The Sun.
London, England, 1869-01-29 00:00:00

THE CHARGE AGAINST THE DIRECTOR)!
Or THE MERCHANTS COMPANY.

On Thursday, at the justice-room of the Mansion House,
Mr. Richard Stuart Lane and Mr. James Childs were
charged before the Lord Mayor, " that they, being directors
of a certain public company called the Merchants'Company
(Limited), unlawfully did make, circulate, and publish,
and concur in making, circulating, and publishing,
a certain written statement, to wit, a circular accom•

panying a call upon the shareholders in the said company,
both well knowing the same to be false in a certain
material particular, with intent thereby to deceive and
defraud John Land and other shareholders of the said
company."
Mr. Douglas Straight appeared for the prosecutor ; Mr.
Lewis defended Mr. Lane, and Serjeant Parry and Mr.
Ledgard the other defendant, Mr. James Childs.
Mr. D. Straight, in opening the case for the prosecution,
stated that it was his duty to appear against the defendants
on a charge of having issued or caused to be issued a
circular which was calculated to deceive and defraud the
shareholders of the Merchants'Company. He would make
a few remarks about the matter before he went
into the material facts of the allegation.
What lie would say about it was that they had put forth
a false circular, and one calculated to deceive the creditors
of that company ' • mid he would remark that all share-
holders ought to be kept in full knowledge of the affairs
of the company, in order that they might not be deceived.
By the circular which had been issued, Mr. Lane and Mr.
Childs bad told the shareholders that at that date (25th
May, 1866) the company was not suffering from any losses.
He was also sure that when the Lord Mayor had heard all
that would be adduced before him he would refer the matter
to one of her Majesty's courts. He would further observe
that he should not go into the affairs of the Merchants'
Corn pany except as they related to this false circular which
had been issued with the cognisance of Mr. Lane and Mr.
Childs. It appeared that the Merchants' Company was
constituted in October 1865, and had a very short career,
terminating in November 1866. Mr. Lane was at
this time on the board of the Credit Fonder
Company of England, and there was no doubt
that he was the head and chief of the Merchants'
Company. He conducted an unfortunate transac-
tion at Marseilles. The learned counsel then stated that
the firm of Lane, Hankey, and Co. was entirely sup-
ported by the Merchants' Company, and that the present
defendants were the instruments by which shares had been
transferred to various individuals for the advantage of
themselves. The prosecutor in this case was a Kr.
Land, who lived at Derby, and he applied for 100
shares, and much to his astonishment he was allotted
the whole of them. He paid £lOO on them and £4OO
afterwards, but he had not paid any calls. This was
remarked upon by Mr. Childs at the first general meeting
of the company, which took place only one month before
its winding up, and Mr. Land endeavoured to speak upon
the subject, but, according to the rules of the association,
he was prevented from doing so by Mr. Lane.
The learned gentleman then went into a long
review of the transfer of shares which was fully
discussed in another summons against Mr. Lane,
which was heard on Tuesday last. He alleged that the
company, when represented as being in a flourishing con-
dition, was making a mere trifle, and was not a speculation
which it would be desirable for anyone to invest in. He
argued that S. White and Co., to whom £5,000 had been
paid, could not be discovered, and urged that in point of
fact Lane, Hankey, and Co. were S. White and Co. also.
He alleged that Mr. Childs was the means by which
money had been paid over to the firm of Lane, Hankey,
and Co.

Mr. Lewis was understood to say t lat this was only a
statement.

The Lord Mayor said that he only looked upon this as
a statement. There was no evidence before him.
Mr. Straight said that he was aware of that, but that
he had had an opportunity of looking at the books of the
company. He was sorry that he was obliged to appear
assuming. Mr. Straight then went into a long detail of
the shares held by the various members of the company.
He concluded by stating that all the assertions which his
speech contained he could prove by the most conclusive
evidence, and also stated that the Merchants' Company's
liability depended upon that of Lane, ilankey, and Cola-
pany. He also said that a Mr. Barlow had remonstrated
over and over again to Mr. Childs upon the advances made
to Lane, Hankey, and Company, and that he had
said that that firm must be kept upon its legs
for their own safety, and in the result it proved
that it was so, as the Merchants' Company was
obliged to be wound up when Lane, Hankey, and Co.
went.

Mr. Spier, examined, said that he was a clerk in the
office for the Registration of Joint-stock Companies. He
produced the memorandum of the association of the Mer-
chants' Company. The registration was on the 6th
October, 1865. The names appended were D. W.
Chapman, 200 shares ; R. S. Lane, 200 ' • EL E. Chapman,
200 ; Helbert, 200 ; Alderson 200 ; Heritage, 10.
Mr. Childs was not on the list. The directors were
entitled by the deed to £5,000 for the preliminary
expenses of the company. The order to liquidate
the company was dated the 12th November, 1866. He
belie\ ed that the official liquidator was named Cape.
The order to liquidate was received at their office on the
27th October, 1866.
Cross-examined : He said that under the 10th Article
the directors might call upon the interest to the amount
of £5 a share, and that if such were not responded to
they might forfeit the shares.
Mr. Lewis : Any person, shareholder or not, can see
that document (which contains the articles of association)
at your office on the payment of one shilling.
Witness: Yes ; they are entitled to see them all.
Mr. Smith, who was clerk to the Registrar in Bank-
ruptcy, produced a deed of inspection purporting to be
signed by R. S. Lane, H. E. Chapman, Frederick
Helbert Helbert, all residing in Old Broad-street, and also
by G. Dubois. It certified that the joint debts of the
firm were £282,000 odd, secured and unsecured.
Mr. Cape said that he was official liquidator to the Mer-
chants' Company, and that he had all the books of the
company ia his possession.
Serjeart Parry : You have examined tLe books of this
company. Can you tell me whether there were any trade
losses in Slay 1366 ?
Mr. Cape : I can only tell you by the books ; there was
no profit and loss account made up at that period. The
only item of profit was in April 1866, and that was
£34 13s. 4d.

