The Express.
London, England, 1849-05-07 00:00:00

THE COMMITTEE OF INVESTIGATION

AND THE DIRECTORS.

The Committee of Investigation have issued the
following remarks in reply to the observations of the
directors upon the report of the committee :

The Cowsitu" of lanstigation feel it to be their duty net
to permit the shareholders to mate, as they are summoned to
do oa the 10th lust., for the purpose of taking into wasiders-
tion the report which they have made, without noticing its
" observadons" which the di•actors have made upon that
report, and more particularly upon that portion of the ob-
venation, which bee reference to what is called " the vital
question of dividend."
Ti., direction, while they admit in general terms the truth
I of the charges made by the committee u to the manner in
which the aosounts have been dealt with, Dave attempted t.
impute to the committee the offence of "great esegoration"
is their repat, in reference to the sum of 320,6731., which
has, in the opinion of the committee, been improperly placed
to Capital Account. It would appear that three objections
are taken to this opinion :
I. That in respect of " 64,0001. and upwards" for interest,
"a similar practice has ben pursued by all other railway
companies—that it is defen'ibls upon substantial grounds,
and that the shareholders have sasetioned it."

117fitaiiiTrii;:-;i7iii:oiNii7riiiTrisra, chiefly eon-
nested with Rolling 6 Stock," that t were properly
to espitaL
111. T c the complaint of the committee should hoes been,
that no depreciation fond had beentoesed out of rerenne
daring the period.
Yens eosnalttee, in reference to Sate objections, reply to
the—

Firer,—That the 84,0001. forms no past of the sum of
320,5721; bat, even if it had, they eau attach no value to
" the patios of all other railway companies," until they
are able to aunt that such practice is consistent with the
usual custom adopted in mercantile affairs • and as the
directors have omitted to state the "substantial grounds"
upon which they say it is " defensible," and your committee
can imagine nese, they elan of core
can no reply to any,
nei:her can they admit that any sanction of the shaseholdera.
if such were the case, would justify any deadens from a
correct prieniple.
To the second objection your committee rerly
That in charging the directors with improperly sending a
largo amount of cisbureements to capital account, really ap-
plicable to re , they have done so openly, and laid be-
fore the shareholders the full particulars of every item so
charged, in order that they ought judge for themselves.
After a most careful re-investigation of these charges, your
committee are quite prepared to be judged either by the
opinion of the shareholders— b 7 invariable custom in all
other affairs—or by what will ultimately be found to be the
necessity of the case ; for wesen the capital acoouot is closed,
as it is admitted on all hands it must be, then all disburse-
ments must come from revenue ; so that the real test by
which to settle all such questions is, are they charges which
will in the wicking of the railway occur again, or are they
such as will not near? If they are, they must go to
revenue fur the future, and upon this prindie your com-
mittee feel they ought to have been so charged daring the
past
To the third objection your committee reply
Tat they are quite aware, that had a depreciation fund
been farmed out of
bursements in question could have been charged,
no complaint of this description could have attached to the
directors ' • but it is precisely because no such fond
his been formed—but, on the contrary, the means cut ae
which it ought to have ban formed have been distributed in
dividends, while, at the same time, the charges which
should have bean defrayed out of it have been paled
to the debit of capital account that your (cantina
repeat the charge of exhibiting false accounts to the share-
holders. The distinction attempted to be drawn by the
directors is not one of substance, but of mere form. If a
sufficient amount of reserve to bear the charges is citation
bad been from time to time carried to a depreciation fund,
thochhargee could not have been placed to capitol, but
would have been practically borne by revenue account. And
what does this attempted distinction prove but that the
directors, under the shadow of a distinction in point of
form, cannot avoid admitting the impropriety on the one
hand of the capital having been augmented b 7 such means,
and on the other of having improperly increased the
amount apparently applicable to dividend ?
Your committee now reply to the observations of the diree•
tors upon that part of the report which relates to the traffic
accounts cal the half year terminating 4th January, 1849.
I.—The item of wages in carryinr department, 2,2971., is
stated to be wholly incorrect ; it is not so—but the ex-
planation is intricate, and shall be given in the words of
the accountants.

