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Mr. D. L.. doch. 24th Aug.,

Mur- 20. I would say half a million ? —That would also depend upon the period for which it was wanted. If only temporarily, the Bank would be in a position to do it. 1375 21. Say for six months,or twelve months?—l should not like to say positively. 22. Mr. Shephard.] That would depend upon the general state of the money market ?—There might be a time of severe pressure when it would be inconvenient. 23. Mr. Johnston.] In Australia some of the Governments make a practice of dividing the account among an Association of Banks ? —The Victorian Government is the only one that I am aware of that divides their account among any number of banks. There has recently been a partial withdrawal of surplus funds by the Government of New South Wales from the Bank of New South Wales, but under no provision for a division of the account. 24. Under the system of dividing the Government account, is it, in your opinion, easier for the Government to obtain a large amount without causing pressure upon the public ? —Taking the united resources of the Association, I should be obliged to answer yes, but practically I do cot think so. I think the Government is much more at the mercy of banks when an association of banks exists than when it is dealing with one bank. 25. In Victoria the Government negotiate its loans in London through the agency of this Association? —It does. 26. Does it obtain any advantage by so doing ?—On the contrary, I think it is at a disadvantage. There has been a recent case of negotiating a loan, in which the Associated Banks failed in raising the loan. The balance of the loan was taken up by the Associated Banks at very considerably diminished prices. 27. Do you think the colony gets better terms by negotiating through the Crown Agents or through financiers ? —I can scarcely tell. Judging by results, I should say the latter. 28. Mr. Pearce.] In reply to a question from Mr. Stafford, you stated that the Bank made special advances on special terms —will you state to what extent these were made, and what the terms were ? — The terms were 6 per cent., and the amount has been up to £250,000. 29. That is to say, the special terms were in favour of the Government ? —Yes. 30. On any occasion have more severe terms been exacted than those stated in the agreement?— No, on no occasion. 31. I observe in the agreement that there is no provision for bringing funds from London to the colony ? —There is not. 32. On what terms is that done? —The Government draw at sixty days', and the drafts are negotiated by the bank at per cent, discount. 33. Has that obtained for some time ? —lt has. 34. Is that the rate on that portion of the loan which has to come to the colony ?—lt is. 35. Is it not a fact that Provincial Governments have been able to get better banking terms than the General Government ?—There has been one notable instance lately in which a bank competing for the Provincial Government account of Hawke's Bay gave an extreme rate. 36. Sir F. D. Bell.] What rate? —Seven per cent, on the daily balances of the account. Of course it is open to individual interpretation what the reason was, but if the Committee would like me to give my own opinion, I will do so. 37. Mr. Pearce.] Speaking generally, do not the Provincial Governments get their business done on better terms than the General Government ? —They do not, generally. 38. You stated, in answer to Mr. Johnston, that in your opinion the Victorian loan was at a disadvantage by the banking account being in an association. You gave no reason for that. Have you any reasons to offer ? —I have no reason beyond the results at that period. The Victorian loan seemed to be at a disadvantage as compared with other loans. 39. Was not that loan, which was 4 per cent., negotiated at £90 10s. ?—I can only judge by what I saw in the papers, and that was that it was taken at 88|. They took it at the minimum price of 90, less accrued interest —and the interest was at least If —so that the price would be 88f. 40. Is it not likely that, if the Government made a demand on the Bank for a large advance, that it would materially interfere with commercial advances made under ordinary circumstances for the necessities of commerce?—lt altogether depends upon the amount. 41. Was it not the fact that the Bank of New Zealand, prior to the floating of the loan, did bring pressure upon their ordinary customers —that is to say, did not afford the same facilities as they were prepared to do after the floating of the loan?— Certainly not. 42. The same facilities were afforded before as after?— Certainly. Of course there are individual cases iv which pressure was brought to bear, but the reasons in these cases had no reference to the position of the Government and the Bank. Cases are constantly occurring such as I have mentioned, but beyond these no pressure that I am aware of was put upon the customers of the Bank of New Zealand. 43. If it is the general impression that it was so, it is an erroneous impression ? —Certainly. 44. You are not aware that any of the managers stated that as a reason for withholding accommodation that would have been given under ordinary circumstances ? —I am not aware of it. 45. Hon. E. W. Stafford.] At the time of floating the Four Million Loan, had the Bank made any large advance to the Government beyond the £250,000, which was stated in the Financial Statement to have been secured on special bonds ? —Without referring to the books of the Bank, I am scarcely in a position to auswer. My impression is that one or two drafts on the Loan Agents were negotiated before the negotiation of the loan. These might be to the amount of £200,000 or £300,000. That is my impression only ; I cannot state it as a fact. 46. In answer to a question from Mr. Johnston, you stated, as your opinion, that the Government of Victoria suffered from keeping its account with the Associated Banks; will you give your reason why you think so. lam not now referring to the question of the loan, but generally? —There may be a combination amongst the banks to refuse any application made by the Government, which one bank would not feel justified in resisting.