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

ANOTHER BANK INQUIRY,

Yesterday Mr Frederick Symons, wine and ST "rit mer-
chant, of 64, Lower Thames-street, appeared 1 efore Sir
Alderman Stone, who was sitting for the Lon! Mayor of the
Mansion-house, in answer to a summoai taken out at the
instance of IMr Ralph Waters, one of thl dii ectors of the
London and Northern Bank, charging h'm 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 Tic., 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 summits
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 £lO,OOO. 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 Sept.
in the present year; and the bank, which had a paid-41p
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 wore 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 £35,000, which amount, it was very proba-
ble, would be considerably lessened by dividends from the
estates of those who had failed. The defendant,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. Defoudaut said they must do so,
and if they did not do so ho was going to publish a certain
document, at the same time taking from his pockot 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 detri•.
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 fliunted 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
ale 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 a ;: lava 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, 1664, 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 £3 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 cJn-
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, however, since such meeting and paysnent of
dividends. and within eels, the, t...,
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
winch up to the present time had been lost exceeded tree.
fourths such c illed-up capital, and in fact amounted to
more than £lOO,OOO, so that there was really less than
£26,000 for the purpose of carrying on the business, the
number of shares issued bud taken up since the meeting
having been very few. Mr. Metcalfe said he 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 £30,000 cash in hand, besides £160,000
worth of good trade bills, and that the losses were declared
to the shareholders at the meeting. On Sept. 23 a call of £5
a share was made, which could have been made five months
before, but it was not wanted, inasmuch as the bank was
making largo 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 in the directors.
The shares being at a discount was partly and chiefly
through Mr Symons being so ill advised as to make such a
stir in tho matter. If he had not pursued such a course,
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-
cery, 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, for information, and he gave him all ho 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
clauso 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 ho had not and would not
trust them. Mr Metcalfe said Messrs Emanuel and Brills
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 a very large amount, upwards of £30,000 of which had
been discounted by beokers 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 bearing the bank's acceptance.
He had already stated that there was:£3o,ooo cash in hand,
besides a large amount in good trade bills, and therefore
that clause was alike untrue, In the next clause it was
stated that the directors perfectly well knew that the
manager, Mr Turner, was totally.unfit for the position, and
that he had not been employed at the London and West-
minster for ten years, but had been engaged as one of the
principal officers of the Unity Bank, which had failed, and
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 Metcalfe, said Mr Turner had been 21 years in
the London and Westm!nster Bank, and the direcors 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 43,000, and that if they declared
a dividend of £0 per cent. and not exceeding £B,
they were to retain amongst themselves £l,OOO • and
if 43 and not exceeding £lO, an additioal sum' of
£2,000, and £l,OOO additional for every £2 per cent. beyond
£lO per cent. This clause Mr Metcalfe said was copied from

