The reply from the directors of the Bank of New Zealand was as follows:—" We have perused your letter of 23rd inst. to Mr Watson, and his reply, with which we concur, as representing our views as well as his."

Mr H. Mackenzie replied : " Yon were certainly not consulted by me at the time of the banking legislation in regard to the proposed agreement between the two banks, and I have no knowledge of your having been consulted by anyone else. You made no representation to me, nor to my knowledge to anyone else, to have any account in which you were interested placed in any particular list. You were not, to the best of my knowledge, advised as to where or how it was intended to deal with any account. So far as I am aware, neither you nor any member of the Government was cognisant of the position in which any account was placed when taken over." I desire to mention this because I notice Mr Braund affidavit this morning refers to it, the suggestion being that I had, for the purpose of arranging my own private affairs, used my position in connection with the banking legislation.

Mr Young : The inference intended was that you were aware of the circumstance.

Mr Ward : I was not aware.

Mr Young: It was supposed, being in charge of the bill, that you were.

Mr Ward : The insinuation has been made that I was aware of it, but, as a matter of fact I was not. When first advised that the loss of the Farmers' Association were from £20,000 to £25,000 I had no idea, however, that the were going to run it to £65,000, and when they were ascertained to be £55,000 I took the responsibility upon my shoulders, believing the time that I should be able to provide for them. As a matter of fact, investigation showed that it was impossible to provide for them, but I was not aware of that at the time of the proposed agreement between the two banks. I was not consulted, and took no part whatever in it. I think it only fair to myself I should like to say, further, as it is a matter of importance to me, that 1 should think most people on very slight knowledge of the circumstances would at once see that if I had been consulted, and if I had been anxious to use my position or to bring pressure to bear in relation to my private affairs, it is highly improbable would have consented to one of the most difficult accounts being put on to the list to be repaid within three months, while almost every other account had three years to be repaid in Instead of having specially favourable treatment, I think my treatment the very reverse, and much worse than that extended to most the people whose affairs were dealt with.

Examined by Mr Haggitt, Mr Ward said: know the shareholders of the association pretty well, and my opinion is that the effect upon them and upon people not immediately connected with the association would be very serious if the association were put in liquidation I believe it would adversely and very material affect a number of people. It would also influence the produce market, because it would force on to the market the products of those connected with the association if pressure were brought to bear upon them.

Mr Haggitt: The effect of putting the company into liquidation, then, would extend page 19 pretty generally, I suppose, throughout the South Island ?

Mr Ward: In my opinion it would.

Tell us what your personal opinion is as to the offer made by Mr Smith and Mr Reid. Is it one which should be accepted?—As against liquidation my opinion is that it is—as against liquidation. It would take a long time to liquidate the Farmers' Association. Anyone who knows anything about country life and considers that 1750 settlers with their all are practically involved, will understand that liquidation would extend over a very considerable period, and I should say that it is impossible for anyone to tell what the losses might be.

Do you think that many people who would be ruined by the company going into liquidation will be able to pull through if the association were carried on in another way ?—There are many settlers who otherwise would be ruined who unquestionably would be able to pull through by arrangement with the association under reconstruction

Mr MacGregor : You tell us you have nothing to gain from the purchase ?—No.

Why is it you say " I have used my best efforts and all my influence with my friends to bring about the offer made by Messrs Alfred Lee Smith and J. B. Reid to the official liquidators of the colonial Bank" ?—I would answer that by asking you another question. Why is it I have paid everything I have got, and which I was not called upon to pay, in support of the association for the last year or two ? It was with a view of preventing disaster to many settlers, and I think I was morally bound to use both my own influence and that of my friends to keep the association going in the interests of the people.

But why should you use your influence to get your friends to make an offer you say you have no interest in ?—Because I did not want the association to go down.

It has nothing to do with the balance sheets put forward by the J. G. Ward Association ?—Nothing whatever. I want as far as I possibly can to see that a number of people whose future to a large extent is involved are not ruined. I want to stand by them if I can, and I cannot do anything myself in the way of money guarantees. I think they would be helped by that offer, and if the offer is not accepted the association will go into liquidation.

And you would go through the court ?—I should say the J. G. Ward Association would have to go into liquidation, and I should have to accept the inevitable myself.

Why should Mr Ward's friends give assistance if not to assist Mr Ward—that is what I want to know ?—You may as well ask me why a great many people should be prevented from insolvency. I believe such a disastrous one would effect the colony as a whole.

Mr Young : Do you think that in every case it is better people should be bolstered up than that they should go bankrupt ?—I did not say so; but I think that if compelling people to go bankrupt means the rain of other people it is desirable to prevent that if possible.