THE GOVERNMENT BANKING.

West Coast Times, Issue 9357, 30 August 1892, Page 4

THE GOVERNMENT BANKING.

THE COLONIAL BANK'S PETITION. SOME INTERESTING EVIDENCE.

(Doniodin Star Correspondent.) The evidence taken by the Public Accounts Committee, in reference to the petition of the Colonial Bank prayirgfor a share of the Government banking account, ia interesting reading ; but it ia altogether too bulky to enable adtquate summary of its contents to ba made. Some portions of the evidence, however, give a fair iudicationof what ia contended on both sides j The petition sets out that in the latter part of 1887 the then Treasurer (Sir Harry Atkinson) sought the assistance ot the Colonial Bank either to advance or procure money to meet the wants of the colony. The Hon. G. M'Lean (chairman of the directors of the bank) stated in his evidence that in 1837 he was sent for by Sir H Atkinson, who stated that he was in a difficulty about his finance, and sought his (Mr M'Lean'a) advice and assistance. Ue said that he was in urgent need of funds to pay the next interest falling due ; that ho had applied to the Bauk of New South Wales, and he ahowed Mr Mll.eanM l I.ean a letter he had received from Mr Rhind, general manager of the Bank of New South Wales, saying that he could not assist the Colonial Government at that time. Mr M'Lean, c >ntinuing,said that Sir Harry Atkinson's own bunkers had got into trouble at this time ; that they had already made advaucos to the extent of £600,000 upon the security of the colony, and could no*, assiat him further. Sir Harry only told witness that he had applied to the Bank of New South Wales, but he (Mr M'Lean) had since learned that the Treasurer had applied to an insurance company in London. When asked ' Could he help,' witness replied that he would submit the matter to his directors ; and, ia reply to another question, he informed Sir Harry that the interest charged would be as low as possible. Witness asserted that he then asked * What about the accounts, if we succeed in getting this 1 Does that carry with it the getting of a share of the Gov. rnment business 1' and that Sir Harry Atkinson replied •It ' would ; that he was quite agreoable to that.' At that time, Mr M'Lean added, j the Bank of New Zealand were in difficulties, and many persons looked at the bank s difficulties as insurmountable while many thought that even more than j a share of the Government account would ! have to go to other banka. He (Mr M'Lean) represented the matter io hia directors, and they went to work in England, procuring advances to the extent of £4-00,600, the securities for part of which (£100,000) were meant to ' be kept in the colony. After a little while Sir H. Atkinson said that he must have another £100,000. The moment they obtained the money matters changed for the better, but when they were negotiating the difficulty of raising the money was great. Mr M'Lean further stated that between Sir H. Atkinson and himself it was agreed that the Uolonlal Bank Bhould not seek to obtain a division of the account at that time They wore both to do what they could to supporo the Bank of New Zealaud, and, ao far aa ' he was concerned, and as far aa his I influence went, witness said he was pre- ,' pared to do everything he could with that j object in view. He asserted positively that there were no two people who ' worked harder in nupport of the Bank of

