The Sun.
London, England, 1861-02-19 00:00:00

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mAimerciaal

_ anr-te-the London and Westminoter Bank, an-
nounced this morning, is attributable 3 o the dis-
covery of a large embezzlement at the ).ranch of
the Commercial Bank in Henrietta-street , Covent.
garden. The amount is £67,000, and although
this would not have been sufficient to a ffect the
solvency of the establishment, a resolution. was)
almost immediately arrived at that it N vkould be
better to prevent all anxiety and alarm by trans--i
ferring the business to the London and West-
minster, and thns assuring the depositors of their
perfect safety. The balance-sheet presented on the
15th ult. showed a reserve fund of
,£75,000, and,
as-the current business of the bank is believed to
have been very sate, there is apparently no reason
to doubt that the shareholders will receive back
the whole of their paid-up capital. Under
these circumstances, as the latest price of the
shares with £2O paid was only £2l, the
prospects of the proprietary will not be severely
"affected. On the other hand, if no timely plan
for averting a Ina had been adopted, a,
j sudden sacrifice of securities might have been ne-
cessary, which, with money at 8 slier cent., could
not fail to have involved heavy loss. The Commer-
cial was one of the earliest of the London joint.
stock banks, having been established in 1839. Its
subscribed capital was £1,500,000, of which only
£300,000 was paid up. The liabilities to customers
are about £910,000. The propriety of using-every
means tQ prevent alarm on the present occasion
was especially increased by the fact that about
four years ago the establishment experienced some
discredit from a series of malignant .and`
unfounded rumours, from 'the effect of which 'Abed
'been slowly but steadily recovering. The fraud just
detected is stated to have been committed by a
ledger clerk named Darden, and is believed to have
been carried on, witholit any accomplice in London,
by: simply retaining a portion of the funds paid in
by customers, who were • duly credited for 'such
amounts, which were afterwards, however, written-
off to the credit of a fictitious account, said to haVe
been opened in the name of a confederate in the
country. Upon any absence of Durden from his
post some of the discrepancies between the pass-
books of the customers and the ledgers of the bank
would have been certainly discovered, and -hence.,
although it was a strict rule of the bank that;
every clerk should periodically absent himself for
holiday, he disregarded that rule and was never
away for a single day—the branch apparently being
far less under the supervision of the directors than
the parent establishment in Lothbury. His mis-
• appropriations have been going on for many yeara.:
A few days back, however, a paralytic seizure, ince,
pacitated him from attending to his duties, although.
he pertinaceously made an effort to do so, and the
whole affair at once became known. Durden is. a
married man, about 40 years of age, with seven
children, and had been 16 years in the bank. Build-
ing speculations are understood to have consti-
tuted the channel through which the money has
been squandered, but he seems anxious to facili-
tate restitution as far as possible, and it is hope&
that some rather considerable amounts of property'
may be recovered. It is remarkable that in July,,
1860, after the occurrence of the Pullinger frauds,,
the directors instituted, as they imagined, a strict
inquiry into the entire conduct of the establish-
ment, in order to see that every possible check
was in operation throughout, and that this inquiry
terminated in impressing them with a conviction
that there was no conceivable mode in which a
fraud by any of the officials could for any period
escape detection.

FJICE 4D. STAMPED, SD.

TILE

The Barrossa, steam corvette, 21, guns, 400-
horse power, which left Woolwich for Sheerness
on Friday, was taken to the Maplin Sands the
next day for the purpose of testing her machinery
and capabilities at the measured mile, The Bar-
rosa is a new and handsome vessel, latelylannehed
at Woolwich and btillt feena plans designed by Sir
Baldwin Walker, late Cogtreller of the' 'Navy.
She ie a sielev ship to Her Majesty's ship Jason.
Her length iienteen perpendiculars is 225 feet
6 inches, her beam 40 feet 4 inches, and her ton-
1ter,1,650. Her engines are built by Messre. Watts
and Son, el the Soho Works, Birthingham. The,
trial, which lastul eeveral hours, was under the
superintendence of Mr. Hall, master of her Ma-
jesty's ship Fisgard, Woolwich, and Mr. Partridge,
Staff engineer at Woolwich Dockyard. The firm
of Messrs. Watts and Son was represented by Mr.
Langford. During the trial the vessel was tested
in every manner, and found to work exceedingly
well, 'lila with very little vibration, She attained
an average speed of 12.19 knots per htiiir, giving a
draught of water forward of 15ft., and aft 17 ; mean
revolutions; 66 ; pressure of steam, 20 indicating
,§he
,bByoool,noofmiGnrailffihtohr,sse;peorevrelyr,:rooop.ei)m,
plielwleedr
the diameter Of which is and; the pitob,r24ft.
ihso horse-power,
The trial was satisfactory in its results.
The
Barrosa will be paced in the steam reserve at
Sheerness.
The completion of the dry dock at Pembroke is
being urged on night and day, relays of men re-
lieving each other every 12 hours ; when finished
it will be capable of accommodating the largest ship
in the British Navy. A gradual reduction of the
establishment both of skilled artisans and labourers
is to take place at Pembroke; The number of men
now employed is about 1,300. The sum of £60,000
is to be expended on the new fortifications in the
bays to the Sonth and at Scoveston up to the Ist of
August next.
The following appointments were made yester-
day at the Admiralty :—Capt. E. Heatheote to the
Ajax, vice Capt. Boyd, deceased; Capt. Sir F. L.
M'Clintock to the Doris, vice Capt. Heathcote ;
Capt. C. F. A. Shadwell, to the Aboukir, vice Capt.
Curry; E. S. Richards, midshipman, to the Aboukir;
P. Steil, chief engineer, to the Fisgard, for charge
of the machinery of the Bristol; H. Houghton,
acting chief engineer, to the Cossack ; S. G. Hall,
third class assist. engineer, to the Indus, as super-
numerary for hospital treatment ; W. R. Henry,
acting third class assist. engineer, to the Philomel;
S. Frazer, acting third class assist. engineer, to the
Cumberland, as supernumerary ; J. Sumner, acting

third class assist. engineer, to the Asia, as super-
numerary ; W. Jones and J. Miller (b), acting
third class assist. engineers, to the Narcissus, as
supernumeraries.

