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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.