The Express.
London, England, 1867-08-26 00:00:00

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LONDON, MONDAY, AUGUST 26.

THE Report just issued by the new directors of
the London and Brighton Railway Company
affords the strongest example of the change that
is now coming over in railway management. In
former years, the greatest complaint that the
shareholders could bring against the board was
that they—the most interested parties—were
studiously left in ignorance of the exact position
of their affairs. The few proprietors who ven-
tured at the half-yearly meetings to ask for further
information were effectually put down, sometimes
with courtesy, more often without. Events, how-
ever, have now taken a different turn. A financial
crisis has taken place which can only be overcome
by the effective co-operation of the directors and
their constituents. The old practice of conceal-
ing facts and manipulating accounts no longer
avails. This truth the new board of the Brighton
Company seem to have thoroughly understood.
Their Report is less open to the charge of reticence
than any similar document that has ever
been published. It is exhaustive almost to
a fault, and lays bare the whole affairs
of the great company they represent with
calm and unflinching severity. Thera is no
hesitation in dwelling upon financial difficulties,
and comparatively few of. the sanguine prophecies,
so common and so often falsified, that the prr
perty will speedily rise to a considerable value.
The task of rehabilitating the concern is acknow-
ledged to be arduous, and although it will doubt-
less be eventually accomplished, it will require an
interval of many years and much careful manage-
ment.

The first point that strikes attention in the
Report is the apparent difficulty in ascertaining the
exact position of the capital account. According
to the old board it stood on the :11st December,
1866, at 15,762,0001. Messrs. Paws, HOLY-
LAND, and Wevaanorsz, the accountants em-
ployed by the then Committee of InvesLigation
(the principal members being on the present direc
tion), state that the sums actually received were
15,751,1911., while the expenditure was
16,254,4071., the difference of 502,f!1e/. having
been provided by " loam" The income in that
year was represented at 1,189,9441., and was
distributed as follows : 686,8841. for
working expenses, 282,7021. for interctt
on preference stock, and 214,6121., equal
to a four per cent.dividend, on the ordinary stock.
In order, however, to arrive at this, on the whole,
satisfactory result, the directors had chirp('
against capital the interest on works in progress,
amounting to 175,178/., besides other items for
maintenance of way, rolling stock, law and par-
liamentary charges, &c., which reach in all a total
of 295,5571., of which the whole or the greater
part should have been defrayed out of revenue.
It therefore follows that not only there was
nothing available for the ordinary shareholders,
but that the income was insufficient to meet the
preference and debt interest. The accountants,
in carrying their investigation back for p-evious
years, tind that considerable sums have been regu-
larly charged to capital which, properly speaking,
ought to have been borne by revenue. They
also observe that, supposing these amounts were
liquidated by future annual apportionmerts, the
ordinary shareholders must give up all hope of a
dividend for years. It would be needle's to go
through the accounts more in detail, but there
are still two points worth considering. The
Brighton Company have for years overdrawn their
balance at their bankers ; but this circumstance
was ingeniously concealed by obtaining a tempo-
rary loan for a dzy or two at the close of each six
months, which was " passed to the credit of the
" current account, thus giving it the appearance
" of being in credit for the sum stated in the half-
" yearly accounts as cash at the bankers." We
prefer not to characterise this plan as we think it
deserves.

The second question is that of audit. The
accountants recommend a more efficient system.
It is only necessary to refer to the auditors' own
report to ascertain the justice of this view. The
latter gentlemen remark that they have frequently
made allusion in their reports to "sums charged to