The Montgomery County Times and Shropshire and Mid-Wales Advertiser

THE MONTGOMERYSHIRE I BREWERY, CO., LTD. PUBLIC EXAMINATION OF DIRECTORS. SENSATIONAL REVELATIONS. HOW THE AFFAIR WAS FLOATED. [BY OCR OWN REPORTER.] TUESDAY. The long-talked of publio examination of the promoters and directors of the Montgomeryshire Brewery Company, Limited, in liquidation, com- menced at the Shire Hall, Shrewsbury, on Tuesday before His Honour Judge Harris Lea, and was of a most searching description. Much interest was centred in the affair, and there was a goodly num- ber of commercial men present at .different times during the day. It may be of interest to our readers to first give a few particulars concerning the formation of the Company. The company con- sisted of an amalgamation of Messrs. T. E. Issard and Co.'s Brewery, Newtown, established 1831; and Mr. David Roberts' Brewery, Aberystwyth, established 1843. The objects for which the Com- pany was established was first to carry on the business of brewers, malsters, hop merchants, dis- tillers, wine and spirit merchants, licensed victual- lers, manufacturers cf and dealers in aerated and other waters, hotel keepers, tobacconists, dealers in tea and coffee, and in a'l other commodities commoDly sold by hotel k^pers, and the like, or that may be required for any business carried oa by the Company, or u: e with. (2) To adopt and curry into effect with any modiho. tions or alterations, an agreement dated February 12th, 1890, and made bo^i'eu C. II. Adam. ci' j one part, and C. L. Lo.r.» ir«.,ioe ?Cl' ar.4 o:i behalf of the Company, of the other part, and to acquire in any way, deal with, derelope and dispose of all the property mentioned in the said agree- ment, (3) To acquire in any way, from time to time, any other such business, or property, as afore- said, or any interest therein, and to make or in any way to deal with any articles required for such business as aforesaid, and to sell and deal in the manufacture. (4) To unite with, buy up, and to take over the business of any other person or firm, and of any company; to promote any such com- pany, and to lend it money, and to hold and deal with any shares or interest in such company, and to guarantee any of its debentures or other securi- ties. (5) To lend money to any such person, firm2 or company, or to any customer, tenant, or agent of the company, and to guarantee the performance of any contract entered into by any such person, firm, company, customer, tenant, or agent. (6) To acquire lands, buildings, machinery, plant, &c., and any property of any description for nse in any business of the Company, or in connec- tion therewith, and to sell, let or hire, and in any way develope, deal with or dispose of the same. (7) To receive moneys on deposit, and to act as bankers, and to lend moneys from time to time on mortgage or other securities, and to raise money on mortgages, debentures, bonds, bills of exchange, promissory notes, or any like instruments, and to charge the assets of the Company, including its uncalled capital. (8) To dispose of any property belonging to the Company, and to sell its whole undertaking, business and property, and to amalgamate with auy other company, or to acquire any interest therein. (9) To do all such other things as are essential or conducive to the attain- ment of the foregoing objects, or any of them. The liability of the members was limited, whilst the capital of the company was X70,000, divided into 14,000 shares of £5 each, of which 8,000 were ordinary shares, and 6,000 were cumulative pre- ference shares, entitled to a preferential dividend of 7 per cent. out of the profits in each year., Besides taking over the breweries of Messrs. Issard aud Co., and Mr. David Roberts, the Company were to take over the large wholesale and retail wine aud spirit business of Messrs. Mytton and Galloway, at Welshpool, the three businesses possessing together 48 licensed hotels, taverns and beer houses. The businesses were said to be profitable and increasing and, with the view of their further extension, it was considered desirable to continue their development through the medium of a joint Stock Company. In addition to the forty-eight tied houses then belonging to the Brewery, twenty- four more valuable freehold and leasehold" houses of similar character had been secured. I'.e books of the breweries, the prospectus con- tinued, had been examined on behalf of the Company for the past five years (up to 1390) by Messrs. r! ••!■!> rr, Watkins and Co., chartered l ;*i, H. r*- civerity? number of bwrrwtetrf beer brewed araoaated to 9, 752, that tho price which was being realised II per barrel was 34s. 10d., yielding an average profit of 13s. 5d. per barrel, and that the turnover of the wine and spirit trades of the Crown Brewery and Messrs. Mytton and Galloway for the year 1889 amounted to £ 11,721, giving a further profit of zC2,930, which made together a total profit of R9,492 10s. 8d. In addition to this, the beer trade done by the 24 new houses to bo taken. over was 2,476 barrels per annum, which, taking the same ratio of profit only, would give a further profit of Cl663 3s. 6d. The wine and ¡ spirit turnover of these houses, plus of those attaching to the Aberystwyth Brewery which had not been hitherto tied for wines or spirits, was £3,972 15s. per annum, which should give a further profit of zC993 3s. 9d., making a grand total of zE12,151 17s. lid. per annum. Thus, after making a liberal allowance for working expenses, and pro- viding for the interest on the debenture stock and preference shares, there would remain a sufficient I sum io pay 15 per cent. on the ordinary shares. Hitherto porter and stout had not been usually I supplied from either brewery, and consequently the tied houses and other customers had purchased there beers elsewhere. For the future it was in- tended that the Company would regularly brew porter and stout, thus adding very largely to the trade and consequent profit and without any in- crease of working expenses, and as the trade was almost entirely a tied one, the profits could not bo j subject to the fluctuations of an ordinary or untied trade. The per centre of profits on the beer with the increased trade would be "nearly doubled" as the extra expenses of production would be but nominal. rI here was every reason, therefore, to anticipate even far better results than those above set forth. The directors confidently anticipated that the dividends receivable