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fG>-) 1 1 
 
 SI AT KM EN I 
 
 OF 
 
 FACTS RELATING TO THE 
 
 UESKJ NATION 
 
 OF THE 
 
 HON. JAMES MOPiRlS, 
 
 AS CASHIER, COMMERCIAL BANK, 
 
 r>ll()CKVlLLE. 
 
 iv I N (; s r () N . 
 is:,i 
 
^ / C? C 7 
 
 
 V<* 
 
 NOV? 7 1944 
 
~i\) THE 
 
 S II A R E H O L D E ?t S 
 
 OF THE 
 
 IM M E R C I A L BAN K 
 
 OF THE 
 
 MIDLAND DISTRICT. 
 
 Co^LAIERCIAL BaNK, ) 
 
 J{ui(j-sto)i^ I'^t Jiihj^ 1851. j" 
 
 Gentle^men, 
 
 On tlie 9tli September, 1850, tlie 
 Hon. James M()iTi>i, Casliie]' of tlie Office of this lii- 
 stitiitioii at Broekville, issued a printed letter, call- 
 inir ^'our attention to tlie causes wliicli lie assi^^ns 
 for liis retiring: from tlie cliar^e tliereof. This let- 
 ter, wliicli first jippeared in tlie form of a pam])nlet, 
 and extracts from wliicli were afterwards circulated 
 over tlie coaiitry in tlie columns of tlie newspapers, 
 Las probaldy Ijeen read by you all, and some may 
 perhaps have l)een in expectation that it would 
 have been replied to immediately, by the Board of 
 Directors, in a similar manner. In this respect, 
 however, the Board were of opinion that it was not 
 inconsistent with pro]")riety and the nature of the 
 case, that they should defer their notice of Mr. 
 Morris's allegations, until the period of the Annual 
 Meeting, when the Sharelioldei's would assemble 
 
 IWBWI 
 
for tli(! general piirjiose^ s|K'eijie(l in the Act (»!' In- 
 corporation. That j)eii(»(l has now arrived, and the 
 Board liave accordingly called on the Casliier lor a 
 plain stiitement of the tacts of tlie case, in sn1)nnt- 
 ing wliicli, on tlie present occasion, tliey feel it in- 
 cumbent on tliem to offer a few comments and ex- 
 planatory observations, inasmucli as the resent- 
 ment of Mr. Morris is directed, not only against \].e 
 Casliier, avIio is resj)onsil)le for the st}le and man- 
 ner of his correspondence, hut also against tlu3 J)i- 
 j'ectors, who arc; res])onsihle for demanding an (ex- 
 planation of the extraordiiijuy course pmsued by 
 Mr. Morris at the Toronto Ofiice, and the proceed- 
 ings consetpient on a refusal tliereof. 
 
 In December, 184*.), the (lovernment issued a 
 circular to the several Banlcs in the Province, de- 
 siring to be informed on what terms the Hanks 
 would take the G(wei'nment Account, and v/hat 
 advances could be furnished to Government, if re- 
 cpiired. The Board, in considering this matter, 
 came to the conclusion, that, as advances to Go- 
 vernment must necessarily involve a diminutio]i of 
 the usual facilities to the customers of the Bank, it 
 was not advisal)le to take the account, coupled with 
 the condition of making advances, and decided ac- 
 cordingly. Subsequently, it was reported tliat the 
 Government had sold I)el)entures in London, to a 
 considerable amount, and as it then appeai'ed un- 
 likely that advances would be rerpiired foi* some 
 time to come, Mr. Ilarjier wrote Mr. Cameron, 
 Cashier of the Toronto Branch, that if he found 
 advances would not pi'obably be wanted, he should 
 endeavour to get part of the Customs Deposits; 
 adding, that he, (Mr. C.,) could get Mr. Morris to 
 support him in the matter. 
 
 Mr. Cameron showed this letter of Mr. Har- 
 per's to Mr. Morris, and Mr. Morris spoke to Mr. 
 
 I 
 
 i 
 
 i 
 
•t (.1' III- 
 
 and the 
 iei' tor ji 
 
 8ii])iiiit" 
 3el it iii- 
 
 aiid ex- 
 ! reseut- 
 lin^^t I AC 
 11(1 iiiaii- 
 
 tlio J)i- 
 ;■ an (^x- 
 siuhT l)y 
 [)r()ceed- 
 
 issiiod a 
 11 CO, de- 
 
 3 l>aillvH 
 
 id Avliat 
 it, if re- 
 Ill atter, 
 to Go- 
 ut ion of 
 l>ank, it 
 k'd Avitli 
 •ided ae- 
 tliat tlio 
 an, to a 
 ared nii- 
 br some 
 Cameron, 
 le found 
 e sliould 
 )eposits ; 
 lori'is to 
 
 \lv. Ilar- 
 
 ■d to Mr. 
 
 i 
 
 i 
 
 I 
 
 I 
 
 llincks on the sul>j('Ct. TIkmi' was iiotliiug nmisiial 
 in Mr. Harper tliiis (.'iHU^avoiirinu," to avail liiiiiscH'ol' 
 Mr. Morris's services. It was elearlv jMi*. Morris's 
 duty, as an OlHcer of tlie IJank, receiving at tlu; 
 time a salary as siicli officer, to do wliat was in his 
 power to furtlier the interests of tlie Institution, 
 wlietlier lie ha[)i)ened to he at Toronto or else- 
 where. Mr. llincks stated to Mv. jMorris that the 
 Connnercial Bank had had an offer of the (rovern- 
 inent Account formerly, and had declined it ; and 
 that, as an arrangement had heen made with the 
 Bank of Upper Canada, it would he unfair to alter 
 it. Mr. llincks ha\'iiig thus ohjected to give what 
 ]\Ir. JMorris >vas recpiested to supptn't Mr. Cameron 
 in oLtainhig, Mr.Morils's authority, diri.'ct or implied, 
 virtually ceased ; nor can it he held as extending to 
 other matters. 
 
