BANKING IMMORALITY.

New Zealand Herald, Volume I, Issue 131, 14 April 1864, Page 4

BANKING IMMORALITY.

| (From the " Mount Alexander Mail.") i A\ e have now waited suflroieutJy long for an 1 explanation of the damaging rumours that have j been current for some weeks past, with reference to i certain gold buying and gold selling transactions, in j which the Oriental Bank Corporation are said to be j mainly implicated. Quite enough bus alreadv been j published in the columns of the Mail to warrant the j oilieers of this bank in making some explanation of j their assumed complicity in what, on the face of it, ! seems to be a very disreputable piece of business. ■ A\ e have looked out day hy dav for some rav of light , which might enable us to remove the odium that was hung over the whole hanking community bv reason i of the statements which have long heen received in I Castlemaine at least, as matters of fact, with reference to tin* sale of adulterated gold. Indeed, we have challenged such an explanation, and we consider that. it the agent of the Oriental Bank had been in a position to clear up the painful uncertaintv it was his positive duty to do so. This course, bow- • ever, has uot been adopted ; but, on the eontrarv, it i has been attempted to smother the whole affair bv a • compromise with the I'nion Bank, in the hope, we ' presume, that the press would become a party to the ; condonation. The matter at issue, however, is of far too grave a character to permit of any further retii cence on our part : and as, the more we have looker! into it, the more are we strengthened in our first views, we cannot now consent to withhold from the , puhlie the written statement upon which our iusinuations have been based.

In another portion of the present issue will be found a plain statement, written by Mr. Thomas ■Hoddens, who for some time was engaged bv the Oriental "Hank to buy and sell jjold for the corporation. It js as wril fo mention that Mr. Hoddens has not now any connection with the Bank in question.

and, indeed, that a disputed account still stands between him and friendship for his late employers. ( nder ordinary circumstances, then, anv such charges made by a person >o siluatcd would be received '-urn //ratio .sY/Z/.v. Hut we ur.. v bound to admit that a careful perusal of the narrative which Mr. liodgens gives goes far to convince us that there is more than the mere shadow of a foundation for the disgraceful revelations which he makes. It will be observed that the writer does not attempt to deny his own complicity in the frauds of which be accuses the Oriental Bank. He admits having sold gold under false pretences, at the instance of the banking agent, and this confession alone appears to he sufficient to surround his statements with an evidence of truthfulness. o\'o man willingly accuses himself, and when a dar/icep* cr/miitix, without any apparent offer of reward,

" makes a clean breast" of his own share in the conspiracy, we arc at least «'ttco united to believe in the sincerity of liis motive. Presuming that Mr. Tfodgcns lias written nothing bul the truth, and lias "set down nought in malice," il heroines compulsory upon us to assist the disclosures by every means in our power, in order that the public con faience in banking morality may not be shaken hv insidious rumours, which it may be within the power of the accused parties to explain away. " Do" don't eat dog." as a u'eneral rule ! and when we find one bank deliberately preying upon the cash box of a fellow institution, we have a rijht fo inquire how the pockets of the outside public might not be in danger under a system of management which ignores the ordinary commercial and moral hypotheses. The assertions made by Mr. llodgens have been noised abroad pretty freely, and there is no doubt that they are believed in by the majority of tlie community. It is well known that when ibe Union Bank discovered that they had suffered loss in consequence of having purchased from the agents of the Oriental Bank a (juaniily of gold of lower value than was represented, I hey brought an act ion, which was afterwards settled by defendants paving all costs and disgorging (he amount which had been improperly obtained. This condonation in the face of the rumours which were current, lent a very ugly colouring to the matter, and to a great extent warranted the conclusion that all had not been * ( fair and above board." ff Mr. llodgens' story is to be believed, these rumours are now confirmed ; and it remains to he seen by what means the Oriental Bank will purify their establishment of the stain that has been cast upon the honesty of its chief officers.

The cbargcs made by our correspondent amount (o fhis:—l. That lie, as a servant of the bank, was suborned to practice a gross imposition upon 11 rival institution, and to defraud the Union Hank of certain sums of money by selling adulterated bare of gold of inferior quality, representing them as metal which on the market is known 10 be of a superior degree of fineness. 2. That he received distinct instructions from the au'ent of the bank to lower the quality of gold by allowing it with base metal, in order to make up for losses which arose out of an unhealthy competition with other banks. 3. That, iu order to more effectually disguise the iriek that was being practised, fictitious names were used sit the instance of the agent; and that miners were actually paid by the bank to become parties to the conspiracy, by representing that tho gold offered by thnn (sub rn&a- for the Oriental Bank) was the produce of their own daium ! Ami, -f. That, writing under ii fictitious name," one of the Oriental Bank employes extracted the sum of unlawfully from the private pocket of a clerk in another establishment, out of which Mini the expenses of an unsuccessful gold selling trip to Sandhurst were paid bv the ()riental .Hank.

We ha ve given the fullest publicity to (his matter upon purely public grounds; and in that light we hope to see it discussed and investigated. If the charges made by Mr. llodgens are shown to be false or malicious, we shall be ready to deliver him over to the punishment which be will have richly merited. On the other hand, should the directors of the Oriental Hank shrink from a public explanation—should they refuse to sift the charges thoroughly, and give proof of being themselves in 110 way party to the Iraud —by visitiug suitable pains and penalties upon the offenders—then they cannot be surprised if the public be recommended to have as little as possible (o do with a company that can for a moment tolerate so gross an infringement of the laws of common honesty. jVot the Union Hank only that has been victimised, but all other banking corporations in the colony arc equally interested in removing—arid, indeed, it becomes their duty fo ell'aci—this blot upon their common character, by every means iu their power. We .shall, with painful curiosity, wait the result of a further investigation of this disgraceful subject.

