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Title: Notebook “Trade and Finance 1868”. IX. The End of the English Joint Stock Bank Inquiry, Foreign Loans and the Postponement of the Overend and Gurney Trial, May to July 1869
Description: Newspaper cuttings in the notebook “Trade and Finance 1868”, April to July 1869, from the Daily News and Reynolds’s Newspaper: the end of the English Joint Stock Bank inquiry, the Central Gas Company meeting, the foreign loan speculation, leaders on banking and insurance, and the postponement of the Overend and Gurney trial.
Author: Karl Marx
Date: 1869-05
URL: https://marxismo.school/archivo/marx-engels/originales/1869%20Notebook%20%E2%80%9CTrade%20and%20Finance%201868%E2%80%9D.%20IX.%20The%20End%20of%20the%20English%20Joint%20Stock%20Bank%20Inquiry%2C%20Foreign%20Loans%20and%20the%20Postponement%20of%20the%20Overend%20and%20Gurney%20Trial%2C%20May%20to%20July%201869
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*Newspaper cuttings, mostly from the Daily News, cut out and pasted in for Karl Marx by his daughter Jenny Marx in the notebook “Trade and Finance 1868”, London, 1868-1869 (IISG, Amsterdam, Karl Marx and Friedrich Engels Papers, P 1). Text from MEGAdigital (MEGA² IV/19), without the editorial apparatus; words in square brackets are missing from the cuttings and supplied by the MEGA editors.[^lic] [Traducción al español](https://marxismo.school/archivo/marx-engels/1869%20Cuaderno%20%C2%ABTrade%20and%20Finance%201868%C2%BB.%20IX.%20El%20final%20del%20proceso%20del%20English%20Joint%20Stock%20Bank%2C%20los%20empr%C3%A9stitos%20extranjeros%20y%20el%20aplazamiento%20del%20juicio%20Overend-Gurney%2C%20mayo-julio%20de%201869)*

#### THE ENGLISH JOINT-STOCK BANK.

On Monday Charles Edward Mangles, [James] Abbiss, and Thomas Bradshaw, three of the director, and Samuel Greenway Finney, the manager of the English Joint-Stock Bank (Limited), which carried on business in Clement’s lane, City, and failed in the panic of 1866, again appeared before the Lord Mayor, at the Justice-room of the Mansion House, on summonses which charged them, in effect, with conspiring to defraud the shareholders by making, or concurring in making, divers false entries in the books of the bank; by omitting certain material particular; and also by making and publishing, or concurring in making and publishing, reports and balance-sheets, well knowing them to be false in divers material particulars.

Mr. George Lewis, jun., solicitor, again conducted the examination; Mr. Metcalfe appeared as counsel for Mr. Bradshaw; Mr. Poland and Mr. Omerod for Captain Mangles; Mr. Montagu Williams for Mr. Abbiss; and Mr. Straight for Mr. Finney.

Mr. Lewis said the Lord Mayor would remember that on the last occasion, in stating the case against the defendants, he referred to a sum of 2,000l. as having been appropriated under circumstances which he did not then desire to repeat. He had since found he was clearly in error with respect to that sum, and, so far as it affected the defendant, Mr. Bradford, he desired to state that publicly, and to express his regret that his instructions had misled him. In reference to the item itself, however, he was not in error.

Mr. Metcalfe: You said 1,250l. of it went into Mr. Bradshaw’s pocket.

Mr. Lewis said he found that was not the fact, that no such sum found its way into Mr. Bradshaw’s pocket, but he would prove there was an appropriation of a larger amount, though that in no way affected Mr. Bradshaw.

Mr. Charles Bradlaugh was the first witness. He said he was in business at 15, Palmerston-buildings, Old Broad-street, as a financial agent and secretary to the Naples Colour Company. He knew all the defendants personally in the way of business. He was employed by the English Joint-Stock Bank in several matters, and in reference to the Nottingham Bank he saw all the defendants personally in the way of business. He was employed by the English Joint-Stock Bank in several matters, and in reference to the Nottingham Bank he saw all the defendants, he thought, except Mr. Abbiss. He did not remember speaking to him on the subject at all. About six weeks prior to the 1st of September, 1865, he thought, he first saw Mr. Finney, the general manager. He also saw Captain Mangles and Mr. Bradshaw. He did not receive instructions from three of the defendants. Mr. Finney, he thought, spoke to him about purchasing the bank. Witness ultimately completed the purchase of the Nottingham Bank, with Hart, Fellowes, and Co., of that town, for 18,000l., of which he believed, 8,000l. was taken in shares in the English Joint-Stock Bank. In the course of the negotiations he had conversations with some of the defendants as to how the matter was going on, but he did not recollect having any actual conversation with Mr. Abbiss. Witness received 2,250l. from the defendant Mr. Finney as commission on the transaction, and be left 1,200l. of it in his hands. He was very glad to be able to leave that sum with him, as he had lent witness money, and witness hoped to be of service to the bank. Besides, he owed the bank some money at the time. The 1,200l. still belonged to witness, and he could sue Mr. Finney if he liked. He had never asked Mr. Finney for it, and Mr. Finney had never offered to give it him. He expected the 2,250l. would have been entered in books of the bank as a payment to him. Witness was offering at that time to purchase several banks for the English Joint-Stock, a bank at Norwich being one. None of defendants except Mr. Finney went to Nottingham with him on the business of purchasing the bank, and he and witness solely superintended the taking over of its assets. About 4,000l. was afterwards returned by the vendors through witness, it having been discovered that the purchase had been founded on a mistake as to the profits of the bank. Witness was several times consulted as to borrowing money for the bank. He remembered in 1865, seeing Captain Mangles, who asked him to borrow 75,000l. for it, and he agreed to do so. It was rather difficult to get money at that time, but when he got the 75,000l. Captain Mangles refused to received it, he having in the interim produced 50,000l. from the Imperial Mercantile Association. Ultimately, 25,000l. of the 75,000l. was taken by the bank by way of loan. That 25,000l. was received through the hands of Mr. Hillell (?), who had it from Mr. Sichel. 2,000l. was paid to Mr. Hillell and 150l. to witness on account of commission and to compromise an action which had been commenced to force the bank to take the whole of the 75,000l. Not one farthing of those sums of 2,000l. and 150l. went into the pockets of any one connected with the bank.

Being cross-examined by Mr. Metcalfe, the witness said the suit after the refusal of the money was not commenced in the name of Hillell. They had been instructed to obtain a loan of 75,000l., while they were so engaged 50,000l. The bank received the 25,000l., and then there was a dispute because they would not accept the whole. A suit was commenced against them to compel them to take the whole, or pay the commission on the larger sum. It was compromised by the payment of 2,000l. instead of 4,000l. to Hillell, and 150l. to witness instead of 750l.

Mr. Oswald Howell, a public accountant, of 39, King-street, Cheapside, said: I have been retained by Mr. Lambert to investigate the books of this bank, and I have been personally engaged in that investigation in consequence. I produce the balance-sheet of the bank up to the 31st of December, 1865. I see there that the gross profits appear to be 46,437l. odd, and the net profits, 14,946l. 9s. 6d. From the investigation of those books I find there was not a gross profit earned at that time of 46,437l., nor a net profit of 14,946l. According to my calculation the bank made none whatever.

The case was adjourned.

On Friday the examination was resumed.

Mr. Thomas Edward Weller, secretary to a company in Bush-lane, said he knew the defendant, Mr. Finney, and was engaged by him from March, 1865, to November, 1865, in amalgamating the bank of Olding and Co. with the English Joint-Stock Bank. From time to time he saw Mr. Finney on the subject, but never any of the three other defendants. He received from Mr. Finney for negotiating the transaction 4,000l. on the 7th of November. The money was paid to him in four 1,000l.-notes, two of which he handed bank to Mr. Finney. Being asked why he returned 2,000l. of the money, witness replied the conversation took a peculiar turn, which showed that Mr. Finney would expect two of the 1,000l. notes. (A laugh). It was written he added, in fact, in large letters on the wall. (Laughter). He said to Mr. Finney the secretary of the bank expected to be similarly remunerated, and he asked Finney to return him 200l. of the money. He sent witness 200l. afterwards, and witness paid it to the secretary. Being asked why he assumed the secretary would expect a douceur, witness replied, amid much laughter, and with a significant gesture, “There was no precise authority; but it was everywhere, all about.”

By Mr. Straight: The negotiation for the purchase of the bank lasted over six months, and witness considered he was badly remunerated by a commission of 4,000l. on purchase money amounting to 100,000l. There had been no previous arrangement, but rather an impression as to the remuneration he was to receive.

By Mr. Metcalfe: He never communicated to any of the directors the circumstance of his having returned 2,000l. to the manager and given 200l. to the secretary. He never saw any of them, nor did he think it was necessary, believing he had a right to do what he liked with his own, and which he had fairly earned in the matter. He never saw any of the directors until now. He saw nobody in the matter but Mr. Finney, and he expected Mr. Finney would apprise them of the transaction.

Mr. Lewis, addressing the Lord Mayor, said he should have to apply to him at the conclusion of the case for a summons for perjury against Mr. Finney, and his lordship would then probably be surprised at the statements Mr. Finney had made on oath in the Court of Chancery.

The Lord Mayor said he never allowed an application of the kind to be made in public. But Mr. Lewis was at liberty to mention that it was his intention to make such an application.

Mr. Lewis said his application would only affect Mr. Finney, and none of the other defendants.

Mr. Metcalfe said all the evidence as to the sums received by Mr. Finney had taken the other defendants by surprise.

The hearing was again adjourned until Monday next, at eleven o’clock, the three defendants, Mr. Abbiss, Captain Mangles, and Mr. Bradshaw, being bailed in the meantime on their own recognizances, and Mr. Finney on one surety of 2,000l. and himself in 2,000l.

#### THE ENGLISH JOINT STOCK BANK.

At the Justice-room of the Mansion-house, on Saturday, Captain Charles Edward Mangles, Mr. James Abbiss, and Mr. Samuel Bradshaw, three of the late directors, and Mr. Samuel Greenway Finney, the late manager, of the English Joint Stock Bank (Limited), which stopped payment in May, 1866, again surrendered before the Lord Mayor to answer the charge of having unlawfully conspired to issue false balance-sheets and reports, and to make improper entries in the books of the company; with intent to cheat and defraud the shareholders.

Mr. George Lewis, jun., solicitor, conducted the prosecution; Mr. Poland and Mr. Ormerod appeared for Captain Mangles; Mr. Metcalfe, for Mr. Bradshaw; Mr. Montagu Williams, for Mr. Abbiss; and Mr. Littler and Mr. Straight, for Mr. Finney.

Mr. Kemp, the accountant, was again cross-examined, and gave further information respecting the manner in which the books of the bank had been kept. At the conclusion of his cross-examination,

Mr. Lewis summed up all the evidence given in support of the charge, and asked the Lord Mayor to comment the defendants for having unlawfully conspired to defraud the shareholders of the sums of 10,000l., by illegally purchasing shares of the bank to that amount; issuing a false balance-sheet for the half-year ending December 31, 1865; omitting from the books certain particulars with reference to the sum of 10,000l. already referred to; omitting from the minute-book all reference to the payment of 2,250l. to Mr. Bradshaw, 2080l. to Mr. Howard, and 4000l. to Mr. Weller; and making false entries with reference to the sum of 50,000l. received from the Imperial Mercantile Association, and the advances to “Jones and Others” of 2,500l.

