1950-12-08 — Page 6

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CASE-BOOK OF SIR PATRICK HASTINGS

CHAPTER 11

The Royal Mail Steam Packet

ORD

Company's

Royal Mall Steam Packet Company and Mr H. J. Morland was a partner in one of the largest and

GO

усать, μετουσ

periods the

to make up losses.

He pointed out, with

Balance-sheet

most respected firms of ac- siderable force, that unless this was at once clear that the secution's witnessco

Company.

one

achievement, pank, which would be unfair Morland were well recognised ing in the police court.

and the Investing in

It was alleged that they had wilfully deceived the share holders by representing that The company was prosperous when they knew it was on the

verge of ruin.

The trouble arosc balance shoots for 1920 and 1927.

circles, and accountancy

sumclent to give notice

in which

were of the manner truding loss

Relied on them into in apparent proft.

the

Frank replies

Lord

had been turned Infinite labour was expended

Moreover he maintained that

tice

rolied on them to see that the company's balance sheets were properly prepared,

From the outset st was ap- parent that the main burden of this part of the trial would fall on Mr Stuart Bevan, K.C.. over the and me, who were representing the years Mr Morland, and we looked to

him for more thorough elucida In 1926 the company asked tion of the facts. the Treasury to extend the Although Mr Morland period during which certain re- doubt an admirable accountant, payments of Joans

were due as a client he was a little try- from the company to the Trea-

Ing. Being completely con- sury.

scious of his own integrity, ho treated all the allegations with supreme contempt, and ab- solutely declined to recognise the danger in which he stood.

for

I did not envy the Attorney- General his task of trying to establish

criminal dishonesty against Mr Morland,

As I called Mr Morland into

any

in

11

the first He

Jury retires

1

-

"a mosty, stuck-up, ten-ahuling-a-lb. bird,"

London Trpreet_Berntza.

NERO HAUNTS

HIM

man named Mervyn LeRoy, one of the top producers of Hollywood.

મ

the epic to.

from them that there had bean KLYSANT was it was accessary, from a bus the proflt had been arrived at of his ruling, none of the coun-

#cl present could take any a transfer from an excess profits the chairman of the ness point of view, to accumu- only by using reserves.

late largo reserves in Kr03 Lord Kylsant had nothing further part in the hearing, and duty or other reserves, which

be small or large?- that

to do with the in- we all left the court in a pro- might in whatever

Certainly. no com- cession. company serted words, mado leaner

final on them, and the

I immediately communicated That was all we could have should be able to draw on them ment

balance sheet,

published, with the Attorney-General and hoped. Mr Bevan's relief war.

for my quite as great as mine. permission Mr Morland's addi- obtained con- contained

solfeltors to interview the pros when I sat down he whispered:

to obtain "That has done them!" course was adopted an un- countants in the world.

After that evidence, how was butored body of shareholders, whole

turn on the statement of their views, defence must Both were pillars of respec faced with a sudden drop

or which the Lord Mayor's action it possible to contend that Mr question of whether the tability. Lord Kylsant's career

their anaual profits, might

used by Mr had prevented us from obtain- Morland had deliberately pre- had been

the words of personal

not

pared that phrase to hide an triumph and

uncary conscienco? culminating in his elevation to to them the peerage in 1923. Mr Mor public. land was a man whose private and publie life had earned the respect of all who know him.

Yot, on July 20. 1931, they

Plender, perhaps the stood side by side in the dock

by the solicitors instructing me dozen of accountants, was the the witness-box anything less

we really wanted to fraudulent Court at the Central Criminal

appearance and. before the pre- see. He, also, had

verined would be impossible to imagine, By R.M. McColl charged with publishing false his company had employed the to obtain instances of the prac witness and fraudulent balance-sheets best possible Arm of accoun- liminary police

court hearing, balance sheets containing words His demeanour was precisely

similar to those as it had been on substantially of the Royal Mall Steam Packet tants as auditors, and that he had been provided with, amplained of. In the present occasion I had seen him.

PARIS. pile

balance

all of

sheels,

accordingly a care treated more or less to the same effect, case, and

allegation with TN a luxury suite of the- questionnaire which to cross-examine fully prepared with

indifference and supreme

I George V. Hotel I talked the distinguished accountants was submitted to bim.

garded his accusers almost with to a weury blue-eyed little The replies were absolutely good-natured contempt. who would be witnesses for the

trank and, in our opinion, prosecution.

The next great difficulty we entirely satisfactory. It was on faced was whether or not to the material he supplied that discluse our main defence at our defence was mainly based.

The trial took place on July Although cross-examined the preliminary hearing. We

He has just finished eight decided to risk the prosecution 20, 1931, at the Central Criminal some length, he declined to months' work in Rome on hearing our defence, and sub- Court, before Mr Justice budge one inch and, when asked sequent events proved we were wright and a jury.

"Quo Vadis," about his interest in the com- well advised to do so.

