A PRECIOUS BANK.

Temuka Leader, Issue 2263, 6 October 1891, Page 3

A PRECIOUS BANK.

At Sydney, on September 7, a special I meeting of shareholders and depositors in the Australian Mercantile Loan and Guarantee Company was held; Throughout the meeting there was intense excitement, and at one time it appeared as though a violent persqna] attack would have been made on Mr Millar, the late manager. Mr Mackie, who was the first elected chairman, was unable to control the meeting, and left the chair. Mr F. B. Freehill then took the chair. Mr W- J. Smith, present manager of the company, gave a report, which showed that qns er-sirector who had left the colony was indebted to £he company for £10,148, not one penny of s'h j.ch was secured by an asset; on another, who compromised with his creditors the company lost £1,312 13s 3d; on another ex-director, whose security had not been wisely handled by those t.Q whom it was i given, the company had lost £Gs £>d; and on two other ex-directorsjthe company stood to lose about £IO,OOO. The revelations were received with manifestations of angry surprise and threats of vengance against those who Were reesponsible. - In. addressing the meeting, he said: "I fouud that.it had been the practice in the early days pf j;|ie company,s existence to get people'to take up shares, paying no money to the company, but the company at pnce advancing to them the application and allotment money as a loan, which to this day the greater number of shareholders have np£ rgpaid to the company, and interest and compound interest have ham charged in many instances for three years. In .making a careful computation of i at-coimts as shown by the ledgers I fotmd

I to my very great surprise that bad debts to between £30,000 and £40,000 sterling had been made at the head office Sydney. The security in most of these accounts was of no value, being mining and other scrip forfeited, and also all the company's scrip upon which it had advanced. I expected to have found other securities, deeds, etc., at least to the value of £20,000. Instead of-that I estimate their value at £5,000. . . . Summing up, I estimate their assets as between £35,000 ahd £40,000, and the liabilitide to depositors and debenture-holders £138,000 ; sundry accounts to rent, advertising, and other charges, £1,200." A scene of great disorder followed the reading of the auditors' report. The Chairman said that the auditors' report showed them that it would be impossible to carry on business any longer. He briefly alluded to ihe law relating to companies, stating that in no other colony in the group could such a one as the one under notice have been floated. From the first he saw it was rotten and corrupt. At this stage there were violent cries of " Let's get hold of the swindlers and hang them. A number of female depositors were present, and many of them cried bitterly at losing their money. Some were servant girls, who had deposited all their savings in the institution, and others were widows. The scene was most heartrending. It wbs decided to wind up the company.