358
whether I took it out of one drawer and put it into another, I was responsible. I did not ear- mark any notes or coins, but I regarded all the accounts as mine, for which I was responsible.
His Lordship-You regarded all the money as you own?
Defendant-No. Sir. I regarded it as in my
custody.
:
THE HONGKONG WEEKLY PRESS AND
You have heard Mr Power make some com- ments on the statement of accounts made by you up to June 30th P-I heard the evidence, I understood him to say that the expendi ture for the quarter on construction account as shown in the quarterly abstract ought to be $32,000 more than I had shown.
His Lordship-I understood him to say that the $32,000 was recorded twice over.
Witness- Deducted twice over. If the ac- count was altered as Mr. 'Power' suggested the balance would be reduced by $32,000, and the construction account would come down from $151,000 to $129,000.
Cross-examined by the Crown Advocate,
You were appointed at Home as chief account- ant of this railway under agreement ?—Yes.
And you undertook to carry out the terms of that agreement ?—Yes.
You knew the preliminary work in the con- struction of a railway necessitates very large sums being drawn from time to time from the construction account ?--Yes. Available for expenditure.
; mind to take a change, did 20, and
back
end hoped to be
at the
of the month 80 as to close the accounts for September. There was no need for me to give details to my assistant, who had to act under my instructions as chief accountant. What I do object to is that I was not given a chance to offer any explanation, but was arrested as a Proceeding, witness stated that in consequence felon, brought back to Canton and kept under of the loan agreement he considered it irregular restraint, and up to now I have not been given to have a cash book showing two currencies. a chance of explaining anything. Accused He opened his cash book, and when it became added that on the day of his arrest he had necessary to pay money in Hongkong or available cash sufficient to cover the alleged the Canton dollars they were entered for what-deficiencies, and would have been prepared to ever the bill was. The amount of the pay it over subject to an examination of the bill would be shown in an “Ao7" form, which accounts, was the standard form used on all State railways in India. The payment would be copied into the cash book, but there was no definition to show whether it was made in Hongkong or Canton dollars, no reference to any bank being given. The difficulty in giving bank references would be that a cash book would be needed with four or five lateral columns if he had to dis- tinguish between the different currencies. As that was prohibited by the loan agreement he put everything down as Hongkong dollars in the cash book In defendant's view the engineer in chief had no authority to sanction anything. The cash book was a record from which the official balance could be struck, and his method of keeping it was borne out by thirty years' experience, as such books had been kept in other parts of the world. On the receipt (side of the cash book would be found the whole of the cash available for construction, and a specific transfer of the money from London to China from time to time which was lodged in the Hongkong and Shanghai Bank. All payments from that money appeared on the expenditure side of the cash book. The accounts
Did you consider it right and proper that were balanced each quarter, when there those large sums-millions of dollars-should WAS an absolute balance in the cash book be simply in your pocket or in your safe ?-- of the amount of expenditure and the There would not be millions of dollars at any amount of cash. The defendant received a
time. It would be in sums of money as requir- payment of $10,000 on his own account ined for monthly expenditure. connection with the floating of a loan. also sold a third share in a patent medicine for $8,500, and retained the two remaining shares. During the last eighteen or twenty months witness had had considerable private means, and had made some payments on behalf of the railway out of his private bank book. On June 3rd defendant worked out his book balance and compared it with the amounts still standing at the Hongkong and Shanghai Bank in Hongkong and the rest of the cash in his hands: that was to say, in the other two accounts at the International Bank. In the process of verification he got a differ- ence, and as it
was necessary to ascertain that difference he was proposing to transfer the whole of the funds back to the Hongkong and Shanghai Bank. Witness scrutinised all the entries in the International Bank book and saw that the $13,000 which formed an item. of the charge, which was about the differ- ence between the balance and the money, would have to be paid back to the Hongkong and Shanghai Bank. As it previously appeared in his private pass book, and had not been refunded, he thought first of paying it back into the International Bank before the transfer of the whole balance to the Hongkong and Shang- hai Bank. That $13,000 enabled him to verify, balance and close his account of June 30th, and was the final difference between his account and the other accounts in the It made no absolute difference to the engineer-in-chief whether a sum of $20,000 was in the International Bank Hongkong currency account, the Bank of Eng- land, or in a bank at Shanghai. Witness did not any time believe that any of the sums of $5,000 $4,000 or $13,000 were due to him from the rail- way, but from time to time he handed the managing director about one and a quarter million dollars for works connected with the railway. When defendant cashed cheques for engineers they were paid the difference in exchange.
International Bank.
at
He
The examination of defendant was continued after the tiffin adjournment.
|
Did you consider it your duty as chief accountant to organise any system by which that money should be in your own pocket P I thought it was the correct thing so long as I was responsible.
