Northern Times.
Liverpool, Merseyside, England, 1859-08-25 00:00:00

NEW AND IMPORTANT ADVANTAGES,

To meet the exigencies of parties, and to render the benefits
of Life Assurance more generally available, the Directors have

adopted the following new and important Principles :-
1. APPLICATION OF PROFITS TO THE PURCHASE OI
AN ANNUITY.

By this system a party not only secures the payment of the
sum in the event of his death before (i 5, but at his option he
may convert the Policy, with its Bonuses, into an equivalent
Annuity commencing at 65. •
2. HALF PREMIUM SYSTEM.

By which a party may secure all the benefits of the Half
Credit System without any debt being incurred.
3. DOUBLE INSUIhANCE SYSTEM.

By which, fox
be secured, which will in
the sum in tho Policy is d
advantageous to young lir,
For further explanation of these new principles, and for the
rates applicable thereto, see the Company's Prospectus, which
may be had at the Head Office, or at any of the Agencies.

nium, a Policy may

r until, in 20 yeari,

!bled. The system ii partieLlarlY

The Company INSURES aga
a, and Flax Mills, Buildings

inst FIRE—Silk, Cotton, Wool

StoCk-ir

of Husbandry, and Effec

61, Prince's-street,
Liv

Manager.
, Secretary

tenbtrs.

IONFOUNDERS.

WA TER WORKS COMPANY,
MITED), CHESHIRE.
Le Wirral Water Works ()Company are
NDERS for the delivery of Water Pipes
n. the Townships of Oxton,
Tran-
in Bebington, &c. Parties wishing
m to Mr. Jelin Cunningham, Engineer,

)1, will receive a copy ofthe rpecification,
do not bind themselves to accept the

ADAMS'S TWO SHILLING PRAYER BOOK,
Bound

h VELVET, with RIMS, CLASP, and TAP LET

63, Cu

:-STREET,

OLD POSTOFFICE-PLACE.)

EXTRAORDINARY REVELATIONS IN
THE SCOTCH IRON TRADE

The supreme courts of law in Scotland, are, it is said,
likely to afford the means of testing the truth or false-
hood of some 'allegations of fraud, startling in the
alleged amount of their results ; and scarcely less
remarkable as showing, if proved, a system of fraudu-
lent arrangement of the affairs of the Carron Company,
one of the oldest and most important copartneries in the
kingdom connected with the iron trade.
It would appear that, at different times, during the
last few years, disputes have arisen as to the value re-
ceived for shares in the company, disposed of by Tepre-
sentatives of shareholders to the committee of manage-
ment ; and it is averred, OR what degree of proof we
know not, that large sums have been paid to discon-
tented parties,- with a view to "buy off" threatened
exposures. Be this as it may, a full exposition of the
matter is likely now to be made. A summon has been
issued against the representatives of the company by
Colonel Maclean, who alleges that he was induced to sell
his shares to the managers of the company on a state-
ment of its affairs which is untrue. The subjoined
abbreviate of the case appears in the money article of the
Times .7

The Carron Iron Company has been one of the most
flourishing institutions of Scotland ; and it is from
success and not from failure that the scandal now about
to be inquired into has arisen. The concern was incor-
porated in 1773, with a capital of £150,000, in 600
shares of £2;;0 each, for the manufacture of iron,
and . its principal works have been at Carron,
near Falkirk, with an agency in London. The busi-
ness has been conducted by a general manager, who,
according to the terms of copartaery, was subject to
the control of .general meetings. For nearly forty
years—that is, from 1786 to 1825—this post
was held by a Mr. atoseph Stainton. Upon his death
this person was succeeded by a nephew, Mr. Joseph
Dawson, while another nephew, Mr. William Dawson,
became assistant manager. A third nephew and a cousin
were agents respectively at Glasgow and Liverpool, and
a brother, Mr. Henry Stainton, was agent in London.
In 1850 Mr. Joseph Dawson died, and Mr. Wm. Daw-
son then assumed sole control. This he still retains, and
hence for seventy-three years the family appear to have
had the establishment in their hands. From these circum-
stances arises the singular story which, through a
process just instituted in the Scotch courts, is presented
to the public. The company under their deed are
allowed to buy the shares of any retiring partner, and
it seems that the managers have steadily availed them-
selves of this faculty. From 1830 till 1851 the Messrs.
Dawson have not permitted any share to be purchased
by any stranger or partner other than a member
of the families of Stainton or Dawson, and the
charge now is, that "by means of false balances,
abstracts, and accounts, and a general system of

misrepresentation and concealment,- the shareholders
of the true value of the
bares at

