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22-07-2018, 08:12
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Setting up a Lager brewery in the UK in the late 19th century sounded like a surefire winner. Punters were willing to pay a hefty premium for Lager. How could you fail to make money?

This sounds so promising:

"The English Lager Beer Brewery, Limited.
With a capital of £100,000 in shares of £10 each, the English Lager Beer Brewery, Company, Limited, has been formed for the manufacture of lager beer. It is stated that arrangements have been made to acquire a freehold brewery with 20-quarter malthouse, stores, offices, stables, outbuildings, and dwelling-house, with freehold building land adjoining, situate at Batbeaston, Bath, possessing a suitable water supply. A special plant will be erected for the manufacture of lager beer, capable of producing 30,000 barrels per annum. The vendor undertakes for the sum of £39,500 to convey and assign the brewery, with malthouse, &c., and to reconstruct the brewery and fit up the same with a special lager-beer plant and machinery and fittings capable of producing ooobarrels per week; also, an ice factory, with the requisite machinery and plant. The first subscribers are :—

H. D. Parsons, 112, St. John’s-road, N. 1
C. S. Culley, I2, Penshurst-road, Hackney 1
C. Markham, The Quarries, Croydon 1
W. McCracken, II, Dovecote-avenue, Noel-park 1
J. Higgins, I4, Manley-terrace, Kennington 1
C.W. Hubbard, 47, Jackson-road, Holloway 1
A.J. Evans,9,,Belle Vue-villas, Wood-green 1

There shall not be less than three nor more than nine directors. The first are F. R. Crawshay, J.P., Lieut.-Colonel Perkins, J.P., Major F. R. Howell, B. Payne, and J. P. Hall. Qualification, £259. Remuneration, £100 each when 6 per cent. dividend is paid, and further £50 each for every 2 per cent. above, with the proviso that in each instance the chairman receive £50 extra."
"The Brewers' Guardian 1890", 1890, page 29.Sounds great. Yet three years later, everything had gone tits up:

The Company to be Wound Up.
An extraordinary general meeting of the shareholders of this Company was held on Tuesday at the Brewery, Batheaston. In the absence of any director at the opening of the meeting, Mr. James Cochrane, of Bristol, was elected to the chair. There were also present Col. Worsley, Mr. J. Humby, Mr. B. Newstead (representing Mr. W. Ferguson), Mr. W. Stevens, Mr. F. J Ferguson, Mr. B. A. Dyer, representing shareholders, Mr. William Cooke, and Mr. J. P. Hall (secretary).

The minutes of the last general meeting were not read, as the minute book was the possession of one the absent directors (Col A. Thrale Perkins), who, however, subsequently arrived.

The Chairman read the report of the Committee of Investigation appointed at a shareholdors' meeting held on the 19th July. This stated inter alia:-

The Committee were met by one director only, Colonel Perkins, with the Secretary. The only accounts which were available for investigation were the approximate balance sheet produced at the general meeting and the books of account belonging to the Company; no effort appears to have been made even to ascertain the financial position for the period between the 31st day of December, 1892, and June 30th, 1893, and the books of account afford no information upon the subject. Dealing, however, with the approximate balance sheet, your Committee beg to report that it does not afford a reliable or correct view of the present financial position of the Company. An effort was made to ascertain from the books how much cash had been received, and what had been done with it, but your Committee regret to report that they were unable to extract the information either from the books or from the secretary. The Committee have ascertained that practically the whole of the paid-up capital of the Company, a sum of close upon £30,050, has been paid

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by the directors to Mrs. Humby, or to her nominees, as the purchase money of the brewery, mill and premises. Unfortunately, however, this large sum did not secure to the Company the absolute possession of the property because it was not conveyed the Company free, but subject to mortgages amounting to £10,000. These mortgages consist of two, namely, one for £3,460, now held by independent parties, and another for £6,540 in favour of Mrs. Humby. It follows, that in addition to receiving close upon £30,000 as the purchase money for the property, Mrs. Humby is still the proprietor of a second mortgage on the whole property of the Company to secure a further sum of £6,540. Following the history of this mortgage transaction, we find that originally both the first and second mortgages covered the whole of the property—in other words, they included the mill. Within the last six months the first mortgage for £3,460 was transferred, and in this transaction the mill was withdrawn from this particular security, but it still remains, subject to the second mortgage, in favour of Mrs. Humby. We further find that this second mortgage is now held on behalf of the National Bank of Wales under circumstances stated to be as follows:—Mr. James Humby, the husband of the vendor, Mrs. Humby, had an account with the Bank and at some date, which your Committee is unable to ascertain this second mortgage of £6,540 was deposited by Mrs. Humby to secure the general account of her husband with the National Bank of Wales. In addition therefore to the liability of £6,540 on the second mortgage to Mrs. Humby (since transferred to or deposited with the Bank) this Company is also liable for its overdraft at the Bank which amounts to the sum of £10,647. So far as your Committee can ascertain the National Bank of Wales claim a security in respect of this overdraft upon an unpaid and uncalled capital of the Company and also hold limited guarantee of some sort from the Directors. In addition to the bank overdraft of £10,647, the Company appears to be indebted to the extent of about £2,000 — although in the absence of any information touching the last six months this figure must be accepted with some reserve — making a total indebtedness of, roughly, £12,500. As the whole paid-up capital was paid to Mrs. Humby as the price of property which was then and still is subject mortgages for £10,000, it follows that the only assets to meet this liability are the loose stock—casks, barrels, and bottles, and unfixed plant, of the total value of perhaps £200. Your Committee are of opinion that the value of the brewery and mill together is not more than sufficient to discharge the mortgages. Under these circumstances your Committee took the responsibility of passing a resolution calling upon the directors at once to take the necessary steps for winding up the company, and they also decided to request Colonel Perkins personally to take charge of the books and papers recording the condition of the company. The state of affairs disclosed by the investigation is such that the Committee are unanimously of opinion that a liquidator should at once be called upon to deal with it, and they urgently recommend the shareholders to wind the company in the most expeditious and speedy manner. In conclusion your Committee regret that the result of their labour has been of such a thoroughly unsatisfactory character, and beg to assure the shareholders that they will be prepared to give the liquidator every assistance in their power to enable him to conduct a careful investigation into the inception of the company and the causes that have contributed to such a disastrous result.

