Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1875-07-07
THE ENGLISH IRON TRADE.
significance of the Failure of Sanderson
~ Co and the Abedare Iron Company.

From the London Times (EditoriaD. June 1.
Yesterday witnessed some OF the most
disastrous failures the city of London
has known since that fatal day nine
years ago when Overend and Quincy
succumbed. After long and painful
struggle, the Abedare and Plymouth
Iron companies were finally announced
to be insolvent, and their collapse has
caused the suspension of MI. Sander
son & Co., bill brokers, with enormous
liabilities. The next few days will re-
veal the extent to which their liabilities
may involve others. This event cannot
be said to have taken the commercial
world by surprise. For some time ru-
mors, and more than rumors, have been
current, and the case of the two com
panles, which represent gigantic part
nership paralyzed by it's own inherent
weakness and the depression of the iron
trade, has been looked upon as hopeless.
But the ruin which the announcement
Of the failure was likely to cause in
duced extraordinary efforts to avert the
catastrophe. All has been in vain, and
yesterday, after a meeting at which
some Of the principal creditors we're
present, it was finally resolved to sup
press payment. Mr. Sanderson & Co.
have been most deeply involved with
the companies, to the extent, it is said,
OF $500, 900, and they have been com
PEELED to take the same course with LA
billties to the extent of several millions.
A sketch Of the Aberdeen and Ply
mouth companies is given in our city
article, and recalls the history Of too
many enterprises which have come to
similar end. The iron trade is one in
which it is absolutely necessary that
business should be backed by power
full reserve of capital. The operations
are on the largest scale, the profits Are
fuctuatlng, seasons OF extraordinary de-
mand alternating with periods of obsti
nate and irremediable depression. At
the same time the expenses are inces-
SAINT and enormous. Great works must
be kent up, with their staff and machin
cry, and even when little profit or none.
is to be made it costs less to keep the
works going than to bring them to a
standstill, with the prospect of resum
ing them when trade revives. The
South Wales Iron Company is an enter
prise by which a rich man or an asso-
citation of bona tfde capitalists, strong
enough to tide over bad times, and to
look for their profits to an average OF
years, may be able to make a very ad-
vantageous investment. But the case IS
different when the actual proprietors are
comparatively poor men. when the COM
pany must be kept going by It's current
gains, or by system Of credit which Is
ever more and more costly to maintain.
When payments approaching the profits
of good years, and by far exceeding the
profits Of bad ones, have to be made
regularly to former proprietors and
mortgages, the life Of the concern Is
likely to be one weary and fruitless
struggle against adverse circum-
stances, with collapse as the
almost certain end. In the present
case it appears that, though the principal
partner is the representative of family
which has held large share in the Alb
erdare company for many years, the
business has lost powerful support in
his time. It is stated that the late Mr..
Aid. Thompson, SO well-known as one of
the great chiefs OF the iron trade, part
ed with his share to some members Of
the Elbow Vale company. These, Diff
fering from Mr.. Fothergill, retired from
the Aberdare company after three Or
four years, and with them went it's real
strength, as regards capital. "Smce
that date there has been one continued
struggle with regard to finance to pay
the installments of the outgoing part
ners and to find working capital to car
nv on with The ordinary conse-
quences ensued, Losses on contracts,
losses by the failure OF other concern, a
heavy blow from the panic of 1866,
mortgages, and then system of exten-
sive and costly financing, represent the
progress of the partnership forum. Its
later developments await elucidation.
There seems to be something beyond
even the necessary struggle for life in
the state Of things described An opin-
ion is expressed that mo real profitable
results have been derived from the
working or the Aberdare Iron company
for the last quarter of century" We
must suppose that the circumstances Of
the company were SO adverse that the
magnificent profits which few years
since made so many millionaires, and
the chief part in raising the price Of
coal, could not alleviate the burdens Of
the proprietors. Perhaps, like other per-
sens in debt, they worked for their credi-
tors. But what we are now chiefly con-
cerned with is the effect Of their trans
actions upon others. The companies
collapse, and they pull down Messrs.
Sanderson & Co., together with others
of minor note; and no wonder, for their
paper in circulation, we are told.
amounts to several hundred thousand
pounds. What is the meaning OF this
excessive confidence in concern heavily
1nortgaged, burdened with the pay
ments to former partners, and known to
have been living from hand to mouth
for the last ten years or more? When
the crash comes the public is told about
the character of a firm; but for this to
be possible, the people whose business
brings them into contact with it must
have known, or had the means Of know
ing, the facts long before. These com
panies, which have not been earning a
profit for a quarter of century, have