The Sun.
London, England, 1861-11-25 00:00:00

THE BANK OF DEPOSIT AND NA-
TIONAL ASSU.R.4IVCE AND INVESTJLENT
11,5,SOCIATIO.N.

TO THE EDITOR OP TEE SUN.

Sir,—Herewith you will receive the report of
Messrs. Harding, Pullein, Whinney, and Co., on
the affairs of this disastrous institution.
We consider every attempt to bring the affairs
into bankruptcy opposed to the true interest of the
depositors, entailing additional costs to the estate
without any advantage. We believe we can,
through the Court of Chancery under the Acts of
Parliament now in force, exercise as full power as
can be exercised in the Court of Bankruptcy.

We are endeavouring to make arrangements
whereby needy depositors can receive assistance so
soon as the probable amount of the dividend which
will be payable has been ascertained.
We are, Sir, your obedient servants,
CHAS. HENRY EDMANDS,
GIBBS AND TUCKER,
Joint Solicitors to the Committee.
1, New-inn, London, W.C., Nov. 23.

64 BANE. OF DEPOSIT.

"TAE NATIONAL ASSERANCE AND INVESTMENT ASSOCIA•

TION.

"To the Committee of Depositors in the National Assur.

ance and Investment Association.
" Gentlemen,—In accordance with your request, and at
the desire of depositors who communicated personally with
us, we have made a searching investigation into the affairs
of this company, and now beg to submit the result of our
labours as embodied in the accompanying statements and
in the following report :-
44 The National Assurance and Investment Association
appears to have been formed by deed poll, bearing date the
28th of May, 1844. The parties thereto were John Blunt,
John Elijah Blunt, Edward Hamilton, Joseph Macardy,
John Yate Lee, William Preston Landor, Joseph Heapy
Watson, Robert Scurr Scowler, and Robert Henry Wilson.
The said deed provided that the association should consist
and be composed of the persons before named, and of
such others as should thereafter become members thereof,
either as assurers or as the holders or proprietors of stock
and should signify their consent, either express Dr implied,
to the agreement or declaration thereby made, or execute
the deed of settlement,' which it was intended should be
prepared. The objects of the association were stated to be :
" 1. The mutual insurance of lives, endowments, and
deferred sums and annuities.

" ' 2. The receipt and investment of money in progressive
stock, either for accumulation by adding the annual interesst
to the principal sum, or for yearly income by paying the in-
terest as dividend.

" 3. The granting of loans upon real :and personal se-
curities, and advances upon investment stock.'
"The association was, on the Bth of January, 1815, for-
mally registered at the Joint-stock Companies' office, pur-
suant to the 7th and Bth Victoria, cap. 110, sec. 58, as a
joint-stock company, existing on the Ist of November, 1844.
" Shortly after the date •f the deed poll, the business of
the association was commenced and carried on under that
deed until December, 1851. The first place of business was
at No. 4, Lancaster-place, Strand ; and from 1854 to the
present time at No. 3, Pall-mall-east. There have also been
numerous agencies in various parts of the kingdom, and
there are now branch offices at Aberdeen, Bath, Birming-
ham, Brighton, Bristol, Dublin, Edinburgh, Glasgow,
Gravesend, Liverpool, Lewes, Manchester, Northampton,
and Portsmouth. At Bath and Bristol there are local
boards of management.
" In December, 18.51, a deed of settlement was prepared
which bears date the 9th day of that month. It has been
executed by the following persons, who have acted as
directors—viz., Lord George Paget, Matthew Hutton Chay-
tor, Nicholas Dennys, Joseph Macardy, Frederick John
Marillier, Peter Morrison, William Simpson Potter, William
Henry Rough, Charles Saunders,George Forbes Thompson,
James Adair, Benjamin Boothb), Lord Keane, William
Wells,Edward John Hobhouse,and Joseph Hullett Browne,
and by Henry Murray and John Chapman Dale, as cove-
nantees. This deed provides that the parties thereto and
every other person who had effected or should effect any
assurance with the association, 'on condition of parti
cipating in profits,' or who then was or should become the
holder or proprietor of any stock of the association,' should
so long as such persons kept their policies in force, or
should continue to hold or be proprietors of stock of the as-
sociation, be and continue as association by the name of
the' National Assurance and Investment Association.'
" The funds of the association were directed to be divided
into three classes, viz.:
"' The Mutual Investment Fund,' to be ' composed of
that portion of the moneys received and to be received for
investment, and of the additions to be made thereto from
time to time by accumulation and otherwise,' such mutual
stock to be exempt from all liability arising out of the as-
surance department.

