■'■ 
 
 ..^... 
 
 
 IMAGE EVALUATION 
 TEST TARGET (MT-S) 
 
 k 
 
 /. 
 
 
 u. 
 
 LO 
 1.25 
 
 tut 
 
 ^1^ 
 
 Hiotographic 
 
 Sciences 
 
 Corporation 
 
 23 WEST MAIN STREfT 
 
 WEBSTER, NY. MSSO 
 
 (716) S72-4503 
 
 iV 
 
 ^v^ 
 
 •1>' 
 
 :\ 
 
 \ 
 
 
 
 
 'V- 
 
'^■ 
 
 CIHM/ICMH 
 
 Microfiche 
 
 Series. 
 
 CIHIVI/ICIVIH 
 Collection de 
 microfiches. 
 
 Canadian Institute for Historical Microreproductions / Institut Canadian de microreproductions historiques 
 
Technical and Bibliographic Notes/Notes techniques et bibliographique* 
 
 The Institute has attentpted to obtain the best 
 original copy available for filming. Features of this 
 copy which may be bibliographically unique, 
 which may alter any of the images in the 
 reproduction, or which may significantly change 
 the usual method of filming, are checked below. 
 
 Coloured covers/ 
 Couverture de couleur 
 
 I I Covers damaged/ 
 
 D 
 
 D 
 
 
 n 
 
 n 
 
 Couverture endommagie 
 
 Covers restored and/or laminated/ 
 Couverture restaur^ et/ou pelliculAe 
 
 I I Cover title missing/ 
 
 Le titre de couverture manque 
 
 I I Coloured maps/ 
 
 Cartes gAographiques en couleur 
 
 Coloured ink (i.e. other than blue or black)/ 
 Encre de couleur (I.e. autre que bleue ou noire) 
 
 I I Coloured plates and/or illustrations/ 
 
 Planches et/ou illustrations en couleur 
 
 Bound with other material/ 
 ReliA avec d'autres documents 
 
 Tight binding may cause shadows or distortion 
 along interior margin/ 
 
 La reliure serrde peut causer de I'ombre ou de la 
 distortion le long de la marge intArieure 
 
 Blank leaves added during restoration may 
 appear within the text. Whenever possible, these 
 have been omitted from filming/ 
 II se peut que certaines pages blanches ajouties 
 lors d'une restauration apparaissent dans le texte, 
 mais, lorsque cela Atait possible, ces pages n'ont 
 pas At* filmias. 
 
 Additional comments:/ 
 Commentaires supplAmentaires; 
 
 L'Institut a microfilm* le mellleur exemplaire 
 qu'll lui a 6t6 possible de se procurer. Les details 
 de cet exemplaire qui sont peut-Atre uniques du 
 point de vue bibliographique, qui peuvent modifier 
 une Image reproduite. ou qui peuvent exiger une 
 modification dans la mithode normale de filmage 
 sont indiqute ci-dessous. 
 
 r~n Coloured pages/ 
 
 D 
 
 This item Is filmed at the reduction ratio checked below/ 
 
 Ce document est filmA au taux de reduction indiquA ci-dessous. 
 
 Pages de coulour 
 
 Pages damaged/ 
 Pages endommagAes 
 
 Pages restored and/oi 
 
 Pages restaurAes et/ou pelliculAes 
 
 Pages discoloured, stained or foxei 
 Pages d6color6es. tacheties ou piquAes 
 
 Pages detached/ 
 Pages ditach^es 
 
 Showthrough/ 
 Transparence 
 
 Quality of prir 
 
 Quality InAgale de I'impression 
 
 Inciludes supplementary materii 
 Comprend du mat6riel supplAmentaire 
 
 Only edition available/ 
 Seule Edition disponible 
 
 I — I Pages damaged/ 
 
 I — I Pages restored and/or laminated/ 
 
 r~pi Pages discoloured, stained or foxed/ 
 
 I I Pages detached/ 
 
 r~~\ Showthrough/ 
 
 r~n Quality of print varies/ 
 
 r~~| Inciludes supplementary material/ 
 
 r~~| Only edition available/ 
 
 Pages wholly or partially obscured by errata 
 slips, tissues, etc.. have been ref limed to 
 ensure the best possible image/ 
 Les psges totalement ou partiellement 
 obscurcies par un feulllet d'errata. une pelure, 
 etc., ont 6tA fiimies A nouveau de fapon A 
 obtenir la meilleure image possible. 
 
 10X 
 
 
 
 
 ^^y 
 
 
 
 
 18X 
 
 
 
 
 22X 
 
 
 
 
 26X 
 
 
 
 
 30X 
 
 
 
 
 
 
 
 
 
 
 
 
 
 y 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 12X 
 
 
 
 
 16X 
 
 
 
 
 20X 
 
 
 
 
 24X 
 
 
 
 
 28X 
 
 
 
 
 32X 
 
 
The copy filmed here has been reproduced thank* 
 to the generosity of: 
 
 Harold Campbell Vaughan Memorial Library 
 Acadia University 
 
 L'exemplaire film* fut reproduit grAce A la 
 g6n6ro8ltA de: 
 
 Harold Campbell Vaughan Memorial Library 
 Acadia University 
 
 The images appearing here are the best quality 
 possible considering the condition and legibility 
 of the original copy and in keeping with the 
 filming contract specifications. 
 
 Original copies in printed paper covers are filmed 
 beginning with the front cover and ending on 
 the last page with a printed or illustrated impres- 
 sion, or the back cover when appropriate. All 
 other original copies are filmed beginning on the 
 first page with a printed or illustrated impres- 
 sion, and ending on the last page with a printed 
 or illustrated impression. 
 
 The last recorded f.-ame on each microfiche 
 shall contain the symbol — ^ (meaning "CON- 
 TINUED"), or the symbol V (meaning "END"), 
 whichever applies. 
 
 Les images suivantes ont At* reproduites avec le 
 plus grand soin. compte tenu de la condition et 
 de la nettet* de l'exemplaire film*, et en 
 conformity avec les conditions du contrat de 
 filmage. 
 
 Les exemplaires originaux dont la couverture en 
 papier est imprimie sont filmis en commenpant 
 par le premier plat et en terminant soit par la 
 dernlAre page qui comporte une empreinte 
 d'impression ou d'illustration, soit par le second 
 plat, selon le cas. Tous les autres exemplaires 
 originaux sont filmte en commen^ant par la 
 premiere page qui comporte une empreinte 
 d'impression ou d'illustration et en terminant par 
 la dernidre page qui comporte une telle 
 empreinte. 
 
 Un des symboles suivants apparaitra sur la 
 dernidre image de cheque microfiche, selon le 
 cas: le symbols — ► signifie "A SUIVRE", le 
 symbols V signifie "FIN". 
 
 Maps, plates, charts, etc., may be filmed at 
 different reduction ratios. Those too large to be 
 entirely included in one exposure are filmed 
 beginning in the upper left hand corner, left to 
 right and top to bottom, as many frames as 
 required. The following diagrams illustrate the 
 method: 
 
 Les cartes, planches, tableaux, etc.. peuvent Atre 
 film6s d des taux de reduction diffdrents. 
 Lorsque le document est trop grand pour dtre 
 reproduit en un seul cliche, il est film* A partir 
 de Tangle supdrieur gauche, de gauche A droite, 
 et de haut en bas. en prenant le nombre 
 d'images nicessaire. Les diagrammes suivants 
 illustrent la m^thode. 
 
 1 
 
 2 
 
 3 
 
 1 
 
 2 
 
 3 
 
 4 
 
 8 
 
 6 
 
\ 
 
 .-'V 
 
 " I 1 1. 
 
 CONSOLIDAT 
 
 OF CANADA. 
 
 A co:M:x^iXj^Ti03sr. 
 
 By JOHlSr F. NOKRIS 
 
 1879. 
 
oy a( Manabioin Insuranee &# 
 
 FIRE & 
 
 MARINE. 
 
 HEAD OFFICE 
 
 —President— 
 
 ANDREW ROBERTSON, Est. 
 
 ,— Marine Underwriter— 
 
 HENRY STEf ART. 
 
 -Manager Fire Depart.- 
 
 JAIES DAVISON. 
 
 -Insp. of Fire Agencies- 
 
 0. H. Mchenry. 
 
 James M, GlasSf (B.€,Jj,9 
 
 A6uocate, Barrister, 
 
 — AND — 
 
 COMMISSIONER 
 
 — FOR — 
 
 New Bnmswiclc and Ontario. 
 67 ST. PRS. XAVIER ST., 
 
 MONTREAL. 
 
 Telephone Exchange. 
 
 THE 
 
 Canadian District TeleiLrapli Company 
 
 HAS NOW 
 
 In Successful Operation, 
 A TILIPNONI IXONANOI. 
 
 '^ 
 
 iliili 
 
 Parties wishing to be conuected with the 
 system will receive all loformatlon at the 
 Head Offlce, 
 
 174 S^, James Street 
 
 BAILIFF, 
 
 64 St. James St., 
 
 MONTREM. 
 
 H & IDELL, 
 
 PUBLIC Accovimm 
 
 AND 
 
 
 OFFICIAL ASSIGNEES 
 
 22 ST. JOHN STREET 
 MONTREAL. 
 
 I 
 
^' 
 
 f 
 
 3 3^ J 
 e.76 
 
 THE 
 
 CONSOLIDATED BANK 
 
 E. 
 
 QT, 
 
 rt.— 
 
 lies— 
 
 
 3 St., 
 
 [LL, 
 
 TANT8 
 
 OF CAXADA. 
 
 j^ ooivd::pinL.^Ti0 3sr. 
 
 By JOHN F. NORRIS. 
 
 NEES 
 
 TREET 
 
 PRINTED UY THE MONTREAL HERALD PRINTING * PUBLISHING COMPANY. ' 
 
 1879. 
 
'1 
 
 sharei 
 ojuno 
 our P 
 
 'Comp 
 
 ])roc'e( 
 
 I Caiuid 
 
 ; wliu a 
 
 be val 
 
 t'.on 
 
 I have 1 
 
 ,; toii-etli 
 
 \ action 
 
 portal 
 
TO THE READER. 
 
 Tlio magnitude oi tla' losses that have recently been sustained by 
 jshareliolder.s in certain banking institutions, together with the devel** 
 opnients which have been made as to the loose manner in which some of 
 our Pi'ovincial institutions have l>een administered, have induced the 
 •Compilei- to lay before the public, in concise and consecutive shape, the 
 proceedings attendant ujkju the stoppage of the Consolidated Bank of 
 Canada, which, in this foi-ni, will doubtless prove interesting to those 
 who are concerned in our Joint Stock institutions, and will, it is believed, 
 ).»e valuable as a work of reference hereafter. The fact of the convic- 
 tion of a Bank President having been secured, whose otience appears to 
 ln\\{} been that of gross carelessness rather than of wilful malversation, 
 together with the circumstance of the ladies having taken prominent 
 action in the proceedings, are matters that serve to add increased im- 
 portance to the whole art'air. 
 
 2 ^ ^ ^ ^ 
 
 X 
 
 A 
 
m 
 
. THE 
 
 CONSOLIDATED BANK. 
 
 Its Establishment, and its Career until its Downfall. 
 
 ! 
 
 1 
 
 i 
 
 The Con>oli(lated Bank was an amalu-ninatittn of iho old City Hanic 
 of .\[ontivnl, iunl the lloyjil Canadian of Toronto, the Pi'psident of the 
 latter iiistilution Ijoiiiu* at the time of the imioii Hon. A. ('!iin[)bell, of 
 Toronto. 
 
 The (.'ity Bank was incoi|iorated on the IJrd April, 1833, by a nuni- 
 hoi- of Montreal nierch.'ints. The fharler momhers were .\ressrs. James 
 Henry Lainbe, Thomas .Storrow Brown, Stephen Field, John Adams 
 Perkins, William RiK-hie, Stanh-y l^>ai^n-, .lames I'^'sher, John Donejjjani, 
 Nieholas P. M. K'.ifczyii, .lames Millar. J. I)omini([ne Bernard. John 
 Frothiii^'hani, Joseph Ti-nmbidl Barrett, Joseph Iioy ai^d William 
 IV'ddie. Mr. John Frothin^liani. the senior menibei' and founder of tho 
 M.(^iitreal hardware house of Frothingham it Woi-kman, was the tirst 
 Pi-esi<lent. The oriu-inal enpital stock was to be £2(M),000 (8S()0.00t)), 
 Halifax ciureney. in S.OOO shares of £-25 (SlOO) each. Tlie Bank, from 
 its inception, seems to have met, from time to time, with very sei-ious 
 losses. So serious were these that at one time the capital was about 
 gone, but it again recuperated, fn 1837 and l.'^38, in conse([uence of 
 tinancial dei-angement in the Ciuted States, both the (lovernment and 
 the banks there hail suspended specie payments, and to prevent tho 
 drain of sj)ecie from Ciuuula which was going on. the bank's here tem- 
 pni-arih' suspended. At one time, when the capital stock was at 
 S1.2U0,()()0. it had 8800,000— two-thinls of the entire capital— at risk 
 lieiAveon three Inisiness houses. In iSii) Mr. Fi'othingham retired froni 
 the I'residency of the Bank, and the late Mr. William Woi-kman was 
 appointed. Mr. F. .Macculloch was at the same time made Cashier 
 
 The stock of the bank at this time sold at 4G. but gradually ran up to 
 
 ]ia)-. When Mr. Workinan and Mi'. MaccuUoch had jnanaged the bank 
 
 for 8orae twenty odd yeai's, the stock again ran down to about 30, and, 
 
 the o|.)inion being i\\;|>ressed that a (diango of management wouM be 
 
 salutary, both the-^e gentlemen in 1873 retired, and Sir Francis Hincks, 
 
 late Dominion Minister of Finance, was elected President, and Mr. J. B. 
 
 lienny, Irom the Quebec Baidv, wa-- appointed Cashiei-. The stock again 
 
 I rose to par, but still thei-e was dissatisfaction. The iioyal Canadian was 
 
 I at this time open tor a change, and an-angements for amalgamation were 
 
 I made which were carried into effect in 187(j. The uiuted subscribed 
 
 I 
 
jy 
 
 capital tlion amr.niite<l to $3,500,000. and as the City Bank liad a larger 
 snri)lus than tlio otlior. the lioyal < ai)a<liaii ]>ai(i into the new conooi-n, 
 the Consolidated, ?f(>0, 000, or .'J pel" cent, of its cajiital as an equivalent. 
 The stock of the l»aid< is s|»i'('ad from one ( ii<l ot the Doininion to the 
 other, and is also held in England, Scotland. Ireland, Newfoutidland, 
 Franee, and even a few shai'e> in India. The total nunihor of share- 
 holders, according to the list j.ulili>hed f»n the 10th Miiy last, was ahout 
 1,575. One hundred and si.\ persons held 2,024 shares, representing 
 §292,400, as trustees, or in trust for others. Sever. teen hundred and 
 forty-two shares were held hy 75 execiitoi's of estates. Three hun<lred 
 and scventy-.si.\ shareholders were W(»nien, the gi-eat majority widows or 
 unmarried. Forty-one clergymen held shares to the extent (»f $5ii.70O, 
 or an average of 81,0<»)I each. Jiy the Preshyterian Church of Canada 
 13 shares were held on account of the Temporalities Fund, the 
 purchase price having heen U|iwai'(U of !^:i2.0iiO. The Chiircdi of Scotland 
 held, at the time (jf suspension, SB.sOd ot' stock, the Temporsilities Hoard 
 «1,700, and the Widow's Fund of the Church §5,000. 
 
 THE ANNUAL MEETING. 
 
 General Statement of Affairs — T/<r i)ositiun of the Baulx' Pievieved — 
 
 li 
 
 15 
 
 D 
 
 H. 
 
 -A I 
 lia 
 
 i;.M 
 
 ■10 
 
 ({ 
 D,.( 
 
 Siiri 
 
 slii'i 
 i iiav 
 wlie 
 that 
 
 The Bank' a Losses — Full Information Demanded — Reduction oj . yea^ 
 Stocfi' and of the Directorate. 
 
 The Annual (ieneral Moeting of the Hank was held at tlie head 
 office, Montreal, on the 4th June, there heing a large atnendance o 
 SharehoMcrs, Sir Francis llincks, President, occupying the chair. 
 
 The meeting having been called to order, 
 
 The Chairman said — Gentlemen, I move that Messrs. Thoma- 
 "Wilson and John Moat be named scrutineers to receive the votes of tin 
 shareholders for the election of Directors, and if necessary for the con 
 lirming of the Acts of Parliament to be submitted to this meeting, ani 
 also that Mr. C. H. Weihay be Seci-etary of this lueeting. Mr. Join 
 Grant seconded the resolution, which was carried unanimously. 
 
 The CiiAfRMAN — 1 liave now to r^-ad the report of the director^ 
 which is as follows: — The Directors (l<'e})ly regret that they have t 
 meet the shareholder^- with so mifavourjdtlc a i-eport of the condition ( 
 the Bank as that whicii it is their duty to submit, and which is as fo 
 lows : — 
 
 Balance at credit Profit and Lo.';s Account, luth Mav, 
 1878 ". 
 
 Profits for year ondod 10th 'Shiv. 18 79, after ('eductiug 
 expenses of management and interest paid 
 
 $ 0,793 
 2r)7.340 
 
 aj»pi| 
 the 
 The 
 
 %i207,140 ■ in C(| 
 
I 
 
 d a larger 
 w concern, 
 nqnivalent. 
 lion to the 
 •foundland, 
 I- of share- 
 was al>ont 
 L.pi'csentin^ 
 iiTulred and 
 •00 hundred 
 v widows or 
 
 of sr):i.-oo, 
 
 1 of Canada { 
 
 ImukI, the 
 J of SeoUand ' 
 •dities lioard • 
 
 f 
 
 Ai'PROpniATBi) : 
 
 Iiit« Kst rest ivi'd $ 3A.:<0A 74 
 
 IJful <lfl.tK, lOtJi Nov.iiib. r. 1H7>< 85,117 73 
 
 Divideinl. Ist Dccttnltcr, 187K loi,14.'i 30 
 
 Rf'St t ransfirnd 
 
 Appiopriatifii lor Icisscs asci rtaiiiol, and f^r finthcr 
 
 (Icprcciation in securities $,17.1, 208 1 '.', 
 
 r>alan(c, Fieliniiuaiv Exjieiises and Hank Note Ac( ount :i'J.;;.'I 18 
 liediictiuii in IJank Premises li;».64r, OO 
 
 Defu ieiu V 
 
 40 per rent, rednrtion of the SubKcribeii Capital, au- 
 thorized by Aet ot Piirlianient 
 
 Deduct I>e(icieney as above - 
 
 Surplus 
 
 ■j:'2."»;7 77 
 
 S U.r<72 7S! 
 
 •j;;2,noo (10 
 
 $27t:;.:i72 78 
 
 r27.2»;; 
 
 $4.V>,8'j: 
 
 ^ 
 
 $l,31'4,r.00 (10 
 450,8!i2 r>3 
 
 $'.'4.3.707 47 
 
 k Reviewed — 
 Reduction of 
 
 at the head 
 atnendance «• 
 e chair. 
 
 essrs. Thonia- 
 le votes of tlu 
 [.y for the coi! 
 s mcetini.^, am ,■ 
 g. Mr^ Johi 
 
 lonsly. 
 
 the director- 
 Lt they have t 
 he condition ( 
 ,vhich is as To 
 
 In view of the continued depression in hn>iness, and the conse<|nent 
 shriid<itu'e in the vahie of pro])erty of evei'V description, it could scarcely 
 have heen expected that tiiis Hank could have escaped without loss, and 
 when it became cK^ar that the known losses would exceetl tho liest and 
 that not only would there b« no metiiis of paying a dividend for the half 
 year lately terminated, hut that tho cajtitai had heen inijiaired, it was 
 deemed advisable in the intortvst of the sharehoklers to obtain authority 
 from Parliament to reduce the caj)ital stock, and as a necessary conse- 
 (pience of such an applietition, a re-valuation was made of all pro])erties 
 held by the Bank whether for business ]>reinises or as security for over- 
 due debts. .\ IJill had been introduced bv the Government at an early 
 period of the late session of the Dominion Parliament which contained 
 a clause authorizinij the (lOvernoi'-General-ii -Council to sanction the re- 
 duction of the caj)ital of a chartered bank ii'ii'er (U'tined lestrictions, and, 
 as there seemetl a reasonable jirospi-ct of this Bill bccomiiig law, tiie 
 I)iiectors did not (^leem it cxpe<lieiit to take any action rcgardini;" the re- 
 duction of the capital, until after the annual meetini;-, and a full discus- 
 sion with the shareholders f»f the pro]iosed measure. Within a few days 
 of the close of the session ol' Parliament infoi'mation was received that 
 the clause referred to had Ixm'Ii exjuinoed from the Bank Bill in Com- 
 mittee and it then l)ecame absolutely necessary in ordei- to secure the 
 resumption of dividends that the nece^^^saty sanction should be given l>y 
 Parliament to a Priviite Bill to redueo the Ca]>ital Stock. Considtation 
 with the shareholders, ]>rior to the presentation of the j>etition, was abso- 
 lutely imj)Ossible; but the re'.luction was authorized subject to their 
 approval, and the I)ire('tors have no hesitation in recommending that 
 the necessary cfuiscnt to tluit iXMluction be given by tlie ]tiescnt meeting. 
 They likewise recommend that the Local Board at Toronto be abolished 
 in conformity with the Act jiassed during the last session of Parliament, 
 
i 
 
 and that, in nccordnnco ^vilh the sjimc Act, the Boai'd of Directors be re- ' 
 duced to seven. The Dii-ectois. after due consideration of the affairs of .^^.V 
 the Bank were of opinion thiit the niaximiini reduction of capital which ^^. 
 it woidd be necessary to seek would I»e H3^ per cent., but as it was i '_ 
 deemed advisable bv the Select Committee, to which tlie Bill was referred ^^. 
 for consideiation, in view of the continued depression of business, to i'C--|i.,>. 
 commend a reduction of 40 per cent, instead of 33i^, they did not deem it ^' ."i 
 expedient to ;ib.!ndon tiie Bill, and if it sb.fudd i-cceive, as they confident- ^i 
 ly anticipate iliat it will, the sanction of the shai'eliolders, the surplus |i^^ 
 will be, as shown in the statement std.mittcd herewith. S043.707.47. -^"^•^^..^ 
 a conse({uencc ot'tlie iliniiuiiiion of the ca])ital of the Bank the Directors ' ' 
 have alre.'idy ti aiisterrcd some of the ai,^Micies on satisfactoiy terms, ii'i'i},,wj 
 will avail tlieniselves otMiivourablc o])])ortuiiities of closin*^ others. 'I'li'tlifiv 
 ,i;"eneral siateniciil is hei-ewith -ulimitted. It exhibit.-; a considerable re^r..j 
 duction ill iho liabilitie-; oi'tlic ]):i!il.: i-bictlv owin^- to diminished cii'cula _„/. 
 turn and dcni^siis. 
 
 F. iiixcKs, ft;,;;7 
 
 Iresi.Ient^,,,,,,^ 
 CKXFdJAL STATR.MKNT. weiv 
 
 10/// ^ra,/. 1879. the hs 
 
 Li ibi''iir-s. pericii 
 
 Cfvpit.ii st..< k pjii.l lip S:;,47],030 t®^"'^ '^^^ 
 
 Re.><crv('(| Intcnst .■^ :i;'>.."ii)4 7 I ^'*''^ ' '' 
 
 Ilnclaiincd Diviricndu 7. 1 78 :• i Mid pi 
 
 . tn.fjs:! .to hav 
 
 Notes Ml rircnlatitui S 777,.'i4i) nn lar<'' t 
 
 Doposits piiyalilc oil drniaiui 2,1 ul.di'ii Os .. "^ 
 
 D('[iosits payat)l<' after iKitici' jj.; ji.S-l. 73 *"nua 
 
 lialaiircs dut' to Koniuii Ai:ciirs 'jr)ii :54:' '28 leio'lil 
 
 Iialaiicc- dih' to otlur P.aiiks 1(1,181 ^S K' thei 
 
 4..-'.':i,!i82 ;h(» Bi 
 
 mention 
 
 j,,„^.. "en If) 
 
 Cold and Silv.M- Cniu s J2ri.,-7i) 'J8 '^*' ^1^' 
 
 Doiuiiiii n Not' s ' 2:!7.tt;'.(i 25 '^^ ''■'' 
 
 Notes and Chcijiii-s of otln '• Banks If)2v'r2.") sit Jlink; 
 
 ? •;iM.827 hat h^ 
 
 GovornnuMit Df lien tares 70,r)<ji; nl v 1 1 
 
 Notes discoimted Current and I,..:, us to (.ori.nralions. .$ c.l !'(;.,^47 r.o ' »> f. 
 
 D.dtts s. eiiird li\ ^ro^t:,'al;es and utiier seeuriti. s 2S7,:r2.l s;, ^^ '''I 
 
 Ileal Kstate and :\I(.ifja-. s on 1!( al K-^tate, (lie piv- '*"'' 'I 
 
 perty of the Bank ISl.usf)^! iCt wi 
 
 Ovordnc Debts not sp..,iallv seemvd rKstinmted L-.ss l tjij 
 
 provided for) 2H,"lM7 4!i lai,,( 
 
 Bank Premises ''^^-,0 m J^ '"'^i'^ 
 
 "' ' ^^ t'o 
 
 Total Assets $7,661, 7ln-»ly si 
 
 At debit of Profit and Loss I'a S'.i X'ciVi 
 
 ie eaj 
 
 S-,1 I2,(;c,'. 
 
 \ 
 
9 
 
 Tlje Chairman eontiimed to remark that the shareholders had been 
 phiced in possession of tliat report lor several days, and had had an 
 ectors be i'^- ()p])oi-tunity for its consideration. It was his duty to move its adoption, 
 he affairs ot .^,^j j,j tioimr so, lie could assure them it was a most painful duty, as he 
 upitul which ^^..^^ j^m.^, every one of them would understand, to have to do. Any one 
 Lit us it "was ]^,)f)^ving anything at all about business niust be well aware of the extra- 
 was referred ordinary depression which the Directors had had to contend with, and if 
 isiness, to I'C- -^jj^iy seemed to liave written off at i)j'esent a verv hiri^e amount of bad 
 d not deem n debts, the shareholders must bear in mind the peculiar position in which 
 ley confident- ^j.^^ Di^octors had been placed. Referring to the que.-.tion of Real Estate, 
 ;, the surplus ^j^^ Chairman said it was necessary to write down the buildings, as no rent 
 B.707.-i7. ^^"^ was charged foi* them, they being the property of the Bank, but it was 
 the Dii'ectorsjjj^,,j^jj^,,. ^i^ji^g wiien the reduction of cajntal was to be dealt witii. Tliey 
 ry terms, anil jj,^,j \\^^.^^ to ,|eal with everything, and to write down properties which 
 others. T^bi^j^ey would not otherwise have written down, lie had seen some years 
 insideraV)le i'^' of t lie depression in trade, and then gave his opinion that it was to the 
 iiished circuUi^j,|j.r„,,.(lj,^m.y Jurtation in business, owing to great ente-prises then being 
 carried on not only by the (Jovernmenl. but by private corporatiors, ai\d 
 lllNCKS, from large e.Kpenilitiires of cajMtal for permanent works of one kind or 
 Presiden'|i,,,,t],ei-^ which had not turned out remunei'ative. and which the banks 
 were vei"V much blamed foi' encourai^inu;. Ho verv much doubled that 
 the baid<s were so much to blame, and .v as not aware in his banking ex- 
 periciice that the banks had forced their business on any class of custom- 
 _ers as had been alleged. If he lo!)ked back ui)on anything with regret it 
 'was that the Bank went into consolidation without a much larger Ee:t, 
 and proba})ly the wisest thing that could have been doiuMvould have been 
 ito have avtuled itself ol" the opjiortuniiy lo reihice the capital and leave a 
 larger sui'jdus. He had, of course, i-ead with cai-e the pioceedings of the 
 liinual meeting o!' tjie great itistitution — which was their imiue Uate 
 ieighl)nur — and theri-tore could foi-m some idea of what are considei'cd to 
 K' the general o])inions exj)ressel. but he might say moi'e especially upon 
 .t,-,i.',i,ii8'2 ,ho Banking Act of the Dominion. That Act is liUei}' to i'ligage the at- 
 
 _ ;ention of Parliament at no distant day, and he need oidy say that in the 
 
 gs.i 1 J.tJit' luggesiions made for im]u'ovemont, he, for one, could see nothing to dis- 
 
 .enl from. No one in connection with that Baidc had any objection to 
 
 he apjtointnieiit of auditors, but he wa~ not piejnired to exju'ess an o])in- 
 
 011 as to whethei- a general system of auditing a]>])liel equally to all the 
 
 Jaidx's under the authoriiN' ol the (vovernmont would l>e the liest ; all 
 
 hat he could say was that he wouKl not in the slightest degree dissent, 
 
 nly he would just throw out a doubt on the subject. The meeting would 
 
 3e fiom the statements submitted that they were in a dillerent form to 
 
 "hat they had been — he was bound to say a much l>etter form. The 
 
 ict was it had l)een usual to mix up the i)ad debts with the profits, but 
 
 1 this ca>e a dillerent course had be(;n adopted. A great deal of com- 
 
 laint had lieen made by sharcdiolders on one thing that he was hound 
 
 '■'.f^'-""'^'') explain, the eomi)laint was that the cajjital had been cut (lown without 
 
 '•"''*■'"" le consent ol tlie>diaieh(dders and without their knowledge-. He could 
 
 ^_ .,,,", ill}' *^uy this that, to the Dii'cctors" ama/,emen1, one Friday eveinng they 
 
 "' .v,!-;'.*^'' '^'^''^'*-''' '""'^^'^ by telegram that the (dauseofthe Baid<ing Act reihieing 
 
 '■ — I© capital of he banks had been struck out. There was not a moment 
 
 5:;.47 1,030 
 
 ti>.(;^ 
 
 3 
 
 IS 
 
 ;.s 
 
 — 
 
 ;J 
 
 
 \ :.'j 
 
 
 
 ! S,-) 
 
 
 
 O^i 
 
 7 -r." 
 
 I 
 
10 
 
 i! 
 
 i 
 
 QX] 
 
 Mill 
 
 oft 
 
 V e 
 
 to lose; in fact, Purliamont was expeciod to dose in a day or two. 
 -At all evont-^, it was an exigency wiiich allowed of no time for the 
 Directors to consider, even amongst themselves, what the reduc- 
 tion should be. Ili^ own oi)inion was that it should be 25 or • 
 33j/^ ]>er cent. He immediately left for Ottawa, resented himself the - 
 nex'. morning, jsucceeded in getting the forms of the House suspended, 
 and in getting the Bill altered in the course of the week with regard to - 
 the reductioih The Bill was referred to a select C(;mmittee. He held •, 
 three meetings with those gentlemen, and did everything to make the I 
 reduction 33^. i»er cent. The discussion was as to whether it should be 
 redu«ed to 50 or HO per cent., and he was actually under the impression 
 and also telegraphed that he ftiarerl they would have to submit to 50 per 
 cent, reduction. Of course it made no difference what reduction was 
 made; the property was there although it would not have been a good 
 thing to have had to suljmit io 50 per cent. Oa the Friday morning, he 
 succeeded in getting them to con-ent to the capital standing at 00 per 
 cent., a::d could do no more, and he felt satisfied that the course adopted 
 had been in the interests of the shareholders. It was unnecessary for 
 him to trouble the meeting wiiji any further remarks in moving the 
 adoption o( the rei»ort. He couM perfectly andt'r.stand that the share- 
 holders would foe! disajipointed in not getting a dividend, but he might 
 say the shrinkage on iiropcrty of every description wa^ very extraor- 
 dinary, and he had no hesitation in saying that the bank stocks of the 
 Dominion of Canada for the past five years iiad diminished twenty-tive I'.'V.' 
 millions of dollars. What tin; amount of shrinkage in property of every ''' '] 
 kind, on real estate and merchandise of every description was, he 
 could not say, but it was very great. He had been (|uite stunned at the 
 continual depression. He was among the oldest individuals in that room 
 and had had a gi-eat deal of experience, and could only say that he had 
 never witnessed such a state of things. He sincerely hoped that, as 
 things were improving in the United States, we might have a revival ot 
 commercial prosperity. With these remarks, he moved the adoj)tion ot 
 the report. 
 
 Mr. J. H. Joseph asked for a statement showing the expenses ol „ / 
 
 ° ' an( \ 
 
 management. 
 
 The CiiAtUM.VN said that he did not feel authorised to give the detail ^^|^"A'l 
 
 (hat Mr. Josej)h i-equired, and in fact, without going into particulars rj-' f 
 
 they might be misleading. The expenses of management had been most 
 
 materhilly reduced, and were in process of further reduction. There wa»^ . 
 
 every desii'e on the part of tliL- Directors to meet the wishes of tlnS*' I 
 
 shareholder.s. """^ '"^ 
 
 Mr. J. H. .]osEi>ii was very sori-y to li.ive to complain that tin 
 expenses of this institution had beon vai-iously reported — the lowotj^ -.J 
 estimate being 4^ per cent.— and it was mcrelyto ascertain if such wa>-J. '''1 
 the case that he put the tpiestion. " ^"I'lff 
 
 The CiiAiK.MAN — They may be 4^ jier cent. - ,. . 
 
 Mr. J. H. Joseph said the Chairman referred to a reduction takim " I 
 place. He knew that a i-ediietion was promised two years ago. H'^j^^^J 
 )er cent, was the i-ate after re luetion, what must it liave'l>een previously \^.^y'A 
 'e thought it would be JK-lter to satisfy the stockholders on this poiiii k \ 
 He did not sec that it wouM endanuvr the Bank. 
 
 gar( 
 
 in tl 
 fron 
 
 the t 
 tion 
 
 woul 
 of til 
 the 
 
 Oiitai 
 and ( 
 
 bus! Ill 
 
 consd 
 
 \v 
 
ay 
 
 mo 
 
 th 
 d 
 
 himself* the 
 5 busponded, 
 th rej^ard to 
 iC, He held 
 [o make the 
 
 it t^ihould be 
 e impression 
 nit to 50 per 
 ■ductiou ^\a^ Cfiairman — Since consolidation the losses in Ontario Imve 
 
 been a good -^54^ ,,oo. and in Quebec $299,102. 
 
 morning, lie .. .^ .> . , 
 
 CiL-MRMAX — It has not been usual to give details. 
 
 Mr. J. U. Jos;Ki'ii — But this is an unusual state ofaftairs. 
 
 Chairman — Thci-e have been very considerable losses in Toronto. 
 
 Mr. J. II. Joseph — "Will you state the amount? 
 
 .Ml'. IIaldaxe — It will be ditiicult to answer the question with re- 
 gard to each particular agency ; but I woubl like to know the losses made 
 in the Provinces (jt' (^uelice ;iiid Ontai'io I'espectivcly lor tbc jjrescnt, or 
 from the period of consolidation ? 
 
 Ml-. IIaldank — But what have been the losses respectively between 
 wo Banks nrior to the consolidation ? 
 
 ng at CO per ^j^^ ^^^.^^ Banks ])rior to the consolidation .' 
 
 )urse adopteu (.'hairman — Von mean the los.-es of each Bank since the amalgama 
 
 necessary tor ^j^^^^ y 
 
 moving the j^j^. u .^j i,^;^'^;__I ,,i^..,„ x\^^, josses between the two Banks before? 
 
 at the ^"pj"^'" Chairman— That would be very hard to get al. Substantially the^ 
 
 but he migh -woidd be the same in projiortion to their respective capitals. The losse; 
 
 very extraor- ^^^. ^j^^,. ^^^^ j^.^ii|. ^j,^^,^. amMli-:amation have amounted to 8:]K».<HMI. anc 
 
 stocks ot the the b.sses of the J:<.yal Canadian have been SOU.OtJlb Of cour.-e the^ 
 
 d t\venty-ti\e j^.^^j .^ lai-irer capital an<l more agencies. 
 
 )erty ot eVClji \\., n at nwi.' — l^o k'inrl (^luuioli tn o'ivo mo (1h» i'o<in>f't ivo In^KOs f<»i 
 
 i 
 
 '"• -• ■■ ■■'I'---. '■" ,' •' ■■■-■- 
 
 w .^w...... ,^. jM'ihap.N. iiioie faiiiiliar wilh that than 1 am. 
 
 ...r. W.M. 'rudMi'soN—'rhai <|Uesiion wa>> wvy important and had a 
 1. There wa-g,.^,,, i,|^},,^,,,,,^, ,,,^ ,1,^. ]..j,j|^. Many of the lo-^es h:iv. 
 wishes of the|j^,^..,, (;.„,. j.ij.,,,, 
 
 Mr. JfALDANF, — I iiii"i-I\- want to rfv\ an 
 iplain that tlr . .. • . 
 
 ed— the 1 
 tain if sue 
 
 •oiiK! t'rom ihc 
 approxiuKue of ihe ligui'es 
 
 Air. IIAI.DWF, — 1 iiii"i-|y want toilet an approximaiC 01 Ihe ngui'es: 
 at th' rj'j,^^ Chaihm.w — I will give you the exact figures. The pioportion 
 
 h)we> jg -j'ji J,, ijk; (:(»i|,i(|(vjiiM- iln' large numler ol' agencies, anil the 
 C'h ^va>j.j^pjj.j[ (,t\,.i(.|, jJaidc, it is not so wry gi-eat a ditVerencc. 
 
 Mr. .JOHN Crawi"ori» — I would lihe to ask ihe beneticial etlect that 
 . ft satislaetoiy e.\|»lanalion of this diflorcnce would have? 
 eduction takim m,. A.vnRKw K'oI!F.rtson— As 1 undei-stand you, Mi'. Chairman, the 
 ears ago. If-^losHcs amount to ^StT.iKKl for Quebec and Onta'rio. of which ^iiUi.OOO 
 )oen previously h,jy^. |„.,.,, iin.„rr(.Ml upon the City Hank's customers, and $541,000 upon 
 rs on this lK)ini he \l,,y.^\ Canadian euxtomurs. ' 
 
 I 
 
 /, 
 
12 
 
 nd 
 
 ^ 
 
 Mr. IIalpane — I wanted tho proportion of the losses before conHoli*'"' 
 dation ? ^'^'i' 
 
 Mr. Saunders moved, seconded l)y Mr. S. H. Ewing, the, fbllowini.'^'-^'*''^ 
 resolution: Whereas an Act has been passed by the Parliament ofthr^'®'' 
 Dominion of Canada, entitled "An Act respecting the Consohdated Bank*^^"'' 
 of Canada," and which is in the following' terms: — ■^^^S'^' 
 
 Whereas the Consolidated Bank of Canada has by its petition V(..*^<^*"J 
 presented that it would be for tho interest of the said Bank that the mini 
 ber of its Directors should be diminished, and that its local Board a:*^'^^' 
 Toronto should be abolished, and has prayed that the said changes in il'**^" " 
 organization should be made, and it is expedient that the prayer of th*®'^^ • 
 said petition should be granted: Therefore Her Majesty, by and with th' < 
 advice of the Senate and House of Commons of Canada, enacts as foi ^ 
 lows : 'f'^^!' 
 
 1. From and after the next annual general meeting of the shar(^'^'^[' 
 holders of the said Bank, tiie Board of Directors of the said Bank shal ^ 
 consist of seven Directors only, and at that meeting seven Directors onij**^ . 
 shall be elected for the management of tho affairs of the said Bank. ^i^'^i'^l 
 
 2. Upon, fi'om and after the said next annual general meeting r^"*^'l 
 the shareholders of the said Bank, the Local Board of Directors of th .' '"• 
 said Bank, heretofore existing at Toronto, shiiU be discontinued an"'*''^ 
 abolished ; and the functions herefofbre exercised by the said Locr^ '^'' 
 Board, shall thereafter be pcifoi'iued in such manner as shall be orden* '"^'^ '' 
 by the by-laws of the Bank. ?*"'«'< 
 
 3. Neither of the preceding sections of this Act shall have any fore *''^ 
 or effect unless apjdoved at the next annual general meeting of xl'f^^'' ' 
 shareholders of the said Bank, or at some adjournment thereof, or at |^*^'* 
 special general meeting of the shareholders thereof called for the purpo- '^ ^^' 
 of considering the same; and at any such meeting one of such sectioi*® 
 only may be approved, if it be so determined by the shareholders, ai ^^ 
 shall have force and effect accordingly. ^p ^' 
 
 And Whereas, due notice has been given that the said Act would H"''^''' 
 submitted to this annual general meeeting for a])proval ; '.^ "^P 
 
 And Whereas, this meeting has duly considered the said Act, and ^^^ 
 desirable that said Act should be approved and confirmed ; It is resolvt'""'' 
 that said Act be, and the same is liereby approved of and confirmed ■'®''' 
 all respects. ^^ '^ 
 
 The CiiAiiiMAN— Is it your pleasure that the report be adopted bed i^"*' 
 this resolution is put ? (Cries of No ! Xo !) I presume there are .soi®^'^'^| 
 dissentients, but I don't thin!: there can be any really formidable oppe^ ^'' 
 tion to its being adopted. 
 
 aati( 
 
 Mr. John CiiAWFoiU)— It should be received and tlien it might '?* 
 adopted at a siil^equent period of the meeting. "* 
 
 Mr. Henky Yates— There seems to be a disposition to keep back f^ 
 formation from the shareholdeis. I think we ought to have tho iufor'^ ^' 
 ation. In the part of the country were some of the agencies in Onta*? ^'' 
 are— fo'- instance, Norwich— it would not pay the Bank Managers' salai?*^'^' 
 if they did business there. Two years and a half ago tho matter v'"^'l 
 discussed, with regard to the Toronto business, and the agent was e °^"' 
 sidered not to be the man for the place; yet lie has not been remov 
 
 \vi 
 
 Mil 
 
 Ie( 
 
 le cl 
 
I 
 
 13 
 
 efore coiiHoliJ 
 
 And hence our losses. I have lieon out of the countrv for a loni; time, 
 
 and have had no op])ortunity of criticising the affairs of the Bank, but I 
 
 think our h)sses have heeu ma<le through a want of attention to the Lusi- 
 
 (■ }\ win"*'*-^^'^" ^ think this nonsense al)out depression in thrust in just to gloss 
 
 Uu\iO .~(]|ver bad management. an<l whatever deci>ion you may arrive at with 
 
 uimen ,U ^[regard to putting down our capital or passing ihu dividends, I think wo 
 
 ^oliaatec '^^ight not to let these men manage our business any longer, 1 f^r one 
 
 . . .would most decidedly objeet to it. 
 
 ^\. i1 mim •^^'"- ^' ^^' J*'^''-'''! — ^ don't sec why thei-e should be any secrecy 
 ■ ^"^^^i^"® , ibout the matter, and why there should be anv hesitati(m about inform- 
 local 15oaru .^^^^ ^^^ ^,^_^^ ^1^^^ l^^,^^_^ j^_^^,^ l^^_^^^^ .^^ S.'aforth an.l what in Toronto. The 
 
 changes i ^^j^^ .„^,| (],^. ,„^]y ^^^y j^. ^o u-ive this inf >rmation. 
 : F'^^yj^^' ?J^^^^'' (Ci'ies of " the oidy way, the only way.') 
 )y and wi ^^^^ -yjj. J jj^ Ji.sEi'ii — I would urge, as lias been suggested by .Mr. 
 
 enacts Crawford, just to allow the other iuisiness to go on, an<l iie ])repared to 
 
 ' V, hiri^"^'*'*''" '^^'I'tdlier the other partieulars should bo gone into afterwards. 
 ^'•^/ R kshal The L'liAiUMAX— 1 have no doire tu witldiold the infoi-matior. It 
 '^t!- f^' onl^**^ ^*^^^'^ usual to give thesi; particulars, and it rofpiires a fesv moments 
 
 I Diroctoi 'oiisideration. The Xorwich agency, the one which the i;-entlemen men- 
 ^aia x>a ; ^ ^.oned. or referred to as being a bad agency, has not been a bad agency 
 jral "''^^^""Kj^t all. It is a mistake to suppose that it would not pay the Manager's 
 3irectois „|i^l«'tiy to run the Xorwich Agency. That agency has been parted with 
 iscontinue 'id handed over to another bank, not because we wanted to part with it 
 
 11 ^f^*^ , '« an agency tliat would not pay, but locause we wanted to reduce our 
 
 shall oe ou rencies, and as there is no secret about it— the ainiouncement has been 
 
 ,, ., th(^ newspajiers — I may tell you that it has been handed over to the 
 
 II have any ,ank of Commoree. who have had an onportunitv of lookinu- int(j the 
 meeting of tl,.^, ^ ^, ^ „. , ...,,. '• ...,i\..:.,. .,. , ..^ , 
 
 inuutiiitj "- •jjj^l^^ of the accounts and eveiwthing connected witii the agency an 
 thercoi, o <■ ^^^ would hardU- have taken it ovei- if thev did not consider it a desirabL 
 d for the pwi'F^je 
 
 of such sectio! ^^^ ^^ TiioMPsox—r would like to state one or two facts with rcfe ■- 
 
 ,havehoiaerb, d ^^ ^^^ ^^^_^ Xorwich agency and Seaforth business. At that time I was 
 
 1 1 jlireclor. I visited X^orwich in concert with oilier Directors. Norwich 
 
 iRlCl AOl ,a snrJv'cn of t:ivoM i-nhi v t(^ ii< It w.'is VPi'om nieiidAr I in n< nx licino- n 
 
 .^ . |)oken of t'avoui'ably to us. It was recommended to us as being a 
 i . , » .i. ,\ I'D' where a large anmuiit of deposits could be obtaincl, and it proved 
 e said AC ,j^ . luccess, In regard to .^ealorth. namely, the salt industries. Avhich were 
 ed ; it ^'^^^^^ , 3alei there, the very largeamoniit of ca]>ital emiiarkel in those indus- 
 lud conni ^^ l^^j eveiy(,)nt' of us to avail ourselves, with considerable satislaction, 
 
 11 ('One or two offers made to the Hank by a numlier of gentlemen who 
 t beadoptedbe <|^^.^^^l^^^l tij^.,^-^^^^,]^^,^ i„ ,)n.^^> work-, and\ve felt justified in taking up 
 13 there aie s ^ ^i. ^^^,^^ accounts that have uidortunatelv since beci/mo Itad. That is 
 formidable oppc^j^^j^,|. ^^.j^j^.j^ ^^^^^^^^ ^,^^. ^^^ _,^^^ ]^].^^^^^ ourselves for. It had an honest, 
 
 , ind foundation, and we have sustained a loss, and that hjss has been 
 ^ lit with as the Chairman jusiitied in reading the report. 
 
 Mr. Joii.v Okawfori* — I would say it is not to be wondered at that 
 
 then it mi 
 
 ;o the niattei xaut^t not therefore be too hard niton them now. I woiUd not expect 
 ho agent ^vas c . 2 
 
 not been remov 
 
 4 
 
14 
 
 Tit) 
 to get satisfactory ansM'crs to any questions I might wish to put. •©pi 
 might call upon the Chairman to make some concessions; and I am vonati 
 glnd to hear liim say that he would make concessions, ])articularly wi||ti.o 
 regard to that fpicstio.'i of had debts, and ] think it is a concession qlfl 
 should all be glad to heai- fiom the Chairman of any Bank officiating Qjefti 
 Kuch u meeting. AVe shall get the iniormalion asked for by Mr. Josei/'lu-i 
 and the losses suffered will not have lieen suffered without some cons^^tio 
 tion. 1 was glad to hear the Ciiairman exj>ress an opinion that list: 
 amalgamation was too icecipitate. 1 thought so at the time. J oppn--j ^^c, 
 it on the ground that we weie asked t<^ do something with our eiatio 
 closed. I was right and am glad to hear the Chairman ackiiowledgjnd 
 that that w;is the ease. It is veiy satisfactory to find the I)ircctor>pew 
 the Bank of Montreal as well as thoi-e of other banks receiving the ^le B 
 gc>tions of shai-eholders. and it will tend to bring these mure ])raclic;flf. 
 in contact with the management than in the |iast. as tl 
 
 Mr. Fred Hamilton — 1 think the shareholders do not think ;)Iati\ 
 concession but an undoubted right that the Directoi's should give all)0 of 
 formation re(piire(l by the >hareho|(lers. I think the ChairmanVid th 
 marks are (|uile conflicting with regard to the agency handed ove A 
 anothei- l)aid<. What about the Bclin branch? These are ex})lanai TJ 
 which we must have. We do not go in for any c«>ncessions. if we ir*. Jo 
 to lose, we will know the i-eason. i. Ian 
 
 Mr. John C'ltAWFoiut — I did not mean what I said to bo takeiajrji. 
 that way. J meant that it was in the jiower of the Directt>rs unde {^^ .j, 
 Act of I'ai'liament to ]»revent us from doing wliat wo are allowed to ,ve tl 
 
 The fiiAiUMAN — (ientlenien, 1 can ; iswer the questioii. li.jg, is 
 dueing our ca[iital ve:y materially we wisiied to dimini-li our busi 
 The agency has not been a bad one, neithei- at Herlin nor Xorwicif 
 am i[n\{v i-eady now to go into the question which 3[r. Jose]ihmw 
 which J did not care to do o 
 
 )art 
 
 iferen 
 
 I mv own re>i)onsi 
 
 itv 
 
 I 
 
 am rea-ss. 
 
 ?.e in 
 
 bil 
 go into the losses ami everything connected with it, 
 
 Mr. IIai.dane — A.s to M:-. ,Io>e|th'> <iuestion, it aj»])ears to 13 fifj. 
 you give (.)ntario and 'Quebec, th«t would be sutTicient. li' you gcj B 
 tario and (^Mieljec that woidd bo enough without going into deta J 
 each agency. ^ " isidj 
 
 A Voice — We want to know ilaii\' of the managers of the bra A: 
 
 are friends of the Directors ? 
 
 Mr. J II. J 
 
 >SKI'H 
 
 -W 
 
 e <'n 
 
 Mt 
 
 nnot infer from the mere fact olaiioii 
 
 having disjiosed of the agency thai it was an ui |»rotitable one. ('nl 
 regard, however, to the ([Uestion ol (diarges of manao'ement I have . I»J 
 
 it stated that G per cen!. of the ea])ital was defrayetl for exj)ense8 ::r3'ii 
 time, and that now it i> 4^. per cent., as admittnl bv the Presid 
 
 hi 
 
 >vlial 
 
 wanted to scan some of the expenses <if the Institution, becauM^he il 
 currently re])ortcd that the expenses are enoi'nious; all will be at ftliiif 
 a ])hiin expiaiKition. Allusion is made lo the depression. J>e})i bes 
 docs not inteifeie with the }):o;iis. That is an old whiin which ougleh if 
 disposed of Depression can oidy affect the amount of business dn ai| 
 the Bank, not the profits en the business. ^More depiession an^oinl 
 profits I should think. Another reference is made to consolidatin of 
 ail the blame is jilaced upon consolidation. I had a great dea 
 
15 
 
 yith it. The consolidation \va> with a hank of good husincs!i>, of good 
 vii^h to piit. l|puto and standing, hut un<loi' bad management. The matter was a 
 . fii^d I am vciiatter ot agreement, ami tlie onnsolidation was carried out with mutual 
 larticularly wiatisfaction. That consolidation would have been eminently beneficial 
 a concession 'Q^ this institution but for the mistakes made by our own Board. The 
 [uk officiating tipfticiencv of the man in -ontrol at Toronto was the cause of the Royal 
 [. l>y Mr. Josci/Anadian Banks bad managemeat. and one of the objects of the consoli- 
 )ut some cons* (ition was to substitute a l)elter management at Toronto. The first 
 opinion that ilstake made by this Bank after coiisolidation was the re-appointment 
 time. I opp"! Toronto of the man whose ba<l management had necessitated consoli- 
 )(.- with our e'ation. T did tny best to stoj) that, but in vain. It was determined to 
 if acknowk'diijnd him b:ick to Toronto, an 1 one of tlie Directoi-> at that time with- 
 
 ihe l)irector^^ew in consequence of that ste]) ; and if you h;id had that man still on 
 
 -^ceivin"" the ^t Board of Directors there would have been no 40 ])ei' cent, now struck 
 
 > more practi(;flf'. Well, the man to whom 1 objected was sent to Toronto. an<l what 
 
 an tlie result ? Jle made atlvances to a firm, of which a m-'mber was a 
 
 do not think Native of his own. to the extent of SlGOuOO, and that firn failed; S.50,- 
 
 Viould give alDO of the amount of these advances were made without an} endorsation, 
 
 he Chan-man'sid the tirm ])aid 15c. in the dollar, 
 
 cv liandcd ove A Yolce— $1(H),000 of the $100,000 was endorsed. 
 
 se are ex\»h\nai The Ciiairm.vx — With regai-d to that, 1 think it unfortunate that 
 
 ^^sions. If we ir. Josepli should go into this. I dislike going into ])articular cases. 
 
 L laugh.) It is one of these cases. (Anothei' laugh.) Gentlemen 
 
 \id to be taUeiagh. but 1 ailvise i)eople who want to enjoy a joke to wait until the end 
 
 Directors undr it, and not to intorrui)t by laugbinii'. A great many in this country 
 
 •ue allowed to vve the impression that every one who is unfortunate in business and 
 
 ,' qviestion. I'ls, i>* the pei-jjetrator of a swindling transaction, and that their failure 
 
 ini-h onr busipart and pr>rtion of the tsAvindle. With regard to the house to which 
 
 in nor Norwiclference is made, that firm was perfectly solvent, and the head of that 
 
 ■h Mr. Jo-epbtn w.is a man of consiilerable private means independently of his busi- 
 
 •ty 1 am reags. The firm was unfortunate in incurring great losses, and no influ- 
 
 e.e in the shape of family connection had anything Avhatevei" to d<^ with 
 
 t ai»l>fars to 13 firm's account. It is certainly time that, in consequence of its failure, 
 ^nt' If vou gc) Bank has made a veiy heavy loss, 
 roin*'" into deta A YoicE— I would like to ask the T'resident if that gentleman of 
 
 '^ isideralile ])rivate means is rich still .' 
 
 lo-ers of the bra Anotiiek Voice— Xo. But liis wife is. 
 
 ' '^ ^[r. J. II. Joseph — You refei-, ]Mr. President, to one firm and I i-efer 
 
 ,Q mere fact ot another. 
 
 rotitable one Ch.vihma.v — No. 1 thiidc 1 refer to the same tirm. 
 .'..(.iiU'nt I have .Ilev. .Iamks (iuEEN--! pivsume gentlemen have come with the view 
 !V"^t'or exnensea ;;rying to amend the state of things. It seems to me that a great deal 
 ' 1)V tiie Presidtjvnat has taken place will iiot have an advantageous etTect. According 
 
 titution, becaUN.he report l)efore us, the stock is down to S4 or 85 per cent., and, if 
 •ill will be at I'thing could be done to restore contidence in the Bank, that would be 
 
 ' r,'-sion. l>eiii iDcst thing we could do. and the appointment of auditors would be 
 ^■l im which ongleh more likeljMo bi'ing out the matters required to be looked into, 
 
 t of business »ln any other course tluit could be adopted, and if these auditors were 
 denvession an-ointed it would bo better to hit upon some plan to get at full informa- 
 ^^. to consolidati'i of the Bank's condition. * 
 
 ,ud a great dea 
 
 i 
 
I 
 
 \ 
 
 16 
 
 Mr. John CitAWFOiiD — I came here to use my influence to get tl^f g. 
 auditors appointed lo get jit the state of the Bank's attaii's, and this ^vi,y^,,.' 
 have to bo done 1»elbre oonti<hince is le^ti^red. There may liave l»een \l^ „.^. 
 best management in the woild. The question of submitting to a reduetio^jj'^ 
 of40 per cent, should bo thoi-oughly discussed. It would have boon satisf";i.jJ^.jg 
 tory tomeif thoi-etluctionhad been 50 or (JO per cent. It would have bet,- y^ 
 much more preferable in my jtidgnient ; the investment would Inive beijj^^ , 
 mo it protitable if the JJireclors had consented to make a tr.ansfer of 50 .,j^^ 
 (JO. This would have been a magnilicent reserve, and would have imf ^ 
 stored confidenee. I hold that a JJest is the main-stay of a Bank Jn,,g,-, ^ 
 ihe only ilern of the statement submitted to-da}- which gives me coiifj^^^^^. 
 denoe in tiie solvency of the institution ; and as it would not cost liiioth, 
 Bank a dollar by increasing this l?est, it should have been increa.sed si g^,^^ 
 more, a a means of bringing l)ack confidence. AVhon you ])ropose rate.s 
 make a reduction of 41) pei-cent. you fail \o i-ealizethe wants of the Baij^,, ,, 
 I would take no half measure. J would go to the Itottom of its attaijn],! 
 and I contend that that is what is requireil to bring the institution inti 
 position to regain fhe contidence of the ])ublic. 
 
 Mr. Henky Yates — Until the Bank's atfaii-s are turned in.side out 
 confidence will be restored. Why not adopt this course. I thiidv t 
 whole of the atfaii's (»i this Bank ai'e loose in connection with it. Gi 
 us a pi-oper exj»f)se. In order to estal)lisli C(^nfidence auditors should \^^ 
 appointed or a Committc" of Shai'eholdei-s to go thoroughly into 'omin 
 affairs of the Bank. I have a large interest in it, and do not want 40 ijctj,), 
 cent, of it to be washed away and given to those gentlemen to misman;j.j^,j^' 
 The President has tJie art of saying a great deal and meaning little. ( }^y 
 Directors were aware two years and a Jialf ago that this depression ^.q^^^,^ 
 
 A 
 
 A 
 T\ 
 M 
 M 
 
 commg upon 
 
 us, and the\' oui^ht to have taken in the sails ; but I 
 
 th( 
 
 told that they have actually been looking up people and asking them .Qd 
 
 their money. This may not be true, but ^i^^ 
 
 Mr, John Grant — You should not say it unless you know it to earii 
 
 at (Ji 
 
 tenf 
 
 true. 
 
 "^•i Mr. Yates — The I)irectoi-s I say shoidd have known so much of 
 I)usinc8-i that they would have i-educed these monies lent out to sc tJic. 
 reasonable limit. Auditors should be appointed, oi- a Committct'ngoi 
 
 Sharehoklers to nnd<e a searching investigation. Jq 
 
 Mr. John Crawford — A great deal of what that gentleman has - 
 is ti'ue, l>ut we must blame the Aet of Parliameiit for it. >^iipp(>Mii 
 uuditors were a])|)()inted it would be doubtful wiiethei- they could go ig .,, 
 the otfice of the Bank and examine the bonds. (Mr. Joseph — No, it iiva\' 
 be the Directors.) If the shareholdei's join together in a|)j)ointing I'lya 
 tors, that is tlie only way to reconcile the diserejiancy that gentleit , 
 liave allowed to arise bv moans of bad debts, l)Ut I doubt that if we 
 
 ws| 
 1, 
 
 po 
 
 inted auditors to-da\' whether it would be a succ 
 
 >ail 
 
 esenl 
 
 ess. 
 
 The CuAtR.MAN — Are j^ou sure that what you say is quite true.l(j(_>,. 
 the gentleman examines the ac((»unts he would see that what he sav,QJ^. 
 
 )ver 
 W stJ 
 
 incorrect, and'that they have boon eurtailing and are curtailinj^ 
 
 is one tinng 1 intended sa\iny aud foi'got before, which might meet 
 
 views of the two gentlemen who have just sj)oken. It is generally ) n A 
 posed, and it is one of the points which reijuires correcting, that Direog^jj 
 
I 
 
 17 
 
 •ned inside out 
 0. I think 1 
 on with it. <ii 
 
 nee to set tli)|B.^,^l^.j^ manaire thini>-s in sueli a way that they liave i:;reat influence 
 I, and this ^viJy^J^. ^j^. y,)^^^ ,jf ti,^> ^Ij.ii.t^,l,(,ljj^.,.s. No one can say that I ever sought 
 ■ have been 'l^otget proxies and J may here mention that one gentleman vohintarily 
 g to areductin^j^ j-,^,^ j,j^ l»i'Oxy, and this gentleman knows all about everything eon- 
 vobeen satist:i'j^(^.(e,| ^vjih the Bank's atVaii's. There are opinions similar to those held 
 .vould have bei,y ^^[,. Yjitess, Cnmmunieations have taken place, based upon the idea 
 vould havelKH]yjt^ ^j^q Directors havi' a good deal of inthience in controlling votes, and 
 Lr.an^i'er of 50 'utopositions were made for Jho appointment of two gentlemen of intluence 
 would have imi ti,.it tlie voles that we could control should be given to those gentle- 
 ofa Bank ai,-^^j^ ^^[j,, i^jglit ,-i.nder valuable assistance to the present Board. All 
 gives me eoiijj^(^^> statcni^ents of the Directors having an interest of one kind or 
 id not cost liiiothcr is entirely a mistake. Every one of them is disinterested, and 
 n increased st j^,^^ i,,,!^ atraid for my own part if evci-y individual in this room invest- 
 
 you ])ropose rates my conduet in reference to lli« Bank's affairs. These two gentle- 
 ants of the Baije^^ wilf j'en<ler more assistance and give better advice than any auditors 
 om of its atfai)ui,i ,i,,_ 
 
 institution inti v Voice — What is the (piostion now before the meeting? 
 Anotiieu Voice — To receive the re))Oi't. 
 The Chairman — I think the report has been received. 
 Mr. A. .Sal'xdeks then put his resolution, which was carried. 
 Moved by !Mr. John Ci{aavford. seconded by Andrew Boheiitson. — 
 iditors shouM Jjat Whereas, an Act has been passed by the Parliament of the 
 (roughly into 'oininion of Canada, entitled : '-.Vn Act to make further provisions res- 
 o not want 40 Ijcting the Consolidated Bank of Canada,'" and which is in the following 
 men tomismamn^is ; — 
 
 eaning little. ( , Whei'eas, The Consolidated Bank of Canada has by its petition re- 
 iiis depression "^esented that owing to recent heavy and unexj)ccted losses the capital 
 
 sails; but I 'the Bank has been impaireil, and it has been found necessary to sus- 
 d asking them ^nd the payment of dividends; that it is most important in the interest 
 the shareholders tJiat the payment of dividends should be resumed at 
 ^'ou know it to early a date as possible, and that to accomplish that end it is necessary 
 at the capital stock of the Bank should be reduced immediately, to the 
 wn so much of tent of forty per cent.; and whereas, it is expedient to grant the j)rayer 
 s lent out to SI the said petition : Therefore Tier Majesty, by and with the advice aud 
 I- a Committecngent of the .Senale and House of Commons of Canada, enacts as 
 
 .lows : — 
 ••entleman has - i. The nominal value of the existing subscribed shares of the said 
 for it. Suppo^mk shall be reduced t ) sixty dollars each on the first day of July, in 
 
 they could go 19 present yeai-, one thousand eight hundred and seventy-nine ; provider! 
 
 oseph — No, it I'vays. that nothing herein t-ontained or done hereunder shall in any 
 in appointing a^y affect or diminish the present liability of holders of shai-es luijiaid or 
 L'Y that gentleit pjiid n]* in t'uU, to jtay up in full ihe amount of such shares to the 
 o\ibt that if w'CQgent nominal amount tln-reof. 
 
 r 2. From and after the said tirst dav of .Tuly the votes b\- the share- 
 
 V is quite ti'ue.ldoi-s of the said Bank shall he computed upon the basis of the new 
 
 hat wliat he say,o|^'^ and no transfer or othei' transaction of any kind or nature what- 
 
 llilL ^>lIt4* AA^ ■--, '>jr\j44IHI in/ IJHII.^IV.1 \J l ^/LliV.^1 llLill.^ll\.LMril V'l 4.»ll> l\|IIVl 'M ilClLltIV »»iii*v 
 
 3 curtailing. Ti^ver shall thereafter bo made or take jdace excejit in respect of the said 
 ich might meelw stock, and the Directors may thereupon close the ti-ansfer books of 
 It is generally ^ Bank for a period not exceeding one week, for the purpose 
 ■cting, that Dii'O-anging the st<ick books of the Bank. 
 
 of 
 of re- 
 
? 
 
 m 
 
 18 
 
 3. The foroicoing provisions shall not take effect until this Act has th: 
 been accejtted by a resolution jKi-se I \>y a niajoiity of votes nt the now th( 
 next annual general meeting of the shareholders, after clue notice that'wi 
 such acceptance Avill he pi'o|iose<l thereat, or at a special general meeting hii 
 of the shai'oholders called fur tlu' purpose of considering the proposed ac- afti 
 ceptance of this Act. pei 
 
 4. Nothing in this Act shall he constructed so as to lessen or vary aiv 
 the liability of the shai'eholdeis of 'The Consolidated Baid< of Canada ' the 
 to the present creditors theivof in ; 
 
 And whereas due notice has Itet-n given that the said Act would Ik mci 
 submitted to this annual general meeting foi" ai)[»roval and acceptance, pro 
 And whereas this meeting has only considei-ed the said Act, and it i- nee 
 desirable that the same should he ajtpi'ovfd, accepted and contii-med; 
 
 It xa lics'Aced, That the saitl Act he, and the same is hereby a})prove< shoi 
 of accepted and contirnied in all re>])ects. this 
 
 In moving this resolutior., ^fr. Crawford said — The subject of a i-c for ; 
 duction of capital of 10 jur cent, meets with my apj)roval, but I woul not 
 have boen glael if this resolution had heeJi jtut into the hands of some ow take 
 representing a lai'ger amount of stock. While admitting the necessit $ure 
 for such a resolution, which I have no hesitation whatever in moving, 
 should have- j)referred the adoption of a resolution for a leduction of 50 <-■ tlie < 
 O'O per cent. I am, however, happy to move the adoption of the resoli enah 
 tion. with 
 
 Mr. Andrew TkOi^RRTSox said the reduction is the onl}* way for tli thinl 
 future succos of the Bank to be secured. It can make no differenc wenti 
 whether it is 'jO, G(», or 70 ; the assets will be the same. It is (piite cle; the A 
 that the difference would be nothing. the ij 
 
 Mr. Joseph — I am sorry that 1 cannot -accept. At least, I move there] 
 accept the lesolution, but I do not api>rove of the arguments of M ing 
 Crawford. Vou sti-ike off 40 per cent, and advance the Rest 45 per cei 
 The argument of Mr. Ci-awford is a pooi- one. I would rather not acce: withl 
 but reject the bill: it will make a difference of three or four months, not shall 
 twelve months. In.stead of ]>aying a dividend in December you could, I stril 
 a short delay, have an Act passed'in Februaiy or March next. for \\ 
 
 Mr. Crawford— In exi)lanation to my friend. Mr. Robertson 
 ■would say that while the assets would be the same there would be 
 transfer from the capital to the Kest account. The pmblic Avill pl:isnni| 
 their money in this institution knowing that they will have to provi 
 lor a dividend. On this ground I think we might have submitted to 
 greater reduction. Boail 
 
 Mr. Tiio.MAS AVorivMAX— I think we had better at once reduce it 
 10 i)er cent.— (A Yoice— " 5 per eent.'")— for the lower we get tare 
 better, according to Mr, Crawford's contention. That is one of the .monl 
 surd aiguments we had fi-om him before. The great object is, of cour 
 to keep the confidence of the ])ublic. but 1 think by our discussion Bot J 
 have so far tended to destroy that confidence which the Bank h;.s hitli 
 to enjoyed. The best plan is to bring men u])on the Board to look afthe 
 the afl'airs projierly. 1 lo )k upon the two gentlemen wdio I believe wLocjl 
 be electe<l to-day as being the jtroper ones to see that the affairs of ; 
 Bank are economically and judiciously manai>'ed. There is an impresvBoai| 
 
I 
 
 19 
 
 this Act has tlint the expenses iiro far beyoiid wliat they ought to be, and it will be 
 s at the now the duty of tiiose gentlemen to deeivaso that expenditure, and bi'ing it 
 K' notiee that* within the means at the disposal of the Banlc. and I hope that any ieel- 
 neral mcetinii; ings iigainst tlie ]hu\k will lie all ienioved. "NVc are all interested in its 
 c r)roi)Osed ac- affairs, and ought to tr}- to restore ponridencc and bi'ing back the pro- 
 
 Serty of the l>aid< to its pi(i[)fi' value. When a JJaidv ceases to j>ay 
 ividends theie ai-e a great many needy ])eo])lc wh<j have to ]>art with 
 dv of Canada' theii- sto(d< to get means of living, and the pidilie does not like to inve.st 
 ill a !)!ud< that is not i>:)ying a dividend. J hope at the next dividend 
 I Act would bo meeiinu", j»!'oi>ably in Deeenilier, the value of the stoek will ha\e ap- 
 nd acceptance, proxiniated to (JO op C>'). that it will have an adding powei", and not be 
 
 Act and it i- necessary to take otf (!(i ^k'V cent, 
 contirmed; Eev. Jas. (Jkke.v — Whih,' 1 quite agree with Mr. Woi-kman that we 
 
 reby a})provci should d(j noiliing to dejireeiate the value of the Bank's stock, 1 fear that 
 this diseussioii is having that tendencv. The motion before the meeting 
 sul)iect of a re for a reduction of the ea|>ital is a plain one, and whethe'" we like it or 
 •il but I woul not we have got to submit to it. 1 would like to see ihe sidunission 
 nd's of some on taken ^vi!h a good grace, and ]ia-s on to the consideration of some mea- 
 <<• the necessit sures for the future conduct ol'the Bank's affairs. 
 
 01' in moving, Th«' Cmaih.man, in the course of some further remarks, referred ta 
 
 'duction of 50 r tlie observations ot' ^Ir. .Tose])h. to tiie efleet that ]»ostponement would 
 
 in of the resoli enable the IJank to olitain a belter Act of Pnrliament, more in accordance 
 
 with Mr. Jose])h"t! views and of his the Chaii-man's. But he did not 
 
 ilV wav for til think they would succeed better next session than last, unless the stock 
 
 Q no Vlifferent went up considerably. The assets of the Jismk, as Mr. liobertson said (if 
 
 It is (luite cle; the stO(d< was i-educed to (»(> ]>er cent.), would be considerably more than 
 
 the market ])rice at the present moment. With the large siii'})lu.s that 
 
 least. I move there is he did not see why there should be any dissatisfaction in assent- 
 
 iru-nments of iM ing to the motion. 
 
 Rest 45 per cei ^Ii'- Boueut Anderson said a motion has been put in m}' hands 
 
 rather not acce with a view to re<luce the numbei- of Directors, and the number that 
 )ur months, not shall form a quorum. It rends: That By-law No. 2 be anicnded by 
 \)er you could, 1 striking therefrom the words '• ten " and '• five " and substituting there- 
 ^ ^^gxt. ^^^' ^''*^' ^^'f>J'^'« "seven " and " four " respectively. 
 
 Air Robertson Mr. D. Morrison seconded this resolution, which was carried, 
 
 ierc would be ^Ir. John Crawford — May I ask if, utuler the present By-law, the 
 
 nublic will phi SITU of $15,0(10 has been set apart to pay the Directors' salaries ? 
 1 have to provi The Chairman — The By-law that exists is a permissive one. 
 'C submitted to ^^^'' Crawford — Then that rt^solution would permit the reduced 
 Board to pay them>olves $15,0'J0. I wouhl like to get the information, 
 once reduce it ^I'"- Vates — We should really know nsoi'e of this business ; there 
 
 -)wer we get l^e $15,000 set aptirt undei" a iiy-law to pay Dii'cctors for losing our 
 is one of the iinoney during the past three or foui- years. 
 
 biect is of cour ^I'"- Crawford was in favour of modifying the Act, but certainly 
 ,,ur discussion not of rei)ealing it. 
 
 ^ Bank hss hitli The Chairman simply observed that although $15,000 was allowed 
 o'lrcl to look afthe Directors by the Act, only about SS.UOO luul been used, including the 
 sdio I believe wLocal iioard at Toi-onto. 
 
 the affairs of '■ ^^^'- ''"Hn Crawford did uoi wish to appear as the champion of the 
 • ,^^^ j„m,.y^>s Board, but he certaiidy oltjected to ask a man to work for nothing, and 
 
I . 
 
 1 
 
 I.' 
 
 I 
 
 20 
 
 conterRlcd (hat some rommu'iati<»ii was an ndditionnl incitement on tin 
 |)Oi't ot liic J)iri'C'U>rs t<» <lo Ictti'r. Jk 
 
 Jlcv. iMr. Ghken moved that the sum \>v reduced to $7,000. ™ 
 
 Mr. T. Workman thouuht it >hould lie u'duccd still further, and 
 iijime<l ^J} ]K'i- meetinii'. and that the meetings he held hut twice a week, he! 
 
 ;Mr. J. ]I. JdSEi'ii. ill vutiiio- tor tin- icjiealor tins Hydaw, did not hoi 
 Avish it to he uuderstuod that the I'resideiit and J)ireetors >hould not ho 
 ]»aid for tlieir seivices. lie favoured j»a}ing them 'i^^) }ier meeting irres- rfsj 
 jtoetive of the inimher of sittings. li*'l' 
 
 The CiiAiHMA.N had no ohjedion whatever to (he retluetion. He ^•'"*' 
 tliought the best proof with regard l(^ the di^|^o^ition of the J)irectors ^^^^^ 
 was that they did not avail themselves of their fidl privileges. ,f(,. 
 
