The Daily Times.
Liverpool, Merseyside, England, 1861-01-25 00:00:00

THE DAILY TIMES, FRIDAY, JANUARY 25, 1861.

LONDON COURT OF BANKRUPTCY.

(Before Mr. Commissioner Holroyd.)

IN RE STREATFIE.I.D; tAtiRENCE, AND CO. IN Br

LAURP.NCE, monTriciott, AND SCHRADER.

At the • adjourned Bitting for ettaiteate under these
failures.

. ,
Mr. Kerslake addressed the court for the derStnees.
Ire said the assigiii;..4 had felt it their duty to apriem•
before the commissioner for the purpose of assisting
in the investigation of the 'haittripts' accounts and
transactions. Although the inquiry tie *deeded to.
a very great length, the facts of the case td which he
(Mr. Kerslake) should call attention would be found Si
the balance-sheet. The house of Streatfeild and'Co.
appeared to have been established for a great number of
years. The bankrupt Laurence became a partner about
36 years ago. Mr. Streatfield died in 1845, and from
that time Mr. Laurence had been the senior partner in
the house. .About 3.4 years ago the other member of
the house in London (Mr. Mortimore) joined the firm,
and he had continued a partner up to the present time.
The Liverpool firm Was established' in: 1846, Mr. Schrader
being the resident pdtfriei; Mid in partnership with
Laurence and Mortimore. The bariltrupfs tarried on
bnsiness as leather factors and hide factor's, the establish-
ment in London being in St. Mary-axe. 'ffié'llegitinia!e
trade of the bankrupts was that of purchasing hides for
tanners and others on commission, and leather for
leather merchants and others, and to sell the, leather
which was the produce of hides which were consigned to
them by the tanners, receiving commission upon those
sales, The bankrupts had departed from this legitimate
course of trading, and had brought themselves to that
court, inflicting serious injury upon their creditors.
There was no doubt that up to a certain time the
bankrupts carried on a fair and prosperous trade. In
the city of London they were believed to be men of
the highest integrity. He (Mr. Kerslake) had some
difficulty in understanding why the bankrupts should
have abandoned their legitimate business—whether
it was to be attributed to a desire for wealth on the
part of Mr. Laurence, or to the pettehant of Mr. Morti-
more for buying land and houses. It was now clear,
however, from the accounts which were before the court
that the bankrupts had to a large extent carried on
business as money lenders, lending money at interest.
The learned counsel then proceeded to refer at length to
tha bankrupts' transactions. He stated that in one year
the bankrupts made profit (on paper) to the extent of
£40,000. The system of loans and advances had been
carried on to an enormous extent, and had been proceed-
ing for years ; but it was never known fully until July 2,
1860, when the house stopped payment. The bankruptcy
was duly announced in the commercial obituary, the
Gazette. It was thought the house rested on a rock, but it
was only raised upon sand, and when it fell eleven other
houses, built on a similarloandation, fell also. Those
eleven houses had been supported by a system of loans
and renewals of bills originally given for goods
supplied. Perhaps the main charges were found in the
accounts from 1857 down the stoppage in 1860. The
assignees thought the bankrupts had traded recklessly ;
that they had, for their own purposes, propped up houses
which but for them would have fallen ; that in order to
support this kind of trading, they sent bills into the
market as genuine trade bills, which were not genuine
trade bills. The system with tanners appeared to be this.
The tanners gave acceptances for hides, which accep-
tances on becoming due were renewed again and again,
Messrs. Laurence and Co. charging commission and
interest. This commission and interest was put upon
paper, in order to swell the so-called profits of Laurence
and Co. Laurence took no care to ascertain the solvency
of the houses with which he dealt, and, indeed, dealt
with those he knew to be insolvent. 'lt seemed to be a
mania with Laurence to sell goods on credit, and to go
on either renewing the bills, or making loans for the
purpose of taking them up. He had entirely dis-
regarded the rules of trade. In the case of Gibson,
the bankrupt began many years ago in Arbroath,
and not being successful there, became, through
Laurence, the owner of a yard at Godalming, in 1854.
Mr. Kerslake then explained the nature of the
transactions with Gibson, which bad already 'appeared
in the evidence. Gibson had a capital of £4,000
or £5,000. It appeared that, upon the sale of the
tanyard, no question was asked by Laurence
as to his solvency or means. Gibson continued to
carry on the business until after Laurence's failure.
The business was at first profitable, until 1857, when
Gibson sustained a severe loss. Gibson accepted bills
for goods supplied by Laurence and Co., and consigned
dressed leather to Laurence and Co., against which in
due course he drew bills. But this system was not con-
tinued. In 1868 a new mode was adopted. Gibson,
in 1855, felt that his capital was insufficient, in con-
sequence of a heavy loss which he had sustained. A
letter from Gibson to Laurence was then read, written
in 1855, in which he spoke of the losses by the Arbroath
concern £3,000, and a heavy loss by a person named
Brown, and a heavy but necessary expenditure. He said
that in such times he liked to shorten sail. Gibson said
from 1858, when goods were supplied, acceptances were
