LXII

1.—6

to give any information in respect to the accounts of clients of the bank, asserting that to do so would injure the institution. Your Committee reported the matter to the House, with the result that the President was fined £500. Other witnesses took the same course as Mr. Watson; but your Committee, considering it would delay the inquiry, deferred bringing the matter again before the House until presenting their final report. Present Position and Prospects of the Bank of New Zealand. Your Committee have carefully inquired into the present position of the bank. They find that, in addition to the deficiency estimated by the Joint Committee in 1895, further losses had been made before the 31st March, 1896, amounting to £54,193, mainly upon Australian securities. During the course of this inquiry, evidence was adduced showing that another deficiency on one account had recently come to light, estimated at between £45,000 and £50,000. The evidence, however, points to the fact that the true position of the bank has now been placed before the Committee. Your Committee consider that in New Zealand its business is now sound, but recommend that it should be confined, as far as possible, to this colony, except for the purpose of exchange. Your Committee are of opinion that, if the outlook for our commerce and agricultural products continues as satisfactory as it is at the present time, and if competent, expert, and reliable management is assured, the bank will ultimately be able to meet all its engagements. John Graham, 9th October, 1896. Chairman. Resolved, on the motion of Hon. Mr. Seddon, That the report be received and read, and afterwards considered section by section. The Chairman read the report of the sub-committee. At 1 o'clock p.m. the Committee adjourned until 5 o'clock p.m. The Committee reassembed at 5 o'clock p.m. Mr. Maslin moved, That the paragraph of the report headed " Retrospect," pages 3 and 4, be agreed to. Hon. Mr. McKenzie moved, by way of amendment, to insert after the sth paragraph the following : " The following passage taken from the Banking Record as having been stated by Mr. George Buckley at the meeting of shareholders held on the 29th April, 1889, and borne out by the deed between the bank and Mr. Russell, shows the character of some of the transactions : ' An advance had been made to the Hon. Thomas Russell of £20,000 in London and secret from the board, and under a deed which debarred the bank from making any demand for the £20,000, or if demand made Mr. Russell had only to say he had lost all the money, or had only £5,000 left, and the bank would be bound to take that in full of all demands.' " Upon the amendment being put, it passed in the negative. Resolved, on the motion of Mr. Montgomery, to insert, after paragraph 5, the following : " The nature of some of these transactions can be judged by reference to Mr. Buckley's speech at the meeting of shareholders on the 24th October, 1889 (page 23, Extracts from Banking Records appended hereto)." Mr. Maslin's motion was then put and agreed to. Losses and Writings-off. Mr. Tanner moved to insert, before the paragraph commencing " besides this," the following : " Some proportion of this sum, not ascertainable by your Committee, consists of accumulated interest and advances." Upon the question being put, a division was called for, and the names were taken down as follow :— Ayes, 4.—Mr. Guinness, Mr. Hutchison, Mr. Maslin, Mr. Tanner. Noes, 6.—Mr. Graham, Mr. McGowan, Hon. Mr. McKenzie, Mr. Montgomery, Hon. Mr. Seddon, Hon. Major Steward. And so it passed in the negative. Bank of New Zealand Estates Company. Hon. Mr. Seddon moved, and it was resolved, to insert after the word "table," paragraph 3, the following : " furnished by Mr. Foster and Mr. Cuff purports to show gross revenues for years ending 31st March, 1891, to 31st March, 1896." Resolved, on the motion of Mr. Montgomery, to add the following as an explanatory note of the sum of £44,858 —viz. : This amount represented unexhausted improvements, which the directors considered should have been credited to profit in previous years." Section as amended agreed to. Auckland Agricultural Company. Section agreed to. Adjustment of Station Accounts. Resolved, on the motion of the Hon. Mr. McKenzie, to insert, at the end of the first paragraph, the following : "being £130,000 less than his first certificate." Banking Legislation. 1889 and 1893 agreed to. 1894 agreed to, after inserting in line 1, after the word "him," "for the first time"; and, in the last paragraph, striking out " a " and " one," line two, 1895 agreed to,