ARTHUR M'DONALD'S BANKRUPTCY.

Tuapeka Times, Volume XXIV, Issue 1905, 18 June 1892, Page 3

ARTHUR M'DONALD'S BANKRUPTCY.

The first meeting of creditors in the estate of Arthur Thomas M'Douald, of Dunedin, wool-broker, was held at the official assignee's office, Dunedin, on Tuesday. The creditors present were : — Mr Donald Reid (representing Robert Brooks and Co., London), £15,472 9s 8d ; Mr J. A. Low (of Low, Sons, and Bedford, London), £7664 5s Id; Mr G. Feuwick (Daily Times), £1 Is; Mr J. H. Kirk, wages, £7; and Mr J. W. Jago (Eveuing Star).

Mr Hosking appeared for the bankrupt, Mr Fraser for Messrs Low, Sons, and Co., of London, and Mr Webb to advise the assignee. Arthur M'Douald, in his evidence, said that when he dissolved with Remshardt, a couple of years ago, he was worth *20,000 A sudden loss in wool speculations iv 1889 90, when in England, involved him in a loss of £40,000. The consequeme was he owed the two principal Eoglish creditors 621,000. He informed them of his position, and they issued fresh credits, allowing him to go on. He had no liabilities in the colony, as he paid here in cash. On his return to the colony, he received a large commission to buy oats. Placing property in his wife's hands, he bought wool largely at Invercargill, advising the Home people that he must have further credits, as his own were exhausted. Unfavourable replies were received, and the wool had, therefore, to be dealt with. Tbe New Zealand Loan and Mercantile Agency Company took up his purchases in consideration of his paying £2500 as a margin. Bankrupt was aware of the comolaints of false packing of rabbitskins. He had heard the evidence before the Assignee of four of his employees, and contradicted that evidence on one point only. He admitted giving instructions ns detailed in that evidence, but denied that it amounted to false packiug. The bales would be four feet long, and the best skius would be about a fourth in depth. He drew against the skins only the actual cost, not charging the whole as best skins. He described them as selected winter grey skins. His object in packing the skins as detailed, instead of following the usual custom of mixing thin and medium pelted together indiscriminately, was because the buyer could better estimate how many of each kind of skin was in a bale.

Owing to the fall in the wool market of 20 to 25 per cent, it caused him a loss of about L 40,000. This left him owing Brooks and Co, London, about L 15.000, and Lawson and Bedford, L6OOO. He saw these firms and they gave him fresh credit, and allowed him to go on. On his return he made a commission of LIOOO on the first large order to buy oats, which amount was paid pro rata to the firms. Other orders name in which turned out larger, and the profits he made were placed in his wife's hands as trustee.

A letter was put in, sent by bankrupt to Low, Sous, and Bedford, who had complained of false packing of wool, in which it was stated that an expert had been engaged to undertake the packing and classing, who had no interest in packing in the manner complained of except to show good results from his work.and concluded, " Needless to say he is no longer in ray employ." Cross-examined as to who this irennt, the bankrupt had to admit that the expert had not been in charge of the lots complained of.

The cross-examination of bankrupt was very lengthy. Davis, who packed the wool complained of, gave evidence that he did so according to Mr M 'Donald's instructions. All through the inquiry Mr Hosking, who appeared for the bankrupt, kept up a vigorous contest as to its conduct and scope. He said the "leeting had been converted into a tribunal of an extraordinary character. They had been brought there not knowing what they had to meet. Charges of extravagance of living were made, as well as a number of others at the instance of one creditor, who had at his disposal the bankrupt's clerk and books. No meeting of creditois was ever in. teuded for such a purpose.

The meeting of creditors lasted from 11 a.m. to 6.30 p.m. A resolution was carried granting the bankrupt five guineas per week for four weeks, giving him also furniture to the value of Ll5O if Mrs M'Donald foregoes her claim.