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CS280/11/38: Bankruptcy

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(April 2018) The mystery over the circumstances relating to Matthew’s bankruptcy in 1848 is now resolved (for additional context, see Newspaper Articles > Pre-1850 > Bankruptcy).

In one of her letters to her brother Alexander many years later (dated Jan 18th 1909, recorded by Wulf Gerdts in his unpublished Matthew Saga), Matthew’s daughter Euphemia recalls “we were all very hard up after our father lost his money through Denny’s failure”. For many years, it was unclear who Denny was or what was the nature of this failure. We now have the answers, thanks to historical research conducted by Anne Carroll, formerly of Perth Library.

D and A Denny & Co were grain merchants in Glasgow. In September 1847 they went into sequestration (a Scottish legal term that is equivalent to bankruptcy: a person’s assets are transferred into the control of an appointed Trustee so that they can be used to satisfy creditors to the greatest extent possible). This had a knock-on effect on the people they had bought grain from (including Matthew), and on those in whose warehouses they had stored their grain (see later).

Matthew’s sequestration papers (see below) cite the failure of Denny & Co as the principal reason for his bankruptcy, but there were other reasons as well. Matthew was owed money by various people, and at least two of these (George Nicol and Archibald Alison Jr) had gone into sequestration themselves. History records “The panic of 1847” as a time of financial crisis, due in part to the bursting of the “Railway Mania” speculation bubble (Matthew also notes he lost some money from railway shares), and as in all such times there is a domino effect of bad debts and bankruptcies. See also The Commercial Crisis (Evans 1849).

 

CS280/11/38: Concluded Sequestrations, Patrick Matthew, Gourdiehill, Renfrewshire

The records relating to the sequestration of Patrick Matthew in 1848 are available under reference CS280/11/38 in the Scottish National Records. According to Anne Carroll, “there is a large ledger (179 pages , roughly A4 size ) held at the NRS relating to all his [Mathew’s] financial affairs and contains references to “Denny’s failure”. I ordered it and read and took notes but there was far too much content for me to take in. I got the impression that I was the first soul to have read the book since it was wrapped up and placed in storage as it was in such good condition. There is a statement by Patrick Matthew as to why he is bankrupt and he goes on to discuss the debts of others, the grain transactions between himself and two farmers living in a neighbouring parish which clearly involved the Denny’s. He also mentioned monies owed to him by Archibald Alison and of his (PM’s) involvement as the proprietor of the National Advertiser, in Glasgow (although he says he had retired his position two years earlier which I take to be c 1846). There are references to concerns made by an advocate in Hamburg to the legality of a sale of a freehold property situated in Sulldorf, as well as a heritable bond of £3000 over Gourdiehill.”

The following are digital copies of various pages of interest from the 179-page ledger.

 

CS280/11/38/pp.57-59: Statement of assets and debts

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Statement by Patrick Matthew as to why he went bankrupt – debts of others (Archibald Allison; G. Nicol; National Advertiser; etc.) – failure of Denny & Co (grain transactions) – losses railway shares

This statement, covering 3 pages, is transcribed below. For a legal definition of “cautionary”, see here. “G. Nicol” is presumably George Nicol, one of Matthew’s 3 brothers-in-law (James Nicol is another). It appears that both were in debt, and indeed the “failure of G. Nicol” is mentioned, suggesting he went into sequestration also. “Woodside” (in the debt of G. Nicol) is also mentioned in other documents (CS280/11/38/pp.140-141). Further research by Anne Carroll (Perthshire Courier, 18 December 1817 p.1 col.2; Perthshire Courier 30 July 1826 p.1 col.1; Perthshire Courier 10 May 1827 p.1 col.1; Perthshire Courier 8 December 1831 p.1 col.3; Perthshire Advertiser 23 September 1847 p.1 col.3) indicates that this was part of a purchase of the “Brewery and Lands of Woodside”, originally made by George Nicol’s father Robert some time between 1817 and 1826. Note also that there are family ties between the Andersons and the Nicols (and thence the Matthews). The “Thomas Anderson, banker” referred to below, who apparently was also known as “Ten Tumbler Tam”, was married to Charlotte Nicol, another of Robert Nicol’s daughters (see here for more details on the Andersons, who were an important linen manufacturing family in Newburgh).