(From the Morning Herald's City .Article.)
The banking public and commercial community
were taken by surprise to-day on the intimation that
the business of the Commercial Bank of London
would be at once transferred to the London and
Westminster Bank. The notice was issued se.
promptly, and the arrangements were so well com--
pleted, that immediately the transactions of the morn-•
ing commenced the change was inaug?irated without
any great disturbance, although much excitement
prevailed to ascertain the reason for this sudden reso-
lution. It was not long before it transpired that the
bank had been made the victim of an extensive
fraud by one of the ledger-keepers at the Weth`-end
branch in Henrietta-street, Covent-garden, .‘nd
that the directors, not desiring to place the o't-
posits and assets in jeopardy, had determined upon"
at once effecting a general liquidation. The course
they have followed has been commended by some,
and objected to by others, though the circumstan-
ces, when they are reviewed, may admit of
explanation. The fraud, which involves a sum of
between £60,000 and £70,000, was not discovered
until-Friday night.;-and c and although it is believed,
with prudent action, the consequences might
not have been fatal, still the directors,
having already suffered from a run in 1857 whici2.
sorely tried them, hesitated in again passing
through that ordeal, so likely to follow the circula-
tion of exaggerated rumours. The principal direc-
tors of the London and Westminster Bank, includ-
ing Mr. Alderman Salomons, were therefore con-
sulted, and it was eventually agreed that the transfer
of the business should be made, unaccompanied by
specific terms or positive engagement of any kind.
Whether this proceeding was thoroughly in accord-
ance with sound discretion has been questioned;
but the difficulties and danger which might have
been entailed by contrary action, it is also urged,
would have been comparatively great. These pre-
liminaries were arranged on Saturday. The state
of affairs being kept thoroughly secret, the intelli-
gence, when promulgated in the form desired, had
the effect of preparing the customers for the event
and facilitating the current of transactions. It is
affirmed that the detection of the fraud was made
through a singular casualty. The defaulter, in
his position of ledger-keeper, had been many years
in the employment of the bank, and steadily refused.
to take a holiday. A few days ago he was seized
with paralysis, and another clerk having been
placed on his books, irregularities were traced,
which led to close investigation, and deficiencies to
the extent of £56,000, according to one account,
and £66,000, according to another account, were
found to exist. The full total of defalcation, it is
alleged, has been ascertained, and is said to corre-
spond with the particulars kept by the delinquent
himself of the malversation he committed. The
money has been adventured in and expended on
building speculations—a property of 40 or 50 houses
in the neighbourhood of Westbourne-terrace, heavily
mortgaged, being the remaining proceeds. He has
also made advances to contractors and builders,
operating with the object of recovering himself, but
eventually becoming more than ever embarrassed.
The delinquent and his friends place the value of
the estate at £22,000, but it is doubted whether, if
realised, any such sum will be obtained. A few other
investments exist of which the bank take posses-
sion under the authority of the law. The fraud
has been committed, it is feared, through.
the laxity of an associate clerk, and by the assist-
ance (whether premeditated or not remains to be
seen) of one or more customers, whom this party
has made subservient to his purposes through pecu-
niary obligatiens. The event has come so unex-
pectedly upon the directors that they haVe not yet
prepared any report for publication, but a board.
meeting takes place to-morrow, and the first
excitement having passed they will be able to give
definitive information to the proprietors. _
at the Through
this change it was a very busy day both
Commercial Bank of London and the London and
earlynd 00. partand
Westminster Bank, a large number oTfhtei rs
the customers
having transferred their accounts. _
of
tohfetCommercial
,
f
Westminster Bank £250,000, cash balance, &c., at
Bank
handed o
o:e London,t: in
the the
oL
the Bank of England and Exchequer Bills, but
notwithstanding heavy sums, owing to the arrange-
ment, were taken out, an aggregate of upwards of
£50,090 was paid in by customers, several express-
ing dissatisfaction that an attempt was not made to
recover the loss and continue business. The Com-
mercial Bank of London was freely patronised by
the members of the Stock Exchange, and their
transactions must have represented a fair total. In
relation to the liquidation, it was also whispered
late in the day that advances had been made to an
amount on Great Western of Canada and Grand
Trunk of Canada shares, though the fact could not
be confirmed. It is admitted that if the present had
been a period when an easy money market existed,
the directors would have tried to pull through, but
with the rate of discount, 8 per cent., it is doubted
whether the resources of
theproved sufficiently elastic to have bank
w
accomplished ol
d
ha
thvee
object.
The effect of the announcement upon the shares
of the bank in the market was unfavourable. The
last transactions were on Friday at 211,- or 21 on
£2O paid. To-day there was a difficulty in obtain-
ing a price, and to have completed sales a much
lower quotation must have been accepted. Until
the result of the investigation shall have been
attained, the actual position of the shareholders
cannot be accurately defined. The capital of the
bank is £1,500,000, and the amount paid up
£300,000. The last dividend declared was at the
rate of 8 per cent. per annum, and the guarantee
fund then stood at £75,000. The shares of the
London and Westminster Bank were operated in at
rather better terms, but no importtuit advance, took
`place.