New Zealand than himself and Sir H. | Atkinson. He added : ' I believe myself: that the Bank c.l New Zofila" had far more to do with Sir Harry Atkinson's illness thauany polities in Now Zealand.' j Part of the agreement with Sir H. [ Atkinsou was that in the meantime tho ; Colonial Bank were to have a share in the remittances to London, with the understanding that the Government were to buy their drafts from the Colonial i Bank from time to time when the Bank o£ New Zealand gave Sir B. Atkinson to i understand that they did not issue them j The Colonial Bank, knowing their j position, cheerfully waived their right, and waited uutil the Baok of iVew Zealand did so. Mr Holmes (general manager of the Bank of New Zealand) had ref uged j the drafts, and the Colonial Bauk had had no consideration at all Bince, except £50.000 arranged by the present Treasurer. He thought himself that the Government ought to be gla<? to get the aci-ooiifc divided, as such an arrangement wohiH fa<ji' : teto the getting of nioniy in London. E* could not say whether, in ! the event of the Colonial Bauk's petition beiug granted, the Government would have better terms than at present, but, generally, he said that they would do the colony's business on the same terms as the Ba>k of New Zealand. Mr Holmes (general manager of the Bank of New Zealand) here asked witness : Do you remember stating lo me that if the Colonial Bank and the Bauk of JSew Zealand would agree to divide the Government account they could command a sufficient number of votes in ihe House to prevent any other bauk . coming in 1 Hon. G. M'Lpan : I did tot say that* I said that the Bank of New Zealand, being partly local and the Colonial Bank purely a local institution, taking it for granted that they had the machinery to carry out the banking business of the colony, that people would be perfectly satisfied to have the business of the Government done by both of them. Mr Holmes : Did you state that you could command sufficient votes in the House to get a share of the account, and that if the Bank of New Zealand refused to acquiesce that you would have a motion tabled to divide the account amongst the six banks % Hon. G M'Lean : I have told you, as 1 I have told everybody, that I should not | object if the account were divided among ; the other banks, but I deny that I made ' the statement you mention. Mr Holmes : Do you deny it, on your honor? Hon. G-. M'Lean : I deny that I ever said that I could command sufficient votes I in the House to force this question to a settlement ; but, at the same time, I did i Hay that I would bring the question before members of the House, and that I would use every means to see fair play | done. Continuing his evidence, Mr M'Leau ' stated that the Colonial Bjtnk was a purely ooally managed institution ; that nearly ihe whole of the shores were held in New ftealtnd ; »nd that it was now in a pi'BUion to carry on tLe whole or pait > f 'he public accounts. Tt was, in bis opinion, a proper thing that they abould ne? at least a share of the public account. Mr W- 'I. tJolmee. general manager of ihe Bank of New Zealand, said that as to the first three parts of the Coljniul Bank p tition, which purported to sot out the circum Ounces under which the Govern* merit ( f Now Zealand sought the as-1-tance of the Coloual Bank, even >a uming thuso circumstaLces to be as s ated, he submitted tbac this f iirni&hed !no grouud for compliance with the <'oloni-il Bank's request, the prantinz of which would be injurious to tbe Bmk of New Zeal md. He urged taat fche Bank of N.w Zealand were iv no way ■ osponsible for the d fficul ies attending the Government finance at that time. The Bank of New Zviland wera then, as nov, wnitr an obligation Jo furnish tbe Government with the advances they requir-d, and they bad loya'ly fulfilled th)t obligat : on and more, for instead of £400,000 they had advanced to the Government £600,(.O0; and Jate r , when itwoa inconvenient to the Government t> ' repay tboeo advances at their due date, the Bank of New Zealan 1 bad renewed i hero, and tbev rem ined ou'standing until the Government were able tt) place themselves in funda by the floating of a loan ; and tbia was at a time when the Bank of New Zealand were ex J po iencing con iderable presmre in their own finance. He further asserted that the Colonial Bank were not the only bank fiooi whom advances could have tein obtained ; ant) thnt such coulr! also have been got from the National Bank. JRe-f-.rring t> an interview wi'hS.r H. A. ' Atkinson, Mr Hulooes stated that Sir Harry had assured him tat be "ha-i not thought of giving any share of the Gove m ent banking account f> the i Colonial Bank, but he win disposed to let I them have tuch a share of (Government remittances as would from time bo time be convenient to the Bank of New Zta'and." The Hon. G. M'Lean, on re-eximinac «ion, mide the following atatemeut re Mr Holiness evidence : — He stated that I aaH that if we both wnt together we could command votes suffiiieut to k ep tho account wi h us. It id tbe word • command ' that I object to. I never used tbe work • command/ I could not command votes, and I never could have used such a word. All that we could do was t j put the ju*fico of tho case before members, and that would influenoe them. As already telegraphed tbe Pufcl'c Petitions Committee have reported recommencing that the Colonial Baok be given a share of the Government remittance, but not of the Government account. The report baa yet to ruo tbe i gauntlet of the House. I