A. Graham’s Bankruptcy.

Gisborne Standard and Cook County Gazette, Volume III, Issue 373, 5 November 1889, Page 2

A. Graham’s Bankruptcy.

A meeting of creditors in the estate of A, Graham was held yesterday afternoon. Present; Messrs Stubbs, Veale, Kenny, Muir, DeLautour, Veale, Hamilton, Bryson, Townley, Finn, A 'air, Nolm, and Dr Pollen. The Deputy Official Assignee said he had examined the debtor that morning, when he had stated ho filed through pressure of creditors aud owing to a se-mrity upon which he placed a large value being sacrificed to pay debts. The statement (as already published) was correct. Mr Graham said he would like to make a few further remarks on the painful position in which he was in, after having been ail these years in the place, and having conducted business in it for so many years. He might perhaps be allowed to refer to the old business which was conducted here under tha firm of Gr.ham and Co . ha being in partnership with Mr Kinross, of Napier, and in connection with which Urge advances had been made to a number of people here, and unfortunately '• heavy losses had also been incurred. He went home to England in 1877, leaving the business in a very satisfactory way. In England he did some very good business for tho firm, and a Urge sum of money which he had left to him by his father he put into the business. When he returned he found that a great number of speculations had been made which had never been submitted to him. Advances on properties of all kinds had been made apparently with the sanction of both Mr Kinross (who came here frequently) and of the Union Bank of Australia, which found the money for most of the advances, About the end of 1878 the City of Glasgow Bank failed, and that brought a deal ot pressure both on Kinross’s Napier business and the business in Gisborne, and the result was that property had to be realised at what was

then considered a great sacrifice, though as values bad subsequently turned out it would have proved a good thing if all the properties had been realised then and the business put in liquidation. He kept on the business till 1881. The business premises and the stoek ot goods were sold to Messrs Carr and Sons. Mr Carr was not in a position to take over tha run holding interests nor a lot of hotel interests which had been gone into when he (Mr Graham) was away. As Mr Kinross had put in a considerable sum more capital into the business than ha (Mr Graham) had, the latter thought to assist the former if ho (Mr Graham) took over the runs aud the wine and spirit stook. He got these at values that wore pretty full at the time, and with a relief from tha more imme-

diate pressure caused by the Bank’s failure the business was fairly good—if the same were done now it would be considered exceedingly good. He thought he would be able to pull through and give these values on the hotels and do a business for himself. The amount of losses in the early days were very considerable indeed, but he had said little nb>ut them. About the time the property was sold out very large losses were made on station property, and also on advances to people who had started with a fair sum of money of their own. On the Pohltikotika station £3OOO had been lost; and the Lo.ne £3500; Mangatikapu .(Campbell’s) £1500; Whatatutu, £l5OO ; Tangihangs, £3000; Wharekaka, Tologa Bay, between £7OOO and £8000; Robertson's, Ess‘. Cape, £2000; which amounted to about £25,500 on station property, without taking into acoount losses on country stores and in other wavs. The total losses amounted to about £30,000 over and above the profits made in the business and a good deal of money of bls own and Mr Kinross’, which had been put into the business. Since he had taken over tha wine and spirit business and tbs hotels the loss had also been vary heavy, in fact, in every instance the hotels had baen mortgaged, and the money was at 10 per cent, tn Kinross and be (Mr Graham) was paying 8 per cent. Tho losses during the last eight, years, in ths difference bstween what was being received from rents and being paid for interest and repairs to the property, represented a very large sum. On the Gisborne, £1075; Kaiteratahi, £450; Roseland, £650; Waerenga a-hika, £200; Albion, £200; Tologa Bay (Trimmer’s), £450; Royal, £350. In addition to that, he had lost a considerable sum in the way of trade about £BOO. By the fire in 1882 he lost about £6OO. In addition to the hotel interests the heavy burden he took on himself practically to make up as far as possible the additional money Mr Kinross had lost, he was paying interest on certain properties not then sold, and which did not realise very much. In this way he estimated he had paid for the last seven years £7OO. which would bring the losses up to £550. He had also lost a large amount on a contract for which he had gone surety—the metalling of Borough and County roads. That was a thing which had really crippled him more than anything else. The contract was half through before he had realised his position. Estimates were always being made that things were going to turn out in a certain way. By that time a considerable percentage of the earnings were being kept in band by the Councils, and in order to get this he was led on, and when it was finished up a loss of between £6OOO and £7OOO had been sustained. Probably some people would think he was foolish in not then having taken the step he now did, but even then he considered he was

