The Sun.
London, England, 1864-12-24 00:00:00

The Unity Joint-Stock Bank Inquiry.

The case in which Joseph Wakefield Terry, the manager)
and Thomas Burch, the secretary of the Unify Joint-stock
Banking Company, are charged with having knowingly
and wilfully prepared and circulated a false balance-sheet of
the affairs of the said bank, with intent to defraud the mem,.
bers and shareholders, was yesterday resumed before the
Mayor at tho Mansion-house.

Mr Lewis, jun., appeared to conduct the prozecution—
Mr Sleigh, instructed by Mr Watson, of Cannon-street,ap-
peared for the defendant Terry—Mr Metcalfe, instructed
by Mr Wontner, sen., appeared for Burch—and Mr Hum-
phreys was again present to give any information on the part
of the directors.

George Lewis Phipps Eyre was sworn, and said he was a
solicitor, carrying on business at 1, John-street, Bedfot d-
rew, a member of the firm of Eyre and Lawson. At the
formation of the Unity Bank he was applied to to become a
director of that institution, and he joined the board from
that period, by which he had been a great loser. The de-
fendant Terry was first accountant to the bank, and was
appointed on December 20, 1855, which was during the
formation of the bank and about six months before the bank
was opened. He had the highest character from Messrs.
Jones Loyd and Co., in whose service he had been 17 years.
Terry was appointed manager on Aug. 17, upon the retire-
ment of Mr Chambers. In June, 1857, he had a conversa-
tion with Terry in the board-room in presence of the direc-
tors. One of the matters in which Mr Chambers was con-
sidered inefficient was in reference to an account of a
person named Gregory, to whom Mr Chambers had lent
£l,OOO without security, and to balance the books the sum
of £l,OOO was entered in the cash article book, and included
in the cash balance for some time, Gregory having, in fact,
left the country. Upon that coming to the directors' know-
ledge Terry was summoned before the board, and he was
asked to explain the irregularity of that sum appearing in
the cash artic!e book, which was then brought before the
board. The item was pointed out to him, and he explained
in the presence of the manager tnat it was an irregularity,
and that gave him (Mr Eyre) great confidence in him fear
his frankness. After the opening of the London and Mid-
dlesex Bank, Lord Torrington, who was the chairman, ex
pressed confidence in Mr Terry,

Mr Lewis observed that he did not know where to find
Lord Torrington.

Mr Humphreys--He is at Windsor Castle.
Witness proceeded--Burch was appointed clerk in 1856,
and was appointed as secretary in 1858, but was not formally
appointed until January, 1860. Burch prepared the report
1
to the shareholders in June, 1858, and witness produced a
manuscript draft in Burch's handwriting. On Jan. 19,
1858, at a board meeting, it was resolved to adopt a sug-
gestion made by witness to appoint a secretary, as the
manager had, previous to the date of the resolution, to per-
form the duties of manager, secretary, and accountant, and
that the duties of the secretary
would be to attend the board
of directors and enter the minutes, to write the half yearly
reports, to write all letters of importance as dictated
by the court, to take the management of the share capital,
keep the transfer books, and issue warrants for dividends,
and some other duties; and, in order that the directors
might have easy access to all sources of information, to en-
able them to control the entire operations of the bank and
their being acquainted with the daily progress, that the
secretary should have to be provided by the manager, in
order to bring before the committee in court, a statement of
customers' daily balances, showing in juxtaposition what
amount under discount, &c. ; a list of bills discounted the
previous day or since the last court or commutes; a state-
ment of loans renewed or for approval, or application for
loans for the consideration of directors; a general daily
balance-sheet, and the cash-book or any other cash and any
other book which the secretary might require for the direc-
tors' inspection.

Witness said those wero his orders at the time for the
fullest information being given to the directors, and it was
only upon the condition of that resolution being carried
that he could have taken his seat again at the board.
The Lord Mayor said that was a very different version of
the duties of secretary to what Mr Sykes had given.
Witness wrote a letter to the directors in June, 1857,
drawing attention to the position of the bank. Oa that
letter a committee of the shareholders was appointed to in •
vestigate the affairs. He resumed his seat at the board on
Nov. 24,1857.

The Lord Mayor askei how many shares he had in the
bank.

