1.—6

34

number. These will take care of themselves; but the advance accounts are more than 6,000 in number, and, seeing that many of the advance accounts are made under the stress of a competition which is often, in my opinion, dangerous, I think an extended audit, such as we have now, should be strengthened by the addition of another auditor. And I think, further, that all colonial banking companies doing business on the lines shown by what we know of their history, and by what is indicated by their balance-sheets, should make a very much larger provision for bad and doubtful debts than has commonly been the case in the past. 162. Have you any other suggestions for increasing the safety of the bank's business ? —I think, while the relationship continues that exists at present between the bank and the State, that the Colonial Treasurer for the time being should not have any interest, direct or indirect, in any advance accounts in the bank. In making that statement, I wish to say that, so far as the late Colonial Treasurer is concerned, we have nc knowledge at all of anything approaching interference of any kind from him. I think it is only fair I should say this, seeing that I am called upon to make the above statement, with the view of guarding against danger that might arise in the future; and I think it is important that, while the veto of the President is continued—l have no quarrel with it—the directors themselves should be able to call upon the Auditor of the bank to report to the Colonial Treasurer for the time being anything which they think it important and necessary that he should know in the conduct of the bank. I think that is all I have to say. 163. The President's veto: Has he ever used his power?— No. 164. Would it be an advantage if the board of directors was strengthened by an increased number of directors representing different parts of the colony ?—I do not think any change of that kind is necessary. 165. Is the Estates Company in a fair way to realisation ?—I think, if the general improvement in trade which has arisen from the increased price of grain and the development of mining continues, the properties—the most of them, at any rate the trading concerns —might be disposed of before long—say, in one or two years. We are leaving no stone unturned to secure that object. 166. Do the facts within your knowledge warrant you in saying whether the colony is likely to incur ultimate loss through the bank ?—As far as I am able to form an opinion, I think the colony need not lose a shilling, always provided the management of the bank is competent and trustworthy ; and always provided that arrangements are made for the conduct of the bank which will nob require interference with its business such as is involved by a parliamentary inquiry of this kind.

Monday, 10th August, 1896. Examination of William Booth, Director of the Bank of New Zealand, continued. 1. Mr. Hutchison.] Have you ascertained the date of your election as a director, Mr. Booth ? —I think it was given to the Committee before—the 22nd September. 2. The 25th, I suggest. You were elected at the meeting of shareholders in Wellington, presided over by Mr. John Murray, after the passing of the Two-million Guarantee Act, were you not ? —It would be on the 26th September. 3. What is the remuneration of the directors of the Bank of New Zealand ?—lt was arranged at the time the directors were appointed that the remuneration would be £250. 4. Has it been changed since then ?—Yes; it was changed after two of the directors became attorneys for the Estates Company. 5. In respect of those two it was changed, was it ? —Yes, and in respect of the other two. 6. Tell us of the change ? —The appropriation for the attorneys was £1,000. 7. Each? —No, for the two. 8. You might tell us what amount was for each?—£soo each. 9. For the two attorneys other than the President, who is an attorney too ? —He had no remuneration apart from the amount paid to him as President of the bank. 10. When did that take place —the change ? —I am not able to give you the dates ? 11. The year? —It was not long after the appointment of the board of directors. 12. That was in September. Soon after that, you say the change was made ? —Yes. 13. By resolution of the directors ? —No; it was made at the time that two of the directors were appointed attorneys of the Estates Company. 14. Do you know when that was ? —I am not able to give you the date from memory. 15. Your power of attorney is dated the Bth September, 1894. Was it soon after that?— That would be, I believe, the time it was made. 16. The remuneration was then fixed at £250 per annum, and soon after the Bth November a change was made, by which two of the directors, who were attorneys of the Estates Company, received £500 per annum ?—That is so. 17. Was any change made in the remuneration of the other directors ?—The payment of the directors who had become attorneys was reduced to £150, and the £100 taken away from each was given to the remaining directors, making their payment £350 per annum. 18. What is the cumulative amount paid to those directors who are also attorneys? —£650 each. 19. And the President's salary is £2,500 ? —£2,250, I believe. I ought to mention that the deed of settlement of the bank provides that £2,500 per annum shall be set aside as payment for the directors. That is supposed to provide £500 per annum each for five directors. The arrangement was that they should take £250. 20. You have stated the arrangement at present in force ? —Yes. 21. What part of the payment to the attorneys who were directors is debited to the Estates Company ?—£l,ooo.