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129. In the ordinary course of things the £50,000 will be paid out of that—you are bound to do so by legislation ?—Yes. 130. On the other hand, the debentures have not been issued ?—No. 131. Therefore, the bank has not that amount of capital to finance with?— No. 132. Am I right in saying that had you been in possession of the debentures the profit and loss account would have shown an increase of profit ? —I think it would have shown some increase. 133. What increase would have been probable ?—I should not like to say, because it was not until the year was far advanced that we could expect to get possession of them. Assuming that no difficulty had arisen, I do not think the position of the bank would have been very much improved. There would have been an improvement, I believe, and some advantage to the profit and loss account, but it is impossible to say how much. 134. But for next year ? —For next year the matter is one of very great importance to the bank. 135. It will materially increase the profit ?—I think so. 136. On referring to the balance-sheet, I see there is an increase in deposits. Am I right in inferring that that is mainly through the Colonial Bank —1895-96 ? —Yes. 137. It is due also to the large increase in Government deposits?— There maybe some increase arising from that source. The Government deposits are changing from day to day. It is not easy to say at this time how the position of the bank is affected by them. 138. Do you know the amount of Government deposits in March, 1895 and 1896 ? —I have not the figures for any date except the 31st March, 1896. The Government deposits at that date were £1,311,826. 139. Will you take a note to ascertain the amount of deposits for the corresponding date for 1895?— I will do that. The Government deposits in London on the same date were £720,464. I might point out that I think you will find the average figures gazetted from time to time. These are the exact figures for the 31st March, 1896. 140. I just wanted a statement showing the increase in Government deposits during the year. Referring to the balance-sheet of 1896, the Colonial Bank landed property and premises are stated at £125,138- Were these valued at the time of the agreement for amalgamation?— The Colonial Bank properties? 141. Yes?— No. 142. They were not valued?— No. 143. You say that the directors of the Bank of New Zealand were prepared to take over the Colonial Bank properties without knowing their value?— Yes. We were prepared to take them over at book-value, because we were prepared to pay the £75,000 arranged to be paid for good-will, and because we were prepared to lose what we expected to lose on the properties —quite £30,000 — in return for the business we get. 144. In other words, the good-will, instead of being £75,000, was £110,000 ? —lt was quite that. But, besides the business of the Colonial Bank which we had selected and bought, we got a guarantee from them —two bank advances, which had become more than doubtful. We got these advances guaranteed. One was an advance of £20,000, and an advance of £5,000. The President of the bank was responsible for the advances, and we found, and were told by Mr. Larnach and Mr. McLean, that in the event of the negotiations falling through there would be nothing left of the security for us upon which these advances rested. We were prepared, rather than allow the negotiations to fall through, to pay the price ; but before agreeing to do so we stipulated that both of these advances should be guaranteed by the Colonial Bank, and we got the guarantee. 145. Is that stated in the bank agreement —the agreement laid before Parliament on the 18th October for its ratification ?—The agreement necessarily does not disclose all the details of the negotiations which resulted in the purchase of the bank. The agreement disclosed the fact that we paid a certain sum for the bank premises, and at the conclusion of the negotiations we were perfectly satisfied with the bargain we made; and we are satisfied now, and would be very glad indeed to make another one like it on behalf of the bank to-morrow. I see that the agreement does disclose, in clause 25, subsection (b), that " the landed property and bank premises appearing in such balance-sheet shall be taken at the values appearing in the said balance-sheet." 146. But there is nothing laid before Parliament that discloses the fact that the good-will was much greater than £75,000 ?—lt is disclosed in the statement that the premises were taken at their book-value. The book-value was in excess of the property-tax value, and was quite £30,000 in excess of what we believed was the selling-value. 147. Was that ever stated to the Government or to any member of the Government?—l do not know. These were strictly private negotiations between the directors of the Bank of New Zealand and the directors of the Colonial Bank. We had to buy, and make the best bargain for the Bank of New Zealand that we could, and we did that, and I believe we made a good bargain. 148. Were there any other secret agreements —that was a secret agreement, you will admit ? — No, it was no secret agreement; it was a condition as between ourselves and the Colonial Bank directors. 149. I will ask you at what do you estimate the amount of the good-will that was paid, or intended to be paid, direct and indirect?—As a matter of fact, it stood in this way: £75,000 and £35,000, less £25,000 which was guaranteed—advances which had been made to the Colonial Bank, and which had become unsafe. 150. That would be £85,000 estimated ?—£85,000. 151. Why is the Colonial Bank Good-will Account put down in the balance-sheet at £75,000? -—Because that is the amount we agreed to pay. 152. For the good-will ?—Yes. We should not have paid the book-value for these properties only that we were getting these two accounts, amounting to £25,000, guaranteed. 153. Are you aware of the sales that have since been made ?—I am aware of some of them,