The Express.
London, England, 1857-03-13 00:00:00

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LONDON, FRIDAY, MARCH 13.

TO OUR Si

IN consequence of the absorption of space by the
reports of proceedings in Parliament, the Proprietors
have determined to issue a DOUBLE NUMBER
ea SATURDAYS, so u to prevent the postpone-
ment of interesting matter. No change will take
place in t►e price. The FIFTH DOUBLE
NUMBER of the EXPRESS will appear TO-
MORROW, March 14.

Out columns have reported a post modes; swami-
nation on the miserable remains of that which is best
characterised in the language of Lord Justice Ktuoirr
BRUCE as "the thing ironically called the' Royal Bri-
tish Bank.' " The results of this very painstaking but
somewhat tedious piece of morbid anatomy, dis-
closed nothing with which the public are not
already familiar. Without wishing to call in ques-
tion the skill of the demonstrator, we must simply
record our opinion that the demonstration has added
little to our prey ions knowledge of this colossal
fraud. The victim selected for the scalpel was Mr.
ESDAILE, the late Governor of the "nefariously
conducted scheme," and the admissions extorted from
him under the torture of a searching erowexamina-
tion were somewhat as follows.

The " thing " appears to have commenced, as it
was conducted, in fraud. Its first fraud was on the
Board of Trade. Under the provisions of the Joint-
Stock Banks Act, 60,0001. was required to be actually
paid up in cash before a Charter of Incorporation
could be procured. The Directors certified that this
bad been done, when, in fact, the amount so paid up
was under 43,0001. How the residue was made up
may be judged of from the fact that Mr. Cumaost's
promissory note for 4,3001. was set down es
a cash deposit in respect of his 88 shares. The next
fraud seems to have been, that even of the cash de-
posited a considerable portion was money merely
borrowed for the purpose of complying with the act
of parliament, under an understanding that it should
be repaid by the Directors immediately such purpose
was served. The result of the utmost pressure that
could be applied to Mr. ESDATLS on this score was,
that " his mind was in a blank state with regard to
his belief as to the matter of fact of such a loan
haling been made." Now ssi ricordo is a safe re-
fuge far a badgered witness. Men of business will
be at no loss to fill up this convenient blank in Mr.
ESDAILE'S recollection.

To another little piece of private barium* Mr.
ESDAILE contemn without any great amount of

circumlocution. One of the first acts of the Directors
after the Company began working was to divide
little cum of 1,1001. among themselves, as a reward
for their preliminary exertions in setting the con-
cern on foot. Of this amount, 5001. went to Mr.
WOREGOR, late of Glasgow, now of Boalogne, for
his eminent services in organising the scheme; the
residue to his brother Directors.
Mr. ESDAILZ admit, that on the death. of Mr.
MuLtess, the solicitor to the bank, in 18.53, it was
discovered that he was indebted to the concern
13,0001.; he admits that after he became governor,
In February, 1855, he found that the debts of
CAMERON, the manager, were no less than 15,0001.;
and he admits that, with this knowledge, he
himself—Mr. &fume the governor—allowed CA-
MERON to continue in the management until the
final catastrophe, when his liabilities had risen to
little short of 19,000/ Ile admits, moreover, that
a few months before ho became governor he got
CAMERON, the manager, contrary to the plain rules
of the charter of incorporation, to discount for
him a promissory note for 5001., across the bank
counter, for the purpose of taking up ten
new sham, in order to double hie qualifi-
cation at the bank. "It did not suit me at the
time," says Mr. DIMMER, " to devote 5001. from
my own resources to the bank." And therefore
secretly, and in known contravention of the charter
of incorporation, this director gets the manager to
advance 5001. of the bank funds for the purpose of
emptying with a resolution requiring him as
director to double his stake in the bank. Again,
Mr. EADAILE had to admit that, although ho was
perfectly well aware that by law the bank had no
right whatever to advance one shilling on the
security of its own shares, yet he, first as director,
and then as governor, had sanctioned loans to
Canntos to an enormous amount, for the
great bulk of which so other security was held
than Csmeitoxlii own shares in the bank—