given as before, but Laurence and Co. thenceforth made
loans to take them up, charging interest; and Laurence
and Co., as soon as Gibson sent them leather, gave a
cheque for the amount, and they also- enabled Gibson
to meet the bills falling due. The acceptances
originally given by Gibson in the first instance did
represent /coffer, but ultimately it would be hard to ,
say whether the smell of the tan-yard ever passed
over it at all. The acceptances were cut up into small' '
sums, both pence and halfpence, and at the end bear-
ing no resemblance to the bills which had been given
for the goods. The learned counsel referred to letters
in June, 1357, from Laurence and Mortimore to Gibson,
" The amount of his (Gibson's) bills had become un-
wieldy; the bills must not be hawked about, which
would damage the reputation of both houses." Remarks
bad been made on the amount of Gibson's bills.
Gibson admitted• that the system was perfectly irre-
gular. Laurence admitted that he made no inquiries
in reference to Gibson; but he said that because he saw
the bankrupt Gibson in company with one William
Gibson, a man of wealth, he inferred that Gibson
had an interest in the concern—that was a puerile
statement to which no man of sense could give credit.
Gibson's account began in 1857. A more reckless
system could not well be conceived ; there were,
indeed, many peculiarities in the dealings between
Gibson and Laurence, which proved that the latter was
thoroughly conversant with the actual position of Gib-
son's affairs. As to Mr. James Herbert Smith, he was
a tanner at Bermondsey. He had been unfortunate in
business; and of this Laurence was aware. Laurence
said he never knew James Herbert Smith was insol-
vent, and that he did not think he could lose anything
by him. In 1850, J. H. Smith sustained a loss by a
debt owing from Payne and Clark of between. £30,000
and £40,000. In his difficulty, J. H. Smith, who was
a customer of Laurence and Co., applied to Laurence.
Laurence found that, in addition to the debt owing
to them by J. H. Smith, which was enormous,, J.
H. Smith was also about to lose £40,000. Neverthe-
less, Laurence advanced to J. H. Smith the money to
help Payne and Clark, and keep himself going. Wm.
Smith also lost money by Payne and Clark, and he, too,
came for help to Laurence and Co. J. H. Smith got
deeper and deeper into difficulties. Laurence and Co.
knew this, yet the accommodation transactions went on
as before, and J. H. Smith's bills were thrown upon the
market as if J. H. Smith was the most solvent man in
London. The only way J. H. Smith could possibly
hope to get out of this load of embarrassment was
through a proposition by which J. H. Smith was to
become a partner with Laurence and Co., and get one-
third of the profits. This was, however, only in conver-
sation, and did not amount to a negotiation. A mining
share, also, said to be worth £16,000, was to be
taken by Laurence and Co. in part payment of a debt
of £93,000. Lauronce did not know where or what this
mine was—whether in Spain or Portugal. The mine
share was bought by J. H. Smith for £5OO, and it
seemed to him (Mr. Kerslake) a curious fiction in order
to prevent the loss to Laurence and Co. by J. H. Smith..
This was, of course, now gone by the bankruptcy of
J. H. Smith. Mr. Kerslake then referred to the
state of the accounts, showing the enormous amount
of bill and discount transactions, renewals, &c., pass-
1,
ing between Laurence and Co. and J. H. Smith,
whose acceptances amounted to £246,000 in 1858.
All these figures had already appeared in the evi-
dence. Enormous as were these transactions, it was
shown that J. H. Smith was insolvent, and that 3. H.
Smith told Laurence that such was the fact. Neverthe-
less, Laurence kept him on his legs. The next example
of the manner in which business was transacted was shown
in the case of Mundy. . With him, in many cases, the
accommodation was pure and simple. Mundy's brother
married Mortimore's sister, and the issue of the marriage
was to be a tanner. William Mundy, who had been a
farmer, was taken from the plough to be a dry nurse to
young Mundy. They were to set up in a tanyard at
Bermondsey, and had a capital of about £3,000 between
them. In 1856 Mundy found the capital at command
was insufficient to carry on the business. Laurence & Co.
made large advanies, and acceptances were renewed to an
enormous amount. Mundy's position was well known to
Laurence, who, nevertheless, continued the system down
to the end, and not content with renewed acceptances,
accommodation bills were to be taken from Mundy to keep
up the credit of Laurence and Co. Mundy dealt with
other leather factors, and he admitted that the mode in
which Laurence and Co. made loans to him was irre-
gular. Counsel then referred to the accounts, showing
how large was the amount of paper between them, and
how comparatively small. was the actual transactions in
leather. Mundy gave accommodation bills, and admit-
ted that he begged of Laurence to discontinue that
system, and to realise his own property. Smith,
Patient, and Co. eommenced in 1844. Smith had 4000,
capital lent by his father, and Patient £l,OOO, lent him
by Laurence and Co. They started in Bermondsey, and
Laurence and Co. found the stock. Smith, Patient,
and Co., were tried severely in the panic of 1857, but
Laurence and Co., supported them down to the bank-
ruptcy. Smith, Patient, and Co. applied for assisiance
from time to time, by singular notes, of which the

