The Sun.
London, England, 1856-09-22 00:00:00

LONDON, MON DAY EVENING, SEPTEMBER 22, 1856.

present time. I will tell you the reason why I have not
attempted to value the property in Wale,. 'rue pro-
perty when it came into their hands was incomplete, and
was an unworkable concern ;it is now a complete pro-
perty, and perfectly workable, with the means of transit
right up to the South Wales Railway. A very able
report has been made respecting the works by an engi-
neer of some eminence, in South Wales, acquainted with
the nature of the property, and the result of it is, that
he has estimated that the works might be made to yield
a profit of 16,0001. per annum.
A SHAREHOLDER—What is the name of the engineer ?
Mr. COLEMAN—I must decline to state it. I may state
that he is a gentleman as well acquainted with works of
this nature as any man in the kingdom, and I had an
opportunity of personally conversing with him on the sub
ject, and through hins I hope ultimately to find a purchaser
for the property. He assured me that the minimum value
of the property was certainly 40,0001., and I think if you
take works which may be made to produce 16,0001. a
year profit, they must be worth at least two and a half
years' purchase, and even if they were only worked to
half their power, they ought still to be worth five years'
purchase. I have exercised a judgment, for I think 20
years' experience has entitled me to some credit, and I
believe that the estimate and valuation I have put upon
the property may be realised. Before going into the de-
tails of the accounts which I have read, I will state to
you that the preparation of these accounts extends over
400 sheets of paper, and the only parties who really
knew the origin, and working, and true position of the
accounts is one man who is away, Mr. Cameron, and
the otb:r, Mr. Crawford, has been so ill that I have
never had a minute's conversation with him, and you
may form some idea of the amount of labour which I
have been compelled to go through in examining the
bonds and documents attached to something like eight
hundred separate accounts.
A SHAREHOLDER—What is the. total loss sustained by
the bank ?
The CHAIRMAN—If the balance be correct, the liabi-
lity in round numbers is 540,0001.
Mr. MARSH—When did the first loss take place in
connexion with these works ?
The CHAIRMAN—This great accumulation of advances
originated from cash credit and discount accounts
granted at a very early period of the business of the
bank—l think in 1850. A cash credit for 3,000/. and a
discos:el, account of 6,0001. were open to the parties of
the name of Damellar and Scales, and afterwards Du-
naellar and Swift. In extenuation of the conduct of the
directors, I may state that these advances were made
upon the recommendation of one of the first commercial
authorities in the City of London. (Cries of "Name,
name.") I cannot state it—l must decline to do so.
(Confusion, and repeated cries of "Name.")
Mr. MARCH—We wish to know the name of the party
who recommended the firm. You are responsible for
the actions of your co-directors, and I want to know
why you take upon yourself to advance our money?
We have a right to know that. (Cheers, and great
uproar.)
The CHAIRMAN—I am sorry I cannot give the gentle.
man's name. I must decline to do so. (" Oh, oh," and
Hear.")
Mr. Stapleton, one of the directors, here essayed to
address the meeting, but was met with a storm of "Sit
down," " Mr. Marsh, go on," &c.
Mr. MARSH—You decline to give it. Well, I leave
the shareholders to put their own construction upon that.
(Hear, hear.) The next thing I have to ask you is this.
You have told U 3 that you gave a 3,0001. cash credit and
a 6,0001. discount credit, making in all 9,0001. Now,
when did that transaction take place ?
, The CHAIRMAN—I will give you, if you allow me, a
history of the whole transaction. Upon the strength of
the same recommendation thee-parties were allowed to go
beyond the original limits.
Mr. MARSH—When did that commence ?
The CHAIRMAN—I think in the autumn of 1850.
Mr. MARSH—Then you had commenced your irregu-
larities. (Hear, hear.)
The CHAIRMAN—Yes ; if you deal with the transac-
tion as such. (Cries of "Of course we do.") Trusting
to the same information, we allowed these parties to have
credit beyond the original amount. We called for col-
