[From Manx Sun Dumbell's Bank, 1900]


THE 3rd of February, 1900, will be a day of evil memory in " Our Island Story" for generations to come. It was on that day Dumbell's Bank, virtually the Manx National Bank, tottered to its fall, and, in its fall, spread ruin and misery fax and wide. To all but a very few it was veritably "A bolt from the blue." Amongst the excepted few were the two managers, the three auditors, and one of the four directors. It is now only too apparent that these officials must have known for some time that the stability of the Bank had been dangerously sapped, and (that all the skill and cunning with which it was being from time to time propped could only delay the evil day of its disastrous collapse. To them, no doubt, that evil day, with the inevitable retribution, came much sooner than expected.

The three other directors may be also included, amongst the few to whom the catastrophe was not as " A bolt from the blue." Their eyes had been suddenly opened to the perilous position in which the Bank stood, but opened only recently and much too late to render any efforts of theirs to avert a catastrophe of any avail. Their surprise and consternation when they were first made to realise that the Bank was on the very verge of ruin were as great as that of the unfortunate shareholders and depositors when the actual collapse came a few weeks later. In that they realised with such surprise the true position of the Bank only a few weeks before its fateful collapse lies the culpability of the directors.

When they had to come face to face with the victims of the catastrophe to give an account of their stewardship they frankly acknowledged the culpably perfunctory way in which they had discharged their duties as directors though in this there was neither consolation nor compensation to the unfortunate depositors and shareholders. One of these three directors, Mr Penketh, was held to be entirely free from blame as he had only recently joined the Board. The Chairman, Mr W. B. Stevenson, was more pitied than blamed on account of his great age and the fact that he was one of the greatest sufferers by the Bank's failure.

For Mr Mylrea - who had hitherto held such a high reputation for capacity, straight-forwardness and thoroughness in the discharge of all the duties entrusted to him, whether as member of the Legislature or as company director-no excuse could be found that would hold water. He was not without excuse, as will be presently seen, though many thought, and not without reason, that in descending to such a plea plea of blind trust . in the managers, who had betrayed his implicit confidence in them- - he aggravated his offence.

But enough by way of general remark. Our purpose is`to give a detailed history of this far reaching calamity,, and to do so, mainly by official documents and by statements taken in public meeting or in the Civil and Criminal Courts from the lips of some of those who, in one way or another, played an important part in relation to the fortunes, or rather misfortunes, of the Bank. We shall commence with a. descriptive account of the public announcement of the closing of the Bank, and what immediately followed, leaving a history of the circumstances which led up to that failure to the statements made by Mr Mylrea and others who were behind the scenes and whose speeches will follow in due course.

How and When the Bank Closed.

Practically the Bank was closed at 4 o'clock in the afternoon of Friday, the 2nd. of February, though suspension of payment was not formally announced till the following morning. A few minutes before 10 o'clock, on Saturday morning, a bill-poster was seen to affix a placard to the principal door of the Bank, at the foot of Prospect Hill, Douglas. Naturally, a newly posted announcement on the Bank door excited the curiosity of some of the people passing, and they stopped to read it. This is what they read:-


Regret to intimate that, in consequence of withdrawals of deposits, they are compelled to suspend payment, but they have the satisfaction to announce that they have made arrangements for


to take over the Assets and assume the responsibilities of Dumbell's Banking Co., Ltd., and that, in order to avoid inconvenience to the customers of Dumbell's Banking Co., Limited, Parr's Bank, Limited, are prepared at once to advance to the


of Dumbell's Banking Company, Limited, 10/-per pound of the amount appearing to their credit in the books of Dumbell's Banking Co., Limited, and will open in these Premises on Monday next, at 10 o'clock.

How the News was Received.

A crowd soon gathered round this startling announcement, and many, as soon as they had fully realised it., full significance, rushed away to communicate the woeful tidings to others. Thus it happened that men, coming down town to their ordinary business at the ordinary time, were met on the way by excited acquaintances, whose greeting was: "Have you heard the news? Have you heard that Dumbell's Bank has suspended payment?" In this way the desolating news spread through the town with surprising rapidity, and the telegraph flashed it to all parts of the United Kingdom. There was soon a rush of shareholders and depositors to the Bank, and when they saw the confirmation of the rumour in the. official announcement on the Bank door there were some sorrowful scenes, though the majority gave little or no outward and visible sign that they realised, as many of them must have done, that this official declaration spelt ruin, wholly or partially, for them and those clear to them.

Parr's Bank Intervenes.

By that morning's post the shareholders had received a circular, of which they did not realise the evil purport till they became aware that it was supplemented by this announcement that the Bank had suspended payment. The circular was as follows:-

Dumbell's Banking Co., Limited, Douglas, 2nd February, 1900. Dear Sir or Madam,-Your directors have considered it advisable to enter into a provisional agreement with Parr's Bank, Limited, to take over the assets and liabilities of Dumbell's Banking Company, Limited, and to continue the business.

Purr's Bank, Limited, is an old-established and well-known Banking Institution with large resources, having a capital paid up of £21,370,000, and a reserve fund of an equal amount.

Their business is very extensive, not only in London, but throughout Lancashire and Cheshire and other parts of the country. Your directors have given the proposal most careful consideration, and they recommend it for adoption by the shareholders. They are advised that, in order to carry, out the agreement, it is necessary for Dumbell's Banking Company, Limited, to go into voluntary liquidation, and accordingly a meeting of shareholder, is called, for Monday, the 12th February, formal notice of which is enclosed.-Yours faithfully,

W. B. STEVENSON, Chairman.

By the same post was also received by each shareholder the appended notice of the meeting referred to in the Chairman's circular :-Notice is hereby given that an extraordinary general meeting of the above Company will be held at the Masonic Hall, Loch Parade, Douglas, at 12 o'clock noon, on Monday, the 12th day of February, 1900, for the purpose of considering and if deemed expedient passing, in accordance with section 112, sub-section 3, of the Companies' Act, 1865, the following resolution as an extra-ordinary resolution, that is to say-

(1) "That it has been proved to the satisfaction of this meeting that the Company cannot, by reason of its liabilities, continue its business, and it is advisable to wind up the same.

"And that Thomas Horsman Parker Mylechreest, of 4, Bartholomew Lane, London, E.C, and John Allen Mylrea, of Douglas, be, and they are hereby, appointed liquidators for the purposes of such winding up, with power for either of them to act alone.

(2) "That the liquidators be instructed to carry out the provisional agreement which has been entered into with Parr's Bank, Ltd., with such modifications as may be agreed upon between the liquidators and the Bank."

It has been considered advisable that the above resolution should be confirmed at a subsequent meeting as a special resolution, and if the resolution is passed it will be submitted for confirmation as a special resolution at a meeting which will be subsequently convened, and of which due notice will be given.

By order of the Board,

JOHN SHIMMON, Secretary.

The full meaning of the circular was at first grasped by few of the shareholders, and indeed many of them did not realise that they were the holders of comparatively worthless shares until they learned than the Bank had suspended payment. Accompanying the circular and notice was a proxy form, of which the following is a copy:-

DUMBELL'S BANKING COMPANY, LTD. I.................................. of ........., being a member of Dumbell's Banking Company, Limited, and entitled to vote, hereby appoint W. B. Stevenson, Esq., the chairman of the company, whom failing, I appoint John Allen Mylrea, a director of the Company, whom failing, I appoint Charles B. Nelson, a director of the company, as my proxy to vote for me on my behalf at the extraordinary general meeting of the company to be held on the 12th day of February, and at any adjournment thereof. And also as my proxy to vote for me and on my behalf at the extraordinary general meeting to be held on the 27th February, and at any adjournment thereof.

Parr's Preparation for the Emergency.

As soon as this provisional agreement had been come to, Mr Mylechreest, the then Superintendent of Branches, but now Parr's representative in the Island, came to Douglas, bringing with him from the head office of that Bank in London a large staff of clerks and £500,000 in gold and notes, so as to be prepared for possibilities — for probabilities, in fact

The day Dumbell's Bank suspended payment being Saturday, made the inconvenience of the suspension more immediately felt, for builders and other employers were in the habit of drawing on the Bank on this day of the week to pay their workmen's wages, and farmers and others, came into the town for a similar purpose. The consequence was that breadwinners of many families had to go home that day without their weekly wage. So it will be seen that already the baneful influence of the Bank's failure was making itself felt beyond the circle of the shareholders and depositors.

Parr's Advance to Depositors.

Mr Mylechreest, in order to enable depositors to meet such pressing demands as the payment of wages, decided to re-open the Bank at 1-30 in the afternoon, and to advance to depositors any sum they required up to half of their deposits This, of course, left out in the cold such employers and tradesmen as had overdrafts beyond the value of the securities they had given As it was, there was a surging crowd at the Bank door sometime before it was re-opened, many not immediately in want of money being anxious to recover possession of even half of their deposit.

As soon, however, as they fully understood the terms on which Parr's handed over the money, many of them hastened to return all of which they were not immediately in need.

The terms were set forth in the following form, which each person had to sign before receiving any advance on his or her deposit: - To Parr's Bank, Limited.

In consideration of you advancing to............... in an account which ............ have opened with you with the sum of £.................... hereby assign to you by way of reimbursement and security to you all sums of money which now are or hereafter may become due to......... from Dumbell's Banking Company, Limited, and............ authorise you to receive such amounts and in............ name to give good discharges for the amount you may receive.

This very loosely drawn document led to much altercation over the Bank counter, and there was much consequent delay, many grumbling that there should be any such stipulation. It was several days, however, before depositors, for the most part, realised that they were not actually drawing a half, or any part, of their deposit in Dumbell's Bank, but were merely receiving a loan from Parr's Bank of which their deposit in Dumbell's Bank to a similar amount was accepted as a security, that should the security fail the liability would remain and in the meantime there would be full interest to pay.

On the Monday following the Black Saturday, the rush of people to the Bank, eager to obtain the advance, was even greater than on the Saturday afternoon, but gradually the real nature of the transaction became generally known, with the result that the " drawing out " on these terms ceased, and, for the most part, as already stated, the money was returned..


The Council of the Isle of Man Chamber of Commerce deserve credit for publishing timely explanation as to the exact condition upon which Parr's made advances up to the half of the deposit on the application of any of Dumbell's depositors, and a letter addressed to the managers of Parr's Bank elicited the following reply:-

(1) The amounts up to 10/- in the .£ on deposits in Dumbell's Bank are advanced by Parr's Bank as an outside bank entirely, as they may or may not take over the business ultimately.

