The Sun.
London, England, 1865-01-28 00:00:00

rHE SUN, LONDON, SATURDAY EVENING, JANUARY 28, 1865.

Charge against a Limited Liability

Company,

At the Mansion-house police-court yesterday, the Little
Hampton, Havre, and Honfleur Steamship Company
(Limited), of 4, Arthur-street East, City, were summoned
before the Lord Mayor, upon the complaint of Mr. James
Ellis, of No. 61, Basinghall-street, that they being a com-
pany under " The Companies Act, 1862," and having capi-
tal divided into shares, unlawfully did make default in com-
plying with the provisions of sec. 26 of the said act, with
respect to forwarding the list of the members of the said
company, and the summary of particulars thereby required
to the Registrar of Joint Stock Companies, contrary to sec.
27 of the said act.
Mr. Lewis, jun., appeared to support the complaint, and
Mr. Poland, barrister, for the defence.
The summons was originally returnable on Thursday,
and when called on Mr. Poland applied to have the hearing
adjourned, upon the ground that an order had been made
by the Master of the Rolls to wind up the company under
the Compulsory Act, and on the previous day the parties
had attended before the registrar that the order might be
made out, and under the circumstances he contended that
while these proceedings were pending, the Lord Mayor had
no jurisdiction.

The Lord Mayor, however, decided that he had juris.
diction, and said he should hear the summons.
. ...

Mr. Poland protested against the jurisdiction, and said he
should, therefore, decline to appear to the summons, and
withdrew.

Mr. Lewis then proceeded to open his case, and in doing
so he went into the circumstances under which the com-
pany was formed, and it appeared that it was originally
started in June, 1863, and was registered in July in the
same year. The capital, according to the balance-sheet
that was published to the public, was £7,492, in shares
of £lO each, £1 of which was paid up. Mr. Lewis
proceeded to detail the items in the balance-sheet,
one of which was £7,000 for promoting and prelimi-
nary expenses, leaving but a few hundred pounds to trade
with, In the course of the past year they got into debt to the
extent of £4,000, and when the balance-sheet was published
it was quite time that the gentlemen interested presented a
petition to the Master of the Rolls. At a general meeting
of the shareholders a resolution had been passed to windup
voluntarily, which, if carried out, would, he said, have
stifled every inquiry into the matter. The Master of the
Rolls, after hearing the facts, gave a very decided opinion
as to the course he intended to pursue, which Mr. Lewis
hoped, would be to bring back some of the £7,000 from the
pockets of those who had the benefit of it.
The Lord Mayor asked who was the promoter of the
company ?
Mr. Lewis said, a gentleman named Elborough ; but he
did not propose to mention the names of the directors. He
proposed to show that a proper list of the members had not
been deposited at the registrar's office.
Mr. Spicer, the clerk in the office of the Registrar of Joint
Stoek Companies, was called, and said the Little Hampton,
Havre, and Honfleur Steamship Company (Limited) was
registered in July, 1863, and on the 17th January, 1865, the
company sent a list of shareholders. It showed the amount
of shares paid up to be £7,495, and the amount of shares
_ _

forfeited none. The total number of shares registeredwere
392, of which 235 stood in the name of Mr. Elborough. He
could not say when the general meeting was held, but if the

list had not been sent in before the expiration of the 14
days after the general meeting it would not be received.

