The Sun.
London, England, 1855-11-30 00:00:00

RAILWAY INTELLIGENCE.

REPORT OF THE COMMITTEE OF INVESTIGA-
TION OF THE EASTERN COUNTIES RAILWAY
COMPANY.
Eastern Counties Railway, Nov. 27, 1855.
At the half-yearlygeneralmeeting of the proprietors, held
at the London Tavern, 31st August, 1855, it was resolved—
" That so much of the report as relates to the dividend
be agreed to, and that the consideration of other matters
mentioned therein be adjourned until the last Friday in
October, and that a committee of seven shareholders be
appointed to investigate the affairs of the company, with
power to examine the" officers of the company, and to call
for books and papers.
.‘ That the following gentlemen be upon the committee :
—Edward Ball, Esq., M.P., Thomas Christy, Esq., Henry
Soper, Esq., Jeremiah Pilcher, Esq., Horatio Love, Esq.,
Thomas Goodson, Esq., John T. Norris, Esq., and that no
resolution was to pass except five be present, but three to
form a quorum, to conduct ordinary inquiries.
When the above resolutions were passed, Mr. Ball had
made arrangements to proceed to Paris the next morning ;
Mr. Norris, also, was under engagement for several fol-
lowing days. dr. Ball and Mr. Norris agreed, therefore,
that the committee should not meet for a few days, and
separated with this understanding. Other gentlemen of
the committee considered it desirable that the committee
should commence their inquiry without delay, and on the
3d of September Messrs. Love, Christy, and Soper held a
preliminary meeting, and adjourned to the sth of Septem-
ber, when a majority of the committee was present, and
Mr. Love was chosen chairman of the committee. Mr.
Ball expedited his return to England, and attended the
committee on the 10th of September, as also did Mr.
Norris. Mr. Goodson wrote to the committee, declining
to form one of the committee.
Your committee entered on the inquiry desiring to be
just, moderate, fearless; not ungenerously to use the
authority which you entrusted to them, or timidly to shrink
from exposing error. They have protracted the report to
a period much beyond that which you granted them— they
have been obliged to do so from the numerous subjects ne-
cessarily embraced in the inquiry, and from the vast im-
portance of some of the branches of that inquiry.
The first subjects to which the committee directed their
attention were those in which issue had been joined at the
last half-yearly meeting between Mr. Waddington, the
chairman, on the one part, and the auditors and certain
directors on the other ; and the objections made likewise
to the accounts, as well as to the conduct of the chairman,
by Mr. Bruce and Mr. Broadbent, two of the directors.
In order emit the committee, as well as yourselves, might
arrive at sound conclusions regarding the position of till:,
great property, they have summoned many of the company's
servants and other parties, whose evidence will be added to
this report. They are thereby relieved from the necessity
of entering so much into detail as would otherwise be requi-
site, because the evidence will speak for itself, and to that
they beg to refer you. They cannot conceal from you the
conviction which has forced itself on the minds of your com-
mittee, that all the charges made by the auditors, Messrs.
Reeves and Mayhew, have been fully substantiated—that
those charges fall short of a true state of the affairs of the
company that most important books, those relating to the
stores, and also to the locomotive department, have never
been laid before the auditors—that no correct ascertained
balance has ever been struck in the stores department since
the period when Mr. Waddington was chosen chairman.
That at the end of each half-year since that period, the
sum set clown as the value or amount of stores on hand,
has never properly agreed with the amount purchased less
the amount issued. And that for the last 2or 3 years 11,3
attempt has been made to a',-t,ree them. Large additioes
also have been made to the capital account of the Eastern
Counties Company, and for which they are not, and cal -
not be made, responsible. They belong to the Norf, lk
Company, for which that company is hound to provide, as
set furthi in the Act of Parliament confirming the agree-
ment made with that company, Feb. 6, 1854.
The sum thus most improperly and illegally added to
the capital account of the Eastern Railway Company is
69,60tii. 10s. There are other improper transactions, to
which we shall have specifically to refer in their proper
places. Your committee name them now, as instances of
the reckless manner in which the affairs of this company
have been administered.
