The Sun.
London, England, 1864-12-30 00:00:00

The Unity Bank.

Yesterday, at the Justice.room of the Mansion house,
before the Lord Mayor, Joseph Wakefield Terry and Thos.
Burch, the manager and secretary of the late Unity Bank,
surrendered to their bail upon a charge of having falsified
the balance-sheet of the 30th of June, 18(2, with intent to
deceive and defraud the shareholders.

Mr Lewis, jun., appeared, as before, to conduct the prose-
cution on the part of the committee of liquidatDrs : Mr
Sleigh, barri:ter, defended Terry ; and Mr bletcalfe, blr-
rister, defended Burch.

Mr Geo. Lewis Phippa Eyro, solicitor, of Bedford-row,
and a director of the Unity Bank, who had been examined
upon the last occasion, was now recalled, and hal his evi-
dence and cross-examination by Mr Sleigh, in which he
made various verbal corrections, read over to him by Mr
Oke, the chief clerk.
He was then cross-examined by Mr Me:calfe as follows :
—I do not think I looked at any books of the bank at all.
The question is one difficult to answer,but I have seen some
of the books from time to time. I havo had the customers'
ledgers brought in on special occasions. That was when I
was anxious about eu,tomers,and when the manager wished
to confer with directors about them, Whenever the directors
felt any particular anxiety respecting the customers we
sometimes looked into the accounts in the books, I am
aware Mr Alderman Mechi has said that we were particu-
larly anxious about Lowenthal's and Stcruc's accounts,
but, to my recollection, pers many I never examined their
accounts myself. Mr Alderman Mechi used to be constantly
at the bank, and was in the habit of speaking to us as if he
had made particular inquiries into the accounts of those per-
sons. Sometimes we looked at the customers' accounts, and
Mr Alderman Mechi constantly made them a matter of
conversation, but I cannut swear th .t he said he had made
particular inquiries into them himself. I have no recollec-
tion of seeing Lowenthal's account in the books ai late as
June, 1863, but I should be inclined to say I did not see it
then. I did not examine the general ledger at all. I
am not an accountant, I am a solictor, I should say, if you
show mo the :general ledger, whether I looked into it or
not. (General ledger handed to witness.) I can now swear
upon my oath that I never looked into it, although that
book might have shown me the whole rummary of the
bank's proceedings. I knew, of course, that there must
have been a general ledger kept, and I was aware that from
that ledger I should see the whole proceedings of the bank.
I mean to swear this—that, notwithstanding the anxiety
about the bills and the critical position of the bank, I never
looked into it. I relied upon the honesty and credibility of
Mr Burch. Both the defendants had described to me the
probability of the shares being worth £3O in July, 1862,
and Mr Alderman Mechi then described the same :thing.
It was so stated by Terry at the public ;meeting in Sept.,
1862. Somebody said at the meeting that the shares would
not fetch £3O, whereupon Mr Alderman Mechi said, in
reply, that they were worth from £l7 to £3O a share, and I
believe he calculated that amount at the time the bank was
transferred to the London and Middlesex. It was subse-
quently that we pressed Alderman Mechi for the payment
of his debt, and I think he proposed to liquidate it upon the
basis of £3O a share. The 17th of June is the date of the
last weekly account of the bank we have. I cannot re-
member what became of the statement of the bank for the
week ending the 24th of June. I have two statements of
the bank for June, but they are not here. I shall give
them into the hands of Mr Howell, the accountant. They
were here on the last occasion, but I took them away in
order to prepare myself for this cross -examination. The
list to which I referred on the last occasion I shall also give
to Mr Howell. I have no other documents belonging to
the bank except these. Mr Alderman Mechi was present
at the time when a conversation took place with Mr Terry
in the board-room, and after that I went to the meeting of
the bank, and was present at it, When I went to that meet-
ing I did not know the whole affairs of the bank, but I knew
about the affairs of Sterne and Lowenthal. Before that I
had been informed of the forged bills being placed among
the past due bills, and I knew that Lowenthal and Sterne's
had been kept back. I believe I heard Alderman Mechi say
at the meeting that the directors knew of no irree.ularity on
the part of their staff. I cannot recollect his exact words,
but it is just possible he may have said so. I have an im-
pression on my mind that ho said something I did not agree
to, but I din not get up and say so. I intimated my disaa
greement by informing one of the directors of the London
and Middlesex Bank of my dissent. I made it no secret or
confidential matter, but I do not wish to mention the name
et that director. I do not know that Alderman Mechi exactly
said that ho knew of no irregularity on the part of the staff,
and I certainly on that occasion did not disabuse the share-
holders at the meeting of the impression ho had conveyed.
Mr Burch was kept in the bank after that, and I was one of
the directors who kept him there. He was kept several
months after that in the same situation. Dr Cook is the
chairman of the liquidators. lle was auditor of the London
and Middlesex Bank during the whole time that concern