 Ml'. AniiRKW JJoHElfTso.N wa^ told that earh I)ireetoi' liad not taken Ban 
 more than half the ^Mm allnwrd him. V5 i 
 
 3Ir. T. Workman favoured leaving the question to the discretion ol *" ' 
 the J^oard. j^^.^i 
 
 Tlie Chairman said that the Directors ha<l the permis.sion to take 4i,i,ij 
 Sl5,0()n, and they took- mei-ely half. now 
 
 Mr. Crawford thought it miiiht he ^e•. down at 67.000 instead ol ***«'" 
 $5,000. [ny> 
 
 Eev. Mr. (Jreen's motion was tlu'ii ]>ut to the nu'Otiiig and carried j^^ ^*, 
 unanimously. I 
 
 Thei'e being no fin'thei" liusinos lelorc (he meeting, the Chairman | 
 again moved the adoption ot'the I'epoii. which was cai'rie<l unanimously. * 
 
 Mr. A. .St. Denis moved, socofided hy ^Ii'. AV. DoxoiiUE, that the 
 ballot hox he noM- opened for the election of J)irectr)rs, and he kept 0}>en I 
 
 initil 3 ]>.m., uidess tivc miiuites olajtse withcuit a vote being cast, when 
 it shall be closed, and until that time and for that purpose only this 
 meeting he continued — Cari-ie(h 
 
 The Scrutineei's ultimately reported the following gentlemen dul^ 
 elected Directoi's: — 
 
 Sir Francis HtNcw's. 
 ik. J. JIkekie, 
 John (i RANT. 
 
 \y. W. OOILVIE, - 
 
 John iiANKiN, 
 
 Andrew Kouertson, V 
 
 A. Saunders. Si'" 
 
 den 
 
 8U.S1 
 
 The meetinii' then terminated. 
 
 Cou 
 
 fa.s 
 
 tnit 
 
 the 
 
 tml 
 
 thoi 
 
 vie 
 
 "hisl 
 
 waJ 
 
 and 
 
I 
 
 .Miiciil on the 
 
 IIHI. 
 
 I'lii'llior, and 
 wico a work, 
 law, (lid not 
 should not lio 
 lec'tiiig iires- 
 
 'dnclion. Hi' 
 hu J)iicH't<)i's 
 
 :id not taken 
 
 discTi'tion ot 
 
 is.sion to take 
 
 0(1 instead ot 
 
 ji; and carried 
 
 the r'liaii'nian 
 nnaniniously. 
 )1IUK, that tlie 
 1 be kept open 
 rig east, when 
 )0>?e only this 
 
 cntlemen dul^ 
 
 21 
 
 SPECIAL STATEMENT OF JULY lOth. 
 
 At a s}»eoial meeting of the Direetoi-s of the Consolidated Hank 
 lu^ld to-day, it was docitled to issue tlie Ibllowing eireular to sluire- 
 Ijolders : — 
 
 Sir— Till! IJoard of Directors of The Consolidattd Ikvnk f<'oI it to be tluir duty to 
 rc'si)<)ii(l l<j niiintrous u|i|itals wliicli tiavf bctn luudc to them on behalf of tlic sharo- 
 Loldtrs to a(i|iiaiiit thi iii at tlir larlirst i)nssil)lt' nidniciit witii tlic actual value o{ the 
 Asrt<t8 of the Hank at tin' prcseut timi'. Without enterint? into minute ditails, which 
 it must be obvious ( ould not lie ])ubli.slnd without detriment to the intinstt- of the 
 diariholdrrH, the icsiiltof a i un fill investigation has been to satisfy the Directors that, 
 after niakin^^ ampb.' allowance Wn- some luavy anticipated bad debts, the assets of the 
 Bank are ^ood value for an amount ranging from 5^1 ,2r)0,0(iO to $1,500,000, or from Goto 
 75 per cent of the present |)ar value of the stock. The valuation has been made with 
 an earnest desire not to plaie, an exaygeiatcfd value on the assi'ts, antl a sufiicient 
 tnargin has been taken to cover possible unforeseen losses. The present estimate has 
 been concurred in by the Acting Ueneral Manager and by all the Directors. The largo 
 Addition whi( h has iteen ma !i' to the losses has l)een owing to what tin; Board are 
 now convinced was a very erroneous estimate, maile at the close of last year, of the 
 assets at the Hi ad (ttti<e, by the late Gen^'rul Manager. Without entiring Jat present 
 into<letails tiie |)ubli(ation of which miiiht be injuiious to the inten sts of the share- 
 holders, the former Board of Directors maintain that they will, at a proper time, be able 
 to exonerate themselves from any charge of misnumagemeut. 
 
 I am your obedient servant, 
 
 (Signedi, F. HINX'KS, 
 
 President. 
 
 TIIE SUSPENSIOxV. 
 
 On the 3l8t July the doors of the Bunk were elosed, and payment 
 suspended. 
 
 I 
 
 MEETING OF SHAREHOLDERS. 
 
 ' Karly in Jidy, several of the largest shareholders, helieving that 
 Sir Francis llineks and his management had eomjdetely lost the conti- 
 denee of the puldie, and that, unless some change was maile, the Itank 
 Could not keej) its dehors ojien. held a caucu> meeting, at which the Kev'. 
 ijas. (xreen, Messi-s. J. 11. Joseph and K. L. Bond, were apitoinloil a Com- 
 |nittee to wait upon Sir Francis and the Directors, with the request that 
 the Pi'esident should I'csign, (keei)inghis seat on the ]ioar<l if he wished) 
 %n(\ a new President from outside be a|)pointed. Sucii a change, it was 
 'thought, would satisfy the puldicand stop the run. After a long inter- 
 iTiew. Sir Fi-ancis declined to resign, or to make anv change, expressing 
 his confiilence of heing able to carry the Baid< through — and his action 
 was suppoi'ted ijy the Boar<l. Xevertheless, the j)ublic were xot satisfie<l, 
 anil the drain on deposits continued, till the Bank was forced to suspend 
 Jiayment on the 31st July. A caucus meeting w'as at once called for tlic 
 
9? 
 
 7tli Aii<;-iiHt, at wliidi resolutions wore passoa, forming the basis of tho 
 
 followini^ coiTesiMJivJenco : — 
 
 Montreal, 8th August, 1870. 
 
 To the President and I)irectori> of the Consolidated Bank of Cannla. 
 
 Gentlemen, 
 
 I log leave to inft»rm vou that a mi^eting of a considerable number of the 
 shareholclers of the Bank was lield yesterday, and that at such meeting a committee, 
 comnosed of Messrs. G. W. Simpson, T. W. Kitehie, E. L. Bond, iind myself, was named 
 as representing the meeting to wait upon you. Tiie object for whicli the committee 
 was appointed was to ask from you an assurance that at the special meeting, to be 
 held en the I8tii September next,"the sliareholders .siiall have an opportunity of making 
 .sucii ciianges in the Dncctorate as the majority may deem advisable. Should you Bee 
 vour way to give such an assurance, we shall be liappy to discuss with you the best 
 means of carrying into effect any ciianges in the Board which may be recommended 
 by the shareholders. 
 
 I am, your obedient servant, 
 
 JAS.^GREEN. 
 
 Chairinan of the Committee. 
 
 til 
 
 nil 
 ca 
 
 rei 
 
 O'l 
 
 Yi 
 UK 
 ill) 
 
 Consolidated Bank of Canada, 
 
 Montreal, 1 2th August, 1879. 
 
 Dear Sir, 
 
 In reply to your letter of the Hth inst, 1 beg to convey to you, on behalf of 
 the directors of this i)ank, an as.surance that at the special meeting to be held on IStli 
 Septeml)er next, the sliarelndders should have ample opportunity of signifying tiie 
 <.-hanges which they may desire to make in the Directorate of this bank, and that 
 you may rely that such changes will be carried into effect by the directors in good 
 faith. I am, vour oliedient servant, 
 
 F. HINCKS, 
 Kev. James Green, President Consolidated Bank. 
 
 Chairman, etc., etc. 
 
 Montreal, Sth August, 18 TO. 
 To the Pr-'fident and Director.'^ of the Consolidate I Hank of Canaia. 
 
 Gentlemen — I beg leave to inform you that at a meeting of a number of tho 
 Shareholders, held yesterdaj'', tht> following gentlemen — viz , Charles Hagar, G. W 
 Simpson, G. W. Stephens, T.'^W.i.Kiteliie and R. Moat were ajipointedan Advisory Com- 
 mittee, to co-operate with the Dir<'ctors in adjusting the atfairs of the Bank, durim. 
 the period between now and the Special (General Mctjtingof the Shareholders, callec 
 for tlie 1 Hth Sept., next. I siiall feel oldiged by y(Mi informing mo whether tin 
 Directors will be jirep-ared to receive and co-operate witli this Committee for tli' 
 objects above specitied. 1 am, vou'- obedient servant, 
 
 E. L. BOND, 
 
 Secretary of Meetinj 
 
 m 
 
 m 
 
 int 
 ho 
 tio 
 
 m.' 
 
 Sii 
 CO- 
 G( 
 
 til 
 
 te 
 
 Sll 
 
 Sll 
 
 till 
 
 wl 
 
 atl 
 
 
 The Consolidated Bank ok Canada, 
 
 McvTHEAL, \2lh Aii'/usl, 187'..t. 
 Dear Sir, — With reference to your letter of the 8th inst., I have to state that tii 
 Directors of tiiis Bank will lie prepaied to co-nperate with the advisory committe' 
 consisting of Messrs. ('has. Hagar, O. \V, Simpson, (i. W. Stephens, T. W. Kitciiie aU' 
 II. Moat, in the adjustnieiit of the atlairs of the Bank during the period between thi 
 and the Special General Meeting of Shareholders, ealb'd for 18th September next. 
 
 I am, vour most obedient servant, 
 F. HINCKS, 
 13. L. Bond, Esq. • President Consolidated Bank 
 
e basis of the 
 
 August, 1879. 
 mr fn. 
 
 namb(.r of the 
 ng a committee, 
 sclt', was named 
 1 tlio committee 
 I meeting, to be 
 unity of making 
 
 Should you see 
 ith you the best 
 )e recommended 
 
 23 
 
 Had tlie Directors not consented to the arrangement as regards the 
 riglit f)t' cliaHgiiio- the hoard, the following notiee, in accoi-danee wifh 
 the Banking Act, was drawn up and signed, to be used, ifnocessaiy : — 
 
 Montreal, l7^/( Ain/itst. lS7i». 
 
 We, the undersigned sljareliolders of the Consolidated Bank of Canada, being in 
 numlurnot less tluui twcnty-fivi'^ and representing at least one-tenth of the paid up 
 capital stock of tli" I5aid<, h>T(by call a Siierjal Genciai Meeting (d" the shareholders ut 
 .he said Bank, to In- lidd at the haidilng hvutc of the said liank, in the City of Mont- 
 nal, <<n iIh' day of next, at twelve 
 
 o'l loiU. (lUMiii) K) ii.nsid. r the position of the sai<l Bank, and to remove the President, 
 Tice-I'residt nt, ami th(isi of tlie Directors who Were re-elected at the last general 
 meeting of the shareholders ; for maladministration and for submitting at such meet- 
 ing false and deceptive statements relating to the affairs of tlie Biink. 
 
 of the Committee. 
 
 iOA, 
 
 I August, 1879. 
 
 von, on behalf of 
 o be held on 18tli 
 of signifying thi' 
 IS bank, and that 
 directors in good 
 
 Consolidated Dank. 
 
 SthAuffuat, 1870. 
 
 a number of tho 
 rles Hagar, G. W. 
 lan Advisory Com- 
 the Bank, durin;. 
 iiareholders, callei! 
 me whether tie 
 !ommittee for th' 
 
 OND, 
 
 Secretary of Mectinj 
 
 ADA, 
 
 2//* Auffu-sl, 1879. 
 ■e to state that th 
 .dvisorv committe 
 
 T. W.' Ritchie an 
 eriod between thi 
 'ptember next. 
 
 On tlic loth Angu-t. the following circular was issued by the Com- 
 . inittee of.Sharoholilers : — 
 
 Montreal, 15th Algist, IS79. 
 
 To tlie Sh'irehdlJ'rs <>/ tli,_ CmixoUhtt' d Bank nf Canndii : 
 
 Deemnig it ne.'essary to take some ju(unpt concerted action to conserve theii 
 interests in the Con.soll(lated fJank of Canada, .so n- of the leadinLr Montreal Share- 
 holders have, during the past (>hirty days, bi'en in constant conference ami consulta- 
 tion, Avitli the following resn't'<: 
 
 A Conuuittee of Shareholders has heea formed with Ilev. .lames Green as Chair- 
 man, and E, L. Bond as Secretary. 
 
 An Advisory Committee, consisting of Alderman Chas. Hagar, >[essrs. G. W. 
 Sim[)son, T. W. liitchie, Q. C, G. W. Stephens and K. Moat, has been nominated to 
 , co-operate with the Directors in adjusting the affairs of the Bardv, pending the' Special 
 General Meeting to he held on l.^th Se|)temlier. 
 
 Tt is Committee has been accepte<l by the Directors. 
 
 An assurance has been received frmn the President and Directwrs. that in all 
 good faith they will carry out the will of the Shareholders in t fleeting any change in 
 the management of the Bank that may he decided upon at the meetini; on 18th Sep- 
 tember, 
 
 Without this uriangi ment the Shareholders w ould have no rii//it to make any 
 
 change in the Directorate. 
 
 ' At this meeting iho Committee propo.se, if supported by the majority of (he 
 
 Shareholders then present, to make <ertain changes in tlf Board of Direction. All 
 
 ;( bhar*liolders willing to co-operate with the Committee are rti|Mrste(l to sign and re- 
 
 / turn the accompanying pro.xy, • 
 
 All proxies received are to be subje< t to the control of the Advisory ( 'oniinittee — 
 will not he used if the sluireholder he present at the meeting, and may he wilhdrawu 
 at any time. 
 
 Shareholders are rc<piested to return proxie.^ as soon as possible to the Se( retary, 
 • from whom any further information may lie obtain <1. 
 
 K, L. BOND, Serretarii. 
 Messrs. Fknwiciv \' Bond, 
 
 Stuck Bluhery. MONTHKil,. 
 
 t Consolidated Bank 
 
 
 ■^tf 
 

 ifj; 
 
 I. 
 
 24 
 
 MEETING OF LADY SHAREHOLDERS. 
 
 
 i 
 
 T/iei/ hold a Meeting' on Au^rust 27///, 1879, oppose iiutling the Bank 
 into Insolvency, and Recommend the Crinunal Prosecution of thr 
 Bank Ollkials. 
 
 th 
 
 pr 
 of 
 ini 
 ec( 
 wo 
 
 This meetiiii^- was held in tlie Lecture Hall of the Natural Ili^jtorv 
 Society, to consult, amon;^; themselves, what steps, if any, should he 
 taken hy them to pi'ovenl their being' asked for any fui-thei* calls on tin 
 stock, and to disrins generally the situation in theii" own interests. 
 Some fifty ladies were [)re-!ent. half that luimber being far advanced ii; 
 years, and the widows or daughters of those who lunl largely contributed 
 to build up the traile of M »!iti'eal, and !iad investel much of their mean- 
 in tlio Consolidatcfl Bunk. One huly wa.> blind, and was led into th( get 
 room by two friends. Another was reported lo be tiie daughter of ai. 
 oflicer who fought at AVaterloo. The majority wei'e attired in dee] tha 
 nioui'ning. The meeting was called to oi'der at four ]).m., Mrs. C. A p'**.' 
 Hollis bring app tinted to the chaii-, ^Fiss Isabella McDjugall acting a^ da_\ 
 Secretary. her 
 
 Mrs. TtoLLt- ex]ilaincd that the meeting had been called for tin 
 purpose of C')nsidering if >ome means could not be devised to get back Tl 
 some of their pro[»erly from the lian'v. They all were aware of tlu 
 circumstances under which the Bank ha 1 faileil, and. with a view li 
 promote their interests and al>o a discussion at the ]irebent meeting, ; 
 resolution had luen prepared f'>r their approval and signature. This \\h 
 secrctar}' would reail. 
 
 Miss McDouqall then read the Hdlowing resolution: — 
 
 Whereas. — Bv louse and scamlalous mismanagement, the Consoli 
 
 den 
 tho 
 1)0 r 
 uiti 
 mill 
 els( 
 
 ig'" 
 
 dated Bank of Catuvla has been oljligod to suspend ]):iym3nt, and we fin Jcn 
 the means on which we dopen<ie<l for our maintenance almost swept on vei 
 of existence; and, „^y 
 
 TFA«;r(/4,— We are given to undei-stand efforts are being made t no 
 put the hank into insolvency, this meeting A'c6"o/r6\N\— That, after matui' Ijk 
 considei'Ulion, we ai'e of the oi)inion that it would be for the interests c 
 all jtarlies coficerned, ihal .strenuous otforts should bo made by thdje 
 directors, shareholders, an<l others concerned, to resuscitate the banl 
 and resume business: ai\(l we. the lady shareholders, bind ourselves lof t 
 assist that object by evei'v means in our powei". for 
 
 We do hei-eby app )int to act for us, and in our names, as outhe 
 
 attorney to Qnvvy out this I'csolulion. sto 
 
 Mrs. IToM.is, having explained themeaiung of the resolution, addocoh 
 that all )iresent were aware that, without the' shadow of a doubt, ihgao 
 Htatement of the bank, at the present moment, was a very diH'erent outhis 
 to that shown by the returns furnished by the Bank to th© GovernmenmU 
 In her ojiinion the person who had made these returns should be prost 
 cuted for his duplicity. They all know veiy well that 3Ir. Cotte, th 
 
 ^ 
 
25 
 
 [IS. 
 
 casliioi' ot' the JaoqiU'-; Cartici- UaiiK', was sent to guf)l foi- similar 
 condiict. 
 
 linij: the Bank 
 
 A Lady — For my |)art 1 wmiM soixl tlio whole of ihom to gaol. 
 A ('iiiti'.rs OF Voices — And so would j. 
 
 Mfss .M(I)oi(;.\r,t, — Well, for my part. I would scud the Directors. 
 J A L\UY — The i>ii'e('tors iwv not so mii(di to Itiame ; ihey wore 
 
 lecutlim of thv ;nierely earoie-s, and l rusted t<io mueh to others. 
 
 -Mrss M<T).ir(iAi>i. — It is Un- tliat vtuy icason that I would ])unish 
 Ihi'in. They we'.'e a]ii)oiiited lo direct tlie all'-tirs of the Bank, and it was 
 
 atural Ilwtorv their -luty to do s,,. 
 
 any should he .Mas. Uoli.i.s e.\j)lained that, from what could ho Icai-ned from tho 
 
 ner calls on tlu prineijial sharelioldcrs, it was not ex|>ooted that more than one million 
 
 own interests, of ilollai-s would he saved out of ihe assets, and that it would bo 
 
 ar advanced iii inipo.^sihle to eoniinue the hu-iness of the hank without a great deal of 
 
 "■elv contribiitei! econoniy. It was their desii-c to continue the bank in ojieration. i'or if it 
 
 1 oV their mean- were placed in the haiid> of the as>igneos, the shareholders would not 
 
 as led into th. got anything, 
 
 dau"'hter of ai. .Miss >I(I>orwALL full}' believed this statement. She did not think 
 
 attired in dcei that Nfr. ( 'ain[>lieli was the right man in tho right j)lace. and n'as quite 
 
 (in Mrs. C. A prepared to say so. She had had an interview with him a week oi- ton 
 
 juo'all actino" a- days before tiu^ crisis, and he compleiely ileceived her, an<l jtreventeil 
 
 ° her from selling her >loek-. 
 
 n called for tin Mus. IFolms e.s|>laine<l the position of the Iktidc, as she heard it. 
 
 'ised to get back The assets wei'e repref«ented to be one million dollars. Out of this both 
 re aware of tlu depositors and biil-holdei-s had to be paid ; and what, she asked, could 
 with a view b the shareholders expect after that? The stoclc was to-day down to two 
 otient meeting, ; per cent., a fair indiiation ol' what lliey might Mippose would be tho 
 laturo. This th< ultimate result. There was iiodoidjt, in her mind, ihat Mr. iJcnny never 
 
 managed the busino-^'s of the bank himself, and must have had some one 
 )n: — else in tho l)ank to manage the business for him. An instance of his 
 
 nt, the Consoli ignoi'anco of the all'airs ot'the lian\ was shewn when he was ask'od if ho 
 i:!nt, and wo fini knew the amount of Archer A: Oo.'s indebtedness to the bank. Ho 
 dmost swept oivre])lied: '• I suppo>e it is glKKi.tiOd ; " when at tho same time his inleri-o- 
 
 gator could tell him it was half a million dollais. After that it coiUd 
 e being made t' not be <inestioneil that y\v. Kenny was noi lit to have charge of a bank 
 'hat, after matur Hki' (he (Consolidated. 
 
 )r the interests c .Miss McDolciali, repealed that >hc iliought all the l>iri'ct(jrs should 
 
 JO made l)y thbe iirosccuted. 
 
 scitate the ban! .NfRs, lloi.i. is said, il'anyihing coidd be done that day in the interests 
 
 bind ourselves tof the stocjkholdeis. ■^lle would be vci-y glad, both for their sakes and also 
 
 for her own, Jbr she could ill atl'ortl to lose much. She projiosed to atterul 
 MW names, as outhe meeting of the IJaidv, and to sjicak at that meeting. If a [loor boy 
 
 stole half a dozen apples, or a |ioor man purloined a j»icce of woo(l on a 
 ■ resolution, addocold wintiM-'s day, t(» keep his tamily warm, they were speedily sent to 
 V of a doubt, tli«raol, and there was no Indp l()r tlnun, Then, were not tho managers of 
 ^•ery ditVerent onthis Hank much gi'eater otVendei-s. for they had deprived many of their 
 \ the Ciovcrnmen')nly means (»t existence in (heir old age ? 
 
 IS should be prose ^^[,j.^ Vass suu-gestecl that all the ladies sh<Mild attend the general 
 at Mr. Cotte, Llinaeeting of the Batd<. 
 
 I 
 
1 
 
 1 
 
 1 
 
 
 
 1 
 
 ' 
 
 1 ; 
 
 i 
 
 ill ' ■' 
 
 tf'ij ft 
 
 M 
 
 III 
 
 2G 
 
 poc 
 
 Mrs. IIoLi.rs considei'od this a f-ajiital idea. 8Iic was going out ®*'' 
 lo'.vn, Itiit intended to ivturn by the iTth, in time for tlie meeting. 
 
 The first resolution was carried unanimously, and iargel}' sigMu', ^ 
 Mrs. HoUis. on motion, being apjiointed attoi'iiey lor the meeting. , " 
 
 Miss Tass moved. secomU'd l>y Miss McDoucall. that all tiie hul 
 here present jilcdge themselves to attend the general meeting of bIli » 
 holders on the ISib piox.— ^Ciuried unanimously . 
 
 Miss MrD(ti(iAi,r. reiieate<l that, not a week previous to either ^ ." 
 annual meeting or the ]')anl<"s closing, she had held a conversation \i 
 the ]»J-esent manager, and infoimed him that .-he contemplated sell 
 out. She told him that she had lost .SHOO on the Merchants Bank, ; 
 was not prepared to loso on this Hank. Mr. (.'ampbell i-cjilied that he c< i . 
 not allow her to do any such thing. Why. she asked, should she 
 (•ave herself as well as others? Jle j-eplied that he was very ni 
 obliged to her foi- calling upon him. lie knew lier very well, and c< ,. 
 not allow her to make a saci'ilice of her stock. He could assurcherhe ' 
 large interests at stake in the Jiank. and that the cause for the al; ^ 
 created was groundless and wa> nieiely an etfort on the part of i ', 
 brokers to bring down the Banlc. .^he saw him afieiwai'ds and told ; j 
 her fears hail been i-ealized, If he had only told hei- he was not in a j' 
 tion to give hei" an ojiinion. she would htive acted on her own jii<^lg'iii,o i 
 but, wilfully misleading her as he had done, there was I'O excuse , 
 him. • ^ ) v^ 
 
 ]Mi{S. lloLi, IS ])i-f»poseil. that some one should ti-y tin' sense ol'i 
 
 .iiust 
 v'^arc 
 o se 
 
 an( 
 
 meeting by a resolution. 
 
 Miss McDoUGALL. — ■ Well, i propose that the President, Sir 1"^' 
 on Hincks, be put under Jii-rest." 
 
 Several Smakeiioldkhs — And ro do I ! 
 
 Mrs. Campbell — And 1 proiiose that .^^l•. I^eiinv should iro \\^ 
 too. 
 
 Miss MoDougall (warml}-) — 1 propose that the whole of thei 
 pi'pseeuted, and that all the dii-ectoi's u'ive uj) eveiythiiig they hav 
 the Bank. 
 
 A SHAREiioLnKK— Most dcridedly. Why should they live in \\\ 
 and we sutler the <oiise(|Uences ? 
 
 jMks. Cami'Uki.l I'cferred to a letie:- of a gentleman shareh' 
 
 im 
 
 le 
 nd 
 
 . gan 
 
 published in the W/.tnrss of the night j>revions. exj)ressive of his \\ 
 ness for one, to ju-osecute the guilty jiartics. She proposed that tli< ■ , 
 pent meeting co-o])erate with that gentleman. I-Voin his letter, it v^ ' 
 appear that he was a large shareholder. 
 
 Miss Mi'OoroALL said she had luentioncd Mi-, ("anipbell's condi *^^, 
 a lU'ominent bank manager, and he said that such conduct was crinl* ^ 
 
 A YoirE — 1 sh'uM think it was. foi- the directors to loan a d(M 
 firm half a million <lollais. 
 
 AN(»TniR \'oi(E — They would ride over y tu in t!ie street, an 
 give you a loal'of brea<l if you were starvinc-. 
 
 Aliss McDouoALL aBked. Why should the Bank give Messrs. A 
 
 They had n<»thini;- to show fur it but 
 
 lac( 
 
 luilf 
 (lerman t(»\' 
 
 !i million ol dollars 
 
 What 
 
 al thev d 
 
 luie with all that monev ? She h: 
 
 he \| 
 
 lan 
 ith 
 
 liai 
 
 a conversation with Mr. (iaiilt as to the eoiiditiun of the Bank, in 
 
 I 
 
■i 
 
 27 
 
 pO'oh-poolio 1 tho iilea of tliei-e iR-ing :iiiytliiai>- wrong, >iiy;iig that itonly 
 exisieil in lier iiiuiginatioii. 
 va;^ going out ^j^_^ Cami'BKLL remarked that she had had an interview with a lead- 
 
 e meeting. ^^^ liiwyei" on the subjeet, who naid it was rather a eurious attair and 
 I hirgely ^^&''^yij^ it, would bo veiy hai-d to bring a criminal action against the Presi- 
 e meeting. lent and Directors, us the only ortence which could, pei'haps, be imputed 
 that all tlic la' ^g^j,,^t, them wouUl be an error of judgment. 
 
 ncetmg ot Bli > A ^^hahkholdkh — It was no error of judgment that cause! them to 
 
 nakf fiilse staicnuMits and likewise keep the doors open to I'ei-eive de- 
 
 |ous to eithei ^Qg|,^ until the last numient It seemed to her the same as putting ono's 
 
 onversation j|:^^jj^l \^^^^^ another person's |)ocket and stealin;; from them. 
 
 itemplated sell ^^^^ ll..r,i,is— It is nctthing more nor less than swindling. 
 
 ■hants iianU, . ^,li{s Cami'bki.l — Makini; false returns to tho Govei-nment is punish- 
 
 ,lied that ho iy^y^^^ ^^^. j.^^^. .^,^,1 ,|,.„ j . ^vhat they did. If tliey had dealt honestly, they 
 
 1, should slio y-Quid ij.j^ye l)ji,l ,,,, ,.^^;isi)ii to be afraid of the public. If the Bank was 
 
 was very ^' ^ a bad siate why not let the ))ublic know ? In face of the large ^ala' 
 
 ;ry Avell, ^^'*^ *-''',.ieg the Dirortors htid boon drawinu'. whv should thov not be called 
 I assureherho:^p^,,.p 
 
 ;usc lor the al; j^ Fef.hi.e (_)i.i» I adv— Yes ; an<l they must got three mouths' 
 tho part ol ^i^j.y while wo lo>o t'ver}- cent we liad by their mismanagement. It is 
 vvai'ds and told i^ qJ^.i^u^^^j',,! il,iiig. The}- ought to get sent to some place to suffer. 
 was not in a j A.votiier Lady said the Managoi- had assured her that the business of 
 
 K-r own jiidg!ii||Q |,ank was both sound and [)rolitablo. and vet, a few dav^* after, the 
 
 was no ^'xcus.'^^^j^ ,^.^^, ^.i,,^^,,i 
 
 , Mas.. n»i, LIS would direct tho att.'Mtion of the meeting to the fact 
 
 the sense ol ^^^ it'ijn' bank went into licjuidatii*:!, all ihe depositors and bill-lnilders 
 ,. ,,tiu8t bo paid. If the shareholders sold out to-day. and there was after- 
 President, Sir I'^rards a call made on them, they would still be Uable. so that they had 
 ,0 security against fui'thor loss, unless they combined and t(tok action. 
 A Si!AaEtiof,i»ER stiid, at the closing of tiie books of tho bank, Sii* 
 ny should go ''Yancis llincks had not tho legal number of shares necessary to (j[ualify 
 
 im for re-election. 
 whole of thci ^j,^;^ M(D(.U(;all— Well, all that ought to come out. 
 thing they hav ^^ SiiAUEiioLnER — So it will, at tiie general mooting. 
 
 Miss M('D>iU(iAi,L thought that no further call should be nuide upon 
 Id they live ni In:^^ |.^^[^, sharoholdoivs, and proposed that tho gentlemen shareholders, 
 nd particulailv the wealthy ones, be recommended to take action 
 illeman >h'^»'C''.' gainst tho (»tticors of the bank. 
 
 •essivo ot his w!' A .Siiauffiom.ek — A great many of tho so called wealthy share- 
 iroposed that tin qI^I^^j.^ I^.^^.^, ^^^^ uuux' money to losi'.I am afraid. 
 
 n his lettei'. it ^> Anothek .SnAr-':iioM)Ea said the manager ivpi-esentod to her a short 
 me before the b;w!k suspended that business was HourishinLT. [)ai'ticu- 
 Canipboll ^ »■•*">'.' '«.ly in the West, whereas it was in the West that heavy failures took 
 oiidutt was eriiijg^^^ besides a iieavy defalcation through a dishonest cashier. 
 .rs to loan a doi Mrs. Holms said one heavy shareholder, a gentleman whose name 
 be was not pei-mitied to mention, was determined to prosecute, and .said 
 n t'.io street, '^"'iaiiy otliei-s were of the same min<i. There were 132 lady shareholders 
 1 the baidv, who, she presumed, were of a like opinion with themselves. 
 k give j^Iossrs. A ^ Laoy had heard that Mr. ilenny was going out of his mind at 
 ow for it but ■"iiainblv. and was not allowed even to see a newspaiier. 
 n.mey ? She hu " ' ^ 
 
 of the Dank, m 
 
 ^ 
 
2S 
 
 Mrs. lIoLLis said llial slio wdmM o ily like to read a certain i)ai)cr 
 to him. 
 
 Some little f'lirtliei' disciissioii lesidted in the ad()j)tion of the follow- 
 ing I'esolution : — 
 
 Moved l)v Miss MrDoidAi.i,. " Tl at a ('e])n1ati()ii Ik ni ihis meotino' 
 be appointt^l to wait upon itromiueiil shareholders, and iiiiie n])()n them 
 tlie duty of criminall}' ]»ro,-ecntin,i;' the (IHcers of the Bank; hut this 
 meetinfr, in \ iew of the loss ali'cadv sustaintd. is not williiii;,' to ineur 
 any further ex])ense." 
 
 On moti(.n of Mrs. MaoFahI-ANE. ^el■onded hy Mrs. Ghace, the 
 followinii; ladies wc e ai)|)ointc(l a deputation to carry out ihe leregoing 
 resolutions: — Miss McDouiiall, Mi"s. Holli.-s an 1 Mr->. (iiace. 
 
 Mr. D. J)Avn:so\. hein>x introduced, infoinied the nieetini;' lliat a 
 pi'climjnary nieeting of shareholders would he Ixdd a few days iiefore 
 the general moetingof the ISth prox . in Mi'. B )n(rs ottice, and suggested 
 that the ladies should ask Mi-. Bond to allow their d.ejju ation to attend 
 the meeting. 
 
 Miss MoDou(iALiv said ^u(dl solicitation I)}' the ladies would place 
 them in a position to he I'efusod. 
 
 The ladies, after consultation, informel Mr. Davidison. throngli their 
 President, that tliev di<l not see it was nece>sarv for theni to attend Mr. 
 Bond's meeting. 
 
 Commenting upon the pi'oceedings at the ah )ve-mentiop.ed hulies' 
 meeting, the Alonfreul liera'd said: — "The meeting was a xavy ])ainfid 
 one indeed ; and the I'eport of the ])ioceedings shows the misery Avhich 
 must be endured by so many deponiient u|)on the revenue derived by 
 their investments in the shares oi' this B;uii<.'' 
 
 
 t 
 
 LHTTKRS. 
 
 Frorn Mr. R. J. Reekie, Vice- I'nyi lent oj iln ('i>u-vtUihi!'i.l /luiil, to Mn. A. Gii.Muuii, <iit^l 
 onejroin Mu. A. Gilmoui; in rn^hj : <>' lli-: i)tki.is iin cnjiji irii'< k-jit. 
 
 C«xsi.>iai)-vTEi) B.vNK Ciiambeh-s, 
 
 lul St. JiuiK'S .Stroct, 
 
 Mo.NTiiEAi,, Mail ]()t/i 1877. 
 Allan Gilmoih, Es(^, (;>tt.'iwii. 
 
 D5AU Sill, — I am in icGtipt of yiiiir Ictti' of \ isti iday, \\ itli ycui' |)i(i.Ny and alsn 
 ^^ . John Maiiurl's proxy, to a( t toi- ymj h -tli at tlir Aiiiiii.il M.i tiii.c: of tlic Coiisoli- 
 ''i Punk, Montnal, to hv luld on tho liist of next iiiuntii. for A;liii li I liavc to tliank 
 y ■ '1 tJiu roiitidiiK.i' you put in ni»'. and I will !..,iiv after your interests, also your 
 f ; ...IS, and if imythint? takes place Ictore the Annual iMeetin;- I will let you kiiow, 
 :: '.' u may know fully if anything in particular is to come up at the said nu'ctinii, 
 ■■'•■-•i:) i,r\t I may liave your views and act accordiiiuly. ] am glad to say nuittons con- 
 nected with the Bank, at prestnt are g'oin}; on satisfai toiily. 
 
 I am, dear Sir. yours faithfiillv. 
 
 R .1. REEKIE. 
 P.S. — If yon wiiih me to attend to anything pp-ticiilar at the Annual Mooting, or 
 before it, I will be liappy to attend to it.— R, ,1. I{. 
 
 o 
 o 
 
 •1 
 
 ]i 
 
 P 
 i.- 
 C 
 
 y 
 
20 
 
 ■oil am paper 
 
 )f the follow- 
 
 ihis iiieotiiiii; 
 1^0 \)])()n lliciii 
 iiiU ; l)Ut tl'is 
 Hiiiii' to incur 
 
 ;. GUACE. tli*' 
 
 the tlivgoiiig 
 
 oetiiii;' thtit a 
 V (hiys before 
 tinil sll,^■i;■este<l 
 tiou lo attend 
 
 ;s would phicc 
 
 through their 
 to attend Mr. 
 
 [Prinitr,-] CdNSOLIDATKD P.ANK CHAMBER?, 
 
 101 St. JailliS istlClt, 
 
 MoNxnEAi,, MiircJi Gth, 1878. 
 
 Allan Gii.Mori?. Ksv , Ottawa. 
 
 J)k.^h Sir, — I i(gr( t iniicli that it wa.s not in my [xiw.t to write you before now 
 about Baniv iiiattns, a.s I promised you when in Ottawa, last week. The na.son is that 
 I was caiiiMl to guihec, on inirerit l)nsiness, the day I arrived here from Ottawa, and I 
 only uot ba( iv y 'st' niay, wh^ ti I went into Biiil< iiiatt( rs, and I have to thaidv you for 
 your '• Proxy, in my favour, to be ejt ( f ti a Dirertor in said Bank for tli,' last three 
 yeais : and Hi<' CoIIowin;;- I can tjive you about tlie Consolidated Bank, in ^Montreal, of 
 wiiieii voM ar.' a Ian,'.' Shareholder : and the followini,' is tie' information I ean give 
 you as iJii'Ttor ami V. P. of ili" CoiiS(didat«'d Bank of Montreal, viz. : tiie Capital is 
 §1.0011,000 suhscrilied, and Sli, !';".'.• 1 paid <ip, and at pr.sent thire is a " Re.st '' of 
 $-.':;'2,ooo (((ual to fully it] ji^r lent' «iii th" paid-up eai^ital for any eontin.^^eiieies that 
 may turn up, and I hope "it will !>.• satisfaetory to you, to guiile you as to selling your 
 stork : as you iiifonnrd uu-. As I have stated to you before, I would not advise you to 
 sell at the j.ri sent [uiee. as the general o|>inion here is that the jireseut price will get 
 better as business will improve. I nuiy her- state that the reports a')o»t the losses of 
 the Consolidated Bank for the last year nw not correct, and should not be taken notico 
 of by any interested jiarty, as siieh reports may lead them wrong. If you want any 
 
 iiKU'i' information from m ' ' ' " ' ' ~ ■"" •"'•■"'• * " ■ ■* ^ 
 
 will (h.) so with pleasure. 
 
 lease let m<.' know, and if it is in my power to give it, I 
 
 (In haste.) 
 
 I am, my dear Sir, yoiu-s very truly, 
 
 R. J. REEKIE. 
 
 ntioned ladies' 
 
 a very i)aiui"ul 
 
 misery which 
 
 lue derived by 
 
 n. A. Gn.MoL'it, 'niJ 
 
 et. 
 
 i:ai., M«!/ 10//' 1^"- 
 
 n' pidxy and alse 
 no- (if tlie Consoli- 
 I'h ] have to thank 
 inteicsts, also youi 
 ,ill ht you know, 
 t the swd meeting, 
 say mittters eon- 
 
 11 .1. IvEEKlE. 
 \nnual Meeting, or 
 
 [Pn'raie.] Co.nsoi.idathd Bank CuA.MnERs, 
 
 lol St. .lames Street, 
 
 iloNTKKAL, Marcfi, llth 1878. 
 Alla.n Oii.Moi'i!, Esi,i., Ottawa, 
 
 l»EAi< Sir, — Y'oiu' favour of the 7th instant is now to haiid, with my letter to ycui 
 of the Gth instant, which I asked you to return to me. as there was an error in it that 
 I did not notice in the copy until at'ter the letter was posted to you. The error was 
 made by my elerk in a huiry looking ovu- the Bank statem -nts in general, and I was 
 en.uaged at tie' time, havinu ju^t arrived from Queli /i;, and wished to catch the mail, 
 as I was behind time, and I had to write you on Bank mutters. However, I am glad 
 that it has luit gone further than you and I, and 1 have to thank you for the trouble 
 you have taken in the matter. 
 
 I not" what you say about your stock in the Consolidated Bank, and all I can say 
 to you in the matter is, I woulil not advise to si II at 8 ) per cent, at firesent : I would 
 not (h) it myself, as tlu^ Sto< k will get better when business gets better than it is at 
 present. There is nothiii.g wrong with the .said Bank that I know of, and as I am Vice- 
 President (d'tiie Bank and eiiipiire into every nuitter at our meetings, twice a week, 
 Monday an I 'I'hursdav, I hive s /en a statem uit to-day which was produced by the 
 Manager to the nieetinu' of the Board to-day, whieh shows increase of deposits over 
 last year of $7fJ(i,JL'i, ami a decrease of expenses in the general management of about 
 if.'i.ooo. and we are reducing our .Veenci<'s in the country in every plaie they do not 
 l)ay, and that there is any risk in keeping them on. The net Profits, ls77 and 18TH, 
 on the 'JSth Feby., w re as follows :— On l-'el>. '.'Sth, 1377, there wer-' SH4,77<).31t and 
 on Feb. 2.-<th, 1,S7H. there were Slo:!,Jl 1,3.!, milking aw increase of $18,440.94 net Profit 
 on Feb. L'stii, 1^7S. .V detaileil stat iii 'lit I will send you for your satist'actifiii, if re- 
 (piircd. There have been certain losses made liy ■ Fadures '' in Montreal, but nothing 
 lilw the sum tliat is reported. I may here state it is not one tpiarter th<' amount re- 
 porteil, and I would advisi' you as a friend not to pay any attention to any report that 
 is not oitieial, ami if I can i;ivi' \oii any information that you may n ipiire about the 
 Consolidated I!anl<, I will he el,,(l to do so any time you may ask me and what I give 
 you will 111' liiets. 
 
 Vours Very truly, 
 
 R. J. REEKIE. 
 
I 
 
 i , 
 
 i 
 
 •t 
 
 '1 i ; 
 i 
 
 i : ^ 
 
 30 
 
 CoNsoi.iDATEn Bank Chambers, Prh 
 
 101 St Jiiinos Stivet, >. ] 
 
 Montreal, A^nil 2ot/i, ISTP what 
 
 Allan Gilmovr, Esf^ , Ottawa : 5?wl 
 
 Dear Sir-L. rq.ly to vour Ictt.-r of yrstorday in reference to the Dividend to ^'f^Jj^j^ 
 
 paid by tlie C(.nsolidated Bank for tlie lialf-year ending :Ust May next. ^^^ 
 
 I iHg to inform you tliat tlie Directors of the said Bank thought, on due con.,viti,(i 
 
 Rid^'ration tliat thev could ni.t give more than :; per cent, as that was the amount ,nit,„, 
 
 that the business could afford in these liard tim. s, and they thought it was better tcigajn 
 
 do this than encroach or redii;c the amount of the •' ll-st," now standing at $23'J,0(i(M,.R„a 
 
 — just as it stood wlien I advised V"U not to sell : and with regard to the Bank losses Jnge, 
 
 we have got off at a considerabk- amount less than we tliought at the time I spoke toyhiJe 
 
 you about the sale, of vour Stock. I notiee by the Market Stock List that when Inore, 
 
 spoke tu you about your Stock the Shares were selling at TO to 77 l»tr cent., they an Jener 
 
 now selling at 78 to 7'J per cent., making each share J per cent, better and of nior._Pay; 
 
 value than they were wljen I advised you not ti> sdl. >re8Ui 
 
 I would be very sorry that I would mislead you in this matter in my present" pa.V 
 
 position in the Bank, and l would not on any consideration. I consider the Consoli-'''** J^ 
 
 dated Bank at present as uood in all respects as it was when I advised you not to sell. ^i 
 
 and if you want anv detailed information that I can give you concerning tlie Bank 1™ *'' 
 
 will be very glad td furnish you all the information I can. I may here state that v.<^^ P'"^' 
 
 ■will not pay Dividends out ol the •• Rest,' as some Banks (h), which 1 am aware (.I'^rcer 
 
 merelv to keep tlieir Dividends up. Tliis I decidedly object to and would never ftgr*^""?, .' 
 
 to on "any account. Hoping you will excuse this long letter, and that it will be sati^"'"*''''; 
 
 factorv that 1 did n(it wish to mi si ad you, 
 
 I am, dear Sir, yours veiy truly, 
 
 (in haste) 
 
 J. I 
 
 R. J. REEKIt 
 
 Privat 
 
 1 
 
 Consolidated I'axk Chambers, ^ 
 
 Ktl St. James Street, '"70"' 
 
 Montreal, Friluy, January 31s/, 187 ■* , 
 ' ./ ) ate til 
 
 lat it 
 
 Allan Gilmocr, Esq., Ottawa : 
 
 Mr. Renny, Manager of the Consolidated Bank here, handed me your letter '^^^ ^^^ 
 notice, dated 24th in.st., that you wish to withdraw your '-deposit " in the Bank i qA 
 ten days ; which notice expires on the .Mh or 6th February ; and I take the liberty, '')ngen 
 the Vice President of the Bank, at the recpiest of the President and Manager, to Infonn qj. 
 you there is nothing wrong with the Bank, but the stock run down by s ime Broker ' -^ 
 through false statements of their own, for speculation. The Bank has a large Resen 
 Fund, at present, to m 'et any contingencies that may turn up ; that I know to be ,„.„, 
 fact. 1 am a large stockholder myself in the Bank, and have not sold a share, byn^ ^ 
 purcliased a large number of shares since this panic, entirely got up by some Stoi^yg ^,1 
 Brokers, for speculation. I know nothing wrong with the Bank or its managemeiij ^j^ 
 for I examine with the other Direct is, matters every week on Mondays and Thuitoli(, 
 days, and if there were anything wrong, 1 would know of it; and I would consider goo(l 
 my duty t > inform you if there were anything wrong ; as you have supported me 
 the Annual Meeting by your votes as a Shareholder, and I sincerely liope you will n 
 withdraw your deposit at present, for if it becomes known the Brokers will taRe iiAjLLAl 
 vantage of the circumstance, and it will hurt the credit of the Bank. If you wish n 
 to give you any statement or information of tlie present slate of tho Bank afifaii^ 
 •will be glad to do so with pleasure, that it may give you confidence, and not to wit 
 draw your deposit at present, for it will iniiire the Bank. ^ i 
 
 Yours faithfullv, sho^| 
 
 R.' J. REEKIE, Yd shJ 
 
31 
 
 'Privdic.'] Ottawa, ?,rd Fcbruimj, 1870. 
 
 ■ Mv Dear Sir, — I am this nHnnin^r in rcdipt ol' yotirs of tlie 31st ult., and note- 
 April 25</* 18TP. what is tiuirin said as to tin- Consolidatid Kanks at'l'aiis, wliith I trust aio all in thr 
 jOOtl slia[n-" that you assuro me thiy arc. Howivi r this may bo, has nothing to do 
 . ,. , with my notice of witiidiawiil of my d«|iosit with the Banii. wliicli was hft there 
 
 .^ Divmen ' waiting tlio chance to invest flic amount to my satisfaction and whidi oppoitunity 
 
 ^- lai now presented itself As to \\v l?rokers making use for their own purposes of this 
 
 ;ht, on due con-,vm„|mwal of my deposit), 1 d'lii t see lirei- tiny should know anything about it,- 
 was the amount mlfss tin' Bank officials give to outsiders inf<»rmation which they siiould not; and 
 it was better teigain, if tlie '5ank is in anytiiiiig like a good sirony position, what shoidd this with- 
 ;Ung at $'23'2,0(i<i,i,.n^al matter? Y'ou say -'that the Bank has a large Reserve Fund to meet any con- 
 the Bank losses .ingencies tliat may turn n]), — that I know to hi; a fact, &( .'' I hoi>e it really ia so,. 
 L- time I spoke tuyhile m\ impr.'ssion indeed conviction is, that it will all be wanted, and as much 
 List that when Inore, tc* make good the largr amount of indilitedn<^ss to the Bank, as shown in the 
 itr cent., they an Jeneral Statiujiiit of loth May last to be ?-^,t;(iS. '.1^7.32, while the Deposits then held 
 tter and of mori —Payable on demand. ijL'.!':;;!, 78-;. st;, Payable after Notice, .*!, 744, 900.78, was (and !• 
 (fesuuie still remains), unreasonably and unsafely large: as what could th<' Bank do 
 present'^ paying sueh deposits, if called upon to do so suddenly, or even for half the amount,. 
 '^-•'/" tl e Consoli-''*^ ^^"'^'■'^ '" '-i>'-"ili.i'^i«'>i amounting to $ .232,078. 
 
 sKtei '^^^Qj.^.jl Ami now I may, in closing, just as well tell you what I think about the Bank, 
 -^"'r tl Bank l"^^ *'"^^ '"^ — ^'"''^ ^''"' Stock will, in all probability have to be reduced one half — about 
 rnmg ' ^^ j.^ p,.^.j^^,,,t vdiny jio^ in the market — and it would only take a loss of a little over 20 
 
 i stale I I '^^^ ^^,j^^ ji^ realizing the debfs <lue to the Bank to wijn- out its " Rest" of §232,000, 
 
 lere 
 1 1 am 
 
 aware c 
 
 . , . cT acri'"^ ^"*'^ '^'"^ Cajutal Stdck, and to that extt nt of loss my mind is already, as a Share- 
 woiil ne ' ° oid^.,. pit.tty will made up. if not unite reconciled, and while hoping for the best, 
 ■at it will be satu- . t j t . t • x i 
 
 '**■ "^ _^ I remain, yours very truly, 
 
 '"? ALLAN GILMOUR. 
 
 J. Reekie, Esq, Montreal. 
 
 R. J. REEKII 
 
 Private^ 
 
 «K Consolidated Bank Chambers, 
 
 '*^ Montreal, lO^A February, 1879. 
 
 Mv Dear Sir, -I have been unalilc, owing to absence in the West, to answer soon- 
 r your letter of the 3rd and 4th instant. 
 I 31s/ 18" ^ ni:{ii\ not urge you turther to refrain from withdrawing your deposit, as )-ou 
 
 .janita j , ate that your withdrawal is caused by vour desiring to Invest the money. I had feared 
 tat it was from want of confidence in the Bank, and indeed your letters would imply 
 me your letter 'ich to be the case. 
 
 t" in the Bank i Of cour.se if all depositors were s'multaneou.sly to withdraw, then the inevitable 
 take the liberty, 'mgequence would be suspension, as would be the case with any bank in the Domin- 
 1 Manager, to infon,n^ or elsewhere. 
 
 'n by s ime Broker •^,. iiave ha<l to meet a consideralile demand at various point?, and it is unfortun- 
 w has a large Resei\elythe case that V)eople connected with rival institutions have done all in their power 
 lat I know to be injine us. I should be sorry to think that you have formed a just estimate of the 
 
 ^4- ark^A a sbnrc. lililim .u'..ii.. ,.,...^. ..........' ..r. ...... T..,l,>;..^, f.,..,, *\.,. r..,*! ,. 4^1. ..<^ 1. ...... *nl.,,., ,-.ln^.<> ^^r.. 
 
 Yours very truly, 
 
 K. JAS. REEKIE, 
 
 )t sold a share, b^i^g of our customers' jtaper. .Judging from the failures that have taken place, we 
 t up V>y some Ste^yg certainly not sufil'ered as much as our neighbours It is of course impo.ssible to 
 or its managemei.n ^Ijat the conseiiuence might be to any bank, if it and its customers were forced 
 ilondays and Thuitolitjuidation, but I have mysvlfto doubt that our 'Ustomers are on the whole just 
 I would consider g^od as the customers of other .banks, 
 ve supported mi' 
 'ly hope you will n 
 rokers will taRe ^'Ailan Gilmocr, Esi^., Ottawa. 
 
 nk. If you wish 1; 
 
 )f tho Bank affuii; 
 ice, and not to wit 
 
 As an examp! ' of how a Bank Director and Vice-President could mislead a/riout 
 ^^]y show his utt'.r ignorance of the affairs of the Bank with which he claimed to be 
 
 R J REEKIE, Vd ghoul J hav;- been intimately acquainted, I have thought it well to have printid 
 
 I 
 

 
 nbovf tlic Utters writt< n to in.' Ly tlir -Liitlciiian occupying that position in tin 
 8(>]i<lat<(l Bank ol Canada. 3ceilt 
 
 I am (juitc sciisil.lc tiiat it can now <l(i iii> no good to niako thcsf public, av« l» 
 will bo some satislactiiMi to let my iVicntls know liow I bi'caini! thu victini oi le to i 
 placed confidence in tlie matter, and atford tin m a u.«< t'lil lesson, should such b.- ay po 
 cd to show what dipendence can lie jilaeed up< n un-askcd-for advice so tcndcnd 
 
 ALLAN GII..M ' 
 
 % 
 
 SPECIAL (iP.NERAL MEETING. 
 
 etracr 
 
 A sjK'fial m.'iK'ral mcctino; of the sliareholdei'.-iof this 
 meneed on 'J'hm><l:iy, .S(.'])t. ISth. at noon, in tlie l»ani<i 
 <rArm('s. to receive >iatenu'nls ot ihi' liank's att'aii 
 
 to (-'onsidoi' its 79 ^^, 
 tion. and to dclcrniino what coiu'sc should l)0 folh>\vod in the jiiitre Jn 
 crisis, to |»rotc(t, most ertecluidly, tlic interests as well of its -«rtton i 
 holdei 8 as ot' its eieditors. The l)oard room was crowded with ^'"8^'^" 
 lioiders. ainono' them many hidics attired in moiu-nini;-. The '"•>ll"^"fl,!l!, 
 are copies of tlie docunienls. wliich were disti'il>iited prior to eni'.|it,|f 
 upon the business i'<)V wliich tlie m 'et;inj;- h id been onvene I: — tqiiire 
 
 m, T, ^ '*<^ '^"^ 
 
 To THE SnAKEHOLUEP.S CF TllE CoNSOLIDATKn DANK OP CA.NA.iA I — 'I'draw 
 
 The directors of the Consclidated Bank suliinit to tin; sharcholdors a tatcnn 
 niont of till' affairs uf the Vwnk. made up to ;ilst ulto., and th"y (lei'i)\v regnrre had 
 it shouM exhibit hisses of so serious a character. With reference to the Ids-Direct^ 
 curred at tlie head oftice, the directors .submit to the shareholders a letter ficil bttoi 
 late general manager, dated IJrd July, tendering his resignation and an (ixtiiiei'ch an: 
 the minutes of the board of directors, at a meeting luddon the 7th July, wii'its we 
 Kenny's resignation was accepted. The diivctor.s have only further to impres-cectly | 
 tlie sharehobiers the desirability, in the common interest of all, of acting in c'* th( 
 with a view to the li<|iii(hition of the liabilities of the bank in the sjieediest iii" t'^n 
 possibb', and also to a realization of the suriilus assets for the bfUetit of the ^ *"' 
 holders. he a 
 
 F. HINOKS, /•' » to 
 dire 
 
 ^r to 
 
 liab 
 
 (Copy.) ihe 
 
 ^ acfa i 1 
 Chamblv Canton, July 3r.l, IHT'J ^ g^^j 
 
 Ren 
 natci' 
 Dear Sir Francis, — I b< g to tender my resignaticai as G*'neral Manag' »rk t 
 to request the favor of it.s acceptance at the earliest date consistent with the the^ 
 ests of the bank. So long a.s I am in the service I shall give my b 'st ctfng| 
 assist the board generally in placing the affairs of the bank in a b 'tter positii-amldi 
 I shall cordially work with any nuinliers who may be appointi'd a (Jommitte<' they 
 port on securities. Witii reference to the losses which appear now to be ini nean 
 on some of the Montreal accounts, while I admit that my tirst estimate 'OW o 
 might require to be provided tor out of the " surplus" (as mentioned to Mr. Pas to 
 has, in consequence of recent nnexpictcd developments, been found quite inai!. in c 
 J must resptcttully [irotest against the estimates which, I hear, have been a 
 by the board. In these the losses are, in my opinion, greatly exaggerated, ami 
 contident that an examination of the securities by a committee will bear 
 opinion. While during the last fortnight it has be<'n very clear to me that 1 
 nectlon with the bank could not long cuntinue with any satisfaction to my> 
 
 The Hon. Sir F. Hincks, K.C.M G., 
 
 President of th« Consolidated Bank of Canada: 
 
 Ha^ 
 last 
 
I 
 
 '.)0 
 
 position in tli 
 
 iO^nt iution of tlielKfiiii in snnii' mattcis, in wliii li, as G>n( r.il MaiiayiT, 1 shoulil 
 
 thfSL' ituljlic, av© lt(( n tonsnitt^H. lias slidwn nir that I am i)ra(ti< ally snpoisidi d^ and has ohliLfid 
 
 thu victim oi le to ask to lir iciirv(.cl from a nsiionsiliility wiiich is no ioniser arconi(ianit'(l witii 
 
 shotiM sucli Ir ay power. 
 
 Ivico so ti-ndcri (! I am, your> faitlifiilly. 
 
 ALLAN OILM 
 
 Sigui'd, 
 
 J. J3 KENNY 
 
 TING. 
 
 ctracljiom I he Miinifc» of a Mf'hnj oj f/ir /tudi-'l cj Dn'rlm-.i, /tel I on f/i' IS'-rnt'/i dii;i <it 
 
 this bank was •^"/,', n^^','. 
 
 ilikiuo- hoiiso. 1 ^j,,| |,.f,.,.,.,„.,. t,, the Irttrr of Mr. Il.-nny, latr General Mana,-,T, dat.d :;id July, 
 
 ;:> C'on>i<l<^'l' i'^ 79, tcndiilni,' liis risiLtnatioii. I dr.siic in .Fnsticc to niysi'lt'and my co-din ctois who 
 
 )\V('il ill tllO inire in (.tii((; |>iior to thr last Annual Mcctinfj, to idacr on iicord my opinion on that 
 
 well of its si'tion of his h'ttci- wliii h nlatcN to tho lofsts whiih a|p|i(ar to Ik; int-vitahlc iJcfon; 
 
 1 1 ..rill, injr so I mav ohscrvc that no to a vciv riMciit pciiod I iiad \\\v most implicit con- 
 
 l*0\V(l(*(l will) '^ O ■ 1.1 I 
 
 11 encf, as well in Ihi- intfi,'-i ity as in tiic^ood jmlLrni'iil (f Mr. l{<nn\. My fonfidi nee 
 llo". illO tollo^ gj.^l ^^ rioiisly shaken dniin^ thr intervals 1m twren the i)ri'paration of the .>,tatt'- 
 3d prior to eul'.nt of llif affa'rs of th.- r>iihk ;ind the Annual Meeting. On ^'ettint; tliat statement 
 iveiiol:— tquirid fi'oiu Mr. I'ridham, the .Vitinu Inspeeinr and lati chief aetountant, a de- 
 
 led Kiatenient of the St;,S'j(),:!| T,"l in the assets. I found to my ama/.emint tliat tl^e 
 'rdrawn ae<(iunts in Montreal anniunted to no h'ss than $i)l T),!**!' -14, and I leipiired 
 shareholders a tatt'"""rit <if these accounts, w hi li when ohtained made it ch'ar to my mind that 
 I I'v (1 'i-n^V rcLtrii''*' '""' heen systematic eoneealni'iit of most important transactions from the Board 
 •o to tlio l()s-t)'r''etors Tlie lioard had riMpiired that at <.V( ry meeting; a statement should ht3 
 '1 1 T- a letter fieil l>if""e 'li«' directors exhiliitmi,'' the liahilities of tho.'ie customers t>f the Bank 
 and an cxtraei'ch amounted (o $l(ii»,Oo(i and upwards, loycthei- with their overdrafts. Such state- 
 fV ' "tli July wli'^t* Were laid h. fore the lioard, hut I found that some were omitted and others in- 
 i' tl ^r to iinnres-i'^ctly stated, and in short, that tlie (iemral Mana.L:<r had .systematically conci-alcHl 
 11 fa •tin"' in e." the Board the slate uf sHV<ial larne aicounts. The liaiiility hdj;er which was 
 tl > -I • 'triest uiW time to time examined hy the iioard, and from which the statements of liabilities 
 1 n 'tit of the ** naade, was so ki pt, as to render it impossible for tiie Board to form any idea as 
 he nj:t;iei;ate liahilitiis of the custonurs. But without goini;' into details. I simply 
 V PTTNc'KS /'■ ' ^^ pliice on record that to ^Ir. Benny's systematic (dnceahiient from the I'liwideut 
 ' directors of his o[)erations is to lie attributed those losses whicii he admits in his 
 it to be inevitalde. The lieaviest of those los.ses will be incurred from an account 
 liabilities on which .Mr. Ileiuiy himself has acknowledj^ed are very much jireater 
 1 he himself had any idea of. There is a very simple answer to Mr. Kenny's pro- 
 < against the estimates of losses whi( h he states have been accepted by the Bt ard. No 
 July 3r.l, 187'V ^ estimates have been laid before the r>oard.and without much more information than 
 Renny has yet communicated, it is not possible to arrive at any satisfactory 
 H : nates. It se, ms to me that if Mr. Kenny's letter were to be received without 
 
 General Manaii' U'k the late Board ol Directors might be held resj)onsil)le to a far .trrealer extent 
 sistent with the they ounht to be in strict fairness They < annot es( ape the responsibility of 
 Live niv b 'st elf' ng placed a much greater dej;iee of (onfidence in Mr. Kenny's judi^nieiit ami in 
 n a b/tter positifandour than they ounht lo have done, judLiing fri in recent <liscliisures, but iieyond 
 ted a Committee they must in justice to thems''lves object to any resi)onsibility. I am unaware of 
 ■ar now to be im neaning of the cxiiression of Mr. llenny's letter " recent unexpic t<ddevelopm'nts." 
 jny first estimate 'OW of no recirit developments except the enlightenment of the Directors ami iny- 
 'ntionecl to Mr. I'listo the transactions which Mr. Kenny has kept exclusive to iiimself, and to a 
 11 found quite inaii- in conlideiice, during a considerable i)eriod of tine. " 
 ear, have b.ien m^ (^Signed), 
 
 v exaggerated, am. 
 littee will bear 
 lear to nn^ 
 
 IX 
 
 II 
 
 Having submitted (he foregoing memoranduin to 
 tha II jjyj^ ..ij. jj^, ujianimously concurred in it. 
 tisfaction to mj - c- ,s 
 
 (Signed), 
 
 F. HINCKS, J'resi.hnf. 
 the Directors who were in 
 
 F. HINCKS, I'leuJent. 
 
, I' 
 
 f- 
 
 l-^ 
 
 s 
 
 ) 
 
 Ij 
 
 
 i! 
 
 i 
 
 i 
 
 3t 
 
 IMK'Hr AND LO.SS STAT KMENT --LllST AI-'.CST, 1^70. 
 
 .BuIhiioo at (lrl.it Profit and Loss Account, 1 Olh May, 1 870 $ "''I''?'''-, 
 
 Interest paid VJ,.>S\1 • 
 
 Interest rcHcrved 2n,87'; ^ 
 
 llcductiun in iianU I'reniis-s •.•■.•••■.••.•' -•'>,'"^" ' 
 
 ADuropriatinn for LoAes ascertained and for finther depreciation inse- 
 curities _^:i!!f:l_ 
 
 !5'J,48!»/J77 1 
 
 Deduct : 
 Forty per cent, transferred 1st Jnlv, 187:', from Capital Sto< U suh- 
 
 scribed Sl,:!'.'4,«;0c 
 
 Prolits for term ending ;jlst Anniist, l:-<7't. jiftei dediK tin.i; expenses lor 
 
 mamigement - ' '^'■'" 
 
 Si,4'Jl.r,:,u . 
 Deficiency $1 ,o<;8,3."; 
 
 $2,48'.', '.'77 
 
 Capital paid up $2,o.S0,yjo 
 
 Deduct: 
 Deficient y as above 1 ,W>^,'M>'< 
 
 $l,')12,."/i:i 
 
 OiXERAL STATEMENT, 31. ST AVfJUSr, 1870. 
 
 Liaiilili'is, 
 
 Capital Stock paid up 
 
 IntiM-est reserved $ 2n,.s7(; 43 
 
 Unclaimed Dividends t),8 14 51 
 
 Notes in circulation 
 
 Public Deposits, on demand j^ .")8."),,"6.") 02 
 
 Public Deposits, alter notice 15:'., 100 73 
 
 Provincial Government Depo.sits, on di'mund 53,294 4*3 
 
 Provincial Government Deposits, after notice 50,00u 00 
 
 Dominion Governni'Ut Deposits, on demand 
 
 Foreign Agents, United Kingdom 
 
 •Contingent Fund to provide for j.ossible losses 
 
 Ass/'ts. 
 
 Oold and Silver Coin $ 1 (3,7(>5 32 
 
 Dominion N- tes 1 3, 1 50 00 
 
 Notes and Cheques of other Bmks 1 7,374 Gl 
 
 i 
 
 Balances due from other Banks in Canada 11 2,673 08 
 
 -Balances due from Foreign Agents, United States 10,643 93 
 
 Noi 
 Lot 
 
 Lofl 
 Kot 
 Not 
 Sea 
 I' 
 B 
 
 Ban 
 
 Ate 
 
 and 
 
 pro« 
 
 Sect 
 
 bein 
 seer 
 
 $2,080,02ii crio; 
 
 27,40'i J^f; 
 5>i7,03'J ^*K1 
 
 Intel 
 
 738,00.5 
 
 103,204 P^^'i 
 171,95Ci W. \| 
 243,2;'l' An(| 
 
 mil- 
 
 182,Hi 
 
 $4,085,52 
 
 meil 
 
 Mod 
 tho- 
 
 47,2:'> 
 
 Meii 
 was| 
 
 123,3'ig 
 
 am<| 
 
 7^^W(B»5^!!! 
 
35 
 
 . .. $ 4:.o,8'.i2 ■ 
 4D,:.8J . 
 
 'jn,87'; -1 
 
 ... l,943,.VJ.-> 
 $'J,48'.t,077 : 
 
 iih- 
 
 toi- 
 
 Sl,31t4,r)00 
 
 $i,4'Ji,nr." 
 ... $i,0";8,32'; 
 
 Oovcrniiifnt D<l..nturrs 
 
 |rott'K(lis<(»unt(l, (Unxnt 1,818 703 19 
 
 Hbans to Corporations 32!t,732 99 
 
 £canK on Ciipitiil Stock of other Banks ti92 C4 
 
 Kotts iiviiiliii-. not siHfiiilly sccuiril •. . 272,2")3 i'>3 
 
 Notes overdue, siTuri/d liy Moit-apes or otlier s<'(iiriti<s 8 l,lM:i 2' 
 Real Kstiitr the prop'rty ot tln' Bank lOtliir than Bank 
 Premises; an<l .Mort;^airfs on l;cul Kstati' sold liy tlio 
 
 Bank , 1 "'0,413 fl7 
 
 Bank premises 
 
 At d' liit of Piolit and Loss A( eoimt 
 
 70,56 J 6G 
 
 2,or)r),97H 2'.> 
 
 120,041 88 
 
 :^,n] 7,202 77 
 
 l,nij8,32<J '.•3 
 
 54,08:), 5 2'J 7'i 
 
 $2,480, '.'7 ■ 
 
 $2,o80,92'i 
 
 .... i,on8,:r2(: 
 
 $1,012,503 
 
 $2,080,9-. 
 
 J 43 
 
 
 i 51 
 
 
 
 27,49'i 
 
 
 537,t)3'J 
 
 -, 02 
 
 
 73 
 
 
 
 738,G(;5 
 
 4 4i3 
 
 
 1) 00 
 
 
 
 103,2'.i4 
 
 
 171,950 
 
 
 243,2'."J 
 
 
 18 2,8t;'' 
 
 $4,085,5'. 
 
 35 32 
 
 
 50 00 
 
 
 74 Gl 
 
 
 S 
 
 47,2" 
 
 73 08 
 
 
 ;43 93 
 
 
 
 123,3' 
 
 SiK FuA.\<is lIiNcKs lo(»l< the (-hail', called ilic nioetiiig U) onlcr 
 and niovod that .Mr. (\ JI. Witliay ad as secivtary. 
 
 Mr. ,1. II. .losKPH. — 'riiorc is no chairniau. Mr. J^vsideiil. 
 
 Sia Fit.v.Ncis lIiNc Kv liolif\('<l ii lo hu the cusioni to consider the 
 president, cdiaii'iiiaii. (Cries of ■■ dissent and assent.") 
 
 Miss I.s.MJKLLA MAf'i»ou(iALN ohjcctcd to J\Ir. Wctluty acting as 
 Seeretaiy. on the gr(»und that he was acting-nianager to tiie hank. 
 
 Dr. HiNusTo-N moved tliat tlie Pjx'sident lake the chair. 
 
 8iH FiiANCis JIi.vcKs remarked tJiat the rnei'e fact of Mr. VVethay's 
 being an officer of tlie hank did not jn-ejudice him in his dutie.s a.s 
 secretary of the meeting. 
 
 (Ciies of '• Certainly, " and appi'obation, which over-ruled cotmter 
 Crie.s of dissent, in which the ladies were energetic.) 
 
 Mr. J. II. Joseph moved to complete the organization of the meet- 
 ing, t!>at Messrs. <r W. Simpson and K. L. B )nd act as scrutineers in 
 taking the votes. (L(uid a])phiuse and u|)roar.j 
 
 Sir Fk.vncis IIi.ncivs understood that tlie common object should be the 
 intei'est of the shareholders. 
 
 A I.(Ai)Y — Has it been ? 
 
 S.':i FtiANcis was aware that the present meeting was composed of 
 persons of vei;y widely ditfert'iit views, and would accept the name of Mr. 
 y-. AV. Simpson as one of the scrutineers, and wouM ])!opose that of Mr. 
 An<lrew I^»bei'tson as the other. (Loud cries of •' 2so. no.'' 
 
 SiK F'rancis said he made the suggestion to avoid the delay which 
 must ensue if a ballot was taken. 
 
 Mr, TuRMUi.L to meet all pai-ties, proposed that the three names- 
 mentioned be accepted — Carrievl. 
 
 Mr. White, Montreal, proposed an adjournment be made to the 
 Mechanics' Hall, in order that every shareholder might hear, and that 
 ^ose who desired to take pai't in the discussion, might be heard. 
 
 On motion of Colonef. TciiXBi ll, the meeting adjourned to the 
 Mechanics' Hall, the shareholdej's foi'ming almost a procession which 
 was generally looked u]»on with surprise. '• Is this a funeral ?"" " What 
 i6 the matter.?" "It is the funeral of the Consolidated Bank," were 
 Wnong the remarks heard. At the Her.vld Office door a prominent 
 
:u\ 
 
 '4 
 
 f 
 
 politician i-omarlvoil : ••The pi-ocessiou of tho Innocents," ''Vi^j.j 
 answered his tViend, •• Innocent (lupe> of i.»a'l hankers," ^^^^^ 
 
 Sir Fkancis toolc the eliaii- at 12.30, and liavinn- ohlained "Ij-bq 
 addressed the sliareiioldcrs. lie said that whjn the present meetini;' j^^^j, 
 called, it ha I I'cen necessary to give a very li»n<:; notice, but that ii ^j^^^ 
 heen convened at the earliest possible moment. Some time ai;-o, a 1113]^^^ 
 of shai'cholilers was cidleJ, and he mi^•ht ()b>erve that up to this da\ ^.^g*.^ 
 directors diil not Icnow whethei- or not the moetinij; represented a niaji.gg^jj ^ 
 of the shurehoMei's. as it was informal: yet, not\\*ithstandin>i: that. 1,^. 
 coiiM say witliou' fear of contradiction, that the i)oard of directoi's a -^g^ , 
 towards'lheu-entlemen who came forward as i-cpresentini^ the shafehol^^ ^^ 
 at the meeting;' in the trankest and fairest s[)irit. An advisory comnii J^^ 
 was aj)]) >inte 1 who lunl tree access to the booics of the bank, an 1 no crjiljii 
 
 lie 
 
 was m;ide to conceal anythinii;. Moreover, they, by appointment, mc! (^ 
 
 board of directors who attaciieil due weight to iheir statemi'nts. Bo 
 he miii'lit sav the dire ctoi'>. whose conduct had been ver\' sev.^rel\- 
 
 icfe. 
 vepc 
 
 sured (a[iplausc). were agi'ccd to ;d»ide by the decision of this meetin^y j^.^ 
 to their retiremeiit. F>»r ids own part he coidd say most sincerely \jj^ 
 ii'a miijoritv of the shavel )!ders desired him to retii'C, he would d' t|i© j 
 ■within tiv(.'. miniitcs at'ter he had l>een informed of the fact. (Apj)!: |jj|^} 
 and hisses.) Ibit he had his responsil)ilities, and while a good inii!,^ ^^^ 
 of the shareholders did not wish him to retire, what could lie do j.0;^|j 
 await their decision ? fJe their decision what it might, he was (juile, i^^tt 
 pared to abide by it. Some of the sharehol(lers. he had heard. th.Hgg j^, 
 the directors ought to be in the penitentiary. (Le,u I applause.) - ^j,., 
 doui)t a grciit many thongiii s >. Ibii he would asic them would •! U'deadl 
 wise that they shoul 1 allow >uc!i a coiu's<' to bi« taken in the criiii-)||ejj, 
 Courts and no! disturb the hai'tnony that shoidd |)revail at the pi'ie fn 
 meeting? ( Ironieal cheers.) They luul 'no common interest in ei. ^ 
 voui'ini;' to put this IJanlv in the best ])0^■: tie pi-sition. , . 
 
 A Voice— We ought to have. ^'"*' 
 
 Sir Fi{A.\(ts continued — With regard \n any apology or explanii ®"^ 
 from the Directors before the mei-ting in the jn-inted report, a far ulsi- 
 interesiing (piestion w.i^ •• What i> onv Iiesf course to pursue at the «xoit 
 
 sent juncture in the nitei-ests ol the nanlc 
 
 A FUKN'tH-SIMOVKlNii Sli AUKUo I, OKI} — < ijve 
 
 iolidn 
 Ited ii 
 
 us some e.\-plana,QQgj 
 about Ascher \' Co ? ('.\pitlause and cries of'- No, no.".') 
 
