Notebook “Trade and Finance 1869”. IX. The trial of the Overend, Gurney and Co. directors: the summing up for the prosecution and the speech for the defence, 18–20 December 1869

Newspaper cuttings, from the manuscript, MEGAdigital (MEGA² IV/19).¹ Traducción al español

THE OVEREND, GURNEY, AND CO. PROSECUTION.

This trial was resumed at a quarter past ten yesterday morning. The court was crowded throughout the sitting, the public interest in the result having manifestly increased.

Dr. Kenealy continued his summing up for the prosecution. He said when he left off on Saturday he was speaking of a book called an “Abstract,” which was produced and referred to by Mr. Harding. The person who made that abstract was said to be Mr. Boys, the secretary of the defendants, and as there was some doubt about its origin he should have been called by the other side to remove it. The next witness to Mr. Howell was Mr. Slater, who attended to the allotment of shares, and that gentleman stated that in his opinion if the Stock Exchange had been aware that there was a second deed, it would have required its production. Turning to the evidence of Mr. Harding, the learned counsel contended that the jury ought to place no reliance upon the estimates of that witness, as it appeared to him that in but too many instances they had not been verified when put to a practical test. As to the contention that the bona fides of the defendants was unquestionably proved by the subsequent sacrifice of their private property, he reminded the jury that before the transfer the ruin of the defendants was already accomplished. They were really bankrupts, but, by inviting the public to bring in fresh capital, they had succeeded in putting off for some months the day of inevitable and absolute ruin. From 1851 to 1860 the firm divided as profits 1,468,000l.; from 1860 to 1865 they divided nothing, and what they had was carried to the guarantee fund. Had the sum of 1,468,000l. previously divided been carried to the reserve fund instead of being withdrawn, the business would still have been entirely insolvent on July 31, 1865. There had been an annual loss of 40,587l. for fifteen years, according to their own figures.

The Lord Chief Justice—As I understand, the loss occurred subsequently. The loss began about 1860. A man is not called upon to anticipate losses, and therefore to abstain from dividing profits. There was no evidence of actual losses which would have shown that they ought not to divide profits.

Dr. Kenealy contended that when the defendants were seeking to induce the public to subscribe for 5,000,000l. they had .no right to shut their eyes to facts. If they really meant to do justice they ought to have gone through their books, and have guaranteed that they were selling a really profitable business. They had been losing 40,000l. a year for the last 15 years.

The Lord Chief Justice—I cannot allow you to say that, because it is not correct. There was a loss for five years.

Dr. Kenealy would leave it to the jury to form their own opinion upon Mr. Harding’s evidence. They had heard a good deal about the Norwich Bank. That bank was also insolvent—if one went, the other must go likewise. The Norwich Bank made no offer of any advance at all. The goodwill of Overend, Gurney, and Co. was put down at 500,000l., that of the Norwich Bank at 500,000l., and the funds there at 591,000l., making 1,591,000l. 591,000l. was locked up in the Norwich Bank, and this was contingent upon the realisation of 2,000,000l. of paper.

The Solicitor-General—The paper was first-class paper. 1,700,000l. was paid.

Dr. Kenealy—That was long after. My learned friend will have the opportunity of addressing you afterwards. Dr. Kenealy contended that the whole of the estimate with respect to the Norwich Bank was delusive. It reminded him of the gammon of bacon which was said to be hung up in some Irish houses to deceive unsophisticated strangers into the belief that it was intended for consumption and not for show. The last witness with whom he had to deal was Mr. Turquand, and with regard to him he asked if any evidence could present a case of greater recklessness and extravagance? There was, for instance, 14,000l. put down to Peto and Betts, which was only a portion of 28,000l. spent on an unremunerative survey of a railway for which a concession was expected from the Turkish Government. It was irrecoverably gone; there was no chance of getting back a single farthing; yet here it was put down as an asset. The same might he said of the account of Xenos, put down as 140,000l.; but there was nothing to be recovered. So the Millwall Works were put down as an asset of 556,000l.; but they were mortgaged to the Norwich Bank, and the Norwich Bank did not proceed against the parties, because there was no chance of getting a farthing. Then Mr. Howard was put down at 134,000l.; but Mr. Howard had been released on the payment of 60,000l. One or two instances of this kind were as good as a thousand to show the unreliable nature of this suspense and guarantee account. To this suspense and guarantee account of 4,000,000l. the directors of the new company added 615,000l., while all that had been received was 600,000l., so that 15,000l. was lost to the shareholders. When they saw all this recklessness and waste, what was the use of the Solicitor-General going about to prove that a ship here and a ship there had realised more than its estimate? He looked at the whole amount, and he said there was no proof of bona fides in the whole transaction. The question the jury had now to ask themselves was whether any or all of the directors were guilty of conspiracy. No doubt the two Messrs. Gurney and Mr. Birkbeck stood in a different position from the other three directors; because, if there were any persons who must have had a knowledge of their position, the Messrs. Gurney and Mr. Birkbeck were those persons. It was easy to say that they found themselves in such a flourishing condition that they did not inquire. It was their duty to inquire; and they were guilty of laches if they went into the market without inquiry.

The Lord Chief Justice—The whole question is as to the state of their mind and the bona fides of their intention. In a criminal case, if it can be shown that an honest intention arose from ignorance, they are entitled to an acquittal. In a civil action the case would be wholly different. In a criminal case you must show actual knowledge of the facts, and that it was in spite of their knowledge that they put forward certain representations.

Dr. Kenealy said, that being the law which his lordship would lay down, it would be for the jury to say whether there was not good reason to infer that they had investigated. That there was no division of profits from 1861. to the time when the concern was sold showed that they had a knowledge of the facts. If there had been no division of profits for four or five years they were not entitled to represent it as a flourishing business. The learned counsel then referred to a letter drawn up by Mr. Gurney in May, 1866, evidently, he said, as an answer to any shareholder who might communicate with them. It stated, he said, that a meeting had been convened by some of the shareholders, at which it was considered that an effort might be made to resuscitate the concern, and that he argued was not sincere, the object no doubt being to throw the shareholders off their guard. Mr. Barclay’s guilty knowledge and complicity seemed to him to have been clearly established by his own deed, drawn up and executed at the time when he became a director, inasmuch as it showed that he could not have been entirely ignorant of the state of the company’s affairs at the time when he joined the board. Another proof of the mala fides of Mr. Barclay and the old directors was the manner in which the transfer of the Norwich Bank had been made, as the shareholders of the limited company had, under the deed, no right to the assets of that bank until 1870. It was provided that the Norwich Bank should keep the books, so that the shareholders of the new company were entirely at their mercy. Did they think they would ever get a farthing? He now came to the case of Mr. Gordon, and Mr. Gordon’s complicity in this matter was shown by the fact that he was the framer and writer of the rough draft of the prospectus, which contained statements of the most reckless and heedless character, and many things which were modified in the prospectus ultimately issued. He thought they would entertain no doubt that the rough draft of the prospectus must have been the subject of discussion at the meetings in St. James’s-square, and that they had the assistance of their solicitor to enable them to escape the meshes of the criminal law. Then Mr. Gordon was present at the meeting to which Dr. Thom went, and at which Mr. Rennie said the whole of the directors had been large shareholders, and had large deposits to the close. Now there never was a more untrue statement, for they were only depositors to the amount of 10l.

Mr. Giffard—There is not one word of evidence given on the subject.

Dr. Kenealy said then he would withdraw that. Then as to the case of Mr. Rennie. Mr. Rennie was an active party to the second deed. He was a member of the board when the minutes were passed in reference to it. The summary of the whole case was this: He contended that the defendants were criminally liable in having made a promise not to call for more than 15l. a share, thereby leading to the inference that the property transferred was valuable, whereas the first 15l. per share was absolutely sunk. He contended that they were liable in having given a promise of a guarantee of principal and interest, which, in their insolvent condition, they knew to be worthless. He contended that they had no large pecuniary interest, as they alleged, in the concern, because all they had held was swallowed up. Then he contended that the 500,000l. which they got for the goodwill they got for that which was worth nothing; that they used the money of the shareholders to the amount of no less than 600,000l. in further advances on the old rotten accounts, and as they got only 600,000l. in return, they lost 15,000l. He said also that they deceived the Stock Exchange, the shareholders, and the public into the belief that there was only one deed which contained all the covenants. The Stock Exchange required the production of all documents relating to such matters, and on the 12th of August they sent the first deed, which had been executed on the 27th July, ignoring the second deed, which had been executed on the same day, and that the suppression of the latter was dictated by mala fides. He said that they executed a secret deed for the purpose of converting the property of the shareholders to their own purposes. He said they were guilty of deceiving the shareholders when in the 58th of the article of association of the limited company they said a profit would be realised from the paid-up capital, when they knew that all the paid-up capital would be absorbed by the liability on the suspense and guarantee account. He said they were guilty of deceiving the shareholders in saying that 500,000l. was to be retained in the hands of the limited company when they had determined that it should be applied to the payment of their own debts. He said that they were guilty of a fraud in pretending to transfer 15,000,000l. of assets against the same amount of liabilities, when in fact they transferred only 11,500,000l., leaving a deficiency of 3,500,000l. He said they guaranteed debts which they knew to be bad, and even wholly irrecoverable. He said that they deceived the shareholders by wilfully withholding from them any information as to the real value of the excepted accounts. He said that they knew the excepted accounts to be worth only a small part of the four millions which they amounted to. He said there was a secret and fraudulent agreement to pay the money of the shareholders in reduction of the liabilities on the excepted accounts, and even to put it into their own pockets. He said there was a fraudulent appropriation of 615,000l. under that agreement. He said there was a fraudulent agreement to continue the suspense and guarantee account three years and five months. He had now closed his case, and had come to the close of his duty. He had to thank his lordship for the great indulgence he had shown him in the position in which he was placed from the case not being put into his hand Friday afternoon. The defendants had the advantage of being defended by gentlemen of great ability and of first rank at the bar, and it was right that they should have that aid. The defendants’ counsel had not thought fit to call any witness, and, of course, they were entitled to say, “We do not call witnesses because you have not made out the case.” But it seemed to him it would have been, on the whole, wiser if they had called witnesses. As he said at the beginning of his remarks he repeated now—if he had used any epithet in the heat of controversy that was improper he now withdrew it, and if the jury at the close of this case should feel it their duty to give the defendants the benefit of any doubt they might have, no one would rejoice more than he should. But it must be a reasonable doubt, not such a doubt as would be felt when an American said he said he had seen a sea serpent 150 feet long. If the defendants were guilty they deserved punishment; but if they were innocent, God send them a “good deliverance.” (Slight applause, which was instantly suppressed.)

