Booms and Boomers.

Ashburton Guardian, Volume XIV, Issue 2892, 7 February 1893, Page 2

Booms and Boomers.

(New Zecil'ind Her id.) The Anglo-Australian Bank wts dirked with an authorised capital of £2,000.000, ..fwliich £250,.00 was subscribed, and 'fcWO,OOO paid up. The diruct-trs, C. U Staple-i (chairman), S. R. (1. Allriyh>, and Ft. v" Ti'))y, put themselves down foi 200 000 shares, of which MnpKs he'd 192 467. Those 200 000 shares should have prr.dn.;«i £50.000, Kut the thrts dircCfoiH only paid uj» k'67 10.s, a id on thi-. magnificent capital the bank' ivgm buMiu-KS. A few months later twe wn> a. furllmr i>su» of 50.000 shares, of which -^aphw look 30,000 without p<ying « farthing. The debits and calls were ret.resonted by cross entries in the boois Ctiu.se hhares »eru afterwards cancelled, aiil a new issue took place. Dunbar. a clerk, ou >% salay of £2 10s a week, was allotted 42,360 £1 shares, and got an overdraft to *h*b amount to pay fur them. Then the bank entered upon a series of audacious swindles. Ib bought shares from the Victorian Freehold Bank, of whicli Staples was also chairman, but no j money actually passed. Larsre swapping , of land took place on which no money was paid, but on which enormous profits were shown. Ihe Hon. J. Balfour, Sir Matthew Davies, J. B. Davies, J. Moodie, and £. C. Elliott got an advance of £50,000 from the bank on land which was afterwards proved to have been not worth half that amount, and the interest on the money borrowed, though it was never paid, was set down as profit. The property had been originally bought for £25,000 by a syndicate which include*! iirectors of the bank. Norwood, one of the auditor*, was credited in the books with £278,255 on the purchase of proper* ties which were held by, the Freehold Bank, and not by the Anglo Australian. Staplas also made a sham sale to Norwood of the Waterloo Estate for £135,000 which Norwood resold to the AngloAustralian for £155,000 and the Alleged profit of £20,000 was taken out of deposits and divided among the directors. The purchase of another estate was cancelled, and the property sold again at a higher figure, and out of the fictitious profit the directors paid themselves again out of deposits a commission of £14,000. Staples'* mother got £1500, and Norwood £539, for what reason the liquidators were unable to discover. Altogether Staples in 18 months paid himself out of the deposits £23,670 more than he paid in. The books were confused by mixing up current accounts with deposits. Deposits, amounting to only £29,935, were in this way represented as £70.438. To make up the balance-sheet which was presented at the half-yearly meeting, Staples transferred an imaginary £25,000 to his own account. Haroldson, u,j manager, an inexperienced young man, was sent to Ixmdon to entice " Lords ani Dukes "to invest in the bank. Sir Graham Berry was accused by Major-General Babbage. of helping to delude English investors. The paltriest tricks were resorted to by the directors. Mrs bliza Finch came into possession of a sum of £60, and being fearful of robbers, went t<> the AngloAus^ralian Bank a few oays before it closed its dojrs, and deposited the money with "a stout gantleman," afterwards identified ac Staples, for safe keeping. Next day she received a blank document, which she foolishly signed, constituting herself a shareholder to the amount deposited, which of course shel<>sc. Colonel Templeton traced the £60 through the books to Mr Staples. The collapse of the Colonial lnv< stment and Agency Company ruined hundreds of people. Its alleged reserve fund of £130.000 was a mere book entry. Between April 30, 1888, and July 1, 1892, the losses amounted to £407,156, a large portion consisting of loans to the Davits Companies. Yu the directors reported a loss of only £48,000. The balance was accounted for by fictitious valuation of properties held by the bank. In four years these were written up to the amount of £154,000, though there was no actual turnover of money. The money of the (shareholders was entirely swallowed up, as well as a great part of the deposits. The actual sum realised from sales of property in four years was only £6596, but the directors paid out of capital and deposits dividends to the amount of £67,000. When the liquidators pressed for the recovery of the uncalled capital they were aasiiled on all sides by cries of woe and despair. A woman, old and in ill-health, dependent on h«r children for support, wrote that the £33 15s which she tiad foolishly invested in the company were the whole of her hard savings for many years. "If you only knew how hard I had worked," wrote another poor woman, "to pay that £30 into your bank ! But I suppose you are used to such complaints. A small fancy goods shop and needlework are not very profitable at any time, and now it is worse. If you can help me I shall be very grateful." A cripple out of employment, went to the office, and with tears in his eyes, begged to be allowed to surrender his 150 shares. An aged widow, iriendlcss and destitute, had lost her all. A man, 76 years of age, had invested £3000, the savings of forty years. These are a few examples out qf. hundreds

lh,e Real Estate Ban*, of which Mr James Munro, ex Premier and AgentGeneral, was chairman, was another institution which went down under men's feet at the very time when the directors were giving confidant »Bsurances of absolute safety. On August 7, 1891, Mr Munro assured the shareholders that no further calls were necessary or contemplated, that the properties of tf»e bank were in splendid order, the deposits all good, and the" paid-up capital secure. The next week the shareholders nm-u told that the subscribed capital of £l,UO*t.;*Oo was all gone, that £450,000 of uncuUcU capital must be called up to the last farthing to meet liabilities, that the balance-sheets and dividends were delusive, and the jrmahtee and securities fictitious. Some of the properties held by the bank were mortgaged three times over, and they did not yield enough to pay interest. It was admitted that Munro had made mpleading statements to, tne shareholderp, but was himself misled and duped. He was apcuseij of having purchased the La Rose estate for £28,000, in the name of Mr Woods, M.L.A., and then, as chairman of the Real Estates Bank, bought it from Woods for £51,000. No trace of the profit on this transaction could be found in the bqoks, and Wood's widow swore an affidavit to the effect that her husband never received a penny of the money, and that with almost his last breath he expressed sorrow far haying allowed himself •itp be made k tool of, '■' Vet Woods appeared in the bank books as a debtor to the amount of £17,413, for which there was not a vestige of security. The order for tlje windiug up of this banj^ waif jnade qn December % and the liquidators only succeeded in getting in £5,4,546 on, calls estimated to ywld £499,0«|5. The total liabiiiti.s were £1,562,140,