THE BANKING INQUIRY.

Otago Witness, Issue 2215, 13 August 1896, Page 21

THE BANKING INQUIRY.

Wellington, August 5. The Banking Committee met at half-past 10 o'clock this morning. A letter was raad from Mr J. C. Hanna stating that be had got through his examination before the Upper House committee, and, aa he was anxious to return to his duties in Auckland without delay, he would be glad if the committee cauld take \\u evidence at its earliest possible convenience; a'so a letter from Mr Booth, stating that it would be a grea6 f *your if he coald ba sel free from coumiua ion for urgent busbess up-couptry until Tuesday next. — The letters were received. The following notices of motion were ianded iv :— By Mr M'Gowan— " That from the evidence : disclosed in the balance shests from 1888 to 1894, showing average writings off from cus-tc-nieis' accounts of £114,810 per annum, and the payment of dividendfl during that period not earned by the bank — and, if we include the writings off for 1895, the average for theae ; eight ye*rs will toUl £300,030 per annum,— this coßimitlea has come to the conclusion it is agiinst the interests of the bank, and immediately injurious to the olony, to further j contioue this inquiry."- j i By the Miuister for Lands— •' That notices of motion ba diicaesod on Wednesdays, and on all othec day« evidence be taken." , ■Mr Hutchison moved— "That Mr Foster be .called ab the next mef-ting of the committee for the purpose of' producing certain' docaments which he had teen notified to lay baforo ihs' committee relating to the globo-asaetß," &3. .'A m>tioi by the Ptemier— -" That the oommiitee deliberate "with closed dbon» s on this motion "—was negatived by five to four. •The Chairman being aboat to put Mr Hutchison's motion, 'The Premier objected on the ground that a resolution had been passed by the committee to the effect that the general manager, officers, aud other witnesses bt» first examined. The Chairman said the committea hsd , decided that certain documents necessary for elimination be firsfc produced. Ho ruled Mr HutchtSDn's motion in order. The Premier said Mr Fvßtsr had informed the Treasury that the returns relative to adjustment were not yet ready. The Chairman thought the proper course would be for Mr Foster to stats that when he was before the commit tse. Mr Hutchison's motion was cirrfed by five to three. The Premier moved a resolution to permit counsel to address the committee on a motion without hotic3 iv support of objections to queitions put to clients. He contended it would be unfair to clients to refuse counsel who appeared at the committee meetings permission to raise such objections. , ' Mr Maslin oppoied tbe motion. Counsel were pastumters in the arS of Bophisbry, and it would place the committee in a false position, as it would hear one side only. Mr Guiuueaa said Mr Maalia h«i raised a bogey and 1 then ba«ed an argument on it. In riply to the argument? that only one side of the oase would be presented by counsel, he s*id the oommittee were sitting in the capacity of judges, and therefore tbe 'same objection wuuld apply to courts of law. < ' Mr Montgomery thought counsel's addresses would only needlessly protract the inqiiry, and there would nob only be wrangltuga amongst the committee bat bebtveeu counsel and the committee. The Minister for Lands moved that counsel's a Wresfea belimited to 10 uoioutes. There were already three lawyers on the oomaoittee and several hush lawyers. • Mr Hutohison ' thought coursal's addrc66e3 would add to the existing stonewalling. The Premier objected to the t3rm stonewalling, and declared it was a rtfkction ou the chairman, who had taken up more time thau any othoc member. The Oh&irnian said he must ask the Premier to-onflno himaelf to tho motion, and leave him to take ctre of himsslf. The Premier : I always like to defend a friend. He contended that certain member* of the committee were ae'ing a<i counsel for the prosecution instead of judges, aud he would be sorry to Bee any of them in the position of judge. Of course he did nob mean that as intimid&uou. Mr Hutohison : Of course not. The Premier said the remark about stonewalling was disorderly. Th 9 Chairman called the Premier to order. The Premier : Then I will say he ii the most orderly member. The Minister for Lwid* protected agiinab reflections on the committee bj the us i of the word " stonewall," adding that Mi- Hutchi'on himself was the worst stone waller whenever any evideuce was being brought cub which he • did not like. The motion, &i amended by the Minuter for Lands, was negatived by 5 to' 4. Mr Guinness moved—" That the committee report to the Home that ia its opinion it is desirable tho resolution suspending Stauding .Ordera Nob. 223 and 229, so as to admit the press to/the pivceediugs, be re-cinded." He said the reports in the preßS had injured the bauk in the neighbouring colonies and led to a prolongation of discussion. The Minister for Lands moved as an amendmeat— «■ That tho resolution stand over until next day, in order to allow time to members to consider the motion. Tha Premier said the comnvttee was not set up to injure tbe bauk, bat the question was whether the press should publish tull and complete repoit? or such garbled reports as might ba supplied. Bat when ib came to a question of the bank being iujueed by itnpsrfect reports sent ta other colonies, then the committee might properly consider whether they would be parties to it by permuting the press to be present at the meetings. He suggested that the committee should deliberate with closed doors on this question. Mr M'Gowan supported the postponement of the question in order that it mignt ba coneidered at the' ssnie time as. one of which he had giveu notice that the further proceeding* of the committee be postponed until the coLcluaiou of the no-confidence debate. The amendment postponing consideration of j the motion till next day was agreed to by 7 to 2. The Premier moved that the committee deliberate as to whether ib is advisable to have further evidence from Mr Booth to-day. ■Mr Hutchison suggested that if Mr Booth was not to be heard Mr Watson's evidence be continued. He denounced the attempt at secrecy avid mysfcary iv these repeated del:b iv- j fcions. | Th.3 Premier said the statement circuUlci by the pices that he bad suggested Mr Guiunesa's motion regarding the exclusion of the pres3 was a mere fabrication, and other statements by the member for Patea were equally unfounded. He desired to phce a communication before members.

Mr Hutohison said if the Premier insisted on discussing matters in committee with closed door* he would move that the report oa noiats so raised ha l*id before the Housa.

