GREAT BRITAIN: Crown v. Kylsant

Lank Sir John Simon, his lawyer’s wig slightly askew with the vehemence of his summation, faced ten men and two women in the jury box at Old Bailey last week. Said he:

“If you think he was a rogue, you must say he is a rogue—the meanest rogue ever produced in a court of justice; but I ask you to take a different view.”

The potential rogue, a white-haired gentleman of 6. ft. 7 in., dressed in a clerical collar, a black-&-white ascot tie and a frock coat of curious cut, looked modestly down his long nose and held his gleaming silk hat on his knee.

Sir Owen Cosby Philipps, first baron Kylsant of Camarthen, the defendant, has been a Peer of Britain only since 1923. In revenge for that he traces his ancestry back to Vortigern, King of the Britons (who in turn reputedly traced his ancestry back to the Emperor Maximus), and at 40 had made himself master of Royal Mail Steam Packet Co., virtual owner of the Union Castle, White Star, Lamport & Holt and half a dozen other lines, the most powerful figure in the world’s mercantile marine.

Over a month ago Lord Kylsant’s trial began (TIME, June 15). He was accused on two counts: 1) misleading Royal Mail stockholders in 1926 and 1927 by publishing statements showing annual net profits of over a million dollars, when the company was actually losing nearly three times that much and dividends were being paid from a secret reserve fund of which the stockholders had no knowledge; 2) issuing a false prospectus of debenture stocks “with intent to induce persons to entrust or advance property to the company.”

The charge was relatively simple, the trial extremely complex. Conducted by Attorney General Sir William Jowitt and defended by “Britain’s foremost barrister,” Sir John Simon of Indian Commission fame, the trial resolved itself into a debate on business ethics with the text: Should a company director tell—and how much? Lord Kylsant thought a director should not tell.

“We never,” said he, “tell shareholders how the balance of profit and loss is made up. . . . It is not easy for the average man to understand.”

Quite a skirmish ensued over whether or not the five other directors of the Royal Mail were guinea pigs.

“It is absurd,” spluttered Sir John Simon, “to think that they were guinea pigs who left Lord Kylsant to do what he liked and merely drew their directors’ fees.”

Lord Kylsant insisted that the other directors were not guinea pigs, thus implying that if he was guilty, so were they. “If the court thinks the five gentlemen of the experience of my colleagues never asked any questions and knew nothing it is quite wrong.”

The jury was out three hours, found Lord Kylsant innocent of presenting false financial statements, guilty of issuing a fraudulent prospectus. Mumbled the judge in a voice so low that it could scarcely be heard:

“The sentence of the court is that you be kept in prison in the Second Division for twelve months.”

Still wearing his long black coat and his high silk hat, Sir Owen Cosby Philipps Baron Kylsant straightway motored to Wormwood Scrubs, passed through the jail doors. Newshawks had scarcely finished writing of what he would be expected to do as a prisoner in Second Division—scrub his own cell, wear prison clothes, work eight hours a day “at light labor” (library or clerical work)—before Lord Kylsant, just like any U. S. convict, was out again, released on $50,000 bail, pending appeal in October.