His Lordship:
Kr. Prewer :
35.
27
The Directors all wanting a large firm and large capital, bbing entirely opposed to it, seeing sa the responsibility was mire, I had a real fear of being saddled with the responsibility of more than two million dollars worth of money.
$2,800.000 was the capital, that sum you were obliged to tɛke.
I am obliged to take the whole sum if the Directors accept it, because it is in the Articles of Association Me Directors have the right to accept the money in full, if they wish, so that I rae keen in preventing a large amount of surplus cash coming into my hands. If the Directors had agreed with me that the whole money called up 20% should be accepted and not more, that would of itself have prevented twoo ch money coming into our hands. But the Directors had the right to receive the other 90% if they wished. If there was an experienced manager coming, the Direct- ora were perfectly right in desiring a larger capital for his arrival. So that it was by a measure of com- promise, between myself and the Directors, that this scheme vas arrived at, they wanting the money, I not wanting the money or the responsibility. But I did not want the bank to lose the interest on the money. By the following scheme this was avoided. The Direct- ors agreed to receive from the shareholders the whole 100% of their shares, but on my compromise the share- holders who paid the 100% had to barrow back 90%, under terms repayable on demand. The result was this s shareholder wes not obliged to pay more than 10%. The Directors wanted to be in a position to lay hands on a large amount of money mediately, this war done by transferring a shareholder's debt from a non-obliga- tory one by hiavoluntarily paying cash and then drawing the money out as a loan, which he was obliged to pay un demand. The Company was put in a better preferen- tial position from what it had been before, because it would have been necessary before to make a call and to gxx go through a lot of preliminaries, whereas no the C
Company can demand from my one of the signatories, the whale or any part of the money which is owing at any time on account of these loane. Now I put this figure in the Statutory Report, Cash Received 876,750. 00 in the belief that it was a true and correct figure of the cash received, because there is no question but that these payments altered the relationship of the parties, one to another. It transferred a debt pay- able only under severe conditions, to a debt payable on demɛnd. Had I put any other figure in the Statut- ory Report than that which did, it would have been in correct. if i had put into the statutory Keport a low figure by a special entry of cash, which ar Ross suggested ought to be there, then the Company could never have maintained the command for these lqans against tựe people with whom they had entered into. They would say "If you did not lend it to me, how can I be obliged to pay it on demand". The Com- pany would have been stopped from declaring these loans in existence. The man who published this Statu- tory report would have been doing the Company a great harm if he had put other figures. In the whole borka of the Company, since its inception to the date of ite