The Minister for.Lan.as : That is a threat. .Mr Montgomery said any private communication the Premier might de3ire to plaoe before the committee would be in the nature of evidence, ar.d therefei-d must be produced ia open committee. The Premier said he would decline to read letters in open committee, and he would not be intimidated by the threat of the member for P<ttea. He supposed ib would not be iv order to j Bay that, like. the heathen Chines, the member for PaWa dealt in ways that are dark and trioks that are vain. Mr Hutchison : Say anything you like. The Premier said he would nob apply the quota'ion personally, but would *ay the hon. membsr would shine if practising in Chiua. He did not desire (o cause delay, but that tho committee should deliberate oa letters. Mr M&filin questioned the right of the committee to deliberate on private communications. Mr Guiune?B, speaking to the motion tha 1 ; theoomraiit^e deliberate, was repeatedly ordered by the chairman to reauma his seat, and persistently r -fused. Mr Hutobijon : I submit that the chairman leave the chair if his ruling is not obeyed. ' Mr Guinuesß said he was speaking to a point of order. The Chairman : There is no point of order. Mr Guinn^si said he would deoline to sit down until he bad spoken to the motion before the committee, as the chairman had . already allowed other numbers to speak to it. • The Chairmnn said hs had ruled that all motions be writtsn and handed in, which had only just been done, aud therefore Mr Guinhosß , was now in order. Mr Guinness said he had understood the chairman to rule that no member should speak a seoond time on a. motion, but notwithstanding that the chairman, who had no other right or' speaking, had several times spoken on the question. The Chairman objected to the abatement, and said he -had a right to state both the motion and amendment. Mr Guiimess rose to make a personal explanation. The Chairman : There is no point of order. Mr Guinness: Ylu spoke to the question and allowed Mr M.'Kqozie to speak to id. The Premie* : If this continues I shall think it my duty to ieporb what is going on to the House. I have never known a chairman t) rise to state the question while a member was speaking. It is not done until the member sits | down. Mr Montgomery : We are dircussing the question whether the committee 6hall deliberate , " The Premier : During the sitting of the Bank Committee last year all commuoicat'oas rec ived by tbe Government or witnesses were always subm't:ed to the committee. If you do not want the Government to assist the committee, the beet thing for the Government will be to let the committee do its own work.— (Mr Hutchison : " Hear, hear.") The Premier : If the member for Patea persists in interrupting me I shall interrupt him in a way he wen' 6 -like. He is not the committee, though he would like <o be. The motion in favour of deliberating w»s^ carried by 6 to 3, aud the conimittea deliberatedYiithbksed* doors. Oa resuming The Chairman said the committee had decided that Mr. Booth be relieved from attendance for a few days, and be invited ta give evidence on Friday. Mr Hutchison siu'd do important documents were htnded by the Premier to the committee. • The Premier thought it in very bad tasfce for any member of tbe committee to reveal what had occurred whilst deliberating. Mr Hutchison said that the statement of the Fi\ mior was calculated to create a misunderstanding. Toe Premier had staled lint he had an important communiot.t oa to lay before tho committee, but he had no important commuob cation. . ' The Premier said he would nob allow the lait stitement to go forth unchaUengecl, because prior to the committee deliberating he hud said that in the face of Mr Hutohiaon's threat he would only lay btfore the committee Mr Booth's letter. An attempt was now being made to cause the country and preir to believe he had asked the committee to deliberate upon a :ni»apprehenßion. Not a aiagle mtniber would say that, and he was nob going to be plaoed iv a fal'e position. The Minister for Lands : I know such a document does exist, and I think the Premier did perfectly right in not expoaiog it after the threat of the m.-mber for Pate*. Mr Hutchison : It seems that there were some c mmunications to be made to the committee which were withheld. Tho Premier : I am not going to allow the hon. member to make a statement which is directly contrary to what took phce. If he gets up 50 time* and makes »uoh a statement I Bhall contradict it. I (raid I had a communication to make, but when I heard that threat I withdrew it altogether. If ho is here to injure the bank I will take csra he is not allowed to do so. " I The Chairman stated that notice of motiou } had 1 been given that the order of ' calling wit- ' nesses be resoiuded, and that in future the committee may decide at the time as to the order without notice of motion. Tho Minister for Lands moved—" That, owing to Mr O'Hara Smith having uuder medical advica to leave the colony for his health the committee take his evidence on Ftiday next." Mr Montgomery : Put it to-njorrow. The Minister for Lunds: Doai the hon. gentleman mean that lam a donkey ? I know what I. am doing jusb as well.aahe do9S. Mr O'Hara Smith's evidence would be important. Mr Hutchison said the motion could nob be put ualees tbe committee were unanimous. It was contrary to the position already taken up in deliberation. The Minister for Lands : Then Mr O'Hara Smith's evidence will not be taken, and the responsibility will rest wi'.h tbe member for Patea. . , The Chairman : He can be examined on Fiidiy. Mi 1 Hutchison : Will you allow vat to hand in a letter add essed to the chairman, which I consider important. The Premier objected to correspondence being handed in at this stage. Mr Hutchison: Letters have already been handed in. One from Mr Ward, •which was handed to the chairman. The Chairman said Mr Ward's letter appeared to have been writteu in the room, and without being enclosed in an envelope w*s placed on the table before tbe chairman's Beat. The Pratnier said ifc was presented in proper ordur. Mr Hulchion: A letter was read from Sit R. Stout received during the course of the proceedings. ' • The Chairman said the present letter wis addressed to Mr Hutchison, whose name was excised and that of the chairman subitibuted. Mr Hutchison said it wa« stated that the communication telegraphed to Australia was so misleading that ib caused injury. This tetter affirmed that Mr Booth'o statement was

correctly cabled, and Mr Booth exonerated thi sender from any garbling or misrepresentation. The Minister for Lands said Mr Hutchison's lettsr was ilyly and surreptitiously rend and produced when it suited him. Suoh conduct as this was of a piece with what he had shown during the sitting of the committee. The Chairman thought the proper oourae would be for the writer of the letter to alter the address to " The Chairman." Mr Hutchison : That has been done. The Miuiater for Lands : Is it nob possible there was another letler . to Mr Hutchison saying '• Will this tuifc you " ? If bo, hind ib to the chairman. Mr Hutchison : I give that statement a decided contradiction. The Chairman ruled that the lebber could not be received to-day. Oa the motion of the Premier, tho committee adjourned till Friday at 10.30, aud will then proceed with f h* evidence of Mr Booth, after receiving documents from Mr Foster. August 7. The Banking Committee met at 10.30 this morning. The Chairman read a letter from Mr John Murray (Syduey) fxiusiug himßt-K from personal attendance iv Wellington on the grouod of ill-health aud domestic iuconvenieaca, acd asking to bo exanioed by coiivnission iv Sjdney. "Ha a!s3 forwarded a 4\vorri written skatemerit of such evidence as hn believed would hi required, and offefe3, if necessary, to be examined thereon by commission. " The Chairman added that Mr Button, "soli-,' cifcor, had received a communication front Mr. Mnrray tb.it delay had ocour.el ia getting the statement sworn to, but ib wou'd ba forwarded