There are intriguing references in this statement to the National Newspaper or National Advertiser, a Glasgow-based newspaper that was apparently co-partnered by Patrick Matthew and Archibald Alison Jr (see also CS280/11/38/pp.104-105). The venture appears to have been short-lived, perhaps lasting from 1844 to 22nd April 1846. According to a brief description in The Newspaper press directory and advertisers’ guide (1846, p.298), the paper was apolitical, being “principally confined to commercial topics”.

Statement by Patrick Matthew, showing how the difference between his assets and debts has arisen.

Assets.
1st. Lands of Gourdiehill sup[posed] value, £5000
Less heritable debt (£3000), £2000
2nd. Lands in Holstein which from the unsettled state of the Country, I enter at the purchase money I paid and the cost of erections upon them I have made, say £2000
3rd. Heritable security upon Woodside, debt of G. Nicol, £1508 11s 1d
4th. Debt due by James Nicol, bill in P. Anderson’s hands, £600
5th. Due by Alex.[?] Alison of [?] about £700
6th. Due by the heir of Alex.[?] Gairns[?] late fenar[?] in Errol, £49
7th. Household furniture in Germany, chiefly, £50
[Total] £6907 11s 1d

Debts.
1st. To Robert Cristall Esq of Inchyra, £4207 11s 7d
2nd. Commercial bank of Scotland, £2956 10s 10d
3rd. Claims of Messrs Corvair[?] & Co., Edinburgh, £2871 9s 8d
4th. Messrs Drummond, supposed, £4666 6s 8d
5th. The union bank of Scotland, £1016 15s
6th. Thomas Anderson, banker, Newburgh, £333 14s 9d
[Total] £16052 8s 6d
Deficiency, £9144 17s 5d

The greatest of this deficiency arises from cautionary and claims for the debts of others, with the failure of D. A. Denny and Company, Glasgow, thus:
Debt of the commercial bank from cautionary for Messrs Archibald Alison of Glasgow, £2956 10s 10d.
Claim of Messrs Corvair[?] for a debt owing them by the proprietor of the National Advertiser from which I retired two years before, but had omitted to advertise such from not having a valid entry, £2871 9s 8d.
Loss by grain transactions etc. etc., the failure of D. A. Denny & Co., due to the Messrs Drummond, say £4666 6s 8d.
Independent of the above, I sustained a loss of £1000 by the National newspaper, and National Advertiser. The Messrs Alison undertaking to free me of all connection with these papers for £1000, and to pay me back about £700, the surplus in their hands above £1000.
I also lost about £800 by the failure of G. Nicol, Newburgh, and a further sum by the fall in Railway shares two years back.
Signed, Patrick Matthew

 

CS280/11/38/pp.93-94: Trustees’ letters

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Copies of letters from Robert Cristall (Trustee on Matthew’s Estate), Patrick Matthew and his partners in grain and flour transactions (brothers Thomas and William Drummond), asking that the Trustees on Denny’s Estate pay up on Denny’s debts. Note the final letter is incomplete (I don’t have copies of pp.95-103 in the CS280/11/38 ledger).

Copy letter Mr Thomas Drummond to Messrs J & J Ogilvie.
Messrs J. & J. Ogilvie, writers, Dundee.
Dundee 6 July 1848
Dear Sirs,
You are aware that on going into the joint transactions of grain and flour with Mr Matthew and my brother, I took a letter from them empowering me to have control of sales and authorising the parties to account to me for the proceeds (as I had come under heavy advances on account of the same) a copy of which letter is herewith sent – On account of the failure of Mr Matthew, Messrs Denny’s Trustee refuses to pay me the balance in his hand due me unless I get the concurrence of Mr Matthew’s Trustee, which I hope you will procure for me to save expence and remaise[?], yours truly, (signed) Tho. Drummond.