lateral securities, and granted money on what, at the
time, was deemed fair commercial value. This was only
what any bank would do. When the advances reached
19,0001. or 20,0001. these parties failed, and then we had
to consider what we were to do. We expected that we
should have been able to recoup ourselves for the whole
of the original bad debt by working the mineral property
ourselves. It may now be said that it was a grievous
banking error of the bank to have endeavoured to cure
the mischief by increasing the liability ; but, gentlemen,
I can assure you that weeks were given to the conside-
ration of this matter, and, at last, the policy of the mea-
sure was carried, and we became the proprietors of the
property.
Mr. MARSH—At what time ? (Rear, hear.)
The CHAIRMAN—I think- this ootearreti in 1850 or the
early part of 1851. At that time the iron market fall fist.
(Oh, oh.) There was no longer a profit on the working
of the furnaces—(A. Voice : " After they came into your
possession ")—but most providentially, as we thought,
the general properties were endowed with a value which
the original proprietors, the Galvanised Iron Company,
had not been aware of. Oae of the advantages to which
I allude was the coal mine on the property, and which
extended oeer nearly a lineal mile. The value of that
coal vein was clearly proved by the fact that the Messrs.
Ford hal been for years working with profi: a con-
tiguous coal mine—one situated on the neighbouring
property, and held under the same le ndlord —Mr.
Talbot, of Glamorganshire. But we found that we
&mid not make the value of this mine available
without an out-pit—that "slips," and a " vent," and
other constructions were requisite. Prudently, or other-
wise, we undertook to supply those requirements ; an I
as a matter of course money kept going out of the bank
week after week and month after month. (Oh.) Gentle.
men, I know that this was matter of speculation ; but,
Prudently or otherwise, we thought that by making cur
property available for due working we were taking the
best means to recoup ourselves kr the advances we had
made. (" Oh, oh," and " Shame.") Gentlemen, it is
very easy to take a retrospective view of the matter and
say that it was imprudent for us to take that step ; but
(to Mr. Marsh) if you, sir, or any other gentleman had
been admitted to our councils at that time you would
have acted on the exigency of the moment, and the
expedients that presented themselves. (No, no.) Shortly
after that, in 1853, we conceived that it would be expe-
dient to get rid of the works, and we received a proposi-
tion from Mr. Frederick Clarke, who expressed his
opinion that if ho took the works in hand he would be
able to pay a certain interest on the outlay of the bank,
and ultimately to recoup us. Mr. Clarke took the
works in hand, and went on for some time ; but findiug
that he had not enough of capital to go on, he threw
the property back upon the hands of the bank. (Hear,
hear.) However, in so doing he expressed his convic-
tion that he was thi • wing up a large f( r.une—(laughter)
—yes, gentlemen, that if he had another 10,0001.
of his own to enable him to work the property, he
would make his fortune. (Laughter.)
Mr. MARSH—Now, when was tbat ?
The CHAIRMAN—I believe it was in 1853, but the
particular moment I cannot tell. We had thus again
to make ourselves masters of the works.
Mr. MARSH—What amount bad been incurred when
you took them back ?
The CHAIRMAN—I think that, including the original
debt, and the purchase of the second and third mort-
gages, with the equity of redemption, the amount must
have stood at 70,0001. or 80,0001. (Oh, oh.)
Mr. MARSH—And this was so far bank as 1853 ?
The CHAIRMAN—Yes. (Shame.) You may say,
gentlemen, that serious as the loss would then have
been, we should have closed. (Hear, hear.) Gentle•
men, we could not—we dare not have closed then.
Mr. MARSH -No, not so long as there was a hope
of bringing fresh shareholders. (Cheers, and " Hear.")
The CHAIRMAN -No, gentlemen ; but it was our duty
to make every endeavour to induce capitalists to come
forward and take the works, in order to recompense the
shareholders for their advances, or to establish a public
company to work, the property ; and I assure you that
a short time ago there was every prospect of our doing
so under the Limited Liability Act.

