The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1842-10-18 00:00:00

THE BANK OF MANCHESTER.

The annual general meeting of the shareholders in the
above company was held, on Friday, to receive the annual re-
port. and to elect directors in the place of those retiring. The
meeting was appointed to be held at the York Hotel, King-
street, Manchester, at eleven o'clock, and, accordingly a
large number assembled at that hour, in the large room be-
hind the hotel; but, the room being too small for the pur-
pose. the meeting was adjourned, after the advertisement con-
vening it had been read, to Hayward's Hotel, in Bridge-
street. The chair was taken by Mr. John Spencer, one of
the directors.
The Chairman, in opening the proceedings, addressed the
shareholders in the following terms :—You have been called
together to-day to receive an account of the proceedings of
the directors during the last twelve months, and to receive a
report of the present condition of the bank. The events of
the past year have been, I am sorry to say, of a most unsatis-
factory nature. Many bad debts have occurred, some of a
very large amount, by which the bank has sustained great
loss, and the present condition of the bank is most disastrous.
For this state of things the directors do not claim to be ex-
empt from blame. One remark, however, may be made on
their behalf; and it is this, that if your money has been lost,
our money has been lost too. After proceeding at some
length on the embarrassments of the Bank, the Chairman
called upon Mr. N. Earle, the company's new solicitor, to
read the directors' report.
From this document it appeared that there was a deficiency
of £16,248. 7s. ; exclusive of the entire capital, £741,030 ;.
the reserved surplus fund and profit for the year, amounting
in the aggregate to £:43,609..85. 9d.; and making in the
whole a total loss of 800,887. 15s. 9d. It recommended a
call of £2 per share, as a means of preventing a premature
sacrifice of property, and that there should be a dissolution
of the company. It mentioned also that arrangements have
been made with the Manchester and Liverpool District Bank
for rendering available such portion of their assets as will
promptly liquidate every demand, and for affording all reason-
able facilities to the customers of the Bank of Manchester.
' The new directors are stated to be Mr. William Haynes, Mr.
William Hill, Mr. William Smith, and Mr. William S. Steil.
Mr. John Spencer, Mr. John Hall, and Mr. John Potter,
were to be proposed for re-election. The delinquencies of
Mr. Burdekin were noticed, and Mr. 011ivant recommended
to fill his place.
The report further went on to show, that " It must be evi-
dent that such a state of affairs was quite incompatible with
the continuance of the business of the bank, and Mr. Smith,
to whom the investigation had been exclusively confined, with
a soundness of discretion which the directors feel bound to
acknowledge, assumed the entire responsibility of devising a
plan whereby the safety of the shareholders, the convenience
of the customers, and the general interest of the bank might
he most effectually secured. The negociations for this end
could only be successfully carried out by the most vigilant
caution and absolute reserve, and the directors were for the
first time made cognisant of the actual state of affairs on
Friday, the 7th instant, when called upon to confirm the
arrangements devised by Mr. Smith.
" It is, therefore, a source of.great satisfaction to the di-
rectors to be able to state that arrangements have been made
with the Manchester and Liverpool District Bank for ten-
dering available such portion of their assets as will promptly
liquidate every demand, and for affording all reasonable
facilities to the customers of the Bank of Manchester. As a
means of ensuring success in these desirable objects and of
preventing the premature sacrifice of property, the directors
have felt it their duty to make a call of £2 per share, which
they hope will, on due consideration, be promptly responded
to by the shareholders.
" They are sorry to be obliged to report that Mr. Burde-
kin, who has for many years been connected with the hank,
has recently absconded, and has misapplied the endorsement
of the bank to his own purposes. It has not been possible
to ascertain the extent of those fraudulent transactions, but
the directors are in hopes that it will not exceed the amount
for which his sureties are liable, and they can only promise
that no exertions shall be wanting on their part to bring Mr.
Burdekin and his confederates to account.

