The Express.
London, England, 1853-12-28 00:00:00

THE EXPRESS, WEDNESDAY EVENING, DECEMBER 28, 1853

GOLD MINIM.; SHAREHOLDERS'

MEETING.
-•-

Yesterday a meeting of shareholders interested
is the Australasia Freehold Gold Miss was held at the

London Tavern; Mr. Guadat.t.a in the chair.
The CHAIRMAN opened the proceedings by stat:ng that
the Australian Freehold Gold Mine Company had been one
of the very first formed for the purpose of mining in
Australia, having been first projected in December, 1851,
and from that day to the present it bad not furnished a
single account, nor publi led a single statement as to the
position of the company. He had attempted to obtain some
information, but had been refused, on the plea that he was
no shareholder, inasmuch as be had
shares, the secretary adding that the company being on the
cost-book principle, such registration was absolutely
necessary to constitute him a shareholder. (Hear.) They
had further informed him when demanding a meeting, that
meetings had been held every two months on the cost-book
principle, which had been attended by the registered Astra-
-1 holders. lie bad then asked how many registered share-
holders were there, and the answer was eight or nine.
(Laughter.) He pronounced such proceedings a regular

farce. (Hear, bear.) Now, at the original projection of
this company 100,000 shares were issued at 11. each, and no
deed was required to be signed, nor was the cost-book
principle notified. lie asked, if the cost-book was to be the

•
principle why not state it oz the scrip, and not first catch the
shareholders money and then tell them what were the
coudi,ions by which they were to be guided. The
prospectus told them they had obtained a ♦aluable
property, which was freehold, abounding in gold
quartz, and held directly from the Crown, under the
protection of the colenial laws. Why this was quite as at-
tractive as a play bill, but the fact was that these com-
panies were nothing but regularly got upend manufactured

articles, made to order. Names were obtained and brokers
were employed to disseminate their shares all over the
coun'ry, and this might accouat for the thin attendance
on that day, as the fact was that the proprietary was scat-
tered over all parts of the United Kingdom. Ile was glad
to say, that in the log ' he had felt it to be his duty to
male he had received every facility from the committee of
the Stock Exchange, and had found all the shares to be
paid up. The public, he believed, had paid in 66,0001.,
and that 25,0004 in shares bad been paid for the land, about
which, be might observe, there was something very curious,
as it was part of the celebrated Bathurst estate, and the

vendors were the same. It wu stated that 25,000 shares

had been given for the mine ; but until they got out all the
facts, it would be impossible to may how all those shares

bad been disposed of. That the sellor had received 25,000!.
was a fast which he did not believe. His suspicion was that

the directors had gone anacks is the matter. There was
no doubt but that hir.)dathews had received the 25,000

shares, but the question was how hs bad distributed them.
(Hear, hear.) They had all heard how Mr. Hudson stated

he had paid 6,0001. in bribes to members of parliament, and

had offered to prove it, but wu not allowed. Perhaps

something in the acme way had taken place in this ease,
but it was enough for their present purpose to
say that the land had turned out utterly worth-

