The Sun.
London, England, 1860-07-14 00:00:00

TWENTY-FOURTH REPORT OF THE
UNION BANK (...F LONDON.
At a GENERAL ME ETING of the PROPRIETORS,
held at the London Tavern, Bishopsgate-street, London, on
WEDNESDAY, the 11th of July, 1860—present, P.
Northall Laurie, Esq., in the chair, and two hundred and
sixty-seven proprietors—the following report was read by
the secretary :
The I irectors beg to submit to the Proprietors the ac-
counts of the business of the bank for the year ending 30th
June last, from which it, will be seen that, after payment of
all charges, and including the sum of £122 Os. 6d. brought
forward from the last yearly account, the profits amount'
to D 24,563 lis. 6d.
The extent and nature of the frauds committed on the
Bank by W. G. Pullinger, the late chief cashier, have been
the subject of a report issued the proprietors immediately
after their discovery, and of a c.reular more recently ad-
dressed to them; but it now becoWes the duty of the
Directors to furnish the details of the defalcations, as they
have been traced in the course of the investigation which
has occupied the constant attention of the Direculors.
The precise amount of the frauds is now ascerttdned to
be £263,125 Gs. 10d., which represents the difference be-
tween the balance shown to be due by the Bank of Eng-
land to this Bank in its own books, and the amount which
appeared to be due to it by the books of the Bank of Eng-
land ; and the investigat ion of the Directors shows that this
sum has been disposed of in manner following
Sums credited to four stock brokers, in their
accounts current with this Bank, which
were not received
Sums credited in same way to a bullion
broker (Nathan) 57,559 3 2
Sums credited in same way to two other per-
sons, customers of the Bank (T. Thorn-
hill and Parr)
Sums received from the counter cashiers to
take up bills, but not so applied
Sums credited to various parties, and sup-
posed to be in cheques handed to the
counter cashiers, but afterwards with-
drawn by Pullinger, and not presented
for payment .. 11,400 0 0
Amount of gold charges as paid to the Bank
of England, but not received by it (small
amounts of which were abstracted in coin,
but the bulk of it is believed to have been
...al.:hanged for notes in the office) - 83,100 0 0

£263,125 6 10
Of this amount £117,271 15s. 2d. has been traced as pay-
ments to members of the Stock Exchange, and is supposed
to represent losses sustained by Pullinger in time bargains.
The investigation also shows that £62,799 6s. 2d. has been
traced to the bullion broker referred to—who is known to
have been largely engaged with Pullinger in speculative
operations, but was not a member of the Stock Exchange.
These sums, amounting together to £180,074 ls. 4d.,
leave an amount of £83,051 ss. 6d. not yet traced to parties
as having received it.
It is now known that Pullinger had an interest in cer-
tain race horses, and that he had betted largely on races ;
but nothing has transpired to throw any doubt upon his
losto in
wetattht way.eanie
nt th at only a small portion of the money was
It will be seen, by the accounts appended to this report,
that the Directors have realised £11,116 14s. 10d. from
property of various kinds that belonged to Pullinger ; and
though they have taken the safe course of assuming the
alance as a loss, they can assure the proprietors that the
subject engages their constant attention, and that no steps
are neglected which may lead to the further recovery of
property.
In their circular letter of the Bth June, the Directors
informed the proprietors that they had been engaged in a
closo examination of the system of checks existing in the
bank, and had, in some departments, introduced others
which they trusted would prove effectual safeguards against
any repetition of fraud ; and the result has been to ensure
the greatest stringency in the administration of the office.
It would be impossible to make the effect of these regula-
tions clear to those not conversant with the daily working
and necessarily complicated operations of the bank ; but
they are based on an extension of the present system of
double responsibility—that is, of each operation of ono
clerk requiring the check of another, and on a rotation of
duties by the clerks in certain departments, whereby the
accounts kept by one clerk are, from time to time, trans-
ferred to another clerk.

The investigation has, of course, been extended to all
the accounts of each department of the bank ; and, after the
most rigorous examination, the Directors can speak with
confidence as to the entire accuracy of all the accounts ;
and they feel satisfied that the system n•w in operation is
sufficient, and effectual in all respects.
The extent of the defalcation, and the simplicity of the
course adopted by Pullingcr, tend to increase the responsi-
bility which the knowledge acquired after the event may
cast upon the manager's department ; but the Directors be-
lieve that no proprietor can forget that Mr. Scrimgcour has
been the faithful and zealous manager of the bank since its
establishment, and that, during his management, it has at-
tained its present magnitude and high position. No pro-
prietary was ever served with more disinterestedness and
energy, and the directors feel assured that these services,
which the proprietors have acknowledged from year to year,
cannot be forgotten on the first reverse which the bank has
experienced.

The Stock Exchange Committee, in their report of sth
June, complain that " the Directors led the public to infer
that the enormous sum of £263,000, embezzled by the de-
linquent clerk, had been lost by him in speculations on the
Stock Exchange," while a loss of " only £53,285 has been
traced on account of speculative transactions carried on
through members of the Stock Exchange." The directors
consider that their statement—" it now appears that :he
(Pullinger) had been engaged in an extensive system of
time-bargains on the Stock Exchange"—is fully borne out
by the figures in this report, supported by the resolution of
the committee on the Stock Exchange, censuring Messrs.
Bell and Ball "for having transacted speculative business
to a most reckless extent for Pullinger," and they do not
think it warrants the inference drawn from it by that com-
mittee.

