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once destroyed; and as all the banks have not branches at the same places, the transmission of its particular revenue to a particular bank would result in a large part of the revenue being always in transitu in coin. Again, if Receivers were required so to divide their receipts, most of them would have to divide their moneys among two or three bank accounts, and many into seven or eight, and, unless the receipts were accurately divided, the labour of adjusting the errors would seriously retard the business of the Treasury. Again if tho revenue was so divided as to confine a particular Ways and Means Account to any one bank, then the Treasury would be unable, except by some system of advance, to pay moneys out of that account at any place at which that particular bank had no branch. I can see no arrangement for dividing the lodgments on account of revenue amongst the several banks at the time of collection which would not result in an enormous addition to the cost of collection, which additional cost would again be augmented by the cost attending its disbursement. The Treasury would require to divide its daily transactions into six parts, representing the operations of the day on each bank. It already draws cheques on sixty-two branches of the Bank of New Zealand, and if each branch of the other banks were made a branch of receipt and issue, the number of different forms of cheques to be used would amount to 150. The only division of the account which would in any degree be practicable would bo a division of the balance of the current account at Wellington, but it would of course be unreasonable to expect that the Bank of New Zealand would continue to collect and transfer the revenue to Wellington on the same terms as at present, if it were allowed to retain only one-fifth of it as a deposit. I observe that it is stated by the Managers of the other Banks that the Government might make better terms as to the interest on the credit balances of the Public Account ; but in view of the lact that the rates now offered by the Bank for fixed deposits for three months i i only 41 per cent., I think that 3 per cent, on the unfixed balance of the daily account is, after making allowance for the very great labour which the Government imposes on the Bank in the collection and disbursement of the Public Funds, a very fair rate of interest; and lam quite sure that the Managers of the other Banks who have been examined on this subject have no adequate conception of the labour which the conduct of the Government business imposes on its bankers. Before proceeding to state in what that labour consists, I may remark that the amount of interest credited by the Bank of New Zealand on the daily balance of the Public Account at Wellington, during the past financial year, amounted to £8,633 3s. 7d., equal to 4-J- per cent, for the year on a sum of £191,848. An examination of the Bank account for the year in respect of which this interest was credited shows that the minimum weekly balance during tho first quarter was £205,798 ; for the second quarter. £429,019 ; for the third quarter, £162,997 ; and for the fourth quarter, £61,132. The present rate of interest for fixed deposits is— For 3 months ... ... ... ... ... ... 4| per cent. For 6 „ 5 „ For 12 „ 5^ „ It will be seen, then, that had the banking arrangements admitted of the investment of the surplus balances as a fixed deposit, the largest amount which it would have been possible to invest for twelve months, at 5i- per cent., would have been £61,432, being the undisturbed minimum balauce of the year. The largest amount which it would have been possible to invest for six months, at 5 per cent., would have been £205,798 for the first half-year, and £61,432 for the second, being the undisturbed minimums for those periods ; and the largest sums which it could have invested for three months, at 4| per cent., would have been £205,798 for the first quarter, £429,019 for the second quarter, £162,997 for the third quarter, and £61,432 for the fourth quarter of the year. As the average of these four sums is £214,811, and as it has been shown that the interest actually credited was equal to 4J- per cent, on a fixed deposit of £191,818, renewed quarterly throughout the year, it will be seen that, within £23,000, the undisturbed balance of the account yielded interest at the same rate as though it had been invested at 4J per cent, interest. It may be argued that all sums iv excess of the undisturbed minimum of each quarter might, under the plan of investing the fixed surplus in fixed deposits, have been made to yield interest as at present; but that argument leads back at once to the object of the present inquiry : Can better terms be had for the conduct of the banking business of the Government than those which are now obtained. I will now state what is the nature of the business performed for the Government by the Bank of New Zealand in the collection and disbursement of the Public Revenues. In the collection of the revenue the Bank receives at each of its branches—sixty-two in number— the daily collections of every Receiver of Revenue whose office is in the neighbourhood, crediting these collections to the Public Account, the Provincial Account, the Corporation or Borough. Fund Account, the Court of Law Trust Fund Account, the Postmaster-General's Account, the ReceiverGeneral's Deposit Account, the Receiver's Deposit Account, or the Natives Deposit Account, as directed in the Bauk slip. For all sums lodged the Bank signs two receipts, one in a form for transmission to the Receiver-General, and the other in the office pass-book of the Receiver by whom the lodgment is made. The forms of Bank Account transmitted to the Receiver-General number about 110,000 yearly. At the close of business on every Saturday each branch transfers tho total sum at credit of the Public Account in its books to the credit of the Public Account at Wellington, and at the same time forwards to the Treasury a detailed statement of the several lodgments comprised in the amount transferred. Each branch transfers to Wellington daily any sum deposited for credit of the Receiver-General's Deposit Account. Each branch receives, or is liable to receive, deposits made by Receivers of Revenue, to be kept in separate accounts in the name of, and to be operated on by, the depositing officer. The Bank gives duplicate receipts for all such deposits, and furnishes a certificate monthly of the balances at credit of each such account. The Receivers making such deposits are —Collectors of Customs, District Registrars of Land, Receivers of Gold Revenue, Receivers of Land Revenue, Judicial Officers, Postmasters.

Mr. Batkin.

4th Oct., 1875.