October 25, 1909.]
THE BUTLER WRIGHT
CASE.
THIRD DAY'S TRIAL.
ACCUSED GIVES EVIDENCE.
The trial of Mr. W. Butler Wright, Chief Accountant of the Imperial Chinese section of the Canton-Kowloon Railway, on charges of larceny of the sums of $13,000, $5,000 and $4,000] money of and belonging to H. I. Majesty the Emperor of China, was continued before Mr. Justice Lindsay Smith and a jury in the Supreme Court of China and Korea at Canton on Oct. 15th.
The jurors were :-J. C. H. L, Smith, R. T. Matheson, W. H. Hill, H. Dent, and C. H. Reid.
Mr. Hiram P. Wilkinson, Crown Advocate, I of Shanghai, instructed by Mr. H. W. Looker (of Messrs. Deacon, Looker and Deacon) appeared for the prosegntion, and Mr. J. C. E. Douglas represented the defendant.
In cross-examination witness said he had not previously had any experience of Government audit. He was of opinion that the railway cash book was of no use for an audit. He had ignored it.
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CHINA OVERLAND TRADE REPORT.
357
Nigerian railway. He had had 34 years' experi- Peking, to have $100,000 transferred to the ence of railway accounts. When he left the Bank of the Board of Posts and Communica- Indian service he was receiving a salary of 1,000 tions. While in Peking the President of the rupees a month, and in West Africa his salary Board spoke to him about this matter, and asked was £1,100 with £100 duty allowance. Wit him if he could arrange to transfer part ness was 55 years of age, and had a wife and six of the loan funds to the bank in which children in England. He was appointed chief he was interested in Canton.. Witness dis- accountant of the Canton-Kowloon railway cussed the matter with the agent and the Cor- under an agreement put in. Witness poration in Hongkong, but they said it could spent a couple of months in Shanghai not be done. The other accounts referred to and Peking looking into railway systems there. in the agreement, to anyone who knew about Then he returned to Canton, made a report and railway accounts, meant revenue accounts suggested certain changes which seemed desir of sections of the railway which might able to him from his experience. The head he opened during the progress of con. office consisted of the managing director, with struction. It was the duty of witness to whom was associated the engineer-in-chief and look after the construction account and the the chief accountant. Witness was told in London revenue accounts of the line. The keeping of that he was to come to China in charge of the funds outside the Hongkong and Shanghai Bank account with equal authority, status and respon- was an infraction of the agreement, and the sibily with the engineer-in-chief. Latterly there accounts in the International Bank were opened had been an official estrangement between himself by witness on his own initiative, and without and Mr. Grove. They did not agree on different reference to anybody. The system of drawing on points, one of which was with reference to what the construction account in Hongkong with the he considered a failure on the part of the Cor- two signatures was found to be absolutely un- poration and the bank to meet a contractual workable. When work began in earnest large Mr. E. A.M. Williams was further examined. obligation: that was, a matter of a transfer of sums of money were wanted and wanted quickly. In reply to the Crown Advocate he said the £500,000 at the telegraphic transfer rate of Contractors presented their bills and had Hongkong currency account in the Inter- exchange on August 29th last year. Witness to be paid quickly. Witness could not keep national Bank at Canton was fed by held very strongly that the Corporation and the them waiting for days until the joint signs. transfers from the construction account in Bank were bound to transfer that amount at ture to draw money from the construction Hongkong. The local currency account was the T/T rate of the day under the terms account was obtained Messrs. Deacon and fed from the construction account and of the contract, because it was a Co, who were the Canton agents for the the Hongkong currency account. Accused's favourable rate. All previous transfers Hongkong and Shanghai Bank, were not able private account showed only one salary entry had been made at the TT rate. In at any time to give him the funds he wanted, for $200 odd. It also showed entries for August this year witness was distinctly played so he called on the manager of the Interna- the amounts concerning the charge. The rail- out, and feeling extremely unwell, consulted tional Bank and said he would like to open way cash book was produced, and witness said two doctors. Both suggested and one urged two accounts in his own name and to he did not find any statement therein showing him to get away as soon as he could for a change. be operated upon by him. One he wished whether items of cash entered as paid were paid Witness was told by Mr. Power that an official to call the Hongkong currency ac- in Hongkong or in Canton dollars. The only audit would begin on August 10th. He showed count to enable him to make quick payments in means he had of discovering this was by endea- the second accountant all the books, explained Hongkong currency. The other he wished to vouring to trace each payment to the pass- the system adopted and the technicalities, and call the Canton currency account, and that book. The cash book as it stood was incorrect. to his mind the books were clear enough for would enable him to make payments in Canton Mr. Wright shonld have debited himself with any professional auditors to proceed on. He currency and to feed the district engineers. the difference in exchange in order to bring it thought the audit would take a couple of He wished this distinction kept so that transfers down to one standard currency.',