(2) If persons who receive advances from Parr's desire to pay them off, they can do so, and receive the assignment note back again.

(3 and 4) The advances by Parr's, if simply transferred to an account at Parr's, or withdrawn altogether, will be chargeable with interest at local rates. (This is 5½ per cent. interest, and, say, one per cent. for commission; total 6½ per cent.) If the money is left at Parr's, and none of it used, then no interest will be charged or paid.

How News of the Failure was Received in Other Parts of the Island.

Simultaneously with the posting of the fateful announcement on the principal door of the office of the Bank. at Douglas on Black Saturday, a similar document was placarded on the doors of the branch banks in the other towns of the Island. As a consequence, similar scenes to those that took place at the Head office in Douglas also occurred at the branch offices in Ramsey, Peel, Castletown, and Port St. Mary.


The announcement caused consternation when first promulgated, though the trade of the town went on much as usual. Dumbell's did a good business in Ramsey, but the larger proportion of tradesmen dealt with the other banks. Unfortunately, there were a good many shareholders in the north, and some of these, it was feared, would be practically ruined. The failure was the one topic of conversation throughout that day and for some days after. Dumbell's held a large number of country deposits, and amongst these depositors there was much consternation. The country people were greatly distressed on hearing the news that the Bank was broken.

It quickly got noised abroad that Parr's had agreed to pay depositors half of their cash on Monday, and there was a great rush, particularly of country people, to the Bank on that day. The prevalent idea was that it was advisable to take half a loaf when it was offered. It was soon found, however, that the offer was not so good as it looked, but that it was only a loan from Parr's intended entirely to relieve persons in urgent need of money, and of no value to persons who had simply placed their money in the bank for security and to draw interest. When some who thought to get ten shillings in the pound were presented with a draft agreement, assigning to Parr's all their claim on Dumbell's, they drew back and would not sign. Others, however, signed, some turning over the account to Parr's, and others taking the money to the other banks.


On Monday Mr Nelson, one of the directors of Dumbbell's, addressed those who had gathered about the Bank awaiting admission. He expressed his sorrow on account of the disaster, and said he himself was a sufferer with others: He urged patience, saying it would be most unfortunate if the shareholders had to be pressed. Many a man might have plenty of property, but if he were pressed to realise it, it would be very hard for him. This speech had a reassuring effect for the time, as there was no suspicion then that Mr Nelson had involved in the failure of the Bank in a way that eventually brought him into the criminal dock and Bankruptcy Court.


The news caused equal consternation in Laxey, where "Dumbell's " had always been the popular bank, owing probably to the influence of the late, Mr Geo.W. Dumbell, who was for many years Chairman of Directors of the Great Laxey Mining Company, Most of the local trades-people and private residents had their accounts there, and a large proportion of the monthly remittances from Manxmen in South Africa, were deposited in the Bank. There was also a considerable number of local shareholders. On Monday the doors of the Laxey branch were besieged by an excited crowd eagerly awaiting their opening in order to withdraw or transfer a. moiety of their accounts Great anxiety was felt on Saturday for the miners, who received their monthly pay mainly in Dumbell's notes, and the anxiety was only allayed when it vas found that the Isle of Man Banking Company were prepared to receive the notes in exchange for gold.


The news of the failure came as a thunder-clap on the people of Port St. Mary and the district. Numbers of people visited the Bank during the day for the purpose of depositing or withdrawing money, only to find the door closed to them, and an unwelcome notice posted in the window tha, payments were suspended. The fact that Parr's Bank would advance 10s. in the £ gave a certain amount of consolation to the depositors, but many and loud were the imprecations against certain persons connected with Dumbell's Bank. What seemed to irritate people most was that deposits were received up to Friday afternoon. Several heavy deposits were made at the Port St. Mary branch during the week, and it was not unnatural that a most bitter feeling existed. A large number of not altogether well-to-do persons had entrusted their all to the hands of Dumbell's, and the greatest sympathy was felt for them in their losses.

One gentleman who had recently come to reside in the parish went down to Dumbell's on Friday with the intention of opening an account with, the Company, but when he arrived at the Bank he found he had left the cheque on the table at home.

It is also said that a heavy shareholder living in Port St. Mary was offered £8 1s. for his shares in the Company the previous week. His family wished him to hold to the shares a little longer, which he did, and so lost a good opportunity of disposing of them.

Several heavy depositors in Port St. Mary and Port Erin had, during the week, withdrawn their deposits.


Early on Monday morning Parr's Bank, Ltd., had the sum. of £10,000 placed in the Port St. Mary offices lately held by Dumbell's Banking Company. When the doors were opened the space allotted to depositors. was quickly filled with an anxious crowd, all apparently with the one intention-that of drawing out the 10s. in the £. The clerk in charge, who was from Parr's London Bank, explained from time to time to those who were withdrawing the money, that there was no Dumbell's Bank, and that the money which was handed over belonged to Parr's Bank. Depositors in Dumbell's had the option of drawing out half their amount to their credit (on which they had to pay six per cent., interest), or of transferring the half to Parr's Bank. The clerk had the greatest difficulty in spelling the names of the depositors and their places of abode, and frequently had to ask depositors to write them out.

On Tuesday matters had calmed down somewhat, but there was still a great amount of business transacted, depositors chiefly transferring their accounts from Dumbell's to Parr's.


Peel shared the general consternation in the stoppage of the Bank. The news spread with marvellous rapidity, but was received calmly, though not without disquieting comment. One of the things to create a want of confidence was that the notes of the Bank were refused at the Post Office. Nothing like a panic occurred, and there was no extraordinary draw on the a :her banks. In all the branches there was a plentiful supply of gold.

The Effect on Other Banks.

As a matter of course the suspension of payment by Dumbell's Bank affected the other Insular banks. Their private advices had led them to be prepared for something of the sort, and it is satisfactory to have to record that there was nothing in the nature of a run on them. Of course some timid depositors and note holders did turn up and in a flustered and occasionally apologetic fashion demand gold in respect of their deposits or the notes they held, but they were quickly and smilingly obliged by the cashiers;, who handed over the hard cash with a promptitude and affability that were very reassuring. These other banks, too, received Dumbell's notes and honoured them at full face value. The Post Office, however, at first declined to accept Dumbell's notes in payment, and this caused doubt in many minds as to whether the notes, now the Bank had broken, had their face value. As a matter of fact, as is now generally known, their value was not at all affected by the suspension of payment by the Bank, as the Government held security to their full value. But this was not generally known at the time, and, consequently, many ludicrous scenes were witnessed in connection with persons who either disbelieved or had not heard that the notes of the closed bank were as good as gold. These doubting or ignorant ones resorted to subterfuges that were laughable in their meanness to get rid of the one pound securities. It was wonderful to observe the sudden desire to discharge Christmas bills with which some folk were seized, and indeed many a tradesman on that Saturday paid accounts that would not in the ordinary course have been settled for many months hence. Otners had pressing need of silver and sent all over the place for such coin, Dumbell's notes being almost invariably tendered in exchange. Yet others developed abnormal thirsts for alcoholic refreshments, but never quenched these thirsts with more than one glass of beer at any one public house, and always tendered in payment for the malt liquor a bank note-Dumbell's of course. They went to lots of needless trouble and some persons benefitted-the law of compensation again. There were, however, a few foolish people who actually parted with nõtes on the closed bank for less than the face value, and the buyer in some cases made a rather handsome profit on the transaction.


In addition to the half million of gold coin brought to the Island by Parr's Bank in readiness for Saturday, the Isle of Man Banking Co. — the officials of which institution had evidently heard something — brought a large quantity of gold to Douglas and distributed a portion of it over the branch banks. The Manx Bank, Ltd., chartered the steamer Ellan Vannin from the Isle of Man Steam Packet Company, and despatched' that good ship to Liverpool on Saturday night for the purpose of conveying to Douglas a consignment of gold for the bank, and this consignment became to hand on Monday morning. Parr's, also received further large consignments of the standard coin on Saturday and Monday. The Douglas branch of the Liverpool Union Bank, Limited (who have combined with Lloyds Bank, London), had a large stock of gold, on hand, supplemented with a good supply of Bank of England notes, and the local manager, Mr G. R. Bargery, did all. in his power to assist in the emergency.

Incidents of the "Smash."


On Saturday morning, when the run began on the Isle of Man Banking Company's Branch at Ramsey, it became urgently necessary to despatch a parcel of gold to the northern town. A brougham was hired at Mr R. H. Collister's stables, and two horses were put in. The turnout was driven by James Devine, an old hand on the road, and he succeeded in doing the journey in one hour and a half, which was splendid going. To avoid the White Bridge Hill, and keep on the trot the whole distance, he took the route via Groudle. Mr Maitland. Chairman of the Isle of Man Banking Company, rewarded the driver's exploit with a sovereign. This is the record time for the drive to Ramsey, the previous best having been that of the late Mr G. C. Heron, who, on one occasion, accomplished the same drive in one hour am. thirty-five minutes, while in pursuit of a levanting and defaulting clerk.


A striking feature of the rush on the Monday ,was the number of persons who, to judge by appearance, had hardly two coppers to jingle together. And yet these persons had banking accounts-and, what is more, had in connection with these accounts moneys to their credit.

Many sleek looking tradesmen who also had accounts with Dumbell's Bank-accounts showing overdrafts, eyed these ill-clad and mean-looking persons enviously, and not a few of the tradesmen registered inwardly a view that ere long they would make some of the drawers pay that which they owed. Quoth one well-known Victoria Street shopkeeper, "God bless me, there's Mrs . That woman's owed me a bit this four years, and has always told me when I've been after her, that she could hardly get a meal's meat for herself, let alone pay me. But it's seeing her I'll be thus evening, I will."

One maiden lady, of over 50 years, who keeps an inn in Douglas, after a hard struggle succeeded in withdrawing one half of the very considerable amount that stood to her credit at Dumbell's. So large was the sum she drew, and so heavy was the gold representing the sum which she received, that she fairly staggered under the weight of it as she proceeded down Victoria Street. It was with her a case of "like parents like child," as upon the occasion of the City of Glasgow Bank smash in 1878, the parents of the lady who secured her money — or part of it — on Monday, became so alarmed that they also withdrew many hundreds of pounds from a local bank, and became their own bankers. The method in connection with savings of moneys that they afterwards adopted was to allow the moneys to accumulate in the wooden "chist " until sufficient was gathered to pay for the purchase of a house, and upon such accumulation being accomplished, a house was forthwith purchased.