as soon as possible ' The letter ivasrcoeivdd, and will be considered' at'a future meeting. A letter was received from Mr N. 13. Burton objecting to the statement that the cable reporS of a certain statement made by the witness Booth hefore tha Baulring Committee was misleading, or telegrapbed for hoitilo purpose;, and asserting that Mr Booth had txouerated the writer from blame, and did not deny the accuracy of the reports. Mr Burtou btd also. offered to cablo any necessity explanation. The Premier said the rults provided that no member of the prass or any oth;r person had auy right) to quest'on the proceedings of the committee. It this letter had com 3 before.the Speaker of tbe Houie the writer would, be held guilty of infringing the privileges of Parlia- , ment. The letter was received and ordered to lie oa tho table The committae resolved, in accordance with tbe decision at la«t meeting, to t«ke the evidence of Mr Booth before discuwing Mr Gninness's .. motion for the exclusion of the press from the onimittee. O'Hara Smith, called, said he had handol in a written statement, aud now submitted him* saU for examination th«reon ; but a* the committee were not prepared to proceed with hti cximication he was excused from farther attendance at present, having , been medically advis>^ to tike a trip for ttw> benefit of his' health. ' W.G, Foster, Wellington, m&nag'er of theß*nk of New Zealand Esta'es Company, produced' certain documents iv compliance with the order of the committee, and referred the committee to' the treasurer for the originals of" others which . were not in his po sea,sjoa. With regard to r ttvbula,ttd form of the Globo as^ets'on the' 17th August 1895 and the details of' property* witness said he cou'd not produce this without' the porminsiou of the Assets Board, as it would seriously sffeob the assets.- A». to the batik's latest aacerb*iucd value, that informafc'oa "sras nob undor his control but that of tbe board, and he g*ve the same reply as to tha valuations ateevbaiaed since 18th August 1895, with the dates of guch valuations. He banded in a statement of the realisation title) of that date, with the dates and result of each. Ha had no documents as to whether the title to eaob. was considered good, bad, or doubtful, but he understood from- tho bank's solicitor*, Messrs Stafford, Tre»dwell. and Field, that &hey were considered good. He had information as to the details of the £148,110 set against the debt of the Auckland Agricultural Company &s- good assets, which ho would produce, subjeo!; to conssnt; also a' statement of the profit andlosi of the Assets Company for the year eud'n>f March 1896. He would also auk the consent of tho board'as to the production of the other documents «*pf cifird. Mr Foster was thanked and withdrew. The Premier produced certiin documents iv the posseision of the Treasury, including Messrs Campbell and Smith's report., Mr Butt's rejoinder, Mr Cuff's explanation, the A«eeti Realisation Bird's account with iho Bonk of New Ztalaud, the Assefci Company's stock adjustment acoount, Messrs Campbell and Smith* rejoinder to Mr Butt, questions by the Treasurer ■ to the Solioitor-geaerAl aud opinion thereon, and other documents. ' ; ■The Premier explainer that while he had' been anxious to prevent evidence which would' affticttha; position being given during the no--confidence debate, tmd had endeavoured unV sucoesf fully to have the* debase close ou' Wednesday, and again on Thursday nijrhfc. fee 1 was now prepared to proceed with Mr Booth's evidence, in rccjrdance with the. resolution 1 passed at thelast aoaeting of the committee. MR BOOTH Rtf-EXAMINKD. William Booth, re-ex&mined by Mr Moutgomery, handed iv » statement showing (.he landed property aud bank premises referred t.> in the agreement of the 18th October 1895, with tbe value of each and the price set againsb any since sold, and the prtseiri income in respect to any remaining unsold. Mr Montgomery : You will recolleat you said in your las 1 ; examination that the position of the Bank of New Zetland is now one of complete safety. I a»k you would nob a complete knowledge of the position of the ban's and its pronpe'ots tend to its benefit ? Witness : I do not tee how the public caa benefit by any fuller knowledge thau I hey have at present. Mr Montgomery : Coming to the wntiags off, you showed in the report furn'slied that they amounted bo £3,695,799. How much of this j amount represents the deb's of private persous , realised during the currency of their accounts ? Is the reduction of the Asset Company's alme account incladsd in the three millions ? Witness: I believe so. So far as this £761,000 is concerned^ ib is in the writings off of private ecoouats ?—? — Nob directly. I shonld think a large part of it Is due to the fall in valu9 of properties. ' No doubb part of it is due to' heavy interett on debentures, beo&usa tbe floating of debentures and the heavy iutereit that had to be paid; crippled the company and ultimately bad a considerable effect in making writing off neces* «ary. I cannot give the exact flguteß as to how , much was loat through debentures being floated at a low amount and being subsequently bought, 'in at £103, but I will try to have the matter . looked up in the books of the bank. I would no! like to say whether, ib was about £300,000, bub I think it i« not less, I cannot lay, without . looking up the matter what amount ot loss arose from trading oonoerns, I oannot Bay whether I c»u agree with the report of the con*

mittee last year that the deficiency of £44,400 was due to trading concerns ; bub the statement given to the committee last year is that d-.ficl-eucy arose in trading concerns, and properties outside New Zealand were responsible for a very large part of it. It is impossible to fiay whether losses through writing off the sh&res of the Assets Company were incurred subsequently to the affnirs of private" individuate bJng taken over by the Assets Company. I oannot tell how anyone could give an exact answer to that question. I cannot say how far the writings off are through losses in private accounts or hotv far through losses hating been taken over. I think the totals of amount of writings off from private accounts can be got from the bank books. I will have a 'statement prepared, but I understand tbe question to be this : You would like to know the total amounts of writings off from private accounts, with a view of distinguishing that from the total writings off, and if tho balance irere assumed to be losses arisiDg fromprivate accounts subsequently ? ,Mr Montgomery : Thit is so. Was any part of the losses made by the bank itself, caused, for instanc?, by a mistake in issuing the two million guaranteed debentures all at once, and having the money lying idle. ' Witness: I would not like to express an opinion on that point. For a time gome money did lie idle after the issue of the two million guaranteed debentures. One million we were obliged to keep taoause the investments were subjeot to the approval of the Colonial Treasurer for the time being, and it was impossible to invest so- large an amount in a shore time. lam pot in a position to state what amount lay' idle for six months. No doubt a considerable, amount lay idle. In 1895 and 1896 a sum. of £1,531,951 was written off. That includes the only provision that became possible, and was used after the bank, legislation in 1895. Mt Montgomery : I wkh to call your attention to tbe apparent discrepancy in the amount. The amount tho committee required was j £1,330,000, and it appears £1,531,951 was written off.. What caused the discrepancy ? Witnets : lam not able to give particulars, but the accountant or auditor of the bank can .furnish them. There were some slight modi 3rations which caused the difference you refer to, but I am not able to give yon p&rtioulats. ; am not able to say wh&t is tbe custom of banks n writing off year by year. My experience re- *.<* 8 only to tbe writings off shown in the >»lance theet for 31sb March 1893. Ido not think there is any way of discovering whether prevision has been made for the total debts in the balance sheets. The contingency fund of £200,000 is generally covered for specific debts. I do not think we included tbe accounts which were not; previouvly inoluded in the oonticgency fund. The contingency funds definitely provided for debts which might; arise out of past transactions in' connection with accounts for which the present directors have no responsibility. As to what was required for the contingency fund we formed our opinion by taking tbe valuation of a number of accounts which might require revision. Some accounts arose during the year not provided for in the contingency fund. In going through the accounts we came to the conclusion that farther provision would .possibly be neoes?ary. I think it very likely that £200,000 will ba required to : provide against certain debts. I have mo distinct recollection of making that statement before the committee. It was, and is now, my opinion. Tho amount by which the contingency fund is reduced was taken at the time final arrangements were made for'writing off. Practically the sum of £54,000 is inoluded in the writinge-eff of 1895-96. Siace then the enntingency fund, hits been undisturbed. We {eft it undisturbed because we bad rcoocy available from the profits of the bank, aud we thought it wise as the- mont-y was avatl&b'e to conserve ( tbe'-contfogency funj, which ia in > a stronger position by £50,000 ss regards the provision for bad and doubtful debts. I think we shall probably "require the whole of it for bad debts'. Whether it will be required during tbe year depends on the management of the bank. I cannot say whether liuco the report of the Shareholders' Committee in 1889 amounts have been written off directors' accounts. So far a« I know, it is not the oase. I have no knowledge of anything of ihe kind. I believe secret reserve funds are oustomary with backs. It would only appear amongst the liabilities of the bank. The money* is put aside, and the bank is resporsible for it. I bave a return here that -will tupply particulars of the secret reserve. (Statemeat handed in.) There was : Capital, £900,000 ; " reserve fund, £45,000. One of the differences might arise from the call made in 1895. The amount taken was £441,206, and the profits accrued £7031; putptnie acoounb, £54,183 ; general contingency account, 63,480 ; interest suspense account, £3720, and smaller items under the head of. recoveries, consolidated property account, bad debts suspense account, no that the capital from every source which the bank had at its command for writing off was £1,531,951. The Assets Company's share account from cills paid up wa» £441,306. Tbe share capit al of the Assets Company vras written down £323,100. This made a total of £764,208. The bad debts written off the bank were £542,316, and further writings off, which covered the balance rhftt made up. to 31st March, 1896, of £54,193.' That left the contingency fund now available £171,136. That gives the exact position, covering everything to the 31st March 1896. In the balancfe fheefc of 1696 the whole capital was written off; £765,177 was written eff the Assets Company. There was some money used not shown in the balanca sheet of gist March. Ido not know if the particulars of these reserves and moneys available were laid before the committee, but the gross amounts were. The report went to show that a further provision of £376,000 was required after, the bank had exbau&ted every shilling of its reFources. I am not aware whether the committee were made aware such a reserve existed. The bank was nob in a position to seek aid from ihe Government until it had exhantted every shilling of its own resources to provide against losses. The interest suspense account was always shown in the balance sheet as liabilities. I am not able to say whether these fuspense accounts, consolidated property account, bad debts suspense account, &o. are jtill in the bank. Practically they were all wiped out — they were exhausted — but I do not know whether they have been added to since. The interest suspense account is in oaees where Recount* are unsatisfactory, and they are placed in suspense instead of being reckoned as profits and distributed. It may become available or may nob. The acoount is debited with interest. It is very improvident to pay away money when there ie a doubt whether you are likely to receive id. I ounnot s&y whether the value of the trading concerns owned by the Estates Company is £561,758. I do not think the trading concerns receive any special concessions. .As a rule they are dealt with rather more hardly than ordinary trading, affairs. lam not abfe to say how Ions; before trading concerns will be realised. We have sold some, several others are under offer, and there is a reasonable prospect of concluding sales within A year or two. I cannot lay what is the amount of shares held by the bank ia

