THE THIRD READING DEBATE.

Otago Witness, Issue 2167, 5 September 1895, Page 21

THE THIRD READING DEBATE.

The tbird reading of the Banking Bill was notable for a splendid speech by Mr George Hutchison — th-5 best I ever heard him <3«liver, in wh-ch he tore the whole fabric of reconstruction to tatters, and the adhesioa of more members to the policy of a State bank, among these being the Premier and the member for Taranaki. Mr Seddon, indeed, made the discovery that he has for many years bsen an advocate of such an institution ; nnd Mr Smith was quite enthusiastic in his efforts to picture the enormous benefits it would ooufer upon the people. Sir Robert Stout, too, enlarged upon them, uuUl at last it eeemed to be a question «s to which would be the first among the speakers to introduce such a measure. Already the State bankers have doubled their numbers since the Joint Committee was first set up, aud there are others who are considering whether they may not balance the vote they have given for the Bank of New Zealand by helping to set up a State bank. A remarkable aspect of the debate of yesterday was the long speeches of Ministers, who appeared to be addressing the country rather than Parliament.

On the House resuming at 2 30 p.m.,

The Hon. J. G. WARD moved the third reading of tho Bank of New Zealand aud Banking Bill. Iv doing so he said having already spoken on the bill several times, he would now content himself with formally moving the tbird reading, reserving to kiimelf the right to reply to fliiv ait^ument agtitift the bill. The Ron E. MITCHELSON said he oould not allow the bill to be re-ad c. third time without entering a strong protest against tho aotion of tbe Government in committing the colony to liuch lar#e liabilities ns they had done with this bill.' He estimated the amount of known liabilities at £3»000,000, whiUt the amount of unkuown liabilities could not poaßibly be ascertained until the assets had been realised as wao proposed by the bill. The colony wa<s bow sole proprietor of tho Bank of New Zealand, and the shareholders had no interest of any kind in the institution, nor would they have till they paid the oall6 to be made on them by this bill. He objected to the bill on three giounds : First, because of the £500,000 o? capital which the colony had to pay ; secondly, because he felt tbat after all the assets bad been realised there would still be a deficiency of over £1,000,000. He afro dissented from tho over-»anguineness of the earning powers of the bank by the bank officer*, and thought they were altogether beyond the mark. He admitted that the Bauking Committee had done its best under the circumstance*, and he was well aware that the recommendations of that committee were most distasteful to some of them, but he sincerely hoped that matters would turn out better than he anticipated. Ho hoped, at anyrate, that the colony wonld not in future bs committed to any further liability in connection with this bank. Before concluding, he read a cablegram from England, just received, to the effect that the banking legislation now before the House bad created surprise and consternation among»t English shareholder ot the bank, especially in the faoe of Mr Ward's recent utterances in London.

The Hon. Mr SEDDON complimented Mr Mitchel-on on his temperate speech, and said they had all had a very trying time, which he hoped was now at an end. He reviewed at length the position which led up to the present bill being introduced, and said the Government were in no way to blame for what had occurred. It was represented to the Government last y?ar by those who were in a position to judge that if the Government did not come to the resone of the bank it would have to close its doors. That came as a great shock to the Government. There was not sufficient time to acquire the information which was necessary, and for not obtaining which they were now blamed. He referred to the fact that Mr John Murray had estimated the earning powers of the Estates Company for the two years before 1894 at 5 per cent., and the House law last night from Mr Foster's

