The Sun.
London, England, 1857-09-14 00:00:00

THE RECENT GREAT BANIeFAILURES.

LONDON AND EASTERN BANKING COR-
PORATION, ROYAL BRITISH AND, TIP-
PERARY BANKS.
On Saturday a meeting wiis adirettisecl. to take
place at the chambers of Vice-Chancellor Sir Wil-
liam Page Wood, for the purpose of hearing all
par ies on the petition presented for the dissolution
and wi ding-up of the Loudon and Eastern Bank-
ing Corporation ; but it appears that, to suit the
convenience of all parties. the hearing of the peti-
tlnn has been adjourned to Monday, 21st inst.,
when it will come before Vice-Chancellor Wood
specially at Ipswich.
It may be mentioned that this is the first case of
the kind where a company formed for commercial
purposes in British India has been brought under
the operation of the English' winding-up law, and
a question is likely to be raised'_as to whether a
company constituted for trading pnrposas in India
is amenable to the Joint Stock Comp,tnies Wind-
ing up Act, although that act contains a proviso
that every trading corporation; whose place of busi-
ness is in the British dominions, comes within its
scope ; albeit its business is conducted in any of
our territories abroad. The places of business of
the London and Eastern. Banking Corporation were
as follows Council-street, Calcutta ; Forbes-
street, Bombay ; Caunon-stree, London ; We st-
bourne-terrace ; 20, Pall-mall, and 44, Mark-lane.
The corporation, as it appears from the official list
of shareholders,iconsis`ed of 98 proprietors. Of this
number no fewer than 27 we're majors and
lieutenant-colonels in the Eait India C mapaly's
service, resident at home and abroa I ; 20 native
in,rchants, two local judges, and the remainder
(between 30 and 40) resident in England and India.
It will be necessary, as there are so many share
holders resident in India, to appoint a winding-up
agency in that country, in connection with the one
in this, which will tend to increase the expense and
inconvenience in connection with the winding-up.
Should the Vice-Chancellor issue an order de lar-
ing that the corporation is to be wound up in Chan-
cery, that operation will in all probability be con-
ducted by Mr. R. P. Harding, who has had the
carriage, under similar .circumstances, of the affairs
of the oyal British Bank. It has been suggested
that the affairs of the London and Eastern Banking
Corporation should be thrown into bankrup.cy,
and if this were to be done, there would be a repeti-
tion of precisely the same unseemly collision be-
tween the jurisdiction of the Courts of Chancery
and Bankruptcy that occurred in the case of the
Royal British Bank, thereby doubling the costs of
winding-up, to be paid, by the unfortunate share-
-holders, to the advantage wholly and solely of the
lawyers concerned. •
The following circular has been, issued to the
shareholders during the past' week by certain soli-

citors :
" 25, Throgmorton-street, London, Sept. 4,1857
" Sir,—You will doubtless have been informed by the
public papers that a petition has been presented to the
Court of Chancery for the winding-up of the affairs of
London and Eastern Banking Corporation.
" We are informed that this step hat been taken frora
a strong conviction that is the only course by which the
shareholders can have justice done to tketn, and by which
they can secure an equal contribution towards the
liabilities, and a strict and impartial investigation into
the transactions of the directors which have brought the
bank to its present position.
" We have long since been instructed by the agents of
several shareholders resident abroad, to adopt active
measures to protect their interests ; and although wedid
not think it expedient to allow our clients to be the
petitioners to the Court of Chancery, we are nevertheless
fully satisfied that a step in- the right direction has been
taken.
" Experience bas taught us that it would be impossible
to obtain an equal voluntary contribution from a large
body of shareholders; that the only result of such au
attempt would be to throw the whole of the liabilities
upon the shareholders; and that without the coercion of
the Court of Chancery, a large number would altogether
escape from contributing. The effect of such an attempt
would be to extract forthwith from the pockets of the
willing ahareholders heavy calls on their shares, leaving
them at the same time still exposed t 3 legal proceedings
on the part of the creditor, and with the certain pros-
pect that after all they would bedriven into the Court
of Chancery, to obtain an equal and just contri-
bution from those who would other wise avoid
making any payment. Without tie aid of the
strong arm of the law, it would be impossible to
obtain a strict and searching investigation into the trans-
actions of those by whom the affairi of the bank have
been conducted, and if it should ho di,"covered, as there
is great reason to suspect, that the funds of the bank have
been irregularly dealt with, it is only by aid of the Court
of Chancery that the shareholders can compel the persons
responsible for such transactions, to refued any monies
improperly applied, and prevent the whole of the heavy
liabilities of the bank from falling on the innocent share-
holders. '
" Upon an order being made for the dissolution and
winding up of the bank, we think that the shareholders
will be best protected by appointing independent gentle.
men as official managers."
On Saturday it was understood that another direc-
tor, a large shareholder, Is absent. It is stated ou
the one hand that the bank is only carrying on bu-
sine:s nominally in Threadneedle-street, where the
London offices have been removed, and on the other
that it is transacting no business whatever beyond
that of preparing itself to ba wound up. It is state I
that the bank has hitherto been receiving pecuniary
assistance from the Oriental Bank on certain term,
but that, in consequence of the improbability of the
calls being responded to, and the non-realis Olen of
the securities, the Oriental Bank now hesita e to
render further assistance. It is rumoured that it
was at one time in contemplation by the Oriental
Bank to purchase the business of the London and
Eastern, and the circumstance of their rendering
this assistance somewhat favours the assumption as
to this being the ulterior object intended. Some of
the shareholders; it is said, have given prornitisory
notes in payment of calls, but it is queztionable
whether, when the t;me comes, if these notes will
be honoured. The liabilities, as far as can yet be
ascertained, amount to .about a quarter of a million,
exclusive of securities.

THE ROYAL BRITISH BANK.
As regards the present position of matters in the
Royal British Bank, it is understood that all re-
quisite exertions are being used in carrying out
amicable conferences with the unfortunate share-
holders in preference to resorting to vexatious and
ruinous litigation. A vast amount of intercommuni-
cation and correspondence is going on between them
and the official manager of the Court of Chancery,
Mr. P. Harding, relative to the amount they can
contribute towards defraying the liabilities of the
bank, and in many cases the as.s'stance of friends
has been sought to enable them to make some kind
of contribution. These compromises are being
carried out under the immediate dire3tion of Vice-
Chancellor Sir T. Kindorsley. The liability of
those shareholders who took shares after the sup-
plemental charter was obtained, being supposed to
be governed by the decision of the court iu Brock-
well's case, which inieffeet relieves nearly one-half of
the responsible shareholders, and appears to give
them the right to clam their money back again,
will, it is understood, be taken on appeal to the.
House of Lords by the other half of the share-
holders. It is manifestly of importance that the
law of such a state of things should be formally
settled, since, under the present decision, it is in
the power of shareholders who may have received
dividends on their shares to - say they were
induced by fraud to
_take those shares, and if so,
many shareholders in other abortive companies will
be able, while receiving dividends, to repudiate
their liabilities to contribute to the losses. Al-
though under the act pi ssed last session, which gave
shareholders abroad the liberty to return and cuter
into compromise, it is stated that a large number