companies. It cannot be serious. For the most part trading oancerns have paid very well. There are nob many shares held In gold mining properties. In the balance sheet tor 1898 iutere&t on the guaranteed capital up to date is included in the liabilities. Preferential shares were isaued in the early park of this year. The interest up to date on them is inoluded in the liabilities. That is inevitable. A<s to whether tbe bank intends to pay £50,000 to the Assets Board I cannot say, because there is a difficulty about the adjustment of accounts. I believe within £400 of the £59,000 is available. I think if we had been in po session of debentures the profit and lots account would have improved. . The increase in deposits is mainly due to the Colonial Bank business. There may bs some increase on account of Government deposits, but they change every day, and it is not easy to say the extent to which the bank is affected by them. The amount of Government deposits on 3l«b March 1896 were £1,311,826. The deposits in Loudon were £720,464. .The Colonial Bank lauded property aud premises (£125,138)- were not valued at the time of the agreement for amalgamation. The directors of tbe Bank of New Zealand were prepared to take them over at book valne and pay £75,000. We were prepared to lose £35,000 in return for inoreased business, but besides the business was selected. We got from the Colonial Bank a guarantee for two account! of £20,000 and £5000. The main facts were disclosed io the agreement )a ; .d before Parliament on the 18th Octjbsr last. We were perfectly satisfied with the bargain we made, and are satisfied now, and would be very glad to make another one as good Jo-morrow. The book valus oF properties was in excess' of the tax value by £35*000. I don't, know whether that was stated to the Government. There were private negotiations between the directors of the Bank of New Zealand and Colonial B ink, and I believe we made a good bargain. The sa!e3 since have been : — One property at Lawrence, valued at £1000, for £259 ; one at Marton, valued at £265, gold f.»r £35 , one at Normauby, valued at £69, sold for £3 : one at Wanganui, valued at £3605, sod for £3003 ; one a!; Wyndham, valued *t £77, nold for £70. I am not able to Bay whether they arc picked properties. I think we tdull get quite as much from the properties as wo exp&cted. We intend to write-down the goodwill account this year by £1000. First the guaranteed shares and then the preferred shares have to be provided for, and then £50,000 per annum to the Assets Board. Five per cent, may be paid on the call by the consent of the Colonial Treasurer. Any balance goes to the Assets Board. 1 do not knovr what valuations have been /made since 1888. I am riot able to gay whether any communication was made from time to time by the directors to the Government with regard to the affairs of the bank. I' believe not. i do not remember auy information being given to the Government as to the position of the bank. I do not know at what date we were prepared to disci >se the position of the bank to the Government. I believe a letter was written by the president under instructions from tbe directors. Ido not know to what extent the Government was nude acquainted with the bank's affairs. Mr Montgomery : Was private information given to the Government in 1895 that wag not given to the committee ? Witness : I have no rcc llection of 'that being don?. lam not aware of any such. Mr Montgomery : Who would be the persons who would communicate with the Government verbally ?— The president is the medium of communication between the Government and the direotors. • Were you present at the interview between <hh Government and the bank direotors ?— I think I was present .at every otic. To yqur knowledge have you or any other director furnished, any member of the Government with' any information regarding private aooonnts P-rNo, sir ; not to my knowledge. Are you ,now furnishing th« Government with information for this inquiry ?— I am not aware of anything of the sort. Am I to take it that the brink is being conducted quite apart from all political influences or communications even with tbe bank by any of the directors or officers ?— Absolutely. So there is no interference on the part of the Government or any Minister with the btnk, and there has never been any interference P— l can say that from my own knowledge. 'Jhe committed then adjourned. August 8. The House Banking Committee met at 11 on Saturday morning. William Booth, re-examined by Mr Montgomery : I produce a return of the writings off from private aooounts, as diotingu'shed from others. I cannot give any information bejond what is in the papers. The writing off from personal accounts is £1,136,262 from 1888 to 1896. That inoludes £171,136 still in the contingency fund not yet wriltsn^off. lam an attorney of the Estates Company. The, head office is in London. I represent the board there with Mr Walter Johnston and Mr Watson. I cannot give the names of the London board. I think there are tbres directors in London. They do not instruct the attorneys here. It is skill in existence as a company. The directors issue a balance sheet when the material is sent from here. There are only nominal shareholders' meeting* of the company. Tho abares are mostly he Id by the Bank of New Zealand. There is no object now ia retaining the London board, and it is not intended to retain it. It is intended to apponfc liquidators hero. I Cinuot go int.) particu'ars. It is the intentiou of the bank to wind up the Estates Company by placing it in liquidation. lam not in a position to describe the process. There will be no difficulty, as the 'shareholders in London are merely nominal. I cannot say it will be done within one year, but it will ba done as soon as possible. I was appointed attorney in 1894. I cannot add anything to the facts disclosed to the committee last year an to tbe position of the Assets Company. I then found the properties overvalued to the extent of the difference between £1,899,000 and £2,731,000. I cannot say what interest the Estates Company .paid to the bank. The bank held an interest to the extent of £1,850,000, since written dowa to £1,089,822. 1 know nothing of the interest of floating debentures and subsequent conversion. The redemption of debentures to.ok place while I was attorney, and the fiaal redemption has just been completed— on 30th June. I can't give you the date when the fint £750,000 was paid off, but I can supply you with details from the beginning. Of course we have taken in paying off debenture!. I cannot say whether the earnings of the Estates Company were sufficient ' to' pay interest on the money borrowed on the security of its assets. Mr Hanua, late manager of the Estates Company, could furnish the information as to tho transactions. He continued manager till the early part of 1895. Mr Hanna was changed because, though we found him an efficient man as regards the books and accounts, a different kind of man was required to deal with large estates, therefore we practically retired Mr Hanna and engaged another having the knowledge necessary and which Mr Hanna never claimed. I think Mr Foster'! management has saved the bank and Estates Company many thousands of