The Solicitor-General then opened the defence. He said he appeared there for Mr. J. H. Gurney, Mr. H. E. Gurney, and Mr. Birkbeck, in conjunction with his learned friends, Mr. Hawkins, Mr. Serjeant Ballantine, and Mr. Matthews. The other defendants were in far abler hands than his, and he would endeavour in anything he should say not to interfere in any manner with what his learned friends might have to say. This, however, he might say, that none of these gentlemen would attempt or desire to make a case for themselves at the expense of any one else. The acts charged in the case were the acts of all, and though there might be—he did not say there was—though there might be a difference in the motives and some unlikeness in the position of some of the defendants as compared with others, yet to a great extent there was common action in all. Messrs. Gurney and Mr. Birkbeck heartily rejoiced that the time had at last come when an authentic and judicial opinion might be passed upon them for their actions. Of unjudicial opinion they had had enough. They had had to live for years in an atmosphere of misrepresentation that was most stifling, and untiring had been the efforts of those opposed to them to cloud by misstatements the real state of the case. His learned friend himself, in opening this case, seemed to think it necessary to do so in a strain of fierce invective, of extravagant language for which in the course of his experience he could recollect no parallel. He told them that no such case of gigantic fraud had ever been presented since the days of the South Sea bubble; that they did what they had done with the most cool and cold-blooded determination to defraud the public; that by their devices three millions of money had been juggled out of the pockets of the public into their own; that for gamblers they might have some compassion, but that for men like the defendants they must have scorn, but no pity. These were some, but not, perhaps, the choicest, of the flowers in the rhetorical garland with which his learned friend—executing all the while a sort of war-dance of exultation—had adorned the victims as he led them to the sacrifice. It is true that he reserved Lucius and Junius Brutus to his peroration; but he did not wait till then for his description of the South Sea bubble and King George the First—a matter which he must have known had about as little analogy to the case they now had to try as anything in the whole range of our criminal jurisprudence that could possibly be selected. His learned friend also thought proper to read some portions of the judgment of Lord Ellenborough in the case of Lord Cochrane, and he called Lord Ellenborough an illustrious judge. For force of language—for a mind of mingled ability and strength—he had as great respect for Lord Ellenborough as any man could have. But if he were about to found a claim to call him an illustrious judge, he certainly should not have selected Lord Cochrane’s trial for his panegyric. It was a case in which, as every one knew, he brought all the wonderful powers of his mind to crush a political opponent. He forced an exhausted advocate to address the jury after midnight, and he obtained from the jury, oppressed and borne down as they were by the prejudices of the time, a verdict against that man which the almost unanimous judgment of the country had long since reversed. If he were to put before a jury what was their duty in this respect he should point to this example as a warning and a beacon to avoid, rather than as an example to follow. Now, what was the object of this indictment, or of the prosecutor’s case? To get the property back from Messrs. Gurney? They were ruined. To insinuate that the profits of the business went into their pockets, and were kept back from the public? It was all gone. They knew—it had been proved in the course of this case—that of every shilling which the Messrs. Overend and Gurney possessed they had been stripped; their life interest, their reversions, their private properties, all had gone—not unjustly. He said nothing against it—but they had all gone to pay the debts which these gentlemen were bound to say. They knew well enough that Messrs. Gurney and Birkbeck, but for the kindness of their friends, must have been by this time brought into a state of absolute destitution; and they had no consolation, under these circumstances, but the satisfaction that at least they had saved their honour and their name, and they have earned the luxury—a luxury which the rich did not enjoy—the luxury of gratitude at the expense of all they possessed. In the Court of Chancery, as his learned friend has told you, they had the power, if affidavits were made, of cross-examining the persons so making them. They took them into Chancery under the power of a penal Act of Parliament which compelled them to disclose everything they had done, be it right or be it wrong; and having got information in that way, though they do not impute to them that they made a single false declaration, they turned round and subjected them to criminal prosecution. It is true they could not be tried formally upon this evidence, because the same Act provides that evidence so obtained shall not be used criminally. What we are trying here is, were the Messrs. Gurney and Birkbeck guilty or not guilty of issuing a false prospectus? Now the evidence on this subject was first obtained by civil proceedings in Chancery, and then they proceeded by criminal prosecution. Whatever that point of law might be worth, the Messrs. Gurney scorned to take advantage of it, but they pointed it out to you, through him, as showing the manner in which they had been tested, and the spirit in which this prosecution had been conducted. If this were, indeed, a public prosecution—if his learned friend were a high priest of justice prosecuting some great criminal, he would be deserving of all honour; but he thought he should be able to show them, before he sat down, that the public spirit and the desire for public justice on the part of the prosecution might be measured by the evidence of Mr. Howell, and by the spirit which his learned friend had been instructed, totally foreign to his own nature, to import into the case. The defendants were charged with issuing a false prospectus. The prospectus ran as follows:—“Prospectus of Overend, Gurney, and Co.(Limited).—Capital, five millions, in 100,000 shares of 50l. each, of which it is not intended to call up more than 15l. a share. Deposit on application, 1l. a share; 5l. per share on allotment, 4l. per share on the 15th Sept., and the same on the 15th Dec. The company is formed for the purpose of carrying into effect an arrangement which has been made for the purchase from Overend, Gurney, and Co., of their long-established business of bill brokers and money dealers, and of the premises in which the business is conducted. The consideration for the goodwill is 500,000l., one half being paid in cash and the remainder in shares of the company, with 15l. a share paid thereon, terms which, in the opinion of the directors, cannot fail to be highly remunerative to the shareholders.” Was that intended to deceive? Then it went on—“The business will be handed over to the company on the 1st of August, the vendors guaranteeing the company against any loss on the assets and liabilities transferred.” Now here he would pause to ask if any one supposed that the transfer of the enormous business of Overend, Gurney, and Co. was done without some reason. There was no doubt that considerable losses had been incurred, and an infusion of new blood and new capital was desirable. The prospectus went on to say—“Three members of the present company have consented to join the board, and two of them, Mr. Henry Edmund Gurney and Mr. Robert Birkbeck, will be managing directors; and it is proposed to retain the services of the experienced staff. They will pay attention only to first-class business. Copies of the articles of association, as well as of the deed of covenants on the transfer of the business, may be inspected at the office of the solicitor of the company.” Well, that was said to be fraud, and was a mere bubble, to be paralleled only by the South Sea bubble. It was a long-established business, from which one partner after another had been looked up in unprofitable speculations, or loans to companies which had failed, and, in some instances, committed fraud. As they were aware, a bill-broking and money-dealing business was to a great extent a matter of credit; but a large amount of available capital was required, and it had become necessary that a large amount of new capital should be brought in. His learned friend, in his remarkable address, said there had been a loss of 40,000l. a year in the last ten years. He might as well have gone back 20 years, and said there was a loss of 20,000l. a year, or 40 years, and said there was a loss of 5,000l. a year. But there could be no doubt that the average real profit for a number of years had been from 180,000l. to 190,000l. a year. That was the evidence of Mr. Harding, and his learned friend asked him no question upon it, though he knew that that was the very root of the case, and his learned friend had no right in a criminal case to say this or that thing was not to be relied upon, when he had the means of showing it was not true, and refrained from doing so. No one said that the money-dealing and bill-brokering business suffered in the hands of the limited company; and it was clear that there was a valuable business to be disposed of. The partners had enormous private wealth and various securities as a set-off against the lock up of 4,000,000l., and the whole case against the defendants de-pended upon whether the estimate of the assets was bona fide and reasonable, not whether the result was satisfactory. Now, how did the old firm set about the formation of a new company? If they had wanted to commit a gigantic fraud, what would have been easier than to have quietly withdrawn their capital from the business, to have realised their vast landed estates and their large life interest, to have placed the proceeds in the hands of trustees, or settled them upon their wives and children, and having thus drawn their neck out of the noose, to have left the house of Overend, Gurney, and Co. to get into bankruptcy? In that way they might have made large purses for themselves, laughed at their creditors, and, like too many others, after paying nothing in the pound, have continued to enjoy apparently all the blessings of life. If they designed fraud, they had, according to his learned friend, an agent ready at hand in Mr. Jones. What, however, was their actual conduct? From 1860, when the losses had become serious, they divided no profits, and having stopped all imprudent advances they proceeded to make over to the Limited Company the legitimate business of money dealing and bill-broking, while they rendered themselves and their private properties responsible for past losses. They took upon themselves every single bad asset. Dr. Kenealy had persistently confounded assets with liabilities, and assumed that the liabilities were transferred to the Limited Company; but never was greater care exercised than was used to prevent such a transfer. The bad debts were to be provided against, and if that could have been done, and the earning power being what it had been, and the general position of the company perfectly sound, Overend, Gurney, and Company (Limited) would have been a great success. If the losses could be met the business would be valuable. Could they be met? That was the question. The jury had heard that there were a consultation and a valuation, and if the valuation entered into at the time were a fair and reasonable one, he ventured to say, subject to the opinion of his lordship, that practically there was an end of that case. Was, then, the valuation of Messrs. Gurney at the time a fair valuation? Some of it fact, some of it estimate. His learned friend attacked it, forsooth, because it was an estimate. He said—I will not have these flowery oriental figures; I look to facts; I look to see what actually passed into the hands of the liquidators; if the assets did not realise, under every circumstance of depreciation, distress, and disadvantage, every farthing of value which Messrs. Gurney put upon them in 1865, I shall treat the realisation as a fact, and the estimate as a fraud. His learned friend must excuse him for saying—What rubbish ! How could properties of that kind have been dealt with except in the way of estimate? Supposing any member of the jury had given a guarantee which was founded on an estimate showing that his property was worth 20,000l., and supposing he were afterwards called upon for the money, would it be a ground for charging him with fraud that the property realised only 15,000l.? The question in this case was, how much at the time the property in question was honestly supposed to be worth. The bank at Norwich was set down at 590,000l., the land at 556,000l., the sundries at 613,000l., the reversions at 92,000l., and the life interest at 97,000l., and the goodwill of the Norwich Bank at 300,000l., making a total of 2,248,000l. As regarded the item for the Norwich bank, there could be no doubt that it was perfectly fair. As to the value of the land, his learned friend by the course he had pursued had shut the mouths of the defendants; but in the opinion of two of the first authorities in London, Mr. Harding and Mr. Turquand, that estimate was perfectly fair. His learned friend complained of “sundries” as a vague term, and said that there were great delusions under general names. “What,” said his learned friend, does Mr. Harding, with his Oriental imagination, mean by such an expression? Mr. Harding carried on his business in the “East Central” postal district, but beyond that fact there was nothing to warrant his being described as “Oriental.” (Laughter.) Mr. Harding would excuse him for saying that poetry was the last thing of which he (the Solicitor-General) should have suspected him. (Laughter). “Sundries,” Mr. Harding said, included property of various kinds, of which he had the selling, leasehold houses and various other things which came under the general