I.—6 1 .

45

6. Do you consider, from the facts within your knowledge, that it would be desirous to have a report made by the Government Auditor as to the advances made by the President?— What I said indicates what I think is an absolutely necessary provision to be made in view of the existing arrangements—that is, that the directors, when they see occasion, should have the power to call upon the Auditor or Auditors to report to the Colonial Treasurer for the time being anything in the nature of an irregularity in the management of the bank. 7. Have there been any facts within your knowledge which appear to you to justify that course?— Yes. 8. It is not a mere theory ?—No ; it is a necessity. 9. Founded on experience ?—lt rests upon the experience we have had in the management of the bank. 1 10. Has this advance of £20,000 to which we have been referring, and which was guaranteed by the Colonial Bank, been redeemed by that bank ?—I do not think I can give any further information about it. It is perfectly safe. 11. But has the guarantee been redeemed? Can you say whether it is still in the bank, or whether it has been withdrawn?—l believe it still exists in the bank—the guaranteed account. 12. What shape did the guarantee take?—l do not think I can give that information. 13. You mean you do not think you can give it, because you think you should not give it. You decline on the same grounds as yesterday?—l am not acquainted with the precise form of the guarantee. 14. Are you unable to answer from want of knowledge ? —So far as that particular matter is concerned. 15. But you could ascertain? —I can do that. 16. Can you say whether the same guarantee covered the £5,000 as the £20,000 ?—The same. 17. And they were on a similar footing?—So far as that arrangement went. 18. As to the security? —Yes. 19. I was taking you through clause 18 of the agreement to purchase, and we had dealt with the first sentence down to the words "so written off." You know that under the next sentence of that clause the Bank of New Zealand had the option, within three months of the contract taking effect, to take over the accounts in the " C " list?— That is so. 20. Can you tell me when the contract took effect —can you give the date ?—I cannot give you the date. It will come with the information being prepared. 21. It did take effect some time or other, and the bank had three months within which to elect. Then, the next sentence indicates that the selling bank—that is, the Colonial Bank—may require the Bank of New Zealand to elect. Did the Colonial Bank call upon the Bank of New Zealand to elect ?—I do not remember whether they did or not. We took care before the time expired to intimate to them that we did not intend to take over the accounts. 22. But Twas desirous of knowing whether the Bank of New Zealand elected of its own motion or waited till the Colonial Bank called upon you to elect ? —I do not remember. 23. Can you find that out ? There would be a communication if the Colonial Bank called upon you ?—Yes. 24. Can you say when the election was made—the time ? —We took care that it was so much within the time as to make the position perfectly safe. 25. One day ?—Not less than one day. 26. That would be towards the end of the three months from the date of the contract taking effect ?—Yes. 27. You see there is an alternative in the latter part of the clause, the alternative being that the selling bank might call on the Bank of New Zealand "to realise or liquidate." You did not elect to take the "C" list, but you were called on to realise or liquidate them. Is there any difference in the terms, as far as you know —between "realise " and " liquidate " ?—We have not been required to realise or liquidate. 28. Are you sure of that ? Do you say the accounts remain in the Bank of New Zealand?— We were subject to our refusal to take them over. 29. You were required " to realise or liquidate ". ?—Yes. 30. Then, the Colonial Bank called upon you to do what—to " realise "orto " liquidate " ? Is there any difference in the terms, or are they synonymous?— Synonymous. 31. Did you realise or liquidate?— There was a considerable amount of negotiation as to what should be done, but the ultimate result was that the liquidators took over to liquidate the whole of the "C'list. 32. That is, the liquidators of the Colonial Bank ?—Yes. 33. Then, the " C " list passed out of the Bank of New Zealand ? —Yes. 34. What security did you get, if you got any security from the Colonial Bank, as to this ?— The"C" list? 35. Yes ?—We did not require any security for that list. 36. What is the meaning of the words in the clause as to the responsibility of the selling bank ?—We have no responsibility in connection with it. The liquidators took it over. 37. On what date was that? —I cannot give you the date. 38. You can ascertain it. There was an agreement probably. How come you to part with the " C" list at all under the contract?—We never took it. 39. You entered into a contract that, on being required by the Colonial Bank to realise or liquidate the accounts in the " C " list, you would do so ?—Yes ; but we were acting only as agents; we took no responsibility. 40. But you contracted apparently to continue to act as agents? —Yes, for a given time. 41. Do you say the Bank of New Zealand is entirely quit of these accounts in the "C" list?— Entirely.