those shares, be it remembered, on which ha
had originally never paid a farthing et cash, but
merely deposited a promissory Kota As her ass
CAMERON, indeed, was concerned, his transactions
with " this thing ironically called the Royal British
Bank," shortly amounted to this. In consideration
of writing on a piece of stamped paper a promissory
note for 4,3001., he had 86 shares allotted to him,
and then, in consideration of having had those 86
shares allotted to him, he is enabled to run in debt
to the bank, in other words, to help himself to cash out
of the bank, to the tune of upwards of 19,0001. Mr.
Governor EWA= indeed endeavoured to save him-
self from a charge of manifest violation of the law in
reference to these transactions, by a subtlety worthy
of Dors SCOTUS, or the Seraphic Doctor. He had
not advanced CAMERON any money on the security
of his shares—nothing of the sort ; no shares were
deposited by CAMERON as any security fors distinct
advance. The transaction was simply this—money
was advanced to CAMERON ; CAMERON held shares
in the bank; the bank was perfectly right in in-
sisting upon having the shares paid over to them.
Finding the shares, the bank held the shares as pro-
perty. We hope our readersaro edified by the distinc-
tion—we trust they see clearly how such a transaction
as this differs widely from the vulgar operation of
making an advance on the security of shares. If
they don't, Mr. FAD ILE does, and it is on the razor
edge of this fine distinction that he "drives his
coach and four" through the clauses of the Joint-
Stock Banking Act.

When the examination proceeded to the 120,0001.
sank on Welsh mines, the astuteness of the late Go-
vernor became more demonstrative, and his powers
of circumlocution were taxed to the utmost.
Captain Hawksley, in the play, is scarcely
more magnificently unintelligible when dilating
on the prospects of the Inc:plot:ibis Oalronic
Boat Company. It was, indeed, a point on which
anything like straightforwardness would have been
eminently inconvenient. Mr. EBDAILE was called
upon to explain why it was that, when a loss of
120,0001. had been realised on these mines in June,
1868, the report of that date—made, be it remem-
bered, a month only before the ultimate crash—set
down this 120,0001. among the available assets of the
Company. The following is an edifying specimen
of the art of fencing with disagreeable questions :
Do I understand you now to say that you represented that
which yon believed to be true when, in the amounts ending
June, 1666, you stated the Welsh works to be a good most to
the amount of 120,0001.1—we11, we did feel, and we were
prepared to say, that the eventualities would be such ea to
produce a lose to the bank upon that—

I do not want to interfere with the exercise of all tho elo-
quence of your vocabulary, bet I want an answer—yes or
no. Do I understand you to represent that you believed you
were stating the truth when, in the accounts ending the 30th
of Jana, 1864 you represented to the shareholders that the
Welsh edam constituted an available amet of the value of
120,0001. ? It is a plain question, and let me have an answer
—yin or no P—lt la not a question that I con give a plain an-
Me to. We Duly have had, and meat have bad of mum,
certain anxious feelings with regard to what the future
would bring about as to that property, but we were not pre-
pared to say that there would be a lose before that has wee
proved. I therefore cannot give you a yes or no sumer.
I can only give you such en answer ea is resent to ray own
mind.

I must mak you, Mr. Eddie, upon the obllgatka of the
oath you have taken, whether, on the 30th of June, 1866,
you believed the Webb mines to be of the value of 120,0001.
Do not hesitate so long.—l am obliged to hesitate, because
et that time we were in confident hopes that we might make
anangsments by which the property would bo redeemed,
that thee, advances would be redeemed.

To another disagreeable question, viz., whether in
the balance-sheet submitted to the shareholders on
the let of August, 11356, the directors did not repre-
sent the bank as solvent, knowing it to be other-
wise; the ex-governor is obliged to reply, after inli
nite pressure, that the report was " certainly calcu-
lated to produce an erroneous impression"—that " it is
impossible to say we were not then deficient"--that
"I can't deny we were then in jeopardy;" in fact,
that "we had nothing to rely on except the chance of
redeeming the Welsh property and realising Mr.
HUMPHREY BROWN'S securities." That surely is as
near an approach as a man can reasonably be ex-
pected to make towards self-crimination. Whatever
may be in store for this bank governor hereafter in
the way of penal retribution under the sanctions of
criminal justice, it cannot be said that he has escaped
entirely after haying had to undergo the ordeal of a
public exposure so damnatory as this.

The Report of the Directors of the Great
Northern, and all the magniloquent talk of these
gentlemen at yesterday's meeting, 'stove one thing,
and one only—the utter worthlessness of audits
as they are generally conducted ; a point to
which we have more than once directed attention.
The mode in which Renetin perpetrated his frauds
has been fully demonstrated in the course of his trial ;
but the shareholders were naturally semen hat anxious
to learn how it was that forgeries of such magnitude,
exceeding 200,0001., and extending over a period of
eight years, had remained undetected.
Mr. Demme, indeed, attempted to shuffle out of
the acknowledgment of this truth by seeking to
make a eeape.geat of Mr. CLARK. This shabby
subterfuge can delude nobody. Mr. CLARK, it
appears, was appointed registrar in 1846, but
as he was unacquainted with either registration
or book-keeping, REDRAW! was engaged as a
clerk in his office, on the ground of his familiarity
with those two essentials. Mr. CLARK was the
nominal registrar ; but other business was given
him to do, and the business of registration de-
volved upon REDRAW!. A director of the Great
Northern and the secretary of the Brighton Rail-
way made the necessary inquiries as to his fitness,
but failed to ascertain that his antecedents included
a disreputable bankruptcy, and that he had been
discharged from the employment of a City firm for
" " -