description of personal property; and Mr. Harding thought that in July, 1865, 613,000l. was a fair estimate of the value of that property. He thought, too, that 97,000l. was a moderate estimate for the life interests. There was a reversion of 20,000l. a-year belonging to Mr. John Henry Gurney which had not been sold. The cause of that being that Mr. Gurney was nearly crushed by this calamity, and his health having broken down, persons might have supposed that they were asked to buy the interest of a dying man. As to the goodwill of the Norwich Bank, Mr. Harding believed the profits of that bank to amount to 80,000l. a year, and, supposing that to be the case, four years’ purchase could not be an excessive estimate. These figures made up a total of 2,248,281l. Further, there were partners’ balances in the private ledger amounting to more than 1,000,000l., consisting of profits which might have been, but had not been, divided, and which were standing to their credit in the books of the firm. Well, then, there were the excepted accounts. These were, as he had stated before, bad assets, bad in such a sense that it was not at all likely that the debt would be paid in full. Securities were hold against those debts; their value was estimated at 1,082,000l., and both Mr. Harding and Mr. Turquand considered that estimate a fair and moderate one at the time. There was, then, evidence that there was a fair and legitimate estimate showing that there would be sufficient to meet every possible demand in respect of the 4,213,000l., and even leave a surplus, without taking any account of the goodwill. One of the jury remarked the other day, with a manliness which did him honour, that the goodwill was all a myth. He admitted that if, in the view of the jury, as reasonable men of business, there was at the time no hope of meeting the deficiency, there might be some foundation for that notion, though the goodwill of a business which had been earning from 180,000l. to 190,000l. a year must have been worth something; but, according to the estimates, there was abundant property in the hands of the Messrs. Gurney to meet any possible claim on account of these bad debts. In a criminal case the only question was, were they bona fide and reasonable estimates at the time?—and, if they were so, how unjust, how cruel, how contrary to common sense it was to say that because they had not turned out as well as those who made them excepted they were a set of fraudulent knaves! As regarded the Chancery proceedings, he had no wish to enter into personal matters, but he must say that his learned friend must have known that what was wanted by counsel for the defence was not mere affidavits, but the answers made by the defendants upon oath in proceedings with which they were parties, and in which they set out their own case. His learned friend might, if he had chosen to do so, have put in the answers made before the Vice-Chancellor, in proceedings in which the defendants made a clean breast of it. He said, however, that he knew nothing himself about that matter, and he (the Solicitor-General) was bound to accept his assurance. As these men were being tried on charge of conspiracy, the question was whether they had a deliberate, wilful, intention to defraud at the time when they made the transfer, and if the jury should not be satisfied of that they were entitled to an acquittal. It was excessively unfair to judge of a matter of that kind by the event. There must, he contended, have been bona fides as regarded the estimates, for this reason, that by the transfer which took place the old firm could not gain a single sixpence, or relieve themselves of a single sixpence of liability, unless the new scheme were successful. They could not gain a single sixpence because the goodwill was at once written off the bad debts; they could not relieve themselves of sixpence of liability because they made themselves responsible to the new company, at the expense of the whole of their private fortunes, to pay the bad debts. Now what would persons who desired to act with perfect fairness do under such circumstances? If it were the case of the jury could they do more than call in four perfectly independent, intelligent, rich, respectable men, place the state of their affairs absolutely and without reserve before them, and say to them “Shall we go on or not,” being bound by their answer? Could there be a stronger mark of bona fides? But they did more, they not only said to those four men “Shall we go on?” but “Will you join us in carrying on the concern?” What earthly motive could Mr. Barclay, Mr. Gordon, Mr. Rennie, or Mr. Gibb have for joining in a fraud? Would men of high position and great wealth, men on whose character there rested not a shadow of suspicion, have been called upon to join in committing a fraud? Might they not in that case have been put into the witness-box and questioned as to whether they did not advise Messrs. Gurney not to go on with their scheme? Nobody had suggested that anything was kept back by the old directors from the new ones; and he craved in aid the character of the new directors, as showing that his clients must have been perfectly innocent if any fraudulent intention. He was not going to say that everything turned out according to the estimates; but the jury knew, as men of business, that the value of property varied, and that men were in that respect often the victims of circumstances. Now he might stop there, and say that if the jury were satisfied with what Mr. Harding and Mr. Turquand said about the estimates, there was an end of the case for the prosecution; but as his learned friend had surrounded the case with a number of suggestions which were more ingenious than merciful, and had made attacks and sown insinuations extending over nearly all the persons connected with the case, and even his own witness, it was necessary to go into other matters. What was the course pursued by his learned friend with regard to Mr. Jones? Mr. Jones, let it be remembered, was called by his learned friend himself—he was no volunteer—and his conduct and demeanour in the witness-box must have been observed by the jury. His learned friend said he did not want to cast any imputation of wilful and deliberate falsehood upon Mr. Jones, and that he made every allowance for a man who had been for forty years connected with the old firm of Overend and Gurney. From Mr. Jones’s appearance he (the Solicitor-General) inferred that Mr. Jones could not regard it as a compliment to suppose that he had been engaged in business for forty years; his firm might have been so, but his own age could hardly exceed that period. His learned friend went on to say that Mr. Jones’s firm must have received vast sums of money from Overend and Gurney in the course of his professional employment, and that that would naturally create a bias; adding that they all knew that persons were lenient towards the errors of their friends; that the circumstances to which Mr. Jones referred happened as long ago as fifteen years, and he did not think he was guilty of any deliberate design to conceal. Some persons might like a candid friend, for his own part he liked an open one. There was nothing in Mr. Jones’s statement to justify the observations that his learned friend had made, nor did he think the jury would believe that there was anything suspicious in the confidential solicitor of Overend, Gurney, and Co. being present at the meeting. Nor did he think it could fairly be said that there was anything suspicious in the meeting being at the house of Mr. John Henry Gurney, in St. James’s-square. Then it was said there was something suspicious in the fact that Mr. Braithwaite was one of the arbitrators under the Norwich deed, and his learned friend made the important discovery that one of Mr. Braithwaite’s Christian names was Beavan, a circumstance which seemed to his learned friend to be a dark feature in the case. Well, the deed appointed three arbitrators, Mr. Joseph Barclay, Mr. Joseph Gurney Hoare, and Mr. Joseph Bevan Braithwaite, and provided that they should be called upon to act in the order in which their names were mentioned. He wondered, while his learned friend was about it, that he did not attack Mr. Fooks, who seemed to have had more to do with the drawing and settling of the deeds than anybody else. His leaned friend said the bona fides of a transaction was generally to be determined by the fact as to whether the verbal or written instructions were given by the solicitor; the spoken word passed away, or at best was preserved by frail memory, but the written word remained, and might at any time be brought up in judgment against the party who wrote it. Now he asked whether that was the way in which a criminal proceeding ought to be conducted in this country? Mr. Jones was in the box two hours, and his learned friend did not treat him as a man unworthy of credit, and when he was out of the box, when no explanation could be given by him, his learned friend, in the discharge of his duty as “a priest of justice,” thought it his duty to insinuate that Mr. Jones deliberately gave instructions verbally and not in writing, simply because the writing might be brought up hereafter against him in judgment. He asked if there was anything whatever to justify those gross insinuations against the character of Mr. Jones, and if it was not disgraceful to make insinuations for which there was not the shadow of a pretence? Then it was said that the deeds themselves were fraudulent, because two deeds were prepared instead of one, and that one was concealed. Now the first deed was the deed of transfer of the business; but the object of the deed was more than that. It was to point out that there was a good deal of the old business which for various reasons it was thought should not be transferred to the new company, but should remain in the hands of the old firm. The excepted accounts were to remain in the hands of the old firm, who were to have three years and a half in which to wind them up. By the 11th and 12th sections there was a general guarantee, not only of the excepted accounts, but of the value of the assets that were taken over, and by the following clauses it was stated that it had been agreed that certain debts should be taken over as part of the assets, pointing out as clearly as could be that there were certain things to be transferred, and others that were not to be transferred. It was all very well for Dr. Thom to say he did not know of the second deed; but the question was, was there any concealment? There was an elaborate provision in the first deed as to the manner in which the accounts should be dealt with; and he wanted to know how his learned friend could say that there was not notice to all mankind that there were accounts which the old firm of Overend and Gurney were to wind up. The second deed dealt substantially with the excepted accounts and the excepted accounts alone, and that showed that the excepted accounts were to be retained in the hands of old firm; but if there was any benefit to be derived from them it was to go, not to the old firm, but to the new; and if in the winding up of these matters it was necessary to expend money, the old firm was to have a credit with the new, the limit of which was to be two months. Now, that was said to be fraudulent; but he could not imagine anything fairer. And when his learned friend talked of its being a fraud that they should have three years and a half allowed them to wind up these excepted accounts, it should be remembered that they were dealing with millions, and that the allowance of three years and a half was anything but a merciful mode of dealing with the members of the old firm. It was said that the sight of this deed would have deterred any man of sense from entering the Limited Company. Dr. Thom said it would have deterred him. Whether it would or not depended simply on this: were the guarantees given sufficient to cover the excepted accounts in the case of winding up? The whole matter came bank to this: was the subject-matter dealt with by the deed covered by the property of Overend, Gurney, and Co.? If it were, it was as honest a deed as he ever met with; if it were not, that did not prove that these gentlemen had been guilty of conspiracy, for they might merely have made a mistake. Then, said his learned friend, Mr. Jones in a moment of candour let out that he gave instructions for two deeds. In common fairness, that should have been asked of Mr. Jones while he was in the box. What was there in the circumstances as detailed by Mr. Jones calculated to arouse suspicion? It was on the eve of a general election, and they had arrived at a time when, if the business was to be done at all, it must be done at once. The counsel thought there should be two deeds instead of one, and Mr. Fooks, besides being a great conveyancer, had, it seemed, a turn for politics, and was going into the country to seek the suffrages of some constituency, and he could only be brought to approve of the first deed in time to get the prospectus out. The brokers said the prospectus must come out at once, and it was issued on the 12th of July, before Mr. Braithwaite and Mr. Fooks had even touched the second deed, and the second deed was not approved till after Mr. Fooks’s return to London. The first deed, however, contained the whole of the facts, inasmuch as it pointed out what was to be transferred, and that there was a great deal that was not to be transferred; and it therefore gave the outline—the leading feature—of the whole arrangement; and the second merely pointed out the particular way in which the excepted accounts were to be dealt with. His learned friend said it was a most remarkable circumstance that five resolutions relating to shares were entered in a separate book. Nothing could be more simple, or more in accordance with the practice of joint stock companies. Mr. Slater told them that all the earlier transactions of the new company took place at the office at which the shares were allotted. There was one set of minutes which had to do with the allotment, another set which had to do with the operations of the company after the allotment; and nothing could be more conspicuous than the