Witness said ho had at that time 40. Unfortunately he
increased them afterwards.
Witness resumed, and said his attendance, and also his
brother directors' was constant. They met twice a week,
and bNiides that one or other of the directors was daily at the
bank. One director was in the habit, periodically, of going
to the West Branch. It was Burch's duty to read out to
the directors the list of unclaimed articles from the cash
article book. The item £1,095 being a draft of Steene's,
which he found in the cash article book, and which appeared
every day fur about 12 months, he never heard Burch
read over that item to the directors. On an average he
theought Burch did not read more than 25 items from the
cash articles. In the book produced there were over 300.
He (witness) had no idea that dishonoured cheques were
entered in that book. Burch had never mentioned that
item to the directors. A large sum was always a matter of
inquiry, and since the matter of £l,OOO witness had alluded
to, he had paid particular attention to the reading of that

book. He undoubtedly considered that Burch read every
item, and he never examined the bills after Burch had read
them. He had great confidence in Burch. On the 27th
June, 1862, there were dishonoured bills in that book to the
amount of £16,265, included in a total of £lB,lOO, purport..
ing to be the cash in hand on that day, and he (Mr Eyre)
had not the slightest knowledge that £16,000 out of £lB,OOO
consisted of dishonoured bills. They appeared in the book as
cash articles. Burch never told him there was that amount
of dishonoured bills amongst the cash. He had no know-
ledge of the bank at that time, except such knowledge as he
obtained from the knowledge of the defendants. The effect
of the rules he had suggested, if carried cut properly, would
have placed the true state of affairs before the directors.
The detailed balance sheet produced, which showed the
amount of past due bills, was never shown to him by either
of the defendants. He saw the manuscript balance sheet
corresponding with the one printed and circulated and
published. The two manuscript balance sheets were in
the handwriting of Burch. The balance sheet was pub,
blished in September, 1862, It would be the duty
of Burch to send the balance sheet to be printed.
and also to send it to the shareholders. Just-before the
publishing of that balance-sheet he (Mr Eyre) purchased
twenty shares. They belonged to the executors of a de-
ceased director, and he purchased them for £2O lOs per
share; but of the £2O lOs he received back £l9 per share,
which he transferred to the capital of the London and Mid-
dlesex Bank, and which he had also lost, except £3 per
share, which he had from the liquidators of the Unity Bank.
With regard to the £340 which he transferred to the Lon-
don and Middlesex, upon the faith of the balance-sheet,
he had not received a farthing. About June, 1862, he had
a conversation with defendants, and they led him to believe
that, with the £lO,OOO they had in the Middlesex, the shares
would yield £3O each. He believed that under new direction
and management, and under a new name, without the odium
which was attached to the Unity, it would be a good specu•
lation.

By the Lord Mayor—At that time he had not ascertained
the amount of dishonoured bills. He did not know until a
twelvemonth after wards the extent of dishonoured bills, and
not until Mr Howell's investigation the full extent of the
losses. There were directions given to the defendants by
Mr Alderman Mechi to prepare a truthful and bona fide
balance-sheet. He did not know the item £207,000 included
bills and cheques that had been dishonoured years before.
He believed it represented the bona fide assets of the bank.
The Lord Mayor—The actual value P
Witness—The actual value according to the manager's
calculation.