rum SUN, LONDO

the clause in the articles of ,some other bank, and was op-
posed by the directors at a general meeting, and was struck
out of the articles. In another clause the plaintiff stated
that the dividend which had been recommended and paid
was paid out of the paid-up capital of the bank, and not out
of the profits, the directors well knowing there were no pro-
fits, in consequence of the very serious loss which occurred
which had been before mentioned. There were other
clauses which Mr Metcalfe said were equally false, and
which he said he should submit was the matter which the
defendant threatened to publish.
He then called Mr Ralph Walters, who said he lived at
Eaton-square, and had property in Newcastle. He was a
magistrate in the county of Middlesex, and was nominally
a member of the bar, but had considerable ;property. He
was one of the directors of the London and Northern Bank,
and Mr E. Briggs, Mr Thos. Collins, Mr Robert B, Hay,
Mr Ivie Mackie, Mr Chas, .Poppleton, Mr Wm. Dallison
Starling, and Mr B. T. Wood were also directors, Most of
those whose names were mentioned had been directors from
the first. At the first meeting of the bank there was a reso-
lution passed to do away with clause 79, enabling the direc-
tors to divide a sum of money between them. It was ex-
punged upon the motion of the directors, and as the articles
then stood the directors had no power to divide a fraction.
Mr Lewis suggested that it might not have been ex-
punged by the defendant's knowledge.
Witness continued—He could not tell the exact date, but
it was at the first general meeting. The bank was opened
in 1862, and the general meeting was held within the year.
Mr Alderman Stone—There would be a minute on the
book of that nature.
Examination continued—Witness had no doubt of it.
The articles were published without that clause. The
directors had not divided amongst them a single shilling,
directly or indirectly. They had taken nothing for salary or
anything else. Up to September last he had no doubt but
the bank was in a flourishing condition, and at the present
time he had no doubt but that the bank was perfectly solvent.
The sum of 410,000 was paid to the original promoters, Mr
Clench and Mr Kintien, who had expended a large sum of
money. It was paid to them by the articles of association,
and except that sum, no other had been paid to anyone in
way of gift or remuneration. In the articles issued after the
meeting there was a clause which stipulated that the direc-
tore were to take nothing except what the shareholders might
vote from time to time. Mr Symons was a large shareholder.
Some time in October he went to him at the bank. Witness
thought it was about the middle. lie did not know the de-
fendant before then ; but in consequence of what a clerk told
him, he spoke to Mr. Symons. He first spoke about several
things, and then said that he bad been a shareholder in
another bank, and he took the course of calling a meeting of
the shareholders at the London Tavern, and he would do the
same with this bank unless his shares were taken at par.
Witness said any such meeting would be extremely damag •
ing to Mr Symons' own property as well as to the bank
generally, to which Mr Symons replied that he and the
directors had plenty of money, and must take the shares off
his hands, or he would call the meeting. Defendant then
put his hand in his pocket and pulled out a paper, which he
said was a draft of a circular to call the meeting. The draft,
he said, was to be printed and circulated amongst the share-
holders. Witness said he would be no party to any compro-
mise in the matter; defendant must take his own course.
Witness did not have the paper in his hand. Defendant
read a few lines of it. It was not a printed paper. (Two
letters were shown to the witness, but he could not say
which of the two it was,) This was the only time that he
recollected seeing Mr Symons upon the matter referred to.

On being cross-examined, witness said bills before they
were discounted were not taken before him or any of the
directors to his knowledge. He was not aware that any busi
ness was being done in London in discounting bills except
occasionally. Ho found that the manager had discounted
very considerably; but he was not aware of it at the time.
He had never seen any exact account, and he did not know
what the amount was. He had not looked into the books of
the bank since the bill had been filed in Chancery to see the
amount of discount in London. He had asked the accountant
but he had not heard from him what the amount was.
Mr Lewis (to witness)—Did the manager discount bills
in London contrary to your direction ?