use of separate books for the two. Moreover, in the latter book there was reference to the resolutions in the former. His learned friend commented on the fact that only one deed was sent to the Stock Exchange, as if there were some improper motive for withholding the second deed. Unless Mr. Jones were instructed by the directors to withhold that second deed, or unless the Messrs. Gurney knew that it was withheld, there could be nothing in that matter to affect the issue before the court; and there was the solemn declaration of Mr. Jones that neither directly nor indirectly, from Messrs. Gurney or anybody else, did he receive instructions, or any communication whatever, as to whether one deed should be sent or two deeds. Mr. Jones said he thought that the first deed represented the essence of the transaction, and that there was not the slightest occasion to send any other, taking upon himself the whole responsibility, if there were anything wrong. If the jury believed that statement it settled the question with regard to the withholding of the second deed. His learned friend said “Mr. Jones has a frail memory, and his conscience might not be powerful. I do not say that he is perjured, but beware of Jones.” (Laughter.) Now, he (the Solicitor-General) maintained that that was not fair. It was not creditable to our jurisprudence that Mr. Jones should have been treated as he had been; but that seemed to be the only way in which his learned friend could grapple with his evidence. It was very difficult to understand what his learned friend meant with regard to that second deed. He said that it was secret and fraudulent, that if its contents had been known, nobody would have touched the concern; and then, turning to the first deed, he said that the “snake” or “cloven foot” was seen there. Form that he went on to declare, in effect, that he did not care about the deeds at all; that the defendants knew that what persons placed faith in was their names, and there was fraud therefore in the use of those names. He (the Solicitor-General) could not understand how there could be fraud in simply making use of a great reputation honestly acquired. He now came to a matter which he approached with great reluctance, lest he should say anything which might appear unfair to a good and honourable man. His learned friend read the letters of Mr. Daniel Gurney to Mr. John Henry Gurney, and asked the jury to infer that the Gurney family knew perfectly well that a fatal catastrophe was impending. Now he (the Solicitor-General) was not going to deny that the transfer of the business was an operation rendered necessary by the bad debts which had been incurred—if there had been no bad debts no transfer would have been required; nor would he deny that the bad debts were so large in amount that in certain events the property of the Gurneys was likely to be required to meet them. Of course the Messrs. Gurney would not have handed over 180,000l. or 190,000l. a year to other persons if they could have kept it themselves. But, as he understood the matter, his learned friend read these letters to show something much worse than that. He praised Mr. Daniel Gurney as one of those old and honourable men who made the reputation of the bank, as a man who read the Ten Commandments, and he rather cracked him up as a good specimen of a fine old English merchant. He did not appear to perceive that he was making an attack on that fine old English merchant by representing him as a gentleman who assented to what he described as a fraudulent operation. The letter of Mr. Daniel Gurney to his nephew, Mr. John Henry Gurney, dated May 26, 1865, was endorsed by the latter, “D. G. as to estimate of surplus.” Nothing could more clearly show than that endorsement did that Mr. John Henry Gurney thought at the time that there would be a surplus. In a subsequent letter Mr. Daniel Gurney said that he felt great objection “to our joint and several guarantee for the deficiency of the new company,” and thought the marriage settlements of his children ought not to be placed after the liquidation. A letter more indicative of bona fides, or of a belief that there could not be anything beyond a heavy loss on the private estates, he could not conceive. The effect of what Mr. Daniel Gurney said was this—You propose to us that we should give certain bonds making us responsible to the limited company for a certain deficiency. I have already given my bonds to members of certain families with which I am connected to secure marriage portions to my son and daughters, and if it should turn out that my property is seriously damaged by this fresh security which you call upon me to give, so that I am not able to pay what I have engaged to pay, the fathers and mothers may turn round upon me and say—What right had you to do that? You were bound as a gentleman to keep us safe.” I doubt whether that would be considered honourable which might have the effect of diminishing my estate. “But,” he added in effect, “I feel that the transaction is upon the whole a good wise one, and, after all, you must do what you propose if you think it right.” Mr. Daniel Gurney went on to say—and this was most important—that he was a man of moderate wealth, while his nephew (Mr. J. H. Gurney) was a man of large wealth, and that he was very much obliged to him for what he had said about making a sacrifice in his favour when it came to an appropriation of the losses. They had not had the letter of Mr. J. H. Gurney to which that referred; but could anything be clearer than that in it Mr. J. H. Gurney had stated that he had enough and to spare? His learned friend had not scrupled to insinuate that entries in a book had been manufactured for the purpose of producing a favourable impression on the jury; but nothing of that kind was said with regard to these letters, and he was satisfied that the jury, viewing them by the light of common sense, would feel that he had put the right interpretation upon them. He had referred to them with pleasure, because, in his opinion, they were creditable to both the parties concerned. His learned friend asked the jury to believe that the directors of the old firm were guilty of fraud because, as he said, the working of the concern after the 31st of July, 1865, was fraudulent. Even if it were so, that remark was not a fair one, as the court had to consider the state of things, not after, but before the new company was afloat. But there was, in fact, no foundation for the statement. To suppose, indeed, that accounts amounting to 4,000,000l. could be wound up without some advances being made would be absurd. One advance was on account of two ships; but in cases in which there were prior mortgages, it might well be necessary to pay off a first mortgage in order to retain the security given; and in this instances, whenever money was advanced, it was advanced in order to minimise the loss. A great deal had been said about Mr. Harding’s statement, that in the last four months of the new company’s operations the withdrawals were at the rate of 1,000,000l. a month. It was quite clear from the general ledger that withdrawals to the extent of nearly 2,000,000l. did take place. The book to which Mr. Harding referred was one which had been kept regularly ever since 1847, and there was no ground for supposing that it was not as authentic as any other book which had come into the hands of the liquidators. But how did his learned friend deal with it when he found that Mr. Harding had explained the apparent discrepancy between his evidence and that of Mr. Howell? Why he charged Mr. Boys, the secretary of the old company, in language which no man could mistake, with fabricating a book for the purpose of telling a falsehood, and conveying that book into Mr. Harding’s possession fraudulently, so that Mr. Harding might find it and might give to the jury false evidence when he came to be examined here. There was not a title of foundation for such a charge, and no consideration on earth should have induced his learned friend to make it. But if he did not mean to make that charge, what did he mean to say? He said Mr. Boys accidentally left the book at Mr. Harding’s office, and that Mr. Harding found it there. What did he mean by that? The Lord Chief Justice asked him if he asked the jury to draw the inference that this was a fictitious book, and his learned friend said neither yes nor no in reply to that question, but said the book ought not to have the same reliance upon it as was placed upon the general ledger. Now he (the Solicitor-General) said when a man made an accusation of that kind, and was asked whether he made it, he ought not to avoid answering the question, but ought to deal with it like a man. He felt he ought to apologise to the jury for going into this, because, except for the purpose of showing the spirit of the prosecution, he could not for the life of him see what it had to do with the matter. One point was that the totals as shown by this abstract were considerably greater than the totals shown by Mr. Howell, but that was because Mr. Howell did not take into account the balances on the current accounts which were kept in the general ledger. Mr. Harding was obliged to admit that his figures did not correspond with Mr. Howell’s, because Mr. Howell had left out of account the general ledger, and in that book there were some 500 accounts. Well, he (the Solicitor-General) had gone to the general ledger, and he found that on one account on which there was 12,000l. in hand on the 31st December, there was only 1,300l. on the 30th of April; on another the balance was reduced in the same period from 16,367l. to 2,848l.; on another the balance was reduced from 13,429l. to 3,322l.; another from 153,186l. to 31l. 7s. 6d. and from 89,424l. to 47,507l., and another from 109,000l. to 116l. 4s. He did not pretend to say that these made the whole difference, but there were 500 accounts, and if the book were examined it would be found that on a large number of them the balances were largely reduced, and that the aggregate amounted to a very large sum. Then there was another matter. His learned friend was instructed to say that there were no discounts at all effected by the company within the last ten days, but Mr. Howell said there were, and in fact they discounted to the amount of 892,000l. in the last seven days. Then his learned friend told them that these defendants had acted as fraudulent directors would do, that they had all drawn out their deposits, and Mr. Howell had written a pamphlet, in which he said Mr. Thomas Gibb was the only director who did not withdraw the whole of his money prior to the collapse. He was asked whether that was true, and he was obliged to admit that it was not true. It was an absolute fabrication. His learned friend was instructed to cast another imputation. He called his attention to it at the time, and told him it was groundless, but his learned friend persisted. He said that Mr. Head, the brother-in-law of Mr. John Henry Gurney, had parted with his shares and had paid no calls. Well, Mr. Howell turned to the share ledger, and found that Mr. Head had paid 40,000l., but his learned friend made no apology for having made that imputation. His learned friend, of course, did not know the facts, but Mr. Howell did. Another imputation made by his leaned friend was, that when the stoppage took place the cash book of the company was mutilated, figures were erased and others substituted, and that the legitimate cash in hand was considerably reduced, and fresh balances were struck. Now, a book not a cash book, but a book containing a copy of certain securities, was put forward, and Mr. Harding was asked if it had been mutilated, but he said it did not appear to have been. And that was the only foundation for that imputation. Well, then, at the time of the crash what was the conduct of the directors? Why, they every one of them stuck to the ship. The Gurneys and Mr. Birkbeck were ruined, and Mr. Barclay, Mr. Gordon, and Mr. Rennie would have been ruined if they had not been very rich men, but they suffered frightfully, and Mr. Gibb also suffered to a frightful extent. There was one other matter which it became him to deal with, and that was, the letter of Mr. Birkbeck to Mr. Peek, on the 23rd February, 1866, in which he said that everything was going on satisfactorily; and a letter on the 14th April, in which he assured him that there was not the slightest ground for the adverse rumours; and that, with the exception of the debts of Pinto, Perez, and Company, they had not made a single bad debt. But he did not think these letters proved anything against Mr. Birkbeck. They merely showed that there were difficulties which he hoped to overcome. Mr. Howell, with a view of wounding Mr. Birkbeck, showed that Mrs. Birkbeck drew out 812l. which had been standing in her name. But what was done with the money? Why, it was invested in shares of the company itself. Could there be a stronger proof of the bona fides with which Mr. Birkbeck wrote that letter? Dr. Thom, in a pamphlet which he had written, had attacked him for what he had said on this case elsewhere, but he would take the liberty of repeating here what he had said elsewhere, that be the defendants guilty or be they innocent of the charges made against them, he only wished that everyone who was engaged in that trial could be capable of such acts of magnanimity as these gentlemen had shown in this transaction. (Applause.) They must all feel sympathy for Mr. Peek, who had lost a great deal of money, and the jury would remember the account he gave of the interview between him and Mr. Birkbeck. What did it amount to? It amounted to this, that Mr. Birkbeck, like a man of honour, was deeply sensible of the blame that would attach to him for the failure of this company; he was talking to a man he had known, who had lost largely, and he said, “If you will only abuse me it will relieve my mind,” But the jury would remember that they had only heard Mr. Peek’s account of that conversation, and that possibly Mr. Birkbeck’s version of it, if he could give it, which he could not, for his mouth was shut, might be different. He had now only one other topic to refer to, and that was the excepted accounts.