As regards Mr. Wei's keeping money in a native bank to buy land, did you wish the Court to understand that on that account you could keep money where you liked and how you liked?—I think the two cases are exactly analagous. He was responsible at the end of the quarter, and as long as the expenditure was reported in the quarterly statement, I was not concerned with the balance of the deposit, as the managing director was personally responsible to the railway for the difference.
As regards the three particular amounts you are charged with having misappropriated, you did take them out of the railway accounts
PI admit that. away
to pay
them
How was it that you did not, having private means of your own, replace those sums ? Because I did not think it necessary immedi- ately to do it.
One of those sums, $10,000, was put but at interest, was actually repaid, and was not paid into the railway accounts, but into your own private account, out of which it had not been drawn ?-It had been drawn.
His Lordship-What is your answer? You took out this money, why didn't you put it back in a railway account?—I thought it immaterial whether it was in one, two or three account.
As regards the 23th June, was this an attempt to pay back $13,000, or simply an attempt to close up accounts P-It was primari- ly the closure of the International Bank balance, and its transfer en bloc to the Hongkong and Shanghai Bank, because that bank was opening in July and I had no justification to continue the account in the International Bank. Besides, those accounts were opened at my per- sonal risk, and if the bank stopped payment I should have to make good the money.
In re-examination witness said his system of keeping the accounts was the Government Mr. Douglas-Part of the case for the pro- system. A large number of cheques drawn on secution is that you were absconding to Shang-the construction account were paid away imme- hai. What have you got to say with reference to that?-I had no intention whatever of absconding or leaving the place any more than other officer of the railway. I made up my
diately.
Before you adopted this system you care- fully studied the systems adopted on other railways in China ?-Very carefully.
|
[October 25, 1909.
Are you of opinion that the system you have adopted is more satisfactory ?—Yes, I am of opinion that it is far more accurate. The hearing was adjourned. +
FOURTH DAY'S HEARING.
ACCUSED SENTENCED TO TWO YEARS'
S
IMPRISONMENT.
an op-
Before the Crown Advocate addressed the jury the Foreman (Mr. Dent) said the jurors thought the defendant should have portunity of earmarking the amounts which he said had been placed to the $9,000 in the "Ao7” account.
His Lordship informed the jurors that for a fortnight the defendant had had an opportunity If he could of consulting his account book. earmark the account, he had had every oppor- tunity to do it.
Mr. Douglas-It would be a tremendous labour to find these amounts.
His Lordship-I take it if he meant to do it he would have done so. I think the jury think he has not had the opportunity. If it was possible for him to do it he has had the oppor- tunity.
The Foreman-I thought he had not had an opportunity.
His Lordship-He has.
certain statute that
con-
The Crown Advocate, in addressing the Court and jury, said that before proceeding to sum up he wished to refer to a gentleman who had been referred to, but who had not been in Court. There was an unfortunate reference to a district engineer, who was alleged to be going to keep ex-" change. The speaker wished to say that he looked into the accounts with the assistance of the accountant, and found there was no founda- tion for this statement. There was a profit on exchange placed in the accounts. The accused was indicted under a he, having by himself or jointly with
of certain monies, others, the care
his own use.
It had verted them to
Butler Wright was been proved that Mr. not only entrusted with property, but was in charge of it, and he himself admitted that he made certain use of the three particular sums The prisoner mentioned in the indictment. seemed to have taken a very peculiar view of his position, and that had to be taken into con- sideration, because it threw a light on his subsequent actions. He read the trust agree- ment in a very peculiar way, and considered it was his duty to supplement that by saying that the Hongkong and Shanghai Bank did something wrong in not sending out $5,000,000 at the T/T rate of the day. The prisoner also said that by clause 4 of his own agreement he There could absent himself at any time. was a peculiar idea in Mr. Butler Wright's mind of his position and of his duties. the jurors that The prisoner also told the accounts opened in the International Bank was a matter entirely off his own bat. The first point the Crown Advocate wished the jurors to remember was that the money in the International Bank was earmarked as railway money. The construction account in the Hongkong and Shanghai Bank fed the Hong- kong currency account in the International Bank at Canton, and the local currency account was fed, with certain irregularities, by the Mr. Wright Hongkong currency account, said the whole of the accounts in the Inter- as his private national Bank were the same
It was account.
an impossible position for anyone to say that he had the right to mix the money of his employers with his own. Even if he was prepared to take a tremen- with large lump dous risk in dealing sums of railway money, it was all the more necessary for him, a man who had dealt with accounts for thirty years, to see that he kept those accounts in such a way that they could not possibly be mixed up with his own private account or the accounts of any other persons. If the accused was content to say that he alone was responsible for the half-yearly balances, he should have been most reful that the Inter- national Bank was not led into error through his having the accounts in a somewhat similar name. If a man chose to deal with the money of others in a way in which he exposed himself to extra risk and in which he took the
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