New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-01-28
THE CASE OF ovEREND, GURNEY Co.

There can hardly be a commercial city in the world
whose business men are not familiar with the name
of Oyerend Quincy e. Co., the late celebrated bill
discountng firm of London-a house, in its parlcu-
lar line of business unsurpassed in the magnitude OF
its transactions After the retirement of Mr. Samuel
Quincy and Mr.. David Barclay Chapman. the con-
duct of the business Of the house fell upon the former
Junior partners Mr.. John Henry Quincy, Mr.. Henry
Edmond Quincy, and Mr.. Robert Brkbeck. These
Younger men. released from the shrewd control of
their late senior partners appear to have launched
ont into gigantic operations of the widest and
most speculative character which operations, 1t is
grayely asserted so far from showing profit, re-
suited in an average loss of 100000 per annum dur
ing the few years the business was in their hands,
thus reducing this formerly prosperous concern 10
state of hopeless insolvency. ,
1t was at this time that the mania for hmiteu
liability companies was exercising SUCH sway over
the English mercantile mind; and the firm OF over
end, Quincy 81 Co., after consultation WIN tnelf
friends and relatives deter,
mined to convert their business into company %, oil
this description Their good name was as yet iotaiy
untainted, and their business was believed, IN En-
gsh commercial circles to be highly lucrative one
They sold the good will OF their business 10 COM
pany governed by board of directors chosen from
among their own friends and connections; LOT the
sum Of f5 100000, stipuating that they shouId re-
main as the managing conductors OF Gho pusooo ~
q salary of 900 year each. The new company
began It's existence on the 1st OF August 1902 taxing
over all the liabilities and assets OF the olu RtI
These liabilities, at the date OF the transfer oi '
business TO the new company, were III respect OF
moneys borrowed on security OF bills OF exchange
and other documents, E90O0OOO; to unsecured cIed-
itors on deposit and drawing account, t9,VU;WV;
and contingent liabilities, IN the shape OF DilIS
redscounted guaranteed. &c, t9OOOUO; Iotaii
liability Of f23,0OOOO0. Their assets consisted OF
f5OO 900 cash and Government securities; bills ana
promissory notes in hand f,3OOOOO, and also IN the
hands of creditors ES.500,0O0; advances and loans
granted by the firm, 100000; cash and douDtf9l
debts f4,2OO,OO0; and lastly, bills rediscounted,
f9GO0OOO or total of nearly f24 100000 But these
bad and doubtful debts really represented losses as
they were due by persons VIGOROUSLY worthless ana
bankrupt. In the books OF the new company Iney
were carried to what was termed IN the general
ledger Overend, Quincy Il Co. suspense ana guar,
antee account" and the sum OF was pIacSu
10 the debit Of the old firm. OF these bad debts the
first on the list is the Royal Mail Steamship 20 lih
auidation) for 1887 900, the sale OF whose steamships
has only realized 100000; then come TWO en- on6
the Greek and Oriental Steam Co, when nag lalIeu
wears before with no assets, Elfi,OOO; DIT; lh0nlas
Howard, n penness bankrupt 1900 Though nc
has made affidavit that his debt IS only
$4,000; Charles Joyce, bankrupt E7SOO;
John Jones bankrupt 400 fS 70 ke dSoh
s3iSOCO Though Mr. Cochs solicitor asserted in Court
that Mr. Coch had no account WITH theinl tle 70
want and Black Sea Steam Co, $4,000 UTTERLY bank
in6 assets Whatever David Leopold Lewis s3ll 900
had failed four times aud is now deadl MIllwall
Iron Works, $4,000 failed, and tho assets utterly
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 capltai
of IS 600 900 with which the new Company proposed
to commence operations.
Such was the high repute in which the name OF
Overend, Quincy 81 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 al
though only els per share out OF the Zoo per snare
capital had been called up they rapidly advanced 10
80 premium. Eight months after this new company
was established, 1t stopped payment on the lOth
Nav 1866 and produced by its stoppage the severest
commercial panic that has ever been witnessed IN
London. The unhappy shareholders, under the In
gsh law of Limited Liability have all been COM
PEELED to contribute their quota, according 10 The
number of shares held by them. toward the lquida-
ton OF the COmpanys debts. The Company
has been IN liquidation nearly three years.
and tho shareholders have, within the last lew
months through the tortuOus windlngs OF the
English Court Of Chancery, arrived nj the rear
state of the old firms position. viz: that at tho
time they sold their business to the new Company
they were really nsoyent to the extent Of E3OO0OO
They have, therefore, instituted legal proceedings
against the old firm and the directors for fraud
and conspiracy and ID would appear so far "a the ta
has gone that they have strong prtnd fdcie case
inasmuch as the new directors were fully aware OF
the worthless character Of the assets included IN the
sum of 2l3 500, bad and doubtful debts purchased
by tho new Company from the old firm, and that
they suppressed this fact in the official prospectus OF
the now Company which they issued