Witness said his sanction was not asked. He frequently
saw the manager, and he did not tell him he was discount.
ing in London. He did not know how much the manager
had discounted for Emanuel and Brillman. He formed his
opinion of the solvency of the bank by the statement of the
accountant. He had not seen any statement which showed
the losses at Leeds. He could not tell how much Messrs
Emanuel and Brillman owed. Emanuel and Brillman were
bankrupts. At present the debt was not proved. The ac-
counts were not made up. No doubt the books would show.
He understood it was about V. 0,000. He had never refer-
red to the books, but ho understood it was that amount. He
did not understand it was £26,000. He would not swear it
was not that amount. He had examined the ledger as to
certain amounts, but not that particular one. He declined
to name any particular account. Ile did not know how
much there was owing to the bank in London in bad bills,
but he understood the total losses must be covered by the
£30,000, without considering any dividends which might be
received. That included the losses at Leeds. He could not
say the amount of the bank's acceptances out at that
11., am uvb huutv cpn-caa do ..f JJZOO,OOO.
He presumed the business could not be carried on without
acceptances. There was a director named Denton, who
retired in the early part of the present year. He had
never heard that he had given acceptances. There was a
customer of the bank at Leeds named Denton, by whom
there was a lees. He did not know that Mr Denton had
acceptances of the bank to a large amount. He did not
know what Mr Denton owed. He never heard of any ap-
prehended for the London and Northern Bank. He was
present at the meeting when the dividend was declared. At
that meeting the directors issuci new shares at £2 pre,..ium.
He did not know how long after that meeting the shares
were at a discount, as he was from town. In the middle of
September on his return from the country, they were at £5"
discount, with a call of £5 to pay. He spoke to Mr Turner,
the manager, about it, and he then informed him of the loss
the bank had sustained. He was very much surprised to
find they were discounting.
Mr Lewis—So were we. Have you the same confidence
in the manager which you had ?
Witness said in one sense ho certainly had not. Ho was
far too easy—people had imposed upon his good nature. He
understood that a person named Sterne had transactions
with Mr Turner, and it was stated at the last meeting that
he owed the sum of £3,000 unsecured. He did not know
that Mr Sterne was indebted to either the Unity or London
and Middlesex, which had failed, and had no knowledge that
he was a customer of either bank, He had heard that Mr
Turner, the manager, was in the London and Middlesex, and
he had heard that he was in the Unity Bank. He had no
knowledge of how long he had been at the Unity. He wes not
a party to publishing to the shareholders that Mr Turner
was late of the London and Westminster. He was not one
who voted the £lO,OOO to the promoters. He was first aware
that sum had been voted very early after the commencement
of the bank. He did not see how much of the £lO,OOO was
outlay. He asked to see, and it was generally given. It
was laid upon the table at one of the meetings, but he did
not know who laid it before them. The shareholders, he
understood, went with the full knowledge of the fact. Mr
Symons was not a shareholder at that time, but he would
have a better chance of knowing than the others. The sum
was included in the preliminary expenses. The preliminary
expenses were not put down as assets. They were put down
in the balance. sheet as a payment. It did not appear by the
balance what was due to the bank's acceptances. There
was £ll,OOO as outstanding liabilities. He did not know
they were acceptances. He supposed it was the item of
drafts on which the bank was to receive payment of the cus-
tomers. He did not know that it was for acceptances of the
bank given to customers. He did not understand that it
was a liability upon which the bank had no security. He
did not know how much the Leeds Bank, which had failed,
held of their acceptances. He was not aware they had any.
The bank had branches at Leeds, Huddersfield, Sheffield,
and Newcastle. The directors held their meetings at the
offices in London. He had never attended a meeting at any
of the branches. The branches wet a under the superinten-
dence of the managers. There was no board to regulate the
management. The directors had reports sent up every week.
The managers of the branches ought not to discount bills
without the sanction of the board in London.

Mr Lewis—Why did you not come to this court and make
tho complaint on the 15th October ?

Witness said because neoessiiy did not seem to require it.
He did not know the day he first saw the hill in Chancery.
He knew there was notice of motion for an injunction to
restrain an amalgamation. He gave the instructions for his
own answer. He did not swear any affidavit. He wrote
down instructions for that purpose. Ile did not make the
complaint because the injunction WAS made. The bill charged
him with neglect, and sought to make him personally liable.
It was not proposed to amalgamate with the Midland Bank-
ing Company within the last month. Ho was not aware that
they were restrained by Mr Symons from amalgamating.
The shareholders had not pledged them not to amalgamate.
The terms proposed that the Midland Company was to give
their £6O. shares fer the £lOO shares of the London and
Northern, and they were indebted to Mr Symons for coming
over to that. That was the proposition made by tho Mid-
land Bank.

Mr Lewis—Up to that time had Mr Symons taken any
legal steps against the bank ?
Witness said ho was not aware that ho had. The shares
had gone down previous to:Mr Symons going to the bank.
He dil not attribute the fall to the defendant. He attri-
buted the subsequent fall to the defendant's proceedings.
He did not know any one to whom the defendant had com-
municated his intention. Witness was at the Leeds meeting
on Monday the 14th, which was called to carry out the
amalgamation. Mr Symons was there. The chairman, in
opening the meeting, said a summons had been granted
against defendant for attempting to extort money. The
letter produced (one of the two alluded to Lefore) appeared to
be like the one defendant produced when he called at the
bank. The letter was dated 14th October, 1864, and signed
by Mr Symons, and was as follows:

" Sir,—l beg to request your attendance at a meeting to
be held at the London Tavern, on Monday the 23d instant,
for the purpose of considering the present position of the
London and Northern Bank. lam a holder of 100 shares,
and think it most desirable that we should meet prior to
paying the call last made."
He did not recollect whether defendant asked him whether
the call of £5 had been made to pay the losses of the bank