Serjeant Parry : Was there, to your knowledge, any
loss at that period ?
Mr. Cape : No, there was not ; but it has not been my
duty to look into that, and I have not taken a full con-
sideration of the point. There was no ascertained bad
debt. There was a very large Swedish business, and that
was transferred from Lane, Haukey, and Co.
By Mr. Lewis : Non-payment of calls are generally con-
sidered as deductions from the capital. They would not
be put to the profit and loss account. They would be a
deduction from the call capital. The forfeiture of shares
would be a profit to the company. Whatever had been
paid would be the profit to capital, which profit would be
assigned to the profit and loss account. The company had
the power of reissuing these shares.
Mr. Straight objected to this cross-examination.
Mr. Lewis : Surely, Mr. Straight, you will remember
that you come here accusing two gentlemen of fraud, and
this is the first opportunity that I have had of asking any
questions for many weeks.
Witness said that on the 1,600 shares forfeited there
would he £5 profit to the company.
Mr. Lewis : Is it the custom of any public company to
issue any statement as to the amount paid on the calls of
shares except in the balance. sheet ?
Witness : No, it is not. Commissions cannot be
charged until account sales are made up. It is made up
on each transaction. There were two several stocks
of wood, and they realised the difference between debits,
£10,570 6s. 10d., and the credits, £19,960 13s. 11(1. The
account of Lane, Hankey, and Co. was reduced by this
£19,960. By D. second transaction the debt of Lane
Hankey, and Co. was reduced by £9,531. ,
Mr. Straight here objected that it would be more con-
yenient for all partiesif Mr. Lewis would desist from this
cross-examination.
Mr. Lewis said that it was a very great hardship that his
client should be brought there on that charge unsupported
by any substantial evidence. The summons had been
issued three weeks ago, and now, although Mr. Lane was
most anxious that the fullest investigation should be
made, the prosecution asked for a remand. He was sure
that his lordship, as the chief magistrate of that great
city, would not allow two eminent commercial men to be
brought constantly before the public in this manner.
Mr. Herbert sated that lie produced the original deed
of inspection of the firm of Lane, Hankey, and Co.
A consultation then took place, and it was agreed
that the further hearing should be adjourned till Monday
week,

TILE LITE MR. ERNEST JONES. -- At a
special meeting of the Office Committee of the United
Liberal party, held at Manchester on Wednesday evening,
it was resolved, on the motion of Sir E. Armitage,
seconded by Mr. William Warburton : " That this com-
mitte has heard of the death of Mr. Ernest Jones with
deep regret, and desires to express its sympathy with his
surviving relatives in their. bereavement. That the Executive
Committee of the United Liberal Party be invited to
join the Office Committee in paying a last tribute to Mr.
Jones's memory by attending his funeral."

The scheme of a penny ocean postage between
Great Britain and the United States looks hopeful.
Mr. Hadfield, M.P., in a letter to the Manchester
Chamber of Commerce yesterday, intimated that
the Hon. Roverdy Johnson, having recommended to his
Government the adoption of this project, Mr. Bazley, M.P.,
and he had an interview with the American Minister on the
subject, and had presented a memorial, signed by 44 or
45 members of Parliament of all political sentiments,
stating their willingness to bring such a measure before the
notice of the Government, and to support it. He enclosed a
letter from Mr. Johnson in reply, which stated that Mr.
Johnson had lost no time in forwarding the memorial to his
Government, and commending it to its favourable conside-
ration.

CHIGNONS DOOMED !—The Sport, a Paris journal,
announces that the great ladies of the French capital have
determined to abolish chignons. " The character of the
head-dress," it says, " is to undergo an important reform ;
the command has gone forth that false hair and wigs
must be repudiated." And not only so? but ladies are
always to appear as if they dressed their own hair, for,
" when the work of a professional is manifest on their
heads, prestige ceases. In the day time the hair is to be
simply plaited, and confined in a net ; in other words,
instead of assuming a pyramidal form, it is to have a ten-
dency to fall, like that of Niobe. In the evening it will
only be necessary to put on the head a crown, or a wreath
of roses, of ivy, or of some creeping plant." The ,S*pi,rt
adds ;—"All is over with false hair, decked with gilded
or metal articles. Henceforth false hair at best can
only be tolerated as a detail, as a modest auxiliary—it
can no longer be the principal or the only ornament of
the head."

The authorities of the Ross Workhouse, Hereford-
fordshire,Tare in jeopardy on Wednesday. The wife and chil-
dren of a tramp had taken refuge in the workhouse and the
wife died there of consumptkn. The tramp, a Scot.liman,
hearing of her death, walked from Liverpcol and tool:
away his children, ono of whom was in a very
debilitated state. This child ultimately died in CLil-
dren's Hospital, Gloucester, as the surgeons said, from con-
sumption of the bowels and the want of proper attention to
the frightful sores on the body. The body of thy; child
weighed only 131 b., and the sores upon it were deep and
ulcerated, and arose from neglect, and from the child hav-
ing been allowed to lie in filth. Tho master and matron
said that all duo attention had been paid to the case, and
that when the father took the child away the worst of the
sores did not exist. But the Gloucester surgeons positively
declared that the sores could not have arisen in the interval
between the child leaving the workhouse and its being re-
moved into the hospital. The jury wished to return a
strong verdict, but by the advice of the Coroner, they
found " Death bir_pgtutal causes," accelerated by defective
414rarbg, •