There was no one present toprove that the meeting was
held, and the proceedings were adjourned until yesterday,
when Mr. Poland appeared to answer the summons, although
he said he did not waive the point as to the jurisdiction.
Mr. Felix Henry Wood was called, who said he was the
secretary to the Little Hampton, Havre, and Honfleur
Steamship Company, and had been secretary two or three
months. He succeeded Mr. Griffiths, who was preceded by
Mr. Elborough. He produced the minute book containing
the proceedings at that meeting.
Mr. Lewis remarked that there were only two entries in
the minute book.
Witness, in answer to Mr. Lewis, said he had not a list
of those present. Mr. Bariman, of 38, Gracechurch-street,
was the chairman. That was the meeting at which the
balance-sheet was passed. He did not know how many
shareholders were present.
Mr. Poland wished to ask Mr. Ellis a few questions, but
he was informed that that gentleman was not present ; but
Mr. Lewis said if Mr. Poland would tell him whathe wanted
to know he might be able to admit it.
Mr. Poland said he wished to know whether it was true
that Mr. Ellis was not an original allottee, but • held scrip
certificates from• another shareholder; that he had never
applied in writing to be put in the register ; and that he
was the person who filed the petition to wind up the coin-
Tatty, all of which Mr. Lewis admitted was perfectly true.
Mr. Poland then proceeded to address his lordship, and
said he would not trouble him with the question as to juris-
diction ; and in reference to what had been said by Mr. Lewis
in respect of the disposal of the £7,000, he might say that
the directors would not flinch from an investigation into
the way in which it had been expended, at the proper time.
It was a matter quite irrelevant to the question at issue,
the only question being whether or not the register had
been sent in according to the requirements of the act of
Parliament. The company was started for the purpose of
establishing a large traffic between Littlehampton and
Havre and Honfleur, and as it was a new business, of course
required capital to carry it out, and must be at first trans-
acted with some loss ; but if sufficient capital could have
heen obtained it would no doubt have succeeded. Being a
new scheme it was no doubt difficult to get capital, and the
shares being £lO each, it was thought better to issue scrip
certificates, which could be transferred from hand to hand,
and he read one of the articles of association to that purport.
Mr, Lewis said that in the interpretation clause it said
that the shareholders should include scripholders as well as

members.
Mr. Poland said nevertheless the holders of scrip were
not members of the company. The answer which he had
to the charge contained in the summons was, he said a
bond fide one. He said that when scrip certificates were
supplied the parties were not registered as members until
they had sent in a written application for that to be done,
and until they were registered he contended that they could
not in any way be said to be members of that company.
The question was who was to be put on the list ? The list
was made out and deposited on the very day required ; but
the directors, wishing to comply with the act, had taken
opinion of Mr. Carr, the solicitor, upon the matter, and he
was of opinion that all the original allottees ought to be in-
cluded as members of the company on the 10th January.
The question was discussed, and the opinion of Mr. Horace
Loyd, a gentleman of reputation, was taken, and he stated
that he was of opinion that inasmuch as the scrip might
have passed out of the hands of the original allottees, they
ought not to be included as members of the company on
January 10, as it might prejudice their rights. Then, again,
the holders of the scrip could not be included, as the scrip
might have passed through many hands, and the present
holders not having brought in their certificates, or given
notice in writing to be placed on the list, perhaps could not
be found. Acting upon this opinion, the directors, as they
thought, complied with the act of Parliament, in sending
the list of the registered members as they appeared from
their books. That a mistake might have been made he
allowed was possible, but he submitted that they could not
willingly infringe the act ; and to show that the directors
had acted in a bona fide manner he should call Mr. Carr,
the solicitor to the company.
The Lord Mayor asked if he was to understand from Mr
Poland that the scripholders were not liable for the just
debts of the company ?
Mr, Poland thought the original allottees were liable.
The Lord Mayor said that was something at variance
with Mr. Poland's argument.
Mr. Poland said they were, he thought, liable, although
they could not be said to be members of the company.
Mr. A. Carr, 25, Rood-lane, solicitor, was then called by
Mr. Poland. He said he was the solicitor to the Little
Hampton, Havre, and Honfleur Steamship Company Com-
pany (Limited). He was consulted as to the making out
of the list of the members of the company, and at his request
a list of sthe whole of the allottees was prepared. It was
his impression that the whole of the allottees, including the
members of the company, should go. There were some
doubts as to that, and the opinion of counsel was taken ;
he prepared a case for the opinion of Mr. Horace Loyd,
and after that, instead of a list of allottees a list of the re-
gular shareholdrs, about 19 in number, was sent in, the
number of shares represented being 300 or 400. The order
for winding up the company had been made, but had not
been served.
In answer to Mr. Lewis, Mr. Carr said he had acted as
solicitor to the company since its commencement, and drew
up the articles of association, and the one with regard to
the scripholders. There was a petition filed to wind up the
company; and at a general meeting a resolution was passed
to wind up voluntarily, but it was before it was known that
the petition had been filed. He could not tell how many
members were present at the meeting. By the articles it
required five to make a quorum. There were more than five
present, but he could not say how many there were. He
knew the meeting was legally constituted.
Mr. Lewis addressed his lordship upon the point of law
raised by Mr. Poland, as to whether or not the original
allottees were to be considered as members, and he con-
tended that they were clearly so.
The Lord Mayor said he certainly thought the public
ought to have some protection, and that a proper list of
shareholders ought to be made out, that it might be known
who was liable for any debts incurred. However, it was a
matter which had been very properly brought forward, and
would show the public how some of the new companies
were got up.
Mr. Poland, in answer to Mr. Lewis, said that the ques-
tion was whether or not the Act of Parliament had been
infringed, and if so he contended that the evidence of Mr.
Carr showed a desire on the part of the directors to comply
with the act, and if there had been a mistake it had not
been done with the intention of violating the act.
The Lord Mayor said he had taken the opinion of Mr.
Oke, and should decide upon his advice, although it would
be against his own opinion.
Mr. Oke said the opinion he had formed was upon three
grounds—First, that the list of members mentioned in the
26th section of the" Companies' Act, 1862, under which the
summons was taken out, clearly meant a list of those per-
sons whose names were in the register of members, as ap-

