We have already said that immediately on the appearance of the investigators' report, on the 19th of October, warrants were issued for the apprehension of the directors and manager, on a charge of fraud. They were accordingly all apprehended on the same Saturday evening, and on the following Monday were brought before the police court; and a week later, after being further charged with theft, were formally committed for trial; the trial, however, not taking place till the 20th of the following January.

The first head of indictment charged the panels with issuing false and fraudulent balance sheets during the years 1876, 1877, and 1878. The fabrication of the balance sheets was actually commenced in 1873, but the Crown went no further back than 1876, believing that they could found a charge on the balance sheets of that and the two subsequent years of sufficient gravity to obtain a conviction.

The panels were charged with the issue of false balance sheets, inasmuch as in that of 1876 they understated the deposits 1,006,000, the acceptances 973,000, the credit accounts, and other advances 2,698,000, and overstated the cash in hand 29,000, government stocks, etc, 753,000, profits 125,000, reserve fund 450,000; in that of 1877 they understated the deposits 1.151,000, the circulation 76,000, the acceptances 1,330,000, the bills of exchange, credit accounts, and otheradvances 3,227,000, the cash in hand 30,000, and overstated the government stocks, Ac, 751,000, profits 129,000, reserve fund 450,000; and in that of 1878 they understated the deposits 941,000, the circulation 89,000, the acceptances 1.393,000, the bills of exchange, credit accounts, and other advances 3,520,000, and overstated the cash in hand 219,000, the government stocks, etc, 926,000, the profits 125,000, the reserve fund 450,000.

In addition to these specific charges they were also charged under this head of the indictment with treating and publishing as available assets, certain bad debts, to an amount far exceeding the capital of the bank, and with fraudulently representing and publishing that the bank was in a sound and prosperous condition, and capable of paying a certain dividend, and of carrying forward a certain amount to the following year's profit and loss account.

Under the second head of the indictment some of the panels were further charged with breach of trust and embezzlement, inasmuch as each of them did in breach of his trust and duty as a director of the bank embezzle and appropriate to his own use, or to the use of the firm with which he was connected, certain specified large sums of money ranging in amount from about ,30,000 to over 300,000.

The third head of the indictment charged all the directors with theft, inasmuch as they did " wickedly and feloniously steal and theftuously away take " certain bills of exchange which had been left with them by customers for collection and credit of account at maturity, and did instead discount the same and apply the proceeds for the purposes of the bank.

The indictment resolved itself substantially into the three foregoing heads of making and issuing false balance sheets, breach of trust and embezzlement, and theft.

On the discussion of the relevancy of the indictment, the counsel for the prisoners argued that the indictment was altogether bad, inasmuch as the first head was not sufficiently specific, and because it was contradictory and unintelligible; and particularly that the eighth count of the first charge, viz., that bad debts far exceeding the capital of the bank had been treated as good assets, should be struck out, because it did not specify the debts which were bad and irrecoverable.

With regard to the second head, counsel argued that the directors committed no crime in sanctioning advances to themselves, and did nothing that was not quite within their discretion in so doing.

With regard to the third head, they submitted that, in sending the bills to London for discount, the directors, though they might have been guilty of some irregularity in sending them prematurely, were not guilty of theft, inasmuch as they placed the proceeds of the bills to their customers' credit at maturity, and only used the proceeds for the purposes of the bank in the meantime in their discretion as agents for their customers.

As the result of the argument on the relevancy. the Lord Advocate for the Crown withdrew the eighth count of the first head of falsifying the balance sheets, on the ground that he was not in a position to give the details of the bad debts treated as good assets. And the Lord Justice Clerk disallowing the other objections raised by counsel against the relevancy, the indictment, amended as above, was placed before the jury.

During the course of the trial, however, the Crown found it necessary to abandon the two charges of em-bezzlement and theft; and the only charge which was ultimately put before the jury for their verdict was that of fraudulently falsifying and issuing the balance sheets.

To enable the reader more clearly to follow the charge which was preferred, we shall here give a copy of the balance sheet of 5th June, 1878, as issued by the directors, together with a pro forma balance sheet of the same date,, made up for the sake of comparison, after giving effect to the falsifications charged in the indictment. And, as further illustrative of the falsifications, we shall also a copy of the balance sheet of the bank on 1st October, as made up by the investigators.

1 ABSTRACT BALANCE SHEET, as at 5th JunE, 1878.

As issued by the Directors.

Liabilities.

I.

Deposits at the Head Office and Branches, and Balances at the Credit of Banking Correspondents

8,102,001

0

4

II.

Bank Notes in Circulation in Scotland and the Isle of Man . . .

710,252

0

0

Ill,

Drafts Outstanding, due, or with a currency not exceeding twenty one days, and Drafts accepted by the Bank and its London Agents on account of Home and Foreign

1,488,244

18

6

Liabilities to the Public . . .

10,300,497

18

10

IV.

Capital Account 1,000,000 0 0

V.

Reserve Fund . 450,000 0 0

VI.

Profit and Loss 142,095 12 10

Liabilities to the Partners-----------------------

1,592,095

12

10

11,892,593

11

8

Assets.

I.

Bills of Exchange, Local and Country Bills, Credit Accounts, and other Advances upon Security

8,484,466

9

2

II.

Advances on Heritable Property, and Value of Bank Buildings and Furniture at Head Office and Branches ........

265,324

9

0

III.

Cash on hand, viz., Gold and Silver Coin and Notes of other Banks at Head Office and Branches

845,963 1 0

IV.

Government Stocks Exchequer Bills, Railway and other Stocks and Debentures, and Balances in hands of Banking Correspondents . ,

2,296,839 12 6

3,142,802

13

6

11,892,593

11

8

II. Pro Forma Abstract Balance Sheet, As At 5th June, 1878

Made up after giving effect to the falsifications charged in the Indictment,

Liabiliteis.

I.

Deposits at the Head Office and

Branches, and Balances at the-

(Credit Banking Coorrespondents

9,043,285

18

9

II.

Hunk Notes in Circulation in Scotland and the Isle of Man . .

799,283

0

0

III.

Drafts Outstanding, due, or with a Currency not exceeding twenty-one days, and Drafts accepted by the Bank and its London Agents on account of Home and Foreign Constituents.......

2,881,252

18

6

Liabilities to the Public . . .

12,723,821

12\

3

1V.

Capital Account

1,000,000 0 0

V.

Reserve Fund .

VI.

Profit and Loss

Liabilities to the Partners

16,220 3 10

---------------------

1,016,220

3

10

13,740,041

16;

l

Discrepancy between this and the

Cr. side.......................

527,179

l

5

14,267,220

17

6