1.-6

16

97. Was each and every account, or the whole of these accounts, in the several lists closely scrutinised by the officers of your bank, or by the officers of the Colonial Bank ?—The accounts in the Colonial Bank ? 98. Yes?— Yes, by officers of the Bank of New Zealand. Ido not think it would be possible to examine with greater care the accounts. 99. In ascertaining the amount you required to be put on the right-hand column against the amounts in the aggregate, that was arrived at by the individual accounts being scrutinised and the amounts required to make them positively good--that was done by scrutiny by the officers of the bank ?—That is so. We went over the whole of the accounts twice, and in doubtful cases further consideration and examination was given. 100. The directors themselves, as well as the officers, went through these accounts ? —That is so; each one of the directors—that is, the whole of the directors, sitting together night after night, went carefully and patiently through the whole of these accounts, and with the officers of the bank. 101. That is, the joint directors of both banks? —No, Sir; of the Bank of New Zealand. 102. Did you meet the directors of the Colonial Bank after you had arrived at a conclusion as to the amount required to be put on the right-hand column ? —As soon as we were ready to report on the condition of the bank we did meet the directors of the Colonial Bank. 103. Did they admit the correctness of your estimates?— They refused to accept the position at all as we put it to them, and the negotiations were for a time broken off. 104. What do I understand by your saying they refused to accept the position ?—Our report to them showed the condition of the bank to be one which they would not accept as the true condition. 105. In asking for this £327,000 they considered it was unnecessary: is that it?— That is so. 106. In other words, they claimed that all their accounts should be in the " A " list?— They would have liked to have them there. 107. In these " A," " B," and " C" lists you could not by agreement compel the customers to come to the Bank of New Zealand; but, as a matter of fact, did you lose a good many of the accounts, or did a majority of the accounts come over to your bank ?—As a matter of fact, we were able to retain nearly the whole of the business of the Colonial Bank. 108. What has been your experience in working the accounts in the "B " list; have you found that your estimates put opposite the amounts have been sufficient, insufficient, or more than sufficient ?—I would not like to reply to that question with any confidence at this stage, because it has not been possible to deal with more than a few of the accounts with a view to determine their actual value; but in one or two cases—notably that of Anderson and Co., of Dunedin, which is in liquidation, and is outside the bank as an individual account —the provision we made for that would have about cleared the account only that some undesirable features have been revealed —features which were unknown to us and unknown to the authorities of the Colonial Bank, which will probably lead to the claim of some amount upon the "umbrella cover" of £272,000. With that exception, as far as we know, the provision we made has been about justified, and I think the ultimate result will be that there will be some surplus for the Colonial Bank from the umbrella cover. 109. You can claim on the aggregate amount, although on one account there may be a loss, and there may be a gain on the others ; or, claim in the final wind up under the cover?— Yes, on the umbrella cover. 110. What is the position of the bank to-day as compared with the time of the passing of the legislation—that is, your bank—is it improving its position, or is it gaining ground ?—The position of the bank is now one of, I think, complete safety, with adequate and prudent management, as compared with a position before the legislation of inevitable collapse. I do not think it was possible for the bank to continue at that time without the help we asked for. 111. What did you estimate the annual earnings of the Bank of New Zealand to be, given a fair year —last year you had only a portion of the year —but take the prospects of the year from the 31st March, 1896, to the 31st March, 1897 ?—I do not think I could answer that question beyond saying that I think the bank will have no difficulty in meeting its engagements to the Assets Realisation Board, and at the same time making a very large provision for bad and doubtful debts. I may say, further, that I see no reason why in three or four years it should not be quite easy to pay 5 per cent, dividends on the second call which is now being made on the shareholders. 112. Now, in respect to the branch business of the bank—that is, the intercolonial and Fiji business —how does your business stand in respect of Melbourne, the Victorian branch ?—I believe, myself, and I think my co-directors are in sympathy with me in saying so, that except for exchange business the Bank of New Zealand should as soon as practicable withdraw from business in Australia. We have closed the Newcastle branch ; we hope soon to close the Adelaide branch; and I think we ought to withdraw from advance business in Australia. As a matter of fact, we have gradually been working in that direction for sometime, and I believe it ought to be done. 113. I will go back to my question about the Victorian business. You have given a general answer, but I intend to ask specific questions as to Victorian, Adelaide, and New South Wales business. Regarding the position of the bank and its business in Victoria, is it satisfactory and profitable, or otherwise ? —lt is, I think, satisfactory at the present time, the business we are doing ; but the condition there indicates, I think, the prudence of what I have been saying as to the Australian business, just as much as at other places. 114. Are you doing much business there ? —Not very much. 115. Now, Adelaide. What are you doing there ?—Very little. 116 Have you made many losses in South Australia, or heavy losses ?—There have been heavy losses made in Australia in years gone by. lam not aware that we have made any losses since we took charge of the bank.