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JAMES BTRIBT. 1807 aaaiBS %:M REPORT OF THE PROCEEDINGS AT A SPECIAL MEETING OF THE SHAREHOLDERS OF THE ^ COMMERCIAL BANK HELD AT THE BANK, IN KINGSTON, ON TV^ED]SrESDA.Y, IsTOVEMBER 6, 1867. » ^•* « P^RALD STKAM PRBSS, 51 & 63 OKBiAT ST. JAMES STRE'ST, 1867 ^> •^'^^a? REPORT. A special meeting of the Shareholders of the Commercial Bank of Canada, was held at the TJank, in Kingston, on Wednesday, 0th Nov., 1807. Therj were present fifty-four Sharehold- ers holding, or representing upwards of ten thousand shares, or one-fourth of the Capital: — Hugh Allan, R. Anderson, J. Malloch, A. Crooks, Wm. Hall, J. Gardiner, S Mc- Mahon, J. II. Meikle, E. A. Prentice, C. S. Gzowski, A. W. Campbell, John Paton, A, S. Kirkpatrick, li. Kent, J no. Moore, H. Yates, T. Ilothwell, C. F. Gilderslecve, Jno. Carruthers, Rev. Dr Barclay, J. B. Marks, Rev. E. C. Bower, Rev. T. A. Parnell, S. Muckleston, W. Nickle, P. R. Henderson, John Machar jame? Tatton, O. S. Strange, John Wiitkins, A. (.'ode, G. Baxter, W. Gridin, R. Montgonury, Rev. J. A: Muloch, H. N. Garrt tt, Jas. Aiicpherson, A. Kemp, A. Cowan, W. Gibson, C. f.ivingston, J. Williamson, L. llcrchmcr, G. Davids(m, E. McGregor, E. Newlands, J. Breden, James Thompson, John S. ('oomb.s, C- S. lioss, JaniL's Ross, R.J. Cartwright, James Ilarty. The PiiicsiDUNT having taken the Chair, subnutted a statement of the affairs of the Bank as they appeared l»y the Books o 31st O^:tober, 1807. A'so, a statement of the same dale, showing the valuation of the Assets as made l)y the Special Commit- tee <,f th '. Board. Tiiese statements are as follows : — General Statement of tlu- Lialiililii'sand Assets of the C(MnnierLial Bank of ('anada, as at •ilKt Uctobci-, 18U7. LIAUIblTJES. Bank Notes in circulation $1,102,100 1) -jxisits, incliulinK' balance ol loan iVom llauk of Montreal, uui)ai(l drafts and items in transitu 1!,01 5,900 Balances due to Local Banks 4i),2'J2 Balance due to London Ai^cnts .... :W3,TJ:'.) Capital Stock 4,(»i)o,000 Brought up $1,134,336 Bonds and Mortgages .... $ 1 09,365 Bonds of Detroit and Mil- waukee R.R 1,770,220 Doubtful Debts $1,106,'787 Less Re&. Fund and Profits . . 470,440 630,347 Notes Discounted, Bills of Exchange, Stamps and all otlier assets not stated above 3,811,415 :$■ 7,40 1,083 ASSETS. Cash, via, : Specie, Provincial Noti^s, Notes of otber Banks, Balanct^s due by Local Banks and Foreign Agents $ 443,475 Government Debentures 400,000 Real Estate — Bank prenuses 285,801 6,327,347 »7,461,6 8a ' C. 8. ROSS, Caihier. Co.MMEnciAi, Bank op Canada, ) KingKton, Nov. 0, 1867. \ Statement of Liabilities and Assets, as eiti- matcd by Spocial Committee. LIABILITIES. Circulation $1 ,102,166 Dejjosits, including balance due Bank of Montrt^al, drafts unpaid and items in transitu 2,015,996 Due Local Banks 40,202 Due London / gents 303.220 $3,461,683 ASSETS. Specie, Provincial Notes, Notes and Balances due by Local Banks and Foreign Agcmts $ Government Debentures Real Estate (Committee's valuation) Bonds and Mt)rtguges Detroit and Mil'vaukee R. R. Bondt', valued by Comnnttee at 50c Notes and Bills Dicoounted, Bills of E.'cchange and Stamps Other Debts due to Bank 448,475 400,000\ 200,000 109,366 i 900, ''0»; 3,114,876 696,53» Carry up f 1;1S4,336 $5.SG9,25« CoMMEiiciAL Bank op Canada, ) lilst Octobc , 1807. I The PiiEsiDisNT then read the fodowio{ Report : — REPORT OF THE DIRECTORS, The Directors of the Commercial Bank t Canada beg to submit the foreicoln. Statement, showing the pos Baitk on the Silut day 1867 :— At this moment, when their energies ti necessarily concentrated upon thu t^ means of providing for the liabiUtiei| of ti Bank, and of effecting as favourable a Si Hi foregMiit tsitioQ o^t|| of O/itobd tletnetit as possible for the Sliu'-ehoklers, the Directors do not deem it advisable to enter into a minute investigation of the immediate causes of the late unhappy sus- pension of this Institution. It will sufHce to say that, for a considerable period after the Annual Meeting of the 3i3th June last, the i)ublic mind appeared to be per- fectly free from all apprehensions of the Bank. No withdrawals of the deposits, (except such as were distinctly traceable to ordinary busiucss causes) seem to have taken place until a few weeks prior to the susijension. From that date, however, the demands of depositors became daily more and more jiressing and continuous, till at last after an absolute withdrawal of de- posits to the amount of one million and a quarter of dollars, and after receiving notice of further removals to the extent of six hundred thousand dollars, it became per- fectly evident that nothing 1)ut the ac- tive intervention of the Goverument, or ot the other Banking Institutions of the country, could avert the impeding disas- ter. Applications for aid were