peared by section 23 and the articles of association, by
which a distinction was drawn between a register of mem-
bers and a scrip register, and consequently the list sent to
the Registrar of Joint Stock Companies, which included all
the names in the register of members, and excluded all
those of share or scrip holders, was in compliance with the
act. Secondly, that if that view were incorrect, the com-
pany having acted under the advice of counsel in returning
a list to the registrar with the scrip holders omitted, could
not in law be said to have unlawfully and wilfully made
default in complying with the provisions of the act.
Thirdly, if these two grounds failed, the 87th section would
stay any further proceedings before the court after it was
proved, as it had been, that the Court of Chancery had
made an order for the winding up of the company.
The summons was accordingly dismissed.

• Dlr. Lewis, on the part of the complainant, asked for a
case to take before the Court of Queen's Bench, which his
lordship thought a very proper course to pursue, and
thought it was one of those cases that the more the circum-
stances were laid before the public the better it would be.

RAILWAY INTELLIGENCE.

GOVERNMENT AND THE RAILWAYS.

Mr. WATxn, M.P., at the meeting of the Manchester,
Sheffield, and Linconshire Railway Company on Wednes-
day, said they had heard that the railways were to be pur-
chased by the Government under the Act of 1844, and an
essay on the subject would be shortly published. The
Economist had been writing very able articles advocating a

-------- • Railway Boards were declared

to be constituted of materials, and railway pro.

prietors to be unstable. The purchase of the whole
£400,000,000 of railway property by the nation was alleged
to be the remedy for defective management, high rates,
and a discordant policy. But upon the question of control
and working these writers tried to escape an obvious
difficulty by proposing to let the working to contractors.
Both in England and in France this had been tried, and
given up after trial. The first Russian railways were
worked by American contractors at so much a verst, and it
was found that the mile-posts had a curious attraction for

each other, and for two years a third ,more distance was paid
for than was ever worked over. Such a mode of working
the 12,000 miles of British and Irish railways would be too

large an affair for individuals, and the contractors would
again become companies. Where, then, would be the gain of
individual force or interest which was insisted upon ? If the
State owned the corpus of the railways and the moving
plant and a contractor or contracting company worked and
applied them, what a temptation would exist to run down
the property and plant in order to extract a higher rate of
profit ! In fact, it was found in practice that where the
owners and workers were one and had one interest, the in-

tegrity of the property was and must be more fully consi-
dered than where one party hadan interest to spend as little
in renewals and the other as much as possible. A high con-

