The Bankrupt Building Society.

Wairarapa Daily Times, Volume XI, Issue 3439, 19 February 1890, Page 2

The Bankrupt Building Society.

Melbourne, -February 8. . Groat interest, not.only among shareholders, 1 but also the general publjo,. has been ; created by the publication of tho report of Colonel Teiupleton, a leading actuary, of the affairs of the Premier pormauent Building Society, of which Mr, James Mirams, M.L.A., was secretary until the Society's bankers forced. Lis resignation, and Messrs Ninimo 'and Dow, Ministers of the Crown, wore members of the oomnjittee; Colonel Templetou shows extraordinary l&xity of management, utter want of system in-boqk keeping, and great extravaganae, to call it by no worse a hamo, in making advances on property. After enumerating, a host of.,the errors, omissions, and .blunders he found in the books, be deals with the loans granted by the secretary during tho last three years'; £1,400,000 was granted in loans, of. .wbioh- over £1,000,000 was advanced during.the boom year, that is, 1888.. In.the month of June authority was given for advances to. the amount of £246,787'105, and; of that amount £106,500 was, granted to one applicant, a.builder. At tho time this loan was granted" the Jbuilder,-, was responsible to. the Association foriv'e, previous loaiis, ; amounting.in ;tho aggregate to £49,800, upon wblcli not one penny bad : been received by the Association for either principal or interest. The amount authorised; in : 1888 j also included advances'to the amount of £84,50.0: builder. Tlns'Bebond' .builder''was, 'a. number of the Committee'-'of -Mahagement of the.Spciety. ■•'Mpst of tho advances were for speculations inland or.buil(3iDg3, to bg ereotod by spoou.

latiw buildcrs,who werenever prossed for repayment and the result has been .•most disastrous, In the second case mentioned not one of the houses on which the £84,000 was advanced was ever completed, and tho Society had to tako them over in that form, and this very extraordinary form of trans-, action is thus detailed by Colonel i- ' Septeraberr' 1888, Cheques were' drawn""fdrlhe ""'""* following .amounts.; '-' £170,000,r -y~ £2o;ooo,£24;dbO',£7liOO(i, £40,218,;: : : . ■ total £B2s,2lt£n'd iliese cliequ'e? ma.. ";■ - paid into the Bank to the credit of the Association, and being thus debited and credited they made no difference ~ in tho account except to swell tho ifigureson both sides by £825,218. The sole effect of these entries was to. inflate the figures ol the cash account. In the course of my investigation ~ of this matter I sent for Mr Mirams, ';. who ms Seoretary of the Association at the times these entries were made, but'lio could not give me any explanation of them, I produced thefa} oheques dated 28th September, 1888,' amounting in all to £825,218, and asked him if the signatures " Jas. tamp'' were his, He admitted 'thjit th]ey were, but he said nothing , about tho cheques or the entries, In answer: to further questions, Mr Mirams stated that he had oiten signed blank oheques, sometimes as many as eighteen ortwenty at a time, and left them with his second in comm. . and Mr Doherty, whom he trusted implicitly. I expressed my utter -' astonishment that he had ; !?;ever' ?{ adopted such a practice, and >theri '-'' : ' '- asked whether he did not afterwards inquire what use had. been made of ■. ':■ " the cheques Bigned by fiim in blank ' '■■ He said he did not', and added that'l' :. should remember that in September, 1888, he was very much occupied with his own-privateintfairß." Colonel '■■; Templeton alsooblained the valuation of a number of properties on which advances' had been made by the Sooiety. a This was effected by a leading builder and contractor, who estimates the present value of the properties,' on- which £278,000 ; is- -.■; advanced, at £i76,000| ; showing a '» 1 prospective loss of over £IOO,OOO, ■ These aro only a few of the main ' points of this startling disclosure. ' He also exposes what he terms one 'of tho most improper transactions it : '< has'ever been bis Jot to: investigate.:-; ; In order to satisfy -;the| Bank, iwbbH were pressingHhe v Sooiety during 'tho-«

last, fow months, the' committee ■ pledged, as security with certain trust companies, L 878.000 worth of the of the bprftwing'inMnvtff tors for an advance of L 175,000, and afterwards handed ' over another L 150.000 worth to the Bank itself. He declaren that the securities should • have been'held for the. safety .of,■ y depositors, and that the Society '.; shouldhave suspended payment rather than take such a ptep. .' v J ;?;.""/; T