1.—6

54

56. When do you refer to as " the beginning." As soon as Mr. Watson was appointed President, do you mean ? —No ; from the time when we purchased the Colonial Bank business. 57. That is, in October, 1895. The question of appointment of General Manager came up then before the directors, I suppose ?—The acting general manager was not in good health, and Mr. Watson, President, was always very anxious that Mr. Mackenzie, with whom he had been so long associated in the Colonial Bank, should come into the Bank of New Zealand and become General Manager; and the matter was put and pressed in such a way that practically the question of the appointment of any one else never came distinctly before the directors. The attitude the directors took up was one from the beginning unfriendly to that appointment, and we simply opposed it from time to time, and we were never willing that it should be made. 58. I understand that you, with your co-directors, other than Mr. Watson, who was President, were unfavourable to the appointment—the whole of them ? —That is so. 59. How, then, was it made against the objection of the directors?—ln the course of the discussion and difficulty that continued for some considerable time on the subject, it came about that we were asked to take the advice of the Premier, and the Premier was asked if he would interfere in the matter. Ido not know how the arrangement was made, but we consented to go together and consult the Premier in the matter; but the Premier—as I think, very properly—declined to advise the directors or interfere, beyond saying that he saw no particular objection to our giving Mr. Mackenzie a trial, always taking care that we gave to him no time commitment. At a meeting of the directors, held immediately after the interview, the appointment was made, and Mr. Mackenzie became General Manager on the same terms as are common to the other officers of the bank—that is, subject to a three months' notice. 60. What is the salary fixed at ?—£1,750 per annum. 61. What was the salary of the previous general manager ? —I do not know. 62. You can ascertain, of course. Mr. Andrews was acting general manager ?—He was at that time. 63. What was his salary ?—I do not know, but can get it. 64. Was that appointment of Mr. Mackenzie by resolution of the directors?—lt was. 65. The four gave way in the circumstances, as you have indicated ?—Four did not give way. I was not able to consent to it. 66. He is now General Manager?—He is. 67. Would you care to mention your reasons for dissenting from the appointment ?—I would much prefer that the Committee should accept the matter as it stands now. 68. I will not press the matter if you prefer to leave it there, beyond asking who voted for the appointment at the time it was made ?—Practically the board silently assented to the proposal, and it was recorded; but I felt called upon, for the first and only time since I became a member of the board, to ask that my dissent should be recorded when the minutes came to be confirmed. 69. Then, it appears in the minutes when the appointment was made that you dissented ?— Yes. 70. Were you the only dissentient ?—I was the only one whose dissent was recorded. 71. Were all the directors present at that meeting?— Yes. 72. And, while not actually concurring, they did not, other than yourself, record their dissent ? You say all were present at this meeting?— That is so. 73. You do not say that the others, except the President, were concurring other than by silence ? —I think that is so. They silently accepted the position. 74. Coming to a more recent event, was there a meeting of directors at which the fine imposed upon Mr. Watson was agreed to be paid by the bank ?—I believe there was. 75. Were you not present at that meeting?—lt was a meeting of the directors—an informal meeting —but I believe they were all present except the one absent in England. 76. Mr. Kennedy?— Yes, Mr. Kennedy. 77. Was it agreed that this fine should be paid by the bank ?—lt was agreed that it should be paid; but it is not quite correct to say that it was paid by the bank. The deed of settlement of the tank places at the disposal of the directors for their fees a sum of £2,500 per annum, and that money is set aside, but not all used. For a considerable time we used not more than £250 for each director of the sum set aside, £2,500. There is a considerable part of that at the disposal of the directors, and we ordered the fine to be paid from that fund. 78. Taking £2,500 as the sum available for directors' fees for the current twelve months, what will be the regular charge against that fund for directors' fees ? You have told us you and Mr. Johnston as directors of the bank take £150 each ?—£lso. We added £100 each to the payments of the others from the £250 we have. It is £350 each, and £150 each to those who act also as attorneys to the Estates Company. 79. I am speaking of the Bank of New Zealand only ? —Up to this there was £350 each for two directors, and £150 each for the other two. What they are at the present time lam not able to say, because the matter is, I believe, rearranged, owing to the fact that since the sale of so large a part of the Estates Company to the Assets Realisation Board the Estates Company directors will not receive more than £100 per annum, and I believe each of the directors now is to receive £500. But I cannot give you the date, because it is a recent arrangement owing to the fact that at the end of March the Assets Realisation Board took charge of the bulk of the properties. 80. Then, we may take it that from March, 1896, the charges against the Bank of New Zealand for the directors are £500 each ? —I would like to refer to the bank to get the exact figures, because it has been changed since the 31st March. 81. We will hold that over, then. Why do the directors take cover for the "B " and "C " lists together, or why do they say in the agreement of purchase of the Colonial Bank that the cover was against " B " and " C " together ?—Because it was against them.