The Sun.
London, England, 1857-11-27 00:00:00

.R.t.IILIFdY INTELLIGENCE.

GREAT NORTHERN.

The following further report of the directors will 1
be presented to the half-yearly ordinary general
meeting of the proprietors, to be held by adjourn-
ment at the London Tavern, on Ist Dec. next :
"In the report issued on the 21st August last the
dizectora duly published 'a. scheme showing the profits
of the company since the precediug half-yearly meeting,
at. which a dividend was declared,' (as the Companies
Clauses Act requires), after retaining the whole earnings
of the last half of the year 1856, 243,9231. ss. Bd. Thisf
sum has been appropriated by the Act of Parliamentau
fr .
o
this year, to repurchase the amount of the stocks
dulently created and issuedlby Redpath and to repay allhis
frauds incurred by the company by reason of
frauds and forgeries,. Particulars of the expenditure of
the 243,923/. ss. 8:1., and of any
amount that may be
-recovered from Redpath's estate, will be published after
the completion of the purchase of the frauduient stocks.
1t is expected that this account will be ready by the next
talf-vearly general meeting.
"The amount of such profits now to be divided is
183,2761. 15s. T_ltider the recent decree of the Court of
Chaecery it is only competent for the meeting to declare
dividend on the footing of paying thersout to the pre-
ference stockholders a full year's dividend, which will
he 168,1251. 65., leaving 15,1511. 94. to be divided
among the holders of original stock, including the A. and
B stocks. This will yield a dividend of 6s. per cent. on
the original stock, and therefore of 12s. per cent. on the
B stock, and none on the A stock, leaving a small balance
to be carried ts the next account,
"The great majority of the proprietors will, no doubt,
be .much disappointed at this result of the legislation and
litigation of this year. The directors caa only say they
have done their best to carry into effect the resolutions
of the meetings of March and July last. It is not their
fault that the bill was drawn so as not properly to express
the declared intention of the company, and of the com—
mittees of both Houses of Parliament, who unanimously
adopted it in the belief that they were thereby making
all classes of shareholders contribute to the loss caused
by Redpath's forgeries ; an intention which the Lord
Chancellor said in his judgment might reasonably have
been entertained by Parliament, 'as the whole act was
a compromise' between the different classes of share-
holders, who were all reduced to an equal difficulty ;
only it had not been clearly expressed.
"Nor was it the directors' fault that after this defect
had been discovered and amended in the House of Lords,
the House of Commons was induced to disregard the
epinion of their own committee, who had heard the case
fully argued, and to defeat the compromise unanimously
adopted by the committee of each house, by retaining
this technical defect in the bill.
"The decision will no doubt seriously affect the re-
lative position of the diferent classes of shareholders
is many companies, by giving a new and unexpected
value to what have been hitherto called preference
shame and effacing the reeognised distinction between
theis and guaranteed shares. Fortunately, however,
this part of the decision is not likely to have
any practical effect on the proprietors in the Great
Northern Railway Company, since bill; for some such
ex'raordinary calamity as that which produced all this
C;nfusion, there would probably never have been occa-
sioieto consider whether the preference stocks are en-
titled to arrears of dividend or not.
" After all, the original shareholders mast remember
that the result of these proceedings, however unfairly
brought about, is only equivalent to that which was
contemplated by the bill first introduced by the directors
and stopped by Lord Itedesdale, which would ultimately
bavis thrown the whole loss on the ordinary stock, by
capitalising it at their expense. The directors sincerely
regret the distress which has been occasioned to many of
the proprietors by the refusal of one. House of Parlia-
ment (or the person who exercises its authority) to allow
that loss to be made easy by capitalising it, and of the
ether to sanction the compromise by which the payment
of the whole out of one half-year's income was agreed
to op the condition of all parties contributing to it.
"The directors venture also to remind the proprietors
that no good can now be done by further complaints.
" At the last two or three meetings of this company,
language has been used from which a stranger wouldsup-
posi that the shareholders had been brought to the verge
of ruin and deprived of all hope of a fair dividers' for
years to corns.
"It is true; that, as usually happens, the greatest
noise has been made by those who suffered leas.
".Bat the preference shareholders who denounced the
_ _

directors for delaying their dividends of 21. and
11. 45., until the most important railway question that
has ever been tried could be fully heard and decided,
have evidently been encouraged in this course by finding
themselves in a majority of voices, though always in a
minority of vote;, even without the proxies; still a ma-
jority can in the first instance carry anything and resist
anything, as there are no means of counting the votes
without -the tedious process of a poll on every question.
" If the peaceful and rational majority of the proprie-
tors think the cbaracterof the company worth preserving
and.that the time is come to make an end of the business
which has caused so much ill-feeling, it is neither pru-
dent for themselves, nor fair to those who have had to
fight their battle for them, to leave their opponents in
even apparent command of the meeting.
" /t is impossible to foresee what course may be taken
at the approaching meeting by those who have created
the disturbance at the last two.
" But the time is coming when no company will get
persons of character to serve them as directors ifAhey
are to be insulted by their constituents whenever they
meet then publicly, and not even allowed to make the
speeches necessary to conduct the business without in-
terruptions. If the proprietors think their business
wound be better done by such persons as those who
usually distinguish themselves by imputing the worst
posSible motives to the present directors in all their acts,
it is easy for them to say so, and as soon as that opinion
is deliberately expressed it shall be immediately acted on.
"But they must make their choice, and the proceed-
ings of th© ensuing meeting will probably be taken to
indicate that et:price in one way or the other.
" The proprietors are reminded that among the busi-
Mfg adjourned, is Mr. Greening's vote of censure on
the.directors, which is necessarily connected with the
consideration of the report of Messrs. Giesler, Malice,
and Waters, three members of the late committee of
inqjiiry on the same subject, to which the director; now
therefore publish their answer and send it herewith.'