Mr. MARSH—I have no wish to go further ; but it ap-
pears, from your statement, that in 1853 you had in-
volved the property of the shareholder 3 to the amount
of 70,0001. or 80,0001., while at that time the paid-up
capital amounted to only 50,0001. (Hear.) I was not
then a shareholder, bet the representation made by you
then induced me in 1855 to become one ; and therefore
I have a right to say, that by your oven admission, you
and the other directors made use of our property to the
amount of 70,0001., in advances on account of this single
concern—these works— although your paid-up capital
was only 50,0001. (Hear.) Can any man, whether he
be acquainted or unacquainted with business, say that
that was a prudent thing ? (Cries of "Hem') Why,
sir, was it not a fraudulent destruction of my property,
and of the property of my children ? (Renewed cries of
"Hear, hear.")
The CHAIRMAN-Will you, sir, kindly point out to me
what you would have done had you been on the board
at that time ?

Mr. MARSH—My reply to you, sir, ia, that in the first
place you are begging the question. (Rear.) Your
inquiry is not a fair one. (Hear, hear.) But I shall
now tell you, sir, that though not brought up to com-
merce, I would never have consented to such a proceed
ing. Had I been a director, f should havo opposed such
a proposition, and if it were carried I should have left
the board. (Cheers.) I would have stated my reasons for
my opposition, and stated to the world that as honest
and hoionrable men it became the directors to wind up
the concern. (Cheers.) But instead of that, in 1853, SO
fleurishing was the concern represented to be that I wail
asked to invest in it by a friend who had a considerable
number of shares. (Hear.) Mr. Cameron was daily put.
tiug forward a statement that the half-yearly capital
was to be increased with every prispect of success.
(Hear.) App ication far liberty to issue more shares was
to he applied for; and I sent an application fer shares,
but did not then get them. Now was that proceeding
on the part of the bank a just one ? \Vas it an English':
man's act ? (Hear.) I have visited every quarter of the
world, and I know the estimation in which English
merchants are everywhere held. I have known their
bills to be accepted when those of even American mer-
chants were refused; but, gentlemen, will this confidence
in our countrymen continue if ouch proceedings as this

be allowed to pass uncensured or to be repeated ? (Hear.)
I say, sir, that I am smarting under the swindling of
myself and my children. (Cheers.) lam not like the
merchant making, perhaps, his 10,0001. a year. The
investment made by me in the bank was a part of the
small patrimony which my children had a right to, and
seeing that the act of those directors may send us to
beggary, or to depend upon half pay,—my brother
shareholders will pardon me if I may appear a little
importunate. (Hear, hear.) I now wish to ask the
chairman whether he does not think that this bank wa,
insolvent when those new shares were issued? (Cheers.)
The CHAIRMAN—The bank was not insolvent so long
as those securities were taken as worth the money they
represented. (Oh, oh !)
Mr. MARSH—But those securities were not worth
their money. (Hear, hear.)
The CHAIRMAN—In our estimation they were. (Hear,
hear, and Oh, oh !)
r. MARSH—But, unfortunately for the fact is,
they were not. (Rear.) I now come to Mr. Humphrey
Brown, an M.P.
The CHAIRMAN--Yon are going through all our bloto.
Several Voices—And he has a right to do so.
The CHAlRMAN—Certainly.
Mr. MARSH—WeII, sir, I read of a manager of a bank
at Tewkesbury who embezzled money, but could not be
legally convicted because he was a shareholder.
(Laughter.) Well, the gentleman received in payment
of an advance of 1,0001. to Mr. Humphrey Brown two
cheques of 5001. each on the Royal British Bank. I
want to know, were those cheques honoured ?
The CHAIRMAN—No. (Hear, hear.)
' Mr. MARSH—Were Mr. BrOwn's liabilities to the bank
as much as 70,000/. at one time?
Toe CHAIRMAN—I believe they were, with running
securities. (Oh, oh )
Mr. kLutsii—Was it-fair to allOwl;im to incur liabi-
lities to the amount of 70,000/.1 (Hear, hear.)
The CHAIRMAN—Perhaps
.you wily hardly believe it
credible that, until I was called to the chair in 1855, I
did not know that Mr. Brown was in debt to the bank
at all. (Oh, oh.)
Mr. MARSH—WeII that was a sin of omission which'
was quite as unfortunate to us as a sin of commission.
As a paid director was it not your duty to have fully
informed yourself as to the finances of the bank I
Tne CHAIRMAN—WeII, when we had officials munifi-
cently paid, and when we had no reason to believe that
they were not acting in a perfectly straightforward man-
ner, and when you remember that much was done below
stairs of which we had no knowledge, then you have a
clue to much of what has occurred. [A. Voice—" The.
is the very thing."] Don't think that 1 am excusing my
self.