' pounds. Mr Foster does not undertake accountant's wo.k, which is in charge of Mr Cuff, Mr Foster only supervising that officer, but under him are the station managers. In 1894 we fouud the book values were artificial value. We had no power to write them down. 1 oannot say whether the London board was aware of the probable value of the assets. I believe annual reports were sent by Mr Hanna. I cannot produce them. I believe they are in London. The reports were prior to our taking office. From that time all business conneoted with the Eitates Company and the Auckland Agricultural Comp?-uy has been in a continuous movement towards the re6ull6 fixed by legislation. They were valued by Mr Foster last year in a return presented to Parliament, I don't know the amount of his valuation. The directors did not meddle with tbe book values of the properties. Mr Foster's valuation, so far as he undertakes to be answerable, was given in a letter, and in all probability differed from this £1,879,000 valuation for which the b;ok? of tbe bank were re'pausible. lam not aware there was any loss in 1895 beyond that which had been acoruing from bad years. I am afraid thej had been all bad years for some time. I could nob say whether there were any writings off from private accounts in the Estates Company. I don't know of anyone who was acquainted with the history of the £54,574 whioh appears in tho combined balance sheet of the Bank o! New Zealind Assets Compiny and Auckland Agricultural Company as tbe sum paid in excess of Mr Hanna's valuation. Toe direotors objected to that valuation under the impreesion that the adjustment to be made might go behind the adjustment made last year. They did nob 'seem to ba aware that an arraagemeut was made about £50,000 in the "arrangement of j Is6t year. The value of stook with the bank and all other stock' at £2,731,000 was fixid, the amount to be covered, along with other properties, by 3£ per cent, debentures. There has been ' do change in the value of stook, except book | alterations since last year. We did not feel at i liberty to a'.ter the value 3 placed before the ! oromittee last year. Wo directed th.at the ! figures should be left as submitted to ParliaI ment laot year. I hope an adjustment will be shortly agreed to. Debentures cannot ba issued till that is csncluded. A fortnight would bo ample t : me to have the debentures ready. As to the Matunuta arrangement, it was made in London in connection with the Loan and Mercantile Agency Company. The directora were ni.t p'.eased with the valuation, and we were informed from London it was part of a concession rendered necessary uutil certain securities held by the bank were realised. Some of these securities were nob in a satisfactory condition at the time the nutter came beM-e Parliament. The Estates Company held the whole of Matanaata. The question of amalgamation with the Colonial Baak arose immediately after arrange moits were nude iv 1895. Ido not know anything of the fir»t proposal in September 1894, That was before my appointment. I have no knowledge of that except what is comrnoa to everyone. The first negotiations aro3o last year during tha session. I have do recollection of any overtures before that time. The president of the bank was the mover .in the ma'.ter so far as concerns. the director*?. There were no specifio instructions given to himi Ho brought the matter -before the board, aod we were very willing as soon a3 any defiaite proposal was submitted.- He knew the Colonial Bank was anxious to sell and that we were on the part of the Bank of New Zealand anx'ous and willing to buy, and no negotiations went on. I cannot define how a matter of that kind was started. It would naturally arise frcm willingness on the one side to buy and en the other to soil. Once we began to discuss- tho mutter the directors of the two banks took charge of it. There were no written negotiations. Whan we knew they were willing to treat we asked for the books of the bank, but I have no knowledge of it. Mr JUonfcgoraery : Have any document in connection with these negotiations for amalgamation been destroyed ? Witness : I think not ; I have no knowledge of the destruction of any documents. Negotiations were interrupted at one time, and all documen's were destroyed, bat they were renewed and re-made when all the business was gone over again. I don't think these were any draft schemes for amalgamation. No formal scheme to my knowledge was set out. Mr Montgomery : Did not the Colonial B*nk want to have everything iii the "A" list at one time. Witness: Naturally they wanted all in the "A" list, and we wanted them in the "B" list. The persons present a1;a 1 ; the meetings where utgotiatiocs were discmsed were the directors aud auditor?, Mr Bailer, and others. Was Mr Buller present when tho accouuts under letter "D" were being dicoosssd ?— I cannot possibly Bay that, but he examined the accounts, and when we wanted his a»sistance wo got that during the discussion, and the board weat over everything again. I do not think anyone prepared the lists. I think that at one tiino there were not more than three lists, bub there were one or two account* that belonged to a different category from those in the three lists, aud it was suggested that a fourth list be made to comprise these. At one time the Colonial B*nk directors were not prepared to nccept the position as we stated, and naturally they were disappointed at the view we took of their business. There were leveral acsounts we declined bo have anything to do with, and left them to tho Co'onial Bank. That was done for reasons which satisfied vi. Ai to the valuation of the bank premises, we took the book value of the properties, and it was no use goiog into separate values. As to the £20,000 advanced, an arrange- ! ment was made by which. the directors can call j upon the auditors to report anything necessary to the Colonial Treasurer for the titno being so i long as the relations between bank and State exist as at the present time. Mr Montgomery : Was this advance of £20,000 secured on the debentures of the Ward Farmers' Association ? Mr Cooper (counsel for the b'ink) : I have opeDly advised witness to decline to answer that question. Witness : I think I have already 6t»ted that I decline to answer. Mr Montgomery : I take it you decline to give any further information regarding it ? Witness : That is bo. The Premier said tbe question was not admissible, as it was outside the order of reference, and he would atk the chairman to rule it so. j The committee was getting into the position of j putting witness int3 the attitude of defying the • committee. Mr Mislin Fan" iC tbequettioa was not cleared up the public would suspect the Premier of being anxious to conceal something behind. The Premier said he was only endeavouring to prevent the committee going outside the order of reference, because if that were done they could not know where it would end. They could not go into private accounts in connection with which there had been no writing off. Mr Tanner argued that the order of reference oovered the question. The Chairman said the £20.000 comoiised an

acoount taken over by the Bank of New Zsaland from the Colonial Bank and was guaranteed by the Colonial Bank. If it became a writing off it would be clearly within the »rder of veferenca. If there had been no writing off it could not be inquired into. They would have an" opportunity of proving that by the evidence of Colonial Bank officials, At present the question was beyond the order of reference.

