The Express.
London, England, 1857-04-04 00:00:00

DIRECTORS AND SHAREHOLDERS.

(From the &heifers' Journal.)
A Esau who should discover a method of mewing
the honest working of joint• stock companies would be th.
greatest benefactor to the world. Everyday shows more and
more the impossibility of dispensing with an engine en
powerful as that of association, and at the same time pro.
duces proof upon proof of the complete failure of evug
check by which the shareholders have hitherto attempted
to guard against fraud. Auditing has turned out nothing
but a fame. Annual reports serve only to blind
subscriber's, who are already caught, and to en.
trap fresh victims into the net. Vigilance on the
part of ordinary members of a company, except by
the apsamodk action of irregular committees of haven.
ration. Is really out of the question. The very strength
of the aseociative principle ("mains in the Lai: Mt? a
joining in a commercial enterprise which it Altera. to
thousands who have neither the inclination are the time
to take an active part In its management. To ay, e.
sumo have amid, that no one ought to take Mars in a
company who is not prepared from year to year to
investigate its melt ',met affairs, and drag to the light
every transaction which its directors are moat into-
rested in concealing, is simply to pan sentence of death
upon the joint-stock system once for all. And yet nothing
short of this sums sufficient to guard against freed,
Government returns, certified statements, and the IA;
answer very well the purpose of rogues, by giving a genuine
appesrenee to the most hollow bubble, bat, as a uptake to
the honest shareholder, they are worth no more thin ,sae
paper. Nothing could be Inure stringent than some of th
statutory requirements which joint-stock Lanka are menial
to fulfil. No doubt it was thought agent safeguard to iosiet
on half the capital being paid up before a charter could is
granted ; but what is the aocurity worthy Mr. &dela sat
Mr. Apeley I'ellatt have furnished the answer, ia their Mcrae
the history of the Royal Britteh Bank.
In 'pile of statutes and regulations, that clever conceit
managed to start with a working capital of about °weak
Instead of one M.alf of the amount nominally subscribed. The
act, as Mr. Eadailo says, was complied with in spirit, he
cause, if the money was not paid up in coin, it ,es
represented by securities, which bore the responsible neon
of Mr. Hugh lanes Cameron, the prime mover in the
swindle. Mr. Apeley Pellatt has a rather bas Moe
conscience, but he makes up for his weakness in the
respect by a surpriamg power of oblivion. Ile does tat
go so far as to deny that in putting hie noun to the
statement that bo,oooi. was in hand, he did in bet tee
tify • lie, but at the time he quite forgot that a huge
proportion of the pretended capital was composed
worthless notes; and Mr. M'Oregor told him that the
act was complied with, and what could he do but pa
his hand to the false certificates' Mr. Pellatt inneentl,
observed, "It appears now that Mr. We:huger sea
have been wrong in stating that the act lad he
complied with, and that he (Mr. Peak) Med bee
Mated his signature under a wrong Mxplenkw. Ifs
signed

