The Pattison Crash
last updated June 12th 2015

THE TRIAL - DAY 4

"What Happend When?                        The indictment
time frame        time frame
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The first witness was Alexander Wardlaw, Clydesdale Bank, Glasgow.
He told about the meeting January 7th 1897 when the company had gone over the £120,000 discount limit by £9,000 and had an overdraft of £18.000. The brothers tried to convince the bank to improve the conditions. This was not accepted by the head office and Mr Wardlaw informed that after a week at a new meeting. This time only Robert was present. Until 1st of February the discount limit should be brought back within the limit. In the first place they were to leave with the bank the company's undiscounted bills, endorsed, and duly in order. Against that the bank was to grant a promissory note for £20,000. signed by the two brothers, and in name of the company. Eventually it was agreed to grant a second promissory note for the same amount. With regard to the first promissory note, the arrangement was to last for six months. As against the second promissory note, the bank was to get £15.000 worth of preference shares in Pattisons, Limited, and also insurance policies in the lives of the two brothers the amount of £15,000 each. A draft was made out in the names of Robert and Walter Pattison and Pattisons, Ltd., and it was granted on the representation that the advance is entirely for the company's purposes and lot for those of either of the individual directors. The promissory notes were renewed twice, the last renewal being current the date of the liquidation of the company.
A key point was - was this money to the company or to the brothers?
"The Juryman: Did it belong to the company?
Witness: Practically it did.
The Juryman: I do not want know practically. Did it?
Witness: It belonged jointly to them.
The Juryman: I do not understand how it could belong both.
Witness: It was part of the arrangement that Pattison brothers were to get the draft in their name, but that it was to be paid into the company's account, juryman: And then it belonged to the company?
Witness. Well, yes.
"
The next witness (James Wight, wine merchant from Leith) was on ef the share holders who had bought the preference shares and now were facing losses. Mr Ure (for Walter Pattison) made a good point when he asked this witness who also has bought shares in another whisky company (Stoodart & Wilson, Leith).
And was not the arrangement the same in both cases, namely, that you stood always to win and not to lose (Laughter)
Witness: Oh no.

The purpose of these questions to these witnesses was to show that they had been deceived by the facts in prospectus prior to the floatation.

One witness (Mr Robert Murray) who was traveller for the company told that he bought 100 Ordinary shares from Pattison under the condition that Pattison were to have the first offer if he later sold. He was asked if he, who worked for the company, did not thought it was strange that the average profits for 6 years were £22,000 and for the last 2 years and eight months were £31,000. He did not answer at once and said he had lost his memory in a train accident. After much pressing he admitted he admitted that he would have taken the shares also of the proflts had been £22,800. He also had agreeement with Robert Pattison that he could sell back the shares to him at any time, and he tried but never got money back and lost. (He had paid £350 for 100 shares (£1000) and the balance against a bill at three months accepted by one of his customers. The bills were renewed and partly paid off by dividends)

Then a customer in Leith of Pattison, Elder & Co - Mr Alexander Somerville Murray told about at a joint transactions when Cameron Bridge whisky was sold.

Another wine merchant in Leith, - Alexander Cecil Newbigging (Messrs Cockburn & Co) told about a joint account for 157 hhds of Carsebridge whisky already done 1882 with the father Walter G Pattison. This transaction was transferred to Pattison, Elder & Co in 1891.

Mr Helm who was whisky merchant in Leith told that they had varouis joint account transactions with Pattison, Elder & Co. The procedure was that Pattison Elder & Co, invoiced Helm and he accepted bills. The whisky remained with Pattisons and either of the parties had the right to sell the whisky and at the end the accounts were squared and the profit or loss divided. He told about 157 hhds of Carsebridge whisky - the same whisky which was sold to Cockburn (see above) and other transactions (Glendronach, Glenfiddich).
He also applied for 100 shares but only got 10. These he sold just 2 days after the stoppage with a loss of 50%. He was asked if he had bought the shares if he had known that the profits were less £11,000 less and said he had taken a less than 10 if he had known this. (My comment: He applied for 100 and got 10 - he should be happy!)



Mr Thomson who was a cashier for Pattison said that he had been instructed by Mr Walter Pattison not to put certain bills through the the bill book. He also gave evidence of the transactions with the Planat brandy and Avoneil whisky (see day 2). Cross-examined by Mr Ure (for Walter Pattison) he was asked about the honesty of Walter - and he said that Walter Pattison had not realised what he had done.

Several persons from different banks were heard and Mr Ingram Union Bank Of Scotland, told that Robert Pattison opened a household account in the bank and spent £43,000 from January to September 1896.

A clerk (William Law) was cross-examined by Mr Guthrie (for Robert Pattison) with the aim to show that the entries of whisky having been sold twice (Emmerson) was made by mistake. His impression at the time of these double entries was that they were intended to square bills.

A traveller was heard and he said that he had never heard about any irregularity.
The court the rose for the day.


Next day ->

Sources:


Edinburgh Evening News - Thursday 11 July 1901
Aberdeen Journal - Thursday 11 July 1901
Aberdeen Journal - Friday 12 July 1901

Advocates Library/National Library of Scotland