The Directors give full credit to the Committee of the
Stock Exchange for their desire to enforce the strict ob-
servance of their regulation against transacting speculative
business for clerks in public and private establishments, as
well as for their anxiety for the reputation of their associa-
tion ; but admitting it to be true, that only a portion of the
money stolen has been discovered to have been lost on the
Stock Exchange directly through members of that body,
there can be no doubt that the bulk of the defalcations has
been lost " through an extensive system of time bargains,"
although all those operations were not conducted by mem-
bers of the Stock Exchange.
The Committee of the Stock Exchange also complain of
the Directors withholding from theirknowledge that Messrs.
Scrimgeour and Co., the Brokers of the Bank, had carried
on a speculative account for Pullinger, while they fur-
nished information to that effect as regards four other mem-
bers of the Stock Exchange.
Shortly after the discovery of the frauds, Messrs. Scrim-
geour and Co. informed the Manager, for the first time,
that they had had one transaction with Pullinger—which
was the purchase of £5,000 Turkish Stock in July, 1856
which they had continued, without charging any brokerage,
till 16th March, 1860 ; having treated it as an act of courtesy
towards a person they had known for many years holding
a confidential position in the Bank of which they were
the Brokers; and as there was no regulation of the Stock
Exchange against brokers dealing with clerks at the time
the purchase was effected, their attention was not drawn to
the rule, as applicable to this case.
The manamer at once, reported this communication to the
Directors, whob received it with equal surprise and dis-
approbation.
The Directors furnished the committee with all informa-
tion traced by them in the course of their investigations;
and, if they had thus discovered any connection whatever
between Pullinger and Messrs. Scrimreour and Co., they
would have reported it to the committee, as they reported
his connection with other stockbrokers, as soon as it became
known to them ; but they had no knowledge of this trans-
action, except from the voluntary statement of Messrs.
Scrimgeour and Co.—and the Directors felt, and still feel,
that they would not have been justified in making such a
use of a spontaneous statement of facts of which the
Directors could have had no cognizance in any other way.
In accordance with their Report on the
24th Aprit last, the Directors have ap-
propriated towards meeting these frauds
the Reserved Fund, which has realised £100,851 15 10
Nowproposed to re-debit Capital Account
with amount carried last year to credit
of that account from Reserved Fund.. 120,000 0 0
Balance to be paid out of profits of the
year

I This cburso will provide for a dividend of 2152 s
2,008 p
12 0
for the last six months, making, with the dividendershanarde
bonus paid in January last, a total payment for the year of
121 per cent. on the capital of £720,000, and leaves anun-
appropriated balance of £3,406 18s. 4d. to be carried forward
to profit and loss account of next year.
The accounts now presented show the results of the ope-
rations of the past year, and attest the extent and highly
profitable state of the business. Notwithstanding the
heavy loss which has been sustained, the number
of customers of the Bank, as well as of proprietors, has
considerably increased, while the amount of the Bank's
balance-sheet, now submitted, exceeds the amount shown
on 31st December last.
The state of the business at the several branches is, in
all respects, satisfactory and remunerative.
The Directors have now laid before the proprietors all
the information they possess with reference to this matter.
They had hoped that, on the twenty-first anniversary
meeting of the Company, the hitherto uninterrupted pros -
Pe'ltY of the Bank would have been the subject of unmixed
believe that
congratulation and they cannot adequately express their
regret that theirexpectarions have not been fulfilled. They
w unanimously
recomm by the course which they no .
Bank Will be b immediate convenience
B k .end for adoption, the permanent interests of the
of the shareholders,
best combined with the
more stock o the largest holders
of the )it ? Directors, as amongst the
Severe as the loss is e(and to none
balance-sheet niB
firming the antirmn3
the present pros"- satisfactory to be able to refer to the
presented, as unquestionable evidence of
of a few Position of the Bank; and as con-
profitsyepaartions of the Directors, that the surplus
that the future
which, with this solitary.
will, wiliel replace all that' has been lost, and
marked by the same prospertY
In February last Air .;,ception, havattended the past.
spected manager of the Charing-cross that office in order to join a—ftrin the able and highly-re-
g-cross branch, resigned
.mercantile firm, as a partner ;
and the Directors have appelvnted in his room Mr. John St.
Barbs, who held, for seven , a confidential appoint-
Thement in the Bank of Englaudears
viz.—Major-Gener t M. atheson, Archi-
bald provisions of the
following Directors retire under
deed of settlement,
bald Boyd, Esq., and Charles Lyall, Tiail
RPleet°da
Boyd, Esq., and Charles Lyall, Esq., offer Land Archibald
are recommended by the Court for re.electione.nuleives, and
Pellew Wilson, Esq., of George-yard, Lombard-street
duly qualified proprietor, hasrge-yard,
given notice of h:
to become a candidate for the office of Direc.toirntaellt intention
meeting. By order of the Court,

H. NEWMARCH, secrete
2, Princes-street, Mansion-House, July 4, 1860. ry,

THE UNION BANK OF LONDON
For the Year ending 30th June, 1860.
GENERAL BALANCE.
LIABILITIES.

Paid-up capital of the Bank
Due by the Bank on current accounts,
deposit receipts (including interest
accrued), and other obligations 9,740,548 9 7
Rebate on bills not due ..
Balance at credit of profit and loss 124,563 14 6

£10,595,005 13 3