The Great Northern board.have issued what they
ter " The Answer of the Great Northern Railway
Board to the report of the Committee of Inquiry."
The only really important portion of " The An-
steer" is the following, in which it will be seen that
the directors persevere in their determina'ion to
throw the blame of the Redpath forgeries on Mr.
Clark, the late share registrar of the company.
The committee are perfectly aware (though they do
not state it, test leave it to be picked out of documents)
that the forgeries had reached 120,5371., while Redpath
was only a clerk under Mr. W. H. Clark, the then
registrar, and that the largest amount of forgeries in any
half-year was committed in the one just before Mr.
Clark's resignation. Yet, so far was that gentieman from
even then diicovering that he had this enormous and
constantly-increasing amount of forged stock in his
books, that (as he acknowledged to the committee)
he was only informed a few weeks before he left that
there were some comparatively trifling discrepancies
So trifling, indeed, did they appear to him, that he again
certified the register to be correct, for the 13th time since
the forgeries began, and left a letter behind him sta'iag
that everything in his office would be found correct.
. .

"It might have occurred to them (the committee) to
inquire how far the registration system of this company
had been copied from others of greater capital and expe
Tittles, and also how far the non-disc )very of the frauds
was due to any system established or sanctioned by the
directors, and how far to the mode of working it. They
have indeed reported emphatically enough, that ' the
secretary signed the dividend warrants without exsmina-
Coil, and without even noting the amount ; so that if be
had been required to state on the following day what
sums he had drawn from the banker, there was no re-
c,» dto give the information.' But they never ae!red a
single question as to the directors' knowledge or sanction
of that practice ; and have so stated the matter ate to
lead any one to infer that the directors had invented or
sanctioned a system by which any amount of false or
excessive dividend-warrants might be sent to the secre-
tary for signature, without the possibility of his disco-
vering the excess.

" With equal disregard both of the facts and the law,
they try to connect the forgeries with the use of the
secretary's stamped signature, not on the dividend-
werrants, but on the stock and transfer certificates ;
-whereas there ii not the smallest proof that the over-
issue& would have been more difficult if the signature
had bleu printed beforehand, as the committee kno w
that it is is other companies. Their statement that the
secretary's signature was requisite to make the tranefera
valid in this company is in direct contradiction or con-
tempt of Sir Fitzroy Kelly's opinion, and Mr. Rochfort
Clarke's, and of Mr. Justice Willes's declaration on
Redpath's trial, of which opinions Mr. Giesler and his
43J-reporters cannot pretend to be ignorant, as they have
a 1 been published in the company's reports.
"It is remarkable that with all their desire to throw
the blame of this calamity upon the directors, the com-
mittee have not ventured to specify a single thing which
the directors ought to have done to prevent it. If
their general insinuations have any defini e meaning, it
craly be that the directors ought to go through the
rd
l'avietr:of every department over again themselves,' in
o to be sure that the auditors,
the accountants, the
se6r
°tun the registrar, and theirrerpective clerks, and
inJeed every officeranservant of the company have all
kept their proper cheeks
ittee meant seytein of?Ph
on each other. If the com-
at is kind, they had better have
id so distinctly, or it4t a have said what they do ,
mean. For even as reganrcylartatee ture, the shareholders
are requested to observe that if their protection against
similar frauds is to depend upon an.
improvement in the
edn. dsehd by
system, or any new made of contiol
this committee, there-is no reason why tehceorrara
not begin again next year ; for they have doneebsoluotuelldy
nothing towards suggesting any specific improvement or
alteration whatever; they have added nothing to the
information possessed by the public long before their
report came out ; they have elucidated nothing, except
their own incapacity for dealing with the suFject they
professed to investigate.
" But although the committee who were specially
appointed for this purpose have failed to point any speefic
defect, or to make any specific suggestion, and have left
the matter exactly as they round it, the directors have
done otherwise. They have been favoured with informa-
tion
from nine of the principal railway companies as to
theAsysteme previously in use with them, and the modifi-
cations made by them since the discovery of Redpath'
fraud. It appears that there is not one in which fraud of
the same kind might not have been committed and gone
on for a considerable time with being discovered. Indeed,

it has been already stated that the plan of registration and
eieming of dividend warrant& of the company was origi-.
ginally founded on that pursued by the London and
North-Western ; and in consequence of the discovery
made at the expense of the unfortunate proprietors of
this company, all the others have already made alte-
rations in their systems, more or less radical and
more or less complete. It is probably impossible to
invent any system of checks which can be relied upon
as a complete protection, where the fraud of one party
is helped by the collusion of some and the negli-
gence of others. It is only after long experience and the
discovery of most unexpected modes of fraud that the
Bank of England and the Exchequer-bill Office have
arrived at their present system, which, after all, can
only be pronounced perfect until some new Fletcher,
Redpath, or Smith demonstrates its imperfection. But
the directors hope that the plan which will be hencefor-
ward pursued in this company will, at least, do all that
can be done to anticipate any conceivable fraud being
carried on without being speedily found out."

MANCHESTER, SHEFFIELD, AND LIN-