D—No. 3

ORDER OF REFERENCE.

Extract from the Journals oj the House of Representatives. Tuesday, April 29th, 1856. Ordered, That a Select Committee be appointed to take further evidence on the subject of the Bank of Issue. The Report to be brought up on Friday next. The Committee to consist of Mr. Fox, Mr. Stafford, Mr. Hall, Mr. Elliott, Mr. Fitzherbert, Mr. Daldy, Mr. Campbell, Mr. Ludlam, Mr. Sewell, and Mr. Macandrew. A true Extract. F. E. Campbell, Clerk of House of Representatives,

Wednesday, Aphil 30th, 185 G. The Committee met at 10 o'clock. Present: — Mr. Stafford, I Mr. Hall, Mr Elliott, Mr. Fitzherbert, Mr. Daldy, Mr. Ludlam, Mr. Macandrew, Mr. Fox in the Chair. Mr. Charles James Fife Stuart called in and examined. 1. By the Are you engaged in the business of Banking ?—I am Inspector of the Oriental Bank. 2. Are you acquainted with the operation of the Bank of Issue in this Colony ?—Yes. 3. Have you known any instances of similar establishments in other Colonies ?—Yes, two instances, in Ceylon, the other in Mauritius, both found to work badly, and both given up. 4. Do you consider the existence of the Bank of Issue in New Zealand an impediment in the way of the establishment of Banks of Discount doing general business ?—Certainly I think so, as all Banks look to profit,—one legitimate source of which is, the circulation of their notes in connexion with local advantages. 5. Have you seen the Resolutions proposed to be moved in the House of Representatives by Mr. Macandrew ?—Yes. 6. Do you consider that the guarantees required by such resolutions are sufficient to protect the Colony against the risk of an over-issue of paper money ?—I think they are so far as any laws can do so; they are almost identical with the regulations proposed by the Treasury before Royal Charters are granted, or rather they form part of the provisions of such Charters. 7. Do you consider that the passing of an Act based on Mr. Maeandrew's resolutions would remove the obstacles which exist in the way of the establishment of private Banks in this Colony ?— Certainly, remove all the legal obstacles. 8. By Mr. Hall.'] Is it your opinion that the business of Banking including the issue of paper currency should be left to private competition ?—Yes, the system is found to work well in Scotland and in every Colony with which I am acquainted. 9. Do you know the real objections which have been found against the working of the Ban t of Issue in Ceylon and Mauritius ?—The objections are twofold, in one case the funds having been applied so as not to be available when required, the notes were not readily convertible ;—in the other ease, (Mauritius), it was thought that the money being invested at a distance, was abstracting so much capital from the Colony. 10. By Mr. Stafford.] Is the exclusive issue of notes the only obstruction against the establishment of other Banks, which the Bank of Issue presents ?—So far as I understand its working. 11. Would the permission to issue their own notes on the part of private Banks, be likely to tend in a small community, with but few articles of Trade, to an over-issueencouraging over speculation, followed by a reaction producing monetary crisis and derangement of Trade ?—I have not that leap, from what I have seen in other simliar communities.