Copy letter above referred to.
Messrs D & A Denny & Co. Glasgow
Dundee 5 Oct. 1846
Gentlemen,
We will thank you to take the instructions of Mr Tho. Drummond as to the sale of grain and flour held on mutual account between him and us and you will please account to him for the proceeds of sales made by you. We are etc.
(signed) Pat Matthew, Wm. Drummond.

Copy letter from the Trustee on the sequestrated Estate of P. Matthew to the Trustee on the sequestrated Estate of Messrs D. & A. Denny & Co. Glasgow
Dundee 7 July 1848
Sir,
With reference to a letter addressed by Messrs Patrick Matthew of Gourdiehill and Wm. Drummond, farmer at Westbank, to Messrs D. & A. Denny & Co, dated 5 Oct 1846, (of which a copy is annexed) I, Robert Cristall of Inchyra, as trustee on the sequestrated estate of the said Patrick Matthew, with consent of a quorum of the Commissioners on that estate hereto subscribing, do …

 

CS280/11/38/pp.104-105: National Newspaper claim

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Claim and affidavit by David Craig Macnish for the period 10 Sept 1845 to 22 April 1846: “for my services as publisher on and in connection with the “National newspaper” at the rate of £150 per annum” – Patrick Matthew and Alexander Alison Junior were the two partners on the newspaper. “Depones” is an alternative word for “deposes”.

(Copy) Claim and affidavit by David Craig Macnish

At Glasgow the eleventh day of July Eighteen hundred and forty eight years in presence of Alexander Brown Esquire one of Her Majesty’s Justices of the Peace for the County of Lanark
Appeared David Craig Macnish residing in Glasgow who being solemnly sworn and examined Depones that Patrick Matthew of Gourdiehill was at the date of sequestration of his Estate, and still is justly indebted and resting owing to the deponent the sum of Ninety one pounds Eight shillings conform to and as specified and contained in an account herewith annexed which is docquetted and subscribed as relative hereto no part of which is paid or compensated, nor does the deponent hold any security for the same or any part thereof, nor any other person, obligant, or company liable to him for said debt, except the said Patrick Matthew and Alexander Alison Junior the other partner along with him in the “National Newspaper,” referred to in said account. All which is truth as the deponent shall answer to God.
(signed) D. C. Macnish, Alexander Brown [??]

Mr Patrick Matthew to D. C. Macnish.
For salary due ine[?] from 10 Sept. 1845 to 22nd April 1846 for my services as publisher of and in connection with the “National newspaper” at the rate of £150 per annum — £93 15s
Deduct received to account — £2 7s
[Total] £91 8s

Glasgow 11 July 1848. This is the account referred to in the prefixed affidavit. (signed) D. C. Macnish

Copy letter David[?] I.[?] Lewer, Hand[?]
[??] to James and John Ogilvie, writers, Dundee

Hamburgh 22 July 1848

 

CS280/11/38/pp.128-129: Gourdiehill heritable bond

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Cash account between Robert Cristall Esq, Trustee on the Sequestrated Estate of Patrick Matthew of Gourdiehill, and Messrs Christie & Pagan, Writers, Cupar, Fife. One item on the account is to “Messrs Duncan & McLean as agents for Mr Seton’s Trustees, half years interest at five per cent on Mr. Matthew’s heritable bond per £3000 over Gourdiehill”.

