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Judge:- How many shares were applied for in this company ? Something over $2,000,000.00
Judge:- How many shares ? 26,000 shares.
Judge:- Now, how much money I am using money in the sense of cheques or matters of that kind was sent with the applications of those shares ? None.
Judge:- Absolutely no money was sent ? No, payments were made later.
Judge:- How were the payments made ? Payments were made apparently in bank notes..
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Judge:- About how much roughly ? I think I could tell if I had the books before me (Books handed to witness) there is no differentiation made in our books between one form or another.
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Judge:- Put it in another way how much money is advanced on these Promissory Notes ? The sum of $349,000 was advanced
to people who paid in advance of call.
Judge:- Advanced to people in order that they might pay their shares ? That is not the right order. They were desirous of paying in full, but it was
Judge:- As a matter of fact you supplied the cash wherewith
they took up their shares ? No, wherewith they paid in advance of call.
Judge:- You supplied all the cash wherewith these shares were paid for ? All the cash that was not called up. paid us entirely for the call on shares.
They
Judge:- You supplied all the cash? We supplied 90% of the cash for the payment of these calls ?
nothing for the payment on calls.
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No, we paid
Judge:- You took Promissory Notes for the amount advanced for this 90% ?
Yes.
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Judge:- What was the security given by the people who signed those Promissory Notes in respect of this transaction? Cash.
Judge:- Cash ? They paid 90% that they need not pay.
Judge:- You advanced all that, and took Promissory Notes from them. If you go to a bank and ask for a loan, they require security. What security did you have? Deposits - they are not compelled to pay that money. They made a deposit in om bank.
Judge:- How did they make the deposit ?
deposit? By coming along and making it.
Judge:- They paid in cheques ? same time.
No, it was all done at the
Judge:- By book transaction ? Of course.
All that you depended on therefore was the responsibility of these people who signed these Promissory Notes ? Our security was cash. They had paid that money and they made a deposit, of that money, and were entitled to borrow on it for
the full amount. I can show you how the bank is greatly advantaged by such a procedure.
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