by the holders of the ordinary shares would from the outset be highly satisfactory, while the sound nature of the debenture stock and preference shares must have been apparent to investors, so they said. The businesses were to be taken over from the 1st March, 1890, and the shareholders would at once enter into a sound dividend-earning property. The price to be paid by the Company for the good-will and the whole of the properties was £ 79,854. The stock-in-trade wouid be taken over at a valuation, and the Company would not take over any liabili- tie. The prospectus also contained the following paragraph The vendor, Mr. C. H. Adams, is the promoter of the Company; and will pay all expenses attending the incorporation and registration of the Company, printing, advertising, etc., up to and in- cluding allotment, except brokerage. There may be other contracts connected with the breweries. as roiug concerns, which, from the nature ol the 1/itsnfless, it would be to publish, j Applicants for shares must, therefore, be deemed to waive the insertion of dates and names of the parties to any suck arrangements or contracts, and j to accept the above statements as a sufficient com- pliauce with Section 38 of the Companies Act, 1167." Also, Where a less number of shares or amount of debenture stack is allotted than that applied for, the balance will be credited in reduc- tion of the payment due on allotment." These were the" bright prospects" of the Company, by which it was hoped to secure a large number of shareholders. 4iis Honour took his seat at 11-45 o'clock, there being also present the Registrar, Mr. E. C. Peele aud Mr. Thos. Bullock, official receiver, Newcastle- ou behalf of the Board of Trade, and who con- ducted the examinations. The wit nesses subpoenaed were tho following:—Samuel Caleb Overton and Alfred Neville Avis (tho promoters), John Lait- ducted the examinations. The wit nesses subpoenaed ducted the examinations. The wit nesses subpoenaed were tho following:—Samuel Caleb Overton and Alfred Neville Avis (tho promoters), John Lait- wood, Arthur Dean Dawson, Henry F. Robinson, William Chandler Mitchell Alfred Newton, William S. Le Grand, Edmund Buckley, C. Lawson Benham, K. E, Beduow, and John liamer. Mr. Dawson was represented by Mr. Graham • j (instructed by Sir. II. C. Clarke) Mr. Robinson bv Sir. F. W. Williams, Shrewsbury and the deben- tore holders by Mr. Parfitt (instructed by Mr. C. S, Matthews, Birmingham). The first witness called was CHARLES HENRY ADAMS, a clerk of Newport, Mon. The Official lieceivc-r What was your occupa- tion in the early part of 1890 ?—Clerk to Air. Laitwood. Ho'" came you to be connected with the com- pany ?—Sir. Laitvvood came to me and said there were several persons interested to float a brewery, and in similar cases it was usual to appoint a nominee, and he should require me to do that, which I did. j Did you see anyone else connected with it ?-I saw Overton and Avis. They were great friends j of Sir. Laitwood. Continuing, witness said he never went to Newtown or Aberystwyth, and, personally, he knew none of the parties interested in the neigh- bourhood. The agreement (produced) of the 11th February, 1890, he could not remember signing but he would have been very likely to sign it in Mr. Laitwood's office. At the time he signed the agreement he did not know what was in it. He saw no one connected with the company, and knew no one connected with it whatsoever. He did not know who prepared the deeds referring to Messrs. Mytton and Galloway's business, in which be was said to agree to buy the goodwill of their business for the sum of X3,000, and also agree to take over the stock and trade at a valuation. He did not kuow how many agreements he signed or who negotiated them. He saw Argles, the valuer, He never gave him instructions to value. Mr. Lawson Ben ham lie continually saw at Overton and Avis's office. There was a third agreement of the same lr. Roberts, of Aberystwyth, whereby he agreed to take the brewery there, wh:ch he knew nothing of, neither did he of the agreement of the 12th February whereby he agreed to sell all these houses to Mr. Lawson Benham. He could not say that he signed the agreements, and he never received a penny-piece from the affair. He did a good deal of work in connection with it, and in return was promised that when the next company came out that he should have a rise and a secretaryship, but it never came off. In their bankruptcy examination Overton and Avis said they gave him a bonus of RIO, but he knew nothing about it. lie could not go so far as to say that he did not. receive it. He received from them about £ 4 fIr addressing circulars, &c., which he had previously pai l other people t,) (to. Ho c. uld not say whether Laitwood got anything out of iö. lie should say that he knew Newton tli..i seeing him at Ovarton and Avis's. He did —r what he was or what profession ha j fa" lowed. Official Receiver: On the 9th April, 1890, a, cheque was drawn in your favour for £ 575. Did you ever receive that cheque ?-I never had any money passing through my hands. Do you know anything about this cheque ?—I am positive that no cheque passed through my hands. The next cheque is also payable to you for -63,014 12s ?—That was never in my possession. Here is an agreement on the 1st May, 1890, signed by you ?—I knew nothing of it. I never had anything to do with the drawing up of any- thing. On the 5th June two other agreements were executed ?-I cannot remember signing those agreements. Why did you sign this document ?—I was in the employ of Mr. Laitweod, and I was almost required to do it. Did Mr. Laitwcod take a prominent part in it ?-- Yes. That you know ?—Yes. He went down to Montgomeryshire with Overton and Avis several times, but I know nothing of the relations between him and Overton and Avis. On the 10th May there was n,000 debenture stock due to you did you ever know that ?-I never saw them. Here is a transfer from you of this 2,000 deben- ture stock to Mr. Laitwood ?—I signed a lot, I think, of blank transfers. I never received any money for thia from Mr. Laitwood. I did it because it was part of my duty. On the 5th June there was another £1,000 of debenture stock allotted to you, and that you transferred on March 7th, 1891, to Peter Allen, newspapar proprietor, Manchester, in consideration of ten shilling. Did you know Mr. Allen ?