PARLIAMENT.

Southland Times, Issue 13501, 18 July 1896, Page 3

PARLIAMENT.

[By Telegraph.] LEGISLATIVE COUNCIL.. Wellington, July 17. It was agreed that the Council should adjourn till Wednesday, 29th inst. Mr Jennings moved that the Government be asked to grant the same railway privileges to females employed in the civil service as are now enjoyed by male workers.—Mr Walker stated that the only privileges granted were those to railway employes, who were allowed quarter fares, and the Government did not see its way to grant the reform suggested.—Motion lost on the voice?. . The Rating on Unimproved Value Bill passed through Committee without amendment and was read a third time and passed. The Gold Duties Act Amendment Bill passed its final stages and the Council then adjourned. Evening Sitting. The Council sat for a few minutes and passed through all its stages an Impress Supply Bill for L 329,500. HOUSE OE REPRESENTATIVES. Mr Steward brought up the report of the Reporting Debates Committee on the question of the evidence of the Horowhenua case to the effect that they had no further recommendation to make,—Report ordered to lie on the table. Mr Graham brought up a report from the Banking Committee, to the effect that Mr Watson, President of the Bank of New Zealand, had refused to give certain evidence Before the committee or to answer certain questions put to him.—Mr Seddon said this was a serious matter and as the report of the committee came on the House somewhat suddenly he would be consulting the convenience of members if ho moved that the discussion betaken at 7.30 p.m.-Mr Watson would then be in attendance and the House could take whatever course it thought proper.— Captain Russell asked whether Mr Watson would be heard at the bar of the House and whether he would be represented by counsel? —Mr Geo. Hutchison’thought there was no precedent for a contumacious witness being represented by counsel. — After, a brief discussion Mr Seddon said the position was whether the officers of the Bank of New Zealand were to defy the House or .whether Parliament was to maintain its dignity. Mr Watson’s refusal to give evidence was apparently premeditated and his action would no doubt be repeated by other officers of the Bank of New Zealand as well as by the directors of the Bank of New Zealand and the Colonial Bank. He would move at 7.30 p.m that Mr Watson be heard at the bar of the House before the House decided on the punishment that should be inflicted.— Motion agreed to. , Replying to questions, it was stated— That a regulation would be issued in a few days prohibiting the importation of hides or bones from Queensland owing to the prevalence of tick plague in that colony.—That a bill would be brought down this'session to amend the Advances to Settlers Act.—That Mr Coßtall, late Government Printer, was requested to send in his resignation : it was not proposed to award him any compensatloThe debate on the Noxious Weeds Bill was resumed and concluded, and the second reading agreed to on the voices. Mr Seddon said that in deference to the wish of the leader of the Opposition he would postpone the financial debate till Tuesday evening. . An Imprest Supply Bill for L 329,560 passed all its stages. Evening Sitting. The Speaker read a letter from Mr Watson asking that he be allowed to be to the Ur of the House by his

solicitor, and from Mr Theo. Cooper asking to be allowed to accompany Mr Watson as his solicitor. •1 Mr Seddon moved that Mr Watson be (called to the bar of the House, and that the , Speaker ask him why he refused to answer a question submitted to him at the Banking ■ Committee, and if he persists in his refusal ■ to answer that he be allowed to have counsel present with him at the bar. Mr Seddon said this question was above all party, and the House, as the representative of the people, should assert its right, no matter how powerful the institution that was behind Mr Watson. It was not a question only of William Watson. If his refusal was countenanced by the House it meant that all the banking witnesses, including the directors of the Colonial Bank, would refuse to answer questions. The privileges of the House had been deliberately assailed and he believed the witness when before the bar would reiterate his refusal. What had been refused to the House could be demanded by any court of law in spite of a declaration. What had been made the situation of the present moment was foretold at street corners weeks ago, when it was openly stated that the House would be defied. History was merely repeating itself, and he quoted from Hansard records where, in 1890, the Bank of New Zealand had refused to supply a committee of the House with necessary documents and papers. He declared that unless members of the House insisted on an answer being given the enquiry would be futile and nothing but a hollow sham.. He hoped there would be few members in the House who would refuse to agree to the motion he had proposed. If the House permitted this matter to pass its power for good was gone forever. Mr Watson had said a declaration of secrecy prevented him giving evidence on certain matters but the view he (Mr Seddon) took of the matter was that in such an enquiry a declaration did not hold good. No matter what happened to the Bank of New Zealand the responsibility rested with the House and not with the president of the bank. The House had passed a second order of reference and therefore the responsibility was on the shoulders of the House. As to the shareholders whose interests Mr Watson said he was protecting, he (Mr Seddon) could not see that their interests were conserved by Mr Watson’s refusal to answer questions. The shareholders were already protected by law, but they should have the satisfaction of knowing who were responsible for the loss of three millions of money during a limited term of years. It was a serious matter for the shareholders and they were entitled to the fullest enquiry. No private or current accounts were to be enquired into by the committee so that there was no foundation for the cry that the bank would suffer by the divulgence of evidence contained in the second order of reference. In conclusion he asked that the House insist on its mandates being complied with. Captain Russell said the Premier had objected to the laughter that had proceeded[from the Opposition benches, but ths outburst was not at the gravity of the situation but ' at the pathos of the Premier. He (Captain ; Russell) fully recognised that it was the | duty of the Opposition to act with the Premier in conserving the’privileges of the House, but there was a possibility that these privileges might be strained. He believed that the privileges of the House had been technically infringed on this occasion, and agreed with the Premier that the person who had infringed them should be asked for an explanation. He still considered in would be injurious to enquire into the private accounts of individuals, and if the House gave that power it would be granting a power never yet given by any Parliament. Mr Geo. Hutchison said members should assert the dignity of Parliament. As to counsel he contended there was no precedent for allowing anyone to interfere in such a case.

