The Pattison Crash
last updated March 24TH 2015
THE CRASH In December 1898 came the crash
"What Happend When?
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5th of December 1898 the cumulative preference stock fall by 55% (from £9 18s 9d to £4 5s.)
Inquiries were made at the head office as to reason for the fall. This should be explained later but is was told "firm's financial affairs at the present moment were in the balance".
Next day came an official statement from the company:
"The directors have placed large securities the hands of the banking companies, and negotiations are now proceeding with a view to obviating any disaster with regard to be company's business."
It was also reported:
"The story is that, some disagreement arose inside the office between the head of department and one of the managing directors, with the result that certain financial aid which the head of the department had given to the firm was withdrawn, and the company, in order to pay indebtedness, presented bill, for, variously stated, £7.000 or £10.000 to the bank, which was rejected. Since the news of the difficulties came to light a rush has been made upon them.
The stock fell in the afternoon to £1 17s 6d
The creditors having bills were asked to hold them for 10 days, in order to get the assets valued and one of the biggest creditors had perfect confidence in Pattisons. 7th of December the stock price went up again and closed at £3 0s 6d.
It come also more details about the cause of the crise:
It was an open secret in Leith yesterday that it was the Clydesdale Bank that declined on Saturday to advance money on the bills of the Company’s £20,000 of London bills, it is said, had to met, but the Company could only raise £11,000. They had hoped that the Clydesdale would provide the other £9000, but it declined to do so, and the Company in consequence, was unable to meet is pressing liabilities.
Sources:
Edinburgh Evening News - Monday 05 December 1898
Edinburgh Evening News - Tuesday 06 December 1898