1.—6

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balance-sheet, on which, had it been liquid, we could easily have earned 6 per cent. ; but we never get more than 1-| per cent, as dividend from the Estates Company, so the bank has always been working with a loss of profit of from £75,000 to £80,000. Had this asset been a liquid one, the bank could easily have earned 10 per cent., if not a little more. Of course, with so much money locked up, the bank, as I have remarked before, has been much dependent for its dividends on what it has got out of the Estates Company. I have told you before how slow trade has been, but this year it has been worse than ever; so that instead of getting a dividend, we have to find money to pay the debenture interest, and the company has been worked at a loss. This is an exceptional year, and I do not suppose the same thing will occur for a long time; but, as a matter of fact, the bank has put its hands into its pockets and paid the interest for the Estates Company. Now, I have extracted some figures from the New Zealand Herald —a well-informed newspaper—which will give some idea as to the reasons a concern of this sort could not pay a dividend. The New Zealand Herald says, five years ago, the value of the wool-clip was twenty-one millions sterling. Between 1889 and 1894 the increase in the number of sheep was estimated at 24,000,000, still the market value of the present clip is not so much now as it was then. With regard to the agricultural interests for 1891 to 1892, the wheat crops of New Zealand were £4 7s. 6d. per acre, in 1893 they were £2 10s. per acre, and in 1894 they were only £1 10s. lid. per acre, and the yield per acre has been the smallest on record. These, I think, are good enough reasons why the Estates Company were not able to pay any dividend this year. . . . And I venture to think that the Government not only acted in a statesman-like but also in a business-like way. In the first place, they avoided what might have been a most serious panic, and, on the other hand, in guaranteeing the preference stock of the bank, I fail to see that there is any chance that the Government can lose any money under ordinary business circumstances ; and therefore, I think, it was a statesman-like and business-like proceeding. . . The bank is now in a strong position. Certainly there is no bank south of the equator stronger than this bank, and, as far as we shareholders are concerned, we are in a very much better position. . . ." That is on the 27th August, 1894. I ask you, Mr. Booth, whether you took any part in framing the report sent to the shareholders in London on the 27th August, 1894 ?—I had nothing to do with the bank at that time. 29. At what date did you come into the bank ? —I think it was September, 1894—the end of September. 30. The Chairman.] You became a director on that date ?—Yes, Sir. 31. Hon. Mr. Seddon.] After going into the bank, did you find things as stated here by Mr. Glyn —that the bank was in a strong position, and able to pay dividends, and the £60,000 would pay all bad debts ? —No. 32. You did not ?—No. 33. When was the first balance-sheet submitted or prepared by you, or your co-directors after your election in 1894 ? —That is the balance-sheet we have been considering a short time ago—■ 31st March, 1895. 34. What did you consider should be written off at that time, exclusive of the losses in the Estates Company, in your balance-sheet of 1895 ?—The Committee had the full particulars in 1895. . 35. What did you consider bad and doubtful debts ? —£376,900 in the bank, and besides that we found it desirable to keep £200,000 as a contingency fund. 36. Then, between the 27th August, 1894, when Mr. Glyn made this speech, and the balancesheet of 1895, on examination made by you, when you presented your balance-sheet of 1895, you found that Mr. Glyn was out by over half a million?— Well, that is our estimate of the position of the bank. That is what we believed. How he arrived at his estimate Ido not know. 37. But you had, I presume, gone very carefully into the position after assuming office, and gave this balance-sheet ?—We did as far as possible. We went to the bottom of it. 38. The Chairman.] Is this the answer you intend to convey: that the present directors, in March, 1895, upon investigation, came to the conclusion that the bank was more than half a million in a worse position than that stated by Mr. Glyn in August, 1894 ?—You see, our knowledge of the condition of the bank was a growth during the whole of that time. We did not know fully in March, but during the subsequent three or four months that was the result we arrived at, that this £376,900 should be written off, and that it was prudent for us to take another £200,000 as a contingent reserve. 39. That that sum must be written off, and £200,000 more must be provided as a contingent fund ? —Yes; that is so. 40. Hon. Mr. Seddon.] Is that the position you put to the Government in June, 1895, when you came for Government assistance the second time? —Yes; the Government had the fullest information on this point placed before them. 41. Will you produce, then, to the Committee what you put to the Government? Did you not put a detailed statement and balance-sheet to the Government showing the position of the bank in June,, 1895, prior to the Committee being set up ? Will you produce that ?—We had no request to produce that, but we can bring a copy of the balance-sheet presented. 42. It will be sufficient for you to say that you did submit to the Government a statement ■showing the position of the bank when you asked the colony to come to the rescue of the bank?— We did. We showed fully the position of the bank—the worst as well as the best. 43. Can you explain the difference you have given us ? You have given us £767,645 as between 1894 and 1895 and 1896. You now say it is £376,900. Are we to take it that the £767,645 is the year previous ? —Some of the writing-off was done before the legislation in the latter part of 1895, and within this sum is also included the writing-off of 1896, some of which was made provision for beyond what we asked Parliament to provide; an amount of £56,502 was written off this year out of profits, and the most of that was for losses, which it was intended should be provided, or might be provided, out of the contingency fund. But instead of taking the amounts out of that fund we took them out of the year's profits.