- No. I can only snggest that Mr. Laitwood gave the stock to the newspaper proprietor as security for something he owed him. Did you hear of Mr. Allen at all in connection with the Company ?-No. Do you know Mr. Avis's writing ?-I have seen 'plenty of it. Is the body of that transfer his ?-I cannot say. I thought he wrote rather thicker than that. On December 12, 1890, thera was another £1,000 allotted to you, making altogether £ 4,000. This £1,000 was also transferred to Mr. Allen. Witness said he knew nothing of this matter, and he had no knowledge of his transferring allotments of.6500 and £ 450. In August, 1890, he did not apply to the Directors for R1000 Debenture stock as tho vendor's nominee, and knew nothing of it .'ranted. Witness never saw the cheque produi" i.f fore for Cl,600, and did not have any share of tho proceeds. He did not know that as a matter of fact the Aberystwyth Brewery was never acquired. He believed there was an action in his name, but he did tiaL kuvf* r.1.» .i. In one instance yon signed? an Agreement whioh made you responsible to the Comdany for £ 700. How came you to sign that ?-For the same reason as I signed the other papers. I never read it over. You practically signed everything that was put before you ?—Yes. In answer to Mr. Parfitt, witness said when he executed these agreements and transfers, he never had any conversation with Mr. Laitwood about them. He asked Overton and Avis about the Company, and they gave him most glowing accounts. They said the shares would be at a premium, and all that sort of thing. They made him believe that the Company was a regular gold mine, but they did not give him any hopes of participating in the profits. He knew absolutely nothing of the history of the Company, and what he did he simply did as m the servant of Laitwood. The latter never said he would have to sign the documents, but he put it in such a way that witness could scarcely refuse. Mr. HfiNRY JOHN ROBINSON was next called, and exainined by the Official Receiver. Official Receiver: Your name is Henry John' Robinson ? Witness: Yes. Where do you reside now •—Towyn, Merioneth- shire. Do you follow any business or profession ?—No. When did you cease to be connected with Messrs Robinson and Wells ?--Twelve months ago. I believe you were one of the directors ?—Yes sir. One of the trustees for the debenture holders ?— Not originally. Who wast originally ?-- You will find that my name does not appear in the original prospectus, but after I became so and am now. I find on the 21st March, 1890, you were ap- pointed with Mr. Devoreux Pryce, is that so ?—It is not so exactly. In explanation I may say I was appointed, without my knowledge, trustee for the debenture holders. I had no idea my name w is down as trustee. I knew I was a director. You will find in the original prospectus that two other names arc down. Have you a copy ?-- I have not. I don't want to go further back than 21st March. At a meeting of subscribers in London you wore present. It was resolved that Mr. H. J. Robinson and Mr. Devereux Pry e be appointed'trustees ?- Was I present ? Is this record true or not ?-I am r- trustee now. Were you appointed in March ?—Evidently by that. And you are also now mortgagoe of one of the properties ?-I am a trustee to debenture holders. Are you now mortgagee of the Lion Inn, Lbny- myneeh ? -Yes. sir. 1 hat is ono of the properties Yes. When was your connection with this Company first mooted ?—Early in 1890. By whom r—By my deceased friend Sir. Issard. What representation was made to you as to the Company to be fo,med other breweries were doing so well this was likely to be- as g-ood as most of them. Was anything said about any brewery but his own ?—Ves, he explained he anticipated, but it was not then settled that two other businesses would be added. Did you have any (.f)ll wi!h unvbodv else at The earlier stages before the agreement was 8i¡;:IIPd NOD any. With 1.Ir, Dawson ? --No. You knew him ?—At connected wiih Issard. You knew Roberts, Slytton ami (.a'.iowciy ? — No. You rv-ver saw the last witness (Adams) ;1 never saw him. Who prepared the memorandum anil articles of association ? J have no idea- Did you peruse them before you signed them ? — I signed them, yes. Were they sent to yce! :-1 lL'1 unable to Efl" how I saw them. The 18th of February, 1390, they are purported to be signed—had you seen anyone before them ? —I believe I met Sir. Overton at the station, and Sir. Issard introduced him to me. You do not know from whom you got them ?-- I do not. Had you any consultation with the others in a body about them ?—I had not. Do you know where they were signed?—I do not. All the signatures appear to have been witnessed by Overton. May I take it you were all together when you signed ?—I think yes. Was Sir Pryce Pryce-Jones there ?—No; I believe he was not there. On the 18th February did you meet -.Nir.Le Grand, r. Chandler Mitchell, and Mr. N ewtoll ?-I did not. Do you suggest these signatures were obtained at the same time ?—I think not; otherwise I should remember these men. You read the memorandum and artiolea before you signed them, did'nt you ?—If I signed them, certainly, yes. e And you knew for what purpose the Company had been formed f The objects for which the Company was established were (1) to carry on the 'business of brewers (2) to adopt and carry into effect the agreement oh that date ?-I did not. Did you not before you consented to be a sub- scriber ask to see it ?—My impression was that my signature was attached to a loose paper. I can assure you that is not so. I have seen the signature at Somerset. House.-Well, it is five years ago. Now about this agreement ?—I saw no agree- ment until the first meeting in March. I will take it, then, you had, not signed this particular agreement. Did you know any of this property going to be acquired?—None but the Newtown property. Had you seen the Aberystwyth property No. Did you know anything of Messrs Mytton and Galloway's premises?-No. Under tho articles the subscribers signatories wero to have power to appoint the first directors. Now do you remember the first meeting of sub- scribers being held in London f I mean the signatories to these articles ?—The first meeting I attended. Yes.—I attended on the 21st March in London. I will read you the resolution passed, Meeting of subscribers to memorandum of association Mont- gomeryshire Brewery Company, Ltd., hold at the Registered Office, 5, Throgmorton Avenue, E.C. Present: A. Newton, W. Chandler Mitchell, Arthur Dean Dawson, Henry J. Robinson, and W. S. LaGrand. It was resolved that Messrs Robinson, Mitchell, Newton, and LeGrand ba appointed directors and Mr. Robinson and Mr. Devereux ,'Pryce be appointed trustees" ?