Mr. Metcalfe then addressed the Lord Mayor on the part of Mr. Bradshaw, and said it was with great pain that he saw gentlemen in the position of the defendants dragged there without the concurrence of the general body of the shareholders, but by one man, who unfortunately, in consequence of a personal affliction, could not investigate matters for himself, and he asserted that if he had been able to investigate matter, he would have ascertained that there was no foundation for the charges brought against the defendants. At the commencement of the proceedings Mr. Lewis said he charged against Mr. Bradshaw that 1,250l. went into the pockets of that gentleman in concert with Mr. Finney. He confessed, having known Mr. Bradshaw for some time, that that statement somewhat staggered him, and it staggered the Lord Mayor also, for he inquired whether Mr. Lewis was able to prove the assertion he was making and Mr. Lewis replied that he was generally very careful in the statements he made, and that he would call a gentleman to prove his assertion; but on a subsequent occasion he retracted what he said, and admitted he had been in error in saying that the 1,250l. went into the pockets of Mr. Bradshaw. Another instance of the recklessness with which charges were made was found in the fact that Mr. Lewis said there was an advance of 25,000l. to Kennedy and Co., but that no Kennedy and Co. could be found. It turned out, however, that this was an advance by the City Bank, and that it was entered in the name of Mr. Kennedy, the manager, at the suggestion of the City Bank.

The Lord Mayor said there was no charge against the defendants in respect of this sum, but he must say that it was most improperly entered in the books. Although it was agreed to enter it in the names of Messrs. Kennedy and Duncan, the manager of the City Bank, it was entered in the name of Kennedy and Co., implying the name of a firm.

Mr. Metcalfe—Then the complaint is that it is entered in the name of Kennedy and Co., instead of Kennedy and Duncan. The learned counsel proceeded to observe in reference to the sums paid by way of commission on the purchase of banks, that the fact of there being no entry in the minute-book regarding these commissions showed that the directors had no knowledge of them, and it was for the prosecutor to prove his case. As to the loan so obtained in the year 1865, it had been proved that they were negotiated for the purchase of Olding’s Bank, because the shareholders had impressed upon the directors the importance of conducting their own London business; and in referring to this matter he alluded to the large number of shares thrown upon the market by Mr. Laurie and Mr. Young, directors of the City Bank, and their friends, which no doubt had the effect of seriously injuring the English Joint Stock Bank, [and it was] to counteract this effect that the directors went [into the m]arket and purchased shares, but he ridiculed [the idea th]at this was done with the intent to defraud. [On the con]trary, it was done in the interest of the shareholders; and as to Mr. Bradshaw personally, there was no evidence to show that he was aware the bank was supplying the funds for the purchase of the shares. The only charge therefore that remained against Mr. Bradshaw was that he concurred in entering the loan of 50,000l. in a wrong account; but it was impossible that Mr. Bradshaw could make a personal inspection of all the books and see that every item was properly entered. Managers and chief clerks were appointed to see that the books were properly kept, and Mr. Bradshaw could not be made criminally liable for a false entry, even supposing it to be admitted that he had been guilty of negligence.

Mr. Litter, on the part of Mr. Finney, complained of the hardship to which he had been subjected by being suddenly arrested on a warrant, and imprisoned in a police cell, while Mr. Kemp did not receive his summons, and was not asked to produce his books till half-past eleven o’clock on the day that Mr. Finney was brought up for examination. Proceeding to refer to the charges against his client, he remarked that the resolution prohibiting the purchase of the bank’s shares with the bank’s money was a matter between the bank and the Stock Exchange, and for the protection of the Stock Exchange. He submitted that the bank would have been in a perfectly solvent condition at the present time had it not been for the general crisis, and the fact that a large number of the company’s shares were thrown upon the market; and because the defendants attempted to avert that catastrophe they were brought here on a criminal charge. He admitted that one of the articles of the association had been infringed, but that was not equivalent to legal guilt. Most of the charges rested on mere matter of book-keeping, with regard to which Mr. Kemp said he would do one thing, and Mr. Howell said he would do another thing. As to the balance-sheet, it was made out by Mr. Maxwell; but he had not been called to prove from whom he had received his instructions. He would not now go into the commissions paid, as there was another charge hanging over Mr. Finney’s head; but admitting for a moment that he did receive bank part of the money, he (the learned counsel) was afraid that Mr. Finney was not the only bank manager who had received money in such a manner, and who had not been brought before his lordship. He denied that banks were bound to make entries which any one could read, because there were matters which it was not desirable all the world should know; and it was sufficient if the manager, or those responsible, should be able to give an explanation. The learned counsel next referred to the loan of 50,000l., remarking that it was a London transaction, which would come under the cognisance of Mr. Olding, and concluding by characterising the prosecution as being of a scandalous nature.

At this stage the case was further adjourned till to-morrow, when the Court will be addressed by Mr. Poland and Mr. Montagu Williams, on the part of Captain Mangles and Mr. Abbiss.

Mr. Finney, as before, was liberated on bail—himself in 2,000l. and one surety in a like sum; and the other defendants on their own recognisances.

#### THE ENGLISH JOINT STOCK BANK.

At the Justice-room of the Mansion-house, yesterday, Mr. Charles Edward Mangles, Mr. James Abbiss, and Mr. Thomas Bradshaw, three of the directors, and Mr. Samuel Greenway Finney, the general manager, of the English Joint Stock Bank, now in the course of liquidation, appeared again before the Lord Mayor to answer the charge of having conspired to issue false reports’ and balance-sheets, and to make improper entries in the books of the company, with intent to deceive and defraud the prosecutor, Mr. Lambert, and other shareholders.

Mr. George Lewis appeared for the prosecution; and the counsel for the defence were—Mr. Poland and Mr. Ormerod, for Captain Mangles; Mr. Metcalfe, for Mr. Bradshaw; Mr. Montagu Williams, for Mr. Abbiss; and Mr. Littler and Mr. Straight, for Mr. Finney.

On Saturday last the case for the prosecution was concluded, and counsel were heard for Mr. Bradshaw and Mr. Finney.

Mr. Montagu Williams now proceeded to address the court on behalf of Mr. Abbiss. In dealing with the charge preferred against the defendants, Mr. Williams observed that the real question was whether the defendants had acted as they had with the deliberate intention of defrauding the public. With regard to the purchase of shares by the directors with money advanced by the bank, he reminded the Lord Mayor that this was done to counteract the effect of a large number of shares being thrown on the market by Messrs. Lawrie and Young, after their retirement from the direction, and as to the 10,000l. advanced by Messrs. Thomas on the purchase of shares, the directors had made themselves personally liable. As to the payment of the commission to Bradlaugh, Weller, and Howard, he submitted that his client knew nothing about the matter; he and Mr. Mangles and Mr. Bradshaw were as much astonished when they heard of it as his lordship was. He had no desire to add one iota to the burden Mr. Finney had to bear, but he asked his lordship to visit criminal responsibility on the right head, being guilty of fraud. With reference to the sum of 50,000l. advanced by the Imperial Mercantile Credit Association, it was said that the entry was made as if the money were a deposit, whereas it ought to have been entered as bills payable. He asked whether his lordship thought that entry made any difference in the balance sheet. Then, supposing he was of opinion it did make a difference in the balance sheet, he (Mr. Williams) did not see how it possibly could, and Mr. Kemp said he did not see how it could, he asked how the directors, who were not aware of that entry, were to be held criminally responsible. Everything they did, they did bona fide and in the interest of the shareholders. At the time of the collapse Mr. Abbiss held 100 shares, although he had previously retied from the board. With regard to the sixty shares transferred to Mr. Maxwell he could only repeat what Mr. Abbiss said, that he represented to Mr. Finney that he would like to sell some of his shares; that Mr. Finney replied that he should not sell them in his own name, as it would not inspire confidence to find a director selling his shares, that he (Mr. Finney) would find a purchaser, and that, at that time, Mr. Abbiss believed Mr. Finney had a bona fide purchaser for the shares. He thought if a person knew the bank was about to collapse he would not have continued to hold 100 shares, as Mr. Abbiss had done. The directors had not benefitted themselves at the expense of the company; on the contrary, they had lost their own money, and if they were to be convicted, he asked who would be a director? If such prosecutions, which were not popular, were allowed to go on commerce would be stopped. He entreated the Lord Mayor to dismiss the charge against the three directors. By so doing he would be dealing a death blow to these pernicious prosecutions, and gain the thanks of the public and of the commercial community of this great metropolis.

Mr. Poland then addressed his lordship on behalf of Captain Mangles. He wanted to know if there proceedings were instituted honestly and in the interests of the public. Why was it that Mr. Abbiss, Mr. Mangles, and Mr. Bradshaw were selected, because if they were guilty there were other directors who were equally guilty. Mr. Poland then went into a lengthened history of the bank, remarking that it was originally established as a creature of the City Bank. The first chairman was Mr. Andrew Laurie, a director of the City Bank, and the City Bank was appointed to transact the London business. Up to November, 1865, Mr. Laurie remained the chairman, and what took place then gave key to the whole transaction. The desirability of transacting their own London business having been urged upon them by the shareholders, the directors entered into negotiations for the purchase of Messrs. Olding’s bank, which bank was accordingly purchased. Immediately thereafter Mr. Laurie and Mr. Young two directors of the City Bank sent in their resignations, and declared their hostility, and instead of being blamed for acting as they had done, to counteract the effects of this hostility, the defendants deserved praise for taking upon themselves a legal liability for which they had to suffer. The better plan, no doubt, would have been to have had nothing understand, and to have called together some of the large shareholders, and explained the position in which they stood, but the defendants adopted the course they considered best at the time. In the case of the British Bank it was ascertained that there was a deficit of 220,000l., and Lord Campbell in summing up said, if the directors knew the bank was insolvent they were guilty, but if they did not know it was insolvent they were entitled to an acquittal. Mr. Lewis was not right in saying that the purchase of shares with the bank’s money was not in any case justifiable. To say that in every case it was criminal was ridiculous. He thought his lordship would be of opinion that the British Bank had nothing to do with the present matter. Mr. Lawrie and his friends held 640 shares, and according to the evidence these were thrown upon the market. The advance to the directors, by which they were partly taken up, were entered in the ledger in such a manner that every clerk in the office might not know what was going on; but the directors took the legal responsibility, and repaid the whole with interest. In addition to that they paid 3,500l. for calls, but Mr. Lewis, not content with that, twitted Mr. Kemp with settling two Chancery suits, which might have been going on up to the present time. (Laughter). As to the sum of 10,000l., it could not possibly be entered in the balance-sheet, because Messrs. Thomas and Co. had made no claim on the bank. They held the shares as security, but as soon as the bank stopped, and previous to it, the directors came forward and took each upon himself the responsibility that rested upon him. Proceeding to one or two other matter, it was said the directors had committed a fraud by omitting from the minute-book certain entries relating to the payment of commissions to Bradlaugh, Weller, and Howard; but each of these sums was entered separately in the ledger, and the directors were not bound to enter every payment of the bank in the minute-book. With regard to the 50,000l., so much had been said about it that he would only add a word. It could not be disguised that it ought not to have been entered on the balance-sheet, under the heading, “Amount due to customers on current and deposit account,” but if an “&c.” had been added, hardly anyone would have ventured to complain. It was cruel that men should be judged by the light of subsequent event, and not by the light of the danger and the peril which they had to confront, and in respect of which they had to do the best they could in the interests of the shareholders. Mr. Lewis said these men had not only acted fraudulently, but they had done it with a motive. He asserted that they had done it for the sake of their fees as directors. That was the mean, sordid motive attributed to them, but the fact was that whereas they were entitled to receive a sum of something like 5,500l., they only received 1,883l. The character of Captain Mangles, as connected with other companies, had been up to this time unstained. He did not appeal for sympathy or charity, but he asked an anxious and careful consideration of the facts of the case, coupled with the explanations given by counsel, and he had no doubt the case would receive that consideration at his lordship’s hands. He felt that although he had been anxious, he should hear from his lordship’s lips, when he came to give judgment in this matter, that there was no criminal charge that could be sustained against the directors.