 ^Ir. llincks, however, offered to sell to the 
 Commercial Bank (roverimient Bills on London, 
 and tliereu])on the terms, as contained in Mv. Har- 
 per's statement, were named — ^tlie rate of premium 
 to he afterwards decided upon hy Mr. llincks, Mr. 
 Morris, and Mv. Camert)n. 
 
 At first, Mr. Harper had no communication 
 with Mr. ]\hn'ris — intending that Mr. Cameron, as 
 Cashier of the Branch ii^ Toronto, should he the 
 chief acting ]iart}\ Mr. Har])er wrote Mr. Came- 
 ron ahout ohtaining part of the Customs Deposits, 
 hut never alluded to ]:>urchasing Government Ex- 
 cliange — and hut for Mr. Morris's communication of 
 28th May, aljout Exchange, Mr. Harper probably 
 would not have thought of it, never supposing Go- 
 vernment Exchange would be disposed of other- 
 wise tlian ])y public tender. And this is further 
 confirmed by tke fact that at this time Mr. IIar])er 
 was ill treaty for .£10,000 of Exchange else- 
 where. 
 
6 
 
 The l>ills on our Foreign correspondents, (the 
 sum of wJiicli Ml'. Morris, in his inex2)erience with 
 resjx'et to Excliange transjictioiis, imagined so 
 large,) had ]jeen drawn in accordance Avith certain 
 negotiations to an amonnt within stipuLated limits, 
 and with reference to a rate of Exchange at Mon- 
 treal, nnnsnally high for some time jirevions, a»s 
 well as our possession of am])le funds in New York, 
 to co\'er the London and Glasgow accounts when- 
 ever it might T)e advisable, and the opinion of our 
 New York Ao-ent that a fall mi<?ht he looked for in 
 the rate of Sterling Bills at that city. Mr. Morris 
 in his pamphlet would lead his readers to sup- 
 pose that tlie Bank had been compelled to draw 
 on its foreign Agents to meet pressing local 
 demands, and that getting the Government 
 Exc]i;mge Avas of tlie greatest possible impor- 
 tance to its credit. Tliis is quite erroneous. The 
 o])erations in Exchange were based on business cal- 
 culations of Prolit and Loss, — the correctness of 
 Avhich any Banker of expoiience will I'eadily admit — 
 when refei'ence is had to the his^li rate at which the 
 Bills were drawn — proceeds invested in discounts at 
 G per cent.— the low rate of interest in London not ex- 
 ceeding 8 per cent., — the prospect of decline in rates 
 at Xew Yoik, Avhere, as before stated, we had am- 
 ])]e funds to remit to Britain, when the proper time 
 
 for doing so arrixecl 
 
 Of all these things Mr. Mor- 
 
 ris couhl have no knowledge. He neither knew 
 AA'hy ^vG had drawn on Eui'ope, the rate of Interest 
 to be ]xiid, the state of our funds in New York — 
 the calculations of rise or fall in rates, — nor in short, 
 anything which could enable him to form a correct 
 jiulgment, or carry out a transaction of the kind 
 Avithout instructions. His entering upon and con- 
 chidiug the arrangement for the Government Ex- 
 change without such instructic)us, Avas therefore in 
 
 i 
 
ts, (the 
 ice witli 
 filled so 
 L certain 
 d limits, 
 it Mon- 
 doiis, as 
 w York, 
 bs wlien- 
 1 of our 
 ed for in 
 . Morris 
 to sup- 
 bo draw 
 ^ local 
 3rnment 
 inipor- 
 s. The 
 [less cal- 
 tness of 
 idniit — ■ 
 iiicli tlie 
 ouiits at 
 1 not ex- 
 in rates 
 had am- 
 ■)er time 
 /[r. Mor- 
 T knew 
 Interest 
 York— 
 in short, 
 , correct 
 iie kind 
 md con- 
 sent Ex- 
 efore in 
 
 =3, 
 
 1 
 
 the first place wlioUy unanthorized, and jis IjcIoit 
 stated, he wfxs without the information necessary foi' 
 judging correctly. Mi'. Morris was tlius wiliiout 
 excuse in ]ia\ing hurried through such a negotia- 
 tion, and his precipitation in closing it, shewed a 
 want of prudence on his part, which can only be 
 accounted for by liis erroneous impression i'e< ''aid- 
 ing the affairs of the Bank. 
 
 There was, in fact, nothing to palliate the un- 
 necessary liaste used. There was nothing in liis h't- 
 ter to sliow tliat Mr. Ilincks wished or required an 
 early answer. There was nothing to prevent Mr. 
 Morris from writing to Mr. Harper, andwaithig for 
 his reply .^ There was nothing to justify Mr. ]\lor- 
 ris in^ fixing the amount, or rate, independently of 
 the views and directions of the Board. 
 