 Sru Ta v.vcis IlrvcKs said— if he was the gentleman wdio Invi sp '^^^j" 
 he would wait until the s])eakvM" h;i I comduded biMore he aslceil (piesi ) 75 
 
 .\ SiiAUKiioLOEH— iu'peat the (Tie-tioi' / ( Crics of " No, no.'') inte, 
 
 A SMARKMOi.nKU — The gentle/uan has a right to ask questijrd.- 
 (Cries of •• Order, order. ") lel T 
 
 Tlie CiTAFRMAN continued that, his own oi)inion was that it wn^^Of d< 
 (solutely nece»ary {"a- the Uank to i;-o into li(piidativ')n. (Applause.) "^** 
 best stej) that could be taken would In' to get some other bank topui'^^ 
 the i)uilding and assume the assets — (_Applaus(\)-and close the n)mnni 
 up as soon as possible. But,-suj)posing this to be imi»ossible. the 8*iry. 
 step possible would be to resume specie payment at the end of DO >. 
 Those with whom he had consulted were by no means sanguine th:ii 
 could bo accomidished, and this failing, thei-e was only one course 
 
»C'cnts, '• ^'-id-^hat was iiisolvcticy, the worst and mo.st undesirable that could bo" 
 iii'SUcd. Far bettei- would it be to trust their interests to some body of 
 
 obtained ""'3i'gpns — to some of the directors who would i»lace then\selves at the 
 ■;ent meetinu' lafoholders' disposal. The directors had said that whatever miii-Jit be 
 , but that il ,jjQ^ ^^1' 1^1, ^.„^^ tiiey would do. He asked them to vote tiiat diiy for a 
 ime ai;-o, a 1113!^^^, ot'^evcii l>irectors. just as they wouid at an annual meeting. The 
 ip to this dav^.QgtQ,.j^ ^f,,j(5,.(^,^,)|^ J,, (.jii-py ,jjit i\^^. shareholders' wishes. One of the 
 3sentcd ti maj ".gat j.y.jsons i\n- censuriui;- the ilirectoi's was the lacU of inspection at the 
 anfling tliat. !,ad"otHro of the Baiilc. With ix\i!;ard to that, he would sn.y that it wa.s 
 of directors a 33^ y, )(;),.[, I,,. ^^. {U.jt ;,,, inspeetion was not made. The Directors had, in 
 m; the shateh'>l|e jinper before tlie shareholders, acki:owIedged that they had enetl 
 lvi>oryc<>nimi plj^j.ji^^. too much contldenco in the late Geneial Manay;er. First 
 )unk, an I no *''iett' he joined the f^ity liank he knew of noinh[)Cctorshii), the directoi'.s 
 )ointment, me: ^i nevec [)i'oj)osed an insjiection, and no inspection had ever taken 
 tenients. l^-'-iicfe. It was very uid'ortunate that the thought oi' such inspection Inid 
 •oi"y sev.M-ely vfip come lieforc the director^^ of the bank, and the reason was tluit 
 I of this nieeti!i.ey knew everything about the baid<. and nothing was concealed from 
 L )st sincerely jm, WitJi reterene(> to a rather st-nsational correspondence pulilished 
 e, he would d' the morning papers, he felt bound to make an exj»lanation. All that 
 c fact. (A PI il had to say was. that if .Mi-. bV'ekie had wi'iiten those letters and had 
 Ic a got)d nuii,n gelling out his stock after wriiing iliem. no man would censure him 
 t could he do ,.0 than the sj)caker. Ihit .Mr. Reekie acted in <lirect ac<'ordance witit 
 t, he was (juite, letter. He was a large stockholder, and l>ouglit stock after writing 
 had heard, tli'ig^ letters, and lie, (the speaker), therefore", did not think it fair t<^ 
 ;ul applause.) ■ that Mr. IJeekie had written those letlei-s with the intention of 
 lem would it n ileading Mr. (rilmour ; he, tberelbre, had felt bound, in justice towards 
 en in the crliii-)lleague, to nnike this explanation. Not one word of complaint would 
 
 ail at the p'^ie from him as to the i-esult of the meeting. 
 
 interest in ii Colonel Tl'Uni{i:ll, having introduced himself, read the tollowing 
 
 )lutions passed unanimously by Quebec shareholders, on the I5th 
 
 , tembei-, at the oillce (>f Mr. W. "D. Campbell, X.P. :— 
 )gy or explanii 
 
 rei)ort a far nisi- Tlmt this mcM'ting frds cmIIi'iI upon to ennnn' in tlic oxprcssion of iiidipna- 
 
 o niirsue at the «*oit<'<^l ''.v tli" culpalilr ncglinc'iKc of the pro.'siiLiit, diivctors and maiiiigfr of the 
 
 1 ' ' iolidatid Uank, in the discliargo ot the trust coniniittcd to tluni, whidi has 
 
 . ^Ited in the snspi'nsien ul' a bank ttiit, in>m its capital, hiiould have liocn one of 
 
 sonic explana.QQgj p,,„.j,,.c„| „i,,n(taiy institutions in tiie Dominion. 
 
 •>• ) 2nd.— Tliat in tJK'ir circular, issuid 15tli July, IsT'j, a statement was made tliat,, 
 
 an who had ^1' dedticting fer antici[iatcd losses, the assets ol' tlio bank would lie ec|Ual to f'-oni 
 he asked quesl > 75 |.,r cent, on its (lu n pre sent |>ar value, a ntateniont which, if founded, 
 of " No no.'^ iD,t«, in the opinion of this meeting-, 1 liuiinal proicedings against its isse.ers. 
 
 to ask (pie>t'lrd. — 'I'hat this meeting, having oonfidi n( e in tlie integrity and ability of Lient.- 
 lel TurniiuU and the Kev. CJeorge Weir, two of the shareholders resident in 
 "1 ■ that it w:i*^*'>5^"' iuitliuii/f and empower them to repres( nt lluir opinions and wisjiesat «ny 
 '^ , ^ V ingj of shareholders, ami re(|Ui'st them to e -onerate with any <)tlier Comruitteo 
 (A])pni • • „jg(j ],^ shareholders ejsewleri; to secure justice to all concerned, and to promote, 
 her bank to ]>Ul' xaeA nec( ssary and advisable, h ual proceedings against the president, direitors 
 nd close tlie niiannger, and engages to contribute towards aio^ expenses which may bi' found 
 intnossible. the sary. 
 tl,[, ,>„a of !M) ' (Signed), GKOKfiE WEIR, 
 
 ns sanguine tiM UOUKHT MRODIK, 
 
 »llly one course ^e,-r(t,ir>/. 
 
 w. 
 
38 
 
 
 M 
 
 Ho moved that Sir Francis Hinei<s, Mcssiv'^. John Grant and W. W. ^f 
 Ogilvie. be aisked to resign, and be rephicud by Messry. Eobert Moat, T. re: 
 W. Ritchie, (^C, Henry Lyrnan and Chai-les Hagar. He said that on his ,^l] 
 arrival in this city he niiist confess lie was very much surprised to find 
 that the directors weie pre))arcd to attend the meeting with an ovei ^tt 
 whelming vote of shares bought i'rom unfoi-tunate pco]»le at a greii; dir 
 reduction, and that it was their intention that day to vote down any thin;.- ^u; 
 the unfortunate shareholders might piopose or bring forward. He woulu 
 &%k Sir Franeis Hinclcs. this ex-(iove)r.or of the Windward Isles, tlii> usi 
 ex-Finance Minister who had received a mof^t distinguished honor fron gul 
 Her Majesty, if he had any decency left, to show it by resigning lii^ 
 positicm^— (loud ap]>hiuse,>— :is piesident of the baid-:. Two yeai's ago :27t 
 when the bank was in a tlom-ishing condition, the stockholders paid hiii; wit 
 an immense salary to look after their interests, 'and he now told tin 
 shareholders that Mr. Kenny was the culprit, and had, in fact, asked tli' of 
 shareholders to believe that he was the (Uily culprit. He thought tii. per 
 directors were just as bad. an '. yet the Pn-sident had come there that day the 
 and intended to hang on as long as there was a single dollar in tli. -con 
 cofters of the institution. (Hisses and ajijdause). Yet he said he w;i- soh 
 
 1)iepared to step down if the shai'eholders wei-e so agreed. The shait incf 
 lolders could not legidly j)i'event the tlirectoi's from voting for bin 
 and yet if they gained their jjoint they would go before tl anc 
 world as having condoned for anything done in the past. He did nn res< 
 know if there was any sense of decency left in those men. (Hisses 
 applause and cries of '' Quite I'ight '" fi-om sevei'al ladies.) Jf thei'e w;i' the 
 he would ask the President to letire. It would be fai' better foi- him ei Prt 
 the morrow to bi'eak stones on the street than to come there and live fi the 
 the balance of the money still left in the vaults of the bank. (A]i])laii- at t 
 and hisses). This wa. what would be done, so sure as the shaieholdci 
 were present, unless they ])revented it. He (the speakei-) had hiid th.e 
 great deal to <lo with banks, moi'e than Sir Franeis Ilincks was aAvare i : Dir 
 and would tell them what would ha])]teii if the same Board was returiH' wo 
 with the exccjition of the man who got on the Board three months a^:' wi 
 and but for whom they wnulil never have knf»wn the position of ii Dii 
 baidv lo-day. . Jle (the sjx'aker) did not care what they said against tli: thi 
 man, it would be a very bad tliiiiu' to have him out of it. No doul ask' 
 sonu> would say it was bcttei- to keep Sir Ki-ancis and the old Hoai "vot 
 Bu< if they did, and he ( the s]icakei-) had the ]>leasui'e of nu'cting li ma 
 sharehoklers a Near hence, lie would be aMc to tell them. nu)st like! 
 that this J5()ard wouM continue to do as they had been doing the I: 
 thirty days. Poor widows with hardly anything Ictt from the wi-eid\ 
 ti)eir tbi'tuiu's had been imluccii to sell Iheii- Stock at one and two doll; 
 a share, (.\pplause.) And who purchased their Slock? Why. il rou 
 Directors What next. Tlity would make a call and the liabilJ! 
 people would >ell out right and left, and who would own the Haul 
 Why Sir Francis llineks and a few of the directors. Then within **n 
 short lime these nu'U would havf a still laiger fortune than tluy li 
 now. and those who had none would hav(> one. It' these men had ai 
 sense of decency left they would say to the stockli(ddei-s : — You man.i^anid 
 the \in\\k in the future, 'we abstain to-da\' iVom an\- fui-ther iminnir<'m< 
 
 by 
 
 kee 
 hat 
 
ant cand W. AT, 
 ;obei't Moat, T. 
 >aid that on liis 
 irprised to fiml 
 with an ovci- 
 )])le at a sjjrea; 
 down anything; 
 ard. He woulu 
 ward Isles, tlii> 
 hed honor irou: 
 y resigning h'h 
 Cwo years aui' 
 olders paid bin. 
 e now told tin 
 1 fact, asked tli' 
 He thought ill' 
 li there that day 
 le dollar in lli« 
 , he said he w;i- 
 'ed. The shait 
 voting for hiii 
 before tl 
 He did nc 
 
 go 
 ^t. 
 
 men. (Ilissi.- 
 .) h^ there w:i- 
 etter for him ci 
 here and live i: 
 ank. (A]>plaib 
 the shareholder 
 ker) had iiad 
 *ks was aAvaici : 
 ard was return^ 
 ree months au' 
 ' position of tl 
 
 said against tli; 
 of it. No doiil 
 I tht' old Hoai 
 ■ (if meeting li 
 lein. most likcl 
 n doing "the In- 
 rom the wi'eck 
 10 and two iloll:i' 
 t(.ck? Why, tl 
 and the lialtilii 
 I own till' Hank 
 s. Then within 
 ne than they li 
 ase men had :n 
 rs : — Yoii man.i: 
 •ther maniigeint 
 
 as 
 
 ■of its ati'tiirs. He hoped for the credit of this maii'iiitieent city of >[ont«, 
 real, that the meeting would md return Sir Francis Hincks for President. 
 /Hisses, clu-ers, iuid apphuise ) 
 
 ^Ir. J. H. .losEi'H sL'Cotidcil tbe motion of Col/rurnbull. and <lirec'.cd 
 attention to tbe fact thai the list of shareholders eligible for election as 
 directors was antedated, whereas all who woi'e qualified up to noon that 
 4ay were eligible. 
 
 Tbe OiiAiR.M AN explaincMl that the list was ]»reparcd accoi-ding to the 
 •usiiai mode at tinniial iiieetiiigs, ami that the woi'il nominated bad been 
 substituted for* tbe woi'd eligible, lie fully concurred witb AIi'. Joseph. 
 
 3Ii'-. Hoi,i,is as rt'j)resenting a nuicting of lady sbaroholders. held on 
 '.27th .\uL!Ust. i-eail tbt> ix'solntious passed at that meeting in compliance 
 with which she bad atteiHb.Ml. 
 
 Sir l'"iiA\(is Hincks couid onl}- >ay f bat, notwithstanding that some 
 of tbciu. Judging froui the I'eporls. were veiy imxious to put him in the 
 penitentiary, to which he wouM have no of)jeclion if thoy couM put bim 
 theri, — ( laugbier) — in the conclusion that, they had arrived at be beai'tily 
 -coneurreil. Nothing would be moi-e fatal than \(> put tbe IJank into in- 
 solvency The conclusion they had come to showed very great sagacity, 
 indeed. (' Jjaugbtei' and a])i»la'i--e. ) 
 
 Tlie Chair.aian stated that Col. Turnbidls motion was not in accord 
 ance with the undiM-standing arrived at. and he woid<l oidy act upon a 
 resolution that wi>: Id place tbe wboleof tbe Directoi-s belbiv tbe meeting. 
 
 .Mr. K. L. Bond ditle/ed witb tln> Chairman, and proceeded to read 
 the Correspondence between the ('ouindttee of Shartdiolders and tho 
 President, taking the grounil that the under.standing was arrived at that 
 the shaiebolders were j)re|)ared to discuss any (diange in the directorate 
 at the meeting of shareholders. 
 
 Mr. ,1. H. .losEi'ii rose to rejdy to a charge of unfaii'ne>s made by 
 thje President, No unfairness bad been })ractised against Pi-esiderit or 
 Directors. The ailvertisement calling the meeting bad been well 
 wordi'd. *')w jjei'ple I'ould understand it; nevoi lludess. after c<)nsidting 
 with a lawyer, he luai'ned that it made ru> proxision for the election of 
 Directors. He referred to the action of the stocd^holders in regard to 
 this ipiestion and die manner in which they had been outwitted, and 
 asked if they were ))repared to abide l>y tbe decision of llu' lioard oi' tho 
 •vote of the stockholders. J[e was astonished ;hat an attempt should be 
 made to evade the (piestion, and would not stand there and be accused 
 by a man at lb • briid< of tbe Penitentiary. 
 
 Sii{ J-'iiANcis lliNcKs said he came to this jueeting detei-mined to 
 keep his temper, and, ihei'i'loi-e. tlie accusation ot the genileman who 
 had bist spoken be would pass by without ftirtbci- comment. The Di- 
 roct');-! weie p e pared to stand by a vote' foi' ^even hireetors. 
 
 Mu.'.Ii n|i;'oar ensued. 
 
 The ^.'iiAiiiMAN asked wb\' Mr. Saunders was not siibjecteil to tho 
 gaiii'/' ordeal as himself. 
 
 A VoicF, — Because he's just cdected. 
 
 The OiiAiR.MAN' bt>gi>ed par l<ui. All were eleeteii at the same timO) 
 and no gentleniati would say thai it was not a com|)romise. 
 
 Mr. .1. H. JosEi'ii — 1 denv that. 
 
■M 
 
 'S 
 
 40 
 
 Tho r'liAiriMAV— The wliolo tbiiii'- was a compromi.-e. 
 Ml'. J. H. JosKPii— It was not, 8ir. 1 never voted. 
 The CiiATRMW— I never imf^u'ined that he did. and nevei' .'said i 
 liedid, hut when he and all Ids friends asked them to elect Mr. Gn, 
 the Dii-ee ors all vrx^ed f-)i' him. 
 
 Mr. (4kant said he di<l not vote at the last meeting, nor did he 
 any one to vote. 
 
 The ('HAtHMAN w;inted to say hut one woi'd— that lie was ])re]i;i 
 to accept the whole uf the seven names. 
 
 Rev. Prokkssok Wkih, Quehec. said if any of the old Board w 
 <:'lected, the sliardiolde^'s would, In- such action, be condonim;- j 
 otfences. and ])lace the Directors l)eyond the reach of any j)rocee(ii 
 l)eini>" taken aii'ainst them. 
 
 Mr. 11. Cas><if>s asked if an election were held now. would ii 
 legal r 
 
 8iR Francis — Not sti-idlv lcu-al.*lMit when the nomination '.vas ( 
 ploted each and every director wdio was not m^ninated would re>: 
 Mr. Cassils then moved that tlie meeting do now proceed to elect sv 
 dii'cctors. 
 
 Mr. J. (Irant said as a director he had objected to the ai'rani;Tii 
 with the comnnttee and lie would not now consent to any other ana: 
 ment than the nomination of the whole seven. 
 
 Ret. J)r. Jknkins rose to a jtoint of order. It would not be 1- 
 for this meeting to elect, but merely to nominate and then it wouli; 
 for the present directors toretii'e, and then tJic election could be jirocv. 
 with. 
 
 Ml-. Cassils accepted the jioint of order and moved: 
 
 Tint a ballot be now taken foi- the nomination of seven dii-ect<>i 
 manage the att'airs ol the Bank. 
 
 Ml'. Allan (JiLMOLR said he did not intend to be present, but as he 
 passing he came in. During the past two years he had i-eceived a numi" 
 letters from the Vice-Pre>i(leiit. who,at'ier he had a])proachcd the sjiea 
 advised him not to sell when the stock was at 7" and 7-"). lie ajtjirij.-M 
 him in writing, and he iiad publisheil the letters in tlie moii 
 pa])ers. lie considei-ed it to be his duty to have them made publji 
 that tho ]-»ublic should set' the manairement or mismanagement ot 
 directors, in these letters the Vice-President advi.-ed him not to - 
 and assured him everyihiiig was all right. He was eiiher a deceiw: 
 was utterly iirnorant of the aflairs of the Bardv. lie did not want 
 more such fricMids. He moved that considering the jwist mi.Nmanageii 
 of the affairs ot the Hank this meeting is of o))inioii that the Pi-oi'i: 
 Sir F. Hincks. ought to reiire IVom the Board. 
 
 Eev Mr.WEiR, in secomling the motion, paid a high conijiliment t 
 genius and ))ast ability of the Cliairman, anil he held the greatei- hi> 
 womil ability the greater hi> cul]iability as President of this Bunk, . 
 fact that lie was deceived by Mr. Ivenny and his clerks wan no exi 
 He was entrusted to lo(d< after the management ot' the Bank, and 
 shareholders could not consistently sujij)o]-t him in a position in w! 
 he had admitted — which all pi-eseni woidd understaml — he had ei'red. 
 (the sjieaker) would not have spoken as iic had done iiad he not 1 
 
41 
 
 nor did ho 
 
 he was pfoji;i 
 
 ■ old Board v, 
 eonii'>niii,!4' ] 
 any proctHMJi 
 
 now. would i; 
 
 nination was ( 
 to<l would ro, 
 eed to elect ^i 
 
 I llie arranii'rii 
 any other ari'a: 
 
 Avould not be 1' 
 I then it won!' 
 could be procc' 
 
 'Chari^-ed by tiie .shareholders of '.Quebec, that they would not be putistied 
 never said i i^'i^i'" l^'fanoiB liincks was not rem .ved I'rom the Presidency of the Insti- 
 
 elect Mr Cin 't"''^"- 
 
 Tlie Cn \1K.MAN said !»<■ rose cli'.efly 10 u practical question, (Cries of 
 
 '* Vote, vote 1 ' Tlu' adoption of ilie^e amendnuMits must be dom- by ballol, 
 
 and mu(di valuable lime would be wasted. Mr. Cassils' amenduienl wa.H 
 
 the only common se:nse coui'st'.io pursue. 
 
 A Sn.\nKnoi.i)i;M culled ;h«' attention of the niectiiiL;' to i!k- fa<'i that 
 if they voted indiscriudnately many votes would be frittered away on 
 scattering- names and bv lost, while the solid vote would b(; foi- the old 
 Board. . Hear. hear, i 
 
 .Mr. A. ]*oHE«Tso.v, as luie "f tl!(> sri'utineers. was not desirous of 
 StavduiJ- there all niii'ht to tulce iuillots on these useless amendments. Mr. 
 Oassils" motion wa.s the only sensible one. 
 
 Mr. Bo.NM, as another seruiineer. was prejjared to stay all nio-ht if 
 i^eeessary. Iftheothei' party objected to the amendment let the main 
 motion u''''. 
 
 Dr. HiNT.sToN thought it w>)uld be reasonalde to confine themselves 
 to what it was ])ossible to do, The Board say, ' Gentlemen make your 
 geiection ;lnd we will abide by it." This meeting was not iiere for" hole 
 aiid corner ' business, and it did not want child's play. If we nominate 
 gentlemen the P)oai'd dai'e not I'ofuse them. 
 
 Aid. McOiiRu and Mr. J, II. Jo.SEi-ii spoke in favottr of the original 
 motion. 
 
 I»ev. Dr. TtRfen ex])ressed a like opinion with Rev. Profe.ssor Weir. 
 
 Hqv. R. C.vmi'bell had other matters to attend to and desired toget 
 
 ■ 1- . f away The oidy sensible course was to vote at once for the seven names. 
 
 HC\Qn lie <» jjg objected to be dictated to by a committee of Montreal shareholders 
 
 isent, )ut as le ^^j^j MpCord, amid much uproar, said he understood that Sir Francis 
 
 •ceived a uuml" gj^^^,.^ ^^,^^^,^j ,^^.^^ i,^. ^j^^^ agreement. 
 
 ,achedthespea ,. ^■,,, Yrasvis-^o t do. ^ 
 
 0. Heap])i(jai Mr. Allen asked if the idea was that an agreement between the 
 
 s in tne moii QQjfj,j^nt^.y arid the Directors was to bind tins meeting of shareholders. 
 
 .mmadepubh, jj^ .i^.^.j,,,.^!,^, objected. 
 
 lanagement ot j^^^ in.lescribable scene of uproar ensued. 
 
 . ' The Chairman, having restored order, stated that he had been re- 
 ■uljer a deceiw: ^^^^^^^^1 (^q ^y,. ^|,at Mr. Saun<leis' name on the Board was oJMected to by 
 e did not want ^j^^l^^,,j^.^^ 
 
 t mi-Yiianagt II ■ Ronewed U|)roar greeted this announcement. 
 that the 1 resM Mrs.s Isahella MAcDoufJALL said that she thought the lady shaie- 
 
 holders shouM have a voice in tliis meeting. She considered the matter 
 
 'l^^^ '"''*!' T^'i ®*'*^'^ "^'^"'^ " ^'^ sul)iect for the attention of the Governor-General and 
 the greater his ^^j^^ Lieutenant-Governoi-.s <tf the si'verai Provinces. Shareholders in such 
 ot tins Jiank. instittitions nee(|ed the prcMeetion of new laws. There were men in 
 ,>rks was no e.X' ^fontieal who were ju'cpared to swear awav men's lives, and women">4 
 
 the Bank, aii'l jj^^j, .,|^,, ( ApnlaUM'.) Thev were tit subjects for Zululand and King 
 apositumin W(.g^^^..,^.,, • n / ^ 
 
 lie had erred. Several Voices — They are worse. 
 
 le had he not Miss Macoouoall called upon the President and Directors to refund 
 
 «ife 
 
12 
 
 . the amounts lost by lady sharoliolders, Her interest in this Bank \\i\< - 
 very ymall, and she was therefore not speaking for herself, but she ealledmd \ 
 ijpo^n Mr. Campbell to make good the pifi^ition she stood in a day oi- two j 
 before the Bank (dosed. She then reported a conversation with Mr,j,.eei, 
 Campbell, and held that it was time ladies sh(»idd be protected, and ni^ear 
 appeal made to Parliament in that behalf. .She also proposed that a sul ^ 
 f^eription be raised for the lady shareholders in destitute cireumstancc-iext 
 and that the gentlemen show their liberality by subscribing thereto. i] 
 
 Considerable discussion ensued as to the mode of taking a vote ni.jjter 
 the directorate, the President and Directors being o]»posed to any othii j 
 than a unanimous vote for seven persons. ait fb 
 
 Mr. Cassils pressed his motion. ' } 
 
 Mr. Allen said it occurred to liim that the old Directors would iiD.miss 
 add much to the honour of the institution. He had heard a great dv;,rj.eat 
 about it, and was of the o})inion that it was a huge swindle from beginiii.msine 
 to end. He could only characterise it as the greatest i-obbery per])etrat( espoi 
 in this country. But he asked who Avere these gentlemen of Montrc;, ^ 
 who proposed new n.en .' The shai-eholders might ue jumping out of tiny bal 
 
 frying pan in' il 
 heard that one ef 
 •was j)aid for it- 
 Btock last year, 
 the directorate . 
 
 Th 
 
 He had heai-d a great many reports. He ha^ curs' 
 e '-"ntleman did not want to be present- unless, j,. T 
 
 cunnmg fellow that, who got rid of hi' No, 
 
 thei'e was another who wanted to get int 
 
 lien tliei'e was anoiner wno wanieu lo gei im M 
 oi"!er ihr't he may influence the Boai'd to [ninths 
 the bank into insohxucy i,> oi 'er that he might be apjiointed lliioukl 
 assignee. (Cries of- Name, nnme,') He had heard of another directnfingst 
 who had pointed out all the secrets and brought them to light, that Lring 1 
 
 M 
 M 
 
 8i 
 Y< 
 A 
 
 '\ 
 
 was a confederate of Ascher ifc Co. They knew tliat Ascher, who got a 
 enormous amount of money from the bank, bought 50 shaivs and pai 
 for them in funds of the bank, and at the desire of the bank transferr^- 
 them to Mr. Saunders. Jle (the speaker) might well say that of a 
 things heai'd of in his life this beat all. He went down to Ascher's plao 
 and what did ho see ? His stock of goods consists 'of a few sticks aine U8( 
 combs, and yet the same firm obtained 1575,000 accommotlation from tli M 
 bank, and the person who gave a scallawag of an institution like tli;ij o'cl 
 Buch indulgence ought to be imprisoned. L 
 
 A L.\i)Y — It was a perfect swindle. it of 
 
 Mr. Saunders said he had been attacked most unjustly. Fioi Se 
 what had been said it might l»e imagined that he was really a confedera; D 
 with regard to the assistance given Messrs. Ascher tt Co.'s estate. A M 
 he had to say was that he was most happy that this question had bt^md, b 
 brought U]), l>ecause he had heard it reported that he -had acted veiken 
 discreditably. Those friends who knew him well would say that what l.llot 
 asserted was correct, and were willing to bear out whatever he stait Mi 
 His comndssions in connection with the Ascher estate only amounted ipsec 
 §♦5,080, fully half of whi(di was to be doducteil for expenses. Imagi-iiii TI 
 that he would be attacdcetl at this mwtiiig, he ha<l called on twogentleim.entb 
 who were present to go over and (dieck lii> bonks. 
 
 A SiLAHEHoLitER — Why did you threaten to throw your stock on li It 
 market, provided Mr. Kenny declined to advance you money? p.ni. 
 
 Mr. Sau.noeks — It is a direct lie. 
 
43 
 
 lis Bank wa^ Dr. iriNosioN thou.ij!;ht that Mr. Saumlors was not on his de'tnee, 
 but she calU'il^nd was entitled to some C()nsi(lerati(»n. 
 
 n a (lay or twd ji^v Mr. \.\yci was not in tifvor «tf revolution in tlie board. The* 
 tion with Miv^i-Qgident and directors should he asked to lesii^n, and if not they should 
 tected, and ui j©ai' the rosj)or.sil)ility. (Cries, '-rut the (|i:estion. Sir Francis.") 
 »sed that a sul- A SuAUEikfLDKR — Shall Sir Francis K; president of this l»ank for the 
 circumstance- lext six months or a year, or not .' (Ci-ies of •' No, no."') 
 ig tliereto. The moiion of Mr. (iilmour was again ju-esented, but was not 
 
 d<ing a vote "fintei'taincd. 
 
 d to any othi'i A Siiai{eiio!,der' tliought tliat Sir Ki-ancis should not be singled 
 )ut for blame more than the dii-ectoi's. 
 
 Eev. Ml-. WEiii — In my opinion. Sir Francis has lieen guilty of 
 L'tors would n(i,mis8ion more than ot commission. JTe i.-; a man of ability, and, as such, 
 rd a great dct.rreat things were expected of him. He was entrusted with the banks 
 e from be.giniii.iusiness more than th(^ direcloi's. and. as such, he is initurally held 
 ery perpetraloesponsible. 
 
 :eii of Montn;. A Si!AHEHoli)E1{ — Sir Franei'ssays that the vote will have to be taken 
 iipingout of tiny ballot, .ind that it will take two hours to do it.. It will be a good two 
 sports. He baoura' work to got rid of him. 
 
 escnt' unless .111 The (.'iiaiisman — The vote is on Mr. Cassils' amendment. (Cries <.>f 
 got rid of 111' No, no.') 
 
 :cd to get int Mr. KrrriiiE, <^.C.. again presented Mr. Allan Gilnum:',-* rci^olution. 
 Board to [iii'ith r slight amendment, and contended that it was perfectly legal and 
 e ap])ointed tlihould be ])Ut to the meeting. ''Ilie previous question was moved b}' J);-. 
 another direct'ifingston, who took the ground that it would cut otf all discussion and 
 lO light, that lii'ing the amendment of Mr. (Jassils to a vote, 
 cher, who got a Mr. Bond — No; the original motion. 
 
 Mr. EiTCHiK, (^.C. — No; the first amendment. 
 
 Sir Francis lltNCKS — Shall the main question be now put.!* 
 
 YorcEs — No; the jtmendmerjt of Mr. (rilmour. 
 
 A Voice — Sir Francis lias told you he will not resign, and what's- 
 I few sticks aine use of wasting tin., when you cannot force him to do so. 
 Dilation fi'om ill Mr. Cleoiiorn — 1 move to adjourn»this meeting until to-morrow at 
 itution like ihi o'clock. 
 
 Lient.-dovernor Ma(;donat.i» ex})lained that the previous question 
 it off all exeept the original motion, 
 unjustly. Fim Several Voices* — Yes. that's it. 
 dly a confedci'ii; Dr. Hingston was re(juested to withdraw his motion. 
 \).'s estate. A Mr. Clegiiorn objected that it took two to make a bargain of that 
 Liestion had bvtnd, but lu^ was ovei'-ruled, and at length the sense of the meeting was 
 •had acted vorken by a show of*hantls, the decision being that a vote be taken by 
 say that what l.llot upon the motion of Mr. (rilmoui-. 
 
 atever he sttiti Mr. Ritcuik moved an adjournm*Mit. and that in case fifteen minutes 
 nlv amounted "ipsed aftei- the d(qtosit of any vote the btillot close. Carrietl. 
 uses. Imau'Hiii The resolution of Colonel Turnbull was ultimatel.v carried, and subse- 
 on two •'•entlcnn ently the j-esolution by Mr. Cassils, that seven Direetors be l»alloted 
 
 snares and itai 
 bank transferie 
 say that of a; 
 () Ascher's plao 
 
 t 
 
 vonr stock on '■ It was then moved that the ballotini: be proceeded with, to clo^e at 
 
 iioiiev 
 
 • •? 
 
 D.m. 
 
)»■• 
 
 V 
 
 Ml 
 
 i : ' 
 
 'M 
 
 AFTER RECESS. 
 
 :an 
 
 On th-e inectln.i;' lK-in,<;' .-ulkHl to oidor u! n.l5 ji.m,, 
 
 SiK Francis Hincks aiuiounced lliat. the l.allotiri^'- for Dirootor^ 
 rcMilted aw tbllovH : — MesM-s. Joliii Rankin, John (Jranf, R. .1. Rw 
 Hon, D. A. MacUonald, Ilcmv Lvnian. W. W. OjLrilvir, James Croii. 
 
 Tlie rej^ult was ivceived with apphiu'-e. 
 
 Mr. RoHKKT Cassji.s then moved ihal this meeiin^- do now staii'i 
 joiii'nod until t'ljuoi iow morning at lO.oO. 
 
 Mrs. liuFj.is -nui t-he had a motion to make. Slie moved, secni 
 bv Miss Maedougtdl. thai owing to the enormous losses made h; 
 bank under the late man:iuement^ entailing suffering on so many (aui 
 llirougliout the conntiy, ihis meeting call-- ujxm the late Dii'een.i' 
 make good a sum of §40(1,000. being e(iuai to ten per eent. upon 
 <)i-igin:d eapital of tJie Bank, in oi'der that s(» mueli of the loss thi- 
 their mismanagement may be relurneil to liie untortunate shai-eliolc 
 (Laughter and applause.} 
 
 SiH Francis Hincks said ?liut if they were to ballot on wuch a nio 
 as this, they woidd be there the whole nigiit. 
 
 Mr. Cassils called upon the chair to jiut his motion of adjoni-ni 
 to the meeting. 
 
 Mr. J. II. Joseph— Xo. no. 
 
 Mr! Uenuv Ly.man said the question was, what would be the p' 
 Of the new Boai-d ? He thought they could come to a decision to-ii 
 or to-morrow morning. He did not think it would take a great den 
 time to discuss this, properly, and suggested an adjournment untii ■'^^'• 
 morrow morning, so that all the pa:'*:es might come together. "^^^' 
 
 Sir Francis HiNCKS did not see what object could be obtainci 
 discussing the future policy of the baidc. It Avould only be prejudi(i;^*^J^^ 
 the interests ot the shareholders. 
 
 Hon. J. EoBERTSoN favoui-ed an adjournment until to-morrow ni 
 ing, as the shareholders would be brought together. Many gentk*^!, ''j^ 
 thought that, with prudent management, the bank could be reinst:^^^" 
 and this was hit^own opinion also. (Hear, hear, and applause.) \^''e 
 
 Mr. J. H. Joseph aid not see why thev should adjourn. The ii_, 
 ing had voted contidence in the late Jioard. (Cries of" No, no.") ^^ ' 
 what stronger expression (»f contidence could there be than the rc-elo 
 of four of them r* He wi.shed the shaieholders joy of the consequc . .' 
 They had practically voted contidence in the old Board. writi 
 
 Sir F. HiNCKs — Mr. .losej>h, himself, -leconded the resolution b 
 four new names on the Boai-d, and there are three new names. 
 
 Mr. J. H. Joseph — But not yours. (Laughter.) 
 
 •oni 
 on< 
 
 wo 
 
 a p 
 
 pOe 
 W01 
 
 Dir 
 
 resi 
 adjf 
 meci 
 
 ban 
 
 He' 
 
 thou 
 
 byt 
 who 
 
 leal 
 
 Sir F. HiNcKs — Mr. Joseph proposed to put four new names on ■' 
 )ard, three have been put on; and the result is that the meetin^^^^ 
 >t decided exactl}' accoi-dinir to Mi'. .los«'pii's wishes. (Laughter 
 
 Boai 
 
 not clecKled exactly accoi-»ling to Mv. .losoph's wisiios. ( 
 
 A Shareholker— That's very dirterent. (Laughter.) . 
 
 Mr. RoBT. Moat was convinced that no vote could be obtainr ^^ 
 
 to-morrow moj'iiing, but he thought something might be done by adj 
 
45 
 
 for r)i lector 
 
 rpg for thii'ty days. By lliat time il wouM i»e jiossil.k' to obtain in- 
 iorniation. 
 
 My. Cassils— But there ari3 some questions to ask wiiieli should be 
 iinsweied n<)w or to-morrow morniiiix. 
 
 .Mr. Moat hojie 1 he would be allowed to express liis o]»inion, and 
 only re^retteil thai it was not tlie same as Mr. Cassii's. Thei'e was not 
 nf, K. .1. K^'-' .0u(j man in the room who eould nay what the future jjoliey of this Itank 
 James ( roll. -vrould be. If tiiey adjourned lor th.ii-ty days, so as to show what tlie 
 ■ position of this baid< might be at that time, he tlioiin'ht the}' Wuultl be in 
 aposition to do somothinu' lli'Mi. but he diij not think the}' were in a 
 position to (hj anytbinii; to-ni<;ln. 
 
 Sir Francis JIi.ncks said, if they adjourned f)r thirty days, the\' 
 WQuid be u'etliiiij;- so iieai" the time the ninety days (.-xpire. that tli'o 
 ©ii'eetoi's wc^dd not know what lo do, not knowing' what would bo the 
 result of that meeting. Tliey had iteliei' leavi' the Direetors tree. If they 
 ■adjonrned thii'ty (hu's liiere would be no time afiei'wards to take the 
 necessary aeiion. 
 
 3Ir. J. P. ( 'i,K'jiroi!\ would nice to ask who it was thai insj)ired the 
 ibaiik to assume the large liabiliiy of J. .). ,Jo.se|»h k ("o.. of Toronto, to J. 
 iG. Aseher? (Sensation.) 
 
 Miss xMACDoiMiALi. — Answer that. 
 
 Mv. RoiJKKT Moat tlioughi that was not tln^ ]»oiiit umler diseussion. 
 He Went ()n to speak in sujiport of a thirty day's adjournment, as lie 
 thought no disciis.>i()ii eould be reacdiod l>y to-mor.'ow morning. 
 
 lion. Mr. IJoHKKTso.v said there was am])le time to form an opinion 
 
 suuiu u^ '"^ r \yy to-moi'roAv moi'ning. 'riiey miglit possil)ly have a vote to censure the 
 
 a ueeis ( ^ ^ whole ol'tho la'e Board, or tliey might have to answer a question such as 
 
 ike a w, < ,;'i Mr. CMeu'horn had j)ut. He therefore asked for an«adiournment until lo- 
 iirnment unt!. . i •' 
 
 . , morrow morning. 
 
 ogei le . ^^£i. ij i^yi^j.^v,. did ,|,,t see that anv liarm eould r(.'>ult from an 
 
 Id i»e obtaineii . ^i * 
 
 , _ . ij- adjournment until t(.^-morroAv umrning. 
 
 ly oe pi J • Several Shareholders — Answer the rpiestion, Sir FraneiN ? 
 
 , ^, , Sir Francis IIincks iiad no hesitaticju in saying that the ])Ui chase 
 
 111 to-moi .,',of the stock and lease of Jost>ph tV' Co. was made without tlie knowledu'e 
 , , ,•' » . , of the .Directors b\- Mi-. Reiinv. It was made a.t Mr. Saunders' discretion. 
 
 «"l<i.^^/^^'"''<Great,exeitement.) 
 
 applause.) ^,jj^^ Macdot-gall — Wliv didn't vou sa\' that in the moi'ning when 
 
 Ijoiirn. Ihe i,^^.^ s.,„„aers was present ? ^ " 
 
 t " iSo, no. ) jyjj. 3^^,rj^iJEi^>; — I deny what tlie President has said. CSen.sation.) 
 
 than the rc-eio g.^, ^^ Hincks— There is a j.aper in the J^ank in Mr. Saunders' hand- 
 
 )i tiie ^■'^•'"'^^l"^ writing whiidi will jn-ove the triuli ot what 1 have said. 
 
 ^*^^- . Miss MA('Doi(iALL — It is not true. 
 
 10 resolution f -j^^. g Pedlar— It is (luite evident Mr. Saunders can give us a great 
 lew names. j^^l of infoi-mation. 
 
 Ml". Sainoeus then entered into an exj^lanation of how he had gone 
 
 V new nameh ^ Toronto^ lieing desirous of assisting Mr. Ascher ; believing tlie ])rice 
 
 lat tlie *'^^|^ 'jf this stock and lease was vcvy hjw, he thought tin^re Avould have been 
 
 >s. (Laugn ii nonev in it. Mr. Ascher was prenared to guarantee tlie pavment by a 
 
 ghter.) . Ijat^el mortgage. 
 
 ,uld be obtamj g.^. Francis HtNcKs— Tliere is the document ! 
 
 the done by a' I; 
 
 ; do now statv; 
 
 ' moved, se<'i'i 
 )jsses made I'V 
 1 so many faiu: 
 late Direcii'i- 
 ler cent, upon 
 ■ the loss thiv 
 nate sharelutl'; 
 
 )t on (such a nio 
 
 ion of adjonrni 
 
 ^•oukl be the p 
 [a decision to-i 
 ike a great de 
 ournment unt! 
 
 I 
 
 !1 
 
 ;(. 
 
 ) 
 
46 
 
 Ml*. Macdoi(iai,l haviiKj: liol i)osses>i(.ii of the j^apor, road it i(. „ 
 mcetinu' in a loud viiicc as t'ollo\v?s: — ,JU ^ 
 
 '■' H. k A. SaiiiKhis, WliolcsiUr JowdKis'. Gd St. Jaiir's St., ftS t 
 
 " MoNTUEAL, 7tli December, !«: iked 
 '' Memoraii hini.'' On ( 
 
 1. The stock of r,. & P. House in 'I'ornnto, tolic punliasfd in tin- nanicnf .\abilil 
 & Co., at Mr. A. Sauu(U'r.s' discivtion. ■_'. Whatever pricf is paid shall De sati^f, ^^ 
 to the Bank. ;!. Mr. McCrark( n to liavc authority to cash ch((iiU' of AschiT > -^ 
 rfi)rcscntinir I'l ]>cr cent, anioimt of purchase, on Tuesday r-ext, and likcwi- lued 
 further lu per cent, vu taking delivery of stotk to accord with terms of .sale (ou ibilit 
 (■ash), balance of pi^riliase to be settled by notes, if endorsed by A, Saunders, i -y^^ 
 to be responsilib' for said endorsation, contingent upon Saunders handjn- ^jufg^ 
 mortgage (ui stock, reserving his own claim out of the L. & P. House lii >: , 
 Saunders to hand over the amount r( alised from estate of ids claim to the Bank. ' "** 
 purcliase of tlie stctck includes leasi' of premises to June 1st, next, by payiii- Spon 
 from time of possession of original ligure, The inten'St of the eighteen yea:>ent I 
 ■ from Junt; 1st, to be purchased, like tln' stock, at Mr. Saunders' discretion, i mi 
 Ascher, or let go, as he niav think best, irrespective of the stock. C'opyoftli: 
 to Mr. McCracken. (Sec Letter Book.)" ^^^^ 
 
 ^ nor 
 
 Ml'. Saunder.s — Now, gciitlciiieii, you liavc lioanl tlii.s leitoi' d at 
 and I ask you what does \[ mean ? tinecl 
 
 Mr. TnoMi'soN — It moans that Mr. Aschof acquired tliis projicrair. 
 the expense ol' the IJanic. re w 
 
 A Voice — Tlie truth is cominn; oui. An excited shareholder ))ihthe J 
 forward one of the lady sharoh()lders, a modest lookino; little woiiirecto' 
 widow's weeds — Look at this lady. Mr. Saunders, and blush I ;enth 
 woman, whose money you have tilched ! You are a bank directoi j^' 
 you? Well, if I had seen you, you never would have had ni}' \^^*u. 
 After all, Mr. Saunj.lers. you are not to blame, but mo for electing, -g 
 u man for our diroctoi- ! The confusion at this point became indescri! j^^ . 
 and Ml-. Saundei's attempted to explain that the l)ank ^vouli,y^L 
 <jventually lose anything l)y iho Aschor-Josoph Toronto ti-ansacticjii jr 
 
 Mr. Sauxdeks — AVhen the liabilities arc paid, the Bank will "n^]^ ^^ 
 
 hy this morto-age 
 
 The nu")tion of adjoui'ument was thou put ami cari'ied. 
 
 THE ADJOURNED MEETING. 
 
 Th 
 Mr 
 
 pons 
 uffei 
 
 Mr 
 Mil 
 
 iside 
 Ui 
 
 Mr. Henry Lyman wished to say a few words about Ascher >'nion 
 According as he understood it, their liabilities to the Bank Avore ' Mi 
 •000. This was a very important ([uestion, and he believed moicJ a fi 
 should have been given to it. At all events, it was liardly exh^i'se 
 the previous evenino". On that occasion the Chairman had state ;ut 3/ 
 the statement eo'*.' itc given in avery few words, and that he coui balF 
 the information in throe minutes, and then he stated that these advinstj 
 were made at the instance of Mr. A. Saunders, of the firm of 11 A 
 Saunders, that notes were passed and endor.sed by Saunders, an^te 
 out of these notes he was first to bo paid artd e.scape j-'i Mabilities. Mij 
 
* 
 
 i])ur, roaa it i( ^jtj^^ Chairman — F.vory sirii^lc wonl uttered by Mi", Lyman, it' he- 
 ill Allow me to say so, is a mistake. The (jnestioii ^Mi-. Ck\i^hoi'M uj^ked 
 as not the question Mr. Lyman put into his hands. Mi*. Cleghoi-n 
 
 1 Dorembcr, l^T (kecl a question alujut a |)artieuhir transaction, and I answered the ques- 
 on exactlv as .Mi-. Cle^fhorn asked it. He did not ask the i^eneral 
 
 in tlic niiiiK' of .\ ability oC Asclici' vV Co.. hut of Aselier, Laurie li Co. 
 
 \'''!-l'f'AsX'f- Mr. Li-.MAN liuid that it did not exphiin the whole east", and eon- 
 ''\t\uul lilxcwi^ lued to ask questions )'es|ieetiniij some S40.<MM) of .Messi's. Aseher's 
 tcims of .sak- (on ibiiity. ])ayahh' by notes, whieli Mr. Saunders endorsed, and for which 
 |)y A. SiuuukTs. « wai* to I'Cf'civc a chattel moi'tijai^'c tor his own security. All that he 
 un(l<is liaiuUii- tinted was Jiritislj fair play, lie b.a<! broui;"ht up the subject aijain 
 J. & P. Houst; liiv^^^ ^j^^^ impression thai Sir Francis had cliarnrd that lientleman with 
 lann o i*- ' ■■ spooBibility for the who'e of Ascher cV' Co.'s account, and upon a .state- 
 iiL" li'ditceu villi- BDt made jicrsonally to nim liy 31i'. Saunders, 
 dors' 
 tocU. 
 
 disorctioii, I ^YiQ Chairman said the only jioint he wished to correct in ^[r. 
 
 -t'P> o "rman's statement was that this jMirchase way not made at the instiga- 
 
 n of the Bank, It was made without, the knowledge of the Directoi's 
 
 ird this letter d at the instigation of Mr. Saundert*, who received his own claim in 
 
 nnection witli the TiOndon and ]*aris iiousc, and let the Bank in for the 
 
 re<l this pro]i' I'aii'. Another point he wished to refer to : A large quantity of good-> 
 
 ire warehoused with h'urniss, and afterwards transferred t'> till orders 
 
 shareholder ]>ibthe London and Paris house, and that \j'ithout the knowledge of the 
 
 Iving little woinrecto'rs. The paper referred to l»y ,\lr. Lyman was found quite 
 
 ; and blush I lently. He had stated frankly and fully all he knew on the subject. 
 
 a bank directui Mj., x.y;vi,^x was not prepared to accej)t the assertion of the Board 
 
 have had my 'it they knew nothing at all about this transaction. Why, he asked, did 
 
 ne tor electing , gg^jjj. ,nj^ know all about it, and why dkl the President not know 
 
 )ecame nKiescn ]^Q^^ makinu- any assumed charge of cul]»abilily .? "Let justice be done 
 
 a) bank wouk.ugh the skies sliould fall." 
 
 )nto transaction Mr. C-assils understood that Saunders was not on the Board of the 
 he Bank will ^\^>r\k sit the time? 
 
 The Chairman — No. 
 arried. Mr. Cassil.s — He was a shrewd man. lie was not a Dii-ector, had no 
 
 ponsibility. He made a bargain, and those who allowed him to make 
 uffered. * 
 
 Mr. Lvman said it was a matter of very great importance to many. 
 
 Miss MAri)(iri,(iAi,L a'^kcd Mr. Lyman it" he considered that the 
 j^J^G. jsident. Sir Francis Hincks. had ha<l faii- ])lay the day before ? 
 
 Mr. Lyman did not seetliat this was the time and place to express an 
 s about Aschei- >nion. 
 
 the Bank were " Mibs MAcnoiKiAM, said Mv. Lyman had known her from a child. lie 
 • believed nioi*' a friend of her late father, and she was very much sui'prised at the 
 ^vas hardly cxIk'I'S© he had taken. He had said that morning that he knew very little 
 rman had stati" *it Mr. Saunders. He did not talk that way the previous day during 
 •ind that ho c(M1 balloting, when he was att(!inpting to intluenee the kulies to vote 
 h1 that these a' bi'^st '^i'' I'l'ancis Hincks. (Sensation.) 
 
 P the firm of H A Laky also asked whether D\\ Kingston was in a position to vin- 
 by Saunders, an^te A^^.|,cr & Co. ? 
 110 r'i 'labilities. Mr. Lyman proceeded to address the ladies, and was interrupted by 
 
48 
 
 i 
 
 Rev. Ml". Grken, who advised him to address iho ehair and tlnis 
 avoid eoiifusion. 
 
 Mr. Lv.iAN deehired that ho did not intliience the vote, and thai ii 
 was not his nhiee to eensiire his fellow-shareholdei's in reference to tiuii 
 vote. lie knew hut little about Mv. Saunders at the time. 
 
 A Lady — Well, you should have stated so then. 
 
 The Chairman then jtut the following motion : 
 
 OD ftCC 
 
 come 
 
 M 
 
 Moved by Mrs. IIollis, seconded by Miss Macdou<»aij>, that owini^'to gjv^ 
 lo the enormous losses made by the Baid-c luider the late nianagemont.iQane. 
 entailing sutl'oring on so many families thi-ough the counti-y, this moetiii;;' ^ 
 calls upon the late Directors to make good a sumot !i:4r(»(),000, being eq\i;il 
 to ten per cent, upon the original capital of the B.mk, in order that -(, ^,j 
 much of the loss through their mismanagement may be returned to tin y 
 
 unfortunate shareholders. — Carried amid laughtei- and applause. Bank 
 
 Mr. IIexky Lyma.v, jocularly, asked the Directors to hand over tlnindlu 
 money. in St. 
 
 The Chairman asked all those present, who were not stockholders I'icton 
 to retire. mittetl 
 
 Mr. Cassils dii'ected attention to the statement of assets aml^he Gc 
 liabilities. It appeared to liim that omissions had been made. It a})peai- o Sp ' 
 ed to him thac there were l»ilU discounted which did not appear in thr^ ior 
 atl'airs of the Bank. They wee entirely ignoi-ed, and were a lai^v^niinei 
 liability. ' ' 
 
 Ml'. Joseph said that full allowance had been made for any los> 
 these notes. 
 
 The CHAiRMAN—Fully. i 
 
 Mr. Ca.ssils pi'esse<l Ids question. 
 
 Mr. BcRNETT asked why no notice of them was taken in the (jrovcni-hQ IJ^* 
 mcnt Returns, and at what time the i-ediscounting began ? eady 
 
 Sir Francis IIincks said ho could not answer all manner of enquirie^ j ^T^^ 
 at once ; but would rojily by simply giving the tacts, which were these :— r^^' 
 The total amount of notes rediscountcd with other banks was S622,0U(l, ^^ 
 
 Direct 
 oiiiieetii 
 
 ■ei ^nt 
 
 ordi 
 
 n 
 
 which was disiribuLed between tive banks which there was no need fo 
 naming. In addition there was a liability ot ST3,00t), which was obtaincM , 
 under other circumstances, being the unKumts I'cceived by tive bankv ".' 
 which had taken the business of the agencies that had been wound u]i, , 
 and for which pajter the Bank had been endorser. The fulk>st investig:i-®P^'®m 
 tion had been made into all this paper, and the fullest allowance had beeiu , 
 made tor bad debts. This system of rediscounting had been going on *^ * 
 since December last, when a run had been begun on'the JBelleville Branch. m 
 This was duly reported in the ne\vs|)apers, and immediately a run w;b. 
 begun on other l>!'anche.s and continued to the time the doors were closed, !^"^\i 
 On the ;>lst December, 1878, the liabilities were as follows :— Deposit >.[^'^^^'' 
 S4,818,713 ; cireulation, $I,282,(;."iG ; total, $(>,10l,::iG9. On the 31st oi ^ 
 Mareh the liabilities wore :— Deposits, ^l,338,24i> ; circulation, S1,0()4,T81I: . f 
 total, 32,413,038, or a decrease in i-ound uumbers of $-4,100,000. (Cheers./ ^. 
 Ho was bound to say the rediscount began some time ago, and deposit V 
 receipts were given for the amounts which appeared as deposits, whilo f. 
 the paper was entered as a liability. 
 
49 
 
 „. . ...1 ,1 ..,Mi'. Cas-«ii,-; — I iu'ii voii iii;i\- liiivo som»'t IniiLC l*^ rvtuin to tlu' bmikh 
 
 lair and IIhk .. , ,. ■ ,• , => 
 
 on account ol tlii'-i' I'cui.-comil*-' I iiuU's ? 
 
 , 1 4i . • i, Mr. .InsKi'i! riici'f is ST'>,<'<>0 rcsc'i'vo toi" \h\^ puriiost'. 
 
 [t*. and that ii ' xf r %- n .• i i . .i 'Hi i 
 
 . .1 3ir. JiV.MAN- — ^ III will find out wli. It the anioiiiits will \>v whoii \'uiJ 
 
 M'ence to tli;it . 
 
 come to pay tln-iii. 
 
 Mr. Ht.KNKTT — Was any |»a|)(ji- rcdisfoiinlcil bclbix' Decenihcr last? 
 
 The ClIAlllMAN — No. 
 
 Ml'. S. J*Ki>i,\ii — 'Jii an o(.'('j(>i(Mi when yoii. Sir, sectn nioi'c ijisjiosed * 
 
 I., tliat owin^fo give iiili»i-inatio!i than usual. I a^k you lo irixc u.> an oiiMine of eeiiain 
 
 managem(Mit,iQai)g. I nee I n'>' iiH-ntion them, hm'all lh»> < ity kiiow> wjiat 1 nu-an. 
 
 r, this meet i Hi;- yir Framis llisrics could not an.^w.T .-o general a nue>tii.]i 
 
 )0, boin_i>- equal ''.,|. 'riiiviur.i. — I would lik<- to lueiiiion ;i nann". if I am in ordei-. 
 
 order that s,, j,lr. I^ki-i, \t;— Say Aschei- & Co. tii>l. 
 
 •eturnod to till Sir Fi{AN«-is IIincks said it wa> veiy dillicult to ascertain how ilie 
 
 ihiuse. Bank hud become involved in this aieoimi. 'J'iie firm was a vei-y old one, 
 
 hand over tln^nd had a very exten-ive lM;>iiK ss. sonic ol'theii" ])ajier lieinir from firms 
 
 in St. .Joiin<. Newt;)unillaiid ; ( 'haiio'tidown. I*. K. I. ; Jl.dilii.x. l''i-ede- 
 
 stockliolders I'icton, Toronto. Hamilton, Kinti-ton, and other cities. 'I'he |i:i])er >ub- 
 
 mitted was su|)|>oscd to be in the oidinary routine. Bui, indi»rlunately 
 
 of assets anil^he Cxeneral Mana^-er had l-oeii \, iui'tMJ.as he states, amoiii:;st otiie.- things 
 
 ide. It ai)iK'ai o g^ i"t*' irrt-guhir transactions with that firm. Momy had been advajic- 
 
 a|)pear in tlu^tlfor a lar<xe amount <>n warehouse rereipt^ wilhoul the gooils beini;"ex- 
 
 wcrc a hii'U'^™^'^^'-'' '""' '^'"-■y ''*"' been allowed \n overdraw their aei-ount. 'I'iie 
 
 Directoi's expe;';e<l to have a staiement of the creditoi-s made at e\ery 
 
 br any loss duiieetinii". but the lial)ilities wtM-e not correctly stated. Tl e l)ireetors had 
 
 'C' ^ntly found out tluit the oiU"e:- of the I5ank who ir^'pai-cd this state- 
 
 lor tiic Directors had leceived sj)ecial instructions not to post 
 
 A' ^ Co. s iitiiiilitics from the oi'dinary book, bv the way. I<nown as 
 
 in the (joven; l^Q liability leda-er, which le«lger u'a>, at every meeiinL:; of the Hoar*!, 
 
 eady fo!" examination. The ledger under tiie name of Ascher & Co. 
 
 I r> • ■ howed an indebtetlne.>s vcr\- mucli le>s than (.'ne could actually conceive. 
 
 lerot enquirRNj^ learned that the clerk, M..ri;-an, had orders not to put the liabilities 
 
 »,. > . iw>,. i'Ascher A: Co. in tlii>book. aiid thai Mr. Kennv infoi med iVlory;an what 
 was $622, 000. 
 
 These amoiuits \vere entered ac- 
 
 is no nceu^ *", ordinii' to Mr. JJennv's statement, and tiot in accordance with the direct 
 I was obtain CI 1 i . ,, i, i * 
 , ^ , , rder ot the i5oai'd, 
 
 ijy nve uanio. a Siiai'.kiioi.i.ek — What were ihe liabilities of Messrs. A^chci- c^ Co. 
 eon wM)und uji. 
 
 ,, . . ,. ' epre.ser»ied ot .■* 
 dlest invcstiua- ^ mi /i 
 
 wancc had been 
 
 Xl;e ('riAimiA.x — On April o'rd. in tiiis ledger, the anioutit due the 
 
 , . Jank bv tliis Hrm was ])ut down as iplS'-'.OOO. 
 
 been going on ^ SiiAitEiioi.i-Ka— And what were the actual figures al that date ? 
 
 Ilj3ville Branch. The Chaikman -.^530,000. 1 am told that J am resi.on.^ible lor the 
 
 eiy a run wa^,^^^^..^l \|.^,,.,„.^.j.'^ .^ct,;. },„{ \ nvwr inrlerslood that 1 v^•as to do the 
 
 *''^ ^^^'■^^'^^!-'"'reneral Manau'cr's business. 1 wa-^ noi informed (;f the particulai-s of 
 
 ,ws :_Deposit>,^^ Lon.lon and Paris house transfer. 
 
 . i. '. ..'if .1!' A Sii.viu:noM>ER— Who induced Mr. Kennv lo make liie advance in 
 
 ion,$10b4,Tb!l:^^ttransaciion? 
 
 SOOO. (theers.i gj^. Fka.x. is IIlncks— ! always understood it was Mr. Saunders. 
 
 ^•o, and deposii ^ Shakkuoi.dkk— Is it tiaie' that shorllv afier the la>t nieeling it 
 
 deposits, while. ^^ ^^^^^^^ ^^^^^ ^j^.^^ y^^. j^^.,^„^. ^^..^^ iUl-itying the books? 
 
t ..' 
 
 50 
 
 \4 'fi 
 
 m 
 
 
 
 Sir Francis ITincks— It wns after the annual meeting that the error 
 was found out. He did not like to use so harsh a term as falsify. He 
 had regai'ded it as a question whether the Looks at the head office of a 
 bank should be inspected by the ordinary inspectors. There never was 
 an irspection of the City Bank. If ])ertoct candour was exercised by a 
 General Manager the IHrectors would knoAv everything. He ought to 
 be a person inwhom they could place implicit contidence. 
 
 A SiiAREiioLi.EK— If Mr. Kt'nny falsified the books, why did tlu 
 Directors not prevent his leaving the country? 
 
 The Chairman — I nevei' said a liarsh w^ord against Mi-. I^enn}', ami 
 for this reason, although he feels very strongly against me, I have nol 
 been able to trace a jiersonal motive in anything that he did. 
 
 A Lady — For wlnoe benetit did he do it thei> ? It must have been 
 for some one's benetit. ('A|)phiuse. and eries of'' Oi'dei'."') 
 
 The CiiAiR.MA.N — 1 think he was led to the coui'se he pursued iy 
 very great nervousness, very gi'cat timiditv. He imau'lned if he hi 
 
 down these tiims the Bank would be luine*!. (Ci'ies of " Ali, that's it. 
 
 "We all know how exeerdingly nervous ho was, (Sensation 
 
 •) I 
 
 wa^' 
 
 asked why be was allowed to esca[ie. It was tor this simple reasf)n [ 
 took lei!;al advice, and leiirned that there wiis noihiiiii- in the statement- 
 Bubmitted to the Boaid on wbicb he could be ci-iminjiliy prosecuted. 
 
 A STiAiiKiioi.DKR — Is it noi ej'iminal to I'aUity books tind make awjiy 
 with thousan<ls ot dollars ? 
 
 Mr. Henhv Lyman — Sir Francis, I wi^h to ;isk you whether it was 
 not competent for you to go liehind the liabilities ledger and see how far 
 it compared with the general le(li;ei' ] 
 
 Sii- Francis Hincks — Certainly, it wis. j have admitted that. 
 
 Mr Hknuy liVMAN— Is ihere any loss accruing through the purchase 
 of the Joseph estate in Toi'oido ? 
 
 Sir Ku.ANcis Hincks — I caunot say at present. I am not prepared 
 to say the Baidc is lesjjonsiblc lor anyihing. 
 
 Mr. Henry Lyman — Then if would apjiear that no very lai'ge loss 
 has accrued fi'(un iliat. Have ^.^i^o.lKKl acciued against these persons in 
 the Baid< since .June la>t. -luce Saunders became a mend cr of the Board'.' 
 
 Sir Fr.ancis Linixs — No responsibility rested with Mr. Saunders 
 since he became a Director. 
 
 Mr. Henry Lv.\iAN--,Mr. Siiundci^ had a •lingular opinion about the 
 solvency of this tiim. Thcic is not ano;hcr man in .Montreal would 
 give them credit lor S.'J<t(). I can tcil the President -t a firm doin^j,' busi- 
 ness in .Manitoba an<l elsewhere whcuotild not obtain ciedit for oiie-lenth 
 of the anu.uiit. 
 
 Sir Khancis Hincks — 1 did not say that Mr. Siuindeis iccommenilcd 
 a credit ; i merely .said ihat .Mi- iJenny had stated tJiat .Mr. Saunders had 
 expressed his lielief in the ^(ilvency of the tiiia. 
 
 A SnARi:iioi,i»Ki<— di' Mr. Lyman appeared last ni-ht as the advocate 
 of Mr. SauiKiers lie would never have been elected. (Hear, hear.) 
 
 Another Siiarkholdkr— He Widked hcune with him last nioht. and 
 that hits changed hbs policy. 
 
 Mr. Gkant thought it woidd belter meet the wishes of the share- 
 holdeis if tluy chose live or six gentlemen w. whom they had contidence 
 
51 
 
 to interview the Directors and inform the .shareholders of the j-e8ults, 
 cither at a subsequent nieelin-- or tiirou->-h the newspajiei's. 
 
 A SHAREEioLnEii — No more hole-und-coi-ner meetinos. I trusted you 
 hist night, hut J wouldn't this mornin.u". (Laughter and applause.) 
 
 Another Siiareik.ldek— No. no, Why alter this; 1 would not trust 
 my own brother. 
 
 Mr. Pedlar— Do I not unlerstand that Mi-. Saumlers was the ))arty 
 that introduced tlicni ^ 
 
 The Chairman— 1 merely said that Mr. Kenny stated that Mr. 
 Saunders had stated he had a great <leal of contideucc in them, and as a 
 firm they wore perfectly gOt)d. 
 
 Mr. ('le(JH()Rn asked Mr Lyman if Mr. Saumlers. who had shown yo 
 much interest in the attairs of Ascher cV Co , acted a^ <lelegate from the 
 Dank at the general meeting of ci'cditors undei' the insolvent Act, and 
 Imw Messrs. Kortosk and Saunders Wvire elected insjiectors ot' the Bank, 
 and if each of them were creditors to the estate? if so, the ti-ansuction 
 was a very unusual one to him. 
 
 Mr. Ly'.man knew nothing of it, and must certainly protest against 
 being ])laced ill such a position. (Cheers and laughter.) lie was not 
 desii-(»us of screening any one, least of all ]\[r. Saundei's, but be would 
 not crucify him because he was a Jew. 
 
 Several Siiareiioldeus — You brought it on yourself. 
 A Lady — Wlio would yon ci-ucity, then } 
 Another Lai>y — AVe honour the Jews more than you do. 
 Another Laky — You would cm ify both Jew and Chri>lian. 
 A Third — We iuive been ci'ucitie 1 enough, I am sure. 
 Sir Fraxcis Hincks exj)lained that there was a good deal of com- 
 •j)licalion about tins matter. During the absence of Mr. Saunders from 
 J\[onti-eal nothing had been said about the insohency. During the ab- 
 sence of the Directors Mr. Kortosk had taken possession of a piece of 
 ])aper, which they liad I'cas.ui to believe Mr. Saunders had seen before. 
 lie might observe that Mr. .Saunders had been ])laced specially in charge 
 ol' the Ascher estate, and was to devote his attention to it, During his 
 absence temporarily for a few days it came to the knrvvledge of the 
 Dii'ectors that large (juantilies of jiackages of goods whijn had been left 
 as s]»ecial security to the Bank had gone away to certain jiersons, many 
 others to Mr. Saundei's. and others to Messi-s. Korto>k and Sternberg. 
 (Great c.vciteinenl.) He could not go all (»ver the affair, but suttiee it to 
 sav that this was eiuMiirh ihv the Directors who unanimously <letermined 
 to put the estate into insolvency They determined, in t'lejr wisdom, 
 t at they c;)ukl not do better than ajipoint Mr. P. S. Poss. assignee, but 
 (iie did not wish to utter a single word of fault-tinding against any 
 gentleman) great ditticulty occurred wiih regard to who should get pos- 
 Hossion of tlie estate. After a ijood deal of ajjplication an understanding 
 was arrived at by which the joint assignees agreed to abandon tneir 
 claims to the oflice, and some understanding was arrived at by which 
 Mr. Shepherd and M'-. Poss came to an understanding. Mr. Saunders 
 was not specially directed by the Bank to rejiiesent it. 
 
 Colonel Turn hull — Thei'c was among t!ic assets a considerable sum 
 as real estate, and aiu^ther large sum as notes ovei'due. He had heard some 
 
i 
 
 
 very ugly rumours on the sticot, and tlion^-lit il would not injure their 
 interests to ask aljout one, the aeoount of O'Ki-ien. When was this tir>i 
 opened ? Under what circumstances, and who was the endoi-scr of tlic 
 first papei-, and was it paid on maturity? The rumour wan that the 
 Bank will sustain a loss of $50,(t00 on this account. 
 
 The (JiiAiHMAN said he would give a hist-M-y of the account so fai- a> 
 he knew. It so I .ippened that it was opened durii.g his absence in 
 England. The first appeaivd to have been in 1875, and commeni'od Iiy 
 discounting a note of eleven thousand dollars. It Avas laid before th, 
 Directors, who utideistood its nature, and no difHculties Avei'e rai jd. Mr, 
 Renny allowed Mr. O'lhien ti) di-aw a cheque on the Bank to pay tlii> 
 note, and allf)wed him to overdraw his account from time to tinu', at 
 the same time taking wliat appeared se(;urity for it. The whole trails, 
 action was ii-regular. An attempt was made to put Mr. O'Brien iiit' 
 insolvency, but he maintained he was worth a tnillion. Mr. lieniiyi 
 also had "an insuraiuc on his life tor $100,000, and would maintain thai 
 he left the account in first-class condition. lie believed in this case hi>| 
 motive was honest. He did it because the Baidv was getting ten per 
 cent. 
 
 A Lady — We have nothing to do with his motives — what about hh 
 actions? (Order, order.) 
 
 Mr. John (uiant said an attack on him was intended, lie was iluj 
 party who endorsed the note, and he di<l it on the understanding he woiiM 
 not be held i-esponsible. He had taken a mortgage in trust for iIk 
 Bank, and was not roponsible in any way tor the note. 
 
 Colonel Turxblli- — This §ll,000 note, endorsed l>y Mr. Grant, i« 
 the first opening of the account. When this matures he has o\erdru\vi.j 
 $33,000. When this note becomes due.eniiorsod by one of the Director- 
 instead of the note being ]U'oteste*l, he is allowed to overdraw to pay tlii' 
 note. The Director is ndieved by the fui'ther overdi'awing. 1 am gli: 
 to have this brougl.t out before the public. If Mr. (irunt had any privai.,,^ 
 arrangement by which he was not to be held liable it maices the mattei" 
 still worse. If it was done without the ki Avledge of the Directors [[']■ 
 worse still. 
 
 Mr. (tR.vnt said every uentleman knew that 
 transacted every da}-. 
 
 A SnAREHoLnEft — Is it then strictly legal ? 
 
 Another .Shahehol1)ER said the Banking Act 
 advance of money on real estate as collateral. 
 
 Mr. Grant — I held it as I)irector's security. 
 
 A Lady — And what security do the Directors give the shareholdii> 
 
 Mr. Grant — I was a shareholder at tiie time. 
 
 The CiL\iRM.vN — There was (;ii'y one no!e of 811,000 came before li. 
 Directors. He was not certain that it wa> 
 
 uich matters well 
 
 did not allow 
 
 Sii 
 
 FOHN H 
 
 Ml 
 
 hu y ab 
 
 »e had 
 
 [einark- 
 
 |apacit) 
 
 Jests of 
 jielie. 
 iow far 
 |e"flcni 
 \v or f 
 Mr 
 [lice iic 
 Ite .M; 
 
 in l' 
 
 lie ovei'-diai 
 
 might have been soonei'. He hiid little doubt the seciii-iiy was suffiein; 
 The inegularity was this: Mi-. Grant did noi know anytliing al^ 
 O'Brien, but he was induced by Kenny to do it. 
 
 Several gpiitlejuen enquired as to tlu' value ol the real estate, an; 
 amid excitement and cries of" Mount lioyal Vale "' and " Victoria Gin' 
 
 'J'he (;n.\iRM.\N explained that .Mount* Uoval Vale was not the wli' 
 
 .M 
 
 Jiave 
 Pste.l. 
 
 Ml 
 
 |on!d 
 '>• coi| 
 ■ M 
 )ut $i 
 
 hid it 
 
53 
 
 lire llieii' 
 
 3r of tlif 
 i that the 
 
 , so fjir iix 
 bsence in 
 icnced liy 
 (of'ove t!n 
 i-jd. -Mv, 
 ) pay thi- 
 ) tinu'. ui 
 ole traii^- 
 tirien iiit' 
 [v. Ecniiy 
 111 lain I ha! 
 is ease h;« 
 ng ten ik\ 
 
 t aV)OUt hi' 
 
 [Ic was iJK'j 
 i<>; he wouM 
 ist tor lliij 
 
 I', Grant, 
 
 o'serdruwi] 
 
 e Director^ 
 to pay till" 
 1 am ghiiij 
 
 any privuKl 
 the inalto: 
 
 reetors ili-| 
 
 alters woij 
 
 i)t allow 
 
 larehohlci'^ 
 
 \o betbro U. 
 ()ver-<lii'i''!l 
 as suthci''!' 
 •thing ill" 
 
 1 estate, an 
 ictoriii <'i'.^ 
 lot the wii' 
 
 <)f Mr. O'Brien's property. It was not entirely a bad debt. Cerltiinly a 
 large amoiir\t had been })'it down as bad, and he mu-t adniil that the 
 whole transaction was irregular, Mr. Renny in his anxiety for the pros- 
 Iperity of the Bank wishing to get ten per cent, on real estate indirectly 
 as he could not do it directly. Afterwartis he tound out this was not a 
 pi'oper proceeding, and he went on making advances by over-drafts. 
 
 Colonel Tltknbi'LL — Before you go, sir, may f ask nhat is tin.- loss oq 
 lO'Bnen's account ? 
 
 Sir Francis IIincks — §75,00!). Jfe explained that ho had some 
 Ipi-essing husiness outside, and askeil leave to vacate his scat for an hour 
 lor so in favour of iMr. Jlankin. 
 
 Colonel Ttrnbull — One word more. I)i<l Mr. (rrant do it with the 
 Iknowledge of the Directors, or was it an ordinary' discount note ? If it 
 Iwas done with the knowledge of t'lc Directors the Bank forteitcd its 
 Icharter. 
 
 Mr. Gi^ANT — I simply endorse 1 it. and have a Ictlci'I received at the 
 lime, which I can pro<luce. » 
 
 The CiiAiRMAV — I feel morally certain that tln^ B )ard knew nothing 
 hioi'e aI)out it than that it was a note made bv Mi*. O'Brien and endorsed 
 )y Mr. (ri-ant. 
 
 Colonel Ti:rnbi;li, — Then all I have to say is tha! \ am glad I placod 
 Mr. (irtuit's name yestenhiy on the list of those 1 lIiouu:ht shijuld resign. 
 >hould like to know liow mtich Mr. Grant owes the Jiank. 
 Mr. Grvnt (promptly)— SIG.OOO. 
 
 A SnAREHornER — How much has the Bank received since its sus- 
 3ension, and what has been done with it ? 
 
 The Chairman — It is Impossible to say. It is lying there 
 Sir Francis Hincks now vuca'ed the chair, which was taken by Mr. 
 foHN Rankin. 
 
 Mr. .). Crawfoi^!) said Sir Francis indicated that he had -ome deli- 
 
 bcy about moving, and that there was a doubt on his mind as t ) whether 
 
 |o had the right to intei'fere. This led him to make a t'e.v geueral 
 
 leinarks. The position of the Direetors im))lii'il that they had both the 
 
 ipacity t ) adtninistor and the opportunity and time to watch the inte- 
 
 3>its of the sbarehohlers. They were not ])lace 1 thei'c as a sujitue in a 
 
 jiche. ^Jo defence could be offered foi- the aets of the rnanageaient ; but 
 
 low far they niiu'ht bo extenuated li}' a want of sujiervision hy the Board 
 
 jittlemeti cmld form their own comhi^ions. Dii-ectors ha 1 no right to 
 
 IV or sell for liettering average's. 
 
 Mr. Bankin cxplaine(l thai he had never scdd a cent of his stock 
 Ince jie ]»ui'ciiased. lie had invented §IO.(M)(l. and wa:- iiuUne^l by the 
 111' Managei' lo increase his liability in order to sustain tlu- Bank. 
 
 .^Ii'. S.NownoN — I ha\e a-'k'ed foi-a -tatement of 31r. Beatlic's account, 
 jliavt' been informed on th<' -treet that ST."). (KM) n\' lii>- jr.uier was ])ro- 
 Isted. and that atter thai he I'eeeived .S'Jl.OiMl from the Bank. 
 
 Mr. BvvKiN said thai ili!-> had been put very tnu(di Inwer than it 
 >on!d hafc be» n. and that Mr. Beattie would not get his estate again if 
 lev could Indp it. 
 
 •Mr, .b)-;Ki'ii said it hil been currently rejiorted thai thej-e w -re 
 kout :*;{'MI.(Mi(> /^oNi" and overdue accounts, and aske I if it were so iiow 
 »nld it be exjdained. 
 
 
rr, ; 
 
 54 
 
 Mr. Plimsoll said that Mr. Louhoii, one of the tellers, had a large 
 amount of bons, which he was savin«,' unknown to the Directors. Being 
 asked whose bons these were, he re})iie(i $68,000 were of Ascher & Co., 
 $47,000 of Beattie, $25,000 of S. Davis, and several of Fish, Shepherd it 
 
 Co. 
 
