The Sun.
London, England, 1864-11-17 00:00:00

ANOTHER BANK INQUIRY,

Yesterday Mr Frederick Symons, wine and I let mer-
chant, of 61, Lower Thames-street, appears 1 (fore 11r
Alderman Stone, who was sitting for the Lor I Mayor of the
Mansion-house, in answer to a summo 1+ i,,Lin out at the
instance of 11,1 r Ralph Waters, one of th (1,. cetera of the
London and Northern Bank, charging h el with having
threatened to publish a certain matter or thing touching the
complainant and other of the directors of the said bank,
with intent to extort money from the directors, contrary to'
the statute 6th and 7th Vic., cap. 96, sec 3.*
Mr Metcalfe, instructed by Mr Turner, solicitor, appeared
to support the complaint; and Mr Lewis, jun., appeared for
the defendant.
Mr Metcalfe said he was instructed by the directors of
the London and Northern Bank to support a sure= ns
against Mr Fred. Symons for having threatened to pub-
lish a certain matter concerning them, with intent to extort
money from them. The London and Northern Bank was
formed in the early part of 1862, having been promoted by
two gentlemen who had long since ceased to have anything
to do with it. The bank was opened in July by the direc-
tors and.the promoters. who had themselves gone to a good
deal of trouble and expense, and paid a sum of £19,000. The
capital subscribed for was £500,000, and £119,000 was paid
up, and the bank started with every prospect of success,
which was abundantly carried out from that time until STt.
in the present year; and the bank, which had a paid-up
capital of £119,000, increased to £140,000 by a subsequent
call, made at the rate of £20,000 a year profit. In Sept.
considerable losses were sustained, The Leeds Bank failed,
and the failure of some of the customers of the bank took
place at the same time, and the result was that the bank lost
a considerable sum, which was, however, estimated at the
very highest at £35,00J, which amount, it was very proba-
ble, would be considerably lessened by dividends from the
estates of those who had failed. The defendtint,Mr Symons,
was a shareholder to a considerable amount, and got fright-
ened when this loss was made known, and wished to realise
the shares which he held in the bank, but instead of selling
them in the market and submitting to a fair discount, the
shares having fallen about £5 per cent, he went to the
directors and said he wanted them to take his shares off his
hands at par, This they could not do, the shares being at a
discount in the market. Defendant said they must do so,
and if they did not do so he was going to publish a certain
document, at the same time taking from his pocket what
appeared to be a circular, saying that the directors had
plenty of money, and it would be an awkward thing for
them if they did not. The paper, which it appeared was
the draft of a circular to call a meeting of the shareholders
of the bank, was afterwards printed, Mr Metcalfe said the
circulating of this circular was something that was detrie
mental to the directors, and which the defendant threatened
to publish if they did not pay him. He said the defendant,
as a shareholder, would have a perfect right to issue a cir-
cular to call a meeting of shareholders, and might make
statements which, although false, he might believe to be
true without any serious consequences ; but at the same
time he had no right to say to the directors "If you
do not pay me my money, I will publish a certain
thing or make certain statements which will not
only damage your characters as directors, but will damage
the bank." The meeting of shareholders was not called, and
he should submit that there never was any intention of
doing so; but the thing was flaunted about merely for the
purpose of inducing the directors to give the defendant the
money for his shares. The next proceeding on the part of
defendant was to file a bill in Chancery,to which he thought
it necessary to draw attention. The defendant, no doubt,
had also a right to file a bill in Chancery ; but at the same
time he had no right to threaten to extort money and then
file a bill because he could not get it, and make a series of
false statements, and nothing, he said, could be more false
than some of the statements which defendant had made in
the bill, and sworn to as true in his belief,
Mr Lewis said the bill could not be filed. There was an
injunction obtained on it, against which not one of the direc-
tors had put in an affidavit to contradict the matters con-
tained in it.
Mr Metcalfe went on to say that the bill purported to be
on behalf of the defendant and other shareholders, but he
should be in a position to show that defendant offered to
drop it if the money were paid to him, and to conceal it from
the other shareholders, Mr Metcalfe then drew attention
to the contents of the bill and read several clauses, the first
of which was one in which it was stated that at a meeting
on the 20th July, 1864, as well as before, and subsequently
thereto, the directors had used every endeavour to keep
from the shareholders the knowledge of the large and
serious losses which had occurred, and to lead them to
believe that the company was progressing most favourably
and making considerable profit, and for that purpose
proposed that the remaining 4,000 shares should be issued
at a premium of £2 per share, giving the shareholders and
customers a preference; and until very lately they had suc-
ceeded, and caused the shares of the bank to obtain a con-
siderable price, and the shareholders to agree to the report
presented to the meeting. Mr Metcalfe said there was not
the slightest foundation for such a statement. There was
no loss at that time, nor did there appear to be any until
the sth of September. In the next clause it stated that he
(plaintiff) had, how„ver, since such meeting and payment of
dividends, and within only the last few weeks, discovered
that not only there were no profits in hand out of which any
dividend ought to have been paid, but that great part of
the called-up capital had been lost, and that the amount
which up to the present time had been lost exceeded three-
fourths such called-up capital, and in fact amounted to
more than £lOO,OOO, so that there was really less than
£26,000 for the purpose of cerrying on the business, the
number of shares issued bed taken up since the meeting
having been very few. Mr. Metcalfe said ho should be in a
position to show that the only loss the bank had sustained
was the £35,000 he had already alluded to. and that the
bank had at the time 530,000 cash in hand, besides £160,000
worth of good trade bills, and that the losses were declared
to the shareholders at the meeting. Oa Sept. 23 a call of £5
a share was made, which could have been made five months
before, but, it was nut wanted, inasmuch as the bank was
making large profits; and after that an amalgamation with
the Midland Bank was proposed, and Mr Symons and ano-
ther gentleman were the only ones opposed to it. There
was a general meeting held, and all the shareholders but
Mr Symons passed a vote of confidence tho directors.
The shares being at a discount was partly and chiefly
through Mr Symons being so illadvised as to make such a
stir in the matter. If he had not pursued such a coarse,
he would have most likely been able to sell his shares
at a premium. When defendant found that a meeting
of shareholders had been called by the directors, then
he took the proceedings in the Court of Chan-
eery, and thought no doubt that they would be
unanswered, and that the bill would remain on the
file and damage the bank, and the directors would be glad
to comply with his demand. Mr Metcalfe then alluded to
another clause, in which it was stated that the plaintiff had
caused application to be made to the London and Northern
Bank for information in respect to the amalgamation, but
all information had been refused, and he was unable to
ascertain the particulars of such proposed amalgamation.
As regarded that clause, Mr Metcalfe said Mr Sy-
mons had applied to Mr Turner, the manager of the
bank, fur information, and he gave him all he could ;
but there were some matters which could not be
made public. A meeting of the shareholders was called,
and the proposition was duly submitted to them. In another
clause the plaintiff alluded to a loss which he alleged the
directors had sustained of upwards of £30,000, by Messrs.
Emanuel and Brillman, late of 76, Leadenhall-street, in the
City, stating that they had received notice from Dr Cook, a
friend of the plaintiff's, and Mr Chatteris, the accountant
of the London and Northern Bank, not to trust them, and
the manager of the bank had said he had not and would not
trust them. Mr Metcalfe said Messrs Emanuel and Brill.
man had been trusted certainly more than they ought to
have been, but they stood very high and were trusted by
many others, and they failed ; but the loss sustained by
their failure was estimated at £35,000, as well as losses by
other customers, who had been mentioned in another clause,
named Stern and Croskey. In the next clause the plain-
tiff alleged that the large sums so lost had for some
time prevented the company's business being carried on
in a proper and legitimate manner, and the directors had
raised funds for enabling them to carry on the business by
issuing bills of exchange, giving their acceptances as direc-
tors, to every large amount, upwards of £30,000 of which had
been discounted by brokers and others, and a number of
which bills and acceptances were still not yet matured and
outstanding. This, Mr Metcalfe said, was utterly and en-
tirely false, and there was not the slightest pretence for say •
ing that the directors had ever issued bills as alleged, and
it was put in by Mr Symons with the view of compelling
the directors to pay him his money, which he found he
could not get in any other way. In the following clause it
was-stated that the bank had no ready money to carry on
their business, and in fact had no funds for such purpose
other than what they get by this call of £5 per share, and
by issuing bills of exchange beating the bank's acceptance.
_ _ _

