Canterbury Provincial Gazette – 1871 – No. 30

Page 189

✨ Financial Dispute Resolution

CLAIM BY THE PROVINCIAL GOVERNMENT AGAINST THE BANK
OF NEW ZEALAND : £800 0s. 2d.

On the 20th March, 1868, the Colonial Treasurer paid to the Bank of New
Zealand, London, to the credit of the Provincial Government of Canterbury,
£190,000.

The Bank held at that date in London an overdue Bill of Exchange, drawn by
the Provincial Treasurer of Canterbury on the Managing Director, London, for
£50,000. This Bill matured the 29th of the preceding month.

The London office did not then take payment of the overdue Bill, but remitted
the entire sum to the Colony. It is credited in the Provincial Treasurer’s account
at Christchurch on the 23rd June, and the account is then charged with the
£50,000 Bill and interest to the 1st of June, £1,019 3s 9d.

The Superintendent objects that the Bank should not have charged interest on
this Bill after the date at which the Government account was put in funds in
London, viz., March 20. That the Bank should have remitted to the Colony, not
the entire sum of £190,000, but the balance after taking payment of the Bill and
interest from due date to the 20th March and he has requested that the amount
charged for interest from 20th March to the 1st June, £800 0s 2d, might be
refunded. The Bank declines to refund it.

The facts connected with the making of the Bills are as follows:—

In December, 1866, the Provincial Treasurer’s account with the Bank was over-
drawn, and the Government had £300,000 of Debentures in the possession of the
Bank in London. The Manager at Christchurch intimates that "the Bank will
be prepared to allow the Government a margin of £80,000; the account to be
reduced to £50,000 by the 15th June next ensuing; if the account should not be
so reduced, the Government to draw on the London office of the Bank at ninety
days’ sight for the sum necessary to place the account at £50,000; and should such
Draft not be met at maturity, nor within three months thereafter, the Bank to be
at liberty to realise Debentures now in their hands at the best price obtainable."

These terms were accepted by the Government.

In July, 1867, the Manager advises that overdraft is now £90,000, and asks
for a set of Bills on the Agent of the Province at ninety days for £40,000.

The Provincial Secretary calls attention to the fact of agreement providing for
Drafts being on London office of the Bank not on English Agent, says Government