 

CS280/11/38/pp.135-137: Holstein property

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Opinion of Carl Westphal, Doctor of Laws and advocate in Hamburgh. The letter questions the legality of the proposed sale of the property at Sulldorf (referred to as “Schenefeld” in Wulf Gerdts’ unpublished Matthew Saga). The letter refers to a letter dated 10 Feb 1840 from Patrick Matthew, indicating “that he purchased the said freehold inhabited by the married people Anderson with the money and for account of his sister”. The letter claims that Alexander (Matthew’s son) does not inhabit or manage the property. The implication is that PM’s sister Margaret and her husband Thomas Anderson were living there, and that the property was purchased, at least in part, with their money. The letter also questions the sale price, as being too low to be valid. The letter also states the year of original purchase to be 1833.

Was this a genuine fight between PM and his sister and brother-in-law, or a ruse cooked up to prevent PM’s assets from being sold off by his Trustees? We don’t know. Note that a subsequent document (CS280/11/38/pp.140-141) blames the “war in Holstein” (First Schleswig War) for the inability to sell the property in Sulldorf, rather than any issue over legality.

Trustee with consent of the Commissioners on the Estate hereby calls a Meeting of the Creditors to be held within the Star Hotel Perth on the tenth day of November next, at 12 o’clock noon, to take into consideration an offer of composition made by the Bankrupt, and at same time to elect a new Commissioner, in the room and place of William Drummond, farmer at Westbank of Longforgan, one of the Commissioners who had resigned.
(signed) Rob. Cristall Trustee
Inchyra Oct 13th 1848

Copy Opinion of Carl Westphal
Doctor of Laws and advocate in Hamburgh
Being requested by Mr Edward Nathaniel Lewer in Hamburgh to give an opinion concerning the legality of the sale of the freehold situated in the village of Sulldorf, in the Duchy of Holstein and possessed since the year 1833 in the name of Mr Patrick Matthew, on a careful examination of the documents laid before me I consider that.

1st The party empowered by Mr Patrick Matthew viz Mr William Horn in Hamburgh cannot be regarded as authorised to sell the said freehold inasmuch as the power of attorney granted him on the tenth September 1847 by the said Mr Patrick Matthew empowered him only to sell and dispose of those properties of Mr P. Matthew that “are all at present occupied by Alexander Matthew as Steward of the said Patrick Matthew”. The said freehold however from the evidence of the Blackenese parish Bailiff Jacobsen dated 11th August it was neither managed nor inhabited by Alexander Matthew.

2nd That the trustees of the Bankrupt Patrick Matthew, do not cast a doubt upon the genuineness of the declaration of the same as trustee of his sister Margaret, born Matthew lawful wife of Mr Thomas Rudaoch Anderson dated Sulldorf 10 February 1840 Viz That he purchased the said freehold inhabited by the married people Anderson with the money and for account of his sister; also that.

3rd The documents of sale of the whole properties of Mr Patrick Matthew in the Dutchy of Holstein can only too easily excite and justify the suspicion of a pretended purchase because the sale money of the whole properties of Mr Patrick Matthew in the Dutchy of Holstein was only estimated at 15129 f 872 f Grt while as provided by the attestation of the value made by the valuators Mr G W Waitz, at the request of Mr W Horn the said freeholder in Sulldorf was alone valued at 1400 f Grt so that I have no hesitation in declaring that the married people Anderson appear perfectly competent to question the sale of the freehold in Sulldorf executed in virtue of the document dated 29th September 1847.

Finally in respect of the inquiry as to whether it might be advisable for the parties to enter into negociations for a compromise of the dispute in question I feel myself bound to recommend such a course, especially as regards the Trustees of the bankrupt Mr Patrick Matthew, because Mr Anderson is not bound to assent to the Commission of Bankruptcy opened over the property of the Bankrupt in Scotland, rather he might demand the opening on the Spot here of a special Commission of Bankruptcy over the property of the Bankrupt in this place.

Hamburgh 22 August 1848
(signed) Carl Westphal, Doctor of Laws and advocate in Hamburgh
James Gordon Translator

 

CS280/11/38/pp.138-139: Estate of Patrick Matthew of Gourdiehill

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State of the Estate of Patrick Matthew of Gourdiehill as at 20th September 1848.

