CO129-535-5 N.I. Brewer- transcript of trial and evidence 1-1-1929 - 31-12-1931 — Page 235

237

Corporation.

In other words, Mrs.Brewer is holding the shares without any beneficial interest, because as soon as they are sold 10% is to go to Mr.Li and 90% to the Instone Banking

There being no beneficial interest whatever to Mrs. Brewer in respect of that. But it was of course necessary that the shares should be in some name or they

could not have been held alive.

-

Mrs.Brewer held these shares the whole $480,000.00. $30,000.00 of them were, in fact, taken up, and in respect of this $30,000.00 Mr.Li received $3,000.00 and the Instone

Banking Corporation received $27,000.00

In respect of the 4500 which were not taken up these were shares that we, during March, 1928, transferred to the Instone Trading. Why transfer. to the Instone Trading ?

Because these shares, in fact, belonged to the Instone Bank. There was not other correct way of looking at it.

A result of the circumstances which had come into being makes it quite clear that since the original $55,000.00 was a refund to the bank that was the bank's profit, and anything purchased with that $55,000.00 was the bank's profit, and that whoever held what was purchased with that $55,000.00 was a trustee for the bank.

These $450,000.00 worth of shares were the bank's property. It is incorrect for any company to purchase its own shares. It would not have been deliberately done in this case, but I have explained the circumstances which came into being.

These shares were standing in the name of Mrs. Brewer, by transfer she was held as trustee. By transfer to the Instone

Trading they in effect likewise became trustees for the Instone Bank.

-

I have dwelt rather fully on that there has been quite a suggestion in respect to these shares largely because

rs. Brewer is involved in it, but as I have pointed out, she has throughout acted at the express wish of the Directors, without any profit to herself, in an entirely honest and competent manner.

The whole point of my additional evidence has been put forward that in every case it has been a question of a discretion in every separate case that has arisen. In every case it has been on

-

Judge:- That is not evidence.

The only other point that I would wish to give evidence on is that the bank was conducted in a competent manner, and that its shares had a real value.

I have already given evidence of trying to purchase them at $97 for $100 share in the middle of 1928. But even after the unforeseeable disasters at Canton and Shekki, after the morass of liquidation into which bad fortune has plunged us, even after this, the value of the company was maintained at a high figure. It was not because we had not a large capital that our company was a failure, but because I had insisted on keeping the capital at a sufficiently low figure to enable all of it to earn money. There was no waste of money, no money lying idle, nor at any time prior to the Canton and Shekki disasters, was there a shortage of money to the extent of making us look for it. It was a competently run firm.

46.