" In submitting so deplorable an exposition of mismanage-
ment, the directors, at least that portion of the hoard who
were in office previously to the last general meeting, cannot
but feel that they have exposed themselves to the several
animadversions for having so fatally misplaced their confi-
dence in a managing committee, and the only argument
which they can offer in proof of their having themselves
beer► deceived, and in extenuation of that wWei they so
liberally regret, is the fact that they have been, and are still,
among the largest shareholders, and consequently among the
heaviest sufferers."

The report concluded with a recommendation for a disso-
lution of the company, and stated that the necessary steps
were in progress for convening a special general meeting for
the purpose.
Mr. T. Greig thought it was due to the shareholders be-
fore receiving the report, to enter into a minute examina-
tion. (Applause.) He came there to charge certain parties
with a conspiracy to defraud the shareholders of the bank—
(applause)--and if he failed to substantiate the charge, he
must throw the blame upon the directors for not furnishing
the matters on which to ground the charge. Mr. Dyer was
reported to have said, in reference to the statement of the
affairs of the bank, and the condition in which it was viewed
by the public—" There must therefore be some misconcep-
tion, and a very great amount of credulity, existing in the
minds of the shareholders concerning the reports which have
been circulated of most disastrous losses having been sus-
tained. It is said that we have lost enormous sums, of
which we, being directors of this bank, are altogether un-
conscious. The figures that have been read to you are care-
fully and honestly compiled from the acounts of the bank.
What do those figures show ? Those figures show, not only
that the whole of the paid-up capital, £741,000, is still un-
touched, but that there is a surplus fund of £19,000."—
(Applause.) The half-yearly meeting. was called, when a
dividend was looked for. What were the shareholders then
informed ? That no dividend could be paid. The approach-
ing half-yearly meeting had now arrived, and they were
called together to receive the cool intimation that the whole
of the capital was gone. (Hear.) But they must not allow
it to go without looking after it. (Applause.) He would
read some further extracts from the last report. Seeing that
the whole of the capital remained, and that there was a sur-
plus of £19,000, what did the directors pledge themselves
through the chairman to do ?—" I hope the board will be so
roused, by a sense of duty, as will induce us to go, in fu-
ture, upon a plan which will prevent our incurring such
losses as heretofore." Then it was said that all the losses
had been ascertained, and written off, and taken into ac-
count; and this was the history that was given—" It is an
act of fairness; I only v:ish to explain to you what state we
are in with regard to capital, and then we will leave you to
sell your shares if you like. The shares were then in the
market at fifty per cent. discount on the paid-up capital.—
" And for myself, although I'm not in the habit of gambling,
I will undertake to say that £lOOO will secure the estimate
for the present year. Why, if this bad all been proved for
the purpose of deception, (if he might be allowed the
term,) how could it have been more strongly placed ?
they had now come to be told that the whole of. the capita
had been lost, after many, himself amongst the number, had
been induced to pay into the bank, and the shareholder s had
risen from little more than 2JO to 300. " Now," said Mr.
Dyer, " with respect to most of the accounts of a doubtful
character. we have obtained security. It is certainly better
to take security to ensure 20s. in the pound in such cases,
even if we had to wait a few years, than it would be if we
were to get 10s. in the pound now." He now passed on to
the remarks of Mr. Chappell : he was another whom he en-
tirely absolved from knowing anything of the accounts of the
bank. " There wanted only a cordial support among the pro-
prietors, to make the Bank of Manchester stand No. 1
among the joint-stock banks of Manchester." That cordial
support had been given the directors, in opposition to the
motion brought forward by Mr. Norris; had that motion
been carried, a considerable amount of property might have
been saved out of the wreck.--(Applause.) There never was
a greater abuse of a word than of the word " banking ;"
therefore, that they might not stamp it ettirely with infamy,
he hoped they would not apply it to such transactions as
those. In this town we had the " Northern and Central"
squander, then the " Imperial" squander, then the " Com-
mercial" squander, then the " Manchester and Liverpool
District" squander, and, as though the town had not been
sufficiently disgraced, they were called together that day to
testify to the " Manchester" squander; and though last, he
was sorry to say it was not the least. He had begun with
parties who were entirely free from blame; he would now
pass to the parties to whom he attached blame, and serious