Mr. MARSH—The general manager of a bank ought
to be the servant of the board, and nothing more. Yet
I was told that the directors of this bank had not the
confidence of the people of London, and that Mr. Came-
ron's manner was most disagreeable to the customers of
the bank. May I ask, what is his debt ?
The CHAIRMAN—About 30,0001., as it appears on the
books. (Shame.)
Mr. MARSH—I wish to know what is the value of Mr.
Cameron's security for the 30,0001. ?
Mr. COLEMAN—I will answer that. (Hear, hear.)
General A ITCHESON rose, amidst cries of "order,
order, and chair, chair," to insist that the whole of the
general expenditure should be given to the meeting.
Mr. COLEMAN—I think you will find it most conve-
nient if you will allow me to go on with my statement.
I will endeavour to account for the whole of the defici-
ency, and also as to the assets of 288,6441. 83. 11d. I can-
not give, as I have said before, the exact value of the
Welsh mines, but simply that their cost was 106,453/.1
4s. Dd. At the commencement I found there were
placed down as charges and expenses 7,1231. 11s. 10d.,
and another item, preliminary expenses, of 15,7931. lls.
111 Then there was the adjusting interest account
amounting to 22,3521. 10.3. 63., the entire losses being
270,4121. 10s. 6d. (" Oh, oh," and "Shame.") I be-
lieve that the adjusting interest account is one of the
painful causes of plunging the concern into inextricable
debt. (Hear, hear.)
A SHAREHOLDER. —We want to know what were the
had debts of the directors and officers.
Mr. COLEMAN. —The loss by Mr. John Gwynne, for-
merly one of the directors, is 13,6401. (" Oh, oh," and
"Shame, shame.") That was increased between 1850
and 1855. He retired from the directory in October,
1851, and,l cannot find that any debts Gave been incurred
since, except the interest charged on the original
amount.

A SHAREHOLDER.—GO on. What is the next swindle ?
(":Hear, hear," and laughter.)
Mr. COLEMAN.—The next account is that of Mr.
M'Gregor (groan., and cries of "How much!") The
loss by Mr. M'Gregor amounts to 7,362/. (Shame,
shame,)

A SHAREHOLDIR.—ie it true that he was a director
with one share— (hoar, hear, and "no no") ? How
many shares had tie I

