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44. You have given us £376,900 as on the 31st March, 1895. Now, I want to know when the other losses, which make up the difference between that amount and the £767,645, occurred ? —ln the £767,645 there were some secret reserves held by the bank absorbed. They were all absorbed and wiped out by the writing-off which is represented in the £767,645. 45. What was the amount of the secret reserves? —I could not give the figures; but this £376,900 was the balance required after the bank had made the utmost provision possible after absorbing the reserves of interest and other sums which it had in suspense. The particulars could be got from Mr. Butt, the Government Auditor. The £376,900 odd was the balance after we had absorbed everything. 46. Am I to understand that you had secret reserves of £400,000 ? There are £400,000 not accounted for ?—There was a reserve fund in the balance-sheet of £45,000. That was absorbed. Then, we had £200,000, of which £171,000 is remaining. We have remaining a contingency fund of £171,136 available to-day. 47. When was the secret reserve first created ?—They are such reserves as are usually held by the banks, and carried on for a number of years—interest charges. I could not give you particulars. Mr. Butt, the Auditor, will be able to give the origin and amount of them. 48. What source is the reserve provided from?— Suspended interest, which is charged and not taken to profit—not taken into account in the profit and loss account. 49. Have you got any of that now ?—A small sum is accumulating. I have no knowledge of it. 50. Was this secret reserve disclosed in the statement of the bank's affairs when put to the Government ?—They were disclosed in this way : that everything the bank had was used, and then the position shown to the Government indicated what was still further necessary to be provided. 51. The secret reserve had been utilised before you came to the Government ?—Yes. 52. It is unnecessary to ask the question, but have any dividends been paid since you came into office ?—No, Sir. 53. We will now turn to the balance-sheet of 1896. What was the position of the bank on the 31st March, 1896 ? 54.- The Chairman.] What were the assets of the bank over liabilities at that date ? —The total is £2,623,417 13s. Bd., without taking into account the reserved liability of £500,000. 55. Hon. Mr. Seddon.] Will you give us separately the amounts that make up that?— There are £2,000,000 4-per-cent. guaranteed stock, preference shares subscribed by the Government of £500,000, an amount paid in advance of uncalled capital in possession of the bank, £47,423; there is a balance to profit and loss of £52,576 2s. Id., and there is a reserve fund of £23,418 4s. lid.; that is all. The reserved liability at that time, as you will see by the balance-sheet, is the £500,000, and the balance of calls payable up to the 31st December, 1897, amounted to £452,567 13s. 4d. So that, in addition to the £2,623,417, there is available in capital called up, but not paid, of £952,576 13s. 4d. 56. What is the amount, if any, you have written off since the balance-sheet of 1895-96? — Written off in this balance-sheet, Sir ? 57. Yes ?—£52,000. I cannot give you the exact amount. 58. That is the actual writing-off?— The actual writing-off from profits of the year. 59. What amount, if any, have you set apart without any actual writing-off taking place ? Have you set anything aside to meet writings-off which you deem necessary to make the accounts safe? —We have nothing beyond the amount held in the contingency fund, which remains at £171,000, which we expect to be quite ample for all our requirements. 60. How much of the contingency fund have you absorbed in the writings-off?—The difference between £171,000 and £200,000—about £29,000. 61. Where have you got the balance of the £29,000; where does the other £1,000 come from ? —We took it out of profit and loss for the year. We took the whole of the £56,502 out of the profits this year. But what was taken from the contingent fund, reducing it from £200,000 to £171,000, was over and above the £56,502. The actual money we took from the banking profits of this year in writing-off bad and doubtful debts was £56,502, without interfering with the contingent fund. 62. Then, in that case, suppose you do not pay the interest on the £500,000 you have to pay the Government out of profits —the contribution—you have been saving your own contingent fund, and taking money which ought to go for that purpose from profits?—We had left, after making that provision, enough to pay the Assets Board, except some £400 or £500. 63. Do you not know that the law says that out of profits you have to pay £50,000 contribution to the Realisation Board, that next out of profits for the year you have to get 5 per cent, for the shareholders on the amount contributed, and then the balance goes back to the Realisation Board. There is the interest also on the preferred shares ? —We understand that we have, first of all, to make ample provision for bad and doubtful debts. Then we have £50,000 for the Assets Board ; then we must pay 5 per cent, on the second call from the shareholders, and then what remains over must still go the Assets Realisation Board. 64. Do you admit that you have £170,000 more than you think is necessary ?—No ; we expect we shall require that. We may or may not. We find it necessary to keep that as a precaution. 65. You still think you want that £171,000 ?—We think we must keep it for the present— probably for three years, at any rate. 66. I want an answer, Yes or No. Do you think from the accounts not disclosed by your books that the £171,000 will be required?—l think it will. 67. You think this will be required to meet deficiencies. Is that since you have come into office or prior? —Before we came into office ; and the £56,502 written-off this year was, as to most of it, lost before we came into office. *2—l. 6.