blame indeed. First, he should remark upon Mr. Roberts;
he did not know whether he was present; if so, he hoped
he would particularly attend to the observations he should
make on his folly. Mr. Roberts had stated at the last meet-
ing that it was necessary to the well-being of the bank, that
the directors should have the entire confidence of the pro-
prietors. They had got that confidence, and this day they
saw the result. Mr. Roberts also stated, that after deduct-
ing the total estimated loss up to that time, and having told
then' that, having proceeded in their usual course, they had
£19,000 to their credit, he asked was it for them to be com-
pared with the bad administration of another bank in its
early days? No doubt he alluded to the Manchester :and
Liverpool District Bank ; but according to what was-now
laid before them, that bank was much better conducted than
this. Mr. Roberts said " The proprietors must trust to the
directors, especially after presenting such a report as that, to
the responsibility to which they were pledged, and upon that
responsibility they were prepared to act.' What responsi-
bility were they 'prepared to act upon ? He wished Mr.
Roberts had been there to answer that question. But he
should look for a full answer; it must appear publicly, as
well as the questions now put. "In the estimate of the
value of our stock, there is no possible loss could accrue, if
you were to stop the bank to-morrow, that could be pro-
portionate to the present rate of shares." This gentleman
was intimately acquainted with the minutiw of the bank ; he
was one of the managing committee ; and be came forward
to make that statement. They must bear in mind that the
shares were that day 50 per cent., he aught say 70 per cent.
higher than they were now. A system had been followed in
this bank of calling certain creditors together ; they had
thought fit to take Bank of Manchester shares from them at
a certain value, as security for their accounts ; they had
thought fit also to take certain property at a higher value
than it ought to be taken at. Not only so, but they had
given a bonus of £lO to keep the thing quiet, and not let the
public into it. [Mr. W. Smith : No.] In the case of
Heron,s creditors, had he not said, •` If you will give me
£9OOO or £lO,OOO, I'll pay all the small creditors in full."
Had the bank any right to give bonuses in that way? Was
is not a grievance that they should make arrangements of
that kind without their coming before the directors, who
were prevented examining the accounts, and thus exposed
to such an attack as he was now compelled to make upon
them. Mr. Greig had been told, whether on proper autho-
rity remained to be seen, that an immense sum of money had
been expended upon a property at Darwen upon which it
now appeared the bank had no proper claim. Within his
own knowlege they had lately been laying out thousands of
pounds upon coal mines, paper-works, print-works, upon
halls, and upon the removal of trees to decorate those halls ;
and the day the bank stopped them in those operations, he
was creditably informed they had three hundred out-duo
labourers employed. Could they pass over in silence such
conduct (" No, no.") In many cases the bank had
founded the alarm, creditors had flocked there, and got paid,
and the bank was the sole creditor upon many large estates.
Wait had they done in the case of Hilton, of Darweh, two
years back, and in the case of Joseph Raleigh? Was it not
a well known fact that reports had been circulated in the
tows, people flocked in with their paper,
.and. Mr. Burdekin
went from one warehouse to another, saying it was a perfect
mistake that the bill had not been discounted, for the
Raleighs stood well at the bank ? It was said by foreigners,
that Englishmen were more liable to offend by cool indiffer-
ence than by bravado ; and he said, the fault of the directors
was unpardonable, for they ought long ago.to have looked
into the affairs of the.bank. And if any foreigners were pre.
sent they would see that when Englishmen had their pockets
picked, and their money squandered. they came together,
and received the report with as much coolness as if it was
the announcement of a large fortune. (Applause.) He was
told that the account of Raleigh's with that bank was about
£lBO,OOO. Could it be believed that such a sum should
have been lent them, in a town where they could not have
got credit for £5OO for two years' back ? (" Shame!")
Bear in mind this was the time when they had the whole of
their paid up capital, and a surplus fund of £19,000 beside.
(Hear, hear.) This was the time when great caution had
been superinduced ' • their structure had been laid, and they
were building up their fabric with better cement, and seeing
that their stones were properly polished and well bedded be-
fore they were laid ; and now they were called together 12
months afterwards, and told that they were £16,000 worse
than nothing.
Mr. Norris said he wished to ask what Mr. Roberts owed
the bank at the time that he opposed the appointment of
auditors, independently of his shares, which ought to be
valued at nothing, for they were worth nothing.