Lord Plender was the first pany, said he had no interest end all epics. witness and his evidence for financially, or otherwise, except

cannot relax any the prosecution

merely to the extent of his auditor's

more." LeRoy complained' examination that everything As this was sharell with all ns he sipped some Ice- depended.

the many partners in his firm, water. The preliminary hearing took

I do not remember ever ap- it resulted in a benefit to him Guildhall before the

cross-examination of only £20. place at

the best im- proaching a Lord Mayor, and

anxiety, and, as At last the jury retired, and portant witness was 3ir Witam with more

the questions and answers were absent some hours, well-

formed the basis of the whole The period of waiting while a However, we eventually dis- McLintock, head of the

firm of accountants covered that the accounts had known

defence, I give them in full; jury is considering its verdict is Is it quite a usual and a one I have always hated. In this been propared in the office of bearing his name.

In front of me were piles of the Royal Mail and the balance

sheets, some audited proper thing for companies to case I hated it more than ever, sheet subenitted to Mr Morland balance

large sums against I was so determined that my set aside Anal by Sir William himself, and it their liability for excess profits clients should be acquitted, and for hts

and certificate

was fairly obvious that the

duty and income tax?--Yes. approval.

the jury was out so long. WAS Jikely Mr Morland knew that re- cross-examination

If they were not required All the devoted band of skil- perves had been used to in- to be prolonged.

for the next year, could they ful lawyers who had worked so crease the profits for

But, as soon as I asked my DORTHC

our properly be brought back into hall and helped me so much. ог question based years before 1920, and said that first

profts for subsequent years? shared my anxiety. Nerves the use was quite usual and main defence, that the actual That would be quite

A began to tray and tempers be "including adjustruent

he said. Some words

came short. Mr Morland alone friends took me to a famous of taxation revenues" were the

maintained his attitude of con-Paris night spot. As soon as we used by words customarily

fidence, almost amounting to in- got inside in simallar

thought I was back wise acountants circumstances. the magistrate

difference. In fact, it became again in the Circus Maximus. I ́

nim tired of crowds and people. adopted what was, to my mind,

intolerable, and when we dis- covered that his exasperating So I bolted out again. an extraordinary and

unprece

would they confidence extended to his homo, dented course: he refused to

people complete not be disclosed la a profit the fecitation became more than strangers-come up to me and allow any of the questions as

and loss account AS having those instructing me could bear, talk about Quo Vadis. They been brought into credit?-

While the jury was still out stop me in the street and start- profit, Mr Moriand considered Air Phene Neal was

Sometimes no reference 13

a telephone call from Mr Mor-asking me whether all the statis that the time had arrived when Lord Mayor. He was also

generally speaking, innd's home was put through ties are really true. solicitor, and perhaps a little-made but,

it will be found that a trans-

get indigestion from ome indication of that fact

his own

to my solicitor.

much?" should be given to the share-conscious of holders.

tance, but how in the world fer has been indicated.

Do I understand you to mean So, when the draft balance he took on himself to reject,

a preliminary Inquiry, sheet was submitted to

The Treasury decided to hold an inquiry into the company's financial affairs, and appointed an accountant to look into their books.

In addition, being a devoutly religious man, he was convinced that divine interference would

Running at loss decide the issue,

The

balance sheet showed that the company earned a trading prodit of £499,000 in 1920, but the Goverment in quiry discovered that in fact the company had been running et a loss.

The alloged proflt was shown by crediting the accounts with £750,000 drawn out of tax re- serve, and that instead trading profit of £439,000, the proper. company had really incurred a loss of about £300,000.

of a

out the Treasury In consequence maintained that the balance shoet was fraudulent, and de elded to institute criminal pro- coodings against Lord Kylsant,

Using reserves

But in 1926, as it was pro- posed to use so lange a sum as £750,000 to change an admitted

SPAL

Left the court formal. It was on his cross- fco,

as chairman, and Mr Morland, trading loss into a declared being irrelevant. as auditor.

At the outset the **se ap- peared difficult, and it was necessary to make careful in quiries, not only into the gen- eral practice of preparing balance sheets, but also into the precise figures in this particular

case

kim, at

then

a

impor

regular credit.

No exception

In many cases,

that if the secret or inner re- He was wrong

Mr Morland wrote In the cross-examination obviously "Including adjustment based on the considered opinion Lord Kylsant's view was that words:

of a large number of eminent great fluctuations in the carn of taxation reserves."

of shipping inga

companies He did this entirely on

his counsel, has always passed my said that comprehension. were only to be expected, and own initiative, and

words were the опея His

201 ruling necessitated gave no indication to the true those

usually financial position.

employed by Recoun- immediate decision. I saw at defence might to share once that the His experience had taught tants to give notice him that periods of prosperity holders and anybody concerned benefit extraordinarily from his declared profit that action. I rose, said that, in view occurred in regular cycles, and with the

WHAT THEY CALL PEACE

By JAMES DOW

the central

Behind this peace, there is no expense spared. Note how eager Poland was to offer a ship and Czechoslovakia a feet of planes to take the Shefeld worshippers to Warsaw,

Someone very

powerful and

"The worth, as we

only choice say, keeping in

behind this world (they bet) is with, must be

Someone business. Peace resolute and reckless

was that war was inevitable..

server are used for that purpose, they might probably come 3 time when an auditor would say dressed him: "Could you kindly A sweet and gentle voice ad- that some indication should bo given to the shareholders that tell me if Mr Morland is likely those transfers are being mate? to be late for dinner?"