estimate that the valuo of the estates was £1,800,000, returning 3'oß per cent , which he thought justified the Government in forming a scheme to separate the bank from tho Estates Company. Ha believed their ec'ieme separated the two interest* more than any other schnna that could well be devised. He combated the stateaH nt tbat the two millions advanced last year were lost to the colony, and he considered very little of tho present guarantee would bo required. They should not forget that a rise of 2d per Ib in wool would mean a sum of £520,000 per annum to the EaUtes Company, which would be a great consideration. Referring to the proposal to convert the Bauk of New Zcalaud into a State btnk, he could not agree to a State bank that would govern the commr-roe of the colony, which he thought moet undesirable. He held that shareholders now for the fleet time knew the true position of their property, and the select committee had been instrumental in disclosing the present position of the bank. If they were to render any assistance at all to the unfortunate shareholders of this bank, he claimed that what was now proposed by the bill before the House woald give that assistance. H« referred in detail to the increassd earning powers which the bank would receive, and which he estimated at £145,500 a year. This he thought more than jmtifl«d the estimate of £130.000 made by the bunk directors, and h« c«)cu)aced fcbafc a)to#ekher there would be £25,000 over and above the amount required for interest on the £2,870,000. /He again Btrongly defended the action of the Government' over this bill, and said tbat those who &r st rted that the bank could cloie its doors without doing great injury to the colony and all the local bodies in it were wilfully shutting their eyes to the great?st disaster that could overtako the country.

Mr DUTHIE utrougly oppofed the bill. He said they had now a bank with no capital and £1,000,000 deficiency. There was not a penny of solid capital in the bank ; it was all borrowed money, aud he had never heard of such a proposal as tj float a gigantic bubble of this kind without any capital whatever. It seemed to him entirely hot-elee* that any satisfactory result could bi achieved from those proposals, and it only meant coming back again on the unfortunate colony to make up tho deficiency that would ba required to be made up in future.

The Hon. J. M'KENZIE said Mr Duthie had just told tbe House the usual story about Mr Murray haviiig deceired the Governmout, but it was just possible that Mr Murray, who was not at that time manager of the bank, might have been deceived himself. As the Premier had ju^t stated, it was proved th«t the estate* wore paying 5 per cent, for two years ptior to 1894. He (Mr M'Kcnzi*) considered th*t th« Government had done tbe be»t pos-iblo thing in the interests of the c >lony in coming to the aiuigfeanoe of the bank, and Mr Duthie had considerably gong down in his estimation as a bu«ia»*i mm when he told the House that no material difference would be ielt if tbe Bauk of New ZeaUnd cloied its doors. He (Mr M'Kenzie) asked how many people would believe that hon. gent'eaian in makiug that statement. He denied that the preient Government were responsible in any way for the position of the Bonk of New Zealand. It was not a trouble of yesterday or five years ago, and he for one member of the Government would not nga.in pass through the anxiety they had for the la*t two yeard o\er that institution. The Government wora not actuated by any pereoual desire whatever, but of acting in the best interesto of the colony and of the people living in ib. They hed also assisted the shareholder* of the bank by their action, and had put thorn in a position that with good eire and management the shareholders might bo able to pull through. Every member of tae House wonld have to take full responsibility for what had been done in this matter ; and there was no nso blaming the Government for what they had done, as they had to face the position and deal with it to the be»t of their ability. He felt that if matters turned out all right the pres a nt Government and those- who supported them on tais que%tion wauld be held up as gentlemen who had done their duty to the colony, but if otherwise thoy would be open to attack. The Government had at anyrate cone th» bs«b they ould to meet tho present difficulty. Mr PIRANI r?grett«d that the Minister for Lands at this s^age of the debate coald not refrain from attributing motives to those of the Government party who opposed this bill. — (Mr M'Kenzik: "I did not refer to Governmtut supporters when speaking ef the amendment for six-months") He ecoep'ed the Miniiter'* explanation, and 8«d that Government supporters were sincere in their action. He at anyrato had never during his short polit : c*l career given a vote in tho Hou»e which pained him so much as ou the present bill. The Premier had again given John Murray a certificate of character, but he (Mr Piraoi) con«ideredtiiatif Mr Marray had not mislead the Government lssfc yoar, and had given as correct information ac they received this year, then the Government would not have misled the Hous^ over the matter.

