The Express.
London, England, 1865-05-11 00:00:00

VH27 BROGDEN'S GOLD OHALNa

OHN BROGDZIPS GOLD GUARD CHAINS.

-OHIBILOGIDJAN'SGOLDALBZRT OILLIDTS.

JOHN BROODKNIGOLD BROOOH CHAINS.

(TROUSERS.—The NEW GOODS aro now
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peke fore good pair of Trouser. nut depend on the eet
inaterials at
HAMILTON matemrst.
10A dtrand, oppo Exeter Man

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LONDON, THURSDAY, MAY 11.

SHAREHOLDERS, both actual and intending, in'
new companies will do well to take warning from
few well-timed words, spoken ez cathedrd on
Saturday last by the MANTRA of the Roux. The
case before the Judge was that of the London
and Scottish Bank (Limited), a concern which
came into life so lately as November last, but
for the winding up of which no fewer than five
petitions were presented on the 6th of May, all
of them having, no doubt, been long ago
duly prepared and made ready for filing. After
hearing the five different counsel, each of whom
represented a different party anxious to have the
Bank wound up, the Master very justly remarked,
in making the order, that he " was shocked at
"the way in which petitions were presented for
"the purpose of creating costs directly it was
" found that a company was in difficulties ; " and
what was here animadverted upon may be called a
new phase in the trade of joint stock company
making. It is to this form of profit in the busi-
nem that we would draw the attention of the
general public. To most of those who have places
of business within a few hundred yards from
the Bank, it is well known that at the present
day companies are occasionally " promoted " or
" got up " with the sole view of an ultimate
winding up, the costs of which eat up the whole of
the capital, but enrich greatly those concerned in
the robbery. Let but a tenth of the shares be
allotted, let but one shareholder be fool or rogue
enough to lend himself to the swindle, let
him be taken in hand by an unscrupulous
attorney, let the latter have for friend
or accomplice a grasping accountant, and the whole
scheme will prove an " imminent success." The
history of such a speculation will be something
like the latter part of that popular novel of our
youthful days, called "The House that Jack
" Built." The capital will all be—minus the pro-
motion money and preliminary expenses, neither
of which are ever "limited," whatever the com-
pany may ba—paid into a bank. In due time the
unscrupulous attorney will get hold of the stupid or
unprincipled shareholder, and, by making matters
pleasant with him, will induce him to sign a peti-
tion for the winding up of the concern. He
will then proceed to the avaricious accountant,
and will promise him • share of the plunder—
commonly called " coats "—as well as the position
of official liquidator to the company. The solicitor
gets up the petition, the shareholders sign it, counsel
present it, the Marna of the Rome or the Vies-
Caarrczia.on is obliged to make the order, and the
attorney and accountant profit by it to an amount
not to be despised. Even an ordinary winding up of
a small company is a matter of nearer three than
two thousand pounds to those who have it in
hand ; whilst if litigation can be in any way
fostered and brought forth—either directors versus
shareholders, or the latter versus the former, or
creditors versus both—the costs may be increased
ad infinitum, or, at any rate, so long as twenty
pounds of the capital remain. As a matter
of course, costs and fees and payments of all
sorts are divided—share and share alike—between
the solicitor, who is fortunate enough to obtain the
winding-up job, and the accountant, who is made
official liquidator. This is the regular custom of
the trade. The attorney who obtains the winding
up of the concern—nominally for his client,
but really for himself and friend—manages to
have his friend named official liquidator, and so
soon as the latter is installed, be kindly appoints
his patron solicitor for the liquidation. Of the
London and Scottish Bank (Limited) we neither
know nor desire to know anything; our remarks are
directed to the winding-up system of joint-stock
concerns generally, not to the affairs of any one
particular company. What wonder if, in the
case we have quoted, no less than five persons
contended for the prize, and the MAW= of
the ROLLS was not a little shocked thereat f It
is not surprising that," for the purpose of creating
" costa, directly it is found that a company is in
" difficulties," there is a keen competition. Five
candidates only ! It is wonderful that there
were not fifty. The five petitions must each
have been signed by at least one share-
holder ; behind each such shareholder there
was no doubt an attorney, and behind each
attorney an accountant. One fortunate man
was allotted the prize, but the only wonder is that
there were not many more in the race. The time
will come, however, when the true value of this
new California will be more fully sacertained,when
every shareholder who obtains his scrip certi-
ficate will sign a petition for the winding up of the
company ; and then each will have a fair start in
the competition for the grand prize.
In the long, long list of joint-stock companies,
there are many that are bond fide undertakings, and
which present to the shareholders not more than
the average amount of risk which is incident to
all trading. These are, however, becoming
the exceptions. Many as are the warnings
which the public have received during the
last eighteen months new schemes are springing
np every day, and the moat impossible prospectus
seems to receive the greatest number of applicants