The Sun.
London, England, 1869-01-02 00:00:00

THE PROSECUTION OF 7HE DIRECTORS
OF 0 VEREND, GURNEY, AND CO_IIPANY
(L 1.4117 AD).

In cross- examination by Sergeant Ballantine the
witness said he had no communication with Mr. T.
A. Gibb before he took the shares. He had filled a
bill in Chancery against the defendants, and on
Sergeant Ballantine aFking what instructions he
gave his solicitor, the question was objected to, and
led to a lung discussion.

Mr. Giffard said Mr. Rennie, one of the defer
dants, had given a complete answer to the bill, and
he should resist all attempts to get the contents of
the charge with the answers given being made pub-
lic at the same time.
The Lord Mayor said he thought the question
ought to be answered, because the more of the facts
of the case that were made known the better it
woul d be for all purposes.

The witness said he desired his solicitor to put
the matter as favourable to himself as possible.
the object of his suit, which was stated in Chan-
cery, was to recover from the whole of the defen-
dants the money he had lost, as be alleged, by
their false statements.

Mr. T. Clarke; of Adelaide-road, Haverstock-
hill, said in August, 1865, he purchased 40 shares
in Overend, Gurney (Limited). He paid 18 pre-
mium. He held them down to the failure, and had
paid since the failure over £6OO upon them. He
had paid in all over £BOO on the shares. He ap-
plied in July, 1865, for 60 shares, but he could
not get them at the offices ; he bought them in the
market.

Mr. Howell, accountant, said he was appointed
by the Court of Chancery on the 30th of August,
1865, to assist the shareholders in the investigation
of the books of Overend, Gurney, and Co., and
0 verend, Gurney, and Co. (Limited). At the
time of the transfer of the old company the liabili-
ties stood, according to the general ledger, on the
debtor side, the amount of " loans on securities"
was £8,978,000. He had examined the nature of
the item, and in the " loan ledger" he found it set
out at length. The witness then proceeded to go
through a perfect labyrinth of figures to prove the
opening statement of Air. Lewis, when, at three
o'clock, the case was adjourned until Wednesday.

The following appeared in our Latest Edition of yesterday
evening:—
To-day the directors of the late company, known
as Overeud, Gurney, and Co. (Limited), Lombard-
street, appeared before the Lord Mayor to answer
a summons charging them with conspiring to
defraud.
The names of the defendants were J. 11. Gurney
11. E. Gurney, R. Berkbeck, Henry F. Berkeley,
W. Rennie, H. G. Gordon, and T. A. Gibb
(deceased).
The defendants were all represented by counsel.
Mr. G. Lewis, in opening the case, said it was
of the highest importance to the commercial com-
munity, and one that he was afraid would reveal a
state of things that would surprise his lordship.
The defendants were formerly the principals in the
large banking and discount house, known as Over-
end, Gurney, and Co., and that the fraud arose
out of the transfer of the business of the bank to
a public company. In 1865 steps were taken to
transfer the business of the bank to a limited com-
pany, and as the bank had a great name in the city
the scheme was looked upon with great favour. Of
course it was represented that the bank was one of
enormous magnitude and enormous profit, and that
everything was in the most prosperous condition.
The whole of the splendid concern was to be sold
to a united company for the sum of £500,000, and
unfortunately the transfer took place, and instead
of a successful business it was soon discovered that
the firm was one that was hopelessly insolvent, and
that at the time of transfer the concern was

in a bankrupt condition, with liabilities to
the extent of over £3,000,000. On the Gth

of July, 1865, it was never for one moment
suspected that Overend, Gurney, and Co. were in-
solvent. The great and important secret was only
known to the defendants, and it was clear that their
great desire was to transfer their liabilities to a
limited company, without one thought of the ruin
and misery such a proceeding would entail. Before
proceeding further he felt it only right to acquit
Mr. T. A. Gibb from any criminal charge ; and
having made that statement he would proceed with
the charge against the defendants. On the 11th of
July, 1865, the transfer was made and completed,
and thus one of the greatest frauds ever imagined
was perpetrated. The articles of association were
dram up, and agaQug Ober thin 64 it

THIS DAY.
The further hearing of the summonses, charging
the directors of the late limited company of
Overend, Gurney, and Co., with conspiracy to de-
fraud, was proceeded with before the Lord Mayor,
in the Court of Queen's Bench, Guildhall. Alder-
man Gabriel, Carden, and Dakin, occupied seats on
the bench.
Mr. Frederick Lewis was the first witness, he
said he was clerk in the Joint Stock Registration
Office. lie produced the official copy of the ar-
ticles of association of the limited company of
Overend, Gurney, and Co. Tile deed was regis-
tered on the 12th of July, 1665. The names of
the parties to the deed were 11. E. Gurney 4,000
shares, J. 11. Gurney 4,000 shares, R. Birkbeek
2,000 shares, S. Gurney 600 shares, 11. Berkeley
1,000 shares, IV. Rennie 500 shares, 11. G. Gordon
200 shares, and T. A. Gihb 1,000 shares. The
above persons were also to be the first directors of
the new company, and £5OO per annum was to be
paid to the managing directors ; the other directors
were to receive £5OO per annum. The winding up
order was dated 23 June, 1866. There was no
list of shareholders filed as required by that Act.
Dr. Thom, of 90, Gower-street, the prosecutor,
said—On the 13th of July, 1565, he saw the pros-
pectus of the company, and afterwards purchased
60 shares at £5O each in the concern at 21 premium.
Up to the 15th of November he had paid in £9OO
irrespective of premium. He had since that been
called upon to pay £1,200 on the shares since the
stoppage of the company. He was present at a
meeting after the stoppage, when Mr. Rennie said
the directors were all large shareholders and deposi-
tors in the company. He was chairman of the com-
mittee of investigation.
In cross-examination the witness entered into a
variety of minute details, and also gave an outline
of a meeting held after the failure, at which it was
shown that separate estates of the Messrs. Gurney
were under lien to the new company to an unlimited
amount. Ile did not know that Mr. Gordon had
paid £7,000 for his shares.
Mr. W. Peck, jun., said he resided at Sydenham.
In 1865 he saw the prospectus of Overend, Gurney,
and Co. in Liverpool. He purchased 2,000 shares
in the company at an average of nearly 7 prem.
Before the stoppage he had paid to the company on
these shares nearly £44,000, and since that he had
been called upon to pay £40,000 on them—the
payment in all of about £84,000.
Mr. Lewis--What induced you to take those
shares?
Sergeant Ballantine objected to the question,
but it was ultimately answered by the witness, who
said he was induced to take the shares upon the
statements contained in the prospectus.
Mr. Sergeant Parry said it was most important
to prove how and by whom the prospectus was
issued.
Mr. Lewis then called Mr. W. Turquand, on his
subpoena, but he did not answer. This led to a
little angry discussion between Mr. Lewis and Ser-
geant Ballantine, after which it was found that a
gentleman named Boyce attended on the part of
Mr. Turquand. Mr. Lewis, on being made ac-
quainted with the fact, then called for a printed
copy of the prospectus, which was at once handed to
him. lle was about to place it in the hands of the
witness, when Mr. Sergeant Ballantine objected to
the witness answering the question without it was
proved that one of the defendants was acquainted
with the contents of the document.
The Lord Mayor asked the learned Sergeant
whether he really objected to the production of the
document. The learned Sergeant still persisted,
and the Lord Mayor said he thought it would be
better to prove the contents of the proctus be•
fore it was referred to.