MR. BRIDGES’ EVIDENCE BEFORE PUBLIC ACOUNTS COMMITTEE.

New Zealand Times, Volume XXX, Issue 4551, 21 October 1875, Page 2

MR. BRIDGES’ EVIDENCE BEFORE PUBLIC ACOUNTS COMMITTEE.

The Chairman ; You are aware that the House of Representatives have ordered this Committee to continue the enquiry in the line of examination on which you were examined before. This being a new examination, it is necessary that you be rc-sworn. Mr. Bridges was then re-sworn. Witness; Before yen proceed with my examination, I should like to say that recently, when I saw the direction in which the enquiry was tending, I thought it necessary to decline to answer questions which would render me liable to a law suit. Now, however, lam quite willing to answer any questions you may put to me which are within my knowledge. I also wish to point out that there are errors in the printed report of my examination on the Gth October, and I wish to take objection to the evidence that was given by me on that occasion having been printed without being first submitted to me. They are simple errors, and do not affect the evidence at all. I desire to be allowed to correct my answer to question No. 618, by adding the words, “or words to that effect,’ 1 to my observation that I had heard Mr. Bathgate say that he would not consent to the price. I also wish to be allowed to explain my answer to question No. 824, by saying that I did not intend to imply that Mr. Bathgate had been subjected to any personal pressure upon himself. I think the printed evidence is calculated to mislead in that respect. The Chairman ; The Committee will now proceed with the examination. Have you read the Act which has been just passed, by which you are fully protected for the evidence you will give before this committee ?—Answer : I have.

Question: Now, Mr. Bridges, the Committee will expect you to make a full statement of the grounds on which you gave evidence before the Committee on the previous occasions, to the effect that pressure had been brought to bear upon the Government by tbe bank in the purchase of the Port Chalmers railway, and they will hear any statement that you may make in the first instance.—Answer: The opinion was founded on a variety of circumstances, some which I find were not facts, as I stated to the House.

Question ; But what were the grounds upon which you made the statement ? You must tell us what it was that led you to make the statement.—Answer : I say it was a floating opinion from a variety of circumstances. Question ; What were the circumstances ? Answer : If you will ask me any particular question as to upon what the opinion was founded, I am prepared to answer it. Question : It is for you to inform the Committee what the circumstances were.—Answer: I am advised by ‘my counsel that the Act passed is not full, and that if I say anything that may be construed into malice, I am not protected, and I should not be protected in the Supreme Court. Therefore I suggest that you should question me. I had no positive knowledge of the fact. The opinion was founded, as I said before, upon circumstances which I find were not correct, the chief fact being that it was not the bank, but the New Zealand Loan and Mercantile Agency Company. X also received a communication from a _ member of the House that I was under a mistake, and that the pressure had not been put by the bank, but by the Superintendent of the province. Mr. J. Shephard : Would you name that member ?—Answer : Mr. Luokic.

The Hon. Major Atkinson : Yon say you were informed that the pressure had been used by the Superintendent. Which Superintendent ?—Answer : Mr. Macandrew, the Superintendent of Otago. The Chairman : I must recall your attention to this, that you must inform the Committee what the circumstances were that made you give the original evidence. —Answer : I can only state, a variety of circumstances. Question : What were those circumstances ? It is my duty to inform you that the House has decided that those circumstances must be fully disclosed, and the Legislature has now given you the same protection that yon would have in a court of law. A court of law would compel you to give answers to such

questions, and you must give the answers here. You must tell the Committee fully what the circumstances were that led you to make the statement. —Answer ; It will be a long statement that I must make. I shall have to call your attention to a variety of matters. The first of these is that there is a company called the New Zealand Loan and Mercantile Agency Company, which is affiliated to the Bank of New Zealand, and so closely allied to it in the colony that the directors of the company are also directors of the bank, and the company is managed by the manager of the bank in London, and by the chief manager of the bank in the colony. The operations in the colony are often of a very mixed character, partly done by the bank, and partly by the Loan Company, and in consequence I have been in the habit of looking upon them as one concern. I have already stated what I heard Mr. Bathgate say. In . January, 1873, I went to England, where I was in frequent communication with Mr. Larkworthy, who is the manager of both the bank and the company in London. I heard him speak of the Port Chalmers railway, and it was he who first gave me a strong impression that pressure had been put upon the Government, by saying that it had been an advantageous operation altogether, and by expressing his desire for more such operations. I think that is all I have to say. Question ; But, Mr. Bridges, you must tell the Committee what the “ circumstances ” were to which you were referring when you said that certain circumstances had come to your knowledge in confidence while you were manager of the bank ?—Answer : I concluded that pressure must have been put ou the Government, or the price would not have been given, having heard that that price was generally considered excessive. I also have an impression that I have heard (though it is only hearsay) that the previous Ministry had determined that they would not give more than‘a certain price. Question: Then the Committee are to understand that what was in your mind when you gave your former evidence was this, that whether it was the Bank or the Mercantile Loan Agency Company was immediately interested, you held that the circumstances, whatever they were, were either between those institutions or by both together?—Answer : Yes.