The Lord Mayor announced that he would give his decision on Monday, and in the meantime he would take into consideration the points raised by the learned counsel—all of which had great weight with him,—and the voluminous notes of the evidence taken by Mr. Oke.

The case was then adjourned, and the defendants liberated as before—Mr. Finney on bill, and the others on their recognisances.

#### THE ENGLISH JOINT STOCK BANK.

Mr. Samuel Greenway Finney, the manager of the English Joint Stock Bank (Limited), appeared on Saturday at the Mansion-house on a summons at the instance of Mr. Francis Devereux Lambert, a shareholder, for having on the 28th November, 1866, committed wilful and corrupt perjury before Mr. George Woodford Lawrence, an examiner in Chancery, under the Companies’ Act, 1862.

Mr. George Lewis, jun. solicitor, appeared for the prosecution; Mr. Littler and Mr. Straight, barristers, for the defence.

Mr. Lewis said the prosecution was in no way instituted by the official liquidators, who until the previous case had been heard were not aware that perjury had been committed. The bank was wound up in May, 1866, and Mr. Finney, the manager, was examined in a suit in Chancery in reference to a claim made by a gentleman for commission on a bank that was ultimately not purchased. The defendant was there cross-examined by the counsel for the liquidators, and he then swore most positively that he never received any benefit from anybody connected with the bank except his salary, directly or indirectly, that he had never received any sums on account of commission, and that Mr. Bradlaugh, who had received 2,250l. for negotiating the purchase of the Nottingham Bank, never paid any sum to nay person connected with the bank. He should prove that Mr. Finney had received 1,400l. from Mr. Bradlaugh, 666l. 13s. 4d. from Mr. Howard, a solicitor, and 2,000l. from Mr. Weller, and he should then have to ask the Bench to commit the defendant for trial.

Mr. George Woodford Lawrence proved the examination f the defendant before him, which was to the effect above stated.

Mr. Gustavus Sichel, a merchant and broker, said in the autumn of 1865 he was applied to by the English Joint Stock Bank to obtain an advance of 25,000l., and in consequence, he negotiated that advance with the City Bank. He received from them 25 notes for 1,000l. each, and handed them to a Mr. Hillel, subsequently seeing the defendant and the secretary in the manner. He handed the same notes to Hillel that were paid him by the City Bank. They were afterwards paid by Hillel to Finney.

Mr. Charles Bradlaugh confirmed this statement.

The payment of the notes was traced according to this statement.

Mr. Frederick Sharpe Buck, clerk to Brightwen and Co., money dealers, Finch-lane, said two notes of 1,000l. came into the hands of his firm on the 2nd of January, 1866, and were at once paid Barclay and Co. In the cash-book that sum appeared to the credit of “W. H. Finney,” which was afterwards altered in another book to “S. G. Finney.” He produced two checks on Barclay and Co. for 2,000l., and 25l. 6s. 8d. interest. They were payable to bearer, dated 14th March, 1866, and crossed.

Mr. George Brightwen, one of the firm of Brightwen and Co., said that a sum of 2,000l. was received on account of Mr. S. G. Finney.

Mr. Edwin Howard, a solicitor in the Poultry, said on 7th July, 1865, he received 2,000l. as commission on the sale of the Bideford Bank. He drew two cheques of 100l. and 500l. on the same day, and he paid Mr. Finney one-third of the whole sum, 666l. 13s. 4d.

One of the notes was traced to Mrs. Finney, who paid it to Swan and Edgar for goods.

The case was adjourned for a week, and the defendant was admitted to bail.

#### THE ENGLISH JOINT STOCK BANK.

At the Justice-room of the Mansion-house yesterday the Lord Mayor gave his decision with reference to the criminal charge preferred against certain of the officials connected with the English Joint Stock Bank (Limited). The doors were opened at twelve o’clock, and the court was almost immediately afterwards crowded by a large number of gentlemen interested in the proceedings. The case appeared to excite a considerable amount of interest.

The defendants, Captain Charles Edward Mangles, Mr. James Abbiss, and Mr. Thomas Bradshaw, three of the late directors, and Mr. Samuel Greenway Finney, the general manager of the bank, took their seats as usual in front of the bar.

Mr. George Lewis, jun., solicitor, appeared for the prosecution; Mr. Poland and Mr. Ormerod, barristers, for Captain Mangles; Mr. Metcalfe for Mr. Bradshaw; and Mr. Montagu Williams for Mr. Abbiss.

The Lord Mayor took his seat on the bench at twenty-five minutes to one o’clock, and at once proceeded to give his decision. He said—At the time when an adjournment took place I mentioned that in addition to going carefully over the whole of the evidence I should also pay attention to any points to which the learned counsel for the defendants wished to direct my attention; but it is necessary to bear in mind that on an investigation before a magistrate the more points of difference that may be raised by counsel the greater is the necessity for referring the case to a higher tribunal, and if I had found it my duty to consider and determine upon any question question of law, then I should have at once sent the case to a higher tribunal; but the points raised had simply reference to the evidence, and my attention has been directed to the statements of all the witnesses, in order that every part of the evidence might be well considered before my decision was given on the present occasion. Now the charge against the defendant may be said to come under three sections—the 82nd, 83rd, and 84th. The 82nd section is in these terms:—“Whosoever being a director, public officer, or manager of any body corporate or public company, shall as such receive or possess himself of any of the property of such body corporate or public company otherwise than in payment of a just debt or demand, and shall with intent to defraud omit to make, or to cause or direct to be made, a full and true entry thereof in the books and accounts of such body corporate or public company, shall be guilty of a misdemeanour.” The 83rd. section says that “Whosoever being a director, public officer, or manager of any body corporate or public company, shall with intent to defraud, destroy, alter mutilate, or falsify any book, paper, writing, or valuable security belonging to the body corporate or public company, or make or concur in the making of any false entry, or omit or concur in omitting any material particular, in any book of account or other document shall be guilty of a misdemeanour.” The 84th section is that “Whosoever being a director, public officer, or manager of any body corporate or public company, shall make, circulate, or publish, or concur in making, circulating, or publishing, any written statement or account, which he shall know to be false in any material particular, with intent to deceive or defraud any member, shareholder, or creditor, of such body corporate or public company, or with intent to induce any person to become a shareholder or partner therein, or to entrust or advance any property to such body corporate or public company, or to enter into any security for the benefit thereof shall be guilty of a misdemeanour.” All I have to decide is whether the evidence submitted to me in respect of these matters is such as to be sufficient to place all or any of the defendants upon their trial, and after doing through the whole of this evidence more than once, and examining it with the greatest possible care I have come to the conclusion that with regard to Mr. Bradshaw especially there is not sufficient evidence to put him upon his trial in regard to any of the matters alleged against him. With regard to two of the other defendants, Captain Mangles and Mr. Abbiss, I have also come to the conclusion that the evidence is not sufficient—(loud cheers, which were immediately suppressed)—to place either of these gentlemen upon their trial in respect of these matters. With regard to Mr. Finney I think he has clearly brought himself under the 82nd section of this Act, which I have just recited, where it speaks of a manager receiving or possessing himself of any of the property of a public company otherwise than in payment of a just debt or demand. Therefore, with regard to Mr. Finney I must commit him for trial on that section of the Act.

Mr. Bradshaw, Mr. Abbiss, and Mr. Captain Mangles were then discharged, and left the court.

The depositions were thereafter completed as against Mr. Finney, and Mr. Oke, the chief clerk, told him the charge on which he would be committed for trial, which was, that he being manager of a certain public company, namely, the English Joint Stock Bank (Limited), unlawfully, as such, did receive and possess himself of certain property of the said company, otherwise than in payment of a just debt and demand, namely, the sum of 666l. 13s. 4d. received from Howard, the sum of 1,200l. received from Bradlaugh, and the sum of 2,000l. received from Weller, and that he did omit to make, or cause or direct to be made, a full and true entry, or entries thereof, in the books and accounts of the company.

Mr. Finney, in reply to the charge, said I beg leave to say that I am not guilty, and that I shall not call any witnesses.

He was then formally committed for trial at the Central Criminal Court, and the Lord Mayor accepted bail, two sureties in 1,000l. each, and himself 2,000l., for his appearance at the Old Bailey to take his trial.

#### THE HUDSON’S BAY COMPANY.—

We are well aware how much the stockholders of the Hudson’s Bay Company are in the habit of relying upon the powers conferred by their Charter, and it would be interesting to learn how many of them have seen and perused that document. Those who have never examined the Charter would do well to call for and read it. It is too important an instrument to be taken on trust and believed in a second-hand. A printed or written copy is simply worthless for all legal purposes. Besides there is no certainty that the printed copies in circulation are literal reproductions of the original; and, therefore, it would be well to ask for a sight of the actual Charter under which these rights have been enjoyed for all these years past. A perusal of that document would, we feel assured, make many converts among the present dissatisfied stockholders to our views, which are, that the best course to be adopted at the adjourned meeting next week is to accept the proposal of Earl Granville.—The Canadian News.

#### DECISION RELATING TO PARTNERSHIPS.—

A question of some importance to members of the commercial community came before Mr. Baron Bramwell, at the Kingston assizes, on Wednesday. An action was brought by a gentleman named Lee to recover the sum of 50l., which he advanced to one of the members of the firm of Carroll and Smith, who formerly carried on business as warehousemen in Friday-street, Cheapside, and the claim was disputed on the ground that the defendant Carroll was not liable, on account of his not having sanctioned the borrowing of the money. The case for the plaintiff was that on the 8th of January he had called at the warehouse and soon Mr. Smith, who told him that they were very much pressed for money at that moment, and he, at his request, lent him a sum of 50l., which he promised to repay in the course of a few days. It was admitted that the amount was entered in the cash book, and that it was paid in the same day to the bankers, and placed to the credit of the firm. For the defence it was attempted to be shown that the transaction was purely a private one between Mr. Smith and the plaintiff, and that the former was alone responsible, and the principal evidence that was relied upon to support this view of the case was the production of the articles of partnership agreed to by the parties, by one of which it was agreed that neither of the parties should borrow money or in any way incur liability on account of the firm without the consent of the other, in wiring, to the transaction. Baron Bramwell ruled that the article in question was not evidence that would in any way be received as against the claim of the plaintiff, and he observed that if such an article could for a moment be allowed to operate, there would have been no necessity for the legislature to have passed the Limited Liability Act. Where business was carried on in the name of a firm, they held out to the world that impliedly each member of the firm was responsible for the acts of the others, and if this was not the case there would be an end of all security in commercial transactions, and in every case where goods were supplied to one partner the others might deny their liability on the ground that they had not given their sanction to the transaction. It appeared to him, therefore, that there had been no defence to the action, and he directed the jury to return a verdict for the plaintiff.