made accordingly iu the above named quarters, but these having failed, it became the painful, though anxious duty of the Di- rectors, in the common interests of all con- cerned, to order a suspension of specie pay- ments, with the hope ot effecting some ar- rangement which would enable the Bank to resume business within the sixty days limit- ed by its charter, either singly or in con- junction with some other similar Institu- tion. Notwithstanding these unfavourable cir- cumstances, the Directors, while far from seeking to conceal the gravity of the calami- ty, yet cannot but feel that the position of the stockholders is by no means so despe- rate as was at first imagined; and even should the Board be- compelled to resort to the extreme measure of going into liquida- tion, they entertain strong hopes of realizing a considerable surplus. The Directors have caused the necessary advertisements to be published, of their in- tention to -apply to Parliament for power to enable them to carry into effect such -changes in the position of the Bank as may ultimately be decided on, and also for n general meeting of the shareholders, to be convened for tne purpose of accepting or rejecting the proposed arrangements. The Directors are strongly of opinion, that the course indicated in the preceding para- graph, of applying to Parliament for power to enable them to make such arrangements as may be necessary, is most desirable to adopt, and would recommend that resolu- tions to this effect be passed l)y this meet- ing. The whole, nevertheless, respectfully sub- mitted, R. J. CARTWRIGHT, President, HUGH ALLAN, Esq., on belialf of the special Committee, then read a Report from that Committee, embracing a correspon- dence with the Manager of the Bank of Montreal, copy of which Report, inclusive of the Correspondence referred to. is as fol- lows : — REPORT Of Special Committee into the affairs of the Commercial Bank : — To the Directors ot the Commercial Bank. Referring to the report on the value of the assets of the Commercial Bank, pre- sented on 14th Septcniber last, with the im- portant changes which have occurred since that time in the situation of the Bank, and the proceedings consequent thereon, the un- dersigned deem it necessary to submit the following supplementary remarks. The circumstances wlMch occurred pre- vious to ,and at the suspension of the Bank, having been recently published at great length in the newspapers, are well known to the public. It is much to be regretted that the efforts made to sustain the Bank, were not met in a more liberal spirit by the institutions of a similar kind in the Province. If they had been so met, many inconveni- ences which have since occurred to some of these institutions might have been avoided. Since the suspension, the efforts of the un- dersigned in common with other members of the Bank, have been directed to saving the property of the Bank and deciding tne various questions arising from day to day ccided on, and also for n of the shareholders, to bo 5 purpose of accepting or posed arrangements, ire strongly of opinion, that ted in the preceding para- ig to Parliament for power ) make such arrangements jsary, is most desirable to 1 recommend that resolu- ;t be passed by this meet- crtheless, respectfully sub- l. J. CARTWRIGHT, President. ^, Esq., on behalf of the 3, then read a Report from embracing a correspon- jlanager of the Bank of ' which Report, inclusive Icnco referred to. is as fol- lEPORT ttee into the affairs of the Jank : — t the Commercial Bank, e report on the value of B Commercial Bank, prc- )tcniber last, with the im- hich have occurred since tuation of the Bank, and nscquent thereon, the un- necessary to submit the entary remarks, ces wlkich occurred pre- e suspension of tlic Bank, iitly published at great )apers, are well known to regretted that the efforts Bank, were not met in t by the institutions of a Province. so met, many inconveni- ince occurred to some of light have been avoided, on, the efforts of the un- ion with other members been directed to saving I \ Bank and deciding tne arising from day to day on the altered position of the Bank . Soon after the publication of the report presented in September, in answer to various upplicii- tions to that effect, a pledge was given that an informal meeting of tlie shareholders re- siding in and near Montreal would lie held previous to the present general meeting, for the purpose of obtaining their vievs on the position of affairs. It was considered the more advisable in consequence of the suspension, that the meeting should take place, and It was ac- cordingly held on the 3!)th October. It was largely attended and a full and free discus- sion to(tk place, which resulted in the un animous passing of the following resolu- tions: — It was moved by Hugh