The Sun.
London, England, 1860-07-09 00:00:00

THE PULLINGER FRAUDS.

(From the Times' Money Article.)
The report of the Union Bank of London, prepa-
ratory to the annual meeting on Wednesday, was
issued on Saturday morning. ' It contains little
more than a recapitulation of facts already known.
Out of the £263,125 stolen by Pullinger, £11,116
has been recovered, leaving the total loss £252,009,
which is to be met in the manner orignally pro-
posed—namely, by the reserve fund of £100,852,
the writing off of £120,000 from capital, and
the appropriation of £31,157 from the cur-
rent profits of the year just ended. As those pro-
fits have amounted to £124,563, there will remain
sufficient to pay a dividend of 12s. per share for the
last six months, and to carry over £3,406 to the
next account. With the dividend and bonus paid
in January-, the proprietors will thus have received
121 per cent. for the year on their capital of
£720,000. Henceforth the capital will stand at
£600,000. As far as the interests of the share-
holders are concerned, the most important state-
ment is, that, notwithstanding the recent event
the number of customers of the bank exhibits an
increase since the report of last year. As regards
.the directs and manager, it is satisfactory to notice
that the manager is shown—as every one acquainted
with him must have anticipated would be the case
—to have practised no concealment whatever re-
garding the transaction entered into on the Stock
Exchange by his relatives, Messrs. Scrimgeour, for
Pullinger, and that the withholding of it from the
Stock Exchange Committee was a course adopted
by the directors on the grounds which, if they ad-
mit of discussion, will, at all events, be regarded
with approval by a large proportion of scrupulous
persons.
The question remains for the proprietors, "Is
any one to be punished ?" For punishment to be
demanded there must have been some unusual
moral lapse. We do not punish people for unpre-
meditated disasters. Now, the present loss may have
been brought about either by wilful over-confidence
in an undeserving individual, or by a reckless ne-
glect of duty, or by incompetence, and, in either of
these circumstances, some distinct censure and
remedy would be called for. Thus far, however,
there is nothing to support any one of these charges.
The case of Pullinger, after '2l years' service, was
different from that of Redpath or of Robson, the
first of whom had been a few years previously dis-
charged from employment in a public company and
used to avow that he had made a fortune by gam-
bling, while the latter was notorious for theatrical
and other extravagances on a salary of about £l5O
per annum. Again, as to reckless neglect of duty,
there are perhaps few business men in London who
are not convinced that the fulfilment of his duty to
the Union Bank has been the ceaseless thought of
the manager. Whether the directors have neglected
their duty and thrown upon him any point of detail
which he trusted them to fulfil is a matter upon
which he must testify, Next, as to the supposition
of incompetence. The history of the Bank thus far
affords an answer on that head. The value of each
share on which £lO has been paid was increased to
£3O by the existing management, and is still £24
10s., and a concern which pays good dividends for
more than 20 years, and after allowing for all losses
stands at 150 per cent. premium, cannot be consi-
dered to have been in hands that were unfit to under-
take it. We may assume, consequently, that the case
is not one of moral wrong either as regards wilful or
reckless neglect, or the arrogant ignorance of under-
taking functions without the necessary qualifica-
tions. No ground for vindictive emotions would,
therefore, appear to exist, Nevertheless, it will not
do to let the affair pass as an " inscrutable" misfor-
tune, arising as the jargon runs, from " causes be-
yond control." There are no "causes beyond con-
trol," and when any mischief occurs it is from neglect
of proper control somewhere. The duty of those who
suffer is to recognise and admit their mistakes, and
to make every possible use of the experience pain-
fully enforced upon them. If the friends of the
directors and manager of the Union Bank should be
so ill-advised as to attempt to represent that these
gentlemen are not to blame it will be a great offence.
They are deeply to blame, and it is just upon the
degree in which they show themselves conscious of
that fact that their real character may be estimated.
They do not deserve additional punishment because
they have not planned or intended any wrong, but
events do not spring from chance, and they may
rely that without grave faults of omission and com-
mission on their part the Pullinger frauds would
never have happened. Let them instead of endea-
vouring to find excuses, exercise themselves in fixing
upon those faults, and they will thus make the best
amends that can be required. If they are at a
loss to commence the self-examination, they may
ask how it was they failed to detect that Pullinger
was unworthy of his place. Pullinger must have
been Pullinger all his life, and could have had no
honesty but what was superficial. The casual daily
expressions of such a man—even his very manner—
must afford abundant signs, if not for suspicion, at
least for a holding back of confidence; and it
will be a great gain when public morality is
sufficiently advanced to bring steady quali-
ties into appreciation and to prevent that
selection, now so frequent, of the boldest
and most assuming, yet pliable rogue to ride over
men of solid abilities and independent feeling.
Annexed is the report to be submitted. The above
remarks are applicable to the facts already known,
but it is right to mention that reports are current
to the effect that attention was called to Pullinger,'s
proceedings almost at their commencement, with no
result except that of bringing subordinates into dis-
grace ; also that some clear and stringent clauses
in the deed of settlement with respect to periodical
audits have been habitually disregarded. These
charges, it is said, will be distinctly introduced at
the meeting on Wednesday. Whether they can or
c tnnot be substantiated, the proprietors may be
urged to recollect that the future standing and 7;i31-
fare of the bank depc nds upon an absence on their
part of all attempts to slur over any irregularities,
and that it is essential therefore that every one
should not only be allowed a patient hearing, but
should be encouraged and thanked for calling atten-
tion openly to whatever may yet seem to require
explanation :
" UNION BANK OP LONDON.—rIEPORT TO BE SUBMITTED
AT THE ANNUAL GENERAL MEETING, ON WEDNES-
DAY, THE 11TH OP JULY, 1860. . _ _