#### THE GIGANTIC FRAUDS OF BENJAMIN HIGGS.

Nearly three hundreds shareholders of the London Central Gas Company attended to meet the chairman and directors at the thirty sixth half-yearly general meeting, held in the London Tavern Friday night. Some time before six oʼclock, which was the hour fixed for beginning the business, the room was inconveniently crowded by excited shareholders, most of them warmly discussing the loss of 70,000l. embezzled by Higgs, and apportioning the blame pretty generally and freely among the directors and officers. Only four or five of the lady shareholders were present; but it was incidentally stated that there are as many as two hundred in the company, some of whom are entirely dependent on the dividends for their income. When Mr. Alderman Dakin entered the room, accompanied by Mr. Alderman Gabriel, the secretary, and a scant attendance of supporters, hisses were given from all part the room, but there was some slight cheering as well.

A shareholder: Are you prepared to place the resignation of the board in the hands this meeting? That would mater ally help the business (Cheers.)

The Chairman: The directors are prepared to take the feeling of the shareholders with regard to what is proper to be done, and if they have ceased to retain the confidence of the shareholders they will at once resign; but I cannot help asking, at the beginning of this meeting, that you will, as reasonable men, remember that we are dealing with a large sum of money, and that whatever we do should be done with due consideration. (Hear, hear.) It will be my duty to show you exactly what has occurred. I first heard of these transactions on the Sunday, and then believed they were only to the extent of 200l. or 300l.; but when I went to the office on Monday we found that, besides the money abstracted, cheques had been stolen, and that a systematic career of plunder had been going on for some years. We at once took the books and placed them in the hands of Messrs. Begbie and Chatteris, public accountants (A laugh.) Their report reached us on the 22nd of this month, and our report to you was sent out next day. I need not state to you my amazement on discovering the system of peculation which for seven years had been carried on in our office, where we believed we were honestly served by careful officers. (“Oh, oh,” and laughter.) I say we believed that. Now we know we were not. (Laughter.) It is easy to be wise after the event. Our clerks had long been unexceptionable. There was no reason to suppose they were given to extravagance or anything bad. I may mention that the family of our secretary, who has been with us since the beginning, have 20,000l. in this concern; the directors have 50,000l. Therefore we have every reason to take care that our affairs are managed in a befitting manner, and it was with the utmost consternation that we learnt of these frauds. It is said that we ought to have known the man Higgs was living in an ostentations and expensive manner. (“So you ought.”) Will any gentleman connected with business on a large scale, having a number of clerks coming at regular hours in the morning and doing their duty quietly and regularly and then departing home—does it come to them to know how their clerks live? (“Yes, yes,” and laugher.) Is that so? It is very easy for gentlemen to say, “You ought to have known;” but it is impossible we could have known. (“You ought to have known.”) I may say that some of the shareholders lived in the immediate neighbourhood, and they knew. If they had had the kindness and consideration to have informed the directors of the unsuitable style in which their clerk lived, we should have been indebted to them. A few days after the event the City solicitor said to me, “So Prince Higgs, my neighbour, has gone off into gas. He was outbidding me and my father in the purchase of land. I said, “Why did you not tell me before?” “Oh,” said he, “they say he is a relation of yours, and I might be considered impertinent in making a communication to you.” I repeat that we had no means of knowing that our clerk was living in that way. We were conducting the business as it had been conducted for eighteen years. Directly we found out what had been occurred, we took prompt measures, by employing the criminal officers of this city, for the detection of the fugitive and vagabond; but, I regret to say, that up to the present time we have not the slightest clue of his whereabouts. We have five detective officers on the look-out for him, and we were able to obtain photographs. The business yielded 20,000l. per annum clear profit, and by appropriating half that sum for a few years to pay off the amount lost, they would still have a dividend and a thriving business. The directors were willing to use every effort to retrieve the loss they had sustained, should the shareholders wish them to retain office; but at the same time, if the shareholders considered it for the interests of the company that they should resign, they were willing to do so. He concluded by moving the adoption of the report.

Sir Thomas Gabriel seconded the motion.

An amendment was then moved by Mr. Gover, and seconded by Mr. Attril in accordance with the resolution of the meeting of shareholders for a committee of inquiry, and a long discussion ensued.

The amendment was put, and lost by a large majority.

The motion for the adoption of the report was then agreed to.

The retiring directors, namely, the chairman, Sir Thomans Gabriel, Mr. Bennoch, and Mr. William Austin, were then re-elected by a large majority; and on the motion of Mr. Kino, three additional directors were elected from the body of shareholders present.

The proceedings then terminated, the chairman stating that after that meeting large and necessary changes would be made in the internal arrangements and management of the office.

#### THE NATIONAL AND PROVINCIAL UNION ASSURANCE AND LOAN SOCIETY.

##### LIVERY SERVANTS AS DIRECTORS.

At the Guildhall Police court, on Monday, George Edmund Reid (secretary to the above society), and Edward Jones (a collector belonging to it, were placed at the bar in custody; and David Kiddle (manager,) and William Winks (clerk in the same office,) surrendered in discharge of their recognisances, before Mr. Alderman Causton, to answer the charge of conspiring together by various devices to cheat and defraud certain persons of divers sums of money.

Mr. Straight, instructed by Mr. Collett, prosecuted; Mr. Harris appeared for Reid; and Mr. Parker for Jones, Kiddle, and Winks.

The evidence previously given having been read over to the witnesses.

Walter Taylor said that he was butler to Mr. Antrobus, of 65, Eaton-square. He had know Jones four years as a friend, having been a fellow-servant in the Earl of Wicklow’s service. Jones was under-butler. About last Christmas twelvemonth Jones asked him to become a subscriber to the society he was collecting for. He had lent Jones 5l., of which 3l. had been returned. He told Jones that he might pay his subscriptions out of the money he had in hand, and they could settle afterwards. He never had any book or policy, nor did he know the name of the society. He never spoke to Jones about becoming a director, and never authorized him or any one else to appoint him a director. He signed what now appeared to be the article of association, but did not then know what they were. He signed to oblige Jones. He had no idea that what he was signing constituted him a director. Was very busty at the time. Would not have sighed the paper had he know what it was. Met Jones some time after with Reid and Kiddle, and Jones introduced them to him. Reid gave him a prospectus, which he put in his pocket, and it was left there for three days. When he looked at it, and found that his name was used as a director, he went to No. 4, Chatman-place, and saw Reid, Kiddle, and Jones. He told them that it was his wish that his name should be taken on. They said those prospectuses were for private circulation, and were never intended to be issued to the public, but that his name should be withdrawn immediately. In consequence of his master objecting to it, he went down again to Chatham-place, and saw Kiddle. He told him what his master had said, and he replied that Mr. Reid was in the country, and he could not do anything until he came back. He saw Reid and Kiddle at Laing’s, at 22, Great George-street, and then the articles of association were shown to him. They talked the matter over, and Reid said that he might rest assured his name would not be used again. That was the first time he found out that he had five shares in the society. He protested again being a director, and Reid said he could not be one, because a director must have twenty five shares to qualify him, and he pointed out the clause providing for that qualification. He then went away satisfied. He did not believe that Jones had any fraudulent intention in getting him to sign.

By Mr. Harris: He gave Jones no authority to take shares for him.

William Heatber said he was housekeeper at No. 5, Bolton-street, Piccadilly. He had known Jones about three or four years. He had nothing to do with any of the societies that had been mentioned, and never had any conversation with Jones on the subject of becoming a director to the National and Provincial Union Assurance and Loan Society (Limited). The two signatures, “William Heather, Estate Agent, 5, Bolton-street,” to the articles of association, were not in his handwriting. In the beginning of February last, Jones called upon him, and asked him if he might use his name, as they wanted a few names to register a society at Somerset House. He said there would be no responsibility or liability, and he gave his permission to his name being used. He gave no authority to any one to write his name. Jones never told him that he had written his name for five shares, but he had said witness should have five shares. About the middle of February a person called on him, and showed him the prospectus, and asked him if he was a director in the society, and he said he was not. Witness at once wrote to the office, protesting against his name being used. Jones called on him the same evening, and told him that his name should be withdrawn. He was then perfectly satisfied.

By Mr. Parker: The person who called upon him represented himself as a detective, or an ex-detective. The person present (Mr. Johnson) was the one. He gave Jones authority to use his name in any way for the purposes of registration.

Mr. Stamp, clerk to Mr. Chatteris, accountant, said that that gentleman was appointed liquidator of the Provincial Union Assurance Association on the 15th of June, 1868, but he had not received one penny in the shape of assets. He had not received 2,000l. for the sale of business, nor 200l. for the lease of the house in Chatham-place.

Mr. Straight said he should have to ask for a remand, but before he did so he wished to state that inquiries had been made with regard to Winks, and he believed that he was an innocent agent in the matter. He would, therefore, with the permission of the court, withdraw the summons against him.

Mr. Parker asked if he could make the case any stronger against Kiddle.

Mr. Straight said he could not.

Mr. Alderman Causton said that, under these circumstances, Winks and Kiddle were both discharged; but Reid and Jones he should remand, and would not accept bail for them.

Reid and Jones were then remanded.

#### THE FOREIGN LOAN SPECULATTION.

IT is a strange coincidence that just three years after the great crisis of 1866 we should be threatened with a similar through incomparably less important occurrence now. It was on Ascension Day of 1866 that the panic culminated in the stoppage of Overend, Gurney, and Co. On Ascension Day of 1869, the sudden rise in the Bank rate of discount disagreeably awoke the commercial world to the consequences of that incessant trust in the promises of foreign Governments which appears the English correlative to the want of confidence in all home enterprises. Even the most careful traders are apt to look upon these questions solely in the light of a temporary hoped-for profit, and trust to fortune for securing it at the expense of their neighbours. Sooner or later the check must come; and in this case not a moment too soon. Far better if it had happened before, for more than one reason.