Allan, Esq., Seconded by the Hon. Mr. llolton, That Thos. Paton, Esq., of the Bank of British North America, be reciuested to take the chair, and Mr. Cross to act as Secretary. — Carried. It was moved by W. Workman, Esq., Seconded by George Moft'att, Esq., That the meeting is of opinion that efforts should be made either with a view to resus- citate the Bank, either by reducing the pres- ent stock and additional capital, or by amal- gamating with another Bank, or by taking an} other step that will enable the Bank to resume specie payments, the whole subjec*^ to the api^roval of a majority of the share- holders present, in person or by proxy, at a meeting specially called for the purpose, and further that application be made to the Legislature for such legislation as may be found to be necessary. — Carried. It was moved by J. G. Mackenzie, Esq., and seconded by Robt. Anderson, Esq. : That the meeting request the special Di- rectors to look further into the position of the Bank, as it may beaff'ectedby the recent suspension, and to be prepared to submit a statement of the position of the assets and liabilities of the Bank on the Gth of Novem- ber to the shareholders, or i)reviously to any other person or institution, from whom a loan may be possibly obtained, with a view to resume specie payment. — Carried. It was moved by W. Workman, Esq., and seconded by the Rev. Mr. Cordner : That the thanks of the meeting be ten- dered to the Hon. Mr. Holton, Hugh Allan and Alex. Morris, Esqs., special directors, for the very great care and attention be- stowed by them in investigiting the affairs of the Commercial Bank. — Carried. Moved by E. Prentice, Esq., seconded by Dr. Campbell : That the thanks of the meeting be given to IMr. I'aton, for his able conduct in the chair. (Signed,) THOS. PATON, Chairman. A. CROSS, Secretary. During the discussion Mr. E. H. Kiag, tiio General Manager of the Bank of Montreal, intimated to the meeting that his Bank was now disijosed to assist the Commercial Bank to resume business, provided on an examination by persons appointed by him, of the affairs of the Bank they proved satis- factory, and that sufficient security was given for repayment of the amount which would have to be advanced. The undersigned being determined not to neglect any chance of obtaining the ne- cessary assistance, mot at an early hour the following morning, and opened a corres- pondence with the Bank of Montreal, which has continued from day to day. The Avhole is submitted herewith for the infor- mation of the Shareholders : — (No. 1 Copy.) CosiJ^ERCiAn Bank op Canada, ) Montreal, 30th Oct., 1867. J B. II. King, Esquire, General Manager, Bank of Montreal. ■ Sir, — In conseauence of what passed at the informal meeting of SLareholders of the Commercial Bank yesterday, we deem it our duty to communicate with you for the purpose of enquiring whether the Bank of Montreal, by itself, or in co operation with another Bank, or with other Banks, Ih willing to extend to the Commercial Bank, such a measure of assistance as will enable it to resume business at an early day. If we are favoured with an affirmative answer to this enquiry, we propose seeking a personal interview with you, in order to discuss fully, frankly, and earnestly, thd 6 mode in which an object, ho intimiitely af- fecting the general interests of tlie country, as well as the private interests representel, ItHAnunici night. In, wc Ifwc'caiibd assiu'iid that assist aiuie tflBrcfcrii an amount, and in a form that wonhl in (,ion of the desiic liey entertain to aid tiie Conunercial Baidv resume business by all means they are ■arranteil in using. In your telegram of )n Down Express Cornwallflfsterday you ask, as u condition, of an ex- >'ived: Will su'.tnit your lamination into the Assets and Liabi'ities of b'>- tothe Moani. l>l,.ase |he Commercial Bank, that an assurance elt.M', .1 possible, the amoMiunild be given that assistance to an am- ^sistanet- you propose. ftu,,!, and i:. a form that in your judgment ^"J,'"od) E. II. K'lNdlivouM enable the Bank to resume business, kvould be granted, jirovided its reincsenta- jtions respecting its ailairs are well founded ; land in your letter of tliis morning you men- Ition one or one and-a-(piarter million of jdollars as the probable measure of that as- [sistance. The Directors with the most anxious wish to promote our mutual object feel that in dealing Avith a matter which I may be found to be beyond the ability ot this Bank alone, they must proceed with great caution. They think it woukl not be right for them to forego the exercise of their own judgment in determining the measure of assistance really necessary to accomplish the end in view ; and that the examination of the assets and liabilities referred to sliould therefore take place before they arc in a position finally to say whether the Bank can of itself, or iu conjunction with otliers, uflbrd the full measure of aisistance necessary, and fCoi'v No. r*.] Montreal, 1st Nov., ISfii S(}., [anager Bank. Your telegram ot yester to us on the train at a ; it is out of our power tiJ ■e an clal)i)rato stateineiil iin(! to be submitted lo L'ir annual meeting this nil ipinion assistance to tliuj 1,000 to !S!!,:i.