The Express.
London, England, 1864-12-24 00:00:00

THE UNITY BANK FRAUDS.

The case in which Joeeph Wakefield Terry, the
manager, and Thomas I.lurch, the secretary of the Unity
Joint-Stock Banking Company, were charged with having
knowingly and wilfully prepared and circulated a false be.
lame-sheet of the Weirs of the said bank, with intent to de-
fraud the members and shareholders, was yesterdny rammed
before the Lord Mayor at the Mansion-house.
Mr. Lewis, jun., appeared to cooduct the prosecutios ;
Mr. Sleigh, iostructed by Mr. Wateoo, of Gnus-.hest,
appeared for the deendant Terry; Mr. Metcalfe, instructed
by Mr. Wootner, jun., append for Burch; and Mr. Hum-
*Toys was again preeent to give any information on the
pert of the directors.

George Lewis Phipps Eyre was sworn, and said he was •
solicitor carrying on business at 1, John-street, Bedford.
row, and • member of the firm of Eyre and Lawson. At
the formation of the Unity Bank be was applied to to
become a director of the institution , and he joined the
board, and bad been a greet loser. The defendant Tiny
was tint sceountant to the bank, and was appointed on
the 20th December, 1855, during the formation of
the bank, and about six months before the beak was
opened. Be had the highest character from Messrs.
Jones Lord and Co., in whose service he had been
seventeen years. Terry was appointed manager in August,
1857, upon the retirement of Mr. Chambers. Is Jape,
1857, he bad • conversation with Terry in the board-rams,
in the presence of the directors. One of the matters in
which Mr. Chambers was considered inefficient war in
reference to an account of a person named Gregory, to
whom Mr. Chambers bad lent 1,0001. without security, and
to balance the books the sum of 1,000/. was entered io the
each article book and included in the eash balance for some
time, Gregory having in facile( ttheootintry. Upou that OW ing
to the directors' knowledge, Terry was summoned before
OH board, and he was asked to explain the irregularity of
that sum appearing in the oash•article book, which was
thea brought before the board. The item was pointed out
to him, and he explained, in the presence of the maoager,
that it wan an irregularity, and Unitises him (Mr. Eyre)
'great confidence in him for his frankneea. After the
opening of the London sod Middlesex Bank, Lord Tor-
! Unison, who was the chairman, expressed his confidence in
Mr. Terry.
Mr. Lewis observed that be did not know whore to dad
Lord Torrington.
Mr. Humphreys-11e is at Windsor Castle.
Wither contiourid—Burch was appointed as clerk in 1858,
and was appointed secretary in 1858, bet was Dot formally
annotated until January, 1860. Butch prepared the report
Ito the shareholders in June. 1858, arid witness produced •
manuscript draft io Batch's handwriting. Ou the Pith
January, 1858, at a board meeting, it waa resolved to adopt
a suggestion made by Mr. Eyre to appoint a secretary,
athe manager bad, previous to the date of the
resolution, had to perform the duties of manager, secretary,
and accountant, and that the duties of the secretery
be to attend the board of directors and tooter the minutes,
to prepare the half-yearly reports, to write all lettere of im-
portance as dictated by the court, to take the management
of the abate capital, keep the transfer books and issue
warrants for dividends, and some otherdutee, and, in order
that the directors might have easy access to all scarves of
information, to enable them to control the entire opera-
tions of the bank, and their being acquainted with the daily
, that the secretary should have to be provided
E;otl.gbrirmanager, in order to bring before the committee or
court, statement of customers daily balanese, allowing in
juxtaposition the amount under discount, se., a list of
lbills discounted the previous day or since the last court or
committee • statement of loans renewed or for approval,
or applications for loans for the consideration of the directors;
• general daily baleoce-chest, and the ash-book, or any
other cash, or soy other book, which the secretary might
require for the directors' inspection.
Witness said those were his views at the tin:e for the
fullest information being given to the directors' soil tt was
only upon the condition of that resolution bsiciearrical that
he would baye taken his seat again at the )olirgL
. .

The Lord Mayor mid that wee a very different version of
the duties of secretary to that Mr. Sykes bad gives. He
wrote a letter to the directors to June, 1857, drawing sites-
Um) to the position of the book. Oa that letter a com-
mittee of abarebolden was appointed to investigate the
Whin. Me resumed his oat at the board os the 21th of
Jane. 185 T.
The Lord Mayor asked Mr. Eyre bow molly thane he had
L the beak.

Mr. Eyre said be bad et that tints 40. Va.fortunately be
increased than afterwards.

