The Sun.
London, England, 1869-02-18 00:00:00

THE SUN, LONDON, 7HURSDAY EVENING, FEBRUARY 18, 1869.

"FALSE, fictitious, and fraudulent" commercial
zansactions, as Vice-Chancellor MALINS alliteratively
terms them, are becoming a drug in judicial reports.
The history of companies worked for the sole benefit
of directors, and of private firms eking out theirnecessi-
ties by instalments from the public purse, is drearily
uniform. The expedients by which responsible persons
appropriated the money entrusted to their care, and
vet managed to steer clear of the criminal law, are
varied, and exhibit much ingenuity, but are all
founded upon a common basis of falsehood. And
yet it is only at the present time that this great
national evil is likely to be seriously dealt with. The
disclosures are now being made ; public indignation
is daily recruited by fresh revelations ; the losses to
many thousands of all classes are still unrepaired.
If the new phases of fraud in the guise of commerce
do not receive serious attention now, they are likely
to remain neglected. But certainly the directors of the
company of which Mr. ILutvEY LEwis, M.P., was one
of the chosen guides, have succeeded in realising all
that is possible in the way of commercial originality.
The suit in which the member for Marylebone figures
so prominently has revealed " arrangements of
more than usual complexity. Mr. llaiivEY LEWIS
and others got up a company to buy the bank-
ing house of LAFITTE and Co., Paris. They
intended to do an extensive business at both
the great capitals, and they designed that their
company, like a huge magnet, should attract " other
banking and financial companies," which were to be
incorporated with the old. One of these was the
Ottoman Company, but as the proprietor of tha
Paris Bank would not give up his property until
40,000 shares in the new company had been taken,
and as the assets of the Ottoman Company were not
ready to meet the claim, an extraordinary manoeuvre
was resorted to. The International Contract Com-
pany was asked to assist the Ottoman Company,
and the Paris banker offered to give the directors of
this company £25,000 if they would raise the 40,000
shares. The matter was further involved by the
National Bank, of which Mr. HARVEY LEWIS was a
director, consenting to discount the promissory notes
of the International Company to an amount sufficient
to enable that company to taliethe 40,000 shares in the
new company. It was arranged that the National Bank
should discount the promissory notes, but that the new
Paris and London banking company was to keep a
balance sufficient to cover the advances made on these
notes. This arrangement, with various fees and pay-
ments, was carried out. When the directors of the
new banking company applied on the Stock Ex-
change for a settling-day, they produced a letter,
signed by the sub-manager of the National Bank, and
certifying that the new company had a balance in
the National Bank to the amount of £3:37,000.
It now transpires that the guarantee was worthless;
the greater part of the sum in question was held, but
held only to be applied to the liabilities of another
company. Money had been paid into the National
Bank for a specific purpose, and yet the directors,
Mr. HARVEY LEWIS and others, allowed it to be
quoted on the Stock Exchange for an entirely
different purpose. The transaction was one which
entirely justified the VICE-CHANCELLOR'S dictum
that all the parties concerned ought to be turned out of
court. And few persons will question a judgment
which represents Mr. IlarivEY LEWIS and his col-
leagues as guilty of acts " false, fictitious, and
fraudulent," which will give Marylebone the
opportunity of electing another representa-
tive, and which holds the National Bank liable
for the whole amount of the false guarantee on
which these transactions were based. In point of
fact, the shareholders of that bank are punished for
the deeds of their directors. It was to obtain the
£25,000 that this falsehood was employed. Mean-
while, whatever benefit Mr. LEWIS and his colleagues
may have derived from their manufacture of docu-
mentary authority, it is the old story with the share.
holders. All the companies are being wound up.

LATEST INTELL LGENCE

(REU'^Ell'S TELEGRAMS.)

