AN UNFORTUNATE SPECULATION

New Zealand Herald, Volume XXV, Issue 9105, 13 July 1888, Page 3

AN UNFORTUNATE SPECULATION

THE ELLERSLIE LAND SYNDICATE, AND ITS RESULT.

THE BANKRUPTCY PROCEEDINGS. Five of the members of. the Ellerslie and Remuera Land Syndicates, who filed petitions of insolvency last week, have made the usual bankrupts' statements before the Official Assignee as follows : — MR. G. AICKIN. Graves Aickin stated :—ln the matter of the bankruptcy of myself, George Fraser, engineer, Alfred Kidd, Hugh Campbell, and George Fraser, land agent. Early ill 1885 a syndicate of eleven persons, of which we formed part, was formed for the purpose of '-chasing from Messrs. E. and A. Isaacs a 1. _li of land at Ellerslie, consisting of 159 .acres, for the price of £15,152; £3152 was paid in cash to Messrs. Isaacs, and they took a mortgage for £12,000 for tne balance of the purchase money. A company was formed under the name of The Auckland Land Investment Company (Limited)," in which each member of the syndicate took up shares in proportion to his interests, and the land was conveyed to and mortgaged by the company. In August, 1885, a sum of £3500 was borrowed from the Bank of New South' Wales by the company, secured by the .bond of the members . thereof. After a short time the number of those contributing to payment of interest became reduced to seven, and j finally to six, and as several'were also liable i on another cash credit of about £8000 to the same bank the payments began to press heayjly upon them, and after a large sum had been paid in interest to Messrs. Isaacs it was arranged about the beginning of last year that Messrs. Isaacs should take the land back and release us on payment of £700; which was contributed at the rate of £100. by each of the seven. The debt of the bank was also reduced by payments on account of principal to the amount of £800, so that in March, 1888, it stood at about £2700. There was some little delay in collecting half-yearly interest, • payable in March, and when it was tendered to the bank it was refused, and a demand was made for the full amounts, and. finally writs were issued. Constant and . continuous efforts were made to effect an arrangement with the bank, and at one time it was thought that the matter was arranged, but the bank would not agree, and would come to no terms, and proceeded to judgment and execution, when we filed . our petition on the 7th instant. With regard, to the Remuera property, in February, 1885, a syndicate of nine persons, with ten shares, was formed to purchase a piece of land from the Auckland Tramway Co. at' Remuera, consisting of forty-seven and three-quarter acres, for the sum of £8610 15s. The sum of £8500 was borrowed from, the Bank of New South Wales for the purpose, the bank securing themselves by a mortgage and a cash credit bond signed by all concerned jointly and severally. In April of the same year an auction sale was held, which realised £1100 cash and mortgages to the extent of £2186, some of whicn are still current. Mortgages to the extent of £118 12s are in default, and the properties reverted to the syndicate. The amount now owing to the bank is £7791, against which they hold mortgages amounting to £2068. Interest to the amount of £1655 has been paid to the bank up to September last. Four persons holding five shares fell out prior to January, 1887, and at a later period (December, 1887), a fifth member fell out, leaving the burden of payment of the interest to four persons only, namely, mvself, Messrs. Kidd, Fraser (engineer), and Powley. In consequence of these defections the responsibility practically devolved upon two of us, as the others expressed their inability to pay their share. On the Bth March last, our position was represented to the bank, when it was arranged that the interest on this property should lie in abeyance for six months ; meantime interest on the Ellerslie bond, together with ±.'IOO principal, should be paid. This was not carried into effect, with the result already explained in the first part of this statement. The liabilities on the two properties (principal ..and interest) are: Ellerslie, £2851 Is 6d ; Remuera, £7866 lis 2d; total, £10,717 12s Bd. The asset on the Ellerslie property is nil, and the Remuera property may be estimated at £8000. With regard to my separate estate there has been no pressure whatever from my trade creditors, as my financial position was quite equal to any demands on it from them, although I have had, for a considerable time, an overdraft at my bankers, which , has been augmented in consequence of the. land payments referred to,- amounting, altogether, to £1150. The security for the overdraft, consisting of stock-in-trade and fixtures of the premises in Queen-Street, was given in March, 1887. The book''debt?, as . then specified, were assigned to the Drug Company in January last, and confirmed in June. The furniture in my dwelling-house belongs to my wife under the marriage' settlements, and the house itself and other properties enumerated in my schedule, consisting of houses, land, and shares, are mortgaged to the full extent of their present saleable value, although I have estimated in my schedule a surplus of £808 8s lid, and the only available assets unencumbered consist of book debts worth about £100, and land shares estimated at £95. My unsecured liability amounts to £832 15a Bd, the greater part of which is due for calls in various companies. The trade debts do not exceed £200. To the best of my belief I have disclosed everything in the nature of assets. MR. G. FRASER (LAND AGENT).