Mr Montgomery: At what date was that advance made?

Witness c I don't remember the data. I think I cannot give any further particulars of the matter beyond what I have already given. Mr Larnach was one of the Colonial Bank direotors and took part in the negotiations. I am not aware that the Government was acquainted with the negotiations going on, nor any member of the Government. I know there were several accounts in the "C " list. I cannot give any particulars. The president of the Bank of New Zealand was anxious to puih on the negotiations. The directors only noticed discrepancies in the Colonial Bank balance sheets just as anyone else might notice them. It is too soon to estimate the net profit from the Colonial Bank as distinguished from ordinary profits. We made our own estimate of the probable results. I think this will be more than realised. We have not yet got the £14,000 set down for the London inscription business. I believe there is some legal difficulty ia the way; The seoond million guaranteed is not earning 4£ per cent. Ido not know what rate it is earning. v It has been changed to a more profitable investment than formerly. It will probably earn more next year, but it is too soon to estimate definitely the position of affairs. They are more favourable now than last year. We have not jet got ths debentures, but I have bo doubt questions in dispute will bs se'.tled in a month or two and that will give us fully £2,500,000. The b»nk is perfectly safe, but I thiuk one more auditor should havecontinual oversight over the accounts in various parts of the country, not only reviewing the inspector's accounts but noting and keeping careful watch over a large number of accents that are liable to drift. Co'onial ba»ks, so far as I have seen since I have become a director, hava nob neßr'y the safeguards which are necessary. You can have 30,000 accounts in the Bank of New Zealand, bub the advance accounts amount to more than 6000. Many of the advance accounts are made under stress of competition whioh, in my opinion, is altogether dangerous. The lines upon whioh the audit is proceeding now could not well be improved, but it should be strengthened by the addition of another •auditor, and further all colouial bauks doing business, from what we know of their history as indicated by their balance sheets, should make very muoh larger provision for bad aud doubtful debts than at present is the case. Mr Montgomery : Have you any other suggesb'ons to increise the safety of the bank's business.

Witness { I think that while the relationship is continued that exists at present that the Colonial Treasurer for tha time baing should not have any interest,, direct: or indirect, or any advance accannt in the bank. In making that statement, I would like to ray that so fat as the late Colonial Treasurer is concerned we in the bank Inve no knowledge of an} thing approaching to interference in any way at all. I think it is only fair I should say tliat, seeing we' have baen called upon to make these statements with a view of guarding agamst danger that might arise in ."uture, that, I think, it is important, while the veto of the preiident continues—and I have no quarrel with it — that the di eo!or.< themselves should be able to call upon the auditor of the bank to report ti the Colonial Treasurer for the time bsiug anything they think important and necessary he should know m the conduct of the bauk. ■ Mr Montgomery t Has tho presidenb ever used the veto ?— No. Will it be an advantage if the board was strengthen d by an inoreased number of directors representing differeut parts of the colony P— l do not think any change of that kind is nece»6ary. Is the Estates Company in a fair way to realisation ?— I think if the general improvement in trade which has arisen from the increased price of grain and the development of mining continues, the properties, or most of them at any rate, and the trading c mcerni may be disposed of before long— lay one or. two years, — and we are leaving no stone unturned to secure that object. Do the facts within your knowledga warrant you in saying whether the country in likely to incur ultimate loss through the bank ?— So far as I am able t~> form au opinion I think the colony is not likely to losa a shilling, always provided tho management of th« baak is capable and competent and trustworthy, and always provided atrangements .are made for the con.duct of the bank which will not require interference with its. business, such as is involved by pirliamentary inquiries. The committee adjourned until Monday, at 10.30. August 10. The House Banking Committee met. at 10.30 this morning. The Chairman read a letter from Mr J. C. Hanna, asking permission to go to Auckland on tbe understanding that he will attend within 24 hours when his presence as a witness is required. — Permission granted. William Booth, examined by Mr G. Hutchison, said he was appointed director on the 26*h September 1894. At the lime the direotors were appointed the remuneration was fixed at £250. After two of the directors became attorneys for the Estates Company it w*s changed, £10C0 being appropriated for the two attorneys — • £500 each. The change was made not long after the Appointment of the board of directcra. Two direcfors were made attorneys in September 1894. £100 was taken by each of the attorneys from the £250 formerly paid and given to the other directors. With the president's salary the total amount was £2250. The deed of settlement set aside £2500 per annum ns payment of directors- £SCO e*cb for five. £1000 is paid to directors who are attorneys to the Estates Com- I piny. Them are five dir. ctors, including the president. The directors are in New Zealand. The-followinfr are the directors of the Estates Company :— W. Watson, W. Booth, W. W. Johrjsloa, R. H. Glyn, J. A. Ewcn, and R J. Jtffrcy. The first three are attorneys as well as directors. I believe the three directors ia London receive £200 a year among them. I don't know the amount the globo assets were valued at. 1 don't know how the company was formed or what was the capital. I believe the Rharoft were held in tru3fc for the Bauk of New Zealand I could not give the nam.es of the ehatebolders. I bjlieve Foma shares are nenvually held outside the Bank of New Zealand. I was appointed a director from London. I don't remember any meeting of shareholders. I don't remember particulars as to how I was appointed. The present auditor was not in office when I was appointed, nor was the president. The latter was appointed by the Government from the 12tb October 1894. I think Mr Johnston presided. No reference j to amalgamation was before the board in 1884. !