 It may be here remarked, tliat on all former 
 occasions wlien purchases of Exchange to any 
 amouiit were contemplated, it was the'invari[il)lV 
 practice to refer the matter to the Board for thoir de- 
 cision, — ^the Minutes of the Board every where fully 
 prove tliis. 'Now in the present instance, Mr. IIar])er 
 having, as stated, drawn on Great Britain for ])ar- 
 ticular reasons, and lla^dng funds Avlience to co\er 
 the drafts available at any moment, hesitated bef( m\ 
 entering upon a transaction amounting to -e4P),<)0(), 
 and desired to lay it 1)efore the B(^ard — for it be- 
 came a question of importance ho^v^ sucli a sum in 
 Exchange was to be ]n'ofitably uscsd, or if it were 
 remitted to Britain, how we should deal A\ith our 
 funds in New York, Avhicli could not be al)Sorbed 
 by demand for drafts on that city. 
 
 The usual day of the meeting of the Board, he- 
 ing that following the day on ^vhich Mr. IMoiris's 
 letter was received, and there l)eing nothing in the 
 letter asking an immediate reply, or even indicating 
 that it was expected — Mr. Harper deferred relpy- 
 
 .j 
 
H 
 
 ing nutil he luul sulniiittcd the iniitter to the Board. 
 Tills wjis the ii8ual practice, and under circumstan- 
 ces, the proper course to pursue : wliik; the jBoard 
 vvouhl have had good gi'ounds for dissatisfaction, 
 liad Mr. Harper concluded so large a transaction 
 without consulting them. In fact no sucli latitude 
 is allowed to any oificer of the Bank, mucli less is it 
 justifiable in an officer having no experience in such 
 large transactions, and being unaccpiainted with the 
 position of the Bank's general accounts. 
 
 The attention of the Stockholders is here call- 
 ed to the ftict, that previous to Mr. Morris's conclu- 
 ding the purchase, he had seen the President in To- 
 ronto, and Ml*. Hamilton had mentioned to him, 
 that Mr. Harper had declined to give more than 
 10| per cent, for a 30 day Bill of a Scotch Bank, 
 on its London Agents, equally undoubted, and at 
 same sight as Government Bills.'^* This ought to 
 have deterred Mr. Morris from purchasing a large 
 
 I 
 
 * Note. — Tlie following extracts from a letter of Mr. IlamiUon to Mr. 
 Uarper, diited Toronto, 1st -lune, lo.jO, show the nature of the conimunica- 
 lions between the President and Mr. Morris ; and the extent of liis " approval." 
 
 " I have just received your letter of yesterday. Upon my arrival at this 
 place last Monday, Mr. Morris stated to mc> what had passed between himself 
 and Mr. llineks, regarding the Exeliaiige — insuhslance thesame iis telegraidi- 
 ed to you by him. I was undi'r an impression that no further negotiation 
 would take place, until ho should hear from you. Wt- had some conversation 
 as to tho rate of premium, and 1 uuder.stood 10^ as the highest which I thought 
 you would givi — he rejilied that the rate would be arranged hereafter. In 
 eonsei[Ucn('e of last Thursday being a lloinan Catholic Holiday, the Lcgishi- 
 live Council adjourned over till yesterday, and I went up to Hamilton. On 
 tny reaching the Legislative Council yestenlay afternoon, I found that they 
 had adjourned a few minutes after meeting, so that I have not seen Mr. Mor- 
 ris or Mr. Cameron since the day of my arrival, and your letter was the first 
 intimation that 1 had of the transaction being elosed. INIr. INIorris slated to me 
 that he thought he would get Mr. llineks to arrange it, that the amount 
 should be paid out to the creditors of the I'rovineiiil Government, direct by 
 eheek, and not have it pass thro' any IJank. If this is don(\ and tiie amount 
 allowe<l to remain for some time uncalled fiir, at the low rate of interest, there 
 will, 1 hope, no loss he sustained. J was not a little surprised to learn thatthc; 
 neg(»tiation had been elosed in the manner you mention, attd cannol conceive 
 the neccssili/ there ims to hiirrij if. so mucky 
 
 1 
 
9 
 
 o Board. 
 •uniMtaii- 
 (3 jBoai'd 
 sf action, 
 iisaction 
 latitude 
 less is it 
 e in such 
 w itli tlie 
 
 lere call- 
 s coiiclu- 
 iit in To- 
 to liim, 
 3re til an 
 ill Bank, 
 1, and at 
 ouglit to 
 5 a large 
 
 nil ton to Mr. 
 ! c( (tnniutuca- 
 5 " approval." 
 
 irrival at lliia 
 ween liinisell" 
 
 ."IS telc'grai)li- 
 r neifdtiatioii 
 ! eouvci'sation 
 liicliIthou,u;ht 
 jrcaftei'. In 
 , the Lcj^isla- 
 milton. On 
 11(1 tliat they 
 !en Mv. Rlor- 
 
 was the first 
 s slateil to iiic 
 t the aiiioiint 
 .lit, direcl by 
 (1 the aiuuuut 
 iitei'esl, there 
 liMi'ii thatthc; 
 iinol conceive 
 
 amount, at a liiglu'r rate, without having hoard n 
 word from Mr. llnrjXjr, as to \\'hat tlie Boai-d 
 thought or wanted, — for Mr. ILunilton liaviiig men- 
 tioned it, G:ave Mr. IMori'is somcthini'' vrliciico to 
 judge of Mr. IIar])or's views. J\Ir. ]\Iorvi>-!, liowt'V- 
 er, in the face of this information, riiid Avilliout any 
 authority, did not wait for instructions, tliough lie 
 could have communicated l)y Telegrapli Avitli ^Ir. 
 Ilar2')er so easily. Accordingly, \\'itliout waiting 
 a reply to liis letter, lie concluded the ^'^^I'diase at 
 a higher rate than was conformulde to I\Ir. Har- 
 per's litioum vicAVS, — gave directions ahout the 
 amounts of Bills to he drawn, for the ])urpose of 
 ])eingseiit to the British Agents of the Bank, with- 
 out any authority A\^hatever from Kingston — a 
 course of action not only highly unsafe and unhusi- 
 nesslike, T)ut which did in fact involve a direct loss 
 of Commission (m that ])artof the Exchange, which 
 Ml'. Harper, had he heen consulted, would not 
 have remitted to London or (llasgow, hcsides the 
 indirect h)ss of the Pi'otit that would have arisen 
 from the disposal of it elsewhere. 
 