The Chairman, in answer to Mr. Dyer, said he had been informed tbat an execution was levied on Saturday by the National Bank of Wales. The Committee were of opinion that any winding should be perfectly independent of the Bank or those representing it.

Mr. Stevens, who said he represented shareholders to the extent of £4,000, alluded to passage the prospectus (dated January, 1890) with which the Company originated. One paragraph stated that a contract had been entered into, dated 7th November, 1889, between Charles Stewart Colley of the one part and Arthur James Evans as trustee for tbe Company on the other part, and that that contract might be seen at the office of the Company's solicitors. That was an important document but it had not been produced when they called for it. Perhaps Mr. Humby could throw some light upon it?

Mr. Humby said in some way the contract was lost. He said it was left with the Bank of Wales but the Bank said "No." At an early point in the constitution of the Company, two years ago, the contract was called for and could not be found. But (in answer to Mr. Dyer) the draft could be obtained.

Mr. Dyer — Perhaps Mr. Humby can tell us whether under that contract any shares were issued fully paid up, or to be issued?

Mr. Humby — No.

Mr. Stevens thought the money taken could hardly have paid the brewer's salary.

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In the couree of discussion it was stated that the directors named upon tbe prospectus were F. E. Crawshay, J.P., Bridgend, Glamorganshire, Chairman, deputy-chairman of tbe National Bank of Wales; A. T. Perkins, J.P., East Court, Wells, Somerset; Major R. Howell, Oaklands, Aberdare, Glamorganshire, director of the National Bank of Wales; John Bellamy Payne, millowner and manufacturer, Chard, Somerset; James P. Hall, Bathampton. The first three, added tbe Chairman, appeared to be still directors, and the last six months Col. Perkins seemed to have discharged the duties of managing director. Mr. Payne, an exceedingly old man, never seemed to have acted; Mr. Hall, on becoming secretary, by the articles of association ceased to be director.

At this point Col.Perkins entered, and explained that he had travelled from Cardiff and been detained. In answer to a question he said he had neither seen the other directors, heard of them, nor had communication with them.

The Chairman said he thought from what had come to his knowledge that the liquidator should have power to go to the courts for assistance.

A resolution to wind the Company having been carried, the question of tbe appointment of liquidator was raised.

Mr. Ferguson said the shareholders and the committee had been most shabbily treated. He would, however, say this — he was sure there was nothing wilful the part of Colonel Perkins, but that it was want of business capacity. He did not suppose he would have allowed the Company to get into that serious state had he known otherwise.

Colonel Perkins said he knew there had been mismanagement, and if he had to give evidence on oath he would say things his own defence he would leave unsaid now. But he could not hold himself entirely to blame; he was but one of a body, and had been over-ruled. He was anxious for a thoroughly independent inquiry.

It was decided to appoint as liquidator Mr. Benjamin Newstead, of the firm of J. F. Lovering and Co., chartered accountants, 3, Church-passage, Guildhall, London, and was further resolved to instruct and empower him to apply to the Court forthwith for an order that the Company be wound up compulsorily, or under the supervision of the Court.

The Chairman alluded to the celerity with which tbe National Bank of Wales had put in its execution, and Colonel Perkins said he believed the reason was there was another imminent. He added that if he had been wrong in not taking measures with regard to the writ, it was because he did not know what to do with such document. —(laughter)—as he had had no experience with them The Colonel added that he had all the books in his care after the Committee of investigation finished, and had kept the business going paying small payments and receiving the same."
Bath Chronicle and Weekly Gazette - Thursday 10 August 1893, page 3.
It sounds rather like some sort of fraud. Pretty suspicious that most of the directors were nowhere to be seen. And whart about Mr. and Mrs. Humby? They seem to done rather well out of the disaster.

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