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131. You have mentioned Mr. Larnach's name. What part did he take in the negotiations?— He was one of the directors of the Colonial Bank. 132. Were the Government, or any member of the Ministry, aware that negotiations were going on ? —I have no knowledge that they were, except as other people were. It was commonly known. 133. Did you have any communication with any member of the Government with regard to the negotiations ? —No. 134. Are you aware whether any of the other directors did ?—I have no knowledge of anything of the sort. 135. Do you keep a diary?— Yes, I do sometimes; not continuously. 136. Are there meetings concerning the negotiations entered in it? —I think not—not the several meetings. 137. Do you know what are the accounts in the "C " list ?—I know that there were several. 138. Was the President apparently anxious for the amalgamation ?—Yes; no doubt. 139. Did he press it on ?—Yes. 140. Were all the directors unanimous with regard to the amalgamation or purchase ?—We were quite unanimous and contented with the final agreement. 141. Did the directors, or their officers, or solicitors take any part in drawing up any of the Bank Acts passed since you have been a director ? —We had the assistance of Mr. Hosking, and to some extent of another firm—Messrs. Buckley, Stafford, and Treadwell. 142. Was the Bill submitted to the bank? —It was submitted to the bank, and discussed by the bank to a certain extent. 143. Did you inquire into the Colonial Bank balance-sheets when you were negotiating for the amalgamation ?—No ; we did not concern ourselves about that, except as to matters in it which we had no opportunity of examining, and we took a general guarantee that covered what we were not able to examine—money in transitu between the colony and London, for instance. We took a guarantee securing the bank as to undisclosed business. -144. Did you place any value upon the apparent balances shown ? —I do not think so. We took out the good business and valued it for ourselves. 145. Was the result of the investigations into the Colonial Bank accounts to show that their balance-sheets were correct or otherwise ?—I do not think we troubled at all. It was no business of ours, because of the plan that we adopted in dealing with the proposed purchase. We did not concern ourselves about them. 146. Did you not notice a discrepancy in the value of the assets as stated in the balancesheets ?—We only noticed it as everybody else might have noticed it. 147. The President, in a letter signed —to be found in 1.-6, page 15—estimated the additional earning-power of the bank under the amended proposals, and he put the net profits of another bank at, say, £30,000 a year. Can you separate the net profits derived from the Colonial Bank business from the bank's ordinary profits ?—Not at present; it is too soon yet to form an estimate of the advantage to the bank. 148. You cannot form an estimate ? —We cannot form an estimate of what has been the actual result; but we did make our own estimate of the probable result of our getting the new business which we took over. 149. From the information of the present business of the bank, will that estimate be realised— probably ?—I think the estimate we formed will be more than realised. 150. You have placed £14,000 for the London inscription business. Did you get that?— Not yet, Sir. 151. Are you going to get it ?—I am afraid not. 152. You said you do not expect to get it ?—I believe there are some legal difficulties in the way. 153. The second million has not been earning your estimate this year of 4f per cent.?— The second of the two millions guaranteed ? 154. Yes?—lt is impossible to say. 155. I find that it has invested £1,069,189 Is. Bd. in Imperial Consols, Colonial Government securities, municipal securities, and other securities. That is in the balance-sheet of 1896 ; what rate of interest would that be earning ?—I do not know; but it is not invested now in those securities. It has been changed to a much more profitable form. 156. Then, you will get increased profits next year from this source ? —Certainly. 157. Has the saving been up to your estimate—£ls,ooo? —I think it is too soon to speak definitely about that. 158. Has the bank now assets to equal its liabilities ? —lt has more. 159. I ask this question, and explain it in this way : Last session it was just about square. Is that position more favourable now ? —I think so—very much more. 160. In what way—you might explain it just roughly ?—We have not yet got the debentures we were to have. I have no doubt that in a week or two matters in dispute will be settled. We shall then get £2,731,000 of available funds, subject to the adjustment that is in dispute. 161. Is the class of business the bank is now doing a safe business ? —I think it is quite safe ; but I think to keep it safe there ought to be at least one more auditor provided, and the auditors ought to keep a continuous oversight over the accounts in every part of the country, not only reviewing the inspector's returns, but also taking note of, and keeping careful watch over, the large number of accounts that are always from a variety of causes liable to drift. Colonial banking, such as I have become acquainted with since I became a director, has not nearly the safeguards that, I think, ought to be insisted upon now that the State has become responsible for the Bank of New Zealand. You have got in the bank accounts for which the bank is liable of more than 30,000 in •6—l. 6.