' I remember the direotors resolving to bay £150,000 New Zealand consols. I don't Tfl« member the date. The consols were to beat interest at 3£ per cent. That money was takes i out of the seoond million. We had the approval of the Colonial Treasurer. If it was in writing it can be produced. I cannot say where tha money was paid over. The consols are still held. I don't think that the money has come back in the form of deposits. I have no knowledge that there were any deposits other than in the •• D " list not taken over by the Bank of New Zealand from the Colonial Bank at the time of the purchase. I remember the call of £500,000 by the direotion of the Colonial Treasurer. I had no knowledge of any correspond* ence on the subject or any statement that that oall was required in order to pay off £1,500,000. The losces of £300,000 ascertained on examination of the bank affairs to be provided- for was" communicated to fehe directors. I believe the president stated at the time* that no further call would be necessary. We asked the Government to meet us in order to discuss the position of the bank. The data of the oonferepoe wa aaked for was the 4th August to discuss the position. We met the Executive on the 4th August. There was no previous application to Government or representation within my knowledge. The result .was that the Government proposed to set up a committee of inquiry. I was not present in Wellington when Mr Murray was sent for. I was made aware of it by the president of the bank when I returned.' I did not acquiesce. I am not aware of any. minute on the subject. I was nob a patty to ''the vote of £500 to Mr Murray for his services. I had no knowledge of such payment. I don't know where it was paid. I could find* that information &s well *s the record of the £530 paid to Mr Murray for telegrams to London and the expenses of the directors in August. There was a recommendation for the purchase ofanother bank. Thtre were no communications with any other bank for purchase except the Colonial Bank. I have no recollection <<f any direct communication with the Colonial Bank at that time. The matter had been spcketi of amongst the director?, and it was generally undei stood that there might be a purchase of the Colonial Bank. Witness did ' not as a director hold, any communication with the directors of the Colonial Bank. The beard of directors . appointed in Septembt r was not; consulted as to the appointment' of the president. It made no recoramc ndation to the Government as to the choice of president. I have no recollection that the execntive of the bank interfered in any way. I have no knowledge of any recommendation from the board in London on the subject -of the president's appointment. We hid by the set of September 4 to set aside £200,000 to ba applied to writing off bad and doubtful debts. We took eff only £29,000 of that amount and wrote off the profit of the year (£54,000). If we had taken those two sums out of the contingent fund our profi's would hare been £54,000 more for the year, and so much more to be carried to * tbe credit of the Assets Realisation Board ; but wo did not thiuk ourselves at liberty to pay anything away out of the contingent fund until we bad exhausted every other source. • Negotiations between the two banks were re- : Btimed soon after the passing of the act remov- * iog the disabilities at io purchase. We were informed by the Colonial' Bank directors that they were willing to discuss terms. The .overtores fr-m the Colonial Bauk were not in • writing. I have no knowledge of any correspondence on the subject. I cannot give the' date when the drafb agreement; was drawn up. When we bad come to an agreement as to importaufc at d tubsUntiil points, we got Ipgal assistance, and tbe form in which ifc was preReutei to .V<irlhmcfit wss tbe result. We took our It gal adviser into our confidence as soon as we bad fixed the main terms of the agreement!. We instructed Mr Button to draw the agreement;, wbich we approved of. 1 asmm'e Me Button would communicate with the Colonial Bank. 1 h*ve no distinct recoil* otien of seeing the draft »grcei.ietit, but whfn I did see ifc. I wss Fatwiied tbat it canied out' our views. I don'b know bow many original copies there were. I don't remember whether I signed more than one. I believe the lists " A," «' B," " C," and "D" were attached to the original. I signed the dttai's of the agreement, which were arranged only two day* before tbe 18th of October. We had the Colonial Bank balance sheet before us when we took that bank's business to pieces. The amounts iv ihe lfsts wrre : "A" list, £926,197; "B," £604,695; "C," £98.382; "D," £102,274 ;-total, £1,732,548. The £133.906 paid. to the Colonial Bank included the balavicfi that was left of the Colonial Bank, plus £75,000. It is not prssiblethat the £133,909 included the £125,000 value of properties. Tho amount is made up of £75,000 for tbe goodwill and tbe balance remaining due to the Ookiniftl Bank after we bad concluded arrangements, wbioh included the book value • for properties. Tbe agreement took effect on tte second Monday aftef it was agreed to at the meeting of share holdera of the Colonial Bauk. With the "B" list we took responsibility for £272 000 With the "C" list we took no responsibility. In respect to th«t list • the Colonial Bank -gave us an indemnity. In respect to the " B " list we took cover for the amount. So far ai I know the amount arrange! . to be partly covered by these accounts was written on the credit side of the account. Mr Hutchiion : Did the Bank of New Zealand on this contract taking efft ct write off the sum which appeared io the right hand column from the amount which we knew was in the other column of the list ? Witneis : It was not in the power of the Bank of New Zealand to write off an} thing. Mr Cooper was instructing witnets when Mr Hutchison objected. Mr Cooper : I claim the light to advise the witnes*, and shall do so. If I am not allowed to do co I obn.ll advise him not to answer any further questions. Mr Hutch'son : It is a question whether the committee or Mr Cooper is to conduot this inquiry ? 1 Witness : So far as lam able, lam willing to give any information consiitent with tbe otand we took up regarding private accounts. What* ever suggestions may como from other persons present they will not interfere with the integrity of the evidence I shall give. Whatever may be the wording of the olause of the agreement referred to, we recognise no obligation to write off any* thing of the "C " list, because we had no responsibility in respect to it. The Colonial Bank made arrangements, and it was for as to place that amount to the credit of the "C list. Mr Hutchison : You bave the agreement before you ? I must ask Ml- Cooper cob to interfere. Mr Cooper : I shall claim the right of advising the witness. He is not a lawyer, bat Is being questioned by a lawyer, and he is entitled to legal assistance in framing answers. Mr Hutchison : That wonld not be allowed in any court. Mr Cooper t I was never placed in such % position where counsel was allowed to sit besicfo the witness while at the same time counsel* mouth was gagged. Witness continued: Ihe £55,233 wm th%

