The Sun.
London, England, 1849-12-22 00:00:00

THE SUN,

none of these instances, where profit was certain, did
they exercise that power by allotting-to themselves or
others any portion whatever of the surplus shares, which
have remained in every case the property of the
company.
" 2. As to loans made out of the company's funds to
' directors and others:—
" Towards the close of 1846 it was evident that, for
' some time at least, notwithstanding the considerable
expenditure going forward on works, a large floating
balance would remain in hand, a portion of which the
directors deemed it advisable to employ temporarily in
loans at interest on security. In this manner, on the
security of shares of this company amply covering the
amount, various sums were lent between December,
1846, and February, 1848, to seven individuals, three of
whom were directors; the total amount of such loans
was under 50,000 L, he rate of interest five per cent.
With one exception, the whole of those sums were
repaid with interest when required by the directors.
The exception is that of a shareholder (not a
director) largely interested in the South-Western
Railway. The directors not being able to obtain re-
payment from him at the stipulated period, did precisely
as they would have done in the management of their own
affairs, they obtained payment for one half the amount,
and took adequate security on real property for the
remainder.
" It way be here proper to remark that, in the occa
rional disposition of balances in hand, the directors have
been guided by no other rule than that of obtaining the
highest rate of interest consistent with good security ;
and whilst in the course of several years, the aggregate
amount of interest thus earned must be considerable,
no loss has ever been sustained by the company. The
loans to members of the direction were certainly accepted
at the time, under the belief that the accommodation was
mutual ; but the directors cannot now be insensible to
the objections to which such loans are liable ; for, how-
ever convenient and advantageous to the company they
may be, as mere money transactions, every such advan-
tage is more than neutralised, if misconception and dis-
trust
are thereby occasioned. 1
" 3. The Directors' Arrears of Call :—lt may be well.
at once, to state that it is understood that the remarks on
this subject, have been pointed exclusively at two mem-
bers of the board. These gentlemen (Messrs. Chaplin
and W. Reed) have requested that there may be no re-
serve as to their names, or as to the circumstances under
which these arrears have arisen. First, therefore, as re-
gards Mr. Chaplin
" It is well known that Mr. Chaplin has, for the last
ten years, been a very large shareholder in the com-
pany, that he has, on all occasions, taken his full pro-
portion of all new creations of shares, besides, on some
occasions, purchasing shares, and that his interest as a
shareholder exceeds that of any proprietor. The ex-
treme confidence which led him to risk so large a pro
party in, and to bind his fortunes,to this company, pre-
vented his being a seller of shares when he might
have realised very large profits, and has always made
him unwilling to diminish his interest at every succes-
sive period of decline in pricess, whilst the repeated calls
upon the large number of shares he held have conse-
quently brought upon him fresh liabilities. Mr. Chaplin
was entitled to rely on his other large resources to enable
him to meet those liabilities; but the circumstances of
the times at the end of the year 1847, followed by the
French Revolution, have operated in rendering these re-
sources unavailable, without excessive sacrifice.
"In the spring of 1845 Mr. Chaplin lent to the com
pany the sum of 43,000 at 31 per cent., which was placed
to his credit in the ledger ; the calls up to the end bf
1847 being:placed to his debit there. Up to the 31st
May. 1846, he remaiued a creditor of the company.
" The several calls and deposits for new shares at the
close of 1846 brought a considerable balance against
him, which was increased during 1847. The various
sums paid in liquidation of these claims by Mr. Chaplin
to the eompany during the distressing years 1847 and
1848, and to this date, amount in the aggregate to
106,2191. 19s. 9d., leaving him still in arrear of call
48,2451., exclusive of the optional calls. Mr. Chaplin, at
this time, is a holder of stock, upon which 194,5741. has
been paid.
" Mr. W. Reed's arrears of calls (exclusive of the
optional calls) amount to 10,0001; they arise solely on
1,500 new shares taken up by him on the invitation of
the directors in December, 1846, being a portion of the
extra 15,000 thirds of 1846-47 ;allotted under the cir-
cumstances already explained. The whole of the calls
on his other shares are fully paid. Mr. Reed was not
then a director of the company. but became so in
February, 1847. The remarks already made in re-
spect to Mr. Chaplin apply in some degree
to Mr. Reed ; both have been long associates
with the South-Western. Company ; both have
had a confident opinion of its resources, and both were
peculiarly affected by the adverse turn of affairs, and
especially by the unexpected revolution in Paris, in
February, 1848, which so seriously injured railway pro
perty in France; and it may be added, that both have
been especially marked by the seal and energy with which
they have devoted themselves to the service of the South-
Western Company. Taking all these circumstances
fairly into view, the directors are willing to abide by the
judgment of any unbiassed and honourable body cf
gentlemen, as to how far it was possible for them to
regard these cases otherwise than as justly entitled to
the same just co:isideration as was extended to the
utmost to every other proprietor. To the same tribuna,
they are also willing to refer the general question, of
whether in any degree it can be justly alleged in regard
to the accusations brought against tbem, that they have
sought their own individual advantage at the expense 01
the proprietors."
The CHAIRMAN, in opening the proceedings of the
day, entered into a lengthened detail of the history et
the undertaking, and exhorted the proprietors ti
abandon the system of bickering, which had of let,
characterized their proceedings. Many circumstances
had arisen to depress the value of their property, but
he protested, upon his honour, that the directors had