The court then adjourned at half-past 4 o’clock till a quarter past 10 this morning.

THE OVEREND, GURNEY, AND CO. PROSECUTION.

This trial was resumed on Saturday morning, the Lord Chief Justice taking his seat on the bench at a quarter past 10.

Mr. Moir said Dr. Kenealy, who had not yet arrived, wished to begin this morning by having the deeds read throughout.

Sir. J. Karslake said when the deeds were put in he did not think it necessary to read them, but he road such clauses as he thought were of importance.

The Lord Chief Justice and he thought it hardly necessary.

Mr. Harding was recalled.

A Juryman said he wished to ask a question. There were two millions of bills of the Norwich Bank discounted; 1,700,000l. you said were paid, 135,000l. not paid, and 227,000l. renewed. Could a company in liquidation renew bills?

Mr. Harding—These bills were re-discounted by the Norwich Bank at the time of the transfer of the business.

The Lord Chief Justice—And they were renewed while the business was going on?

Mr. Harding—The bills were the bills of the various parties and were renewed by them, not by Overend and Gurney. The drawers would renew the bills with the acceptors, and they were then re-discounted?

By whom?—By the Norwich Bank.

What was the ultimate result of those bills that were renewed for 227,000l., were they paid or not?—No; they were unpaid, and we had to rank against the estates of the parties.

The witness then put in the following statement of profits of Overend, Gurney, and Co., from 1851 to 1860 inclusive. In 1851 the amount of profits was 156,700l.; amount divided, 120,000l., and 37,415l. was carried to the reserve fund; the amount carried to reserve this year included 704l. 14s. 4d., part of the profit of the year 1850. In 1852 the profits were 186,386l. 11s. 10d.; the amount divided was 180,000l.; and the amount carried to reserve was 6,386l. 11s. 10d. In 1853 the profits were 212,977l. 13s. 7d. At the end of this year 219,755l. 7s. 10d. was written off in respect of loss on fraudulent metal warrants. No profit was divided that year. In 1854 the amount of profits was 153,000l.; the amount divided was 80,000l., and the amount carried to reserve was 73,500l. 7s. 8d. In 1855 the profits were 155,256l. 11s. 10d.; the amount divided was 132,000l., and the amount carried to reserve was 23,256l. 11s. 10d. In 1856 the profits were 148,617l. 15s. 7d.; the amount divided was 140,000l., and 8,617l. 15s. 7d. was carried to reserve. In 1857 the profits were 144,460l. 14s. 5d., the whole of which was carried to the reserve account, there being no division of profits that year. In 1858 the profits were 293,626l.; the amount divided was 240,000l., and 53,626l. was carried to reserve. In 1859 the profits were 442,074l., of which 360,000l. was divided and 82,074l. was carried to reserve. In 1860 the profits were 343,373l. 17s. 10d., of which 216,000l. was divided, and 127,373l. 17s. 10d. was carried to reserve.

A Juryman—What was the reserve?

Witness—To meet bad and doubtful debts.

What was the amount of the reserve?—It was exhausted in meeting bad and doubtful debts.

The Solicitor-General—There was a very large sum—348,000l.—written off at one time.

A Juryman—Were the accounts of the profit and loss arising from the speculative business kept distinct from that arising from the legitimate business?—They were not, they were merged into one.

The Juryman—Could we have a statement of the profits for three years anterior to the commencement of this speculative business?

The Lord Chief Justice—That is exactly what occurred to my mind. Conceiving that the commencement of the losses was at a later period I wanted to go back, but I am rather struck with this. This does not quite meet what I expected, because we find that as regards 1853 they sustained a considerable loss on these fraudulent metal warrants.

The Solicitor-General—That is Davidson and Gordon’s case.

The Lord Chief Justice—But still they entered upon a speculation.

Mr. Mellish—No, they had advanced money on dock warrants which turned out to be forged.

The Lord Chief Justice—If they had been taken in by forged warrants that is a different thing.

Mr. Mellish—Your lordship will recollect that the parties were tried and convicted at the Old Bailey for the forgery.

The Lord Chief Justice—With that exception there appears to have been nothing up to the year 1860 in the shape of bad debts, but in 1857 no profits were divided.

The Solicitor-General—That was the year of the panic.

The Lord Chief Justice—they carried to the reserve fund 144,460l. in 1857, but that was, as the Solicitor-General says the panic year. In 1858 they made a profit of 293,626l., and in 1859 a profit of 444,000l., and divided 360,000l., and carried 82,000l. to the reserve fund.

A Juryman—That, I imagine, was the interest of the suspense and guarantee account.

The Lord Chief Justice—They actually divided 360,000l.

The Juror—What I want to know is whether in these large sums they did not calculate the interest of these dormant accounts.

Mr. Harding said, speaking from impressions, he did not think that in the year 1860 these debts could be termed doubtful. It was subsequent to that date that they appeared to him to have accumulated into what they are now. The witness went on to state that his lordship would recollect that he was unable to reconcile the discrepancy between two statements as to the amount of withdrawals from the bank, and he intimated that he believed it arose from certain accounts not having been taken notice of by Dr. Kenealy, and which he (witness) had taken notice of, and also from a difference between the two dates. He found that Dr. Kenealy, in taking the 31st December, took an amount less than he had taken by reckoning from the 30th January, by about two millions. On the 30th January the deposit and current balances of the company were about two millions more than they were on the 30th January, and that commercial men would understand to be not an unusual thing. Then Dr. Kenealy did not include the book called the general ledger. Now, he had turned to several accounts in order to show that that ledger ought to have been regarded. On one account a deposit of 5½ per cent. on one day’s notice, on the 31st December there was a balance of 15,000l. On the 18th of May the balance was 45l. 18s. 7d. In another account a balance of 7,554l. on the 31st December had been reduced on the 10th of May to 435l. Then there was another account, the account of a well-known Paris house, in which the balance on the 31st December, 1865, was 16,316l., which, on the 10th of May, 1866, was reduced to 13,009l. In another account the balance was reduced in the same period from 36,216l. to 14,596l.; another from 16,367l. to 2,996l.; and another from 45,471l. to 4,342l. There were a number of other accounts in which the balances had been reduced in a similar manner.

Dr. Kenealy—If these amounts were withdrawn after the 30th April they would not affect my figures.

The Lord Chief Justice—I think they would, because your figures show that within the last six months there was only a diminution of two and a half millions.

The witness stated that in another account the balance which stood on December 31 at 153,000l. was reduced on the 10th May to 71,209l. In another the balance was reduced in the same period from 89,424l. to 36,349l., and in another from 79,000l. to 118l.

The Lord Chief Justice—Therefore, it stands that as between the 31st Dec. And the 10th May, instead of only 2½ millions being drawn out if you take the accounts in the general ledger there was a much larger sum drawn out.

Witness—Yes.

The Solicitor-General—You have looked into the book of statistics, and as far as you can judge is it to be depended upon?

Witness—That book came into my hands with the others in the liquidation, and I have no reason to doubt its accuracy.

At the request of Dr. Kenealy a marginal abstract of the deed relating to the Norwich Bank, dated the 23rd of April, 1866, was read by the associate. One or two clauses, or portions of clauses, were read in full.