The London correspondent of "The Scotsman" wrote of the suspension of payment by Dumbell's Bank in the following weighty term: —

"The collapse on Saturday of Dumbell's Banking Company (Limited), which has thrown the Isle of Man community into a state of much distress, affords a striking instance of the dangers of working on too narrow a margin of reserve. That institution which was started in 1874, was one of the three banks which served the Island, the other two being the Isle of Man Banking Co. (Limited), which was founded in 1865, and the Manx Bank (Limited), established is 1882.

" The failed institution has an authorised capital of £180,000, in shares of £6 each, of which £150,000 has been subscribed, and £50,000, or £2 per share, has been paid up. Until the early part of the present decade its deposits were restricted to £900,000, but in recent years it has pushed ahead with a good deal of energy, and the deposits and current accounts, according to the balance sheet to the end of June last, reached £1,299,170.

" In this and other respects it went far in advance of its competitors, the deposits of the "Limited" Bank having during the last five or six years, risen from £800,000 to £998,000 only, and those of the Manx Bank from £180,000 to £196,000.

" In 1892 a syndicate of promoters took the town of Douglas in hand and started various schemes for its development as a holiday resort. A big gamble of land ensued in the neighbourhood, and much money was invested in the movement, a great deal of which was ultimately lost. To what extent Dumbell's Bank may have participated in this business or in projects which sprang out of it we shall learn later on. What, however, seems certain is that the directors have in one way or another lent the Bank's. resources in a too lavish fashion. for years past nothing has been added to the reserve fund, which only amounts to £40,000.

" With liabilities on deposits and notes reaching to £1,327,000, cash in hand at bankers amounting to only £114,353, or only 8.1 per cent. of these call liabilities, was deemed sufficient for safety. Five years ago the proportion of cash reserve was 18½ per cent.

" In the case of the other two banks a much more conservative policy was pursued, the proportion of ready money held by the Manx Bank to its liabilities on deposits and notes outstanding being 21 per cent, in contrast to 12 per cent, at the earlier date, and in that of the Isle of Man Bank 15 per cent., as compared with 15½, per cent. five years ago.

"It is not a little curious that in view of the discrepancies thus shown, Dumbell's Bank should have gained the lion's share of local patronage, though the most casual inspection of the figures of the balance sheet should have made it clear that the position was undergoing deterioration.

"Its discounts and advances amount to over a million sterling, but how they are split up is not shown on the accounts, nor is it possible to say what may be the character of the securities held against the advances.

"For the same reason one is unable to say what will be the approximate outcome of the liquidation.

" There is an uncalled liability on the shares of £100,000, which it is thought will be swallowed up in discharging the obligations of the Bank.

"In reference to the smallness of the cash held against deposits, it is only too well known that the case of Dumbell's Bank is no exception so far as regards a very large number of provincial banks. It is also notorious that much of the business done is of a nature that would not commend itself to a well managed London or Scottish bank. Too much is put into land and bricks and mortar to render the assets available in case of an accident.

"Another bad feature is that in order to give an appearance of undue prosperity inordinately large dividends are paid, whereby an insufficient provision is made for accidents.

" During the first seven years of its existence Dumbell's Bank regularly paid ten per cent. per annum. This was increased in 1889 to 15 per cent.; from 1890 to 1893 inclusive, 16 per cent. per annum was paid; in 1894, 16½ per cent. ; in 1895, 17 per cent., and since then a regular 18 per cent. has been paid, so that it is hardly surprising that shares were eagerly sought after by indiscriminate investors at heavy premiums, the price having quite lately stood at £8 per share or a premium of 300 per cent.

"If this episode induce investors to look more carefully into the balance sheets of provincial banks which pay large dividends, in order to ascertain the proportion of cash to liabilities on which they work, it will not perhaps have been an unmitigated evil."




On Wednesday, the 7th of February, a number of shareholders held a meeting to consider the course to be adopted at the extraordinary general meeting to be held on the following Monday. The meeting was private, but the following particulars were elicited:-

Mr W. Todhunter presided, and after a general discussion a deputation, consisting of Councillor Cottier (Douglas), Mr J. Mylchreest, M.H.K. (Castletown), Mr Thomas Teare (Ramsey), and Mr Edward Martin (Castletown), was appointed to interview Mr Mylechreest, and to ascertain from him what arrangements existed between the two banks. Mr Mylechreest informed the deputation that if the shareholders accepted the proposals to be offered at Monday's meeting be guaranteed there would be no call on them. Parr's, he said, wound take over all the liabilities and pay all the debts. If there was. a surplus remaining the shareholders would get it pro rata, while if there was a deficiency Parr's would make it up. On the other hand, should the proposals be rejected, Parr's would free themselves from the whole affair. They had come to stay, whatever happened.

A private meeting of shareholders was held on the following day (Thursday) at the Stanley Hall, Circular-road, to receive the report or the deputation. Mr W. Todhunter again presided.

The deputation made their report, and which is quoted in the preceding paragraph.

The Chairman added that the deputation were favourably impressed with the interview with Mr Mylechreest and came to the conclusion that it was in the interest of all parties to accept the agreement and pass the resolutions to be proposed at the following Monday's public meeting.

Mr J. M. Cruickshank, the legal adviser to the directors of the Bank, and himself a large shareholder, addressed the meeting, fully ex-plaining the terms of the proposed agreement with Parr's Bank, and strongly urging the sbareholders to secept it, not only from a selfish point of view as being best in their own interest, but because it would enable them to perform

The High Moral Duty

that devolved upon them of paying the depositors 20s: in the pound, and would save the Isle of Man from a great disaster. On the question whether Mr Mylrea should be appointed joint liquidator with Mr Mylechreest, Mr Cruickshank said the meeting might rest assured-although hard things had been said about certain people-that, whatever happened, when the liquidation was concluded Mr Mylrea would come out with clean hands.


Parr's Withdraw from the Agreement




An extraordinary general meeting of Dumbell's Banking Company, Limited, was held on Monday, the 12th of February. In connection with the meeting the notices (see page 18) had been forwarded to the shareholders in the Company.

Great interest was taken in the proceedings, and the meeting was attended by over two hundred shareholders, several of whom were ladies, These shareholders were mostly residents of Douglas, but not a few came from England, while parts of the Island other than Douglas were well represented.

On the platform were Messrs W. B. Stevenson (Chairman of Directors), J. A. Mylrea, C. B. Nelson, A. P. Penketh (directors), J. Shimmon (secretary and manager), J. M. Cruickshank (advocate), F. Browne (advocate), J. J. Creer (advocate), and R. S. Baron (acting secretary).

Mr Mylrea took the chair as Mr W. B. Stevenson, though present, was too ill to do so.

Mr Mylrea on the Situation.

The Chairman said: Ladies and gentlemen, we are met to-day, I regret to say, under circumstances infinitely more painful than any of us have yet contemplated, for it is my first duty to tell you that Parr's Bank, Limited, on Friday morning last, notified t us that they had withdrawn from the provisional agreement. with Dumbell's Banking Company on the ground of a breach by us of clause eight of that agreement, to which I will afterwards refer; and at a later interview, on the same day, they made another offer, to which I shall also refer; and that offer has since been further modified. It now remains for me to put before you the whole circumstances of the case, with the desire to conceal nothing, to excuse nothing, but to tell you the whole truth, so far as we know it. The

Painful Position

which I occupy to-day is one which, three months ago, I as little anticipated I should ever be called on to occupy as any shareholder in this room can have anticipated it. It is needless to say — indeed words cannot express — how deeply the directors feel the heavy responsibility which attaches to them, in that, having been entrusted with your confidence, they have, either by what they have done, or by what they have failed to do, contributed to bring about the sad position in which we find ourselves to-day. We feel, too, that that responsibility is in no way alleviated by the fact that, as the Board held collectively nearly one-seventh of the capital of the Bank, the pecuniary loss which must be sustained will fall upon them with crushing severity. But, ladies and gentlemen, whatever view you may hold with respect to Mr Nelson and to myself, I confidently appeal to you — and I am sure I shall not appeal in vain — not only for your forbearance, but for your sympathy for Mr Penketh,, who has only very recently taken the place of his father, an old member of the Board, and, above all, for our Chairman, Mr Stevenson, the chairman of this Bank for a quarter of a century — a gentleman whose honour I feel sure will emerge from this great trial unblemished and unstained (applause). Ladies and gentlemen, his most serious fault is that, he, in common with the other members of the Board, placed the most absolute,

The Most Implicit Confidence

in our general manager — Mr Alexander Bruce — and in our manager — Mr John Shimmon; and that confidence has, unhappily, been grossly betrayed. (Sensation and hisses.) On this subject — a subject upon which, naturally, the directors have the very strongest feelings — I could say a great deal ; and there is a great deal which might, and must yet, be said. But, at this juncture, I refrain from doing so, feeling that it must be postponed until the more serious business which is to-day engaging our attention is dealt with. It is painful to have to make these reflections on our two managers; but while it is just that the Board should bear the full blame. attaching to it for permitting itself to be ~o deceived, it is not right or just, either to them or to those belonging to them, that the Board should bear the whole blame, while those who have been either

The Active or Passive Authors

of this disaster are to escape untouched and unscathed (applause). I would like to say that the Board, in making this statement, make it simply as an explanation; they in no way offer it as an extenuation of what they can now see to be their

Unreasonable Trustfulness

and want of suspicion. For myself, I desire to ask for nothing at your bands but the sternest judgment, the strictest justice you may think it right to apply (Might applause). I have lived among you for fifty years, and it is for you who have known my life do say whether you think it conceivable that I would have willingly or knowingly contributed to bring about this disaster in which we have been plunged by blind and misplaced confidence in old and trusted officials of this Bank, who not only possessed our confidence, but were trusted and esteemed throughout all grades of society in the Isle of Man. I have only

One Relieving Thought

in speaking to you to-day, and that is that I am not indebted to the Bank (applause). I was indebted to the Bank, and my account has been a very profitable account to the Bank; but as soon as I ascertained that there was pressure for money I paid off the whole of my indebtedness ; and I would like to say this, further — and that, too, in this dark hour, is a comfort to me — I should like to say I have never used my position as a director of this Bank to speculate with the Bank's money, either directly or indirectly (applause). The closest scrutiny of my affairs will show that all the speculation; of my life — speculations properly so called — are covered by the sum of £150. But, gentlemen, you will forgive me if I say that

The Most Important Question

for us to-day, is to consider what is the best thing to be none at this juncture in the common interest of us all, and not to occupy time in investigating the conduct of directors and of officials of this Bank. That investigation, with all its consequences, the directors cannot, and will not shirk. On the other hand, both myself and they will tell the shareholders frankly, absolutely without reservation, what they have done and what they have left undone, and they will abide by the result whatever it may be. But

The Most Serious Matter

for us is at once, to-day, to consider our position, and how to make the befit of it (hear, hear). In order to enable you to understand the position, I must first briefly state what has recently occurred in narrative form. Little more than two months ago the directors be-came, for the first time, aware that things were not all right with the Bank. They at once set inquiries on foot, but we were obliged to act cautiously and circumspectly, lest we should bring about disaster by too open an inquiry. I regret to say that we received little help from the principal officials-Messrs Bruroe and Shimmon who still persisted in their

Suicidal Policy of Concealment.