-)0,000 ini-1 il)le the Commercial Baii| fs with an assured pros its position. The foriiij conditions of the loan d ino.st co!iveniently discii itervievv ; but, if your fter considering our ss before tlie terms and conditions can be dis- cussed in detail. But while they entertain this view, as that wliicli ought to guide tlieir conduct towards their own Hharehoblers and the public, they feel so desirous of ar- riving at a favourable decision, that they will be glad if you will act on the proposal contained in your letter of. this morning, and place before them a written statement of the suggestions you have to oiler, accom- panied with sucli a statement of the nature and amount of the present assets ami liabil- ities of the Bank as you may feel warranted pi giving, to Ijotli of which I need hardly add their immediate and most anxious at" tcntion will be given. I am, dear Sir, (Signed), E. II. KING, General Manager. Messrs. Hugh Allan, ) Directors ilcm. I>. 11. llolton, /■ of Commercial Alex. Morris. ) Bank. (No. 7 Coi'v.) 3IONTUKAL, Nov. 2, 1807. E. II. Kino, Esq., General Managi^r, Bank of Montreal. Dear Sir, — \Vc are in receipt of your let ter of yesterday's date, and arc much grati- fied by the expressions it contains of the desire entertained by the Directors of the Bank of IMontreal, to aid the Commercial Bank to resume business. As you could not see your way to acting upon the proposition submitted to you by Jlr. Cartwright, on be- half of the Commercial Bank, after the failure of the negotiations with your own and the other Banks, when suspension had become imminent, that if you could afford the necessary assistance to avert the impend- ing calamity, the assets of the Commercial Bank would be placed unreservedly at your disposal, it did not occur to us to apply to you for assistance to resume business, until you let fall at the informal meeting of share- holders, on Tuesday last, an intimation that something might possibly be done in that direction ; for it was quite obvious that a co::)siderably larger measure of assistance would be required to enable us to resume than Avould have sufficed to prevent saspen. sion. ButjAvhcn a hope, however faint, was ■41 ,.j J I !■■ 8 ii held out tliat even this larger measure of assistance roiirhi; be obtained from, or through the powerful 'ntervention of the Bank of Montreal, it beciime our duty to exhaust every effort compatiljlc with a pro- per regard for the interests confided to our care, to bring abaut a cousuuimatiou so im- portant to those we represent, as well as to the public generally. We regret that the Directors of the Bank of Montreal should insist upon an examination into the Liabili- ties and Assets of the Comuiercial Bank, not only before they will jironiisc to give the requisite aid, if the result of such exami- nation should be satisfactory, but before they will even discuss the terms .ind con- ditions of any possible arrangement. In view of the various plans now imder con- sideration for the rehabilitation of the Com- mercial Bank, W3 think it would be in the last degree injurious to its interests to sub- mit its affairs in detail to an officer of an- other Bank, except with the express under- ptanding that adequate assistance will be forthcoming in the event of the represcnta- tioiis Oil which we propose to found the ne- gotiati'i o being proved on examination to bi^ 'veil founded. There is surely nothing unreasonable in o . •■ king that our repre- sentati'^ 'f- may bt .^ "'' to be accurate until the j'cgotiatio'" .acU a point at which tliei verifioat. )i' ^vould become a matter i p. 'nilcal imi ' ■ *i"e to the parties professing t„ as^va" ; ;hu money required by the Comuierc ii', : Bank, At that point of the negotiations, Ave repeat, we shall be jirepared to submit the Liabilities and Assets of the Bank to as close an examina- tion as may be considered necessary. AVu venture to hope, therefore, that your DUec- ters will reconsider the determination at which they arrived yesterday, and consent to Iiaving the negociatious opened on the presumption that our representations are accurate. Until we are advised ot their final decision in this i)reliminary question, wo think it would be i)rematuro to lay be- fore them either a. statement of our own views, or of the present position of the Liabilities and Assets of the Bank. We may, however, observe that we consider it ca3P;^t;al to ^hp ^access of any arrangement looking to an