The Bank Enquiry.

Feilding Star, Volume XVIII, Issue 16, 18 July 1896, Page 2

The Bank Enquiry.

MR WATSON BEFORE THE BAR OF THE HOUSE. A FINE OF £500 INFLICTED. (Par Press Association.) Wellington, July 17 In the House this afternoon the Speaker read a letter from Mr Watson asking that he be allowed to be accom- I panied to the Bar of the House by Mr i Theo. Cooper, as his solicitor. Mr Seddon moved that Mr Watson be called to the Bar of the House, and that the Speaker ask him why he refused to answer questions submitted to him at the Bankinp Committee, and if he persists in his refusal to answer that he be allowed to have counsel present with him at the Bar. Mr Seddon said this was a question above all party, and the House as representative^ of the people, should assert its rights^ no matter how powerful the institution that was behind Mr Watson. It was not a question only of William Watson. If the refusal was countenanced by the House it meant that all the banking witnesses, including the Directors of the Colonial Bank, would refuse to answer questions. The privileges of the House had been deliberately assailed, and he believed witness when before the bar would reiterate his refusal. The situation of the present moment was foretold at street corners weeks ago when it was openly stated that the House would be defied. History was merely repeating itself, and he quoted from the Hansard record where in 1890 the Bank of New Zealand had refused to supply the Committee of the House with documents and papers. He declared that unless the House insisted on answers being given enquiry would be futile, and nothing but a hollow sham. If the House permitted this matter to pass its power for good was gone for ever. Witness had said a declaration of | secrecy prevented him giving evidence I on certain mattf-rs, but the view he (Mr Seddon) took of the matter was that in such an enquiry a declaration did not hold good. The shareholders were already protected by the law, but they should have the satisfaction of knowing who was responsible for the loss of three millions of money during a limited term of years. It was a serious matter for the shareholders, and they were entitled to the fullest enquiry. No private or current accounts were to be inquired into by the Committee, so that there was no foundation for the cry that bank would suffer by the divulgence of the evidence contained in the second order of reference. Captain Russell fully recognised that it was the duty of the Opposition to act with the Premier in conserving the privileges of the House, but there was a probability that these privileges might be strained. He believed the privileges of the House had been technically infringed on this occasion, and agreed with the Premier that the person who bad infringed them should be asked for an explanation. He still considered it would be injurious to enquire into the private accounts of individuals, and if the House gave that power it would be granting a power never yet given by any Parliament. Mr Geo. Hutchison said members should assert the dignity of Parliament as to counsel. Mr McKenzie congratulated Mr Watson on the stand he had taken, despite the fact that it was a breach of the privileges of the House. Going back to the time of the Bank legislation, he expressed the opinion it would have been better then to let the Bank go by the board. Mr Earnsbaw objected to the prosecuting speech made by the Premier, and com batted the assertion that Mr Wateon had been contumacious. Mr Hogg said that the fact that the Directors of the Bank of New Zealand were attempting to burke this enquiry showed there was something behind it that would not bear the light of the day. Mrjor Steward quoted precedents, and coutended that up to the present the House had followed strictly in the footsteps of precedents in this matter. Mr Guinness quoted a precedent to show that the oatb of secrecy was no legal excuse for refusing to answer questions put by the Parliamentary Committee. Mr Seddon's motion was then put and agreed to on the voices. The Sergeant-at- Arms then nshered Mr Watson and Mr Theo. Cooper, his solicitor, to the Bar, when, in answer to questions put by the Speaker, Mr Watson reiterated bis refusal to answer questions with regard to writings oft of the Bank of New Zealand. Mr Watson said he did this in no spirit of contumacy or defiance, but because the terms of his appointment were that be should conserve the interests of the colony and the sbareholdera to the best of his power. In answer to questions put by members, Mr Wataon said he received legal advice on Tuesday afternoon last. After conferring with his Directors it was decided that he should not divulge any information regarding the private accounts of the Bank. He believed if the questions were answered regarding private accounts the customers of the Bank would fall away, and the colony would thus suffer. He believed that the officers of the Bank would also decline to answer such questions. He still thought it against the interest of the Bank, the > colony, and the shareholders to give the information. Such information would not be produced by the Bank at the order of the Supreme Court unless the item asked for was in a suit. The writings off by the Bank in the past had been very numerous. There were not many present customers of the Bank who had had their accounts written down in the past. He was asked to produce all the writings off since 1888, and this he refused to do. He considered the customers of the Bank would conclude that at any time information with respect to writingsoff would be given if that information were divulged to the committee at the present time. He had been legally advised not even to give the individual amounts written off, as it might lead to the recognition of the persons. He declined to say whether or not any members of the Legislative Council had any accounts written off. Mr Cooper then proceeded to address the House on Mr Watsou's behalf. He said, in refusing to obey the mandate of the Committee of the House, Mr Watson acted from no idea of a sense of contumacy or disrespect to the Committee or House. On the contrary, he acted from a high sense of the duty he owed to the colony, shareholders, and easterners of the bank. Although a technical breach had been committed, it was not an action that should be visited with punishment. He dwelt on the necessity of keeping the secrecy of banks' business from the public gaze, and quoted regulations which had been framed to secure this secrecy. The auditor of the bank was specially effected by these regulations, and the President was in the same position as the auditor in the matter. He contended that under the Banking Act of last session it was imperative upou Mr Watson to preserve secrecy. In regard to the accouuts of the A, B, C, or D lists they would oot be produced in a law court. If it wero once recoguised that the Bauk could be compelled to divulge information regarding any of its accouuts, confidence in the institution would bo sapped and none of the customers v/ould feel safe under these circumstances. No business man would keep his account in' the Bank of New Zealand nny longer. Mr Cooper asserted that Binue the enquiry bad commenced