While the court was waiting for formal proof of another document.

The Lord Chief Justice requested Mr. Mellish to address the court, as he had expressed a wish to do, on behalf of Mr. Barclay.

Mr. Mellish said he had to submit that there was no evidence which ought to be left to the jury as against Mr. Barclay. The first six counts in the indictment were not counts for a conspiracy at all, but counts upon the statute 24 and 25 Vict., ch. 96, sec. 84. That statute said, “Whosoever, being a director, manager, or public officer 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,” &c., “shall be guilty of a misdemeanour.” There was also a provision that no person should be liable to be convicted in consequence of anything which he might himself have disclosed in any process of law or equity. He was not going to rely upon this last provision, as Mr. Barclay had not disclosed anything in that way; but it partly explained why the prosecution had added a number of counts, apparently with the view of treating the actual committal of a certain act as an overt act of conspiracy. Eleven counts—6 to 17—were counts of that description, and they all treated the issuing of the prospectus as the substance and essence of the office. The 18th count charged that the defendants conspired together, by divers false pretences, and by divers artful and subtle means and devices, to obtain and acquire for themselves the money of one Adam Thom, and to cheat and defraud the said Adam Thom. [This count did not specify what the false pretences and] the artful and subtle means were. It was a count for defrauding, not all persons who might belong to the company, but a particular individual. Now he submitted that that count could not be sustained.

The Lord Chief Justice said it struck him that if the conspiracy were once established, although at the outset it was not intended to defraud any particular individual, yet it must be regarded as a containing conspiracy; and if the object were accomplished, it was in the result a conspiracy to defraud particular individuals.

Mr. Mellish said, however that might be, he should contend that the only thing which could be said to have been done to induce the public or anybody else to subscribe was the issuing of the prospectus.

The Lord Chief Justice said there might be a conspiracy to defraud, the accomplishment of which was to be effected by the issuing of the prospectus. If the jury should come to the conclusion—he did not mean to express any opinion on the point—that the concern was a thoroughly rotten one, and that the parties must have known that, and determined to get rid of their interest and induce the public to take it, although it might be that one of defendants had nothing on earth to do with the publishing of the prospectus, yet if he concurred in the antecedent conspiracy, what was done for the common purpose must be taken to have been done by all the parties.

Mr. Mellish said the counts for conspiracy were so general and so vague, that it was almost impossible to distinguish what was sufficient evidence in point of law to prove that an individual was a party to it. For instance, his learned friend (Dr. Kenealy) said in his opening that Mr. Barclay was a cousin of one of the Messrs. Gurney and a brother-in-law of another. Was that a kind of evidence which could be accepted in a court of law? What he (Mr. Mellish) wished to show was, that as regarded Mr. Barclay there was not sufficient evidence for it to be left to the jury to say whether he was a party to the conspiracy, supposing one to have existed.

The Lord Chief Justice said, supposing the jury should think that every one of the defendants must have known that the concern could only end in ruin, a very strong conclusion so far as Mr. Barclay was concerned, seeing that he made himself liable for 50,000l., the present objection could not be sustained.

Mr. Mellish said he contended, on the part of Mr. Barclay, first, that there was no evidence in point of law that he was a party to the prospectus: and secondly, that there was no evidence in point of law that he had any such knowledge of the state of affairs in the old company as could possible make him guilty if he were a party to it. There was no evidence that he had any knowledge of the state of affairs until he became a director, on the 8th of August. After citing the letters from Mr. Daniel Gurney to Mr. John Henry Gurney, and referring to the third deed which was prepared at the request of Mr. Barclay, the learned counsel went on to argue that it was quite clear from the evidence and the dates that the defendant took no part in the discussions about the prospectus; that he was not an original director, and was not intended to be one; and that the prospectus had been settled, the instructions given for the deeds, and the whole mode of carrying out the scheme had been arranged before he became a director. At the time, he said, when Mr. Barclay was asked to become a director he was very much interested in the laying of the Atlantic Cable, and was about to go to Ireland in the Great Eastern to see the commencement of the work. No doubt some communication had taken place between him and the other directors, but there was no evidence as to what induced him to promise that he would be a director. He took 1,000 shares. Thereupon, on the 23rd of July, the day on which the company was formed, he signed the memorandum of the articles of association; immediately after he went away in a hurry in the Great Eastern; and, except that he consented to become a director, he was in exactly the same position as any other shareholder. The prospectus was issued by the promoters of the company, and his (Mr. Mellish’s) defence of Mr. Barday was, in substance, that though he had consented to become a director, he never was in any sense a director before August.

The Lord Chief Justice observed that Mr. Barclay agreed to become a director before the prospectus was issued to the public.

Mr. Mellish said his lordship would recollect that in a case in which an action was recently brought in that court against Sir Edward Watkin, on the ground that he was a party to the issuing of a fraudulent prospectus, when the defendant had stated in his evidence that the first saw the prospectus in which he was announced as chairman of the company at the Great Western Railway board, and that he at once wrote a letter to the promoters, saying, “Your prospectus is too florid,” although he afterwards acted as director, and even as chairman, the jury at once stopped the case, and said there was no evidence against him. In the present case there was no evidence that Mr. Barclay ever saw the prospectus before it was issued.

The Lord Chief Justice said it was not for the Judge to assume that a person who became a director of a company formed to carry out, as was alleged, a scheme involving fraud, was not cognisant of that fraud.

Mr. Mellish said Mr. Barclay did not intend to impute to Mr. John Henry Gurney, Mr. Birkbeck, or any other member of the old firm, that they contemplated fraud; he would rather be convicted than make such an imputation. It had, however, not been proved that Mr. Barclay ever even went to the offices of the old firm before the prospectus was issued.

The Lord Chief Justice said if it appeared that Mr. Barclay simply consented to be a director, and when the documents were laid before him signed them without any knowledge of the facts, the jury ought, without hesitation, to dismiss the case as a against him; but at present there was nothing to show that he never went to the offices, or that he undertook to subscribe for 1,000 shares without having any knowledge of the state of affairs.

Mr. Mellish said neither Mr. Jones nor Mr. Slater appeared to have seen him at the office.

The Lord Chief Justice thought he was not justified in assuming that he did not go there, or that he held no communication with the partners through which he became acquainted with the pecuniary state of affairs. The question was one not for him, but for the jury to determine.

Mr. Mellish said his lordship knew how difficult it was in such a case to get the jury to attend to a minor point like that.

The Lord Chief Justice hoped it would not be difficult in that case.

His Lordship then consented, at the request of Mr. Mellish, to reserve the point with regard to Mr. Barclay in case the jury should return a verdict of “Guilty” against the defendants.

Dr. Kenealy said his learned friend Mr. Moir had gone through the draft of the private deed, and had found an extraordinary number of erasures and alterations, and as he intended to make some comments on the appearance of the draft, he proposed that it should be seen by the jury.

The Solicitor-General submitted that if any observations were to be made as to the appearance of the draft Mr. Jones should be asked what he had to state about it.

The Lord Chief Justice—We have had it, that great alterations were made in the second deed by Mr. Fooks on behalf of Messrs. Gordon and Rennie.

The Solicitor-General—There were a great many meetings, Mr. Jones says, upon it.

The Lord Chief Justice—I do not wish to anticipate any observations that I have to make, but I must say that the alterations made by Mr. Fooks go far to satisfy me that he, as counsel for Messrs. Gordon and Rennie, was extremely vigilant to watch over their interests as distinguished from the interests of the members of the old firm.

After some further discussion on this point, in which Sir. J. Karslake, the Solicitor-General, and The Lord Chief Justice all spoke of its being a common thing for drafts to be altered and re-altered so that hardly a word of the original was left, when it was finally settled and approved.

Mr. Jones was recalled and examined by Mr. Moir—He spoke to alterations respecting the financial assistance to be given by the new company in reference to the suspense guarantee account being made by Mr. Braithwaite and struck out by Mr. Fooks, and alterations suggested by Mr. Fooks being amended by Mr. Braithwaite, which amendments were again struck out by Mr. Fooks, and so on with other alterations. There was no schedule to the draft, but it must have been there some time.

The Lord Chief Justice—I will ask you this general question—Did these two gentlemen discuss the various provisions of this deed as it affected the interests of the old firm and the interests of the in-coming new directors as a common interest, or as an antagonistic interest?

Witness—I should say as an antagonistic interest. Mr. Fooks was settling the draft on the part of the new directors, whereas Mr. Braithwaite had prepared the draft on behalf of the vendors.

And Mr. Fooks was acting in the interest of the vendees?—Not the slightest doubt of it.

By Dr. Kenealy—The first sheet had been copied by a law stationer. Almost every word of Mr. Braithwaite’s had been struck out. It was the ordinary practice for the schedule to be added by the attorney and not by the counsel. Mr. Fooks must have seen the schedule, because the engrossed draft was signed and approved of by both counsel. That was not the draft.

Dr. Kenealy—I want the draft signed by Mr. Fooks?—Here it is, this is the draft of the first deed.

Dr. Kenealy—I do not want the draft of the first deed. We are satisfied about the draft of the first deed. I want the draft of the second deed.

Witness—They are both signed on the basis of a contemporaneous indenture. Yes, this is the schedule, there it is at the foot.

The Lord Chief Justice—Is that the finally settled draft?—That is the finally settled draft.

The Solicitor-General—There are several alterations even in it?—Even at the last moment.

Even in the schedule?—Yes.

Dr. Kenealy—They are both settled and approved on the same day—the 11th of July.

Witness—That is not the actual date of the signature.

The Lord Chief Justice—How comes that?

Witness—For this reason, that as they were signing they suggested that as the post deed should be dated on the 11th of July, and as they were supposed to be contemporaneous deeds, both approvals should be on the same day. I now see that they were engrossed by my stationer on the 25th of July, the two deeds. I had them engrossed as soon as I could obtain them from counsel.