1 arced counsel then read specimens—" Let the bearer

have as under.—Yours truly, Smith, Patience, and
Co." These were the letters from a dehtnr to a large
creditor, and looked as if the case had been the reverse.
Laurence admitted that such applications were made to
his firm almost every day in the week. which demands
were supplied by each or note. William Smith, in
his . evidence, said that in 1858 he feared his
/house wouhrstop payment, hut knew that. the; would
not stop unless Laurence and Co. stopped also. The
upshot of the yearly amounts was that, acceptances were
given . to the extent of hundreds of thousands—leather
sold only a few thousands. Mr. Kerslake then referred
to an analysis or the transactions of Laurence and Co.
with the, eleven failed firms, which has in substance
beet published, . Laurence said that the discount houses
had canvassed him. This they did on the faith of the
Paper being gerthine.. They thought Laurence was an
honourable and an honest man. Laurence, it was proved,
had said to them, "Mow me up, hut give, me the money."
But he (Mr. Karslake) repudiated the alleged eagerness
on the part of the banks. Lartre.nee's financial inge-
nuity had baffled the keen-sightedness of the bank
managers until Draper's failure. What was Laurence's
motive for thus supporting insolvent harms ? It was
because the failure of one of those houses at such a time
(as Mr. Smith swore) would have a most pernicious
effect, upon the house of Laurence and Co.—indeed,
bring it down. The system of loans, accommodations,
ritid renewals, would have become known, and, if known, ,
put an nil fo.- The learned counsel having referred at
length to several other matters, concluded by saying
'that the assignees were not actuated by any vindictive
motive in opposing the bankrupts, and they would be
quite satisfied with any judgment his honour might
think fit to pronounce.
Mr. Watkin Williams followed in opposition. He
admitted that the bankrupts had been got into their pre-
sent position step by step. The banks had discounted
the paper under. the impression that the bills were good
trade bills. This was a fraud. He asked for a refusal
of the certificates.

Mr. Linklater next spoke in opposition. He had not
proceeded very far when the court adjourned.

TRURSDXY, Jan. 24.

Mr. Linklater, in proceeding with his address to the
court, said he, should net go at any length into the
transactions of the bankrupts with the failed houses, as
they had already, to a great extent, been sufficiently
dealt with by the learned gentleman who had preceded
him ; but he desired, nevertheless, to go somewhat more
into detail with reference to one or two of those houses,
for the purpose of bringing nnder the attention of the
court some matters which had not been remarked upon.
The learned gentleman accordingly went minutely into
a variety of particulars, with the view of laying bare
the entire class of transactions in which the bankrupts
had been engaged, and he was left speaking at a late
hour yesterday afternoon.