" ' The Mutual Assurance Fund,' to be composed of
moneys received and to be received in respect of assurances
on lives, ' on condition oi participating in profits thereof.'
The Genral Fund,' to be composed of meneys re-
ceived and to be received for investment in the capital
stock of the association (which was limited to £100,000), and
of all:moneys received in the assurance department other
than those belonging to the Mutual Assurance Fund.

" The holder; of mutual stock' were to be entitled to
such interest on the amount of the stock held by them, not
exceeding at any time the rate of 5 per cent. per annum,' as
should be from time to time determined by the board of
management, to ' be payable solely out of the profits,' which
should ' have accrued out of the said mutual investment
fund.' If such profits should be more than sufficient for
the payment of interest, it was competent for a general
meeting to direct the division of the surplus by way of bonus
among the holders of ' mutual stock,' which had been
created more than six months.

" The qualification of a director, until the ordinary gene-
ral meeting in the year 1857, was that he should hold stock
to the amount of £lOO, or a mutual policy or policies to the
amount of £999. After such meeting in the year 1857 the
qualification was that he should hold stock to the amount
of £2.50, or a mutual policy or policies to the amount of
£1,998.

" The deed further provides that ordinary general meet-
ings:of the members of the association should be held in
every year after 1866 ; also that 50 members of the associa-
tion, being each of them a proprietor 'of paid-up stock. of
the association' to the amount of £2OO, or being the holder
of a policy for not less than £999, might at any time require
.the clirectorslto call an extraordinary meeting of the asso-
ciation. It will be observed that no distinction is here made
.between the proprietors of E capital stock' and the proprie.
tors of ' mutual investment stock.'

" The names of the several persons who have acted as
directors of the association since Jane, 1851, with their re-
spective qualifications (if any), will be found annexed to
this report. _ .

" lila deed was not registered at Joint-Stock Companies'
office, the association not being within the provisions of the
Joint-Stock Companies' Act, 7th and Bth of Victoria, cap.
110.

" In June, 1854, an Act for granting certain powers to
the ' National Assurance and Investment Association,' 17th
of Victoria, cap. 43, was passed. This Act contains pro-
visions relative to the members of the association, which
will no doubt be found to have an important bearing upon
their rights and liabilities. By the 13th section, individual
members are to be reimbursed out of the funds of the asso-
ciation, or 'by contribution from the holders of capital
stock of the association,' and by the 15th section, contribu-
tion is to be paid by ' each holder of capital stock,' in such
proportion,' as the amount of capital stock held by such
capital stockholder shall bear to the total amount
,for the
time being of the capital stock of the association.'
" Many of the printed documents issued from time to
time contain the words and Sgures ' capital stock, £100,000,'
but it does not appear on investigating the capital stock'
accounti2osoo that the amount has at any time exceeded
10s. Of this amount only £8,593 10s. appears to
have been • paid for in cash. £7 100 appears to have been
issued in satisfaction of claims against the association ; and
£4,357 (making up the £20,050 10s.) arises from amounts
'entered to the creditofpardes as cash payments by them
for capital stock. Such
otmts, however, were not really
ti
paid, but were at the same me charged to them in another
loans
account as loans, and which remain unpaid.
"The entries last referred to
appear in the books under
dates December, 1852, sand December,
and of the
amounts so entered a sum of £5OO appears 1853,
in the name of
the Marquis of Abercorn, and a similar
rs uarra
deatoefd includedth as the
0 in the
name of Lord Templemore; whose names
trustees of the association in a memorial
of
September, 1854, made and enrolled in Chancery peura6th
to the 19th section of the ' National Assurance and Invest-
ment Association Act, 1854. A sum of £5OO also appears
in the name of Lord Keane, one of the directors ; a sum of
£1,500 in the name of William Simpson Potter, another of
the directors; and sums of £2OO and £lOO in the name of
Nicholas Dennys, also one of the directors ; the remaining
portion of the £4,357 is composed of smaller sums. The
amount of ' capital stock' held was varied from time to time
by additions thereto and by amounts which appear to have
been repaid to or credited in account with parties upon the
recurehase of their stock. The following statement shows
the variation and the total amount of capital stock' held on
the 31st of December in each year:—

Amount held on
Dec. 31
in each Year.
£ s. d.
6,307 7 6
10 0 0 .. 20,000 10 0
100 10 0 .. 19,900 0 0

Additions Amounts
Year. during the Repurchased
Year. or Cancelled.
£ s. d. £ s. d.