accounts had been withdrawn from the Bank, and two very large one bad been taken away recently. If the customers left the Bank its ruin must very soon follow. Messrs Watson and Cooper then withdrew and the House took the supper adjournment. On resuming Mr Suddon moved that in view of Mr Watson's persistence in his refusal to answer the questions put to him ha be fined £500 and be detained in the custody of the Sergeant-at-Arms until the amount is paid. He said Mr Watson's defence that night was only an aggravation of the offence. Although Mr Watsons language was respectful i I there was au evident determination on his part to refuse to give the evidence asked for by the Committee. His sole reason for wishing to obtain information as to the writing off was to ascertain how far the Government were justified in the action they had taken. Captain Russell said no one could have listened to Mr Watson's replies to the questions put to him without being convinced that he had a high sense of duty imposed upon him. The opinion (Captain Russell) held was that the colony had nothing to do with the bad debts written off prior to 1894, and therefore Mr Watson, in refusing to furnish this information was really acting in the interests of the colony. It would be injudicious to fine Mr Watson i'soo, as he had acted nnder direction of the Bank Directors, and they would therefore be running the Bank and colony. He moved as an amendment " That this House, whilst holding its paramount right to compel full disclosures by any witness summoned before its committees, and to punish for contempt all witnesses refusing to give testimony when required, is of opinion that under the circumstances Mr Watson should not be compelled to disregard the solemn declaration of secrecy he made to the Bank to preserve inviolate the confidence of its customers." After a very long debate Capt. Russell's amendment was rejected by 45 to 19. Mr Bell then moved to strike out the fine -with the view of submitting imprisonment in the custody of the Ser-geant-at-Arms. Lost by 44 to 20. A proposal to reduce fine to i£so was lost by 37 to 27. The Premier's motion was carried by 36 to 26, and Mr Watson was recalled to the bar, and the decision communicated to him. The House rose at 4.25 a.m. This Day. Owing to the late sitting of the House the Banking Committee will not sit today and has adjourned till 11 on Thursday. __^_.«______^