less, Ind that the company had been obliged to
content themselves with speculating in gold which
had been raised elsewhere. There were many
unfavourable reports about the company, one of which was
that the first agent sent out had turned out badly ; but on
this as on other points he had been refused all informa-
tion. His belief was that the company had lost 10,0001. or
12,0001. through this person, and this, with the 25,000
shares, accounted for the 37,0001 of their money. In
December, 1851, they sent out a working staff to Mr. Pula-
ford, and these, finding nothing upon their own ground,
had been nothisit bat a set of tramps ever since, digging
haphazard all over the country. However bad this might
seem, there was is this ease something to go upon.
He believed that the directors were not averse
to • winding up, and that there was still about
30,0001. of their money left. The directors were all wealthy
and men of standing and reputation, and having placed
themselves in a false position, their obvious duty was to
give every facility for the fullest investigation. Why,
truing bun betrayed into giving an enormous price for a
few acres of land, which bad turned out to be worth
nothing, their duty was to have returned the shareholders
money without any deduction for expenses, as they were all
self-elected persons. This had been done in the eases of
two unsuccessful companies, with one of which Mr. Gurney
was connected, the money had been all returned to the
shareholders. (Hear, hear.) He had now stated the prin-
cipal facts connected with this company, and it was for the
meeting is consider the best means of putting an
end to such a state of uncertainty. In his opi-
nion the Winding-up Act would be the beat re-
medy. Let them first divide the assets, and then would
come the question of whether, the directors having pur-
chased an estate for 25.000/., which had turned out to be
perfectly worthless, without due inquiry, they were not
bound, both in honour and equity, to indemnify the share-
holders? (Hear, hear.) His belief was, that by a trifling
subscription amongst themselves they might get out of the
affair with credit. Directors, fur instance, should not re-
ceive free shares. He could not say positively that they had
done se in this case, but he bad every reason to suspect
that they had gone snacks with the vendor. (Hear, hear.)
Who had taken 100, and who had taken 1,000 shares, he
could not say, bat these were the facts that he wanted to
come at. He had received letters offering disclo-
sure, • thing which was only to be obtained by
peaching" among the guilty. In all job. of this
kind some parties were sure to be discontented
with their share, and as these parties were only waiting
for an opportunity to " blow," there would he plenty of
Queen's evidence and all theme dark matters would soon
come to light. (Hear, hear.) Since these meetings had
commenced he had received letters from holders in nearly
sixty companies complaining that they had not been in-
cluded in his list. Carson's Creek shareholders were espe-
cially discontented. (" Hear," and a laugh.) They had
had no meeting since 1852, and one of the directors was a
member of her Majesty's government, Mr. Sadleir, M.P.
This gentleman had influenced the board to lend out the
money of the company on estates ha Ireland. A very
goodinvestment, it was true, and that was a comfort to
the shareholders, but then the original purpose for which it
had been subscribed vies gold mining in Australia, and its
destination should not have been altered without the consent
of the shareholders. His belief was that in all these cases the
money might be legally recovered in full, but then the pro-
cess was most tedious and expensive, as in the case of the
Madrid and Valencia, which occupied years, and cost
3,0001., when the directors were at last brought to book,
and the shareholders got back half their money. He would
recommend a middle course, which might obtain them an

inWalment. He did• not Wish to Dear too hard on the
directors, and should, therefore, in the first instance, pro-
pose a committee of investigation.
Mr. STIVINSON, in seconding the resolution, expressed
the obligations which gold mining shareholders were under
to Mr. Ouedalla. (Hear, hear.) With respect to the Aus-
tralian Freehold, he thought it was not the interest of the
shareholders to quarrel with the directors, especially
as they had still a large sum of the share-
holders money in their hands. (Hear, hear.) There
seemed to be a great difference of opinion as to the duty and
respunsibility of directors. He looked upon them as trus-
tees of the property of others, and he considered them to
be legally and equitably responsible if there had been any
misappropriation of shares. Then came the question of how
far they were responsible fur the 25,000 shares they had
paid for the land, which was said to be worthless. He
had been an original allottee, and could have sold his oha.es
at a premium; but he relied on the directors, and had
since found that these gentlemen had allotted 500 free
shares each to themselves. (Hear, hear.) Here were
7,000 shares gone at once, bed tea the 25,000 given for
the land. The public had subscribed 66,0001., and the
questioa was, what bad been done with she money?
Mr. Outdate had informed them that there was
30,0001. yet in hand ; if so, the best course would
be to appoint a committee to carry out one of
two plans, either to have the affairs wound up or to
compel the directors to allow of a new infusion of strength
into their board. lie bad never had much confidence in
a board composed of majors, and colonels, and captains,
who might be very honourable men, but never were able to
cope with a commercial difficulty. Of their directors Sir
C. Rumbold was dead, and another had retired, so that
they were now reduced to a small clique, sad there woo
every necessity fur an infusion of aew strength. There was
another point to consider, and that was in bow far the com-
mittee of the Stock Exchange had been justified in allow-
ing of the exhibition of these shares in their official list.
His opinion was that the committee would not come'
out of the matter with very clean hands. In
the same way as a company obtaining an act'
of parliament gave them the stamp of authenticity, an
admission to the official list of the Stock Exchange, gave a
new undertaking a status which influenced the public, 500
iniluced th, mto invest their money, and therefore it lit -
cam the committee to exercise great care and caution in
their admissions. (Hear, hear.) As to the probability of
getting back their mosey, be had called at the office a letc
days since, and knew something of the circumstances uu kr
which their estate had been purchased. There was a ceetem
Mr. A., who having been transported some years since hail
ultimately obtained a ticket of leave, and having mice. cited
in amassing some mosey, had purchased a thousand acres of I
land for 1,0001. The person who time over sail wild this
land to the Lake Bathurst Company was the eon.iu-law of
this Mr. A. (Hear, hear.) Now, their directors ell, ged
that they had been gree.ely 'repos. don in the purchase of
land, and he now asked them on whose judgment they had
felt themselves justified in giviug 20,0001. lir 300
acres of this land. (liver, hear.) However. all the men
cannected with their bourd were men of wealth end stand-
leg, and the only question was how to get at then,. lie
thought the shareholders should, as men of business, be
contented with getting beck a portion of their money, and
with these views he should second the motion for a com-
mittee.
Mr. Of VALLS reenti .ned the case of a solicitor, of whom
he had heard, and abs had received 000/. es • gratuity.
Mr. CIIkKNOCa said that the great question to constncr
was what was the extent of power really possessed by the
fairways. He believed them to be merely delegates ap-
pointed to do the bovines' of the shareholders. Hers, then,
was n ow in which a company had been in existence for

