The Banking Enquiry.

Feilding Star, Volume XVIII, Issue 20, 23 July 1896, Page 2

The Banking Enquiry.

(Per Press Association.) Wellington, Jnly 22. The sub-Committee of the House Banking Committee mot at 10 o'clock, and farther arranged business to be submitted to the General Committee. Mr Seddon's notices of motion regarding the production of the committee's report and various other documents with the Bank of New Zealand from 1888, reports of the Globo Assets Department, Estates Company, and the names of officers who had prepared such reports was passed with verbal amendment. Mr Guinness* notice of motion that Walter Guthrie be called to produce books, documents, and papers relating to writings off by the Bank of New Zealand in respect of any Company with which he is associated was agreed to. A letter was here read from Sir R. Stout, contending that Mr Guinness' notice of motion was outside the order of reference, and denying that any capital had been written off in favor of the companies referred to. The General Committee met at 11. The examination of Mr Booth was continued. In answer to Mr Seddon he said there was no record at the Bnnk of any statement made by Mr Murray to Government in June, 1894. He could not say whether there was any record of Murray being authorised to approach Government at that time. Mr Booth said in 1895 the Bank's capita! was £3,059,745. Tne amount of assets over liabilities was £3,105,-----129. That was in accordance with the statement, but they were not all good assets, as, for instance, the Estate? Company shares taken at par value. The writings off in 1895-96 were £1,531,951. This makes the total writings off since 1888 £3,095,-----798. This included writings off for the Estates Company, but not the estimated deficiency. The writings off in connection with the Bank in 1895-96 amounted to £771,774, and from the shares of the Estates Com* pany £760,177. The total written off in connection with the Bank since 1888 was £2,335,622, an average of £291.952 per annum. The writings off from the Bank leaves the Bank in possession of nearly £200,000 contingent reserve. The Bank held that still. It was important to mention that the writings off for this eight years covered an accumulation that had been going on for a good many yean before. Mr Seddon.— But you have not shown that in your balance-sheets? Witness.— No. The total amount paid in dividends from 1888 to 1898 was 1*265,688. He was satisfied that for years before 1888 the properties of the Bank were overvalued. He had nothing to do with the report which was sent to London in August, 1894. When the directors came to Government for the second time in June, 1895, the fullest information regarding the Bank's affair* was submitted. Mr Seddon, in examining Mr Booth, said, " Do you think the Directors were justified in paying those dividends since 1888? "Do you think it was honest in the face of information given toyousince yon became a Director of the Bank ?" Mr Booth, " I do not think I hay* got sufficient information to warrant my saying ; what 1 can say is only this, that in view of the position we found the Bank in, the paying of any dividends for some years is a very extraordinary thing to me. I can say nothing move." Mr Seddon, " Can you say that these balance-sheets (since 1888) disclose the true state of the Bank of New Zealand, judging simply from what has come under your own notice since you became a director ?" Mr Booth, " Well! I can only say that their estimate of the position was a very different one from the estimate which I think I should bave formed of it," Mr Seddon, "Do yon think the writings off which you have quoted wen sufficient to have met fairly the bad and doubtful debts ?" Mr Booth, " We found that when we took over the Bank's writings off we had not made sufficient provision." Mr Seddon, " For bad and doubtful debts?" Mr Booth, " Yes." Mr Seddon, " What you recommended to be written off was the difference as between what yon thought would be the fair position of the Bank and that in which you found it ?" Mr Booth, " That is the measure of difference." The Premier/ In answer to further questions, Mr Booth said that the officers of the Bank who, in the past, were responsible for advising the Directors, were not now employed by the Bank. The recommendation that it was necessary to write off £771,000 came from the officers of the Bank—in this case from Mr Watson, the Bank's President. Three Inspectors of the Bank, in the colony at the present time, where Messrs Lichfleld, Dingan and Bnller, while the present Inspector for Australia was Mr Parfitt. The General Manager of the Bank in 1894 was Mr Holmes, and in 1895 Mr Andrews was acting as General Manager, but he was in London and Mr Watson practice ally had cbarpe of the Bank. This Day. The sub-Committee met at 10 o'clock, and proceeded to deal with Mr Gum* ness' notice of motion, referring to the Walter Guthrie Company documents, which had been postponed pending proof ef relevancy. Mr Guinness now produced copies of the reports in the Banking and Insurance Record to show that the Bank of New Zealand waived interest on Guthrie and Company's debentures, the Estates Co. holding 10,000 shares in the same company. Mr Hutchison contended thete was ! no writing off in respect to the Walter Gathrie Company, but an allowanoe of 4:90,000 on the conflicting claims. Eventually the Guthrie Company clauses were carried by three votes to two. Tta General Committee met st 11, when tbe report of the sub-committee, ox\ tb« notices of motion referred to it, was dismissed. M* Hutchison moved that the clause excited by the sub-committee in his no&ee of motion, calling for papers, documents, Ac., in connection with the Ward Association, be reinstated. He bold that tbe requisitions were properly within the order of reference, as they ware connected with the Colonial Bank affairs. In support of bis contention that bis notices of motion were relevant, - Mr Hnchison quoted from Judge Williams' recent judgment in Dunedin, and {irocoeded to argue at some length in Avor of the admission of evidence relating to the Ward Association. Mr Soddon thought Mr Hutchison's speech very much out of place. He might as well have said " I bave now pot my knife into Ward up to the hilt. I have turned it round, and howdoyoa like it ?" Mr Hutchison had forgotten his position on this committee. Alt the members of the committee were in a position to judge, and should view the evidence calmly and dispassionately. At this stage tbe chairman read a -letter from Mr Ward, who said he idte.

rated Sir Robert Stout's protest to the Committee against the unnecessary disclosures of private affairs of persons not shown to be connected with the subjects of the enquiry. Mr Ward said be courted the fullest enquiry into his official acts, and gave the committee an assurance without reservation that there bad been no writings off whatever, either by the Colonial Bank or the Bank of New Zealand in respect of the Ward Farmers' Association, or of himself. Mr Seddon, continuing his remarks, replied to the quotations of Judge Williams' judgment made by Mr Hutchison, and. said he had been puzzled to understand why some of these matters had been dragged in, and commented upon when only ex parte statements were before the Court. His surprise was shared by some of the ablest lawyers and baainess men in the colony. Judge Williams' judgement, he contended, should not be taken into consideration by this committee for the committee should try the case itself. Mr Stewart thought Mr Ward should be placed in exactly the same position as Mr Gutbrie, and asked to produce documents relating to writings oft. If there were no writings off there would be no documents to produce. Mr Montgomery thought Mr Hutchison had proved a connection between his notice of motion and the order of reference. He felt, however, that the committee in enquiring into the affairs of pnvite companies would have to go back to the House for amendment of the order of reference and the sooner that was done the better. Mr Maslin said it bad been stated Mr Ward was a slave to the Colonial Bank when the banking legislation was initiated, and in the face of statements such as these the Government should court the fullest enquiry. Mr McEenzie said the public could rest assured the Government had nothing to hide in the matter. What the Government objected to was the unfair attempts being made to blacken Mr Ward. Left Sitting.