Mr T. THOMPSON had supported the bill throughout without any amendments, and ho did co as he considered it in the best interests of the colony. This matter had given him more concern than probably any other during his 10 years in the House, and he accepted all responsibility for hi* action. Mr HALL-JONES reviewed the circumstances that led to this banking legislation, and said that, to a certainly, they would hava raoie of it iv future. He asserted emphatically that the assets would not realise the amounts set on them, and that b-fore nine years were over they would havo another bill down extending the time for the realisation of the assets. He would call for a division on the third reading iv order to lvc^rd the votes of thoje who voted for this iniquitous proposal. Mr M'NAB said tbat, iv accordance with tbe votes he had already given, he disapproved of the bill altogether. Mr HOGG repretted to hear the speeshes made by Messrs Pirani and Hall-Jones, which were not only attacks on the Government, but on the Bank of New Zealand. His own impression was that if values and prices improved the bank would also show gre*t signs of improvement. He supported the bill iv the interests of the colony. The House adjourned from 5.30 to 7.30. On re&uming, Mr MORRISON said that since first reading the bank report he had felt disgusted with the whole matter. He had made exhaustive inquiries from those competent to^Biprees an opinion on the subject, and the universal answer was that if the bsnk was to be saved there was no alternative bub to come to its assistance Although ho had supported the passage of the bill he was not at all sure that the data upon which the committee had come to its conclusions were correct. The colony had accepted a huge liability, which he was afraid they would hear more of on some future occasion. He appealed to tha common sense of members whether the seven millions of deposits in the bank could be locked up without cansiDg great hardship. He had no doubt that the deposit money would eventually have been paid, but the fact of its being locked up for ft long

time would havo caused great distress. He was only sorry that tho Government did not rise to the occasion and say i " Very well ; how maoh do you want to foil out of the rotten concern, and we will manage it aud run the institution at a State Innk." The bank would hang round the neck of the oolony for a long time to come. The Government could not have mado a greater muddle of the affairs of tho bank than its old directors had done. It was hi* firm belief that b fore nine years lud passed the estab'tehraont of a State bank would bn forced ou the Government then in power. With regard to amalgamation, he was afrtid it meant the formation of a financial ring, which would hay* a monopoly in the colony ; but still from a bu«in«M point of view, aud iv the inter e»t« of the oolony, amalgamation was perhaps dettrabU.

Mr E. M. SMITH ooueidered what had been done had been in the interoat* of tbe industrial classes. Ho was sorry that tke proposal to deal with the Globo Assets by means of a national lottery had not received more consideration from the House. Ho wa» in favour of a State bank on the lines laid down by Sir R. Stool, aud the time was not far distant when the colony would have such an institution.

Mr MASLIN believed th« preeeok action in regard to the bank was justifiable. He deprecated the conduct of certain mombera in trying to absolve tk»m*§lves from the con* sequences of last year 1 * guarantee. Aft were joiutly responsible for that measure. They had now either to saorifica tbe two millioai already voted to the bank or afford it timely and constant aid with a view to ftfceoring the institution into a position of solvenoy, and he thought they were fully justified in supporting the present bill. Ho objected, however, to the tendency in the bill to create a huge banking monopoly in the oolony.

Mr G. W. RUSSELL thought the House had risen to the occtkion and approached this qmsMon from a oolonial instead of a party point of view. The Land for Settlements Act must oocupy a prominent place iv dealing with the properties of the Estate* Company. The fact was people in the coloay were not prepared to put their capital into thete ettate* whan prices for produce were so low, and especially when tho Orowu could take th<.m over and dUposo of them uuder lea»« in perpetuity. He believed the Coown would eventually have to take over the estates under the Land for Settlements Art Tho contorel of the bank, a* provided in ths bill, was not in the hand* of Parliament, bat rather in the hands of the Miuistry of the day. Whilet feeliug evary sympathy for the unfortu-mte shareholders he ootild no* forg«t tlmttheinterestaoftho ooloity mu«t bo protected. No one would deny that the bill had been much improved in its p*>6age through Committee. Hit printipal complaint was that a< the bill stood there was nothing to prevent the bank becoming a huge cctopu* and swallowing up every one of the other banks in the colony, provided, of course, tbe eorwent of Parliament was obtained. Last night's vote on W>e amalgamation clause was the outcome of violent whipping on the part of the Government, who desired to secure as large a majority an possible on it. His opinion was that it would be far better to postpone amalgamation for a year or two uutil tho prospect* of the bank bad been thoroagWy tested. He regretted eorneihing had not beeu done, whon dealing with this qu.stion, is) reduce the rato? of interest to oommsroUl people, and he woald have liked to have »een the Bank of Now Ze*land nsc<3 as a lover to this end.