Dr. Kenealy then summed up the case for the prosecution. He said he had to congratulate the jury on the approaching completion of this trial. He had no doubt they all felt very much how great and solemn a responsibility rested upon them, not simply the responsibility which, as men of honour and morality they owed to their own consciences, but the responsibility which they all owed to the general public. Although this case was remarkable for the magnitude of the interest involved, and also for the position which the defendants had occupied to the present time, it was to be dealt with exactly on the same principle of law as that which was applied to the miserable case of a mock auction at Quarter Sessions. Indeed, it seemed to him that this case was analogous to that of a mock auction. There the parties put up for sale false and fictitious articles, which they pretended were genuine. By flaming advertisements and by placards at the door they induced unsuspecting countrymen and silly Londoners, if there were such persons, to purchase, and it was not until the articles were afterwards shown to some experienced person that the purchaser found that instead of a diamond ring, which he supposed he had bought, and a golden ornament, he had got a bit of glass and an article made of brass. This was exactly the case here. The defendants professed to sell as valuable that which they knew was worthless; they promised to assign as solvent that which they knew to be insolvent; and by promises of this nature they induced a great number of persons to part with their hard-earned and honest money; and the persons who had been so defrauded of their money, having discovered, as in the instance of the countryman who had bought a piece of glass when he thought he had been buying a diamond ring, and an article made of brass when he thought he had been buying gold, now complained that the prospectus by which they were induced to part with their money was absolutely false, and they were as much entitled to redress as if they had been deluded at a mock auction. He was going to put before them a plain issue. Was his concern insolvent with the knowledge of the defendants at the time that they professed it was solvent? If they found that it was insolvent it was their duty to hind the defendants guilty. He was extremely glad that they had had the evidence of Mr. Jones in this case. His learned friend, no doubt, thought that Mr. Jones had done great injury to the prosecution. He took an entirely different view. He considered the evidence of Mr. Jones as damnatory to the whole case of the defence. He did not wish to cast any imputations of wilful and deliberate falsehood on Mr. Jones. He made every allowance for Mr. Jones’s position as having been for years employed by the defendants as their solicitor. During that time he must have lived in the most intimate relations with them and have conceived a friendship and affection for them, and he must have received vast sums of money from them in the course of his employment. All these things would naturally give to his mind a bias. And then it was to be remembered that the things he spoke to happened so long ago as 1865. He put it to the jury whether there was not something suspicious in the meetings at which it was determined to bring out the new company being held in St. James’s-square. Instead of carrying on their consultations in Lombard-street, or at the office of their solicitor, the private residence of one of the members of the old firm was selected, so that no observation would be attracted to what was there going on. The object of the meeting was to discuss the propriety of transferring the business of Overend and Gurney to some new company to be formed. If it were merely to discuss the financial position of the firm, and the mode in which a prospectus was to be framed they did not require the presence of a lawyer. The first meeting lasted for more than two hours, but did Mr. Jones give them any idea of what was done? All that he really told them was that some figures were mentioned, and that there was a vague idea that there was to be a considerable surplus. Mr. Jones thought that somebody said there would be a surplus of 800,000l. Credat Judaeus apella. It was clear that legal matters were under discussion.

The Lord Chief Justice—I do not think that you asked him the question.

Dr. Kenealy—I asked him to state accurately what took place.

The Lord Chief Justice—You did not ask whether any legal matters were discussed, because I was struck with that.

Dr. Kenealy—Mr. Jones stated that the matter discussed was principally the question of the prospectus.

The Lord Chief Justice—As I understood, the surplus and the prospectus were the subjects under discussion, and incidentally one of the members of the old firm mentioned the surplus that was calculated. Beyond that nothing was asked of him as to whether there was any discussion of a special character.

Dr. Kenealy, resuming his address to the jury, said a transfer of a business of this kind was one of the simplest things that could be done if it were an honest transaction; but if it were dishonest the greatest caution was required to shelter the parties from the criminal law, and the presence of their legal adviser was necessary. Well, the first meeting terminated, and one would have supposed that the matters that could come under discussion would have terminated there. But not so. Another meeting was held in the same place, a long meeting, at which there was another discussion, and at which the prospectus, he presumed, was finally settled. Then Mr. Jones was told in perfect innocence to do all that was necessary as a lawyer. There were millions to be transferred, and he should have thought the magnitude of the transactions was such that the instructions would be in writing. But they were oral. Now, as a rule, the bona fides of a transaction might be judged of by the fact whether written or verbal instructions were given. If there was anything dark and to be concealed, of course no one would be foolish enough to put the instructions in writing. What was said passed away; or if it were preserved at all, it was only in frail memory; but litera scripta manet. There it was, and it might be brought up in judgment at any time. He now came to the instructions given to Mr. Braithwaite as to the preparation of the deeds. It was clear that either what was intended was not them communicated to Mr. Braithwaite, or that Mr. Braithwaite did not fully understand it. He was described as an eminent conveyancer; and one would have thought that if it were a bona fide transaction the whole business could have been made clear to the mind of Mr. Braithwaite without any difficulty. But that appeared not to have been so, because there were other interviews—interviews when Mr. John Henry Gurney saw Mr. Braithwaite in company with Mr. Jones, and interviews when he saw him alone; and whether the whole of this design was communicated to Mr. Braithwaite, or whether Mr. Braithwaite, without being actually let behind the scenes, was merely instructed to prepare so and so, was a matter that would probably never be known. That Mr. Braithwaite was entitled to the fullest and most perfect confidence of the Gurneys was apparent from the passage in the deed relative to the partnership in Norwich Bank, which provided that he should be one of the arbitrators in case of any dispute. He was justified, therefore, without casting any imputations on Mr. Braithwaite, in saying that he would not be at all inclined to suspect that there was any darkness in this transaction, and that he was not at all likely to put questions to them which would be of a hostile nature. Everything was done that was likely to put a man like Mr. Braithwaite off his guard, so that he would not enter into the matter with that suspicion which, if the parties had been utter strangers to him, would have been excited. Mr. Jones said he gave Mr. Braithwaite instructions to prepare the deed or deeds for the transfer of the business. Did not that show that it was in contemplation that there should be two deeds. They had heard a very ingenious explanation which Mr. Jones gave. Mr. Jones would not be a member of a legal firm employed by Messrs. Overend and Gurney if he were not a man of great ingenuity and skill. Mr. Jones said only one deed was mentioned in the prospectus, because it was necessary to get out the prospectus at once, there being then a prospect of a general election, and he did not know that there would be more than one deed. But where was the necessity of hurrying on the prospectus? The number of shares applied for showed that instead of the company being brought out, as Mr. Harding stated, at an unfavourable time, the case was the reverse. 224,484 shares were asked for, and only 83,000 could be allotted.

The Lord Chief Justice said he understood Mr. Harding to allude to what happened after the company was brought out.

The Solicitor-General said Mr. Harding referred to the state of the money market.

Dr. Kenealy said he must ask the jury to consider whether the real reason for all these interviews was not to be found in the conviction of some of the defendants as to the position of the concern. He conceded that there was a remarkable distinction between the members of the old firm and the directors who joined the new company. It would be absurd to suppose that the Messrs. Gurney and Mr. Birkbeck ever communicated to the new directors their exact financial position. But, on the other hand, it seemed improbable that London merchants and men of business had no knowledge of the position of the old company when they consented to share the destinies of the new one. The transactions connected with the second deed threw a ray of light upon the matter. The knowledge of the two deeds from the commencement was brought home to the whole of the directors; and if any of them had no knowledge whatever of what was in contemplation, would they have allowed it to be held forth to the world that there was only one deed. The Stock Exchange required all documents to be laid before it. Could any man of honour say that its requirements were met when a deed of such importance as the second one was kept back? The suppressio veri looked in this case like the suggestio falsi. The fact that nothing was said about a second deed afforded ground for the suspicion that the defendants knew that everything was false and hollow. The whole purport of Mr. Jones’s evidence with regard to the early meetings of the directors was, that the burden of the song there was that there was a large available surplus. He (Dr. Kenealy) must say that either that must be a delusion in the mind of Mr. Jones or the Messrs. Gurney must have wilfully and wickedly deceived the other directors. The correspondence between old Mr. Gurney, of Norwich, and Mr. J. H. Gurney, furnished the most conclusive evidence that the Gurney family knew perfectly well that they were at that time in a state of utter ruin. On the 25th of May the former wrote to the latter:—“My dear J. H.,—It appears to me you have done quite the right thing in negativing the proposal of continuing the Overend, Gurney, and Company business.” From this it was clear that such a proposal had been made, but this gentleman thought that to act upon it would be only adding ruin to ruin. The nephew had taken the advice of his uncle—one of those cautious men who had established the reputation of the bank by fair legitimate dealing, not by extravagant dreams and speculations. Well would it have been if besides this negativing of the proposal to continue the old concern the partners had revealed their position manfully to the world, and left the creditors to take the 10s. in the pound which Mr. Harding thought would have been available, every one would then have respected them, and been sorry for them. Mr. Daniel Gurney went on to express a hope that nothing would occur “to frustrate the negotiations with the National Discount Company.” Mr. Jones said he never heard of such negotiations, but could any one doubt, after what he had read, that there were negotiations? On the 24th of June his uncle wrote, “My dear J. H.—Your two letters received this morning. I am sincerely pleased that everything is in good train for the formation of the new company, and I trust that all will go well in starting, and that you will find a fourth desirable director.” This was written four days after the interview in St. James’s-square. “I certainly feel a very great objection to our joint and several guarantee for the deficiency.” What deficiency? According to Mr. Jones there was a magnificent surplus of about 700,000l.

The Lord Chief Justice observed that that surplus was dependent on the whole of the private property of the Gurneys being sacrificed.