Mr Thos. Mackenzie congratulated Mr Watson on the stand he had taken, despite the fact that it was a breach of the privileges of the House. Going back to the time of the bank legislation he expressed the opinion that it would have been better then to let the bank go by the board. Mr Earnshaw objected to the persecuting speech made by the Premier and combated the assertion that Mr Watson had been contumacious. He applauded the stand taken by Mr Watson and said it was only fair that he should have the assistance of counsel at the bar of the House.

Mr Hogg said the fact that the directors of the Bank of New Zealand were attempting to burke this enquiry showed there was something behind it that would not bear the light of day. Mr G. W. Russell said it should be remembered that what was done by Mr Watson and his directors was done in the Interests of the colony. The Premier had submitted no proof that a breach of privilege had been committed. Mr Steward quoted precedents and contended that up to the present the House had followed strictly in the footsteps of precedent in this matter. Mr Collins questioned whether there was any wilful refusal in this case, for tho witness had stated that he was bound by oath of secrecy. Mr Guinness quoted a precedent to show that an oath of secrecy was no legal excuse for refusing to answer questions put by a Parliamentary Committee. Mr Seddon, in replying, said Mr Watson's refusal to answer questions was wilful, for he had reiterated his refusal. He felt deeply pained at having to take the action he was doing as he had a great respect personally for tho President of the Bank of New Zealand, but he (Mr Seddon) had a duty to perform to the House and the country. Some of the information that had been refused had appeared in the Insurance and Banking Record and in Mr Geo. Buckley’s report, it having been divulged by some of the directors. The Government had not seb up this enquiry for political purposes and he denied that he was either prosecutor or persecutor. The motion was agreed to on the voices. The Sergeant-at-Arms then ushered Mr Watson and Mr Theo. Cooper, his solicitor, to the bar, when, in answer to questions put by the Speaker Mr Watson reiterated his refusal to answer questions with regard to writings off of the Bank of New Zealand. Mr Watson said he said this in no spirit of contumacy or defiance, but because the terms of his appointment were that he should conserve the interests of tho colony and the shareholders to the best of his power ; besides whichhe had signed a declaration of secrecy. His own feelings had been that under the circumstances he ahould refuse to answer such queitions and he was fortified in his view by the strongly expressed opinion of his legal adviser to the same effect.

In answer to questions put by members Mr Watson said he received legal advice on Tuesday afternoon last and after conferring with his directors it was decided that he should not divulge any information regarding the private accounts of the bank. He believed that if questions were answered regarding private accounts the customers of the bank would fall away and the colony would thus suffer. He believed tljat the officers of the bank would also decline to answer such questions. Ho still thought it against the interests of the bank, the colony, and the shareholders to give the information. Such information would not be produced by the bank at the order of the Supreme Court unles the item asked for was in a suit. The writings off by the bank in the past had been numerous. There were not many present customers of the bank who had had their accounts written down in the past. He was asked to produce all the writings off since 1888, and this he refused to do. He considered that customers of the bank would conclude that at any time information with respect to writings off would be given if that information were [divulged to the committee at the present time. He had been legally advised not even to give individual amounts written off as it might lead to a recognition of persons. . All other information he was prepared to give. There might be cases of a bank carrying on business not altogether good, but in every case provision was made against probable loss. He declined to say whether or nob any members of the Legislature had had accounts written off. -- Mr Cooper then proceeded to address the House on Mr Watson’s behalf. He said that in refusing to obey the mandate of the committee of the House Mr Watson acted from no idea.of contumacy or disrespect to the committee or to the House ; on the contrary, he acted from a high sense of the