—I Remember the meeting but not as to ,the trust. ,■« i You remember the appointment of directors,?- ) Yes, sir. ¡ On tho same day in London at the same place there was a, meeting of directors, at whioh you, Mr Newton, Mr. Mitchell, and Mr. LeGrand were present. Do you know wkether Mr. Dawson was at that meeting ?—He had been at that meeting as a subscriber. He could not as a director attend the meeting, but was he present ?—I don't remember. Perhaps it will come to yonr mind when you hear what was done. You remember whether any- one else was present besides you four gentlemen ?- Yes. What is his nania ?—Mr. Talbot. Was he present at that meeting ?-I am certain. He was invariably present. Was he present r-Yos. Was Mr. Godfrey p-! think not. We will drop Adatns out of it. Wera Overton and Avis present P-Yes. Laitwood there ?-No. Benham there Yes. Anyone else ?—I think not. At this meeting, Which Mr. Newton was ap- pointed chairman, the certificate of incorporation was produced and the following appointments made: National and Provincial Bank, bankers; several persons, brokers; Messrs Talbot and Watkin and Mr. Perry Godfrey, solicitors; Messrs Watkin and Co., auditors, and Mr. Benham, secre- tary pro tern. Did you know what Benham was ?— A clerk of Overton and Avis. And the offices to be in London. At this meeting the prospectus being approved it was resolved that £ 150,000 be issued to the public. When did you first see this prospectus ?--At the first meeting, March 21st. Was it gone through ?—I am not clear upon that but probably. Cannot you reluember whether the different paragraphs were discussed ?-You fix me to a date; it is impossible. I am fixiug the dawhen it was issued to the public ?—I was at the.m^ting, but it is impossible after five years for me to tell you how it was dis- cussed. If you ask me if I consented I must say I did that. I have no recollection of it then being discussed. Do you say you were party to the prospectus and it was never gone into. Was the prospectus dis- cussod ?—I would not swear it was on the 21st March. Was it aver disciis vd '-—Certainly. When ?-I cannot giwe tlif date. It was issued immediately ?—Yes. And you canftgt ('t>ow whether yon consented i —lflng| ■- -j i»5i.ib3 ws the prm-uotcr^'1 j without my sngg.>sfin^ it. His Honour 'an yon say whether it was dis- cussed or not b'toro it was out?—I think I should say I have no doubt the prospectus was discussed. The Official Receiver: Now we will take this prospectus. It starts by saying the subscription lists will be opened on the 25th March and closed on or before the 28th March, 1890. The Slont- gomeryshiro Brewery Co. being an amalgamation of Messrs. P. E. Issard and Co.'s Brewery, estab- lished 1831, and David Roberts, established 1848. Is that 1831 the date the business started ?-I don't know. Share capital £ 70,000 debenture stock £ 30,000. The directors are stated to be Issard and Dawson, Roberts (Aberystwyth Brewery), then yourself. Did you know who Mitchell, Newton, and LeGrand were ?—Never. Did you ever meet them before ?—Never. Then you were asked to ba a member of the Board I presume by Sir- Issard ?—Yes, sir. Did you enquire who your colleagues were ?- Yes; I remember Sir PrTce.Jones was named and the others were strangers- Did you ask Mr. Issard who they were ?—I did not. Did you know they were nominees of Overton and Avis ?-I do now. The people principally concerned in the pro- motion ?—Yes, sir. Messrs. Talbot and \Vatkins were well-known ? -Yes. And Mr. Talbot was present at the meeting when it was proposed his firm, with Sir. Godfrey, should be the solicitors ?—Yes. Were Messrs. Talbot and Watkins solicitors for the vendors Slessrs.-Issard and Co., and Messrs. Mytton and Galloway, and Mr. Roberts ?—I believe Sir. Talbot was solicitor for -Ir. Dawson. Do you know whether Sir. ialbot saw this pros- pectus before it was issued ?—Certainly. You know that of your own knowledge ?—I do You have told us yon did not see the prospectus until the morning of the meeting r-That is so. Did you take any steps to ascertain the correctness of the statetneIlts in the prospectus ?- None. Who prepared it as far as you know ?—Slessrs. Overton and Avis principally. And you took all in the statement as facts with- out enquiry ?-As an inexperienced man-yos. We are told that the Company was formed to purchase the Crown Brewery at Newtown, Aberv- stwyth Brewery, tied houses, and Slytton and Galloway's business, 43 tied houses. Then tiiore is this paragraph In addition to the 48 tied houses already belonging to the Brewery, 24 more, valruble freehold and leasehold .houses of a similar ctmracJer have been secured. Did you enquire what they were aad how secured ? There was a long list; I made no enquiries. I knew by mv general recollection that a number were connected with Issard and Company and that was the list. These 24 are outside that? I knew there was an extensive number. Did you know what vvas meant by acquiring these houses? The houses belonging to Sir. Is?.ard were either acquired as freehold, leasehold, or bv tenancy; the sajne app' ^r- Roberts and Slessrs. Slytton and Galloway; did you assume these would be acquired ill tlllJ same way by purchase, or agreement p-Yes. I knew one of the objects of the Company was to acquire more houses. As owners or tenants ?—^es. Do you know who instructed Messivs Warson Company, the 'acoonnta"^ kuow we re- appointed at that meeting- Do you know who instructed them ?■—-No. Do ;on know that they did value the business ? I know they travelled to Newtown for that purpose. They certify the number of barrels brewed amounted to 9,752 at 34s. 10d. per barrel, shewing a profit of 13s. 5?,d. per barrel. Did yon sce any certificate of Messrs Watkius?—I did not. You see it says number of barrels brewed not sold. You didn't ask to see the documents ?—I did not. My investigation satisfies me that the number of barrels brewed and tho number of barrels sold are two(liffert,nt things. Why did you not ask to see thJie documents ? Why did you take the ipse. dixit of Overton- and Avis ?-I left ittothe vendors and Overton and Avis. You did not think there was any responsibility in putting your name to the prospectus to see that facts were stated ?