Northern Times.
Liverpool, Merseyside, England, 1859-12-30 00:00:00

A SHAREHOLDER—Can you give the full amoant ?

Mr. BnAmrny-Moonn—l have not got the total
amount. Weil, I think, gentlemen, I'llavegiven you a
very tolerable insight into 'the affairs of the bank, and
how they have been managed--(applause)—and that
you will agree with me that nothing could be worse, and
-that no other result than the termination which came
...upon us could have been expected by any one who was
acquainted with the facts I have detailed to you.
(Applause.) It will be in the recollection of „the
• meeting, that last year indignation was expressed
by more than one gentleman in this room at my
making use of the words " delinquent dii•ectors."
(Applause.) Now, whatever unOct be.`the appro-
priateness or inappropriateness ors that term twelve
months ago, we have- , since then seen a trial
in a court of justice, and .I think that what occurred
there will not only sufficiently justify the expression I
.made use of, but will also show you that the liquidators
have been in possession •of -information which, Ithink;•
would have warranted them in.taking.initiatory measures
against the directors. (Applause.) • I should be sorry
to apply or to use any harsh • term towaris any gentle-
men, but there was evidently a manifestation of 'feeling
to put me down on that occasion.' (Hear, hear.) The
indignation was strong and warmly expreSsed ; and I
appeal to van now, gentlemen, whether, after the
statements I • have laid before 'yen—Whether the ap-
plication of the term "delinquent directors": is not
a proper, nay, even a mild one. (Hear, hear.) -In sup-
port'ot this, might quote from the LOrd Chief Justice, .
when certain eharges Were'made in an appeal which was
made to-him. He says this— The declaration imputes.
to-him that he- -knowingly.eencerred. in a report which
he knew to be untrue, and that be did so-with aa in-
tention of deeeiVing. I am sorry to, say i think that in
this case that has been proved acrainSt_hlat.'.
lordship goes on to sayethat, " this declalation is not
agaiast him for concurring and. chlyising merely, bat it is
also for repreeenting that a dividend was paid out of the
profits, and that- the bank was a situation
safely to make such dividend. Eye and '.bye
he was asked was that-the. -time state of the
affairs of thTbank..: decided-Vit. was not. Upon
that there is no dispute that that was incorrect—that it
was uiatrae." • Ho goes cn to say, '"Mr. Dixon by his
frankness had brought this upon himself. Still Mr.
Dixon is acting the part of a cautious'.and honest man."
(Applause.) He ralds,• " why did he not like it? (That
is the report.) It would alarm those who might be in-
clined to become shareholders;' they did not• like it
because it spoke ,he the truth tooplainly." The Lord.
Chief Justice goes On to say, "I- say the fair • inference
is this : that he concurs in it because'. he believed it
would-no-thilerm them ; 'that it could nOt-pnvent-people
continuing their deposits in the bank ; that it could not
prevent people baying shares in the hank: Is not that
a fraud ? (He means of course a 'legal fraud.)
Although he might believe that if the .hank went on
proverohsly, and made £,103,000 a year, ultiMately it
might prosper, add feral a • successfal speculation ?"
He then goes on to .show the, danger of the directors ;
and to that I wish to call the 'liquidators' attention, as
the chairman has..told us they see no;reasou to takeany
.other view than
and
one they took last year, about the
responsibility and liability of the directors, both in a
moral paint of view and also in a criminal point of view.
I have little doubt that the chairman has carefully read
those Inagatents,
.L.tiel the opinion of the judges who sat
on that occasion; mid I think the paragraph I am about.,
to read cannot. have escaped_bis attenti:en :—" In the
case of the directors of the British Bank, I had occasion
to lay down, I believe--and that was not considered as
a misdirection in .point 'of law - to the inry—that if
it was thesintention of the directors to publish What they
knew to be untrue, for the purpose of inducing persons .
'to hut shares- in the bank, that they were guilty of
-doing what was Wrong and might he indicted for a
conspiracy. Although-they. might have belieYed at the
time that by a successful career the bank might ulti-
mately be solvent, by publishing an untrue statement of
the condition of the' bank for the purpose of inducing
persons to become purchasers 'of shares and running the
risk'of the bank becoming bankrupt, that was what the
hw would.not allow, and those Who did so -were subject
'to both civil and criminal proctiedings." (Hear, hear.)