It was the last straw. --Yes,

"Yes, madam," he repiled, "I Are there not many cases in

should think about which a reserve of this kind is months late."

the credit of the made into year's profit and loss and no mention is made that reserves

arg such cases,

But he was wrong.

twelve

.

Those horses.....

"Oh, those horses. Oh, those thousands of people.

"There

extras,

were 18,000 and 130 a day used to faint on an average in Rome's summer heat. Oh, those costumes. the worry of it all."

Oh,

He stretched out on the sofa · and stared at the ceiling. He camelhair wore

dressing- own with his initials boldly gown, woyen over the heart..

"Listen.

Old Nero

eating so

selling papers on a San Fran-

LeRoy, who started as a boy

clsco street corner-ho nover

string of 12 horses in Hollywood. went to school-owns a

An expert

New

"I am sailing back to York. Everyone keeps telling me there will be a whole lot of people I know on the liner. And

what they are-

The jury returned a verdict you can guess of Not Guilty, and both Mr going to start talking about," he have been called upon?-There Morland and Lord Kylsant said.

Is it done by Arms of the very highest reputo?--Yea

were acquitted,

Unhappily for Lord Kylsant, that was not the end, Against it is your view that no excep him alone there was a further tion could be taken to that prac- charge and be was

convicted tice?-As u principle, no excep- and sentenced to a term of im- tion could be taken.

prisonment.

Aro

Relief

there common

phrases

Former M.P. Mr Konnl governments are afraid that if THERE is no doubt about

ank

Might there come a time when of the they fight the Soviet Union, the Zlacus, turfed it, we are getting peace Labour Party for his part in war will bo turned into a civil the auditor would say: "Now 17 stuffed down our gullets previous Peuce Congresses, war by the Communists and the these reserves are to be used these days. Yet are we must know

this Partisans of Peace in their own again come indication must be more about not making a mistake by than we do. Mr Zilliacts has countries."

given to the shareholders that account is continuing to think that explained why he recently re-

the Peace

That is why the power behind the profit and loss signed from

Com-

from by transfers this is merely a matter of mittees. He says

doesn't augmcated peaco compaign (in a letter the

the

The the excess profits duty reservo"?- consider

expense. cranks and well-meaning if published recently):

purpose la more practical than Yes. befuddled idealists?

you talked to these the vain hope of persunding Partisans of Peace in private, Britain to join the Soviet blee. tacy argued that issue in the (peace) campaign leading French Communists, M. It was given by one of the

a declara- Waldeck-Rochet, in and that one had to choose on tion that has been reprinted in used by auditors to indicate cuch peace which side one stood.

Soviet

by the papers, and

augmentations in one or other French paper. L'Aube without of these forms: "Excess profits denials by Waldeck-Rochet or duly

After adjustment." the the party.

adjustment of reserves for ex- Taxation "We can be certain," he said, cess profits duty."

"Adjustment of ex- client and political vassal of "that Д year of guaranteed adjustment." pense as the Power who per- the US, or of forming part of peace is a year utilised to the taxation reserve"?—Yes,

Are all these phrases comTM 'pence with the suaded the Chinese to send tho

Soviet utmost by the Soviet Union to Union at its head."

reinforce its army. It is tomonly used by auditors to in- troops into Korea.

profit That is Mr Zillacus's final permit this development of the dicate transfers to the

account from taxation reserva? actively continuo our-That is so. in his CHS with satlefaction

own peace campaign. Peace for Pro- must

And those transfers, accort. newspaper that Chinese troops fessor Bernal's Britain and for propaganda in favour of peace. had "liquidated" 4,000 of the Professor Joliot-Curie's France "Do you not see that this is ing to the facts of any particular

means. nothing more or less the best means to meagre Tibetan peasant soldiers,

ensure the case, might be either small or than

Large?-Yea. becoming part of the destruction of our enemies?" The same

That being so, if you saw such powerful

Soviet bloc peace-

This is what they call peace lover who pulls the strings to But the most sinister words This is the kind of peace they words as those which

in a profit and lo keep the laughter going in in his letter describe the parti. want to bring us, to stud down described Malay and Indo-China,

sans belief that the capitalist our gullets with a bludgeon! account, would you understand

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Snip

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A CUSTOMERS

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TOMORROW

The Barmaid And The Pearls

Then the little man-50 and greying grinned boyishly.

well, I have become

pert

En ex--

One night in the Colosseum a gulde started to show him what

he described an Nero's seat

LeRoy told him "Listen," "This Colosseum was built ···

years after Nero died." *-.

Sald LeRoy: "He just stood there open-mouthed "

London Express Service)

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