the document without reading it." lf h lan
worth while now to discuss the relative merits of the
worthy directors, the question would be a curious as for
casuists, whether it was more honourable to obey the Id
"in spirit," after the manner of Mr. Esdaile, or to dpi
declaration of fact without reading is contents, or Wire
the trouble to remember the truth or falsehood of the
statemente thereby conveyed. The only motel we ad
to draw frees the transaction is, that certificates ai
declarations by directors are not very efficient safari%
of the interests of a proprietary body, or of the public a
large. What, then, are shareholders to do, if they
cannot protect themselves by vigilance or be kat
harmless by the shield which government in id
wisdom may have stretched over there ? Are they a
trust to the known character or respectability of he
gentlemen who volunteer to manage their investments kr
theta P Wo do not think that all boards are quite as bad u
the directors of the Royal British Bank, but there is stile
lesson to be leaned from it which admits of a rather ester
application. Directors of the Apaley Petal stamp an st
very uncommon, though he may be rather an exaggastal
specimen of the school. Whenever a board does go ea
wrong, you are sure to find, upon an analysis of its cocoa
shiest, that it is made up of two classes of men-
these who help themselves, and those who shut the
eyes, perhaps wilfully, perhaps carelessly, wittle the
bal
colleagues are pursuing their pined trade. The
are always two or three immaculate directors who,
pure simplicity of heart, have signed everything which
put before them, end, after governing a company for ays •
or two, have been utterly ignorant of ail its affairs—at g
rate, of all which they would be ashamed to own. Berber
it is only in very extreme cases that this kind of Mama
blindness is carried so far ea to leave the misguided dints
1 In %Prance of the secretary who takes down the minutes;
Sebald, and in doubt as to the nature of his ea a ' ~
r a member of the company which he represents.
pest alkowance must be made for • gentleman who has
In the parlour of tho Royal British Bank, as it must be el.
Pm rent a very extraordinary amount of ignores
MI 01011ritiel in such a case to enable a director to retire, et
Mr. Apaley relish did, after a year of office, without any
thing affecting his character, his integrity, or his lioneuty.
TM unfortunate "'mansion seems to be, that, although I
read may contain the names of men who have borne honest
urfght characters, there is no security for the unhapy
ilemalteddere. Let us grant to Mr. rallatt, for argument'
ad% the character which he claims, and it does but make ti
Orr worse. If be wee not the plunderer, his very virtue
are the means of amoying the public into the MA
Why, It le the compatible men who do all the mischie
Mr. Comma might hive worked to little purpose if he h
I met boa bulled by imeelates who pledged their previa
elkeseart as • prise for his nefarious schemes' and it
ply toes wank that the appearance of a name of sum,er
respectability upon a bad cd Directors affords no cos:
protection against the aril barefaced plunder by one or ode
of the colleagues of bin who bare it.
j The more one nee of the internal working of ait
I elated bodies the more obvious it is that every
depends on the integrity of the actual manager. An in
meat in shares is, in eubetance, a deposit on the
security of some unknown official. Sometimes it is -
secretary, now and then it is the chairman, •
rules, or perhaps it may ho a clique of two or three
a numerous board who have all the threads in
own grasp. Mcro subscribers for shares cannot
tell who the man really is in whom their renfidem
practically reposed, much lees can they judge hoe
their trust is warranted. And yet mm must and v
go on investing in joint-stock companies, to reap
or ruin according as they chance to fall into bona
knavish hands. There la no way of evading the
entirely. A moderately crafty manager would
the cleverest devices for keeping him honest gains b
will. The only present mode of diminishing the rink teen
to be, to concentrate authority in few hands, so that it ile
be known in whom the trust is really placed. And th
only prospective aid which the legislature can tin
will be to apply the terrors of the criminal law to cacti
form of dishonesty which is becoming the feria al S
times.

Colonel Simmonda, C. 8., who was with Our
Pasha in Asia Minor, was to quit London yesterday for
purpose of proceeding beyond Kate, to fin the benzin/
the Russian territory in Asia. Colonel Stanton he
for some time in Bulgaria making similar arrangunna
reference to the Russian frontier in that quarter.
We (United Service Gazette) understand is
be bar liejegy's present intention to distribute the Viof.
Omsk prima to those appointed to receive the d
of sada am satire will bo given by the autldaineo
was Dagartamat and Admiralty. The eanowsremat
amemarßy be delayed fora short period.
A letter from Berlin rays :—" The emigrans6
Prussian peasants to America has recommeaced as s
scale. The majority of these emigrants mend as
provinces of Posen and Pomerania. whilst other Fr°
where the population is denser, furnished but few ear'
Many Prussians are also starting for Rungs, rs
colonies of workmen which the Russian government ata
founding along the railway from St. Peterebtug to X2ao
The King of Sardinia left Pelican°, for Nen
the 31st nit.
A letter from Milan, in the Opinion of
states that the polies have seized all the number'
Aidmoritat Gamtte containing the debates on the fog";
lions of Alessandria, and. various numbers of the to
Deists containing articles on the present diderewes
Austria sad Piedmont, and favourable to the latter.
ARYT RETIREMENTS.—During the peat
there have been no fewer than 3.1 retirements
commissions, and 10 resignations of the service,
officers have been superseded, and her Majesty bee aS
with the service of a fourth As elmost all then te."
Ire 9,111011g111 the %AWL* aMtl 8au1k..., the
will son be MatoroM.— United Settles (14:00.