4s a matter of duty, .if I had filled the chair,
to exonerate mySelf I would have taken a
legal opinion upon it--to
exonerate myself from a
liability ao.feaeful. 'Because, when we,come to look at
the consequences, from the stoppage of.a hauls like this
'—the Misery, the ruin, that it has spread abroad—cheer,.
hearye-the inmates of lunatic asylums it his furnished,
and bow many it has sent to the'grave, and the widows
and orphans that have 'suffered 14 it,e(hear, hear)—it
is a tesponsibility I would ...not have incurred without
appealing to.the shareholders, or, at allevents, taking a
legal opinion upon it. (Applause.) Mr. Justice .Wigh t-
iaaan--I•will not troablc you with reading much of this
-"concurred entirely in the statements of its condition,
—(hear, hear)—which he knew at' the time - of the
report to be untrae,-, and which was untrue in fact."
-Now, what, was the report. ,-In point of fact it did not
contain a true report, which appears from the testimony
of gr.- Dixon himself; •in fact, onehhall of the capital
was irrecoverably' gone at that time. • He goes on
to say, "that Mr. Dixon, (these are his own words,) to
pLvent disastrous cbneeneenCes.to the bank, had eon-'
curred in a statement which he says in his own evidence
he knew to be false. Now, that is the whole gravamen
of the .charge; it is that he knew it to be Oilse."
And he then goes on to say-- He did what was
wrown_kuewing what was. right." I Can only say as
far as am pesonallyconcerhed, that I wish, with all
my heart, that„Mr. Dixon had been a direat3r'in 1852'
and. 1853. (Applause.) Because, I will say this, that
I do believe if he'had been a director,. that; so far froin
our being. the siuTerers that we now are, we should have
eseaped with little, or perhaps no loss at all ; and he
would have- been spared the position which he fell into:
by acqiiiesino.' with others in the report which was laid'
before us. As Mr. Justice Wightinan very properly
.observes—"l quite agree with the rest of the court
that up to a certain time the elhduct of Mr. Dixon
was net' honest,, but ieral.eeworthy" I give
him credit that., he intenued to do what was
right, and I shall have no hesitation in repeat-
Mg, that I wish he had been a director- at a much
earlier period.. Mr. Justice Hill concurred entirely in
the opinion of the other judges. The judge defines the
report as "a report published falsely, with the intention
to deceive." The--judges said "the jury had found the
report to be a false and. fraudulent one, and they saw no
reason for disturbing the verdict." Mr'. Chairman, I
am sure I need not tell you what a' vary painful task I
have undertaken' in making these statements to . the
shareholders ;• but, sir, I think it is due to them, and
due to the world, as a warning; that everything should
be made known, and the more publicity is <riven to
this matter the better it will be for all the °banking
establishments throughout the kingdom. I regret
that it should have fallen to me to make this statement,
but it does so happen that it has devolved upon rae, and
I have endeavoured to do it with as few remarks and
opinions of my own as I possibly can give. (llear, hear.)
T have confined myself to matters of face which have
come to our knowledge since we met here last year, by
an inquiry which we obtained at great cost and trouble,
and which you, sir, I think, might have given us with-
out any cost or trouble at all--(applause)---and I think,
after what I have quoted to yon from the different judges
in the case, that if you have not already perceived
you ll.new percive and se the ncessity of
in vinwidication e of yourself, e
and to e
exonerate yourselfy
from responsibility, of taking some opinion -and some
advice, and consulting the shareholders about initiatory
proceedings being taken. (Hear, hear.) I wish to
repeat that the statements I make I do not make on
my own responsibility, but they are taken from :the
report of the examination of the bank books made by

the official reporter, and which report has been sub-
mitted, before it has been returned to our hands, to the
inspection of the Master of the Rolls; and inasmuch as
he saw no ehjeetion to that report being confided to the
shareholders, I think I am amply jastlfied,- and those
who have acted with me are justified, in bringing this
knowledge before the body of the shareholders at large ;
and if it had been so intended that the report should not
be made public, •and the shareholders have the benefit
of such information as it might convey, it would then
have been returned to the liquidators to be kept secret
by them, and' entombed, as everything else has been,
from LI3 up to this 'day. I mast apologise for the great
length of time I have occupied this meeting ; but I feel,
at the same time, that although I have .occupied a large
share of time, it has been a comparatively small space
compared- with the matter the proprietors would like
to be informed about; and it is, as I told you at the
beginning, only a skeleton of the business: (Applause.).
