Volume 2 - ElectricCanadian.com

1867 TO 1901 103this examination had been concluded, Mr. Walker said:"The present task has been rendered more than usuallydifficult by the fact that our opinion of some of the bank'sassets differs very materially from that of my predecessor.Whenever the element of doubt fully enters into an asset, thebasis for valuing the asset should be one which leaves out ofsight all sources of recovery which are merely conjectural, andthis, I think, applies with the same force to an account whichis current and on which interest is collected, as to debts alreadyin default, if the source of recovery of the whole debt cannotbe seen. Between such a method of valuing the property ofthe bank, and a more hopeful view under which appropriationsare not made until losses are positively ascertained, there isunfortunately room for very wide difference, especially whenthe assets under examination amount to as much as sixteenmillions of dollars."The report of the directors presented at the annual meetingheld on July 12, 1887, showed that on the advice of the newmanagement they had appropriated for bad and doubtfuldebts the sum of $930,543 and had transferred to ContingentAccount, to cover the estimated loss on doubtful debts stillcurrent and on accounts in liquidation, the further sum of$455,490. These appropriations not only necessitated thetransfer of $1,100,000 from the Rest, but exhausted the sum of$150,000 accumulated as a reserve for rebate of interest oncurrent discounts. The Rest, which had reached $2,100,000in 1885, had now been reduced to $500,000. Nevertheless,the dividend of seven per cent, had been more than earned,and the discount business of the bank was found to be notmerely active, but in a sound condition. The career of thebank, during its first twenty years, had not been a brilliantsuccess, but it is well to remember that it had a record notenjoyed by any of the banks which could be compared with itin size or amount of capital; it had a capital which had neverbeen impaired, it had never failed to pay a dividend, and ithad become the leading bank in the province of Ontario.