two years, and had given 25,0001. for 500 acres of land,
because they were told it contained gold. He wanted to
know were directors to be paid- for such conduct
as thin ? They were all aware how these things
were got up. A stockbroker probably not overwhelmed
with business, and an attorney In a somewhat similar pre-
dicament, said, " Let us get up a company." Away they
went and gut hold of a captain, a major, and a colonel. lf
they could get hold of an M.P. or an alderman, the public
was caught by the now at once. A prospectus, nicely got
up on hotpressd paper, was then issued, and tne shares
distributed throughout the country. Then the directors
made themselves a present of a thousand free shares each,
and proceeded to bay a piece of land. Somebody had got •
piece to sell covered with nuggets, and away they went and
bought it, without making a single inquiry as to the truth
of the representations. (" Hear," and laughter.) Then,
every time the shareholders made aay inquiry at the
office, they were told they had not commenced opera-
tions yet, or they would next week, or they expected ad-
vices from their agent next week, and in the meantime
the directors had their weekly luncheon and wine, all of
which went into the petty cash, and out of the pockets
of the shareholders. (Laughter.) If any shareholder got
troublesome, he was boldly asked, "Who are you r"
" You ate nobody, we are the directors, and you the com-
mon people. We will give you no accounts." (Laughter.)
He thought that if these directors were respectable men,
they ought themselves to come forward with the account/.
Mr. LIND° said he had looked over the prospectus, and
did not find it stated that their company was on the coat
book principle ; on the contrary, the prospectus clearly
indicated that they were nut established on that principle.
Towards the conclusion of the prospectus, it was intimated
that it was "intended" to adopt the cost book principle,
but it Wll clear that the decision on that subject ',mild be
come to at a general meeting of shareholders. In fact it
could not be done without their consent. (Hear, hear.)
The course he should recommend would be for an original
alluttee to bring an action against a director, and he would
undertake to say that if such action were properly conducted,
they would recover every shilling they had paid. (Hear.)
Mr. Sums said that it appeared the directors had
30,0001. in head. if they had taken 500 free shares he
must withdraw all confidence from them.

Mr. OVIDALLL had one other statement to make. Long
after the directors had ascertained the worthlessness of the
estate, they bad permitted the shares to be sold et t
premium. He was for the " wind-up," as the office would
not pass the " whitebait feeds " in the accounts.
Mr. &PARE suggested that one of the committee should
register, and try conclusions with the directors.
Mr. LIND° was against registering.
The resolution appointing a committee palsied unani-
' money, as did also one of nomination, and one of thanks to
Mr. Guedalla, which terminated the business of the
meeting.