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to another and legal relationship was altered identically as if cash had passed.
S
Was this the nature of the transaction the shareholder came to the company to borrow money. You say "You can have a loan on a Promissory Note" the loan was given on the shareholder signing a promissory note and no money was
advanced to him using the word "money" in the ordinary sense. But the result of the transaction was that the amount of the promissory note was applied in part payment of either his allotment or call money in arrear, and he appeared in the Company's books as owing the company that money was that the substance of the transaction ? No, I shall give you the transaction. The transactions were this
I did not want to be over-loaded with a lot of capital. I had applications before me for 2 million dollars worth of shares, and I refused to allow shareholders to pay more than 10% of their money, unless they would agree to provide
the bank with money instantly available on demand, by borrowing to the extent to which they paid in excess of the 10% called up thereby placing the benk in a very advantageous position. Incidentally this is not my invention- but will be found in any decent book on Political Economy dealing with the subject of Banking.
This is the head office Loan Ledger (Ex NIE 16). I am taking this as a typical case - Li Ting Sang, June 10th, was granted a loan on a promissory note for $500 ? Yes.
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And on the same date, June 10th in the Shareholders Ledger Mr.Li Ting Sang is credited with having paid $500.00
in cesh on account of his shares ? No, that is a different date One is the 16th, and the other is the 10th (Argument about date- and Judge settles it by pointing out to Mr. Brewer he is looking at the wrong item and Mr.Brewer recognises his mistake and agrees).
Do you agree ? Yes.
Do you agree that this was the form that the transaction took in all cases ? They paid us cash, and we paid it back.
There are similar entries in regard to all these other Promissory No te transactions to the extent of $31,000.00 ? Yes. May I be permitted to make another remark, in direct reference to Mr. Li Ting Sang. He is our Compradore, He was
not in need of money. He made a deposit in respect of his Compradoreship. If there were one man who did not need this $500.00 it was he- but he took it to oblige me, because I wanted cash available on demand for the bank.
Judge: Was there any security taken for these Promissory Notes or was there any collateral security ?
In every case the man has paid his $500.00 Until he pays we give
him no loan.
O.R:- On the subject of Mr.Li Ting Sang's financial position on Jan. 1st, 1929, he was owing the Company $9,188.00 ? He is in credit with the Company on other
eccounts.
Has he ever paid it ? He has never been asked to.
Never been asked to pay ? actually came to the crash
As I have said, until we there was never one man asked to
pay money because my whole object was to get rid of the money
18.
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