—I consider it rested with Messrs Watkins. You say you never asked to see these reports, but as a matter of fafct Sir. Watkins did not certify anything of the kind. I have their reports and they do not say anything of the kind ?—Those were matters connected with the original formation of the Company, and left with the solicitor and vendor. Do you say that Mr. Talbot knew of all these statements in the prospectus ?—Undoubtedly. Messrs Watkins gave three distinct report a. They gave the report of each busineae. In no one report is there mentioned 9,752, and no such number putting both breweries together. You say in issuing these shares to the publio that the accountants gave a certificate that a certain amount of business was done, you did not ask for the certificate, and they did not ceitify f—I relied on the solicitor and thoae forming the Company. Don't you think that there was a responsibility onyot, being known by people in Wales as a business man, to see to these statement. ?—I do know now, but I didn't then. Eight thousand nine hundred and eighteen were brewed really, and these gentlemen in order to bring it up to the number brought in thoae sold by Mytton and Galloway. With regard to the barrels browed, the whole figures with regard to the profit are based upon the idea they have been sold-, but the number of barrels sold is 6,849 with Mytton and Galloway's, 33 per cent lesa than the number brewed for the pravious years- really average of years. Tho paragraph in the prospectus goes on to say "Beer realised 34* 10d, showing profit of 13s That 13s 5 is kreated as being profit divisible, but the 13s 5 was gross profit, and they say so in their certificate. They give gross profit and go on to say we have not taken into account rent, wages, bad debts, or any- thing." Mr. F. Yf. Williams interposed, and submittad that it was not fair to question in that Way, and after some little discussion, The Judge rulad that the Official Receiver had not gone beyond the latitude which should be allowed him. The Offical Receiver continuing You say you never saw these ?—I didn't see them. Don't you consider it was your duty to see them? —No; I don't. You did not at the time f—I did not. You see in the prospectus what large profits wera predicted ?—-Yes. Did it over occur to you if such were made why they wanted to sell ?—-I never enquired why they wanted to sell. Benham was secretary ?—The first secretary. Did you see the cerrespondence which took place at that date, 21st March, calling attention to the statement about these projects It-No. Did you know of such letters ?—No. Do you know he wrote a letter in reply ?—I do not. A latter was written to the newspapar in reply to the correspondence ?—-I don't know anything about it. Did you hear it suggested that the Welsh brewers wore not demented, but in each caM the heads were old men who had made their little pile and were willing to capitalise a part of their busi- ness ?—-No. You know Issard had not made liia" pile" ?—I knew he was not a rich man. Who instructed Arglla's to value ?—I don't know. The amount stated as the valuation in the pros- pectus was £79,854. Don't you know whether you saw them or not ?—-I say not. Did you enquire if the amount stated was the amount ?—I did not. Did you enquire how the amount was made up ? —Na. Did you know at this stage a.t what prices these properties had been acquired by Adams, the vendor ?—I did not know. Are you quite sure ?—I am. At this meeting on the 21st March tha following resolution was proposed :—" It was resolved that the contracts dated the 11th February, 1890, between Issard and Company of the one part and Adama of the other part; David Roberts of the one part and Adams of the other part Mytton and Galloway of the one part and Adams of the other part and the contract of the 12th February, 1890, between Adams of the one part and Benham of the other part, and contract dated the 12th March, 1890, between Benham of the one part and T. E. Issard of the other part be confirmed and adopted f "—The solicitor being present I made no enquiry. I relied on him. Did you enquire what they were P-I have no recollection that I did. Hare you any recollection of being informed what they were-I have none, but if I may explain—at this meeting the solicitor being present a number of questions would be broaght forward at different times. I relied upon this gentleman w «r.4*rft. irv v These agreements referral to here are ateo f referred to in tho prospectus and you still eay you did not read them ?—-I relied entirely on the solicitor. The agreement mantioned here are between the original vendor and Adams f -1 have na recollec- tion of seeing them. When did you first know the amount of the purchase money Adams was given to pay the vendors for their property ?—I camaefc answer that. About II-Probably about that time. A meeting was held in London on the 29th do you remember being at that meeting ?—I was present. Mr. Talbot was also present P-Yes. Do you know whether Overton and Avis were thero ?—Invariably. I should tell you that the time for subscriptions bad expired, the day before I think. Had any con- versation tuken placo between you and Mr. Dawson and Mr. Issard or any other parties, but particu- larly between you and them as to what subscrip- tion should be received to justify you going to allotment. Had that matter been discussed?—Nat to my recollection. Had you formed any opinion in your own mind ? —None. I had not heard before the meeting on the 29th. Did you see tho applications, before meeting I saw the amount. One hundred and forty five for 3,143 shares. Did the directors go singly through tho applica- tions ?—I think not. Did you make any enquiries as to what sub- scriptions came from brewers ?--Xo, it ditlnot iu- terest me. Oil! Did any discussion take place as to the de- sirability of going to allotment ?—-Yes. Did anyono oppose it ?—None. Did Sir. Talbot adviso it ?--Mr. Talbot advised us to go to allotmeut. Having regard to the comparatively small amount of subscription do you think you were justifiad in going to allotment ?—I thought so then, on tho advice of the solicitor. The amount of the subscription at that time re- presented the valuation amounted "to and this amount was wanted according to tho contract. How were you going to find it P — Do you ask me what I think about it ? Yes ?—I took tho word of Mr. Talbot M sufficient to proceed to allotment, and concluded it was right. Was it a legal question ? Was it not a question for a commercial man more than a lawyer?