Dr. Kenealy continued—Mr. Daniel Gurney wrote that he had great objection to the marriage settlements being placed after the requirements of the liquidation fund. In the next letter he said he acceded to the giving of security, but added, “You must bear in mind that in case of a real catastrophe all my family and myself would be in total destitution.” Those words “a real catastrophe” must convince the jury that at that time it was perfectly well known to all the members of the Gurney family that the bank was not solvent—that a catastrophe was impending, and that it could only be averted by some such device as was resorted to. He must here remark that a most singular document had been presented to the court that day. The jury had been told all along that the cause of the silence about the second deed was, that it was not ready. A document was produced in the handwriting of Mr. Fooks, an eminent member of the bar, which purported to have been signed by him on the 11th of July. They were now asked to believe on the evidence of Mr. Jones that that date was untrue—wilfully untrue. Sixteen pages of the draft of the second deed were missing. Mr. Jones’s explanation was that the draft was cut up at counsel’s office; but it seemed most remarkable that there should be such a series of mishaps with regard to the second deed, while there was no suspicion about the first. From what was done in St. James’s-square he passed on to consider the real position of the firm of Overend and Gurney at that period. Their position was most lamentable. They had on their books a series of debts amounting in all to 4,213,000l., for which they could not expect to receive, under the most favourable circumstances, more than million, which, in the result, realised only about half that sum. That was an immense amount to have as a deed loss upon the concern; and what added to their misery was the reckless way in which they had acted a short time before. In 1858 they divided as profit 240,000l.; in 1859, 360,000l.; in 1860, 216,000l. In 1861 they seemed to have opened their eyes to what they had been doing, and in that year they divided only 3,600l. The way in which this matter was put by Mr. Harding was, that having been in such flourishing circumstances, and divided so much money, they were perfectly justified in disposing of their business in the manner they did. On the other hand, he (Dr. Kenealy) contended that when those large profits were divided they knew what was hanging over their heads.

The Lord Chief Justice said that was just the point at issue. Mr. Harding said it was not till after that time that the doubtful assets became doubtful.

The Solicitor-General protested against its being assumed in a criminal prosecution like that that Mr. Harding’s statement was open to exception. It was perfectly competent to Dr. Kenealy to have gone into details to show that those debts began to be oppressive at an earlier period.

Dr. Kenealy thought the dates had been given. The debt of the Atlantic Royal Mail commenced years before. Long prior to the transfer it must have been discovered that a large proportion of the 4,213,000l. was valueless. From the prospectus it would naturally be inferred that they were offering to the public something of great value, whereas of the 15,000,000l. of assets nearly one-third was not realisable. They said that the terms of the transfer could not fail to insure a highly favourable return to the shareholders. If they believed that they ought to be acquitted, if they disbelieved it they ought to be convicted. They said that they would give their zealous attention to “the cultivation of business of a first-class character only.” That was a promise. Did they intend to fulfil it? They bound themselves by a separate deed to advance money on account of an old deficiency. Had the public known that fact, would they have applied for shares? As to the 7 per cent. dividend which the shareholders were led to expect, how was it possible that it could be realised? An utterly illusive idea was also conveyed by the provision in the deed that the directors were to be at liberty to acquire “any other business of like character which they may hereafter think it expedient to acquire for the benefit of the company.” Among the fish that flowed into this net was Dr. Thom; and Dr. Thom, after having lost his 2,400l., went to a meeting of the shareholders, at which the whole or the greater number of the directors were present, and he asked a question three times, and it would be for the jury to say whether the answer was satisfactory. It was made an article of accusation against Dr. Thom, that having promised to produce answers and affidavits made in Chancery, he refused to do so. Now he (Dr. Kenealy) offered to put those documents in, but he refused, and considered he was justified in refusing to put them in, unless he reserved his right to comment on them. The learned counsel then referred to the correspondence between Mr. Peek, who had lost 95,000l. by this company, and Mr. Birkbeck. Mr. Peek being a very large shareholder, and hearing some adverse rumours, wrote to Mr. Birkbeck, who replied that they had not made a single bad debt, and that when the time came for bringing the affairs of the company before the shareholders Mr. Peek would be perfectly satisfied. He also referred to the interview between Mr. Peek and Mr. Birkbeck on the 10th of May, when they were putting up the shutters of the bank. Mr. Peek asked why it was, and Mr. Birkbeck said the Bank of England had refused them assistance, though they offered them good security, and that they had refused because there was an old grudge, and that he sat down at a table and laid his head upon it and said, “I wish you would accuse me, it would relieve my mind.” to which Mr. Peek replied, “If everything has been honest I do not see any reason to accuse you.” He (Dr. Kenealy) hoped that the real meaning and spirit of that interview might be regarded in this light, that Mr. Birkbeck’s conscience smote him when he saw the man who had lost that vast sum of money. He hoped that it was a moment of repentence, and that it would not fail to operate on his mind at a future time. But if Mr. Birkbeck had been an innocent party to this transaction he could not imagine how he could have made such a remark. Mr. Peek went again the next day, and saw Mr. Gibb, one of the directors, who said they had prepared an account showing that they were in a position to pay a dividend of 7 per cent. If that statement were true, why had no such account been presented to the court? He now came to Mr. Howell, who he thought had been hardly dealt with in this case. Mr. Howell came there simply as an accountant, and although Mr. Harding was called after Mr. Howell, he failed to show that Mr. Howell was wrong in any of his calculations, nor did Mr. Turquand, who gave his evidence very independently, point out any error in them. Mr. Howell showed that the new company started with a debt of 2,970,000l. Now, was that ever contemplated by the shareholders of the new company? Was it ever dreamed of by those who subscribed their money that they were doing so, not to promote their own interests, but the interests of old firm of Overend, Gurney, and Co.? But the debts of the old company swallowed up the whole of the money subscribed by the new. Mr. Howell said the real profit of this unfortunate company during the ten months of its existence was only 4,500l.

The Lord Chief Justice—I cannot understand how they could discount bills to the amount of 56 millions without making a greater profit than that, unless some heavy losses are to be deducted. Mr. Harding, were there any losses?

Mr. Harding—Mr. Howell deducts from the balance of interest 130,000l. which had been charged against the suspense and guarantee account.

The Lord Chief Justice—But that ought not to have been charged.

Mr. Harding—The company were paying interest to those who had money there, and if they were not to charge interest to the suspense and guarantee account, they were paying interest, and not receiving.

Dr. Kenealy cited several of the clauses of the first deed, and contended that much of what he read was calculated to mislead. The old debts were, he observed, disposed of in a parenthesis, as if they were of no importance; and no one could guess from that deed what was their real nature, or what was contemplated with regard to them. The term “obligatory” was used in speaking of them in connection with what the old directors were to do, as if some advantage were being offered to the shareholders with regard to 4,000,000l. which was locked up. He then referred to various clauses in the second deed. Clause 13 was, he remarked, a very singular one. The business of the old firm being represented to be in a most flourishing condition, it was there provided that any sums of money which the new company should advance to Overend, Gurney and Company for the purpose of enabling them to close their accounts should be repaid by the vendors within two months. The inference from that was that the old firm was in such a state of insolvency and ruin that they were unable to get in their outstanding accounts without borrowing money from the new company. A sight of that clause would at once have manifested to the public the insolvency of the concern. He hoped that the jury would, when they came to deliberate, look at the schedule of old debts, and see what kind of things were included in it. There was a third deed, which he had put in for the purpose of showing that Mr. Barclay had a guilty knowledge of the second deed. Mr. Barclay had a guilty knowledge of the second deed. Mr. Barclay had been represented as a person who was entirely ignorant of the past transactions, and who was misled by his opinion of the Messrs. Gurney; but the third deed reciting the conditions on which he consented to become a director was quite inconsistent with that supposition. He would now refer to the evidence given by Mr. Harding on the fourth day of the hearing. Mr. Harding came before the court in what appeared to be a perfectly impartial character, being the official liquidator of the company. He had, however, had some previous transactions with the Messrs. Gurney, which were not unprofitable to him, and in his capacity of official liquidator would receive upwards of 20,000l., and no doubt the jury would bear those facts in mind, and ask themselves whether he could be regarded as an impartial witness. Long association and interest naturally biassed the mind of Mr. Harding, as they did that of Mr. Jones. The tenor of Mr. Harding’s evidence was that the Messrs. Gurney had been making large fortunes for a long series of years; that their money dealings were most colossal, being reckoned by hundreds of millions; and that if they formed erroneous ideas of their position on the 31st of July, 1865, that was very excusable, because they did not regard millions as ordinary mortals viewed them. That was, he thought, a fair representation of Mr. Harding’s theory, and he hoped the jury would not be misled by the brilliant flashing of that gentleman’s figures. Probably through his contemplation of millions, Mr. Harding had brought himself to believe that Messrs. Gurney believed their views to be well founded. He (Dr. Kenealy) was not much versed in figures himself, nor, he thought, were the members of the bar generally versed in figures.

The Lord Chief Justice—Except figures of speech. (Laughter.)

Dr. Kenealy continued—Mr. Harding had singularly exemplified the old adage that you might prove almost anything by figures. He stated that in the first four months of 1866 deposits were drawn out of the bank at the rate of a million a month. He afterwards attempted to modify that statement; but the impression which he conveyed was that such was the rate of withdrawal during that period, and the jury was left to infer that it was not possible for the new company to stand such a drain. Mr. Harding derived that information from a book called an “Abstract,” which came into his possession in a manner that he did not explain. He said that he got it with the other books; but it was an unfortunate fact that he had been in constant communication with Mr. Boys, and if it had happened that Mr. Boys accidentally left that book in the office Mr. Boys would find it there. He did not say exactly how it was delivered to him.

The Lord Chief Justice—He said it came to him amongst the other books of the company.

Dr. Kenealy said it seemed very odd that that book should have been abstracted, and still more singular that it should differ from the general ledger. According to the general ledger the total amount drawn out in the first four months of 1866 was 1,475,157l., being an average of 368,789l. It would be for the jury to ask themselves whether the abstract which he had mentioned was made with the intention of conveying the truth. If it were made in order to convey an erroneous impression that was a thing to be strongly condemned.

The Lord Chief Justice—You ask the jury to draw the inference that that book is a fictitious one?

Dr. Kenealy—I ask them not to place the same reliance upon it as upon the general ledger of the company. According to the general ledger the amount withdrawn in the first four months of 1866 was 1,475,257l., while the amount withdrawn in the last ten days was 1,014,000l., the aggregate being considerably less than 3,000,000l.

The Lord Chief Justice, after expressing a hope that the case would be concluded on Tuesday (to-morrow) asked Dr. Kenealy how much longer he would take to finish his remarks.

Dr. Kenealy thought he would be able to conclude in an hour and a half, or at the outside in two hours.

The Court then adjourned at twenty minutes to five, till a quarter past ten this morning.

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