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Bankruptcy

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In April and October 1848, numerous notices appear in British newspapers declaring Patrick Matthew to be a bankrupt. These notices advise creditors of times and places of meetings to discuss Matthew’s financial situation.

Unfortunately, none of the notices explain the reasons behind Matthew’s bankruptcy. In one of her letters to her brother Alexander many years later (dated Jan 18th 1909, recorded by Wulf Gerdts in his unpublished Die Matthew Saga) Matthew’s daughter Euphemia recalls “we were all very hard up after our father lost his money through Denny’s failure”, but unfortunately this only deepens the mystery as there no clue in this or any other surviving letter as to who or what “Denny” might be.

What we do know is that the period 1847-48 was a time of many bankruptcies due to the bursting of the “Railway Mania” speculation bubble and an associated money market panic. The resulting Commercial Crisis is described in a contemporary book of the same name (Evans 1849).

More concretely, we know that Matthew is recorded as a Committee Member for the “Dundee and Perth Railway Company”, the “Forth and Tay Railway Company” and the “Ayrshire Malleable Iron Company”, and as Chairman for the “Scots New Zealand Land Company”, although unfortunately we don’t know Matthew’s level of investment in any of these ventures. None of these companies turned a profit, and some may have incurred a substantial loss. The Dundee and Perth Railway Company was the only one that may eventually have returned a dividend to Matthew, but he invested in it 1835 and the line was only opened in 1847. The Forth and Tay Railway Company never saw its line built, but its losses would probably have been limited to the cost of the initial survey. In contrast, the Ayrshire Malleable Iron Company (which later became the Ayrshire Iron Company) was implicated in substantial losses of around £80,000, and the timing of Matthew’s bankruptcy would be exactly what one would expect if Matthew was seeking to avoid liability as a solvent shareholder in the company’s debts (the Ayrshire Iron Company was dissolved in May 1848).

Matthew’s involvement in the Scots New Zealand Land Company is the other venture that may have incurred heavy losses for Matthew. Clearly this was something of a pet project, as it put into action his Emigration Fields belief in emigration as a cure for many social ills, and as its Chairman he may have invested in it considerably. The key question is whether or not Matthew bought any land in New Zealand in advance, in order to sell it on later to prospective emigrants through his company. If he had, then he may well have lost his claim and his money as a result of the Treaty of Waitangi signed between the British Government and various Maori chieftains in early 1840, which annulled all previous land purchase agreements. But it’s unclear whether he did buy any land, or send any emigrants to New Zealand. Some have suggested that the Scots New Zealand Land Company perhaps grew into the “New Zealand, Waitemata and Manakou Company” (for example, Hocken 1909), which did buy up land around modern-day Manukau in 1838 (see, for example, Stone 2013, p.262 & following). However, it appears the only reason to suppose a link between the two companies is because both were backed by Scottish investors. Matthew is not listed as a Director or Committee Member of the latter company, and the origins of the latter company, as described in Stone 2013, appear to have arisen from different circumstances and involved different personalities.

Putting all this together, I think Matthew’s investment in the Ayrshire Malleable Iron Company was the likely immediate cause of his bankruptcy, but its failure may have been just the straw that broke the camel’s back, in the sense that none of Matthew’s previous investments were profitable, and some may have incurred severe losses too.

 
“Edinburgh Gazette. Sequestrations”. Caledonian Mercury, 3 April 1848, p.3 col.6 (pdf image)

March 30. PATRICK MATTHEW of Gourdiehill, in the county of Perth, grain dealer — Creditors meet in the Star Hotel, Perth, 7th and 28th April, twelve o’clock.

 
“Scotch Bankrupts”. Morning Post, 4 April 1848, p.7 col.2

Patrick Matthew, grain dealer, Gourdie Hill, Perth

 
“Scotch Sequestrations”. Morning Chronicle, 5 April 1848, p.7 col.6

PATRICK MATTHEW, of Gourdiehill, Perthshire, grain dealer — April 7 and 28, at twelve, at the Star Hotel, Perth.

 
“Scotch Sequestrations”. London Standard, 5 April 1848, p.1 col.4

Patrick Matthew, Gourdiehill, Perthshire, grain dealer — April 7, 28, at 12 o’clock, at the Star Hotel, Perth.

 
“Scotch Bankrupts. Sequestrations”. Dumfries and Galloway Standard, 5 April 1848, p.4 col.6

Patrick Matthew, grain dealer, Gourdiehill, county of Perth.

 
“Scots Bankrupts. Sequestrations”. Perthshire Advertiser, 6 April 1848, p.3 col.6

Patrick Matthew of Gourdiehill, in the county of Perth, grain dealer — Creditors meet in the Star Hotel, Perth, 7th and 28th April, at twelve o’clock.

 
“Scotch Sequestrations”. Durham County Advertiser, 7 April 1848, p.7 col.4

Patrick Matthew, Gourdiehill, Perthshire, grain dealer.

 
“Scotch Sequestrations”. Newcastle Guardian, 8 April 1848, p.7 col.2

Patrick Matthew, Gourdiehill, grain dealer.

 
“Scotch Bankrupts. (From the Edinburgh Gazette of Friday, March 31.)”. Carlisle Patriot, 8 April 1848, p.4 col.5

Patrick Matthew, of Gourdiehill, in the county of Perth, grain dealer.

 
“Scotch Sequestrations (copied from the London Gazette of Tuesday, April 4)”. Bell’s Life in London and Sporting Chronicle, 9 April 1848, p.7 col.3

PATRICK MATTHEW, Gourdiehill, Perthshire, grain dealer.

 
“Edinburgh Gazette. Examinations, &c.”. Caledonian Mercury, 19 October 1848, p.3

Creditors of PATRICK MATTHEW of Gourdiehill, meet in the Star Hotel, Perth, 10th November, twelve o’clock.

 
“Meetings, &c.”. Edinburgh Evening Courant, 19 October 1848, p.4 col.3

Creditors of Patrick Matthew, grain-dealer, Gourdiehill, meet in the Star Hotel, Perth, 10th November, at twelve o’clock.

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