The Sun.
London, England, 1857-08-27 00:00:00

EXTRAORDINARY DEFALCATIONS.

The worst financial disgraces of the past two
years have been recalled and augmented during the
present week. The old themes of the Great North-
ern Railway Company and the London and Eastern
Banking Corporation have both attracted renewed
attention, while a fresh interest has been awakened
by the exposure of the Surrey Gardens Company,
and of the defalcations, forgeries, and other delin-
quencies at Liverpool, which have become generally
notorious, except to the Liverpool community
themselves. With regard to the Great Northern
Railway, the new features have consisted of the
report of the directors preparatory to the meeting
on Saturday next, the judgment of the Vice-Chan-
cellor on their attempt to repudiate the claims Of
the preference shareholders, and the report of the
committee appointed in March last to investigate
the general management of the concern. The re-
sult of all these documents is that, while on the
one hand the Vice-Chancellor and the committee of
investigation have placed the conduct of the direct-
ors in a light most painfully humiliating to the
credit of English companies, the directors them-
selves, instead of uttering a single word of com-
punction or apology, have boldly taken the
opportunity to libel the House of Commons,
reproach the Times, taunt such of their con-
stituents as have endeavoured to uphold legal
rights, and finally, seek from the general body
of shareholders proxies to enable them at the
approaching meeting to continue their defiance.
Considering that one of their pleas to shut out
the preference shareholders was actually the
same as that employed by the repudiating States of
America—namely, that, although the money had
been raised, the certificates issued to represent it
had not been formally sanctioned by the requisite
vote ; that the Vice-Chancellor has found it neces-
sary to tell them that "it is too late for any com-
pany, alter taking subscribers' money and issu-
ing certificates, referring to an Act of Parliament
to object that three-fourths of the meeting did
not assent, and that the stock was not issued under
all the provisions of the Act ;" that the committee
of investigation announce that the Directors allowed
Redpath to pursue his career without the slightest
check or supervision ; that the secretary signed the
dividend warrants in bundles, without a list, or
certificate, or examination of any kind ; that the
stamp which represented the signature of the
secretary was used by any of the clerks in the
registration office at pleasure, and that even
down to the latest period of the investigation
many items have been found placed to capital
account which, in the opinion of the committee,
should have been charged to revenue—this demand
on the part of the directors and secretary, not
merely for a continuance of unlimited confidence,
but -virtually for an approval of their past acts,
is perhaps without a parallel. As respects the
next case—namely, that of the London and
Eastern Banking Corporation—the new revelation
is just such as might have been expected. The
shareholders, after having lost all their paid-up
capital of 501. per share, are callel upon for a
further contribution of 151., with an intimation that
the assets to meet outstanding liabilities threaten
to yield much less than had been anticipated, and
that .coesequently the extent of ruin cannot even
yet be estimated. They are warned, moreover,
that unless they pay promptly the concern will have
to go into bankruptcy, where their prospects will
be still worse. Meanwhile Colonel WTaugh and all
the workers of this misery can laugh iu security, the
liquidation being private, and their victims happy
to let them escape if by so doing they can avoid the
tender mercies of the Law Courts, professedly este-
blislrial to afford them aid. As to the Surrey Gar-
dens Company, the facts appear to be such as must
sooner or !weir lead to some criminal procedure.
The capital, subscribed only 15 months ago, was
32,5601., the whole of which has been lest, while
additional debts have been contracted for 26,0001.,
of which 14,5001. is upon a mortgage of the music-
ball, 11,5001. being wholly unsecured. Yet a divi-
dend at the rate of 10 per cent. was declared
last October, the object apparently being to induce
the public to take up at par 744 shares which still
remained unissued. The way iu which the money
has been appropriated seems a complete mystery.
Airs. Seacole is stated not to have received a farthing
of the proceeds of the recent manifestation of public
sympaehy in her behalf, aril M. Jullien asserts
that ho hes been cheated, and is a ruined man.
Meanwhile it is complained that Mr. Jam Cop-
pock, of Cleveland-row, St James's, who is repre-
sented to hive been the acting D.rector, makes
no sign ; and here, again, the first impulse of all
concerned seems to be to keep the matter out of
the courts and to accept any sacrifices, provided
they can but be allowed to have the winding-up in
their own hands. The claim of Mrs. Seacole, how-
ever, is of a character not to be postponed, and, as
some persons are to wait upon Lord Palmerston
upon the subject to-d►y, it may be hoped that de-
cisive measures will at once be employed. Finally,
while all these affairs have been going on, we have
had accounts of a gigantic defalcation on the Liver-
pool Stock Exchange, followed by a mercantile for-
gery and disappearance, and several failures, which
have hi en rendered more painful as illustrations of
the state of commercial morality by an apparent
combination f-r the purpose of hush:ng them up,
so as to prevent any reproach from falling upon the
speculative classes. Under such circumstances,
the question arises how can the business of the
country be carried on ? In the largest as w(11 as
in the smallest undertakings unscrupulous misma-
nagement seems universal. There is, however, no
occasion for despondency. The mercantile com-
munity of Great Britain are still sound at the
core, and, looking at the immensity of our trans-
actions, and at the number of people who in this
ago of talk are ready to trust the control of their
affairs to any pretenders who have the tart either
to overbear or impose upon public meetings,
the number of bad cases that transpire is not
comparative'y so large as is in their notoriety
they appear. While the journals are teetniug
with accounts of disputes and exposures among
Directors and shareholders, the latter in many
instances have only to complain of their own ig-
norance or indolence, the great daily transactions,
involving millions, upon which depend the fame
and prosperity of the country are honourably con-
ducted at all points by men who have never been
heard of either as wonderful projectors or extraor-
dinary financiers, but who in the quiet and sucess-
ful pursuit of fortune, contrive, each in his sphere,
to uphold the reputation for integrity that has
made the country what it is. The popular feeling
is not altered, and much of the evil lately wit-
nessed has arisen from a defective state of the law.
This has been remedied iu a great measure by the
Act upon the subject passed during the present
session, which it is hoped, will sweep from the
field all who have hitherto followed the trade of
Director, relying upon perfect immunity whenever
it might suit them either to neglect or abtbe their
trust.—Times City Article.

THE OTTOMAN BANK.