duty he owed to the colony, the shareholders, and the customers of the bank. Counsel submitted that although a technical breach had been committed it was not of a kind that should be visited with punishment. He dwelt on the necessity for keeping the secrecy of the bank’s business from the public gaze and quoted regulations which had been framed to secure this secrecy. The auditor of the bank was specially affected by these regulations, and counsel submitted that the president was in the same position as the auditor in the matter. He contended that under the Banking Act of last session it was imperative upon Mr Watson to preserve secrecy in regard to the accounts, and the A, B, C, or D lists could not be produced in a court of law. Mr Watson honestly believed that if these questions were answered it would result in the downfall of the Bank of New Zealand, and it was for this reason that he took up th* stand he had assumed. If it were once recognised that the bank could be compelled to divulge information regarding any of its accounts confidence in the institution would be sapped and none of the customers would feel that they would be safe. Under these circumstances no business man would keep his account in the Bank of New Zealand any longer. Mr Watson had as high a regard for the dignity and privileges of this House as any man in v the colony, but h* also had a high regard [for the institution which was bound up with the colony. Mr Cooper asserted that since the enquiry had commenced accounts had been withdrawn from the bank, and two very large ones had been taken away recently. He 'contended that the House ought, in the interests of the bank and the colony, to uphold Mr Watson in his refusal to give this information. If customers left the bank its ruin must very soon follow. Mr Watson might be technically guilty of committing a breach of privilege, but not a wilful one. Mr Watson felt that if this information was given, although he might escape punishment, a large amount of suffering would follow owing to a financial crisis that would ensue. He again repeated that Mr Watson was not a contumacious witness in any way, but had acted from a-high sense of the great trust imposed on him as the President of the bank.

Messrs Watson and Cooper then withdrew and the House took the supper adjournment. • On resuming Mr Seddon moved that in view of Mr Watson’s persistence in his refusal to answer the questions put to him he be fined L5OO and be detained in custody of the Sergeant-at-Arms until the amount is paid. He said Mr Watson’s defence that night was only an aggravation of his offence. Although his language was respectful there was evidently a determination on his part to refuse to give the evidence asked for by the committee. He took exception to Mr Cooper’s statement that if the accounts written off in the past were known it would ruin the Bank of New Zealand and he thought it would not have the slightest effect on the bank as it was now in a solvent position. He spoke at length in support of the motion and instanced the case of the Loan and Mercantile Company, which had received the fullest publication. His sole reason for wishing to obtain information as to writing off was to ascertain how far the Government .were justified in the action they had taken.

Captain Russell said no one could have listened to Mr Watson’s replies to the questions put to him without being convinced that ha had a high sense of the duty imposed upon him. They had it on the authority of the Premier himself that it was highly improper to disclose the position of the bank, and ho had swelled with indignation when members of the Opposition asked for certain information on that point. He now, however, held a different opinion. He (Captain Russell) held that the colony had nothing to do with bad debts written off prior to 1894, and therefore Mr Watson, in refusing to furnish this information, was really acting in the interests of the colony. It would be injudicious to fine Mr Watson L5OO as he had acted under the directions of the bank directors, and they would therefore be fining the bank and the colony. He moved as an amendment — ’’That this House, whilst holding its paramount right to compel full disclosure by any witness summoned before its committees and to punish for contempt all witnesses refusing to give testimony ,when required, is of opinion that under [the circumstances Mr Watson should not be compelled to disregard the solemn declaration of secrecy he made to the bank to preserve inviolate the confidence of its customers.” Mr Seddon said he would withdraw that portion of his motion which provided that Mr Watson should remain in custody till the fine was paid. Mr Geo. Hutchison said he should support the Premier’s motion down to “fine.” Mr Montgomery supported the Premier’s motion although he had opposed the order of reference. Mr Duthie said they were gradually getting into a worse position in regard to the Bank of New Zealand and now they proposed to take a step that must ultimately prove its ruin. Mr G. W. Russell and Dr Newman criticised the action of the Government in this matter.

Mr Ward said Mr Duthie, in 1894, was willing to have the affairs of the Bank of New Zealand referred to a committee before the guarantee was given, and yet now he condemned an enquiry and said it was going to ruin the bank. He agreed with the Premier that the country should know who were the people who had benefited by tho enormous writings off, and he deprecated the contention that this would injure the bank.

Messrs Bnchanan and Allan twitted the Government with desiring to fine their own nominee to the presidency of the bank. Mr J. McKenzie said members of the Opposition early in the session had desired to have Mr Watson removed from office and now they were defending him. Sooner or later'the whole history of the Bank of New Zealand would be disclosed, for the country demanded it, A day would soon come when the management of the bank would be changed from the clique who at present ruled affairs. / The debate was proceeding when the telegraph office closed at 2 a.m.