Your committee have further to observe that contracts
have boon made with individuals on terms not remunera-
tive, and that by so doing a large portion of the carriage of
coal and goods has been done at a positive loss to the COM-
pAny, while in some instances they have been ruinous to the
merchants engaged in those branches of business, and in
others annoying and degrading; that a monopolyhas been
established which, in its operation, has been hurtful to the
company and offensive and vexatious to the numerous
mercantile establishments situate on your line of railway.
The name of the firm with which one of these contracts
has been made is Messrs. E. and A. Prior, trading under
the firm of the Norfolk and Eastern Counties Coal Com-
pany, the use of which name was most improper. Prefer.
ences also have been given to another company to carry
cattle over the line, greatly to the injury of the merchants
and farmers who live within your district, and to the
damage of your own revenue. In a word, a total shire-
gard has been evinced of all the right principles on which
a large commercial undertaking like yours should be con-
ducted. A large increase has been made to the bonded
debt by loans granted illegally and without your autboi itt .
A most reckless expenditure has been kept up, not for your
advantage, but fur that of other individuals and companies
which we shall specify in detail.
Additions have been made each half-year to your capital
account of a most injurious description. Improper repre-
sentations have been made at several of the half-yearly
meetings of the state of your affair; and the conduct of
some of your directors has amounted to a systematic sacri-
fice of your interests, and the conduct of others to a total
disregard of those interests, which, if permitted to con-
tinue, would inevitably result iu consequences of a most
serious nature to yourselves.
Your committee consider that one cause of the losses you
have sustained is to be found in the constitution of the
board of directors itself. It consists of 15 members—of
that 15 only 8 represent the interests of the Eastern Coun-
ties Railway Company itself ; five other of the directors
sit at the b3ard, by authority of an act of Parliament given
to the Northern and Eastern Counties Railway Company,
which company has a fixed dividend secured to it before
any dividend whatever can be paid to the Eastern Coun-
ties proprietary ; and those directors have no interest at
stake, and are little construed in the results of any in-
juriow, agreements which the Eastern Counties Railway
Company may enter into. Two other of the directors re-
present the East Anglian Company ; and although they
are interested in keeping the expenses down, and the charge
against revenue as low as possit,le yet they are not affectul
by the bargain which the Eastern Counties Company has
made with the Norfolk Company, as well as with the-Eest-
ern Union Company, in agreeing to pay those companies
all their proportion of receipts, less 46 per cent. only, how-
ever much the loss may be ; or any other bargain they may
make of a similar nature. If they had been, your. coinmi
tee feel assured they would have satisfied themselves
as to a fact of a most. important nature, before the agree-
rnent would have been completed with the Norfolk and
Eastern Union Railway Companies.
The fact to bo thus ascertained was, what were really
the working expenses of this company at the time the
agreement was proposed. The present chairman (Mr. Wad-
dington) set them down as 41/. Si. sd. per cent. The half-
yearly accounts, ending the 31st December, 1853, show
that sum as the percentage; but that was not a true per-
centage—it was near 45 per cent., and this company is
bound by their contract to charge only 46 per cent., inclet-
ing, in such working expenses, repairs, and re-erection el
bridges, and maintenance of the permanent way. On the
Norfolk Company's line alone a sum of 32,0e0/. is now
required to repair dilapidations that already exist, to which
subject no consideration appears to have been paid, and no
adequate allowance required in the contract with them.