Very soon

menced his dishonest operations, but from the state-
ment of Mr. CLARK it is clear that opportunities and
temptations abounded. The accounts, during the time
the shares were in process of division into various
classes, would appear to have been in utter confu-
sion ; the responsible registrar was known to be in-
capable of verifying them as an accountant only
could do, but still the auditors seem to have given no
hint that all was not perfectly clear and orderly. In
the beginning of 1834, just before Mr. CLARK was
superseded by RZDPATU on the plea of saving 2301.
per annum, some discrepancies were found to exist
connected with the dividends, which did not tally
with the amount of stock issued; an investigation
into these errors was commenced, and was in pro-
gress when Mr. CLARK left in April. Had Mr.
CLARK remained, the investigation he had set an
foot would have been continued, and REDPATH
detected; but after his dismissal the inquiry was
dropped, and free play given to the man of bad ante-
cedent,. Of this fact the Directors' Report takes
not the smallest notice, and Mr. DENISON also took
good earn to ignore it ; nor is the result of the inves-
tigation then set on foot in the slightest way alluded
to. Yet the facts of the discrepancy and the
consequent inquiry had been evidently communi-
cated to the Secretary of the Company, and, it must
be presumed, to the Board also. Still the auditors
find nothing incorrect; either their attention is not
called to the errors, or they consider the subject

foreign to their duties ; and in January, ISK the
Secretary informs the Chairman that ho has been
told that du amounts of stock and of dividends paid
do not correspond. Still the auditors find the books
admirably kept, and quite correct. But the game has
nearly come to an end, for the fraud is too vast to be
easily concealed. REDPATH apparently conducted
the investigation into the causes of these discrepan-
cies, and reported in August that errors to the extent
of 1,3761. A stock had been discovered and corrected.
The Secretary, however, complained that REDPATII
did not pursue the verification of the books vigo-
rously, so it was clear that the above amount did not
represent the whole known error.
Now, it is remarkable, and on the first announce-
ment of these frauds we commented on the fact,
that although in August, 1836, great discrepancies
were known to exist, and were being investigated,
the auditors express their perfect satisfaction with
the state of the books and the accounts, and certify
to their correctness. This is a subject which impera-
tively needs explanation. Knowing that these errors
existed, did tho heads of departments conceal the
fact from the auditors, or did they even fail to call
attention to them ? If such were the case, they are
utterly unfit for their posts. Or, if those facts were
known to the auditors, if they were aware, in
short, that the books were not correct, that the
state of the accounts, with errors of more than
two years' standing; was eminently unsatis-
factory, how came they to append such a
delusive attestation to the balance-sheet P If,

knowing those facts, they have done so, they
have grossly abused the trust reposed in them; if,
on the other hand, they failed to make such an
examination as should have enabled them to dis-
cover the existence of some discrepancy for them-
selves, they have neglected their duty. It is no
answer to such a charge to say that auditors cannot
go through every item of vast accounts like those ofl
the Great Northern. If the books of that Company
have been kept on any sound principle such an
error as the issue of dividend warrants for fraudu-
lently created stock could not pass undetected for a
mouth. It was detected, and that in 1854; but it is
not until more than 200,00 W. of forged stock has
been registered that the errors are thought of suffi-
cient importance to call for vigorous search ;
nor even then do the auditors deem it
necessary to modify their commendations of
the accounts, or their attestations of their accuracy.
If on the other hand, the Great Northern accounts
are so kept that such discrepancies can long exist
undetected, how is it that the auditors have pawed
so pointed an ealogium on the system, and on the
mode in which it is carried out ? Tho books of a
railway company mast show bow much money has
been received for stock of every kind, and conse-
quently how much stock is entitled to dividend.
And in like manner the amount of the dividend
warrants issued for any given half-year would show
how much stock existed at that period. There was
abundant room for fraud which might not be de-
tected by either of those modes of comparison, so
long as the compiler of the register of shareholders
was himself the criminal; but we cannot conceive
how such a thing as an over issue of dividend could
have failed to bring about detection.