Question : Well, what were those circumstances ?—Answer : I do not quite understand you. Question ;'So far it appears that the two institutions are to be taken together instead o£ the bank alone, as having put pressure on the Government. How, X again ask you what the circumstances were under which pressure was put on the Government ?—Answer : The circumstances by which I came to my opinion are these : I heard Mr. Bathgate make a certain statement. I heard Mr, Larkworthy say it was a very good operation, and he left the impression on my mind that it was a very profitable operation indeed. I felt very little interest in the matter, and I do not remember putting any questions to Mr. !. ark worthy respecting it. I also heard that the Ministry had given more than the previous Ministry determined to have given. These are sufficient circumstances to prove that pressure had been put on the Government. Question : Then are the Committee _to understand that it was from this conversation that you had with Mr. Bathgate that you were led to make imputations such as those which are contained in your previous evidence ? —Answer : I had no intention of making imputations. If you remember, I requested to let me withdraw or modify that answer, stating that it was a hasty one. Question : Are the Committee, then, to understand by your present evidence that it was not your intention to cast any imputation upon anybody ?—Answer : Yes. Question ; And are the Committee to understand that you have no other information to give on the purchase of the Port Chalmers railways ?—Answer : I have no other information to give. On the advice of my counsel, I have no information to give, but I am prepared to answer questions as to facts within my knowledge. My counsel says the Act does not protect me. Hon. Major Atkinson : Then you have information to give ?—Answer : I do not know that I have any information to give. The Chairman ; I will ask you again, are there any circumstances whatever which, as a matter of fact, came to your knowledge in a confidential way, and are there any accounts, books, or papers, or any officers of the bank, or otherwise, with respect to which you are able to give any information whatever to the Committee ?—Answer ; As a matter of fact I do not know.

[Witness was here requested to withdraw while the Committee deliberated, and the usual hour for adjournment having arrived, he was not recalled, but was ordered to attend at half-past eleven next day.] The Chairman : Mr. Bridges, in your evidence on Friday you stated that up to the time you left the Bank of New Zealand Sir Julius Vogel’s accounts were nearly always overdrawn?—Answer: Yes. Question ; The Committee desire me to ask whether you are aware that that account was ever exceptionally treated by the bank ?—- Answer ; Yes ; exceptionally treated in this way, that; the account was allowed to be overdrawn in Wellington up to a certain amount—l think it was £2oo—and then it was transferred to Auckland by his own cheque on the Bank of New Zealand. Question : Which in fact wiped off the overdraft from the Wellington account ? Answer : Yes.

Question : Do you know whether that cheque which extinguished the overdraft at Wellington was placed to the debit of his account in Auckland ?—Answer: I do not know within my own personal knowledge. Question ; That question has been put to you at the request of the Committee generally, and the Committee also desire to know how you connect the fact of the overdraft in Sir Julius Vogel’s account with the purchase of the Port Chalmers railway ?—Answer : The accommodation granted by the bank was so excessive that the bank would have great power over him. Question ; Yen have stated £2OO as the amount of overdraft he was allowed in Wellington ! —Answer : Yes. Question : Do you call that an excessive amount of accommodation ?—Answer : No ; that was a frequent occurrence. I mean the transfer of his account to Auckland.

Question : This operation of transferring his account when the overdraft reached £2OO was an occurrence that took place frequently ?—Answer : Yes. Mr. J. Shephard : You know nothing of the state of Sir Julius Vogel’s account in Auckland ?—Answer'. No.