But, by the middle of the month, the directors had convincing evidence before them that the funds of the bank were so completely locked up by advances and over-advances, and the danger of a large withdrawal was so great that, umess they could obtain the help of some powerful English corporation, the Bank was in the greatest danger. We, therefore, decided to approach Parr's Bank, Limited, with whom the subject of an amalgamation had on many previous occasions been talked over; and tins having been done, Mr Parker Mylechreest, superintendent of branches of Parr's Bank, came over, discussed the subject with the directors, and

A Preliminary Agreement

was arrived at,, following which Mr Mylechreest entered into an examination of the affairs of the Bank. He then returned to London, and :Mr Nelson and myself followed, and after pro-longed discussions with the directors of Parr's Bank, a draft provisional agreement was arrived at on Saturday, 27th January. We also arranged there the form of resolution for the meeting of shareholders, which it was absolutely essential should be posted not later than Friday, 2nd February, that is to say, the Friday following the Saturday on which he had come to the agreement. The reason why this was essential was that on that day we were bound by our Articles to pass the balance sheet, but inasmuch as it was impossible for us, in view of what we had discovered, to sign that balance sheet, or issue it to the shareholders a;. containing a true statement of the position of the Company, it was necessary to replace it with a

Notice of Resolution for Winding up.

In order to try and secure secrecy, we arranged that all the printing should be done in London. on Monday, the}9th, we returned from London, in order to get all matters on this side put into train. On Wednesday, the circulars and notices of resolution arrived, and we then found that the form of the resolution had been altered, but there was no time to exchange views and reprint it in the form which we should have preferred. On Thursday morning, 1st February, the provisional agreement executed by Parr's Banking Company, was submitted to us by Mr Mylechreest with a counterpart for our signature. On examining it, we found that this agreement contained an important clause which had never been suggested or discussed in London. It is clause 8 of the agreement, and I do not desire to say that it is other than a perfectly reasonable clause. For lack of time to negotiate, we had no option but to accept this clause and comr)y with its requirements, in the important circumstances to which I shall presently refer. The agreement between Parr's Banking Co. and Dumbell's Banking Co. we then signed and exchanged, and on Friday, 2nd February, the notices were posted. But on that day a demand was made upon the Bank which the Bank could not meet, and on Saturday morning we were

Compelled to Stop.

Mr Mylechreest, in view of possibilities, had returned to the Island with a stall and a large supply of gold and notes his intention being, as arranged in Lon-don, in case there was a stoppage, to open the following day in terms of the provisional agreement, and, accordingly, on Saturday, about 1-30, Parr's Bank opened for business. And now, ladies and gentlemen, having briefly recapitulated the course of events preceding the suspension, I will ask Mr Cruickshank to read to you the provisions of the agreement, and explain what was its scope.

Mr Cruickshank Reads and Explains.

Mr Cruickshank: I need not call your attention to the fact-because the Chairman has explained it-that the withdrawal from this agreement was only made on Friday morning. I only call your attention to that for this reason that I had the painful duty of addressing a good many of you last Thursday afternoon and explaining, so far as the circumstances would permit, the scope of this agreement; and I wish to make myself perfectly clear that at that time there bad been no attempt whatever to wthdraw from the position as it stood under this agreement. The agreement stands thus

Memorandum of Agreement made this 1st day of February, 1900, between Dumbell's Banking Company, Limited (hereinafter called the Vendors), of the one part: end Parr's Bank, Limited (hereinafter called the Purchasers), of the other part.

1. The vendors agree to transfer to the Purchaser the whole of their assets, property, and rights of every kind, including their uncalled capital and goodwill, and all their undertaking, and the right to use the vendors' name on cheques for the purpose of showing the continuity of the business. The vendors shall deliver to the purchasers possession of all the premises hereby agreed to be transferred immediately after the meeting of shareholders which is to be convened for the 12th day of February, 1900.

You will observe in that, that the question was asked at the lay meeting of shareholders as to the call. Now, I explained-but I have heard since that my explanation was not sufficiently full-that the assignment of the assets of the Company :to Parr's Bank entitled them to make use of that call.


2. The purchasers shall take over all the vendors' assets and liabilities as shown in a balance sheet to be audited by an auditor or auditors appointed by the purchasers, and shall out of the assets transferred to them as mentioned in clause 1, and so far as such assets shall be insufficient, out of their own moneys pay and satisfy such liabilities.

3. The vendors will procure each of their directors to give an undertaking to use their best exertions to secure a transfer to and the maintenance with the purchasers of the whole of the business of the vendors, and also that such directors will not become directors or managers of any bank carrying on business in the Isle of Man for the space of five years from the 31st day of December, 1899. The vendors shall call the necessary meeting or meetings, and take all such steps as may be requisite for placing themselves in voluntary liquidation and to enable the liquidators to carry out the sale and purchase hereby agreed upon.

4. This memorandum is provisional only and subject to the following conditions, videlicet: — (a) That this agreement shall be confirmed and adopted by the vendors at the meeting (without adjournment) about to be convened for the 12th day of February, 1900, and that the liquidators be duly empowered to carry out this agreement, and that they do forth-with after such meetings adopt and confirm the same.

That, said Mr Cruickshank, has been altered on the suggestion of Parr's, Banking Company, Limited, and their advisers to this extent that a confirmatory meeting was to be held, and notice was given of it in the notice calling the meeting.

(b) That one of the two liquidators to be appointed under the voluntary liquidation shall be Mr Thomas Horsman Parker Myle-chreest, the Superintendent of Branches of Parr's Bank, Limited.



Before I leave that sub-section, you will see, as to the appointment of two liquidators, that the notice couples with Mr Mylechreest's name the name of the present chairman of this meeting, Mr Mylrea. Now, I explained to those shareholders fully, I think, at the meeting on Thursday, how that came about. As you have heard, the negotiations were proceeding in London; time was of the essence of the contract; it was impossible to communicate with the Island and hunt about, and thus give away all the precautions that were being taken as to the secrecy, the necessary secrecy, and arrange for another name to be submitted for that of Mr Mylrea. It was, therefore, suggested that it was the only way out of the difficulty, and' he reluctantly consented to allow his name to be used as being the only course open. I know, as I told you on Thursday, that the duty ii distasteful to Mr Mylrea, that it is abhorrent to him, and that if nothing is to be sacrificed in your interests by his not taking up the office of liquidator, he will be only too pleased to retire.


(c) That the purchasers shall have the conduct of the realisation of the assets and property and of the payment thereout of the liabilities, with full discretionary powers of sale, or coin promise with or giving time to debtors, and of dealing with any matter arising in the realisation of the assets or the winding up of the business, and shall hand over to the liquidators for distribution amongst the vendors' shareholders the whole surplus which shall remain after satisfaction of the liabilities, the costs of the liquidation, the remuneration of the liquidators, and the costs, charges, and expenses incurred by the purchasers in realising the assets and winding up the business.

(d) Provided, on realisation of the assets and complete liquidation of the business, the purchasers find that the assets and property of the vendors cover the liabilities and the costs, charges, remuneration and -expenses mentioned in clause (c) of paragraph 4 hereof (but not otherwise), the purchasers shall pay to the liquidators, for distribution amongst the shareholders, the sum of 250,000 as the price of the goodwill of the business.


Now, there is some little misunderstanding about that. I told you at the meeting on Thursday that the agreement was simple, plain, and easily to be understood, and I think this is as! simple and plain as it can possibly be. They undertook, if the assets met the liabilities, that they would pay £50,000 for goodwill.

(e) If any dispute shall arise between the liquidators and the purchasers as to the amount in fact realised by such assets, it shall be referred to the President for the time being of the Institute of Chartered Accountants in London; or, if he shall be unwilling or unable to act, then to such one of the Fellows of such institute as shall be nominated by the President.

(f) The liquidators shall call up and enforce payment of such portion of the vendors' uncalled capital as the purchasers may from time to time direct, and the proceeds of such call shall be paid to the purchasers.

5. The purchasers shall be entitled to the profits of the business from the 30th day of December, 1899, and shall pay interest at four per cent. per annum, to the liquidators, for distribution amongst the shareholders, from the last-named date an the amount distributable amongst them after payment or satisfaction of the liabilities, and costs, charges, remuneration, and expenses as aforesaid until such payment is made.

6. The vendors and the liquidators shall, at the re qnest of the purchasers, perform and exe-cute all acts, deeds, and documents, and concur in all acts, and, on a proper indemnity being given, shall allow the purchasers to use the name of the vendors or the liquidators in any action, suit, or other legal proceeding which the pur-chasers may think necessary for the realisation of the assets.

7. If the purchasers shall deem it necessary or expedient, for giving effect to this memorandum, a further and more formal agreement shall be executed by the vendors, the liquidators, and the purchasers, with such further auxiliary powers and clauses as may be agreed, and, in case the parties shall not agree upon the form of such agreement, it shall be settled on behalf of all parties by Mr F. B. Palmer, barrister-at-law.


8. The basis of the foregoing agreement is a balance sheet made out by the vendors to the 31st day of December last, a copy of which, for the purposes of identification, has been signed by Charles Banks Nelson, John Allen Mylrea, Alexander Bruce, and John Shimmon, on behalf of the vendors, and Thomas Horsman Parker Mylechreest on behalf of the purchasers, and it is agreed that if the auditors in the course of their audit find that the vendors' liabilities on the 31st day of December last exceeded the amount of liabilities appearing in the above-mentioned balance sheet by the sum of twenty thousand pounds, the purchasers shall have the right to rescind this agreement, and it shall thereupon become null and void.

In witness whereof the said parties hereto have caused their respective common seals to be here-unto affixed the day and year first before written. The common seal of Dumbell's Banking Company, Limited, was hereunto affixed in the presence of

The common seal of Parr's Bank, Limited, was hereunto affixed in the presence of John Dunn, Director and General Manager (a member of the Select Committee of Directors); and E. D. Hyatt, Secretary.