" Mr. licaely deducted from the earnings on cartage a:-
count dark; the half-year ending Jan. 4, 1849, the sum of
85:1.45. This was dons to ever the depreciation of horses
sad carrying stock in his dispaelment. The profits of cartage
are broughtinto the last halt 's account, as prepared by
the accountant', alter ;teasing this sum as a charge, and
which, under a correct system of management, ought to be
placed to the amid d MEd
' By the mile elegimi by the dossiers in bringing in to
the eaU yeady monk de esselple sad disbursements only,
it ha the sad ef giving souneeliallead of capital the credit
for tits esposelatien so mope* preeided for by the superin•
eeriest oldie earryieg derremeat
"The oder item of differeam fa the not cf 1,4461. les. 5d.,
remind de enure of bluffest ea calls, which the account-
ants, k their report, page.; give thew opinion, ought nut
to be pissed to revenue amount, istearaseh as ell the interest
to menu has sot bean charged to that amount."
eirretioef old materials, 1,1221.
In page 8 of the seeenstaste' report, the reason is set forth,
why it is madded this should not be credited to revenue :
these nuke, as the directors do sot notice, they have most
probably overlooked. On reassideratiost of the matter, the
committee mantas the ogmlen they More a:premed.
111. Roped', of Bee dmnetratema, 13,6881.
There aappgpseesss es be no differenee between your committee
and the dhemlme veepedine this item ; both sore that it
ahead beporthini eat of the last baltymes trade amount—
the comm by make it a direct charge, the directors, by
kink/ a baked le moor ft.
IV. Uhssildiag twe engines £1,381
New mime tires and springs m2,365
£8,748
The directors dispute the propriety of this charge, because
the stuns were paid in the half-year's account ending July 4,
1848. It does appear from an examination of the traffic
books, Oa the payments were so made, but the date of the
entry dwerging them to capital, which was the mistake to be
comma& was not made until the lest half-yetT ; and in this
ease de directors have corrected an oversight, into which the
emensikee were led by the kresekrity of not bringing thew
sums its dm addesslion beck at the proper paned.
V. 'Mikhail at poillementary charges, 1,3711.
No perds• of this amount is kr parliamentary expenses,
sad is a owed diary against the half-year.
VI. Repaks el malt wag. gam, 2,9291.
It is admitted that 2,2291. of this sum was paid for roofing
new waggons " with iron reefs in lien of nine ;" and as both
the sae end the ken rood were charged to capital, and only
one of them rensmia ia oilstones, donne only the oculd on
any pretence be charged to capital
The 700 L appears to have paid fork the previous
haltyror.
VII. Interest on unproductive espital, 7,1831.
It mum be obeerved, in 1116/1110111 to this um, that the
revenue amount has already been credited with the interest
en 500,00 W. (the amount .1 the unproductive capital.) This
interest, amounting to 12,6001., was emitted to be charged to
the debit of istarest account in the construction books; if it
had been so Aerie* it would have resulted in Increasing the
mount of 7,1881: to 19,6831.-12,5001. of which only being
applicable to capital m the total meant of interest on an-
gmsdnetheVl capital. the balance, vie., 7,1831., must necessarily
TmNI.N.
. The Amp dr locomotive engines, 84,478/.
Hod redrode to the report, page 18, it will beam tied
poor ommeitese do not onside: that the whole d tbk mma
weed have been properly chargeable to the manse assenne
ado post half-year, had the slake of the company ken
kept la proper order ; but the locomotive engines and ear-
Awes have sot only been purchased out of capital in the first,
leetanee, but they have also been replaced and rebuilt out of
digever sines.
uterus famished by Mr. John Hunter, the boo-
motive superintendent, show that the loss sustained
% elle company from locomotive urines and car-
worn out, and for depredation, amounts to
201,3091. bs. 9d. No fond having been set apart until now,
by the direction either for the reused of the rolling stock or
of the " permanent way," the shareholders will see the
serenity (tor treating the 84,4781. as the committee have
done.
Although the result is the same, whether the expense of

renewing the locomotive stook be paid out of a fund set apart
fur the purpose, or be defrayed when it arises, yet the better
pulley appears to be, that this expense, whisk cow keeps
pus, or nearly so. with the trolls, should he paid at once out
cf seventy
_p than that a feud should be set apart which easy
In applied to other purposes. The renewal of the ails,
sleepers, and other mater iaki of the permanent way, which is
not curtest and mestant, cencaly be met by a fund set apart
so prevent irreaular deemeds upon the revenue, and oases-
quota fluebastion of dividends.
The expense of renewing the sleepers alone, will, accord-
ing to the report of the reddest engimser, dorms_ this and
the text four years, antosat, by his estimate, to 246,4001., or
to 49,2801. per mum. Although the committee believe
that Mr. Samuel has taken sae:tress view of the came, they
ere bound to attach some insporteace to a written report
presented to the directors before this ismatigatiess began.
The assets and liabilities of the company have nut even
now been laid before the committee la a clear and business-
late shape ; and it was on this amount the oomanittee were
compelled, in their report, to treat this important subject so
generally. The statement they have obtained is of conside-
rable leng:h, and it is summed up by the company's ao-
countants in the follow's. yammer ;
MUM
_ _ _

Available asses £117,408 8 2
Other awe* 108,722 1 8
Coaikesat met 176,124 15 4

£402,256 6 2

Liabilities, immediate tutu prig 162,684 0 0
Other liabilities—At:musts tad ocottrosts 194,484 0 0
Ditto Disputed 21,733 16 2
Norfolk ditto 37,073 0 0

£415,856 16 2

Bonds felling due in 1849, after July 4.... 171,200 0 0
Bonds felling due in 1860, and subsequently 1,293,679 0 0

£1,470,779 0 0

VIIRTHIR CONTINGILNCIIII.
Expense of making the extension t) Wisbeach
Harbour, and tho branch hi. from Snelford

to She p reth £160,000 0 0
In addition to the above awasetaiatd sums, the company is
indebted largely to variant, parties for work done, of which
no stomata can be obtained until the whole are advertised.
The important inquiry now arises, how are these liabili-
ties to be provided for ?
Of the first alas of the assets said to be available, there
may be considered 105,7501. applicable for immediate use.
Of the second class, your committee consider that not more
than one•half will be realised, and that not a: an sexly period.
Of the third class, they ars of opinion, that not more than
40,000 f. can be made applicable, and that not immediately,
to the discharge of the obligations of the company.
It, then, the prcposed dividend be paid, it must be replaced
by borrowed money, and will therefore, in fact, be paid out
of capital, and thus sanction the continuance of a practice
which admits of no defence, and which has brought the com-
pany'. affairs into their present state; such being the case,
your committee put it to you for your own deeilion whether
you will add to the liabilities already enumerated, the large
amount unwary to make the dividend is guercioo.
WILLIAM CASH, Chairman.
Tsonas CHRISTY.
RIMY V. RAM
BUM= Bum.
JOIIIPX GLYNN.
WILLIAM MAYHEW.
°soma Mask.
Taomu Brumwoon.