 Mr. Morris, in his pamphlet, gives as a reason 
 for his unnecessary haste in concluding tlu^ ])ur- 
 cliase,tliat Ijecause it was just possi! de for ]\Ir. Ilari)er 
 on 29tli May, to have answered Mr. Morris's letter of 
 2 Sth,— therefore as Mr. Morris did not on the 
 morning of the 30tli receive a reply from Mr. Har- 
 per, he (Mr. M.,) considered himself at liberty t(; 
 act on his own views in the matter. Now no one 
 was iRore fully a^vare of Mr. Ilarix^r's attention to 
 the interests of the Bank than Mr. Morris, and a 
 moment's reflection must have convinced, "him there 
 must have l)een some good reason why Mr. Harper 
 had not written a1)out an ofter of such an amount. 
 And as thei'e was nothing in the letter of Mr. Mt^r- 
 ris, demanding an immediate ansAver, Mr. Harper 
 
 B 
 
 J 
 
♦' 
 
 .oukl not have su,,iK«.a tl,.t Mi'. Mm-ris w.mld «. 
 fUrtbro-et his ]K>.ili.M,, as to dose thj, tra.sac o i 
 until a reasonaLlc time had l)ecu all<m;o<l tor it. 
 con.i,leratioi,. Mr. M<,rris '"^ving ^vritten to M 
 Harper, slionld have taken no imtlier st ei)-, until 
 afta^is^er was received hy hiin, for the Board are 
 decidedly of opinion, that under no circumstances 
 was t ustifiahle on the part of Mr. Morris--even 
 v-fth til. concurrence of Mr. Cameron, tlie Cashier 
 o( tlie Bank at Toront,., to lU'gotiate ' ueh large 
 Bills, without the previous knowledge and sanction 
 
 'mi' Morris further in his pampliiet, alleges 
 that the Presi.lent approved of the transact;..!!— 
 the maimer in which this is stated whether inten- 
 tionally or otherwise, is ca culated o ^'}f^}^^ 
 Stockholders, and Sir. Morris .r.-idently wishes it to 
 he undei'stood that Mr. namdton am'>"';--^;i\% 
 purchase as a whole, and wJ'.en comp eted. 11 is is 
 errcmeous. The rate was n<.,t decided nrcii .itte 
 Mr. Hamilton left Toronto, and ot course he could 
 not approve or disapprove of what was undecidecl 
 and iincertain-nor did ho for a moment suppose 
 that Ml. JMorris would settle the rate or aniount, 
 without instructions from Kingston ; otherwise ho 
 would, of course, have toid Mr. ^h-'i'"^ f- ^-f' t'* 
 them. Mr. Morris avoids all notice ■.! M". amil- 
 ton having mentioned to liiin^he '•«■<'* J*' -^1'^' 
 cent, which had heeu recently ottered l>y Mi. Ha i- 
 pev, at Kintr-^fm, for the 30 day Bill, to which he 
 should in iustioe have alluded in 'stating his case 
 
 Mr. Morris says that as Mr. Ilari>"r, after l.e- 
 ing .■.pp.-l-c.l of the purchase on StrtiMay, te e- 
 grtpLcA Mr. Cameron to get the size ol tli" l'> l« 
 feduced, this must he taken as an approval ot the 
 purchase ! In tlii- view of the ease, the Board can- 
 not concur. Mr. iiarper seeing the purchase com- 
 
 » 
 I 
 
&I 
 
 11 
 
 action, 
 for iifi 
 to Mr. 
 •;, until 
 ird are 
 stances 
 — even 
 Cashier 
 1 larire 
 auction 
 
 alleges 
 ction — 
 V inten- 
 ead the 
 les it to 
 1 of the 
 This is 
 c'li after 
 le conld 
 .decided 
 suppose 
 amount, 
 rvvise he 
 Avait foy 
 ; Ilaniil- 
 10^ per 
 Ml. Iljir- 
 .vhich he 
 s case, 
 after he- 
 ay, telc- 
 the r>illB 
 d of the 
 oard can- 
 lase com- 
 
 ])leted, naturally wished to make the most of the 
 harirain — unautlioi-ized as it Avas, and the inference 
 Ml'. Moi'i'is draws from j\lr. Ihirper not having tel- 
 egra])bed his disa])proval, isin their- judgment whol- 
 ly umvarranted. 
 