early resumi)tion of business by the C mmercial Bank, that a coubider- able proportion of the amount required should be advancetl upon the scfcurity of the Detroit and Milwaukee Kailway Bonds. You will remember that in the negotiations with yourself and tlie representatives cf other Banks, which occurred just before our suspension, you suggested that these Bonds should be the basis of the proposed advance ; and the reasons for this course that existed then, are of at least equal va- lidity now. Jlr. Morris is not in town ; but we have reason to believe that he shares our views on all the points referred to in this letter. We renuiin, dear Sir, Yours very truly, HUGH ALLAN. L. II. IIOLTON. Directors of Commercial Bank. Copy No 8. j Bank of Montreai;, £ Montreal, 4th Nov . 1807. Dear Siu!^,— Your letter of tlie Unci in- stant reached me on Saturday evening, and I shall lose no time in summoning a spe- cial meeting of th'i Directors to consider it. Let me, however, point out the mis- conception under w^hich you appear to labour with respect to the proposition which you say was submitted by Mr* Cartwright. That gentleman and the Hon. Mr. Ilolton called late in the evening, after all other negotiations had failed, and I could only say then, as I say now, that it was iinpossil)le to take such responsibility as tlie entire sustainment of the Com- mercial Bank, at a moment's notice, which it would have been then necessary to have done to avert suspension. Let me also dis- claim for the Directors and myself, the idea of calling in question the accuracy, accord- ing to your own convictions, of the position of the Commercial Baid^, as well as the supposition, that they desire for any other reason than that of aiding that Institution to look into its affairs. But the object be- ing to aid, as far as they are warranted in doing, in enabling the Commercial Bank to mcc'i; its engagements, I trust that you ly resumption of business ial Bank, that a cons,ider- of tbo amount required 2cd upon the sdburity of [ihvaukee Railway Bonds. n- that in the negotiations 1 the reijroseutatives cf ich occurred just >)efore rou suggested that these the basis of the proposed e reasons for tliis course , are of at least equal va- it in town ; but we have that he shares our views eferred to in this letter, dear Sir, •s very truly, HUGH ALLAN. L. n. HOLTON. tors of Commercial Bank. py No 8. NK OF SIONTnEAL, ntreal, 4th Nov . ISfiT. ir letter of the 2nft in- n Saturday evening, and ne in summoning a spe- Di rectors to consider er, point out tlic mis- which you appear to ct to tlie proposition ■as submitted by BIr- L,'cntlemau and tlie lion, te in the evening, after >ns had failed, and I , as I siiy now, tliat it itkc such responsibility linmcnt of tlio Com- moment's notice, winch then necessary to have ision. Let me also dis- rs and myself, the idea the accuracy, accord- Mctions, of the position Bank, as well as the ay desire for any other itling that Institution s. But the object be- tlicy are warranted in the Commercial Bank lonts, I trust that you will see that the inquiry must take a broad, er ground than th mere advance of a specific sum of money on a special security, to which your letters would seem to limit it. If you concur in this, it would be very desirable for me to be in possession of something more definite to lay before the Di'ectors at their meeting, for although I am sure the Board will have ho objection to allow negotiations to be opened on the presumption that your representations arc acurate, I would only wish to guard th Bank against thereby giving an implied pledge, that the specific assistance you speak of will be given in any form but that which they may consider most likely to at- tain the object in view, viz. : meeting the Bank engagements to the public, and en- abling you to resume business at an early day. I am, dear Sirs, Yours truly, (Signed,) E. H. KING, General Manager. Messrs. Hcan Allan, ) Directors Commer- Hon. L. H. HoLTON, J cial Bank Canada. P. S. — In anticipation of hearing from you befoie 4 o'clock, I have summoned a special meeting of the Directors for that hour. E. H. K. [COPT NO. 9.] E. H. King, Esq., General Manager Bank of Montreal. Dear Sir,— Your letter of this date has thi moment (12.30) been placed in our hands, and wu thank you for summoning so promptly a special meeting of your Direc- tors to consider our communication of the 3nd. The object we aim at, and which we have kept constantly in view throughout this correspondence is, au eaily resun^ption of business by the Commercial Bank, not as- sibtance to liquidate, nor the virtual admin- istration of its affairs by another Bank. While, therefore, we are prepared to dis- cuss freely with you the steps we propose to take to bring the Commercial Bank into a position to resume business, and maintain