lasted. During that time, though it lost £75,000, as stated
by other witnesses, he was the auditor.
Re-examined by Mr Lewis—There was only one audit of
the London and Middlesex, for that bank only lasted about
12 months, having lost the whole of their capital.
Mr Lewis—Were these acceptances of the London and
Middlesex Bank given by the defendants ?
Witness—l shall go into that if we are to enter upon the
'aff4irs of the London and Middlesex.

Ilag Lord Mayor iat:mited that it was unttece.sary to
enter into these affaire.

Re-examinatian continued—Burch was kept in the bank
for several months after the time I have referred to, but
certainly not with my sanction. Thera were eight or nine
directors. I did not make any statement to the meeting of
shareholders, but I told one of the directors of the London
and Middlesex that Sterne and Lowenthal were debtors•

They were debtors also to the London and Middlesex, and

when my statement became known to the directors of the
London and Middlesex the dismissal of Terry was the con-
sequence. Tho general ledger contains the totals, not the
details, of the affAirs of the bank. It is very easy for
managers and secretaries to deceive directors in banking
matters. If the regulations adopted in this case for the
government of the manager and secretary had been carried
out the one would have been a check upon the other.
Mr E.njamin Bower examined by Mr Lewis—l reside
at Edmonton, and am in business as a fruiterer in Lower
Thames-street. I am a wholesale merchant, I am deputy of
the ward of _Billingsgate, and was one of the directors of the
bank. I joined it 11 months after it was opened. I supp se
that was after the loeses occurred under the management of

Mr Chambers, but I would not have joined it had I known
such losses were made by him. I held ten shares at first.
Then I bought another ten to qualify myself as a director,
and after that I bought five more. Before I became a direc-
tor I was a shareholder. I joined the board in April, 1857,
and I remained a director until the last, when the Unity
went over to the London and Middlesex, and then I became
a director also of the London and Middlesex. Irrespective
of my interest in the Unity, I transferred all my shares to
the London and Middlesex, and I took 100 shares besides
in the latter. Those shares were taken in my son's name,
but they belonged to me. I generally attended the half,.
yearly meetings of the Unity, when the balance-sheets were
submitted to the shareholders. I remember the balance-
sheet of the 30th of June, 1862. which was passed in Sep-
tember, and I was present when it was agreed upon at the
board meeting. I had no idea that forged and dishonoured
bills irrecoverably gone years and years before were put into
the credit side of that balance-sheet. It certainly was never
done with my sanction in any shape or way. I purchased the
five shares in the year 1861, after the meeting. lam not quite
sure of the date, but I think it was the 6th of August, 1861.
I bought them at £l6 per share. Before I purchased those
shares the defendants made no statement to me, but at the

time we were about passing over to the London and Middle-
sex, in August, 1862, they did make a statement to me. I
then asked Burch if he would give me particulars of the
asseta of the bank and their value. Ho gave me a paper in
his own figures, which I now produce, and there are some
figures of mine attached to it, so as to make a calculation of
what they would produce, and on the other side I made a
memorandum to the effect that the assets would produce £3O
a share.