{loUs-IIUYING DISCIOSUHF.B. Tlie following statement with refi-rence to the recent gold buying transactions, to which we hare oil several occaeione referred, haE been handed to ub

(.1/. A. Mail) by ITodgens. gold assayerof Chewton. We publish it without alteration :— Chewton, 11th January, ISGt. 1. When the compact between the banks (for the purpose of keeping down the price of gold) was broken. gold immediately rose to a most ruinous price. T. as gold buyer to the Oriental Bank at Chewton, refused lo buy at increased prices. Mr. Tnite, the agent at Castleniaine, called upon ine and asked me wlint I intended to do under the competition. I told him that I intended not to increase the price at. present, but to let the customers sell their gold to the other banks ; for if we purchased at present rates, we would lose at the rate of -Is. per ounce, and it would be easy when the competition was at an end to get back our customers by an advance of 3d. per ounce. Mr. Tnite then infrrmed me that he had received instructions from Melbourne not to send down any gold that cost more than 7Gs. per ounce standard, but to protect our customers, and lie gave me instructions to buy at the ruling rates, lind that he would take the gold and allow me Gd. per ounce for buying. Mr. Taite accordingly took the gold, and I was credited Gd. per ounce for a few weeks, What he did with the gold I cannot say ; but shortly afterwards lie had a large bar. purchased from Messrs. Mackintosh, of the Vineyard Reef, which bar he told me T had better dispose of myself. I therefore drove up with him to Maklon, and on the way up he told me to sell it to Messrs. Waruock and Brothers, agents for the Union Bank, and to say that the bar came from Strangways. I then, upon arrival at Maldon. sold the gold to Messrs Warnock and Brothers, at 82s. per ounce, representing the bar to come from Strangways, but offering at the same time to sell it by assay. I gave the name of '■ Peters & C 0.," and received the cash, which cash I paid over to Mr. Lucas, the sub-agent at Chewton. When 1 was selling the above bar (o Messrs. Warnoek and Brothers, there was also another person selling a large bar, for which he received 85s. per ounce, as the man who sold the gold while I was there received 83s. per ounce for a bar of TJaylesford gold, which was entrusted to him to sell by the Oriental Bank, and that the Oriental Bank paid liini ten shillings for the sell-

2. Oot instructions from Mr. Tiiite to retort the alluvial gold, us it would sell above its value as Bcndigo reef gold ; consequently retorted the alluvial gold, (Hid Mr. Flukle nml T started oil'for Sandhurst —Fluide with the Custlemaiiie gold, I with the Chewton. I sold the Cliewtou gold for 80s. 3d. per ounce ni'tor melting. While I was in the melting house, Mr. Fluide eume in with his gold, which the smelter refused to buy. After 1 was settled with by the Hank of Yi-toriu T met Mr. Fluide, who informed me that on first weighing the gold the clerk made an ewor of 1(5 dwt., but when lie had it re-weighed it was tlie right weight, but that he was determined, as lliev did not purchase the gold, to make them pay the difference, which would more than cover bis expenses to Sandhurst. The clerk of the Victoria limil; told Mr. Fluide if on his arrival he found there was any mistake in the weight, he would pay it out of bis own pot-kef, Mr. Fluide, consequently, on his arrivhl at Castleniaine, wrote to the cashier of the Victoria Bank under u fictitious name, claiming the iZi. which was remitted to him, and out of which the Oriental Dank paid Mr. Fluide's expenses to Sandhurst . ii. Mr. ITuidu and I started for Maiden, and I sold both Castlemaine gold and Chcwton gold to Messrs. Wurrioek, they giving inc u cheque in favour of Messrs. Peters, on 1 lie T'nion Bank, which cheque I handed to Mr. Taite. and to avoid detection the che<iue was paid into Mr. Taitc's private account at the Bank of Victoria, endorsed by Ml*. Gibson, the accountant. of the Oriental Bank Corporation, "with tlie name of Peters ft: Co. 4. Got instructions from Mr. Taite to melt flown tlie gold and add sufl'cient of some other metal to cover the loss in melting. This gold was sold bv a>snv to the Chartered Hank, Castlcinaine. The Union Bank intended to proceed against the Oriental Bank on five bars, retained in possession of the I'liion—two burs pot" up at Castleniaine, two melted from the raw gold bv Messrs. AVarnoek, and one melted bv me, 'J'he Oriental !'ank regularly sent Mr. ITluide and Dolphin up to Maldon every Saturday for the purpose of disposing of inferior gold. They besides had a regular depot for inferior gold at Mr. McKenzies. Kaglchuwk, where the miners ire-re employed to .sett thf \ioht f/x oft of their vim c/ff/'/Hx, and ire re j,ak( by the Orifittvl Rattle Jor dohoj .so. The Branch of the Oriental Bank, at Sandhiiist. were also kept in supply with inferioa gold for sale as ♦Sandhurst reef gold. The Oriental Bank also employed Messrs. Bell and Homes, to sell Daylcsford gold in this district. Mr. Bell sending the gold round by Ins travellers, who were orders? for sate. Some of the gold I purchased from the travellers, and lost money by so doinirThe price which the Oriental Bank purchased gold at was so excessive, that when it was sold up the country, under false pretences, there Mas a loss of ••£3s)—which they debited niv account with.