its credit, wo feel that the responsibility of deciding on the efficacy of those steps must rest at last with ourselves and our Co- Directors, and not with the Directors of the Bank of Montreal, if they should be induc- ed to aid us. If this view be correct, the principal object of any examination into the asc-sii aud liabilities of the t;omroercial Bank would seem to be to determine upon its ability to fulfil the engagements now proposed to be entered into, and we can only reiterate our assurance that if the nego* tiations should reach a period at which the verification of the representations we may make should possess any practical interest to you, we shall be prepared to afford th© utmost facility for that verification. If your Directors should consent to open negotiations on the basis proposed by us, we would again suggest the desirableness of u personal interview, which we are per- suaded would greatly accelerate their pro- gress. We have already intimated that we think assistance to the extent of a million to a million and a quarter will be required, and that a considerable proportion, we woud. now say $750,000, should be on the security of the Detroit and Milwaukee Railway Bonds. Whatever amount exceeding $750,- 000, we might require, up to a million and a quarter, we propose to secure by Bills re- ceivable. The time of repayment and other terms of ihe conditions of the advance, we defer saying anything about until wo shall, have an opportunity of discussing them with you. We remain, dear sir. Yours truly, HUGH ALLAN, L. H. HOLTON, Directors Commercial Bank. (No. 10 Copy.) Bank of Montreal. ) Montreal, 4th Nov., 1867. > 5:45 P M. ) Dear gir.8,— My Directors have held their special meeting, and considered the letters that passed between us to-day and Saturday. They understand from your last communication that you have come to tho conclupion to request this Bank to under- take to make an advauce of the sum of $1,- 350,000 say $750,000 upon tho securitfir of 10 Detroit and Milwaukee Railway Bonds, and 1500,000 upon Bills Receivable—which the Directors also understand would be in ad- dition to the existing loan of $300,000. They understand that in your opinion, this advance of $1,250,000 would enable the Commercial Bank to resume business, and that our undertaking to advance tlie amount is conditionul upon your satisfying this Bank of tho correctness of your representa- tions respecting the assets of the Commercial Bank. The Directors understand further, that you are not willing that they should exercise their judgment as to the sufficiency of the aid you seek, or as to the jirobaljle course that might be taken by the Creditors of the Commercial Bank, upon j'our resump- tion of specie payments on money borrowed from this Institution, upon securities that now form part of your assets. The Direc- tors feel that they would not be justilied in meeting such a proposal. They regret that they have not received more encouiftgement in their endeavour to convince you that they have been sincerely desirous to do all that was in their power, consistent with what they considered the safety and ability of the Bank of Montreal to enable the Commercial Bank to meet its engagements without any unnecessary delay — and they desire me to express the disappointment with which they abandon the hope they entertained, that you would, under all the circumstances, have felt warranted in meeting their views as to a preliminary examination of your Assets and Liabilities. They have indulged the belief that, if this had been conceded, they would have felt themselves in a posi- tion to enable you to meet the whole of your engagements after a few days delay, and at the same time secure to your Stockholders the option within a given period, of raising new Capital with which to resume control of your business, or wind up the Bank, as they might consider after full investigation, to be most conducive to their own interests. I remain, Dear Sirs, Yours truly, (Signed,) E. 11. KING, General Manager. Mesurs. Hugh Allan, ) Directors Commer- Hon. L. H. HoLToN, ) cial Bank of Canada. [Copy No. 11.] Montreal, Nov. 5, 1867. E. H. King, Esq., General Manager, . • Bank of Montreal. Dear Sir,— "^'e are fitvoured with your letter of last evening. We have not question- ed and do not now question the sincerity of the desire to aid the Commercial Bank expressed by the Directors of the Bank of Montreal ; but we have felt that our duty to the important interests committed to onr charge required, that before exposing the liabilities and assets of the Commercial Bank to an examination in detail by officers of other Banks, there should be such an inter- change of views as would establish a reason- able probability of a successful issue to the negotiations being ultimately reached. The course proposed by us, we