The Press.
London, England, 1857-03-14 00:00:00

TILE ROYAL BRITISH BANK.

- _
Mn. EsnAir.r, late Governor of the Royal British
Bank, underwent his first examination at the Bank-
ruptcy Court on Wednesday last. Mr. Linklater
appeared for the assignees; Mr. Nenning tor Mr.
Esdaile. The examination resulted id some ourious
disclosures. Mr. Esdaile admitted that upon the
opening of the bank on Nov. 19, 1849, of the 50,0001.
subscribed capital to be paid up, according to Act of
Parliament, only 20,2501. were actually paid up in cash
and lodged to the credit of the British Bank in the
Pauli of England, He had no recollection as to the

251

source from which the sums of 5,685/. and 3,1101.—
paid into the credit of the account on the 20th and
21st of November, 1849—were derived. He had no
recollection whether loans had been obtained by
the directors to swell their account at the bank : his
mind was " a perfect blank " upon this point. Upon
the 29th of October previously to commencing busi-
ness the directors made a loan to Sir James.WKen-
zie of 7,5001. They also divided 1,1001. among
themselves for preliminary expenses without enter-
ing that sum in the books of the bank. Of this
1,1001. Mr.J. M'Gregor, the governor, took 500/.,while
600/. were divided among the directors. He admitted
that the directors, contrary to Act of Parliament,
had, without leave of the Privy Council, repaid
deposits to certain depositors, who refused to sign
the deed of constitution. When elected governor of
the bank, in February, 1855, he investigated the
accounts, and found that, besides himself, Mr.
Humphrey Brown, Mr. M'Gregor, Mr. Cameron,
Mr. Coppins, and Mr. Walton had opened ac-
counts with the bank. Mr. Cameron owed upwards
of 15,0001. on his discount account. Mr. Mullen',
the solicitor, who died in 1853, was also in debt to
the bank 13,0001. In reply as to what was
the meaning of the entry in Mr. Cameron's private
ledger, " May 6. To the credit of the account
of H. T. Cameron, Esq., E. Esdaile, 500/.," witness
explained that in the August previous Mr. Cameron
had lent him, on his promissory note, from the
monies of the bank, 5)0l. It was a "purely private
transaction," and was not known to the directors till
he, Mr. Esdaile, as governor, examined the accounts
in February, 1855. It was the only transaction
witness ever had with Mr. Cameron, and arose from
a resolution of the board that the directors should
double their qualification. So that, in point of fact, the
application of the 5001. borrowed from the bank was to
pay to the bank the same amount for ten new shares.
From Feb., '53 to June, '5O, witness permitted
Cameron, though indebted to the bank 8001. on his
drawing account, and 15,0001. on his discount ac-
count, still further to overdraw his account to the
extent of 3,9571., the whole amount being lent upon
Cameron's personal security. Witness was aware
that the bank had no power to advance money en
its own shares, but as Cameron, Chandler, Humphrey
Brown, M'Gregor, and others held these shares, the
bank took them as "collateral securities." For
instance, Mr. Chandler, one of the auditors of the
bank, wanted to borrow 8501. Mr. Cameron leut
him the money from the bank, on his promissory note,
taking his nineteen bank shares as a " collateral
security." The subject of the Welsh mines was then
gone into at some length, Mr. Unklater pressing
with pertinacity the point whetbe.• Mr. Esdaile con-
sidered that he and the directors in June, 1856, were
making an honest statement to the shareholders in
setting down as assets the 120,0001. expended and
lost in the Welsh property. Witness refused to
reply directly to this question, but admitted that the
bank at that date feared that they would lose be-
tween 50,0001. and 70,0001.
Witness afterwards admitted that in December,
1854, in June and December, 1855, and June, 1856,
if they had taken off from the assets of the bank
those debts that were bad, and only those that were
bad, they ought not to have divided one shilling of
profit among the shareholders :

- Were not the same circumstances known to your fellow-
directors ?—1 presume the same impressions were present
to their minds. Ido not like to speak for others.
I ask you whether, before the completion of the
accounts ending the 30th of June, 1656, there were not
frequent consultations between yourself and your fellow-
directors, whether you ought or ought not to misrepresent
the affairs of the bank ?—Whether we ought or not to
make a dividend there was.

I ask you whether there were not discussions among
your body before the accounts were closed up to the end
of June, 1856, as to the propriety of setting forth the bad
and doubtful debts in a different manner ?—No, I have no
recollection of it at all.

Witness, after much pressing, also admitted that by
the 20th of June, 1k55, the bank was insolvent :
Did you not know in June, 18.55, that the whole
100,0001. was lost? That is my question to you, and I
will prove it ?—I was not prepared to say that 10:fore Mr.
Coleman's statements were, iu their placed
before us.

Did you believe that the bank was solvent then ? No.
have already a.lmitted, subject to my own explanation,
that we did not at that time regard it as solvent.
I)o I now understand you to say that you beli:ved the
original paid-up capital of 50,000/. had been lost, and that
the bank was insolvent in June, 1855 ?—I think I must
admit as much as that.

to say that, including the
from that time dcwn to the
on dividing the dividends in
son believed the whole first
C.
dividend in the shape of
gh you knew the whole
1.0001. bed been lost ?
awned till V{e4tgOs7

Then, do I understand yon to
account of June, 1855, and from
closing of the bank, you went on d
the shape of profits, although you
paid•up capital had gone ?—Yes.
You went on declaring a divi
profit to the shareholders, althoug
of the original paid•up capital of CA
We surmised it.
The case was shortly oftcr adjoi
next.