•mount in the right-hand column of the " O " list. We understand the words to mean that the money was to be writtsn to the credit cf the accounts. ' We oredited £93,382 with £55,233, leaving consequently £43,149. That is how the "C" list stood imtaediateiy after the contract took effect. That list was guaranteed to us as it stood. It was different from th«"B "list, inasmuch as we took the "B" list with the provision that was made for it. Any loss over that amount the Bank of New Zealand vras responsible for. The Premier: The witness sayi the "O" list was never taken over by the Bank of New 2eal*nd. The Chairman : Do you Bay that the Bank of Ntw Zealand never took over tho " C" list ? Witness ; We mtde arrangements to work it as agents for the Colonial Bank for three months, and than we were to inform the Colonial Bank whether -we would take it over. Three days before the expiration of the time •»re informed the Colonial Bank ire would not take it over. We took the guarantee of the Colonial Bank for the " C " list, and were content with £272,072 as cover in respect of the «• B" lisb. The "B" list amounted to £604,695, and any lois above £272,000 would be the loss of the Bank of New Zealand. £548,762 wai in transit. I believe there were bills in transit irhieh had to be dealt with afterwards by the Bank of New Zealand. Mr Hutchison : Attend to my questions. S"du oannot do so by attending to your counsel. Witness-: I am afraid I am under some obligation to attend to both. Mr Hutohison : Among the reports submitted to you were there any by the Colonial Bank inspector. . ■• • - -• Witness : ' We bad the assistance^ of the insgeotor of the Colonial Btnb, but relitd on our ■own. reports, I don't think the reports of the inspector were submitted to usexctpb such information as we asked for. We had no need for reports in respect to the •' C " list. The information we bad-ab'iut the acoounts in the "C" list reudeied ilf unnecessary to a»k for information from the inspector of the Colonial Bunk. I have no recoil, ction of any information baing supplied further than what we asked. We had in(oim*tiou supplied $o us. It was -written in thebooks of tbe bank. Ifc was verbal also. What ■verbal information we had came to, me after it had been communicated to the other directors. I don't know who it oame from. Messrs Macattby and Johnston gave some information. There t?&6 no special information outside that. We knew the accounts in tte "C" list from the^poks. The two account? of £20,000 and - £5000 iTeie not in ih«s "C" list. Tfaey had nothing to do with any of tbe lists. .I am not able to give you any further infortna.'iion vhettner this turn of £20,000 has any re r ereucd to a parcel of debentures. Mr Hutchison : Do you decline to answer the '.mesfcjon ? Witness : I am resting on the ruling of the eh I'Uroan last week. *i!w Premier contended that the question Ct>uld not b3 pressed as no writing off was proved. Mr Montgomery argued thst the amount came within the tcope of the orcjer of .reference becaune tho committee had to consider whether the £20,000 was bad or dcubtful assets in the purchase of tbe CoJonial B<tak. ' j The Premier contended that these Accounts had keen thowu by the evidence of the wi< ness at> previous, sitting to be outside the nmouni caid for the goodwill and thebook value of tbe properties. If it was merely an inves*m*n(; of the tank it would not come within the order of reference. Mr Maslin faid the order of reference contained grounds for inquiry outside writings off. Ij v? 08 highly important that the committee should have full information as to these two advances of £20 000 and £5000, a« th«y were involved in the geceral terms of -tbe order i of reference relating to. the management of the affairs of the bank. ,'.fter further discunioa, jVituess. in answer t> the ohaitm&n, said : Tnis £20,000 is not connected with tbe goodwill or tbe book value of property. The two sums were'guarantef dby the Colonial Back. I csnQot cay whether the guarantee was ? straated. It' would involve disclosure" 1 of the private aocounts of the bank. The Chairman : I shall ru!e that the question is premature. f&t Hutchison asked the chairman to explain why it was premature, The Chairman : I say it is irrelevant at the present time. Witness continued : Tbe»e amounts of £20,000 and £5000 haveco'hinj to do with the contract beyond what tho contract; discloses. In effect, we put tee, actual value at £90,000 instead of £115,000 for landed property and the bank premises of the Colonial Bank. We expeoted to 10-e £30,000 or £35,000 en tbe book •»a.lue*. The question of the £35.000 being in jeopardy came up towards the cud of the negotiations. We did not hexr of it fitst from Mr M'Lie&n or Mr Laroach. It became cl««r that in; the evenly of tb% agreement failing through the eecutity upon which those advances reeted would have become ics'cnce. I could cot •ay how far tbe loss of tbia £25,000 ,n0u1d bava affected the Bank of New Zealand, because by so deiog I would be revealing tbe relations with private individuals. They did not come to us fiora the Colonial Bank crigin%lly. Tne president of tbe bank was practically responsible for these advances. I can't tay whether the directors were responsible for those two advances at tho time they wero made. lam not able to snswer because it -would disclose information regarding private acccauti. I refusG to aDSwer. .tfter discussion as to the relevancy of the question, The Chairman asked witness whether the directors were responsible for the two advances at the time they were mads ? Witness : The true answer would traverse your ruling on Saturday, and would disclose the affahs of private individuals. If that answer is not tufficient I must decline to answer the question, because the answer would disclose the confidential relations of the bank with its customers. A discussion ensued on the questions of adjournment till 3 o'clock in the afternoon or until 10 30 on Tuesday. Witness said he was perfectly williDg to give his time to the committee, but his health would not bear the strain of afternoon as well as morning sittings. Tho Premier and Minister for Lands said they had pressure of departmental business which would prevent their attendance in the afternoon. f The committee adjourned until 3 p.m. On resuming, The' Chairman asked the direction of the committee- *s to what documents should be printed of those produced by witnesses. ; On the question of printiDg_the return of the profits and loss accounts at 23 stations of the Bank of New Zealand, ,Mr Montgomery objrctpd on the ground that publication would be prejudicial to the interests «f the bank. ■"The Premier contended on broad grounds that the public were entitled to the information, 9ti swred that the documents be printed, As

a member of the Realisation Board he wasted the public to know the position when the present board took office. The committee resolved that the documents be printed with several others. On the question of Mr Booth's refusal to answer the questions asked at the morniDg sitting, Mr Hutchison moved — " That there being evidence, now before the committee that under the agreement of the 18th Ootober 1895 between the Colonial Bank and Bank of New Zealancj, that the list-named or purchasing bank has complied with the proviso under clause 18, wbicb provided * that the purchasing bank should immediately on this contract taking effect; writ" off the Amount? st&ndtag in the rigb.t-b.fcnd column of the •' C " list and credit the respective accounts in such list with the amounts so written off,' this committee calls on Mr W. Booth, the witness, now under examination, to produce a certified copy of saoh •C ' list." The Premier objected that notice of motion must be given. It was resolved that notice of motion be liven. Mr Hutchison moved—" That consideration of Mr Booth's refusal to answer certain questions be deferred." The Premier seconded the motion. Mr Montgomery, in supporting the motion, .said the questions which Mr Booth declined to answer would have to be replied to by someone. The motion was agreed to. The committee proceeded to discuss the motion by Mr Guinness to exclude the press | from its meetings. . The Chairman ruled that, as the committee had patted a resolution. at a former meeting t that Mr Booth's evidence be completed before dealing" with notices of motion, Mr Gaianees'e irio'.ioa was not In order. Tl c committee then adjourned until 10.30 io-morirow.

' THE WRITINGS OFF. Tho following is- the statement of the amounta written off from 1888 to 1896, as extracted fivm tho bookfl of the bank suid laid befo e.ttts committee by Mr Booth. Th« total

Tbe amounts not specified are thus made up : Mr Hoan'a adjuntment of deficiencies ia 189H (dealt with in London) ... £319,000 Tho reduction of the Estates Compawj'« share account in 1895 £764,300 To contingency fund account £171,13 C The amounts -written off year by jear (showing the New Zetland writings off ia the second

a member of the Realisation Board he wasted the publio to know the position when the present board took office.

writings off for 1 tbat ; penod 1 are: New Zealand Australia ... Fiji .'.. London Not specified Total ... ... £1,184 697 005.09!) 15,071 3.99J „. 1,284,442 ... £3,095J99

ite;— 1833 1889 1890 1891 [592 1833 mi 1895 18915 / I ... I ... I ... I ..'. \ •" ! „, i „, Total Total Writings off. £216,835 109,565 1,169,555 J5.919 21,198 13.532 15.1(54 1,477.758 • 54,193 . £37095,799 In New Zualand £164,5« , 6<,4K 669,071 13.3K 9.2^ 9,65f • 2.62( 244,771 10,W{ ... £1,18i,C9]