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THE HONGKONG ELECTRIC Co., Ltd.
THE GENERAL ELECTRIC CO., of China, Líd. and Andersen, Meyer & Co., Ltd, Sate Agents. David House, Des Your Roud, Hongkong.
WARWICK REVUE
OWING TO STEAMER
DELAY THE COMPANY
WILL OPEN ON
FRIDAY, Dec. 20th.
AND NOT ON
THURSDAY, Dec. 19th.
AS
PREVIOUSLY ADVERTISED
"RICKSHAW" BRAND CEYLON TEA
Cheapest and Boat
From all leading.Compradores.
THE HONGKONG TELEGRAPH,
BREWER CASE EVIDENCE.
"DID NOT MAKE A CENT EXCEPT HIS SALARY.”
DEFENCE QUESTIONS.
"There is nothing in the books to show that Mr. Brewer has made a cent except for his salary," said Mr. Hampden Ross, the auditor commissioned to Invostignto the books of the Instone Banking Cor- poration yesterday, when he con- cluded his testimony in the Brewer
cone.
Mr. Ross has spent two after noons in the witness box answer ing questions of law, and practic in relation to the system of draw- ing up a Company's balance sheet. When hypothetical questions were. nut by Mr. E. Davidson on behalf of the defence, witness appealed to
.
WEDNESDAY, DECEMBER 18, 1929.
Mr. Davidsons In that cave on the same assumption (I am sorry to ask you another question which may help defendant); "If that is so, then it is a correct term to use in the balance sheet-As far as the word "secured loans" is con- cerned, yes. In view of the fact. that as an "assel" it is worth no- thing, it is still a mistake in the balance sheet. When I say it is worth nothing, I mean to say that it is shown on the balance sheet It is not worth the money at which
How do you prove the fact?—It
is impossible to collect money on
4
Since the Company wont into liquidation 7-Yos.
In it not a fact that the Official Receiver has collected money on those loana, as you call it?
Mr. Somerset Fitzroy (inter- posing): I will put Mr. Agassiz into the box and you can ask that question.
Making it Balance.
Mr. Davidson: I now come back
sheet, these same are included in On the other side of the balanco the wald-up capital 7-Yes.
the Bench. The hearing which to the question which I asked you was before Mr. A. W. G. H. Grant-same assumption; you can bring Ross. On tho originally, Mr. ham was again adjourned.
Resuming his cross-examination yourself to make this state- of Mr. S. Hampden Ross, Mr. Eing a secured loan 7-Yos....
ment is verbally correct, of its be- Davidson. asked: "Collateral Se- curity Loans shown in the balance sheet as an asset and amounting to $349,000 odd, represent notes signed by shareholders in advance of calls? These were definite promises to pay various suma of money, by the shareholders? Yes, It is treated as monies in ad vance of calls and lent back to shareholders. Assuming that they were valid debts they were in fact asnetu ?—No.
N
Why not? They were not realis able.
I said assuming they were valid debts they were all assets?-A asset must be worth money. That is not worth anything.
I am asking you to assume they were valid debts and therefore worth money?-A debt due to n company is an asset. A bad debt
19 1201.
They had therefore to be includ- ed on the assets side to balance the balance sheet?-Not necessar
make it balance?-On the same as- Why not? How else could you
include any thin on the balance sheet to make sumption, you can it balance. It is not the correct way from my point of view,
Well, it is my point of view wa are dealing with at present. J know you have your own views of it-They were not there just to make the books balance. They' must have been put in there to
I don't say they had not been put in thero. It is obvious that if it is to be on one side it must be also put on the other, to make the whole thing balance. Therefore,
can be verbally correct?-As- suming they were secured loans,
I regret to say I have not as sumed they were bad debts, and you have no right to assume they
I want tự n back for a moment, were bad dehta,-I have every
Mr. Ross, and again deal with the right to assume seeing that I in-item issued and subscribed capital vestfrated the books.
How can you say for certainty which 1 did not deal with yester
day. The amount of $2,613,000. they were bad debts? Supposing. odd is correctly stated? The they were not valid debts, they issued capital according to the
were not assets?-No.
They were described as "Colla-hooks, is $1,444,000.
What about subscribed capital? feral Security Loans." Will you take it from me that "Collateral-There was no subscribed capital. Security Loans" are secured, or do you sureest something else?I understand it to mean "additional
securities."
Asked to Assume.
Everyone of those debts was se cured by à lien on the share holders' shares?-In my opinion, that is not a security.
1 am not asking for your opinion. These are the forms relative to that point which I now read to you:
You know it was not subscribed cavital?--To call it subscribed capital i should require proof of its, having been maid in as sub- Beribed capital,
Into the Law Agnin,
I'm asking you to assume that view, and you did so when we dealt with the assets, that these applicu. tions were nod for shares?—Yes.
