The Press.
London, England, 1857-05-02 00:00:00

TM: ROYAL BRITISH BANK.

THE examinations continue. Messrs. Chan Aler and
Page, the auditors, Mr. Craufurd, the late manager,
Mr. Humphrey Brown, Mr. Gillott, and other of the
directors have been examined this week. The tenor
of Mr. Page's evidence was to the effect that in pre-
paring the audit he had believed everything told him
by Mr. Craufurd, and had been deceived. He merely
looked at the. totals and retied upon Mr. Craufurd's
statements, without examining the ledger :
Commissioner: You seem to throw it all upon Mr.
Crawford. Why did you not look at the vouchers ?
Witness: I took Craufurd's statement as correct.
Commissioner: Then what was the use of the audit?
You do not appear to have looked at the vouchers or at the
figures in the ledger.
Witness explained that the audit was a general audit, and
not interfering in the management.

About five hours were usually occupied in the
audit. Mr. Page had no notion that 95,0001. of past-
due bills were not "assets " as represented by Crau-
furd, nor even that Brown's overdrawn account of
37,5921., Cameron's :30,0601., or the 54,049/. sunk in
the Welsh works, were not available assets.
Mr. Thomas Chandler, the other auditor, appears
to be a gentleman of varied accomplishments. He
is a surgeon, a brickmaker, a director of the Wandle
Water Company, of an Australian Chartered Company,
and of a Brick and Tile Company. Mr. Chandler's
evidence was precisely similar to Mr. Page's.
The assets were all represented by Craufurd as good.
Loan account, No. 2, witness described to the same
effect represented in the ledger as " bills continued
with collateral security." Never heard of Brown's
overdrawn account at the time. Craufurd made the
same representations to him substantially as to Page,
and the real facts were found pretty much as Page
had described them. Never heard of the Welsh
works until after the bank failure, although 120,0001.
were sunk in them. tip to the failure of the bank
believed it to be solvent. Never heard of the debts
of Cochrane, Gwynne, Oliver, or the others.
Mr. Craufurd, the late manager and previous ac-
countant, when asked why, as accountant, he had
made false representations to the auditors, re-
plied :
It was the form given to me by my predecessor, and
drawn up by Cameron. I could not swear to the pre-
cise words I told Mr. Page. I cannot recollect what I said
to Page about London bills discounted with security,
though I will not swear positively in contradiction to what
he says. Cameron gave me the titles of the accounts in his
own handwriting or pencilling. I daresay that is among
the papers.
Solicitor : As " London bills, No. 5," was calculated to
deceive the auditors, why did you not tell them so?
Witness: You are assuming they were denied.
Solicitor: You have said so already.
Witness : I could not have done so without referring to
my superiors.

-SoliCitor : Then, you were the vehicle of a falsehood, you
admit?

Witness: Page said once, " The audit is, after all, a mere
farce." I said, " I agree with you that it is a farce—nothing
better."

Solicitor: Why did you consent to be the vehicle of a
falsehood?

Witness: It was master and clerk; I obeyed my instruc•
tions. In April, 1833, I knew there were 40,0001. in the
past•due account and past•due bills.
Solicitor : Was it not the design that the creditcrs of the
bank should believe the 95,0001. past due bills were good
assets ?
Witness : That was so.
Solicitor : When you knew that 1:,0001. at least was bad,
why did you not tell them ?
Witness : I obeyed my instructions.
Solicitor : Were you not the servant of the company—of
the directors ?

Witness: J considered myself as responsible to Cameron,
and I was told by Alderman Kennedy I must look to
Cameron, who told me once, when I spoke to a director, he
would dismiss me if I did so again.

Mr. Craufurd further admitted that batween 8,000/.
and 9,0001. of the assets of the bank consisted of
their own shares. The auditors did not know this
and he did not tell them. With respect to the sus-
pense account "he gave the auditors tho best account
he could." He did not tell them of the Welsh
works being included in the suspense account !or
31,(x)01.:--
Solicitor : Were not the Welsh works the ruin of the
bank ?

Witness: Undoubtedly.
Solicitor : Yet you never told the auditors or the etiStenee
of the Welsh mines and the advsuee of 140,0006. ?