 At this x^oint the meeting was interrupted by a lady charging Mr. 
 Wethay, the Secretary, with pi-esuniing to address her. 
 
 Order being restored, 
 
 Mr. JosEi'ira.sked whether a regular system was pursued of countin:: 
 
 the cash. 
 
 Mr, Wethay replied that the cash was counted by live officers of 
 the Bank, and occupied several hours. He, with Mr. ('lark, had gone 
 through the casli wluui those bo7is were there, and ]Mr. Clark had refuso-i 
 to sign them. To his kno\vlc<lge the Directors had counted the Ciish 
 twice^ — the tirst time about eighteen months ago, and the last ab.m: 
 seven months ago. 
 
 Mr. .JosEi'ii— Did you not tind it strange to see §300.000 in bons y 
 
 Mr. Wethay i-eplicd that he was subject to tiie Manager, wiio ro- 
 lieved him of all responsibility. 
 
 Mr. Grant stated th:U when the directoi's counti'<l the cash, tlici 
 w».reoidy a few bon.s of about .'51.100. and nothing at all irregulai-. 
 
 Mrs. .Holms said the management had been most scandalous, iuv 
 ©very one of the directors was to blame. 
 
 D. was moved bv ^Ir. C. Ilsly. seconded by Miss Macdouoai.i. 
 ''That Messrs. T. W.'Kitchie, (^C, Col. Turnbull and AM. Hagar be , 
 Committee, to dratt a peiition to the Government on beli;dl Of the shnif 
 
 "- — ' ' I -.... — .- 
 
 holdei's of this l)ank, for an immediate investigation as to the coi'ivctin 
 
 sent to 
 
 Di 
 
 of the monihU' reliirns or statements sent to the Government by i 
 Directoi's; al>o foi' the arrest jind punishment of the otticei's, for all fill- 
 statements made by the directors iind management of the bank."' 
 
 The motion was put and passed amid givat applause. 
 
 Mr. Foley ^aid it might be inte-resting to leai'n something concei! 
 ing the account ot William Conlson, grain merchant. 
 
 Ml'. Kankin explained that the loss o\i a shi])mejit of grain to Live 
 jtool, by s' .'ating, had been between 160.000 and >i7(».OO0. and the b;u 
 lost to the extent of s.'i5.oo(i. 
 
 A YoM'E — ^^hy was the lorn not insured .'' 
 
 No answiM' was given to tlii< (piestion. 
 
 Mr. S. Pkdi-ar moved an adjournment for an hour, in order tiiat t: 
 shareholdei's nuuhl obtain, the only consolation under the eireumstaiir' 
 /.t'., that of knowinu' bow >ome of tlieir money went. He was aUo ' 
 sirous that the meeting should clo^e with Sir Francis in the chair 
 
 time 
 far a 
 
 Wet, 
 
 $300 
 tote 
 
 not I. 
 ducti 
 
 try? 
 
 r 
 
 tell a 
 mflke 
 Moi'g 
 Oneo 
 to pla 
 sent f 
 thKth 
 
 hero ? 
 ■ S 
 a man 
 had d( 
 asked 
 in th 
 leave 
 count 
 are n 
 Ever} 
 and if 
 we We 
 
 A 
 Ken 1 1 
 
 A 
 and d 
 Couns 
 
 '} 
 
 Ad jour 1 
 
 U'(| till two 
 
 o elo( 
 
 k. 
 
 books 
 
 that til 
 AKTI'R RPX'KSS. lion? 
 
 Sil 
 Mr. Peiilah aske<l if the bank bad lo-t much by brokers? The ti 
 
 Thel'iiAiuMAN — \ery little, him, a 
 
 A Shareholder said* thev h.'ul lost bv one brokei-. Mr. Dhind. ^^is il 
 
jO 
 
 I ad a large 
 )i-s. Being 
 •her & Co., 
 ■shepherd k 
 
 aririnii" Mr. 
 
 [ of count in L' 
 
 •e officers of 
 k, had gf»i»(,' 
 : liad refnso'i 
 ted the o;ish 
 ic Uist alx)U! 
 
 in bons ? 
 ger, who 10- 
 
 cni^h, tiioi 
 ■guhir. 
 'undalous, iw.' 
 
 MACuoroAir 
 . llagar bt . 
 
 f of the slinvf 
 u' correctiH'> 
 •innent by \\) 
 ^^ for all t:il> 
 bank.' 
 
 thing con eon 
 
 i;i'ain to I>iV' 
 and the l':>i 
 
 order that i 
 circiiinstaiii 
 was al'-c 
 be chair. 
 
 kers ? 
 r. Pvhind. 
 
 A Director — And the only one. It was onlv $5,000. 
 
 A Voice — Are any nf the employe's in tlie bank's pay at the pl•e^ent 
 tixpe, who were aware of the state of things you have informed us of. so 
 fapas Mr. Kenny is concerned? 
 
 The < 'nAiiorAN. in rejdy to vai'ioiis interi-ogators, said tlieie was Mr. 
 "Wethav. Mr. Loumji:. .Mi-. Morgan, Mi'. Kenny and Mr. Piidhani. 
 
 A SuATtKiToLDEK — It is vuj'y strange tiitit liiese bons to the e.xtent of 
 $300. 0(H). ^honld havejain there all these djij's, and no one hail courage 
 to tell the directors. ( hir diiectors have been paid tifieen th(»iisand dol- 
 lai'B a year, and yel tiiey know nothing oi the atlairs ot tlie bank. 1 do 
 not know what tin.' counti-.v is cominu' to. it tliat is to be the wnv of con- 
 ducting business. 
 
 Mi's, llor.i.is a>i<< d wliv Mi'. Moraai. was allowed 'o leave; the co.un- 
 try? He ought io have liet'ii ke|)t here, and be ])resen( at the nieeling. 
 
 The Chairman- said Mr. Morgan had not left the country. He would 
 tell al! ai)oLit .^I(■. Morgan, jdtlioiigh he must confess he did not like to 
 mak(^ sueh sfaTi'ineiits. He continued — There was no doubt that Mr, 
 Morgiin knew a great deal about the transaction. I wanted him hei'e. 
 One or two aeiitleinen — one of whom 1 >ee lefoie me — thought it desirable 
 to plaee a ileteetive U]ion hiin. I did not know upon what ground. I 
 sent for him and he came, when I told him that it was very important 
 thiftt lie should be here, and he jn'omised to remain in Moiitieal. 
 
 Miss MacijoL'<jai,l — Hid you take any security tor his appearance 
 here ? 
 
 Sii' Fra.ncis — No. I could not do that : there must be a charge against 
 a man in ordei- to keep him here. Mr. Morgan claimed that he did as he 
 had done by direction of his superior otticer. When I wrote to him and 
 aeked him vvhy he had broken liis promise, he answered, that he was not 
 in the pay of the Bank', that his wife was ill, and that he was forced to 
 leave on that account. He is not, however, out of the jurisdiction of the 
 country; he is in Peteiboro'. We could not move in the mattei'. Men 
 are not to be put in the penitentiary against the laws of the country. 
 Every man must have ;b trial. Many people think I ought to lie there, 
 and if sent 1 am ready to go. We must tak'e legal counsel, however, and 
 we were not ailvised to <io anything. 
 
 A SiiAUEiroLUER 1 elieved they had ground for action against Mr. 
 Renny tf)r tiil^ilying the bool^s. 
 
 Ano'iukk SiiAREiior.DKH asked the name of the lawyer who advised, 
 and did not believe that the Jlon. Mr. Abbott, if he was the Bank's 
 Couns(d. wi'uld ad\i>e the !>;;nk not to |ii'o>ecute. in face ot'the facts. 
 
 Ml'. Ii.si.y said talsifyinii' lio(>|<.>, was a criminal orteiice. 
 
 Sir FR.VNf'is — 1 do not see that thers was any falsitication ot the 
 books (Laughter, hisses and iioiucal cheers.) 
 
 A SiiAREiioi.DEii — Do J on not call it falsitication of the books to say 
 that there art^ liabilities to the extent of SiiOU.OOO when there are a mil- 
 lion ? (Sensation.) 
 
 Sir Fi{ AN( is — Wi'U. y<iii may call that falsifyir g bo(»J<s: I do not. 
 The truth of the mailer is. .Mr. yioi-gan says he did what .Mr. Renny told 
 him, and Mr. Renny says he j)laced t(M) much contidence in Mr. .Morgan. 
 This 1 know, that I had a >taleinent concerniiiii' the athtirs ot' Messi-s, 
 
5<: 
 
 Ascher 
 
 .^ C. 
 
 to ask ine >?()iik' 
 
 1 Olio day Ml". Aiulvcw JJobertsoii called 
 quesstion alinut. the liabilities in the stateiTie.it. Mr. Morgan 
 
 o. ill mv drawoi", an< 
 
 came to mv otTico arui u 
 
 1 t.skod MK- il»r it. J liave it to liim. and when i sent 
 
 <(.r it two iionrs alterwaids, he replied that it liad been destroyed. ^Loud 
 lauiif.ter and iusses.) That was the tirst suspicion 1 had of Mr. Morgan 
 that all was not right. I saw .Mr. JJenny about it afterwards and he 
 remarked that I was too luird on Mr. ^lorgiin : that he was somewhat 
 
 careless. 
 
 Mrs. Holms — Did Mr. Morgan destroy it '. 
 
 Sir FuANCi.s — lie did. .Mr. Robertson was present when I received 
 
 the nu'ssage. 
 
 Mrs. lIoLi.is — You knew then that he was a guilt\ man, and you let 
 
 him go 1 
 
 A SiiARiiioi,Di:i{ — How long was that before the annual meeting? 
 
 Sir FiiANCLS — That wiis atter thf annual meetirig, and liefoie Mr. 
 Renny went away: 
 
 A SuAREiioLnEii — And yet you said a moment jigo that you could not 
 take proceedings against either ot them for want oftlirect evidence'? 
 
 A Shaiieiioliek asked if all that were set down in the assets were 
 good, 01" included any of the insolvent firms t 
 
 Sir Francis saicl that in eases where there v mc liabilities of $100,- 
 000, and 800,000 were paid, the amount was wij)ed otl' and tin' $40,000 
 ])laced to the good. 
 
 Mr. KoBEKTSoN thought there was no neeessity in turther ]»rolong- 
 ing the meeting, as \u) ]»ractical i-esult could arise therefrom, it wai^ 
 now time for thein to act and do all that they eould with a view to a 
 r !^ sjieed}' i-eali/-iition of assets. He therefore moved, 
 
 "That the I>ireelors of thi> Jiank are hereby itistrueted in the mean- 
 time to proceed to close the affairs of the Bank by voluntary li(|uidation^ 
 without too much sacritice ot as>ets, at as early a period as possible, 
 either under their own suj)ervision. or by a Committee of theii- number, 
 or otherwise as they ^ha!l tleem best; that the Boai-(| is hereby au- 
 thori/A'tl. if they deem it imjiosible for the Bank tw resume operations m 
 general banking, to disjtose of the assets to another bank or banks, and 
 thai repoJ'ts irom time lo time shall be sent to the shareholdei's of the 
 progress made in carrying out the resolution." Carried uiianimouslv. 
 
 The (,'iiAiUMAN said liie motion tully met his \ iews. 
 
 Ml'. FuKNJss was called to explain his traiisaetious with the Hank. 
 ]Ie exjdained that he had einioiseii tiij-ough Mr. Ueiiny, at the ordei- of 
 the Bank, notes for Me-sis. Aseher A: Co. to the extent of some 8200.000 
 to !?:)O0,0tlO. and further thai goods which he held in warehc'iise tor 
 3Iessi's. Aseher. and re])iesenfed by them to be woriii $21-!. 000. were 
 valued at $T,<»00 by his valuer, and J5S,(MI0 by Mr. Hagar toi' the Fxiiik. 
 The CiiAiu.MAN explained that the lowest estimate the Bank jiremise.s 
 
 >o Ijiiildiiiii's at 
 
 in Montreal was worth was $12,000. Then there were a 
 Toronto, Seaforth and Clinton. 
 
 Ml'. Pedlar thanked Sir Fianeis ioi- his frank replies to (pu'stions, 
 
 mnencetnent 
 
 and said that he thought more highly (»f him than at the coi 
 ol' the meetinic. 
 
 Sir Francis thanked Mr. I'edlar. and declaietl the meetiny- closed. 
 
57 
 
 an- 
 
 A CRIMINAL ACTION LNSTITUTED AGAINST THE 
 
 DIRECTORS. 
 
 Criminal action having 1 ecn taken against the Pi'Gsident and Direr- 
 toi'S on the 7ih October, the following' indictment wa.s relurned, endorsed 
 as a "Tiuo Bill": - 
 
 Province of Quebec 
 
 ') I X T H E C ( ) U R T OF i\ U K E X ' S B E X C II 
 
 m, 
 ain 
 
 Ui^irici of Montreal. ) (Crown SiDEj September Term, 1ST9. 
 
 To Wit: 
 
 The Jurors for Our Lady the Queen, upon their oath, 
 })]vsent that belbie and at the time of tlie committing of the oU'ence 
 hereinaftei" mentioned, John Baxter J.'eiiny was the (Jeneral Manager, 
 .and Sir Francis Hincks, liobert James Reekie. John Grant, John Kani> 
 llugl) .Mackay. and William Watson Ji;ilvie. were Directors ot a cert 
 bunk, called '' The Consolidateil Baid< of (/anada.'" and that they, the said 
 John Baxter Benny, Sir Fi-ancis IJincks. JRobert James I'cekie, John 
 (irant, John ]uankin. irun-h Mackav, and William Watson OuMlvie, beimr 
 respectively such (lencral ^fanager and I>iiectoi-s as afoi-esaid, on the 
 sixth day of February, in tiic year of our JjOi'd one thoiis^md eight 
 hundre.l and sevenly-ni'ie, did unlawfully and wilfully make a certain 
 wilfully false and dece}>tive statement as a cei-tairi i-eturn, partly written 
 and partly j»!'intcd, icspecting the atlaii-s of the said ]5ank. whi(di said 
 statement was wilfully false and decev)ti\e in cei'tain material ))articulai's 
 — that is to say, in this, to wit. that it was therein falsely stated that 
 certain lialtilities of the said Ikiidc — to wit. " Olhei' deposits payable on 
 demand" — amounted, on tlie thirty-tirst day of January, in the year of 
 our Lord one thousand eight hundred and seventy-niric. to two million 
 one hundred and eighty thou^and thi'ce huixlrcd and seventy-three 
 <lollar.s and sixty-one cents; and in this, to wit, that it was therein 
 fiilsely stated that cei-tain " (Jther liabilities of the ]?ank ' — to wit, 
 '■ Other deposits payable after notice or on a fixed day" — amounted, on 
 the day and year last aforesaid, to two million thirty-one thousand and 
 ninety-eight dollars and two cents; and in this, to wit, that ii was 
 therein falsely stated that no amount was dut', on the day and yeai- last 
 aforesaid, bv the said Consolidated Bank of Canada to other Ijanks in 
 Canada; and in this, to wit, that it was therein falsely stated that 
 certain assets — to wit, the ''S|)ecie'' of the said Bank — amounted, on 
 the day and year last aforesaid, to three hundred and eleven thousand 
 four hunib'od and sixly d<dlars and eighty-five cents; and in this, to wit, 
 that it was therein falsely staled I hat certain other assets of the Baid\ — 
 to wit, -'Dominion notes" —ainoiin'eij, on the day and year last afbiesaid, 
 to two hundi-ed and sixty-si'vcri ihousand seven hujidred and thirly-thi'ee 
 dollars and fifty cents;* and in ilii^, to wit, that it was therein falsely 
 stated that certain othei* assets of the said l>ank — to wit. --Xotes of and 
 "Cheques on other banks" — amounted, on the day and year last afoi-esaid. 
 to two hi:iii]i'e(i and sixtv-three thousand ei^-ht luuiilred and thirty-eight 
 
 \i 
 
I/K 
 
 5S 
 
 ilollars and niuclv-nino cents: and in lliis. to wit, th;it it was theiviii 
 lal,>elv staled that certain olhei' assets of llie said Bank— to wit, " Notes 
 aiirl hills discounted and current ''—amounted, on the day and year last 
 atoresaid, to seven million two liundreii and tifiy tlioustind one hundred 
 
 ■ and ibi-tj-nine dollars and forty-tive cents; and in this, to wit, that it 
 was therein talselv stateit that there wei-e n!> '• Otlier A>^sets of the said 
 Bank' not included under the several heads c(»ntained in the sairl j'otui'n, 
 they the said .lohn Baxtei- Kenny, Sir Fi-ancis liincks, Kohert Janio 
 Eeekie, Jolm Grant. .lohn Kankin. llngii Mackjiy. and William Watsi-ii 
 
 •Oi'-ilvie, then well knowiui;- the >aid ^lateinent to h'u iaise in the several 
 
 }»articulars atoresaiil. 
 
 A True Bill. 
 
 J. WALKKR. 
 
 Foreman. 
 
 SCHILLER i; lUJLHAUT, 
 
 (.'lerks of tfie Crown. 
 
 ARRAIGNMENT OF THE ACCUSED. 
 
 i/ 
 
 
 m 
 
 On tlie suceeedinij: day. on the o])eninu' of the Court, the Bank 
 Directors and otli<?r hank ofHcers, against whom true hills wore returned 
 on Tuesday, put in an a])|»earance. with the exce})tion of IMr. Renn}', 
 late Manager of the Consolidated Baid<, understood to he in St. 
 Paul, Minnesota. The Court room was crowded with pi'onunent citizens, 
 among whom were many of the friends of the accused. Mr. Devlin, Q,C., 
 and Mr. Archamhauit, Q.C., appeared foi- the ('rown. and Mi*. Ritchie, 
 ■(J,.C., for the pi'ivate prosccutioii. ]\[r. W. H. Keri', <^ C, app'^aved for 
 Mr. Hugh Mackay, Mr. .John Rankin, and Mr. W. W. Ogilvic ; Mr. 
 Macmaster, foi- Mr. Jolin (rrant; Mr. Wurtele , (^.C. and Mr. Abbott. 
 (^C.. foi- Sir pj-ancis Hincks : and Mr C. P. Davi.lson. Q.C , for Mr. J. B. 
 lienny. 
 
 On motion of Mr. Ritchie, 
 
 Sir Francis Hincks. J{oht. .Tames Reekie. Jolm Trrant, John Rankin, 
 Hugh Mackay, and William Walter Ogilvie were ari-aigned and pleaded 
 not guilty John Baxter Renny was called, but did not answer. 
 
 The Clerk having askeii the accused, in the usual form, when they 
 
 would be ready for tiieir trial. Mr. Macmastei-, on behalf of Mr- John 
 
 •Orant, asked until Saturday to give him an opportunity of looking into 
 
 the indictment. It was a nnitter of .so mueii importance to his client 
 
 that he felt bound to ask for delay to prepare a defence 
 
 .Mr. Ritchie, objected to a delay until Saturday, and suggested that 
 tJje ti'ial should take place to-morrow (Thursday.) 
 
 Mr. Macmaster thought no injuiy could he done to the case of his 
 'learned friend for the prosecutio'; by delay until Saturday. 
 
 His Honour— Have you any special grounds. Mr. Macmaster, for 
 urging the delay ? 
 
59 
 
 Ml'. Macmastkr— No special <» rounds, your Hoiioui', except that the- 
 matter is one which reqiiires a careful exanii nation of the i»roce(lings, and 
 the great importance of the case to my client. 
 
 "ilis Honour— Oh, the imj)oi'tance of the case, thafy all ! What do 
 v»'U say to it, Mr. Ritchie ? 
 
 Mr. Ritchie — 'ro-mnn-ow. your Honou)-. 
 
 After sonic further convoisation, it was agreed that the trial should 
 take ])lace on Fridav. 
 
 Mr. JvEtii^. and Mr. C. P. l)AVir)So\, on behalf of Mr. Oifilvie, Mr. 
 IJankiii ami Mr. Jfeekie, said they were ready to go on at any time. 
 
 Hifs Honour — \'ery well. 
 
 The accused were tlu-n a(lniit;ed to hail, the principals in the sum of 
 $1,000 each, on each of the two inilicinK'tits, being $2,000 in all, and their 
 sureties in the sum of S.')0(> un each indictment, or SI, 000 in each case. 
 The following gentlemen became sureties foi- the accused : — 
 
 For Sir Franeis. Hon. Liulu-r Hamilton Ifolfon and Mr. George 
 Stephen, merchant : I'or Kobt. .James Ifcekie. Mr. Josei»h Jlickson and 
 liobt. Craik, M.l). : f()r Mi-. .fohn (irant, merchant, y\v. John MairY(»uiig, 
 merchant, and Mr. Jas. Power Cleghorn, merchant ; lor Mr. John Kan- 
 kin. Mr. Gilbert Scott and Afr. Andrew Fred. Gault ; for .Mr. Hugh 
 Mackay, merchant, Hon. Kozaii'e Tiiibaudeau and Mr. Duncan Mclntyre ; 
 for Mr. W. W. Ugilviu, Mr. John Ogilvie and Mr. Henry ('leghorn. 
 
 MOTION TO QUASH THE INDICTxMENTS. 
 
 On the 9ih October. Mr. Devlin, Q.C, and Mr. Archambault, Q C, 
 re])resented the Crown, Mr. Piti-hie. QC, appeared for the private prose- 
 cution in the case of the Bank Directors and officers, who, with the 
 exception of John JJaxter llenny, were all present with their counsel. 
 Mr. Kerr, (^.C., }»iesentetl a written motion in the case of the Queen 
 against John Baxler Kenny to fpiasli the indictment on the ground of 
 certain techtdcal objections, 
 
 Mr. JiiTcnrE objecte<l to ludng called ujion to answer immediately a 
 motion which ha<l just been j)laced in his haixls, ;ind which he had not 
 had time t(» rend. He had rec(.'ived no nwtici- that a demurrer was to be 
 made this morning and be propo>ed that the argutnent should take place 
 to-morrow at 2 o'clock. 
 
 Mr. Dp:v'i,i.^ said that as far as the Crown was concerned there was 
 no objection to goon at lo o'clock to-moi-row (Saturday.) 
 
 His JIonor — Has Mr. llitchie no objection / 
 
 Mr. Ritchie — Welb your Honor, I am oj)posed to answer any motion 
 before I have time to read it. I have never heanl of any one represent- 
 ing the Crown being called upon to answer a motion which had just 
 been thrown d(jwn before him. 
 
 His Honor — Very well, let the matter stand until to-morrow at ten 
 o'clock. , 
 
 On the case against John Grani being called. Mr. Macmaster said ho 
 
w^ 
 
 CO 
 
 4r 
 
 liarl signed the denmiTer and tliat the other defendants would answer itt 
 the same way. The other cases were then likewise postjjoned. 
 
 The demurrer UjM)M which the motion toqaash the indictments is made 
 is as follows: — And the saifl Sir i'Vancis Jlincics, llobert James Reelfio. 
 John llinkin and William W. Ogilvie, in their own prope;- persons came 
 into Court here, and having heard the said indictment read, say that the 
 said indictment and the mutters therein conlaineil in manner and fbi-ni 
 as above set t'oi'th are not siirticient in law, and that the said Sir PVancis 
 Hincks, llobert James Reekie, John liaidvin and William W. Ogilvie are 
 not bound by the law of the land to answer the same. 1st. Because there 
 is no allegation thei-ein ol the said otfouce therein set out having been 
 committed in the DisiricL of Montreal. 2nd. liecaiiso it does not a])pear 
 in the said indiclment that the C(»iisolidated Bank of Canada is a bank 
 j^ubject to thooi)eration of the Actof Parlitiment ot'lheDominiim of Canada 
 (.31: Vic, cap. 5), nor is it shown in the said mdiciment that the said Act, or 
 any Act of the Dominion of Canada, applies to the Consolidated Bank of Ca- 
 nada. :Jrd. Because each of the false statements alleged in t!iesaid return is a 
 misderneanoui" of itself, and such misdemeanour should be the subject of 
 one count, whereas thei'e ai-e over six misdemeanours alleged in the one 
 count in the said indictiu'jni. -Ith. Because it is not tiierein allege-i tliat 
 the return, which is said to contain tiie false statenuMits. was a reUirn in 
 the Government of the Dominion oi' Canada. 5!n. Because it is not 
 therein alleged that the said I'elurn was evei* pul>li.>l)ed. 0th. Because 
 it is not therein allege I tha' the said Sir Francis llincks. Ridjert James 
 Eeekie, John Ilank-in and Wiliituii W. Ogilvie were directors of a bank 
 to which the Biidcing Act> ol the L))minion of Canada apply, and this 
 the said Sir Francis llincks, U )l)crt .lames Eeekie, John llankin and 
 William W. Cgilvie a;e readv to verify. Whei-efore. for want of sutli- 
 cient indictment in this beliaif. the said Sir Fi-ancis Hincks, Robert 
 James lioekic, JoIiM Ruikin. William W. Ogilvie, p. -ay judgment, and 
 that by the Court here they miy b.' disms^ed and discharged from the 
 said premises in the said indictment. 
 
 Argument on the Mot has toquisk the Indktmenl and Demurrers, on the 
 
 10/// October, 1870. 
 
 Mr. Keur— In this case, may it please your Honor. there»are tw*^ 
 indictments, pi-ecisely similar in tbrm, laid against the late manager and 
 directoi-.s of the Consolidated Bank. (The learned counsel here pro- 
 ceeled to read from the intlicinients.) The comdu^ion in each indict- 
 ment is as follows: — '-They, the said defendants, then well knowing the 
 '•• said sta'ement to be faUe in the ^:everal particidars aforesaid." "Our 
 clients are ]>erfectly certain that there is no tijundation for this, and they 
 are perfectly reaily to meet the indictment; still, they act under the 
 a<lvice of their counsel, and we consider it requisite "^that we shoidd 
 demur to the indictment, and move to have it cpiadied. \re take the 
 responsibility of ))Utting in these pleas: although I want it underst )od 
 that our clients are exeessiveh- desirous of proceeding. 
 
61 
 
 The loai-iK'd enmisel now read ihe motion to qua^h, ami iho I'oasonfi 
 therein set foi-th, and then eontiniieil his ari;-iinienl as foll(nvs : The 
 general princi])le ot law applieable to indietments is tliat all the faets and 
 eireiimstances necessary to eonstitute llie ott'enec should be shewn in the 
 indictment. Anothei' pi'incij)le of law is this, that wlu-n general terms 
 are made use of, it becojnes neces.sary to set out facts and circumstaneen, 
 in order to shew that the facts ai'« inclmled in the terms made use of, and 
 to shew that they are within the meaning of the Legislatuie In this 
 case the ]»rr>ceedings are founded on the CL'nd Sec. of the .'J4th Vie., Cap. 
 f). That Section is as tollows : — 
 
 The makinf,' of any wilfully falsf or deceptive stnttment in any an ..iiiit, slato- 
 inent report or otlicr docunjeiit rcsiiccting the iiffairs of the J'.iiiili f-liall, iiiili ss it 
 amounts to a hiuher offence, be <a misdemeanor and any and eveiy President, Vice- 
 President, Director, Principal Partner t« covimanditp, Auditoi-, Manugei-, Cashier, or 
 other officer of the Bank, preparing, signing, approving or eoneurring in sucii state- 
 ment, rt'turn, rejiort or doeuiuiMit, or using tiie same witii intent to decei\e or mis- 
 lead any party shall he held to have wilfully made such false statenant, and sLall be 
 further responsible for all damages sustained by such party in consKjuence thereof.'' 
 
 I maintain that these words, ''in any aecount. statement, icport or 
 other document."' are generic terms, the woi-d report occuiiiiig in the 
 tirst instance in the loth section of the same Act, and theie specitied as 
 a moiiihly return to be made l»y the Bank to the trovernnient. The 
 l.Uii section commences thus: '• Mcnthly returns siuill lie made by the 
 -' ^iiwk to the Government in the fwllowing torm.' A:c. it must be ad- 
 mitted as clear law that the making of any wilfully false statement in 
 any (hjcuinent respecting any Bank must be a I'alse or deceptive state- 
 ment in some account, return, j-cpni-t or other doemnent (-tiieially issued 
 by them ; and it becomes necessary therefore for the pleader in such a 
 case as this not merely to say it is a return respecting the ;ui'aii's of the 
 Bank, but to show that it is a return made in eompliance with the l/Jth 
 section. Moi'eover there is no allegation that it is a return bij the Bank. 
 L say that it is absolutely necessary to consult section KJ and to describe 
 it in the words of that section. In the pi'esent instance it is not allegeil 
 that tite i-eturn was made by the Banic at all ; thei-e is no allegation of 
 the statement having been made ; there is no alleo-ation that the retin-u 
 itself was ever made. It is clear law that the return is not a return 
 until it is received by (rovernment. It is not made, in the words of the 
 Statute, until it is sent to the (fovcrnment. and receiveil !>y the (Jovern- 
 nient. 
 
 Hi« Honor— Is that a matter of allegation or a matter of proof? 
 Mr. Kerr — A matter of allegation. Moreover, this section lo jjro- 
 vides that the return '' shall lie made in the following ff)rm. and shall be 
 made up within the tirst ten days of each month, and shall exhibit the 
 condition of the hank on tiie last juridical day of the niimili preceding; 
 and such monthly retnrns shall be signed by the pi'rsident, or vice- 
 president, or tlie director, (or if the \n\\\k be en commandite, the princijtal 
 ]»artner) then acting ns president, and by the manager, <ashier, or 
 other principle officer of the baid<. In this instance, this I'eturn is not 
 shown, on the face of the indictmrnt. to have been signed by the dii'cc- 
 tors ; there is no allegation of this return having been signed. If it 
 were not sii^ned there would be no otTence — even if it were a wiliully 
 
 6 
 
 i\ 
 

 62 
 
 false statemGiii and deccittive; and if it was kept in the bank, it coukf 
 be no otlence, inasnuR-h as it had never been maik- or published by any 
 party, and there was no (»j)p(»rtnnity, tiiereiore. utlbrdcd to the directors 
 to mislead or deceive anv person. 
 
 1 will now cite authorities in sujijiort of my eonlf>nti(m/ In Arcli- 
 bold, on Criminal Law, 17 edit., pa.^'e ;")1. it is laid down that— 
 
 " Every oircnci' cimsists of ct-Hiiin acts done or omitted under certain circum- 
 BtanceK; and in an indictment tor the oll.nee, it is not suttieient to cljargo defendant, 
 generally, with having '.oiiiinittrd it, us tliat lie stole the .iroods of J, or eonimittod 
 burglary in the house of , J S. or tlie likr ; hut all tlie faets and eircunistanees tonsti- 
 tutin^c the offence, must he s|i(< ially set forth. 
 
 At pasjjc 52 we read that — • 
 
 "Every fact or eireunistanee. wi)i( li is a nee< ssary iiiU'rcditnt in the offence, 
 must be set forth in the indiitint'iit . '' 
 
 His Honor — How do you a]»]ily that / 
 
 Mr. Kkhk — The return, in this case, shotdd have been allc,o-ed to 
 have been made to the <iovt'rninent. There is no alleu'ation on the face 
 of the indictment that it wa> made. The circumstantial detail is insuffi- 
 cient, accordin<^ to this authority. There is no allegation that it was 
 made, but it couM not le a return uidess it was made ; and if it was 
 made, then the jurisdiction woidd be at Ottawa. At page 52 of the same 
 book, we tind that •• If any tact or civciimsiance, which is a necessary 
 ingredient of the otl'ence, be onutted in the indictment', such omission 
 vitiates the indictment, and the defendant may avail himsell'of it by de- 
 murrer. Thus, in an indictment against a public officer for non- 
 performance of a duty, without showing that he was such an officer as 
 was bound by law to ])er{brm that particular duty." 
 
 At jiage 53 wo arc told that — 
 
 '• >iot only must tiie facts ;ind cin umstanci'S which constitute the offence be 
 Btated, liut they must be stated witii such certainty and jirecision that the defendant 
 may he enabled to Judge winthrr they constitute an indictable offence or not, in 
 ori:er that he may demur. or jilead to the indictment accordingly — that he maybe 
 enabled to determine the species of ollence they constitute in order that lie may 
 prepare his defence accordingly — tiiat \\r may he cnahhd to plead a conviction oi 
 acquittal upon this indictment in liar of another prosecution for the same offence — 
 and that there may be no doubt as to tlie judgment which should be given, if the 
 defendant be convicted." 
 
 At })age 60, ArchboM deals with indictments for otfenees created by 
 statute; — larceny, for instance, is an indictment created by statute, ar.d 
 he says : — 
 
 " The statute contains a definition of the offence ; and th(! offence consists of 
 commission or omission of certain acts under certiiin circumstances, and in some t 
 with a particular intent. An indictment, therefore, for an offence against . 
 statute must with certainty and {irecision charge the defendant to have committed or 
 omitted the acts under the circumstances, and with the intent mentioned in the 
 statute, and if any one of these ingredients in the offence be omitted the defendant 
 may demur." 
 
 At page 02 he continues; — 
 
 " And pursuing the words of the stntute is sufficient ; unless indeed there are 
 generic terms, in which case it is necessary to state the species, according to the truth 
 
63 
 
 of tho case. WhtMC a statute (fi)r instiun;,'^ niakcs Iho maliciously killing of cattle a 
 felony, it is not Hiim<;icnt in an imlictment on tli.; statiito to charge the dcfondaut 
 ■with killing cattlt-, uenerally, l»Ht the spocies of cattle, as horse, mare, g.lding cow- 
 ox, heifer, Ac, must be st^itcd/' "" ' ' 
 
 Iti thb instance 1 nraiiitaiii tlmi ir, i> i\.Miiiisito to (leclarc* that this 
 was a Rotiu'n nii'U; l»y the Bank 1o the ( J (Vcrnninit ; that, was the 
 species of Rot urn ; Ijocnns© u Jtciiii-n niiolit Itc varioii>ly (|iialirie(| ; as a 
 Rolui-n if made by one Ihnk to another, Hii,i;-ht l)e so >iyle 1 ; there tnio-ht 
 1)13 (litterent kinds of Rotiirns. Thoi'c is notiiiiio- to shew thai this is a 
 Return which was intended to ije >lpietly true, and thai a false statement 
 eoiisii.';ned th<." jiai'ties to tin' punishment in (|Uestion. It heeoincH 
 necessary to i-efiM- to >eetioii [."J in oimKm- to discover the [teeuliar kind of 
 rciturn whi<di is intemle 1. Ity section Crl. tikhe the sulijeet of punislnnetit 
 if fal,-e. I will nf)W cite from f*aK'y on eouvjci jon^, wliei-e \]\v >uhjeet is 
 Ml ii'o (dahoralely treated. At j)aii'e 21:5 lie says: — 
 
 " The following is an example of the like nde, iiiiniely : that where the statute 
 ehaiacterizL'S tlu; class of otfi iiees prohiliited hv a general descrijilion. the narticular 
 avert acts must appear in the conviction, in order to ascei tain their legal clTect." 
 
 It is scarcely noces.sary foi- me to 'dte authoritie>, that a conviction 
 must he l»a>ed on the infi»rmation, and that the intbrmatiou must contain 
 ull the alleo-aiions neeoss.'iiy for a conviction. 
 
 His Honor — You contend that tlie indictment cannot be more nor 
 loss than the ciMiviction. Is that the application'? 
 
 Mr. Kkrr — It is, your Honoi-. At i)ai;-e 215, wc road that — 
 
 '• It has l)ccn observed that the descrjp'tion of tlie off(;nce must at least be i.t 
 particular as that used by tin; statut>'. But it has also l)een seen from tii(f instances 
 before noticed, that in many cases it must be mere so; andsi'veral examples have been 
 given that it is not enough to follow men-ly the words of the statute. It may, indeed, 
 be collected as a general rule from the foregoing and following case s tiiat, where mi 
 act in describing the otfenci; makes use' of general terms wlu<'h eml)ra' i" a variety of 
 circumstances, it is not enough to follow in a conviction the words of the statute, but 
 it is neessary to state what particular fact prohibited has been committed ? " 
 
 At page 217, Willos .1. says: — 
 
 " In summary convictions the riiii.r;je must be precisely set out. 7'//" ''i^ilfucf 
 rnnn'H i/i) fnrtliT tli<in (he cliai-;ie. You should havr> alleged the fact in the information 
 in tiie same manner is you would have in the evidence." " It is not true," Mr. J. 
 Bulb-r says. ' That in fraraintr a conviction it is sulficieiit to follow the words of the 
 stati'.ti' in all cases. In .some, indeed, it may, as where the statnte gives a particular 
 fle'jcrijitiipii of the offence ; but it is otherwise where a particular offence is included 
 11 I general description.' Where a i)articular act constitutes the offence, it may 
 
 be enough t" describe it in the words of the legislatun^ : but where the legislature 
 speaks in general terms, the conviction must state whatacl in particular was done by 
 the j>.'> V utt'ending to enable him to meet the charge." 
 
 1 would also cite, in support oi' this, the general practice followed 
 with respect to cases of forgeiy. It is suttteient to allege tliat the de- 
 len<iant did foro" the promissoiy note for the payment of money: it is 
 necessary to di > i-iijo it, to show that it is for money, to show, in the 
 description, the actual purpoi-t. The section of our statute which pro- 
 vides that when it is necessai-y to set eiit a written document in an 
 indictment it may be described l»y the name it is generaih' known by or 
 by its purport. Iocs not apply to this present indictment, because these 
 
64 
 
 111 
 
 ■|i 
 
 monthly retui-n- 
 
 of the Bank arc known as Monthly returns to the Govern- 
 
 ment, not merely ■■returns 
 
 His Honour— I on 
 " return'' wouM mean no 
 
 Mr. Kkru— Ye> : an^ 
 species of i-etui-n i- mean 
 as given in see 
 of that se<'tion 
 
 hold. then, that the popnhir sense of the word 
 
 ihinu' hei'e. , 
 
 1 rmainlain tliat. in order to discover what 
 1. von ninst take the de-ci'iption of tiie ivturn 
 tinn i:>. and descviiie the i)a!-licu!ai- return by the word 
 
 Of 
 
 .!e vea 
 
 ^ _ rs we have <leparted from the striet ])leudin<j: 
 
 reqnh-ed. hut I trn-t we shall not furthei- d.egcnerate. Indictments 
 .should state the fa('t> sm a> to i»n1 the j^ariy an fo't wiih the partieular 
 
 offence with which 
 
 Ik- i- idjaruetl. 
 
 Ilrs IIoNoii— The T 
 
 pt-'U'lSl 
 
 wvc are somewhat responsible for thai 
 
 Our law> re.-])ee 
 
 tin"- tlic tVaniin^ uf iiidietments have, no doubt, broughi 
 
 :il)()Ut much bi'evit\-. 
 
 Ml-. Kehh— -Tiie Legi-lalure does not cueom-age ol ;;;',■ iirity. 
 
 His IIo.\(»H X<>: I'lit we get into a great degree of obscurity .some- 
 times in our endeavour> t ) he brief 
 
 Mr. IvEUR— But bi-cviiy i> the m)u1 <>: wit. and 1 fancy thai a cloud 
 of word's does not inake anything eleare". There is anoLher ])oint in 
 this casc.'i^ There is no allegation \vhatM)ever in the indielment that 
 the Consolidated Bank- of Canaila i> a haidv to which the 13aiddng Act. 
 34 Vic, chap. 5, apjdies. This is the second j.oint The ;>4 Vic, ^-ha]!. 
 5, applies merely, on ils lace, to the eharter-s oj- acts of inc()rporati<m of 
 the several banks enumerated in the schedule lo that Act. including any 
 amendments now in f)rce. au<l the tirsi sei-iion, enaets that tlicso charter> 
 or acts of incorpoi-ation are continued until the 1st of July, 1871, and 
 from and after that day the >aid charters are continued, subject to the 
 provisions of this Act until the end of the next session of Parliament ; 
 and from and attei- the end of such se>sion. this Act shall Ibrm an<i be the 
 charter.s of the said I'anks respectively, until the 1st day of July, 1S81. 
 and the provisions thereof shali apply to each of them respectively, and 
 their itresent c'uu-tei-s shall lie repealed, — exeept o-id}', as to the ir.atlers 
 for which the said ciiartL'r> ;ire ahnve eonlinued until the day last afore- 
 r^aid. The second section enacts, that — 
 
 "The provisions of tliis Ait sliuil upiily to any li'.ni< to ii.' hficjiftrr incorporatod 
 (which ex|)ivssiou in tiiis Art im lii'lo.^ ^'tiy Biinlv in' ^ rpoiutcd liy any .\(t passed in 
 the present Session or i any t'ltnie Scssi-.r" of t'. ■ I'aiiianunt of Canada), wlietini 
 this Act is specially ni''Ution.'<l in its Alt of i,,"oinoralion, as well as to all Banks 
 whose chartm-fi an- licndiy eonlinu d, Imt not to a. . otlitT, unless extended to it muK- 
 •the special provisi ms lieieinat'ter nnid'." 
 
 Youv jlotiorwil! ohviM-ve that this Aet does not a|»]ily to the whole ot 
 the Banks in existence at the time of its passing ; it merely applies to 
 tiiose which are mentioiM'il in the schedule, and to those which might 
 thereatter he incoi'|)orated. On looking ovei' the schedule, the Consoli- 
 dated Bank does not appeal- as one of the .Banks. 
 
 • XoTK.-Ii Will 1)1' observol llial, np to tills point. lUe liMriied L'mn>ers ar.unuieri allaeks 
 the nidieiiiit'iii as deleetive In mil speeiiyitii,' the Heiuni. allivi'd liicdiu.iiiiliie tiiliestalemeni, 
 .and In nut idi'iiilfylir:: lliu [{eturii wpli ;li" lurtl'Milm- sper;ei of rclunis or dueumenls co teni 
 plated by tUe H;inkliij.r n'ls; ami. tUeiTfore, llie aiyiiiaeni. mi (,n-, tiea s iirlnelpallv upon ami 
 ttappo Is i l:e 4'li and ".111 reasons of tlie Deiiinrrer and Motion to qiiasii. namely : lifvuu^'' tlw- 
 it HI) (lUi'jiiti.iH llmf fh" ivtttrii ('(.v ,1 ri'tin-ii. tn (.forexniient ; uud, Ufcimnf it i.s nut xhouni that 'In' ><• 
 turn w,is pnbliHifi. <»■ in i<^'' fmnifn fc tin- puhlk. 
 
65 
 
 Now, it is not allei^ed in the indielment that the Consolidated Bank 
 Avas incorporated after the passini-- of tiie Banking Act. There is nothing 
 in the indictment to show that the Consolidated Bank was not in existence 
 at the time of the passing of the Act, it may, for naught to tlie contrary 
 appearing in the indictment, liave lieen incorjiorated before then, and have 
 been thus a»Bank to which that Art (bx's not apply. The fart of the Bank 
 being incorporated since tlie jiassing of the Jianking Act would iiavi' to 
 be matter of allegation ; for you eaiinot take coginzance of anjthing that 
 is not alleged. I maintain, thei'cfort'. that the otfence of milking a false 
 or deceptive statement in a rclui'n of :i Hank only apolios to the refui'n 
 of a Bank to which thu provisions of this parliruUi'- act ai)j»ly ; and 
 
 <e('ondlv, that it is an otfence. sub rim lo : because if a Biid<, in i-esi)e 
 
 WllK 
 
 h tl 
 
 le I'ctui'n con tame 
 
 a fab 
 
 ct of 
 
 e or d(.'eL'[)tivc sta em.'Ut. was not, one 
 
 to which the provisions of this rict aj)plicd. tbeii' woul I be no oflenC' 
 
 His JIoNOK — J tidmit that this is an offence sub modo : but L di> not 
 see that it is requisite to show that tbe Bank was incor])orated since the 
 Bunking Act, if that fact should be establisbod by ])roof. 
 
 Ml". IvERR— T maintain that tbere ought t<i lia\e been an allegation- 
 in the indictment to the effect that the Consolidated Bank of Canada was 
 a Jiank sul.jject to the provisions of tin' Banking Act. inasmueh as it 
 might be a Bank in existence at the time and thei-efore one to which the 
 ])rovisions of that Act <lid not a|»]>Iy. tor the sim[)le reason of its not 
 being in(duded among the banks in the schedule to that Act. jV.s a 
 -.natter of fact the Consolidated Hank was incorjiora.ted after the passing 
 of the Banking Act, and in its Act of -Incoi'itoratio:! there i> a clause to 
 tiie effect that the Banking Act shall aj>jtly to that Himk. I do not wish 
 to mislead the Court as to this fact, but 1 say that it was ab.solutely 
 necessary to show on th;* iiice of' the indictment that this Ban!: did come 
 under the operation ot the law in (juestion, this Baniv not bving men- 
 tioned in the schedule to the oi'iginal Banking Act. 
 
 llts Honor — Then you c )ntend that this is not a matter of ju-oof. 
 
 Mr. Kerr — It is not a mattei- of jiroot', I will tak'e another gr<jnnd 
 so as to show trie looseness of this indictment. It is not even alleged 
 that this Biiidv is ar. ijicorjjoi-ated liiiids: it is not alleged that it had a 
 charter. Are we to throw aside ail these things — all these reciuisites? 
 And are we to have a [liece of jiaju'r. as it , ere. thrown at a man's head, 
 and say, ''I will prove you u-nilty. and I am not olilige 1 to inform yoti 
 '•of what. you are guilty until 1 have f»und you guilty?" You cannot 
 jirove moi'e than you have alb'ged ; and 1 contend that thi> indictment 
 cannot lioid water, Thi> act a])plies only to such of the Haidvs then 
 existing as were mentioned in tiu' s(diedule, and to jiatd<s coming \\\\i> 
 existence since. Now I have established, moreover, that it applies onlj' 
 to chartered or incorporated J5anks: and tluM'e is u) alleu-ation that this^ 
 Bank is chartered or incorporated, oi- subject to the iianking -Vi't in any 
 way. I maintain, fiu'ther, that the .Hence under conside.ation is ;Hk 
 otfence mb mo;io, and that the allegation of the offem-e should bi' framed 
 in such a numner as to bring these '^•etulctnen clearly and diri'i-tly witlftji 
 the meaning of the Act and within tlie meaidnL'' 'm particular ot tiie 
 -econd section. For. where a [irivate individual or a partneiship car. les 
 on the business of Baid<ing. and tiiey make a return in which there is a 
 
CO 
 
 
 't: ;| 
 
 m 
 
 false or deceptive statement, that would not be a misdemeanor under 
 this Act, the offence being an offence only sm6 modo. On this point I 
 refer yon to Paley on Convictions M'ho eayc* at page 232 : 
 
 " Wh<'re the enacting (■liiusc of a statute constitutes an act to be an offence only 
 su/> worio, the particular exreptions must be expressly s|Hcified and negatived ; but 
 where a statute constitutes an act to be an oft'ence generally, and in a subsequent 
 clause makes a proviso or exception in favor of particular cases, or in the same claiiee 
 but not in the enacting part of it, by words of n-ference or otherwise, there the proviso 
 is matter of defence or eX( use, which need not be noticed in the information or con- 
 viction.'' 
 
 This statute expressly says that only certain incorporated banks 
 shall lie subject to the provisions ot'tliis Act : consequently that may be 
 looked upon as the eiutcting clause constituting the offence. Palky at 
 page 21)2 goes on to say that : — 
 
 "'It is immaterial wlictlier tlie eX(eiition be in another section or in another Act 
 of Parliament, if distinctly referred to and engrafted into the enacting clause. This is 
 apparent from the following cases.'' And then he cites certain cases : '' In the case of 
 R. vs. Hill, il am <inoting now from page 23(i , it is the very point established and 
 settled that the general averment is not sufiident, and that it must be averred that the 
 dt^fendant had not the rpialititations mentioic'd in the statut<'.'" 
 
 In this present instance there is no o-enera! averment at all. The 
 special qualitication that this B:uik wa-^ not excluded, is neither generally 
 averred, noi- sjtecially averred ; an(' thcrctoio the above case, and all the 
 cases cited, iqion the same yioint. at piiges 2:34-5 a])])!}' witli redoubled 
 force. At page 2H' ajipear the t'olb.wing word-^. used by Lonl Manstield • 
 
 " This will not do : the defendant can bv convicted oxl// "j the chiinj'' in Ifv injar- 
 malion ; and that must he sutficieiit to Mipport the conviction." And Mr. J. Ashurst 
 says, " the evidence must pmre but cannot sii/,p/i/ any defects in the infoimation.' 
 
 I merely cite these to show thai the^o objections are not merely tbr- 
 mal objections, but substtint!:il. I will cite one case which has already 
 received the approbation of yourself and the other judges-- 
 
 His Honor — (interrujtting) — The conviction cannot go beyond the 
 indictment. I admit that. 
 
 Mr. Kerr — And 3'ou are bound to restrict the evidence to what is 
 alleged in the indictment. It is necessary to negative any exception, 
 and then it is for the defendant to jtrovo that he comes within that ex- 
 ception, if he lelies on that as his defence. Kverything constituting the 
 offence must be alleged, and anyihing that might be an excuse- siiould 
 be negatived in the indictment. Absence from a master's service may 
 be exeusable or juslitialile — the iinlawtulness must be shewn by stating 
 that it was without valid excuse, and an indictment was (piashed because 
 it merely stated that the defendant absented himself from his master's 
 service. In this instance, if this bank was not an incoi'iiorated bank, 
 the charge is (piite consistent with the innocence of the defendant, the 
 onus, therefore, is on the jM'iisecution to iu>gative his innocence. 
 
 I dare .say great stress will be laid, by the prosecution, on the case 
 of Cott(^. Jn that ease, there wa^ a motion to (|u:isli, and .ludge Ramsay 
 reserved some points, five of which were ailjudged upon. The first 
 p<iint was this: — " Whether the indiclineiit is detective, and ought to bi' 
 (iuasiied and set aside, as it docs not allege or show that the statement 
 
 Hlgl 
 
 11 
 
 or retur 
 requirer 
 lention. 
 defectiv 
 of the st 
 Thirdly, 
 negative 
 show in 
 Kuui'thb 
 and shot 
 corisel, a 
 it does n 
 I he won 
 tial 
 
 should 
 lion. Fi 
 tlie jury 
 numerou 
 in the ill' 
 have bee 
 The.- 
 Ml the ca 
 Cotte's c 
 he cited i 
 (oiii't gi\ 
 importan 
 Ills 
 into one ( 
 Mr. J 
 |irosecuti< 
 the mode 
 to insist V 
 Mr. ] 
 or two an 
 I'cgai'd to 
 the comm 
 disclosed 
 merits, 
 whether t 
 the effect 
 legislation 
 iiient whii 
 we must tj 
 M'c thatth 
 Ijy sectioj 
 niont be 1 
 of such 1 
 I'linishaliK 
 'listini^tion 
 the aid of 
 
6t 
 
 or return, therein referred to, -vvas a statement or ret. 
 
 ni which, by the 
 
 requirements of the law, he wa^ hound to make. "' That is not oui- oon- 
 luiition. The second point was :— •■ Wliether the said indictment is a! 
 dci'cctive, inasmuch as it omits to aile!:;e or show that aiiv 
 
 sa 
 
 use was made 
 
 1 hat is not om* contention. 
 
 ive. as il contains no 
 
 of the statement <u' retuiTi referred to. 
 Tliirdiy, '• whethei' tlie indictment is also detect 
 jicgative averment with reference to either of the items mentioned, to 
 show in what i-espect they were false. ' Neither is that our contention. 
 Fourthly, '• whethei- the indictment is als(» defective and null and void, 
 and should have been <|uashed i'ov the leason assigned by defendant's 
 (•(irisel, at the time of tlie trial and bef )re the jury were sworn, viz: that 
 it does not charge any offence in the teims of the statute l»y omitting 
 the words • with intent to deceive or mislead, ' which intent is an essen- 
 tial ingredient of the otfence and heing so de.-criLed by the statute, 
 vhould have been averied in tlie indictment. '" That is not our conten- 
 tion. Fifthly. " Whether the ap])licalion of the defendant's counsel, after 
 the juiy were sworn, (hat the Crown jirosecntor do elect which of the 
 imnierous accounts, or enumeration ot alleged false statements, set forth 
 in the indictment he intended lo rely on. were well tbunded an<l slnmld 
 have been granted. 
 
 These were the five ])oints adjudicated upon by theCou'.'t of Appeals 
 ill the case of Cotte; but the>e are not oiii- contentions; the ju<lgment in 
 Cotte's ease, therefore, is not a])plicable to the })resent case and cannot 
 he cited as an authority, consequently there has been no judgment of a 
 ('oiirt given on the j)oints now raised and these points are of tlie greatest 
 importance. 
 
 His Honor — Then, as to these sevei-al misdemeanouis being put 
 into one count. What about that ? 
 
 Mr. Kekr — There has only been one case in England in which the 
 [•rosecution was brought against a Secretary, hut they did allege there 
 the mode in which the deceptive statement was matle. I am not inclined 
 to insist upon that point. 
 
 Mr. MacMaster — Ma\ it j)!ease youi' Honor. I may mention a ]»oint 
 '•r two and cite an authoi-ity which goes to confirm our jiosition with 
 regard to the first point, — that the indietment is defective is not alleging 
 the commission of the offence. Unless an offence punishable by law is 
 disclosed by the indictment the defen<iants are not bound to }»lead to the- 
 iiiei'its. The indictment is defective, and we must first ijivestigate 
 whethei" there is any legal charge whatever. A remark has (lrop]te<l to 
 the effect that pleadings in criminal mattei's had been simplified by recent 
 legislation. In the ])reseiit instance there is no general foi-tn of indict- 
 ment which could be framed, and when we come to frame an indictment, 
 we nmst take up the j)rovisions of every section of the Ijaiikiiig Acts, and 
 ^ce that the indictment is drawn in mh h a form as to disclose an offence. 
 Hy section (J2 of the Hanking Act. it is enacted that if any false state- 
 nicnt be nuide in a return concerning the atfaii'sof a Bank the making 
 iif such fal>e statement shall be a misdemeanour, aid as su( h it is 
 |iiinishable ; but the terms of the secti(»n ai'c oidy explicit and capable of 
 distinction by the aid of the other proxisions of the statute. Without 
 die aid of the othei- sections of th,' Bankiiii:' Act tlu' term " Heturn 
 
68 
 
 if 
 
 I** ' - 
 
 would have no f^ignification whatever; in a popular sense it would have 
 none. The ]U'OBeeution .should >hew that tiie woid " Retujn'' in such a 
 word an, taken in eonneetion with the alleged ei-inie, eonstituteB an 
 offence hy statute. The 13th yeetion of the act >peciHes the monthly 
 returns made \>y the Baid<. It enacts that. " Monthly returns shall he 
 made by the Ihuik in the tbih-wing loim." There is no particular species 
 of return stated in the iiiuictint.'nt. If the defendants ai'e to be called 
 u])on to an!^wer the indictment they ai'e entitle 1 to know what sort of 
 return, and whether a retmn to ^dme atithority or to some person is 
 requited to 1 e nuuie by statute. The indictment should state that this 
 was a monthly return' made by the Bank to the government of the 
 Dominion of Canada. 
 
 His Honor— J see that argumeiit. 
 
 Mr. Macmaster — Then again, your Honor will observe that this loth 
 section, giving the ioim <»f the return, was amended l»y the statute 
 35 Vict., chajitcj- -^3. section 1 ot which changes the fomt, but in it we 
 luive u leiteration <A' the ihr^'i- essentials — heie we have them all 
 pieseived, — namely : that it shall be (1) a monthly return; (2) a monthly 
 return to the Government ; and (3) a monthly return to the Goveinment 
 by a bank; none of which aji- disclosed by the indictment in this c.ise. 
 ] will only cite two authorities frum Aichl old's (.'rinnnal Pleading, 17th 
 edition — luimely, pages 52 ai .1 (!3. Page 52 has been aheady cited by my 
 learned fj-iend. Mf. Kerr, but '13 wa>- not. At }»agc 52 we read that — 
 
 '' If any fact or tiivuiiistaiK c. A\!ii( li is a lu'ccssary inuredicnt of tiic ofUVnce, lif 
 ■<1 ill tlio iiidictimiU. sik ii dini 
 niav avail hiiiistlf (jf it l>v dcniunxr. 
 
 omitted ill tlio iudictimiU. sik ii diiiisssiou vitiates the iiuiictmeiit, and the defendant 
 
 And. at j^age t)3. we tind that — 
 
 "If all the ingredients of the ofl'iiKe, wlnther it he an (.ffence at ronim(*n 
 law (or one created hy a statute), he not set forth in the indictment, or if any of them 
 be not stated with snlticient certainty, the defendant may dcmir, move an arrest of 
 judgnicnt, or bring a writ of error.' 
 
 The last citJition gives the riuht to <lemu!', oi* move in .s.-rest of 
 jiidgment, if the offence be not stated with jireeision : and the other, it 
 the circumstJince."s are not set out. 
 
 Mr. JiiTcniE, on behalf of the pro.MX'UtioT!— My learned fiien<l. Mr. 
 Kerr, says that the defendants are excessively anxious to pi'oeeed. 
 and that they are pertecily ready to meet the indictment, if they aie 
 8o eager to meet the ehai-ge. all i can .say, is. that they hiive taken ti very 
 singular wjty of shewing their willingness and readiness. Mr. Kerr has 
 abandojied one of the icasous — one of them has been abandoned entirely 
 The cjise of Cotte dis])oses of all these objections, and I shall take up very 
 little time. 
 
 Mf. Macmaster— The first j.oint raised by Mr. Ken-, was not raiMMl 
 in Col te's ciise. 
 
 Mr. RiTriiiE — The jueseiit indictnu'iit is ti'amed ujkui and follows 
 Colt('''s in exact ternr<. and Cotte's case was carried to the Court "( 
 Ajtpetils on the ]iaid<iiig Art ol ISTI, which, ly its t;2nd section, j.iovides 
 in general terms, thtit — 
 
 " The making of any wiifnlly false or deci [itive «tatcnient in anv acioiuit, 
 
60 
 
 ntiitcmtMit, r('])()rt or otlicr document lospccting tho aft'airs of the bank shall bo a 
 niisdemeanonr. ' 
 
 icr. It 
 
 Tliiit cruatos all the ofleiico that can l>o committed 1 
 
 oe 
 
 i-ned ill the ott'eiicc. Uiidei- (hat d; 
 
 )}' ]»01'S0I1S t'Oll- 
 
 iiiso tliis indictment ha-> been framed 
 
 il t'ollows the exact wordini;- nfthe Act. and stood the test in the Court 
 of Appeals. The indictment, aficr descrihin^- the defen(hints, aileii-es that 
 
 on 
 
 the date thei'oin mentioned thi'V '-did iinUiwt 
 
 ullv and 
 
 wiif 
 
 ullv make a 
 
 oci'lain wilt'ully false and deceptive statement in a' certain relui-n paillv 
 rritten and jiai-tiy pi-intcd !es))ectinu' the affairs of the said Bank;"— 
 
 ■\v 
 
 and then the ]»artlciihir items alle^'ed as false are set foi-th ; in fact a hill 
 of ](articiilar.s has heeii im-orporated in the indictment, althouii'h not 
 
 Tiie pi-ineipal ai-gument of my learned friend is, 
 
 nhx^lutelv necessarv 
 
 that we ouo-ht; to have pointed out what sort of ivtnrn was meant. Tho 
 pi-eci.se point was i-aised in the case of Cotte, in other woi-d^. '• You do not 
 show tliat this is a monthly reiui-n to he made to Government." In the 
 case of Cotte, this point was rai-ed in etfect hut not iit tiic same words. 
 In the Cotte case tlie ohjection is in more general tei'ins. moi-e com|)re- 
 !ien>ive; ami still the Judges — your Jionoi- heing one of them — held that 
 indictment was good on that pf)int. All the anthoi-itics set up hy Mi-. 
 
 illC 
 
 ivci'i', were applicaoie under a previous system ot criminal ])leading and 
 had gi'eat force; hut, now, all the>e technicalities hav'e heen swept away 
 hy recent legislation, which <le(dares that if the terms of the statute are 
 followed, and if the ]>risoner can see what the oltenee is intended to he. 
 the indictment is good. Kor instance, in a ease of forgery referred to in 
 Ar(dihold, lOth edit., p. o.'j'J, the indictment merely mentioned the doeu- 
 iiiont forge 1, as a certain w;ir:ant for payment of money, without giving 
 the date or stating the amount or anything else. My learned friend was 
 unfortmuite in citing tiic n^pusites of an indictment for forgety. This 
 point has heen Itefor*! thn Court of Ap])eal.s antl this Court; and the ruling 
 lias heen tiiat, unless the ]iresiding judge has heen misled, the indictment 
 '^liall he iicld gof)d In' following the tei-ins of the statute. By 32 and 
 3;) Victoria, chap. 2!'. section 2". it is enacted that — 
 
 '•Till- forms of indictuc'iu ((jutaincd in tlie schrdiilf A to this Act may hv ust'd' 
 .ind siiall bo sufficifnt as n^spects tlic scvfral otfenccs to which they nspuctivdy ro- 
 iafi' ; and as rcspi'ctH otTi'iici's not mcntioiifd in thf sclicdub' tlu' said forms sliall 
 Ki'ivc as a guide to show the manner in wliieii the otffuces are to be charged, so as to 
 avoid surplusagt; and verliiage. and the averment of matters not m.'cessary to be 
 prnvcd, and the indictment shall be gnod it', in the opinion of the Court, the prisoner 
 will sustain no injury from its iM'ing ju'ld to br so, and the oti'ence or ofl'ences in- 
 tended to be charged by it can bi- undirstood from it." 
 
 Mr. Kerr lias ^aid the return in (piestion might he a return furnished 
 from one Baidc to another. Suppo>e it were, the indictment would still 
 he good under the Haidcing Act ; it would he good whether it is a return 
 to he mad«' to (htvernineiit or from one Bank to another if it wei-e a wil- 
 fully fahsc oi- decejdive -tateinenl. It i> not necessa; y to point out that 
 ilic I'etui'Tf is one to he made liy law, oi' that it is a monthly return to he 
 male to (lovernmoni. The deci>ioii in the Court of Appeals cover.s this 
 Then as t » th<^ other ohjectiou. that there is no alleu-ation that the Con- 
 .^oiidated B:» ' "s one ol' the Bank- tt,» which the Banking Ad applies. 
 
 j1 
 
to 
 
 
 Ml". Kerr does not see tlmt this is i 
 
 lentical with the objection talcen 
 
 s CllSl 
 
 cnnxi 11 IS no 
 
 t shown lliiit tho Banquo Jacques Carlit'r 
 was duly inc. n-poralcl :in.l .abject to the j.rovi>ions of the law relatiii^r 
 
 €ott 
 
 Be 
 
 to Banks juk.I Banking? 
 in Cotte's ca«e 
 
 Tii(l"0 Ranisav refused to allow that object 
 
 Mr. Iverr nryed that it is not shown on the face of tjie I <1 
 indiclnumt that the C..nso!i(hile(l Bank comes nn.lei' the operation of tin- 
 
 rv to show this, because the Con- 
 
 Ban 1 
 
 nil 
 
 Acts and that it was necfssti 
 
 lal 
 
 .solidated Bank min'ht have been incorporated previously to the oi-i^ii'ii 
 Bankini;- Act of 1S71. Now, if the Consolidated Bunk iiad been nu'ii 
 tioned fn the schedule to that Act it would have been nojnore necessarv 
 to be stated in the indictment than in (Jotte's ea>e. 
 
 Tlie Consolida 
 
 tOi 
 
 Bank of Canada was incori)orated by the :}'J Vi«-t. Chaj). 44 section H (,t 
 
 which enacts that all the pi'ovisions :n 
 
 I the amendiuents of tlie Bankin 
 
 Act shall apply to the Consolidated Bank of Canada in the same manno 
 
 if the same were expri'ssly incor])oratc 
 
 1 in this xVct. lli^i-e, therefori 
 
 vision in tlie Act of Incorporation of the Consolidate I 
 
 an 
 
 i> an express pro 
 
 Bank of Canada, that the Banking- Acts shall a].i»ly to that Bank a> it 
 expressly mentioned in the Banking- Act and its amcndnients. In ISll 
 Parliament i)y the Baiiking- Act I'cpealed the charters of tho Banks in 
 existence, and substituted that Act as a ^-eneral ciiarter for all Baid<> 
 Therefore all the Banks in Canada have .a new charter wiiji a few exci.'i>- 
 tions. The BanquL- Jac<pics Cartier lias this new chartei', and tlii- 
 Consolidated J]ank of Canada has this new charter. If it was nm 
 necessary in the case of Cotte to state that the Banque Jacques Cartiii 
 was subject to the ]U'ovisions (d' the Bankini;' Act, it is not necessarv 
 in tliis case to state that the Consolidate"! Bank is sultject to tho-r 
 provisions. 
 
 Mu. WoTiiERSPooN— T he loariu'd counsel for the j)rosecution ha- 
 cast a slur Uj)on the defence. The fact, however, that tlie indictment in 
 Cotte's case was sustained <loes not make an absolute precedent to biinl 
 u-^ in this case. 1 would a^uin draw the attention of the L!oui't to the 
 act relatin_i>; to Criminal Procedure, 32 and .33 Vic, e. 29. Section 27 o[ 
 that act is an enactment to assist the Court to come to a decision as t<i 
 the sufficiency of tlnMiuhctmcnt. A p')int was taken by the prosecu- 
 tion, that the indictment would bo i;'ood even if the return were a re 
 turn made to another bank'. The section of tlie act creatinij^ the otfencr 
 must 1k' taken In connection with tiie other sections of the Banking Act. 
 Section 13 detines the use of the tes-m and limits it: and, therefore, in 
 describing (he otfence alleged to be committed, it must be described in 
 technical terms, to indicate it as a return detined by section 13, wliicli 
 limits the use of the term throughout the whole Act. The prosecution 
 by admitting that the tei-in used in the indictment would refer to a state- 
 ment made to another bank', liave thereby admitted that the term s'l 
 used in the indictment is a general term. AVter leferring to the prac 
 tice in Kngland with the return-, made by a railway company to Gov- 
 •oi'iiment. whndi retui'ns ai'c ri-ipirred to be detined in [)artieular tc^rni-. 
 Mr, Wotherspoon com|ilaiiied of the manner in which the yrosecution 
 liad chosen to as|)er,se the motives of the ilcfeiidants in putting forwanl 
 these feclinical pleas, which ha<l been advised '•.' their counsel, who 
 thought tit to take this cour>e in the interest oi .; eir clients. 
 
 His 
 
 they arc 
 
 nical or 
 
 His 
 
 (llUlsil Ul 
 
 His 
 
 iiicid in 
 for the c 
 ileinurre 
 the defei 
 of the C« 
 al>o tliat 
 same des 
 ls79, aiu 
 charged 
 sjiectivel 
 affairs of] 
 (reneral I 
 these wil 
 particula 
 the moti 
 objection 
 (lecdared 
 ullegatio 
 initted ii 
 'leteiidan 
 |ii'Ocedur 
 mur.'er* 
 (Useussio 
 t'.iat the 
 t.Vinsolidi 
 length, i 
 tiefence. 
 cient for 
 on mutio 
 in tlie sa 
 Jacques 
 was a d 
 the Dora 
 lating t( 
 to reserv 
 this omi 
 
Ilrs Honor — When persons Jire hroiii^ht before a eoiirt of justice^ 
 they Jire juHtitied in taUMng every means of (lefendin«; themselves, tech-'^ 
 iiieal or otherwise. 
 
 His Honor i-eserved jud<i;ment on the demurrer and motion to 
 (iiiasli until tiie followinir Mondav. 
 
 ion ii:i- 
 ment in 
 to bii'.'l 
 
 to tile 
 on 27 lit 
 on as 1(1 
 prosecu- 
 e a i\' 
 
 otteiMT 
 
 pi-ac 
 (j'ov 
 
 TIIE lp:gal objfxtions. 
 