The action of the Bank of England has taken the majority of the commercial and monetary public by surprise. It is, however, very salutary, and based on sound banking principles. Unfortunately, it comes concurrently with unfavourable political news from America; and as one of the principal causes of the increased value of money has been a long-standing and excessive speculation here, and especially in Germany, in the securities of the American Government, the effect of any cloud from the United States tells with double severity. Moreover, as frequently pointed out in our City columns, we have been lending too freely for some time past to foreign borrowers. They are always legion, and the low rates of interest prevailing in England since the collapse of 1866, coupled with the fact of the general unwillingness to invest in English securities at all, except the Funds, has given a golden opportunity to Russia and other States to attract a large amount of our floating capital upon terms so high that their ruinous level ought to have checked imprudent commitments instead of stimulating them. In Frankfort, Vienna, and other places, speculation has gone wild for some time past. It is stated that in Vienna especially the rage has extended even to the clerks of the banks and financial establishments; but, this point apart, it is beyond dispute that the chief business of our own Stock Exchange for some time past has been in foreign loans, and daily interdealings by telegraph with Continental markets in this class of securities. Confirmation is given to this fact by the common verdict in the banking world, that the recent drain on the Bank of England is not due to any important revival of activity in trade. In illustration of this may be specified the statistics of the Clearing-house recently published by Sir JOHN LUBBOCK. In the past year the increase over 1867 was over 270,000,000l., but of the surplus more than 106,000,000l. is represented by the Stock Exchange settling days, and the remainder is probably due to the usual displacement of capital caused by the introduction of old or new foreign stocks. The hope that the increased clearances have resulted from any recovery in our home commerce is sadly belied by the stereotyped reports which have been published week after week of dulness in early every branch of trade, and by the reports from the cotton manufacturing districts, concerning which there can be no dispute and but one explanation. With the exception of iron, there is no real improvement in the principal branches of our national industry. The depression of the last three years continues, and it is to be feared we have not yet fully paid the penalty both of the joint-stock mania, and of the profuse expenditure in this country of various kinds which accompanied it. It is vain to preach: people will not be wise in speculative periods. They always hope to make a profit, and transfer their liabilities. It was so in the railway mania of 1846, again in the limited liability company movement, and since then in the more recent issues of stock by foreign Governments. True, they have largely absorbed abroad, and some of them benefit our trade by creating a demand for articles of our own manufacture; but the greater part of this outlay is not productive. Costly armaments and extravagant State expenditure render money of vital necessity. It must be true render money of vital necessity. It must be had at whatever cost, and the crowd of loan contractors who compete with those embarrassed Governments of course only aim at getting rid of their stake quickly and profitably to others, all in the main expecting to be able to put unpaid instalments upon a successor. The serious point is, that a very large amount of such instalments has yet to be met by somebody, and directly any dark spot arises, one market resorts to another to find the means of escape, while loans are sharply called in, and banking accommodation becomes difficult if not impossible, as these newly created stocks are well known to be drifting among the different Bourses of Europe.

The lesson, as far as we are concerned, that we have to take to hear is, to beware of those foreign commitments which specious as they may appear at first sight, have too often led English families by hundreds and thousands to impoverishment or ruin. If the consequences of imprudence fell solely upon those who deserve them, there would be little to be said. Unfortunately, they extend to the innocent as well as to the guilty. The honest trader, careful to do nought but legitimate business, finds his whole operations crippled by the folly of others. The Bank rate is raised from no fault of his own, and a transaction which otherwise would yield a fair profit becomes at least a risk, and possibly a loss. If, by their present and future action (for there appears little doubt that the rate must be raised again within a day or two), the Bank can stop this prevailing infatuation of trusting to any foreign Government that chooses to offer its worthless securities, the nation will reap a signal and permanent benefit.

#### COMMERCIAL PROSECUTIONS AT THE MANSION-HOUSE.

##### TO THE EDITOR OF THE DAILY NEWS.

SIR,—Will you allow me a few lines to comment on the observations of the Lord Mayor in the case of a charge against the directors of the Hercules Insurance Company. The Lord Mayor is reported to have said that “he wished it to be understood that he would discourage in the strongest possible manner any attempt to make this court the medium to enforce claims against parties in the position of the defendants.” Nevertheless, the fact is that since the hearing of the case of Lane, Hankey, and Co., and that of the English Joint Stock Bank, which is now under consideration, what may not be improperly termed a “reign of terror” has been inaugurated, and every gentleman who has filled the unfortunate position of a director of an unsuccessful company is liable to be mulcted in any sum which his ability to pay, or his terror, may induce him to pay, sooner than be held up to the world in the position of an accused felon. No one could desire that those who have done wrong intentionally, fraudulently, and wilfully, should be shielded from justice; but it cannot be in the interests of society that fraud and failure should become synonymous terms. Every gentleman who has filled the position of a director of some defunct company must now that he is liable to be charged before the Lord Mayor either with some act which in all probability he never committed, or with some fraud which he never conceived; for it is so easy to make such a charge if the acts and doings of 1864 be read by the sad experiences of 1866, especially if those acts be stated with not too great an adherence to be the truth.—I am, &c.,

A SOLICITOR. London, May 14.

#### EXTENSIVE CHEQUE FORGERIES.—A CONVICT’S EVIDENCE.

At the Justice-room of the Mansion-house, yesterday, a respectably-dressed young man named Sydney Thos. Webb, a clerk in the office of the Provincial Banking Corporation, Edgware-road, was charged before the Lord Mayor with being concerned with another man in forging and uttering a cheque for 397l. 10s., with intent to defraud.

Mr. Mullens, solicitor to the Bankers’s Protection Association, appeared for the prosecution, and Mr. Johnson for the defence.

It may be recollected that a few weeks ago a young man, who gave the name of William Walker, was apprehended in the act of uttering a cheque for 327l. 10s. purporting to be signed by Messrs. Neumann, Sons, and Co., cigar importers, St. Mary Axe, at the bank of Barnetts, Hoares, and Co. On the previous day he had obtained the pass-book of that firm, and a cheque-book, by means of a forged order, and when arrested he had in his possession two other requests for cheque-books, addressed to different banks, and purporting to be signed by customers of those banks. He was examined before the Lord Mayor, and then committed for trial at the Central Criminal Court, where, at the last session, he was convicted of uttering the cheque knowing it to be forged, and sentenced to seven years penal servitude. After his conviction he gave information which led to the apprehension of the prisoner.

Walker, whose real name was Thomas Hobday, was now brought up from Newgate and examined at considerable length for the prosecution. He said—I know the prisoner Sydney Thomas Webb, and have known him three or four years. I was formerly with a Mr. Herring, a grocer at Birmingham, and the prisoner was at that time a clerk in the Birmingham Town and District Bank. We lodged together with a Mr. Davis. In July, 1867, I was convicted of forgery at the Warwick Assizes, and sentenced to 12 months’ imprisonment. Webb knew all about that. After I came out in July, 1868, we associated together again, and the prisoner frequently visited me at my lodgings. In August, 1868, I obtained a situation at Liverpool with Mr. Deer, a grocer. In the end of December I left that situation, and shortly afterwards came to London. When I arrived I knew the prisoner was living in Harrow-road, and I called upon him there. I went to reside at Wyld’s Coffee-house, King William-street, Strand, and occupied room No. 14. The prisoner came to see me repeatedly, and slept in the same bed with me. I stayed there about two months, and then removed to Tilley’s Coffee-house, in Westminster-bridge-road. The prisoner also came to see me there. We went to music-halls, and places of that kind. About the time I was staying at Tilley’s I made the acquaintance of a young woman named M Williams, and we went to live as man and wife at the house of a Mrs. Dawson, in Waterloo-road. We went by the name of Mr. and Mrs. Thomson. The prisoner visited me there repeatedly, and remained all night on two occasions—sleeping on the sofa. The second occasion was on Thursday, 18th March. He left me on the morning of the 19th about 8 o’clock. I have never seen him to speak to since that morning.

Mr. Mullens—What was the object of your coming to London?

Witness—The prisoner wrote me some letters, which I destroyed, and said he wanted me to present cheques at the London banks. I had presented forged cheques at a bank in Birmingham. As soon as I came to London we talked about presenting the cheques. He was going to make use of crossed cheques which passed through the bank at which he was engaged. I recollect Wednesday, March 17. At seven o’clock on that evening I met the prisoner in Trafalgar-square. I had been accustomed to meet him there often. We went to Gatti’s Music-hall, Villiers-street, Strand. The prisoner there showed me half a sheet of blue paper with the signature Neumann, Sons, and Co. at the bottom, on the right hand. At the same time he produced a cheque for 10l., and told me that the signature on the blue paper was tracing from that on the cheque. We then went to Waterloo-road, and at my lodgings the prisoner handed me a piece of paper on which was written, “Please give the bearer a cheque-book, and if our pass-book is made up, let him have that also.” I copied this form on the piece of paper containing Messrs. Neumann’s signature. The prisoner produced another piece of paper with the address of Neumann, Sons, and Co. upon it. I was to present the order next day at Messrs. Barnett and Hoare’s bank. I did so, and received the pass-book produced, and a cheque-book containing 240 cheques, similar to the one produced. I took them home and put them into my portmanteau, which was kept in my bedroom. On that day (Thursday) I met the prisoner at seven o’clock, and he came with me to my lodgings. We cast up the pass-book, and there was a balance of 888l. The prisoner produced three cheques; one of them was for 500l., signed by Lindo and Davis, and another for a small amount, signed by Harris, Blackman, and Sons. These two cheques were drawn respectively on the Imperial Bank and Robarts, Lubbock, and Co., and had been paid into the Provincial Banking Corporation that afternoon. The prisoner also produced two half sheets of white note paper, one containing the signature of Lindo and Davis, and the other the signature of Harris, Blackman, and Sons. I filled them up in the same way that I had filled up the paper with Messrs. Neumann’s signature, requesting a cheque-book and the pass-book, if made up. He gave me the addresses of the firms. For that purpose he had obtained the loan of a Directory, leaving two sovereigns as security for its return. We then went to Drury-lane Theatre, and came back about 12 o’clock, and the prisoner stayed all night with me, as I have already mentioned. We got up at six next morning, and filled up a cheque for 76l. The signature of Messrs. Neumann appended to it was a tracing from the 10l. cheque. I filled up a cheque. Another cheque for 397l. 10s. was then made out, and was copied from one of twelve cheques which were in the pass-book. The prisoner said he had taken the three cheques from the case of a fellow-clerk named Ribbles, and that he must be off and replace them before Ribbles arrived at the bank. I made an appointment to meet him that night at Wellington-street, Strand. I left fourteen sovereigns in a purse in my portmanteau. I presented the cheque for 397l. 10s., and was taken into custody. When I was examined at the Mansion-house I was defended by an attorney, who had called on me in the prison. I had had no previous communication with him.

Some corroborative evidence was given, and the prisoner was then remanded.

#### ANOTHER CHARGE AGAINST DIRECTORS.

At the Justice-room of the Mansion-house, yesterday, eight gentlemen appeared before the Lord Mayor to answer summonses which charged that they, being directors of a certain public company called the Hercules Insurance Company (Limited), unlawfully did make, circulate, and publish, and concur in making, circulating, and publishing a prospectus relating to the company, well knowing the same to be false in divers material particulars, with intent to defraud the complainant, Mr. Michael Cook, the younger, and divers other shareholders.

Mr. George Lewis, jun., solicitor, appeared for the prosecution; Mr. Hardinge Giffard. Q. C., Mr. Straight, Mr. Poland, and Mr. Willes for the defendants; and Mr. Merriman, solicitor, watched the case on the part of the liquidator.

Mr. Lewis, addressing the Lord Mayor, said this was a summons against these gentlemen, who were directors of the Hercules Insurance Company, for issuing a false prospectus in reference to that company, and for conspiring to commit divers offences in contravention of the Companies Act of 1862. His lordship was good enough to grant summonses, after considerable care and deliberation, upon the sworn information of certain shareholders, and the deposition of Mr. White, the official liquidator of this company. On Thursday evening he (Mr. Lewis) received from his clients, who were shareholders residing in the country, a letter directing him to ask his lordship’s permission to withdraw the summons against these gentlemen, and they stated that it was their desire to take proceedings in the Court of Chancery, and not to pursue the proceedings in this court. He desired to state that he was unaware of this matter till that night, and the letter he had received he thought it right to hand to his lordship. He expressed his regret that he should have been the means of causing his lordship so much trouble in the first instance in investigating this matter before issuing the summons. He had now, under the direction of his clients, to ask his lordship’s permission to withdraw from the prosecution.