Witaem resumed, and said hie attention** anti also his
brother directors wee cowslips.. They always met twice a
week, sad, besides that, use or other of the directors was
daily at the bank. One director wee io the habit, periodi-
wally, of going to the west brooch. It wse Burch's duty to
read out to the directors the list of uncleared articles from
the cult article book. The item 1,0931. was a draft of
Sterne's, which be found iu the mob article book, rod which
appeared every day for about twelve months. He never
heard Burch read over that item to the directors. Oa *a

average be thought Barth did not read more than five and
twenty items from the cash article book. In the book pro-
duced there were over three hundred. He (witness) had no
idea that dishotionned cheques were entered in that book.
Burch had mentioned that item to the directors. A
large sum was always a mstter of enquiry ; sod since the
=arnica' 1,000/. witness had alluded to, he had paid parti-j
eider attention to the reading of that book. He undoubtedly
considered that Burch reed every itew,and he never eternised
the bills after Burch had reed them. He bad great confidence
in Burch. On the27tb ofJune, 1662, there were dishonoured
is that book, bills to the amount of 16,265/. included in a
total of 18,1001. purporting to be the cash in hand on that
day. and be (Mr. Eyre) bed not the slightest knowledge
that 16.0001. out of 18,000/. coasisted of dishonoured bills.
They appeared in the book as cash articles. Bauch sever
told him that there wits that amount of dishonoured bills I
amongst the cash. lie bad so knowledge of the beak at
that time, except such knowledge as he obtained from the
information of the defendants. The street of the rules he
had suggested, if carried out properly, would have been
to place the true Mete of affairs before the directors.
The detailed balance-sheet produced, which showed the
amount of past due bills, was sever shows to him by
, either of the defendants. He saw the manuscript
balancetheet, correspoodieg with the one printed,
and circulated. The two manuscript balance.theets
were is the handwriting of Burch. The balance-
sheet was published in September, 1662. It would
be the ,duly of Burch to send the balauce-theet to be
printed, and also to send it to the shareholders. Just before
the publishing of that bobcat-sheet he (Mr. Eyre) put-
chased 20 shares. They belonged to the executors of a
deceased director, and he purchased them for 201. 10s. per
share. Out of the '2O/. 10s. be received beeklo/. per share,
which be transferred to the capital of thO London awl Mid-
dletiex Bank, and which be had alao lost, except 3/. per ,
share, which he had received iron. the liquidators of the
Unity Bank. With regard to the 640/. which he traesferred
to the London and Middlesex upon the faith of the balance-
'sheet be bad Sot received a farthing. About June, 1962,
he bad a conversation with the defendants. end they led him
to believe that with the 10,000/. from the London end
Middlesex the shares would yield 301. each. He bellowed
that under new direction and management, and under a new
name, without the odium which was attached to the Unity,
it would be a good speculation.
By the Lord Mayor—At that tiros he had not arnartained
the &mount of the dishorionred hill.. He did not know until
la twelvemonth afterwards the extent of the dishonoured
bills, and not until Mr. Howell's investigation the fell
exteet of the lessee. There were directions given to the
defendants by Mr. Alderman Medd to prepare a truthful
and bona fide balance-sheet. He did not know the item
' 207,0101. included bilks and cheques that bad been dis-
honoured years and years before. He believed it rem-
; seeted the lore tide assets of the bank.

The Lord Slsyor —The actual value.
Witness—The actual value accordiag to the manager's
valuation.

In cootinuation witness said it was not by bin direction
that forged bills were included. A forged bill of a cus-
tomer named Madams, for 1,44/., was included in the good
assets. That bill appeared by the =imam to have beau
ordered to be debited to the profit and loss account as irre-
ooverahly lost. Mr. Alderman Meat held about a
fifth of the capital of the bank In shares, and was
very constant in his attendance at the bank, and in
consequence of that witness was not so constoot.
On the 251 L November, 186 i, at a board meeting, resolu-
tions were pared, " That the thanks of the board, collie-
tively and iodivislually. should be presented to thy manager,
secretary, district manager, and staff, for their untiring
seal and ability and servicas rendered to the directors and
shareholders on trail/fernsg the business of the bank to the
London andlliddlesex and on winding up its alfairaitod that
360/. should be awarded and forthwith paid to the manager,
emestary, and clerks for their services during the amalgama-
tion with the Landau and Middlesex (Limited), and for their
put and onatiouing services in winding up the affairs of the
bank ; and alno that a farther sum of 250 f. be
awarded and paid them when such services wore
completed on the condoners of the wiedint up."
Mr. Terry's salary was on his first appointment 7501. •
year, which was afterwards increased to I,oon/. At the
time that resolution was pared he had maids& of what had
sine* come to his knowledge in respect to the item of
207,f00/. Is December, 184 • resolution was passed, di-
recting Burch to prepare • list of defaulters to the Unity
Bank. That list was promoted to the board. The debt of
Iftwoos for 2,1001. was sot in that list; err was Imweath•ll's