It is evident that the Directors have been at-
tempting to push economy beyond its useful limits,
and that, as regards their accounts, the staff is
either insufficient or incompetent as a whole, or both.
They have probably saved for a few years four or
five hundred a year, and have saddled the proprietors
with a loss which represents an annuity of some-
thing like ten thousand pounds in perpetuity. And
herein lies one great lesson to all Railway Com-
panies. In transactions of such magnitude us those
connected with railways, frauds are easily perpe-
trated, of no great consequence individually, but
serious in their aggregate amount, and negligence
is as injurious to the prosperity of the Company
as the frauds are easily committed. There is
no way of counteracting these evils but by
an effectual supervision, entailing a real and
well-defined responsibility. To secure such a
supervision, shareholders must be content to pay
a proportionate remuneration ; it is a more econo-
mical course than that of making small annual
savings at the risk of a heavy eventual loss. But,
above all, they must secure a better system of audit ;
it is the very foundation of useful reforms, which
without it are likely to be mere delusions. It is the
absence of such an audit that renders it necessary fur
the Great Northern shareholders to apply to Parlia-
ment for a bill legitimating the forged stock before
they can divide the profits of the past half year, and
to insert in that bill a clause full of danger. Power
is to be given to the Directors to buy up and cancel
the forged stock when and how they please ; and
without calling in question the honour and integrity
of the present Board of the Great Northern Company,
the existence of such a power in the hands of any
board is in itself a sufficient reason for demanding
that such a thorough investigation of the accounts
shall henceforth be made by the auditors as may
render its abuse almost an impossibility.

DAVISON O. DUNCAN.—POILIC CONORATU-
LATion.—Watt Hartlepool, Weftedey, March 11.—
At a meeting of the Wad lissiggssi lageewmast
Commanenem, held yretenleg—ed ea 4 whims tax‘
fags ewe attend the wotds whisk amid Ole buds slits
nowt mike for Mid in the are "Dsgless v. Dams,"
blued st Durham cat Trideybei—lheeemlielmes teselved
he Nam to the proprietors et dr Arises Oassody 44.6.r-
-a:or their °myocardium's gm the stelely erg hat whirred,
sad to °rpm their witilhdleast Go azoray in width they
hod ?Whetted the rights of ths puss The M. raw-
hides mu unanimously weed hi s—w Tied fib eleeeeheion,
reprresststives of the pads d Wad lialow4 mewls-
taloa the Durhams Gloody Adbordaa_ sad Se Newspeper
pease generally, upon the deter, midi Ire bow edged in
the tarok of the t,iot .Dwilses w. Dome: e~eat upon
the et...notions m!rie by the armitedusses Odeber 4.t,

on*, Mumt to hit to thins
Hart Dow to toor, la Wont llordepool coootteryt which
hyenas did not ewe bonsthe tridiegi—the question in-
volving thin trial being of sub ira• that thn bnttk
fought by tho Derams Onrnfy Alwrfieer will, by loading
to an alteration at dr waggon law, prove beneficial to the
Ulan proos of Oral Britain."

POOR LAW MEDICAL REFORM ARROCIATION.—
Last eight an aggremlte matting of medical students was
held at St. Martin's Hall, Mr. Layard, M.P., in the
chair. A report, road by Mr. G. Evan. Farr, honorary
secretary, entered into a statement of the endeavours of
poor law guardians to be continual'', reducing tho
salaries of their medical officers, and of the aorta re-
peatedly made by the profession at meetings held in the
London and pro vM6al medical schools and elsewhere to
procure an adequate rate of payment, and no doubt was
entertained but that the matter would be set right by the
public when it became acquainted with the injurious effects
resulting tram the mew system, not only to the profes-
bat the stir*: poor. A number of resolutions
(no les the el6t), spoken to ehiedy by medical studcnta
of the sides Isaiah. in Lemlaa, and kasa Manchester,
Mad, sad Tat, were aarimately passel. The sub-
stems of dr Ira free of deer easehethse Pass follows :
, Thee shalt was sidled hr to lime kw radical relief
✓ue fa the fret likes It Wooed ths efficiency of
Makplft dr siosrar, the pewees, and
lowsekg do of side oar gerratas of
dad Mk"; dud areeserelha of de terikal an-
played was krareete, tad apporwhiss dole Mears
atn= rehreel rogrehriseal poemd
ad that the
met `di
timely herhelf are
are sod
ef eallidse peer. The Ire hoe seedatior
orevt,6= uts eileindataitot all do
stahmle Is Wo, ad hos dam
end eat drake he pkon kr the
someneet, sal to the dream dela lamione
Anwar the assabere et dr podia with
setroyedas Mahan ale were prof, hot whis isek no
pert la the wire Dr. Hare owl Prelhere deans,
coo U ; Idemers. WWilsois mad Holmes
sta, of It. s ; Pater Mr. Critchett,
of the Larks MOW ; Dr. O'Coeser, of the Royal Free
Haapttel ;
LXrrd. armarar Irak dlt Marfa; Dr. oibb, and
r. J. P