- The 011.1/RMAN said that he had allowed Mr. Bramley-
Moore to go on with the whole of his statement,
although he considered it irrelavent to the-objects of
the meeting.. All the information which he desired had
bebn given to him by order of the Master of the Rolls,
and the lieuidatore, so far from withho'ding any infor-
mation, badl been conseeting parties to that order; and
as soon as they had permission, they placed every-docu-
ment they touli consistently place in the hands of -the
accountant. With reSpeet .to the liquidators taking.
initiatory proceedings, there might be a difference
of opinion..: If. • the. shareholders _certainly had .re-
ceived legal opinion, and that opinion was strongly iu
favour of taking. legal proceedings, it - is possible
that if such •an • opinion was placed in the hands
of the liquidators, they might ask the Master
of . the Rolls to give his permission for such pro-
. ceedings to he taken ; but without hii opinion they
did not consider it their duty to take any proceedings
whatever. He had allowed Mr. Bramley-Moore to
make his statement, because he considered it was quite
well that. it -should he; made, but made at, the proper time,
and the shareholders ought to haye. called a meeting.
He did not know whether it was a propeiequestion, but
• he would like to ask if .Mr. Bramley-Moore had taken
counsel' s. opinion ? .
Mr. BRAmenee-Moonn—l decline to answer. that.
The ClIA11:31AN repeated that if he had taken counsel's
opinion, and if .that opinion .was strongly in: favour of
legal proceedings being taken, the, liquidators ''would
communicate with the Master of the dolls upon the
sabjeet.,

I • Mr. )3:No:se-I feel, on the whole, rather pained,'
because I should have been , brought forward so prom-
inently in the remarks just now made. . The share-
E.-holders who aro present are.pretty well conversant with
the part that I have .taken ; and although I. feel the
injustice that is done to me, do not. rise so much to
complain, -.0f.: that as to complain of. the ;complexion.
which is now sought to be pet•on the amount of mis-
representation that was; alleged to haYe.been made in.
- the ',report of. July, 18:37.
.The,wholesef the proceedings,
of the , trial.. Dixon verse's Scott, and the proceedings.]
before the four judges when a illation was macinfor a
new trial, went to show beyond all question that £58,000
-,was the extent. of the
.deteit that was then known
to the (Erecters. It .is true that, Me.; Justice -Wright-.
man' by some error, for which I cannot account, did
seem to he under the :impression that then more than
half the .capital was gene; and that• that fact was then,
• known to the directors, and beingunder that impression
he cominitted'n clearsuidiefinitelnistelse--ea mistake into,
which he may, perhaps, have been led h the statements
in the papers that the V. 5,000 was
..-1,!;k40A. Now,
gentlemen, I ~wieb..to stand clear. NV it have
been stieteet. to. and liable to, that I will bear as
I well May; but I do complain, and I• do think that
• in the position which I have taken in this bank which
was forced neon me under circumstances which made
me the necessary, person in the' bank, that it is highly
unfair that stile ueuelency should be magnified from
Vssat•ooo to 1580,000. The dethit kneevn tile direc-
tors wasL5S,OOO. I , believe the report that .was issued I
would convey the impression that the capital was net:
whole—at any rate, confinires myself simply'to facts„
and not wishing to.eall for any more lenient interpreta-
tion than those 'facts .I.vill. warrant, .1. wish it to be
cleaxiy me:ea:stood that £58,000 alone was the dcfiei
ency ; fuel thet the state ef: the !hank, .as after-
wards e:,:Liltecl,itself,,was. notknown to me--7was not
known to the dice3tors. Wiiatcv.er._cousure. in.r fail
upon the , direct() k.s- . those ' who were raanagieg the
concern, for. inipeedeno, for nceilgenee, for ignorance
or incapacity is fairly due; but on behalf -of myself, and
on , behalf of the directors, 1 do deprecate the great
• injustice of assenting that they knew f.icts which they
did not know, andswhich, as far as the,outeide direeto.rs
-were ceneerned, they had not . the means of .knowing.
