Parliamentary Banking Enquiry

Southland Times, Issue 13504, 22 July 1896, Page 2

Parliamentary Banking Enquiry

(By Telegraph.) Wellington, July 21, The sub-committee of the House Bankt Committee met this morning at 10 o’olocl Mr Cooper watched the proceedings behalf of the Bank of New Zealand and ] Samuel as counsel for Mr J. G. Ward, was resolved that the proceedings of ( sub-committee be reported to the gene committee from time to time. The co mittee then proceeded to discuss the not® of motion by Mr Hutchison on the questi of producing It was resolv that the lists of writings-off date back 1888 only. The sub-committee met again at 3.40 p, and proceeded to review the noticee motion tabled by Mr Hutchison. Amo the amendments introduced was one by Seddon to call upon the bank to prod, copies of all entries in the books respect writings-off since 1888. The clause refert to the production of the share register the bank was excised. Clause 3, relating the minute book, was altered so as to inch particulars of writings-off. On the quest of producing the debentures of the Wi Association held by the bank, Mr Seddon objected on the ground t the clause was beyond the order of re| ence. ‘Unless there were writings off committee had no more right to demand production of the Ward Atsociatii debentures than those of Guthrie and Q or the Gear Meat Co. He moved that clause be excised. Mr Montgomery contended that recent Court proceedings had shown connection between the Ward Associaf and the bank. He suggested that whei doubt existed as to connection the chi be postponed. Mr Hutchison said the judgment by Ju WiLiams had distinctly implicated the W Association. Mr Seddon denied thattt was any judgment; it was merely a ata ment founded on affidavits in which reference was made to Mr Ward. The clause was struck out for the press Mr Seddon said, in respect to framing ias and deciding on witnesses that counsel heard as regards relevancy and he that effect. Mr Steward questioned whether II motion was in order, the resolution of general committee having barred counj addresses. The Chairman ruled the motion out order, but would allow questions to be-j through the chair. Mr Seddon moved to strike out the cli referring to the production of documents Mr Ward, contending that there was relevancy.—This was agreed to, but portion of the clause empowering the e mittee to call upon Mr Ward to attend? give evidence was allowed to stand. The other clauses under the same hi calling upon Mr Ward to produce articles of association, share register, ball sheets, books and correspondence of Farmers Association and of the 0 Beach Refrigerating Company were j poned on the understanding that the ( mittee might call for the document required. The clauses regarding the attexdanci Messrs Keith Ramsay, Vigers, and Sil son and the production of documental passed, with an amendment that the J ments be produced when required. 3 The clause relating to the productioi the original share register of the Colt Bank was also postponed. Clause 4 —as to the production of It and documents of the Ward Farmers i ciation in connection with the Colonial B —was" struck out. Clause 6—production of letters and t munications as to deposit by the Cola Treasurer, in 1894, of L 150,00 —was cised ; aho regarding the production of, debentures of the Ward Association held the bank. A notice referring to J. M. Butt (Audi being summoned to give evidence and: duce documents, was agreed to with n amendments. Mr Seddon remarked that he was in session of information showing that neg tions for an amalgamation of the Cola Bank with the Bank of New Zealand d back to 1888. In reference to the prodik of all documents, papers, writings, etc the possession of the liquidators, ; moved that the House be asked to p« the committee to set aside any obstad their production based on the ground of documents being confidential. Mr Hutchison argued that the commi already possessed the fullest discretion power to deal with documents, confide; or otherwise. Mr Seddon said that even where. House ordered papers and documents li laid on the table confidential docum were excluded.—The clause was ame: so as to include confidential documi Mr Seddon intimating that he would a for the excision of the clause at a I stage.