1852
1853 13,743 2 6 ..
18.54 OP

,000 0 0
1855 . • .. 19,
1856
• ‘,
.. 19,000 0 0
18,57 .. 19,000 0 0
_
1858 .. 300 0 0 .. 19,600 0 0
1859
.. 700 0 0 .. 18,900 0 0
18605, 500 0 0 .. 13,400 0 0
..
change appears to have taken place in the ' capital
stock' accounts since December, 31, 1860.
" The ' capital stock; which appears to have been re-
purchased or cancelled in the year 1860, is entered in the
4 capital stock ledger' in"the names of Lord George Paget
and of Dr. Edward Raney. The sum appearing to have

been repaid to Dr. Rayner was £l,OOO for capital stock of
the same amount of which he had been the holder from
1853. With Lord George Paget an arrangement appears to
have been made by which ' capital stock' for L 1,500 (held
by him from 1853) was given up in exchange for ' invest-
ment stock' certificates for £2,520.
"By the Approximate Statement of Affa't B. at the 31st
of October last, it will be seen that the total liabilities
amount to £364,636 3s. 16., and that the assets are not ex-
pected to realise more than £55,086 13s. 4d., leaving the
large deficiency of £309,549 Os. 9d. Upon discovering that
the amount which the assets would be likely to realise
would be but small in comparison with the extent of the
liabilities, we considered that a strict examination into the
transactions of the company during the past 10 years was
absolutely requisite ; and the result of investigating and
analysing the accounts will be found in the' deficiency
account.' We do not find that any profits have at any
time arisen from the business which has been carried on.
In every year the total amount allowed for interest on de-
posits has exceeded the amount charged to borrowers,
while the income derived from the assurance department
has never been sufficient to meet the expenses incurred at
the chief office, branches and agencies. The difference
between income and expenditure (the recognised loss in
each year) has been from time to time been written off in
reduction of the ' stockholders' fund,' tbe ' assurance fund,'
and (after those funds had been exhausted) fin reduction of
the annuity fund. The annuity fund consisted of sums
paid for the purchase of annuities. The business of the
association in this department had been very :small until
the year 1858, when an arrangement was made with the
Defender Fire and Life Insurance Company, by which the
liabilities in respect of foreign annuities granted by that
office were undertaken by the National Assurance and In-
vestment Association. Since that time the business has
materially increased ; but with few exceptions the annuities
have been purchased by persons resident in France, who in
most instances required that the purchase money should be
invested in French Rentes or other securities, in the joint
names of the annuitants and of the company, until by the
death of the annuitant the amount was released. Under
these circumstances, it was not possible to exhaust the
' annuity fund,' nevertheless, by entries in the books a re-
duction from time to time appears to have been made, so
that at the 31st of December, 1860, the balance appearing
to the credit of that account in the books was only
£62,536 17s. 11d., whereas the actual amount ;of the in-
vestments existing, and beyond the control of the associa-
tion, was about £156,690.
" The following analysis of entries contained in the books
shows the gradual progress of the insolvency fram the year
1852. The amounts inserted in the first column do not in-
clude any losses by bad debts or by unsound investments,
as it does not appear that such items have at any time been
dealt with :

Loss by Interest and Amount appearing
Expenses to Dec. to be due to De-
Year 31 in each year. positors on Dec.
31 in each year.
£ s. d. £ s. d.
1852 .... 4,969 10 0 4,303 8 0
1853 .... 12,259 610 30,543 0 5
1854 .... 18,105 15 5 79,196 16 4
1855 .. ~. 33,804 17 5 118,205 15 9
1856 .... 48,782 5 6 164,822 12 5
1857 .... 66,661 16 5 179,740 17 3
1858 .... 92,376 3 1 226,362 8 1
1859 .... 112,628 15 0 296,078 9 0
1160 .... 147,935 14 9 348,096 18 9

