THE WEST OF. ENGLAND BANK.

Temuka Leader, Issue 208, 9 December 1879, Page 2

THE WEST OF. ENGLAND BANK.

After an investigation which lasted for nine entire days, the case for the prosecution against the manager and directors of the West of England Bank has been brought to a close. The story is a sad one, and extends over many years, but its main features are sufficiently simple. The West of England Bank was started in 1835 with an available capital of half a million of money. Its original directors were men of considerable position and influence both in Bristol and in South Wales, and for many years the bank did a large and lucrative business. It was believod tobe as solvent as the House of childe or the Bunk of England itself. Its shares brought a high premium ; its dividends were large; its operations continued to extend. When or how its downward course first began it would now be difficult to say. It is clear, however, that 10 years ago at least, if not earlier, there were upon the books of the bank several very heavy bad debts, which ought, by all ordinal rules of business, to have been viittcn off. The largest of these commenced as far back as 1855, when the bank took over the banking business of Messrs Toogood, of - Cardiff. Among the customers of the Toogoods were the Messrs Booker and Co., a large South Wales firm, believed to be highly • prosperous, ■ but in reality insolvent. Booker and Co. soon become indebted .. to the West of England Rank in a very large sum, and year by year the balanceagainst them increased ; the directors seem to have been afraid to boldly avow the existence of a loss so large, and to have determined, at any cost, to keep Booker and Co. afloat ; "tl»is resolve once taken, losses accumulated day by day until the position became desperate,, and in 1867 half a million of money-had been swallowed up. In ,spite of tnis fact, the insolvent was converted into a joint-stock company under the auspices of the bank, and the public was invited to take shares in it. Such a course of conduct could have but one possible end. When-the crash came at last the bank had utterly lost all that it ever had. It had spent everything;, even to its paid-up capital .of L 750,000. It had spent the whole of its reserve fund, amounting to Ll 56,000.' Its deficiency beyond this, due to investors and depositors, was over L 300,000. In round figures, in short, a million and a quarter of money had been irretrievably swallowed up. And yet, almost down to the hour of-- its suspension, its published accounts and balance-sheets had shown large dividends and rich bonuses, which we know could not possibly have been earned. The directors have been committed for trial.