 Mr. JuHlice Monk overrules them on (he IZth Odubei 
 
 Hrs Honour rendered jndi^ment on the motion t(j (juash the iiidiet- 
 iiiont in tiie ease as follows : The (jiiestions which nave been presented 
 foi" the consideration ol the Court arise on two motions to (juash and two 
 demurrers to indictments ai-'ainst the accused. The objections urged by 
 tlie (hd'ence in the-e several proceedings are identical, and the decision 
 of the Court in regard to one disjioscs of (he other three. I ma}' remark 
 also that the two indictments ai'e the same in form, setting forth the 
 same description of oti'ences committed, the one on the 9th J.inuai-y, 
 IsTO, and the other on the Gth February. 1879. The defendants are there 
 charged with liaving uidawfully and wilfully made at these dates re- 
 sjiectively, certain wilful, false and deee|)live returns respecting the 
 attairs of the Consolidated Baidc of Canada, they then being, one the 
 (rcneral Manager ami the othei-s. directoi-s of of the aforesaid Eardc, and 
 these wiltul and false statements are alK'ged to exist in certain material 
 particulars which are theiein set forth in detail. As before remarked, 
 die motions to quash and the demurrers involve similar grounds of 
 objection, and it is lu'ged against the indictments that they should be 
 ileclared and adjudged insufficient in law. 1st. " Because there is no 
 allegation therein of .iie said ntlence therein set out having been com,- 
 niitted in the disti-ict ot .Montreal.'" This ground was abandoned bv the 
 delendants' counsel at the ai'gument, and as a matter ot law and legal 
 procedure it could not prove successfid on a motion to (piash or on de- 
 miir.'er" The point is too cleai- under the statule to admit of doubt or 
 discussion. 2nd. ''Because it does not appear in the said indictment 
 t'.iat the said Act, or any Act of the dominion of Canada, applies t<t the 
 Consolidated Bardv of Canada. ' This objectioji was argued at great 
 leny;th, and ur^ed with considerable ingenuity b\- the counsel tor tlie 
 defence. But in regard to these pretensions, it might, perhaps, be suffi- 
 (ient for me to refer to the case of Colte, in which one of the points raised 
 on motion to quash reads as tl)llows : " Becau>o it is not shown, as set forth 
 in the said imlictment, that the Baidv therein leferred to as La Banque 
 Jacques Cartier, of which, it is alleged, the said IloiioreCotte was Cashier, 
 was u duly incorporated baid<ipg institi'tion, doitig business withiti 
 llie Dominion of Canada, and subject to the provisions of law, re- 
 lating to banks and baidiing." A leai'iied Judge of this Court refused 
 to re.serve the question thus submitted for his decision, and held that 
 this omission in the indiclnient was liOt fatal. In that opinion I 
 
w 
 
 m 
 
 72 
 
 entirely concur, and in any case, even if that view of the huv was not s., 
 clear to my mind, I would hesitate in the face of such a i-uhng hefofe 
 dissentinL' from that dccisi(»n on the ]u-cseiit occasion. But as this point 
 was not submitted to the Coui-t of Appeals upon the reserved case, aii<l 
 as the Consoli<Uited Bank of Canada is not to be found in the sehedide t., 
 the Banking Act 34 Vic. C.^ap. 5, it is, iierhaps. due to the argument nf 
 Counsel that I should, in a few words, assign my reasons why the above 
 decision in the Cotte ease applies to the one under consideration, and 
 must be upheld and adhered to in this instance, although there is a slight 
 ditference between the two banks in regard to the (hites ot their incorjio- 
 ,..^tion— the one being in existence at the lime of the Banking Act, ami 
 the other incorporated by a statute subsequent to that Act. If] clearly 
 understand the objection, it amounts to this : Th« Consolidated Bank of 
 Canada not being in existence when the Hanking Act was passed, and 
 therefore, not bcung refei-red to in the schedule to that Statute, its subsi'- 
 quent incorporation and the ai)plication of Dominion Banking Law to thai 
 institution shouM have been alleged in the indictment. At tirst sight, 
 and upon a restricted view of the law, there is, no doubt, something plau- 
 sible about this argument, but [ confess myself, after carefid consideration, 
 unable to see how it can be successfully urged against the suHiciency ot 
 this indictment. Bearing in inind, therefore, the precise point raised hy 
 the defendant's counsel, vi/,. : If the Consolidated Bank of Canada was in 
 existence when the :]4 Vie, C;q). 5, was enacted, that Act does not ai)]dv 
 to it because not mentioned in the .Schedule, -<-id as it was incorporated 
 tive years afterwards by the Act 39 Vic, Cap. i, this subsequent charto;' 
 should have been alleged in the indictment, in order to show that it came 
 under the operation of the Aci 3-i Vic, Ca]). 5. lu order to mark the 
 relation of these two statutes, the one t(» the other, it is necessary ii 
 refer to them a little more in detail. i\v the first clause of the Banking 
 A-ct it is enacted in sul)stance as follows : The Charters or Acts of Incor- 
 poration of the general l)anks enumerated in the sclieiluleto that Act are 
 continued, subject to the provisions of that Act until 1st July, 1881, and 
 the provisions of that statute shall apply to each of them respectively, ami 
 their then present (diarters were repealed, except only as to the mattciN 
 for which tlie said chartiM's are as therein above (•ortiniied until the day 
 last aforesaid. In the section 2 of that Act will be found the following' 
 words: — •' The provisions of this Act shall a[»ply to any Ijank to be her/ 
 after incorporated, (which ex])ression in this Act includes any bank in- 
 corporated by any Act passed in the present Session, or in any futuii' 
 Session of the I'arliainent of Canada) Avhether this Act is specially men- 
 tioned in its Acts of incoi'poration or not, as well as to all banks whosi' 
 charters are hereby continued; but not to any other, unless extended to 
 it under the special provisions hereinafter made.'' Section 13 of the 
 same Act provides that '• Monthly returns shall be made by the bank to 
 the (rovernmen in the following f )rm, and shall be made up within the 
 first ten days of each month, and shall exhibit the condition of tne bank 
 on the last juridical day of the month preceding, and such monthly re- 
 turns shall be signed by the president, or vice-president, or the director- 
 (or. if the bank be en eomnuuidite. the principal partner) then acting a-^ 
 j)resident, and by the manager, cashier, or other principal otficer of tin 
 
73 
 
 I not SI) 
 ' befbi'e 
 is point 
 ise, jukI 
 >dule tu 
 nent df 
 le above 
 ion, Jiml 
 aslijjflit I 
 ijic'oi'iio- I 
 \.C't. ami 
 1 clearly 
 Bank <if 
 ised, and 
 ts subsc- 
 \v to thai 
 st si,ii'ht 
 ing plau- 
 (leratioi,. 
 L'icncy "t 
 •aised liy 
 la was in 
 lot apj'lv 
 i»rporaU i 
 it chai'te;' 
 fit it came 
 nai'k the 
 essary I't 
 Banking 
 of Incor- 
 it Act are 
 1881, aiul 
 ively,anil 
 c matt f IN 
 1 the day 
 tollowin-' 
 be her>' 
 bank ii' 
 my t'uturo 
 iaily nioi!- 
 iks whose 
 ctended \'> 
 13 of the 
 10 bank to 
 vithin the 
 t'tne bank 
 ion Lilly I'o- 
 directtii- 
 1 actiiiii' :•'' 
 icer of the 
 
 I) 
 
 < 
 
 bank, at its chief seat of inisinesp.' Section 62 of thet>ame Act, 34 Vic, 
 Cap. 8, enacts that '• The making of any wilfully false or deceptive state- 
 ment in an\' account, statement, return, report, or other document re- 
 Hpecting tlie affairs of the bank shall, unless it amounts to a higliei" offence 
 be a misdemeanour, and any and every president, vice-president, director 
 principal partner. i?/i commandite, auditor, manager, cashier, or other 
 otficer of tlie bank preparing, signing, approving or concurring in sach 
 statement, return, report or document, or isbuing the same with intent to 
 <leceive or mislead any party, shall be held to have wilfully made such 
 false statement, Jind shall further be responsible for all damages sustain- 
 I'd by such party in conse(jUcnce theieof." By the 13th clause the law 
 imposes on the bank^^thc duty of making moiithiy return.^ ii» the Govern- 
 ment ; and the (i^iid clause s]jcaks of any wilfully lalse or decep;ive state- 
 ment 111 account, staiement, return, report or other documoni iv-specting the 
 affairs of tlie liank. and it i'ui-rhcr declares that any president, vice-]iresi- 
 dent, director, auditoi-, managci", cashier, or other otficers <tf the bank pre- 
 paring, signing, ajijtroving or concurring in suchslaiemciil, return, report 
 ur document, shall be held to have wilfullv made such false sialement. It 
 must be admitted that tliis elause emi)races a great number and variety 
 ol' cases legarded as wilful and false in Imsiness tran.-aciious. It un- 
 doubtedly is extremely sti-ingeiiL and cumpivhensive, and is calculated 
 in the highest degree to stimulate the activity and vigilance of every 
 one connected with the nianagemcnt of those important iii>titutions. It 
 goes far beyond the monthly returns which banks are ol)ligc i by the A(;t 
 to make to the Government ; but such is the law and we have to take it 
 as we find it and administer it as best we can. Its bearing on this ca-^o 
 will appear in the sequel of tlioe remarl-s. Now let us ascertain whether 
 this Act 31 Vic, caj). 5, with this and other provisions apidics to the 
 Consolidated Bank of Canada. Section 9 of the Act of Incorporation of 
 this "Consoli.lated Bank "" 39 Vic, c.ip. 44, enacts that •' The Act of the 
 Barliament of Canada, passed the thirty-lourth year <jf Her .Majesty's 
 reign, chapter hve, intituled > An .Vet relating to Banks and Banking,' 
 and all the provisions thereof, and the amendments thereof, shall apply 
 to the ' ConsoliJated Bank of Canada," in the same manner as if the same 
 were expressly incorporated in this Act, except in so far as such pro- 
 visions relate specially t(» banks in existence iiefore the jiassing thereof, 
 or to banks e/i (?om?/h///c/(-7e, or are inconsistent with this Act, and it is 
 t..en declared to be a public act. Here we have an express clause of a 
 public act declarin-- that the Banking Act, 34 Vic. Cap. 5 shall aj.ply to 
 theConsolidaied Jiank. The Court is bound to know this provision ol 
 the law. I am (jbliged to recognize and act upon it without allegation m 
 legal proceeelinu:s and without proof other than that furnished by the 
 law itself What necessitv for alleging the fact in the indiclinent? 
 What object wouhi be attaiiied in a jaosecution like the present, by in- 
 serting such an allegation therein? I have none— [■ know ot none— in 
 the opinion of the Court such an avei'iuent would be simply useless, and. 
 therefore, this ground of demurrer must be overruled. ^^ e come now 
 to the third reason for demurring to this indictment, and it is as follows: 
 Thirdiv— Because each of the false statements alleged in the said return 
 is if false, as alleged, a misdemeanor of itself, and each sucli misde- 
 
■I 
 
 ' i 'Wi 
 
 li,i 
 
 meaner should be the subject of one count, whereas there are over six 
 misdemeanorB alleged in the sole count contained in the said indictment. 
 This ground, I believe, was abandoned at the argument; but, in any 
 case, this point was dispotjcd of by the Court of Appeal in the Cotte 
 case ; the Court holding that the indictment, which was in form pi-ecisely 
 the same as the one under consideration, did not charge the deiendant 
 with several otiences or with om- oU'ence in diftei'ent counts, but contains 
 only one count, charging the di'fendant witti only one offence — that !>;. 
 of having unlawfully and wilfully made a certain wilfully fa se and 
 deceptive statement m a return respecting the allairs of the iSaidc, whit li 
 Btatement, it is averred, was false in sevoi-al iiai-ticulars, the whole foini- 
 ing but one otfence, as the seveial particuhii's iif which the statement 
 was false and deceptive were included in the same i-eturn, and foinied 
 but one and the same transaction. This pretensi(m. therefore, cannot le 
 sustained. The ••4th' and " 5th '" reasons are as fed lows ; viz., — 
 "Fourthly."' — Heeause it is not therein alleged that the return, which i'^ 
 said to contain false statements, was a retui-n to the Government ol the 
 Dominion of Canada. " Fifthly.' — Because it is not therein alleged that 
 the said return was ever published or made known to the public. The 
 law does not distinguish between returns imjiosed as obligator}' by the 
 Act and other returns, and whore the law (h^as not, the Coui't will not — 
 cannot distinguish, besides, these points were disposetl of by the (-ourt 
 of Appeals in the Cotte case, and in that judgment T concurred. The 
 wonting of that indictment, as bett)re remai-ked. was tlie veiy same as in 
 these, and it was held that thei-e allegations were not necessai'v. The 
 otfence consists in the making any wilfully false or deceptive statement 
 in any account, return, lejtort or other document respecting the atfairs 
 of the bank. The indietment is in the very teinis of the statute, and no 
 more is required in this instance. Besides, the retui'U must be wilfully 
 false and deceptive, — the natu]v of that return will sjjeak for itself when 
 produced and legally i>roved. Till then, and owing to the eonipre- 
 hensive language of the siatute, the Court is of opinion that these aver- 
 ments were not necessary, and eonsequently that the opinion of them i^^ 
 not fatal. Tiie j-eason rhat it is not alleged in the indietment that the 
 defendants wei'e directors and officers of a bank to which the Banking 
 Acts of the Dominion of Canada a])ply. has already been considered and 
 disposed of. The necessity of negative averments' in the indictment was 
 also mentioned in the argument. The coun.sel are awai'e of the Indding 
 of the Court of Appeals as to such allegations in the ease so often re 
 ferred to above. The authorities cited by Mr. Ken-, from Archbold and 
 Paley, in my opinion, do not a}>])ly to the case under consideration, and 
 the inconvenience and even inexpediency, in view of an elfective ailmiti- 
 istralion ot justice in cases like the present, of attemjKing to point out. 
 before the adduction of evidence, in what particulars such statements 
 are iiilse and deceptive, must l»e obvious to every one familiar with th( 
 incidents of this kind of jtrosecution. The statutes I have quoted and 
 referred to are public acts. They are )»recise, formal and peremptory in 
 their pi-ovisions; and 1 am of opinion that the jurisprudence of this 
 Court fully justilies the application of them, which the Court feels called 
 upon to make in these cases. The motions and demurrers are conse- 
 (juently dismissed. 
 
75 
 
 over H]x 
 ictmc'iit. 
 , in any 
 he Cotte 
 precinoly 
 olendant 
 contains 
 -tiiat i><. 
 1 sc and 
 k, wliicli 
 )lo I'oi'ni- 
 tatomc'iii 
 . foinied 
 aiiiioi I c 
 i viz.,— 
 which i< 
 it ol the 
 ,ii;e<l tiiat 
 ic. The 
 ' by tlir 
 ill not— 
 he Com t 
 hI. The 
 nie a^^ in 
 ■V. Tlie 
 atenient 
 '.' att'aii's 
 i, and no 
 wilfnlly 
 ■If when 
 eoin|)i'C- 
 s^e avei'- 
 iheni i'^ 
 hat tht; 
 Sankiiiii' 
 i-etl ami 
 ent wa> 
 Jiolding 
 ft en le 
 >ld and 
 ion, and 
 ! admin- 
 int out. 
 tements 
 ill» th( 
 ted antl 
 )tory in 
 of this 
 5 called 
 conye- 
 
 Mr. Kerr moved, as a matter of form, that his Honor would ho kind 
 vnough to reserve the points for the Court of Appeals, and to enter the 
 motion on the record. It was merely a matter of opinion. 
 
 His Honor admitted it wa-< a mattei- of opinion. The Coui't would 
 enter the motion, but he declijied to make any reservation. 
 
 In answer to the usual question put by the Clerk, 
 
 Mr. Kerr said they ]»leaded •• not ijuilty. " In askini.!; to reserve 
 the (juestion for the Queen's Bonch, he meant, of course, on both the 
 moti'm and the demurrer. He would at the same time move for a sep- 
 arate ti-ial. 
 
 Mr. KiTriHE said it had not been allowed in cases of misdemeanour; 
 he had no objection, however. 
 
 Mr. Keiu! — 1 suppose my learned friend will consent to an English 
 speakin:.; jury ? We are i-eady for trial immediately. 
 
 His Honor said they were desii-ous that the ti'ial should rlose this 
 wcM-lc ; if they could liegin on Wednesday, this miichl be (lone. 
 
 xVIr. Rltchie — I think Thur.sday would be the earliest day on which 
 we could proceed. I intend to take up the case against Sir Francis 
 Hincks first. 
 
':? il 
 
 SIR FRANCIS HINCKS ON HIS TRIAL. 
 
 i 
 
 narifcsT IDA.'S'. 
 
 COURT OF QUEEN'S BENCH, CROWN SIDE. 
 
 Present : His Honour Mr. Justice Monk. 
 
 Montreal October IGth, 1SY9. 
 
 The followint; Counsel appoai-ed :— For the proseoution, Mr. Ritchie, 
 Q.C., Mr. Archambault, Q.C., and Mr. T. P. Butler, Advocate. For the 
 defence:— Mr. Kerr, Q.C.. and Hon. J. J. Abhott, Q.C., appeared for Sir 
 Franci* Hincks; Messrs. Wurtele. Q.C., VVotherspoon, and Macma.ster 
 watchinir the case for the other directors of the Bank, all of whom were 
 present in Court. 
 
 The case of the Queen vs. Sir Francis Hincks being called, on motion 
 of Mr. RiTCHifi, 
 
 Mil. KiRR, Q.C. — I must ask my learned friend for an English jury. 
 Mr. Archambault, Q.C. — I cannot consent to that. The panel must 
 be called in regular order. 
 
 Mr. Kerr — You cannot do that, as we have a right to six English 
 jurors. 
 
 Mr. Archambault— Oh! certainly, you can have that. 
 Mr. Kerr — We prefer to be tried by onr own countrymen. 
 Mr. Archambault — We are mostly all Canadians here, Mr. Kerr. 
 (Laughter.) 
 
 The names of the following witnesses were then called : — Sir L. 
 Tilley, Messrs. J. M. Courtney. \V. J. Buchanan, George Hague, F. L. 
 Burnett, C. H. Wethav. M. S. Lonergan. Wm. B. Morgan, W. C. Pridham, 
 Arch. Campbell, John Rankin, E. L. B>)nd, R. Moat, H. Beattie, Rd. E. 
 Grindley. 
 
 After considera*ble challenging on lioth sides, the following gentle- 
 men were empanelled as the jury: — Michael Mellon, James S. Noad, 
 Charles Gratton, Flavien Hardy, George Maybank, David Miliar, James 
 D. Scott, Richard Boyce, John S. Cartney, Richard Lamb, Thomas Irving 
 and James Callaghan. 
 
 In opening the case for the prosecution. Mr. Ritchie said this was 
 the second case of the kind brought befoi'e the Coiii'ts in the histoiy of 
 Banking in this country. The charge against Sir Francis Hincks was for 
 an otfence made l)y law a misdemeanour, but one of a very grave and 
 seriouH nature— namely, having furnished and sent to the Government a 
 false and deceptive return respecting the aiTairs of the Consolidated Bank. 
 The retui-n of the amount of liabilitiei* and assets of the Consolidated 
 
11 
 
 Bank of Canada on the 31st dny of Janiiavr, IHT^. i^howod the ti.tal liahi- 
 h'tiess to be $'h^22,H'M.HH, and "the total assets. $M.H<iS,22-_'.>J5. Prior to 
 May, 1876, there were two l>a(ilcs carrvin^j;' on Imsiness in Caiiadu. one 
 was the old City Bank, which had been e.stablishe<l in IS.'JJ.an inf^titution 
 almost coeval with the history of banking in Montreal, and, thoiiM;h some- 
 what slow, Htill a very safe, .steady-<;'oin,ii: bank: and another bank, the 
 Hoj'al Canadian, earryinif on business at Toronto, haviitir nimieroiis a^'en- 
 eies. The City Haidc was, |)erhaj)K, not a vei-y sirotiff Inink. but it htid 
 never l>een obli,u-ed to elo^o irs doocs, tiioiii;h oi> on<? occjiNion it> ciiMital 
 had been reduced. Tiie'Royal Canadian Bank had not been so fortunate, 
 having, in 180!l, been oblii^vd to suspend paynifnt. Thfts». banks amalga- 
 mated to form a stroiii,^ bank, under t!ie name of the C^Msolidated I^ank of 
 Canada, and this amalt^amntion was ratiiii'(l l)v an Aft of Parliament, and 
 went into operation, dating from the lOtb May, 18T<>. flie new Bank had 
 a capital stock of $i,(H)0.i)(l(l, and eomnienced l»usine.<s under the most 
 favourable auspices. The tii-st PreMdent of the Bank was Sir Franeii 
 Hinck», a man long known in the history of this (■ounti-y. of The highest 
 standing and ol' well-known tinancial ability, and ability of every descrip- 
 tion, no one being Bupposed to bo an abler rinancier tlian he in the com- 
 mercial world. He was paid as an officer of the bank to attend to its affairs. 
 There were also other gentlemen of great prominence fojiiected with the 
 working of this institution, and all were confident of the great success 
 which would attend it. Everything seemed fair until la-t April, when 
 affairs took a downward tendency, the Bank beiuu' otili<jed to apply to 
 Parliament for authority to reduce its caj)ital : i nd. in tact, its nom*inal 
 capital was reduced to|2.4i)0.(IOO. Its .subscribed capital was 83,500.000, 
 almost all paid up. Instea<l of this measure saving the bank, thingi* 
 went from bad to worse. Thougii the outside world knew but little of 
 this, deposits continued to disappear, tlieie lieing a steady i un on the 
 institution, which compelled it. on the 1st of August, to close its doors, 
 since which time it has not resumed payment. In 1871, l^arliament 
 passed a Banking Act, which was applicable to lianks then existing and 
 to those started after that date. By section 13 of this Act, th(3 obligatioti 
 was imposed upon every bank to furnish monthly returns to th« Govern- 
 ment, within ten days after the expiration of the last day of the month, 
 showing the true liabilities and as-^ets. Section &2 ])rovides that should 
 such returns be false or likely to mislead the ]niblic, the President and 
 officers should be considei-ed guilty of a misdemeanour, and bo jiunished 
 accoi'dingly. Such returns were to be signed by the F^resident or other 
 (»fficers of the bank at its chief place of business. In 1873 a change was 
 made by Parliament as to these i-eturns. Tlie object of Parliament in 
 requiring these returns to be made, and in amending the Act of 1871, was 
 that all information necessary should be furnished in order to enable the 
 Government and the public to judge of the condition of a l.iank. The rirst 
 item required to be given to the public was the ca])iral, and that very 
 properly, as the shareholders incurred double liability; and next the law 
 requires that all the liaiiilities of the bank should be stated under the 
 following heads: — 1. Notes in circulatiini : 2. Dominion t-rovernment 
 deposits payable on demand ; 3. Dominion GoveiMr:^. nt deposits pu\ able 
 alter notice; 4. Provincial Governme; t deposits payable on demand; 
 
19 
 
 6. Pi'ovincial Government depo^itp paj'able after notice; 6. Other depoBits 
 paval.ic on clemami ; 7. Other deposits payable after notice; 8. Due to 
 other banks ii: Canada; It. Due to a-jeneies ©r other banks in tbrei-!i 
 countries ; 10. Due to ai,a>ncies, kc, in the United King<lom : 1 1 . Lii.bilitiis 
 not included uikIci' tiie fore.iroini; heads. Then, on the other side, the 
 assets of tlie bnid< were to he accurately stated, all, of course, for tl)( 
 information of tlie pui.tlic, under liie following- heads: 1. Sjiecie ; 2. 
 Dominion notes: '.'>. Notes of and ehe<[ucs on other l»anks; 4. BaUiocos 
 due from other i.anks in Canada: 5. Bahmces due from other banks aiid 
 ati'encies in foi'eii;ri ountries; tl, Bahmces due from banks and a^-encii^ 
 in the United Kinti'dom : 7. Government debentures or stock ; 8. Loans 
 to Dominion Coveiiiment ; 0. Loan> to Proviticial Governments : Ki. 
 Loans, diseounts. iV:c.. tor \\hi(di shaies of the capital stock of other 
 banks aj-e held as (ollateial : 1 1 Loans, di>'joiints,or advances, tor which 
 bonds or drbenturos of municijia.i or other corporations, o * public srciir- 
 ities are held as coi lateral : 12. Loans, discounts, or advances on curi'eiit 
 account in corjiorations ; 13. Notes and bills dif>counted and cuireiit ; 
 14. Notes and bills discounted and overdue and not s])ecially secured ; 15. 
 Overchie debts seemed by nioitga^e. or hy deposit of or lienon otherstock, 
 or by othei- securities: ](!. ReaTestate other than bank pi'emises. and mort- 
 gages on real estate s(,l(l hy tlu' ba)d< : 17. Bank |ircmises ; 18. Assets 
 iiOL included undei- roro^'oing heads. 'I'his covered all tlie items of assets 
 with one exception : that was the lialiilitiesof Directors which was placed 
 m a separate item, merely to indicate to the public what tiie lialtilities ot 
 th« direetoi's were to the institution. 
 
 IDs lloN(»iR — What was the time of this jaw ? 
 
 Mr. EnriiiK — It is 30 Victoria. Chapter 4."5, ]'assed in 1873. The 
 intention (»f tl.'e Legislature, in passing this law, was, of course, to give 
 security t(^ the ]»uhlic. In Ho})temlier last, after tlie suspension of tiie 
 bank, the dii'ectors called a meeting to see what could be done. The 
 me -'ting was U;rgely aitendf.'d by the shareholdei's, and was ot' a veiy 
 excited natui-e. .Sii- Francis Ifincks presided at that meeting, and many 
 explanations wei'c nculc and statements submtted. From these expla- 
 nations it was found ilia.t, as early a.r Deeemhci-. tlie B.^nk liad been 
 boj'i'owing from other banks to the amount oi' :8(Vi2.000. Di the returns 
 which were ma'e by the President and Directors o', tlie (>th February. 
 1871b said to cover the ])ei'iod up to theiilst .raniuu-y last past, there was 
 no raenti(Ui of what was due to t>ther hanks. Any of the Jury accu-^- 
 tomed to business could see at once that if at tlie end of one month a 
 bi\Tik should return tliat it owed nothing to other banks in Canaila. and 
 that at the end of tlie next month a large amount sliould appeal' under 
 that head, it v,as manitcvt tliat 'he ]»osition of tlie baidv had been weak- 
 ened to such an ( xtent tliat it had toajijily to othei' banks for assistance. 
 That would have been a most imjiortant declaration *o n.ake in the 
 return, because, instead of the Consolidat .'d Bank appearing as it did 
 a'M>car, it would have shown that its; securities had been pledged to other 
 baiiKH. Here was an endeavor to conceal this state of attairs: lience the 
 indignation >f the shai-ehcdders. This might be called a "danger item.' 
 in this statcnr-'iit it would a]>]K'ar that rio'hing wns due to ()ther baid<s. 
 Th'3 thi'te first items i > llie assets wfie. Sjiecie. $.'{ll,4ii0.8r) ; Dominion 
 
79 
 
 Tilt 
 to <i;ive 
 
 of'llu' 
 Tho 
 a vci'y 
 
 nuiTiy 
 
 expla- 
 d beoi) 
 
 e turn -J 
 H'liai'v. 
 
 I'e waK 
 
 a(.'Cii'^" 
 lonth a 
 
 a. and 
 
 illHifl 
 
 weak- 
 8tan<('. 
 
 in the 
 it (lui 
 () other 
 nee th*' 
 
 item.' 
 
 liui\l<s. 
 niinioiv 
 
 notes, $267.738.5(1 ; Notes and checjiies of otiier bank^. $2G3,S3S.0f». Now 
 another fact elicited it the meetiiii; was tiiat from time to time, and fi 
 
 a mi 
 
 mbe 
 
 r of months, it liai ! eeii Uie <•u^tom of the utlicers of the laidc 
 
 to count under the head nf " s| 
 
 tecie 
 
 ani 
 
 1 c:ish 
 
 notes which vrei'c worthlc 
 
 1 Ht'i'is. hovs ami deniarK 
 
 i 
 
 The amount of I he / 
 
 j"(is ai 
 
 h1 d( 
 
 ematid notes 
 
 ic could not tv'il tlie exact 
 
 weiv stated to \)v from ■?2f)i»,(i0(i to ^liOii.oUO — 1 
 tiii'ures, as they had not hud ;u'c(>s«- to ilu' Iniok-^. aiid ihi> j)ro>ecution had 
 been made upon wlial wa^ >tate<! at ih.'i! meeting-. Au'^thrr item al 
 !e::i'e(i to be a mi>stiiteincnt was • Note- a 
 
 bills d!«c(>unl('d and current 
 
 S7,250.U!)4"..'" The hist item in t! 
 
 ■ lateinent is i,q\-en in iiie terms o 
 
 the law, ■' Other assets not included unilcr the fon'onini: iieads :"' but 
 here attain iiuthinu' was -stated ;>s {<> fhc-c as-;ets. rlu' amount biunii left in 
 blank'. W these I/oil's, wiiieh wcr.- Tuerei\' there to rejire^ent casji. had 
 
 H'en s 
 
 tated 
 
 in (heir jti'oj)er j»laer, tlta.' is. under the 
 
 iti>m >■ Other 
 
 .'issets not included under tlie fote^'oin^- heads."' the j>ul>lie would liav 
 
 al 
 
 ken the alarm at (iiu-e 
 
 hese were the |U'incij>al items which 
 
 had 
 
 been ])ointed out at tin meetiiii.'' as lri\inL:- been misstated. The Legis- 
 lature in re(juii"ing these items did ,-<> under very stringent ])rovisior 
 
 ill the taw 
 
 ne 
 
 b2nd 
 
 se( 
 
 lion (it the liankiiiir Act ^av 
 
 Wdfullv 
 
 makitig a false and defepti^e ^talenient sliall. unless it amounts to a 
 higher otfence, b<' a mi-deineaiiour." The s(>((i(>ti aU" d,ecl.'<re> tha! the 
 ofiieer signing such falsi' statenst nt shall be held to have made it wil- 
 ttiUy, so that all that tlio ])r')sefUiinn had to d(» Avas to pritve that Sir 
 Francis Hincks was President of the I>ank, and tliat he had signed such 
 talse statement. Large amounts had liecn l)ovrowed from other banks 
 which had not been shown in the return, and a large annur of /jons ap- 
 ])eared as ea^h which should not have app<'ared at all. He believed that 
 it was a<! incori-ect proverb that " ti^nre- could not lie." In eon(du»ioni 
 he expressed a ho])e that if the jury had the sligiitest feeling prejudicial 
 to the defendant they would lay it aside, as in no other w;iy eould they 
 fulfil their dutv. If the return^ made on tin' ♦itii of February were true, 
 ♦lien it was their duty to ae(iuit. but if they wei'e wilitiliy falsi', then it 
 was th'eir ]»lain duty to bring in a verdict of guilty, no matter what the 
 connequences shouki be to the defendant. 
 
 The first witness for the j>rosecution was 
 
 John M. Comrtnev. wno. beiiu' swori\, .>aid : — I reside at Ottawa, 
 and amlke]>uty Minister of Finance : I know tin- detendaiit. Sir Francis 
 Hincks; li now pro(luce the leuirn made to 'he (btvei'iiment by the 
 (Consolidated Batik ot" Canada, wbteh i^ <iafed mi ^\\v Gtli Fi-bruary last. 
 and signed by Sir Francis Hincks and .!. B. Jbnn_\. 1 know the haml- 
 writinu' of Sii- Francis nin(d<s. and iden(i(\- tlie signature as hit 
 
 Th 
 
 e return was r.-ad l(t the jury, and wa> the statmient >howiiig th* 
 a'l'iiirs of the bank on the Ist.lanuary last. 
 
 JJy Mr. Kehr — These bank retui'ns rome uikUt m_\ '-i>e<Mal super- 
 vision ; hav<' been ten years in the Finatn-e Hepartment. 1 came direct 
 from England <o take the [)osltioii. and have ha.l a great de;il of experi- 
 ence, having heeii in bank's iii Fnglainl iind India. 
 
 M». Kkrr — What d<» y-u <'.ins;dei' >hoidd app<'ar under the heii^l of 
 " Balances due to othei" banks in (^anada '.'' ' 
 
 Mk. j^'nviiiE — I obv'ct It. the (oie'-^fion ; tiiis is a question of law. 
 
80 
 
 TIrs Honour — Do not put the <iuestion ho pointe«lIy. 
 
 Mr. Keijr — Do von consider thai the items " BahincoB duo to other 
 
 Ki 
 
 mkH 
 
 aiu 
 
 1 ■ B; 
 
 dances (hie from otlier Banks " are contra items ? 
 
 A. I have IkkI no practice in p)"ej)anng batik returns m Lanu( 
 and T should hardly like U) say whether the two sides should be alike, 
 
 Mk. IVEKit — You have seen a nunilier oi'tliese returns? 
 
 The Witness — Yes. 
 
 Mh. Kerh — And in tho case of loans by one bank to another, w 
 has !■ en the general jiractice '.'' 
 
 Mk. IJiTCTitK ohji-cted to the '[uestion as immaterial. If it 
 
 i;it 
 
 WtTi' 
 
 proved tlial aU the other hanks in Canada followed tlie same vicious 
 course it woidd liaidly justity the defendant. If a man were accused nf 
 larcGny, it woidd not do to ->linw that twetity other larcenies had Ut-ii| 
 committeil. 
 
 Mr. Kerr — I mean to ^how tjiat if it has been the custom of otlai 
 bard<s to \)\a<-^ these items under the head ''Balances due toother bai 
 in Canada. "' ami rhesi- have been i-eceived as such by the officers ot 
 Crown. J'^ir l''raiicis was merely following' the usa<;e ibllowed by otl 
 baidvs. If 1 can show that it was done by other banks, it would sin'irl 
 
 tiifl 
 
 iW 
 
 that 1 
 
 ns view was pai'takeii d) iiy utiiei* banks. 
 
 Question — Do balances due to other banks mean balances du 
 
 e ;tii 
 
 exiiiihle 
 
 Mr. RiTriiiE — This is :.■>[ the time to <;o into that now. The will 
 
 wit!) a view to elicit infbrmatioti oi\ 
 
 ness mav Ik' recalled anvl exanmie 
 
 this point afterwards. 
 
 Mi{. Kkrr said tile point which he wished to raise was in ca^ci 
 
 loansof banks, what liad been the ireneial nractice ? 
 
 pri 
 Mr. Rrn niK objected, contenoinii: that it was illeiral. 
 
 Mr. Kerr — I want to si 
 
 low what is realh' the meaniriir o 
 
 .ft! 
 
 le n-di' 
 
 due t 
 
 o otner bank 
 
 His Honor — it is a cpiestion of evidence, not of opinion: I 
 
 ■l!>tlll.l 
 
 the <»bjection. The (piestion may fiossibly be asked at a futiii-e utagi 
 the case, but not at jireseiit. 
 
 The witness was directe(l to witinlraw. it beiuig understood tli;' 
 miirlit be recalleil. 
 
 ARcniBALTt (.'amprei-I-. Aetinu" (ieneral Manager of the Con>(»licl;itf4.,,| 
 
 Frai 
 The 
 
 U'.IS ) 
 
 hetw 
 I km 
 tvro t 
 not I 
 i'onii 
 ll'')7,' 
 anioiii 
 on oi 
 tJiis Ji 
 can not 
 at all; 
 the ca> 
 l»ari:\ 
 Ociobo 
 iiiimbei 
 t"' able 
 liad f>ef 
 "f S48, 
 -N'oveml 
 ■Stadaco 
 same b; 
 82,5,0' (» 
 I>ccemb 
 XortJi A 
 tlie .sam 
 J^ank (j( 
 Hank ot 
 M!», Ir, 
 beiiin- vo 
 tif" hon,s 
 ijiiKi jiJte 
 posit I 
 
 Bank, swor>. said : I proinee the book.^ in use in January last, sb<>v 
 the assets, liabilities and I'alaiices to the eredit of the other Bank^ 
 
 )roduee the Minute Hook 
 
 »■(■() 
 
 rdii'iT the deiiberatif>ns of the Board 
 
 a general statement showinif tin- ^)(«ition ot tiie imnk on Hist Jan 
 b^71* : a statement oi' he liabJhtirK :<nd assets of the lijink ; the tra: 
 lions with other Bank- are in tho brntk produced ; the book pi 
 
 at oral 
 
 '1111 1 o< I 
 JtlKiMf.t, 
 
 lie time 
 
 iinil 
 
 % 
 
 0(1M/ 
 
 shows the amount of ispocie : <annot produce a book siiowiiijir ihe rmi! 
 ot depositoi-R. To ;r»'' the whi-le of the amounts payable on denial 
 w«)uld have to produce a" the lodgei-s of the Bank. 
 
 The Witno s was then ordered to \)V(<fhiC£ the other books ot 
 
 mk, I 
 
 fecci 
 
 lilt 
 
 l)ank at Montreal a' tw lock, to which hour the (!ourt 
 
 adjourned 
 
 wa'- 
 
 On tlie re-openinir Mt theC.nirt at two o'clock, the Witness nrotlinm 
 ..1 1 .,,1 • 1 , 1 ■ . ' , X' 
 
 the other book.- required, and I 
 
 his examination was <'onlinue(l ;— ■ic ,j( 
 
 pts I 
 
 •••rrowedj 
 l^ei'i'mbeil 
 
 here 
 [ruTowed 1 
 
 'I T) 
 'aymeni 
 
 ']>o,- 
 
81 
 
 to C)thei 
 
 K? 
 
 Canuiiii. 
 aliki-'. 
 
 Fnnicis Hiiicks was Prosidei,! of rho ll-iiik in .Jnnuaiy un.J Fcl.riiai'y lasl. 
 The H|jO(Me lield by the bank on tlie .'ils', January la>t". in al! tlie »>raii>'he.s, 
 \v.is$;^ll,4(;i).85: thcsporieiield in MDUtival v/as Sl'J6.S7«i. TJKMiittoi-once 
 between these two amounts \va> $1 14,r)"^4.,^ 
 
 ind was held bv the branches. 
 
 1 know nothinn- jiersonally a^ to th.- ••ori-evinexs of the -latc-incnt. The 
 tvro tellei's, Messrs. J.onsor) and Hiiu'hes. arc in a position to know. I do 
 
 not know the aetual ainoimt on liand in Montreab T 
 
 her, wliutB Dominion notes held on ibe IJNt Januarv la>t. b\ the Hank 
 
 |L'()T.73ul.r)0; the amount in the Montreal branel 
 
 amount ot 
 
 wa.s 
 
 1 wa.> §1(;<;,485; i]u 
 
 t' It WCTi; 
 
 le vi'-'i"'!"! 
 iccused 
 had Ih'u| 
 
 n of <''die'.| 
 ther biiiilo 
 cers «»i tiicl 
 >d l)y otliM'l 
 ■on Id shi'wi 
 
 amount hel<J ia' the braiiehc- wa-- S 101. 24s; . .')(». Thf notes of and v\ 
 
 on ( 
 
 )lher Banks, held in Montreal were §101. 344.1') Tl 
 
 u'fiue." 
 
 K- total un<ler 
 
 this headino- was »:?<a'\.>:-}8 . 9l> ; the balance was held bv tlie branel 
 
 cannot say whether those statements w 
 at all ; could not sa\- wjietiu"' tlie f> 
 
 ie>. 
 
 ere Cfii'i-eet or !i!>i, a> I wa- not hero 
 
 e (ions oi' oeniand notes wtV' 
 
 IIK 
 
 the cash itci 
 
 bar 
 O 
 
 hided 
 Domini' >i! note.-, and the books did not >how. Tl 
 
 m 
 
 IK 
 
 iwel S'24,0^:>..'>'. from ibe Jjank of Commeix- 
 
 10 
 
 e oi 
 
 Ctoiiei' 
 
 1878. Th.'i 
 
 I the 241 h 
 
 e weit- two i-eeeipts of ihat amount wiih ditfei'ent 
 
 lumbers; the t'-iai wa> rf?48.1()()',G() , the A 
 
 eeounlani 
 
 yi 
 
 .innc 
 
 In' able to tell what >. rv was mad< 
 
 on th 
 
 h lOl 
 
 ano wlK'tlK 
 
 th 
 
 that 
 
 will 
 loan 
 
 had been returned on the 31 si January la>t. TIk-it wa- a further sum 
 
 es tine uii'i| of $48,lbG.f)f) borrowed i'vom the Bunk of Coii.mei-ee on the I'ith 
 
 November, 1878. The next tntrv was a loan of §25.000 from the 
 
 (i 2nd l)eeeml)er. l>'s7S ; (»n the same dav, from the 
 
 The >vu| 
 jrniUlioii onj 
 
 ii> in ca-vM 
 
 Stadaeomi Bai 
 
 sum 
 
 (J bank, anothef loan of $25.(100 
 
 'TX 
 
 I oil the same dav another 
 
 $25,0' <»; makin<r in all S75,000 from the Stadae(jiia Bank, (hi the 28th 
 l)(>eemher. 1878. thei'e was a loan of §200.000 ti'oni the l^ank of British 
 
 North America, and on the MOth of the same m>>nth $2()O.Oii0 more fro:n 
 the same Hank. On the 10th January, l>7!b were borroW('(| from the 
 of the *v.>i(l^ Hank of Monti-eal $'J8.2S7.2-- : on the 22nd Jannaiw. lS7lt. from the 
 Bimk of Monti-eal. a furthei $12.S.138, 8!» ; and on the 28tl! Januaiy, 
 bTl*, fnmi the Bank of Montieal. $50,000. That is all I see entered as 
 beinu" received trom any bank up to that date. 1 cannot sa}- whellu'r 
 Itli" hons which have been s]»oken of wei'e char<i'ed to particular ac<'ounts 
 
 1 afterwards ehan-cd. Banks tjave the money and we uave them 
 li'posit recei])ts. and sometimes coHatcral secui-ity. Cannot say what 
 
 latei'al security was iriven, noi" whelhei' tin* amount of notes d\>- 
 tmuited was reduced in tlie statement to the (iovernment bv this 
 
 ture btatif'l 
 Itood tbi 
 
 :on 
 
 • OlK 
 
 UlHt, sboNV 
 Bankv 
 
 Cr 
 
 Board 
 In St Jaiiuai'l 
 
 iinouiit, or left a.s thev were. Witnes> was at the otiice in Toronto at 
 time spokeii of. 
 
 Di)ii!. 
 
 By Mr. Kerr. — I saw the i-eturn furnished to (i(»vernment in the 
 
 , but difl not compare it with the books. I cannot say if the deposit 
 
 l(»ok pn>'^i'#i'i't'ipts from the Bank of Bi-itish Noi-tli America showed if the 82OO,o0tl 
 
 nved on tlu' 28th December, and th(> 82<M).0OO boi-roweij on the ."{Oth 
 
 tlie tn 
 
 l>K 
 
 tlie lUT 
 deui; 
 
 111 
 
 [)oiiMnbor. were due on the olst Januai-y, 1S71>. J'lie (U'iii'inal roeipts are 
 
 jot here The $0.S,287 borrowed on the lOth Jatmaiy, and the ??12;i,i:{8 81) 
 
 iooK- '" Ji'irowed on the 22nd January became due on tlu- 25th Ajiril, b'*!"'.* ; 
 
 ,vu't wa- '''^11' 150,000 IxM-rowod on the 2"8tii Januaiw became due on 2Stli April, 
 
 lb The depodt receijOs were returneij by the Bank of Montreal (»n 
 
 Itness pnitl"#i);iyment ot • money. These deposit receipts wore read to the jiir) 
 
 |o 
 
 nliniKH 
 
 \:-} 
 
 lie I 
 
 I epos It 
 
 otH in favour of the Sladacona Jiank be-ame <lue thirty 
 
 j: 
 
82 
 
 ■days after notice. Thoi-o was iiothini;- to show lliut nofico had ever been 
 <nven. The delimit rei-i'ipts in tavr of the Bank of Coinmorce aniount- 
 uii;- to S4.S-tliH.r)i;, were iioi due on the 31^1 .lanuary. and not payable at 
 •unv ^))e(•itied (inu-. Then- wn- no evidence on any of the.-e deposit 
 receipts tlnit tbev were due on \h" /Jlsi January, 1879; the iwo first were 
 payable wiibourni.;icc ; lhe\ l"n-e ii tere>t. one if allowed to reniain four 
 nimiths unpaid, the other if allowed to remain liii'oe month.-. The ori- 
 iriiial i-eliirn of the '>ank t<. the Deputy >lini-ler -.1 Finance ai^-rees exactly 
 Cvith tiieenti'ies in the book. Have liie jtas^dtoiiks ..f ilco Bank in my 
 posse-^sion. lint have not e.xaniined thorn ; the balances of the small j)ai.- 
 books of all the baid<> le^ree e\-acl1y with our books e.\cej>l in the sum ot 
 SUl.") in the liank of Monireni balance. I mean the IvAi^ov from which 
 the returns were made ; it i> not iiiiu.^ual to tmd discrepancies of this 
 
 kind. 
 
 Mi{. Kerk— .Mr. Campbell, will y^n exjjlain to the gentlemen of the 
 jury how the return:- o! the bank are made? 
 
 Objecied to and objection over-ruled. 
 
 Mil. C.VM1M5E1.1. — The toiaU Were taken from the books an<i the re- 
 turn- nnide to till' in'ad ottice. ^Montreal wa-> as fnuch a branch ot the 
 banlc as anv othei- bi-anch ; the return- weiv made up to the 3lsl Jan- 
 uary. There weri' IS brantdies and twn sub-agencies on the 31sl Jan- 
 uary. 1S7!«. Hold in jny haml the balance sht'cts ol' the ditVei'cnt offices, 
 — wit,h tjie execj)tion ofTorouto and Chaboille;: Square, of which I have 
 the full returns — showing tiie state of aftairs on that particular day. 
 These were sent in to the head office to siiow how matters were pro 
 gressing at the branches These balance sheets would generally be 
 received or. the 3rd or 4th of the uuiith. They are received by the 
 manager at the head otfice. and handed to Mr. Pridham, the inspectoi', 
 who had the tigures ti-ansferred into the book produced — General State- 
 nu'iit Book, ilave not compared the balance sheets wMfh the books of 
 the bank. 
 
 The C(»urt adj<»urned at 4' fO p.m. 
 
 SECOIsJO IDAY 
 
 Friday, October 17- 
 
 ARciiiB.M.n (Ix.MPBKLi. — Cross-exanunaiioii continued by Mh. Kekr 
 — The tiguivs in the genei-al balance book show a correct statement of 
 the liank on the Hist Janutiry. The returns to the Government arc 
 taken from this book. 3Ir. Pridham was at that time Ins])ector of the 
 baidv, and Mr. Helm was aceoimtant. 1 wa- at one time inspector mv 
 Helf. These returns are ready on or about the lOth day of the succeed- 
 ing month for signature. It is imjiossible for the J'resident oi- any one 
 man to verity the aeeuraev oi' these statenients. as they aiv made un ai 
 (litlerent point>. The President. 1 think, h;is to rely on the .stateuieni-' 
 sent in by the bi-anches. The chief accountant mamiges the details o| 
 the head office. The President, I think, looks to the General Manager 
 
 1 
 
83 
 
 li. Kekr 
 
 mcnt. ot 
 neiil are 
 
 »r of the 
 ,'C'lor my 
 
 succeed- 
 
 iinv <'»'^' 
 e up at 
 
 detail-' "1 
 Manugoi' 
 
 for the correctness ol' the return.-., and the 
 All the Defendant could do wouM U- f 
 hooks. 
 
 utter to his suhordinutes.. 
 H- to conipaie ihcin with the hianch 
 
 Ke-exaniined bv Mi'. iifrriHE : — I cannot v;,v that tl 
 
 if the return ot ?A>\ .)anuar\- la> 
 
 n.' li'eneral halam-e 
 
 Ba 
 
 nk. 
 
 ast. bv 
 
 Th 
 tl 
 
 wa.-^ in favour of the Con.soli( hated 
 
 le 
 
 aUmce due to other l>aid-:s in Cana(hi. on the '.'As{ Januaiy 
 
 'Vera I ^^as^-i»(((lk.s, wa.'^ ?;: 
 
 46 
 
 lO. 
 
 .752. iiO. The Dominion note 
 
 mi. due tVnni other baid< 
 
 wc'i-c 842,1^2';. Ill the easli at T 
 
 oronto 
 
 everything was cnriect; thei'e were no h<,„s inehnled in it. Tlie K-iral 
 tenders on l>t Janiuiry ha-^t. at the TonnitM branch, wore S4'i.2(;(;, juid 
 the." sjieeie in the liank wa> s:i7.7yo. '[^!n- rep.irn.s on that diiy iVoni oiher 
 
 iranclies and ai^'oru'ies were nierelv iiaiance>-. 
 
 I I 
 
 ia\'(' 
 
 Pi\'si(h'nt in si^•ninl:• the (lowrnnicni returns would I 
 
 le otticers ^f the bani<. bnt thcr 
 
 e was n.»l niueh 
 
 l»ro 
 
 la^e 
 haliil 
 
 1 H I ^> 1 
 
 bK 
 
 -aid tlial the 
 to depend on 
 itv of liis not 
 
 kiiowuiix aliout special loans; it was h; 
 know, if he attended to his duties. 1 
 ciiunteil at >b)ntreal, not liavini;- lieen there. 
 
 .Mr. KiTciirE — Would you not enter (n-ii.'i in th^ iteii 
 elmled under fbi-ei;'oin<i' head-" in the return '! 
 
 Ihai he 
 
 xMild not 
 
 do not Know how tlit casti wa&i 
 
 as>ets not in- 
 
 W'r 
 
 rNESs — 1 would inelude all ni 
 
 pro,, 
 
 locunienls in it. 
 
 Mr. IliTCHlE (interrupting- 1— But we are speaking;' of iinpi-oper doeu- 
 
 iiients. 
 
 Mr. JvERH. objected as thee.xi'^tence of these ho)i)i had not been proved. 
 
 \ViLH.\M J. T. JiOfsov. sworn, said; I was in the employ of the Coii- 
 "olidated Bank in Deeeinfer. January and Febiaiary last, in ilie eaj)aeity 
 if receiving teller. (Witness produced his 'i'eller's l.Uotter ot January 
 ast, showing tlie amount <»f specie, dominion notes, and notes ot and 
 •lie(pies on other baid<s, ludd in his cash, i Tiie annunit in specie in my 
 
 cash on 
 
 tl 
 
 le 31st .lanuarv last was SbiO.l") 
 
 Doniiruon iKttes, SIJOl : 
 
 bit 
 
 ('» . 
 
 de 
 
 notes of otlier banks. Sr).L'>;4: (dieijues on other banks. .S51.r)44, 
 -lips. §221,495. ■ The debit slips reju-oenting S221.4i.>o were uiven to me 
 to hold by the General Manager, I'y whom and by the Assistant Manager 
 they were initialled. These slips represciUe"! various sums whitdi luut 
 tieen lent tc>, among other tii'nis, Archer \ Co., Sti.'S.dOd; Heattie iV Co.. 
 147,(100; Funnss tS: Co., .'!?3<).f>7<'. and Fiirniss ^ Co.. #27.!>0(l. The total 
 amount on these slips was |221.4!*5. The\ were given to me to hold in 
 my cash. 
 
 His lloNorR — What relation does this hoai' to tlie rduin ? 
 
 .Mr. Ritchie — This siun should have come in under the items — .Specie, 
 l!f.'>U.4G(l 85, or 1) minion Notes !tf2(I7.73.'>..'»() or Noti-s and eluques ot 
 uther banks |2t)3,838.!-<t>. We sli'dl. perhajo, discover where it does really 
 ('(line in. 
 
 .\KcniB.\ .■• < Mi'BELn. l?e-e.\ainination continued — Produce the boh 
 referred to by Mr. Louson, I cannot say how these boas were counted 
 Ml the return. Mr. Wet hay oi- .Mr. I*ridh im will be able to explain them. 
 
 Mr. Louson's examination continueil — On the 31si .January last the 
 Hiiid< hud Hpecie, Dominion notes, and notes of and cheques on other 
 
 i5:iid<s, to the amount of 157.740.^(1 
 
 ri 
 
 le total amount on 
 
 hand 
 
 wa!" 
 
 S-'7'.f235.8fi, leaving a balance of -1(1221, !f»5 in bo>ts; was given no instiaic- 
 "Us with j'egard to ihes^e siij)s. except to holt.l them u'- cash. 
 
84 
 
 By Mr. Kerr — On that day had not in my possessions any notes for 
 which tliese were exchan.ned: do not Icno^v wluit they were given for. 
 
 Alexandek J. lIuuiiKs, sworn, said: L was jniyini!; teller in the 
 Consolidate! Bank on the ;Jlst January la>t. On that day we lield ot 
 si)eeie, •t]2.52;"). in : i)ornini()n notes. |ir>,614; notes of aiul cheques on 
 other Banks. .•f4.1J<>2.(iS: in oui- own hills. $177. (Wi. Have been in the 
 
 habit of lioldin;^^ bom for small ainounis in my easli ; amon<.jst the bun.'i 
 was an accepted cheque of J. C. Baker lor !?kOU».». The total amount oi 
 eash item^ was >''J]«».07;^ ■■'^■i. 
 A. Ill 
 
 (1: r 
 
 th 
 
 .1' the (. 
 
 loH.v A. KE[»i)Y. sworn, said: i wa> m tlie employ oi the i.onsoii- 
 d'lted Uiiuk op Hist January last, as paying teller. On that day I liad 
 in specie *21.;J5: Dominion notes, .:*1.57<i: notes ot and cheques on 
 othvA- BanK>, .•i;;]0.r)(i0.24 : bills of other Banks, *;).7^7.S(); in our ow.i 
 J]ank bills. ^2 :J.'i'.^ : sundry bills on other Banks. .^2,048.85; making n 
 total of 1540,241.44. 
 
 Wii.t.i.-VM ('. Phmuiam, ^worn. said: On the olist January 1; st I lieM 
 the po.-ition of aeting insj-eclor of tin* ( \)nsolidated Bank. 
 
 M\\ iiiTCHiK,— What vvas Sir I'ranci^ llincks" salai-y as President ? 
 (Question oltjcch'd to. and ob'cction overi'uled. 
 
 Witness — The salary paid Sir Kranris was !j!4.00() per annum until 
 June last. On the I'.^th Feliruary L counted Mi-, Lousun".s cash. 1 found 
 the slips (produced) among his cash. They aj)jieared to have been carrnvl 
 as cash sineo the 28th Novcuibei'. 1878. 1 c(Muiied the eash on that day, noi 
 otficially. but as an act of kiridness to assist M'". Wethay. I believe thr^e 
 are the notes (proi.iuced) i'eprcsent(>d l>y the sliji. L was doing dut>' m 
 the Bank the whole of the month of January. Tiiesje bans and den\an<i 
 notes were iriven to rover o\cr-drau'j:hts. llaviiiij" diseovered this slii) I 
 refuse<l to siij-n the siaicnieni ot cash on hand. David Ivinnell w;i> 
 Accountant of itie .Montreal brancli, Sii- l^'raneis Hincks was a.t llu 
 Bank from day to day: he might have lieen absent occasionally. 
 Witness was Accounliuii beroi-c Januaiy, and counted the cash on ilir 
 2(lth Xoveniber. two davs beiore tiie slip was given. These bdna weiv 
 given to cover over-drafts. The de])osit ledgei's wouUi sln>w the respec- 
 tive amounts. .Mr. Helm liad charge of one of them, and Mr. Elliott ot 
 the other. 
 
 By Mr. IvKitit, — I had something to do with countinii' the canh aftt-r 
 I became Inspectoi', but not so mueh as before Mr. Helm became :ic 
 eountant. These deman<l notes or b'lim were not inclu<l(;d in any one d 
 the three items repi-C'^eiitim.;- -peeie, Domiidon notes, or notes and eheciuvv 
 of othei' bank'"^. The aceountant's balance boolc of the Moncreal Brai lii 
 of the Consolidated Hank shows on the 15 Ist January, as ledlow.s : — Tellerv 
 $5l).'),71»2.45, from which is de'iucted S28(l GGO.IH. "The cf)mponent par - 
 of that deduction according to a book of reference, included the hons an.l 
 demand notes held by .Mi-. Lousor.. and all that was included in the i"- 
 niinion notes, specie or ehe(pies on other l»anks : these slips* or de'uaIMl^ 
 were classed under the heading "Notes and Bills diseoiinl^d ami curreni 
 They were given to cover over draf't«. and weiv subseipiently diaeoutitt'l. 
 They had not been disiountedon the iilst January, }»ut had been receivtil 
 into the cash, as if the paity signing had d<'posited his cheque on the 
 2Sth November. 187>i. Previous to .Fanuary last, 1 waf Accountant ot 
 
 oil 
 
 olh( 
 
 to ii 
 
 dein 
 
 \ C( 
 
 II: 
 
 «2;i. 
 
 I'i 
 
 eil 
 
 'etui 
 
 colli 
 
 bans 
 cash 
 Thai 
 
 of th 
 
 and 
 duel 
 Thes 
 and 
 it wi 
 as ca 
 reas( 
 I lies* 
 
85 
 
 otes i\<v 
 
 1 for. 
 
 ill tlu' 
 
 lield ot 
 
 l^iK's on 
 
 I in the 
 
 the boitfi 
 
 iiount of 
 
 ('onsoli- 
 ay I lifiil 
 
 qiies oil 
 our ow.'i 
 laking ii 
 
 8t I lield 
 
 qdent ? 
 
 uni unlil 
 
 I t'ouiid 
 
 .'11 (.'iirriivl 
 
 .t lUlV, IK'I 
 
 ievo ihr^c 
 y duty 111 
 I domainl 
 lliis sli[» I 
 uiK'U was 
 
 tW !l.t till' 
 
 .'Usi«jnaiiy. 
 
 ih on ilir 
 
 /^r/rt^ Were 
 
 he respfc- 
 
 . El Holt ot 
 
 cash at'ttT 
 let'iime ac 
 iuy OIK' "1 
 nd che(|;.'t"- 
 'ul Brai rii 
 ;— Tell.'i- 
 ment [»aiv- 
 e hon& iiii'l 
 in tlie L'" 
 tr demaiHif 
 111 curi't^ni. 
 disi'ouriH '' 
 oil receipt''' 
 que on lli"-' 
 i.'ountanl ot 
 
 the Consolidated Hunk, and had (•hari^c of the returns. Thei-e uero 
 two offices of Lho hanlc in Montreal, the head ottiee and the blanch. 
 The head otiirc was in the upper part ot the* hank pivniises on Plac© 
 d'Armep. Kaeh braneli hud lo niakt- a return to the head ottice ; the 
 Montreal bi-aneh was asdistinei troin the head office as any other hnt'neh ; 
 the returns were received within two or three days from the dill'erent, 
 branches — sometimes a day or two later. We irenerallv try to liave tlie 
 return read'.^ by the 0th, but must wait till ail tiie balanVe sheets are 
 received. They were then niveii to ii clerk to journaliHe, and the 
 (Tovernment returns were taken otl' our balance sheet from the ledi;or. 
 Since the amalj^amation of the baiius. th.' work of uiakino- up '"the 
 returns was under my sU])crvi>ion. ji was not |((.vsij,|,. ti»r nie to 
 examine into the correctness of the bahuice-sheels. The refiirn, when 
 completed, was taken to the l're>ideiH tor sji^-nature. The President 
 could not verily the correclne>s of the retu!'n> within the time allowed 
 by <b»vernment otherwi-e than Irotii the rnonlhly Kiaieiriciits of the 
 branches; ii Wduld necessitate him beinu at twenty <litfcieiit place-^ at 
 the !*amo time. 
 
 liy a .luROH— I am jierfectly sutished iiiat iheitem deduried from the 
 general balance, is the one I'eterred to tor demand note- and non^. 
 
 By Mii. Keur — I supervised the return o| the inontii ot .lanuarw The 
 return corresponded exactly with the l)ook>, and wa.> madi' up as correct- 
 ly as it was p(jssible l(» (hi. I tonic e\'ei-y pi'ec.-iutioii, and h(dd nu>elf 
 I'GHponsible for its corrt'ctness — The etleci ol includiiin- these demand 
 notes in tlie notes discounted would m't haw been to mislead the head 
 office. 
 
 JJe-examined l»y Mr Ritcijik — By r^•t■elrill^■ to the book•^ I tind that 
 on the Hist January last, Hie indeiite(bie-> ol tiie C.'onsf)iidati'd Bank to 
 other l»anks wai!j$2,14ii.7o; the boHf< and demand notes *2S(i,(;(i().l !J, rcfei-i ed 
 to in Mr. Louson's cash, were discounted on the 2Ist February. 1879 ; 
 ilemand notes, ,S. Davis & Co.,(i;ited Xovember 2S. $L!r).4-r).H> ; B. Furness 
 \ Co., $oO,(»7(»; Asrher c^ Co., !?G8.U(hi; 11. Beattie cV: Cu.. !i;2.").(l(i(l : ditto, 
 IlL'.OOO ; ditto. $10.(100 : B. Furnish \ Co., ?l:7,!)<iO : Davidson Bro^-. cS: Co., 
 1R2;»,100. 1 am not [•rej)ared to say that this aiiKjunt was incorrectly car- 
 'ied in the return. Am positive that these iti'ms were included in the 
 '"etui'iib. The delendant iiad means of knowiny; wdiether any loans were 
 contracted with other banks. 
 
 Mr lliKMiiE — Wliat L Wiintto ascertain is how thescdetiiand notes or 
 hons entered into the discounts aii<i then i'eapj)eared in Mr. Jjousons 
 cash .'' (A.) As till' as tiie lellei' was concerne<l it was cash to him. (Q.) 
 That is at the end ol the inontn they were discounted, ami after tlieeml 
 of the iiiontii they fell btick into the teller's cash ? (A. ' He dediicterd it 
 and sent it ii|)stairs. (Q. ) Did \ uu take any pains to ■-ee if this was de- 
 ducted ? (A.) Vi's . accoi'iliiiii to the balance sheet it was deducted. 
 These demand notes were includeil in tiie return under the item " notes 
 and iiills discounted, |t7.Iir)0. Ulb4r>,' I cannot say jiositively wju'ther 
 it was in eonse(pienc(>ot ni\ ret'iisai !(• certify these demi'nd notes or bons 
 ascasli,on the 21si February that they were discounlc'd. but I have good 
 reaKOn to lielieve that was the reason Tlie slip would ^how at what date 
 these demaicl notes wi-re diseount«-'i. 
 
 i 
 
SO' 
 
 ^y A Jl'roij — I ciinndt say I'.y wliosc oi-ders the di^(■ount refencd 
 to was orilered on the 2lst of Ft-bi-uary. 
 
 By Mr. Kerh — The books on l:jlst Janiuirv sho^ved a bah'inee duo lO' 
 other liaiiks of :r2.M(i.73, and fVoiii other batiks, $X>, 752. iiO. The dittei- 
 enee, $1.(105.27, was tliat mentioned iti the return as ittm No. 4. "Bab 
 anees due from other banks." $l.f!0o.r)7. Tliis system lias lieen fol- 
 lowed sinee the amalgamation. T would eon>i(U'r that the tellei' holdijii: 
 a debit slip as cash would be iri'egular. V>y doiiiii; it as it was done, tia 
 tendeney was to blindfold the eyes oi'the J-'resident and Diieetors. The 
 demand notes wcic held by the (Jenei'al Managei'. 
 
 By Mr. liiTcnii-; — If the Consolidated Bank owed a large amount to 
 one baidc, and oibei's owed tho foinifr. it could not pay one anntunt by 
 the other? — 1 would not (•on>idi'r it irregular to enter a loan froip. 
 anothei' bank, iov which a deposit rei'ei]it had been liiven, in the (■oiuinii 
 of deposits. 
 
 JU' Jits Honor — 1 would not consider that a loan was due to anotli< i- 
 bank until it had matured, 
 
 l)AVin KrNNKLi,. sworn. >aid ; — I have been Accountant of thi' Con 
 bolidated Bank since the amalgaiiiati(»n. Have liad charge of the ledger 
 of the 3Jontreal bianch sinee Novembei" last. C)n the 2tth October, 
 187S. theie weie i>sued deposit I'cceipts. in favor of the IJank' of Coin- 
 meret'. toi- !f48,l()(!.t!»!. The entry can be found in the gen«'ial ca^h 
 ho(d<, entei'<'d as ex(diange borrowed fiom tlie P)aids of Commeiic. 
 itlO.diM) stei'ling. h would have the same etl'ect as cioh ijeposits. 1 have 
 no doubt the otliei- loans from the Dank of Commerce were entered in 
 the same way. On the Mrd l)eccmb(M'. IS7S. ihei'e weie lhre(! s) ecial 
 deposit receipts aggregating !?^7'). 000 in favor <if the Stadaeonu Hank, 
 The fii-st of these was I'cjiaid on the lOib .I;tnuary, the stcond on t},< 
 5th of March, ano the t'hird on the 7tli .\pril. IS711. The Bank of (Vuii- 
 merce loan was lep.aid as follows: 824. Os;;.,'!;; oti the 24lh .January. l>7'.i: 
 §48,4(i(!.(;(i (.11 the 12t!i l-Vbiuaiy. and i?24.0.^;)..'j:] on the 24th Fcbruarv 
 187!»; and on the 24ih Februaiy. 1^7!). ihe loan from the jiank of Hriti-h 
 North America, amounting to .'?2(tO.U(l(i. (annot say what amount wa- 
 clue t'» other baid\s on the ."Mst .lann.arw 
 
 By .Mit. J\KI{M — Tbeie was no undci'standing as to how the moi;(\ 
 nhould be returned: these amounts remained payable after the iJl-l 
 Januaiy, ls7'.». The Baidc of Bi'itisji Xoiih Amei-ica never asked li.i 
 the money. The loan trom the iiank of ihitisji Noi'ib An\eriea was no' 
 eLtere<l under the liea<liiig of •• Bills due to <.||iej' Baid^s. • h is usual 
 to en;ei' ai'tive balances under thai head. It is a discus.scd (piesticn 
 among li.mkers as to whcihcr a loan from ;mothei'd»aid<. not due. should 
 bo entered under that head oi' not. The question tiirmed tlie .subject i-t 
 dih)eus:>ion in the pri'-s when the Merchanis Baid< borroweil money. 
 
 Bv A .JcRoR— In that ease a <leposit I'ect'ipt had been given. 
 
 At this ;dage the witness faiided awa\' and had to bo removed fi-oii:. 
 the Court. 
 
 Iakmiard R. (iRFNULEV sworti said — 1 was ( 
 
 leiieral 
 
 M 
 
 ammer o 
 
 f tl. 
 
 Bank of B. N. A. on 31st of.lammry last The first loan nnde to tl 
 Consolidated Bank b\ th,. Bank of "British North Amer 
 
 December for $200, (Kjo. and (ui the 30th J.)eeember for a like amo 
 
 H-a was on 2Mn 
 
 uid 
 
 l);inki 
 in Se 
 llinc 
 
 slateH 
 dated 
 Jlim-: 
 $')00.( 
 ence 
 • Bal 
 sliouh 
 hocau 
 from 
 pay 1; 
 a|)pea| 
 Condi 
 *secui-j| 
 
 } 
 
 )anks 
 
87 
 
 Thov were outstauiliiii;- on the :jUi .Tainiiii'v 1: 
 
 The l(»ans were 
 
 s due to 
 (lift'er- 
 •Bul- 
 
 K'ou foi- 
 lioUliiii: 
 Olio, ll.c 
 
 s. Tlif 
 
 lOllllt to 
 
 i»ui)t bv 
 
 111 tVoltl 
 coliunn 
 
 alio 
 
 tlici- 
 
 the Con- 
 e leciu'er 
 Ortol ei'. 
 »!' Cnlii- 
 ml eiislt 
 iniiiei If. 
 . 1 liav. 
 teied ill 
 :; s]efi;;l 
 iH Hank. 
 I on thi 
 c of (Vmi- 
 ry. l>^T!i: 
 <\'l)ruary- 
 )f Brit 1-1, 
 omit \v;i- 
 
 lO iiioiicy 
 • tlio :ii>t 
 aske<l tiii 
 t was mil 
 t is usual 
 
 (pU^tieli 
 U'. sliolli'l 
 
 subjeet I't 
 
 )iiey. 
 
 1. 
 
 [)ve(l fi-oiu 
 
 i>;er of th( 
 Lie to the 
 IS on 28th 
 e awiouiii 
 
 effected by the (ienei-al Manai;-ei'. >rr. Il*uiny, on (iepo.Mt i-oeeipt.s. (Th< 
 ;h'i)osit i'ecei])ts were pro.luee 1 and road.) "The Consolidated :^aiik aj)- 
 plie I to tiic Bi'itish North Ani(M*ica Bank foi- the loan^. Ttio interest 
 Avas at seven pei- cent. I received as eollaterals. diseounti'd hills to the 
 uinount of *:]52,07f). 1 don't tiiink ijie.^e bills weiv endoi'.->ed bv the 
 Bank, but they wort' ac :iunpanied by a letter. 
 
 By Mr. Kerr — Thei-e was noihinn- detiniU' about repayniein 
 not called on the Consolidated Bank on the :Jlst Januarv I 
 
 Had 
 
 or re-pay- 
 
 nieiit. It was understood at the time that it was an indetinito loan. Our 
 Bank has lent money to only one other bank in Afonti-eal, and for a, 
 ip.iieli lai'ii'or amount, but not on deposit receipts. ()!ir bank has never 
 
 t)iiri-oweil troin any itaiiK. I lie anioinl horroweij \>y the (yonsolidated 
 •Bank was not entered ••due to other banks," I have kiir)wn other 
 l>atik'> which have borr.)Wel nioiiey, and sviiii-h loans have not been 
 phu/ed under the head a>- •'due !o other banks." it i> not understood 
 lliat bank's bon-ow troin eaidi other. I am aware that when the Mer- 
 chant's Bank borr«»we<l a larifc amount of mniey there was a discussion 
 ill the pajier.--. because it was not I'eiiirnel as due lo otjier banks, bat 
 was placed in the deposit ac •oiint. The amonnt of these loans appear 
 in the returns of the Jiank of British North America us -'due from other 
 banks." 
 
 By a Jtrou — In the case meiuioiu'd by MV. Kerr, no deposit I'oceipt 
 \n\A been o-iveii. 
 
 Mr. IJiTriiiK— Is it not a fact tha' the only other loan made by your 
 hank to another bank was l>y the I)ii'eetors u'ivinn' their ikjU^s, which 
 wore discounted r — A Ves; I eannr»i i-tMueinber whether the iJirectors 
 werj makers or endorsers of the notes. 
 
 EoHERT Cassils swom, sai<l — I have had C(uisid»'ralde experience in 
 hankiiiij;- in Canada; was present at the sjiecial meetinj^ of shareholders 
 in .Se|)tember last. 1 believe it was the HUh inst. when Sii- Francia 
 llincks ])resided. 
 
 Mr. Kerr — I «jbjcct to any evidence reu,'ardinii' any meeting!; of 
 iShareholders. 
 
 Mr. Ca.ssils continued —There was no metition ot'a loan in the 
 statement submitted at that meetini;-. 1 then ask'ed when the Consoli- 
 dated Bank commenced to maki' loans from other Biink.-. Sir F'rancis 
 llincks rcjilied tiuit it was in (.)ctober and that the am<>iiiit obtained was 
 ?')()(). 000. It was not stated what security was given, I ha 1 no refer- 
 ciu'c to the return furnished to the fiovernm "it. 1 think' the items 
 • Balance due to otlu'r banks," and •Balance due from other baidcs," 
 should be kept separate, and the whole amounts placed in each column, 
 because in the- "balance due from othei- banks" there miu-ht be balances 
 from insolvent banks, while the bank itself miu'lit In' called upon to 
 jiay the " bala^n-e due to oihei banks" immediately. If a lar<j^e balance 
 a))peare(l a.s due toother banks in the I'otiu-n. it would appear in a weak 
 condition. As t(^ loans reine^ented by deposit receipts with collateral 
 .security, these should certainly appeal- in the column ''due to other 
 hunkn." 
 
 By Mr, Kerr— I was the Mtinagei' oi' the Montreal branch of the 
 
;> ■! 
 
 -€<)mniercial Bank up to 1855. when I hccnnie Cashier of the Bank of 
 J-Ji'itish North America, in which })osit,ion I continued till 1S<)1. I was 
 Cu>^hiei- of the Bank of U))|tci' Canada ti'oni 18G1 till IHiU], when the bank 
 wab in had cireuinstances and tiiiUid. Since IH^fi I have had no ])ractical 
 experii'ucc of the Baiddn^- Act. Jiahuices due to otliei- hanks, generally 
 speakinir, niean.s the same thing as halances. Threatened Sir Francis 
 liiticks wiih leiiiil ])roceedings, hut did not call him ■• a blackguard.'' 
 oi- "a swindler,'' as some otJier gentleman had done; have no animus 
 iigainst him ; ai-ciised the de(end;.nt of (lece|)ti<)n ; was not in'ilate<l at 
 f lie time ; my lo-*s amounted to .:^8HS : iiave still an ojdnion that their 
 «-onduct was hiaiily repi'eiiensihle. Dtirii.g the time 1 was in the Bauk 
 <»f rpper ('anada retui ns were made. The Hank of l.'pper Canada wa> ;i 
 complete failure. 1 do not consider a pi'omissory note due until the \ii>\ 
 day of grace has expired. 
 
 Mr. Keuk — Is It not rccogiu/.cd ih.-it the woids '• due to othei- ]>ank> 
 in Canada'' means payable to other Inmks in Canada? Witness — Yc.>, 
 usually. 
 
 Bv Ills llo.Noru — 1 con>i<ler the loans made on crdlaterals as ;i 
 ]ial)ililV of the Baid^. and sh-)aid have -o accounted foi" them in the 
 leturn. 
 
 Wen'TWoutii J. IjUchana.v, sworii, said — 1 was General Manager ot 
 the Bank of Montn.-al. (»n lilst Januai-y last. On the lOth Jaimary the 
 4'on,solidated Baid< borrowed of the Bank of Montreal $98,287,22, re])re- 
 Fcnled by a de}»osit receipt, and ])ayable 25th A])i'il, and covered by 
 collaterals, consisting ot bills disc<>unted. On the 22nd Januaj-y they 
 Itorrowed il2;>,lo8 89. )>ayable April 25th ; on the 28th January ^oO.OOlV 
 payable on the 28th Ai)i'il. This amount wm guaranteed by certain 
 gentlemen. The delendant was not one of them. On the vilst Januaiy 
 ^200,000 were borrowed and bills discounteiJ. There was no depo>it 
 3'eceipts. These sums r(>])resent a total of |-171,42(i. 11. These loaii» 
 were jnade here, ami the money paid over. 
 
 By Mr. Kerr— 1 had no experience in Monti-eal outside the Bank o| 
 Montreal, but 1 believe it has been the custom in banks where amount> 
 have been bori-owed on time to place them under the heading of deposit^ 
 payable aftei- notice, if they w(>re jiut undei- •' balanc(>s due fioni other 
 bardxs"' it would create the im[)ression that the bard\ might be called uji- 
 on to pay at very short notice. It has always been a matter of doul)t n^ 
 to the proper method of accounting for such amounts on the (Toverii- 
 ment returns. It does not appear that the loaiof $2(10.000 on the 31st 
 Januaiy was on time but on demand. 
 
 By Mr. Kitohik — If these loans weie entered under the headinu 
 *' depo.sits payable alter noiice,' oi- 'on demand." it would deceive tin- 
 2)ublic; the i'oim of (Toverninent I'ctuvn does not admit of showing tin 
 exact state of things: there slioukl be a heading foi- "Time loans to' 
 and 'from other banks.' 1 never made a return to the Governnjent : 
 it wa.s not my duty. 
 
 Frank Henry Burnett. Stock Bi-oker, sworn, said; — I was pi-cseot 
 at the meeting ol' the shareholders in Mechanics" Hall, at which 1 askci 
 Sir Fi-ancis Hinck.s .some questions as to why the $022,000 borrowed fy 
 the bank did not appear as being •• due to other banks" in the I'eturns to 
 
S.t 
 
 tho luM 
 
 the (rovorrinK'nt. It certainly misled nie, as I was not awaiv tliat the 
 l.iiiik- had heuii borrowing lari^'oly, and fiad 1 known tlii>. >houid not 
 Ii;iv(' had eontidcnco in it. 
 
 By .Mr. Kkhr— I dl-voi- lieard of the Coiisolidaiod 
 liiivinii^ Itorrowcd money on deposit rocoipti' 
 
 • •r any otluT 
 
 t)unl 
 
 CiiAiiLEs IIknry Wkthvy. sw 
 
 orn, sai< 
 
 1:-I 
 
 le (.'onsolidated ilank in Janiiarv la-t. 1 had 
 
 was assistant manairor 
 
 L.'iiMjn's cash on i'(»tli Fei)niai'v ; ..n the l!M!i Fel 
 
 oeeasion to cmint Mr 
 
 k'inand notes and lions anioiiiilinu; to over Sl'ddtiiid. 1 al 
 .lithe 2()Lh Noveniher; on llie llMh Fcl.rnarv, ther- 
 
 ruar\ iherc wi-re 
 o comiti'd it 
 
 iMiie 
 
 U'hieh Ml-. I'ridhaiii refiistMl t 
 
 were oeniatK 
 
 I 
 
 o cortitX- as rash ; tiiot^ demand 
 
 ;i^i 
 
 tes were for (n-er $200,(i(M»; I cannot speak positivrlv as to the i^ist 
 
 dlU' li!l 
 
 Is withoul i-et'eriiii,^ to the books of" the diH<(,iiiit ot-partinent 
 At this >tag-e of the proceed iiiirs the (,'oii:'t adjouihcd iiiitii 111 o'eJocU 
 o-niorrow moiiiiii<;. 
 
 ds as a 
 I in the 
 
 lager nt 
 larv the 
 2, I'epre- 
 'ercd by 
 ny thcv 
 $i50,0(M"). 
 r eertaiii 
 Jannaiy 
 ) deposit 
 3SC loaiis 
 
 ) Banlv ol 
 
 anioiinis 
 
 fdeposit- 
 
 )m other 
 
 ailed up 
 
 'doul)t :l^ 
 
 Gov e I'll - 
 
 the 31 SI 
 
 head it lu 
 
 eeive thf 
 
 iwing till' 
 
 loaiis to" 
 
 erniiieiit ; 
 
 s ])reseii1 
 h 1 askcil 
 rowed hy 
 returns l'» 
 
 THCmo 1DA."Y. 
 
 Satnr'ia>i. () 
 
 i.'i I)' 'I I' 
 
 IS. 
 
 Mr. Cn.\Rr.ES Wetitay evidence eontiniied— The statement b>»ok [.ro- 
 liuced in supposed to go before the Board twice a week, and to contain 
 ilie total of discounts of the vari<Mis customers of the brajich from one 
 Board day to another. From the 20th to the 24th February tlie tollowin-r 
 
 about $38,000 for ordinary local paper. 
 
 His Honour — Mr. Ritchie, 1 want to know if this b > >lc 8!i)w> the 
 ^anle figures as the slip. 
 
 Mr. Ritchie, Q.C. — It shows the Itiils disc )unfe(l fn)m the 2(lt!i to 
 the 24th February. 
 
 Q. What wa? the amount of discounts in the previ»ii> interim? 
 
 This question was obj cted to on the ground that, whether the 
 amount was lai-ge or small, it had nothing to do with liie case. The 
 iilijecfion was maintained. 
 
 Mr. Wethay continued — The Board met on Monday, the 24th Feb- 
 ruary, as the bock produced shows.. The defendant was ]))-esent. 
 
 His Honour — Does tiie book show the nature of the bills discounted. 
 >-ii that the defendant would be really cognizant of their nature i" 
 
 I'he book was handed up to his Honour, and was merely a tbrn\ul 
 record of the meetinu'. 
 