" The debts due to the association appear to be for moneys
advanced and interest thereon, and in some few cases for
capital stock.' From an examination of the bonds and
other securities held, we have come to the conclusion that
the loss by doubtful and bad debts will be very little short
of £65,000. The largest amount owing by any debtor is
£16,280, which sum appears to be due from M. Julian Ber-
nard, and the security held is a mortgage of shares in Ber-
nard's Patent Boot and Shoe Company (Limited) ; at the
present time these shares have no market value. There are
amounts, also, appearing to be due from the following joint-
stock companies—viz., the State Fire Insurance Company,
the Consols Insurance Association, the Agricultural Cattle
Insurance Company (winding up), the Aldershott Manure
Company, the British Provident Life Assurance Company
(winding up) the Mitre Assurance Company (winding up),
the North of Ireland Mining and Pier or Harbour Com-
pany, and the Times Fire insurance Company. Included
in the list of debtors are the following trus•ees £nd direc-
tors, viz. :—The Marquis of Abercorn (for capital stock),
£500; Lord Templemore (for capital stock) £500; Lord
Keane (for capital stock), £5OO ; "William Simpson Potter,
£4,334; James Adair, £945; Nicholas Dennys, £720; and
the Hon. B. Boothby, £2BO.
"Large losses also appear to have resulted from arrange-
ments entered into with L'lmperiale, the State, and the
Defender Assurance companies, and with the agent or ma-
nager of the Livorno Bank of Commercial Credit, in Leg-
horn. In 1851 an agreement appears to have been entered
into with L'lmperiale Assurance Company (which carried
on its business in Paris), by which the National Assurance
and Investment Association subscribed a portion of the capi-
tal of that office and became interested in the business. The
connection continued until 1858, and including the expenses
incurred, appears to have resulted in a loss to this associa-
tion of nearly £20,000. With respect to the State Fire In-
sur ,nce Company, the loss has been far more considerable.
This office was established in Dec., 1853, and the advertise-
ments contain the following names of directors who are or
have also been directors of this association :

policies, transferred to the Waterloo Life
Assurance Company in September last,—
amount assured £97,00915. 6d.
To liabilities in respect of annuties, amount-
ing in the aggregate to about £14,000 per
annum.

L 364,636 3 1

In September last an arrangement was made with a com-
pany in Paris—La Caisse des Families—by which these re-
sponsibilties of the National Assurance and investment
Association were to be assumed by La Caisse des Familles,
upon the transfer being made of French Rentes and other
securities then standing in the joint names of the annui-
tants and of the company. _ _

(It is not supposed that any claims against this estate
will arise out of these liabilities.)

CR. ASSETS,
By cash : £ B. d. £ a. d.
At bankers' 32 7 7
In hand
By sundry debtors:— 68 17 11
Considered good .. 24,402 16 5
Considered

doubtful... £52,802 16 2
Considered bad 21,337 9 7

74,140 6 9
Estimated to
realise.... 13,000 0 0 13,000 0 0
- 37,402 15 6

Amount carried
to deficiency
account .... 61,140 5 9
By property es-
timated to re-
alise
By securities held bycreditors,
estimated value
Less amount of claims as
per contra
Surplus
56,086 13 4
(L 54,742 would be required to pay 3s. in the pound.)
By deficiency 309,549 9 9

£364,636 3 1
DEPICIENCYACCOUNT FROM JUNE 1, 1851, TO OCTOBER

31, 1861.
To deficiency :—As per ap- s. d. s. d.
proximate statement of af-
fairs .. 300,549 9 9
To amount of capital stock .. 20,050 10 0
Less amount repurchased .... 4,670 10 0
15,380 0 0
_

To amount received in respect
of life assurance premiums,
,Scc
Less amount paid for reassur-
ance and for claims
37,066 12 8
_

To amount received as pur-
chase-money for annuities :
By transfer from the Defender
Fire and Life Assurance
Company £69,313 13 1
Amount re-
ceived from
sundry per-
sons
203,688 16 0
Less amount now invested in
French Rentes and other se-
curities in the joint names of
annuitants and of the com-
pany 176,893 0 0
-- 26,795 16 0

Difference in balancing books not yet recon
ciled 398 0 3

£389,189 18 8
CR. £ a. d. £ s. d.
By amount allowed to deposi-
tors for interest 84,057 5 2
Less—Amount charged
to borrowers, &c 23,709 11 4
-- 60,347 13 10
By preliminary expenses, including cost of
establishing branches .. 20,175 1 8
By expenses as under
Advertising, chief
office 25,426 2 1
Salaries 15,695 15 11
Rent, rates, taxes,
repairs, &c 10,855 6 7
Printing, station-
ary, scamps, &c. 6,628 16 10
Incidental ex- •

penes, medical
fees, &c . 6,823 6 8
Law charges.... 2,303 16 10
Travelling ex-
penses
Directors' fees 13,705 15 10
82,737 6 9
Agency expenses at 14 branch offices :
Advertising, salaries, rents,
travelling, printing, medical
fees, petty disbursements,
and fees of local direc-
tors 35,101 15 4
Expenses in con-
nection with
theFrenchAn-
nuity business,
and with
' L' Imperiale '
Co., in Paris. .11,322 13 0
46,424 8 4
_ .