Question ; Nor did you at the time you were manager ?—Answer : No. Question ; At what intervals was this overdraft cancelled in this way ?—Answer : At irregular intervals. Question : About what intervals ? —Answer : 1 cann'ot trust my memory to make any answer to that question. They were very frequent. Question : Four or five times a year ? Answer : I should say much more than that, but I really cannot tax my memory. The Chairman ; You stated when you were last here that you wished to give some further evidence with respect to Mr. Batkins’ memorandum. Before you do that I wish to ask you some questions in elucidation of evidence you have given in reference to the general banking arrangements. In question 195 you state that the course pursued in Victoria of employing the associated banks worked well. How would you propose to make the receipts and payments to the different accounts in New Zealand ? Are there any such separate accounts kept in Victoria, and any such payments made there ?—Answer : I believe so. I was in Melbourne on my way to this colony in September, 1874, and I consulted two of the bank managers there on the subject. I asked them whether there would be any difficulty in the matter, and they said “ no. I asked Mr. Curtayne, the Manager of the Union Bank of Australia, how it was dorm, and he said, “ easily enough, there is no difficulty in the matter.” Something called away his attention, and I did not get particulars, but I believe the difficulties pointed out by Mr. Batkin are visionary. Question ; Do you know whether the Go-

vernment of Victoria has any local paymasters ?—Answer: I do not.

Question: Did those bank officers whom you conferred with in Melbourne know, or were they aware of, the accounts kept by the New Zealand Government when they fa 'ftve you their opinion ?—Answer: No, I should think not.

Question: You do not know anything about the matter yourself ? —Answer: No. Question: In answer to question 522, you said that you knew the London bank rate for fixed deposits for twelve months varies from Ito 5 per cent. What London banks were you referring to ; were you referring to Colo, nial banks having offices in London, or English banks? —Answer; English, Colonial, and Indian banks.

Question: Name some of those that gave 4 to 5 per cent ?—Answer : AH the London banks give 31 to 4 per cent. The London and Westminster, and Union of London, give from 4to 5. It is a matter of advertisement that they give 5 per cent, for deposits for twelve months.

Question: Did the National Bank of New Zealand offer to take any part of the loan ? —Answer : Not that I am aware of.

Question : Mr. Magniac, in a recent repor of the National Bank, states that they had a share of the loan. How did they obtain it 7 —Answer: By tendering, I suppose. Question: To your knowledge, they did not make any offer to the loan agents to place any of the loan ?—Answer: I am not aware that they did. Question: You never heard that it was (heir intention to make an offer ?—Answer: No.

Question; You state in answer to question 554, that you could prove that the Bank of New Zealand put pressure on the public ? Answer: Yes ; there are so many cases within my knowledge of persons being pressed, that that could be proved. There is no doubt in the mind of any banker ou the subject. Question : But the Committee wishes to have your own knowledge; not what you may think was in the mind of any banker ? Answer : I have heard many persons mentioned, whose names I do not remember, upon whom pressure has been put by the managers, who stated they must have money. The Chairman: Mr. Bridges, in your original examination you said at different times that pressure had been exerted by the bank upon the Government. The term pressure in reference to any action taken by a bank has a well understood meaning among all persons acquainted with hanking transactions ? Answer : Yes, I suppose so. It is generally understood.

Question; In fact, it means that any arrangement which may exist as to overdrafts or accommodation generally will not be continued, to the same extent at all events ?—Answer; Yes, that is the usual mercantile acceptation of the term.

Question: Then, when you said that you did notmean that political pressurehadbeen exerted by the bank in the instance you mentioned, but simply .that pressure had been exerted, you meant pressure in the ordinary sense ? Answer: Pressure maybe described in other ways. Question: "What is the other way?—Answer: Yes, I meant in the ordinary way. Question : Well, at the time the purchase of the Port Chalmers railway was completed the following persons were members of the Ministry:—Sir Julius Vogel, Sir Donald McLean, Mr. Bathgate, Mr. O’Korke, Mr. Eeynolds, and Dr. Pollen. To which of those gentlemen did you mean to refer as upon whom the pressure had been exerted?—Answer: That is a matter of opinion. Question: Was it Sir Julius Vogel ?—Answer: I do not know that Sir Julius Vogel had any accommodation from the bank at the time.

Question: I am not asking you about the express amount of accommodation, but about the word pressure, the influence, in fact, which you designated by the term pressure. Do you think it was exerted on him ? —Answer: I have said that I have no knowledge that any member of the Government had an overdraft at that time. I was in England. Question; The word overdraft has not been mentioned ?—Answer: Well, advance or accommodation.

Question: Did you mean Sir Julius Vogel as one of the members of the Government when you said that pressure had been exerted?— Answer :-I do not think lam permitted to answer that question, because I do not know it as a fact that he had any accommodation or advance.