Now, observe that that section 8 refers entirely and solely to gross liabilities. There is no question of assets about it--simply the question if the gross liabilities exceed by £20,000 the sum set out on the balance sheet which was the basis of the agreement, then they shall be permitted to withdraw.

That is, the whole of the agreement, and, as I say, the position turns pretty well to-day upon clause 8 (applause).

The Chairman Resumes his Narrative.

Continuing, from the part of his speech at which Mr Cruickshank interposed, the Chair-man said: Now the next point is that I will read the resolution which is to be proposed to this meeting, and will state the grounds upon which it has been based. Next I will try to explain their giving us notice that the agreement was rescinded, so far as they are concerned, under clause eight. Next I will state the subsequent offer made by them to us, and, finally, I will tell you the course which, after the most serious consideration, and having literally very few moments in which to make up our minds, after consultation with Messrs Cruickshank, Browne, and Creer, we, with the greatest deference, venture to suggest to you as the best course under all the circumstances to adopt in the common interest. Now, next I will read to you the resolution which is to be proposed to this meeting. Notice is given that a. meeting will be called, as has already been read out to you by Mr Cruickshank. The vital part of the resolution is sub-sections one and two. You will see in subsection one it is stated that it has been proved to the satisfac-tion of this meeting that the company cannot by reason of its liabilities continue its business, and it is

Advisable to Wind Up

the same, and that Mr Alylechreest and myself be appointed liquidators ; and the second sub-section says that the liquidators be instructed to carry out the provisional agreement which has been entered into by Parr's Bank, Ltd. You will see in sub-section one it is stated that it has been proved to the satisfaction of this meeting that the company cannot by reason of its liabilities continue its business, and it is for me to say that, of course, in the first in-stance, so far as to offer you formal proof, if formal proof were needed, of the fact stated in the resolution, that the suspension of the Bank on Saturday is prima facie proof of our inability to meet our liabilities. But I may just state further, and it is sufficient for our purpose, for the (resent time at all events, that the position of the Bank is this: That it has over-lent, and over-advanced

Beyond its Possible Resources;

it has tried to do too much business, and its reserves have become so locked up in securities not readily realisable that any moment a serious withdrawal, or a serious demand on our reserves, could not be met, and, as you know, it has not been met. That is the actual position of the Bank with respect to the facts which it is necessary to show to you under tha resolution. Now, ladies and gentlemen, comes

The Most Vital Point,

namely, the signing of the balance sheet, for the purpose of identification, by Mr Nelson and my elf, Mr Bruce, and Mr Shimmon, and the circumstances under which it was signed, and, being found incorrect, was claimed by Parr's Bank as their ground for vacating the agreement. I have already stated — and this is most material — that this balance sheet about which we are now talking is the balance sheet which the, directors, after what they had discovered, felt at once it was impossible to sign and issue to the shareholders as a true statement of the position of the bank, and hence their endeavours to find some arrangements with another institution. You may, not unnaturally, inquire, Why, then, did you sign the balance sheet? When Mr Mylechreest called upon us to comply with clause eight of the provisional agreement which has been read to you, and that was on the Thursday morning preceding the Friday on which we had to post our notice, we at once pointed out to him — Mr Fred Browne, advocate being present — that we

Could Not Pledge Ourselves

for one moment to the statement of assess, inasmuch as they would depend for their value upon the manner in which they were realised. Mr Mylechreest agreed that this was so, and that in signing the balance sheet for purposes of identification we could not be considered to be binding ourselves, to the value of the assets, as Parr's Banking Company, under the agreement, took the risk under that head.

We then pointed out that as regards the liabilities, in the few hours at our disposal it was physically impossible that we should, even :f we could, satisfy ourselves from the books of the Bank themselves, that our liabilities were as stated, and, in short, we pointed out, what I think you will all see for yourselves, that we could do no other then get the solemn assurance of the officials who were responsible for the balance sheet, and sign it on the faith of that assurance. Mr Mylechreest agreed that this was the prorer view to take, and, accordingly, Mr Shimmon, the general manager, was called up, clause eight of the agreement was read to him, and the importance of it ex-plained; and he then

Assured the Directors,

in the presence of Mr Browne and also of Mr Mylechreest, that the balance sheet before us contained the whole of the assets and the whole of the liabilities of the bank. Mr Browne then, at our request, went and saw Mr Bruce, who was confined to his house, and he, after having the situation fully explained to him, and the agreement read, also gave the same assurance, and, moreover, signed a declaration to that effect, which had already been signed by Mr Shimmon ; and on the faith of that assurance Mr Nelson and myself, on behalf of the directors, signed the agreement. On the same afternoon the agreements were sealed and exchanged, and, in order that you may under-stand the authority upon which we were acting, I will read to you the declaration which was .signed by Mr Shimmon and Mr Bruce, and on the faith of which we signed the balance sheet


Douglas, 1st February, 1900. To the Directors of Dumbell's Banking Co., Ltd. We, Alexander Bruce, general manager, and John Shimmon, secretary and manager of the above Bank, having reap the eighth clause of the agreement about to be executed between Dum-bell's Banking Company,, Limited, of the one part, and Parr s Bank, Limited, of the other part, and which agreement has been initialled by us, hereby declare that the balance sheet therein referred to, which has also been initialled by us, correctly sets forth the whole amount of the liabilities of Dumbell's Banking Company as on the 31st December, 1899.

(Signed by) Alexander-Bruce; John Shimmon. Witnessed by F. Browne.

Now, gentlemen, if any question arises as to the authority or the circumstances under which Mr Nelson and myself, on behalf of the directors, signed the balance sheet, and thereby made ourselves responsible for a position of affairs which latter on turned out to be incorrect, you know just as much as we know the whole circumstances under which the transaction took place. I must now take up the narrative from the Friday to the Saturday. On Saturday it was discovered that there was

A Liability Undisclosed by the balance sheet amounting to more than £20,000 allowed for under clause eight, and this fact Mr Nelson, Mr Penketh, and myself at once disclosed to Mr Mylechreest. On Monday a second undisclosed liability was dis-covered, and that fact was at once communicated to Mr Mylechreest, but in both These cases the liabilities were in respect of sums dire to creditors who either held securities or had resource against the parties other than the Bank. Upon these facts being represented to the creditors concerned, they agreed to rank against Dumbell's Banking Company for the sum of £15,000 only, thus bringing it under the £20,000 named in clause eight (applause). A binding document to this effect was executed by those creditors, and produced by us on Wednesday, the 7th, to Mr Mylechreest. Thus the essence and intention of clause eight being to provide against a liability of £20,OM in excess of the amount stated in the balance sheet-the defect which was created by the discovery of the two sums I have named being brought down to £15,000, and so was. in effect and in spirit cured. I should add that the mis-statement in the balance sheet was occasioned by Incomplete Entries in the books of the Bank, so that while the balance sheet and the books agreed, the books being wrong in the first instance, of course, then the totals in the balance sheet were wrong also. Feeling that it was uncertain what view Parr's Bank might take of the transaction, and in view of the fact that there were only a very few days before the meeting of shareholders, and that in the meanwhile Parr's had entered upon the bank premises under the provisional agreement, and were reaping the full benefit of that agreement in every respect, we at once pressed Mr Mylechreest to let us know what view Parr's took of the matter. But it was only eleven o'clock on Friday morning last that we received from them a formal notification of the rescinding of the contract by them. On the evening of the same day,

An Alternative Proposal.

was made to us by them, which was discussed between us on Saturday... After the fullest consideration we came to the conclusion that the proposal so made was so uncertain in its operation — as to the sum likely to be received for goodwill — that we, could not feel justified in recommending it to you; but we intimated to the representatives of Parr's Bank that if the uncertainty were removed by a definite and satisfactory amount being named for goodwill, we would, without prejudice to your rights under the provisional agreement, place the proposal before you for your consideration — not to be dealt with at this meeting, which cannot, of course, be done, but at a subsequent meeting of which due notice will be given. Since this position of affairs was arrived at on Saturday evening, we have received, just before coming to the meeting,

An Amended Proposal, and it appears to me that there is no object to

be served by not disclosing to you at this stage what that proposal is. In the first place, it entails the abandonment of the provisional agreement; it makes an offer to pay £40,000 for the goodwill of this Company; and to pay £15,000 for the premises of the Bank throughout the Island. There are some other suggestions in it offering, if desired, Mr Mylechreest as liquidator, and also access to the books of the Bank, and other small matters; but, substantially, for your purpose, all that it is necessary to remember, is the offer by them on the basis of the abandonment of the provisional agreement to pay to Dumbell's Banking Co. £40,000 for the goodwill, and £15,000 as the price of the premises throughout the Island. It will be, of course, understood, as Mr Cruickshank reminds me, that it was to be a voluntary liquidation. Now, ladies and gentlemen, I have endeavoured plainly and truthfully, on behalf of myself and fellow directors, to explain to you the position in which we stand. I have not sought on your part to evade any inquiry, or to excuse ourselves from any blame which may properly be attachable to us. The time for

Searching Investigation

into all that must come, and will be met by u; as it must be met. But the point for us now is to suggest to you the advisability of adopting a course of action, and the responsibility is on us to advise you what, in our judgment — if you will permit us once more to advise you — it is best for you to do (hear, hear, and applause). With regard to the provisional agreement which we have with Parr's Bank, and which they have notified their intention to abandon, I have to say that we, on our part, do not, at the present juncture, admit their right to abandon that agreement (hear, hear, and applause). At the same time, we have to look to the whole of the circumstances of the case, and to consider what that attitude may entail, and if it be possible that an alternative which, after full consideration by the Board, and after you, ladies and gentlemen, have also had full time for consideration, could be put before you, which we would think a better proposal than that laid down. But our present suggestion to. you, if you will permit us to make it, is that you should agree to accept the resolution which has been put before you. That will save whatever rights we have under the provisional agreement, if we are advised that it has not been departed from in the essence and the spirit by us. Then, after having had time to consider the matter, we will place before you, at a meeting to be subsequently called, the proposal which is

