THE FAILURE OF THE SOUTH HANTS BANK.
A meeting of the shareholders of the South Hants Bank (whose stoppage we announced last week) was held on Tuesday afternoon, at Totterdell’s Hotel, Portsea, to receive a statement relative to the position of the bank.
Mr. J. S. BLAKE, draper, of Portsea, was called to the chair, and made a statement with reference to the immediate circumstances which led to the closing of the bank doors.
Mr. QUILTER (of the firm of Quilter, Ball, and Co., accountants, of London, in whose hands the matter had been placed) said that the bank only closed on Friday, and on that day they were exceedingly anxious to dispose of the goodwill of the bank in the best possible way, and it was not until twelve o’clock that they succeeded in making such an arrangement (with the Provincial Banking Corporation) as might produce them £2,000 or £3,000. At the present moment he was not in a position to make a full and complete report on the various matters connected with the bank, but he would, as far as he was able, answer any questions that might be put to him. From the best information that had been given to him he was afraid the loss which would have to be made good by the shareholders would amount to a very considerable sum, but whether it would be £50,000, £60,000, or even £70,000, he was not at present in a position to say. Much would depend upon the realisation of a very large debt due to the bank, which they hoped might be realised almost in full, or, if not in full, certainly to the extent of many shillings in the pound.
Mr. MAROIN asked what was the amount of that account?
Mr. QUILTER said about £40,000.
Mr. S. S. LONG: If you are successful in getting in this debt, will the liabilities of the bank still be £50,000?
Mr. QUILTER: Yes; and if not, those liabilities will be increased by something like £20,000. That is the best approximate estimate I can give you.
A SHAREHOLDER asked if there had been any auditor appointed?
Mr. QUILTER said he understood that there had been. He had looked at the balance-sheets from 1861 to 1864, and he did not observe any auditor’s signature during that period, but up to 1861 the accounts had been regularly audited by Mr. Lacey, of Petersfield.
Mr. BIDDLE remarked that 12 per cent, was the last dividend paid to the shareholders, even though the bank was then hopelessly insolvent.
Mr. WHITE, one of the directors, said that he had done his duty, and was satisfied that the half-year’s earnings warranted them in paying a dividend of 12 per cent.; and £7OO had been put aside for bad and doubtful debts.
From a conversation that ensued, it appeared that the bank was insolvent when the last issue of the new shares took place.
Mr. R. W. FORD, solicitor, inquired whether Mr. Quilter was in a position to lay before the meeting a statement of the assets as presented to the shareholders at the last half-yearly meeting, February last?
Mr. QUILTER said he had seen a paper which he supposed was, or ought to be, a copy of the balance-sheet submitted to that meeting; but he was sorry to say there were names entered as being indebted to the bank, and certain fictitious debits had been placed there—(cries of ‟shame”)—so that he believed that this balance-sheet did not speak the truth.
The CHAIRMAN, in a short speech, vindicated the conduct of his brother, of Mr. Smithers, and Mr. Loney, who were directors, and who, he believed, were as ignorant of the affairs of the bank as he himself was, the managing directors being Mr. Reeves and Mr. White; but with regard to the latter, the chairman thought that if he had sinned at all he had sinned innocently.
Mr. BLAKE, of Gosport, a director, said he had a copy of the balance-sheet placed before the meeting in February last, from which it appeared that the balance was £724 14s. 8d. He had no more power to look at the accounts of the gentlemen who had overdrawn than any shareholder, nor did the directors know of the extraordinary overdraw until Christmas last. He understood that there were not less than £15,000, of notes and bills put aside at the time of the failure of Roy, Spencer, and Co. Mr. Jackson (a director, since dead) induced those gentlemen to draw cross bills for £7,500, but those bills were never properly dated, and they were put into a place and locked up, and were now lost by the statute of limitations.
A SHAREHOLDER remarked that they had been entered as assets.
A question was asked as to the amount of Mr. Reeves’ deficiency.
Mr. QUILTER said there was some difficulty in extracting the truth from that gentleman—(a laugh). They had put him into the crucible on several occasions, and the best information they could get from him was that he had taken £16,000 of bank money, but ‟he (Mr. Reeves) was bound to say that it was unknown to any director except himself.” They had succeeded, however, in getting from him some securities, which would diminish the loss to some extent, although he believed that the loss sustained through Mr. Reeves would amount to £14,000—(expressions of surprise.)
Mr. WHITE declared that he knew nothing of the matter until last Friday morning. It did not appear in Mr. Reeves’ current account, or he (Mr. White) must have known it. He was petrified when he heard of it.
The CHAIRMAN said there appeared. to have been an account book kept by a clerk of the bank, who was never able to understand it. He could never make the accounts tally, and after being there a few years he began to feel that something was wrong. He was told to do things in this and that way, and he did so, but ‟when I got married (said the man) I began to feel my responsibility and character more than before, and I began to feel that my character was tarnished. I knew that there were things which were wrong, but I had no power to interfere.” He (the chairman) said, ‟How could you allow this thing to go on?" He replied that the books were kept by Mr. White, and those books were so kept that nobody understood them but Mr. Reeves.
Mr. LEWIS, of London, solicitor to the Provincial Banking Corporation, having addressed the shareholders as to the nature of their liability,
Mr. BLAKE, of Gosport, moved—‟That it is desirable that the provisional official liquidator should be appointed the official liquidator of the company.”
The motion was agreed to, although Mr. QUILTER explained that the appointment of such an officer was in the hands of Vice-Chancellor Kindersley, who would, however, no doubt give effect to the recommendation.
Some other business having been disposed of, the proceedings closed.