B.—No. 13.

TERMS ON WHICH THE BANKING BUSINESS OF THE COLONIAL GOVERNMENT IS DONE BY THE BANK OF NEW ZEALAND.

Respecting Deposits. Interest is credited on the daily balances of the Public Account in Wellington at the rate of 4 per cent, when the balance is under £50,000, and 3 per cent, when above that amount. Respecting Advances. Interest is charged on debit balance 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 be allowed for the whole period during which such excess is maintained, equal to the difference between 6 per cent, and the Bank of England rates. Respecting 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 (other than for interest and sinking fund) are made by draft at sixty days at par ; remittances at shorter dates at \ per cent, below the current rate, but never below par. Eemittances to London for interest and sinking fund are made on the following terms : — The Bank undertakes to find the money in London, in amounts and on dates specified in a Schedule furnished by tho Treasury, on condition that the money due in London in a given month is paid to the Bank in Wellington on the first day of the third month next preceding the time for payment, with a premium of i per cent., i.e., that all the interest payable in London on the Ist and 15th October (for example) is paid to the Bank in Wellington on the Ist July. It is further provided that if the Government wishes to defer the payment for another month (that is, in the case cited, from the Ist July to the Ist August), it can do so by paying an extra premium of -\- per cent. N.B.—There is also an understanding with the Bank that if a mail from New Zealand, with instructions to pay interest, &c, should not have arrived in London (through accident or other cause) when the interest becomes payable, the Bank will then pay it without advice for the honor of the Colony. General Provisions. The Bank is to be tho 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. J. Woodwaed, Treasury, 25th September, 1871. Assistant Treasurer.

Paper A, "1 4. Paper B. Paper A, •J" 1 to 3. aPer *• Paper A, **f 5 to 7Papers Cto L. Paper A, fB. Paper B. Papers M and N.

A. Mr. T. Eussell to the Hon. AY. Fitzheebeet. Sic, — Bank of New Zealand, Christchurch, 29th March, 1867. Eeferring to the recent interview I have had with you, and to the correspondence that has already passed between this Bank and yourself, relative to the conduct of the Government Account by the Bank, and also taking into consideration the altered and improved position in which the Government Account will shortly be placed by the sale of the Treasury Bills for £150,000,1 have now the honor to submit the following terms for your approval, as the terms upon which the Bank of New Zealand proposes to manage the banking business of the Government: — 1. That the charge to be made by the Bank for interest on any debit balance of the Government not exceeding £50,000, shall be at the rate of six pounds per centum per annum. 2. That in the event of such debit balance exceeding £50,000, the rate of interest shall be seven pounds per centum per annum on the whole amount while such excess exists. 3. That in the event of the Bank of England discount rate continuing for two months in excess of 6 per cent., that an increase of tho rates provided by clauses 1 and 2 shall be allowed the Bank for the