were Lep

stock, and wet

-0 thus induced to sell their sh—
prices greatly 'below _their actual worth." Among
others, in 1847, Colonel Maclean was led to sell twenty
shares at £7OO each, and he accordingly brings an
action to have the sale and transfer set aside, and to
be reinstated in possession on the ground that it was by
false and fraudulent pretensions that they were obtained
from him. In his "summons," or bill of compl2int, which,
it must of course be bomb in mil& is as yet ontirely ex
parte, he alleges as follows:—Although the provisions of
the deed reqmred the appointment of committees for the
examination of accounts, no such committee has been ap-
pointed since 1813,—half-yearly balance-sheets were:;
made out, but in these the annual profits and the assets were
systematically put down at far less than their proper
amount. Thus in the ten years from 1829 to 1838
there were, it is averred, under-statements to the extent
of £175,119, the profits being represented as £118,925
instead of £294,543. Mr. Joseph Dawson used to
send to Mr. Henry Stainton, the agent in Lon-
don, and brother of AIL Dawson's predecessor in the
management,- "trial balance-sheets" which were cor-
rect, and these were then altered and adjusted to
meet. the object in view. In 182 G Mr. .Joseph
Dawson, it is alleged, wrote to his dear uncle" that
the balance then prepared showed profits amoanting
to £15,085. This, he said, "we propose to reduce
by transferring £2,500 from flask goods to pig iron,
and Teducino•' the value of the pig from inventory to
that extent; also by diminishing the inventory of
flask goods £l,OOO, and by transferring £l,OOO
from general charges to the credit of timber, and
deducting that amount from the timber inven-
tory." The total was thus brought down to £10,085.
But the writer went on to sugggcst as this suns was
"still - rather too much," that it might by certain
dealings with the "insurance accounts" be sub-
jected to a further diminution of £1,500. In reply,
Mr. Henry Stainton, the uncle, is quoted to have ob-
served, that he would rather not touch the insurance
accounts, as some of the partners had their eyes upon
them, and that he. would " prefer operating upon the
flask goods." There was also a fund in London, known
only to Stainton and the Dawsons, called the "Secret
Reserve Fund," which amounted in 1838 to £77,792,
and which 'is described to haie been chiefly accumu-
lated by debiting . certain consignments of military
whole
stores .from Carroll to the Board of Ordnance in Lon-
don, with breakages, which had never occurred. These
for the
supposedol e quantity
proceeds
nl?t
breakages-went sometimes to the extent of 25 per cent.,
and Mr.- Henry Stainton delivered to the Board of
Ordnance,bitt
of the unbroken goods. 'I hus this gs continued apparently
remitteda'dreceived
Carronpaym oeuntil 1850, when Joseph Dawson died, and William
Dawson succeeded to the control at Carron, while
Henry Stainton remained as agent in London. Dissen-
sion, then, for the first time broke out between the
sent,families of Stainton and Dawson. William Dawson,
being manager, called upon Henry Stainton to
account for the London fund. Stainton admitted
its existence, and handed over £96,000 to the company.
He died shortly afterwards, and the company made a
claim on his executors for shortcomings, which was com-
promised last year by a payment of the enormous sum
of £220,000. Whether it WAS from these family feuds
that the outside shareholders, or those who were for-
7s, gained an idea of the transactions
~ and which form the subject of
action, does not appear, but it may be

arehold

now recounted

t such was the case

menty years, according to the narrative of Colonel
Nlaclean, some of them had been vainly endeavouring
:o get information. A Mr. Romanes, in particular, used
ictive efforts, but was always defeated. The parties were
aware of his aim, and in 1826 Stainton wrote to 'William
Dawson, while sending him a certain account, "It may
Romanes, and can do no harm in any

erve to amuse

way." At a later peri'od William Dawson wrote to
Stainton that to comply with all Romanes' demands
would "cause endless trouble and no little mischief;"
that he had better reduce his balance at the Bank
of England, lest it should attract the notice
of their " enemies ;" and that a certain sum had
Inre" been.
_ . .• ft

kept back in order that their Fat ,uuto
shareholders) might not suppose they had so much cash
in hand. Sir J. Gibson-Craig, then law-agent of the corn-
-I:nanlyB,4s6trie elnuaoguasinly
warned
thet hatmlatla
oingmenreastacndarrtohne others
should should be furnished with the information desired, and

gs, pro e.
eof the shareholders—a Miss Adie-
against on
time,
sell her stock to the •
to
beiner allowedQignorance of its real value. " The, account made
total ,
id Sir James, in a private letter to Dawson
31P,' said
in 1846, " does not disclose the state of the com-
pany's affairs, but conceals it. The debts due are
eh- larger amount. No one who is not a
ted by £130,000. The assets are un,Jcrstated
eli)•roccaenedihnave the least idea of the
the stock, and -I therefore think it illegal in
any managing partner to buy the stock of any one who
is not a managing .partner." Still, these -varnings are
managing °priariitsn
alleged to have had no effect, and in the following year
Colonel Maclean also was induced to part with his
.%tio'.ol.:l'
leCul'ga‘ se' 'at
ialottuY
interest. This purchase threatens, from the preseut,
proc A•dings, to form a fatal barge n for tee "company;'