 ]\lr. ]\Iorris would have the readers ofliispam])h- 
 let helieve that the ])urcliase of Exchange was of 
 the greatest consecfuence to the J>aiilv, and very 
 proiitalde. That it was nece-^-mry to the Bank has 
 been already shown to he erroneous, and it will not 
 be dillicult to show, that the profit, if any, was tri- 
 fling. As stated hefore, Ave had funds in Xew 
 York whence to remit to cc>ver the British ac- 
 counts, and there was ample time, (two months), 
 to coni])lete arrangements for this object, lliere 
 was no gain in the shape of interest — indeed that 
 was rather a loss, as the rate of intei'est in London 
 was under 'iS per ctmt., — as previously stated also. 
 Even had the ]>oar<l decided to take (Jovernment 
 Exchang(». at 11 per cent., an unnecessary loss of 
 ooniL.ission was incurred hy ^Ir. ]\h)rris''s not wait- 
 ing t(> know what disposition of the Exchange might 
 he ]ireferred hy Mr. Harper, as the greater \vAvt 
 would have heer, taken in small sums to sell agahi, 
 without gonig through the London Account. — 
 Again on the ^11A\\ ]\iay, our Agent in New York 
 advised the rate there 10 i)er cent., and the demand, 
 not animated, and (m Hth June it declined to *.)i per 
 cent. (I 0| per cent. jMr. l\h)rris (juotes rates of 
 Exchange at Toi'onto l'2l. This could only he ob- 
 tained for discounts of h»ngdated paper. On 27th 
 May, Ml'. Cameron could only obtain 11 ^ on settle- 
 ment ofl)alances with other Banks, which is the 
 l)ro])er regulating basis u])on which a Bank should 
 <letermine ])urchas(^s of pAchange. 
 
 To return to the stat<'ment of facts. On re- 
 ecipt of Mr. Morris's Telegraph, advising purchase, 
 
1 •> 
 
 Mr. Iiai*i)ei' wrote tu Mr. Morris a letter wliicli will 
 he found in tlie Casliier's statement. Mr. Morris 
 styles tills letter a remarkable (Toeument, l)y wliicli 
 he considered liimself deeply insnlted. Unprejudi- 
 ced readers may ])erliaps fail to discover the deeply 
 insulting character thus attributed to Jt— though 
 even liad its tenor l)een severe, it would have been 
 warranted by Mr. Morris's proceedings. It nnist be 
 clear to all that the discourteous return of the let- 
 ter hi a blank envelope, was the most effectual 
 mode of putting an end to correspondence between 
 
 the parties. 
 
 Mr. Harper is the Executive Officer of the 
 Board, and is responsible to the Directors, and 
 tlirough them to the Stockholders for^ the correct 
 and judicious management of 15ank affairs. His in- 
 structions on all nuitters of importance should be 
 obtained, and acted upon by the subordinate Offi- 
 cers. A contrary course is clearly subversive of all 
 proper government of a Banking Institution. 
 
 Mr. Morris has evidently felt that his position 
 as an Officer of the Institution did not Avarrant his 
 coui'se of ]>roceeding. He has therefore alleged 
 that li(^ acted only in his social and political capaci- 
 ty, and in consefpience of liis " intkience" with the 
 Government, as a public man, having been refpies.- 
 ed 1 )y Mr. Harper. By reference to that gentle- 
 man's letter to Mr. Caineron, it will be seen that 
 such statement is inaccurate. I\Ir. Harper did not 
 seek Mv. IMorris's political or social inthience. He 
 merely intimated to Mr. Cameron that as a matter 
 of course he could get IVIr. Morris to support him in 
 his ap[)lication. Now as Mr. Morris wa,s a paid 
 servant of the Bank — then receiving a Salary as 
 such — and only absent from liis duties at Brockville, 
 ])y the snlferance of tlu^ lioai'd, — Mr. Har])er natu- 
 rally lliouglit tlint lie Imd n riglit to eall on Mr. 
 
IH 
 
 Morris to assist liirf Id'utlier (^ffic-ei' in making the 
 ap])li('ati<)n to (iovcrnnicnt, as in all similar cases 
 won](ll)e ex])ectecl IVoni every Officer oftlie Bank. 
 
 As to the course of proceeding already advert- 
 ed to, which Mr. Morris chose to adopt, with refer- 
 ence to My. Harper's letter, it was regarded as so 
 offensive, l)y the Board hefore whom the matter 
 was laid, that they could not overlook it, or desire 
 the Cashier to conduct the ordinary transactions 
 with that gentleman, until a suital)le exphmation 
 was afforded. Ani])le time ^vas allowed IVlr. ^loiils 
 to olfer an explanation, hut instead of doing so, he 
 ])re])ared and disseminated a partial statement, jus- 
 tifying instead of excusing his conduct to the Board, 
 and his superior Ofiicei'. It was quite out of the 
 (question that matters coidd he allowed to remain 
 in such an unsatisfactory state. An intimation giv- 
 en to i\lr. Morris to that eifect, led, tlu^refore, to 
 liis resignation. It is true, that iNIr. IMorris offijred 
 to appear before the Board ])erst)nally, ])ut there 
 were many ohjections to such a mode of settling the 
 <[uestion at issue, Avliich will readily occur to the 
 minds of the Shareholders, even without reference 
 to the reason given in the Cashier's statement, here- 
 unto annexed, or to some of the remarkable por- 
 tions of the letter of Mr. Morris. 
 