—You hardly put it in a way understand. Was not the question a question for a com- mercial man ?—Then, I reply, 1 relief solely on these present and more experienced than myself. [ You were £ ^8,000 oif -the vendors taking all it shares. How were you going to raise it ?—I am not prepared to say. You suggest it was an ill- adequate sum. One of-the vendors, owing to the subscription, took shares instead af money. I J did not know it was insufficient to go on with. I thought it; was- a preliminary, and debentures were to be issued. Did you anticipate the amount being raised by debentures ?—I cannot say. I cannot swear what I anticipated. Surely it is a fair question to ask you how you propose to supply tho remainder of the money P— No such proposition came before us. 1 r. was never discussed ?-—Never discussed. Was anything said at this stage as to the Com- acquiring the whole property ?—Not at that siau'o. Were you aware that Messrs Issard and Dawson at that time had advanced money to the promoters to pay expenses ?—I was not. When did you first hear of it P—Later I heard it, bur casciially—no direct statement. Slay I take it at this stage you knew the profit t-hew! people were going to get out of Company —the promoters I mean ?—Certainly not. I asked you a little while ago when you said the original contracts. "About that time you said. Now we are getting a week later; had you seen them then ?-Y8S. And then you knew the amount of profit they were getting ?—I have explained these documents were never investigated by me, and I don't know what sums of money were given and received. You say at this stage you did not know the amount iho promoters wore to get ?—I don't kstow now. The next meeting was on the 9th April in Lonclon. Yon do not appear to have been present. What was the rule about calling meetings ? Would you have notice of that meeting ? No doubt I had notice, but it being held in London and I living in Shrewsbury it was inconvenient to attend. About the end of March, 1890, did you receive some 25 16a ?--No. Who paid your expenses to London to attend the first meeting of subscribers and directors ?-All were paid by the Company with the fees of the directors ? Tkere were no fees then ?-Then I can say I did not receive anything from Overton and Avis. Will yon swear you did not receive £ 5 16s. in March f—I would not if it represented my ex- penaø. Do you know that a cheque for 27,980 was drawn at that meeting ?—-You will find that meeting was called by Overton and Avis without referring to any other director. I was not summoned. It was called for the London directors only by Overton and Avis. Then at the next meeting when you were present and Mr. Talbot likewise, the minutes were read and confirmed. Did you make any enquiry as to why you were not summoned P—I did not. Did you make enquiries as to what the £ 7,980 meant ?-In Mr. Talbat's presence—no. Did you make enquiries as to who had it ?-I concluded it was correct and I did not enquire. At the meeting on the 9th there seems to have been a further allotment of shares bringing up the total to L16,710 debenture stock, £ 19,680 directors' remuneration to be not mjre than £ 500 was fixed the directors and apportioned. Did you fix your own remumeration t—I don't recollect that. I cannot tell at what meeting. What was it fixed at ?—I don't recollect that. Do you know how it was to be apportioned ?—I imagine in equal proportion, but I don't remember. There appears to be cheques given at different times for brokerage ?-I remember some given, but I cannot identify particular payments. The next meeting was held on the 1st Mav, 1890, and at that meeting there was an agreement practically adopting the agreement entered into between Adams and Benham, said to be trustee of the Company. Do you remember that agreement being read ?-I da not. The agreement of 1st May, 1890, was a mere formal adoption, and there was a modification of the teems because in this agreement the Company waived the question of the mortgages and had agreed to buy, leaving mortgages unpaid ?-Was that dooument prepared by our solicitor ? I presume so.—-If so, I relied implicitly upon him. It i. scarcely fair to put everything on the solicitor. His Honour; Did you think this did not concern you -I coincided You did not consider the accuracy or inaccuracy of the price at all ?-No. At this point the Court adjourned, and on the resumption, His Honour authorised the official receiver to warn the witnesses Newton, Laitwood, and Lo Grand by telegram that unless they appeared for examination a warrant would be issued against them. Mr. Bullock explained that the witnesses Overton and Avis were now in custody in London, and arrangements had been made for their appearance on Thursday. Continuing his examination, Mr. Bullock asked was your attention specially called to the mortgage being left ?-I remember a discussiorr with refer- ence to the small subscription, and I remember many matters we antioipated to be paid by the subscriptions were postponed and the mortgages were included. Mr. Talbot was at that meeting. Did it occur to you, having regard to the small amount of sub- scription that you could not acquire all ?— It occurred from the first-the difficulty of the'small subscriptions and inability to pay. At this meeting it appears you adopted the Crown Brewery contract. That was the contraot where the extraordinary profit was given to the promoters. You had plenty to buy the Abery- stwyth business with and leave out the Crown ?— There was a difficulty with regard to the Aber- ystwyth Brewery. There is a clause giving power to acquire one or more. You acquired property on which an exorbi- tant amount was to be paid to the promoters ?—It did not occur then. Did you hear before the first of November there was to be a modification of the contract ?-l cannot fix the date, but I did hear it. Mr. Bullock having read the resolution adopting the agreement and that it be executed and seal attached, said there is nothing to show the modifi- cation ?—I was not aware on the 1st May that we anticipated any modification, but I know the articles permitted it. Did you ascertain at this meeting what interest you would acquire itr the tied houses P-My;cotieep- tion ui the word tied was a R-uraral one and I don't rhink I could tell yon. Vf-liWyjut Vra-HraHr-a-faA■ tkr.j. ftome trf be houses- were never acquired?