B.—No. 13,

4

RETURN SHOWING BANKING BUSINESS TERMS BETWEEN

whole period such increase has been maintained, equal to the difference between 6 per cent, and the Bank of England rate. 4. That interest shall be credited to the Government upon the average balance of the Government Account kept at Wellington, known as the " Public Account," at the rate of four pounds per centum per annum so long as that average shall be under £50,000; and when above that amount, the interest shall be credited upon the whole amount at the rate of three pounds per centum per annum. 5. That all remittances between the Provinces of New Zealand on Government account be made at par. 6. That all remittances between New Zealand and the adjoining Colonies be made by fifteen days' drafts at par; by drafts at shorter currency, at one-half the ordinary drawing rate charged to the public. 7. That all" remittances to London be made by sixty days' bills at par; by drafts at shorter currency, at -J per cent, below the current rate, but never below par. 8. That the Bank of New Zealand shall continue bankers for the General Government until tho present proposed arrangement be determined by six months' previous notice. 9. That all past arrangements shall be considered rescinded from the date of the acceptance of this proposal, except for such transactions under existing agreements as have not been matured at such date. In proposing the foregoing terms, the Directors have made their proposal upon such a scale as to leave to the Bank only a very moderate margin of profit; and the Directors of the Bank refer with confidence to the past dealings of the Bank with the Government as a guarantee that, at all times, the requirements of the Government will be met with the utmost liberality that prudent management on the part of the Bank will allow. I have, &c, The Hon. the Colonial Treasurer, Thomas Eussell, Wellington. For the Directors of the Bank of New Zealand.

B. The Hon. W. Fitzhebbeet to Mr. T. Eussell. Sib,— The Treasury, Wellington, Ist May, 1867. In reply to your letter of 29th March ultimo, submitting certain terms for my approval as the terms upon which the Bank of New Zealand proposes to manage the banking business of the Government, I have the honor to state, for the information of the Directors of the Bank of New Zealand, that I have submitted these proposals to my colleagues in Cabinet, and that I am authorized to inform you that the terms as proposed are regarded by the Government as just and liberal, and that I accordingly, on the part of the Government, accept them without any modification, as from this date. I have, Ac., Thomas Eussell, Esq., Bank of New Zealand, Auckland. William Fitzheeeeet,

c. The Hon. J. Hall to the Manages, Bank of New Zealand. Sib, — Treasury, Wellington, 12th June, 1868. I have the honor to submit for your consideration a proposition with respect to the supply of funds by your Bank in London for the payment of interest and sinking fund on account of the various loans of tho Colony payable there. The enclosed Schedule will show the amounts that require to be provided, the days on which the respective payments have to be made, and the parties to whom the money is to be paid. The Government wishes that the Bank should provide these sums on the days on which they are required without any further notice being given, and I therefore request that I may be informed of the terms on which the Bank would undertake to do this. In conversation with the Inspector of the Bank of New Zealand, I suggested that the Bank should furnish a Schedule similar to that now enclosed, showing the days on which it would require to be placed in funds to meet these payments, and that, prior to those days, the Manager of the Bank in AVellington should apply to the Treasury for a Comptroller's Order authorizing the transfer of the required sum from the Public Account to the Bank, including the charge for remittance according to the scale at present in force. I understood from Mr. Murdoch that the Bank would be willing to enter into such an arrangement when the terms should have been mutually agreed to. As the first payment that has to be provided for requires to be made on the Ist November, I hope to receive your answer in such time as to cause that payment to come under the proposed arrangement. I have, &c, The Manager, Bank of New Zealand, Wellington. John Hall.