months, but did not think there was any from one to the other could he readily effected. occasion why he should not go away. Under Witness considered these accounts to be under clause 7 of his agreement he could absent himself his own control, and that he was responsible for for any period not exceeding thirty days on the the monies in them because he had acted ultra score of ill-health. He sent a medical certificate vires. No one else could draw on those accounts, to the managing director with the intimation but on one occasion when an urgent payment that he was going. Witness did not think that was necessary while the defendant was away, Mr. the sanction of the managing director was Power was allowed to draw $5,000. On his return necessary. He first mentioned that he was go- however, he was asked to regularise the matter by ing in the early part or in the middle of August. signing a cheque. There was also an account He spoke of his departure quite freely to his for $3,000 kept in a Chinese bank for the friends and told Mr. Power on August 30th purpose of meeting Custom payments in Hai- that he was leaving by the Tenyo Maro on kwan taels. These accounts were opened in the 3rd of the following month. In July Mr. the early part of 1908, and were continued Grove explained to him and Mr. Power that it until the early part of une, 1909. Then the would be necessary to transfer the railway offices railway got notice that the Hongkong and to Tungshan, and stated that the offices Shanghai Bank were about to open a branch and residences would be transferred on in Canton. It then became necessary, October 1st. That was why witness took if that was so, for witness to transfer steps to pack his things with the object all monies back to the Hongkong and of being ready to remove. He saw
Mr. Shanghai Bank, because there would then Lorria with reference to auctioneering | be no justification under the loan agreement for some of his effects. The rooms in which he any monies being in a separate bank. Witness lived were two or three times, or perhaps four called on the manager of the International times, the size of the rooms provided for him at Bank and told him he was afraid he would Tungshan. If he put his dining room furniture have to close the accounts in that bank, as other- in the house provided by the railway he wise he might be brought to book. Witness would have had to stay outside. He put a limit transferred the balance of the Hongkong on the things he wanted sold. His servants currency account to the Hongkong and Shang- were still in Canton, where he had a few out-hoi Bank, because he wanted to start in that standings, some $5,000 or over, but he did not bank as soon as it was opened. The day the make any effort to collect it before he left. Hongkong and Shanghai Bank opened witness Witness' effects in his house and in godown he interviewed the manager, and asked if he intend- valued at over $5,000. A friend booked a berthed having local currency accounts. The manager for him on the Tenyo Maru. On arrival at Shanghai he was arrested, the specific charge mentioned in the warrant of arrest being for embezzling the sum of $13,000. The charges against him now were for larceny of the sums of $5,000, -13,000 and $4,0 0. When witness first arrived at Canton there was an acopunt called the railway construction account in the International Bank That was opened with a sum of $10,000 before he arrived, and was operated upon by the joint signatures of the managing director and the chief account- ant, according to the sub-section of the title. Witness read the railway agreement to read that no monies were to be withdrawn from the Hongkong and Shanghai Bank and deposited in any other bank. The managing director spoke to him, and he approached the agents in Hongkong about it being desirous, under instructions from
It's not been touched by you?-I have referred to it, if you call that touching.
Do you remember in the lower Court prefer. ring a charge against the defendant of having stolen $21,000 odd profits on exchange ?—I did not charge him.
I mean to say you gave evidence concerning it. What is the total amount of the loss on exchange ?$27,836.43 to June.
How much did you find Mr. Wright had credited exchange ?-$22,038.09.
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A cheque may be drawn on the Hongkong construction account for payment of amounts, some in Hongkong and some in local currency? -No. Take an "Ao7" form. Certain amounts are paid in local currency and certain amounts in Hongkong currency. Mr. Wright would draw cheques for the amounts, irrespective of the currency, on the construction account, and transfer the total to the Hongkong currency account in the International Bank,
In stealing profits on exchange the money would have to come out of the bank first ?- Yes.
And to do that you have either not to vouch for the money or to improperly vouch for it ?—— You must not vouch for it at all.
Did you get so far in your audit as to as- certain whether the accounts of the railway were kept in Hongkong or Canton dollars The accounts were kept in Hongkong dollars,
And the railway cash book as in Hongkong dollars P-No. Canton dollars are treated us Hongkong dollars there.
And if the cash book had been kept in the way you suggest the balance would have to be kept in two currencies ?-No, the balance would be in Hongkong dollars:
This closed the case for the Crown. William Butler Wright was first called for the defence. He stated that he had been a qualified passed accountant on the government of India railways from 1875 to 1887. Then he was deputed auditor for the Mahratta railway from 1887 to 1899. From 1901, after two years' leave spent at Home, until 1907, witness was chief accountant and deputy general manager of the
said he was not going to touch local currency until he got some experience, so defendant was thrown back on the old plan. He told Mr. Grove that he had closed the Hongkong currency account at the International Bank by transferring the balance to the Hongkong and Shanghai Bank, and stated that he would trausfer the other account as soon as the bank opened a local currency account.
We are now going to deal with the specific cheques which the prosecution allege have been taken. You have heard the evidence?—Yes.
Have those transfers taken place?-From accounts 1 to 3?
Yes? They have taken place.
What have you got to say?--I considered I was responsible for the whole of that cash balance. Whether I took that $13,000 out of one pocket and put it into another, or
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