HOW BANKS ARE FLOATED.

Lyttelton Times, Volume LI, Issue 5611, 18 February 1879, Page 7

HOW BANKS ARE FLOATED.

At an extraordinary meeting lately held of the shareholdere ;in: the ,HuR 1 and County Bank, which collapsed after 'the l City of Glasgow Bank failing, a waS submitted of a somewhat startling nature. ' The report stated that the directors fleeted at at the last meeting had investigated the matters connected' ! with the formation and promotion of ' the ■ company, and they now discovered that thee Bank ■ was only promoted by two'personß-rMtStanlet, the. managing brother-in-law. For seven 'years previous to his going to Hull, Stanley had .been a promoter of companies, and had'ffioated eight companies, all of which Had heen unsuccessfid. The articles ,of association had been signed by seven persons who had one share each in the Bank. - One of these had his share paid up by Stanley. Another person became a clerk in the Bank, and, with the -exception of Adams, his wife and Two children, and Stanley and his children, only one person in Hull or ite suburbs -had. subscribed for any shares in the Bank, The articles of association contained a clause which gave Adams, as secretary, power to appointmanager, and he appointed Stanley for r ten years at a salary of at least £BOO petfftflnum. By this time 600 shares bad been subscribed) And the shareholders beoime suspicious, as no directors were appointed and~a requisition was,, presented to SJtanfejrr"directors at once.. o He'Sajd he should-do so at his own and he-afferwarda ;bagan to enter into agreements with . various persons at the' expense ..of the Company. He appointed Mr Alexander, London, manager for five years certain. He was to have £IOO a year, with a commission of one per cent on deposits, 1,-lfi;. per cent upon all moneys paid to the London branch) and one-fourth of all the profits accruing in the London district. He appointed Mr Tellyard, solicitor, at 50 guineas per annum,.and three guineas a-day and travelling expenses when visiting Hull.on the business of the. Bank, and Mr Trotter, auditor, on the same terms as Mr TeUyard,- * The- directors hadnow come to the-:conclusion thab;the Bank had bean projected ..without' anjr'hnpa of success, and the .promoters Ead^spent£2soo in a hopeless attempt. The company appeared to have been promoted for the personal benefit of Stanley Adams. Inconsequence of this and other matters, . the directors, had oome to the conclusion that the only thing to be done was to wind up the company voluntarily.