George Eraser deposed as follows : I have been in business here as a land agent for the last eight years, and have not been in any previous monetary difficulty. I have not been actively engaged in business for the last eighteen months, for the simple reason that there has been nothing doing. I kept a regular set of books all the time I was in business. These books will show that I was perfectly solvent at the beginning of the year 1885, and that I was making a large income. About the time named I joined the Ellerslie Land Syndicate, and having had read to me Mr. Graves Aickin's sworn statement before the Official Assignee on the 11th instant relating to the affairs of that syndicate, I believe such statement to be substantially correct. During the last six years I entered largely into land speculations on my own account, involving very considerable liability. As a rule I made money up to about '2\ years ago, when the depression began to tell seriously upon values, and I soon found myself involved to the extent of many thousands of pounds' worth of property totally unsaleable. The properties still remaining are estimated in my schedule at £5513 8s 2d, on which there are secured liabilities amounting to £14,778 lis 2d. Most of the property is quite unsaleable at the present time. My unsecured debts, apart from the syndicate liability, amount to £2319 10s 2d. My household furniture, and everything I had in the nature of assets, is in the hands of secured creditors. My position at the present time is that of a precarious living from my profession as an accountant, and until times mend I cannot hope for anything better. MR, A. KIDD. A. Kidd stated :—I have been an hotelkeeper in Auckland for the last twelve years, and it is only within the current year that I have experienced any difficulty in meeting mv engagements, and this difficulty has been solely caused by my connection" with the Ellerslie and Remuera land syndicates, into which I entered early in 1885. I have had read to me the sworn statement of Mr. Graves Aickin, made before the Official Assignee on the 11th instant, relating to these two syndicates, and to the best of my knowledge and belief what it sets forth is substantially correct. But for these speculations, particularly with regard to the falling-off of the members of the syndicate, narrowing the responsibility down in the Remuera case from nine persons j to two, and in the Ellerslie case from j eleven persons to three, I should have been able to pull through, because my trade business was and is thoroughly sound. With regard to my separate estate: In October, 1886, the owner of the Commercial Hotel granted a lease of that house to my wife. Just at this time I entered into partnership with Mr. Wildman in another business, 3 decided that my wife should take over the hotel business altogether. . There was no formal transfer of the stock, but latterly she had paid accounts by her own cheque, and the license was paid for in her name, and afterwards transferred to her on the 7th inst. I consider that I made my wife a present of the stock-in-trade at the time the lease was granted to her in October, 188fi. On the 25th February last, I had to raise £3:30 on the hotel furniture to enable me to pay off an overdraft at the bank. My connection with Messrs. Kidd and Wildman ceased on the same day I closed the overdraft (February 25, 1888), and the greater part of this overdraft went into that business. A valuation was made of the stock, etc., and a bill of sale given to me for £800— my share. This is still current, and forms my only available asset outside the syndicate interest. I have no trade debts; but owe £01 ss—viz., £50 to a private creditor, and £11 5s for rent of a city leasehold property, which is utterly valueless. My secured liability amounts to £(>BO I9s 4d (apart from the syndicate), and the present saleable value of the securities is about £600. All means of a compromise having been exhausted, I cannot suggest any solution but that of handing over to the creditors what is left.

