THE BANKING COMMITTEE.

Timaru Herald, Volume LX, Issue 2184, 11 September 1896, Page 3

THE BANKING COMMITTEE.

(By Telegraph.) WELLINGTON, September 10. The Banking Committee resumed al 10.30 o'clock this morning. The Premier continued his examination of Mr T. G. McCarthy. The witness stated, m connection with the advance of £20,000, that some blame was attachable to Mr Watson, as he recommended the advance after the directors had decided against it. At the time ol the advance Mr Watson gave the directors certain information with regard to it, which subsequent events proved to be incorrect, but witness believed that Mr Watson stated what he thought to b« true, and had no intention of wilfulty misleading the directors. Mr Watson ought to have known more about this advance. The ultimate ground of the objection to the appointment of Mr Henry Mackenzie was the way m which the Bank of New Zealand directors fouud the business of the Colonial Bank. From what he knew and heard he understood that the losses of the Bank of New Zealand were due to the management at headquarters, and the material losses were made prior to 1890. He had come to the conclusion that Mr Henry Mackenzie was partly responsible for the position of the Coloniar Bank, as the result of their investigations disclosed a different state of affairs from that which the directors had beenled to expect. The information given to the Government m 1894, with regard to the Bank of New Zealand's posi tion did not go far enough, and some one was to blame for this. He believed the information came from the London board, and Mr Murray only acted as agent for that board. Witness was of opinion that Mr Watson and Mr Mackenzie should not be kept together m charge of the Sank of New Zealand, as they had been seriously mi taken m the conduct of the Colonial Bank's business. The witness could not say that Mr H. Mackenzie was incompetent and incapable as a banker, as since his appointment he had met all that had been required of him. So long as witness was a director and the bank had debts it would not pay dividends. The directors who paid dividends when they were not earned ran a serious responsibility. Asked if he thought it would be to the advantage of the bank if the services of an experienced London banker were secured as general manager, witness said he would prefer an officer of large colonial experience, but his idea was that two managers should be appointed, one with London, and the oth^r with colonial experience. He thought Parliament should make the payment of a divi lend on the preference shares independent of the shareholders of the bank. The bank was now carrying on business on stricter lines than it had done m the ■ past, and customers were not given more accommodation than their business warranted. It was not correct to say that the Wellington and Wairarapa districts were specially fa-! vouved by the directors m the matter of advances. The bank was acting very carefully m regard to mining matters m i the Auckland district. He considered I the appointment of Mr Murray, manager j of the Auckl md branch, on the advisory board of the Anglo-Continental syndicate, was to the interests of the bank. He was not prepared to say that wider! representation on the bank's directorate would be advantageous to the iustitution. Witness handed m information as to the management of the Fiji branch | of the bank, which showed that the total writingß-off from 1891 to 1896 was £1769. Examined by Mr Montgomery the witness- stated that he joined the directorate at the request of Mr John Murray. Mr Murray explained to him that there | was a gap m the Estates Company which would have to be filled up by the colony. The opinion formed by Messrs Buller and Litchfield, regarding some of the Colonial Bank's accounts.had since been borne out by facts. Mr Watson's idea of the value of some of these accounts was more favourable than those taken by the inspectors of the Bauk of New Zealand, and their views had been found to be correct. The Committee adjourned till to-mor-row.