 Mr. ]\ [orris states tliat there was ample time to 
 recall the Bills sent to our Agents in London and 
 (ilasgow — certtiinly there was — they might have 
 })een recalled, but it would have been inexpedient. 
 Jt appejirs to the Board that to have shewn our 
 Foreiirn Au'ents that a Manac:er of one of the lesser 
 Agencies of the Bank, had, without authority, 
 made a large purchase of i^xchange and dis])osed of 
 it, without juiy connnunication with the Ili^ad Of- 
 fice — was such a pioceeding as would luive led them 
 to enb'rtain no very exalted \ i(MV of th(3 manag(!- 
 
14 
 
 inent and dkcij,liiie of our Institution— tlio Ev- 
 cliiinge wiis tliei'efore not i-ecal]iHl 
 
 llie 15oar.l will pass over ndtliout f„rtl,er no- 
 tace, _ the breacli of confidence exhibited l,y Mr 
 Moms in niaku," public, private conversations ca^ 
 sual y hel.l witli the President, on matters relaSngto 
 tile J5,n,k as well as m coininunicatinf' his correspon- 
 dence with the Cashier, to parties," (sonwbeir- 
 mg to o her Banking Institutions,) viio vi a 'e 
 gree of delicacy which we shall ni^ attSiiirt to mea- 
 sure, proceeded to pass judgment, without miy other 
 nifomation than the ex^yarfo representatioi/of Mn 
 
 . ^H ,?0'^|t^ Ji'i^e thus touched on tlie main 
 points of Mr. Morris's pamphlet, with as muchXe- . 
 with ™'\^*';-l^f «'»<^'V's they have found consistent 
 
 W •' w'*^' ^" "^^'r ^^■"^^^' Stockholders, who 
 liaye a right, when the conduct of their Officers 
 and Servants are complained of and assaikd- o 
 dear and satisfactory exjdanations. 
 
 It only remains tV)r them to add an eYiiression 
 of their regret, that they should have thus bee 
 coinpelled^ to anmiadvert upon the unpleasant ,n^ - 
 nc, iwhicliaOeutleman, long employed by the 
 
REPORT 
 
 OF THE CASIIIEr., ON MR. MOJIKIS'S 
 
 PURCHASE OF 
 
 Government Exchange, in May, 1850, 
 
 CALLED YOU BY THE 
 
 BOARD OF DIRECTORS, 
 
 ON 14t]l OCT., OF THAT YEAR. 
 
 rr 
 
 The facts of the case are as follows : — 
 
 On the 28i'd May 1850, I wrote Mr. Cajiieroii, 
 from wliicli the following is an extract: 
 
 "Tfydiifiiul tlmt tlic GovciMunont will not require any advances, after 
 the late sale ol' I )el)eiitui'es — at any rale not ti> any extent — you ean get Mr. 
 Morris to support you to ^-et part of their Iju.siness and deposits, from the 
 Custom House. It niii^lit be as formerly, allowing the Publie Ottieers to de- 
 jwsit ill whieli Bank they please, — or let the Province bo divided between the 
 two Banks." 
 
 On the 27th May, Mr. Caiaeron showed this 
 letter to Mr. Morris, — Mr. Moi'ris saw the Inspect- 
 or General, and on the 28tli May wrote to me as 
 follows : — 
 
 Toronto, May 28ih, 1850. 
 My Dear Sir : — 
 
 Last iiiffht, In conversation with ]Mr. Hineks, 1 made np- 
 l)lieation to him for a siiare of the Government Account, but 1 found liim un- 
 willint!: to take any part of the Deposits from the liank of Upper Canada, and 
 really, 1 had not the face to press him to do uu ungcnerouw act towards Kid' >ut. 
 
16 
 
 liiit [ lliink I sli!ill 1)0 Jibltj to ^vt Iiiiu to iniilvL' a beginning with us by-ainl- 
 byt", to the (.xk'iit, at least, of thiMluties pahl by Cameron's customers. In 
 tlie meantime, however, I\h'. Ilineks wiys, that "ho will £rivc us ,£^25,001) or 
 Jt'oOjtlOU Exehaniico, (at apriee to be af;Tee(l on.) in Deposit at 3 jier eent. in- 
 terest; 30 (hiys notiee to be p;iven l)efbre Mitlidrawing it, and that it would be 
 chequed out lor the general purposes of the Government; and that in his opin- 
 ion, it would remain with us for some considerable time. I will connjumieatc 
 tliis to Cameron to-day. Cameron is doinpj a lint' business, and I am pleased 
 to hear, that ho, of all t lie l^ankinjj OfHeers of the City, is tlie most jiopular. 
 Tlie money paid SHipis n(}t one of the best appropriations in tlie world. We 
 liave at last lovely weatlier. 
 
 Yours faithfully, 
 (Signed,) J. MORRIS, 
 
 On 28tli May, Mr. Hamilton, (President,) ar- 
 rived at Toronto, to wlioni ]\Ir. Cameron mention- 
 ed, that Mr. Morris had arranged to get £'8r),(H)() 
 Sterling, and that the rate VKt-'^' to he fibred hy Mr. 
 Moi-ris, Mr. IIincl:s, and himself, (Mi-. C.) ^ It is 
 here to he observed, that when the President spoke 
 to Mr. Cameron and Mr. ]\I()i'i'is, on the suhject, tlio 
 j'ate Avas not settled, IMr. Hamilton approved of the 
 otlier terms. He mentioned to Mr. ]>Iorris that 1 
 declined to give more than 10^ per cent, for a Bank 
 Draft, SO days date, on London, for .£1323. 
 
 Mr. Morris's letter to me of the 28th]\ray, was 
 received on Wednesday, the 29th May. The fol- 
 lowing day, (Thursday), being that of the usual 
 meethig of the Board, I wished to submit the mat- 
 ter for decision, as usual in such cases — there beino* 
 nothing in Mr. Morris's letter al)out an immediate 
 answer being necessary, and the fiict of the rate 
 being left open, indicating that it was reserved fui* 
 tlie decision of the Board and mjself 
 
 On the 30th May, whilst the Board was in 
 Session, I received a Telegraph from Mr. Mori'is, 
 infornnng me^ that lie (J/r. J/.) had ])iircliase(i 
 .635,000, Sterling lixchange, at 11 per cent., and it 
 further a])pears, that J/r."j/orris gave insti'uctions 
 at tlie llc^ceiver Genei'al's Office, to ha\e the 
 amount drawn in two Bills, of ,i*24,00() and 
 .£11,000. 
 