•
Commission
Allowed to
agents and
others 17,515 1 8
Allowed to ma-
naging direc-
tor in lieu of
salary 7,937 3 1
-- 25,452 4 9

154,613 19 10

By amount paid to annuitants 57,621 2 9
Less Amount
received from
French Rentes 14,947 6 10
Investments:re-
alised upon
deaths of an-
nuitants ..... 11,901 12 6
26,848 19 4
30,772 3 5
By losses as under .117,872 15
Shales taken in L'lmperiale
Assurance Co .. 7,900 0 0
Shares in the State Fire In-

surance Co
Bad and doubtful debts—esti-

mated loss by
Property—estimated loss on
realising
F. Garelli and others 7,477 16 6

117,872 15 5
By cash deficiency not yet ex-
plained

1389,189 18
" HARDING, PULLEIN, AND CO.
" 3, Bank-buildings, Nov. 23."

DIR. GLADSTONE 'ON ;MIDDLE CLASS
EDUCATION IN PUBLIC SCHOOLS.

OXFORD, FRIDAY.

A highly important meeting was held in the Sheldonian
Theatre this afternoon, for the purpose of promoting the
establishment of cheap public schools for the lower middle
classes. The Vice• Chancellor occupied the chair, and
among those present were the Bishop of Oxford, the
Bishop of Rochester, the Bishop of Chichester, the Right
Hon. Mr. Gladstone.

The Vice-Chancellor opened the proceedings in an elo-
quent speech, in which he explained that the object of the
meeting was to procure the sanction and support of the
University for a class of schools which had been established
by Mr. Woodard, in Sussex, and which was the beginning
of a great movement throughout the kingdom for the esta-
blishment of public boarding schools, for the sons of the
upper class of tradesmen, farmers, clerks, &c., at payments
from £2O to £3O a year, and to support a scheme for the
erection of premises to accommodate 1,000 boys, sons of
small shopkeepers and others of what might be termed the
lower middle class, near Shoreham, The masters of such
schools to be clergymen, graduates, and trained school•
masters.

The Chancellor of the Exchequer moved the first resolu-
tion, which was as follows :—" Considering the growth of
intelligence among the lower classes, owing to the impulse
given of late years to education, the establishment of public
boarding schools for the education of the lower and middle
classes, which may be cheap and self-supporting, is of great
national importance." After some preliminary remarks,
eulogistic of the scheme of Mr. Woodard as established
and in action at Hurstpierpoint and Shoreham, the right hon.
gentleman proceeded to address himself to the general ques-
tion of education among the middle classes and the advan-
tage of public schools. He said—Mr. Vice Chancellor—The
place in which we are assembled is no inappropriate place,
and the framers of the resolution have reminded us that
this is no inappropriate time, for stating the object of the
work they have in hand. The resolution I am to move
states that the growth of intelligence among the lower classes
is the reason why the establishment of certain schools among
the middle and lower classes is of great national importance.
There can be no doubt that we have reached an epoch at
which the wise munificence of the Legislature directed to the
cause of popular education in its broadest sense has produced
a great and visible effect upon the general intelligence of the
masa of the population, and depend upon it there is no com-
munity that can be in a perfectly healthy state without
something in the nature of a pressure upwards. As the sap
rises from the ground in vegetable nature, so it is in the
various stages of human society : with a stagnant lower
class no society can do well—no country can be power-
ful or secure. (Cheers.) On the recognition of that
principle the Universities of England have, from the first,
been founded; and although in the lapse of time a larger
portion of their special work has come into immediate con-
nection with the higher orders of the community, yet even
now they cannot afford to disregard that rich mine of wealth
in the lower strata of society, from which fresh treasures
may
ever more be obtained to vary, to enrich, and to enlarge
the resourcestu mind,
of
institutions. talent,
and
dt while hehilearianctteelrliwgehniccehhthase
university has to train and to apply to the service of this
country and of its insti
thus ben quickened in the lowest classes, and amongst
mass of the population, there can be no doubt that
the
elow
the
middle classes, to the advantage of which Mr. Woodard h:
addressed himself specially, is at this moment in a position
of some danger. And it is no unkindness to say so in plain
terms, because nothing is more difficult—so slow and un-
perceived, though sure, are social movements—nothing
is more difficult than to bring home to the mind
of the members of any class the clangers that it may LIM