431

Witness : I did not volunteer any statement on the
subject. I thought Page kncw about the Welsh works.
The Welsh works were the largest customer of the bulk.
Solicitor: How can you consider an investment a cus-
tomer ; and if so, why did you not tell the auditors so ?
Witness : Because they were told that they had no right
to look into the securities.
The directors appear to have made the best of
their bargain :

In some instances the directors helped themselves to
their salary in the middle of the year. The salary was
voted by the shareholders fot the past year at the annual
meeting. When the directors drew out money, the
amount was put down to the suspense account. The
money which the directors took us their salary before it
was due, being put down in the suspense account, actually
appeared as the assets of the bank. An account was made
up on the 3rd September, IMO, by me, which showed the
assets were 30,0001. less than their liabilities.
The evidence of this witness concluded with an ex-
position of the art of cooking accounts :
Booker and Co. recovered damages against the bank-
-1601. debt and costa—but it wis set down as an asset to
the last, and interest may have been counted on it. It is
a debtor balance. I suppose the bank thought they had
a claim against I find that six per cent. irtereat
was charged on that sum, and added to the profits of the
bank. That was not commenced in my time, and I do
not know the history of the transaction.

By this ingenious process it will be seen that what
under ordinary circumstances would have been set
down as lost money was not only made an asset of
the bank, but kept year after year, from 1853, as a
profitable asset—sometimes paying interest at six
per cent.; so that, instead of a sum of 1601. lost by
the bank in 1853, it actually appeared in the bank
books in 1857 as principal and interest, 1741.—the
money having been years before in Messrs. Bookers'
pockets.

In connection with this gentleman, we may call
attention to a circular issued by him on the 11th of
August, IMO, a few days previous to the bank
closing :

Let me, therefore (concluded this circular), beg you at
once, if you have not already done so, to bring your own
account and that of every friend you can influence to your
own bank, where we fully believe the bualuess facilities
afforded are equal to any other joint-stock bank, and the
benefit* which will thus directly accrue to yourself as a
shareholder must be most apparent.—l am sir, your
obedient servant,

THOS. CRAUFURD, General Manager.
With regard to Mr. Humphrey Brown, the history
of his connection with the bank is briefly told. He
became a director on the 4th of February, 1853, and
opened an account by a cash payment of 18/. 4:.;
taking up the twenty shares necessary for his quali-
fication by a note of hand for 1,0001., which was
never paid, and effecting a small loan on his own
account 'or 2,000/. This was in February, 1833. By
the 2nd of May that year. a successim of similar
small loans had brought the total debt to 9,0001., and
having once reached this point it went on at a rapidly
accelerating ratio. By the end of 1854 it had reached
some 30,0001. In May, 1855, Cameron, on his re-
turn to the bank after a three months' illness, found
that it had been increased to upwards of 74,0001. In
November, 1855, it had reached its maximum, and
then stood at 77,698/.

SLR CHARLES Fox AND Ma. HENDERSON appeared
upon their last examination before Mr•. Commissioner
Balguy in the Birmingham District Court of Bank-
ruptcy this week. After a conversation between the
solicitors and Commissioner the bankrnp•s were
passed, and the certificate meeting was f xed for the
27th of July. In the meantime (three months) the
creditors and all other parties will have the opportu-
nity of making all necessary inquiries into the affairs
of the bankruptcy and be prepared to lay the result
before the Commissioner on that occasion.

A NEWSPAPER AGENT, one William Cockburn, was
brought before the Lord Mayor, on Tuesday, charged
with having written, printed, and published, certain
libels upon the "Bank of London," in a publication
called the Joint-stock Companies' Journal. Mr.
Bodkin appeared for the bank, and, having stated -the
case at length, read extracts from an article pub..
lished on the 18th of April last, which, on the au-
thority of a recent article in the Atlas newspaper,
charged the directors with helping themselves to the
funds of the bank. Boys were hired to stand with
placards at the bank doors, and to offer for sale
copies of the journal containing this libellous charge.
The defendant denied that he had anything to do
with the paper beyond being the advertisement agent.
The case was remanded. An application at the
Court of Queen's Bench for a rule nisi for criminal
information was granted on Thursday by Lord
Campbell.
WALTER RAMER'S LIFE POLICY of 1f2,000/, is about
to become a subject of litigation. 111 r. Smith, the
solicitor of the Palmer family, has applied to the
Bankruptcy Court for leave to bring an action against
the assignees of Walter Palmer's bankruptcy, who
claim the money. The case will be heath heat •eek
before Mr. Commissioner Balguy.