believe to be in strict accordance with the fitness of things and ordinary usage in analogous cases, and we deeply deplore the tVuitlcssness of our persistent efforts to convince your Directors of its reasonableness and propriety ; we re- gret also that our reiterated protl'ur of a personal interview, in order lo remove mu- tual misconcei)tions, if such existed, and to initiate earnest negotiations, was not ac- cepted. We must respectfully dissent from your statement of the uudL-rstiUidingof your Dir- ectors " that you [we] are not willing that they should exercise their judgment as to the sufficicency of the aid you seek" on the contrary we expected and desire that they would exercise their judgment on this and every other point of the proposed arrange- ment before becoming bound to advance so large an amount of money, but we did not contemplate, as it is obvious from the con. eluding portion of your letter that your Dir- ectors did, the transfer of all th^ issets and the whole administration of the Commer- cial Bank to the Bank of Monti eal, as the basis of any advance to be made by the lat- ter. We could not assent to such a proposi- tion without the sanction of our sharehold- ers, even if wo regarded it as advisable our- selves, which we certainly do not. We learn for the first time from your let- ter, that your Bank would under any cir- 11 yNo. 11.] sTREAL, Nov. 5, 1867. "■' . .- ". trciil. re fHVOured witli your f. We have not question- question the sincerity J the Commercial Bank •irectors of the Bank of ive felt that our duty to •ests committed to onr at before exposing the of the Commercial Bank n detail by oflicers of hould be such an inter- 'ould estal)lish a reason - I successful issue to the iltimiitely reached. The, us, we believe to be in th the fitness of things n analogous cases, and tlic tVuitlessness of our lonvince your Directors and propriety ; we re- reiterated proffer of a n order lo remove mu- if such existed, and to Jtiatious, was not ac- lly dissent from your standing of your Dir- are not willing that their judgment as to aid you seek" on the and desire that they udgment on this and he proposed arrange- bound to advance so oney, but we did not bvious from the con. ir letter that your Dir- of all tl)^ issets and tion of the Commer- of Monti eai, as the be made by the lat- nt to such a proposi- ion of our sharehold- it as advisable our- uly do not. t time from your let- uld under any cir- cumstances have undertaken alone to make the necessary advances to the Commercial Bank. Your earlier letters distinctly convey r& different impression, which is an addition- al cause for regret that the personal inter- view we sought was not accord d at an early stage of the correspondence. We thank your directors and yourself for the courtesy with which your side of the correspondence has been conducted, and •which we trust has been reciprocated by us. We remain dear Sir, Yours truly, HUGH ALL:VX, L. II. IIOLTON', Directors Commercial Bank. The undersigned were not long in per- -ceiving that the only terms on which assis- tance could be obtained, were such as in their opinion it would not lie for the inter- est of th'.' Shareholders of the Commercial Bank to agree to. If it hud been afforded jjrevious to, and in time to prevent the suspension, it would have been of the utmost importance ; but now, alter the credit of the Bank has been so seriously impaired, a mere temporary loan, repayable in a few months, though of little permanent benefit, would be highly desirable, if it could be obtained on suitable terms, and would gladly have been availed of, as a means of enabling the Bank to resume business, and affording time to sirengthen itself by such measures as seemed most ad- vantageous. But for permanent purposes it is necessary that fresh capital, sufficient to restore public confidence, either by a new subscription, or of stock, or by some other method, must be resorted to, and the un- dersigned recommend the meeting to-day to pass resolutions similar in c.iaracter to those adopted in Montreal. It will then be the duty of the Directors, prior to the meeting of 17th December, to make the best arrangements in thf Ir power for the interest ot the Shareholders, which arrange- ments must then be submitted to the Uene- ial Meeting for ratification. HUGH ALLAN, L. H. HOLTON. /LEX. MORRIS. Kingston, 6th November, 1867. The PRESIDENT then moved, seconded by H. Allan, Esq., that th< two Reports now read be concurred in anc printed for the information of the Shareholders. The motion was passed unanimously. Robert Anderson, Esq., then moved, seconded by Edward A. Prentice, Esq., the following resolutions: — The Directors are hereby authorized to peti'ion for and obtain an act from the Par- liament of Canada, to contain the Pro- visions following : — 1. To extend the period of suspension of speice i ayments without forteiture of the Bank Charter. 