• Now- it is universally known that the peactic.e,of the
banks in Liverpool is to oentitap the knowledge of .the
traneaeti)es, of private indiViduals in the, hank to one or
-two individlials, namely. .the.manager and ehe managing •
directors. :5Th ether the eyatten be right or. ,-strong that
is the system, and. I say it is unfair, it is harsh, it is.
unjuetiaable to • visit upon those who adhere to, the
system,- the faults of ..the system itself. BesideS
being the practice in the banks in Liverpeol, I.believe•
it is the practice of a great many larger joint-stock
batiks in this country. There is another fact of which
many of.the •shareholders: here -are also aware that, at
the commencement of-, the. cheer of this bank it was
stated to the assembled shareholders that the knowledge
of the private ace,onnteiof indixiduale Would. be confined
to the. manager and two manseing directors, and the
reason: this was done was:stated to be in oesler that•cus-
tomers might be willing to give the bank the benefit of
their.husiness, knowing that their accounts would not
be exhibited to .a board of twelve individuals, thus mak-.
• ins public all their transactions. That feature in the
policy of the hank was adduced ,as a reason why ells-,
tourers would come to the bank.
~ That same statement,
waFemade• at a subsequent meeting a year afterwards,
and therefore condoned. by the directors.. .It
.beeanse
then a settled principle of the bank's management that"
none. bet , :the manager and the • managing directors
should know the private accounts of -Individuals.
Now, I 'ask, , under that systom—and that system
being the general system of the • banks .• in the town
—I. ask is it fair, Is it justifiable to visit upon the
outside directors the consequences ..of the want of
Ithat knowledge which they declare they did not- have,
and which 'the shareholders of the bank assented to.
their not knowing). I. agree that the system is
a bad ore; but there is the system, and it is upon that
system -that the bank has been conducted. Ido not
wish to detain you any furtherthan is absolutely nem,-
sary, in:order to place myself right with:regard to the
allegation's-that are now being made; and I do again
repeat, and I wish. you earnestly to' bear in mind that
the amount of misrepresentation that is alleged to have
'been made, does not exceed .V 58,009, and has no con-
nection whatever with the developments that were
'after-Wards made; as whht was thef-real and true-
position of the bank. The directors had before them a
statement, and on a severe estimate of the balances •
of certain accounts there was a deficiency after paying
'the -dividends of £58,000. The report was certainly
vague ; and I can'only soy, that my appreciation of the
effect that it would have upon the public, was justified
by th 6 fact that after it was made public, no-shares
were bonht at a price higher than would have , been
paid had the deficiency been stated. A deficiency of
VB,OOO .would have made the shares worth £9 10s. •,
any such-was the impression, that no shares were sold
aboVe £9, and the most were sold at £B. Therefore,
I contend, that as far as. regards the impression upon
the public, the public were not deceived, and it was not
my Intention that there ehonld be any deception. If I
had thought the report would deceive, I would not
hive concurred in it. (Hear, hear, and applause.) It
is very easy for gentlemen, after facts have been
made. known, and disclosures have been made, and
• a state of things has been realised, which the
wildest suspicion would never 'have led peeple' to antici-'-
' nateit is very easy to say that this should have been
done, and that should have been done t but there are
difficulties of a position in which a man may be placed,
and in .whiClehe has to consider a great many things;
and the position of the directors and the position of
myself at that time was one of great difficulty, and of
difficulties which no one may. be ashamed of avowing,
and of difficulties by which no one neeeLbe ashamed of
saying that he was, to .some extent, influenced. There
is not a shareholder of this bank who, under similar
circumstances, would not have done precisely the same.
I only wish further to make a statement which I think
should be made, after the way in which Mr. Bramley-
Moore left it open to suspicion-'-not supposing that
he intended it—but still, after the way that he
left it open to suspicion that the debtors of the bank
were to some extent at least people with whom the
directors were more or less directly or indirectly con-
•cerned ; now, I have to state that as far as I have
been able to observe, and as far as I know
anything of the business connections of the directors
of this hank, and as flu- as I know anything of their
personal connections and relationships, there is not in
the whole list .of the debtors by whom the bank has