The accountants and solicitors ordered to report upon the affairs
of the City of Glasgow Bank published their report on the evening of Friday week. It is almost appalling in its frankness. The managers of the Bank had treated bad debts to the amount of £7,345,000 as available assets, and had estimated the value of the securities representing them at sums stated by the debtors themselves, and of course bearing no relation to the truth. Of these bad debts, nearly six millions were owing by four firms, whose securities are not worth a fourth of the amount. The management, ever since 1873, had annually entered a fictitious deduction of £973,000 against the " bills payable " account and the foreign and colonial credit account, and had falsified other accounts so as to lead shareholders to believe that the bank had lent upon credits less than was the fact by £1,126,764, and had good securities more than was the fact by £926,764. The managers had not even the gold legally necessary to meet their- notea by £200,000, the direct falsity of their weekly return on this head being acknowledged in the books. The management was fraudulent, in fact, and the total loss, exclusive of £1,000;000 of capital also lost, was £5,190,983. Immediately on the publication of the statement, the Lord-Advocate arrested the managing director, six directors, and the secretary, who, unless they for- feit their bail, which, according to the Scotsman, they can do, will all be tried for conspiracy to defraud by the publication of false accounts. The report of itself of course proves the existence of guilt, but only a careful trial can show who were consciously guilty. It is believed that if the inquiry is pushed, as intended, behind 1873, other names will be added to the list.
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