THE RANGOON TELEGRAPH CABLE.

The following are the particulars of the transshipment
of the Rangoon and Singapore telegraph cable from the
iron screw steamship Queen Victoria, stranded in Barn
Pool, Plymouth, into the Government hulks. The dis-
charge into the brig Pilot commenced on the 6th inst.
and finished on the 11th. It consists of 39 knots of the
main cable, 91 tons, and 27 knots of the shore end, 189
tons on the berth deck ; and 20 knots, 47 tons, en the
upper deck ; total, Pilot, 327 tons. The Brig Rover
commenced on the 6th instant., finished on the 13th ;
57 knots main coil of the cable, 133 tons, and 23 knots
shore end, 161 tons, and 48 knots main cable after coil,'
all on the berth deck ; total, Rover, 406 tons. The
Corvette Arachne commenced Jan. 11th, finished 18th.
Berth deck, main cable, forward coil, 18 knots, 42 tons,
ward-room aft 27 knots, 63 tons, main coil 44 knots,
103 tons ; shore end, main coil 22 knots, 154 tons ;
total on berth deck 362 tons ; main deck, port side
aft 15 knots; main cable 35 tons, starboard 15 knots
35 tons; total main deck 70 tons; total in the the three
vessels, 283 knots main cable and 72 knots shore end,
355 knots, 1,165 tons. Although the cable was covered
with water while running, only two kinks occurred ;
they were caused by the disturbed position of the coil
where the keel had been forced up by a rock underneath.
The three vessels are now moored up Hamoaze, near the
Royal Albert-bridge, Saltash, lashed alongside of each
other, for the greater convenience of the electricians
when testing the cable. Awnings arc spread over the
coils on the main decks, to protect the cable from the
weather, and windsails are fitted down to the berth.
decks to keep it as cool as possible. The temperature of
the cable is, of course, considerably lower since it was
recoiled, and it is very satisfactory to state that if the
cable continues in an improved condition until it is
thoroughly dry no further apprehension of heating need
be experienced. Every assistance has been rendered to
the contractors, Messrs. Glass, Elliott, and Co.. by the
Government officials, Commander Brown, master-atten-
dant, and Commander Paul, his assistant; the value of
ready help at such a time cannot be over-estimated.
The cable is believed to have received no material
injury, and tests very well. It is intended to rejoin
the wire and thoroughly test the whole. To-morrow
(Saturday) or Sunday, when the tides range high, an
attempt will be made to float the Queen Victoria, by
Captain Daniel Russell, from Lloyd's, a gentleman who
has had much experience in operations of the kind.
Harris, the diver, has examined her, and reports that a
smooth rock, 25 to 35 feet long, is right under her main-
mast and pushes up the keel ; the after-part of the ship,
which was buoyant some time after grounding, has how
sunk down on the beach. The Queen Victoria is divided
into three compartments, and it is proposed to draw the
water from the forward compartment with one of
Gwynne's pumps, worked by an engine of 10 horse-
power, and capable of lifting 1,000 gallons per minute.
The after compartment is provided with another pump,
worked by a six-horse engine, which lifts 500 gallons
per minute. When these compartments are empty (the
cable being landed), it is hoped that she will float
sufficiently to be taken into the large graving dock in the
Plymouth Great Western Docks. If not, she will be
removed to a clean beach near, repaired by divers, and
then placed in dock. The Queen Victoria is a five-year-
old ship ; she was lengthened 62 or 63 feet at Sunder-
land, purposely to receive the Rangoon cable, the coils
of which occupied about that length in her. There
is, we are informed, neither lower deck nor beams
in the new part, although the depth between the
main deck and the ceiling is over 19 feet. Some mer-
cantile men consider that the arrangements for the con-
veyance of the cable, which weighs nearly 1,200 tons,
were not of the best kind. It should, if possible, ;have
been distributed more equally over the ship, instead of
being in two coils only, one immediately before, the
other immediately abaft the mainmast, and all within a
distance of some 60ft., in a ship 280 ft. long; this alone
was calculated to cripple her. The cable was also
stowed too low ; the platform on which it was laid
should have been higher. When all stowed the upper
part of the coil did not reach the main deck by ;about
Bft., and the main deck is low, because a spar deck runs
fore and aft the ship. When laden the line of flotation
was two or three feet below the main deck, and conse-
quently five or six feet above the upper part of the coil,
and she must therefore have rolled fearfully at sea.
The weight of the cargo no doubt decreased her steer-
ing qualities, which are defective. It is also probable
that her rudder and other fittings were not increased
proportionately after sho was lengthened. The
two main pumps are worked by a crank which
requires the labour of eight men ; a lift of 28 feet is
usually considered the Pna.vinium on board ship; in this
case the water has to be raised over 31 feet. The pumps
are fitted on an iron frame, bedded with wood, apparently
not in a very secure manner. No doubt many modifi-
cations will be made before she again proceeds to' sea.
The ship is insured in various companies to the extent
of about £42,000. The cable is insured at about
£BO,OOO. There is some dispute about the liability in
regard to the cable, which was underwritten in the first
place for a voyage to Rangoon, and when it was deter-
mined to send the Queen Victoria to the Mediterranean
this alteration, it is said, was not properly endorsed on
the policies. If this should be the case it will form
the subject of the second legal proceedings since the
unfortunate cable was shipped. The first were brought
by Messrs. Newall and Co., for an alleged infringement
of their patent mode of stowing. They obtained an
injunction just after the ship left Greenwich. Her
Majesty's paddlewheel steam-sloop Spiteful, 6, Com-
mander William C. P. Wilson, was sent into the Chan-
nel to bring her into the Sound. On Monday Captains
Ferrer and Box, two of the Pilot Committee of the
Trinity House, inspected the stranded ship in Barn
Pool. Fortunately there has been no weather likely to
injure her much since she has been ashore.

