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

TWENTY-FOURTH REPORT OF THE
UNION BANK (;1` LONDON.
At a GENERAL MEETING of the PROPRIETORS,
held at the London Tavern, Bishopsgate-street, London, on
WEDNESDAY, the 11th of July, IS6o—present, P.
Northall Laurie, Esq., in the chair, and two hundred and
sixty-seven proprietors—the following report was read by
the secretary :
The hirectors bk 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 sem that, after payment of
all charges, and including the sum of £122 Os. 6d. brought
ftrward from the last yearly account, the profits amount
to £124,563 14s. 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 to the proprietors immediately
after their discovery, and of a circular more recently ad-
dressed to them ; but it now becomes 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 Directors.
The precise amount of the frauds is now ascertained to
be £263,125 Os. 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 investigation 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
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
exchanged for notes in the office)

£263,125 6 10
Of this amount £117,274 los. 2d. has been traced as pay-
rents 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 tho Stock Exchange.
These sums, amounting together to £180,074 Is. 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
Own statement that only a small portion of the money was
lost in that way.
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
balance 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
close 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 one
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 new in operation is
sufficient, and effectual in all respects.
The extent of the defalcation, and the simplicity of the
course adopted by Pullinger, tend to increase the responsi-
bility which the knowledge acquired after the event may
east upon the manager's department ; but the Directors be-
lieve that no proprietor can forget that Mr. Scrimgeour 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 member" of the Stock Exch.eng..-„" directors
tonsider tharittair oar 745}.441- 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 defalca ions 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 their knowledge 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 porson 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 manager at once reported this communication to the
Directors, who received it with equal surprise and disc
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. Scrimgeour 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 April last, the Directors have ap
propri ated towards meeting these frauds
Reserved Fund, which has realised £100,851 15 10
Now proposed 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
31,156 16 2

£252,008 12 0
r This course will provide for a dividend of 12s, per share
for the last six months, making, with the dividend and
bonus paid in January last, a total payment for the year of
121 per cent, on the capital of £720,000, and leaves anim
appropriated balance of £3,406185. 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
hrofitable state of the business. Notwithstanding the
eavy 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.
Tmheeey had hoped that on the twenty-first anniversary
perity of the Bank would
of the Company,the hitherto uninterrupted pros •
congratulation been the subject of unmixed
have
regret that thel and they cannot adequately
believe that b3' the course which they The
express their
r expectations have not been fulfilled..
.y
recommend for ad • the
Bank will be be t option, the permanent interests of
Bee ed with now untuumousiy
of the shareholders. n the immediate convenience
more than to the Dire Severe as the loss is (and to none
of the stock) it is satit2rs, as amongst the largest holders
balance-sheet now presset4_,t°rY to be able to refer to the
the present prosperous po-Z, as uuestionable evidence of
firming the anticipations of tre of the Bank ; and as con-
profits of a few years will
marke all that has been lost, and
that the future will be
onnthattended the st.
with this solitary sue4ido hashe same prosperty
which,
In February last Mr. Wight
the able and highly-re-
thatbranch, resigned
spected manager of the Charing_
Mr
a partner ;
office in order to join a mercantilaBam,
me Mr. John St.
and the Directors have appointed in li?
ions of the
Barba, who held, fqr seven years, a O,BZr
went in the Bank of England. ntial appoint-
The following Directors retire under the p 0
batli
dd.
deed of settlement, viz.—Major-General Matheson, bald Boyd, Esq., and Charles Lyall, Esq „d
reArchi-
Boyd, Esq., and Charles Lyall, Esq., offer thenaselYelisi
are recommended by the Court for re 'election. Fleetwood
Pellew Wilson, Esq., of George-yard, Lombard-street,
duly qualified proprietor, has given notice of his intention
to become a candidate for the office of Director at this
meeting. By order of the Court,
. H. NEWMARCH, Secretary.
2, Princes-street, Mansion-House, July 4, 1860.
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. ........ .
.• 9,893 9 2
...
. . .
Balance at credit of profit and loss 124,563 14 6

Z 10,595,005 13 3