The Best Proposal

that we can obtain and make to you on behalf of Parr's, Banking Company. That meeting we shall call at the very earliest opportunity, and I hope that the issue of the whole matter may not be so bad as we have all feared and anticipated (hear, hear). The resolution which I put before you to-day requires confirmation, and that confirmation will be within a fortnight from now — not earlier than a fortnight — but we will endeavour to put that other proposal to you at an earlier date than that — so that, if it be found necessary, the confirmatory meeting can then drop, or you can be advised not to confirm the resolution, and we shall work under the proposal we now make to you with regard to the purchase of the goodwill by Parr's. Therefore, if I may once more put it to you — our advice to you, in the present juncture, is to pass this resolution in the form in which it is before the meeting; and then to leave it to us to make the best arrangements we can with a view to placing before you at the earliest possible date the proposal which I have indicated to you as having been made to us by Parr's Bank, if it be thought advisable. I can only say, in concluding the remarks I have to make to you, that the circumstances surrounding the whole case are very sad, and we feel the position very deeply, and we feel our responsibility very keenly. We feel we should not

Without Greater Precautions

than we have taken, place confidence in the men in whom we have placed confidence; but we have done, as soon as we became aware of the circumstances in which we were situated, the very best we could, as men, to retrieve the situation. I cannot say, as yet, that we have absolutely failed; but whatever may be the result, and whatever blame, and great blame must be attached to us, I can only say that I do trust that no shareholder in this room, or any human being, may have to undergo

The Mental Torture

and the poignant anguish through which your directors have had to pasj during the past two months (applause). Now, for the sake of formality, I will put this resolution to the meeting. If any shareholder thinks fit he will second it, and with a view to being perfectly certain as regards the voting on the resolution, I will only suggest that we, on our part, will appoint two tellers, and that the shareholders, on their part, will appoint two tellers, in the event of it appearing that there is any doubt as to the manner in which the resolution has been carried by the meeting. With that explanation, I formally move the resolution. It is as follows,: —

(1) "That it has been proved to the satisfaction of this meeting that the Company. cannot, by reason of its liabilities, continue its business, and it is advisable to wind up the same.

"And that Thomas Horsman Parker Mylechreest, of 4, Bartholomew Lane, London, E.C., and John Allen Mylrea, of Douglas, be, and they are hereby, appointed liquidators for the purposes of such winding up, with power for either of them to act alone.

(2) "That the liquidators be instructed to carry out the provisional agreement which has been entered into with Parr's Bank, Ltd., with such modifications as may be agreed upon between the liquidators and the Bank."

Mr J. Mylchreest, H.K., seconded the motion of the Chairman.

Mr Mylrea Opposed as Liquidator.


Mr T. Teare (Ramsey) strongly condemned the conduct of the directors. In the course of his speech he said : Who stands between us shareholders and Parr's Banking Co., blocking the way that we might accept unreservedly? I say there is only, one name standing between hundreds of shareholders and their acquiescence in the agreement. That, sir (to Mr Mylrea), I regret to say, is your name. I regret it exceedingly. I feel certain that if a vote was taken on each section of the resolution, barring your name, it would be received by an overwhelming number, but, on the other hand, Mr Mylrea's name being there, makes it awfully difficult to accept the resolution although we are bound to do it to save ourselves, and not so much ourselves as to save hundreds of people who have overdrafts in Dumbell's Bank.The result of not accepting the resolution would be awful to the Isle of Man. At the preliminary meeting Mr Cruickshank implored us to accept Mr Mylrea ; Mr J. T. Cowell also besought us to accept him; and Mr John Archibald Brown, in the "Isle of Man Times " (loud hisses)-I regret I have to mention his name in this matter — has also besought him not to oppose Mr Mylrea. What is the fact? These three gentlemen, Mr Cruickshank, Mr J. T. Cowell, and Mr John A. Brown, support the appointment of Mr Mylrea. It is the old thing. It's linked motion (applause). Mr Cruickshank is respected in Ramsey. There is no man in the Island that I admire more. I am only sorry he has come up to Douglas to work amongst you (laughter). If there is any man that is straight in the town of Ramsey it is he; there is no hanky-panky about him; and he told you straight, it was, as legal adviser to the Bank, he was beseeching you to appoint Mr Mylrea. What is Mr J. T. Cowell's position? One of the directors of the Isle of Man Steam Packet Company, with Mr Mylrea. And what is the position of Mr John Brown? Chairman of the Isle of Man Breweries Company (hisses). I .regret we are associated with it. I believe there is one curse that has brought us to the ground to-day, and that is these syndicates (applause). (A Shareholder "Keep to the point"; and interruption.) I am keeping to the point, but you are interrupting me. To come back to the point; Mr Cruickshank stated than Mr Mylrea would only be too glad to get out of this unpleasant job. I believe the man; I believe he is heartily sick of it. If Mr Mylrea is true in what he says, is there not an open door for him ? It is provided by the Companies Act that a liquidator may resign, and another be appointed in his place. If we carry him, and he give us the assurance he will retire from the position when he knows his holding it is against the wishes of the great majority of the shareholders in Dumbbell's Bank — (cries of "No, no!" and " Yes ") — we may pass the resolution (applause). It is said Mr Mylrea's hands are clean. I believe he is a man of honour, a man who would not tell us anything but what he believed; but if he wants to prove to the world that he is like Caesar's wife, above suspicion, he will say " Put in another liquidator," and so prove to the world what I have said to-day. (Mr Mylechreest : He cannot retire. We can not do without him.) I believe he could, and if he wants to prove his hands are clean, that is the way to prove it.

Mr R. Brew (Ramsey), Mr R. G. Cottier, T.C., and Mr D. Vondy (Ramsey) urged the adoption of the resolution as it stood.

Mr Mylrea Replies.



The Chairman: Mr Young raised a point which from my own personal point of view I should like to clear up a little. He suggested several times that some of the directors were what he described as old hares, who had been holding shares for a long time, or buying and selling at a profit. (Mr Young: No, no, not the directors.) I should like to be perfectly frank with you, and say I have never sold a share in the Isle of Man in any of the companies in which I have shares. I not only hold shares in Dumbell's, but in the Isle of Man Steam Packet Company, the Gaslight Company, the Tramways Company, and the Railway Company, and whatever shares I ever held I hold to-day (hear, hear). Another point was made by Mr Teare, I think, and one or two others, with respect to my nomination as, liquidator. Gentlemen,

Just Conceive the Situation, imagine it for yourselves, and do you think there is any position a human being would avoid, if he could avoid it, more strenuously than I would avoid that of liquidator of Dumbell's Banking Company. Endeavour to realise. Mr Nelson and myself were in London, doing the best under the most awful pressure of time to carry an arrangement through. We were literally driven. They had to get somebody to act, and the question became this, that unless I permitted my name to go down as one of the official liquidators no agreement could have been arrived at prior to the suspension. But for that you need not for a moment surpose my name would have been there. I cannot give the undertaking asked for, that I would retire, for the simple reason that if I did I would in law invalidate the whole thing For a man to accept a position and say he would retire on the faith of it would be such an absurdity that it would invalidate the whole thing.

Just another Point

with regard to the question asked by Mr Beard He suggested a, committee of three to consult with the liquidators in this matter. I am afraid that under the provisional agreement it would be such a modification as would tend to risk the validity of the agreement. Whilst it is open to you to do so, if you think fit, our strong advice, not only from me, but from the legal advisers, is, it is best, if you can see your way, to take the resolution as it stands (applause). This is a time for perfect candour, for putting away all reservations and all concealments. I am not going to put anything to you for one instant under any disguise, or lead you to imagine you are getting what you are not getting. I will not do it. I want you to understand absolutely from me,

As Man to Man,

what it is you are doing. You are going to confirm a resolution which purports to confirm an agreement with Parr's banking Company, who rightly or wrongly, have already, as I have explained, withdrawn from that agreement. we at this juncture do not advise you that they have the right to withdraw from that agreement. Therefore we advise you, whatever rights you have adhere to them; and in order to save whatever rights you have in respect. to their withdrawing, pass the resolution. But understand clearly this point they have withdrawn from the agreement. By the resolution we are adhering to it, and we are endeavouring

To Save Your Rights.

Then arises the second question : If it be found that another offer can be submitted to you, which under all the circumstances is found to be the best offer that can be made to you, then that offer will be submitted to you at the earliest possible date. If you have any doubt or misunderstanding, I am here to explain it to you; but don't let there be any doubt or misunderstanding as to what is now before you and the effect of it. With these remarks will put the resolution, which I will again read to you.

The resolution having been read, was put to the meeting. It was carried almost unanimously, only one shareholder — a lady — voting against it.

On the conclusion of the meeting the company dispersed, feeling that the position of affairs was utterly unsatisfactory, and that they had been forced into a position, in which they had no option but to accept the resolutions proposed for them by those who had been, in a large measure, responsible for the situation. It was evident that Mr Teare's remarks on the causes of the failure, met with much acquiescence on the part of many present, and this feeling was even more largely shared by persons who were interested in the Bank as depositors or creditors.

In the interval between this meeting and the promised adjourned meeting, criticism became more acute and pronounced. It became more generally realised that Mr Mylrea had, by his previous conduct, proved his unfitness for the position of liquidating so vast a concern, and it was also felt that he was too intimately connected with the conduct of the Bank, to assure persons who were interested, that the affairs and management would receive that thorough investigation which the events demanded.

So overpowering did public feeling become that no surprise was felt when the notices issued for the second meeting (which was not, however, called for nearly a month) contained an announcement of Mr Mylrea's intended resignation, and, the selection of Mr W. H. Walker to take his place.



The adjourned meeting of the sharehoIders of Dumbell's Bank was held at noon on Friday, March 9th, at which M r J. A. Mylrea presided, the other directors present being Messrs W. B. Stevenson, A. Penketh, and C. B. Nelson. Mr T. H. P. Mylechreest, of Parr's Bank, was also on the platform.


No fewer than three official notices of this adjourned or confirmatory meeting were issue,. They were as follows: -

[Notice No. 1.]

The Companies Acts, 1865 to 1892, inclusive. (Isle of Man.)


(In Liquidation.)

Notice is hereby given that an extraordinary general meeting of the above Company will be held in the Masonic Hall. Loch Parade, Douglas, at 12 o'clock, noon, on Friday, the 9th day of March, 1900, for the purpose of considering, and, if thought desirable, of authorising the liquidators of the Company to adopt and carry into effect a certain provisional agreement, dated the 26th day of February, 1900, made between Dumbell's Banking Company, Limited, of the first part, and Thomas Horsman Parker Mylechreest and John Allen Mylrea, liquidators of the Com-pany, of the second part, and Parr's Bank, Ltd., of the third part, for the sale to Parr's Bank, Limited, of the goodwill of the business of Dumbell's Banking Company, Limited, for the sum of £40,000, and the sale of the various buildings and premises in which Dumbell's Banking Company, Limited, lately carried on business for the sum of £15,000.

Dated this 26th day of February, 1900.