— Several of taese bouae* were hot acquis^ and I know Mr. Talhot wall con- ¡ stantly urged to got I At this same meeting there was a contract signed adopting the Aberystwyth contract; also Messrs. Mytton and Gwiiowwy's. You know ai. tuaie-" time there was £3,000 -T;ll ?—Probably so. Did you consider that it was beneficial to the Company that the Company should give £ 3,000 where the vendors were tied only for three years ? —I had no knowledge of the sizo of the business, but I certainly think a sum of money should be paid, and I concluded that would be valued by a competent man. How about the three years ?-I had no know- ledge about that. At the same meeting there was a cheque drawn for zE3,014 12s Od in favour of Adams ?-I can only say I should recognise it as, a propor thing. I knew Adams had to be paid a sum of money. Did it not occur to you that it would have been a prudent thing to see some part of it went to the hands of the original vendors ?--ot if it was signed and passed to Adams. What was the company going to get from Sir. Adams for the £ 11,000 2-1 didn't until to-day know who Adams was. Did not the directors ascertain whit he had done why ho should get this £ 11,000 ?--I looked to Adams as the man who was selliug to the company the whole affair. At this time is it not a fact that no transfer of any property had been made ?--It is if you say so. At that stage you knew Adanu was going to get £ 11,000 ?--I knew he was having £ 3,000. How about the £ 7,900 P—I know nothing about it. I called your attention to the fact, that the minutes were confirmed at the meeting it which you were prasent ?—I was not present at the meeting. But you were at the meeting they were con. firmed. Is it usual for directors to got their fees at eacli meeting ?—I had no experience. Railway expenses were included in them, and I should'i think it would be a fair thing that they should be paid. The next meeting appears to nave been on tho 10th May. Sir. Talbot was presont at that meet- ing. Do you remember at that meeting Slessrs. Issard and" Diiwsc-u were appointed directors ?—I remember a meeting of that soit. And do yon remember the shares were alloted to Adams ill" respect of the contract and debenture stock ?—The items did, not impress me, but probably it was so. Nothing turns upon it. 1 Do you remember Sir. Dawson Nyasettairiiiazi and yourdeif vice-chairman, and you two anil Issard appointed a com- mittee of xnana^eme.iij etoa t roniotiioor at' that time being appoun-ed to any piriioular pose as director. I may say there is no other appointment.—They were anxious to get my business experience in the business as much as possible, but I don't remember thafc. r Tbis was on the 10th and at that meeting I see that is a resolution that Argles be instructed"^ a.t onco value the stock of tho Crown Brewery— who suggested',it ? I should suy that that had reference to an interim dividend. Pardon mo litis nad reiora-ice to the purchase of the stock. Not in tho original contract ?—No. Mr. F. W. Williams suggests you may be con- fused in tho dutes. Wo have got to the "10th Slav, 1890, at which Mr. Dawson and Sir. Issard came on the Boartl for the lirst time. At that meeting the Board reso»vod thatMr. Argtes be instructed to value the sMck with a view of purchasing ?—1 ca.nnot tell you which member of the Board sug- gested it, but 1. should say Argles was looked upon as a most suitable man. Mr. Benham. was appointed secretary, and it was decided to have offices in London. What was the idea, considering the business was in Wales?—I have no doubt whatever that it was at the instance of Overton and Avis, who, with their nominees, practically monopolised the busi- ness of every meeting. On the 10th May, also at Newtown, was the statutory mcetmg of the company. Were you pre- sent at that meeting ? Yes, I was there. Did the chairman (Sir. Dawson) at that meeting make this statement That. the meeting was merely a formal one, to comply with the Companies Acts, but that he was very pleased to be able to state that although the Company had only been floated a short time it was in a satisfactory con- fl dition, aud things were working smoothly and well and the necessary capital had been subscribed and the Company took the profits from the 1st March ? I don't remember that statement, but it appeared as described to us. ■ «n You cannot say he made a statement ?-Not at that time. Is it a fact the necessary capital had been sub- scribed at that time ? It depends. As we had been advised by our solicitor I concluded the necessary capital had been subscribed. I should not have hesitated to have made such a statement if I had been called upon. Who besides Dawson had arranged to take money in shares instead of cash ?-I cannot say. Roberts, and Mytton and Galloway ?-At that time Mr. Roberts signified his intention of not joining. There was notice from the first that owing to inability to supply cash he would re- pudiate. Could you have carried it out ?-By the issue of debentures. Will you explain how it was to be done you had. i already asked for subscriptions, and £2,970 only was applied for ?-I am not versed in it, but^wa were impressed that it could be done. 2,970 and Z200 at Christmas-ia that all, not- withstanding the efforta ?-I don't understand. Is it not a fact that all the debenture stock the Company were able to get off, subsequent to the lat May, was X2,000 ?-A sum was raised. By mortgage ?—-Mortgage seems to be the same as issue. Oh! Did Mr. Dawson say the vendor would take a larger amount in shares than was intended ?— Yes. Where is the volunteering?—Mr. Dawson did volunteer at the meeting to take shares. On the question of capital subscribed. Did yo. ever hear of a further issue ?—Yes. What was that, please?—It was proposed to issue a further prospectus. I objected; in conse- quenco that prospectus never weat out. Do you know that Mr. Benham wrote to several people—shareholders—about 16th June, long before the timo you were implicated, that the directors proposed to issue further shares to acquire further houses ?-I had no knowledge. I don't believe it came before the Board at all. If fee did it, it was unauthorised ?—Certainly. A letter from the offices in London, signed by Benham to Mr. Dunderdale, and dated 23rd May, 1890, was read by the Official Receiver, stating that ainco the allotment of shares the directors had had offered ta them several houses in the vicinity of the Brewery; the Company was formed t. acquire, and from enquiries they were of opinioil, that their acquisition would be much to the benefit of the creditors and zP,10,000 could profitably be used. Did you know anything of that ?