WOOLBROKER’S AFFAIRS

Otago Witness, Issue 4039, 11 August 1931, Page 9

WOOLBROKER’S AFFAIRS

CREDITORS DISSATISFIED EXTRAVAGANCE ALLEGED. CHRISTCHURCH, August 5. A deficiency of £13,991 was disclosed in the bankrupt estate of Washington Irving Carney, farmer and woolbroker, who met his creditors this morning. The assignee (Mr J. H. Robertson) presided over a large attendance. “ The whole cause of my trouble,” said bankrupt in a sworn statement, “ is due to my thinking that the good conditions of 1929-28 would continue and to the general slump that came in 192931. I kept going in 1930-31 hoping that I could recover, and instead only got into greater difficulties, and my farm could not help to pull me through.”

After creditors had voiced their criticism regarding the living expenditure of bankrupt and his wife, the assignee said that -it was his duty to condemn in the strongest possible terms a lot of extravagance which had been a contributing cause in the bankruptcy. A committee was set up to assist Mr Robertson in the disposal of the assets. Bankrupt,, in his sw-orn statement, said that since 1925 he had been engaged in the wool business, buying and selling wool on commission and on his own account, working for firms in Bradford, the United States, Canada, and Australia. He was, until the 1928-29 season, making a net income of £3OOO and upwards a year. He bought Penfold’s farm at Omihi in November, 1927, taking 984 acres at £l7 an acre and letting Penfold take bankrupt’s house at Papanui road at £7OOO, giving Penfold a mortgage of £5OOO. Bankrupt had not made any profits from the farm though he had spent £llOO on-;, improvement to it, hoping that conditions would improve.

Cross-examined by the assignee, bankrupt said that he had been in New Zealand for 20 years, but he was still a citizen of the United States. Prior to 1925 he represented two wool firms in New Zealand. In 1925 he was buying wool for about 16 clients. He bought wool on his own account .in the 1929-30 season, and, as a result, lost about £2OOO. . The second and third years on his farm at Oinihi were disastrous. Questioned about his living and personal expenditure, bankrupt said that

he did-not impose a limit on his wife. In 1926 it amounted to about £9O or £lOO a month.

The assignee: Will it surprise you to know that in oneeyear it considerably exceeded that amount? In 192728, continued the assignee, when the bankrupt made a profit of £2OOO, he paid into Mrs Carney’s account £1505, and she spent it all. Bankrupt’s own expenses were £835, so that the total?nLl n A ltUre was £2340 ' The Profits in 1928-29 were £593, and bankrupt paid into his wife’s account £1162, and his own expenditure was £l5OO. For the year 1929-30 the profit was £253. Mrs Carney received £lO2O, and bankrupt’s own expenditure was £6OO. “On those figures,” said the assignee, “it is not a great wonder that bankrupt is where he is. to-day. I have been very careful in going into the figures, and have been quite fair to bankrupt, who may be able to throw a different light on the matter.” Bankrupt said that he first realised that he was. insolvent in 1929. He then cut down his expenditure. Bankrupt was asked if he thought he was justified in keeping his children at a boarding school. The assignee:' Do you think you were justified in incurring debts after you had stopped making money in 1929?— I had hoped that the farm would pick up, and that the depression would lift. Mr A. A. Penfold (a creditor) : Don’t you think you were insolvent when you bought farm?—No. » Do you think justified in spending £6OO on your children’s education?—l think that figure is rather high. Well, there would not be much change out of it. ■ *

Mr Penfold then referred to a dance in May of this year, at which bankrupt’s daughter attended as one of the debutantes. “T think it’s a shame,” he said. Mr Weston, bankrupt’s solicitor, explained that/the dance was given by several hostesses when Mrs Carney's eldest daughter “came out.” The cost to Mr Carney was £l2. Bankrupt did not take his wife into his confidence, and at that time she did not realise the position they were in. It was his idea, and bankrupt was weak in allowing it. Mr J. Murdley (a creditor) : Mrs Carney purchased a 14 guinea frock from us in March. Don’t "you think she knew the position then? Bankrupt said that she did not realise the position until April. The assignee: Do you think she was justified in carrying on under the old scale of expenditure?—Yes, sir. But her friends could tell her that there was a slump on.—l told her before Christmas that she must not buy anything. The assignee: You. are before your creditors with a large liability. Will you admit that you were foolish in not telling your wife of the position you were in ? —Yes.

Mr Penfold: I met Mrs Carney at the farm long before March with a mortgagee and prospective buyers. She must have known their mission. It is ridiculous that a man, just because he was carrying a lot of style, should come here and get his debts whitewashed. “ When a man comes into bankruptcy,” said the assignee, “ with debts of £13,991 and with a possibility of the creditors getting only Is to Is 6d in the £, something should be said regarding big creditors. They must have known all along what bankrupt had been doing, but on the lists are numbers of traders to whom the bankrupt has not given a square deal.” Evidently at one stage, said the assignee, bankrupt was making a big income, and he and his wife were in the habit of spending that income? Suddenly the income ceased, and bankrupt and his wife, who evidently moved in well-to-do circles, instead of ceasing . their expenditure incurred a lot of debts. The situation bankrupt found himself in must be very painful for him, as the higher up the harder the fall. “ Certainly when he applies for his discharge,” continued Mr Robertson, “ I will be obliged to put certain facts before~4he court. It is my duty to condemn in the strongest possible terms a lot of the extravagance which has been a contributing cause in this bankruptcy.” The meeting was adjourned.