17 
 
 On ]'(M'('ipt of Mr. M( arris's tclegra]>li, (^ioth 
 May,) aih'ising hh liaviiig laken tlic Excliaiige, 1 
 wrote liiin, 1)y order of tli(^ I>oar<.l, asking liim for 
 an explaiuitiou of tlie luiautliorised purcliase. The 
 following is a co]')y of tliis letter : — 
 
 Kingston, 30th May, 1830. 
 TiiE Hon, James iMokuis, 
 My Dear Sir: — 
 
 Ydur link' <A' the 'Jsih inst., reached mc yesterday, and 
 yiiur Tclo£rraidi,wlien the l>ciard was sltthiij:. In your note to me youmerely 
 state, l!iat Mr. Ilineks said lie would i;lve us .£":2r),"0(lO or i;:]0,0()() "Exeliause, 
 at a ]a'iee to he agreed upon, — In deposit at 3 per cent., — tliirty days notice to 
 he given, hefore elieeking on it. jSow you must he aware tliat such a nego- 
 tiation eould not he entered into without the assent of the Board. The Txianl 
 were thi'ivCore tak'eii liy surprise with you:- Telegrapli, stating that you had 
 taken X';l."),(HM) at 1 1 percent., 30 days, wiiliout waiting for their reply, or 
 any n(\g(>tiati(iii whatever l-y us, with the Covernnient. How is it that Mr. 
 Caineniii has not written mo on the subject, ti a- as this matter comes under 
 his Ofheial duties, it .should have Cdiue through him oflleially. I consider the 
 rate too high, for wo can get only 11 or 11-1 .at ^lontreal, in small amounts, — 
 and pay i'dlard I per cent. : and there would he no prolit to send it to Lon- 
 don, and the only way to make h per cent, is to send it to New York. Did 
 any of the other PKUiks take at the same rate? and on the same terms? If so, 
 we cannot complain on that pniut ; but the TunivX will not sanction your act- 
 ing in that way again, without their consent being asked, and obtained. I will 
 he anxious to learn the cause of your procedure, for explanation to the Board. 
 VV'e would not have oll'ered more than lOJ, per cent., lia- I am certain th<^ rate 
 at New York will tJill, from the rise of Cotton and other articles in E)ngland. 
 I think it woul.l 1)0 but fair, that the customers of each Bank should pay their 
 duties by cliccjiie on the liaiiks, and such cheque deposited by the Collectors, 
 at the respective Banks, ao-ainst which the Government may check when re- 
 quired. To this course no B)ank could object. 
 
 ^^^Vill you explain to me the cause of your observation that " the Salary to 
 IHQK i:-* ii"t one of the best appropriations in the world ;'' and upon what 
 such an opinion is iiTounded. 
 
 Believe me. Yours truly, 
 (Signed,) F. A. HARPER. 
 
 .'{I.s7. — This Utter was too lati- yesterday I)y a few minutes. To-day I have 
 a Telegraph from Cameron, slating, that the' Drafts were made in two sums 
 nn\;, whieli has causid me to order the whole to Ijondon, thereby entailing 
 .•mother i per cent, expeiice on i,'t<>,(»0(» I wanted in Bills to be negotiated at 
 N'AV Yoi'k. 
 
 F. A. II, 
 
 How is it the Government did not olllr the Exchange by tenders ? 
 
 Seeing the 2)iireliase completed, I tek^graplied 
 Mr. Oanieron tt^o-et size of the Bills reduced, as 
 l wished to mo, \n\vi in IVew Yoi'k. This was not 
 done, however: Mr. Morris declining to ask their 
 
18 
 
 hamg ch.'ingod. Mr. Morris I'eturnecl ray letter 
 Liii(I(;r bknk envelope, mid sent telegraph that ho 
 was deeply msnlted, and could not reply to such a 
 letter,— requesting me to return 2nd and 3rd Ex- 
 change, and recall Ists. I replied that it was too 
 ate to recall tlic Bills, and that I looked for a let- 
 ter trom Mr. Morris. Subsequently, Mr. Cameron 
 telegraphed me, that the Keceiver General was 
 ready to take back tlie Bills, and cancel the tran- 
 saction. 
 
 ^ I considered that recalling the Bills would have 
 involved an explanation to the correspondents of 
 the Bank m London and Glasgow, which would not 
 conduce to the interests of the Institution, and 
 tiierefore declined to recall tlie Bills. 
 