perfectly solvent, valuing the properties at their value then But property, especially hotel property, had gone down and down in value for the past five years, until it had dropped away to almost nothing. He had a share in the Opou station, which in 1886 had been valued at between £5.000 and £6.000. the security on which had been sold a few weeks ago for £4OO. With that taken out of his assets he was hopelessly in arrears. If that bad worked out for another year or two be believed he would still have got the amount out and it would have made his position look very different. He thought it only just to himself to make this exp'anation, for he felt his own position acutely, and had endeavored to pay everybody their just debts. Even now if he got his discharge he would consider himself morally bound, it he was in the position, to pay off all his liabilities. Of course they were of such an amount ihat he could scarcely hope to nay everybody off, but thsre were certain creditors at least whom he should do his utmost to pay. He would consider himself under s moral obligation to give to his creditors all he could earn beyond what would be a bare subsistence for himself and family. Ha had not in any form put away a penny for his wife and family, and had left himself quite destitute, handing everything over to the creditors. He admitted he had made many errors of judgment and done indiscreet things, but everyone doing business had for the last few years been writing off largely for depreciation of property, or for bad debts. Tnere was not a single large business but had to write off a great deal more than had been made. He did not know whether things were going to be brighter in the future. If business were as they all wished it to be he might make some promise, but as it is there was no use in making any promises that he was not certain of being able to fulfil, but he repeated that he would strain every nerve to pay off the liabilities. Although it might be very poor consolation to ths creditors now to know that so much money had gone, what had been expended had in many ways helped in the development of the district. Unfortunately the usual fate of pioneers had overtaken many ot the people, but others were stepping into their shoes and would reap the benefit. If he had spent money foolishly it was not done from selfish motives or on his family, but with the idea of assisting those whom it was thought would do well. In the force of circumstances many ot these people lost their money, much of the loss being caused through defective Native land titles, which had been such a trouble to the place, and in other cases tc giving too high values, all the values in New Zealand being inflated, He was now going through the same experience which had befallen many of the old merchants.

Mr DeLautour did not quite follow Mr Graham as to how the losses had affected his position. He did not understand that the amounts in connection with the firm had been paid by Mr Graham, and he did not see the claims in the statement.

Mr Graham did not say they had ; he only remarked that the losses had been made in the old business. Since then £12,000 had gone. In reply to further questions by Mr DeLautour, Mr Graham said the losses he had enumerated would account for the debt duo to the Assets Company Us well as what

he owed to other people. He had no authority to apply the money to his personal losses. Latterly he had a power ot attorney from the Company. Most of the money had gone into the contract account (Oxenhsm's), which had extended from 1883 into 1885. Tho money was available as far back M 1883. In May last he ceased to act for the Assets Company. The £5,900 was accumulated leakage from 1883 to May last. He had not during that time disclosed to the Company that their money was being used in thia way. Dr Pollen asked if there was not something mixed up about the Assets Company's titles which Mr Graham had got fixed up when in Parliament!

Debtor : One of the principal reasons that Induced me to come out for the House was that I thought I would be able to fix up some titles of theirs I succeeded in fixing up some I believe would not be fixed up if I was not in the House.

It was proposed by Mr Hamilton, and seconded by Mr Johnston, that the debtor be allowed the furniture, valued at £250.

Dr Pollen and Mr Townley spoke in favor of the proposition, stating that they all felt sympathy tor Mr Graham, and discriminating between this and other bankruptcies in the district.

Mr DeLautour, speaking for himself, was" quite favorable to the motion, but on behalf of the Assets Company he suggested that the motion be made subject to coufirmatlon at a future meeting. The suggestion was agreed to, and the meeting adjourned.