Mr G. HUTCHISON admitted that the bill had been dealt with apart from party considerations. He had noticed that not one of the memberd who' had spoken on the third reading hud expressed himself as satisfied with th« course taken. They had all explained aud apologised for their votes. This was not the attitude that representatives of the people should take np. The Minister for Lands bad stated to the Committee thai if the proposals were not adopted it meant an iuoreue in tho graduated land tax. — (The Hon. Mr M'Kkkzie : •' I never said auythiug of tho kind. Wh*fc I did say was that any inorenso of taxation must come from the land.") The sptckacle of tbe Minister for Lands associated with the great landed proprietor! of the colony was a flight for gods and men. The C*louial Treasurer 'wiw well known to be a friend of the Colonial Batik, and he had helped it in th« recess by giving it £150,000 of public money. If the president of tho Bank of New Zealand made the 6t«temeute he was reported to have made to tbe committee he was not centfctont with tho attitudo he had taken up six months ago at a meeting of shareholders. Ho showed where tbe alleged discrepancy lay in Mr Watson's statement*. Shareholders were pot plaetd in any better position under thio bill than they would he under a reoomtruotiou scheme. The proposals were all in favour of febe wealthy and what he might term tbe " ovordr aft " olwics. The gre&t mass of the people of the colony would i.ot derive any beeoftfc from the sehome. The stopp»g« of the biuik would very loon have bad a ho*l*hy and restoring effect oa the condition of the colony, and he denied that the woful picture presented by many members would have followed the BUipemion of the bank. With regard to araalfamatjon, he believed tbe astute directors of tho Colonial Bauk had ouffi-ient proxies already in their pockets to briiijj this about. The Hon. Mr REEVES did not think-the line of financial argument followed by the last speaker was either fair or straightforward. It was never intended that the £80,000 interest on the two millions should come out of the ordinary profit* of iht bank. Mr Hutchison had said no one in the House was satisfied with the proposals, but he (Mr Reeves) had h«atd several members say ou the floor of the House that tbe proposals satisfied them. H» would have thought that on an occasion like thin numbers on both sides would have studiously endeavoured to use only the moit guarded language, but he was sorry that there were a few who did not take the same view of the matter. The Government had ohosen the lesser of two evils in a great national cri«is. Under the circumctmccj the GoTerumfnt had done what any other Government would hava done last session. Their policy had failed, he admitted, but there was good reason to believe that wh3t they were doing now would be successful. It must bo remembered that these proposals were not .framed by the Government-. They came from one of tbe largest and most influsntial committees that had ever fat in connection with the House, and absolute unanimity prevailed in the cDmroittee on the point that the colony should afford immediate and effectual aid to the bank. There was no reason why the Government should oourt legislation of the kind ; in fact there was every reason why the Government should denire never to hear the name of the Bauk of New Zealand again. He objected to the taunt that the Colonial Treasurer was a friend of the Colonial Bank. In a colony hke this there was scarcely a man of any business standing who had not some connection with one or other banking institution. Taunts like this should not ba hurled from the other tide of the House. It wai shown to the committee thab the earning power of the bank mast be increased by the absorption ef some other bauk, and mem* ben were convinced that the scheme mutt coßa

tain a provision for amalgamation. Tho House had plenty of high-minded { independent men in it who would not be lobbied into supporting any rotten scheme. Toe Government could now bring the Land for Settlement* Act to bear on tfae estatee of the Asiets Company, and this in itself would prove a solid and useful r«lurn for the money expended on tbe bank. H* could not understand bow members could belittle tb« evil results that would assuredly have followed the suspension of the bank. The other 'Australian colonies afforded proof of this. .What the Government and Labour Bureau had dose for tbo unemployed would be a mere bagatelle to what they would have been called on to do h*d the B*nk of Ntw Zealand closed its doors.