Yes, if that is so, then it is cor rect to deseribe the expital as $2,613,000 7—Asíuzņing that the actual statement as it stands is correct
1 hereby make an application to the Justone Banking Corpora- | I take you a point further. The tion for a personal loan of subscribed capital is that which $9,000, which sum 1 propose to has been allotted on those loun use in payment of the balance applications?--You are taking me outstanding on 100 Ordinaryakain Into the law. From the Shares applied for (or allotted point of view of an auditor and a 1 must say that tho to) me in my name, on which layman,
WEB not yubscibed the sum of $10 mer share has
it appears on the been previously paid by me in cash. I agree that this loan, if
I am not huggesting that they accepted, shall be a lien on the said shares "and that in the should not appear on the balance event of my essaying to transfer sheet.- or hypotherate the said shares, shall be forthwith repayable Bench. without demand."
$2,613,000 capital as balance sheet.
Witness again appealed to the
Mr. Davidson, pursuing the Mr. Davidson: "I agree this question asked: If the capital loan if accepted, shall be a lien on was subscribed, that is to say, if the said shares." That is an agreb-applications were received, the ment viving a lien on the share-statement "issued and subscribed capital" is not false?-I don't holders' shares?-Witness: Yes.
If that is security, were these agree. debts not secured?--You are ask- ing me to assume again.
I am asking you to assume that is security, because I have ample evidence, have authority more weighty than your opinion, that it is security, and only ask you now to assume that it is so-You are asking me in every case to accept your explanation as regards the law, and then you want me to ans- wer your question."
What do you understand is "sub- scribed capital" as opposed to "issued capital?" "Subscribed capital" is enpital which has been duly applied for, and money has been received with the applica-
Lions.
+1
Won't that involve allotment?—— No, I don't think so.
True Statement of Affairs. Turning to the item "stocks,
I am asking you, for the pur-shares and other securities," you poses of argument, that that is have told us that these consisted of security in law?-1 don't know $115,000 fully paid-up shares in the possession of the Instone Trad- anything about the law,
ir Company-Yes. The books show that these were transferred from Mra, Brewer,
But do you accept it from me that that is the law?--No, I am not prepared to accept it because I don't know anything about the law.
Secured Loans or Not, -
'You don't know-you can't any they were securities in law, in other words, that they were secured loane--I cannot answer your question:
If those shares had been shown In the balance sheet in this way, that they were put at only half.of their nominal value, would you have any quarrel with it or the figure? Yes, I think so. I Am sure of it.
As an accountant-
Witness: As an auditor. Mr. Davidson: As an auditor I If a lien on the shareholders' put it to you in another way. I own shares is security in law, are suggest that if it is put in" Lhat not these secured loans?—I am way, it can also be a false state- unable to answer a question which ment? If these shares were worth is based on assumption.
par, yes...But I think it would be Mr. Grantham: That is a clear a false statement, question. I think you can answer Although if it is actually liter-' that. Let us put it in this way,ally and perfectly true? Yes. A Accepting Mr. Davidson's assump-balance sheet, to be reliable mast tion for a moment, do you accept present a true statement of af- such as secured loans?
fairs. If these investments were After considerable hesitation, not worth it, they should be shown. witness replied: "Yes, but I can at their real value or have a foot- not agree that a loan through a note in the balance sheet as to what lien on Company's shares is a their real value is. secured loan.”
If these assets were actually
Mr. Grantham: But supposing Instone Trading Co, shares stand- for a moment that, in law, that in~ in the books of the Company lien on shares is security?-Wit- | at their par value?—Yes; ness: Yes, yes,
(Continued on Page 6.):
The
Season's
Greetings,
Madam.'
A
GIFT
"
OF EXQUISITE · TASTE
NO GIFT IS SO APPRECIATED BY “THE FAIR SEX” AS--
SUBTLE PERFUMES
AND THERE ARE NO PERFUMES OF PURER FRAGRANCE THAN THE CREATIONS OF-
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OF WHICH
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A. P. C. BUILDING,
Tel. C.345.
HOW TO COMPEL ATTENTION
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IF YOU HAVE VISITED
SHANGHAI, LONDON, PARIS or NEW YORK
RECENTLY, YOUR ATTENTION MUST HAVE BEEN INSTANTLY ATTRACTED TO THOSE PROGRESSIVE ESTABLISHMENTS"-
ILLUMINATED
BY
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SIGNS SOLD ON MONTHLY PAYMENT PLAN.
FULL PARTICULARS AND ESTIMATES FROM
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68, Queen's Road, Central.
NEON
The Cold Light"
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IN THE WORLD.
1
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