✨ Financial Dispute Analysis
v.
The reasons given by the Directors for refusing to refund the sum charged for interest from 20th March to 1st June are:—
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That the Bank in negotiating the Bill took credit for eight months’ interest, which period “allowed for transmission of the Bill to London, its currency there, and the return of the proceeds to the Colony.”
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That “the eight months expired 14th February, 1868, and the Bill having been returned unpaid, interest was fairly chargeable on the amount until the first of June, when funds were provided for it.”
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“The agreement with the General Government in no way affected matters of account between the Provincial Government and the Bank; but it cancelled a stipulation that the Draft should be paid in London,” and made it payable in the Colony.*
As to the first point, the discount charged was £2750. If this sum was intended to represent eight months’ interest, that period was no doubt adopted because the Bill would take about two months to reach London, and would mature six months afterwards. There could be no proceeds to return to the Colony, because the Government had already received those proceeds. Eight months’ interest is therefore consistent with the intention both of the Bank and of the Government that the Bill should be paid in London, and it is altogether inconsistent with the supposition that either the Bank or the Government intended that it should come back to the Colony for payment.
The second paragraph is inaccurate throughout.
(a) The Bill was dated 6th July, 1867. Eight months from that date would be the 6th of March or thereabouts. But whenever the period of eight months may have expired, the Bill matured on the 29th February.†
(b) The Bill was not returned unpaid when it fell due nor, so far as is known has it been returned since. Application for it was made to the Bank at Christchurch when it came to charge on the Provincial Account, and the answer given was that it had not been sent from London.
(c) Interest was undoubtedly fairly chargeable on the Bill until funds had been provided for it; but those funds were provided, not, as Mr. Murdoch states, on the 1st of June, but on the 20th of March previous.
The meaning of the third paragraph is not clear, but whatever it may be, it will be obvious that the transactions proceeded throughout on the assumption that the Bill would be met in London. There is not in the correspondence a single word which indicates that either the Bank or the Government anticipated that it would
- Mr. Murdoch’s letter, January 7, 1870.
† Bank statement of particulars of Drafts.
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Canterbury Provincial Gazette 1871, No 30
✨ LLM interpretation of page content
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Claim by Provincial Government Against Bank of New Zealand
(continued from previous page)
💰 Finance & RevenueFinancial Dispute, Bank of New Zealand, Provincial Government, Interest Charges, Bill Negotiation, London Payment
- Mr. Murdoch