The Lord Mayor said he had no doubt the prosecutors had exercised a wise discretion in deciding to take civil instead of criminal proceedings. Criminal proceedings ought never to be adopted unless there was a clear case, for the names of respectable parties were brought forward and an impression was created in the mind of the public. Of course, as no evidence was offered in any way, the prosecution was withdrawn.

Mr. Lewis said his lordship had issued a warrant against the manager of the company for a like offence, upon a sworn information laid before him; and a reward had been publicly advertised by the shareholders for his apprehension. He had to ask his lordship to permit that warrant to be withdrawn.

The Lord Mayor—When no evidence is offered there is no case before me.

Mr. Giffard, Q. C., remarked that as far as he could see there was no foundation for the charge, and the course pursued by the prosecution appeared to admit that.

Mr. Lewis—It does not admit that.

Mr. Giffard—The fact speaks for itself.

Mr. Poland said one of the directors had instructed him to appear in his behalf to meet this charge. It was with great pain that his client appeared in this court, and if the case had gone on he thought he should have satisfied his lordship that there was no foundation for the charge against him. For the last three years he had had nothing to do with the company.

Mr. Willes, on the part of his client, said he had only to concur in the observations of the other learned other gentlemen.

Mr. Lewis observed that he had no desire to cast any refection upon the defendants. He did not offer any evidence, but he could not allow it to pass that the summonses had been granted without foundation. They were issued upon sworn evidence.

Mr. Giffard—Which I presume is not true. (Laughter.)

The Lord Mayor—As far as these gentlemen are concerned, there is no charge against them.

The parties then withdrew.

AFTER the severe process of sifting to which our Joint Stock Bank have been subjected for the last three years, the public can afford to look without alarm at the revelations made from time to time as to the interior history of banks that managed to acquire a measure of public confidence in their day. The report of the Creditors’ Representatives of Barned’s Banking Company, a Liverpool institution which failed in May, 1866, contains some remarkable disclosure. It states that the capital of the Bank was held in 40,000 shares of 50l. each, on which 10l. was registered as paid. The remaining 40l. has since been called up, with the following result:—8,000 shares have been paid up in full, and 1,200 are being paid by instalments. The latter shares are held chiefly by small traders and manufacturers and retail dealers, who are said to be behaving well, and making great efforts and sacrifices. Further, on 2,000 shares the calls are being compromised. The largest class, however, numbering 16,500, is formed of shares standing in the names of persons whose affairs have gone into either bankruptcy or liquidation; and the next largest, 12,300 in number, are shares in the names of absentees or nominees, from whom nothing whatever has been obtained. The explanation given of this disastrous state of things is that only about 14,000 shares were held by bonâ fide shareholders. The remaining 26,000 stood in the names of adventurers, speculators, and clerks without means or resources. The latter had lent themselves to certain of the directors to assist in floating the Bank, and these directors in return paid up the 10l. call on these nominee shares with money drawn from the Banking Company. One of the directors, who held 5,355 shares in the Bank, and whose total liabilities amounted to 340,728l., had only assets to the value of 70l. Of the nine gentlemen whose names appeared on the prospectus of the Bank as directors, only two, Mr. J. A. BENOKE and Mr. GEORGE COLLIE, have discharged their liability to the estate. A more miserable exhibition than this is not often made.

“NOT guilty, and we hope he will never do it again” is a verdict by which, according to tradition, a jury once relieved itself from extreme perplexity. The LORD MAYOR’s decision in the case of the Merchants’ Company is marked by no such confusion. He has stated his opinion of the moral position in which the defendants stood with the utmost clearness. He had no doubt that the Company was formed with the object of relieving the firm of LANE, HANKEY, and Co. of their difficulties; but although in this way they had caused great loss to the shareholders they had kept themselves within the law, and therefore he could no commit them for trial. Of course with his conviction the LORD MAYOR could not have done otherwise; but the result must very disappointing to those of the defendants, who, having been designated by public opinion and the evidence as peculiarly responsible for the institution and management of the Company, professed to expect their ample and triumphant vindication from a jury of their countrymen. This satisfaction, it would seem, is finally denied them.

IF the Money Market, which is now told by the Government to take care of itself, has hitherto been leaning upon the Government for help and “consideration”—and there is no doubt it has been so leaning—then the change introduced by the mere declaration of Mr. LOWE behoves to be considered well by the parties who belong to that market. The Bank of England, the joint-stock and private banks, the bill-brokers, the country banks, traders, and merchants are all placed in a new position, to which they must adapt themselves as best they can. The change will not merely consist in the reduction of the Government deposits in the Bank at one part of the year, and their great increase at another, though that may be the first effect of the economies introduced in the collection of the taxes. Mr. LOWE has the courage of his convictions, and is quite prepared to consult only the convenience of the Government and the taxpayer in other matters affecting the position of the Bank of England. It has hitherto been the sole banker of the Government, but Mr. LOWE sees no reason for keeping up that relation. We are ourselves bankers, he says, receiving large sums from the public on deposit; when we want to borrow we need not go to the Bank of England, though we deal with it for other purposes, but to ourselves, qua bankers, and we shall not only borrow on as good terms as before, perhaps more cheaply, but improve our own banking business. It is said this will not be practicable for him, but we are only concerned here with the spirit of the suggestion, which reveals clearly a disposition to settle the relations between the Government and the Bank on a purely business footing. In other words Mr. LOWE in giving the Bank of England the Government account, and conferring on it any other privilege, will drive as hard as bargain as he can, acknowledging no other obligations but what are in the bond, and giving it in return full liberty of action as private institution. Such a principle may well lead him to revise the contracts with the Bank itself, which would not be a bad thing, but it also changes at once an existing custom, and this is what all are now concerned with. To appreciate the change we have only to compare the legal and the customary status of the Bank of England, the legal status being the one which Mr. LOWE, so far as the Government can do so, proposes to make customary. In the eye of the law the Bank is only a Joint Stock Association, which has bought a certain monopoly of issuing notes for a valuable consideration, and of which the Government is a customer, like any other private individual, for the convenience of receiving and paying money and obtaining occasional advances on the most favourable terms. In neither capacity does it undertake any public or semi-public duties. It buys the privilege of note-issue for its own private advantage, the interest of the public being cared for by the limit which the State fixes to the monopoly it sells: and the only screw which the Government can put upon it to obtain advances is that of any other customer—the threatened withdrawal of its account. The quid pro quo in the bargain is very definite, and there is above all no undertaking by the Bank to accommodate the public, by loan or otherwise. It is customary, however, to consider the Bank as a semi-public institution, having certain public interests to look after in return for State patronage and backing, compelled to act as no bank would act if it thought only of its own interest. It dare not, in ordinary times, complete with its rivals for deposits and discounts, and it must maintain an exceptionally large reserve; in times of difficulty it is expected to be lavish of its credit to avert the worst evils of a panic. It has, in fact, grown to be a bankers’ Bank. Prevented from attracting other deposits, it must be content mainly with the balances of bankers, who find a central institution convenient, especially for the accommodation in difficult times which, as customers, they may expect, but whose deposits, for that reason, and also from their peculiar liability to be drawn upon, are not the source of much profit. Looked on as traders, the Bank of England shareholders pay a great deal for an exceptional position, though they may be compensated by the exceptional security of their capital and dividends. All this custom has been changed. The Government formally repudiates any idea of patronising or backing the Bank, and the foundation of its position as the Bank of bankers is destroyed.

In what way will the change operate? What ought to be the course of the Bank of England, and of the bankers and money-lenders who deal with it? What must be the understanding of the mercantile world in regard to the accommodation they may expect? It is to be feared that things will not adapt themselves very quickly to the new principle, although it would be the interest of all concerned to expedite the change, as the present system is delicate and dangerous in the highest degree. The shortest road to improvement would undoubtedly be the acceptance of the Government challenge by the Bank of England. The shareholders might say that as they had no public duties laid upon them, were not specially charged with maintaining a reserve for all the banks of the country, were in no way bound to give assistance in difficult times except as other banks find it expedient to aid their customers, they would compete in the open market with others, and make all the profit they could. It is the tendency of Mr. LOWE’s proposals to force them into this course, by making their not very profitable business still less profitable than it is; but there are various reasons why the Bank will be slow to adopt it. There is no doubt that with its privilege of note issue, its prestige as the Bank with which the Government deals, and its enormous capital, it could, if it liked, speedily absorb a large part of the business which now flows into private banks and joint-stock banks; but such competition would instantly raise a demand for the investigation of its entire position. Other banks would be tempted to compete for the Government account, and for a share of the monopoly of circulation. The upshot might be the sale of the monopoly to some one or more competitors, and the transfer of the Government account in whole or in part. In short, it is not for the interest of the Bank shareholders, if they are content with a small and steady profit, to disturb existing arrangements. They may think it on the whole better to suffer any loss they threatened with by Government being more exacting, and repudiating all partnership with them, than to seek compensation in acts which will lead them into a new business altogether.

The duty to take action rests more clearly with the bankers who resort to the Bank of England, and depend upon it. It is they who are called upon to notice most directly that the Bank of England is not patronised or backed by Government—that the Deity they worship and look up to and implore aid from in panics is one of their own creation. It is for them to consider whether the extra profit they make by not keeping a proper reserve, by trusting to the Bank of England to support them in an emergency, is really worth having. Although the Bank says nothing now, it is likely enough to be compelled to refuse assistance when a difficulty comes. The expectation in which they resort to it has not in fact the foundation it possessed before Mr. LOWE’s challenge. In any case they would be much stronger and safer, as really originally and independent banks, each looking only at its own business, and not concerned with what may be in the till of another bank. Their satisfaction, and that of the public, with the precautions they now take, is a matter of continual surprise. According to the figures for 30the June last, the business of the principal London joint-stock banks is transacted on the following basis:

|  | Liabilities | Cash Reserve |
|---|---|---|
| London and Westminster Bank | £19,638,000 | £2,344,000 |
| London Joint Stock Bank | 14,779,000 | 2,023,000 |
| Union | 17,095,000 | 1,745,000 |
| City | 5,173,000 | 441,000 |
| London and County | 15,705,000 | 1,853,000 |
| Consolidated. | 2,576,000 | 439,000 |
|  | £74,966,000 | £8,845,000 |

That is, the principal banks of London, excluding the Bank of England, hold in cash rather less than 12 per cent. of their liabilities. Apparently they have only cash to pay about a tenth of what they may any day be asked for; but they have not in reality so much, for a portion of their so-called cash reserve is in the Bank of England, probably about one-half of it, and might not be available in extremity, as the last panic proved. This is not a very comfortable state of things, and most unworthy of great institutions for the sake of a paltry profit. They ought to hold in cash about a fourth or a fifth of their liabilities at call or short notice, and that in their own hands—no part deposited elsewhere to be used in some other business. The responsibility of neglecting this simple precaution has not become very great. All concerned have notice that they must look to themselves only in difficulty, and if they persevere in the old ways they must bear the penalty.

The duty of the mercantile world in the new circumstances is the clearest of any. “It is the business of speculators,” says Mr. LOWE, “not only to see that their speculation is in itself sound, but if they should require assistance in the way of accommodation, that there is a reasonable probability they will be able to find it.” They must watch the signs of the times, and take care how they commit themselves. Until the new principle is fully adopted by the banks, there may even be periods of unprecedentedly severe pressure, for which the mercantile community must be prepared. What they should agitate for most, however, is increased produce on the part of the banks themselves, so that a crisis may be strongly met. As an incident of such an agitation the legal position of the Bank of England and its relations to the Government may be rectified, but apart from any Government alteration, the bankers and the mercantile community can take all the necessary steps to a comparatively safe system.