There is another reason why you should be more particular
as regards the construction of your own board, and it is
this :—The affairs of the three associated companies, the
Eastern Counties, the Norfolk, and the Eastern Union
Companies, are managed by a joint committee, consisting
of
_Lour members of the Eastern Counties, two of the Nor-
fol,and two of the Eastern Union board. It requires
great
watchfulness to weigh the effect
m:tug from that joint committee. Your interests are not
always their interests, otherwise they never would have
of
violated an act Parliament binding each company to
provide for the worksayn omenitts own line, which it had begun,
and to saddle the payment
be
it on the Eastern Counties Com-
pany alone ;
company which had no right observed the payment to fall on the
ght or title to the property, end
which, a few years hence, may be severed from it. It is
very necessary you should bear inpresent consti-
tution of the board, and it is of the last the'importance you
should provide a remedy. So long bas you have aru 60-
rity sitting at your board influencing your :Alai's, with-
out any strong motive to protect your interest, and
who give themselves little or nu trouble to understane
the motives that influence other of your directors,
so long will your affairs remain at the mercy of those
who hold out to you, half your by half year, delusive
statements ; who make representations, and fill the re-
ports presented to 3 ou with promises which are never rea-
lised, and will nut bear a moment's examination.
Your committee is anxious to occupy as little of your
time with the report as possible ; but they would not pee.
form their duty if they did not point out, in as plain and
simple a manner as they can, each head of inquiry to which
they have directed their attention, and their object in call-
ing your attention to it.
In directing the attention of the shareholders to the
manner of disposing of the 1,099 shares of the Tilbury lineell
,
your committee desire to avoid saying anything wLi
way hurt the feelings of those gentlemen who received the
shares. The case is thus :—Eight gentlemen were ap-
pointed to manage the Tilbury Railway—four selected
from the direction of the Eastern Counties board, and four
from the direction of the Black-vall board. There woes
40,000 shares to dispose, to raise capital for constructing
the line, 5,954 of these remained unappropriated. The
market for them was heavy ; but when the line was let for
',,term of years, the shares improved in value, and rose to
sus. to 50s.premium each. The joint committee decided
to c.
iistribute 4,863 shares amongst the shareholders of the
Tilbury
1,()91 olaeou'llany. These shares were so accepted. leaving
that thesr:l unaliotted. And your committee are of opinion
homer.
of
then'. shares, being the property of the share-
been
disposed
'Tilbury line, ought, by a fresh allotatio-a to
have
joint committee at of,
as were the 4,863 shares. But the
on the 6th July, 1853
Tilbury line, at their first meeting,
sod a resolution " that the re-
sidue of the 5,95,1
shales, after making the further allot-
ment of ono for every seven,
I thereby, placed at the &liaise should be, and they were
the
Eas . ast.rn Counties Coln-
piny," of the four members of that
committee named by
Railway Cn-
piny," thus conveying these shares to that portion of the
committee of the Tilbury line who represented the Eastern
Counties Company. Now such resolution
eienamitteen itself could
. legally only empower such members of the
to
bold these shares for the benefit of the shareholders, it being
incompatible with the trust or office of a director orcottie
tee man to accept property for his own benefit, and
prupriation of those 1,091 shares by four gentlemen of taEe.
directors of the Eastern Counties Company was wrong.
TILBURY AND SOUTHEND LINE.
Your attention should be called to the injurious effects
likely to be produced to this company by the leasing of the
Tilbury and Southend Line to Messrs. Peto, Betts, and
• Brassey. The intention of the directors of this company,
when that line was projected, was, in conjunction with the
Blackwell Railway, to protect the territory of the Eastern
Counties Company, and to prevent traffic being abstracted
from__ it, and also to avoid competition which would have
an injurious effect on the parent line. 'One of the first acts
of the joint committee, after their appointment, was to
allow Messrs. Peto
and t° pay them Pete, Betts, and Brassey to make the line,
by the shares the entire amount of the capital raised
mitted the Ea;
alLa innd soon after the said joint committee co -
find capital for rolling
Railway to an agreement to
bury Extension linengasttock to work the traffic of the 'Til-
bury tes which your committee find
are extremely toprejudicialthe interest
t. of the Eastern
Counties Company. The agreement for the lease contains
a c.,usiciorable number of te orn remarkable clauses—
one of which is, that the lessees,n Messrs. Pete, Betts, and
Brassey, shall have the power of fixing rates for paseen-