for 4,6351.; Banyard's, for 5,6001.; S. H. Bond's, for 1,4001.;
and John Harris's, for 1,3604 Oa the 3011 January, 1863, •
resolution assured that the suresary should prepare a
statement showing the financial position of the bank, and
present it at the next meeting. It appeared by the mi-
nutes that one was presented. In March, 1863, there was a
resolution that an alphabetical list of debtors should be
prepared. The book produced, which was principally in
Butch's writing, but which had some of Terry's
figures in it, was the book produced at the meet.
lag. (The book labelled good, bed, and doubtful debts, be-
im. alluded to.) He bed no reoollection of the debts of
Starnes and the others he had alluded to being included in
that book and which alone amounted to nearly 17,0004
He had not the slightest ides that those amounts were
owing to the took. On the morning of the 9th Feb., 1864, he
was is the hoard room of the Loudon and Middle's: Bank.
He saw Mr. Alderman Mechi there, and he had a piece of
paper in his hand with a list of debtors, and he (witness)
noticed the names of Sterne sod Loweothall and asked
Burch, who was present, how it was they had not been
mentioned before, as he did not remember seeing them
before. Burch said be would prefer that Mr. Terry should
answer the question, and he left the room, after which Terry
entered, and he asked him how it was that Stern. and
Lowenthall were debtors to the bank, of which the directors
knew nothing. Terry said they were debtors, and admitted
it had been concealed; bat said he had done so with
an object in doing it. He (T ). said by intro-
; ducing Lowenthal' to the London end x he should
be able to reduce the debt to the Unity. Be (witness) was
I a director of the London sad Middlesex and he knew
Lowerithall was baying mousy from that hail ; but he had
oot at that time been made aware of the fact that he owed
money to the Unity, or he should not have given his sanction
to hie having money from the London and Middlesex. He
had no knowledge of the release given to &award in respect
to this 5,6001., and Terry would have no authority fouler's*
that debt without the consent of the board. lie had no
relates of the assignment and miaow of 10,(X)01. of Furies.
Those accounts were constantly discussed by the board.
Burch was sure to have been present. He bad spoken to
Burch about Lowenthall when that party's bills were before
the board, and he said it was • good account, and the accep-
tances were genuioe, although the amounts were not small.
He bad no idea that the whole of Loweathall's acceptances
were given up, and the worthless paper of Irunsides taken
in exthauge.
The Lord Mayor—To have something to represent the
amount. . _

Mr. Lewis—Jest so.
Witness continued—He slid not know that Iron/ides
bills bad been struck out to avoid presentation. At the
time Loweuthall was a customer at the London and Mid-
dlesex neither of the defendants said auytbi•g in respect
to Lowenthall's debt to the Unity. Burch was naked in
reference to Mr. Loweuthall's bills what sort of • cus-
tomer he was' and be nail the bills were paid in esah.
Lowenthall's debt to the Londe* and Middlesex was ori-
ginally 7,000/., of which 4,0001. was entirely lost. When
the balance was published in June, 1862, showing the bank
to be solvent and capable of paying • dividend, be had not
the slightest suspicion that it was otherwise, or that it wee
not • correct statement of the affairs. He (witness) had
no hand in preparing that balance-sheet. It was left to the
two defendants.

- -
Cross-examined by Mr. Sleigh—lle believed, according to
the terms of the report, there was a surplus of 3,2151. is.
after paying expenses.
Mr. Sleigh drew Mr. Ayre's attention to his letter of Jane,
1ft.57, in which be stated iu reference to the atfsire of the
bask, be Waisted that the lossee daring the part half-year
bad bees 9.0001., and that out of the 150,01101. coital, only
15,0001. was available for banking purposes, the rest having
been lost, and asked whether be believed that between that
and September, 1862, the bank had so far regained its losses
as to have a surplus of 3,0001!
Mr. Ayre replied that be did not say the money wee
lost, but that it was unavailable, Mr. Chambers, the former
manager, having at that time a large aces oat in loans, and
said a call of had been used.. _ _

Mr. Sleigh repeated his question. and Mr. Ayr. said
he believed the statement set forth in the balance-sheet
that there was 3.001 H. divisible, and did sot think at
the time that the defendant would have made such a state-
ment if it were untrue.

-11e-inne.-;;;;Th;n again adjourned, the defendants
being admitted to bail an Wore. inn total Rua al 8,0001.