THE formal statement of Mr. WATKIN EDWA.RDS
in the Bankruptcy Court must possess a certain per-
manent value. As it is uncertain when the charge
against the directors of the- great discount company
will come on for hearing, or whether the eccentrici-
ties of British law will ever allow us to hear the last
of it, so clear and lucid a statement of an important
part of the case must be of great service. The

special jurymen must be thankful for a
document which will save them so much trouble.
No amount of evidence-weighing could put the
history of Messrs. OVEREND, GURNEY, and Co., so
_ _ _

far as Mr. EDWARDS was concerned in it, in a clearer
light. What may be the effect of this narrative
upon the future position of Mr. EDWARDS it is for
the LORD CHANCELLOR to decide; but, as a matter

of fact, the nature of the official assignee's explana-
tion does not admit of the remotest doubt. The
evidence given before the City magistrates told its own
tale. The explanation is simply another edition of the
evidence, softened in some places, but very materially
embellished in others. The public may charitably
allow Mr. EDWARDS the full benefit of his illness in
1867. There can likewise be little dispute that his
examination before the magistrates was severe, and
that he met with " great hostility from all parties,"
meaning that public feeling was unanimous on the
subject of his transactions. Nor is it worth while to
contest the point whether Mr. EDWARDS attended the
meetings of the Atlantic Company once or twice a
week, whether the absorption of time in this sort of
business was so great as is generally believed, whether
his emolument were so far reduced by the Bank-
ruptcy Act of 1861 that his embarking in trade was
only to recruit a diminished income. The conclu-
sions drawn from the evidence of Mr. EDWARDS
he became the paid adviser of the discount
company whilst official assignee at the Bank-
ruptcy Court—that he was connected with many
firms with which the company had dealings, and
he received money from both sides; that during his
period of advice the nun of the great house was ,

were,

rate he has begun his arduous work in the tight spirit, begun and completed. These matters of fact,
and apart from party feeling and political prejudice, notwithstanding Mr. EDWARDS'S " confusion " at
all must admit that he is fully entitled to the proud the Guildhall, are in no wise altered in the explana-
position he now holds, alike from his ability and from tort' - •
document. The LORD CHANCELLOR will base
his judgment upon the story, but the story itself is
long devotion to the public service of his country.
In the secondary portions of the debate, we of the plainest description. All that Mr. EDWARDS
does in the way of mitigation is to subject
may discern an active spirit of reform, and there his evidence to a species of reduetio ad
seems little reason to fear that this session will be absurdum reasoning. He solemnly denies that he
wasted as too many have been. Mr. GLADSTONE used any information derived from his official posi-
emphatically declared that physical impossibility tion for the benefit of OVEREND, GURNEY, and Co.
would alone prevent them from carrying out all their The £5,000 lent to Mr. CHAPMAN was made over
wishes, but that the house must accept the mention of from motives of the purest friendship. His relations
Scotch education as an earnest of their desire to have with OVEREND, GURNEY, and Co. were no secret,
the whole question brought forward as soon as pos-
was also notorious. Mr. EDWARDS pleads that the and the gift of the yacht by Mr. STEFANOS XENOS
Bible. The ratepaying question must be looked to,
he declared, withont reference to p irty conflicts. commission he received from Mr. Z. C. PEARSON
The public will have seen with satisfaction that M was received with the full knowledge of at leastr. Mr. HENRY GURNEY. From these and other
BRUCE, in the course of yesterday's sitting, ob- similar arguments he deduces that his business
tained leave to bring in a bill for the more effectual transactions out of the Bankruptcy Court
repression of crime. This is a step in the right direc- were not improper, and were merely for the purpose
tion, and it is fortunate that the right hon. gentle- of eking out a reduced income. To investigate
man has had his attention called to it so soon, as we such a conclusion now that Mr. EDWARDS is himself
may now have a chance of seeing some legislation on trial would be trenching upon delicate ground;
taken place on the subject, a consummation earnestly but it may be observed that some of the gravest
points of the Guildhall revelations are wholly
to be desired. The new Session has commenced
calmly, but with more dignity than might have untouched. It is somewhat surprising to
been expected, and it seems suitable that at an ex-
learn that the LORD . CHANCELLOR of 18641 V
citing juncture like this the two great party OVEREND, GURNEY, and Co. But taking Mr.
chiefs should abstain from irritating encounters-, and EDWARDS'S answer, " that he was undertaking
turn their thoughts entirely in the direction of the arbitrations, references, and negotiations," in the
public interests. They may fail after all, it is true, fullest acceptance of the words, it is clear that it
in persuading their followers to keep within due does not describe the nature of his extra-official
bounds, but meanwhile we should accord just praise work. He did not say that he was a paid official
to the ex-Preraier for this graceful recognition of the adviser. Nor does he explain how he got the
claims of his rival, and to the present possessor of appointment with the discount company; nor how
the confidence of his Sovereign for the spirit of mo-
in many other cases he was paid by various firms
for driving hard bargains with them in the interest
deration which he has displayed in a time of much
temptation. But really great statesmen must always ofOVEREND, GURNEY, and Co.
rank their country's interests higher than the On the important point whether his receipt of
passing commissions was sanctioned by the directors who
chances of the hour, which bring defeat or victory employed him, Mr. EDWARDS and the directors them-
alternately in their train. selves are hopelessly at variance. But as Mr.
EDWARDS contradicts himself on other important
points, the calculation of probabilities is not diffi-
cult. He first affirms that his official knowledge
was not used for the benefit of the discount com-
pany, and then, in a very remarkable series of
revelations, states that it was. We now learn that
one of the chief duties of the principal adviser was to
keep certain ruined firms out of bankruptcy. The
discount company was so involved that the revela-
tions of a bankruptcy court would have produced
an immediate catastrophe. " With all cases
with which he had to deal," he was to avoid
the Gazette at any cost. Had this employ-
ment no connection with his position as official
assignee ? Yet this was the work upon which he
laboured " night and day,"
and so far successfully.
It must be owned that he faithfully carried out the
" scheme of concealment " which had been laid down,
and kept estates out of bankruptcy. But though lie
made himself master of all the firms with which he
had to deal, he did not fail likewise to
make himself master of the discount firm.
He gained such knowledge
of this great concern
that everything he asked for was conceded to him.
It was then that his destructive powers came into
full play, and everything commercial crumbled up
before him, as if touched by a magician's wand. The
GURNEYS might well have paid £O,OOO a year to
escape his advice ; but this could riot be. The
rupture came at last; but Mr. EDWARDS'S know-
ledge was still in his hands, and by means
of it he insisted on receiving gentlemanly treatment,
and upon being paid £20,000. His scheme of con-
cealment was so effectually carried out that he con-
cealed both his own and his employers' transactions
from 1804 until his defective memory recalled a part
of them in 1800. Mr. EDWARDS'S explanation ex-
plains much.