dition of repair meant a high condition of safety, and he
preferred himself to travel upon a company's rather than
on a contractor's railway. The act of 1844 merely affected
railways constructed after May 1, 1845, so that part of the
Manchester, Sheffield, and Lincolnshire Company's line
was under it, and part not. For himself, and speaking en-
tirely in the interests of the companies he belonged to, he
was ready to express his entire readiness to hand over to
Government and Government officials the property, the
working of it, and all its thousand-fold responsibilities and
anxieties. Many of those who had helped to make this
grand railway system what it was would, personally speak-
ing, rejoice to find that Government did as much for the
country in the future as the companies had done in the past.
But they must consider the question not merely as railway
proprietors, but as citizens of a great and free country, and
in its bearings upon the industrial life and political inde-

pendence of the people. The country had always grown
greater when Government had let industry alone, and had
always gone back when Government had put itself in the
place of the self-reliant action of the people. Of late years,
following the light of political economy, their general po-
licy had been for the people to do as much for themselves
and the Government as little as possible. He feared, there-
fore, that whatever his own interests, he couldnot argue in
favour of their increasing the national debt by £400,000,000
or more, and of allowing the working of the lines to be
farmed as the French taxes were before the Revolution. He
did not contend that the present system was perfect. It had
had to be elaborated from day to day by perpetual experi-
ment. It was now only 30 years old, and its earlier stages
were harassed and impeded by an amount of obstruction on
the part of both Houses of Parliament and of landowners
which was well illustrated in the "Life of George Stephen-
son." In fact, he contended that Government and Govern-
ment contractors would make it less perfect, and might stop
the tide of progress and improvement. The act of 1844 could
only come into force after a special act had been passed, so
that it was merely declaratory after all. It proposed the
power to reduce the tolls of all lines paying more than 10
per cent., but so that their dividends should not thereby be
less than 10 per cent. And it proposed the power to pur-
chase all other lines sanctioned after 1845, at 25 years' pur-
chase upon the " annual divisible profits" of the preceding
three years, subject,however,to arbitration should the com-
pany consider such a price not equal to the real value of
the line. All that was fair enough, but it must, he thought,
be a mere dead letter for various reasons. There were
some 250,000 employes connected with railways. Only ima-
gine a party Government armed with the nomination and
control of such a body, and able to distribute to political
partisans or the incapable relatives of electioneering agents
some £12,000,000 a year in salaries and wages. How long
would political independence be English words ? (Ap-
plause.) How soon would our country resemble France in
the latter days of Louis Philippe, when it was said that for
every voter there was a place and placeman ? But while.
agreeing with the Times newspaper that it would be unwise
and impolitic, even if possible, tomake our Government the
common carrier for the nation, he thought the agitation of
this question paved the way for some reconsideration, after
all these years of experience, of the relations of the railway
companies, the State, and the general public. That recon-
sideration would start with the inquiry how far it was con-
sistent with true political economy, and, if consistent, to
what extent was further or other legislation required ? And
it would include those political measures of concert between
the railway interests and the State which were likely to ex-
tend by mutual action the efficiency of the great railway
machine. He understood that onehon. member was think-
ing of a Parliamentary committee on the Act of 1844, and
that others were meditating a commission. He confessed that
a committee of a moribund Parliament seemed hardly able
to deal with this question, but a commission fairly selected
was quite another thing. A commission which contained
the elements of high thought and undoubted practical ex-
perience would not ignore political consequences in dealing
with commercial interests, nor would it be led away by the
prejudice which local claims or sectional trade interests
might express through members of Parliament on the eve
of a general election. Of course he spoke in his individual
capacity only, but; it seemed to him that a commission
which included such names as Neill and Newmarch, and
representing the practical railway men, Galton, Swift,
Clarke, and Allport, ought to be satisfactory to all, and that
such a body of men of thought and of action might well re-
port to the next Parliament upon the future relations of
railways with the State, upon any general legislation re-
quired by public interests, upon the question of credit, and
upon the economy and efficiency of the future. It must be
always borne in mind that railways could not be station-
ary. The system was yet far from complete. Every line
must keep expending capital to keep pace with its traffic,
and as severity of the service increased the working cost
augmented. It was not like a lighthouse, the cost of which
was the same whether one ship or a thousand paid toll for
passing. Every new ton or person carried involved a new
outlay of capital after a very short limit of time, and a new
and additional cost. A commission might very well consider
whether four or five large systems bound to interchange
with each other by a thorough system of working might
not be better than 50 or 60 smaller ones; whether a better
co-operation in the interests of the public might not be
established between company and company ; and whether
rates might not be equalised, perhaps in some cases lowered
with advantage, both to the railways and the public. The
State, too, might consider how much of the £500,000 or
£600,000 a year paid for postal and military service to rail
ways might be paid by the mere loan of the Government
credit and guarantee on loans and capital, in place of, as
now, money payment taken out of the taxation of the coun-
try ; and it might listen to the arguments in favour of allow-
ing a confederation of large railway companies to become
mutual guarantors for a limited amount of capital avail-
able for trustees. Evidence might also be taken as to the
better adaptation of the plant of railway companies for the
conveyance of military stores and cavalry horses ; and some
scheme might be devised whereby the inventions of mecha-
nical men should not, as was too often the case now, be
absorbed by rapacious patentees, or be thrown aside by
their very abundance, but be carefully considered and re-
ported upon by some competent tribunal.