 Mr. Wetiiay, — The handwriting of the names of the directors pro- 
 -^u\ I identify as that, of Sir Fi-aricis liincks. Do not know who eliecked 
 lift' those large amounts of demand notes, whose amounts 1 believe were 
 tarried to the credit of the respective |>arties about the lattei- part of 
 November. [ was not present at that nceting, nor do 1 think 1 \v;cs pre- 
 >cnt at any meetiniis about that time. 
 

 IMAGE EVALUATION 
 TEST TARGET (MT-3) 
 
 ,^ 
 
 
 ^' 
 
 
 ^d? 
 
 ^ 
 
 1 
 
 1.0 
 
 1.1 
 
 11.25 
 
 150 "^^ 
 
 j*^ 13.6 ■ 
 
 US 
 
 2.2 
 
 U4 
 
 I%oliOgraphic 
 
 Sciences 
 Corporation 
 
 23 WiST MAIN STREET 
 
 WEBSTER, NY. )4SS0 
 
 (716) 873-4503 
 
 '^'^^ 
 

90 
 
 3n 
 
 H'fl 
 
 wf'A 
 
 By Mr. Kerr.— (Q.) Mr. Renn}-, I believe, exercised the powers of 
 discount ? (A.) There was no regular .liseount <lay ; every day was u 
 discount day ((^) And Mr. Kenny discounted on his own responsibility 
 very frequently belween the dates of the Board Meetings? (A.) I pro- 
 Bume he did ; I don't know. The books which contain those aecoujiis 
 referred to. and in which the ajnounts of discounts are placed to the cre- 
 dit of the respective parties, are now in court. The deposit ledger would 
 show those accounts. An itjin or $2'^Alrt. amount of demand note, was 
 placed to the credit of S. Davis & Co.. in licjuidation, on the 27th 
 November, 1878. On November 5s. 1878, S27, JHK) was placed to the 
 credit of H. Furniss iV ('o., the proceeds of a demand note for $30,07(1. 
 On November 2!nh. 1^78, there is a credit to Ascher ^: Co.. of 8G8,000, tht- 
 amount of demand note. On November the 29th a credit of $25,000 is 
 placed to the account of JI. Beattiu Ik. Co.. also the proceeds of a demand 
 note. On the 2nd Deei-niher there a]»pears another credit t(t H. Beattic 
 & Co, of $12,000, u demaml note also. On the 22ml Novembei-, 187S. 
 there is credit to 11. Beattie t^: O .. of $10,000, which I think must he 
 the proceeds of the note I h(»hl in my hand (witness he.-itating), and yet 
 it can't be. either, for tiie note is dated the 28th November. 
 
 His Honor— Try and cleai- il up. Mi-. Wethay, and take yonr time 
 about it. 
 
 Mr. Wethay — I seeaii amount of $10,000 to the creditof H. Beattie 
 on the 28th November. I think it must be that. 
 
 Mr. Kerr— (Hantling him a slip). Pei'haps, that will enlighten you, 
 
 Mr. Wethay — This is a deposit slij), which shows that $10,000 were 
 placed to the credit of Beattie & Co., and on it are the lettci's 1). N. 
 
 His Honor — Is that the note? 
 
 Mr. Wethay — I presume it is, as it is of the same date as the credit. 
 
 His Honor— On the 22nd November. 1878, there was $10,000 ere 
 dited which you think are the proceeds of that note bearing that date? 
 This is the credit slip? 
 
 Mr. Wethay — Yes. In looking at the accounts of B. Furniss & Co., 
 I think I made an error in stating that the $27,900 were probably the 
 proceeds of a demand nolo foi- $;J7,07<>, dated 28th November. This note 
 appears to have been credited B. Furniss & Co , on the 21st February. 
 $30,070. 
 
 Mr. Kerr — Look at this slip also, and sec whether tiiere wei'e not 
 two accounts of B. Fuiniss ik Co. 
 
 Mr. Wethay. — Theic are three or four accounts, and they are veiy 
 puzzling. On the 28th Noveinber, .«27,900 ai'e cre<lited B. Furniss cS: Co., 
 which seem to be a demand note. I find another account of B. Fnrniss 
 & Co., ciedited 130,070, on the 23rd November. There is a disci-epancy 
 between the date in the ledger and the date of this credit slip, whicli is 
 dated 28th November, but 1 am inclined to think the former is a clerical 
 error. The date of the note is also 28th November. On the 2lNt Feb- 
 ruary Davidson Bros & Co. are credited Mith $23,100 ; that would be the 
 proceeds of the note now shown to me of $20,800 dated 4th November. 
 
 Mr. Kerr — Who is the person in the hank who ordered that these 
 demand notes should he carrieil to the credit of these accounts iiK 
 Novembei'. 
 
!n 
 
 wei'S of 
 waH u 
 isibility 
 I \n\'- 
 K-eouiiis 
 the cro- 
 r woiilil 
 te, was 
 le 27th 
 to tlie 
 $:-iO,0"(). 
 000, tho 
 5,000 IS 
 leniJiiid 
 Beat tie 
 It'i-. 1S7S. 
 must lie 
 and vet 
 
 )T)r time 
 
 . Beat tie 
 
 iten you, 
 000 were 
 
 he credit. 
 ,000 ere 
 lat date ? 
 
 iss & Co., 
 >ably the 
 This note 
 ^'ebi'uarv. 
 
 were not 
 
 are vovy 
 liss & Co., 
 J. Fiirniss 
 ■icrepaney 
 which i8 
 a clerical 
 Jlst Feb- 
 ild be the 
 ember, 
 hat. thene 
 'ountH iiK 
 
 Mr. Wethay — U must have been the Tieneral Manager. Mr. Rennj^ 
 
 Mr. Kerr— \Va,< it his duty to h:ive rejHii'ted thi.s to the Directors ? 
 
 Ml'. KiTCHiE — I object to that question. 
 
 His Honour — Put the (|uesiion m another f(»rm. 
 
 Mr. Kerr— Must not all these malteis of discounts g-,) before the 
 DireetorH at their meetin^:s ? 
 
 Mr. Wethav — All maiteis ofdiscounts are supposed to go before 
 the Boa 111. (<^.) Thesi' trajtsaclions, how d(> you ciiaracteriso them ? 
 Were they discount transaetidiis ? (Aj They were transactions which 
 should certaiidy have u^one before the Board. (Q ) Cons('(|uentlv they 
 Avere regular diseount transactions ; and the only thing which distin- 
 guished them from regular diseounts was, that they weie not brought 
 before the Board ? (A.) I dont know that they were not brought betbie 
 the Board, (q.) Were ihe\ brought before tlie Board ? (A.) I don't 
 know. (Q.) Then, were they kept secret 'f (A.) 1 am Jiot aware that 
 they were kej)t secret. ((^.) ]s it not a fact that they were not brought 
 before the Directors befoj'c 1st Fel»ruary. 187^, and that you remon- 
 strated with Mr. Eenny foi* not biiiiging them befoiv the Board? (A.) 
 I am not aware that I ever remonsti-ated with Mr. Jienuy for not bring- 
 ing them before the Board. ((^.) Is there any thing in the Books to 
 show they were broun'ht before the Directoi-> previous to the 2lst Feb- 
 ruary 1879 ? (A.) No. ((^) And tliere would be if there had been? 
 (A.) Yes. (Q.) Were you not aware by the books that these transac- 
 tions had taken place ? (A.) I was not. I tii'st became aware when 
 certain amounts, said to be (lemand notes, were passed thi'ough as dis- 
 c<junts. That was in February. Viewiui; these matters in the lii^ht of 
 recent develo|>ments, I eertaitdy think they were purjxisely kept secret 
 from me. They were not geneially known in the Bank until pa.ssed 
 through the discount book, when any clerk on turning up the book eould 
 see them. The first discovery was made by Mr. Pridhani in counting 
 the cash. He then found certain ii"i-egularities in Mr. Louson's cash 
 which he reported to me, and 1 reported them to the (fenei-al Manager, 
 and refused to look upon them as cash until I had receivetl his sanction. 
 That was in February. Mv honest conviction is that Mr. Kenny wa& 
 desirous to withhold the knowlclge of ihese transactions from the 
 Directors, and in that he succetnled only too well. After the counting 
 of the cash in Febi'uary. these matters found their way into the proper 
 books. 
 
 Re-e.xamined by Mr. llrrcHiE — You say these hons ami demand notes 
 Avere discounted long befoie Kebruary.^ (A.) They were not passed 
 through the bo<»ks before then, but the money appeals to have been ad- 
 vanced. ((^.) That is they were held as ie|)iesenting cash, althougli 
 they were demand notes? (A.; Instead of the notes having been passed 
 through as diseounts, they were held i i the teller's cash, I presume, to 
 prevent their coming before the Board. ((^.; And they weie taken out 
 of the cash items, the end of February, for the pur)»ose uf the (tovernment 
 statement ; are you aware of that ? (A.) It seems to me there is a mis- 
 conception about the cash as 1 have always understood it. I thiid< that 
 ])racticall3' the.se matters never went into the cash. It is )»erl'eclly true 
 they appeared in the teller's blotter, but the tellers book, although it Is 
 
r Ir' 
 
 92 
 
 i 
 
 ■ 1 
 
 a bank book, is, to a \\^\\ gicat cxttnt, a[iait from the <icric'ral systim of 
 book-keeping in the bank. Although the islip itself is in possession of 
 the teller, the amounts K'])iesented on it were s'.tled out v\(\\\ nifiht ; I 
 un<lerstood one of ihe \vitnes^es yestoiday to say four times a month, 
 but 1 maintain they were taken out every niglit. They were taken out 
 of the eash and pul in their proper places wliere they (»ught to 
 have been from the tiist. viz., among the discounts I oun» ot show 
 this bv tiic books. You sav the carrNing of these large a?nounts in the 
 eash wa."5 not genei-aliy known in the bank; did not tiie discount elerk 
 know something, who was he? (A.j Mi-. Struthers was discount clerk. 
 Mr. liiTCiiiE — He didn't know. Cannot tell amount of Ascher k 
 Co.s ovei'drawn balance on .'ilst Janiiary, n(»r of any ot Ihe otliers. ((^.) 
 Will you refer to tiie book that shows that extraordinai'y tiansac- 
 lion? (A.) I could not, but the accountant can. ((^.) Were you 
 assistant general manager? (A.) I was merely assistant manager 
 at Montreal. Mr. Renn}' coniiiined the two po.sitions of geneial 
 manager of the bank and manager of the local office. As cashier 
 of the City Bank he had the management of the funds. When 
 these loa'is were made fi-oni the other baidvs a large amount of <li.'-counted 
 paper was handed over as collateral security-, and recoi'ds of these trans- 
 fei-s were made on lists, but no entries made in the books. Two lists 
 were made in every case, one of which was handed to the bank with the 
 notes given as collateral security and a duplicate kej)t in ihe Consoli- 
 dated Bank, ((i.) Then iliere was nothing to show in the books or in 
 the Government stattMucnt what discounted notes had l»een handed over 
 to other bank? as collateial >ecurity for loans? (A.) There v as nothing 
 in the books. I did not make up the Government statement. 
 
 Mr. W.J. Bl'cha.nan j-ecalled by the prosecution. The loan referred 
 to by me yesterday as being due the i^ank of Montreal from the Con- 
 solidated Bank on demand, was really not due until 2(Ith April, 1878. I. 
 was in erroi*. 
 
 Lt. Col. TuKNBULi-. (Quebec, sworn — 1 was [tresent at the meeting 
 of the shareholdei-s of the Consolidated Bank in Mechanics' Hall, on 18tli 
 September last. Sir Fiancis Ilincks ])i'esided. Sir Francis Hincks said, 
 in rejily t(» a question from Mr. Cassils. that the Consolidated Bank had 
 borrowed about SG20.(H)() from other banks, which amount was not 
 entered in the statement hiid before the meeting. He also stated that 
 these moneys had been borrowed at differ*, nt times, as far back as Oc- 
 tober, and that discounted notes had been handed over to the ditferent 
 banks as collateral security, whicli notes wore included in tlie amount ol 
 notes discounted and current at the time he :"turned the Government 
 statement on the 31st January. The words he u>ed were as m-ar as 
 p(»ssible to this etfect : that these notes which were handed over as cnl- 
 late'-al ttecurity had not at any time been taken out of the baid^'s b<.ok. 
 as re-discounted notes, they therefore necessarily must bo included iti 
 the item No. 13. \U said further, the amounts borrowed fr<»m otii.r 
 banks appeared under the head of Deposits. 
 
 By Mr. Kerk— You have no special knowledge of banking, I thiid<'/ 
 (A.) I have.^ ((^.) l'erha]»> you will then favor us with an 'idea as t.. 
 how you would manage with respect to these notes as collateral seruiiiv 
 
■m of 
 
 )!» of 
 
 bt; I 
 onlh, 
 ii out 
 ht to 
 
 show 
 in the 
 
 clerk 
 clerk, 
 l.ci- .^c 
 
 ambiie- 
 
 e you 
 luager 
 cneial 
 jtisluer 
 When 
 ounted 
 i tran!<- 
 ,(» lists* 
 'ith the 
 j(ti»M>li- 
 s or in 
 }i\ over 
 nuthiiiii: 
 
 referred 
 he CoH- 
 1878. I. 
 
 meeting 
 ,on 18th 
 •ks (-aid, 
 ,ank had 
 waH not 
 ited that 
 ,v as Oc- 
 ditleient 
 niount «•! 
 ^ci'nnu'nt 
 < near ii'- 
 iv as <'"l- 
 U's hnok- 
 clu.ied in 
 oin olhrf 
 
 ;, I think'.' 
 
 idea as to 
 
 d secuiiiy 
 
 m 
 
 if you were niakinj;- up tiie statement ? (A.) If I had parted with these 
 jiotes to ajiother hatd<. and horrowed money on them. 1 cerlainlv would 
 i!()t retui-n them to the (Ittvei'nment as n<>ios hold by me. for the' simple 
 reawon that it was quite jjossihle a large amount o'' tiiese notes mii^ht 
 never have been paid. (Q.) Do you understand the ditlerence between a 
 note re-discoiinte(j and a note i'-iv»'n as eoljatei-al security ? (A.) Yes • 
 a note re-discounttMJ is a n<tle witU whifh yon part altoncther. It bc- 
 lonjs's to the btiidv to which you discount it. and it j»aid yon have nothinir 
 more to do with it; it not )»aid nnd you have endorsed it. you are liable 
 f »r the amount. (^(^ ) What is the conditir)n of a note given as collateral 
 security? (A.) Its condition is tiiat in the event of your making good 
 the money boi'i-owed wiien due, tiie note will l)e returned to von. |^(^.) 
 AVhose pro|»erty is the note in the meantime? (A.) It is the )»ropertv 
 of the ))erson who holds it as collateral secin-ity. (<^) Ib'W would you 
 include the amount of such notes in the (iovei-nment relin-n. or W(*)uld 
 you lake them out entirely? (A.) 1 think these iintcx ought not tohave 
 heen returned to the (Jovernment as notes in the jjossession of' the bank. 
 They should n"t appear in the return at all. 
 
 .*-^A.MrKL SrHrTiiEKs. assistant discount ( lerk in the Consolidated 
 Baidc, sworn : — The tirst time it came to my knowledge that these de- 
 numd notes lor S221,41>.') \\(vv held as part of Mr. Loummi's cash was on 
 the 28th November, when tl^e debit slips were made out. This was 
 known to the (ieneial Manaii-er. Mr. Moi'uan. Mr. Louson and Mi-. 
 Ilubbell. 
 
 Andrew B. Stew.art. Olticial Assignee. sw<M-n : — 1 was ])i'e.sent at 
 the special general nu'cting ot' the shareholders on tlu' 17th and ISih 
 last Se|)tember. and hi'ard the defendant make the statement that S(J22.- 
 (lOO had been boi'rowed since (Jctcdier, 1878. 1 corroborate the state- 
 meids made I)V C.'olont>l Turnbull. 
 
 Mr. RixruiE — Are you aware that Ascher & Co. are in.solvent ? 
 
 Mr. Kkrr — T object to the ([ueslio-.). It has nothing- to do with iho 
 case. 
 
 Mr. Ki'^ciiiE — I will n<»t press the question, as I do not wish to 
 blacken tiiose demand notes — they are black enough already. 
 
 Cross-examination continued — Ijooking at the statement book, ore 
 you able to ti-ace what Asher A: Co. had done with the §tJS, <)(>() ? Did you 
 see the .slatenn'iit l»ook ? (A.) I saw the statement book aftei* that 
 meeting. I en<leavore(i t<» trace what Ascher cS: < 'o. had done with the 
 ])roceeds of their notes. ((^.) At the meeting, what statement was imide 
 ill answer to ^[r. Burnett's enquiry ? (A.) 1 don't lemember distiiu'tly ; 
 Jiiit 1 understood the books were ])erlectly in accoi'dance wit' the 
 Covernment return. 
 
 EnwAHU L B )ND, Broker — I was present at the s|)ecial general 
 nu!etingrefei-red to by the ju'cvioiis witnesses. Heard .Sir Fi'ancis Jlincks 
 siiv that a large sum of nnuiey had been bori'owed by the bank ; do not 
 recollect the amount. I heard him say that the loan-, when borrowed, 
 had been etjtercd as de|»osits: that a large number of bill., had been 
 ])!e<lged to give tiiese loans. As a broker, had also occasion to look at 
 monthly returns. If. in the return to the Coverninent. inst(*ad of the 
 amount being among the de]>osits. it had apjieared that 8!»!^>^>,0(M».00 vva.s 
 
 n :-i 
 

 fil 
 
 li 
 
 In. 
 
 it 
 
 
 II! 
 
 !:fi 
 
 fl 
 
 •outstandiiii? (iuo to ollu'i- hanks, it would linvo alaniiod the jmblie as to 
 the state oPtho Imnk. In this return, the column •' Due to other^Banks ' 
 is blank, and in the (.•oluinn " Due from other Banks, S1,()0(). 
 
 Bv Ills Honor — We are in the habi» of luokin^- at i):ink returns to 
 the G<)vernment, and c'lnpaiiiiu' them with the i-eturns of the previous 
 
 month. 
 
 By Mr. Kerr— There was a street rumoi- in Jaiuuuy that the 
 Consoiidateil Bank had bori-owed largely from othor hanks; cannot tell 
 the exact date or the amount. That fact led mo to make enquiries (.f 
 Mr. Jienny ami .Sir Francis Ilincks, and they told me there was nothing 
 in the coiidition of the alfairs of the baiJ< to wai-rant the decline in stock. 
 
 Mr. BtTrHiE— I hoj)e you are satisfie 1, Mr. Jverr. 
 
 David Iunnkll. Accountant of the Cons;)li(lated Bank, i-ecalled — 
 The loans outstanding on ;^>lst January last, weie : Froni the Baid< ot 
 British Xorth America, §400,000 ; from the Bank of Montreal, $471,426.00 , 
 from the Bank of Commerce., S24,083.iJ3, and 84S,4GG.0G, niaki-- , 
 $72,54y.5t9: from the Stadacona Baidv. two loans of 1^25.000.00 each; 
 forming altogether a total of SiMK} 9T<i.lO. No deposit receipt was given 
 to the Bank of Montreal for the $2iKI.<iOO b(»rrowed on the 31st January, 
 but there was a letter. In the returns to the Government, the over-drawn 
 balances were entered under •• notes and bills discounted and current." 
 The amount of overdrawn bahmces on 31st January, Avas S517,372.02. 
 Some of them were secureil by mortgages; cannot .say how much was 
 f^ecured. In the returns from the Montreal Bi-anch to the head office. 
 $517,372.02 appeared as overdrawn accounts. 
 
 ^[r. Pkidh.vm, r^'-called — I was not aware that on the 31st January 
 la.st, §200,000 was b >rrowe«l from the baid< witliout any deposit receipt 
 being given, I only heard .so last evening. 
 
 Mr. Ritchie — N^ow you have befl)re you theboook showing the ovei- 
 tlrawn accounts in the Consolidated Bank to be ^517,372.92. Where doe> 
 that amount ap[)ear in the (government returns V (A.) Under item 1-!. 
 " notes and bills discounteil and current." (Q.) Is it not a fact, Mr. Prid 
 ham. that at tliat time the Ijank hcUl no notes discounted representing that 
 amount of 1517,379.72 ; that in fact it held nothing but overdrafts? (A.) 
 They did not hoki note> to that amount, but they held overdrafts and 
 securities. 1 could not say how much the securities amounted to. (Q.) 
 How much was Ascher & Co.. overdrawn on the 31st Januar}' ? (A.) 
 They were not overdrawn on the 31st January, ((^.) H(av is this itein 
 of 1517.372.92 composed. Have you a list of these overdrafts? (A.) 1 
 don't think it. We were in the haltit of taking out a balance siieetevei'v 
 fortnight. From memoiy I think Beattie & Co.'s account was overdrawn 
 by S17.072.38 on the 31st Janutiry ; we had collateral note* as security 
 f()r about !tt9,000 ; this amount ol''|17.072.38 was overdue. (Q.) And still 
 it was included in the return to the Government as '' notes and bills di> 
 counted and cun-ent?' 
 
 By His Honour— It is included in the 8517.372.92 ? 
 
 (A.) Davidson Bros.' account was overdrawn $7G, on the 31st Jan- 
 uary ; P^ish & Shepherd's account was overdrawn SfS.fiOO ; T. F. OMirien '^ 
 special account was overdrawn $78,810.79; T. F. O'Brien's ordimiry 
 account was overdrawn $48,127.78. 
 
mi 
 
 05 
 
 By His Honour — Are you sceiu'cd on this account ? 
 
 A. We have u lot of mortgages and stock. ' 
 
 Mr. KiTCHiE— Have you any oiher large amounts of overdrafts? 
 
 A. There is B. Furniss tSc Co.s special account Xo. 1, overdrawn §06,- 
 279.13 ; this is also partly socui-ed hy mortgages. Forsyth, §4,210.47. 
 1 have not the slightest doubt that the amount of overdrafts as stated is 
 the cori'eci; amount. 
 
 By Mr. Kerr— During'your oxporieuee in this Bank in making out 
 (Tovernment ivtui-ns, how were these (nerdi-afts placed ? 
 
 A. As '' notes discounted. ' This was the practice in the Roval Ca- 
 nadian Bank, and also in the Consolidated Bank, and the way the>e over- 
 drafts were i-eprescnied was l.y elie<[Ues and notes charged. * The present 
 Gover.iment form in use is not clear on this point ; I have tried to ascer- 
 tain the j)ractice of other haidvs. 
 
 By His Ho.voir — I assisted in making uj) this return. T presented 
 it to the general manager. •52S(;,iJ0O. 10 was deducted an. I placed among 
 notes discounted and curi'cnt. 
 
 This closed the evideu' e for the Crown. * 
 
 FOH TlIK DKFENCE. 
 
 • 
 
 Mr. Kerk — called nii<)ii the (rciieral Maiuiger of the Bank of 
 Mont)"eal, 
 
 Ricii.-MID B. Anol's. who lieiiig ^worn saiil— I have made these re- 
 tiu'ns to tlu" Giovernment >ii)ee 18tJ!> ; 1 am ae([uainttMl with the mode in 
 which these returns are made up: the liank of >[oMtreal has ;i numlioi'of 
 these branches throughout the country. I have examined the rt-tiirns 
 with the Canada Ga/ette, ajiitreciatively tVoin month to month, and have 
 come to the conclusion, iVom the figures there, that Banks geiuM-ally have 
 entered loans i-eeeived I'rom other bank's under the heading of di'posits r>n 
 time, or time depo.Nil>. I infi'r from this that there has been a vei-y 
 great dist'rejianey in those I'l-tui'n^ between amounts due to other banks 
 and those due by other ljank>. The amounts due to other banks usually 
 have exceeded those due liv "Uher baidvs dui'iiiii" the iiast two vears to a 
 very great extent, from a million t(t two million dollars. This discrep- 
 ancy IS well known to ju'olessional men and arises tVom the uncertainty 
 as to the manner in which those amounts should be treated, as to whether 
 loans from other baidvs should appear as due to other baid<s or as depos- 
 its payable on a lixed dale. The general treatment has l)een for the 
 Btndvs receiving loans to inelude them under deposits payable after notice 
 (»r on a Hxed dati'. 
 
 By the Court — [ tind a great discrej)ancy in the eoUnnii No. S. 
 amounts I'elurned as •• balanees due to oilier banks." ;iiid eolumn No. 4 in 
 the assets, whicli corrospcmds with it. '• balances due from other banks 
 in Canadii ' This large diserejiancy i)etween these two eolumns shf)ws a 
 variety of treatment ; it shows that loans received in (his mannei' have 
 Iteen treated as '• de[wsits on time." and I infer that this has been the 
 general practice. 
 
9(j 
 
 "! ;.j i 
 
 Mr. Kerr— Accoi^lin,^' to your idea, Mr. Angus, if there wjls uih- 
 formitv of praclie'c in Itanks tlit-su two columns ought to balance ? (A.) 
 Yes. Tlie only way in which I can account for this discrepancy in these 
 two cohimns is, that some banks have not treated these h>ans as comini,' 
 under this pyrticidar iiead, but under the head of deposits. The practice 
 of the Banlv of Montreal, in entering loans to other banks in the return 
 made public, has varied somewhat, according to the character of the loan, 
 the time it might have to run, and the securities obtained. It has iioi 
 been invai-iable. If the Bank of Montreal had borrowed from otlnM- 
 banks in Cana<la a sum of money on time, I would not consider it im- 
 perative, in making a correct statement, to place the amount so borrowed 
 under the heading No S in the list of liabilities, because the loan does not 
 become due until' maturity. I should therefore have exercised awisedis- 
 cretion in plaeing it under the head of "deposits on time " or " other 
 liabilities not included in tlic above." 
 
 Ills Honor — In ordinary cases it would go under No 8; 
 
 Mr. Anous — ruder No.^ S or No. 7, "deposits j)ayable after notice 
 or on a fixed date." These loans are sometimes made for the convenience 
 of the bank that lends jis well as the bank that borrows. They aie 
 evidenced by deposit receipts, and come underthe head of deposits. For 
 instance, if the Bank of Montreal wishes to employ its capital advantage- 
 ously, it goes to another bank and says : '• Will you take so many hundred 
 thousand dollars of our capital and give us interest at 5 or 6 per cent. .' 
 The baidv accepting pays the interest. On the other hand, it might be ;i 
 loan made for the interests of the other bank and so treated. Tlie-c 
 lo;ms are siisco])tible <if e.xplanatittii. Tlie'e is a reason, from a i>rores- 
 sioii:d ])oint of view, whv a loan fi-oin anoilicr baid< ])ayable on time ^r 
 after notice should not appear in the i'(;lm'n as due to other banks, and 
 also from a public jtoint ot view. By entering such loan under the heai!- 
 ing of due to other baidvs, the manager would do injustice l,o his bank, 
 because he would i-epresent a loan obtained as an immediate liability' and 
 would i-efpiire, consequently, to keep a very large cash reserve against 
 the item so entered. The loan would appear to the public as a liability 
 immediately exigible, and would require a much larger I'eserve to he 
 held against it than would a loan oi- liabilit}' payable after notice or on a 
 fixed date. 
 
 Mr. Kerr — You therefore apply the AVi)rd " due," as it appears on 
 this return, not to existing liabilities, but to lialdlities that are exigihli' 
 at the time of making the return ? (A.) I don't quite understand that 
 question. (Q.) Do you consider an amount due only wheti it is exigihlo 
 and p.ayable? (A.) I look upim the word "due" as indicating a balamo 
 exigible and payable immediately. I have had occasion, in my experi- 
 ence as Manager, to deal with ovei"tlrawn accounts, but we try to restrict 
 it as much as p'issible. In the returns to Government by our bank 
 overdrawn accounts are scrutinized and distributed among the different 
 columns to which they belong; if to the Dominion Government, they are 
 put under "advances " to that Government: if to the Provincial Govern 
 ment, as " advances to the Provincial Government;" if to real corpora- 
 tions, as "advances to corporations." If to private individuals, our 
 practice has been to include the very small amounts we have in that 
 
fIT 
 
 as niii- 
 ? (A.) 
 in tlHse 
 CO mi III!; 
 practice 
 return 
 Lhe loan. 
 haK iml 
 nx otluM' 
 iv it iiii- 
 )orrovvo«l 
 does rittt 
 , wisedi^- 
 • '' otln'i' 
 
 ter notice 
 ivenietue 
 They aic 
 sits. FiM" 
 livantauc- 
 y hundred 
 ii- cent. ? 
 uii'ht I'c :i 
 
 5d. TlK'M. 
 
 a a prot'cs- 
 lU time or 
 mnUs, iui'l 
 r the heui!- 
 , his bank. 
 ibility' jukI 
 ve against 
 
 a liability 
 erve to l"' 
 
 ice or on a 
 
 ippears on 
 ire exi^ii'l^' 
 stami tliat 
 is exigit>U" 
 g a balaiuo 
 'my exju'vi- 
 y to restrict 
 our bank 
 \e ditfercut 
 nt. they arc 
 cial Govoni- 
 lal corpoi"'- 
 nduals, our 
 ave in thai 
 
 y 
 
 way among bills (Ijsi'oumo.l ami ciiri'iMi. in siioi-t. in tli.- ('..jmnn exactly 
 indicating the lo.an s that have bu'ii iu,.(lc. CMlaicral >ccui'iiics hold by 
 the baiiiv lo:- <le]> ».-its with othe;- banks <1() not aitpeai- in our i-etnrns. \n\t 
 the amoiiiiis given against theni appear a.s a iiabilitv. The collaterals 
 themselves are hell ill a special b<)')k kepi for that purpose, in >i as we 
 would enler so mii'-ii whea! or corn or iiv.n agaiiisi spe-jul "uilvanccs. 
 They iU) not a|»pear in the public return as our pi-opei-ty o/ in an v shape. 
 ((»).) JIow shoiihi the iii!:k borrowinu' tivat those se'eurities tjiven as 
 collaterals in its return. ? (.\.j T|,;,t is a ,|Ue>tion 1 have no? ha<l to 
 consider so far. 1 <lo not see inrler what heading thev coiiM be repoi-ted 
 to the (b)vernnioiit ano the ]mbjic. They might be atlixe.l as a memo. 
 to tlie retm-n, iiirler a heading ot" notes and bills discoiinte 1 ;in<l current, 
 hypothecated as collate. -al seeunty t'u- loan-, but it that iiinno. were ])iit 
 in liie relurn i <pie>lion who;!e'r ii would be clear to ihe public, 
 becau-e there is no machinery to;' p)v-eiiting tlii< intbrmatioii to 
 the ])ublic. The < b>ve.'nmeiit roiiii'ii does not pi'f)viilc a mean.s. 
 ((^>) ii" those notes <;iveii as eoihuerai .>ecui-ity wei-o not inrhiled in the 
 amount of bills <li>counte 1 and curivir. would no! the a->ei> be dimdiished 
 by that amount, while the lo.tn wasinclulel in the lia.bilitie->? (^\.) Yes 
 and if the amount of the liability diil n »t a])pear. but was deducted from 
 the amount of bills (lisc.unted and cui-rciit. it v,-ould have had a vc.'v de- 
 ceiving eti'ect upon lhe jaibiic. be.-aiise 'die bills discouincd uiiti! ]iai"d do 
 II )i <j:o into the cash; l!:e m »i'e eoi-i-e-t way is to >iiow the whole amount 
 i) ' bills discoun'.ed. 
 
 (t^.) AVhat oj.p irtwiiiiy !i;is the Pn^ideni of a iJiin;; which has a 
 mimber of branches to check witiiin the ten days allnwcd l>v law, the 
 I'ctura whi(di is prosenled him tor .-i^iiature? (A.) If he were ve;y' in- 
 dustrious and devot' .1 his whoh; time e.vciusivoly to it, he mi^dit com|)ile 
 a rcrtiirn similar to that which is made by two ])rofes-ii)iial men in that 
 lime, bill he would a!-- I 'epilre (jUili;icalio;i> not u-uaiiv po->se--'' i \,y 
 presidents of liank--. an i whicji are only acijuired by .]te da! 1raininu\ 
 
 lime for which few nieit in 
 
 iio.'iion have to oiitain. Kyen in tins 
 
 case he would have io i-dy upon ih<' r"turn> sent in from tiie branejies. 
 The res]) onsiliilily fir ijie c >; i'(>ctne-s ot' ihe return ma ie to tin' fi overn- 
 ineiiL rests up )n the chief a"e Mntaiit and gene/al man !_;'ei'. Tic I'resi- 
 dent can com]»are llie rc;iirn w'tli the return^ of p.'ev-^iH moniiis. and 
 obtain explanatio:is of any ile\i;iiio,i>. so as t) sati-'ly his iiwn nwnl on 
 the subject, as our iN'oid^n! dv)es. Jdiat does n »t ia\-oive an eiKjuii-y 
 iiilo the business of any bi'ancli. but only into the tii^'u/c. furnishc i by it. 
 Cmss-KXAMtxEh HV ^Il!. IJiT.'iUK — The ditheii I iv apjiears to be on 
 the side of the lioriowinu" baiii\- thire is none in crcdiiiiig the amount on 
 die ]):u't of the lender? (A.j 1 staled there was a diiliciilty, and am pre- 
 pared to show we ai\' snnietimes puv./;!!' I as to the c oIuumi in which we 
 should j)lace those lojins when ina>!e. {(().) Is it not Ji tinet that your 
 bank eiitere I in its j-eturn the S47l,'")i) loaned the Consolidated Bank, 
 .lanuary last, under the heading ••balances due by other lianlcs? (A.) 
 Yes, a large portion of it. 8omo time ago it would not have a])peared in 
 that way, but the public press seemed to call for the fiu'ures of that de- 
 scription, and I saw no great harm in our placing it that way. (Q.) If 
 on the 31st January last your bank was a borrower from other banks to 
 
 
 
 'Ii 
 

 L. "1 
 
 
 it;; I 
 
 
 !»l^ 
 
 98 
 
 the extent of $993,000, would you consider you were giving the public .v 
 correct statement by hiding the amount under the cover of the heading 
 •' Other deponitH payalilc after notice, or on a tixed date"? (A.) If I 
 had no otlier opportunity of reaching the public than by the public state- 
 ment exacted by the Crovernnienf, I do not know that I could put it 
 under a more correct heading. ((^.) Do you not think it would be more 
 correct under No. 11, "Liabilities not included in foregoing heads," and 
 show the public the nature of the transaction? (A.) I have stated I 
 should probably have given preference to that scheme, but consider it 
 would be discretionary on my part to do so or not. (Q.) Then you think 
 that statements which ke])t from the (Government and the public the fact 
 that the bank Ijad been oldiged to resort to other banks for aid to the 
 amount of a million dollars would not have a tendency to deceive tlio 
 public as to the condition of the bank? (A.) I repeat that in the retuin 
 there are only iliree headings under which information can be conveyed 
 to the public, and it is optional with bank managers to use either. (Q.) 
 Which lieading No, 11 or No. 7 would convey to the Government and to 
 the public the most correct information ? (A.) My preference would be 
 for No. 11, " liabilities not included under foregoing heads." (A). In using 
 one of the only three columns eapable of giving any information to the 
 public, it was optional to use " deposits payable after a tixed date." My 
 impression is that column No. 11, "other liabilities not included under 
 the foregoing heads," was not the proper place. I have never required 
 in my returns to acknowledge loans from other banks. (Q.) Had you 
 made a return to the (Government on the 31st .Fanuary last, and had yoii 
 found 1517,000 representing overdrawn accounts, some of which were 
 secured by mortgages and some not at all, would you have considered 
 yourself warranted in entering it under No. 13, "notes and bills dis- 
 counted and current ?' (A.) No. My own practice has been to distri- 
 bute tiie.se overdrafts among the respective columns, hut without know- 
 ing more of the circumstances 1 may say 1 liardly ihink 1 would, but I 
 can scarcely conceive having such an tniiouiit of "that character to deal 
 with, i never saw ^uch assets witliouL being able to allot them in the 
 manner i have already mentioned after suelT a scrutiny as I would give 
 tlieui. They should have been written otf altogether or distributed 
 under tiie heads of advances to Dominion (iovernnient, to corporations, 
 etc., as llie c;i.-e might be. I sjieak of the (rovernnieiit returns ihnn the 
 knowledge i have ol'ours and also of those of other banks, as the}^ have 
 sometimes been subniitted to me before publication. If an ordinary 
 account has been oveidiawn, our custom i.< to include it under the head- 
 ing "notes and bills discounted. "" 
 
 By Mr. Kerk — Our custom has been to include overdrafts under 
 the heading of bills discounted. I do not know if it is entirely correct, 
 but the reason is that such overdrafts aie in connection with that depart 
 ment of our business, ((^.j Consequently though your bank is lucky in 
 not having overdrafts, still whether the 'amount is large or small tlic 
 practice is the same ? (A.) Yes. (Q.) Does not the President look to 
 the Manager lor the correctness of the report? (A.) Yes, to a large 
 extent he must rely on the jirofessional assistance he has. 
 
 His Honour — In the case of demand notes, what form of securitv do 
 
09 
 
 lublic I*- 
 icadini: 
 ..) If'l 
 c stato 
 put it 
 30 more 
 ,g," and 
 jtated I 
 sider it 
 :)U think 
 the fact 
 I to the 
 3ive the 
 le returti 
 onveyod 
 
 31'. {(I) 
 
 it and t(y 
 would ho 
 In Ubing- 
 n to tl\e 
 ic." My 
 ed under 
 required 
 Had you 
 I had you 
 liph weie 
 onsidercd 
 bills dis- 
 to disti'i- 
 lut know- 
 aid, hut 1 
 r to deal 
 m in the 
 ould U"ive 
 istributed 
 porations, 
 s from the 
 they have 
 ordinary 
 the head- 
 
 afts nndof 
 
 y correct. 
 
 I at depart 
 iH lucky ill 
 
 small tlic 
 nt look U) 
 
 to a lavii-e 
 
 fjecui'itvdo 
 
 you requiro ? (A.) Wo don't have demand notes. (Q.) You are 
 familiar vvith the law relating to these accountH? (A.) I am. (Q.) You 
 are also familiar with the form of these accounts, and you think it more 
 proper to place them under the heading of •' deposits ?" (A.) Yes. The 
 general practice is as I have stated. It has been my practice to see how 
 the other banks have kept their accounts in order to be prepared to re« 
 spond to any demand made upon us. 
 
 A JuROK — (Mr. Wood) — Who in your bank is hold responsible for 
 the correctness of the return ->. tlie General Manager or the President? 
 (A.) Both. We both make a declaration under oath that, to the best 
 of our knowledge, the retui'n is correct. The President has to rely on 
 the General Manager and the latter on his subordinates. In the case of 
 an error occuring the President would look the principal executive officer 
 who might place the lesponsiljility lower down. If a demand note had 
 been put into the cash I (h)M't know of any other heading that it could be 
 ])laced under than •' notes discounted." unless thei-e were securities, as 
 loans upon bonds oj- bank st(;ck, which would classifv it as " loans upon 
 bonds." 
 
 Mr. Ritchie — lia demand note had not been discounted at all but 
 had been given for ovei'drafts leproseiiting cash to a large amount, and 
 if it wore discounted on a later day wouM that appear among notes dis* 
 <:ounted ? (A.) You cannot discount a demand note. 
 
 Mr. RiTGiiiE — But it has been discounted. 
 
 Mr. Anous — You mav give cash for it, but you can't discount it. 
 Practically the President verities the coi-rectness of the return. The 
 President of the Bank of Montreal dot";. 
 
 Mr. Johv Ingram, Assistant Manager of the Merchant^ Bank, 
 ^worn : — I have been resident for some two yoai'.-; in Montreal, and have 
 been engaged in banking in Eno-land, Scotland, Xew York and Montreal. 
 The figures published in the (rovernment returns, indicating the treat- 
 ment of both assets and liabilities, show a discrepancy chiefl}- in those 
 items which exhibit the indebtedness of banks one to the other. I could 
 account for that dii^crepaney, because the banks which lend put down the 
 amount un<ler the heading of 'due from other banks, wishing to put their 
 best foot forward, while those that borrow entered it in another column. 
 (Q.) Ijnder what head? (A.) If a deposit receipt is given, they enter 
 it as deposits on time, because it is voucbed for by the deposit receipt. 
 If entered otherwise, it would be fictitior.n. I do not sec that, if no de- 
 posit receijit were granted, it would alver the mattei- at all. (Q.) You 
 would consider that to enter a time loan as '-due from other banks" 
 would bo exceedingly incorrect ? (A.) I don't know that it would be 
 •exceedingly incorrect; it would be misleading,. as it might be taken to 
 be past due. I think that these colunms wei-e only intended to repre- 
 sent the pass-book balances between l)anks, similar to the clearing house 
 operation in London. ((^) In the event of overdrawn accounts existing 
 in your bank, under what head would you ])lace these overdrafts ? (A.) 
 I should make an analysis of these overdrafts and treat them accor- 
 dingly ; 1 should classify them according to the accounts. Supposing it 
 was an overdraft on an individual account, 1 should be driven by the 
 iuaufficiency of the classification in the Government return to place it 
 
]ri) 
 
 I ill 
 
 !li 
 
 I ', ;i 
 
 : !■* 
 
 It t| 
 
 ih 
 
 iiiidi'i' •• ii<)l('> 'iiftfi ;;:.i. 1 j.ikI ciineiil. " (<^i rinl-'i- \vli;it lic.-ni wmiM 
 you !,.e Ibrced lo I .;. ■■ iiiiiaii'i ii"tij.>? (A.) l>u|»i)»^t; iiiulcr llio Isc.'i'l 
 of" notes (li^(.■()lllll(M. .id ciii-it'iii. ■ (<\>,i Siiii|'<)M.' llio liMiik lioriow^ a 
 lar<,'o sum ol' luoiu-v i: in anoilior I'ank an-i .i:\\<'> a laruu aiiioiinl of m-- 
 (•unties tor ii. li(,\v .m,i:1iI lliat entry hi le made, and on<i-|it there to I c 
 any entry notieini;- l!.i- lint ot'tlieM- .-ecuril't'> liavinir I ceii yivcn ? (A. i 
 1 sliouM no* eonsi(U': lliat citlicr l-ank >lH^nld maUe a ))rii,ci|»al ent!-y. 
 1 con^i«'.e^ tliey sliouid have made a Mili>iiliiiiy entry, hut not to l»rin_i; 
 tliem into tkt/ l.alahtc >iiiei. Ii >hould li- a menndandum. {(^.) Ae- 
 i'ordin;^' to the oralif' <'t' ilio .Mcreliaiii-' i'>ank, li<>\\ do yoii nianau*' 
 with j'es)K'ct tn tliu>e tW" contra cht i-i(.'>. •■ due to " and *• (hie tVom "" (MJu'i- 
 banls> ? Is it \our hal'it iw ^u^^tl•nei the u'ieater fiom llu' It-ss and 
 merely ahow it.f dillLMtucr lo a|i|t('ar ? (A.) Uiu' ]»!aeiiee ha> not heen 
 
 The ' ii''v frnnicnl rcUirii ha> an ilcni 
 a])|)lX'! end. i opret in^• t he l>ank > ])i»\- 
 
 entiivly unit' >, in in lliat ici;ai'M. 
 on l»ulh '>ides. 11(0 iid'oi nuition. 
 
 tion eould he cx.racted Irom hoih the entj-ies, I iiuve rea-on to lehevr 
 that some la: ks (dioOM- one and oiju'i" hanks anoiiier metln ih Tlicre 
 migliL I e the (M.\'ctii)i! au'ain^t striking' a I'ldancr and cnlfrin^' lln' dit- 
 ferenee. thai xune hank> minlit apjear to haw no as.-cts. hut there is the 
 (louhle liah!lii\- of the >iiaieh'>l(ir! -. which would make theii" as^ei-. 
 not so had in ;i..' omL 1 should not CMiisider that method ineoiweet. The 
 officer retspons! hie for the eo:reeinc-s (»f these leluin.s in the .Mei'(-hnnt>' 
 Bunk was the ciiief acccuniant, hui that olhcer ei)uld only proceed uio!, 
 the ti_i>*ures wideh are pre.ented to him. and ihi'ouu'h his sU])erior ollicei' 
 it is pre.-eiite ! lo the Pre^-ident. (<,).) The Proideiil has to I'ely upon the' 
 fidelit\- of th<- cfiicerN of the haid\ ? {A.) Yes, not only the President, 
 but the chief executive otiiccr, has to rely on the tidclity of suhordinate>. 
 J3v Mr. JincHiE. — What is the o!)Ject of making" the>e hank rctui'n> 
 as far as the puhlic are concerned? (A.) To enlii^hten the Govern- 
 ment and the public a> to the ]to>ition of the hank. ((^.) If you had 
 been makini;" up a (iovernment return Irom your books and found that 
 you had hoi'rowed >^9!>3.0UO from other baido. would you consider your- 
 self Justified in entei'in^' that amount as if it had been received fiom the 
 public on account ? (A.) As a matter of fact, it' the money had been 
 payable after a fixed day. 1 woiiM cijusider myself shut out hy the form. 
 I consider the Government returns are very defective documents, (t^.j 
 If you borrowed a million dtdlar.>, payahle after notice, would you eniei 
 it un<ler the heading '' liahilitie.s not included under foregoing heads ' ? 
 (A.) I do not think tliat cla.s^irication would he open to such a transac- 
 tion as you dfrscrihe. (<^.} Your oj)inio« on this point is diiierent fnun 
 that of Mr. Angus. (A.) I have the greatest respect for the opinion ot 
 Mr. Angus, in all that relates to hanking, but I may be permitted to 8ay 
 you are dealing; with a very large sum of money, and I am adjusting my 
 answers to your qucstione. I think the public would he suiprit'Cd indeed 
 to find a million dollars suddenly pitched under that heading in a 
 monthly return. (Q.) I have no douht they would. "Would you not he 
 completely misled if a l)ank had borrowed that amount trom other baid<.^. 
 and if that amount, so bon-owed, was entered in the return as if it had 
 been received on deposit } (A.) I beg your pardon, 1 have lost the 
 thread of your question. (Q ) If you were preparing a return for tlse 
 
101 
 
 \V(»lll'l 
 10 I'.C'Il'l 
 
 ri'MW.x a 
 t of M'- 
 • ic to 1 o 
 I ? ( A. ) 
 il entry, 
 to lnini: 
 ((,).: Ar- 
 
 tniiiia;:^ 
 
 :n "' (^iIkt 
 
 IrvS aini 
 
 hot Iteeii 
 
 nil iU'in 
 iiUs ])f>>i- 
 
 r» Ic'lil-Vr 
 
 I. 'Vhvw 
 
 ; ih.' <lit 
 
 lore is the 
 leir !is-et- 
 •iect. Tl.r 
 *k'i-(li:\iii> 
 
 ■OL'd Ulol, 
 
 ioi- oHici'i' 
 \- upon thi' 
 'ProitU'Ui. 
 lioi'fliniiU'-. 
 Ilk returns 
 e Govern - 
 [■ you hu'i 
 'ound tliHt 
 idor youi- 
 1(1 iVom tlu' 
 had been 
 tlio i'ovm. 
 nls. ■ ((^] 
 you entei 
 ig heads '? 
 a transa<- 
 rent from 
 opinion oi 
 Itted to Bay 
 [justing my 
 ii-ed indeeil 
 lading in a 
 vou not I'l' 
 Tthor banlo, 
 if it haa 
 Ive lost tho 
 Irn for tin' 
 
 31st January last, su|iposii)ir the hank had hoi-i-owcd f.,iir oi- live huct- 
 dred thousand doUars within the juvccthng niunih — that it had hoi-j-oweif 
 this money to make good eertain de|tosiis — it' iluit wan entered in tha 
 return you were ju'eparing. to make it a])pe;jr as it' it had lieen received 
 on deposit from the )»ultlic, would n<it that he rh.ceiving ? (A.) It would 
 not deceive me. ((^ ) But do you think that would he advising thf 
 j)uhlie of the tact tluil ther<e loans had liecn inaMc? (A.) I do not kn<>\« 
 that the puhlie should he advised of these hcitis. ((^.j Then you con 
 8i(ler that the ohject of these returns is not to advice the puhlie us to tho 
 pi>sition of the hank, that, in fact, nothing in the nature of a "danger 
 item " should go into them ? (A.) i do not know that this is a 'dan- 
 ger item " at all. it might he pohsil'le that the money had hcen bor- 
 rowed to ]»urehase eX(diango at intere-t, and 1 w.»uld not consider that I 
 would be doing Justiee to my hank at all by putting it in the return it» 
 •■ due to other banks. " {{}.) Suppose, on the other hand, that you had 
 been obliged to borrow a million dollars to keep your hank open, don't 
 y(»u third< the ))uhlic should he advise I of il? (A.) That is rather a 
 dittieult question to obtain an answer to. I >lioi)ld stiy that tiie public, 
 intei'ested in knowing the p>>ition of a bank, are not exclusively de- 
 pendent on the Government returns t'ov inl'ormation. 1 doubt if any 
 Government return could lie so framed as to give su'-h infoi-mation to the 
 public. (Q.) I ask whether a iiank. which had l)een ohl-ged to lioi-row 
 nearly a million of dollars to kee|i its doors ojien, would lie Justified in 
 covering that up under item ot •' other deposit.s payalile alter notice or on 
 a tixed date," or whether the ])uhlic should not he informed of the posi- 
 tion of that bank ? (A.j As a hanker, 1 have already stated that the 
 Government return is superlatively defective. What I understand by 
 item 8. '' balances due \o other banks, ' is merely a clearing out between 
 the banks, and 1 claim that such a transaction as the horrowing of a 
 million has no place under this head. The principle is the -ame whether 
 the amount is a million oi- one doljtir. (<^.j Could it not he stated that 
 it is a loan? (A.) It would l»e violation of the statute. The siatute j)re- 
 scribes that form and no other form. I think that, if you cannot classify 
 your statement to a tiner])o;nt than that, it wouM he iie!ter to have no 
 statement. (Q.) 1 think so. too. Vou say you <lo not consi lei* it ino<>r- 
 rect to strike a halance hetween the items ' due to " and " due from 
 other banks" and give itoidy ? rA.) I do not con>i<ie:- it incoi'i'cct. (Q.) 
 Do you not considci- it more c(U'i'ect to put on one side what is "due to " 
 and on the other Hi<le what is •• due iVoni o'hor han!<<. "' than merel.y to 
 give the difference on one sitio of the return ? {.\.< It i- more definite, 
 ftut not, in my opinion, more c<.;-re(n. i}.' Sujijto-ing you found a man 
 credited tor 8-iOt),(M»(l, without anything- to show for it. wo;il 1 you feel 
 vourself justitied in ])Ulting this under •• notes and bills di-count.d ami 
 current?"' (A.) 1 ^hould he' very -on-y to have k. conlem|iia-e any such 
 set of tigures. but 1 >hould say tlii're is \u) other place in the return, 
 (Q ) Kxplain why they could not go unler the hoa'lini:; b^, ''assets not 
 included under foregoing heads?" (A.) Tliat h.eading is i-athei- a sore 
 point with bankers^ (Mr. Eitchic, interru])iing— I have no doubt of it.) 
 The Witness continuing : There are some baidvs that omit it altogether. 
 Jt used to be a sore jxtint with the .Merchants Bank, I do not know why 
 
102 
 
 ,m 
 
 it should not be put there. (Q.) Would you conskler yourself entitled to 
 put ^517,000 overdrawn balances, represented by cheques, etc., as '♦ notes 
 and bills discounted and current?" (A.) lean only answer that ques- 
 tion as I c^d in my examination in chief— 1 should classify them and put 
 th^ under the proper accounts. (Q.) But if you had a cheque, repr«i- 
 senting an overdraft on an individual accounts would you hesitate to 
 place it under heading 18 ? (A.) I must say that I find it exceedingly 
 difficult lo swear to answers to all the questions you put as to what I 
 would do under a certain hypothesis. I do not know what I would do. 
 At all event.. I would have more time to considerthan I am likely to get 
 here. (Q.) You gave y«ur opinion very freely, Mr. Ingram, on the other 
 
 Bide. 
 
 His Honor — Do you believe this return would be deceptive, either 
 as regards the Government or the public .? (A.) It might be misleading 
 to the public without being instetitionally deceptive. 
 
 fi 
 
 14 V ' 
 
 Pi i 
 
 ADDRESS BY MR KERR, Q.C. 
 
 Mr. Kerr, in addressing the jury for the defence, reviewed the history 
 of the City Bank, and its joining with the Royal Canadian, to constitute 
 the Consolidated Bank. Mr. Rennie. who had been cashier of the City 
 Bank was, he said, promoted to be general manager of the Consolidated, 
 and as such was chief executive officer of that institution. Under the 
 Banking Act of 1871, section 13, it was provided that a monthly return 
 should be made to the Government, in a specified forra, such return 
 should have been signed by the President, Vice-President, or by the 
 Manager, Cashier or other principal officer in the Bank. The form given 
 in 1871, was altered afterwards by the Government. It appears that the 
 Consolidated Batik regularly followed their instructions in the returns 
 made to the Government. Mr. Kerr here quoted from the lG2nd section 
 of the Act of 1871. He also read tthe penalty for a violation. He read 
 as follows, to jhow the prescribed formality : " We declare that the fore- 
 going return is made up from the books of the Bank, and that it is correct, 
 to the best of our knowledge and belief, and the bank never held less than 
 one third of its cash in Dominion Notes." The return was required to 
 be m.ade in February, 1879. It was made up from the balance sheets ol 
 the difterent branches, and it was absolutely requisite under the Statute 
 that this return should be sent in previous to February 10th. It was 
 made according to the ordinary custom of banks, and, as has been 
 shown, according to the custom of other banks. The different branches 
 and separate agencies each made up their balances, the head offices ac- 
 cepting the condition of each of these branches. It was impossible to 
 verify all these returns and count the money of the bank in order to be 
 certain of the correctness of the returns from the subordinate banks, r.s 
 this work would take more than the ten days" grace allowed in which to 
 furnish the return due on the first of the month. From the evidence, it 
 appeared that the balance sheets were received at the bank on the third 
 or fourth day of each month, in the head office. Then this was confided 
 to the inspector, who handed them to the chief accountant who an-angod 
 
103 
 
 titled to 
 s '* note» 
 lat ques- 
 
 and put 
 e, i'epr<*- 
 3sitate to 
 eedinij;lv 
 
 what I 
 'ould do. 
 ily to gel 
 the other 
 
 ve, either 
 lisloadiniT 
 
 he history 
 constitute 
 f the City 
 nsolidated, 
 Under the 
 hly return 
 ich return 
 or by the 
 orm given 
 irs that the 
 he returns 
 2nd section 
 He read 
 at the fore- 
 t is correct, 
 Id less than 
 required to 
 ;e sheets ot 
 the Statute 
 th. It was 
 IS has been 
 it branches 
 1 offices ae- 
 ipossihle to 
 order to be 
 te banks, r.-J 
 in which to 
 evidenee, it 
 m the thinl 
 ,vas confided 
 ho arranged 
 
 these different bahmces under the heads in whiih, in his opinion, each 
 item should come, and these returns were then entered in one of the 
 books, and from that book was drafted that i-eturn Avhich was sent to the 
 (Government. It was then, according to the general practice of the bank, 
 as Mr. Pridham had sworn, given to the general manager, who, having 
 examined it and convinced himself that it was correct, liande<l it to the 
 President, who signed it. Mr. Pridham swore positively that the return 
 was made out in accordance with the general custom, from the books of 
 the bank, and in accordance with the balance sheets' forwarded to him. 
 He continued, it might be presumed that the President could investigate 
 the condition of the bank, go over and check each item in these retiii-ns. 
 But you have it in evidence that that would be simplv impossible. The 
 books of the bank are scattered all over the Dominion of Canada, and yoa 
 must come to the conclusion, gentlemen of the jurv, that it never was the 
 intention of the Government to have the President of a bank check every 
 item with the whole of the books of the bank, in order to be perfectly 
 certain of the fact that there was no en-or in any of them. In a lai-ge 
 institution such as a bank, it is requisite that there should be depend- 
 ence placed by the President upon his subordinates, and. a.s Mr. Pridham 
 says, the responsibility in the bank of making the return rested upon 
 him.^ He was the party obliged to collect these balance sheets, assemble- 
 the figures under the proper heads, and make out the returns. And his 
 responsibility also was limited, because he ha<l to depend u])on the i-eturns 
 from the ditt'erent branches, and, consequently, he looked to each of 
 them for the correctness of statements sent in to him. You will observe, 
 gentlemen of the Jur}-, that it was thus utterly impossible Ibi' the Presi- 
 dent to know whether the returns were correct or incorrect. You must 
 be satisfied that it was impossible for him to do so, either in the branch 
 office or in the Montreal head office, when the books from which the 
 balance sheets were taken could not be reached by him, nor was he ex- 
 pected to do SO" How was it possible for the legislature to impose u])on 
 him the task of counting the cash, or of verifying the amount of notes 
 under discount, or of seeing that they were corn-etly repoi'ted in the 
 returns'? All he could do was to depend upon bis sub-otHcers. and. from 
 the books in which the balance sheets were kej>t, to satisfy himself that 
 they were con-ectly reported in the return. The charges in this case are 
 founded upon acts or omissions, it ni;ty be said, of the Montreal Branch. 
 In order to support them it must be showni that Sir Francis Hincks knew 
 that the statement in question was false. By tbe evidence, it may bo 
 said, the charges arc narrowed down : First — That in the specie. Domi- 
 nion notes, or Notes of and cheques on other banks — that is to say, in the 
 three first items of assets in tbe returns — there should be included certain 
 demand notes of private individuals making these demand notes come first, 
 then other .specie, Dominion notes, notes of and due other banks. This 
 is founded upon evidence that Mr. Louson held, from the 28th November 
 until the 21st February, demand notes to the extent of $221,000 odd 
 in his cash counted as cash. But it is eleai-ly anil conclusively proved 
 that these notes were deducted from the items previous to the making 
 out of the returns and were not calculated therein. Consequently that 
 charge is entirely untbunded. The second chai-ge is, that nothing appeared 
 
 m 
 
104 
 
 '1' = 
 
 im 
 t - ' 
 
 !■•■■ 
 
 I* : ■: 
 
 r.-i 
 
 H 
 
 ■. i \. 
 
 under item of liabilities, while $292,000 were due to other banks. Item 8 i^ 
 
 couched in the followiui;' vvurdj- 
 
 I)ue to otiier Banks in Canada." Now th*. 
 
 amount.s borrowed from the other birnks and outstanding but not due on the 
 31st January, were ^91)3,770.11, together with interest upon those amounts. 
 Now, it is not shown that any liability was incurred. In fact, so far 
 as the greater number of the loans were concerned, they were deposits on 
 time, and thus they wej-e not notes and were not due. It is ju'etended 
 that they should luive been included in itcju 8, '-Duo to other Banks in 
 Canada." It is claimed on the other hand that to have so entered them 
 would have been misleading. In the Hrst place they were not a liability 
 due. Had they been so classed it would have led the public to believe 
 they were exigible. Secondly, it would have been leading the ]»ublic to 
 believe that the ])Osition of the Bank was nmch worse than it really was. 
 Item 8 was placed opposite to item 4 and was intended to show balances. 
 The ]>ractice of banks was not uniform. While the loaning banks gene- 
 rally, almost invui'iably, included the amount due to them from other 
 banks as •' balances dne fi-om other iianks,"' the borrowing baid<s have 
 followed the utiier sy>tein and placed the sum boi-rowed as under the 
 heading of deposits. Mr. Angus tells you ii, his evidence that thei'e is 
 a total (»f diti'crcnce between thoe bajdvs of two million dollars sir.ce 
 187S. This shows that the ])ractice is not confined 1o jilacing the 
 tigui'es under that heading, but in olher dejjosits payable after notice or 
 on a fixed date. Mr. (nindley also (le]»osed to a similar fact, and ii.' 
 doijig so the.>e gentlemen bi'ing to bear upon this jxjint their own personal 
 ex])erience in some of the leading banks in Camula, and also their know- 
 ledge oH the practice in other baidvs for a number of yeai'H past. More- 
 over, such an entry would have iixluced the belief with the fTOvern- 
 ment that a larger i»roj)oi-tion of cash was held. Would not thi 
 liave had a u'reatei- etlV'.'t tipon the ( 
 
 Tovei'nment am 
 
 1 tl 
 
 le 
 
 ])eoi 
 
 .le tl 
 
 nm 
 
 the heatling of the loan under which it was ])j'opej'ly ciasse I ? It Avas 
 impos-ibic foj- the Bank to j)laee loans made to them wliicli were not due 
 under the heading of notes immediately exi^'ible. And in order to fortify 
 my position [ refer your Honor to ^tatements of assets Number 14, 
 Notes and HiiN discumitel, overdue and liot sjX'cially secured. The use 
 of the word overdue there eou]»led wiih the word ilue shows that loans 
 have a stage of c^isience ])i'evious to their iiecoming due, which may 1 
 
 K' 
 
 (lesen 
 
 bed 
 
 as •• not due 
 
 line 
 
 an< 
 
 Dvei'due — three stau'es. 
 
 Tl 
 
 lere i- 
 
 nothing that reiiuires iliai any Ntjiionieiii ^llonld bare Ijeen nuideof not* 
 due other banks. The ibir.l jtomt made by the prosecution is one which 
 
 do not thiniv re([iure-^ nni 'b 
 due from other bank's in < 
 
 eMisiicration at our han Is, that the balance^ 
 ana i;i were not given in con-ect form, 
 iba? i!ii^ was the way in which llii- 
 )i:irticiil;ir [\r\\\ nf lotarn^ iia>> alwavs beiMi treated bv lln' 
 
 K 
 
 o\v 
 
 \va.- 
 
 evi I el 1 1 
 
 return^; and the b;da 
 otfiee 
 
 III" 
 
 show conclusive: \' 
 
 nee 
 bat 
 
 Is tliu> foi'warded by ll)e bank 
 
 miouht due 
 
 '.y 
 
 an< 
 
 I t 
 
 o tin- 
 
 ore, It was a nnitier 
 
 Consolidated Bank were noi retu'-ned; and. tberel 
 of impossildhty ti»r the chief acc(juntant, or the manager, to put tlw 
 bakmci' in the b;)ok, in tiie place in which my learned iriend wanted it. 
 Tlius, t\)v instance, in Toronto there weiv 310,000 due to the ('ons ili- 
 dated liank from olher banks; the Consolidated Bank owed those banks 
 
 to 
 
 |.n 
 
 wl 
 
 (ha 
 
 inai 
 
 wei 
 
 the 
 
 cci- 
 
 secil 
 
 piec 
 
 creil 
 
 the 
 
 that 
 
 by 
 
 the 
 
 M-()U| 
 lint 
 
 a d( 
 
tern 8 is 
 vjovv the 
 e on the 
 mountH. 
 
 [, so far 
 posits on 
 retended 
 L^anks in 
 •ed them 
 I liahility 
 
 believe 
 public to 
 3ully was. 
 
 balances, 
 nks fienu- , 
 •om other 
 inks have 
 under the 
 
 1 there is 
 liars since 
 lacin*-- the 
 
 notice of 
 iCt. and it' 
 >n personal 
 Jioir know- 
 list. More- 
 he Goveru- 
 d not this 
 ,e(»ple than 
 
 IV It wa- 
 •ere not dur 
 er to iorlii'y 
 S umber 14, 
 
 I. The use 
 that loans 
 
 lich may ho 
 There 1- 
 
 uideol'iioto- 
 
 ,,ue which I 
 
 the l>alaurc- 
 
 H-IVCI tbrlll. 
 
 wliich ih!- 
 
 ed i'y ^''!' 
 Uie "bank- 
 
 uid tt> »>'* 
 as a nuilU'i' 
 
 id wanleil i|. 
 
 the (/ons'tli- 
 
 1 Uiose t>:inl<- 
 
 105 
 
 :f(5,<>U0. But, instead of >h('\viii^- t!u' traiisaciion ill detail, in tliat man- 
 ner, the bank otiiceis merely retnrnel liie (Ut^erence as s.i.iidO — and this 
 ]»rincipU) was t'olhiwed thinu^iiMiit — .^-o iluit it was im]"i»ib!e to u'ive the 
 in<hd>te<btess of the ('on.voli(iate<l liank to oth.er banks and of oiIiei> to 
 the Coiisoli(hited Bank. All they eoidd (h) was to make the return as it 
 was done. It luis been the xcry saire custom in tlie eh'ai'inu- house in 
 Hni;'land. wdiere the bank'.- ju-actiee is to .>trik-e a bahinee I'etween batdvs, 
 and the bani-c owini;- the money ;it the close of liu^iness was cJiarged 
 with the balanee. Tid^ i> tiie ]»ractire, f\en in the most ]U'os])ei'ous 
 eoiidltiitu of things, and. theief-tre, it is impos'^ible foi- you to eoii>ider 
 this eliarge as having any foinidatioii. The touitli charge is that de- 
 mand notes, to tlu' amount of S-21. I'.'."), were iiududed among the notes 
 discounted and curi'eni, while tlu'v were only disemtnied in Februar}', 
 IST'.i. alter the makim;' ot' the ( iovernir.ent return. Of ail futile argu- 
 ments, this is the most faiile 1 havt- ever heard in a Court. 1 should l)e 
 incdint'd to say that when an aniounl of interest is carried to the credit 
 of a man's account, it is virtually ea.-ing the account. And can it bo 
 jireteiided that Mi', iviuiny. for hi- own [tiir]ioses, to blindfol<l tiie Presi- 
 dent, diil not treat ilimi in this way, wddch is to ti'eat them a-« cash ? 
 The fact is !•] vn that they n-cre actually i»ui back annuig the iiotes 
 everv evening ; airl can it be ])i"ctcn'led thai he did not ;;ctu;dly iiliiid- 
 fold Viie j»resi(teiit and directors? Thc-^e ncte- were actiuilly included 
 amoni:" tie discounis. t'an it he iirctended that the President 
 should ha\'e u'one down tVo!.! t!ie head oiiice in!o the bank' anl 
 counted the notes di-counted aiiii ihe !iote> not discounted '. Had he not 
 to deiiend upon the othcers of the jjaidc for iii^ intormatiiui I Can it be 
 iiretende*! that lie eountei! tluun himself, and that tiC should have known 
 where the <leposits should have bee.i '.■' Can. it be held to be showing 
 that lie knew these were included in the tmiounts di>counled .^ But ^ 
 maintain that these demand notes cai'ried from the "JOth of September 
 were«^-irtually cashed, an 1 were propi-rly included in the return under 
 the head in u' '• Notes discounted and cui-rent." The tilth charge is that 
 certain notes ^iveii a- eollatei'al security were included among the assets, 
 No. Sy. •' lialances discounted an<l current.'' The same argument, to a 
 verttun extent, ai»|»lies to this as to the !a-t charge. Ibil I nmintain that 
 tiiose notes were properly included under that headin--, and I havi' no 
 ilitficultv in showing you. i^cnllemen of the jury, that th.at wa> the 
 proper wav to treat the item. A n<'te given as collateral security re- 
 mains thepropcrty ot the person wdiogi.es it until the debt talis due. 
 It is sent out as being special security for iha debt— given as eollateral 
 security. The principle of our law is that all a man's property is 
 pied<'-ed (o Ids creditors. This is iiothin-' less than t -ansfei-rinu' to a 
 crcdUor the am )unt due to iiim. Now, thus taking the s;;.")-2.0(iU given to 
 the Jiank of British North America as security tor tiie loan made l-y 
 that Bank to the Consolidated, you will (observe that the loan as made 
 hv the Consolidated tii^tnvd amonu- the liabilities of the ConK)lidated to 
 the extent (.f ?Io<i.<Hi(i. If S:!.*)!'. (»<><» had been taken out (.f the assets, [ 
 would ask anv man whether the liability w.uild have been rejircMUited 
 not as bcin'r i<4»l7.lMHb Imt as beinn- $7.V.».<»ri!) ? Thus it w.uild have b.-en 
 ndeceptimCand w.mld have ma le the condition of the Bank wor.se than 
 
!■■' .i 
 
 106 
 
 fit roally was. The same rule a])plies with regard to the Bank of Mont- 
 real. Take another case in item 17 of the assets — the Bank promises 
 '{government security for $700,000. Would it be obliged to pay? Does 
 not the Bank promise so much ? I do not think that any pretension such 
 .as that should obtain for a moment, because it would have the intention 
 •of depleting the size of a loan for which a mortgage had been given. The 
 last charge is that certain overdrawn accounts to the amount of over 
 $500,000 were included in item 13, under the heading "Notes and bills 
 discounted and current." You have all heard the evidence — that it is 
 •entirely the evidence of the prosecution. The evidence of bankers and 
 •experts as part of the prosecution makes a good case for the defence. 
 Tou have heard the evidence given in a case very similar to this, in 
 which there were overdrawn accounts. The actual place, as has been 
 shown, wherein to place this was under the item No. 13, " Notes dis- 
 counted and current." This, moreover, has alwa^-s been the practice of 
 the Consolidated Bank, and had been the rule when it was the old Royal 
 •Canadian Bank; it is the practice carried on to-day in the Consolidated 
 Bank, Consequently, there has been no chrnge in Sir Francis Hincks' 
 method of doing his work, and his return would only have been follow- 
 ing the same practice he had followed during the number of years of its 
 prosperity. I think that these are the main charges, and that I have 
 disposed of them satisfactoril}-. But apart from, and even if it wa?? 
 proved that there had l)oen a false statement issued, it would have been 
 requisite to show that this statement was not correct, and that it 
 
 was so accordinir to the 
 
 knowledge 
 
 and belief of Sir Francis 
 
 Hincks; and you cannot bring him in guilty unless you have proved 
 that such were the facts. I say — First. That the statement is pre- 
 sumed to be correct until all its statements are proved to bo false. 
 •Secondly. It is incumbent upon the prosecution to prove the falsity of 
 the statements alleged. Thirdly. The prosecution must prove that each 
 statement proven) false was wilfully false. Fourthly. That is was so 
 made with intent to deceive or mislead the public. " Fifthly. The fact 
 that any one statement being false, coupled with proof that it was made 
 knowingly, was sufficient to support the charge. Sixthly. What arc 
 the principles that are to govern the case, and that are to be laid down? 
 
 His Honor called Mr. Kerr's attention to clause 62, and read there- 
 from. 
 
 Mr. Kerr. — I do not see, your Honor, that that can be held to govern 
 a criminal case, although the Legislature does some extraordinary things 
 in face oi^ Magna Charta. No Court could have done such a thing. 
 
 His Honor — I do not call this a precedent, and such legislation is 
 really very loose. 
 
 Mr. "Ritchie — Sir Fi-ancis will think it too tight. 
 
 His Honor — 1 think it rather vague and loose legislation ; there is 
 too much ambiguity about it. 
 
 His Honor then drew attention to the words " held to be wilfully 
 made," and said he would like to have the meaning of the word " held ' 
 made clear, as it would make some difference if the Jury were told that 
 the word " held " made proof that Sir Francis did know of the falsity of 
 the statement. 
 
107 
 
 Mont- 
 •omises 
 
 Does 
 )n such 
 tention 
 n. The 
 of over 
 nd billn 
 at it is 
 ers and 
 defence, 
 this, in 
 las been 
 otoH dis- 
 iictice of 
 Id Royal 
 solidated 
 i Hincks' 
 n foUovv- 
 ars of its 
 ,t I have 
 if it wa^ 
 ave been 
 i that it 
 
 Francis 
 I'e proved 
 [it in pre- 
 bo false, 
 falsity of 
 that each 
 is was so 
 . The fact 
 was made 
 What arc 
 hiid down ? 
 read therc- 
 
 d to goveri> 
 nary thing-> 
 hing. 
 ^mshition IS 
 
 m; there is 
 
 be wilfully 
 'ord " held 
 re told that 
 he falsity of 
 
 Mr. Kerr— No, your Honor. The fact that he intended to misleaJ 
 or deceive must be shown. 
 
 His Honor — Then he is supposed to have had no knowledge. 
 
 Mr. Kerr — It is incumbent u}K)n the prosecution to prove that he- 
 wilfully and falsely made the statement for the purpose of benetiting 
 himself. Our legislation is to some extent jumbled up. 
 
 His Honor — Oh ! so it is. 
 
 Mr. Kerr — We declare that the foregoing i-eturn is made up from, 
 the books of the Bank, and that it is correct to the best of our knowledge 
 and belief. That is all that is required. 
 
 His Honor — Yes ; you hold that the certificate modifies the respon- 
 sibility. 
 
 Mr. Kerr— I think the book was produced. The fact is, there was 
 a misrepresentation about the thing. The book is here. 
 
 (The Jury were here shown the book which Mr. Kerr held to be a. 
 Government statement.) 
 
 Mr. Kerr — I think, gentlemen, that I have gone over the whole facts 
 of the case. It is useless for mc to tell you that a great deal of prejudice 
 has been engendered against the bank. It is hardly necessary to ask you 
 as jurors to rendei* strict justice, or to expect that you should discard from 
 you anything that has been sai<l and written out of Court. The object of 
 the defiendant is to have a fair trial. He is conscious of his innocence, 
 and looks forward to an acquittal with certainty, because his conscience 
 is devoid of crime. He knows that if any error unfortunately crept into 
 the retui'n it was not through hiui — that he was not the guilty part}-. We- 
 have challenged tor cause in this case, to have no prejudiced man upon 
 the jury; and I can say. for my client, that he would scoi-n to be acquitted 
 upon any other ground excci»t because he is innocent of the charge 
 against him. 
 
 ADDIJESS BY MfJ. KITCIIIE. Q.C. 
 
