Stationers School
Bolt Court, Fleet Street, E.C.
15th July 1871

My dear Chesson,

I enclose the circulars which you asked for. The point on which the controversy has turned you will see from the report in the Railway Times I sent you, is not the right of the Factors to share of the Canadian indemnity as partners, which as you will see by my letter to the Factors I did not advise them to maintain (they being in fact not partners but servants payable by a share of the profits), but on the Company’s breach of contract and the violation of the Deed Poll, for which I maintained they (the Factors) had a right to compensation, which compensation I measured by what would have been their share of the indemnity had they been partners.

The argument is this. The Company’s trade has been injured by its conversion from a monopoly into an open trade, by the extent of the indemnity they received from Canada and as the Factors interests were injured to a proportionate extent, a jury would I contended measure their compensation by that proportion of the indemnity (2/5th = £120,000), which they had in the original monopoly.

Mr Donald Smith on behalf of the Factors has accepted £107,000 instead of £120,000 and it is agreed that all the Factors shall retire as a body on the receipt of this sum, and then be re-engaged on a different footing under a new deed-poll, the Company claiming and the Factors conceding the right of re-electing only those men who may be considered suitable for carrying on the re-organized trade. It is a mode in fact of getting rid of certain officers who had taken to habits which unfitted them for their work, and who were an incubus on the Concern but for whom a reasonable provision is made on their retirement. Those who are re-elected and they will no doubt be the greater part of the present Factors, will make a good thing of it, for they may get better terms under the new deed pool than they had under the old and have their compensation besides.

Yours very truly
A.K. Isbister

F.W. Chesson Esq