Mr. Commas-a—l believe he held ten shares. There
can be no doubt but that a.furlier inquiry into the af-
fairs of the bank must take place. It will be the duty
of the shareholders to insist upon further inquiry, and
they have a right to demand it ; but there is one fact
which I desire to bring under your notice, and that is
that since the present governor had filled the chair there
has been no increase of the debt at all, and, as you are
aware, there are many other new directors wh• knew
nothing at all about the matter until they became mem-
bers of the board. (Hear, and oh.) Another point I
feel it to be my duty, as your accountant, to lay before
you, is a fact I have endeavoured to ascertain, namely,
that I think there is not one farthing lost by any one
gentleman now sitting on this side of the table as a direc-
tor. (Hear.) I think it highly impolitic and indiscreet
that I should disclose the value of every debt, as it may
be of disadvantage to the shareholders themselves, if I
were to disclose the value I estimate them at. (Oh, ob.)
I may be wrong, and am liable to error as well as other
people, but I think it will not be advisable, unless the
proprietors demand it, that I should disclose the value
of all the bad debts, because if people know what esti-
mate I put on the debts they will ritft pay you more.
Then there is a debt of parties connected with the direc-
tors through Mr. Humphrey Brown of 50,0001. (Oh,
oh, groans, and Shame, shame.) The direct loss
through directors has been 70,978/. (Oh, oh.) The next
lose is one occasioned by the firm of Oliver, of Liver-
pool, who were introduced through Mr. Wharton, one
of the directors. It amounts to 13,4865 (Oh, oh.) The
next account is that of Mr. Cameron—(groans and
hisses)—whose liabilities, standing in his Own name,
amount to 21,2501., besides a further loss by his traffic
in shares of 8,7521., making a total sum of 29,9021.
(Shame, shame.) The directors were led to believe that
there were policies existing on Mr. Cameron's life
amounting to 10,0005, that there was security upon his
property at Dingwall, and other securities, upon which
he was said to have claims, amounting to between 3,000/.
and 4,0001., making from 24,000/. to 26,0001., and in
addition to this there were 200 shares in his name.
These were the securities which the directors supposed
they had from Mr. Cameron, but I regret to say that it
has been discovered that the whole of these securities
and policies had been previously charged and encum-
bered by other parties to the extent of their value.
(Shame.) The value of the property at Dingwall would
not realise anything like that which was represented as
its value, and my opinion is that what you will be likely
to get back would not exceed 3,0001. or 4,0001. (Louie
cries of " Oh, oh.") I find that there is a less also by
Mr. Mullins, of 7,0001. This forms a total loss of
121,840/. occasioned by directors directly or indirectly.
(" Oh, oh," and " Shame, shame.") The next item of
losses arising from various accounts in the same form
amounts to 49,7351. The next item is a loss of
59,365/. on 492 sundry accounts, (" Oh, oh, shame,"
and cries of " These are for the friends and relatives
of the directors.") These were general cus-
tomers of the bank. The next item belongs to the
branches of the bank. The had debts or losses by the
branches appear to be 10,428/. (Shame) The esti
mated loss upon the value of the premises occupied for
the business of the bank and its branches will, I believe,
amount to 14, 0221. There will, I think be no loss upon
the South Sea House premises, with the exception of a
claim of the builders, which is disputed. Indeed, I
think they will prove to be of more value than their cost;
and I will tell you why, and that is that the directors
have been from time to time been offered a premium for
them. I think that four-ffths of the whole value of the
establishments will be likely to be realised. There are
only two items more—namely, 3,7061. loss on sale of
securities, and 11,0001. allowance for contingencie,,
which I think you will find make up the total loss of
270,0001. Having given you these facts, I may perhaps
be permitted, as a man connected with commercial mat-
ters, to make a remark upon this subject. (Hear, hear.)
It appears to me that the promoters or managers of this
bank began with a theory which practice has shown was
enti rely wrong. (Hear, hear.) In fact, the persons who
started the bank did so upon a principle which is spe-
cious and false, and I have no hesitation in telling you,
as a public man well acquainted with these matters, that
unless the public asd commercial men do something is
arrest the progress of specious individuals such as those
who concocted the scheme open which this bank was
founded, more serious occurrences of a similar nature
will recur. (11-ear, hear.) I have placed before you
the facts which have come within my cognisance as ex-
plicitly as possible, without the slightest iefitienco being
exercised over me by the directors or any one else.
(Hear, hear.) It has been asserted that I have been en-
gaed 1y the directors to cook the accounts. (Shame.)
Now, I do in common fairness and common justice ask
you, the shareholders, to refute that. (Hear, hear.) I
do assure you, after an honourable practice in this city
of upwards of 20 yeare, there never wan yet a board
strong enough to make me cook their irtecoun.s. (Hear.)

A. YEOPRIETOR—What was the financial condition of
the bank prior to the new shares being issued ?
Mr. COLEMAN—If I am to give a fair and explicit an-
swer to that question, I must say that if the account, of
the bank had been properly made up, the shareholders
ought ❑ever to have had a dividend in any one quarter.
(Bear, hear.) T regret that I have been compelled to
give you a verbal statement, but I really have not had
time to get you out the entire position of the bank in
every particular, as I first undertook the duty last Wed-
nesday week.
In reply to Mr. MITCHELL,
Mr. COLEMAN stated that within the last few months
a director bad transferred some shares to Mr. Cameron,