MR. G. H. POWLEY. The statement of George Henry Powley is as follows : —1 have carried on the business of a clothing manufacturer since 1880, and have

; never previously been in any monetary difficulty. On the Ist of January, 1885, I was perfectly solvent. In the month of January of that year I was induced to join a land syndicate, which took over certain property at Remuera. I have had read to me Mr. Graves Aickin's sworn statement, made before the Official Assignee yesterday, relating to the transactions of this syndicate, and to the best of my knowledge and , belief it is substantially correct. On the 20th July, 1885,1 took over 105 shares, or a third interest, from one of the members of the Ellershe land syndicate, which had then been recently organised. I was recognised by the syndicate as holding one-third of Mr. Kidds interest, but I was not a party ito the bank bond. or these shares I first ! paid Mr. Kidd £S9 17s 9d, and since then I have paid calls amounting to £134 3s 6d to the company into which the syndicate ; merged. 1 he'balance of my liability for 1 these shares is about £290. I attribute my j present position wholly to these two specula--1 tions. The total payments on account of the Remuera property amount to £398 3s 6d, of which £124 19s 3d has been refunded. The payments on account of the Ellerslie pro- : perty amount to £224 Is 3d, of which £80 has ! been refunded, my actual contribution to the two syndicates being £417 6s 6d. With regard to my position as to further liability on these two speculations, I am uncertain, and I am equally in doubt as to the assets that may arise from them. With regard to my trade business, during the last two years I found that it could not stand the constant withdrawals to meet the payments on the land transactions, and consequently had to raise money—firstly, upon my life policy, £IS3: secondly, upon my household lurniture, £125; and lastly, upon my plant, machinery, and lease of premises, £125. In addition to the land transactions_ I held shares in the following companies :50 in the Auckland Co-operative Drapery Company, 24 in the New Zealand Tobacco Company. 160 in the Auckland Tramway Company, and 100 in the New Zealand Frozen Meat Company,' and within the last three years I paid upon these shares a total sum of . £456. I reckon my losses outside of my trade business during the last five years exceed £1200, as can be shown by my books. I haye struggled during the last three years, in the midst of keen competition, to keep my business just within paying point, and the immediate cause of my filing on . the 9th instant was the issue of a writ against me by the Bank on account of the Remuera syndicate bond. My unsecured liability amounts to £138 6s 6d on trade account, and £390 12s 6d, balance owing on the Ellerslie shares. The secured liabilities amount to £992 10s 6d, . and the value of the securities is estimated at £1028 0s 2d. The unencumbered .assets are : Stock-in-trade, £50; book debts, £10; and also an allotment 'of land at Devonport, valued at £40. I have, to the best of my belief, disclosed all my assets, and under existing circumstances cannot see my way to suggest any compromise. - ... " j

G. FRASER (IRONFOUNDER.) George Fraser stated : I have been in business as an ironfounder and engineer during the last 28 years in Auckland. Since the 10th of May, 1886, the business has been carried on under the style of George Fraser and Sons, my two sons having a half interest between them. Stock was not taken when they joined. I simply admitted them as partners without capital. Early in 1885, I was strongly urged" ' and, unfortunately, agreed to join two land syndicates, namely,' the Ellerslie and Remuera, in reference to which I have had read to me Mr. Graves Aickin's _ sworn ■ statement,- made before the Official Assignee on the 11th instant, and to the best of my knowledge and belief it is substantially correct. About the same time I took 250 shares in Robert Graham's Waiwera property, and this I was entirely prompted to by friendly feelings towards Mr. Graham, who was a very old friend. They were £1 shares. I have already paid £500 on account of calls, and am still liable for £235 10s 9d, for which no action has been taken. 1 About the same time, also, I joined five other persons in the purchase of some coal-bearing' land at Hunua. 1 took 2-12ths of the whole,, and I have already contributed £700, without any return. My estimated interest in this property is shown in the schedule if assets. In my trade business no profit and, loss account has been made since Mr. Tinne withdrew from the concern, , somewhere about 1883, and the balance-sheet of that time can be produced. I considered I was solvent in the early part of 1885, when I went into the various speculations referred to, although at that time 1 had a considerable overdraft at the bank, but I was hopeful of realising sufficient out of the b.s. Triumph to wipe off all my liabilities. This hope, as is well known, has not been realised. The general depression of the last two or three years has tola seriously upon our trade. Nothing, of course, could be done to diminish our overdraft, -in fact the Amount increased. The bank's security is mortgaged over 700 acres of land and second mortgage over dwelling, house and land, the total estimated value being £5300, the first mortgage liability on the house being £702. My schedule of assets and liabilities relating to the foundry business is being prepared. I cannot speak now as to the exact position, but believe that the one will about balance the other. My private debts do not exceed £20. The only unencumbered asset I have is the household furniture, worth about £200. Under existing circumstances I cannot suggest any compromise.