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 Nothing further transpired until Monday, June 25th, when there was disclosed to Sir Joseph Ward, for the first time, the fact that the bank was in such a serious position that the State alone could save it from bankruptcy, and that unless steps were taken at once, its career would be suddenly stopped.

The information was imparted at a private interview by Mr. John Murray, the bank’s representative, and, at his request, Sir Joseph placed the whole position, as far as it had been disclosed to him, before Mr. Seddon.

Both Sir Joseph and Mr. Seddon realised at once the gravity of the crisis. They discussed the matter for hours, and endeavoured to look at it from all points. They admitted, without any cavilling, that the bank had to be saved if it could be saved; but they also stood convinced that it was not the function of the Government to sacrifice the country to any extent whatever for the sake of an institution which was conducted in the interests of private persons, and which had brought at least a large proportion of its trouble upon itself by its bad management.

On the day following the disclosures to Sir Joseph, Mr. Seddon and he had a conference with Mr. Murray, who told the Ministers in plain language that, unless the Government came to the rescue, the bank would have to close its doors in a few days. He admitted that, in spite of the sound position apparently held by the bank, as disclosed by the balance-sheet, there was absolutely no hope of its being able to carry on beyond the following Monday. The bank, owing, it claimed, to low prices, bad seasons, and other causes, was quite unable to declare a dividend to shareholders at the approaching annual meeting, and the result would be that the bank must close. Even then, in spite of strenuous efforts to collect resources, the bank’s executive found the utmost difficulty in maintaining the gold reserve prescribed by law. The very low price of the bank shares in the market was itself evidence of distrust that might at any moment develop into a panic.

No one doubted that the closing of the bank would be a calamity. The institution was bound up with the colony in many ways. The shadow of the bank was over the whole land.