"The directors submit tho accounts of the business of
the bank for the yoar ending 30th Tune, from which it will
be seen that, after payment of all charges, and including
the sum of £122 brought forward from the last yearly ac-
count, the profits amount to 1124,563.
" 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 immediately after their dis-
covery, and of a oiroular more recently addressed 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 directot•',

" The precise amount of the frauds is now ascertained to
be 1.263,125,.which represents the difference between the
balctuea shown to be due by the Dank of England to this
bank in its own books, and the amount which appeared to
be duo to it by the hocks of the Bank of England; and the
investigation of the directors shows that this sum has been
disposed in the manner following:—
Sums credited to fourstockbrolgia, ,it their
accounts current wi,tl this bank, which
were not rdepi-,•,;)41 ,
£81,058 18 0
Smug c•iedited in same way to hulllP:a
broker (Nathan) ....
Sums credited in the mune 17:ty to two
other pergsss, eustoresrs of the bank
(Thornhill and I'nri)
Sums reeeivta from the counter cashiers
to take up bills, but not so applied
Sums creditedto various parties, and sup-
posed to be in checks handed to the
counter cashiers, but afterwards with-
drawn by Pullinter, and not presented
for payment
Amount of gold charged 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 exchange:l for notes in the
afbe)

57,559. 3 2

1,543 15 0

25,463 10 8

83,100 0 0

£263,125 6 110
" Of this amount, £117,274 los. 2d. has been traced

payments to members of the Stock Exchange, and is sup-
posed 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 £187,074, leave
£83,051 not yet traced to parties as having received it.
" It is now known that Pullinger had an interest in cer-
tain racehorses, and that he had betted largely on races ;
but nothing has transpired to throw any doubt upon his
statement that only a small portion of the mon. y lost
in that way. _ _

" It will be seen by the acermiappended to this report
that the directors have real,. cd £11,116 from property of
various kinds that be), mged to Pullinger ; and, though they
have taken the de course of assuming the balance as a loss,
they can ;issue,: 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 of 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 insure the
greatest stringency in the administration of the office. It
would be impossible to make the effect of these regulations
clear to those not conversant with the daily working and
necessarily complicated operations of a bank ; but they are
based on an extension of the present system of double re-
sponsibility—that is, of each operation of one clerk requir-
ing the check of another, end on a 7 otation of duties by the
clerks in certain departments, whereby the accounts kept
by one clerk are from time to time transferred to another
clerk.