Abbildungen der Seite
PDF
EPUB

undertake certain duties and responsibilities to which the law expects them to apply reasonable diligence and care. They are bound to account to the company for all profits, and are responsible for any losses that may be incurred by their acting ultra vires, or by their willful misconduct, or by negligence. Innocent mistake does not appear to render them liable, and they are entitled to place a reasonable amount of confidence in the officers of the company.

In the course of giving judgment on a case which is quoted by Dr. Heber Hart in his work on the law of banking, Dovey v. Cory, the Lord Chancellor made a statement containing the following remarks:

“The charge of neglect appears to rest on the assertion that Mr. Cory like the other directors did not attend to any details of business not brought before them by the general manager or the chairman, and the argument raises a serious question as to the responsibility of all persons holding positions like that of directors, how far they are called upon to distrust and be on their guard against the possibility of fraud being committed by their subordinates of every degree. It is obvious if there is such a duty it must render anything like an intelligent devolution of labor impossible. Was Mr. Cory to turn himself into an auditor, a managing director, a chairman, and find out whether managers, auditors, and directors were all alike deceiving him? I can not think that it could be expected of a director that he should be watching either the inferior officers of the bank or verifying the calculations of the auditor himself. The business of life could not go on if people could not trust those who are put into a position of trust for the

express purpose of attending to details of management. If Mr. Cory was deceived by his own officers there appears to me to be no case against him at all. The provision made for bad debts, it is well said, was inadequate, but those who assured him that it was adequate were the very persons who were to attend to that part of the business, and so of the rest."

At the same time the law appears to lay down that the trust reposed by directors in others must not be blind or unqualified or to the exclusion of the exercise of their own judgment, and they are bound to fulfill the regulations of their own company.

The duties and liabilities of managers are left in a similar state of vagueness as far as the law is concerned. Like the directors the manager has to account to the company for any profits that may accrue to him in connection with his position, that is to say, he must not conduct business on his own account and keep the profits for himself, and he is of course expected to use reasonable diligence and

care.

In a case in which a bank manager had obtained a commission for bringing about the amalgamation of two banks, it was stated in the course of the judgment that since he was a manager, bound to consult the shareholders' interests only, he could not retain a pecuniary benefit obtained by him in his character of manager not known to and not sanctioned by the shareholders who employed him.

It has been shown above that special regulations were made for the periodical publication of the liabilities of joint-stock banking companies under their note issue.

Apart from this, the statements of accounts which banking companies have to produce are, with one unimportant exception, merely those laid down by the joint stock companies acts; that is to say, once a year the accounts of every banking company have to be examined by an auditor or auditors. The auditors have to be elected by the shareholders once a year, and have access to the books and accounts of the company at all reasonable times. In the case of a banking company, an investigation into the company's position may be ordered by the board of trade on the application of not less than one-third of the shareholders.

A special form of statement of capital, liabilities, and assets for banking and similar companies was laid down by the companies act of 1862. It provided that every limited banking company and every insurance company and deposit, provident, or benefit society under the act should, on the first Monday in February and the first Monday in August in every year, make and put up in a conspicuous place in every office in which it carries on business a statement showing the capital of the company, authorized, issued, and paid up, and also a statement of assets and liabilities of the company on the first day of the preceding month, drawn up in the following form: Debts owing to sundry persons by the company

On judgment.
On specialty
On notes or bills.
On simple contract.

On estimated liabilities.
The assets being divided into-

Government securities.
Bills of exchange and promissory notes.
Cash at the bankers.

Other securities. This is the only form in which publicity is imposed by law upon banking in the ordinary sense of the word as it is now understood in England. It need hardly be said that from the form of the statement it conveys absolutely nothing to the ordinary member of the public, and these statutory statements, though they are still put up by the banks in their offices, with more or less modification from the original form, are perhaps the only statements issued by them to which no attention whatever is ever paid. Custom has made the banks publish the accounts and balance sheets which the law only compels them to lay before their shareholders in general meeting. Appended is a specimen of the balance sheet and profit and loss account of the Union of London and Smiths Bank, which is selected by reason of the fact that it presents its position with unusual detail.

THE UNION OF LONDON & SMITHS BANK (LIMITED).
Statement of accounts for the half year ending December 31, 1908

General BALANCE.

[ocr errors]

LIABILITIES.

£ s. d. Capital subscribed, £22,934, 100, in 229,341 shares of £100 each; paid up, £15 1os. per share.

3, 554, 785 10 Reserve fund invested in consols, local loans stock, and

Transvaal government 3 per cent guaranteed stock, as per contra..

I, 150, 000 £

d. Current accounts.

25, 116, 492 19 4 Deposit accounts.

10, 759, 370 8

35, 875, 863 7 4

[ocr errors]

S.

[ocr errors]

S. d. 3, 461, 362 2 I 24, 268 11

7

Acceptances and guaranties---
Liabilities by indorsement on foreign bills sold.--
Other liabilities, being interest due on deposits, un-

claimed dividends, etc.Rebate on bills not due. Profit and loss

£

d.
Balance brought forward..

193, 839 17 7
Net profit for the half year ending
December 31, 1908---

174, 507 6 3

563, 352 I II 29, 077 5 II

S.

[blocks in formation]
[merged small][merged small][merged small][merged small][ocr errors]

6,882,073 19 6,933, 965 · 2

[ocr errors]
[ocr errors]

Money at call and at short notice.
Investments:

Securities of and guaranteed by
the British Government...

2,939, 312 7 II
India stock and Indian Rail-
ways guaranteed bonds.---

313, 098
English corporation stocks, rail-

way and waterworks deben-
ture and preference stocks,
colonial stocks, foreign gov-
ernment and railway deben-
ture bonds...

1, 748, 753 4 8
Other investments.

94, 915 13

[ocr errors]

5

5,096, 079 12 Reserve fund (£567,000 consols;

£515,500 local loans stock; £207,600 Transvaal government 3 per cent guaranteed stock)

I, 150, 000
Bills discounted:

(a) Three months and under .-- 3,978, 249 15
(b) Exceeding three months..- 450, 511 13

[ocr errors]
[ocr errors][merged small][merged small][merged small]

4, 428, 761 8 10 15, 456, 759 15

I

[blocks in formation]

Loans and advances.
Liabilities of customers on acceptances and guaranties,

as per contra...
Liabilities of customers for indorsements, as per contra.
Bank premises, chiefly freehold (at cost or under)----
Other assets, being interest due on investments, etc.--

3, 461, 362
24, 268 II

7 1, 455, 879 4

137, 906 7 7

[ocr errors]
[blocks in formation]
« ZurückWeiter »