The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1869-02-04
CHI A RI Es TON
THURSDAY MORNING. FEBRUARY 4, 1869
The Case of overena, Gurney & Co.

There can hardly be commercial city
in the world whose business men are moi
familiar with the name of Overend, Gurney
& Co., the late celebrated bill-discountine
firm of London-a house, in its particular
line of business, unsurpassed in the mag
nitude of its transactions. After the re-
tirement of Mr.. Samuel Gurney and Mr.
David 'Barklay Chapman, the conduct Of
the business fell upon t former junior
partners, Mr. John Henry Gurney, MIR.
Henry Edmond Gurney, and Mr.. Robert
Birkbeck. These younger men, released
from the shrewd control of their late senior
partners, appear to have launched out into
gigantic operations of the widest and most
speculative character, which operations, 1t
is gravely asserted, so far from showing q
profit, resulted il anAaverage loss Of e60O,-
900 per annum during the few years the
business was in their hands, thus reducing
this formerly prosperous concern to astatc
of hopeless insolvency.
1t was at this time that the mania for
limited liability companies was exercising
sucN sway over the English mercantile
mind; and the firm of Overend, Gurney &
Co, afteS consultation with their immedi-
ately interested friends and relatives, de-
termined to convert their business into 4
company of this description. Their good
name was as yet totally untainted, and
their business was believed, in English com-
mercial circles, to be highly lucrative one.
They sold the good will of their business to
company governed by a board of direc-
tors chosen from among their own friends
and connections, for the sum of e5 .000, 600,
stipulating that they should remain as the
managing conductors of the business at
salary of $4,000 year each. The now
company began its existence on the lst of
August, 1865, taking over all the liabilities
and assets of the old firm. These liabili-
ties, at the date of the transfer cf the bus
mess to the new company, were in respect
of monies borrowed on security Of bills Of
exchange and other documents, go 1000, 600;
to unsecured creditors, on deposit and
drawing account, s5,Ooo,O00; and contin-
gent liabilities, in the shape of bills redis-
counted, guaranteed, &c., 100000; a
total liability of :e23 100000. Their assets
consisted of 100000 cash and government
securities; bills and promissory notes in
hand, s1, 100000, and also in the hands of
creditors; sS, OO,0OO; advances and loans
granted by the firm, 100000; cash and
doubtful debts, "a, 200 900; and lastly, bills
rediscounted, $4,000. 900; or total of
nearly e24,OOOO 900. But these bad and
doubtful debts really represented losses, as
they were due By persons VIGOROUSLY
worthless and bankrupt In the books of
the new company they were carried to what
was termed in the general ledger "Over-
ssend, Gurncy s. Co., suspense and guaran-
sstee account" and the sum of "a. 2l3, 1856
was placed 10 The debit of the old firm. Of
these bad debts, the first on the list is the
Royal Mail Steamship Company (in liqui-
ds,ion), for sS37,0Cc, the sale of whose
steamships has only realized e100 600; then
come two merchants, who had failed, one
owing sl7 600, the other e54 900; the
Greek aud Oriental Steam Company, which
had failed years before with no assets,
s144, 600; Mr.. Thomas Howard, q penniless
bankrupt. eS30.oo0 Qhough he has made
affidavit that his debt is only 920O0);
Charles Joyce, bankrupt. e7S, 600; John
james, bankrupt, s22 600; Kslson, Triton
& Co., b.nk-upls, s291, 900; J. E. c. Coch.
S2l3. 900 (;houga Mr. Coch's solicitor as
serted in court that Mr.. Cooh had no ac-
count with them): the Levant and Black Sea
Steam Company S3S 600 (utterly bankrupt
and in liqnidaiOu); Lawrence s. Fry,
Sl4s 900 (uo assets whatever); David Leo
pold Lewis, S34l 600 had failed four times
aud is now desd); Mlllwall Iron Works,
$4,000 (failed, and the assets utterly
worthless); and many others of like char
acter for different amounts. 1t is needless
to say that these details did not appear in
the published prospectus which invited the
public to subscribe to the capital of ST, 1000,
600 with which the new company proposed
to commence operationa.
Sucn was the high repute in which the
name of Overend, Gurney & Co. was held,
the firm having been in existence for the
best part of century, that the shares were
readily taken by the public; and, although
only fifteen pounds per share out Of the
6fty pounds per share capital had been
called up, they rapidly advanced to nine
pounds premium. Eight months after this
new company was established, it stopped
payment on the 10h May, 1866, and pro-
duced By its stoppage the severest CONNER.
cial panic that has ever been witnessed in
London. The unhappy shareholders, un.
der the English law of Limited Liability,
have all been compelled to contribute their
quota, according 20 the number of shares
held by them, toward the liquidation of the