NOTICES FOR THE COMING SESSION.—The follqwing
notices have been given for the approaching Session of
Parliament : —Mr. Roebuck,—To ask Mr. Gilpin whether
he is a descendant of John Gilpin, and otherwise to in-
sinuate to the remarkable Minister, that when humble
people are suddenly elevated to the backs of horses, they.
are very likely to ride in an objectionable direction.
Mr. Edwin James.—To move an address to the Crown
for leave to him to wear his blouse and pistols (as deli-
neated in the Illustrated London News) the first time he
moves the address in the House of Commons. Mr. W.
Williams.—To move an address to the Crown fu• leave
to him, when he receives his coronet of Viscount, to.
have the same electroplated, as more in.accordance•with
the economical principles of the day than old or silver-
gilt. Also to ask the Crown whew it is likely the hon.
member 'will have the'said distinetron. Colonel North.
—To move that Mr., Speaker be instructed to issue his
warrant to the Sergeant-at-Arms to arrest any
.member
who, not holding a commission in the army, shall pre-
sume to speak• or ask a question upon any military
subject. whatever. Sir Francis Baring.—To ask Vis-
count Palmerston the reason why he, Sir Francis, is not
a member of the present Ministry, and to assure the
•noble Viscount that the nation can have no confidence
in a Cabinet which has not the official co-operatiOn of
the honourable baronet. Mr. Bright.—To move ' that
the Warrior be immediately completed, and presented
by the House of Commons to the Emperor of the I:%net
as an assurance of the belief of England that His M y
I will never do any harm with that vessel or any other.—
4,1 her .
Punch.

-- 1'

LATEST NEWS.

(BY BRITISH AND IRISH MAGNETIC TELEGRAPH.)

FRANCE.

UNEASINESS AMONG THE COMMERCIAL
CLASSES.-THE EMPEROR'S FORTH-
COMING SPEECH.

The Minister of Commerce, in reply to deputa-
tions of manufacturers asking for explanations of
the political situation, has said that he hoped for
the maintenance.of peace, but the country would
soon know what turn events were likely to take
by the Emperor's speech and the debate on the
address. I ' ). AcE
It is said the Emperor's frequent interviews
with MM. De Morny and De Persigny, no other
person being present, have reference to the pre-
paration of his speech to the legislative body.
The absence of the Minister for Foreign Affairs
from these consultations is much remarked upon.