I.—2b

34

613. They did not hold any bonds at all then ?—No ; my impression is they did not. 614. At no time did they holds bonds of the £3,000,000 Loan ?—Not that I am aware of. 615. Sir F. D. Bell.] I want to know whether the statement that you were just telling us was made by those five directors, to the effect that the Bank would not give accommodation to the Weld Government, but would give accommodation to the possible Stafford Government—whether that statement was made by the directors with instructions to you to communicate it in any way to the Government ?—No. 616. And do you know whether any of these five directors did themselves communicate it to the Government ? —I do not. 617. Then for all you can tell the Committee, Mr. Fitzherbert, as the Treasurer, was quite unaware of the view which the directors were taking ? —I do not think so, from his remark to me. When I told him I would consider his proposition, he said, " Oh no, that means referring it to your directors, our political enemies, and I won't have that," or words to that effect. 618. The Chairman.] Are there any other circumstances? —Yes, there is the purchase of the Port Chalmers Railway by the Vogel Government. I think it was in Mr. Vogel's Premiership. I think that purchase would not have been made at the price it was made, but through pressure put by the Bank on the Government, the Bank being largely interested in it. The railway would, perhaps, not have been made but for the Bank. 619. Hon. E. W. Stafford.] The railway was a private undertaking, was it not ? —Yes ; the money, or a large portion of it, being advanced by the Bank. I heard Mr. Bathgate, who was a member of the Ministry at the time, say he would not consent to such an exorbitant price being given for the railway or words to that effect; and it was generally considered in the Bank that it was one of the most profitable operations the Bank had had. 620. You heard Mr. Bathgate make that statement. Did that statement affect the ultimate price ? —I do not know. 621. You have made a distinct statement that you heard Mr. Bathgate say he would not consent to a certain price as being exorbitant. Was that price, which he considered exorbitant, the price which was given or not ?—I cannot say. 622. And for all you know it might have been another price than that given ?—Yes. 623. And Mr. Bathgate might also have withdrawn his opposition ? —Yes, he must have done so. If I remember rightly, the first price was obtained. Ido not think there was any alteration. I think the price first named was the only one. He said he would not consent to the price demanded. 624. But you do not know whether that was the price given or not? —No, but I believe it was. 625. Then that virtually would show that Mr. Bathgate had consented after all ? —To pressure. 626. From whom ; his colleagues or the Bank? —That is impossible for me to say. 627. Hon. Major Atkinson.] How do you know there was pressure then ?—I only infer it; I suppose he gave way on account of the pressure. 628. Sir F. D. Bell.] How do you show that the question of price that was given by the Government for the Port Chalmers Railway depended upon some pressure that was brought upon the Government by the Bank ? —The Bank being largely interested, the negotiation was managed by the Bank ; and the Bank held the debentures for the railway. 629. Are we to understand you to mean that the Bank endeavoured to get the utmost price for the benefit of the customers whose operations it had been conducting?— For their own benefit chiefly. 630. Would you consider that an endeavour by the Bank to get the best price they could for the completion of a transaction was anything in the shape of political pressure upon the Government of the day ?—That is my opinion certainly. 631. Then if the Bank were engaged in any transaction with its customers about a private enterprise, you would always think, if the Bank was doing the best for itself and its customers, that it would be putting pressure upon the Government? —That is a different matter altogether. 632. Hon. E. W. Stafford.] Applied to the Port Chalmers Railway, where was the pressure? — Because the Bank had so much to do with it, and was so interested. 633. Sir F. D. Bell] How do you illustrate that this brought political pressure upon the Government ? —The price at first was resisted by the Government. 634. Hon. E. W. Stafford.] —Where was the political pressure to make the Government succumb ? —That must be left to imagination. It is a matter of opinion. 635. Mr. Pearce.] What consideration did the Government get for giving this high price ?—That is a question of opinion. 636. Hon. E. W. Stafford.] You cannot tell the Committee where the pressure was brought to bear. You have stated the fact that in your opinion the Government yielded to political pressure; can you form any idea of how that political pressure was exercised ?—Yes. 637. What is your idea ? —I shall decline to state that. 638. You have only made half an answer to the question ?—I hear one of the Ministers characterise the demand as an exorbitant one ; I know that it is the general opinion out of doors ; I know it is the opinion in the service of the Bank; and I afterwards find that the demand is yielded to. 639. You say you are not aware that what Mr. Bathgate said was an exorbitant sum, was the exact sum paid ?—Yes, I think the first demand was eventually acceded to. 640. Sir F. B. Bell.] How would the Government have been damaged by the pressure of the Bank, to which you are referring, if they had not yielded ?—By paying the difference between a reasonable price and an exorbitant one; the country is damaged by the difference of price. 641. It appears to me that by your answers you would lead the Committee to believe that your opinion is, that by some corrupt attempt the Government were induced by the Bank to give a higher price for the line than they otherwise would have given. In what way would the Government have been damaged if they had refused to yield to that corrupt attempt?—l should have no hesitation in answering that question, but, as I stated at the beginning. I must be quite clear whether I am open to any consequences on the part of the Bank or any individuals. My answer to that would extend beyond the Bank.

Mr. Bridge*.

6th Oct., 1875,