to assert its rights, Tho responsibility of conserving tho interests of tho Colony and the shareholders did not rest solely with a servant of the Crown, but with the representatives of tho people, and it was a most audacious statement on tlm part of counsel that the giving of this evidence would bring down the Bank of New Zealand. It would, ho contended, have not tho slightest effect on tho solvent customers of tho Bank, and, on the other hand, the sooner these insolvent concerns were cut away from tho Bank tho bettor it would be for that institution, Quito sufficient had been disclosed by counsel to convince him that the sooper t|}ey know who those favoured people were the sooner they would bo able to put the Bank in a proper position, and the better it would be for the Colony. He had never heard of such a deliberate attempt to burk enquiry, and ho could only conclude there was something they wished to conceal, and that fact must prejudice tho Bank, the directors and officials in the eyes of tho country. It would he hotter for them all to take advantage of the opportunity and give the information asked for. If it was refused, and tho Colony was to continue its guarantee, it was high time those responsible should assort themselves and the dignity of the House. The Bank was now absolutely impregnable, end tho only way to keep it so was to lop off those accounts and the persona responsible for them who had lost the money of tho shareholders and would lose the money of the Colony. CAPTAIN RUSSELL MOVES AN AMENDMENTThe Leader of the Opposition said no one coqld listen to the remarks of Mr Watson's counsel without being impressed with the idea that Mr Watson was filled with a very high sense of tho duty ho owed to the Colony, and ho thought the House could uphold its dignity without imposing any severe penalty on Mr Watson. Ho contended that tho statements of counsel with regard to tho possible effect of tho disclosure of this evidence wore entitled to considerable credence, and ho knew casosin the last 24 hours of accounts which were withdrawn from the Bank. The enquiry into tho writings • off must affect every account now current. Ho suggested that to insist on a fine of £SOO was injudicious, Seeing that he was acting under the orders and by the advice of the directors and counsel, and they would only bo fining the Colony. Under the circumstances ho thought an amendment like this would meet the case: —“That this House, while affirming its paramount right to compel full disclosures by any witness summoned before its committees, and to punish for contempt all witnesses refusing to givo teatimony wben required, is of opinion that undorl tho circumstances of tho present case the witness William Watson ought not to be compelled to disregard tho solemn declaration by which, as an officer of the Bank of Now Zealand, he engaged to keep secret tho private affairs and to preserve inviolate the confidence of customers of the Bank."

Mr Tanner supported tho motion, saying that if actionsliko Mr Watson’s were allowed, the privileges of tho House would vanish. Mr G. Hutchison said tho House would be abdicating its position if it did not mark its sense of disapprobation by passing a resolution such as was proposed inflicting very substantial punishment. Mr Montgomery supported tho Premier’s motion, by which ho contended tho privileges of the House were maintained. Mr Ddthie said it was their duty to enforce the privileges of tho House, but he urged that in making an enquiry into matters not necessary for their purpose they could not expect to carry with them the support of public opinion. To continue this conflict with the directors meant that the Bank would close its doors in six months. The House bad got into a false position, and he implored them to pause before going any further, and h© thought the course proposed by the Leader of the Opposition was that by which they could retire with the least loss of dignity* Mr G, W, Bussell said tho amendment was a clear case of baokinfr-down, but his opinion was they should excise tho writingoff clause from tho order of reference. Dr Newman wanted to know how they were going to collect this fine if Mr Watson refused to pay it. Were they going to fine him £SOO every day ? He suggested the matter should be postponed for consideration until Tuesday. Mr Ward spoke in favour of full investigation into the affairs of both banks, but said if there was any member of either of those committees who had received favours from the Bank of New Zealand he should at once retire,

Mr Buchanan and Mr Lewis twitted tho Government with making an attempt to fine their own nominee.

Tho Minister of Lands said this fine of £SOO would bo subscribed by tho directors and by gentlemen whose sins were to bo hidden by tho suppression of this evidence. The management of the Bank would have to be put on a better footing, That could only bo done by a full enquiry into tho past, and anything short of this evidence that was now refused would not be satisfactory. Tho House must insist upon the witnesses before the committee giving evidence, otherwise the enquiry would be put a stop to. The debate terminated at 2.25 a.m., the amendment being lost by 45 to 19. The division list was as follows, the ayes voting vgainst the amendment: — . Ates. —Buddo. Cadman, Carncross.Carnell, Carroll, Collins, Dunoon, Flatman, Graham, Green, Guinness, Hall, Hall-Jones, Harris, Hogg, Houston. G. Hutchison, W. Hutchison, Joyce, J.’ W. Kelly, W. Kelly, Lawry, McGowan, J. McKenzie, McLaohlan, McNab, .Meredith, Millar, Mills, Montgomery, Morrison, Parata, Per©, Pinkerton, Pirani, G. W.

| Russell, Scddor., G. .T. Smith. Ptevona, Tanner, R. Thompson, T. ThompI son, Ward, Willi-;. J Noks. —Alien, Bell, Buchanan, Buiek, Button, r'rowther.Dnthie, Earnshaw, Fraser, Ifeke, Lang, Lewis, T. Mackenzie, Massey, AloGuire, Newman, W, R. Bussell, Te Ao, Wilson. Pairs.—Ayr : B. McKenzie. No.- Stout. Air Bell proposed to strike out from tho Premier’d motion the words “and be fined." This amendment was lest, and another amendment by Mr J. W. Kelly to make the line i*so was also defeated. The Premier’s motion, imposing a fine of .£SOO, was carried, the reference to detention by tho Sergeant at Arras being struck out. fThe House was still sitting when we went to press.) THE GUTHRIE COMPANY. Sir Robert Stout lias forwarded the following letter to tho chairman of tho Banking Committee and .of tho sub-committee re evidence. Sir.,—My attention has been called to a certain motion in your committee made by Mr Guinness, a member of jour committee. I that this motion was placed in his hands by Air Ward. Whether that be so or not, lam convinced it is entirely outside the order of reference of your committee, and has been put in for the purpose of attempting to injure mo and companies in which Ihold shares. I wired the consulting director of tho Walter Guthrie Company last night as follows; Was any sum written off Walter Guthrie and Co., Limited ? What was the allowance made to you, and what amount ? What was claimed ?” I have received the following in reply r —“ Bank has proportionately with ourselves reduced interest on two occasions to W. Guthrie and Co., Limited, but no capital haa ever been written off. When the first reduction of interest was made the Bank was charging very high rates —namely, from 8 to p per cent. Before business was transferred to a limited company, the old firm had a claim to settle for breach of contract in connection with London and colonial goods credit. The Bank’s representative certified to the correctness of the claim, which from memory was £20,000 with interest. Tho banker refused to pay this amount, but compromised for .£IO,OOO. Owing to tho death of secretary, am unable to find particulars of account at present, but feel certain the amount was over .£20,000." I may add that I had no connection of any kind with the old firm of Walter Guthrie and Co. referred to, and that so far as I know none of tho companies concerned had any writings - off by the Bank of New Zealand. Personally I have no objection, if within your order of reference, to lay open even all my private affairs, and J presume Mr Guinness will consent to the same being done with his. I think it is, however, highly improper that, because of my political attitude, other persons* affairs should be investigated by your committee.