The Lord Mayor—Was that made out from the informa-

tion Burch gave you ?
Witness—lt was. It represents that £270,000 wero the
assets of the bank, and upon that calculation made by my-
self it produces £3O a share. There are the words, confi-
dent of £80,000" inserted in the memorandum, and these
were taken also from Burch's statement. With reference to
the management of the bank, I remember the rules and re-
gulations put in force by Mr Eyre, and the Board sanc-
tioned them, and resolved that they should form the mode
of proceeding. I attended at the Board and committee
meetings almost always. The committee meetings rotated,
and it is unnecessary, therefore, for all of us to be present
at them, but there were very few which I did not attend.
Beyond that, whenever I had an opportunity, I used to call
in at the bank and give an opinion, and if I knew any bills
to be bad I recommended them not to be discounted. When

I attended there I paid attention to all the things which the
defendants brought to my notice. I did not prepare the
balance sheet, nor had I anything to do with It was
brought before us. I had nothing to do with its preparation,
except to sanction it when it was laid before us. When the
original document was laid before us we had no doubt about
its correctness, and so we sanctioned it, and afterwards it
was printed. I did not authorise the release of Bunyard's
debt of £2,500, or any of the other debts. It such a release
had been granted there must have been a resolution by the
directors passed. I was 77 years of age about 10 days ago.
Cross-examined by Mr Sleigh—When the balance sheet
of the original document was brought before the board there
was, perhaps, a discussion about it, but there was no doubt
thrown upon it. It was adopted about June 24. Whenever
it was submitted it was made the subject of discussion as
to whether it disrppointed us as to its results.
Mr Sleigh—Yes, but it showed a profit, and therefore you
could not find fault with that ?—We had in reason to doubt

Was it not presented on three several occasions to the
board before it was finally adopted P—l believe not. It may
have been so, but I do not recollect it.
I ask you distinctly, was not the balance-sheet placed be-
fore the board three several days previously to its being
passed ?—lf the minutes say so no doubt it was.
Will you abido by the minutes ?—I will.

I believe, sir, you paid the same attention to the bank up
to the very last day that you did at the commencement ?
Certainly I did.
In point of fact, Mr Deputy, were you not tha Cerberus
of the whole establishment ? (Laughter.)—The what ?
(Great laughter.) It I could understand you, I would an-
swer your question.
Well, leaving out of view all ollusion to the classics, did
you not say this at the public meeting--" We examine
everything ; there can be no retrogression and no advance
without our helping to promote it." Without adopting any
classical allusion, I ask you, was that so? Was that the
statement you made—that you examined everything, and
took care of everything, and that that was your practice?—
Yes; the same as I would in my own establishment; but I
presume, in either case I might be deceived.
Yes, but, Mr Deputy, you went very much further, and
boasted, very properly, that although your staff might be
very honest and industrious, you would keep a sharp look-
out after them ? I did all I could, but it appears to have
been of very little use.
Did you tell the board on one occasion that there was no
necessity to have more frequent audits because you were an
auditor yourself 2—l told the shareholders that at the general
meeting, and I think so still, that there was no necessity for
the auditors to be there once a week.

Did you tell them that because you wore the body and
soul of the concern--because you looked so minutely into
all the matters?—Yee.

And because some were not quite so active as yourself ?
No.

Then, what made you go to the bank every day, seeing
that the books would not come regularly bc,tore you except
on !he Tuesdays and Friell3.'B P—We went into the board-
room every day to do business if the manager end secretary
wanted us.

But, as a matter of fact, did not you into the acccunts
yourself without being asked to do so
I mean you yourself sal your brother directors ?—We did
not go into the offices, below or above, to examine the books,
but all that was brought before us we examined to the best
of our judgment.

Did you not examine everything—not at the meeting, but
when you went into the bank? Did you not look at the
bills, and those which were not nice did you n)t pass be
tween the finger and thumb, and throw them on one side ?
If you ask me any particular question I will answer you.
I shall press you to tell the Lord Mayor whether you did
not inform the shareholders that there was no occasion for
an audit of the accounts every week, because you yourself
were an auditor.—Whenever these things were brought
before us we did it.