Mr. Smith said he thought it w:oUld be about .C 40,000, but
the bank at the time held securities.

Norris.—Of what description ?
Mr. Smith.—Of twist and other things, which were under
the controul of the managing directors.
Mr. Norris.—Take them at their proper value, what
amount do you think he owed the bank, and take his shares
at their proper value ?_ _ _ _

Mr. could not pledge myself to any definite
amount ; because I have not referred to tie state of the
account at that time.

Mr. Norris.—But he owed a debt of considerable amount?
Mr. Smith.—Oh, yes.
Mr. Norris.—Did he return it as a good debt due to the
bank ? •

Mr. Smith.—Oh, no doubt of it.
Mr. Norris.—Very well ; when he did that, he must have
known that he was not worth one shilling. (Hear, hear.)
And he being a managing director at the time, and the bank
being minus the whole of its capital, he could not have been
ignorant of it, and must have committed a fraud. I have
nothing more to say. I think when a man acts as Mr.
Roberts has done, he ought to be held up to the contempt of
the whole world. (Applause.) A shareholder suggests I
should ask what amount he is owing to the bank at present.
Mr. Smith.—The total liabilities, on his own account and
in connection with others, amount to £74,os2.—(Hisses, and
cries of " shame !")
Mr. Norris said he exonerated all but the managing di-
rectors; but he thought the constitution of the bank was
wrong. _ _

Mr. J. W. Fraser asked what transactions the Bank of
Manchester had had with the Bank of Charleston, and also
whether a shipment of specie recently made to that bank by
Mr. Burdekin, had been clandestinely conveyed to his use.
Mr. Smith said that the transaction was quite safe and
satisfactory, and that Mr. Burdekin could not, on his arrival
in America, possess himself of the money.
Mr. J. . Dyer said, in Hiltons' case, where a lamentable
amount was staked, he had been told by Mr. Roberts and
Mr. Burdekin that that amount was amply and fully securkd
by mortgages on good and substantial property, and that
they had only to wait five years to get in the balance, accord-
ing to an agreement entered into with the parties. They
told him he need not trouble himself about that account; the
consequence was he did not attend to it. With regard to the
two firms of Potters, he had been told that there were secu-
rities which would save the bank from any serious loss on
those two firms. He saw Raleigh's account with great as-
tonishment and alarm, and asked how sane men could have
allowed them to get nearly fifty thousand pounds into the
debt of a bank. The answer was—" You may depend upon
it he'll turn up a trump after all; we shall lose nothing by
him." (Laughter.) He doubted it, and wished the account
to be brought to a close ; but being shown a list of an Enor-
mous amount of out-standing paper received from that firm,
which the bank was liable to take up, over and above the
balance, and that paper being actually used then to raise
funds for the daily transactions of the bank, to stop him
then would have been to stop the bank. He resisted an ad-
vance of £l5OO to him ; but it being the deliberate opinion
of Mr. Brown, Mr. Burdekin, and Mr. Roberts, that if it
was not given the bank would be stopped that week, he (Mr.
D.) gave way.
Several other gentlemen spoke, and resolutions for the
purpose of appointing Mr. Olivant a director in the place of
Mr. Burdekin, of preventing further transfers of shares, and
of raising a call of X 2 per share, were adopted. The meeting
separated about a quarter before three o'clock.