 On tlie 13th June, Mr. Morris not having sent 
 any exi)lanation as to Ifis unauthorised purchase of 
 il.xchaiige, asked foij/n my letter of the 30th May, 
 UTitten by order of t];e Board, the Directors took 
 the matter into consideration, and adoi)ted the fol- 
 lowing llesolution : — 
 
 the l(TtlHSHl;l''.n"'r''{?^ ^"t^^" R"'';^' ^ ^^^""' ""'^'^''''^^ to him, dated on 
 Hm f II 'Z;^''"- ^"'- ^^^""''"' ^■^■l''ti"ff to the receiving of Depos- 
 
 c'rii .i c , , 1 . ''n- !'7''^'^'- J^'"t as in the present «tate of matters, 
 be re-'mS ,1 "« ofln-ial eon.munioation with INIr. lAIorris, ilioFi^$m 
 
 tu\S. 1;^ ^''"^ '^''y ^'^'-'^ waited ' some tS^ 
 
 • 1 P^^'L ^'^ *^^^^ Resolution was sent by the Pre- 
 sident to Mr. Morris, on same date. Mr. Morris 
 replied, tliat he intended being in Kingston, on the 
 i » til J une and would explain personally. He ar- 
 rivet m Kingston on that day, and the Board de- 
 cided, that as the matter had been already advert- 
 ed to in the records of their proceedings, any ex- 
 !>lanation Mr. Mori'is had to oi^er, should be made 
 
'.» 
 
 ill vvi'itinii'. The PicsidiMit addnsscd Mr. Morris in 
 cont'orinity. '^I'o llii' note of tlie I/rcsidi'iitV, IMr, 
 Morris rq)]itHl, tluit Mltlioiiiih lie tliou<j,'lit tlic mat- 
 ter a niisunderstaiuliiig LetuTen me and lilinself, 
 and liaviii^' no connection with liis duties as Cashier 
 at Brockviile, he did not liesitate to place in the 
 hands of the President, a document purporting to 
 Ibe a Stiitement of Facts — with the request, that it 
 might l:>e submitted to the Directors, and fyled 
 anionic: the records of the Board; this statement is 
 copied in ^Ir. Morris's ]")amphlet. 
 
 In my private correspondence Avith ]\ri'. Came- 
 ron on this sul )ject, 1 jnentioned to him that I wouhl 
 ]ia\e no objection to h^ave the matter to he arbitrat- 
 ed on, l)y two nmtual friends, if ]\Ir. Morris felt so 
 dis]:»osed. After some further corresponch^nce, Mr. 
 Morris agreed to this, and he named on his part the 
 Hon. P. B. I)eP>biquiere, ami. I named the lion. 
 Wm. Ca)ley. In the event of the^:e parties diiierhig 
 in opinion, it Avas agreed that an Umpire shouhl l)e 
 appointed, and after some discussion between Mr. 
 Morris and the Arbitrators, he at kst agreed to the 
 appointment of Mr. Widder, of the Canada Com- 
 pany, v,'\\o kindly undertook the task. That gen- 
 tleman gave his award, as accompanying Copy of 
 the Document, dated 5th Se]^teml)er, 1850. 
 
 After my return from Enghmd, in Fel>ruary 
 last, letters passed l)etween Mr.'^Morris and myself, 
 in accordance with tlie same. 
 
 (ropy,) 
 
 Toronto, 
 
 'September, 1850, 
 
 Having oonscntod to act as Frnpiro in the event of any disa^veoinem 
 arislim- l.ttwxcn the lien. V. 15. DelJlaquiere aiul the Hon. Wm. Cayky, M. 
 r., tlie UtI'cives iipiKiiiitrd by llie lloii. .la.s. Movris ami F. A. Harper, Esq., 
 in tliemntt<T at i^slu> betweon tli-in; and beiiiu; imw recjuii'ed to adopt the 
 opinion of IMr. DeUIa-iuieiv, dated the llili ult., or that of Mr. Cayley, dated 
 <lie ITlh uh., wliicli those f^ntlenien liavo transmitted to mc, I have to state, 
 
-? 
 
 20 
 
 tfiat nfU'i'.'i carfful oonsldfratuni of all tlie covrospondciico and papers iviatiny 
 to the siil)j('(f, that I ooiuur in tlic opinion of Mr. Caylcy, of which the Ibllow- 
 jnf^is a true copy. 
 
 (Signed,) ■ rUKDiailCK WIDDER. 
 
 Toronto, ITfii August, IS,')!). 
 
 Tlie undorsiinied, after a earefid perusal ol'tlie Memoranda, and corres- 
 pondence jtlaced in his hamls, is jirepared to stale that, in his opinion, they 
 contain nothinj^ wliieli can be construed as afteetin^; the honor, or refleetinp; 
 upon tlie eharaeter, of either of the irentlemen who have so frankly snhmitkjcl 
 their diil'erence to arbitralion. Tlie diflienlty whieh lias oeeurivd, a]>i)ears to 
 have ori^i'inated in a niiseoneeption of the jjurport of ."Mr. Harper's letters, 
 which a very few words of explanation would have easily removed: at the 
 same time, the undersi<i'ned feels bound to state his conviction, that Mr. Mor- 
 ris would not have entered upon any n(>n;otiation with the Governnient, had ho 
 entertained the sliichtest doubt of the full conetUTence of the lioard, and that, 
 in concluding; the arraiiaviiieiit, with the Inspector General, he was actuated 
 solely, by a very zealous desire to promote the best interests of the Institution 
 with wliich lie is connected, and in which he has an important stake. Tlio 
 undersigned arrives at the opijiiuii, that the letter of the :50ili ]\hiy, addressed 
 by Mr, Harper to the Hon. James Morris, was written exclusively with the 
 object of conveying the sentiments of the writer, and the Directors of the 
 Bank, on a business transaction, and that it was not in any way designed, to 
 wound the feelings of the jiarty to whom it was addressed. 
 
 The undersigned feels satislied, that Mr. Harper will have no hesitation 
 in conveying an assurance to that etUet, to INIr. Morris : and, that Mr. Morris 
 will as readily express his regret, at the step taken by him, in returning Mr. 
 Harper's Letter, under feelings of extreme momentary disai)pointment. 
 
 (Signed,) WlLLLiM CAYLEY