The clause relating to calling Ge Todd, chairman of the Assets Realise Board, was passed slightly amended, j of the notice regarding the appointin accountants to report upon the bat sheets of the Ward Farmers Association referred to the general committee and list of witnesses to be called was arnei by the addition of G. Foster, mana, director of the Assets Board. A new clause was added to include production of balance sheets between! June and 15th October in connec with the station, stock, and It hold property and tho balance t submitted to the Government adjustment between the Estates Comp the Assets Realisation Board, and Government, together with all draft bal sheets and also original certificates of Government auditor, showing the ad ments between the two companies and Government, also the report of Mi Smith and Campbell and their statemei accounts, also rejoinder to same. Mr Seddon’s motion in favour of a ret being produced by W. Booth showin the expenses incurred in connection I banking legislation prior to 1894 and ell and particulars of the same, was agreed with slight amendments. The committee adjourned at 5.30 til a.m. next day. The general committee met at 11 o’ol The Chairman reported that since meeting he had received a letter from R. Stout. The letter was not read. The committee proceeded to deliberatl to the order in which witnesses shall called when the committeeresumed. 4 Wm. Booth was called and supplied ) copies of the balance sheets. Examined Mr Seddon he said he had been a directa the Bank of New Zealand since 1894 and the Estates Company nearly as long? produced the balance sheet of the bank 1888 but he had no knowledge of the ball sheet and had not seen it before. At t time the capital was one million, the re« fund half a million ; balance of the pi and loss account,£6o,B6l and the excel assets overliabilities, L 156,801. (Mr Wat here explained that the books had b kept in a curious sort of a way. In his 4 amination he had stated that tho atnoli written off accounts in 1888 total L 216,000 but had since found the I figures were L 216,885). Mr Booth < tiuuingsaid he had no personal knowledg the writings-off. The auditors at the ti were G. P. Pierce and J. L. Wils Pierce had since died. The 1889 bal* sheet included tho accounts of the Lon< office up to 31st January. The capital I L 424,874; the balance of profit I loss, L 88,449; assets over liabili! £1,213,323. The reserve fund seemed have disappeared. Twenty-five thouei new LIO shares were issued at L 7 paid! realising L 174,824 : the amount written was L 109,565. —Mr Seddon : There wai total written off in 12 months of L 825,0 —Withess: Yes. The reserve fund < used between 1888 and 1890 and the amoi then written off was L 1,169,555. In II the capital was LI, 125,000 ; assets o liabilities, L 1,224,783. Thera did not pear to have been any increase of tho sb capital, nor was there any writing dowi share capital. No reserve fund was creit the writings off were LI, 169,555. —j Seddon : That makes the total writings) together with the loss of the reserve fl £500,000) £1,995,920, — Witness s I