W. Baring Stevenson, Alf. Penketh, directors. T. H. P. Mylechreest, J. A. Mylrea, Liquidators.

[Notice No. 2.]

The Companies Acts, 1865 to 1892, inclusive. (Isle of Man.)


(In Liquidation.)

Notice is hereby given that an extraordinary general meeting of the above Company will be held in the Masonic Hall, Loch Parade, Douglas, at 12 o'clock, noon, when the subjoined resolution, which was passed at the extraordinary general meeting of the Company, held on the 13th day of February, 1900, will be submitted for confirmation:-

(1) "That it has been proved to the satisfaction of this meeting that the Company cannot, by reason of its liabilities, continue its business, and it' is advisable to wind up the same

And that Thomas Horsman Parker Mylechreest, of 4, Bartholomew-lane, London, E.C., and John Allen Mylrea, of Douglas, be, and they are hereby, appointed liquidators for the purpose of such winding up, with power for either of them to act alone:

(2) " That the liquidators be instructed to carry out the provisional agreement which hay been entered into with Parr's Bank, Ltd., with such modifications as may he agreed upon between the liquidators and the Bank."

Dated this 26th day of February, 1900. T. H. P. Mylechreest, J. A. Mylrea, Liquidators. [Notice No. 3.]

The Companies Acts, 1865 to 1892, inclusive. (Isle of Man.)


(In Liquidation.)

Notice is hereby given that an extraordinary general meeting of the above Company will be held in the Masonic Hall, Loch Parade, Douglas, at 12 o'clock, noon, on Friday, the 9th day of March, 1900, for the purpose of appointing an additional liquidator with power for any one liquidator to act alone.

Mr William Henderson Walker, of Douglas and Liverpool, chartered accountant, will be proposed as such additional liquidator.

Mr John Allen Mylrea; one of the present liquidators, has notified his intention to resign on such additional liquidator beng appointed. Dated this 26th day of February, 1900.

T. H. P. Mylechreest, J. A. Mylrea, Liquidators.



The Chairman said: In order to place clearly before you to-day the position in which we stand I have to ask your patience whilst I briefly recall the position at the last meeting and then tell you what has transpired from that day up to the present time. You will remember that I then explained to you that on the Friday previous to the Monday on which we met Messrs Parr had intimated to us. that they withdrew from the agreement they had entered into with Dumbell's Company on the ground of the breach of clause 8 of that agreement, inasmuch as the liabilities undisclosed by the balance sheet of the 31st of December exceeded the sum of £20,000 provided for in that clause, and you will remember that having arranged with the creditors concerned to reduce their claim to £15,000, and so bring them down to the sum neeeded,

Our Position at the Last Meeting

was that we could not admit, we could not advise you to admit that Parr's Bank had any right to withdraw from that agreement, and so we advised you to adopt the resolution provided for in that agreement in order that there might be compliance with all its requirements and to preserve our rights under that agreement. Immediately after the meeting a case was stated for the opinion of counsel, and Messrs Cruickshank and Creer proceeded to London with a member of the Board and submitted a case to two of the most eminent English counsel, and after the most careful consideration they arrived independently at the same conclusion, namely, that on the facts as they snood, if there was a liability undisclosed exceeding £20,000, the liability stated on the balance sheet, then irrespective of any subsequent agreement as to the assets,

Parr's Bank was Entitled to Withdraw

from the agreement. As to the resolution passed by the meeting to put the Bank into liquidation and to appoint Mr Mylechreest and myself liquidators, counsel advised that no confirmation was needed. Our advocates returned from London on the Saturday following the day of meeting. On the Monday following we met to consider what had best be done in the interest of all concerned. Two courses were open to us. First of all to adhere to the agreement and to take proceedings against Parr's Bank for the performance of the agreement; or, in the second place, to treat the agreement at an end and endeavour to make the best we could of the alternative terms. The first course would have entailed long and costly litigation, coupled with the risk of losing the alternative terms which I have named, and, therefore, after the most painful consideration we felt that in the absolutely clear and unhesitating opinion of counsel, and in view of the other risk to which I have referred, it would be impossible to advise you to take proceedings and try and substantiate the agreement, and therefore the agreement must be considered at an end. Then

The Second Course,

which I have indicated, was the only course which was open to us. It is impossible to say with what reluctance we felt ourselves forced to that conclusion. When the Board realised the position in which our misplaced confidence in the management had placed our shareholders we determined to strive with all the energy we possessed to do all in our power to retrieve the situation, and I think it must be admitted that the agreement at which we arrived with Parr's Bank, was, under all the circumstances, a most satisfactory agreement. Under that agreement every depositor would have been entitled to be paid in full on the 13th of February last. The assets of the Bank, as to which under the agreement Parr's Bank took the whole responsibility, would have been realised under the most favourable circumstances, for such a strong Bank as Parr's might have given any amount of time necessary so as not to unduly press those who were in a difficult position, and so obtain the best possible results with the least possible dislocation of trade, and so with the least possible risk of loss to the share holders. The loss of that agreement, with all the unspeakable advantages it included for the shareholders and depositors and the Isle of Man as a community rests, and must for ever rest directly on the souls and the consciences of two men-the man who not unintentionally or by accident, but with deliberate intention and with an object in view, caused those entries to be made in the books, and the man who stood by and well knowing the effect of what was being done

Never by Word or Sign

gave his directors a hint, directly or indirectly, that anything unusual was being done. Let me add that both of them, as we now know, were perfectly aware of the position of the Bank which they themselves had brought about and were well aware of the confidence which we placed in them. Yet they systematically concealed everything from us and assured us that the business was in a sound and flourishing condition, and stood by with eyes wine open watching us fall blindfold down a precipice (sensation). In saying this, I hope you will not misunderstand us or think we are trying to remove all blame from our own shoulders: We placed the most absolute, the most implicit confidence in the honesty, the integrity, the business capacity of the managers Mr Bruce and Mr Shimmon, who had occupied a responsible and confidential position for over 20 years, and yet in every way that could possibly be conceived that confidence had been misused and betrayed.

The Crime is Theirs,

the responsibility is ours, and whatever be our blame we must bear it to, the end. Having with the deepest regret concluded that that agreement must be abandoned, we then entered into negotiations to obtain the best possible terms, and we are assured by Mr Mylechreest and Mr Munro, after exhausting every argument, every means of persuasion that could be brought forward with that object in view, that no better terms would be offered than the terms included in the resolution which would now be submitted to the meeting.

Mr F. Browne then, at the request of The Chairman, read the memorandum of the, provisional alternative agreement which had been come to between the directors of Dumbell's Bank and the representatives of Parr's Bank, under which Parr's Bank agreed to give £40,000 for the goodwill of the Dumbell's Company's business and £15,000 for the bank premises m Douglas, Castletown, Peel, and Ramsey.

The Chairman said that the next thing, after coming to this agreement, for the directors to do was to find as a third liquidator a gentleman of ability and of integrity and who was absolutely beyond suspicion of any connection with the Bank, with any of the directors or officials, or in any way connected with the Bank, and he thought the shareholders would agree with him that in Mr W. H. Walker they had found such a man (applause).

After some questions asked and comments made by several of the shareholders the resolu-tion to accept the second and alternative offer of Parr's Bank of £55,000 for the goodwill of Dumbell's business and the buildings was agreed to with one dissentient, and the resolution appointing Mr Walker one of the liquidators was agreed to unanimously.

Mr Mylechreest and Mr Mylrea were appointed liquidaiiors under the resolution passed at the previous meeting.

The Chairman (Mr Mylrea) announced nis intention of resigning and stated he had only in the first instance accepted the position provisionally and because he could not possibly avoid doing so.

Asked if he would not allow his name to be put to the meeting for re-appointment as a liquidator, the Chairman emphatically refused "after what had been said outside."


Previous to the adjourned meeting of the shareholders of the Bank a crowded meeting of the depositors was held at the Masonic Hall, on the last day in February, at the instance of the Mayor and Town Council, the Corporation having a deposit at the Bank of £10,000 at the time of the suspension of payment.

The Mayor, who presided, in the course of his speech, said the Corporation of Douglas had a large sum deposited in the Bank and the Finance Committee of the Council, on the suspension of the Bank, at once met to consider the position of affairs.


After considerable discussion, the following, resolution was adopted on the motion of Councillor Cubbon, seconded by Alderman Wm. Goldsmith.

Resolved, ' That this meeting, having heard expressions of the opinions of the depositors who have spoken, desire to emphasize the desirability of the economical and speedy realisation of the assets of the Bank, in order to ensure an early distribution to the creditors of the Bank, and this meeting having heard that Messrs Mylechreest and Walker are to be proposed as liqudators, hereby approve, of ;such appointment, and consider that the concern should be wound up by voluntary liquidation, under the supervision of Court; and would recommend that three of the depositors, or shareholders, of Dumbell's Bank, should act in co-operation with such liquidators, as a committee of inspection.'

By a subsequent resolution Councillor E. Chadwick, Surgeon - General Sanderson, and Mr T. P. Ellison were appointed the Committee of Inspection.

The only part of the resolution which was not in accordance with the result of the share-holders meeting was as to the recommendation to appoint a Committee of Inspection.

At the shareholders meeting, which followed, a strong feeling was expressed that it was advisable to appoint a Committee of Inspection to act in conjunction with the liquidators.

Mr Mylrea (who presided), in reply, said: In the English Act of 1892 there is such a thing as a Committee of Supervision, which has large powers of controlling the liquidation, but in the Company's Act in the Isle of Man there is no provision for a Committee of Inspection in liquidation, and, therefore, to appoint such a committee would be to appoint a body who would have no legal status. They would not be able to conduct the liquidation or to control the liquidators. You may take it that the best possible supervision is the publicity of the liquidators coming before the shareholder; and laying before them all the facts required. Plain Speaking from the Pulpit.

On Sunday evening, the 22nd. of April, tw,) of the leading Nonconformist ministers in Douglas — the Rev. D. Inglis, B.A., and the Rev. J. Davidson — made the Bank disaster the subject of their pulpit discourse.