THERE are few reports more alarming than those which affect the stability of Insurance Companies. These associations are an indispensable part of the economy of modern life among almost all classes of the community. An insurance policy is often an important part of the provision for a family, even among the richest; while through all the middle classes down to the very poorest, and including many who are usually considered of the working classes, it is the most effective instrument for warding off those apprehensions of the future which are so natural to the winners of precarious incomes. The mere whisper, then, that there is something wrong in the business, that not a few companies are unsafe, or cannot be known to be safe, affects very nearly many individuals of many classes, and these the most prudent and careful, in the very matter wherein they have shown their prudence. A report of the kind, for that reason, should not be lightly circulated; but when it is circulated, and that on good authority, it cannot but receive the most earnest attention, and be followed by the most anxious desire that a remedy should be provided. This is precisely what is happening at the present moment. On the very ground that there is much suspicion of fraud and wrong in insurance companies, a Bill has been introduced into Parliament by the late Vice-President of the Board of Trade, in order to do something to set matters straight. The Bill, too, has passed a second reading, so that the endorsement of the House of Commons has so far been given to the idea that there is something amiss which the Legislature can help to remedy. We fear that whatever may be thought of the provisions of the Bill, there is too much truth in the suspicions which have made it seem expedient to do something. There must be a great deal of mischief done by unstable companies. A Committee which investigated the matter in 1852 found that while there was reason to believe in the satisfactory position of most companies, yet new companies were constantly springing up, “with no reasonable prospect of or guarantee for success, and frequently without any bonâ fide intention of transacting business.” In fact, between 1844 and that date 311 companies had been provisionally registered, of which only 140 had been completely registered, and 96 only were in existence in 1852. A “considerable traffic” had in short been carried on “in the mere creation of companies which had never any prospect of a bonâ fide existence.” The same evil has continued since 1852. Altogether, between 1844 and 1866, there have been 519 insurance companies provisionally registered, of which only 258 were completely registered, and only 46 were in existence in 1866. The remaining 212 that had attained complete registration had either failed or been transferred to other companies, being unable to continue an independent career. The consequent suffering of many families, disappointed of their indispensable provision, must have been incalculable. Nor must it be supposed that the creation of flash companies or weak companies is the only danger of the insured. The misfortune is that from the very nature of their business insurance companies cannot be tested quickly by facts, and removed from the field if they are noxious. They have cash in hand from premiums coming in and from new business to meet their everyday liabilities. Twenty and thirty years or longer may not be too great a period to reveal the deficiency of a company which has been almost all the time insolvent. Consequently the insured in many a company which is in good repute cannot know but that his support will fail him. At the same time there are practices indulged in by many companies which have a ruinous tendency, though with moderation ruin may be escaped; but who is to say whether the line has been transgressed or not? The expenses of management, for instance, are most perilous. They should be as a certain proportion to the business done; but a sanguine board of directors expends money in proportion to the business that is only expected, until losses are incurred which cannot be made good. It is almost the universal practice, again, to divide profits among the insured, but there are different ways of estimating the profits, and so generous a plan may readily be followed that the waste of the entire means of a company is the result. There are other pitfalls to which the business is exposed, while to all must be added the danger of change in the management during the currency of a policy of insurance, so that a man who chooses wisely to-day may find a generation hence that his wisdom has gone for nothing through the substitution of men whose entrance into office he could not prevent, and of whom he perhaps know nothing. Such are the facts and suspicions with regard to insurance companies; and it cannot be denied that, however safe the overwhelming majority of the insured probably are, yet there is no little room for general uneasiness. In so important an affair of life, it is the wish of the public to be absolutely sure.

But the remedy for the present doubts is not so simple. On what principle is the Legislature to interfere? A very great deal can be urged, and has been urged, on behalf of non-interference. It is the business of people to find out trustworthy companies; they have supreme interest in doing so; they must be allowed to go right or make mistakes, just as they do in other parts of their own business. But the reply is not perfectly satisfactory. People have a feeling that they are not quite competent judges between one company and another; and that the greatest prudence may be at fault. How are they, in fact, to decide on minute calculations of actuaries, and tables of mortality, and allowances for business management and interest; and how are they to be secured against the gradual changes by which an association that never dies comes to breathe a new spirit and be managed on new principles? Rightly or wrongly, people will believe that in insurance business they can be assisted as they cannot be in other affairs of their own, and that the matter is so vital a one to the welfare of themselves and of society that they ought to be assisted. They ask that they shall be guaranteed in some way against failure in the most characteristically prudential act of their lives; and even as a matter of expediency, a wise statesman would seek to encourage the class by whom the demand is made.

We fear, however, that the remedy now proposed is not enough. What Mr. CAVE wishes is the publication of the annual accounts of the companies, according to a prescribed form; and a decennial inquiry into their affairs by an actuary, whose report, together with the instructions he received, is also to be published. But this does not meet the special danger to be guarded against;—popular inability to understand the accounts. I one sense insurance business is regular and simple. The problem is to provide against risks which on a large scale are unfailingly regular; and this is done by the payment of premiums on a scale which can be settled with precise accuracy, as all the elements in the calculation, including expenses of management and the interest to be expected on the best security, can also be know beforehand within very narrow limits. But while all is clear in principle, the particular calculations cannot be followed by the mass of mankind. Given the best statement possible of an insurance company’s position, and few would directly be a bit the wiser. They must trust to the opinions of experts in the accounts when they do get them, but faith is difficult, if not impossible, as soon as there is the faintest dispute. Good actuaries declare in vain that Trades’ Unions are constructed on an insolvent basis, even for their professed purposes as friendly societies, although they have to bear the burden of strikes as well; their protests make no impression on the mass of members. Those who insure would for the most part be incapable of appreciating similar opinions in matters which concern them. The very phrase used in regard to the proposed decennial investigation—that the basis of the actuary’s calculations is to be stated along with his report—shows what controversies may be looked for. There are numberless points on which experts differ, and although some men of intelligence would divine by instinct where the controversy was about essentials and where only about details, the mass of ordinary men would to a certainty be confused. Nor can it be said that the proposed remedy is one which will be good so far as it goes. The mere publication of accounts under the Act will be constructed by clever managers into a proof of Government sanction, and in that way become the means of new imposition. Already the ordinary phrase, “Incorporated under Act of Parliament,” is turned to a similar bad use. The mere doing of something indifferent which the law requires as the means to an end is assumed to put the company doing it under some special Government protection. We cannot be too careful against multiplying mistakes of this sort, and the best way is to give no excuse for taking the name of the Government or the Legislature, unless there is some real responsibility, and some real precautions have been required.

We think that in this case there are some precautions which the Government might take. One suggestions is that a Government department—say the Board of Trade—should be allowed to give certificates to any company which submits its affairs to investigation, we suppose a periodical one, and which the officers of the department find to be really solvent. This we believe will be a much better plan that that of Mr. CAVE’s Bill. Instead of accounts which they do not understand, the public will have the opinion of a trustworthy authority; and if they will not take that opinion they will have themselves to blame if they are ruined. The Government officers may err, and indirectly implicate the Government in responsibility for a company’s liabilities; but the business is so simple for those who are experts, that little apprehension need be entertained of any serious loss occurring. The social gain is at any rate such as to be worth some risk. God as this suggestion is, we think something farther might be done. The officers of the Government might have power to inspect all companies, and give or withhold certificates at pleasure. There is reason to fear that under a permissive Bill, companies which could set the example on account of their great position would decline to be troubled, and would so protect a host of others which have too much reason to dread investigation. People would see that many uncertificated companies were as good as the certificated, the certificate would be cried down by those interested, and so the public would be as bewildered as before. By making investigation compulsory, we should at once render fatal the want of a certificate, and thus crush many an imposture. We are not sure that it would not be expedient for the Government to become the sole insurer, so simple is the business, and so essential is the highest stability to the insured. Still we are long way yet from a reform of the sweeping description, to which there would at any time be many objections; and it may be practically sufficient to establish perfect security under the present system.

* * *

#### COURT OF EXCHEQUER.—APRIL 19.

##### Sittings in Banco.—(Before the Lord Chief Baron and Barons Bramwell, Pigott, and Cleasby.)

##### STREET v. MORGAN.

This was an action upon an alleged indemnity to pay calls upon shares in Overend, Gurney, and Company. About a month before the stoppage of that company the plaintiff held seven shares, which he employed his brokers to see. The defendant, a dealer in shares at Norwich, telegraphed to a broker, named Pater, of Old Broad-street, London, to purchase 800 Overend and Gurney’s. Pater did accordingly purchase, and among the shares bought were those belonging to the plaintiff. The plaintiff executed the usual transfer, and Pater paid for the shares. The name of Morgan, the defendant, was inserted in the transfer as the ultimate purchaser, but he did not take any steps to complete the transfer, and the consequence was that the name of the plaintiff remained on the register of the company as the owner of the shares, and after the failure of the company he had to pay to the official liquidator 220l. for calls. He then brought an action against the defendant for the amount, and at the trial in London before the Lord Chief Baron, a verdict was returned in his favour, but leave was given to defendant to move this court.

Mr. D. Keane, Q. C., now moved to enter a verdict for the defendant, on the ground that he was not liable, as he only acted for a principal—a gentleman named Smith, who had been unable to meet his engagement. He contended that the London broker had no right to place his name instead of Smith’s on the transfer.

The court granted a rule.

#### COURT OF BANKRUPTCY.—JUNE 29.

##### (Before Mr. Commissioner Winslow.)

##### IN RE PETO, BETTS, AND CRAMPTOM.—JUDGMENT ON A DISPUTED PROOF.

His Honour said this was an application to expunge a proof for 5,000l., made by Stuckey’s Banking Company against the estate of Peto and Betts, upon the following promissory note:—“5000l.—London, 16th April, 1868. Three months after date we jointly and severally, and any two of us jointly, promise to pay to Stuckey’s Banking Company, or order, the sum of 5,000l. value received.—S. Morton Peto, Edward L. Betts, F. R. Crampton.—At the Union Bank of London, Princes-street, London.” The first objection was, that the bank had elected to prove against the separate estates of Peto and Betts, and therefore had no right to prove against the joint estate of Peto and Betts. But it was contended that as they had carried on a joint trade, and had also each carried on separate trades, the bank had, by the 152nd section of the Act of 1861, a right to a double proof. He was of opinion that the promise by each of the makers of the note must be considered as a distinct contract, and that each such contract, when the maker or makers were in trade, must be considered as a promise by him or them as a sole trader or member of a firm. The statute did not require evidence that the note was made in respect of any business contract. Every note given by a sole trader or a firm was, in bankruptcy, a contract by him or them, as a sole trader or as a firm. Another objection was that the note was not within the statute of Anne, by reason of the uncertainty who was the person promising to pay. This depended on the meaning of the words “any two of us jointly.” If they only gave the bank a right of selection of one of the three combinations of two which could be made out of the partnership the contract would be void; for the person to pay must be as certain as the person to whom payment was to be made. These words, however, were commonly used by conveyancers, and the object being to give as large a security as possible to the promisce, the words used would be as large as possible. Therefore the ordinary rule must be applied, and the note constructed ut res majis valeat quam pereat, and the Court must give to the words as extreme a meaning as they were capable of. Upon consideration he was inclined to think that “any” was capable of being used in the sense of “every,” and in the best dictionaries “every” was given as the first meaning of “any.” Therefore, the words “any two of us jointly” would be capable of the meaning contended for by the bank, and would make it a contract by each two of the bankrupts. Though the case was by no means clear, this was the conclusion he had arrived at, and he must therefore refuse to expunge the proof made against the joint estate of Peto and Betts.