Mr BUICK opposed the bill because he did no* b«ti«ve in the public credit being employed to bolster up private institutions, and particularly «n institution the position of which was due entirely to Hs own internal management. Ba W*»«d the committee for not hiving Uk«u erktonceaato tbe general effect on the colony if the back had clo«ed its dcors. He had very little sympathy for the shareholders. They .waaUd to make money out of the concern, and if they had lost their money they must accept the situation as the forfcuue of war. There was an «s4ue absence of finality in the proposals. Ha would vote againtt the third reading. Dr NBWMAN considered the Bank of New Zealand bad been ono long curse to the colony. Dartag the reoers each and every one of the Ministers and the supporters of tbe Ministry bad in avery corner of the colony called forth beans af applaute on reciting the deeds of barofam performed by Ministers during the baskiog crisis of last session. The fact was this prMeat surprise or cruis had bsen exceeifogly well engineered, and the poissns who war* puftieg the strings were clever enough to always ring in a surprise during tbe session, and n*v«c at any other tiaae. His calculation was that when this bill passed this unhappy country would have committed itself to tho bank to t*« extent of over eight millions. Mr O'RBGAN said it had been a source of regret to him that he had voted for the Bank Guarantee Bill of la»t session, bat he did not ■cc haw the Guverumei.t alone could be oalled OB to hear the whole responsibility of the Legislature's action on Meat equation. If the Bank ot New Zealand had the right to demand assistance, other banks had the same tight, and if that right was reoogi>ised what must bo the effect on the colony at large ? It would have been better if the baak had been allowed to go into liquidation, as he believed tho d is** tar woold h*ve been of a most transitory character.

Sir R. STOUT said the voting of the House on tbe disqualification clause was evidence to (he MiniMry that mtmbers were heaitily sick of the •• spoils to the victors " system. Members should retrain from attacking the bauk which was so iiexvrto*bly mixed up with the colony, and they should be careful not to prevent the recovery of oonfidecca. The Government could »ot be divested of its responsibility for last year's act. Thi valuations given to tbe committee this je*r w«*e made in 1891, and shanM have been available to the Government last year. Had they asked for them they would have shown the datfeienoy between the book value and the ascertained value. Had the House known that the two millions would not have been given. The Premier said Mr Murray had atsurad thsm otbetwi«e. The bask ought now to retruva U»»lf. It had a large goodwill, which had «vaa now a considerable value. The Legislati»m of the Government had affected this institution, and it was unduly affecting commerce aad iacUutry. The Government must take oat* that it appointed the b««t men to the Realisation Boaxd, mbaolutely irrespective of politics, if confidence wss to be- restored. -.

Mr SA-UNDBRS said Gt>v©rument could not txpect him to eupporb a bill which involved any claw of borrowing, as he, as well as a majority of ta* members of the House, were pledged to a noB-bor<-o*u>g policy. M* li. THOMPSON said anyone wLo had watohfid tbe eveuts of the last wtek or two most hara become very suspicious. The ord«r •f i*fW«eo6 to the committee was carefully drawn op to produce & cettain result, and that rataft a»d the scheme were known in various quarters weeks ago. He did not blame the 'tiamMHni for lie bill of last session, and itoek his shave of tho responsibility. He opposed the pnoaeet bill.

At 11.20 p m. the Hon. Mr SBDDON stated tfe»% he would like to geb the bill through that aiftht, and premised that those mevabar* who cottkl n*l speak now, owit-'g to shottne«s of lima, srooid have an opportunity of doing so when &• amendments came back from tbe Legislative Council.

Mr CROWTHER intimated that he would Toto againaft the third readiug.

Mr T. MACKENZIE also spoke.