The Rev. D. Inglis, preaching at the Finch Hill Congregational Church, took as his text " Owe no man anything, but love one another. ' In the course of his sermon he said: —

It is; my intention to say as little as possible to-night about the men who have been designated " the active agents of the disaster." Their conduct has been characterised in terms sufficiently scathing by one of the directors of the Bank, and it will be investigated thoroughly and impartially by the courts of law. When that has been done we shall know exactly what their conduct has been, and, till then, we must speak with due and proper reserve. It is, not too soon, however, to sass what we think about the practice which has contributed so largely to the disaster of making enormous overdrafts. It was with a feeling almost of stupefaction that the public heard of one vast sum after another. Thousands of pounds seemed to be as plentiful and easily got as pebbles. The whole thing sounded

Like a Fairy Tale,

and one could hardly help feeling as if we had got out of the region of sober facts into that of the Arabian Nights. Unfortunately, it was all too true — painfully and shamefully true. Of course, we know very well that it :s the business of a bank to lend money to its customers for the purpose of carrying on legitimate trade. But here was an institution giving its money away with both hands to men who had no security whatever to offer. It must be admitted that this was a great temptation — a temptation more particularly to men destitute of moral principle, who are usually ready to yield to it, and take advantage of their opportunity. It is right and proper enough to borrow money for legitimate business purposes, if there is a reasonable prospect of paying it back. It is never right to do it if there in no prospect of paying back, and it is surely criminal if the money is used to carry out

Gambling Speculations.

No one doubts that an honest man may be overtaken by misfortune, and, strive as much as he will, he may be unable to pay his debt a, and so become bankrupt. In such cases the judgment of the public is, as a rule, very lenient. But what are we to say of a man's conduct if he goes on borrowing money long after he has become hopelessly insolvent? What are we to say of it if he borrows after he knows it to be impossible for him ever to repay? or, if he does not know, is culpably ignorant of his true position? I know of only one word which fitly characterizes such conduct. It's "stealing." The man is

A Thief and a Robber.

It is high time to learn to call things by their right names. Few things do greater harm than the glossing of wickedness over-advancing all manner of excuses for it, and saying it is not so bad after all. Something will have been gained in this time of crisis if we learn as a community to look at things in their true light-and in the light of the highest principle. Men guilty of the conduct of which I have spoken must be recognised as standing on the same moral level as the Frisk-pocket and the burglar. It may seem to some that this is a hard saying, and it may be thought that sympathy ought to be felt for men over-whelmed by adversity. Well, if you like, I will tell you who the people are with whom I sympathise.

I Feel for the Men who have been trying to carry on their business on honest lines. The battle has been all the harder for them because they have had to meet the unfair competition of others who had the resources of a bank at their back. The end of that condition of things is part of the gain that will come out of our troubles. I also feel for the depositors, who are in danger of suffering great loss, and who, in the meantime, are reduced to sore straits and suffer great inconvenience. It is all very well to borrow money from a bank and imagine if it is never repaid that the bank can stand it. People who do this ought to remember that they are appropriating the money of their neighbours-what the widow has put away for safe keeping, and the hard-earned savings of men and women who wished to have a stand-by against the time of sickness, and old age. Our sympathy is due to those whose

Confidence Has Been Betrayed.

and who, in the time of need, discover that their . money is gone. It is peculiarly distressing when we find the evils we condemn practised by men holding a public position; or, worse still, a place in the Christian Church.


This was the subject of the sermon preached by the Rev. J. Davidson in St. Andrew's (Presbyterian) Church, taking as his text Romans ail., 17: "Provide things honest in the sight of all men." Appended is an extract from his discourse:-

This disaster has shaken the Island to its centre, and besmirched its character. It has brought in its train poverty, sorrow, disease, and death. Here is a disaster which has been brought about by the culpable recklessness and "cupidity of unscrupulous men. They occupied positions of trust. The widows and the orphans; the men who toiled hard for a competency against old age, confided to them their little all; and, in the case of the share-holders, at least, all has been ruthlessly swept away. . . The directors, too, carry weighty responsibility, and if their spokesman, at the public meetings, expressed their feelings, they must be humiliated beyond measure-and no wonder. But that same director, who declared that life for him had lost its sweetness; that he would never know another happy hour on earth, ought to have

Remained in the Obscurity

he professed to seek until, at least, he had a mandate from his constituents to return to public life. And what shall we say of the enormous overdrafts which have been dragged to light?-and a lurid light it is. For years, this bank seems to have been an open till, where one was welcome to fill both bands with gold, and to come again. Tradesmen, financially rotten, were bolstered up; and when a man knows be is financially rotten, and continues to add to his liabilities, he proves himself to be morally rotten as welt. Now, I would draw a distinction between those who, up to the suspension of the Bank, had securities to meet their overdraft; out, because of the fall in these and other securities, are now, or may become, insolvent. Those men deserve our sympathy and compassion. But the others deserve severe

Censure, Not Sympathy.

Some of them may find excuse in the plea, that they had no idea of the extent of their liabilities, and were staggered by their amount when faced by them. but, surely, it is arrant cowardice, to use no stronger term, which refuses to look the facts of our life in the Lace. This form of culpable cowardice, and worse, is the cause of much misery in our midst to-day. We are all sufferers through the nefarious practices of prominent men in our midst; and the depth of that suffering and poverty has not yet been sounded,. God forbid that it should be so great as some people fear. Our heartfelt sympathy goes out to those was have, cruelly sunereu, and have been cruelly wronged; for those, especially, who are aged and helpless, and almost friendless. May laud send them help out of His sanctuary, and make those of us who are able to help, do what we can for their relief.

The Only Public Statement Made by Mr Bruce.


Subsequent to the adjourned meeting the following letters were sent to the Press — Sir, — My attention has just been directed to certain statements made by the Chairman at a meeting of the shareholders of Dumbell's Bank, held yesterday.

He alleges that the balance sheet of last December was deliberately drawn up in an irregular manner, with an object in view. In justice to myself and others 1 most positively assert that such an accusation is absolutely untrue.

No one was more astonished and distressed than I was to hear that there was any suggestion of an error in the balance sheet. I have been very ill, and confined to my room for more than five weeks, and entirely unable to attend to business, and no notice was given to me that such a charge was to be made at the meeting, but I hope soon to be able to get about again, when I will make a point of going into the matter and placing a further statement before the public.

If a technical error has been made in the balance sheet, which up to the present moment has not been proved to me, I have to say at once that such error was purely accidental, and not made with the intention of misleading or deceiving any one. — I remain, yours faithfully,

ALEX.BRUCE. Ballaquayle, Douglas, Isle of Man,

March 10th, 1900.


Sir, — I have been waited on by many friends with reference to the sensational statements made by Mr Mylrea at the recent meetings of the shareholders of Dumbell's Banking Company, and I have been advised to publish the facts, and place Mr Mylrea in his true light with regard to the "undisclosed liability." At the time, the £65,000 loan for the Tramway Company was negotiated, I was informed the loan was obtained for the Tramway Company, and the entries, so far as I am concerned, were passed in strict conformity with that information. At the time this transaction took place Mr Mylrea was a director of the Tramway Company, and, if he did not know of the transaction, he ought to have done. It would be interesting to know what explanation he makes for his assumed ignorance of this. On the 3rd February last, an official from across the water, who was interested in the transaction, tailed at the Bark and asked to see the entries as they stood in the books of the Bank. On showing him the entries, he asked "Where is the contingent entry?" I replied, "There is no contingent entry. The loan was made to the Tramway Company." "Not at all," he replied, "the loan was made to the Bank, and the Bank was to lend the money to the Tramway Company." I replied, "This is the first intimation I have had that the loan was not made to the Tramway Company." — Within five minutes after this, Mr Mylrea was put in possession of these facts — facts which. as a director of the Tramway Company, he ought to have known, and yet, in spite of this, he got up at the meeting on Friday last, when I was not there, and told an untruth, by imputing to me that I knew the entries were not correctly passed. He said "I stood by, and, while, knowing the effect of what had been done, never, by word or sign, gave the directors a hint." When Mr Mylrea uttered that sentence, he had full knowledge in his own breast that I learned the fatal news only at the same time as he learned it himself. — Yours truly,


Douglas, March 12, 1900.


Mr Mylrea sent the following letter to the local Press: —

Sir, I have read in the Press letters from Mr Bruce and Mr Shimmon commenting on statements made by me at a meeting of shareholders of Dumbell's Banking Company held on the 9th ult.

I do not intend to enter into a paper controversy with these gentlemen. It will be the duty of the liquidators, Messrs Mvlechreest and Walker, to enter into a scrupulously minute and exhaustive investigation of their relations with the Bank both personally — and as managers, and I think it will be advisable in the interests of everybody to await the result of that investigation. — Yours truly,


16th March, 1900.

The "So-called Undisclosed Liability."


Messrs William Aldred, Son, and Co. forwarded the following letter to Mr J. A. Mylrea : —

J. A. Mylrea, Esq.

Dear Sir, — We would like to have requested your permission, when at the meeting of Dumbell's shareholders this morning, to explain a point to which we — as the shareholders' auditors — consider sufficient attention was not given, but as it was of paramount importance to have the resolution carried without raising any side issues, we refrained from addressing you. We now, however, write you in the belief that you will be willing to receive any authentic information which can assist the shareholders in the present crisis. We would draw your attention to your statement that "it was discovered ,hat there was a liability undisclosed by the balance sheet amounting to more than the £20,000 allowed for under clause 8." As you are aware we were not asked to audit this balance sheet, but we are informed that the liability to which you refer was in respect of a sum of £65,000 debited in the bank ledger to the London City and Midland Bank and credited to the Tramway Company, being represented by debenture bonds given by the 'Tramway Company to Dumbell's and passed on by Dumbell's to the London City and Midland Bank. We understand that the London City and Midland Bank deny that. they accepted these debenture bonds in reduction of the amount clue to them by Dumbell's, and that consequently Dumbell's liabilities were increased by this sum of £65,000. The point which we wish most emphatically to press upon you is this, that, granted this item had been wrongly debited to the London City and Midland Bank, it does not, from an accountant's point of view, affect the honesty of the balance sheet, as it follows as a matter of course that there would be an additional asset of 265,000 to correspond with the additional liability, and, therefore, although there may have been a technical error in reducing the liabilities by £65,000, as the assets had been reduced by a corresponding sum, for all practical purposes,the balance sheet signed for purposes of identification was correct. We do not hesitate to say tllat had we under ordinary circumstances been called upon to examine the accounts for the last half year, we should in all probability have passed this balance sheet as a correct statement. of the bank's liabilities and assets, as shown by the books. We need not tell you that the balance sheet we signed in July last was, in our opinion, an accurate statement of the position of the bank, and we consider that th- exception taken to the so-called undisclosed liability of £65,000 is a mere legal quibble, and, being covered by an undisclosed asset of equal value, it is perfectly plain that there was nothing to which very great exception can be taken. As experts in figures we wish to give you our opinion in relation to this matter, as we think it is of vital importance that the shareholders should appreciate it.-Yours truly,




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