I am pleased to see iconoclast and local history rapscallion Peter ‘Pedro’ Cutler has been busy once more this week; rather than resting on his laurels over last week’s article about Captain W.B. Harrison’s unfortunate electoral dysfunction, he has been again trawling the archives and found that Harrison was apparently involved in murky business elsewhere.
It seems Old Bill had shares in a local bank, of which he was a director – and after a failed merger bid, the bank crashed; oddly, the good captain seems to have sold all but a handful of his shares just before the trouble kicked off.
This stuff is dynamite, and actually looks set to interweave several ongoing threads here that formerly seemed to be utterly unconnected.
This, of course, is not the first time we’ve seen a collapse of a bank locally.
I thank Peter once more for his research diligence, and I am saddened to hear that a local group of mining historians seem to be deaf to his requests to modify seemingly incorrect accounts in their publications that he has highlighted. It seems that for some, image is more accurate than veracity. Which is a great shame.
Any comments or catcalls? Post them here or mail me: BrownhillsBob at Googlemail dot com. Cheers.
Peter Cutler wrote:
On the morning of the 21st December 1888 the shareholders of the Staffordshire Joint-Stock Bank Ltd awoke to receive a circular, or to read in the newspaper, that a conditional agreement had been made by their directors to amalgamate with Birmingham Banking Company Ltd. A special meeting was called for the 15 January 1889 and the Proposition for the acceptance of the conditional agreement of December 20th 1888 was approved, also that the SJSB be wound up voluntarily.
The Chairman, JJ Clarke, was not surprised to see so large an attendance, and he could quite understand that they were considerably surprised when they were informed through the newspapers and by circulars sent out, of what had been done by the directors. The directors had taken the step after very careful consideration as absolute secrecy was needed. The amalgamation will make the BBC the largest bank, it is stated, in the Midlands districts, having 35 branches.
But things seem to go very quiet and in December a crowded meeting of shareholders was held in Birmingham to consider the position of affairs owing to the delay in publication of the liquidator’s report. Dr Duncalfe stated that when the amalgamation was brought before them the balance sheet showed surplus assets amounting to £215K…making the shares worth £33 each, instead of that the offer was now £14 10s. (Shame!) Whether the result was owing to misreprentation or bad agreement remained to be seen. What were they going to do? (Voices: “Prosecute”). Several shareholders maintained that if the directors had misrepresented affairs they should be punished. It was decided to appoint an investigative committee and report to the adjourned meeting.
The Birmingham Banking Company Ltd had been established in 1866 with a subscribed capital of £2.86m and a reserve fund of £312K
The SJSB was established in 1863 with a capital of £1m. One of the directors being W Harrison Esq (Brownhills Collieries).
In January of 1890 the investigative committee made a report. The immediate cause of the disposal of the bank appeared to be litigation commenced by one of the directors against the General Manager, who intermated that he should make disclosures affecting the position of the bank. The sale appeared to have been carried through in a hasty and unbusinesslike manner. The directors had engaged in speculative business, incurring serious losses, for which they were responsible. The shareholders should take the advice of a law officer of the Crown as to the liability of the directors. The Committee would continue.
Back in 1885 five directors had given guarantees to the tune of around £21K on the old, bad and doubtful debts, and at first they agreed to honour these. But after the appointment of the Committee their attitude changed and they withheld the payment due to the Committee’s hostile attitude. They considered the allegations against their motives and conduct to be incorrect and unfair.
But the Committee disagreed and stood by their allegations; the loss was appalling and they had enough do do to reconcile the shareholders to their fate, without being asked to become apologists for the directors. The directors had advanced loans on speculative and insufficient securities; they were guilty and culpable of negligence in not allowing their securities to be revealed from time to time, and that in defiance of the auditor’s frequent advice; that they were guilty of producing balance sheets which were delusive and misleading (applause). The Committee had not charged the directors of any dishonourable actions at all; what they had charged the directors with was want of moral courage and bad management (Applause).
Further what consideration, too, did they place on the action of Mr Harrison, one of the directors, who at the identical time that two of his colleagues were engaged in making an unconditional surrender to the BBC was himself selling out his shares in the bank by the hundred? He had sold all his holdings except for 50 shares needed for qualification as a director in the months of November and December. Just before liquidation 160 were sold by him to innocent and unsuspecting purchasers, (shame!) and the last sales were on the 4th of December. Some were averse to acceptance of the £21K preferring to see the impeachment of the board and auditors, who year after year laid before them misleading balance sheets as to the position of the bank.
In July of 1890 a cheque was received from WB Harrison for £3.5K.
Just a Thought…
I think there are a couple of misconceptions by some local historians, one being that the Harrison family made all its money from coal. Indeed, they certainly made a huge amount, but in 1849 and their venture into coal W Harrison Esq was already, in the words of Lord Hatherton, in possession of a large fortune. There were many ventures that failed, but many of the coalowners had many irons in many fires and could quite easily ride the ups and downs of the market.
The other is that the Harrison Empire was a family concern, and therefore run in some kind of family manner. This many have been so in the very early years, but by the early 1860s they were among the founder members in the Cannock and Rugeley Colliery Company Limited. I am sure there is a difference between a family concern and a concern in which one family have a great number of shares.
I may be wrong but the above example suggests to me that if the ‘limited’ is placed after the concern the directors can distance themselves from much of the blame that may come their way.