Question: As a matter of opinion, was he in your mind when you used the term? —Answer: I am advised by my counsel that I must say nothing as a matter of opinion; it must be only as a matter of fact.

Question: You have distinctly stated that you believed pressure was exercised by the bank on the Government?—Answer: I have requested my counsel to give me his opinion in writing, which shows my course quite clearly. I will lay it before the Committee. Question: I do not think the Committee have any right to see the advice you got from your counsel at all The duty of the Committee is to get from you the grounds on which you stated previously that pressure had been exercised by the bank upon the Government?—Answer: Yes; but unless those grounds are facts, I am prohibited by law from answering these questions. I can give no opinions, or I am liable to be criminally prosecuted as showing malice, or what might be construed into malice.

Question: Did you refer to Sir Julius Vogel when you said that pressure had been put upon the Government?—Answer: I have said that my opinion was from a number of inferences. I do not think I can answer that question. Question: Do you refuse to answer?—Yes: I refuse to answer that question.

Question: Was Sir Julius Vogel involved in those inferences. That is not criminating yourself in any way ?—Answer: Yes. Question: Were the other members of the Ministry (naming them)? —Answer; No. Question: How was Sir Julius Vogel involved in those inferences? —Answer; From the fact that up to the, time of my learing Wellington for England Sir Julius Vogel’s account was nearly always overdrawn at the bank. , .

Question: Then you think that any man who has an overdrawn account is subject to this inference? —Answer: Yes.

Question: You have stated more than once that your answer would extend beyond the bank. To whom would it extend beyond the bank ? —Answer: To Sir Julius Vogel. Question; Sir Julius Vogel was then a member of the Government, and the Committee infer that outside the Government and outside the bank your answer would extend to some third parties ?—Answer ; No, I have been misapprehended. Question: Have you since your last arrival in the colony said to any that you would or could make such revelations of the doings of the Bank of New Zealand, or the Loan Agency Company, as would make the Bank of New Zealand glad to give your bank a share of the public account, or words to that effect ?—Answer : No, I have not said words to that effect; that is incorrect. As regards the last portion, certainly not. Question? That is the portion which refers to getting a share of the Government account? —Answer; Yes. Question; Then you have talked about making revelations ?—Answer: No ; I have no recollection of that. What I have said is to this effect, that if it was known what I know, the bank would lose the Government account. It was to that effect, but not as you put it. Question: To whom did you state that ? Answer: I mentioned it to several. Question: Can you name any one? —Answer: No. Question: Then will you state what the revelations are that you meant?—Answer ; I have done so.

Question : The Committee is to understand then that the statements you have made heretofore in your evidence were what you meant by the term revelation, as used by you in private conversation.—Answer : Yes. Question : With reference to the statement which you made, that pressure had been exercised by the Bank of New Zealand, is it not a fact, speaking of the private customers of the bank, that pressure has been put within the last twelve or eighteen months by more than ■ one bank on individuals.—Answer : Yes.

Question: I>y the bank which you are managing, for instance, has it not been found necessary to put pressure on individuals in that bank ?—Answer ; Yes, it is a matter of everyday occurrence. If an overdratt is found to be too large, it is required to be re-

Question : In answer to a previous question with reference to the transaction with the Weld Ministry, you said, “ Mr. Bussell said to me that they would not make the advance to ♦he Weld Ministry at all.” I understand that remark to have been made by Mr. Bussell to yourself, not in the presence of the Board, but in private conversation. However, theie seems to be some difference of opinion about it. Perhaps you will state how it was i—Answer . I forget Most likely I was alone with Mr. Kussell at the time. I have htt e doubt it was said to me alone. I should like before the Committee release me from attendance to call attention to the fallacies and mis-statements contained in the memorandum of Mr. Batkin with respect to my evidence. Question: You mean with reference to . ... the general banking arrangements .—Answer ; Yes The Chairman: Well, when you attend again yon may perhaps make a statement on the subject if you wish to do do. Mr. D. L. Murdoch wrote as follows m answer to the Chairman :—At the time Mr. ' Bridges was in the Bank of IS ew Zealand Sir Julius Yogel was resident in Auckland, where he had valuable mining and other interests yieldin'’' considerable revenue. His Wellington account was for family expenses while obliged to reside there, and at his request, mstead of his drawing each cheque on Auckland, the balance was allowed to accumulate till it reached about two hundred pounds, and he then drew a cheque on his Auckland account. Xu no way was tlie account treated in an exceptional manner. The imputation apparently meant by Mr. Bridges, is simply a wicked and malicious invention.