done all they could to overcome them, and advance
the interest of the shareholders. The practice of cast
ing obloquy upon the Executive of a railway had been
too freely indulged in, and he was not surprised that
his own board had come in for its share of abuse,
but no matter whatever the imputations were that hac
been cast upon him and his brother directors, he
could assure the meeting that there was not the sha-
dow of a feundation for them. Ile admitted that
their past policy had been some times faulty, but
were not the proprietors, as well as the directors, as
much to blame for this ? All the sehemes they had
promoted, and some of them certainly were most de-
tective, and had turned out most disastrous, had been
fully sanctioned by the shareholders after due delibe
ration, and it was not till that approval was obtained
that the directors ventured to prosecute them with
energy. True, many of their calculations had beer,
negatived by results, while many of their works had
proved failures in a pecuniary sense, but that conk
not be charged as the fault of the directors. They re-
commended their plans and schemes, believing then.
them to be for the interest of the proprietors; and
if they had failed, which he certainly was not pre
pared to deny, they ought not to be charged with
having deliberately deluded the shareholders, but
rather that they had simply committed au error of
judgment. Now, he put it to the shareholders, did
they think men of character and station like those on
this board could be guilty of the offences which had
been laid at their door ? Why, leaving out of the
question station and character, the stake they held in
the concern was too large and extensive to admit of
their trifling with its affairs ; but it would be useless
their attempting to recover their lost posi-
tion unless they had the confidence of the
great majority of the proprietors. The public would
have no faith in the undertaking while they conti-
nued to disagree in the manner they had done.
Something, therefore must be done to get rid of the
stigmas which bad been cast upon the board of di
rectors, and, as there was no foundation whatevet
for them, he and his colleagues thought that the best
plan of disabusing the public mind on the subject
was to have the matter fully and Impartially in-
vestigated by a committee of shareholders. He
had therefore to move, in conclusion,,that a committee
be appointed to investigate the charges and statements
made against the integrity of the directors at the last
special general meeting, and any other charge
affecting the honesty and probity of the directors
the committee might think fit to inquire into.
Lord MORELY had much pleasure in seconding the
resolution, being quite confident that the result of
the investigation would satisfy the world that the
imputations which had been made against the board
of Directors were wholly and entirely groundless.
Mr. JOHNSON wished to know what proportion of
the falling off in their receipts arose from bad times
—what proportion were from the depression in the
money market, and what proportion arose from the
reduction of charges?
The CHAIRMAN was not in a position to give these
proportions, but he did not think any great falling
off resulted from the reduction of charges. The
charges were reduced in 1846, but they were now at
the maximum.

Mr. IliNwicx did not think it necessary, after the
report, and the candid statement of the chairman, to
have the proposed ivestigation. The majority of the
shareholders, he was convinced, were fully satisfied
that the depression of their property resulted from
untoward circumstances, and not from any breach
of faith, or misconduct of the directors, and would
therefore, with the permission of the meeting, move
as an amendment a vote of confidence in the direction.
Mr. Sisow cordially seconded the amendment, and
protested that it was not only unfair to the directors,
but highly injurious to the company that these un-
founded charges should be so unscrupulously in-
dulged in.
Mr. MAYE, of Manchester, was not satisfied either
with the report or the statement of the Chairman,
who, he thought, had good cause to say, "Heaven
save me from my friends 1" The Chairman, had,
however, told them that it was necessary
for the interest of the company, and indis-
p:nsibly necessary for the vindication of his
own character that an inquiry should be had than up
jumps one of his friends and says, " Pooh ! pooh!
we don't want it." lie, for one, Lowevtr, did Ns ant
it, and until the investigation had taken place neither
he nor his fellow shareholders in Manchester would be
contented to allow the present board to retain their
existing position.
Lord .I.IIORELT entreated the mover of the amend-
ment to withdraw it, and allow the committee of
inquiry to be appointed. The directors were anxious
that this course should be adopted, and he trusted the