The Hon. Mr WARD replied at 11.25 p.m. He Mid it was very eaty to fiad fault, as many nembeES had done. Seme generosity should fot shown to fchoee who bad the solution of this clificaity on their shoulders. No better scheme ttad been brought forward by any other hon. gentleman, and he regretted the aspersions that had been cast on these who had been try ing to do their beat for the colony. The attitude *f some hoo. members opposite was in dtatiftct contract to that of the leader of the Opposition. Members should remember the great strain that had been on Ministers aud stemlMrt of the committee during the last few days. Now as to what he had said to the ■karekolders in London : be told them he couM >«fc promise them that another call would pok h* nude. Mr George Hutchison was always 'f*ij to impute unworthy motives to other 'sMmbers in the statements (hey made. Since last year's guarantee had been giren two directors had personally inspected the whole of the property of the Estates Company. A director bad b*en sent to Australia to examine the books there, and th<s general manager had been sent to London to look into matters there. It was not until June of this year that the true position of the Estates Company was arrived at. He detailed the ciicumetanees which led up to the guaranteeing of the two millioDS last year, and took exception to the content ion that the onus of the whole affair should fall on the Government. The balance sheet of the Bank of New Zealand was £ laced jn the hands of the Government by Mr lurray, and it was on the position disclosed therein that the Government gave the guarantee. He said distinctly Mr Murray did not mislead the Government, and the Go?ernment did not mislead the House. It was an .arguable point as to whether the two millions guarantee was justifiable, but it was evident since that it was required. If the two million chare capital bad been obtained in the firat instance instead of stock there would have been no necessity now to apply to the House fer more share capital. The Government knew, and so did the previous Government, of the weak pesitien of this bank. The bank tried on it* own account to get additional share capital in London to enable it to carry on, and it was only when it failed in this attempt- that it came to the House for assistance. List year he had referred in his speech to the absolute necessity of severing the Assets Company from the bank if the institution was to prosper. As •oon as the actual position of the Assets Com-

pany was ascertained by the directors of the bank the Government wera approached on the subject, and negotiations led up to the present proceedings. No Government would have been doing right if it had not disclosed the true position of the whole institution to the House through a joint committee. Even if tho committee had been set up lait year it would not have ha«l the information possessed by this years committee, and its investigations would have been practically useless. It was stated then that it would take a year to fully ascertain the true position of the bank. The Government had been congratulated from all parts of the colony on tho action it bad taken this year to prevent the bank suspending, and telegrams from all parts of tbe country told them they were doing the right thing. He was sorry he h\d not time to go into tha details of the bill. As to what had been said about his private affairs, he was prspared to meet the member for Patea with regard to them whenever he liked. He deprecktci the lying statements that had bean m«de about him in the lobbies. There could not be one word of truth in tho statement that this scheme htd been circulated some weeks ago, and there had been no secret compact on the matter. Everything had been done in the best interests of the colony, and he hoped the proposals would prove successful.

THE BILT, PASSED.

On a division the third reading was carried by 33 to 21, and the bill passed. The following is the division list :

Atks (33\— Mtsßrs Buddo, Cadman, Carncross, Carnell, Collins, Duncan, Flatuian, Eraser, Green, Hall, Harris, Hoge, Houston, W. Kelly, Lawry, Mackintosh, Haulm, M'Gowau, J. M'Keuzio, M'Lachlan, Millar, Mills, Morrison, Pavata, Pl»kerton, G. W. Russell, W. R. Rus«ell, Seddon, X M. Smith, St>svcni=. Steward, Ward, T. Thompson.

Noks (21) — Messrs Crowiher, Karnshaw, Graham, Hall Jone«, Ileke. G. Hutchison, W. Hutchison, J. W. Kelly, Lang, T. Mackenzie, Massey, M'Guire, M'Nab, Mitchchon, Newman, O'Regan, Pirani, Saunders, Tanner, K. Thompson, WiUon.

Pairs. — Ayes: Messrs Meredith, Carroll, Buchanan, Stout, Willis. Montgomery, Reeves. Noes : Mesßrs Joyce, Larnach, Allen, Te Ao, Bell, G. J. Smith, Buick.

The House rose a few minutes after midnight, and it was agreed to meet at 7 30 p m on Monday to receive tho bill after it punod the Legislative Council.