TILE CIiURCII CONGRESS.

The Liverpool Church Congress will open on Tuesaay,
October sth, under the presidency of the Bishop of
Chester. The sermon will be preached by the Bishop of
Derry. The following list of subjects has been fixed
by the, Executive Committee :-1. Improvement of our
Church Services ; Rivision of the Rubrics; How to
improve the attendance at public worship—(to be
taken at one session ;) 2. The Church's work in our
large towns ; 3. Phases of unbelief, and how tc
meet them ; 4. Diocesan organisation ; 5. Exploration
of Sinai and Palestine : the Eastern Churches
6. Clerical education and the ancient universities ;
7. Capabilities of our cathedrals ; 8. Education, including
Sunday schools; 9. Foreign missions; 10. Church
patronage, and superannuation of the clergy. The secre-
taries specially appointed to correspond with speakers and
writers are the Rev. T. E. Espin, rector of Wallasey,
Cheshire, and J. W. Cropper, Esq., of Liverpool. The
Congress will occupy four days. One of the evenings is
to be assigned to a working men's meeting.

THE HARTLEPOOL ELECTION PETITTON.

The petition against Mr. Jackson, the Conservative
member for the borough, which was appointed to be
tried yesterday, has been withdrawn. Counsel on both
sides stated that there was no case against the sitting
member, and the matter was formally adjourned
to allow any one else to take up the petition, should they
feel disposed. It is anticipated that nothing snore will
now be heard of the matter. At the general election
the candidates were Mr. Jackson (C.) and Mr. Richard.
son (L.), and up to the close of the poll it was doubtful
which side had obtained the victory, the committees of
both gentlemen placing their own candidate in a majority.
At the declaration of the poll, however, Mr. Jackson was
returned by a majority of three, the numbers being :
Jackson, 1,550; Richardson, 1,547. The defeated midi-
date demanded a scrutiny in the petition, but this has been
abandoned.