The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1869-02-04
CHI a r L E S It O N
THURSDAY MORNING. FEBRUARY 4, 1869
Tho Case OF Overend, eurney ss Co.

There can hardly be commercial city
in the world whose business men are not
familiar with the name of Overend, Gurney
& Co., the late celebrated bill discounting
firm of London-a house, in it's 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 the former junior
partners, Mr.. John Henry Gurney, Mr..
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, it
Is gravely asserted. SO far from showing q
profit, resulted in on average loss Of e6OO,-
OOO per annum during the few years the
business was in their hands, thus reducing
this formerly prosperous concern to state
of hopeless insolvency.
1t was at this time that the mania for
limited liability companies was exercising
such sway over the English mercantile
mind; and the firm of Overend, Gurney g.
Co, after consultation with their immedi-
ately interested friends and relatives. de-
termined to convert their business into q
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
tors chosen from among their own friends
and connections, for the sum Of s5 600, 900.
stipulating that they should remain as the
managing conductors Of the business at a
salary of $4,000 a year each. The new
company began its existence on the 1st of
August, 1865, taking over all the liabilities
and assets of the old firm. These liabili-
ties, at the date of the transfer of the bus
mess to the new company, were in respect
of monies borrowed on security of bills of
exchange and other documents, G0,OOO, 900:
to unsecured creditors, on deposit and
drawing account, e5,00O,O00; and contin-
gent liabilities, in the shape of bills redis-
counted, guaranteed, &c., a9,OCO,OOO;
total liability Of e23, 100000 Their assets
consisted of $500, 900 cash and government
securities; bills and promissory notes in
hand, 81, 100000, and also in the hands of
creditors, e8,5OO,O00; advances and loans
granted by the srm, e7OO,OOO; cash and
doubtful debts, 100000; and lastly, bills
rediscounted, e9,600,O0o; or total of
nearly e24,0OO.O 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 s.Over-
"end, Gurney & Co., suspense and guaran-
'tee account" and the sum Of G4,213,896
was placed to the debit of the old firm. OF
these bad debts, the first on the list is the
Royal Mail Steamship Company Gn liqui-
dation), for eS37,Occ, the sale Of whose
steamships has only realized e1OO, 900; then
come two merchants, who had failed, one
owing $4,000, the other 954,OOO; the
Greek and Oriental Steam Company, which
had failed years before with no assets,
e144, 900; Mr.. Thomas Howard, penniless
bankrupt, 93sO,0O0 (though he has made
affidavit that his debt is only 92OOO);
Charles Joyce, bankrupt, e7S, 900; John
Jones, bankrupt, s22,OOO; Kelson, Triton
s. Co., bapkrupts, 1921, 200; J. E. G. Coch,
| $243, 900 (though MIR. Coch's solicitor as
serted in court that Mr.. Cooh had no ac
count with them); the Levant and Black Sea
Steam Company $as, 900 utterly bankrupt
and in liquidation); Lawrence & Fry,
$l4S,OOO (no assets whatever); David Leo
poid Lewis, SS4l 900 chad failed four times
and is now dead); Millwall Iron Works.
$4,000 Called, and the assets utterly
worthless), and many others Of q 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 SIS, ,OOO,-
600 with which the new company proposed
to commence operations.
Such was the high reputo in which the
name Of Overend, Gurney & Co. was held.
the firm having been in existence for the
best part OF a century, that Che shares were
readily taken by the public; and, although
only fifteen pounds per share out Of the
hfty pounds per share capital had been
called mp, they rapidly advanced to nine
pounds premium. Eight months after this
new company was established, il stopped
payment on the 1osh May, 1866, and pro-
duced by its stoppaga ths sev.-ss. ccsns-.
cial panic that has ever been Witnessed ia
London. The uahappy shareholders. un.
der the English law Of Limited Iiab;,itv
have all been compelled to contribute their
4 quota, according 70 the number Of shares
held by them, toward the liquidation OF the
company's debts. The company has been