The Globe. TUESDAY, MARCH 19, 1878.

Globe, Volume IX, Issue 1258, 19 March 1878, Page 2

The Globe. TUESDAY, MARCH 19, 1878.

SOME of our readers inay hare the English papers a report of an important decision by the Master of the Rolls in November last, in the case Williamson v. Barbour. The plaintiffs were a firm of Calcutta merchants who have been doing business with the defendants, Manchester commission agents, for a great many years. It was shown that Messrs Barbour were under a contract to buy goods and forward them to the plaintiffs for a fixed commission. Messrs Williamson discovered, however, that in addition to the legitimate commission the agents had been pocketing certain allowances and discounts which they urged should have passed to the credit of their account. It is not necessary to enter into the details of the case. Suffice it to say that it was shown that defendants had received various allowances and commissions for which they had failed to account. The defence raised was that the plaintiffs knew of those charges, that they were according to the usage of the trade, and moreover, that defendants were in the position of principals in every respect except buying, and were therefore entitled to charge a profit. Sir G. Jessel thought differently, and in an elaborate judgment held that the plaintiffs had made out a sufficient case to enable him to open the accounts and have them dealt with specifically. The suit, however, never reached this stage, as the defendants paid the large claims made upon them rather than allow the accounts to be brought into Court. Naturally the case occasioned a great deal of comment in commercial circles in England. The Economist, referring to it said: —“There is no principle in law more firmly established than that the agent who appropriates profits without the knowledge of his principal is guilty of a fraud. Not by Manchester men only, but by many other departments of the trade, that principle has come to be overlooked.” A striking commentary on the result of the above action may be seen in the announcement made by two leading grain merchants, in the advertisiug columns of our morning contemporaries. Those gentlemen evidently have determined to forego those pickings (probably prompted by the result of the case referred to), which long custom here, as well as elsewhere, has sanctioned, irrespective alike of law or equity, and a means is thus opened up to long-suffering shippers, to make a stand against the ■black mail hitherto levied upon their goods. The majority of our woolgrowers and many of our farmers have, of late years, been in the hafiit pf their produce to England Instead of selling it in the colony. But the result of those experiments, particularly jn shipping of grain, in most cases has j not been entirely satisfactory, The high ■ figure often realised % their prodw ift

London is wonderfully reduced by the time the mercantile company or firm has made Ithe numerous pickings and deductions; the result being that in many instances the unfortunate producer would have been far better oil' had he sold for cash in the colony. Amongst these pickings there is first of all, a commission upon the amount of the freight varying from sto 10 per cent. Usually this is received by way of a credit note from the agents of the ships, and more than compensates for the primage charged in the bill of lading. The agent thus pockets unknown to his principal a rebate on the freight, while in his account sales a debit appears for freight with primage added. Again the policies issued by the insurance companies show nothing of the 15 per cent rebate which is credited in account at the end of each quarter. It is also worthy of notice that three months’ credit is usually given for the premium of insurance, while the unfortunate client is debited with it as a cash disbursement. Then there is the matter of exchange. Goods, it is well known, are usually treated as remittances to the London correspondents of the colonial mercantile company or firm. This, of course, saves the cost of remitting in cash. Instead, however, of giving their clients the benefit of this exchange, it is usual, we believe, actually to charge them an exchange as though drafts were being drawn against the shipment, thus pocketing a double sum. Yet another little picking may be mentioned. London correspondents invariably return a credit note of one-half per cent on wool, and from one to one and a quarter per cent upon wheat. The full commission charged, appears, however, in the account sales, copies of which are rendered to the sheep farmer or the grain grower; while the credit note for the rebate only appears in the private account current which is kept between the two correspondents. Of course no reasonable man expects any. , agency company to do business for nothing, but let them make their charges openly and explicitly, and cease to appropriate undivulged pickings, which have left them open to actions similar to the one referred to at the commencement of this article, and which the Manchester house was only too glad to compromise. Were shippers in the colony to follow the example of the Calcutta firm, a revolution would result in the mode of doing the export business of the colony, and the amount which might be obtained by way of reclamation upon account sales rendered during the past few years, from not only one institution doing a large business in New Zealand, but from some of the leading export houses, would astonish those interested. Not only would current profits be swallowed up, but past accumulations trenched upon —accumulations which have perhaps been largely created by contributions from the pockets of confiding clients.