The Express.
London, England, 1851-06-21 00:00:00

RAILWAY.

Yesterday an extraordinary general meeting of the
thersholders of the above company was held at the Free-
masons' Tavern, Queurstreet, for the purpose of having
salimilled to them for their consideration and approval, or
adrewtse, of a memorandum of agreement entered into
tar settlement of all differences between the ordinary share-
holders and the company, represented by the directors, of
the first part, and the guaranteed interests and preferential
stareholders, petitioners against the Caledonian Arrange-
ment Bill of ISSI, of the other part; and, secondly, to ep-
itome, or otherwise, a bill in parliament to give effect to
the same." Mr. DUNCAN wu in the chair.
The adv•-•• mentZ which the meeting had been con-

rend having been ....ad by the Secretary,
The CHAIRMAN said that the memorandum of agree-
meat referred to in the advertisement had been circulated
amongst the shareholders, and he therefore presumed
that it might be taken as read. (Cries of " Yes.")
The last time he had the honour of meeting
them he announced that the arrangement bill had
been read • second time in the House of Commons.

Immediately after that the bill
into committee DTego-
tiationa had been attempted for the purpose of bringing
about an amicable arrangement, but without the effect de-
sired by the directors; and it was not until after the com-
mittee had intimated an inclination to permit the bill to
pass that negotiations were commenced. The object of
them was to effect a reduction of the existing claims of the
guaranteed and preference interests. The directors pro-
posed that these interests should abate one third of the
amount of their claims; but this was objected to, iu it was
considered that an abatement of one-fourth wonld be suffi-
..

cient, and that the resources of the company would then
be equal to meet the guaranteed claims. The directors
held that this would be insufficient The net revenues

....
of the present year's traffic was estimated at 88,000/.—
that was assuming that the receipts would be equal
Ito the amount received for the first fifteen weeks.