* * *

THE letter of Dr. ADAM THOM, which we published yesterday, is one to awaken fear lest the Overend and Gurney prosecution which he has undertaken may have a lame and impotent conclusion. It is know that on the application of the defendants, who of course are anxious for the termination of their present state of suspense, Lord Chief Justice COCKBURN has appointed this day week for the trial, and there can be no doubt that on that occasion, as at the Mansion-house, the defendants will have the advantage of being defended by some of the ablest members of the Bar. Dr. THOM, on the other hand, appears to be entirely unprepared. He has applied to the Home-office, asking the Government to undertake the prosecution; but the Government, which is in nowise bound by the view taken of the case by the LORD MAYOR, has declined to comply with the request, and Dr. THOM reverts to his original intention of conducting his case in person. To this, however, the LORD CHIEF JUSTICE decidedly objects. It is contrary to the practice of the Court, and he will not allow it. In these circumstances all that Dr. THOM can promise us is, that he will “raise the preliminary question of his rights and duties” on the day of trial, suggesting that this may prove “more important than the main point at issue.” It is not surprising that Dr. THOM should thus think; we suspect, however, that the public would rather see the point postponed, and the trial proceed. Dr. THOM says that he has done his best, and the blame of failure must be divided between “the apathy of the public and the absurdities of our criminal jurisprudence.” The public may be blamable for not having rallied to the standard of Dr. THOM, and our jurisprudence may much need reform, but the prosecutor knew the conditions under which a trial was possible, and voluntarily assumed the responsibility, of the weight of which he now complains. It would be most unsatisfactory to all parties, certainly to the defendants, if these proceedings were to be cut short upon a question of procedure.

IN giving reasons on Saturday why the Government should take up the prosecution of the partners in the firm of Overend, Gurney, and Co., we said that since they have been committed for trial the presumption is that they are guilty. By the familiar process of applying in one sense what had been advanced in another—by taking the moral presumption, which we contended should weigh with the Government, for a legal presumption—the Pall Mall Gazette contrives to produce conclusions sufficiently absurd, for which we respectfully decline to be responsible. The presumption of which we wrote is a grave reality. It was acknowledged in the House of Commons on Thursday night by speaker, and the friends of the defendants showed themselves sensible of it when they professed their anxiety for a trial. We do not suffer ourselves to forget that there are false as well as true presumptions, which it only needs a fuller disclosure of the facts to detect and destroy, and we gladly hope that this one may be among the number, but in the meantime the presumption we have described operates against the defendants. Our contemporary criticises the action of Dr. THOM with about as much fairness as he replies to our observations. Dr. THOM’s statements are discussed as if the amount of counsel’s fees represented the whole costs of a prosecution, of which they are but one item. The Government admit that the costs in the British Bank prosecution were 20,000l.: Mr. Lewis undertakes that this case shall be conducted to a conclusion for one-fourth of that sum. This does not seem an extortionate proposal. But if the money is not forthcoming, Dr. THOM must not be blamed should the prosecution have a lame and impotent conclusion.

* * *

#### THE OVEREND AND GURNEY PROSECUTION.

On Tuesday morning, at the opening of the Nisi Prius sittings of the Court of Queen’s Bench, at the Guildhall, the Attorney-General said he was instructed on the part of the prosecution in this case to apply to have the trial postponed until the December sittings. His application was founded upon an affidavit setting out that it would be utterly impossible to conclude the trial during the few days which remained of the present sittings.

The Lord Chief Justice said that Saturday would be the last day of the sittings, and that unless the case could be concluded by then it would be very inconvenient to commerce it, and be obliged to postpone the further hearing for so long a period.

The Solicitor General, on behalf of the Messrs. Gurney, said, that he perceived there was no paragraph in the affidavit stating that the prosecution was to be properly conducted. He certainly should oppose an adjournment of the case unless an assurance to that effect were given.

The Attorney General said he could not give an absolute assurance that he was to be instructed to undertake the case, but he believed he was to be.

The Solicitor General said he could be quite satisfied with the assurance of his learned friend.

Sir J. Karslake, on behalf of Mr. Gordon, said it was most inconvenient to a gentleman in his client’s position to have such an accusation kept hanging over him. The learned counsel said he, too, must insist upon an assurance that the case, if postponed, would be conducted according to the rules of the court.

The Solicitor General likewise animadverted upon the hardship of the Messrs. Gurney’s position. While these charges were pending they were day after day exposed to the most merciless attacks on the part of the press, attacks which he should not stop to characterize as they deserved.

Ultimately it was agreed that the trial should be postponed until the December sittings, and an amended affidavit was, it is understood, put in, embodying the stipulation insisted upon by the defendants’ counsel.

THE persecution of the unfortunate shareholders in Joint Stock Companies has hitherto been confined to those shareholders who were actual members of the companies at the commencement of the winding up; but it is now assuming a new direction, and the liability of past members is likely soon to be tested by an actual call upon the B list of members of the Accidental and Marine Insurance Corporation. The Companies Act, 1862, makes all those past members of a Company who have not ceased to be members for one year prior to the winding up, liable to contribute to the payment of such of its debts as were not contracted after the time at which they ceased to be members. This liability, however, is not to be enforced unless it shall be made to appear to the Court that the existing members are unable to satisfy the contributions required for payment of the debts and liabilities of the Company. A member who had sold his shares three days after the commencement of a year before winding up would, therefore, be liable to such debts only as were contracted during, or as were existing debts or liabilities during, those three days. And the purchaser, or successive purchasers, who might have held them for one, two, or three months, or any other period during the remainder of the year, would be liable only to such debts as were contracted or were existing during those periods respectively, and still remained unsatisfied. It will be seen, therefore, that in order to ascertain the extent of the liability of a past member, it will be necessary in every case to prepare a separate balance-sheet showing the actual state of the Company’s debts and liabilities during those periods, whether long or short. In many Companies—as, for instance, in Banking Companies—where the debts and liabilities would be varying to the extent of thousands, and tens of thousands, not only from day to day, but from hour to hour on any given day, this has been found to be practically impossible; and therefore, although in several of these cases the present members have been utterly exhausted, the liquidators have hitherto failed to utilise the liability of the past members. Several lists of B shareholders, or past members, we believe, have been settled; but hitherto no calls have been made upon any of them.

The Accidental and Marin Insurance Company, in which, if in any case, the B shareholders ought to be rendered liable, and in which, if in any case, they can be rendered liable, seems to afford special and peculiar facilities for nothing the practicability of the Act in this respect. This Corporation, as we learn from the report of the Committee of Investigation dated October, 1867, was composed of several amalgamated Companies, which in 1865 issued a Prospectus proposing to raise a capital of Two Millions, in 80,000 shares of 25l. each, of which 40,000 shares were to be then issued. But instead of forty thousand, the public subscribed for only 5,000 shares. From that report we learn that certain irregular transactions took place amongst the directors of this Corporation with reference to a large number of the shares. It seems that in March, 1866, six members of the Board transferred 2,712 shares, then standing in their names, to various persons, but chiefly to a clerk of the Company, leaving each of those directors the holder of 250 shares only. On the 21st of that same month, about five days after these transfers, the Company made a call of 5l. per share; but of course the call thus made was not paid by the clerk to whom the shares had been thus transferred. On the 3rd of October following, the directors at a meeting of the Board, at which four of those six directors were present, forfeited all the shares on which the calls had not been paid, for the benefit of the Company. On the 16th of that same month the Company passed into liquidation. The total number of shares forfeited was 5,014, and no less than 3,213 of these were standing in the name of one clerk. But besides the shares so forfeited, it is stated 3,353 other shares had been transferred within the twelve months prior to the winding up, the larger proportion of these also being transfers from the Directors and officials of the Company. The outstanding liability on these forfeited and transferred shares was estimated at considerably more than 100,000l. There can be no doubt but that these transactions were, to use the mildest terms, of a most reprehensible character. The directors ought, unquestionably, to be held liable upon all the shares thus fraudulently transferred and forfeited, and that, as we understand the report recently issued by the liquidators, is the object of the pending proceedings. The liquidators having exhausted the list of A shareholders, and proved to the satisfaction of the Court that no more money can be extracted from them, have turned their attention to the past members. “The first portion of the B list of contributories was settled, they say, on the 10th July, 1868; but that settlement was immediately followed by motions on the part of several of the past members to take their names off the list.” All these motions have failed, though several contributories appealed to the LORDS JUSTICES, and an appeal is still pending in one case in the House of Lords: the liquidators are about “to apply to the Court to make such call for the full amount of the unpaid capital upon every share in the company which had been transferred within the twelve months preceding the commencement of the winding up, including all forfeited shares, when the transferee has not paid the calls made.”

The accounts necessary to sustain these proceedings are, as the liquidators admit, of “the most voluminous character,” and the costs and expenses will necessarily be very heavy; but we apprehend the greatest difficulties will have to be encountered in adjusting in each case the call to be actually made. It may be comparatively easy to settle the list, or the first portion of the B list (though we do not comprehend what that first portion means), which seems to comprise all who as past members are liable to contribute something; but in may cases it may be exceedingly difficult to show what that something is—that is, what debts of the Company the individual past member may be liable to contribute to. The case is greatly simplified, no doubt, by the fact that there wee only twelve days during the twelve months prior to the winding up on which transfers were registered. But where shares have been transferred to a number of successive purchasers, we apprehend that separate balance-sheets must be prepared in order to show what were the existing debts of the Company during the respective periods each purchaser held the shares. And then it seems to be by no means certain whether the liability commences with the date of the registration, or with the date of the transfer. A shareholders ceases to be a member of the Company when he has sold his shares, and executed a legal transfer of them to another party; and yet he is held to be liable to the creditors of the Company so long as his name remains upon the register. Grave questions may probably be raised as to continuing debts or obligations. Most of the creditors of this Company are creditors on policies of insurance either against accidental or marine loss, and it may be, and no doubt will be, a question in some cases as to when the contract was made or the obligation was incurred; how long it existed as a mere liability, and when it became a debt for which the shareholders for the time being could be held liable. But all these nice points, and several others that might be suggested, may, however, be overridden by the enormous amount of the Company’s indebtedness as compared with its assets. It is said to be, at the very best, so thoroughly and absolutely insolvent, that if all the unpaid capital upon all the shares were called up and actually paid, there would still be a large deficiency in the amount required to pay the creditors in full. It may be, therefore, that at any period during the twelve months prior to the winding up there would be a sufficient amount of indebtedness to require the whole of the uncalled capital on the shares of the past member, in which case he would have no interest in raising any of these questions.

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[^lic]: Text from MEGAdigital (Berlin-Brandenburg Academy of Sciences and Humanities), MEGA² IV/19, licence CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/); the editorial apparatus of the MEGA is not reproduced.