BANKING- ARRANGEMENTS OF THE GOVERNMENT.

Colonist, Volume XVII, Issue 1979, 14 October 1875, Page 3

BANKING- ARRANGEMENTS OF THE GOVERNMENT.

A STARTLING- STATEMENT.

(From the New Zealand Times.) The Select Committee on the banking arrangements of the Government have brought up an ad interim report. As will have been seen by our report of Parliamentary proceedings at Friday's sittings, Mr Bridges, of the National Bank, having made, in the opinion of the committee, grave imputations against members of the Legislature, and having refused to answer any further questions, the committee were of opinion that the inquiry ought to be prosecuted by the House. In pursuance of this, the House parsed a resolution on Friday, summoning Mr Bridges to the bar where he appeared at 8 o'clock on Monday, and was attended, by Mr. T. L. Travers, as his legal adviser. The evidence and appendicea thereto, taken so far betore the committee, have been printed, and occupy thirty-nine pages of foolscap, and contain many points of remarkable interest. EXTRACT PEOM THE EVIDENCE. Mr Bridges, a director of the National Bank, entered fully into what in his opinion were the losses entailed upon the,country by the arrangement with the Bank of New Zealand. In the course of his examination the following occurred :— " Supposing that your directors had been placed in the same position by Sir Julius Vogel as; the Bank of New Zealand was placed in—that is to say, receiving an assurance that £1,500,000 would remain for six months—do y6u consider that, notwithstanding that limitation, the rate would have been much more favorable than t*hey could have obtained ? " —" Much more favorable," " And though their standing in England and their own position, notwithstanding the youth of the bank, they would have been able to see that financial operations based on that assurance were made good ?"— •'Undoubtedly." .: " Supposing that, a similar offer had been made to place £1,500,000 with the National Bank, not for six months certain, but with the assurance that so far as then known it would be left for six months, what rate in your opinion could have been obtained on that understanding?"—"l think a fixed rate could have been obtained. At present you are not getting a fixed rate: you may gtt only I per cent, next month, as the rate varies with the Bank of England rate. I think that a fixed rate of at least 3£ per cent, could have been obtained." Mr Bridges stated that he was aware of occasions on which the Bank of New Zealand authorities had put pressure on Governments, but subsequently declined to particularise, as the circumstances had come to his knowledge whilst ho was a confidential ier-, ■(.-■- "<>'■■'•-■• iiJ.-.'i i-,;n ,>■:;,:;: % ■"■;. .■.,-,;,■.,... ; ; J; ,^ ~ v r; _

-• vant of the bank. At a subsequent examilP nation the following letter was read — ' a "Bank of New Zealand, September 28, ; 1875.—Sib, —I have the honor to acknowd ledge receipt of your letter, dated 23rd inst., |f calling my attention to certain questions put g to Mr Bridges by a member of the Public i Accounts Committee, together with the answers thereto, and requesting that the z ' bank will permit Mr Bridges to give the j fullest and most detailed information upon y the particular point referred to that the n. committee can desire.' My directors quite concur in the opinion you express, that 6 general statements, such as appear to have * been made by Mr Bridges, are prejudicial to \ the interests of the public service, and not i only relieve Mr' Bridges ft on any secrecy on » the subject, but desire me to express a hope ' that you will compel him to make the fullest ' disclosure. I have, <fee, D. L. Mtjbdoch, s Inspector.—Reader Wood, Esq., Chairman . Public Accounts Committee, "Wellington." 4 " That therefore, gives you full permission 3 to state directly what you really referred to . in this matter. Perhaps you would have no 3 objection to do so ? " " No; but previously > I should like.to ask you a question There f is an axiom in law that the greatest truth I may be the greatest libel. Am I open to i any action at law on the part of the bank? " i —"No." ' The witness then entered i fully into the r transaction between the "Weld Ministry and '. the bank. He then referred to the purchase i of the Port Chalmers railway, and said that i purchase would not have been made at the • price it was made, but through pressure put by the bank on the Q-overnment, the banks , being largely interested in it. The railway i would, perhaps, not have been made but for > the bank. ' " The railway waa a private undertaking, , was it P " —" Yes; the money, or a large portion of it, being advanced by the bank. ' I heard Mr Bathgate, who was a member of the Ministry at the time, say he would not consent to such an exorbitant price being given for the railway ; and it was generally considered in the bank that that was one of the most profitable transactions the bank had had." " What consideration did the Government get for giving this high price ? "—" That is a question of opinion." "You cannot tell the committee where the pressure was brought ,to bear. You have stated the fact that in your opinion the Government yielded to political pressure ; can you form any idea as to how that pressure was exercised ? " —"Yes." " What is your idea ? " —" I shall decline to state that." " It appears to me that by your answers you would lead the committee to believe that your opinion is that by some corrupt attempt the Government were induced by the bank to give a higher price for the line than they otherwise would have given. In what way would the Government have been damaged if they had refused to yield to that corrupt attempt?"—"l should have no hesitation in answering that question, but, as I stated at the beginning, I must be quite clear whether I am open to any conse quences on the part of the bank or any individuals. My aaswer to that would extend beyond the bank." " When you left yesterday, you objected I think, to give some specific information, because your answer would 'extend beyond the bank,' and you wauted to be quite clear as to the course the committee would adopt with reference to your evidence in that respect. The committee have deliberated, and their opinion is that all the protection they have the power to give you will be given."—" I understand. Ido not think that is sufficient to protect me, and therefore I have no further evidence to offer. Perhaps you will allow me to withdraw the last answer I gave yesterday ? " —" I cannot consent to that." " In answer to the question put to me yesterday, I meant that pressure was used on the part of the bank, but not political pressure. Pressure was used to obtain a higher price for the property than it was worth, the bank being interested." " The committee desire me to tell you that they consider your answers to the questions that have been put to you of a very important nature, as they involve practically the character of some of our public men. The committee do not think the answers ought to rest where they are, and they consider it their duty to press the matter further, and to endeavor to obtain from you more precise answers than you have yet given to those questions. Whilst the committee are desirous of giving you every protection that lies in their power, they must leave it to you to'determine as to what the nature and character of that protection is, that is to say, whether it is sufficient to cover you as completely as you wish to be covered under the circumstances of the case? "■—" As far as lam aware, no. I have looked at the Act, and it appears to me quite unreasonable to expect that I should make any statement that should render me liable to a lawsuit." " At the same time, the committee are of opinion that theae answers cannot remain where they are, and that you must be more explicit. Would you Btate to the committee under the circumstance, what the nature of the pressure is to which you alluded with regard to the purchase of the Port Chalmers railway ? " —" With all respect to the committee, I must decline to answer any questions that I think would render me liable to a lawsuit." x A great deal of cross-examination following upon this, terminated in nothing material being elicited, and in Mr Bridges refusing to answer any further. The result of this has been already stated. [Mr. Bridges gave no satisfactory reply at the bar of the House, but he probably ' will make some disclosures (saya a telegram 1 from Wellington) before the Select Committee. It is unknown what member of the i (government he refers to. It is the duty of 1 the people's representatives to ferret out I the truth or otherwise of Mr. Bridges's startling statement]