Manawatu Herald. TUESDAY, SEPT. 22, 1896. The Banking Enquiry.

Manawatu Herald, 22 September 1896, Page 2

Manawatu Herald. TUESDAY, SEPT. 22, 1896. The Banking Enquiry.

• — * - — The Legislative Councillors have used more despatch and more intelligence in enquiring into the past legislation dealing with the Bank of New Zealand than the House has done, as they have already made their report. It is not surprising to learn that the Committee have found " that Mr Murray withheld from the Government information respecting the Estates Company that he could have given, and that it wi3 allimportant the Government should have received," which thus endorses all that has hitherto been said about the Government having weakly yielded to the demand of this gentleman without having taken reasonable step 3to ascertain the position of the Banic. The report declines to say anything decisive about the appointment of tha President, beyond there being " no evidence to^how that the Government showed any special anxiety to appoint the officer in question." The Committee object, however, to the way the AuJitor is placed, from there being an agreement that " in the event of his appointment coming to an end, kte would be able to re-enter the service of the Bank at a salary equal to that which ha was receiving when ho resigned to take the auditorship," and recommends that the agreement should be terminated. The purchase of the Colonial Bank is approved of, and in mentioning the Bank of New Zealand business it is cheering to find it stated that " although the expectations of witnesses vary as to the degree of success that may be anticipated, the evidence all points to the stability of the Bank, and to its being able to make sufficient profit to justify the action of the Legislature in 1895." Regarding the late Colonial Treasurer, the report will not be held so satisfactory by the Ministry, as it exposes the " deal in oats " and promissory notea in a very trenchant manner The account of these transactions h disposed of in the report as follows : — In June, 1895, an inspector of the Colonial Bank was sent to Inveroargill to endeavour to reduce the overdraft of the Ward Farmers' Association, and he obtained a draft on London for £80,000, founded on a warrant for oats. Mr Ward, the late Colonial Treasurer, returned to the Colony in July, 1895, and shortly afterwards became aware that his financial position was involved, and also became aware of the oats transaction, the short history of which is that Mr Fisher, the manager of the Ward Farmers' Assooiation, at the request of the Bank, gave a draft for £30,000 t on London, supported by a warrant | for 80,000 bags of oats, but the preI cisc term 3of the authority on which the draft was given were not communicated to Mr Fisher, and he ; stipulated that the draft should not D 3 operated upon until Mr Ward's return to the colony. The evidenoe shows the nature of this transaction, and from it may be gathered the amount of cover in the form of oats actually in existence to support the warrant. It must be remembered that thia was done while Mr Ward was absent from tha colony, and that as soon as he became aware of the facts he acquainted the Bank au- 1 thorities. I Your Committee is of opinion that / Mr Ward ought, when he became |

aware that his financial position was seriously involved, to have acquainted his colleagues in the Government, and that he ought to have tendered his resignation of the office of Colonial Treasurer Considering the financial position of the then Colonial Treasurer, and having in view the necessity that was then known to exißt for negotiating for the purchase of the Colonial Bank» and of the passidg of legislation to give effect to the same, and the knowledge that those transactions and that legislation must necessarily affect him, it was in the opinion of the Committee eHtfeniely unfortunate that Mr Ward should have continued to hold the office of Colonial Treasurer. Your Committee think it right, however, to state that they found no evidence to show that Mr Ward was associated with the negotiations for the purchase of the Colonial Bank. Amongst the subjects that camo under your Committee's notice duriug their inquiries, and showing how undesirable it was that the position of Colonial Treasurer should ha\e been held by Mr Ward while the banking agreement was under arrangement, was the item of £55,150 in the C list. The evidence shows that at the time the agreement between the I banks was under negotiation the Hon J. G. Ward was indabted to the Ward Farmers' Association £55,160; that, in order to place the said Association in a position which it was then considered would enable that account to be taken. over by the Bank of New Zealand, or some other bank, the sum of £55,150 was placed to the credit of tho Ward Farniars' Association by the Colonial Bank, and a promissory note Was taken by the Colonial Bank from Mr Ward for that amount. This promissory note was secured by all the agsets Mr Ward could offer, which are variously estimated, but which were not adequate security for the promissory note. The Bank of Mew Zealand appears ' not to have been satisfied with the account, and requirel time to con- I aider it. With this view the account was retained in the C list, and three months were allowed within which the Bank of New Zealand wa^ to decide whether they accepted it. Prior to the end of the three months they declined the account, and it afterwards went into liquidation. Your Committee cannot avoid expressing their opinion that, considering Mr Ward's position, and that the placing of the £55,150 in the 0 list under the above mentioned conditions was subjecting him and the account to grave disadvantages, he ought to have bsen informed by the Colonial Bank of what was pro-> posed to be done before such an agreement wa3 concluded. It appears from the evidence that no member of the Government was made acquainted with any particulars relating to the A, B, C, D lists.