In continuation, witness said it was not by his direction
forged bills were included. A forged bill of a customer named
Madums for £1,841 was included in the good assets. That
bill appeared by the minutes to have been ordered to be de-
bited to the profit and loss account as irrecoverably lost. Mr
Alderman Mechi held about a fifth of the capital of the bank
in shares, and was very constant in his attendance at the
bank,and in consequence of that witness was not so constant.
On Nov. 25, 1863, at a board meeting, resolutions were
passed—" That the thanks of the board collectively and
individually should be presented to the manager, secretary,
district manager and staff, for their untiring zeal, ability,
.•
and services rendered to the directors and shareholders on
transferring the business of the bank to the London and
Middlesex, and on winding up its affairs ; and that £350 be
awarded and forthwith paid to the -manager, secretory,
and clerks for their services during the amalgamation with
the London and Middlsex (Limited), and for their
past and continuing services in winding up the affairs
of the bank ; and also that a further sum of £250 be
awarded and paid there when such services were completed
on the conclusion of the winding up," Mr Terry's salary
was, on his first appointment, £750 a year, which was after.
wards increased to £l,OOO. At the time that resolution was
I passed, he had no idea of what had since come to his know-
ledge in respect to the item of £207,000. In Dec„ 1862,
a resolution was passed directing Burch to prepare a list of
defaulters to the Unity Bank. That list was presented to
the board. The debt of Sterne for £2,100 was not in that
list ; not were Lowenthal's for £4,635, Bunyard's for £5,600,
G. 11. Wood's for £1,400, and John Harris's for £1,360.
On Jan, 20, 1863, a resolution was passed that the secre-
tary should prepare a statement, showing the financial
position of the bank, and present it at the next meeting.
It appeared by the minutes that one was presented. In
March, 1863, there was a resolution that an alphabetical list
of debtors should be prepared. The book produced, which
was principally in Burch's writing, but which had some of
Terry's figures in it, was the book produced at the meeting.
He had no recollection of the debts of Sterne and the others
he had alluded to, being included in that book, and which
alone amounted to nearly £17,000. He had not the slightest
idea that those amounts were owing to the bank. On the
morning of the eoth Feb., 1864, he was in the board-room
of the London and Middlesex Bank. Ile saw Mr Alder.
man Mechi there, and he had a piece of paper in his hand
with a list of debtors, and ho (witness) noticed the names
of Sterne and Lowenthall, and asked Burch, who was pre-
sent, how it was they had not been mentioned before, as
he did not remember seeing them before. Burch said ho
would prefer that Mr Terry should answer the question,
and he left the room, after which Terry entered, and he
asked him how it was that Sterne and Lowenthall were
debtors to the bank, of which the directors knew nothing.
Terry said they were debtors, and admitted it had been
concealed, but said ho had done so with an object in
doing it. He (Terry) said by introducing Lowen-
thal' to the London = and Middlesex he should be able
to reduce the debt to the Unity. lie (witness) was a director
of the London and Middleaex, and he knew Lowenthal' wao
having money from that bank—but he had not at that time
been made aware of the fact that he owed money to the
Unity, or he should not have given his sanction to his hav-
ing money from the London and Middlesex—Lowenthall's
debt to the London and Midillesex,:He had no knowledge of
the release given to Bunyard in respect to his £5,600, and
Terry would have no authority to release that debt without
the consent of the board. He had no release of the assign-
ment, and release for £lO,OOO of reties. Those accounts
were constantly discussed by the board. Burch was sure to
have been present. He had spoken to Burch about Lowens
thall, when that party's bills were before the board, andle
said it was a good account, and the acceptances were gen-
uine, although the amounts were so small. He had no idea
that the whole of Lowenthall's acceptances were given up,
and the worthless paper of Ironsides taken in exchange.
The Lord Mayor—To have something to represent the
amount ?
Mr Lewis—Just so.
Witness continued—He did not know that Ironsides' bills
had been struck out to avoid presentation. At the time
Lowenthal' was a customer at the London and Middlesex,
neither ofithe defendants said anything in respect to Lowen-
thall's debt to the Unity. Burch was asked, in reference to
Mr Lowenthall's bills, what sort of customer he was, and
he said that the bills were paid in cash. Lowenthall's debt
to the London and Middlesex was originally £7OOO, of which
£4,000 was entirely lost, When the balance was pdblished,
in June, 1862, showing the bank to be solvent and capable
of paying a dividend, he had not the slightest suspicion
that it was otherwise, or that it was not a correct statement
of their affairs. He (witness) had no hand in preparing
that balance-sheet; it was left to the two defendants,

Cross• examined by Mr Sleigh—He believed, according
to the terms of the report, there was a surplus of £3,215 78,
after paying expenses.
Mr Sleigh drew witness's attention to his letter of
June, 1857, in which he stated in reference to the affairs of
the bank that the losses during the then past half-year had
been £9,000, and that out of the £150,003 capital only
£15,000 was available for banking purposes, the rest having
been lost ; and asked whether he believed that between that
and September, 1862, the bank had so far regained its losses
as to have a surplus of £3,000.

Witness explained that he did not say the security was
lost, but that it was unavailable, Mr. Chambers, the former
manager, having at that time a large sum out in loans, and
said a call of £lO had been made.

Mr Sleigh repeated his question, and witness said he
believed the statement set forth by the balance-sheet, that
there was £3,000 available, and did not think at the time
the defendants would have made such a statement if it were
untrue.

The case was then again adjourned, the defendants being
admitted to bail as before in a total sum of £B,OOO.

Foreign Mail Packet List.

MAILS DUE.

Australia and Mauritius, via Southampton.... Jan. 18.
,-- via Marseilles' Jan. 12,
Brazil and Cape Verds, by British packet .. Jan. 5.
Cape of Good Hope, Ascension, and St. Helena.. Dec. 29.
China, Penang, and Singapore, via Southampton. Jan. 2.
via Marseilles ...Dec. 27,
Falkland Islands
Gibraltar, via Southamptt n Deo. 27,
India (Calcutta), and Ceylon, via Southampton Jan. 2.

via Marseilles, ...Dec, 27.
fndia (Bombay), via Southampton
via Marseilles Dec. 21
Portugal....
Malta, Egypt, and Aden, via Southampton Dec. 27.
via Marseilles Dec, 21
Newfoundland
Oporto and Vigo
U. S. and British N. Amorica, by Brit. packet.... Dec 29,
by U.S. packet....
by Canadian packet. Dec. 30
W.C. of Africa, Madeira, and Teneriffe Tan 10.
West Indies and Pacific . .. .Dec.. 29.
13ahatnas (via New York) Jan. 12.
Bermuda (ditto)
Cuba and Mexico Dec. 29.

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