PUBLIC RECORD OFFICE
Reference :-
TTILIC.O. 882
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PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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further instructions on this point, which, if sent to me by telegraph, will reach me in
time.
I have, &c.
(Signed)
J. POPE HENNESSY.
+
&c.
The Right Hop. F. A. Stanley, M.P.,
&c.
&c.
Enclosure in No. 4.
SUPREME COURT OF MAURITIUS. MARCH 1885.
EXTRACTS from the Judge's Notes of the Evidence in the Case of the Queen v. Couve.
Mowbray, Charles, sworn.—I am assistant accountant at the New Oriental Bank, and was so to the old one. Have been four years here and was in Oriental Bank, London,
five years.
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Came out as assistant accountant. Cross-examined. If I bought drafts payable to the Oriental Bank's order, that would he a "journal "-(corrected) a "cash" entry.
Question. I buy drafts and pay in my cheques on the bank, why is that not a journal entry?
Answer. A journal entry is a transfer from one customer to another. The cash- book includes receipt of coin and cheques and disbursements-any cheques. Commercial and Franco-Egyptian Banks' cheques are considered as cash. If Couve drew a cheque on his account at O. B. C. for drafts, it would be entered as cash. I have sometimes overdrawn my account to a large amount. There is a list of parties entitled to overdraw, but Couve's name is not on that list. The manager's permission is necessary to over- draw, and those accounts are to be made square at the end of the month. I had shares in the bank as security to cover any overdraft. I never overdrew to the amount of my securities. I had no other securities in the bank than sugar estates shares. I believe the Highland estate was started on 31st March 1882, In April I had an overdraft against securities in these properties. The short time I had those shares was the only time I had an overdraft. Bank officials were then allowed to hold sugar estates shares. Now they would not be allowed. At end of the month I had not to square my over- draft. I have never drawn cheques at end of month with a view to square my account; that would double my indebtedness. Two or three days after my overdraft, an entry has appeared; not a cheque but a debit to the amount of my overdraft. That was a "house entry."
Cash is debited and the account is credited without a cheque pussing. It is a transfer which passes through the chief cashier's book. An outsider night think cash had been paid, but one who knew the practice of the bank would not. The manager of the bank inaugurated that system, and it was discontinued at least a year before the bank closed. By checking the cashier's cash, you might detect the fact that cash was not paid; but a slip from the manager to the cashier took its place. The slip is the same as if the money were paid in cash. Say it was a loan on the 31st. It is not claimed on that day by the bank, so it is not entered on the 31st as a debit, but as a credit in a "house "transaction. Most of those transactions appeared in a book known as the Temporary Advances Book." By this transaction our accounts were generally squared I consider as I have described. The credit goes through on 31st, and debit on the 1st. this as a regular transaction, because it was allowed by the manager.
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Clerks and Government accounts got interest on current deposit accounts. If Desperoux had a credit balance he would be entitled to interest. At end of first half, 30th June, 1883, he received Rs. 8'63 c. His account was occasionally overdrawn for a few rupees, and he has got money from bank after Carnal Boudon's fashion to about Rs. 60,000. He would have been constantly our debtor had books been kept properly.
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Duffield, Charles Edward.-Was acting accountant in old Oriental Bank, and is accountant in new. Was three years in London bank; acting accountant some time before O. B. closed.
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Cross-examined. Don't know system of book-keeping was loose and unsatisfactory. The detail book should have been balanced daily. He (Couve) was sometimes told to leave it for two or three days at end of month. The cheques were entered first.
open It was left open to make more entries. The cheques and slips, to enter which it was
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kept open, might not have been drawn. Know of no instance of cheques drawn on last of month being filed three or four days before entry.
The book was kept open to close some sugar account, which should appear arranged to the end of the month. A cheque for some reason or other is delayed, perhaps through sickness or absence. It might be more regular to enter on the last day a cheque coming afterwards.
Permission is required for an official to overdraw. The chief of deposit department keeps a list, or carries the names in his head. No doubt there was originally a list. I suppose there was one in 1883. I have seen it. I used to keep one when in the department. Overdrafts are called in D. book "Temporary Advances." If there is an overdraft, and it is omitted from the temporary advances, there may be special per- mission. There is no record of special permissions other than the temporary advances list. The head office gets its information as to overdrafts from that list, I know that by the manager's permission some clerks have overdrawn. The general understanding is that official's overdrafts be settled before the end of the month. They are not always so settled. When a cash entry is made in settlement, an entry of cash is made by the manager's authority. The cashier had a voucher for it when he was to square an account by a cash entry. The manager in that case was personally responsible to the cashier. The inanager would give an order to the deposit officer for the amount to stand over and appear as cash. The slip was a credit" slip. A voucher accompanied the credit slip, emanating originally from the manager, and qualifying the slip as cash.
A party so credited was a day or two after redebited for whole amount of draft.
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I know nothing of other accounts being debited to cover overdrafts credits; know nothing of other accounts debited to cover my account. A debit to the "Mauritius Cricket Club" was practically a debit to myself, as I was treasurer and responsible to chest for the money. I may think the same with regard to the "Athletic Club," On 30th September 1882 I find the Athletic Club debited and credited. The "Rifle Club" has been debited and re-credited with the amount of my overdraft on Bewsher's authority as treasurer. My overdraft was obtained on credit slips.
I am not aware that the detail book totals were made up on separate bits of paper before entering. Names might easily be out of alphabetical order. The total in ink. ought to be correct. If you forget to enter the detail, the addition may be wrong; the book is then false.
Every month returns were made to head office. The returns were taken from the C. D. ledger, compared with general ledger. If the balance book had been always compared with C. D. A. book, the frauds must have been discovered.
There were two detail books. The cheques from other books were locked up, and removed early by the peon in the morning. Perombelon, Despéroux, and Couve were always early at work. The practice of authorised credits to cover over-drafts was stopped before Mr. Don came.
Re-examined. Our returns would have been correct had the balance in C. D. accounts and balance books been correct. If one balance is
wrong, all goes wrong.
I
was treasurer of the Mauritius Cricket Club, and had absolute control of its funds. I never took money from it improperly. I say same of Athletic Club. It often owed me
money.
There are always two cheques out of place at foot on the day where the totals afe false.
I believe some overdrafts were on security of shares. I always got the manager's permission for overdrafts.
Ferguson, John Alexander.-Manager of the New Oriental Corporation. Knows Couve, who was a clerk in the bank. I never authorised him to overdraw his account. There is a rule about overdrafts, and a list which is kept. The rule is to square up at end of month, but that is a matter of arrangement. The amount is generally arranged, and, if exceeded, attention is called to it.
Cross-examined.-Mackenzie inspected the bank accounts on two or three occasions. He examined the books, and found them correct. I never heard of any circular of his that overdrafts should not be allowed. Cash or cash equivalent is always given. The officers of the bank are Europeans. They could not overdraw without my sanction. When I asked them to pay, they paid-by cash or cheques. I am responsible for the overdraft, it cash is entered as a matter of account. The transaction is one of account. I am the book of reference. "I am not going to tell you.”
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