would include the reserve fund which had disappeared. Mr Gibbs tells me he has had some difficulty in tracing the arrangements of the accounts up to 1894. There is no trace of the suspense account as a separate item The auditors who signed these balance sheets were Wilson, Scott and Brown, who can bo summoned to give evidence. I believe the Sooo is in that L 1,124,874. In 1891 the capital was L 890.833; the balance of profit and loss, L 59.522. There reserve fund in this balance sheet of L 21,000 which was taken out of the L 59.522 The amount carried to the new reserve fund was LJO.UUO. There was a dividend at the rate of 5 per cent., absorbing L 21,250 ; carried forward, L 18.272 ; written off, L 18,949. The divided in 1888, at 7 per cent., absorbed 135,000 ; in 1889 (7 per cent.), L33,obd ; in 1890 there was no dividend ; in 1891 a o per cent dividend absorbed L 21,200. In 18901891 the capital was lessened to’the amount of L 227.167. — Mr Seddon : That is a Joss of capital of over L 200.000. Where did it go to’—Witness: It is quite evident it has been absorbed in the large sum wnttin off ia 1890.—Mr Seddon : How did it get back to 1891? — Witness: The difference is between 1890 and 1891. It was in 1891 that it disappeared from the balance sheet. The balance sheet is signed by Edwin Waterhouse and G. Sneath, Gresham Street, London. The head office was transferred to London in Juiy, 18JO. Ine balance of assets over liabilities, including capital, in 1890 was L 957.355, less amount of dividend paid (L 21.250 After paying outside liabilities the amount left would be L 936.105. No suspense account is shown in 1891. In 1892 the capital was L 900.000. It is well, however, to call attention to the fact that an interim dividend was paid in September, 1891. The position in 1892 was —amount to credit of profit and loss, L 78.830; interim dividend paid, L21,5U0 at the rate of 5 per cent; assets over liabilities, L 938.330. That left, after the money appropriated in dividends had been paid, L 953.330 assets over liabilities, including the addition made to the reserve fund of £15,000, raising it to L 35.000. The writings off for 1892 amounted to L 20,191. There were two half-yearly dividends in 1892: the first, September, 1891, LJ2,000, and the second, March, 1892, the same amount. The balance sheet for 189- was signed by the same names as the previous one. In 1892 the capital was L 900.000 ; reserve fund increased from £35,000 to £45,000 ; the balance carried forward after providing for the dividend of. 5 .per. cent., Ll 9 160; the assets over liabilities, including’capital (£900,000) was £964,161 ; the amount credited to profit and loss, L/4,1b1, and a 5 per cent, dividend absorbed L 22,500. Ten per cent, was added to the reserve fund ; the amount written off was L 13.532. The balance sheet was signed by the samo auditors as the previous one. The general managers were—for 1888, D. L. Murdoch, who was succeeded on sth June by John Murray; Mr Tolhurst, appointed on 15th January, 1889, resigned on 23rd October following. On 25th March, 1890, J. M. Butt was appointed manager, and while ho took up the dutiis as general manager the head office was removed to London and Captain Colbcck, Messrs Butt, W. S. Wilson, and Murray were appointed attorneys to look after matters while Butt was in charge. Mr Holmes was appointed in London as general manager and arrived in March, 1891, with full powers of attorney, cancelling the power given to the others and replacing Mr Butt. Holmes was recalled in June, 1894, and Messrs Butt and Michie were associated as general managers. The head office was transferred from London to Wellington and the new board now in office was created on 26th September, 1894. They were Messrs Johnston, McCarthy, Butt, and Kennedy. The president was appointed by the' Government on 12th October, 1894. The directors in 1888 were Jas. Williamson, G B. Owen, J. M. Clark, Sir Frederick Whitaker, W. B. Taylor, W. S. Wilson, and S. Browning. For 1889 the directors were W. S. Colbeck, W.B. Taylor, W. S. Wilson, A. Butt, J. Murray, F. Peacock, and J. N. George. There was also a London Board composed of Sir Jas. Ferguson, Hon. A. J. Mundella, Hon. Sidney Carr Glyn, Sir Hercules Robinson, J. Alexander Ewen, David Murray, and D. M. Stewart (manager). In 1890 there was no record beyond those at the head office, which was in London. Tho attorneys conducted the business until the appointment of the London Board. The names of the London Board were: Richard A. Glyn, Colonel Roberts Barring, J. A. Ewen, Sir Jas. Ferguson, E. Herbert Tyson, Mundella, D. M. Stewart, and the London manager (Henry B. McNab). In 1893 the directors were the first five names | as above and tho manager (McNab); ; in 1894 the same, with . C. M. ; Tevetmeer general manager. There were | two separate Glyns, Sydney Carr Glyn i being a member of the celebrated banking . firm, who wan on the Board in 1888 and i 1889. In 1891 R. H. Glynn was on the • Board. On 31st March, 1894, the capital . of the bank was £900,000. Only one halfyearly dividend was paid. The reserve fund | was £45,000. After paying the ; dividend for September, 1893 to i 31st March, 1894, at 5 per cent, absorbing L 22,500, there was carried forward L 37.779; assets over liabilities, L 982.740; profit and loss for the year, L 60,239, out of which the dividend was paid and the balance carried forward amounted to L 37.779. The writings-off for 1894 were L 15,164. —Mr Seddon : Have you the statement prepared showing the position of the bank in June, which was submitted to the Government? —Witness: The next I have I got is the 1895 balance sheet, showing the ; position of the bank ou 31st March of that . year,—Mr Seddon : I want the statement of I the position of the bank when Mr Murray , came to the Government in June. —Witness: Did he prepare and submit a statement different from the balance sheet of 1894? — Mr Seddon : You show by your balance sheet of 31st March the position of the bank and in June the bank came to the Government for assistance and stated that the bank ■was in such a serious position that unless immediate help was granted they would have to put up the shutters. I have no doubt ’ you will be able to find the statement prepared by Mr Murray.— Witness : J think there must be some private communication supplied from London to Mr Murray. We have no statement except that which came from London on 31st March, 1894 Whatever information camo from London must have been by cable to Mr Murray. He must have the information.— Mr Seddon : You have no knowledge of a statement prepared by Mr Murray.— Witness : No. The head office was in London. He must have been instructed from London.—Mr Seddon : But when you search you will see whether there was not a report prepared by Mr Hanna showing the position of the bank in June, 1894.— Witness: Was the statement left with the Government by Mr Murray or did ho take it away ?—Mr Seddon: We ask you to search diligently for these statements and bring them here to morrow.—Witness : We have no knowledge of their existence, but we will search for them and make en-

qtnnes. . The committee adjourned till 11 o clock 1 tomorrow. «