Did you audit the accounts every week ?—No.
Croce-examined by Mr Metcalfe—l never examined any
books but those which were brought before me at the board,
I did not examine the cash article book every day. I pre-
sume that I looked at the paq• due bill book if it were laid
on the table. The cult article book was read by Mr Burch,
and I dare say it was left on the table. I cannot say whether
the directors looked into it.
Mr Metcalfe--W hat was it left on the table for, if it was
not for the directors to look into it 2—lf we had any doubt
we should have looked into it.

Did you over look into the general ledger ?—No; I do not
.hink I should have understood it if I did.

But you are a bootmaker? (Great laughter.)—A what?
(Renewed laughter.) No; I a►n a fruit merchant.
I beg your pardon, I thought you said a bootmaker.
You keep books and a ledger ? --Yes ; and I write a great
deal in it.
And you examine it ?—I do.

You say you used as much vigilance in the affairs of the
bank as you do in your own business ?—Yes, but still I do
not think I should have understood the bank ledger.
Did you ever examine it ?—I do not think I did. I have
known it to be eent for by some of the directors, but I can-
not tell which of them—probably by Mr Eyre. I think it
is very possible that several of us looked at it when any
particular account was mentioned.
Re-examined by Mr Lewis—The directors ordered a
weekly report of the affairs of the bank to be prepared by
Mr Burch and brought before them, and that was invari-
ably placed on the table of the board of directors. The
ledger sent for by the board was a very largo ledger, I
believe it was the customers' ledger, and not the general
ledger. When I said I audited the accounts once a week
I presumed everything was brought before us, and that we
were all doing our duty to the best of our ability. The
weekly report was brought before us according to order, and
that, I expected, contained the balance. A quantity of bills
were brought before us day by day, and if we did not parti-
cularlyknow them we asked for information. The cash-article
book was read. I don't think the discount-book was also
brought before us. We were very anxious, because a great
number of Lowenthal's bills passed before us, and we in-
quired whether he was a good man, Both defendants t eplied
that he waa a provision merchant, that he supplied little shops
round about London, that the bills were drawn upon these
little men, but they seldom paid on the day, but that they
brought their money and that Lowenthal took up the bills,
and that statement was made to the London and Middlesex
Bank. I had not the slightest doubt of the honour of both
the defendants during the whole of these transactions, and
never doubted their word for a moment,

Mr Thomas Carlisle Hayward, examined Mr Lewis—My
place of business is at 93, Minories. lam a merchant, and
joined the Unity Bank as a director in 1853. I was induced
to join it at the solicitation of Mr Baylis and Mr li,night. I
took my qualification at that time, but subsequently I in-
creased my 20 shares by 61, making 81 in all. I remained
a director until the bank transferred its business to the
London and Middlesex. I went over to the London and
Middlesex Bank as a director, and at that time my interest
in the Unity was about £5,000, calculating the shares at
the amount I paid for them. I paid £4,200 for my shares,
which money I lost. From the Unity assets I received £2
or £3 a share. I attended from time to time my duties as
director. I think we were all much alike in point of activity
at the Board. We attended on Tuesdays and Fridays, but
perhaps Mr Alderman Mechi was the most active member.
I bought my last shares at Christmas, 1861, at £2O or £22,
upon the faith of our manager that they would produce
£3O. I thought I might safely give that money for them.
The defendants from time to time brought the matters be-
fore the directors, which appear upon the minute books, as
to the bills, the cesh-article book, &c. I had nothing what-
ever to do with the preparation of the balance-sheet of June
1862. I had no knowledge that forged bills and irrecover-
able debts of years and years' standing were inserted in the
assets. II al I known that I would have wound up the bank
at once. I was not aware that diehonow ed checks and paste
duo bills were inserted as cash in hand, I generally attended