The Pattison Crash
last updated March 24th 2015

"What Happend When?                        The indictment
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The most important witness was Mr Archibald Tower Arrol of Alloa. In May 1898 he entered a joint transaction with Robert Pattison for the purchase of 28,141 gallons of Glenfarclas whisky for 4s per gallon (£6,443 11s 6d). Either parties were entitled to re-sell the whisky and communicate the sale with the other. Robert expected that it would be sold within 6 months with a profit of 3d or 4d per gallon. The profit should be equally divided. 25th of May he received the invoice which had the remark "waiting orders" which meant that the whisky was waiting there if Mr Arrol could sell it. He also had two other joint accounts (Kirkliston) with Pattison at the same time. In November 1898 Mr Arrol met the brothers and was told that the Kirkliston whisky had been sold after only a month in stock. He told Pattisons that he was not going the renew the bill of £6,443 11s 6d. Robert got very passionate but said that if the whisky was not sold within 6 months they would use the whisky themselves. Mr Arrol got a delivery warrant for the Glenfarclas whisky. The warrant stated the same cask numbers as the invoice. He was informed that the whisky was not sold but could not say who of the brothers said that. He agrees to renew the bill but he asked that they saw their banker before. Pattison also said that the whisky should be sold within 12 months and the profit would be 6d per gallon(instead of the 3d).
In December after the stoppage he saw the brothers again and asked for his whisky. They said that it was there.
In February 1899 he learned from the creditors that the whisky was not in stock but had been sold to Mr Magnus M'Lean already in June 1898 for the same price as he had paid. Mr M'Lean had in the meantime died and his trustees had raised an action against the liquidators for Pattisons Ltd and got an order for delivery of the whisky. This was decided 4th November 1899 by the Court of Session. Mr Arrol had to pay £6,599 without any delivery of whisky. He was cross-examined by Mr Ure who asked about the conditions of thw other deals. (Aultmore and Glen Grant). He said that these deals were different because here he was the buyer and Pattisons was the seller and he did not get a warrant. He could not explain why he in the Glenfarclas case appeared on the bill as seller and on the invoice as buyer and that the had not got a warrant in the beginning of any of the transactions. He never intended to take the whisky. He also knew that it was agreement between Pattison and M'Lean son that Pattison would take back the whisky if it was unsold. Mr Ure stressed that the whisky came back to joint account as M'Lean used this opportunity. Arrol said: "But I never got it" and Ure explained that this was due to failure of Pattison Limited and that the whisky never went away. He was not present at the litigation between M'Lean and the liquidators but was informed about it.
As a side note: The company Archibald Arrol and Sons, Limited made a similar floating of the company in August 1899. 50% or 7500 off 5 1/2 per cent cumulative Preference shares were offered to the public and the rest was kept.

Nest witness was Alexander Muir, whisky merchant in Alloa. He arranged a meeting between Archibald Tower Arrol and the Pattiosns in May 1898 and Robert Pattison proposed a joint account with some Glenfarclas, Glen Grant and Aultmore whisky. Muir was also present at the meeting in November 1898 and said that Robert Pattison explained that he had not found a market for the Glenfarclas whisky as it was comparativly new. Muir also said that he had a commission of 1 percent up to £1000 and 0.5 percent above from Pattison. He also said that Arrol had said that he was "too heavy with Pattisons" and wanted to reduce his discount at the Clydesdale bank and that Pattisons got rather angry as they thought Arrol doubted their firm.

Mr William Morton, was agent for the trustees to late Magnus M'Lean. The arrangement was that M'Lean could sell back the Glenfarclas (39 butts, 116 hhds, 3 qrs) and add 2d per gallon if unsold at maturity of the bills (2nd January 1899). He expained the letters dated 25th of November 1898 sent to Pattison asking for a delivery order marked by the Excise Officer of the whisky in favour of the trustees of the late Magnus M'Lean with the effect that the goods belong to the trustees. 3 days later they got a letter from Pattison with delivery orders and warrants for whisky. He explained that they later raised an action against the liquidators for delivery of the whisky. The liquidators maintained that the whisky never was sold to M'Lean but was on a joint account, but finally the whisky was delivered. He did not know of any arrangement between the son and Pattison that the whisky should be taken over and the agreement between them to take back the whisky. He also said that he had not heard about Arrol until the action was raised.

Next witness was Magnus M'Lean, son of Magnus M'Lean, whiskybroker in Edinburgh who died on 18th of August 1898. He said that on the backside of the invoice dated 30th of June 1898 there was an endorsation "We hold the within-mentioned to your order, and invoice it back to us, plus 2d unsold, net cash at maturity of bill, plus London bank charges" signed ny Robert Pattison. He infomed Robert Pattison some days after his fathers death that it was likely that the whisky would go back. During this talk a small account(4s 2d) for repairing a cask was discussed and Robert Pattison cancelled that account. Mr Ure pressed him about the circumstance why he was not prepared to pay the repair of the cask if he owned the whisky and the cask. He said that it must have been faulty on the day of purchase. He also said that he thought that he had explained the arrangement of taking back the whisky with William Morton (the agent).

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Aberdeen Journal - Saturday 13 July 1901
Advocates Library/National Library of Scotland