LONDON, BRIGHTON, AND SOUTH COAST.
The report of the directors states that the amount of
capital raised to Dec. 311ast was £12,314,528, consisting of
£4,967,260 ordinary stock and shares, £4,311,202 preferen-
tial stock, £1,750,510 mortgage debt, and £1,285,556 de-
benture stock. The amount of capital expended during the
half-year had been £793,472. The gross revenue for the
half-year ending Dec. 31 last had been £582,629, showing
an increase of £45,469 over the corresponding half of 1863,
and making the gross revenue for 1864, £1,048,930, or
£48,955 in excess of that of the year 1863, and £23,507 over
that of the Exhibition year of 1862. The traffic of the first
three weeks of 1865, notwithstanding the unfavourable state
of the weather, showed an increase of £7,445 over that for
the same period of 1864. The total working expenses and
renewals amounted to £292,498, or 51 per cent., against
£273,209, or 52 per cent., for the corresponding half of 1863,
showing an increase of £19,289. The cost per train mile
was 2s. 11d., against 2s. 11id. in 1863. The increase in the
working expenses arose from the increased mileage, and
from the necessity of providing the proper staff for new
stations,and maintaining the line and plant in a state of com-
plete efficiency. The revenue of the half-year was debited
with the usual £7,000 in respect of the permanent way im-
pohroarvgeme
feonrt
faentecoruesntt,oannodaiptfhtaadl
elaxapednadlsoodtoonbethareaßnoanddiotrioanoadl
the Seaford lines. The works on the South London line,

the London-bridge enlargement, and the widening of the
Greenwich viaduct were progressing satisfactorily, and the
whole would be completed before the end of the present year.
The directors remained of opinion that a considerable addi-
tion to the revenue would be derived on the completion of
this important metropolitan communication. The contracts
had been let for the line from Peckham through Streatham
and Mitcham and Sutton, and for the improved approach to
the Victoria station. The works on the Leatherhead and
Dorking line, as well as on that from Dorking to Horsham,
forming the second through line to Brighton, were also pro-
ceeding:rapidly. The South Croydon line and the Newtown
Station at Croydon would be ready for traffic during the
present half-year. The arrangements for the land for the
Kemp-town line and station were very forward ; the work-
ing plans were completed, and the contract would be shortly
let. At the special meeting of the 19th December last the
amalgamation of the following undertakings with this com-
pany was concluded—namely, the Brighton, Uckfield, and
Tunbridge-wells, the East Grinstead, Groombridge, and
Tunbridge-wells, the Banstead and Epsom Downs, and the
Horsham and Guildford. The works on all these lines were
progressing rapidly ; the two first will be ready for traffic
before the end of the year, the other two within a few
months. The only line promoted by the company in the
present Session was that from Hailsham to St. Leonard's,
in substitutiOn for the branch rejected last year. Powers
are also sought for some deviations and improvements of
lines which had been previously authorised. The net
amount at the credit of the revenue account was £154,993,
out of which the directors recommended the payment of a
dividend of 3 per cent. for the half -year, payable on the 13th
of February, amounting to £849,017, leaving a balance to
the credit of the current half-year of £5,976, and making
the dividend for the year 1864 amount to 51 per cent.