State of the Estate of Patrick Matthew of Gourdiehill as at 20th September 1848 years.

1. Assets recovered, none

Assets outstanding
I Heritable
1. Lands of Gourdiehill – last upset[?] price (exclusive of balance of compensation due by the Dundee & Aberdeen Railway Company — £5000
Deduct heritable debt — £3000
[Total] £2000

2. Security on Woodside with interest about — £1600

3. Lands in Holstein, after deducting Mortgages according to Mr Lewer’s estimate — £700
[Running total] £4300

4. Money remitted by the Trustee to meet a mortgage over the Holstein property — £215
[Running total] £4515

II Moveable
1. Sum payable by Mr Robert Matthew tenant of Gourdiehill at Martinmas 1848, being expiry of lease for value of stocking — £120
Note Mr Matthew states that his son has a counter claim equal to this

2. Household furniture chiefly in Germany, stated by the Bankrupt as worth £50, but understood to be included in Mr Lewer’s evaluation of the property.

3. Contingent legacy of £100 under the will of Jane Matthew estimated at — £20
[Running total] £4535

Deduct balance due to the Commercial Bank and the trustees agents exclusive of expence of sequestration
Viz to the Bank £615 13s 5d
To the agents £23 3s 7d — £638 17s

Remains — £3896 3s

Subject to deduction of Trustees Commission and Expences of sequestration.
Inchyra 30th September 1848. (signed) Rob. Cristall Trustee
Remarks on the foregoing state

 

CS280/11/38/pp.140-141: Issues over the selling of assets

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Letter from Robert Cristall, the Trustee on Patrick Matthew’s Estate: Gourdiehill was put up for sale but without obtaining a purchaser; Woodside was sold to the Edinburgh and Northern Railway Company but not yet paid; the Holstein property was impossible to sell due to the war there; the remaining outstanding items “explain themselves”. For a legal definition of “composition”, see here.

[heading partially obscured] … to the creditors … dated 19th November 1848

Robert Cristall of Inchyra, trustee on the sequestered estate of the said Patrick Matthew, hereby intimates, that at the general meeting of the creditors held on the 10th

1. The Lands of Gourdiehill were twice exposed, but without obtaining a purchaser; and when a third time advertised, the sale was delayed in consequence of Mr Matthew coming forward with an offer of composition

2. The Lands of Woodside, over which the Security of £1600, extends have been sold by the debtors in the bond to the Edinburgh and Northern Railway Company, but the price has not yet been paid nor a title granted, which is the reason the security has not been realized

3. Owing to the war in Holstein the trustee has found it quite impossible to realize the property there

4. The remaining items outstanding explain themselves (signed) Rob: Cristall Trustee Inchyra 30 September 1848

Newburgh 13th October 1848
Referred to in our minute of this date
(signed) Rob: Cristall Trustee, John M Downie

 

Other references to Denny’s failure

Matthew was not the only person affected by Denny’s failure. The following two court reports detail the case of Thomas Laurie & Co vs. Denny & Co’s trustee (William Anderson). When Denny & Co had gone bust, some of their grain had been in warehouses belonging to Laurie & Co, and there were storage duties to pay. Laurie wanted to withhold the grain until all duties were paid (including unpaid back-duties), but the court found that Laurie had no right to do so, and ordered that the grain be released to the trustee for payment of other debts.

 
“II. Laurie v. Anderson”. Leading Cases in the Commercial Law of England and Scotland, Vol. 2: Contract of sale, by George Ross, 1855 (T. & J.W. Johnson), pp.498-507

 
“8th February 1853. First Division. Thomas Laurie & Company, Advocators, v. William Anderson, (Trustee in Denny & Co’s. Sequestration), Respondent.”. Reports of Cases Decided in the Supreme Courts of Scotland and in the House of Lords on Appeal from Scotland: Volume 25, 1853 (M. Anderson & Co.), pp.226-229

 
Page created: 28 April 2018
Last modified: 9 May 2018

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