2. To authorize the Directors of the Bank, by By-Law, to reduce th.) Capital Stock of the Bank, and to raise additional capital on such terms as may be set forth in such By-Law. Resolution 3 : * The Shareholders of the Bank being pre- sent in person or by proxy, to the immber in all o:' 10,240 Shares, take advantage of this meeting in the present circumstances of the Bank, to authorize the Directors of the Bank to obtain the further following provisions in the proposed Act of Parlia- ment, viz. : 1. Authority for the Directors to enter into an agreement with any other Banking Institution or Institutions for an amalgama- tion—and to determine upon the terms of such amalgamation, and the relative value, of the Stock of the Bank and such other amalgamating Bank or Banks— and to agree upon such other terms for the con- duct, management, and general relations of the amalgamated institutions, as the Direct- ors of the Bank may think best,— such agreement not to be valid, until confirmed by the Shareholders of the Commercial Bank, and which confirmation may be ob- tained at the Special General Meeting now convened for the 17th Dec. next, or at any future special meeting. 2. A provision of a similar purport to the last foregoing, to be applicable to any such other amalgamating Bank or Banks— and also general provisions for more effectually carrying the intended araal«(amation into effect, also as to the name of the amalga- i {■■ . If .- t. 12 mated Bank, and either with or without power to increase or t . make addition to the Capital Stock of the amalgamated Bank, or to that of either or any of the Banks so am- algamated—such increase of Capital to be sanctioned by a Special General Meeting of the Shareholders of the respective Banks. Also to change the mode of voting at gene- ral meetings of Shareholders, so that each share shall entitle the holder thereof to one vote. 3. A provision for a change of the head or principal office of the Commercial Bank, or such amalgamated Bank, to be sanction- ed by the Shareholders last aforesaid. 4. In the event of failure on the part of the Commjrrial Bank to raise additional Capital, or to amalgamate as aforesaid, or otherwise to continue its business, such act or acts to contain provisions, for vesting by a general assignment, all the Estate and ef fects of the Bank in Trustees for the speedy liquidition of its liabilities, and for distri- bution of the surplus amongst the Share- holders—with special provisions and powers for such purposes— the Trustees to bj named, and the assignment sanctioned at the Special General Meeting convened for the 17th day of December next. 5. And further, such act or acts may con- tain permissive power for the Commercial Bank to sell, and for ary other Banking Institution to buy the assets of the Commer- cial Bank, and to assume its liabilities^ The terms of any such uTangement to ber confirmed at the aforesaid convened Special General Meeting of the Shareholders of thfr Commercial Bank, or at any Special Gene* ral Meeting and of a Special General Meet- ing of the Shaieholders of the purchasing Bank. II. In the event of the hereinbefore men- tioned Act not being obtained, or in the event of the Shareholders of the Bank not agreeing to accept the provisions thereolV or if they shall otherwise think best, then one of the objects of the special general meeting now convened, will be to consider and to take action upon the course to be pursued with respect to the position of the Bank's affairs, and if necessary to authorize a general assignment of the Bank's assets^ to better discharge its liabilities- The Resolutions were passed unani- mously. It was then moved by Johh Paton, Esq., seconded by C. S. Gzowski, Esq.: " That the cordial thanks of this meeting^ be given to Messrs. Allan, Holton, and MoHRis, for their exertions on behalf of the Bank." Passed unanimously. The PRESIDENT, in declaring the meet- ing closed, expressed the hope that all the shareholders present would attend the im- portant meeting to be held on the 17th of December next. , ♦. yi *4 ■ <. , » M- a assume ita liabilities, such uTangement to bfr jresaid convened Special the Shareholders of th& or at any Special Gene- a Special General Meet- Iders of the purchasing )f the hereinbefore men- ng obtained, or in the lolders of the Bank not the provisions thereoj; irwise thmk best, then of the special general aed, will be to consider upon the course to be ; to the position of the necessary to authorize t of the Bank's assets^ s liabilities- were passed unani- by JoHW Paton, Esq., owsKi, Esq.: :bank8 of this meeting- Allan, Holton, and rlions on behalf of the imously. in declaring the meet-> the hope that all the would attend the im- 3 held on the 17th of