tie had.already stated that there was:£3o,ooo cash in hand,
besides a large amount in good trade bills, and therefore

,hat clause was alike untrue, In the next clause it was

stated that the directors perfectly well knew that the
manager, Mr Turner, was totally.untit for the position, and
that he had not been employed at the London and West•

minster forten
of theyears, übutnliitay Bank,dbe h
been engaged as n
principal officers failed,o e
ofandthe
they had notwithstanding appointed him manager at their
head office in London, and with a view of deceiving the
shareholders had causedhis name to be publicly advertised
as late of the London and 'Westminster Bank, and had
wilfully concealed the fact of his having been one of the
chief officers of the Unity Bank which had so disastrously
failed. Mr Metcalfa said Mr Tamer had been 21 years in
the London and Westminster Bank, and the directors re-
ceived from that bank the highest testimonials as to his
character and capabilities. In another clause it was alleged
that the directors had a personal interest in carrying on the
business of the bank, and attempting to show that the
profits were large, although they knew to the contrary, for
by a clause in the articles of association it was provided
that the directors were annually to divide amongst them for
their services a sum of £3,000, and that if they declared
a dividend of £0 per cent. and not exceedin £B,
they were to retain amongst themselves £l,OOO ; g
and
if £3 and not exceeding £lO, an additional sum of
£2,000, and £l,OOO additional for every £2 per cent. beyond
£lO per cent. This clause Mr Metcalfe said way copied from