This is part 2 of a tale of financial corruption which began on 15th November.
I must begin by apologising for the delay in completing this brief digest of the Batten, Carne and Carne (B.C.C.) shareholders' meeting which took place on Saturday 19th December. I'm afraid the meeting rambled on for quite some time on the Saturday and Sunday is not a day for dealing with venal matters.
As promised, I went along to the B.C.C. meeting to hear what the board had to say by way of explanation. The meeting was held in St John's Hall in the presence of somewhere in the region of 250 shareholders, most of whom were residents of west Cornwall but a smattering from east of Hayle and a small number from out of county. Just to remind you: this was an extra-ordinary meeting of shareholders summoned to consider a proposal to wind up the business. That was the formal position, but as I've said before, the reality was that the shareholders were being presented with a fait accomplis, an agreement to amalgamate with Consolidated had already been signed.
The Chairman, Mr Charles Campbell Ross began his remarks by stating that the directors believed that if we, the shareholders, supported the action proposed by the board then we would have our capital repaid in full. I have to admit at this point that I felt a profound relief that my shareholding is small. Reassurances of this kind are not, to me, one bit reassuring.
Mr Ross explained that he had three principal objects in view: firstly, he wished to explain the causes of the current predicament which had led the board to their decision to amalgamate with another bank; secondly, he wished to outline the process which they had gone through in carrying out the decision; and thirdly, he wished to explain the details of the agreement under which the business was transferred to Consolidated. You will note, no doubt, that they took a decision and carried it through to action and only now do they wish to consult!
As I predicted in my recent letter, the haste and secrecy was put down to the need to save the bank from a run on its funds once it was realised that it was under-capitalised and the share issue of last year had, not to put too fine a point on it, failed. Failed to place over two thirds of the issue in fact. I won't bore you with all the details except to say that the shortage of funds implied poor dividends and interest rates for a prolonged period which it was feared would lead to a crisis of confidence with inevitable results. The board therefore concluded that they must act quickly and they sought to amalgamate with another bank.
Quite why the bank was now under capitalised was not addressed, as if it were something utterly beyond the ability of the board to manage. Though Mr Ross did let it slip that they had not even realised that their deposit and current account balances were down 15% since June. It seems I was not the only person to jump ship! They only realised what was happening when they made up the accounts to transfer the business to Consolidated a mere six days ago. I think a glimmer of light may have accidentally been allowed to fall upon the collapse of the house of Carne.
Mr Ross stressed that the board had been in discussions with other banks besides Consolidated but for reasons of commercial confidentiality he felt he could not divulge their identities. He described these banks as being very high in banking circles but, after due consideration, the board came to the conclusion that it was in the best interests of all shareholders to accept the terms offered by Messrs. Bolitho and Co.
He then went on to details the terms of the agreement of 14th November by which the two businesses are now amalgamated. AMALGAMATED. Now there's a word, to me it hardly does justice to the situation. It may be the correct term for the arrangement arrived at but to me it sounds as if there is an element of choice and that two businesses are amalgamating themselves into a new entity voluntarily. In fact the chairman had already told us we had no real choice but to amalgamate with another bank. The framing of the agreement is exclusively in terms of vendor and purchaser. B.C.C. has been allowed to get into a mess and it has been bought by its major competitor for a bargain price. Less in fact than was originally offered, due to the unexpected decline in account balances.
Having taken us through the 10 points of the agreement the chairman then put the motion before the meeting, essentially that the agreement with Bolitho, Williams, Foster, Coode, Grylls and Co. of 14th November made it desirable that their company be voluntarily wound up and that Charles Campbell Ross and Edward John Gardiner, auditor, should be appointed liquidators for the purpose of the winding-up. The motion was seconded by Mr Bodilly.
Much discussion followed, in which Mr Bazeley and a Mr Martin from Exeter were especially vocal. Mr Martin claimed to speak on behalf of a large number of shareholders but as an 'outsider' his views were treated with a degree of disdain. The essence of the discussion was that there was disquiet that the board were appointing the liquidators from among themselves and there was a strong feeling that there should be a shareholder representative appointed by the meeting. It was all very polite though at one point Mr Martin expressed the view that it was a cause for regret that there had not been a little more frankness when the balance sheet was last presented. In the end, no suitable candidate to be third liquidator emerging, the motion was passed with a huge majority.
I have to confess that from his own point of view I thought that the chairman handled the meeting extraordinarily well. He concentrated the force of his oratory on what the board had achieved and managed to create a generally positive atmosphere with much cheering and applause. Mr Martin, on the other hand, emerged as an interfering outsider with no real insight into how these things should be managed.
I have no doubt that, now the euphoria has died down and we have all had a quiet Sunday to reflect on what has come to pass, there will be a deal of head scratching as to how we have allowed a situation to come about in which those whose stewardship has resulted in our bank's failure have now been given the job of sorting out the mess. We are all clients of Bolitho and Co. now but I fear that Batten, Carne and Carne will cast a long shadow.
Cornishman 24 December 1896
Cornish Telegraph 24 December 1896