This amount would be reduced to 20,0001. by the Gain
-
kirk and Greenock claims, which had a priority. The
surplus would therefore be 68,01101. The application of the
68,0001. among the other preference claims would have pro-
duced this effect. The present preference and guaranteed
claims against the revenue amounted to 133,0001. If they
deducted from that sum one-third, or say, in round num- "e,
bees, 45,0001., there would be left 88,0001.; whereas they
would have only 68,0001. to meet it with, so that there •
would be a deficiency of 20,0001. per annum. The guaranteed 4'
claimants argued that no portion of this deficiency should fall
upon them, and in that case the preferenccshareholders would 1
have to suffer to that extent. The guaranteed claimants, 2
however, contended that with a reduction of one-fourth of
their and the preference claims, the revenue would be suffi-
cient to meet the demands' against it. Now, he must observe II
that if an abatement of only one-fourth of those claim" had
been agreed to, the 133,0001. would be reduced by 33,0001.
only, in which case a claim of 100,0001. against the re- 4'
venue would have existed, while they would have had only
68,0031. to satisfy such claim, so that the deficiency would
have been 32,00d1., and thisdeficicncy it was proposed should I
fall upon the preference holders. But the deficiency, what- 1
ever its amt met, could only be made up by prospective in- 2
crease of the traffic line, by a reduction of the working ex- '
rases, and a reduction in the interest on debentures.
The guaranteed interests, however, took their stand upon
certain conditions which they would not abandon, and the
directors, feeling the importance of an approximation to
an arrangement of all these interests, entered into an
arrangement which was in the hands of the shareholders,
which, although it was not such an arrangement as they 2
could have wished, was, nevertheless, the best they could
bring about under the circumstances. The result was a
striking off 33,0001. a year from the burdens of the company.
The arrangement also contemplated the legalisation of the
claims of the preference shareholders. In dealing with the
preference holders, the directors felt that they were dealing
with their partners, with a priority indeed amongst their co-
proprietors ; but in dealing with the guaranteed interests
they were dealing with parties who had legal claims and a
well-defined and recognised legal status. By giving the
preference holders a legalised position, clear of disputes,
they were giving them an equivalent for the concessions
they sought. Another important point was the exercise of
the borrowing powers of the company, an outlay being 3
absolutely required for the erection of station aecommoda- 1
tion on the line. The sum estimated to be required for this
purpose was 27,0001., but this, it was hoped, was more
' than would be wanted. At any rate the directors pledged
themselves that the outlay should be made with every regard
to economy, and with a strict rye to the advantage of the
company. From this outlay it would be observed the gua-
ranteed interests would derive fresh securities for the pay-
ment of their dividend, in addition to their right to claim
their modified dividend out of revenue. But they stipu-
lated further for the capitalisation of the sum they were
prepared to abate, and they insisted also upon retaining a
right of lien over their own lines. That right of lien
enabled them, in the event of their dividend not being paid
in fourteen days after it became due, to obtain from the
court the appointment of a judicial factor. Clauses to secure
this lien were introduced in the bill. Th as they had priority
of claim upon revenue, additional security for the payment
of their dividends from the additional outlay intended,
and they hail also obtained the lien clauses in the bill. As y
fir as the guaranteed interests were concerned then, they I
were, he thought, placed in clover. (" Ilcer, hear," and
laughter.) They wanted, however, a share in the manage-
ment, nay, a preponderance at the board. But to this he
(the chairman) could never consent. Much as he respected
these gentlemen as individuals, and happy as he should be
to see them at that board, he should be very sorry. to ace
them at that board as representatives of a clam interest
which had been thrice secured already. The chairman pro-
ceeded to advert to the peculiar alliance of the preference
and the guaranteed interests. The guaranteed parties were
the annuity creditors of the company. The preference
shareholders were the partners of the ordinary share-
holders, with a priority inter se. They always had a
vote in the election of directors, and he hoped they would
not take part in identifying themselves with the creditor
interest in the question of management. Ile advised them
to set aside this spirit of sectional interest; the company had
been too much cursed with sectional interests already. The
preference holders then asked for an auditor of their own.
The board had no objection to such a check on their
accounts, on the part of the preference holders, and it was
provided for accordingly in the bill; and in respect of
the appointment of a special member of the board as the
representative of preference interests, he thought the pre-
ference holders had a sufficient guarantee that their interests
would be held sacred by having a voice, as ordinary share-
holders, in the election of the general board. In reference
to the capitalisation of the suns abated by the guaranteed
shareholders, in ordinary stock of the company, at 25 years'
purchase, !ho directors were constrained to consent to allow
ft. For this purpose they would be under the necessity of
providing 413,0001. stock, but as there was 250,0001. forfeited
stock of the company on hand, the sum to be actually
capitalised would be under 200,0001. A similar demand
was made by the preference holders for capitalisation ; but,
as he had before shown, there was a very broad distinction
between the guaranteed interests and the preference part-
ners ; the demand was refusedebut it was agreed at length
that the question should be referred to the parliamentary
committee on the bill. An important point to which he
was desirous of directing their attention was the subject of
the re-construction of the board. In the circulars which
they hail issued, the directors had been careful to avoid
giving any recommendations on this subject, which, never-
theless, was one of the greatest moment. The board had
taken great pain, to bring about an arrangement of the
different interests in the company, and if the proprietors
were satisfied that these arrangements were in the main
reasonable and calculated to advance the general interests
of the company, they would do themselves the credit of
accepting the result of the board. But in setting their
seal to that agreement the ordinary shareholders must secure
the management of the affairs of the company in their own
hands. (" Hear' hear," and cheers.) All the revenue
would go to pay the guaranteed interests, and 44 to the
preference holders, and for a long time would the original
shareholders be without a dividend. The guaranteed
holder had no interest beyond his guarantee, but the ordi-
nary shareholders had a reversionary permanent interest,
though prospective, and to them should the management
of the line be entrusted. (Cheers.) In this matter he
asked the opinion of the shareholders whether he was right
or wrong ? (Cries of "Right, right.") He did not wish
to see the doctrine which had been advocated in
connection with the affairs of the East Anglian
Company brought to bear upon the Caledonian—
namely, that creditors were the proper persons to have the
management of an estate in negotiation with its debtors.
This was not a board or party question ; it was a question of
broad principle. They wished to give all parties as good a
dividend as the resources of the line would admit, leaving,
however, a hope of some vestige at a future day to the
original shareholders. The chairman concluded by moving
a resolution approving the memorandum of agreement.
The resolution was seconded by Mr. Cram.
A very long and somewhat diffuse discussion followed the
motion for the approval of the agreement.
Mr. WHEELER, on the part of himself and other pre-
ference holders, desired it to be understood that if ne did not
on that occasion state his objections to the agreement, or
the proposed bill, or to the remarks of the chairman, his
silence was not to bo construed as an acquieseence or consent.
Mr. THORNTON, also a preference holder, wished to ex-
plain, that although he acted as chairman of the com-
mittee of preference holders, and was therefore bound to
sign the decision of the majority of his colleagues, still he
reserved his private right to oppose the policy of the board.
The company had the money of the preference holders in
times of great difficulty, and now they repudiated (cries of
" No".) As to the management, he denied that the prefer-
ence holders had ever stipulated for a majority of the
board.
Mr. ABBOT could not give his support to the bill. He
believed there would be a deficiency of 27,0001. a year
with the reduction. If they agreed to the present arrange-
, *sent they would find it necessary to come to another in a
twelvemonth's time.
After a renewed protest on the part of Mr. Walnut=
sad Mr. THORNTON, the preference holders present de-
clined to vote at the general meeting, intending to vote at
a meeting specially convened at the close of the present
' special meeting, and withdrew accordingly.
An amendment was then moved and seconded, to the
• effect that the amount abated by the preference holders
; should be capitalised in like manner as the abatement of
i the guaranteed interests.
The amendment was put and lost, and the original me-
I than carried, only two hands being held up against it.
i The SECRETARY then read the draft bill, and a special
; resolution approving the same, we believe, was carried
• unanimously
A vote of thanks to the chairman closed the proceedings.