—Nothing what- ever.. I may say this unfortunate gentleman did sub- scribe a few shares more. This letter was not copied in the letter-book. I want to ask you one question about these additional houses, because at the meeting on the 5th June Mr. Adams got X2,000 for thcsothouses. You were at that meeting ?- Y es. ° Why did you part with the money before acquir- ing the houses ?—There was considerable delay ijL completing some of the contracts. But why part with the money before they were completed ?-Wo would do so on the advice of our solicitor. With regard to Mytton and Galloway's contract, were you aware that that was merely to acquire their business for a term of three years during which they were not to trade ?—I know the im- pression was that some blundering had been made in the contract with them, but I was not aware of the three years' condition. When Watkins and Co., a firm of London ac- countants, were appointed to value the book debts of the different concerns, did you consider they were the best people to do work of that kind dowa in Wales ?—I did. Here is a cheque in your own handwriting drawn in favour of G. II. Adams for zEI32 10s. on account of new applications. Can you explain what that was for ? I presume it must have been for appli- cations for new shares, but the phrase on account of new applications does not explain itself to me. Can you tell me what benefit the Company got from the cheque ?-I cannot say. Was a cheque for £500 which was drawn i. favour of Adams on the 16th July, 1890, ever brought to your notice ?--No. The cheque, I see, is signed by the two London directors. Who had the bank-book ?—Overton and Avis. Had you gentlemen in the country an oppor- tunity of checking it ?-Yes, at our meetings but my objection to Overton and Avis was that they were always there with their three nominees, and controlled all that was done. Tha1 was the reasom I gave for my resignation soon afterwards. Who was the man on the Hoard whom^Min -rnnlii » say T~prnnnniMil *1 n»n*»rriniiTn I' 11 ."FJ.l.1II fj ;i;- pwpiM who represented tue^«iotv& oS others? May I take it you were practically the only independent man on the Board ?—I was, throughout. Is it aot a fact that on the 7th August, 1890, 1 —-W." m llll.l SCTTcrTt- WttO had subscribed a single share ?—I know now it was so; I did not know then. I see you were to bay the book debts of the businesses you acquired at par value ?—Yes, but it was also understood that any debts not collected were to be taken back by the vendors. Did you apply to Mytton and Galloway ?-No, I sua speaking of Issard. Was the question of the valuation of the stock gone into at all ?-J have no recollection of goinr into it. Can you explain bow it was that when Slyttom and Galloway estimated their stock on December 31, 1889 th y. put it at £1,301, whereas only six months later Sir. Hargreaves estimated it at £ 2600? -The stock fnay have increased in the interval. Mytton and Galloway got all their money, did they not -Yes, very cleverly. Examined with regard to tbo finances of the Com- pany at this time, the witness said he was not aware that tho bills of the Company were being dishonoured. Mr. Issard did not make any state- ment of that kind to him. lIe know himself that the Compauy was in a difficulty for ready money- He was not aware that three days before Issard wrote a letter in which he stated the Company's- bills were being dishonoured Mr. Benham had written to a shareholder saying The Company, I. aai phrased to say is in a very flourishing con- dition." You did not think thc.Company was in a flourish- ing condition ?—I knew it was not.. Why then was an interim dividend declared aoout this time ?—It was declared on a statement prepared by Messrs. Watkins and Co., showing a profit. Why was it thought desirable to declare an in- terim dividend ?—I should recognise it as the usual procedure. Notwithstanding your extreme difficulty with regard to finances ?—The difficulty was with regard to ready money only. A. large trade was being done, and we were assured our assets were in ex- cesss of our liabilities. While your balance-sheet showed a profit of £ 796 did you not notice that nothiug was charged for rent, rates, or taxes, nothing for licences, for re- pairs, for reserve accounts, for bad debts, or inter- est on mortgages ?—I was not aware of any omissions. Are you aware that while £100 only was put down for law .expenses. the amount actually paid was £733 ? -1 was not aware cf if. And not :-i .-pence was put down for valuers charg?s, v/ni^l..xUiouuUid Lo £ 4jo?—± .itbuju. that Watkins and Co. are responsible for that document. Up to this time you had no shares in your own name ?—No. On the 29th August, 1890, 25 fully paid up ordinary and 25 fully paid up prt.ferenca shares were transferred to me without any con- sideration on my part. I discovered the other directors 4had had some shares given to them, and on my mentioning it they undertook to hand me those fifty, I did not kuow then, as 1 know now, that it was a wrong proceeding. My solicitor told me 1 had acted improperly, and [ returned the shares and never received any dividends or any benefit from them. Have you never, Mr. Robinson, received sixpence of dividend in any shape or form ?—No. But while the shareholders and debenture holders have lost very largely you have lost nothing ?-No, and I will give you the reason. When Issard in- vited me to join I said I would not put anything into it, and ho said it was not necessary. Did you think it a right thing, having regard to your position in the neighbourhood-, to let the Com- pany have the influence of your name upon those term's?—I do not for a moment believe my name influenced anyone. No; I was coming to that. Did you know that notwithstanding the glcwing prospectus not half a, dozen shareholders within 50 miles of the neigh- bonrliood of those properties subscribed?—I knew afterwards. Did not that strike you as extraordinary ?—I was surprised, But there wire morn than six. Yes, niue members or the JSSLH,,1 fam'ly applied for a share each, which would bring the number up to 15. Were you aware that the mopey for the interim dividend was found by Overton and Avis ? —I was not. If Benham wrote a letter saying th3 reason the dividends were being paid in driblets was that the machinery had broken down and that the dividend warrants could not bo printed, he did so without your sanction ?—Yes.