BANKING ARRANGEMENTS OF THE GOVERNMENT.

Appendix to the Journals of the House of Representatives, 1873 Session I, B-03b

B.—3b

1873. NEW ZEALAND.

BANKING ARRANGEMENTS OF THE GOVERNMENT.

Presented to both Houses of the General Assembly by command, of His Excellency.

No. 1. Memorandum of the Arrangements under which the Banking Business of the New Zealand Gotebnment is conducted by the Bank of New Zealand. TnE arrangements under which tho banking business of the New Zealand Government is conducted by the Bank of New Zealand are as follows : — The Colonial Account. All moneys lodged to credit of the Public Account at the several branches of the Bank of New Zealand throughout the Colony are transferred every Monday morning to the credit of the Public Account at the Wellington Branch, whence they are withdrawn for expenditure as required. Interest is credited on tho average balance of tho account at the rate of 4 per cent, when the balance is under £50,000, and at 3 per cent, on the daily balance when above that amount. The London Account. All moneys received in London are paid into the New Zealand Public Account at tho Bank of New Zealand, whence they are withdrawn for expenditure as required. Interest is credited on the daily-balances of this account at the rate of 1 per cent, below the current Bank of England rate of discount for the time being. Overdrafts. Interest is charged on debit balances at the rate of 6 per cent, when such balance is less than £50,000, and 7 per cent, when above that sum ; with proviso that if the discount rate of the Bank of England shall continue for two months in excess of 6 per cent., then an increase in the above rates shall bo allowed for the whole period during which such excess is maintained, equal to tho difference bel ween 6 per cent, and the Bank of England rates. Remittances. All remittances on Government account between the Provinces of New Zealand are made at par. All remittances between New Zealand and the Australian Colonies are made by draft at fifteen days at par. Eemittances at shorter dates, at one-half the current rates charged to the public. All remittances to London are made by draft at sixty days at par; remittances at shorter dales at a half per cent, below the current rate, but never below par. General Provisions. The Bank is to be the Bankers for the Government until the arrangement be determined by six months' previous notice. All balances belonging to the Government are to be kept at the Bank of New Zealand. C. T. Batkin, Treasury, 2nd August, 1873. Secretary to the Treasury.

No. 2. Memorandum by the Secretary to tho Tbeasuet relative to tlie Agreement of 1868 with tlu> Bank of New Zealand. The arrangement under which all interest and sinking fund due in London was paid through tho Bank of New Zealand was entered into in December, 1868, (see letter of tho Manager to the Colonial

B.—3b.

2

Treasurer, dated 22nd December, 1868, marked, J. in Appendix to Journals of the House of Eepresentatives, 1871, B. No. 13,) and was subsequently modified in the month of January, 1869 (see letters K. L. in same paper). The agreement provided that the amount of all interest and sinking fund due in London, with half per cent, premium thereon, should be handed to the Bank at Wellington on the first day of the month three months prior to the due date ; and the arrangement operated without interruption until the Ist April, IS7I, when the Bank was informed that the interest and sinking fund payable to the Bank on the Ist March, and due in London on 15th July following, would be provided by the Crown Agents in London, out of funds then in their hands. On receipt of this communication, the Bank made a claim for premium, in the same manner as if the amount had been remitted through them under the agreement of 1868. Under the special circumstances, this claim and one other of like character were admitted; but further claims of similar nature were subsequently made, and being disputed by the Government, the question was referred in January, 1872, to the arbitrament of the Hon. John Hall, who decided that the Bank was entitled to the commission claimed, and that the agreement of 1868 must be held to have terminated on the 2nd January, 1872. (Copy of the Hon. Mr. Hall's report attached.) C. T. Batkin, Treasury, Wellington, Bth August, 1873. Secretary to the Treasury.

Eepoet by the Hon. J. Hall. The questions submitted for my decision by Mr. "Woodward on the part of the Colonial Government, and by Mr. Murdoch on the part of the Bank of New Zealand, are as follows : — 1. Is the Bank entitled, according to the spirit and intention of the agreement of 1868, to receive up to and including the Ist January, 1872, the commission provided in the agreement, with its subsequent modifications, on the sums required as per schedule furnished by the Government, to be provided in London for the payment of interest and sinking fund on Colonial loans? 2. Is the agreement of 18G8, with its subsequent modifications, still in force; and if not, when did it cease to be in force ? I am relieved from the necessity of considering the position of the above questions subsequent to January, 1872, because although Mr. Murdoch contends that the Bank is strictly entitled to six months' notice from the Ist day of that month, he has confined the actual claim made by the Bank to commission on sums to be remitted up to and including the Ist January, 1872. I have perused the correspondence on the whole subject submitted to me by Mr. Woodward and Mr. Murdoch, and have received from them verbally further information bearing on the questions in dispute. There appears no difference between those gentlemen on any material question of fact. After careful consideration of the facts thus submitted to me, I am of opinion— 1. That according to the true spirit and intention of the agreement of 1868, the Bank of JN rew Zealand is entitled to the commission claimed. 2. That the agreement of IS6B must be considered to have terminated on the 2nd January, 1872. Christchurch, 17th February, 1872. John Hall. Py Authority: George DiDsurET, Government Printer, Wellington.—lS73. [Price 3<J.]