 Mr. KiTcniE, Q. C, replied for the pi-t)secution upon the whole case. 
 He said : Before commenting upon the evidence wliieli has Iteen adduced 
 before you, and which has necessarily heeii long, and. 1 fear, somewhat 
 tedious* I wish to narrow down ami reniive certain portions of the case- 
 from your consideration, so that you may see clearly the points upon 
 which the prosecution dei»ends lor a verdict. I wish to withdraw any 
 ]ioint on which I am not prepared to ask for a vt-rdict against the defend- 
 ant. It has been stated that it was impossible for the defendant to check 
 over all the returns from the outlying In-aiiches and agencies. I think 
 that is quite reasonable. It would be unt'air to charge the defendant 
 with anything upon that ground. No discrepancy ifi tlie returns coming 
 from any outlying bi-aneh has been proved before yon. There is another 
 point. Although I think it wouhl have been more correct for ti#«? return 
 to have shown how the ncrte-^ handed over to the lending Banks had been 
 treated, by addini!; a memorandum to the return, I am not prepared to 
 say that the omission of this makes the return absolutely incorrect. I 
 withdraw everything from the charge as to reports from outlying 
 
 M 
 
V'l'i 
 
 m 
 
 108 
 
 agencies;, liecause, as a matter orfaet. avc have not proved that there was 
 
 anythinii; \vr()no- in tiicni. Tlicii there is another point. 1 tliink tliat. as 
 
 hiisines.snicn, you will see that the piopei- way to do wonki have been 
 
 to put down the 'lalanros •• to '" and •• Ironi ' other baidis; hut 1 will not 
 
 trouble you on that score, and J also withdraw that item. There is 
 
 another thin,!;'. Vou remembei' the evidence upon tlie S221,2:».') whieli 
 
 Mr. Louson earried in his cash ; this was su})posed to have ijeen shown 
 
 as ca-^h in the (b)vernment return at the end ot' January. That turns out 
 
 not to have been tlie ease: ihesc slij)s were struck out of tiie ca-h. so 
 
 that the case is narrowed down to two items. \ make this statement in 
 
 advance, because 1 do not wish to urg-e a siuu'lc ]ioint au'ain^st the det'eici- 
 
 ant upon whieii J cannot eoiiseieiitiou>ly claim a venlict at y<jur hands. 
 
 I should !k' unworthy ot'the position 1 occupy if I did. The prosceuti<.Mi 
 
 claim a verdict in thi- case nw tiie followiun- jioint.s; The evidence, ^vhich 
 
 was rathe:' lenii'thy. has tJirown li^'ht Uj»on the wretched affairs of the 
 
 C nisoli.late I iiank on the olst .lanuary last. The Bank ai)peiirs to have 
 
 been in a failini:' c )nditii)ii as far bade as Xovend.ter of last, }eai'. Cp to 
 
 the en<i of January it had been obliged to bori'ow -"^DnS.IJTiJ to koe]t open 
 
 its dojrs. Now that fact was known xo the President ; lie staled to Mi. 
 
 B )nd, and he s;a!ed subsequ ntlv at a meeting of shareholde.s. that 
 
 he knew of this : an 1 yet we have th!-> dece])tive return to the (i>\'ern- 
 
 ment. You will ol)se;-ve that these loans were included under the heading. 
 
 ••Other deposits payalile .".Iter iioiiee or on a fixi'd date."' Dil yen evev 
 
 hear of a Ban!: lakiiig <le])0>its and then handing over their securities to 
 
 secure these deposits ? Tlie thing onl\' re juires to lie stated, it doe- not 
 
 reipilre any argument at all bjfore twe! 'e intelligent men to showMhat this 
 
 statement was grossly doce]»tive. 'fhc operation was, no doubt, very jn'o- 
 
 fitable to the Ic'iiling banks, because the misfortune of one bank i- the 
 
 oni)0i'tunitv ol' another. As much a- seven per cent, was piiid, and 
 
 securities to a large amount, naime 1 ovei- to secure tlie-e 
 The Bank of B.-itish North America lent 81<>(i.()no near 
 
 •• oep IS 
 the en: 
 
 Ol 
 
 D. 
 
 ecCMiber. ■\Vith a transi'erol notes <liscounted as collateral securiiN' to an 
 
 ani'^unt ol' up'.vari 
 
 >f SHoL'.OJii, atid this went under the hca 
 
 iiniii' 
 
 lej) )sits. 
 
 V 
 
 )U saw tne deposit i'eeeij»ts; these amounts were payao 
 
 without notKH', With seven jier cent, mtei'est, 
 
 lie loans from the Iknii 
 
 »f Montreal were payaMe on time. Tiie 
 in elassifs•ln^• the-e loan-. 
 
 ■mlinu' bank's ha-l n > di!ticult\ 
 
 Ills lie'il 
 
 ;!e i : om o! ne 
 
 ainio 
 bani<s 
 
 >t the whole of them w 
 
 ert' iiiaeed uinn i 
 
 tnd yiv. Align- has stated, it a]ip 
 
 ar 
 
 ed iiy tiie rctu n- publishe I, tliat aim )st two millions we.'e due from 
 banks without sho-vving what banks tlie\' were. Tl 
 
 le e\iitence (»1 
 
 .Ml 
 Casr-ils .Ml-. Jjoud !ind Mr. Burnett went toshow tliat thcv were deceive 
 
 b\" this return ; and Mr. .Vn::'i 
 
 a I 
 
 lioiii:-! 
 
 I he ajipeared somew 
 
 hat 
 
 anolou'ist for statements of this kind, could not iionv that \\\v\ 
 
 as an 
 were 
 
 m 
 as 
 
 isleading. What iierson, knowing that this bank had been, as I'ar ba 
 
 CK 
 
 .Janu: 
 
 irv, oi> 
 ihl 
 
 liged to borrow nearh- a milli(m, 
 
 would have bought it- 
 
 stocdv or would have kejit an account theiv? It is said that no iiili 
 
 mat ion cou 
 
 Id \ 
 
 )Q 
 
 nven 
 
 a nn 
 
 )re monstrous jiroposition 1 have nevei 
 
 heard in a Court of Justice. Was there any difficulty in 
 loans under No. 11, ''Liabilities not included under the foi'eu'oiiiH' 
 
 putt 
 
 inu' 
 
 tl 
 ilea* 
 
 U'-c 
 
 What objection was there to placing it under that head, witli an e.xpia 
 
 a ill 
 
 ovei' 
 
 or J) 
 
 of tl 
 
 ed 
 
 ."^tutd 
 
 liai^ 
 
 rouni 
 
 ci 
 
 lar 
 
 uecel 
 
 otferl 
 
 (■use, 
 —a 
 ■vidj 
 is el 
 it is 
 
10. 
 
 ve ^vt\s 
 hul. a^ 
 e boon 
 vill ii')t 
 hero is 
 ') wliieli 
 shown 
 
 ll'llS iu\t 
 
 c-i\-h. ^'> 
 ineiit in 
 ( del'oii'i- 
 [■ l\uiuls. 
 
 'f, \vhuli 
 's "<'!' the 
 s to have 
 .. C|) M 
 
 C.l lO Ml'- 
 
 c Ci-vorn- 
 ehcu'liug, 
 
 you over 
 euritie- I" 
 lL (Iml-- no I 
 wthul this 
 
 very ]n'>)- 
 lulv 1- the 
 
 pail I, aiiti 
 
 K'|i '-it-. 
 
 hi' e-:r.l "'' 
 nriiy t>» :o\ 
 
 e lie:i<li!'- 
 
 ;v pavahle 
 u the liasik 
 
 V dillieulty 
 
 ;H'l'(l lill'h 1' 
 
 . it avi'^""'- 
 > ,\ue iVoiii 
 
 Mice *it ^l'- 
 ei'O (U'eeive 1 
 owhat a> an 
 t, tiiey were 
 , U-, [\v: i-aeK 
 e houghl il- 
 iiit no iul<''''- 
 havo never 
 cutting' tUe-e 
 .oiiig-hea<l-? 
 ilh an oxpia 
 
 nation, if they liked, ^ho^ving that they were time loans? Surely Sir' 
 FruneiH Hi neks eould not pretend that he did not know of these loans. 
 He kept up the imprets-ion that these were deposits from the public^ 
 It waw di^sgraeeful in the hiirhesl degree to any one who had a hand 
 in the matter. We find, as far back as NovembtM", that 8221 495 was 
 earr ed ii. tiie teller'ts eassh as casii, which was represented by wo'thless; 
 demand notes — the notes <>f'concei"ns which have since become notoriously 
 insolvent (The learned counsel here enumerated the overdrawn accounts 
 as already published.) How were these ti-eated ? At the end of January, 
 after thoy made these large loans from the Jiank ot Montreal, theoflficial* 
 found these slips in the cash ; ajul, going from one falsity to another, in- 
 stead of leaving the amount as '• Specie,"" they put it down as •• Discounted 
 notes" at that lime: but these notes never were discounted until February 
 lollowing. That fact was shown by the bwoks of the bank. On the lOth 
 February they Avere found in the teller's cash; they were discounted 
 notes at the end ot January, and came b k:' as cash in February. It i* . 
 not pi-etended that Sir Francis Hincks -"vas igno.ant ; that he kne\v 
 nothing of all this. His learned friend said the President is not obliged 
 lo count tlie cash ; but what does this certiticate say, which they have 
 signed } They have to make a statement that not less than one-third of 
 cash reserves is held in Dominion notes ; how i-an they say this if they 
 have not counted the cash ? But we have something woi'se than this, — we- 
 have overdrawn accounts for $517,372.92, and they were included in the- 
 return as "Notes and bills discounte<l and current." Here is a book 
 (skowing the book to the jury) in which these overdrafts are entered. 
 Here they are all in the sanie column, cai-ried out thus '-overdrawn 
 accounts ^927,H72.92. This return is made up from this book, and can it 
 be said the said the President knew nothing about this? We had all 
 this worthless trash of neurly a million dollars, as to whicdi there is not 
 a hint given in the return. To represent the amount of §517,:{72.92 of 
 overdrawn accounts, there was n(»t a scrap of paper in the shape of a billJ 
 or note. The" demand notes"" which rigured according to the exigeiK-y 
 of the case, either as •• cash" or •' notes discounted," were never discount- 
 ed until between the 20th and 24th February last, as appears by the 
 ^^tatement Book laid before the Directors at their meetings, and which. 
 has the handwriting of Sir Francis Hincks on the page where these dis- 
 counts appear. In the face of sueh evidence, how is it po>>sible to 
 characterize the reuirn in question otherwi^e than as wilfully fal.se and 
 
 deceptive ? 
 
 1 now come to the defl'iice, if su^di it can he called, that l.as been 
 
 ortfered on behalf ot the delendant. It amounts to little more than an ex- 
 
 icuse, upon the lA-round that (»ther P.aidv oltieials had done the samethiiig, 
 
 -a fact which has been ))roved in a very vague and -eneral way. The 
 
 k-vidence ot Mr. AN<irs. the i.rinrij.al witness on behalf of the delendant, 
 
 ii> claimed as siipportin-x the defeme. When carefully analyzed, h(>wever, 
 
 it is strongly in favour of the prosecution. Mr. Angu^ ^tates in reference 
 
 t. the " loans."" that while accordiiiir to prevailing practiei", they might 
 
 Lhe thought properly) appear as -deposits. " he should have preferred to 
 
 ^ ' ' " m'li under '• Other liabilities not included under 
 
 With reference to the " overdrawn accounts " en- 
 H) 
 
 place them in the return 
 lhe foregoing heads 
 
It 
 
 
 ;T \" 
 
 ii;: 
 
 I 
 
 110 
 
 teied as " Noten and bills discounted," Mr. Angus had never, in his ex- 
 perience, had to deal with any lut trifling and exceptional amounts. 
 These, when directly connected with a customer't* discounts, are entei cd 
 in the return (although he could not nay it was correct to do i^o.) 
 among the current discounted notes. II he had had to deal with the 
 enormous overdrafts which were in the Consolidated Bank, at the end ot 
 January, he would have written them oft', or have placed ihem in the re- 
 turn undei' tlie head " Other ast^ets not included under the foregoing 
 heads." When one of the jury asked Mr. Angus, 'Who is responsible 
 for the coriectncss of the leturns to Government?" he answered very 
 properly, "The President and General Manager," and explained wiih 
 what care tlie leturns of the Bank of Montreal are made up by the Pic- 
 sident and himself. 1 now came to the evidence of tho^only other Avit- 
 ness, brought forward tor the defence, that of Mi'. Ingram, Assistant 
 General Manager of the Merchants Bank, a very extraordinary witness 
 indeed. This grandiloquent banker, who comes from the city of Glas-^ 
 gow, via London and New York, to Montreal, does not find the form of 
 return prescribed " superlatively excellent." In fact he thought the form 
 defective and one that did not afford the proper means of giving inform- 
 ation. Mr. Ingram is still a very young man, but he has had great ox- 
 Eerience in banking. He gave his evidence with an assurance which did 
 im little credit. When 1 asked him what there was to prevent the 
 loans to the amount of $993,976 being placed under the head " bthcr 
 liabilities, &c.," with a memorandum added — " namely, time loans 
 from other Banks," he answeicd glibly, " That would be a violation ot 
 the statute." That was his legal opinion. In giving it, Mr. Ingram for- 
 got, if he ever knew, that there is a wise provision of our law, which 
 declaies that, where forms are prescribed, they may be varied so long Jis 
 they are not used to mislead. Mr. Ingram's " opinions " upon law and 
 banking, appear to be of equal value. When asked whether the "demand 
 notes." " overdrawn accounts " and other trash, amounting in all to up- 
 wards of $927, 000, ought not to have appeared in the return under 
 '' Oth^r assets not included under the foregoing heads,"' the poor man 
 fairly broke down. The item "other as.'^ets ' was a "sore point" with! 
 bankers, and they would like to dispense with it. You will have no (iitti-| 
 cuhy in dealing with such evidence as that. 
 
 The case for the jnosecution has been fully made out. The retiirnl 
 has been proved to be wilfully fidse and deceptive. The excuse set up is 
 no defence at all. Sir Fiancis Hincks, who, whatever else might be s:ml 
 of him, had always had the courage of his convictions, and of his actions 
 as well, was not a man to follow the lead of any other banker in makingl 
 up these returns. He knew the law well, having been Minister of Fintu;>e| 
 when the Banking Act of 1871 was passed. 
 
 Gentle.men, I will not detain you longer. The lasc of the pro^e( u-j 
 tion is sujtported by the clearest possible evidence. You have on eiulJ 
 side of the retuin amounts of nearly a million dollars improperly enteiedj 
 and in a w:iy to mislead the (iovernmeiit and the jiublic. A more (-keep' 
 tive retuin could hardly be imagined. You have a i)ainful duty to [erj 
 form, but I do not believe you will flinch from its performance. I ti i;s 
 to your tirniness and intelligence for such a verdict as shall satisfy iln 
 
 wa.s 
 
 and 
 
 moJ 
 
 the] 
 
 Th( 
 
 plaj 
 
 was 
 
 •coni 
 
 Hel\ 
 
 He I 
 
 poii 
 
 the 
 
 grol 
 
 thai 
 
 thef 
 
 thoi 
 
 of 
 
 for 
 
 spiij 
 
n his ex- 
 amountK. 
 •e entered 
 
 do so.) 
 wiih tbe 
 
 the eiid ot 
 
 in the lo- 
 
 foregoing 
 ■esponsiblc 
 vcred vei y 
 [lined wiii^ 
 Dy the Pie- 
 
 othei" wit- 
 Assistant 
 .ry witness 
 ty of Glas- 
 the form of 
 rht thie form 
 ing inforin- 
 ad great ox- 
 L'e which did 
 prevent the 
 ead "Othov 
 
 time loans 
 
 1 violation ot 
 . Ingram for- 
 r hiw, which 
 ed 80 long as 
 ipon law and 
 the "demand 
 ; in all to lip- 
 'return vin<,!ei' 
 Lhe poor man 
 e point" with 
 1 have no dii^- 
 
 The retiiiul 
 xoiiee set up is 
 5 might be suull 
 1 of his actions! 
 iker in makingi 
 8ter of FinaiHej 
 
 of the prosiruj 
 u have on ciulJ 
 I'operly entoini 
 
 A more dc'trj 
 ful duty to r^r| 
 inance. 1 ti>''^ 
 ^hall satisfy 'in 
 
 111 
 
 slomand.s of public justice, and, what is of more importance to you, as 
 shall satisfy your own consciences, and as shall fulfil the solemn oath you 
 have taken to render a true verdict according to the evidence. 
 
 THE JUDGE'S CHARGE. 
 
 His Honor Judge Monk then addressed the jury. Ho complimented 
 them on the attention they hau given to the case, and traced the hi.story 
 of the transaction from its comineiieement. The accmed was charged 
 -^vith having made a wilfully false and deceptive return on the 31st of 
 January, 1878. It was shown that, ha<J not the bunk borrowed between 
 October 2-lth and Jaiiuury 3 1st of that year, nearly a million of dollars, 
 it wouhi have close 1 on the 81st Cjiober, and a great deal of the distress 
 and Huffering caused would have beon obviated.' He mentioned this to 
 show that the jury must not regard this exr-opt as outside of and foreign 
 to the evidence. They must come into C »ui-t and give a verdict upon 
 the evidence, and not with any tliought or prejudice othei-vvisf than as to 
 the law of the case. Tlie arouse 1 was advanced in life, a man of eminent 
 character, a politioian who had oecupiel positions of grout trust. Not- 
 withstanding his liigh po-irion they must treat his case as if he woi-e an 
 ordinary man. and must e.Kclui'.o any feeling in his fivour on account of 
 the high position he had pivvionsly ludd in the country. JJut there was 
 another question that they must not di>oanl — the character of the man. 
 He was a man against wlio-,o eharaotoi' the learned Ju Igo had never heard 
 any refloetion. He was bound to leli the juiy that that was a fact they 
 must take into consideration, and, while on the one hand tlicy must exclude 
 his high position, they nm-^t also take into consideration, in disposing of 
 the case, the high chui-acter he enjoyed. He gave them his opinion as 
 to bank directors, although they were doubtless as well aware ol'it as he 
 was himself. They were selected foi- thoir position, high character, wealth, 
 and public confidence in their integrity. Lot none suppose for a single 
 moment that they were selecte 1 to give the details of the b;ink"s business 
 their attention, or in anv wav to look into discounts or anvthinij else. 
 There were certain ofiicjals whose business was to do that. In the first 
 place there was a ]>aid Pi'osident and a paid Managoi-, whose business it 
 was to do that. An oivlinaiy director had confidence, and must have 
 ■confidence, in his co-iiirectors uiitil those co-directors had ])i'oved them- 
 selves unworthy of his contidence, until there was something wrong. 
 He made these I'emarks because thoy had come to anothei' important 
 point — the consideration of the President, lie might tell them that 
 the President in some cases was sole:tod not upon precisely the same 
 ground as other directoivs. It was just as well for them to bear in mind 
 that presidents were selected for their s])ecial aptitude for the business of 
 the bank, and wei-e ex])ectel to devote theii- time in some part, if not all 
 their time, to the batdc's business. The shareholders having sele-^'ted a 
 President, they paid him a salai-y, and he became in fact a paid oflPcial 
 of the bank. In the present instance Sir Francis Ilincks was selected 
 for his eminent character and his high ability and skill in finance, to in- 
 :spire confidence in the minds of the public, and to give a guarantee of 
 
112 
 
 I, : 
 
 fluoce.'<8 to ti.. faille. Ho was to have been remunerated; he was remu- 
 nerated. HiH posit On was in nonie degree ditt'erent from that of other 
 directors. He was hound to know the details of what was going on in 
 the bank. In regard to the matter of headings, Sir Francis HinckH held 
 the position of Piosident, and had access to the bank. The gentle- 
 men of the jury might hold the opinion that Sir Francis Hincks was not 
 different fiom an ordinaiy l»ank officer It was for them to say so. If 
 they thought him a paid officer of the bank then they might attach what 
 importance they thought proper to the obligation resting upon him. 
 With these remarks he came to the ipiestion, tirst, whether the returns 
 were false and deceptiv**; that was the lirst point they had to determine, 
 The counsel for the prosecuti(»n had withdrawn some of the items in the 
 indictment, two or thi-ee in all. He would not go over the figures; thoy 
 had already done that. He would call tlieir attention to these loans from 
 other banks. Xow, the statement was either true or false. If they 
 found it was true in regard to the tirst item, then they would say there 
 was no ground for the charge. In regard to this matter of loans fron\ 
 ■other banks, was it false and deceptive and calculated to deceive the 
 public? He thought they had had ample evidence upon which to 
 form their own opinion. They had heard that the loans were made, 
 and of the extoiit also. They undeistood that one of these loans was to 
 the extent of some hundreds of thousands of dollars, and that discounted 
 paper was delivered as collateral security, :ind the fact was these were in 
 reality loans to the bank. Now, if they were loans and nothing else, and 
 the bank thought proper to give receipts, and the leading banks thought 
 proper to takethem. it was all right ; it did not alter the case at all. It 
 was competent for these banks to take deposit receipts, but as he said 
 Jbefore, the transaction was the same — simply a loan and nothing else. 
 A good deal had been said by the defence about the loans not having been 
 due and payable, and that they should not have been entered as amoui\ts 
 -due to other banks. It was lor the jury to say whethei" they wei'e or not. 
 If the jury was satisfied that these things should have been entered as 
 loans, to the bank, and if they were really loans they would thus say 
 th&t the return was false, because it was a liability, and was not stated 
 as such at all. He did not wish to enlarge u])On the consequences of ti 
 false return. It was for the jui-y to come to the conclusion that thoe 
 were not ordinary deposits. If they were loans from bardis thej' could 
 not be deposits, and if they wei'e not deposits then they were placed 
 upon the return where they did not belong, lie did not know wheie 
 they should have been entered or when they should have been 
 
 not tell the jury what would have been tho 
 put them, or that he thought these deposits 
 that having been entered as deposits tho 
 He would leavo ihat to themselves to determine 
 irom their own deliberations. He would pass on to the next. It was 
 •contended that there were included in the next item a large amount of 
 demand notes, and not only that, but that in I'oality at the time this re- 
 turn was made these demand notes weie discounted. If the jury found 
 from the evidence that this was not the fact, that at the time this return 
 was made they were not; discounted — if they wei'e discounted between 
 
 •due. He woukl 
 -correct place to 
 
 were loans, 
 returns were 
 
 and 
 false. 
 
113 
 
 4 remu- 
 
 )f other 
 
 r on in 
 
 ckH heM 
 
 I genile- 
 was not 
 
 y 80. It' 
 
 ach what 
 
 [)on him. 
 
 3 return?* 
 
 elermine. 
 
 ms in the 
 
 res; thoy 
 
 oans fron\ 
 
 If they 
 
 way there 
 
 oans from 
 
 Bceive the 
 which to 
 
 rere nuvie, 
 
 ans was to 
 
 discounted 
 
 ese were in 
 
 ng else, and 
 
 iks thought 
 
 e at all. 1^ 
 as he said 
 
 othing else, 
 
 having been 
 as amount> 
 
 were or n(^t. 
 entered as 
 (1 thus say 
 18 not stated 
 quenees of n 
 n that the>e 
 8 they could 
 were placed 
 know where 
 have hoen 
 •e been the 
 lose deposits 
 deposits the 
 to dcteimmo 
 next, it ^V'^^, 
 ge amoui\t ot 
 ''time this re-, 
 he jury found 
 le this return 
 .nted between 
 
 the 20th and 2-4th of Fohruary, and the return made on the 18th of tfiA* 
 month — if they could do so they had a i)erfect i'ij;hl to do so, if they ditf. 
 not, however, he could not see liow they could call it true and faitfiul 
 i-eturnB. It was an error, false and conti-ary to law. That was a point 
 for their consideration, and he merely intinuited his imprecision. He 
 now came to the overdue balances, and as they knew all ahoul them tbey 
 eould do what their consciences justitted theiu in doing. It was at alD 
 events to him an extraonlinary place to find them entered in No.. 13, 
 He thought it did not represent the true state of things. He had no 
 desire to dwell longer upon the coriecttiess or falsit}' of the particufai;*^ 
 lo which he referred. The jury had to ascertain whether they were falset. 
 or deceptive, hut having done that something else remained behind.'. 
 Assuming that it was false, they had to ascertain whether it was wilfully 
 made, and if they were of opinion that the accused was deceived or miis- 
 Icd, that he had consented to the return in good faith and knew nothing: 
 of its falsity, and in <loing all this. had exercised the diligence which he 
 should have exercised as a paid Pi-esident. although the return might be 
 false, they would have to acquit him. If, on the other hand, taking into 
 consideration the fact that he was a paitl President of the bank, had ac- 
 cess to it, and should have known where he stood, and was thus responsi- 
 ble ; if they believed that he acted with a gross, criminal negligcuce- 
 their duty was plain. If, as proven, they should think Sir Francis- 
 hud been misled by the usage of other bank presidents, even if this was 
 the case the return was false and deceptive. Let them take up the 
 question of loans ; was he aware that they were discounted? Did he 
 know^ that the bank was borrowing money f-om Octobei* until December 
 lo keep its doors open ? Did the jury imagine for a single moment that 
 he did not know these things? He was at the head otfice; could 
 a loan of nearly a million dollars have been made and the President of 
 the baidi not know it? If he did not know it. the retui-n was false and 
 he should not have signed it. Then with regard to the (question of dis- 
 counts. Did the jury think for a niomerit that, as President of the bank, 
 undei' the responsibility resting upon him. ho did not know about them? 
 Was he entirely ignorant that the demand notes were in reality not dis- 
 counted? It was extraordinary if he did not know. To say that he did 
 not know Avas going very far ; to say that he did know was ihe only: 
 I'easonable impression. It wa^; so held in the City of Glasgow Bank case.- 
 It was most difficult to prove in a case such as that against .Sir Francis 
 that he knew all about it, but tl.'ey must consider that from his position 
 he should have known of these tiansactions. and they hai a right to in- 
 fer that he di«l know, and in that way they eould bring the knowledge 
 home to the accus<Kl. There was another side issue abi lUt deposits that hti 
 need not refer to. There might be no doubt that he knew the returns were 
 false, and it was for the jury to determine this. They knew their obliga- 
 tion, and the law had be'cn explained to them. He would not say that he 
 made the false returns, if he made them at all. to deceive the people, but to 
 inspire in the minds of the public a feeling of confidence in his bank. The 
 intention was good for tlu' bank, but there was the other consideration — 
 the public. Of these third parties a good many wei-e deceived. It was- 
 to them of a most fatal and ruinous character. U the jury found that he 
 
11 
 
 ■m 
 
 m 
 
 Uli 
 
 i ' 'i 
 
 If i 
 
 !4t - 
 
 i'''nff 
 
 114 
 
 had made these false returns, even if only in the hof e that it would float 
 or tide over the bank, then their duty was u painful one to find him 
 guilty. The evidence of Mr. Angus jind Mr, Ingrnni, the last of whom 
 said that the i-eturn could have been made in no other way, was good as 
 far as it went; but it amounted to nothing. They had not told of one 
 bank which did the same thing. Do you suppose that if any of their 
 banks owed five millions that it would not have left a blank ? But this 
 had not been established, and even if it had, I should have been bound to 
 tell you it was a flagrant violation of the law, which no general usage or 
 practice would have justified. Having again called upon the jury to ex- 
 clude all extraneous matter from their minds iji dealing with the question, 
 he complimented both counsel (m the decorum observed throughout the 
 case, and submitted it to the Jury, confident that they would bring in a 
 verdict in accordance with their oath, the evidence in the case, and their 
 intelligent sense of justice and right. 
 
 THE VERDICT. 
 
 After an absence of about two hours the jury returned into Court 
 with a verdict of (Juilty, Sir Francis Hincks being allowed to remain out 
 on hJB personal recognizances. 
 
 Mr. Kerr moved that certain points be reserved and laid before the 
 Court of Queen's Bench in Appeal. 
 
 His Honour took the motion en delilere. 
 
 MOTION IN ARREST OF JUDGMENT. 
 
 
 i 
 
 UK'' 
 ¥■■■ 
 
 m 
 
 In the Court of Queens Bench, Mr. Justice Monk presiding, Mr. 
 Kerr on the 24th October said : — In the case of the Queen against Sir 
 Fra-ncis Hincks I have the honor to present to the Court two motions, as 
 follows : On behalf of Sir Francis Hincks, one of the defendants in this 
 matter, that the judgment on the verdict rendered against him, the said 
 Sir Francis Hincks, by the jury empannelled to tiythe issue between 
 our Sovereign Lady the (^ucen and him, on this indictment, be ariested, 
 that all the proceedings t>ince the plea of " not guilty '' by him be set 
 aside, and judgment of acquittal be given for the lol lowing a^nongst other 
 reasons : — 
 
 Ist. Because there is no allegation in the indictment that the said. 
 Act or any Act in the Dominion 'of Canada applies to the Consolidated 
 Bank of Canada. 
 
 2nd. Because it does not appear in tlio said indictment that the said 
 Act or any Act of the Dominion of Canada applies to the Consolidated. 
 Bank of Canada. 
 
 3rd. Because each of the false statements alleged in the return is, it 
 false and deceptive, a misdemeanor of itself and each such misdemeanor 
 should be subject of one count, whereas there are over six misdemeanor.^^ 
 alleged in the sole count contained in the indictment. 
 
115 
 
 (\ float 
 (I him 
 whom 
 rood UK 
 of one 
 f their 
 lit this 
 lund to 
 sage or 
 r to ex- 
 uestioii, 
 out the 
 ing in u 
 id their 
 
 to Court 
 main out 
 
 efore the 
 
 ding, Mr. 
 gainst Sir 
 lotions, as 
 its in this 
 
 the sairt 
 le between 
 
 an ested , 
 im be set 
 )iigst other 
 
 it the saiil- 
 ^nsolidated 
 
 at the said 
 onsolidaU'd. 
 
 i-eturn is, it 
 isdemeanor 
 ^demeanors 
 
 4th. Because it is not therein alleged that the relnin wliich is mid 
 to contain false and deceptive statements was a letnrn to the Govern- 
 ment. 
 
 5lh. Because it is not alleged that the return was ].ul.liyhed or made 
 known to tlie public. 
 
 JJth. Berauhe it is not alIfgo<i that Sir Francis Ilincks was a director 
 of a Bank, to wjiieh the Haid<ing Acts apply. 
 
 MOTION To IIAVH POINTS P.KSERVKD. 
 
 Mr. Kerr also moved, on the part ..f the ilefondant, Sir Francis 
 Hincks, that the following points de<'ided by the learned Judge, pre- 
 siding at the trial of the said defendant, lie reserved tur the considera- 
 tion of the Court of Queen's Bench, Apj.eal side. 
 
 l8t. Tint item 8 (Due to other Banks in Canada) of the liabilities of 
 the Conf-oiidated Bank in the said retuiii was a wilfully false and decep- 
 tive statement, nothing being ]»laced under the said item, whilst in 
 reality $993,97hMl loans to the said bank should liave been placed under 
 the said item, although the said loans were not then due. 
 
 2nd. That item 13 (Notes and Bills discounted and current) of the 
 assets of the said return was a wilfully tiilsc anti deceptive statement, in- 
 asmuch as the demand notes, the amo"unts of which had been carried to 
 the credit of their makers previous to th«> !/st day of January lust past, 
 had been falsely included under the said i;j:h item of the assets in the 
 said return, they having only been passed by the defendant and the 
 directors of the said bank for discount, and a«-tually discounted on th© 
 24th February, 1870. 
 
 3rd. That item 13 (Notes and Bills discountt'd and current) of the 
 assets was a wilfully false and deceptive statement, inasmuch as there 
 were included therein J007,000 of over drafts, which had never been re- 
 presented by bills or notes discounted and current on the 31st Januarv, 
 1879. 
 
 4th. That although B. B. Angus and W. J. Ingram, bankers, wit- 
 nesses for the defence, proved that there was grrat variety in the practice 
 of banks througliout the Dominion, and great doubt existed, yet, that 
 banks borrowing moneys on time had been in the hahit generally of in- 
 cluding such loans under item 6 (other deposits payable cm demand) and 
 7 (other deposits payable alter notice or on a lixed day), of the liabilities 
 in their retuj-n, and of always including overdi'afts not secured under 
 item 13, "notes and bills discounted and current.' such practices did not 
 constitute a usage and formed no grounds of excuse lor the acts com- 
 filained of, and (lid not destroy the ])resumptioii of criminal intent on 
 the part of the said defendant in signing sueh returns. 
 
 Mr. Kekr — It is hardly necessary for me, your Honor, to say any- 
 thing in regard to the importance of the ease, and the i-espectability of 
 the defendant, but I think that it is only due to my client, and the public 
 in general, to i-emind you that the practice in banks at present is excess- 
 ively loose. The grounds urged by us in arrest of judgment 1 have just 
 
 I 
 
I 
 
 ,■ ^i* 
 
 
 V 'I 
 
 M 
 
 116 
 
 read. I feel a!>8urc(l that you will give thorn the consideration they 
 deserve. 
 
 Mr. Ritchie — I would merely sa}'. in reply to the learned eounsel's 
 remarks, that the verdict in the case he refeis to has been lendeied by a 
 jury, as we all know, of very great intelligence. So far as my own part 
 in thiB trial is concerned, my desire is that the defendant should have a 
 fair and impartial trial. It, however. y»ui- Honor can s«e your way 
 clear in j-eserving the jioints. 1 have no desiic whatever to place the 
 slightest obstacle in the path of the defendant to have the case leco'isid- 
 ered. I may, pei'haps, refer with yiropiicty to what was dvme in the case 
 against Cotle. of the Bank Jacques ('artier, in which 1 conducted the 
 prosecution. The same action as the counsel for the defence, is taking 
 at present, was instituted by Cotte's detence, with what I'esult your 
 Honour is aware. Although Mr. Justice McKay at first thought he 
 M'ould consider the ]ioints, they were afterwards dismissed. 
 
 Mr. Kerr — Your Honour, I don't t'link the Cotte case has any bear- 
 ing on this. Cotte was mcKily the cashier. 
 
 Ml- Ritchie — In the (,'ouit of Appeals, whei'c youi- Honouj- will be 
 present, the legal atmospheie will be perfectly clear. Five learned 
 Judges W'ill give the defence evci-y op]»ortimity of arguing the case. 
 
 His Honour — 1 would feel inclined at present, and I think it is but 
 fail", to j'esejve the case. 
 
 Mr. Ritchie — The Montreal Herald awl the Witness, have very pro- 
 perly abstained from making any observations in tliis case, but the 
 6'«*e(^f', perhaps, wiih a desire to follow the same wise course, but not 
 (succeeding so well, has published an article, in which it says, "That 
 it seemed somewhat strange that the ti'ial should have gone on in the 
 presence of a public sentiment, or moie properly of a public excitement, 
 which makes it somewhat difficult to secure a calm and judical enquiry 
 into the case." Now whoexer wiote that article 
 
 His Honour — 1 must discoijntenance any disctission in Coui-t of the 
 observations made in the leading articles of the papei's. 
 
 Mr. Ritchie — 1 find, too, tliat the interviewer has been very busy, 
 according to another jtapei". 
 
 His Honour — Kveiy man is entitled to his opinions, and to express 
 them if he thinks jiroper ; but whether it is wise or not, for them to 
 allow iheir opinions to he ]»ublished, is their own business. That is their 
 business; they are i-csponsiblo for the ])ublication of tlieir own opinions. 
 I don't sec tliat the time of the Court, should be wasted in a discussion of 
 this kind. The jui-y have done their duty; they have acted under a 
 complete sense of theii- <luty. 
 
 Mr. Keiir — 1 would like to say something in reference to the re- 
 mai'ks made bv Mi-. Ritchie. 
 
 Mr. Ritchie — Oh. if my friend 
 say all I had to say. 
 
 is going to reply, I should like to 
 
 U\ 
 
 His Honour — What do you projtose? 
 
 Mr. Ritchie— To bring under xhv attention of the Court — I thirdc it 
 right to call the attention of the Court to these remarks of the press— I 
 think it will serve a wholes«me purjx.se. The late Lord Campbell, when 
 lie ])ublished his biograjihics (»f certain eminent persons, is said to have 
 uddel a new terror to death. 
 
 e\ 
 n^ 
 
 P 
 b( 
 
 til 
 
 Ci 
 
they 
 
 .TiHel'ft 
 [ by a 
 n part 
 lave a 
 r way 
 ce the 
 ■o'lKid- 
 le catse 
 ed the 
 taking 
 t your 
 ght i»e 
 
 y bear- 
 
 ■will be 
 learned 
 
 t is but 
 
 Biy pro- 
 but the 
 but not 
 " That 
 ) in the 
 itement, 
 enquiiy 
 
 •t of the 
 
 ry buBy, 
 
 ) ex])re8i* 
 them to 
 it is tlioir 
 opinions. 
 uKsion of 
 under ii 
 
 the re- 
 
 d like to 
 
 I thitdc it 
 > piesi* — I 
 >ell, when 
 d to liavo 
 
 117 
 
 His Honour — A new teiror to what? 
 
 Mr. Ritchie — A new terror to death. 
 
 His Honour— 1 think it would be difiicult to do that. 
 
 Mr. Ritchie — Our modern inlorviewer adds a now terror to the 
 living. 
 
 His Honour— I don't suppose it is necessary, Mr. Ritchie, to take 
 up the time of the Court witli the discussion of such a subject. Mr. 
 Ritchie then resumed his scat. 
 
 Mr. Kerr — Your Honom- will observe that Cott«::''s ca.sc was a 
 different case to this ca.se. Cotte was the Cashier of the Bank, and th^ 
 decision of the Court was sinij)ly upon the points reserved by Mr. Justice 
 Ramsay, and actually submitted by him to the consideration of the Court. 
 The points I wish to have reserved are not only the ])oints set out in our 
 demurrer and motion to quash but also the j)oiiits raised at the trial, and 
 the points that your Honour mentioned, that loans should go und' r 
 
 certain hea<iings 
 
 His Honour — We will discuss the points to i)e reserved in Cham- 
 bers. I will see you and Mr. Ritchie in my Ciuimbers and settle as to 
 reserving any points that may be doubtful in my own mind. What day 
 .shall we say? However, during the interval l»etween now and the end 
 of the term, ?»Ir. Ritchie and Mr. Ken- can see me in Chambers, and 
 we can discuss the mattei-, and decide what points shall be resei'ved. 
 
 Till-: POINTS RlvSERVED. 
 
 On the I^Oth October His Honour i-endcrcil judgment on two 
 motions made by Mr. Ken-, in the case of Sir Francis llincks, granting 
 the tirst, to i-esei-ve coi'iain points raised at the trial fur the decision of 
 the Court of Appeal, and icjecting the second, which was a motion in 
 arrest of judgment. His Honour said three j)oints merely of law were 
 reserved. The tirst point was in regard to loans from other banks as- 
 suming the character of chc(|ucs and being entered in the letui-n as 
 deposits and sanctioned. Of C(»nrse, it would be necessary to see the 
 evidence to give the position of such tads and of >uch reservation. The 
 next point was in regard to demand notes, that they were cai'i'icid an<l 
 put among the discounts, and then |)laced under tjic item "bills and 
 notes discounted and ciM"r<'ni.'" The tliinl jtoint was that overdrafts weie 
 put undei- the item " l»ills and n< tes discounteii and current." It had 
 been .submitted to the Court that there was an eri'or here, and the; points 
 had been specifically leserved in -ucli a way as to bring up pur«? quo.s- 
 tions of law. 
 
 Sir Francis Hincks then renewed his bail to a]»pcar before the 
 Court on the 'J4th Mar( h, being the first ilay cd' next teiTu. 
 
118 
 
 SIR FRANCIS HINCKS AND MR. SAUNDERS. 
 
 t 
 
 I'll 
 
 lii 
 
 The following con-e.sponden e appeared in the ditt'erent papers, im- 
 mediately after the Special General Meeting of the Bank :— 
 
 Sir, — The absence of anything like order or calm deliberation at the 
 meeting of the Con>olidated*^ Bank on the 18th instant — the only one 
 which I attended — rendered it im])Ossible for many to obtain a full hear- 
 ing for what they desire to say. As I consider that I especially suffer 
 from this cause I desire that you would enable me, by the means of your 
 columns, to give a yet more"^ thorough and emphatic denial than I was 
 ■enabled to do" at that nieeting to statements made by Sir Francis Hincks 
 respecting me — statements based Oii an utter ])erversion of facts, and 
 put forthi not in the interests of the stockholders, but with no higher 
 motive than still further to poison their minds against me. I sa}' " still 
 further," because friends had made me aware that previous to the meet- 
 ing Sir Francis had iteon d<»ing his Itest to create a strong prejudice 
 against me— with what effect, however, was shown at the meeting by 
 the large vote i-c'jorded for me, exceeding that cast for him, notwith- 
 Htanding that some excited individuals of both sexes succumbed to the 
 blandishments of Sir Fi-ancis. and elected themselves his most obedient 
 echoes. I can conscientiously aver that the only reason f()r my having 
 incurred his displeasure is that a Ijody of the largest holdei's of stock, 
 men of the highest status and of unimj>eachable integrity, thought suffi- 
 ciently well of my capacity and ])rinciples — and I am proud to be assured 
 by them that they think as well of them nuw — as to deem me woi'thy of 
 a position on the bank directorate. They demanded this of Sir Francis 
 and the old Boar<l of Directors, who found it expedient to com])ly with 
 the demand. But from this time, Sir Francis looked upon this party of 
 stockholders, including myself, as intending to make his tenure of office 
 as short as possible. Hence ids attitude towards me at the meetings. I, 
 on my part, however, have never for one moment im|)uted to him, as 
 •others have done, an}'^ personal or dishonorable motive in permitting the 
 state of things I found. And I am therefore justified in saying that the 
 instincts of a gentleman, if not his duties as a chairman, should have re- 
 strained him from his persistent attempts to colour with the darkest 
 hues everything he uttered j'especting me at both meetings, more espec- 
 ially at the one from which I was absent. Sir Fi-ancis Ilincks was 
 pleased to say Itefore the close of the proceedings that '' no resjtonsibilitv 
 attaches to Mr. Saunders since he became a director." I miirht then 
 reasonably Ite considered as exemj)t from the duty of defending transac- 
 tions for which I am n(»t at all responsible to stockholders; but I am 
 ])erfectly content to consider the tortuous windings and misre))i'e.senta- 
 tions of Sir Francis, even with regard to these. First, then, respecting 
 " the London and Paris llou->e." in Toronto. Sir Francis charges me with 
 instigating the purchase of the estate. I totally den}- that the sugges- 
 tion originated with me. I cerlaiidy was consulted in the matter, bn; 
 
119 
 
 3, ira- 
 
 at the 
 V' one 
 
 hear- 
 guffer 
 (' your 
 I was 
 lincks 
 ts, and 
 higher 
 
 ''still 
 ! meet- 
 •ejudice 
 
 ing- by 
 otwith- 
 1 to the 
 bedient 
 
 having 
 fi stock, 
 ht suffi- 
 
 artsured 
 
 )rthy of 
 Francis 
 )ly with 
 party of 
 of office 
 ings. I, 
 him, as 
 tting the 
 that the 
 have re- 
 darkest 
 ,re espec- 
 icks was 
 onsil)ilitv 
 crht then 
 transac 
 but 1 am 
 3])resenta- 
 ■especting 
 18 me with 
 10 sagged- 
 latter, bni 
 
 not until the intended purchase was decided on. At th<! meeting ot" the- 
 18th inst., I denied the assertion of the Piesident that there existed any 
 document which dechired anytliing else than what I have just stated,. 
 because I knew of none signed either by tlie Bank or by myself. And 
 when the pjiper was produced, which .Sir Fi-ancis so tragically tingeved, 
 he knew that it was nothing but a mere copy of instruetions from Mi*. 
 Eenny to be sent to Mi-. MctJracken. This deadly weapon, brought in 
 his pocket with so much righteous forethought to annihilate me, fui-nishes 
 another proof of liirs con^^ummate abilities as an "old politician."' Sir 
 Francis further staled that it was I '• who boui;-ht the stoek and received 
 «40,000 for $27,000 !' Sir Franeis would thus make thei)ublic believe that 
 I made SlrJ.OOO out of the transaetion ! Theie is not one particle of truth in 
 his statement : it is entirely an hallueination of Sir Francis' fertile brain, be- 
 cause I never j-eceived one cent of this, only three hundred and tive dollars 
 (S305), and this amount was for goods supplied from our establishment.. 
 Next, Sir Francis t>tates at (he nieetingof the 19th inst., insubstance, that 
 during my absence from Montreal the Bardv discovered that a quantity 
 of goods had been sent fi'ojii Ascher iS: (jo. to various persons, among 
 others to me, and the moment the Directors were awai-e of this thev de- 
 termined to put the affair into insolvency. In reply I have to say that 
 Sir Francis' discovei-y is — a mai-e's nest. The true facts are these: 
 During the wintei*, goods wei'e transferred to me, with the bank's know- 
 ledge, in security tor a loan of $1,8U<» odd, which was paid me in June 
 by the bank's cashing Aschers ehe(iiie. when the goods in question were 
 re-transferred by me to the baidf, no goods having been received since 
 then. It seems difficult to reconcile these facts wiih the President'* 
 statements, that this transaetion was only discovered during my absence. 
 I left for Halifax iibout the ]9lh July, and the bank had been in posses- 
 sion of the goods sinee the beginning of June. With regard to Bank 
 shares, I may say that last winter Messrs. Ascher informed me that they 
 had transferred (not " fitly ' but) seventy-tive shares of Consolidated 
 Stock. Against these there is a lien mueh more than the present value 
 of the stoek, and as to having threatened to throw my stock on the 
 market if the Bank did not extend the credit ot Aseher & Co., I have 
 already given a denial to this eharge at the meeting; and in faet, it will 
 appear loo absurd to a bnsine.-s man tor further eoniment. Sir Francis 
 is rcjiorted on the llUh insi. to have remarked, '' I did not say that Mr. 
 Saundei's recommeiuled a credil, I merely said that Mr. Kenny had 
 Htated that Mr. S. expressed his belief in the solvency of the tirm.'' In 
 reply to tliis assertion (»t Sir Francis. I would merely say that I never 
 expressed anv sueh belief. Regarding n»y inspectorship to the Aseher 
 estate, this was suggested by Mr. P. S. IJoss. otticial assignee, but declined 
 by me, and 1 iuoposed Mr. Campbell, mamiger of the bank, in my stead, 
 and he and two others were api.ointed. ll was oidy wheJi the business 
 of the meetinu- was nearly eiidcl that my name was added to the list; 
 but! soon aftei" resiiiiud. Having ikjw I'eplied to the chai'ges of Sir 
 Francis Jlincks. I would say, in conclusion, that while he showed so 
 much solicitude at the meeting to defend one of the Directors, who was 
 one of his supporters. ln' could not tind a single word to utter witli refer- 
 ence to the services I have rendered the Institution during my term of 
 
 i 
 
 I 
 
120 
 
 office. He would not say whether T have or have not zealously devoted 
 most of my time to the interests of the Bank— whether it was or wan not 
 my earnest desire to resuscitate it and place it in a good position. He 
 would not tax his memory with the further awkward fact, which, how- 
 ever, is well known to the community, that I am one among the largest 
 losers by the Bank, being a member of the syndicate formed for the pur- 
 chase of a large quantity of the stock. I have, however, ihe consolation 
 of knowing that, in retiring from my onerous trust, I have to the very 
 best of my ability discharged my duty to those who appointed me, and 
 with the best interests of the Bunk always kept steadily in view. 
 
 I am. sir. yours obediently, 
 
 A. SAUNDERS. 
 Montreal, Sept. 22, 1870. 
 
 11^ 
 
 
 .?IK FEANCIS RKPLIES. 
 
 Sir, — The very serious charges preferred against me by Mr. A. 
 Saunders, in a letter published in your issue of this day, must be my 
 apology for trespassing on your columns. Mr. Saunders alleges that, at 
 the late meeting of the shareholders of the Consolidated Bank, I made 
 '' statements based on an utter perversion of facts," and that my motive 
 was " further to poison their minds against mo."' He then alleges that, 
 "previous to the meeting,'' frieiuis had made him aware that I had been 
 doing my best to create a strong p-ejudice against him. With regard to 
 my statements, I affirm that I made none that J shall not be able to sub- 
 stantiate, and as to my assumed motives, and alleged misropre-enttition 
 of Mr. Saunders, I can only express n\y ho])e that the public will receive 
 with distrust Mr. Saunders' interpretation of my motives, and will re- 
 quire from him proof of his allegation, that 1 tried "to create a prejudice 
 against him." Let him give the names of the friends from whom he 
 derived his information, and the facts on which they Justified their charge 
 Having stated so mueh with regard to the general charges, 1 shall pro- 
 ceed to what is specitic. in my opening remarks I matle no allusion 
 whatever to Mr. Saunders, and those present at the meeting cannot have 
 forgotten the hasty manner in which the original resolution, preparad by 
 the friends of Mr. Saunders, was moved prior to the discussion of the 
 affairs of the Bank. It would certainly be imagined, by any reader of 
 Mr. Saunders' letter, that I had volunteered to attack him with reference 
 to the [)urchase of the London and Paris House, and yet he could easily 
 have ascei'tained from Mr. Cleghorne, who made the enipiirv, that I had 
 liekl no communication whatever with him on the subject. 1 can make 
 the same assertion with refei'ence to the other questions which wero put 
 to me. 1 would ask an imj>artial public, nay even Mr. Saundei's himself, 
 what course 1 could have }mrsncd other than that which [ adopted '.•' 
 Should J have refused to answer the fpiestion put to me ? But 1 am 
 charged with misrepresentation. To that charge, I shall I'cjily. Mr. 
 Saunders states; — " I certainly was consulted in the matter, but not until 
 
 ' acc( 
 
 I tha 
 
 tak< 
 
 pi'io 
 
 diffi( 
 
 that 
 
 feret 
 
 wii 
 
 i"q>e 
 don I 
 Tho 
 to ■: 
 trans 
 wiO, 
 
 stock 
 the p 
 Hie B 
 bitter 
 arrani 
 
 H 
 
121 
 
 [)t 
 [e 
 vv- 
 
 ir- 
 on 
 ivy 
 md 
 
 RS. 
 
 the intended punha&e was decided on." Docs Mr. Sniuulors mean to con- 
 vey the ideu that Mr. Kenny, the hiti' (Jcneral Manai;-or, or't/in'/ted the idea 
 of purchasing a bankrupt estale in Toi'onto. consistin:^ of ^oods ot' which 
 he know nothing, and at the risk of the Bank? I never asserted that the 
 Hi^henxQ origuKitf'd W'Wh Mr. Saunders. It is far from inipr()bal>lo that Mr. 
 Ascher may have been its author. What I assei'ted, and what 1 still 
 affirm, was that Mi". Saunders sti-ongly advised Mr. Renny to 'enter 
 into this most irregular transaction. When .Mr. Saunileis attempted to 
 deny my assertion, whii-h was based on a memoi-andnni in .Mr. Saunders' 
 own hand-writing, I was compelled to produce the document in my own 
 defence, but itso ha])pened that instead id' bringing it in my pock'ct, I was. 
 not aware until after I made mv statement that it was Ivini;- on the tabla 
 beside me. It was not lu'ought to the mi'eting by me. The doenment 
 has been printed and speaks for itself I never attcmjited to eonvey the 
 idea that Mr. Saunders made the ditference between ^L'T."<»ll ;ind .SIO.OOO 
 out of the transaction. He hiinsell;^ as I understood him, alleged that he 
 had bought goods Avorth $411,000 f)r ?2T,000, but I could not have re- 
 ferred to any such tigui-es as R-10,()00. 1 deny most emphatically that 1 
 made any statement which is not su])jioi'ted by the printed (iocuments 
 with reference to the London and Paris House at Toronto. I proceed to 
 the next statement ot Mr. Saunders, which has reference to the transfei-- 
 ence of tcoods. oriijinallv belon<j:ing to Mes.^i's. Ascher A: Co., from the 
 Avarehouse of Mossi-s. Furniss & Co., to various pors(. '-. At the moment 
 I could not recollect the names, and I avail myself of liiis opportunity of 
 stating that if 1 named Mr. Sternberg, of which I have no recollection, 
 but which I am reported to have done, no goods appear to have been 
 delivered to him according to .Mr. Furni.ss' statement. 1 made no charge 
 against Mr. Saunders in connection wiih this matter. I did state as a' 
 fact, which would be contirmed by all the Directors, that after Mr. 
 Saunders' departure for Halifax, about the 19th of July, a statenient was 
 obtained, wdnch is befoi'o me. as I write, in which Messrs. Furidss ct Co. 
 account for a large amount of goods e.Kceeding in value §100.000, and 
 that it was stated to tht' Directors that Mr. Saunder>, who had uiuler- 
 tuken to examine ihe A.-cher !iccnunt*<. had been aware of these transfer."? 
 prior to his de[>;n'lure. The Ascher estate is ^o complicated, and the- 
 <liflieulties so great in ascertaining tin' nature and e.Ktent of the losses, 
 that I certainly should liesitate !o make «diargcs against any of the trans- 
 ferees in connection with it. With regard to t,he lr:i!i>fcr of Bank slmres. 
 wh.di I stated as 50, and which Mr. Saunders alleges to have been 7'), I 
 repeat the assiM-tion which I ma<le at the meeting, and to nuike as>urance 
 doubly sure, I have a^ain examined the transfer book and stock ledger^ 
 The 75 shares are a mvth. Mr Saunders had !• shhre-^ at his crudit prior 
 to :^r(l December. ISTS, on which day Messrs, Macdougali, l^rothers 
 tran.sferre<l .^0 shares to the order of 'Mr. Archer, which were ^laid Jor, 
 with .Mr. Iicnny's sanction, by a che(|Ue (Ui the Consolidated Caidc. This 
 stock Mr. Ascher assiu'i'ed !('• .Mr. Saunders, who acceptei' the transfei-, 
 the practical etlect being that Mr. Saimders g,,t ,-)(i >harcs otsloek which 
 the Bank paid for. I have reason to believe that Mr. lienny complained 
 bitterly of the tran.saelion. I have never as.^erted that this was au 
 arran'^ed-plot between Mr. Ascher and Mr. Saujiders^ nor do I pretend 
 
 "" ■ n 
 
 m 
 
122 
 
 il 
 
 m 
 
 .4 
 
 
 that the former was not indebted to the latter at the time. I gave the 
 facts precisely as they appear on the books, and I may add that there 
 was no transfer of 25 shares to Mr. Saunders at or about that time. I 
 never made any sueii statement as tliat Mr. Saunders threatened Mr. 
 Benny to throw his stock on the market unless he extended the credit 
 ofAsfher&Co. I admit that J myself was informed that Mr. Morgan 
 had alleged that lie heaid such a threat nfade, but as I have no proof I 
 never rej)eated the statement, and certainly said nothing on the subject 
 at the meeting. The question as to this threat was made direct to Mr. 
 Saunders by Mr. llollis, and was denied Jjy him, but I did not interfere 
 at all. W'th regard to my statement that Mr. Saunders had expressed 
 to Mr. Eenny his high opinion of Messrs. Ascher & Co., 1 have only to 
 affirm that Mr. Kenny has so asserted. As to the inspectorship of the 
 Ascher estate, all J said on that subject was that the Directors had not 
 approved of the ai-rangements sanctioned by Mr. Saunders. I have now 
 disposed of the various charges prefel'red by Mr. Saunders against me, 
 while pretending to reply to charges which he states to have been 
 brought 1^' me, but AvhV-h were, in truth, correct answers to questioner 
 put by shareholders, and to which I could not refuse an answer. 
 
 Montreal, Sept. 23rd, 1379. F. HINCKS. 
 
 COMMUNICATIONS. 
 
 THE CONSOLIDATED BANK OF CANADA. 
 
 Montreal, 6th October, 18t9. 
 Thos. W. Ritchie, Esq., Q.C.. Cliy. 
 
 Dear Sir, — I have been requested by Mi*. Ilagar to hand you the 
 accomjianying copy of a resolution passed at the Special General Meeting 
 of the Bank held 18th and IDth ult. 
 
 Yoiii' obedient servant, 
 
 (Signed) ClIAS. II. WETHAY, 
 
 As&t. Mgr. 
 
 [Enclosure.] 
 
 Moved by Mr. C. lUley, seconded by Miss Macdougall : — 
 
 " That the fdllc.winp ^(,'iitleni<!i, viz , Mr. Thos. W. Ritrhic, Q. C, Colon(;I Turn- 
 bull and Aldorniau C. Hagar, he a committee to draft a petition to tlio Government 
 on behalf of the «liiireliol(iors of tliis Bank for an ininiediatc inveetigation as to the cor- 
 rectness of the monthly Ketums or hitat^ments, sent to the Government by the l^irei- 
 tors ; also for arrest and pimishnient for all false statements made by the Direetors 
 and Manager of this Bank. Carried. 
 
 The above is an extract of the minutes of a SjK'cial General Meeting 
 ofstockholdersof the Consolidated Bank of Canada, held at Montreal 18th 
 and 19th September, 1870. 
 
 (Signed CIIAS. II. WPITHAY. 
 
 Consolidated Bank of Canada, ) Secretary, 
 
 Montreal, Cth October, 1879.]" 
 
123 
 
 , the 
 there 
 
 lC. I 
 
 I Mr. 
 
 credit 
 organ 
 
 i-oof I 
 iubject 
 to Mr. 
 terfere 
 jrcssed 
 only to 
 of the 
 lad not 
 tve now 
 nst me, 
 ^e been 
 uestione^ 
 
 1879. 
 
 id you thf 
 a Meeting 
 
 Montreal, Sth October, 1879. 
 
 Dear Sir, — I have to acknowledge receipt of your letter of the 6th 
 Instant, enclosing a resolution passed %' the shurehoUiers of the Consoli* 
 •dated Bank at the Special Meeting held on the ISth and liUh ult, Inas« 
 much a^the shareholders at that meetini^ virtually re-elected four of the 
 Directors of the Bank, I must respectfully decline to ;ict upon the com- 
 mittee named by the resolutiou. 
 
 YQurs truly, , 
 
 (Signed) 
 
 THOS. W. KITCIIIE. 
 
 •Chas. H. Wethay, Esq., Secretary. 
 
 Sir, — The attribution to mo of the role, of advocate, especially of one 
 of the Directors of, the Consolidated Bank, by the Chairman and others, 
 at a late meeting of shareholders, induces me to explain that 1 did not 
 desire or intend to shield any one, Jew or Gentile, found to be culpable. 
 Whether in the course of the investigation which took place, and in view 
 of the facts elicited, the individual relerred to was found to bo wanting, 
 -every one who followed the pt'OceecTings, either at the meetings or as re- 
 ported in the journals, can judge. I will, however, ventare to say that 
 no person who-^e record is in any way dubious should be placed in the 
 position of a Bank Director. Further, I hope that ere long voting by 
 proxy will be abolished, and that shareholders of banks and other cor- 
 porations will have the option either of wholly ijeglecling their interests 
 or of voting ])ersonally foi* those directors whom they deeni competent 
 and trustworthy, and so annual elections become realities and not the 
 shams they are at present. 
 
 H. LYMAN. 
 Montreal, 20th September, 1879. 
 
 ;thay, 
 
 Usst. ^l<jr- 
 
 toloncl Turn- 
 
 , as to the cor- 
 Ibv the Dirt't- 
 ' the Directors 
 
 [ral Meetin,!: 
 loTvtreal 18th 
 
 FITHAY. 
 
 Secretanj' 
 
 CORRESPONDKXCE WITH SIR FRANCIS IIINCKS. 
 
 The following correspondence has a))peared in the Hamilton Spec^ 
 tator, at the recjuest of Hon. Isaac Buchanan ; — 
 
 ILuiiLTON. Ortober 20, 1870. 
 To the Hon. Sir Francis Hincks. Montreal: 
 
 I am distressed at the unexpected result, and would value very highly 
 any suggestion how possibly I could serve you in any way, directly or 
 indirectly. I know that it is the .syscem that is to blame and not you, 
 •who had no personal motive. * 
 
 (Signed,) ISAAC BUCHANAN. 
 
ill 
 
 ■"•hi > 
 
 i 
 
 124 
 
 KKPLY OF Sm FRANCIS HINCKS. 
 
 ''■'■■■' _ ■ ' • • 
 
 - 418 St. AntoIne Street, 
 
 Montreal, 21s/ October, lS7f). 
 Mv Dear Mr. Bitiianan,— Many tlianks ihv your veiy Mnd tele- 
 gram, and ibv your .sympathy with lue. You are pi'ol)al)ly not aware of 
 the facts connected \villi my ca^e, and I, therefore, will state tliem to you 
 iis an old IVieud. wiiose i^ood oi)inion I desiiv to retain, a.s briefly as 
 poj-sible. The charge was making; a false leturn wilfully witli the 
 intention of deceiving the Govei-nment and the public. Now, the fir.st 
 point is, was the retuVii false? The second, if false, was it wilfully so? 
 You are, no doubt familiar with the heading under which the returjis of 
 liabilities and assets are made to the Government. Those headings wei'e 
 prepared by a Comi^iittee ol\Bankors, and it is simply alisurd to supjio.se 
 that loans from one bank to another and overdrafts could have escaped 
 the considei-ation of the House of Commons who considered the subject. 
 They made a beading for " overdrafts," although the^-e is such a specific 
 lieading in the National Ba)d< returns. They made no heading for "time 
 loans from other banks.'' There is a heading "due to other banks." I 
 protest against the ojiinion that it ever could have been contemplated 
 that such ordinary ti-ansactions a> loans from one bank to anotiier, some- 
 times for mutual convenience and sometimes for aid, could, with projiriety 
 be included under surh a head as '• liabilities not included under tbiegoing 
 head-;." ^^■hich was obvi()U>ly Intended to meet some imjoreseen liability 
 Avhich could not be ])hiced under the heads which had been pi'ovided for 
 all known banking tiansaetions. The oidy other head under which l^ans 
 from banks (m time, and f )r which deposit receipts were granted, is that 
 of " "lue to other banks." 1 fee! assured that it never was intended to 
 place under that head any items L)ut the actual cash balances between the 
 banks analagous to a dealing house settlement. If 1 am right, then tlje only 
 place in which the'«e lime loans can be placed is "other deposits payable 
 after notice." The .Iiidge instrueled the jury that these wei'e loans, not 
 deposits, as if eve]'y sum of mimcy ])aid to a bank on a dcjwsit recei]>t was 
 not a loan. In the ca>e of '• overdrafts " there is absolutely no lieading 
 under whiidi they could be ]»!aeed except ''other assets not included," and 
 to whi(di the objection alre:idy stated ap})lies, and the one under whicli they 
 actually were ]>laced and under whieh they are ])laced by all the other 
 banks For the ri'asonsl have stated I hold that the I'eturn was not only 
 not false, but in every res])ect correct, and all the banking testimony 
 •was favorable a-< to the ju-aetice of treating time loans as deposits on 
 notice, and the treatment of overdrafts is univei'sal. f believe; but ad- 
 mitting for argument sake that the returns were wrong, and tluit the 
 particular classes of ti'ansaclions should have been stated olhei'wise, then 
 was thei'e wilful decejition "> To suj)port this charge, I take it that there 
 ought to l)e evidence that the banlc made some change of ])ractice in the 
 returns, and that I knew of it, the object being to deceive. The books 
 of the Bank prove that the retui-n complained of was in the form pre- 
 <'.iselv as it had always been The offiecrs of the head office who pre- 
 pai'ed the statements swoi-e that they were correctl}- made out according 
 to the established i)ractice. I signed them in the usual way when 
 
). 
 
 Lcle- ■ 
 
 •0 of 
 
 you 
 
 y ^'^ 
 
 the 
 
 tirsl 
 ( so? 
 ns of 
 
 were 
 ppose 
 
 ibjccl. 
 pec i tic 
 " time 
 
 " T 
 
 iiyilated 
 •, soiue- 
 opriety 
 i^eo-oing 
 Uah'dity 
 ided ibr 
 cb l4)ans 
 , is that 
 nded to 
 . een the 
 tlie only 
 .ayiiblc 
 
 123 
 
 \ 
 
 \ 
 
 presented by IhoUcn. .^lanngev. I don't think tl becoininu; to comment 
 on the Judge's chai-ge oi- the niean> whicli the liitv provide^ foi* a privato 
 prosecutor using the name of the Ci'own to secure a prcjudifod jury. My; 
 
 -i-i! i:-. u Tf...- . •_ j'l) 
 
 consolation lies in a " Mens conscia recti 
 
 ♦ Yours trulv, 
 
 ^Signed,) 
 
 Ho.V. TSAAC Bk HANAN. 
 
 F. IIIXCKS. 
 
 • Hamilton, Ont., October 23, 1870- 
 
 To Sir Francis Hiru-ks : 
 
 I have tai<eii the re.-«pon>ilMlity of ]>ublishing our corros])on(lenec ia 
 this evening's Hanulton Spectator, not consulting yo>i, as I thought that 
 you might in youu position have delicacy in authorizing whal I deem in: 
 the cause of truth and justice to be a right and necessary step to get it 
 shown that it is the system that shoidd be attaclved. [ have sent tKo 
 paper to you, and also to the press of Toronto, Ottawa, Montreal, New 
 York, London, Glasgow, and Manchester. 
 
 ISAAC BUCHANA:>f. 
 
 OPINIONS OF, THE PRESS. 
 
 n( 
 
 From the Montkkal IlEUAi.n. July 17th. 
 
 The publication of the circular of the Directors of the Consolidated 
 Bank vesterday niusL have astonished our leaders, more particularly 
 those who have their money invested in that institution. It is ditticult 
 to comprehend how so many intelligent bitsitu'ss men c»juld agi'ce to put 
 tot!;ether so much, meaning so liitk — an exhibition of weakness in every 
 respect. How can interested parties trust %uch a statement when oro 
 so dirt'erent was made oidy a few weeks ago? The .^iiestion of numugc- 
 ment or mismanagement nee^'.MMt now be gone iut<>. Let us begin about 
 the peiiod when a probable crisis uas admitted l>y everybody concerned ; 
 that was shortly after the payment nf the last dividend. At that time 
 Borae of the Directors openlv^leclared that the shares were wortii very 
 much more than the mai-ket" value, indeed that the capital had been im- 
 paired a comparatively trifling amoiit t; such assurances we-e given us 
 
126 
 
 !, 
 
 
 i 
 
 till the date of the annual meeting, even in the face of the fact that 
 application had been made to Parliament to authorize a deduction of 
 capital. It was then thought by the l)irectors to be a great hardship to 
 be obligetl to Bubniit to cutting down the capita to the extent of 40 per 
 cent. ; the general impreMsion then prevailing was t}»at 25 per cent. 
 would be sufficient. Wo mention those facts only with the view of 
 ex])osing the .evidently indifferent manner in which the Directors have 
 watched the interests of the shareholders. So satisfied were the Board, 
 that the reduction was much greater than it ought to be, they absolutely 
 brought down a balance exceeding $900,00Q, enough in all conscience to 
 meet any ordinary conlingency. No more positive assurance coidd have 
 been given than that at the annual meeting, that every provision had 
 been made for bftd and doubtful debts, rendered all the more satisfactory 
 to the meeting, when it was so strongly expressed that the Committee 
 on Banking and Commerce had subjected the capital of the bank to too 
 g^'eat a reduction. Starting six weeks ago with a surplus of nearly a 
 million dollars, can anything be more remarkable than the meaningless 
 circular which yesterday emanated from the Board of Directors. There 
 is not a definite line in it; it is just as va^'ue as anything could be; 
 could not have been more vague if all the bank directors in the Dominion 
 had had a hand in drafting it. If the circular affords any information, 
 it is that, when these positive statements were made at the annual 
 meeting, the Directors knew little or nothing about the affairs of the 
 Bank; yet .they undertook to present a wftrthles^i statement, and are now 
 obliged within a few weeks to acknowledge a blunder of say $1,400,000, 
 without the knowledge that the atmosphere is now clear. This is not a 
 time to prate about generosity, but it does seem at this stage undignified 
 on tlie part of the Directors to take I'efug© in the late General Manager, 
 with whom nearly all have been acting for so many years. 
 
 From the 3Iontreal Post, July 18th, 1879. 
 
 1^1 
 
 fi f' 
 
 It is quite evident that there is a great want of confidence in the 
 circular issued by the president of the above named bank to the share- 
 holders on the lO'th Inst. The stock sold yesterday at $15 per share, 
 while, according to the valuation of the directors, the shares are worth 
 $36 each, or 140 per cent, more than the stock exchange value. It has 
 come to be a matter of discussion now in financial cii'cles what the actual 
 value of a share in the Consolidated Bank is, as the affairs of the institu- 
 tion now stand. The insiae value of the surplus assets of the bank, as 
 stated in the president's circular, is about 60 per cent, of the present" par 
 value of the stock, which is $(jO. The f(51lowing letter, which explains 
 itself appears in this morning's Gazette: — 
 
 To the Editor of the Gazette: 
 
 Sir, — Respecting the circular from the Consolidated Bank, published in yonr 
 issue of yesterday, I fear the sharehold<»fi cannot have more confidence in this report 
 than in those [)reviously made by the same gentlemen , what we want is, a full valua- 
 
 Bankl 
 The r| 
 
 Add 
 
 FromI 
 Balar 
 
tion of assets, ccvtifiod to by Messrs. Saunders and CampV)oll, and a re-organization of 
 the board. 
 
 We are told that the assets are good value somewhtTe between |,l,25(i,O00 and 
 11,500,000 ; a nice little margin truly, after a previous deduction of two millions from 
 the assets. Now, I have good n^ason to believe that the .'xunjination of Me>sr8. 
 Saunders and Campbell resulted in something like the following tiguns, taking the 
 June statement of $2,100,0(io capital, and $900,000 nsarve account as a basis :— 
 
 The examiners found that to make a liberal allowance iur all known i.fid and 
 doubtful debts, overdrawn aec<.unts, &c., would reiiuire the appropriation of nearly all 
 the reserve $;tOO,000,. leaving the $J,]Ou,O0a mtnrl . but wishing to (oim a reserve 
 account they thought it adviKa])le to deduct a percentage of nil discounts to be set 
 aside for that pnrpose, their idea being some $COO,0(hi, or about 10 ]ier cent, on the 
 discounts. Now, the above, if correct, is a very ditferent story from what one would 
 infer from the circular. Tlie shareholders have to f.ar the extreme undervaluation 
 •of their assets by new men, just as much as over-valuation by the old managers. Mr. 
 {Saunders and Mr. Campbell api)ear to have the contidence of the public, which will 
 go a long way towards the adoption of any report they make. Meantime, we look to 
 Mr. J. H. Joseph and Mr. Thos Workman to indicate the much needed reform. 
 
 From the Montreal Star, July 19th. 
 
 The directors of the Seoteh banks seonj dutei-minod to profit by their 
 late terrible experience In connection with the miismariai;ement of the 
 City Bank of Glasgow, and have taken one of the remedies to prevent 
 the recurrence of such a cata.stiv>])he. We .see by the late Scotch papers 
 that all of the banks there have Hubinittetl their' statements to indepen- 
 dent auditors for verirication. It is ])leasingto be able to state that the 
 result has been eminently satisfactory. The universal apathy of share- 
 holders in a matter of such vital importance to themselves is again 
 exemplified by the fact that the decision to employ ])ablic auditors was a 
 voluntary action the part of the directors. If shai-eholders have no more 
 interest in their own affaii's than to sit quietly at the annual meetings 
 and adopt the j-esolutions, framed by the directors, they will have nobody 
 but themselves to blame when they fiiul their property has been squan- 
 dered. We want a new departure in the line ol" pul>lic audit in Canada ! 
 What board of directors will be first to move, or failing that what share- 
 holder will have the boldness to insist upon its being done. As we have 
 before remarked, such a course would render misleJlding or false state- 
 ments about imj)0ssibie. 
 
 The following letter was yesterday read at the meeting of the board 
 of directors of the Consolidated Baiik : 
 
 TiiE President and Dirkctors op thk Consolidaikd Bank : 
 
 Gentlrmen, — I b'g to state the ref ult of the investigation into the accounts of the 
 Bank. 
 
 The reduced capital amounts to |2,080,O00 
 
 Add balance present contingent account 943,000 
 
 $3,023,000 
 
 From this has to be deducted for bad and doubtful debts 11, 420,000 
 
 Balance to contingent account 25^,000 $1,073,000 
 
 Leaving a surplus or capital of ♦ $1,350,000 
 
 In addition to the contingent account of 253,000 
 
It is proper (hut I slifiild r«mark that the foniroiiip valuations are bafi< d on 
 rstiiiiatrfi of assets, of Hif T.ank iiiatlc hy tlircc parties actin^r iii(lcp( ndfutly, two of 
 whom are the new directors, Messrs. Rdhertson and Satinders, and in whii Ij J myself 
 concur : the result being that tlie a( tual surplus assets of the Bank arc equal to nearly 
 C"t per lent on the redun d capital. 
 
 Vours respei tfiillv, 
 , (^Signed.) ARCir CAMPP.ELL. 
 
 • Acl/fii/ (Je.li. M'tncujcr. 
 
 MONTKK.M,. ,/u^</ \^th. 187!'. 
 
 The stntcnioiit now licars all tin- wciiilit of tlio nfficial utteraiior of 
 Mr. ('ami)ln'll, the now actiiiij; ^cnoral nianauer. and' Mosiji-s. 8aini«lcr.s 
 and F^d>ci'tson, the now dii-ootors. All of tliosc n'ontlomon haviniij had 
 110 part in tho late niana!j;oTnent «d'iho bank, liavo of course no intcrOKt 
 to ^.ervo in making; nuittors look l.otlor tlian ihoy roally are. On tho 
 contrarv. llioir natural desire would ho to ropresont tho case as bad as it 
 actually is, to save themselves from the possibility at some future day of 
 beinii; accused of makiiiii; a false or misloadiuif statcmont. It is but 
 reasonable thereforo to assume the atl'airs of tho ('(»nsolidatod Bank have 
 bi'en af, last as correctly slated as is ]>ossible, without going into minute 
 details. Both the board and* the new acting manager seemed disposed 
 to meet the issues srjuarely, and to bo doing the best possible under the 
 
 oircumstances. 
 
 * 
 
 ill- 
 
 From the Montre.\l Post, August 1st. 
 
