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

1,240
The Waterloo Purse and Waterloo Plate 360

ENCE.

IRES FOB, 1869.
rARY.

1, 2
I:IARY.
I Nottingham Spring... 23, 24
Chelmsford.... ......... 25, 26
I Derby Spring 25, 26

West Drayton lB, 19
West Somerset lB, 19
Margate . ... 29
Durham... 2, 30
30, 31
Epsom

Newmarket Cravon...l2, &e.Enstixune l9
Lewes '9021
Croydon._ 22, 23
Newmarket Ist Springi _

26, &c.

£lOO

THE PROSECUTION OF 7HE DIRECTOR S
OF 0 VEREND, GURNEY, AND CO2IIPANY
(L 111117 LD).

THIS DAY.
To-day the directors of the late company, known
as Overend, 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. H. Gurn-ey,
H. E. Gurney, R. Berkbeck, Henry P. 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
sta:e of things that would surprise his lordship.
The defendants were formerly the principals in tl.e
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 co npany. In 1865 Eters 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 wit's great favour. Of
course it was represented that the bank was one of
enormous magnitude and enormous profit, and that
everything was iu 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 6th
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 feltitonly right to acquit Mr.
Gibb and Dr. Thom 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
skilfully drawn up, and among other things it
laid down that the defendants were to be the first
directors of the new limited company, and such a
proceeding at once prevented the great secret of the
hopeless bankruptcy becoming known. Two of
the defendants, Mr. J. H. Gurney and Mr. Birk-
beck, were to be the managing directors of the
concern, with a salary of £5,000 a year, and every-
thing made to appear that the whole concern was
one of the most prosperous in the city. But the
real fact was quite the reverse. The bank was rotten
to the core. Nearly the whole of the capital had been
lost, and the cash at command, in a bank with mil-
lions, set down as capital, was scarcely £125,000.
He (Mr. Lewis) could hardly imagine a greater
fraud than that wuich had been perpetrated—per-
petrated, he contended, by the defendants with a
full knowledge that they were all ruined beyond
hope of redemption without other parties could be
found on which their enormous deficiencies might
be cast. That the position of the bank was well
known to the firm there could be no doubt, because
previous to the transfer and registration of the
limited company he had a letter, written by
one of the Gurneys interested to a very large
extent both iu the London and in the
Norwich houses, dated the 4th day of
July, which contained words to the effect that if
the catastrophe became known he and his family
would become nearly, if not atterly, destitute, and
this was the person wno was to be the chairman of
the new and supposed wealthy company. Some of
the purchase money of £500,000, it was to be ex-
pected, would at least have been forthcoming when
the crash came, but that, like all the visionary mil-
-1 ion, had melted away, and nothing was
left for the unfortunate shareholders but
misery, and to many ruin. The proper course
for Overend, Gurney, and Co. to have taken
when they became aware of their insolvency was to
have pulled up as honest men should have done, but
this they did not do ; but, on the contrary, sought to
escape from ruin themselves by shifting their lia-
bility on others, and this furnished the key to the
whole transaction. They concealed everything that
could give the least idea of their utter worthless-
ness, and succeed by secrecy in concocting a fraud
which, he contended, had no parallel in the annals
of any other commercial country in the world.
[We shall continue the case iu our late edition.l