 It has been more than once intimated in out- financial columnsduring 
 the past fortnight that it A\'as more tl'un probable that tlie management 
 of the Consolidated Bank would be unal)le much longer to resist tho 
 increasing demands on tho part of depositors and note-liolders. The 
 announcement, therefore, of the suspension of payment by the bank, 
 which took phice yesterday afternoon, the last day of the mojith, will not 
 be surprising to our readers. A constant drain has been made upon tho 
 I'osources of the bank for weeks past, and on the management becoming 
 saiisfied that all puidic confidence in the staliility of the institution were 
 lost, strenuous eftbvts were made to reduce the liabilities to the public by 
 disposing of as many agencies as possible, and no fewer than nine 
 agencies have boon closed, otlier banks having assumed the deposits; 
 while at the head otHco and outstanding agencies the depcjsifs havo boon 
 also materially roduoed. Yesterday the City and District Savings Bank 
 took over the Chaboilloz square branch of the Consolidated, and a circular 
 was issued to the depositoi's notifying them of the fact, and infoinung 
 them if thov do>^ired their money it would be paid at once. About one- 
 half of the depositors applie<l for ami obtained their money, tho amount 
 so paid aggregating some $15,000. There were 10 'sigencies. altogether. 
 During the afternoon some of the demands made at the head ofHce wore 
 so heavy that they could not be mot, and hence the s.uspension. The 
 managers of the bank submit to the public a comparative statement of 
 the liabilities on the 8th June and on July 29th, which shows an aggrc- 
 
d on 
 
 wo of 
 lysflf 
 it-arly 
 
 LL. 
 
 inau/er. 
 
 (•e of 
 
 uderH 
 rr had 
 tcront 
 ►n the 
 d 5\B it 
 day «)t 
 is but 
 k have 
 minute 
 isposod 
 del' the 
 
 sdurini*; 
 gcniont 
 sist the 
 •B. The 
 e bank, 
 will not 
 po!i the 
 comin^:; 
 on were 
 ublie hy 
 an nine 
 U'positK ; 
 ivu 
 
 lieeu 
 
 ligs Bank 
 I cireuhir 
 ifbrnuniX 
 lOUt oiie- 
 jiniount 
 toilet l>er. 
 ice we;e 
 on. The 
 enient of 
 \n agiivt'- 
 
 12!> 
 
 gate reduction of liahililins hotvveen iho-se (hites of S 1,H() 1, 98.4.69, tho 
 tiguro.s \)eiu^ as IoHowh: — 
 
 Deposits, 8th .Jiirii', IHTO I'S'Vni Tno "<f> 
 
 " :i!»lh .July, 1879 '...'.'.[ ][[[[[ [[]['^['.'.', '.'.'.['.'. '['a'^'/^UIM 
 
 $i,7n,i).s5.r,'.) 
 Circulation ndiK i ij alHuit 120 iioo.oj 
 
 Aggrof^iitc iX'ducti'Hi nf lialiiliti s $1 ,Hni,',H-,.5:) 
 
 Since tlie (hiu ol tiie u«'iiei-ai inan:i::rci"-« hist K'tter, which was ])iib- 
 lished in ihe-e cohinms, iioilnng l,as orcurrcd to lead him to chang-e his 
 opinion a.s to the vahic «»(• the asst'ts of the liaidx. It is understood that 
 the accounts ivniaininu" at the two oi- three undis])os»'il ol' ao-encies in 
 Ontario, and at the one ai Sf. Hyaeinthe. aiv too small to seriously inteV- 
 iere with business at these |>l;ic<,'>. 
 
 Front tlif .MoNTiiEAi. IIerai. d, Au^-ust 5111. 
 
 ^Ve tear that hanking- in Canada has heeii i'nr sonie years too much 
 like the bankini;' in (ireai Jh'ilain. on whicfi the failure of the <ilas<;'ow' 
 Bank, an«l the jiroceeiiiniis gi-o\vinn' out of ji. thrt'W such a vivid and 
 ijhastly lii^'hl. AVheii we iici lo the •• true inwardne.^^ " of oui- late de- 
 ])ression and '"ali that ii implies, '" indeed, we >ee moi'e and mt)i'e I'eason 
 to imjHite it nuiiidy to that recklessness of tradinjjj of vnIiJcIi our l»aid<ini;- 
 has been itself a i^'reat pail. ;is well a> the greatest promoter in other 
 directions of business. Exrepi the one cau-c of thai di'pre.; sion. to be 
 found itrimai'ih' in the fallinii' oil' in the lumber ti-ade. there ai'c few of 
 our misfortunes whicli ea)in(»t be trai-ed to the inllation caused by the 
 i'ea<liness with which anybody has been abb- to jnocui'C credit. O^er 
 and over a,ij;fliii the inve>tii;alion of bankrujit accounts has revealed this 
 fact — that a man has lived lor years at a rate foi- which his orig'imil 
 capital would n<»t have supjtlied the means tor a sinuic month's expemii- 
 ture. Of course, his eatiiii;-, drinking,- clothini^-, &c.. have been mainly so 
 mucii pro])erty ii-revocal'ly subtracted IVont the wealth of the community, 
 and the whole loss has been subsn-actcd trom the ]»roj)ei'ty of his ci-cili- 
 tors. We are satistied tlu»t the man would not Juive been believed who, 
 a few years ago, had descril>cd .the utter folly and imbecility with whitdi 
 those who have controlled the available ca))ital of ilic coimtry were allow- 
 ing it to go into the hands of persons alike destitute of means, oi' ex])eri- 
 on^'G, except indeed ex])erience of the best way to Ka\e creditors in tlie 
 lurch, gained b)- previous adveimiro of the same kind. Vet it could not 
 have been im])ossible to get at the faMs. it emild not have been abso- 
 lutel}'' beyond the reach of investigation, that a cei'tain man whose 
 account with the wholesale dealer, or whose accc])tanccs at a bank were 
 running up by the tens of thousands, was a ])er.son who, .inheriting 
 nothing, had had no o]ij>ortiuuty of making -unything tor himself, and 
 was without any solid assistance from wealthier men. No doubt, under 
 the most carelul svstem of business, occasional ft-aud is possible; but the 
 
130 
 
 
 
 mi 
 
 distinguishing feature in the era, which we hope, is now about to bring 
 itself to a close, is the infrequency of fraud. The truth is that it was not 
 worth while to concoct a fraud, when Tom, Dick, or Harry could have 
 goods or money to any extent he pleased, without being put to the 
 labour even of weaving a |)laustble stoiy. It \vould be very unfair to 
 impute all this blundering to the small class of men which is made up of' 
 the Managers and Directors even of those banks chiefly amenable to the 
 censure it implies. They were only bitten like the rest with that mania 
 for speculation, and that belief in a constantly swelling prosperity which 
 afflicted us all, and was very much encouraged by political no<>sense 
 about the vastness and wealth of the great Dominion, constituted by 
 annexing a few not very rich Provinces to each other, and charging them 
 collectively with burdens which, divided among them, would have 
 frightened them ,ul. Still banks are the main springs of ci-edit, without 
 whose motion the smaller spi-ings could not play; and bankers ought to 
 be, by their position, on the watch towers of finance, and by their know- 
 ledge of business, t'heorolical a. id practical, the first to perceive and to 
 check delusions such :in the one which we ai-e considering. We fear, on 
 the contrary, it cannot be successfully denied tiiat they have been the 
 chief promoters j!)f it. The facts already kaown respecting the Consoli- 
 dated Bank are the liest justification, of what we ai-e saying. We appre- 
 . hend that, even with tlio recent example of the City of Glasgow Bank 
 freshly before us, it will be hard to find a banlcing scandal worse iu 
 extent — we do not say in kind — than the one which we ai-e condemned to 
 consider in our own communitv. If the current statements are to bo 
 believed, some 81,700.000 have been lent to a firm with several branches 
 and to some four other tirms. to wl. >:n no rational stockholder in the 
 bank would have lent §100.(100 if aL tieu uames had been on the same 
 note. • We presume that before long, .lud in some authoritative way, the 
 f:icts will be substantiated, anil that the |>ublic will know how it was 
 possible, that such marvellous errors as to the ti'ue jiosition of the K-nk 
 could have arisen, in a diiectory which contaijied not only inucli talent 
 of wdiat may be called the financial and book-keeping kind, but also much 
 of that kind whieh bi-longs to shrewd and experienced men of business, 
 well acquainted with the pecuniary strength of theii- customers. Tliis is 
 at present a mvsterv of mvsteries. It is incredible to any one who 
 knows Montreal, that some of these men woidd have allowed such large 
 sums of money to go into such hands. It is,' of course, no secret that an 
 imputation is cast upon the late Manager of \^ilfully and systematically 
 deceiving bis Directors, though in that case he must have had accom- 
 plices within the bank'. On the other hand, no one who has kn(;wn Mr. 
 Kenny eould pi'cviously have bt'licved it })ossible that he could have got 
 up a decej)tion, so continuous, deliberate, and systematic, and hence so 
 exceedingly wi(d\ed, as this imputation implies. The most remarkable 
 part, perhaps, of the whole is that — so far as we can see at j^resent — no 
 one coimected with the Bank has had the least corruj)t or personal inte- 
 rest in the tei'rible losses sustained bj' so many unfortunate persons. Of 
 course, w« say this under I'esorve, and subject to the fuller revelations 
 which cannot bo much Tonger delayed ; but very grave reason as tiio 
 stockholders may have f^r complaint, we do not perceive any ground for 
 
131 
 
 ,8 not 
 have 
 ) the 
 lir to 
 up of* 
 .0 tlio 
 mania 
 which 
 isense 
 cd by 
 ; them 
 have 
 without 
 ght to 
 know- 
 and to 
 ear, on 
 ■en the 
 jonsoli- 
 appro- 
 ,v Bank 
 orse in 
 naned to 
 to be 
 i-anfjhes 
 in the 
 le same 
 ay, the 
 it was 
 10 E.\nk 
 1 talent 
 |so much 
 iusinessi, 
 This is 
 [)ne who 
 h Uirgo 
 that an 
 |uiticaliy 
 iiccom- 
 ;wn Mr. 
 ave got 
 ,it'ucc so 
 l^arkablo 
 ^cnt — no 
 Kil inte- 
 ^M. Ot" 
 elations 
 II as the 
 bund for 
 
 suspecting that PrcKident or Directors have enriched themselves by the 
 vahie of one copper at their ex])ense. Whether they deceived themselves,, 
 or permitted themselves, culpably we cannot but fear, to be deceived, 
 they seem to us to have fully ])articipated in the dehision vv'hich their 
 .misrepresentations creati^d, so that some of them — we are speaking, of 
 course, of the old Board, for the new niemliers ai'o' open to no blame — 
 have added largely to their holdings of stock within a few months, and 
 have thus taken ujion themselves a ]>art of the Iohs, which would other- 
 wise have fallen elsewhere. Nor do we gather that those wiio speak the 
 worst of Mr. Eenny lay to his charge the sin of making his own gain by 
 the loss of his employers. This absence of personal interest in the wi'ong 
 done, if it turn out to exist, is very fai- from a Justification ; because men 
 have no right to undertake the management oi' othei- men's property 
 without beini; able to do it, and, beini;- able, without actually doing it. 
 Men long broken to business must luue some, very cogent and extraordin- 
 ary excuse for putting out statements so false as the recent statemejits of* 
 the Consolidated, always of course excepting the last, have manifestly 
 been. But thei'e is still a wide moral ilitfei-ence btlvvcen neglect or in- 
 competence, and i-ash acts committed for j)ersonal g;>'n. whatever may 
 be the legal effect of the former class of errors as to pecuniary liability. 
 And we repeat that, in the ])resent state of our knowledge, it seems fair 
 to consfder the Direetoi-s, and, indeed, also* the Manager (only he can 
 hardl}' be guiltless of deliberate misi'epi'csentation) are entitled to the 
 benefit of this diftdrerice. 
 
 Fro7n the Montrf.al Post. August 9th. 
 
 By way of indicating how the business of the Cit}' of Glasgow Bank 
 was conducted, it is related by Mr. .Fames Morton, examined before the 
 Sheriff's Court a few days ago, 'that the. bank used to give iiim i'li(),000 to 
 £50,000 in a day upon Ids lO U"s, which were redeemed a few days after, 
 and that the ti-ansactions never found their way into the books. In nine 
 years he thus obtained eight millions sterling, and with such splendid 
 backing he was enabled tn carry on an eimrnious business without any 
 capital of his own. In IStll he i>egan by owing the baid< ,C4,0(M), and 
 ended in li^TG with half a millio'i. In returr\ tor these favours, he was in 
 the habit of buying drafts on iion Ion just before account days, to a large 
 sum, which would then appear in the bard< returns as eash. and be 
 redeemed after ihe (•.)okiiig operation wa«; over. 
 
 If report be true, .somewhat similar transactions, on a smaller scale, 
 have been carried on with one oi' the recently defunct banking institii- 
 tions in this city. For several days ])ad, it has been etirr<Mitly reported 
 among dry goinls men liere that a well-known firm in iIm' trade, against 
 whom a wntofaltachmcnt was issued last week, had lor months previously 
 enjoyed the rich but e.KCeedingly rare privilege of having (heir own notes 
 discounted at a certain bank' for almost any amount, on order. The 
 irrofularitv of such |»ro<'eedinu> is too i.ateut to*rei|ui|'e '■omnient hore> 
 
132 
 
 and the ability of the said firm to pay up is manifest in the fact of their 
 failure almost contemporaneous with the stoppage of the bank, and there- 
 fore the withdrawal of their exceptional accommodations 
 
 I 
 
 W' 
 
 % 
 jli 
 
 W 
 
 !i 
 
 From the Glasgow News, August 14th. 
 
 It is satisfactory to observe that the linancial crisis in Canada has 
 passed over so soon, and that it has involved the suspension of only three 
 of the 39 banks which supply tinancial facilities to the Dom.inion. ^ A 
 much worse result might have been ox}»ected when it is remembered 
 that this large number of banks is out of all pj-oportion to a population of 
 fuur millions. The disparity was pointed out in our columns ^ome time 
 ago, and judging by the mail advices to hand to-day, this view of the 
 Blatter seems to have struck some of the sharehcdders in the Canadian 
 hanks. The result has been a resolution on the part of the shareholders 
 in the Stadacona banlc, of Quebec, to go into li(p»idation. This apparently 
 extreme course has been adopted simply because it was believed that 
 there were too many banks in (Quebec. There is no mention of impaired 
 resources, and it appears, indeed, that the capital of the bank is still 
 intact. The concern is one #f those that sprang into existence in 1874. 
 when there was a kind of epidemic with respect to the starting of new- 
 banks. It appears singular that no one should have proposed amalgama- 
 tion, but the question of absoi-ption into a lai-ger under! aking does not 
 appear to have been considered. Many of the Canadian baidcs are veiy 
 small institutions — so small, indeed, that out of the whole 31) there are 
 but half a dozen which boast capital over two millions of dollars. The 
 disasters which have hap[)encd to the Consolidated, the Exchange and 
 th;^ Ville Marie were, therefore, not wholly unaccountable. Many of 
 these banks ought never to have been created, and in all probability they 
 would never have existed had it not been for the peculiar line of policy 
 adoi»ted by the Bank of Montreal after the close of the 'American civil 
 war. Under these circumstances a gi'cater commercial crisis might have 
 been looked for, and the crisis has passed over so far with remarkable 
 lightness and rapidity. ( )ne important lesson suggested by recent events 
 is that the smaller banks, whicji will always be liable to danger, ought 
 to strengthen their positions by.amalga'nating with lai-ger and strongci 
 institutions. Consolidation of this kind has been successfully ado[)te(i 
 elsewhere, and it would probably answer vavy well in Canada. 
 
 ills 
 
 From the Montreal Siiaueholder, September lOih. 
 
 The shareholders of the Consolidated Bank may glean what comfort 
 they can t'roin the ex[)lanatioii of the otlicials at the meeting hchl 
 yesterday, and of this we shall perhaps have more to say hei-eafter. In 
 the meantime, what we would like to know is this, if in a })eriod of three 
 months and twenty days the interest paid and reserved {.mounts to 
 
leir 
 
 hi-ee 
 . A 
 
 jered 
 on of 
 time 
 if the 
 adian 
 )lderH 
 rently 
 1 that 
 paired 
 is still 
 1 1874. 
 ot" new- 
 .lirama- 
 )es not 
 •e very 
 ere are 
 The 
 lu-e and 
 
 any of 
 [tythey 
 
 "poUoy 
 l\n civil 
 Iht have 
 ItvrkidAe 
 event* 
 
 Itrongi'i 
 kdopt^ed 
 
 133 
 
 110,459.08, and the profits (after dedueting expenses of management) are 
 only ^27,050.21, how long will there be anything left in the concern ? 
 There must be money in it. or directors and others vvoidd not be eagerly 
 buying up the stock. Then again, what about the expenses of running 
 the thing in these thi-ee months and twenty days ? Surely the time for 
 trifling with the money of the unfortunate men and women has gone by. 
 Let the direetors speak 
 
 •' All circumstanct'js that may compil 
 Full tifdt.'ucf to tilt' tale they tell.''" 
 
 Let them inform tlieii' shareholders what the actual running expenses 
 were and drop the air of official reticenee that sits so ill. eveii on the 
 pr0!*perous bank director, and give to the public statements tjiat by their 
 simplicity shall cnablL- the shareholders, whetlu'r male or t'eniale, or 
 or whatever theii* knowledge of accounts, lo niKlerstand what is being 
 done with their monev. 
 
 From the MuNTOKAL Star, September llOih. 
 
 The eaiise of the present uidbrtunaie condition of the baid< may bo 
 summed up in one sentence, whiidi is. the icnnt "f iin impdrtial an<t 
 iiidepenilent audit of the ht'inj oifict'. The bank had a I'c^'uhirly appointed 
 inspector, who tit stated intervals went through the variciii> branches, but 
 he was not pennitted to inspect tlu; head otiicc, tlic general manager, 
 Mr. Itenny. loftily sayinu' thai he would not allow the work under his 
 chaige to bo insp(>ctcd by an iid'erior otUcer. Sir l"'r;incis statcij yester- 
 day at the meeting that no inspecli-Mi ot the head otlii-e had ever been 
 made and it is also sai<l the Board had never t'on>idered the advisability 
 of having it done, having complete confidence in the (Jeneral .Manager. 
 3Ir. Renny had been prixately re(|iies(e<l to have the insjiector of the 
 Hank reside liere Instead of at Tormito, and had })artiaily consented (odo 
 so, but had never carried out the j»ronii.-e. The logical coiLvefiueiice of 
 this neglect is (hatuver ;i million and adialfot' the losses of the Haidc 
 were made at the head ojliee. Men comjieteni to form a. correct opinion 
 uidiesitatinglv assert that had a tlioroui;h inspection taken place two 
 ye.ii's ago there would have been no occasion for a suspensiiui, anel that a 
 knowledge by the board ol'lhe true state of atfairsevcn a year ago would 
 have matle the wreck a much U'ss hopeless affair •ban it now is. 
 
 •omf<»vt 
 ■ig hcbl 
 Ler. I '' 
 of three 
 untH I" 
 
 Iruni tht' .MoNTiiKAi. Hkh.m.p, Sept. 22nd. 
 
 Our eitizc^ns cannot have perused our I'eports of tlie recent meetings 
 c»f the [stockholders of this \j\\\\k without a feeling of Iminiliation. 
 It must be as-unnd that an institution such as the one in (piestion w^oidd 
 be plai-ed under tlic direction only of men havitig some right to be con- 
 sidered as the upttiiiati'S — tlic best men we possess in the commercial and 
 
 12 
 
134 
 
 ii 
 
 financial community. Y'et, in default of accusation b of a wor^e kind, it 
 muBt be said that no set of men erer exhibited a more lamentable amount 
 of imbecility and criminal neglect of duty than tho.se under whote man- 
 agement the capital of the Consolidated has dwindled away to nothing or 
 next to it. We gladly believe that none of the gentlemen who appeared 
 on Thur^^day and Fi-iday in this unenviable position are opt-n to the 
 charge of of benetitting by the losses which have fallen alike upon them- 
 selves and the other shareholders of the Bank. Even the misrepresenta- 
 tions with which they have been Justly reproached do not a})pear to have 
 been of that heinously guilt}' kind Avhich have sometimes been made hy 
 men who desired to induce others to lelieve them from losses. One can 
 readily sjnipatliise with the righteous anger of Mr. Allan Gilmour, but 
 when it is known that Mr. Eeekic acted himself on the advice which he 
 gave, and bought shares at the time he was advising his friend against 
 Belling, we cannot but acquit Mr. Eeekie of intentional wrong-doing. 
 It appears, also, that at least one other Director, Mr. Kankin, 
 had bought shares at a time when everj'body now knows that the 
 Bank was already in deep water, but when he still believed the 
 representations of Mr. Eenny that it was in a sound condition, 
 and consented, at that gentleman's I'equest, to sustain the mar- 
 ket by considerable purchases. But, having said this, we have said, 
 all that can justly be advanced to palliate what, except in the one 
 particular of personal fraud, is perhaps as disgraceful an example of 
 banking mismanagement as the woild has ever seen. The statement of 
 Aaron, when he was reproached by Mose§ with having led the children 
 of Israel into idolatry, that he had put gold into the fire and it had come 
 out a calf, was not more helplessly idiotic than some of those made last 
 week as to the accounts of the Consolidated Bank. Hundreds of thous- 
 ands of dollars were going into the hands of men whom none but lunatics 
 would have trusted with hundreds — and no one of those who ought to 
 know knew anything about it. A comparison of tke liability of the 
 ledger with other books would at once have disclosed the fraud which 
 was being practised — but it seems to have occurred to no one that these 
 sort of comparisons are essential to the effective supervision of any large 
 business. Every month there was a solemn account rendered to the 
 Government of the condition of the Bank, and in this statement the cash 
 on hand tigured — but no one ever discovered that (he amount of this 
 cash on hand could only be made up bj' bons, which would never have 
 been made unless by persons in pecuniary difficulty, whose bons wei'e, 
 therefore, valueless. T!ie law prohibits banks from lending money on 
 moi'tgage. tor the reason known to every num acquainted with the tii-st 
 principles of banking, that mortgage business is always deadly to dis- 
 count banks — but when a borrower, who could not pi'ocure a loan on his 
 real estate from any appropriate institution, offered a much higher rate 
 than the transaction would have warranted if the security had been 
 esteemed good by persons in that branch of business, the Bank Mannger 
 jumped at the big profit, and prevailed upon a member of the Board I 
 connive at and abet the bi-cach of the law. Moreover, this illey-al audi 
 dangerous course having once been entered on, each i-enewal of the trauv 
 iiction, instead of being regarded as a waiinng to stop, wits a renewed 
 
 SI 
 
 
135 
 
 niado 
 
 occasion for a,i v 
 thei 
 
 •-•W'l-.' "I,;,-!, ,;„...'■..," '"■■'.> IHi.lr I,, .,,1,1 ::"•.•'";' I'Hnocom. 
 
 „ ;" ) *» I- ( .111) (); ,.lt ,, I 
 
 M 
 tl 
 th 
 th 
 
 niis- 
 ->ot on Ml ', '"^^'"'- '^^-^''' the 
 
 
 r. 
 
 ■'■'" !/•'-■ M■>sra,^, s,,.u,k„„i,,„ 
 
 ", Oct'.i.,.,. -j,.,}^ 
 
 VVJiiloMvvhaw t..,.on.rp..,,,).,, 
 
 X ^"t ai inviTQ ifj 
 
136 
 
 twenty years have been comparatively insignificant, wlien the enormous 
 magnitude of their operations during that period is talccn into account, 
 it must yet be said that this in but poor consolation to the actual sufferers 
 outside of the shareholders, if they are, as we believe them to be, but few 
 in number, and for the benefit of these, as well as of the more unfortunate 
 shareholders, we would throw around ban lung every legitimate safeguard 
 that the law can give. Still we are of the opinion that the wisdom is not 
 yet evolved in the mai'ch of human intellect to devise any certain means 
 of safety. There is one thing that may bo done, howevei', and that is 
 the swift and certain execution of justice in the case of fraud ; the 
 -whole community has been ringing with charges of malfeasance; men in 
 liigh places iiave been recreant to their trust, have alienated the money 
 entrusted to them or have lavished it with reckless hands npon unworthy 
 objects. There has been talk enough, it is true, of prosecutions, but the 
 embezzler is allowed to resign and quietl}' disappear, the bank director 
 to vote money i^v thousands indirectU' into his own pocket, and but a 
 feeble pi- .^s: ised — and it seems as if the very thirst for revenge had 
 
 blinded the i of Mie deluded victim to the proper course to pursue. 
 Lot no sentiment u feeling be allowed to prevail; let eveiy man that 
 misapproprirtes funds be made to feel there is still justice in the land for 
 criminals; tlion -.ill ( "• financial atmosphere be purified, and the whole 
 •community leaiii a !(•> a ihat will have a wholesome eftect for the 
 future. 
 
 From the Montreai, Shareholder. October 17th. 
 
 A director should be a man esteemed by his fellow men ; he should 
 Hiavc a thorough knowledge of all commercial afi'aii-s ; he should be in 
 good pecuniary circumstances, and be able to devote a reasonable time to 
 the service of his constituents, and, al)ove all, he should be a man of strict 
 integrity and uprightness; for it must not be forgotten that not only does 
 a want of these tjualifications on the pai't of the dii-ector lead to inefficient 
 management on the })art of all concerned, and to consequent loss, but 
 ■will show itself in reckless perversion of his ti-ust, and consequent ruin to 
 Lis constituents and evil to the commiinitv at lai'u'e. 
 
 From the Montreal Herald, Oci ..u ." ,|. 
 
 In reporting the venlict rendere*! yestei'day by the jury in the case 
 of Sir Francis llincks, wi- must pi'onounce the old sentence, ''let justice 
 ibe done.'" There can be no doubt that the public, and especially stock- 
 liolders in banks have had gi-uve reasons for complaint of the manner in 
 which their affairs iiave been managed. The testimony of Mr. Angus 
 and other ex|)erts showed, indeed, that the monthly statements of the 
 " Consolidated " were made in accordance with the ideas, and what nuiy 
 be, ]ierha])s, ealled the system prevalent in the profession; but to what- 
 <n'er extent this may have seemed to relieve Sir Fi-ancis, by establishing 
 
 solida 
 of giii 
 this vt 
 
 trial i.s 
 
 opinioi 
 
 f'on, tl 
 
 t'oni/nt 
 
 P''opi'ii 
 

 that ^^^ 
 
 ^T^oniuM^Vi i;:;;;f;:-'^ns,vv^ m.v i... C^ 
 
 !^ thing of ,..„rs,, V \?'";^'' ""''vi'lnaJwl h,a I ?'"''^^' ^^''"■"'' tho 
 
 that no .uch stain rosf^^^^c^'^^^^^^'c-. This /h r^' "^ "'t'H-sini. 
 punished for th ' n^;,^^':". ^^'' ^^•^n<- HinHc" ^ ^ !;": ^'^ ^'^"^-^^^'e? 
 must be so- vof fi "■\'^'''-" •>« severe v as the f},l- ' ■^'''^' "^"metimes 
 
 Si^' Fi-aneis SiJ^ "^,^ '-'^' of evidence haJ :^ J^ ^"^ -;;' i'^ontLnaf 
 mind by those who " ; /^ '^^'^'"« to us that t W f , S •'' ^^^^ ^^•''»' "Poii 
 by/^tat^e/^ee^o C^:;^-!^^thetribunal w^^ '- ^o-- i^ 
 
 which, .'urine, the h tan- option ,.n the nio .1 '"■•'.^•^'v<'rne(l 
 
 ^'■''"""'•^f"-^™'-^<--:™.0.„,,,,,,j„ 
 
i38 
 
 on in the presence of a juibiic ^sentiment, or more properly of a public 
 excitement, which makes it .somewhat difticult to secure a calm and judi- 
 cial enquiry into the cu'^e. The other day in Toi-onto, the trial of a man 
 accused of murder was ])ostponed until the next assizes, because of an 
 article which had api)e!ired in one of the newspapers, and which, it wa.s 
 thoujLjht, mii;'ht jtrejiidico the case of the prisoner. That was excess of 
 caution, but the ap]jlioatiun apjioars to have beeft granted as a matter of 
 course. "We cannot but thinic tliat gentlemen occupying the position of 
 directors of the Consolidated Bank' might claim at least equal considera- 
 tion. As we have said, we make no cotnnieut upon the verdict, nor upon 
 the proceedings genei-aily. There are reflections which naturally 
 suggest themselves, but they can be postponed until the subject is out of 
 the hands of the Courts. 
 
 From (hf Kingston News, October 22nd. 
 
 The conviction of Sir Francis llincks, while perhaj)S just, will 
 prove a subject of regret on account of the venerable gentleman's age 
 and position. While guilty of negligence he has not been guilty of any 
 act of personal ci-imiiiality. His case will prove a warning to other bank 
 presidents. 
 
 agai 
 
 From the St. John Telf.oraph, October 22nd. 
 
 ^ It is a matter of regret that such a charge should be proved 
 ainst any bank president in Canada, but at the same time it is clear 
 
 that bank uifieers should not be permitted to publish false statements of 
 the condition of the banks even if they did so ignorantly. 
 
 From the BEhLv.v\LLE Ontario. 
 
 A vei'dict of guilty has been retui-ned in the case of Sir Francis 
 Hincks, chawged with making false I'eturns, as President of the Consoli- 
 dated Bank, to deceive the (Jovei-nment and the public. The charge was 
 a serious one, and hence the verdict of the jui-y must be correspondingly 
 serious. While all will regret that one who has long occupied such a 
 conspicuous place in Canadian political and tinancial history has been 
 convicted of such a crime, sympathy with the widows and orphans who 
 suffer from criminal carelessness in the management of their trusts, will 
 fiml vent in an expression of satisfaction that an example has been given 
 which will have a deterrent etfect in future. 
 
 Tl 
 over th 
 people 
 almost 
 th'fferen 
 the eVid 
 will esc 
 especial 
 than of 
 for Sir J 
 an opini 
 aj'e tree 
 ail men ' 
 bank djj-, 
 
i3f) 
 
 «•«« t,,, iu„,,™, Sp„,„„„ 
 
 Thei- • ^"■'' r.vTOR. 
 
 money for himseIC „"."""■■' "'' the bank fo" VL "'"' ">•'< ■?'''• 
 
 ^^shareholders, ,he,^. ,vra 1?''^ I"™ •■>«-'""-» Lim 
 
 •"if.'iiiijic'd 1 
 
 onThT;:;:/;^'',''"' '■'■•'"■■'-■ ••on 
 
 ^'•'"« Me Lo.„ov F„EK P„.s., 
 
 to screen certain 1- "''"''*^'* ^^^'m to put t i^ •' "''^^ ''"^ <» J'oor 
 
 pointed m tl.e hi ''"'''''^■^"^tutioiis nj, i' """^ "^^^' f<n'^vav<\ ^uw 
 
 Seeing tl^t^ ^ ^ ^l-^,;^ the ^harelK,],);!! t^,^-^i'-^^ent ottieel: I!;! 
 
 be ju«t as well if f I . , 'f ^^'''' ^^^'^ l>ickod in hi / '"''""^ ^'" ^^'"'v- at 
 to believe tl^ ^i^^^^^":^^^'^^ ^^ -^ -Xd ^ ST /"^^' '^ -'^'^' 
 01- that the testirnonv ;Ar T'^'' ^'^' ''cin a 4ate !in' "T" ^^^'^^ ^^^ 
 looseness has nrev'^il' , ^ ^^"^^^^^^ than <,thers. 
 
 -i^'ATREAL Witness. 
 
 the evidence ,1 ™"'. "^ "'••""• I'cople' „ . L If,' ' ""' ""'>• heeanse a 
 
 will e«car,e'i,t ;:,::;;::; t" •'?''"-"".' '"!-n^:'; -t , "iXJ'*' """■■'" "^ 
 
 «specially.,o «he., H "np"i-t.-int person wo,, «. '' S''™t Pinn 
 
 than ofintent o .J ■'"•"^•■"i"'r is |.a,ire,. of i, , ' "ffc'-and this u 
 
 ?« opinio^r^ihri;:;- 1 •i,"!!-';^- ■» o..'/n:;iuninn, r^,-'-- 
 
 «" men who -Lvo r". 'r"'' """ '-^'-diot >• ', ? "'' "''" ''""''■ "'" 
 
140 
 
 isuc'h 1 ositioris should considci' before aeeej>tii);[j: wlietliei' iliey arc preiiar- 
 vi\ to ir.sist on a coiniilete kiio\vIetl!;'e of' the aflaii's ot the iii^titiilinii 
 which they ai'e siipjtoscd to eoiitii)!. and to hold tllcIn^elvos fully res])oii- 
 (siblefor all that is done hy such institution. Jf not. let them stand aside 
 and make way for some one who will. Sloekholders too must be prcijai'cd 
 to face a demand foj* hiijlier compensation for diicetors whose duties wilt 
 be so much more onerous. 
 
 From the Montreal Post, October 23rd. 
 
 The late vei-dict jtassed upon Sir Francis Uineks. and its probable or 
 possible results are beiuLT vigoiou.-ly discussed, both in convei'satioii 
 among business men and by letters to ncAVspapei's. The clause of the 
 Act beai-ijig on the ease seems to point out clearly that impj-isonment 
 for any peiiod, not exceeding two years, at least, must follow such a 
 conviction, yet the impression prevails that the prosecution will ni>t a^-k 
 for judgment, and that the verdict will be set aside. Tbe foi'leilure of 
 Ids title, and of his pension of .t!l,0()0 sterling from tbe Britisli 
 (fOvernment, in consequence of the veriiict, are also matters upon which 
 speculative opinion is J'ife. These are all (juestionH, howevei', which the 
 Privy Council and Courts have yet to settle, and, therefore, "we refrain for 
 the present from expressing any opinion as to the justice of the verdict, 
 further than to say that the indictment seemed to us rather a vague one 
 from the begininng, inasmrch as the Directors of no Bank in the world 
 are or can be held directly responsilde for the accuracy of the items set 
 forth in Government statements, and especially when so many agencies 
 are involved. This was clearly demonstiated by the testimony of Mj". 
 E.B.Angus, of the Bank of 5lontreal, and of othei- bankers called as 
 witnesses. The responsibility, so far as any criminal action is concei'ned 
 at all events, must rest upon the (lenei-al 5lanager and accountants. If 
 the indictment had charged the directors with falsifying statci \ents of 
 the affairs of the bank, made to the shareholders over their own signa- 
 tures, both at the last annual meeting and since through the public 
 prints, then we thirds there would have been some gi'ounds for a 
 "thorough legal investigation," and it might have met the case befbie 
 the shareholders and the public generally. As it is, leading bankers and 
 all well-informed financial men legai-fl the verdict as largely the result 
 of popular feeling and indignation, and it is understood that efforts will 
 be made by counsel for the defienee to have the conviction quasheil. 
 
 i 
 t\ 
 ir 
 k( 
 
 Uu 
 thi 
 
 Nfii 
 
 spo 
 
 wlu 
 
 jnii) 
 
 hovi 
 
 0])in 
 
 and 
 
 Judg 
 
 the n 
 
 the c 
 
 more 
 than \ 
 single- 
 that tj 
 fiftov a 
 •'I'vvayM 
 throiio- 
 ■in fra'n 
 Tl 
 .^•I'ave ( 
 bank Jia 
 wei-o pv, 
 *ha/i wit 
 ^he mos{ 
 itttribiifl 
 ^•annot I 
 
 [nst Tno 
 erni of 
 pautliv..^- 
 takoii bet 
 
 T 
 
 ■Si 
 
 Fro:- /(e Journal of Co.MaMEiiCE, October 21th. 
 
 The pi'incipal topic of })ublic discussion during the week lias beetiK 
 the trial of Sir Fi-ancis Ilincks bef>re the Ciairt of (Queen's Bench, M me e\ 
 
 charged with having, as President of the Consolidated Btmk, signed aM *h"it, altlioi 
 false return to the Oovernment of the affairs of that institution in Febiu-J '''lal, \vq l)^ 
 
 subject. Si 
 
 n 
 
lioii 
 yioii- 
 isido 
 ai'cd 
 will 
 
 le or 
 itioii 
 ■ the 
 meiit 
 eh a 
 t :ih.k 
 re «)t' 
 ritish 
 khich 
 1 the 
 in for 
 relict. 
 > one 
 
 A'Ol'hl 
 
 is bet 
 .•neiert 
 f Ml-. 
 ed as 
 einecl 
 i. If 
 !nts of 
 hijgna- 
 public 
 
 for a 
 befoie 
 rs and 
 
 result 
 .s will 
 
 s Lh'CuI 
 
 Bendi, 
 
 i;ue(l 
 
 FebLU-j 
 
 vow (/le 31 (..V 
 
 'rHE.W. .SilAUKIl 
 
 Th 
 
 that, altl 
 
 ^ oveiil nfn 
 
 'Lueh^ ()e(,,l 
 
 ti'in]. 
 
 lOllo;-}) 
 
 SU 
 
 bject 
 
 '^vo believe 
 
 W(^ I 
 
 It-' \V('olc is sr 
 
 •(•f24ll). 
 
 'P''e.:;-iiaiif with 
 
 .Sir F. 
 
 '^^ve alcea-iy <|pvo(e<l ,. 
 ourselves justitivd ,-,. ,| 
 
 o much (tf 
 
 '•incisHinekshas b 
 
 welj 
 
 /no- 
 
 ;•»'• ■^]>aee ti, tJ.o J 
 
 '^'" fonde/nned /bi 
 
 i'^ fi little j 
 
 iiUiro 
 
 I to 
 
 ,7"ger on th( 
 
 "0 ordinary ofto 
 
 nee. 
 
142 
 
 II has not ovon Ijccm \vhisj>ero(i tlitil lie has appi-ojM-iated to his own 
 pi'opo/' use any of the funds entrusted to his rare; no oiu; has accused 
 liim oi' leuilin/j; hii'ijo nums to any of his relatives, neaj* or distant ; indeed 
 it may aluK^st be sai<l to have heen shown that, in al! ;hes(^ points to 
 which the masses have heen accustomed to attach tlic ido;* of moral turpi- 
 tude, there was no guilt attached to the deleiKhmt. The odenco was of a 
 more suhth^ doscri|)lion. H was as if the JjCij^islatui'e. rep res(ui ting- the 
 whole of the iidiahitants of Canada, had said : '• We Urc w'Miny to confer 
 ii[ion certain individuals all the great and invaluable privileges attached 
 to incorporated companies for the purpose of Joint-stock Lauking, ar ' *^he 
 issuing of notes to be used as currency ; my, more, we are willi ,o 
 confer on these individuals a monopoly of the supplying of these notes, 
 and to enact penal laws to prevent others from infi'in;ging on their rights 
 in this respect ; we are willing to trust to the good faith and honour of 
 these individuals that they will not abuse these privileges, and as a 
 pledge of their tidelity we require at stated periods a full and particular 
 account or return of their operations under our trust. We require them 
 to state in these returns the result of their business transactions once a 
 month for the pui'pose of enabling us and the electors of Canada who, 
 through u>, have conferred these j)Owers, to Judge what use they have 
 made of theii' i»rivileges. These returns are intended to enable us and 
 the public to Judge whether these privileges have been abused or not, and 
 whether these incorporated banks continue to mei-it the contidenco re- 
 j)'>sed in them.'" 
 
 AVe believe tliis is in effect what the Legislatui'e has said, aiv' is 
 also evidently the view the Jury took, and notwithstanding th is 
 
 seeni> to In.' a fea>on;d>K; interpretation of tlu' wishes of the LegislaLi»re, 
 the Con.solidaied Ba.ik wiien in disticss (.leliberately over>tat(.'d its notes 
 discounted cui'rent. tiiiled to return large amounts of overdue and un- 
 secured loan'-, many of wliieh were indeed worthless, and told the 
 Government and peopK- of Canada that the amount they had l.toi'i-owed 
 to .stave otV the evil day al exorbitant rates of interest had been rocdved 
 in the oi'dinai'y course of l)usiness. This is the gravamen of the offence 
 ♦'haryed. We reu,'''et to sav that the idea is abroad that such practices 
 are common auiongst liankers. We do not believe it. That some have 
 been guilty we do not doid)t, and we believe that those who have will ere 
 long tiiul thev have undertaken a task beyond theii* sti'ength. In any 
 case the result of the trial will have the effect of ins])ii'ing a greater 
 respect for our banking laws, and more contidcnce in t! 'dture of our 
 baidvinu" esiablishments. 
 
 From the Canadian Speitator, October 25th. 
 
 There can be no doubt that there were gi-ave iri'cgularities in the 
 management of the ^Montreal branch, and that mucdi miseiy an(i suffering 
 liave ix'sulted to the shareholders from the failure of the baidv. It is 
 gi-avely to be feared that these considei-ations have at this time unduly 
 persuaded the jury to convict. Whatever the result may be, it is matter 
 
not flJ1^/^.. ;_ . . ~ ' '■!. 
 
 ^0 8hall nc ^'^'^ ^LD, Oetobor 27th 
 
 animals if iV. ' ''' 'i f>i'oe,(i.i- w„„] . '*"»« "s tij,. ,„, , , '"""■", and 
 
 ".iters '.''""'Mi"* 
 
 oankmir, and the 
 
144 
 
 word discounts certainly can only in ntrictnetsS apply to advances on 
 not^s with two namoH, ropi'esentiug in general real busineSH transactions. 
 Whatever reason, howevcj", theje may be for this way of classing a 
 transaction, in which a Bank intentionally, and from the tirst lends 
 money on a single name, with or without collateral security, such 
 ciassitication cannot be admitted to cover up and dispose of the previous 
 false enumeration of personal and worthless bons as if they wereg(»ld or 
 legal tenders. For that Sir Francis was not responsible. The mistake 
 in reference to this part of the case was in assuming the wi'ongdoing of 
 others when he became aAvare of it. 
 
 From the Journal ov Commerce, October .31st. 
 
 It is not a little extj-aordinary that although many years have 
 elapsed since the [>assagc of the Aet relating to Banks and E-inking, 
 there has been no discussion l>y the j)ress until very I'ecently as to the 
 tbrm of the returns to (iovernnuMit, although it has hven admitted by 
 Bankers in their evidence in the late trial that there was a great deal of 
 uncertainty as to the proper mode of classifying such ordinary banking 
 transactions as loans from other banks and ovei-drafts. The publication 
 of a letter addressed by Sir Fi-ancis iliiuks to the Hon. Isaac Buchanan,, 
 of Hamilton, which will l)e tbund elsewhere, has led our daily contem- 
 porary, the Montreal Herald, to enter its pi-otest against the allegation in 
 that letter that the returns signed hy the wj'iter wei'c in accordance with 
 the law. We cannot congratulate the Herald on the ajypositeness of his 
 equine con\j>arison. Admitting that a breeder of horses would give ;i 
 false account if he enumerated his stidlions as so many mares, we wouKl 
 ask the Herald whether, if the said breeder wei'o required to make a re- 
 turn undej' speciric beads of his stock of various descriptions, and tluit 
 there was but one heading for horses, he would be guilty of deception if 
 he returned both stallions and mares under the general head of horses. 
 We might be I'eady to admit that, if the Hanks were calle<l on to rendci- 
 a true account of theii- condilion in their own wa\- and on theii- own le- 
 sponsibility, loans of the description of those wliich, as the Jhriild oh 
 serves, imply {(overty would not be properly classed with de}»o,-its. The 
 banks have no such power. Init must tbllow the j)rescribe<l foi-m. Tn- 
 tbrtunately for the Herald's argument no distinction is nuide in the 
 parliamentary classitieation (and moreover it would be found veiy ditli 
 cult to make one) between loans made by one Bank to another foi" the! 
 convenience of the lender and for that of the b(jrrowur. The items in the 
 returns under the general heads of liabilities and assets ai'e 2!> in numfn'r 
 and yet such ordinal y banking transaction^ as overdi'ai'ts and time l<jan> 
 from other Banks have been for numy years returned under diilereiit 
 heads by the Baidvs generally, and it is oidy when a conviction lor wilful 
 deception has taken place that the press has t; !;en up the discussionj 
 The //<Ya/(i does not state how these transactions should have been i< 
 tu.'ned. lie simply objects t(» the heading ailopted. 
 
 J 
 1 
 
 V 
 h 
 
 a J 
 
 in 
 
 rej 
 Ht 
 
 te,-. 
 
 con 
 Jate 
 bejj( 
 
 n\ 
 
 treat 
 
 in th 
 
 thou^ 
 
 J" xh 
 
 ftii'Mis 
 
 of the 
 
 ^Tovei- 
 
 '■e^soii 
 Ti 
 the «ii[ 
 iicnd w 
 " -ParJi: 
 "«gainj 
 one ob.s 
 not ^eenl 
 <"oliiniji 
 Would \m 
 one. \x 
 ^^ adoj)(( 
 ^^•an,s;Kti( 
 •■'eceptive 
 the Um'vo 
 been giv,. 
 ii-om the i 
 f^> to p,,, 
 
 ifO'n anof/ 
 Baj]jv ,.e(j„l 
 
'"'«"■„ to ui'r- J"''"'""! imi;^ "■■"""• "<"'«>." .4f ;•"■>■ '•'■'.""•o 
 
 '" a Pi'a.(( , *>'''^' "■'■'li \vilf„ V . ■'* •'> "theiN .,/, V'"^'-' ''Of,, „.,.it 
 
 -" ',;!:{?,,«-'- in. /««,:,";;; .«':;,^-r,-o„ be...™;e'' 1.;' -*io„ .;,!' 
 
 president is .."l, .,7. ""',"' ''""''•- as u.;!)'"'' """""jrh it nmSt i;^|.'"T'"'«- "i" 
 
 '"o.st in .' '":"0'o;y,.,. „,.,,'" '^-■Si^torue when J,e I , .'"'° "" ch„„„„ 
 t'-iaJ thai M ^^' /^''^' ^^^nJ>l(' ' ,11 "''^^'^^^''''^ ^nhe b' / r''""'^' ''^- the 
 
 ^'-^-i - ^>i ;;;t ^^ ^'- p^^Zn'Z'^^r ^^^^^^^^^ "" ^^^ 
 
 1" the rotun. .. '*'^'*'' ^^'"<'t-ivs as t '/v ^ ''"■eet,n-,s. 'jilV ''M'^i-enMy 
 ^^^-^•gii the i '^ -^ '^' ^"''.Vu-av\^;^**:f-,A/affi,,„, ^|^ ^^^-'^ nev^ 
 
 fill 
 of ih 
 
 
 /le I'et 
 
 " as tht 
 
 '•etu 
 
 'JJient th 
 
 ^^,_,'/'K' Montreal ,>/h'<.. ...'"' ''aiance ,sl,^.. 
 
 '■"' and (u niai, 
 
 '(t it 
 
 (-ra/d 
 
 '■t-^soii to 
 
 ve 
 
 * ill'ticj 
 
 y Hec 
 
 a I oiii 
 
 t'le «uh 
 
 
 ''"j>iaiu tj 
 
 
 ■t't', were who]] 
 
 at ie, 
 
 sist, u 
 
 sjjeet, 
 
 liii it 
 
 It in /•„, 
 
 iiend 
 
 j^et 
 
 J » mill If Is •! f. -••>Mit- (^1 
 
 ",'"!' ^'aiik (,H 
 
 ''<'<-'Ollsi(io,. f/ 
 
 * <-'y'iVjiie,' th, 
 
 will 
 
 '" a .indicia/ 
 
 '. ^^''ich ha.v 
 
 coi-s will 
 
 lo t; 
 
 oi'l/j of 
 
 "leet witl 
 
 a^'j'anient „ext Ne 
 
 against a 
 ne oh 
 
 I'e 
 
 <«ioji to 
 
 '^|"W(. aiT 
 
 'f '-^ dithVult 
 
 'iui i 
 
 lave 
 
 'VO.s 
 
 ai ion 
 
 — -" io ■nnrrT''' ^''at 
 'l'^^"''<>'M,r thcs . . "'' f.^^^'^^an/, 
 
 
 '>" uhi,.{, ,^, 
 
 ■'t will i 
 
 ■«* .'I 
 
 
 '.y -Vcf 
 
 ^ tilt' (i 
 
 f^^'^'iii to est 
 
 '•^o as to 
 
 ij'/»re- 
 
 '"y of 
 
 ■ '^ I 18 1 1 M I w >,...'.' I I 1 
 
 ^•>'.^''^"no„,,/^';^:;^''atisthat ], 
 
 Mot 
 
 u-e 
 
 adoj)to(I 
 
 I— - . v,il l^t!(| ji,,, ..wiui-. 
 
 't' c-an.ctj by 
 
 '3- anj 
 
 "<''i head 
 
 fk.. / ^^^- A loan ninv- /... .. '!^'.\^'^' "lo veiv,.,. . 
 
 That h 
 'It Would j 
 
 ead 
 
 I""ovidin 
 
 ;""'>\ide 
 
 ave hut 
 
 <' does 
 
 l.'U 
 
 i"i( Wo ad' 
 
 (' J' 
 
 >y any oihei- U 
 
 'iisiid 
 
 mit 
 a new 
 
 the borrowing ,,,,^:- 
 ueen Afip<.ii .. .^ 
 
 '^» given -t 
 
 ^;,;'i"L^-""^.i-^";'?i:'^::"; "';'/. 
 
 '"^ ''auij'e of ai 
 
 'at couhi 
 
 l\' Lr 
 
 tven. 
 
 from th 
 
 ■'^'"'g in tile /, 
 
 J>''<'1) an ^nst 
 
 ;!-j^ankt;-:^:'!''r/«-''"ga;i 
 
 oast diffieiilti 
 
 0J-, t 
 
 u 
 
 put ti 
 
 ';v™-k-.:;i,v: ;''":""•: ^1,/;; 
 
 unoti 
 
 t'"o:n anotJ 
 
 'e ease nioi 
 
 ^^^■;::;;:;::;r;::r*- 
 
 ■o t;«'i'i'e((lv. il 
 
 '^' *>''/c^V^^' i., th 
 
 'le 
 
 tlllL'- 
 
 It. in 
 
 '■■ "■• "itiZ '■':: T'">-" 
 
 'g^''" to be 
 
 t>'it its i-j, 
 
 'iVlIM 
 
 ^J»J'J'i'hended 
 
 ami 
 
 a pan 
 
 * pt'Ojl 
 
 aiKJ 
 
 I/, r . ^ I ' i ' ••III 
 
 '^ '" "ic' stock, Tl 
 
 T"- '' "^*giit b, 
 
 
 inge 11 
 
 oan. 
 
 il'* a CO, 
 
 a.s«un,ed thatch 
 
 ICiC i 
 
 ^V>"«'liank 
 
 ^ n(»l 
 
 i: 
 
 :7i"^''.'C'o, (here mix , » ''""fe' 
 
 ^'<^<e?'^, 
 
 ^•^ article to 
 
^1* 
 
 ■r M 
 
 146 
 
 lead us to suppoBe that he has suffieienily considered the danger that 
 might be ineuiTed by a bank borrowing merely for convenience, and not 
 at all from necessity, from publishing the fact that it had obtained time 
 loans. That view, however, will rcqiiiie considei'ation when the amended 
 form of return comes up for discu>.'?iuii in Parliament. 
 
 From the Journal of Coimmerce, October 31st. 
 
 In our last issue we expressed an oj^inion that while the cahe against 
 Sir Francis Hinckis, as President of the Consolidated Bank, was still 
 sub-judice, it was premature to make it the subject of discussion. The 
 reservation of the points of law, on the motion of the defendant's counsel,^ 
 has been granted by the judges, but months may elapse before the full 
 court may b« called on to adjudicate upon them. Meantime the press, 
 especially in the sister province of Ontario, has had no scruple as to the 
 propriety of discussing the vei-dict, although we regret to have to state 
 thai the spirit is far removed from what we should tei'm judicial. There 
 are, of course, sevei-al exceptions, and notably that of the Monetary 'J itnesy 
 which has treated the subject with an evident desire to give fair play tO' 
 the accused. The article in the Mmietary Times discusses two wholly 
 distinct subjects, which have, nevertheless, been very generally treated 
 as one, the writers for the press being apparently unable to perceive the 
 gross injustice of their comments on the proceedings in court. Those 
 subjects are : the charge of making false and deceptive returns to the 
 Grovei'nment, and the charge of negligence or incapacity in the discharge 
 of hisduty as President of the Bank. We purpose reviewing the article 
 in the Monetary I imes under both heads, but at present we shall confine 
 ourselves to the one which treats of the trial in the Criminal Court. We 
 cannot discuss the subject satisfactorily without noticing that the 
 Monetary Times has arrived at the conclusion that Sir Franciw Hincks 
 was guilty of negligence. He, however, admits that there was " nothing 
 in the evidence ' to show " deliberate intentional fraud." And yet the 
 charge on which the trial took place was that of wilfully making a false 
 and deceptive return to the ( Jovernment. Hardly a journal that we have 
 reail has ti-eated the case on its merits. We do not, hoAvever, teel 
 disposed to notice at present those articles, which are evidently written 
 without the slightest pretention to impartiality or fairness, but shall 
 endeavor to discuss the subject with the Monetary Times in a spiiit 
 similar to its own. 
 
 We should infer from the remarks in the Monet ry Jmits that tlio 
 I'cturns were made out under the supervision of the General Manager, 
 Mj'. lienny, and that it was not ])roved that .Sir Francis Hincks '' took an 
 active part in the yu'eparation of the returns," that there was a disposi- 
 tion in the writer to throw blame on the Genei'al Manager for falsifying 
 the returns. ]S'o such defence was set up. The officer who had been 
 chief accountant in the Head Office, and who subsecjuently became inspec- 
 toi', proved in evidence that the return on which the cliarge was based 
 was made out pivcif-ely in tlij same way as it had alwa}s been since the 
 
 I 
 
 1 
 
 ii 
 
 Cf 
 
 in 
 
 nn 
 
 Th 
 
 hut 
 
 evi( 
 
 jmln 
 
 not < 
 
 hii(\ 
 
 extr; 
 
 ^een 
 
 Mone 
 
 >*iihjec 
 peing 
 
 *o the 
 ^o us. 
 
 *"^t depyj 
 on (iepos 
 Payable i 
 Jet Uv. I 
 
 l^^ street 
 bankn wei 
 
 ^, '^ ^^ «< 
 a motive 
 
 -^J^SUh or a 
 placed, had 
 
 ftl« "'' ^»^'^- 
 "le very ^e^ 
 
 ^'thout dw 
 
 
148 
 
 Monetary Times is by no means satisfactoiy. Tt mast be borne in mind 
 that since the passage of the Banking Act, neai-ly ten years ago, no less 
 tluin two amending Acts have been passed rehiting to the returns, and 
 yet the heads are" still so obscure that we are told that whichever form 
 is adopted is " a choice of evils.' 
 
 \Vo proceed to consider what the Monetary Times has to say regarding 
 the alleged falsitication of the assets by placing " ovenirafts" under the 
 liead of notes and bill^ discounted and current. It cannot bo denied that 
 the general usuage of banks has been precisely that of the Consolidated, 
 -ai)d it is certainly going a great length to affirm, as the Monetary Times 
 does, that overdrafts " ought not to be permitted at all, as the return 
 giv9s no place for them.'' It may be acimitted that the English form 
 *' bills discounted, loans, overdrafts, &c.,'' is more precise than ours, and 
 that if it be expedient to have the overdrafts stated separately there 
 should be a distinct head, us in the United States. There is in our return 
 .110 heading under which "overdrafts" could be placed but bills discounted 
 iind current and "other assets not included under the foregoing heads," 
 and to rlace them unirr such a heading would really convey no informa- 
 tion either to the Government or to the public. At all events, the Con- 
 tiolidated Bank never from the period of the tirst return for May, 1876, 
 .placed any amount under either of the heads " liabilities not included 
 under the foregoing heads '' and " other assets not included under the 
 foregoing heiuls." Those headings are held by the executive of 'li.-it 
 Bank to have been intended for items wholly unforeseen by those w lo 
 prepared the return. Neither time loans from other banks, nor over- 
 drafts, which are ordinary banking transactions, could possibly have 
 escaped notice. The infei-ence is that it was not deemed expedient to 
 place them under specitic heads, and there are obvious objections to a 
 statement of the former, owing to the widely diflfei-ent circumstances 
 under which loans to banks are made. It is far from unusal for a bank 
 to make loans on a deposit receipt for its own convenience, either for the 
 i)urpoeo of making use of surplus funds or of selling sterling exchange. 
 If all such loans had to be stated, the borrowing bank would })q exposed 
 ito the imputation of l)eing so weak as to have been compelled to borrow, 
 aud might be subjected to remarks which would etfect its credit. What- 
 lovor may bo the judicial interpretation placed on the particular items 
 .which have led to the late criminal charge, we cannot entertain a doubt 
 that the subject will be promptly taken up by the Government, and the 
 icfvm of retr.Mi amend I. .s the Monetary Times justly observes; 
 ■" There is also clearly a ui: i (•♦•on between the floating balances which 
 a^'isoH from day to day in ii.^ dealings of banks between one another, 
 jand the loans which are sometimes made by one bank to ;another for 
 ina\;i;il convenience. The return, however, provides only for the former 
 of ' ii«' ic. It is this want of completeness in the form of return which has 
 le. the diversities of practice among bankers with regard to the item 
 ITc t* \;a\ to, some contending that the two should appear under the one 
 |j©«. . .g, and others urdei- another." 
 
 
 T 
 
 Rsqu/i 
 politic 
 ^usinef 
 
 fiated £ 
 Canada, 
 '^ed anc 
 
 Afontreii 
 subscrib 
 (ioJ]ar«. 
 
 \o BankN 
 ^''inada, ( 
 
 •^'^^^ai- and 
 part x\,Q , 
 
 Bank in c 
 
 "^PositH b 
 
 'i^hQv part 
 
 fnd the a 
 
 oaianccN yj, 
 
 f^^e real an* 
 
 i?„^^'<3Ban-^ 
 
 biHsofexc 
 
 'Statement 
 
 ^y ^he Bani, 
 
 ;''«o the rate 
 
 I 'ne amount 
 
 
 ti 
 
^^E CIVIL SUITS. 
 
 
 i \ ■ 
 
 ^^^ 'It real. 
 
 SUPERJOR COUR 
 •'0H>. MO.VK. /.,„.,,, 
 
 T. 
 
 VS. 
 
 Canada J n? ^'*"'^'''* ^vus incor 1^^";^' ''"^' "^i-vu- ' v h '""^ ''^'Wares-^ 
 
 if ^ ^^ e!^ ti:;:!;'^'*' ^'[^'-- -Slip- - ^^ oi^ih ^^f/ ^'"-on- 
 
 TJiflt M 1 niiljjon fiv.. I i Canada, it« 
 
 ^^'-^Janc-es due to ,e R. ?'"''^'^^^ "otcs h "f.^^ .^^?''i and sf,; ' /'^/^'^ 
 t^'e real and nfi> "'^'*"^^' ^''oin ofhn,. « . "® ^'-tu ts of m ,> ^'"'^'on, 
 ^0 the Bank ?^?" P^'P^'^r of th e ,t"'^''^ ^»"<J instit,, ^ni ..^^"'"^' ^h^' 
 
 statement ir. -^,'.,"''^<^<>(intod not.^s: . ^^"S tne aniotinr^ . owirjr 
 
 ^3- tho Bank 'in I'*'" "" "'^ " " nn?7h'^''P ••">" « h-^' ,«.,"^ "« "i""' 
 
 * ^^'6 said dividend' 
 
150 
 
 »nd the amount ot debts due to the Bank, overdue and not paid, with aa 
 estimate of the lows which miij^ht probably accrue thereon ; and the naid 
 Banlc waM also bound to malie monthly returns to the Government in the 
 form, and at the times prescribed by law, exhibiting the condition of this 
 Back on the last juridical day of each month. 
 
 That in and by the said statutes relating to Banks and Banking it is 
 enacted that no dividend or bonus shall ever be made so as to impair the 
 paid-up capital of the Bank, and that if any part of the paid-up capital be 
 lost the directors shall, if all the subscribed stock be not paid up forth- 
 with, make calls upon the shareholders to an amount equivalent to such 
 losses, . (1 such losses (and the calls, if any) shall be mentioned in the 
 return on next made by the Bank to the Gij^vernraent, provided that in 
 any ca whei-e the capital iias been impaired as aforesaid, all net profits 
 shall be <ipplied to make good such loss. 
 
 That, on and before the 20th day of April, 1878, the paid-up capital of 
 the said Consolidated Bank of Cansuia had been, to the knowledge of the 
 said Bank and of its diiectors and officers, largely impaired, to wit, to an 
 amount exceeding one million dollars; but the directors of the said Bank, 
 on or about the last mentioned day, fraudulently contriving and intend- 
 ing to conceal the tri),i state of the affairs of the said Bank, and to induce 
 the plaintiff' and others to become shareholders in the said Bank, whilst 
 the said paid-up cypital was so impaired as aforesaid, illegally and will- 
 iully declared, and subsequently paid, a dividend of three per centum, 
 amounting to the sum of 1104,020 60, thereby further impairing the 
 same, and on or about the 2'3th day of October last, 1879, the said 
 directors, whilst the said paid-up capital continued so impaired, and had 
 been still further largely impaired with like knowledge and fraudulent 
 intent, illegally and wilfully declared, and subsequeiilly paid a dividend 
 of three per centum, amounted to $104,020 60 upon such paid-up capital, 
 thereby still further impairing the same. 
 
 That although well knowing that a large portion of the capital of 
 the said Bank, to wit, an amount exceeding two millions of dollars, had 
 been lost, and although all the subscribed stock of the said Bank had not 
 been paid up, the directors of the said Bank fraudulently contriving and 
 intending to conceal the true state of the affairs of the Bank, and U) in- 
 duce the plaintiff and others to become shareholders in the same, illegally 
 and wilfully neglected, from and after the said 20th day of April, 1878, 
 up to and including January last, to make calls upon the shareholders 
 and to mention such loss in any of the monthly returns made by the said 
 Bank to the Government, and to apply all net profits to make good such, 
 loss. 
 
 That on or about the 8th day of June, 1878, an annual meeting of 
 the shareholders of the said Bank was duly held at Montreal aforesaid 
 for the election of directors, and at such meeting the then outgoing 
 directors of the said Bank, pretending to comply with the provisions of 
 the 36th section of the Act 34 Yictona, chapter 5, but fraudulently con- 
 triving and intending to deceive the said siiareholders and the public, 
 and to conceal the true state of the affairs of the said Bank, and to induce 
 the plaintiff' and others to beconte shareholders in the said Bank, sub-. 
 
"^'^^^ to the saicl , ^^^ 
 
 - -tut- scute oi' th,. Mfp . •"'^■'^'-J 
 «nd others to i 'Whjj-.s of (i , 
 
 accuracies and f i ^'''''' «*« ^'> ^et fovth ., 
 
 otherwise by the .^' -'/'^^^^"^'"t. rm de in ,f^' P^niculars of these i. - 
 
 ^"^ofJa„,,^-t'^;ofOeeen.w' ^:^^ 
 
 dividends had ^JenVf '?''' P'«'''tift- rcj\^^/" '''"^^ '^^^ludin;.. the "S 
 
 -^ being .;^,^-^j^^;-'..K,,,^ t4t t ;;;;:/ 
 
 as aforesaid, and vf^hZ 1 '"'""'•' meetin.r .,n i . "* •'^"t>'»Hted to the 
 
 ^ That on or about tf *J^olS.oO which .sharen 
 
 ^^<^^^:t^^:;^^ -<i consolidated 
 
 «aid Bank had beco^ ''''" ?^' ^^^^ '^'^' who e of tL ''T" ^"^>^" '^ the 
 twentj^-seven 8haie«Tf .f'^ '"^'^ '^^f' and the nf't^P' ^'"P'^^^J o'" the 
 
 ^«rthJe88, and the said '^''lj^'^''''fi«:have^^^^^^ ^? P»''cha.sed and 
 became whoijy osV"^^,^"^'^ f «^8'5 78.50 pa'vibr?^^ ^''^^^^^^^re wholly 
 «?d dul beeon^ ^l^i"?-. ^^at the .aid rd^ nt;^.. ''^ ^'^^ P^-Mti hi 
 
 ""u UK, become a ^h^./L \ '"'" tiie .aid Dj-iint;^ • ''*"<^' pJaintitt ha 
 
 shares by the saiVt" -audt I ^f 'i ^'^^^ «-Kk 1^ to becom. 
 the sa d n..r.u „ . :'«*U(iulent aiK ilU„.i „/:^"'^ /or the sa rl nn,»i 
 
 the said Bank 
 
 and 
 
 iJiegaJ 
 
 o*" «*tLfci an 
 amount of #25,000, 
 
 sustained 
 
 omission 
 
 lent and illegal 
 
 •me 
 
 — o«iu jjank and it^ r"-^'^^ uuu illegal acts .,,n,j • ^^^'^ "u 
 
 acts 
 
 rirrL'"'i-"."ti> 
 
 ««id number of 
 ceisaid of 
 
 '^'•^'^aul ban been cau ed /''^^''Y'^^' «nd the 
 
 "^ V which he hZllL^^\'r^' fraudulent 
 
 ^** '"^^''•^^d damage to the 
 
' . 152. 
 
 By moanB of which said scvei-al premises and by the law the said i 
 Consolidated Bank of Canada has became liable, and being so lia&le has 5 
 frequently promised to i)ay to the said plaintitt' the said sum of 125, 000^ i 
 but now refuses to do so. Wherefore the said plaintiff prays that the i 
 said Consolidated Bank of Canada, the defendant, be adjudged and con- • 
 demned to pay him, the said plaintiff, the sum of $25,000, with interest > 
 and costs, including costs of exhibits. •' 
 
 J. P. BUTLER, 
 Montreal, 8th October, 18t9. ,■ Attorney for Plaintiff., 
 
 * ^bs» W^^jtLj^A .^i^fc. ' 
 
1 
 
 INDEX. 
 
 '1 .. / 
 
 History of tlio Bank 
 
 Annual M<!oting 
 
 President's Statement 
 
 General Statement 
 
 Discussion 
 
 Spe.Mal Statement of July 1 ," , 
 
 Suspension 
 
 Meetinf^ of Shareholders at Mr. Bonds and Correspondence. 
 
 Meeting of Lady Shareholders 
 
 The Gilmotu-Iieekie Corres|>ondcnce 
 
 Special General Meeting 
 
 Mr. Renny's Re;iignation and its acceptance 
 
 Statement to lUst August 
 
 Indictment of the Directors 
 
 Arraignment of the Accused 
 
 Motion to quash the Indictment 
 
 Argument on the Motion 
 
 Mr. Kerr 
 
 Mr. Macmaster 
 
 Mr. Ritchie 
 
 Mr. Wotherspoon , 
 
 The Objections Overriii''! 
 
 Sir Francis i.incKS on his Trial , 
 
 Mr. Ritchie opens the Case , 
 
 Mr. Courtney's Evidence 
 
 Mr. Campbell's •' 
 
 • t • • • • I 
 
 Mr 
 
 Lau.son's 
 
 (( 
 
 Mr 
 
 Hughes' 
 
 a 
 
 Mr 
 
 Pridham's 
 
 11 
 
 Mr. 
 
 Kinnell's 
 
 (■' 
 
 Mr 
 
 Grindley's 
 
 u 
 
 Mr 
 
 Cassilg' 
 
 li 
 
 Mr. 
 
 Buchanan's 
 
 (( 
 
 Mr. 
 
 Burnett's 
 
 a 
 
 Mr. 
 
 Wethay's 
 
 i( 
 
 Mr. 
 
 Turnbull's 
 
 II 
 
 (> 
 6 
 
 8 
 
 10 
 
 21 
 
 21 
 
 21 
 
 24' 
 
 28 
 
 32 
 
 ;V2 
 
 34 
 
 57 
 
 58 
 
 59 
 
 60 
 
 (50 
 
 (57 
 
 68 
 
 70 
 
 71 
 
 76 
 
 76 
 
 7r> 
 
 30 
 83 
 34 
 84 
 86 
 86 
 37 
 88 
 88 
 89 
 92 
 
154 
 
 PAai 
 
 Mr. 
 
 E. L. Boad's 
 
 
 Mr. 
 
 Kinnell's 
 
 
 Mr. 
 
 Pridham'i 
 
 
 Mr. 
 
 R. B. Angus' 
 
 
 Mr. 
 
 Ingram's 
 
 
 Mr. Struthors' Evidence 93 
 
 Mr. A. B. Stewart's " 93 
 
 93 
 
 ; 94 
 
 94 
 
 95 
 
 99 
 
 Mr. Kerr's Adlrcss 103 
 
 Mr. Ritchie's <' 107 
 
 ■ Mr. Justice Mnk's Charge Ill 
 
 ■ The Verdict 114 
 
 Motion in Arrst of Judgment 114 
 
 Motion to hav Points Reserved 115 
 
 The Point.s Rcjrved , Ii7 
 
 Mr. Saunders' Letter 118 
 
 Sir Francis Hincks' Isply 120 
 
 Letter from Mr. WetHy 122 
 
 Reply of Mr. Ritchie I33 
 
 liCtter of Mr. H. Lynn 123 
 
 Mr. Buriianan's Lettc 123 
 
 Sir Francis Hincks' R)Iy 124 
 
 Opinioim of the Press 125 
 
 Declaratiofii in tlie Civ Suits , 149 
 
 ( 
 
 18 
 
 m 
 
 SlH 
 
 /s 
 
 It8 biisii 
 Comp 
 the 
 
 A„ 
 
WSW, HALL, MILLER & cq^ 
 
 MANUFACTURERS OF 
 
 ^lOSTE 
 
 ■■fcf<?c • 
 
 
 HEAD OFFICE: 
 
 SIR A. T. GALT. 
 
 5ONTREAL. 
 
 -VICK-PMOENT- 
 
 JpHN_R,-^KlN ESQ. 
 
 , . THE ACCIOEMT 
 
 " '*' 0"^!^ pure,y AccMent InsuraJon ■ 
 It" busine^, i« „o,, ,,„„ ^^^.^^ „,, " ' "' '" ^'"""'«- 
 
 'he only Oana<li„„ Co,„p„„,. vvhic ^ ", '™;" '""' »" '^ 
 
 EDWARD RAWLINGS, toager. 
 
0^ 
 
 
 ■ THE CANADA 
 
 GUARANTEE COMPANY 
 
 I.S 
 
 THE ON^LY COMPANY IN AMERICA 
 
 WIIICII IS SOLELY DEVOTKIJ T<» 
 
 OlANTING BONDS OF SURETYSHIP 
 
 For Governmdi^, Bank, Railway, Oommercialand all Employees in 
 
 Positions of Trust. 
 
 I rosiuons oi xrasi. 
 
 Need not ask lelr.irlends to become or to continue boiirul lor tUcm. as they 
 
 CAN BE THEIR OWN SURETIES 
 
 By paying anill cli.iryo to this c'oinpiiny. ii they are lulluble perafjns. 
 
 The CaiBda Guarantee Company 
 
 IS THE ON-i^r COMPANY TO WJIICII THE GOVERN- 
 MENT HASGRANTED A LICENSE TO TRANSACT 
 (JUARANEE UrSINESS IN THE DOMINION OF 
 I CANADA, 
 
 Bo oM CompaBy liiii£ male aoy Dsjosit wiiaieyer for eaaranlee Bfliioeis. 
 
 THBBOninS SYSTEim 
 
 (»F THIS COMPANY 
 
 Headers the Premi' Annually Reducible after three years — the reduction 
 this year rqtsfrom 15 tO 35 percent, 'Ji^ the Frerainm. 
 
 Have been alreatlpaid by this Company for losses by unfaithful F!rn 
 
 ployeaVITIlOUT a SIN<iLE CONTEST AT LAW 
 7"//f>1l'>1//.^S^f>45S£of the Company over ani above CaiMtal at . . $110,045 
 
 AND THE GROSS RESQCES 476,460 
 
 (^See RejaortUooernment tu 3()lh December, iSlSjJusfpahii ■ i.) 
 
 m ^ 
 
 Frospsctuses, Fob, &c., may 1)9 had on application to the 
 
 HEAD OFFICE: 
 
 260 ST. JiES STREET, MONTREAL. 
 
 President-Sir A. TALT. ! Vice-President-JOHN RANKIN, Esq. 
 Ed^v'cl Ha^vlings, Manager. 
 
 1 
 
 c^. 
 
f 
 
 ST. IAWS88CKJIAII. 
 
 cr,vo 
 
 St. James Street, - - - Montreal. 
 
 For the past thirty years^this Hotel, familiarly' known as the " St. Law- 
 rence, " has been a ''household word " to all traveliors on the con- 
 tinent of Noith America, and has been 
 
 PATRONIZED BY ALL THE RbYAL AND NOBLE PERSONAGES 
 
 WHO HAVK VISITED MONTREAL. 
 
 This Hotel has been recently re-taUen by 3Ir. Henry ri«>aran, the former Pro- 
 prietor, who has handsomely and ap)n-oprialeiy decorated and renovated the 
 interior, and completely refurni.siied the whole of the a|Kiitments with 
 
 NEW^ FUniSriTUREI 
 
 2"/ie Hotel is admir,}.hl]j situated, being in the very hicirt of the City, and 
 contip-uous to the General (post Office, the (Princij.^l ^anks, (Public 
 FuildiniT'^- Laio ijourts, Cotnmeroial E.xchixmres, 
 
 XteillTTVT'AT' And. rFeles3^Az>l3L C3£B.oe8. 
 
 Its^- The Hotel will be managed by MR. 8AM(^EL MONTG'>lvii:HY, under the Immediate 
 personal supervision of .MU, HOGAN, than whom no one Is better qualttled to condu t an hos- 
 telry of such magn'tude as the St. Lawrence Hall, and than whom in) one has gained a better 
 reputation as an obliging, generous aud considerate liost. 
 
 a © M I 
 
 
 connissio^Eiu for takimo affidayit(» 
 
 To be used in the Prouince of Ontario. 
 
 115 ST. FRS. XAVIEE STREET, 
 
 MONTREAL.