THE COLLIE FRAUDS.

Globe, Volume IV, Issue 407, 1 October 1875, Page 3

THE COLLIE FRAUDS.

The London Correspondent of the Argvs writes: —A preliminary meeting of the creditors of Messrs A. Collie and Co was held on the 28th July, at Cannon street Hotel, Mr Smith, of Messrs Smith, Travers, and Co. representing the London and Westminster Hank, was voted to the chair. The meeting was one mainly for the interchange of information calculated to elucidate the great conspiracy. An approximate balancesheet was presented by Mr Young, the accountant, which discloses about as disgraceful a state of affairs as any bankrupt estate ever showed. The magnitude of the liabilities, and the scantiness of the assets of a firm which had enjoyed for many years the highest mercantile standing and credit in the city, excite the wonder of everybody that the discount houses and banka could have been so egregiously deceived. Indeed, not a few individuals insist that the banks must have known the character of the paper which they have so freely discounted, and are not therefore to be pitied for the enormous losses they have sustained. Such persons, of course, see vindictiveness in the action taken by the London and Westminster Bank to expose and punish the delinquent firm. The joint and separate estates of the firm taken together show available assets amounting to only £250,542, and the estimated liabilities reach £1,889,785. Besides the quarter of a million realisable now, there are further assets requiring time for realisation, and which are set down at £554,850, to that the positive deficiency is upwards of a million. Some of the items which figure in these assets, however, are of very doubtful value. The private estate of Alex. Collie, for example, ranks for £60,000, but In this is included his West End mansion, which is reported to be heavily mortgaged. Equally dubious are the Carolina cotton warrants, stocks and shares, warehouse stocks, &c, which may be wholly or partly pledged. It was stated at the meeting that the Loudon books had not been balanced for the last twelve years, but the Manchester account had been much better kept. The amount of the drawings of Mr Alexander Collie had been about £lO 000 per annum, while the Manchester partner had drawn out at about the same rate. As no deed of partnership had ever been executed, an attempt was made, on behalf of the Manchester creditors, to separate the Manchester from the London house, but the meeting would not listen to the proposal. As they had stood, so must they fall together. The London business seems to have consisted of an agency for the Manchester firm, doing the financing, and carrying out the speculative transactions. Mr Alexander Collie’s mansion in Kensington Palace Gardens, with its furniture and pictures, was announced for sale last Friday, but on an application being made in the Bankruptcy Court for an order authorising the auction, Mr Registrar Broughton refused to grant it. He stated that the proceedings already taken were irregular, and that if the receiver persisted in the sale he must do so on bis own responsibility.

The vigorous action of the London and Westminster Bank in prosecuting these men for fraud, has sent a thrill of delighted satisfaction through the community at large. It is another sign of the awakening of national conscience in regard to the commercial iniquities of the age, but in certain financial and mercantile circles the step has created the utmost consternation and alarm. It is reluctantly admitted that the malpractices of the Collie’s and their confederates are very general among merchants, and it is defiantly insinuated that the banks are fully cognisant of the worthless quality of a large portion of the paper they discount, and are content to connive at the irregularities so long as they can make profits and pay large dividends. Some idea of this kind must have been in the mind of the writer of that disgraceful article which appeared in the Timex on the 28rd of July, the morning after the first appearance of Messrs Collie before Sir Thomas White at the Guildhall Police Court. The tone of that leader was as favorable to the criminals as though it had been penned by a special pleader fee’d for the purpose. It

called forth on every side loud expressions of dissent and disgust. The whole banking fraternity were specially indignant, inasmuch as the facility with which such crimes as those attributed to the Collies were committed was said to be owing to the laxity of the banks, a n they must have known, or surmised, the teal value of the paper with which they dealt ; therefore the Collies could not have been so very guilty after all, Such was the gist of the Times' argument, a pitiful role for the great journal to play at a time when brave attempts are being made to purge our Stock Exchanges and our commercial system of the trickeries, immoralities, and frauds which have assumed so colossal a growth of late years. Shamed by the outburst of public disapproval which followed that apology for thieves, in a subsequent article the Times considerably modified its tone.

After the first arraignment of Messrs Collie, at Guildhall,} owing to a difficulty regarding bail, they were conveyed in the prison van to Newgate, in whose stone cells they spent about thirty reflective hours When they were released, remembering our Lizardi’s case of flitting to Spain, the magistrate and bank solicitors were very scrupulous about the position and standing of the sureties. On the 28th ult, the case was proceeded with before Sir Thomas White, and from the evidence furnished on that occasion, we can form some idea of the nature of the frauds perpetrated, and also of the line of defence ready to be taken up by Sergeant Ballantyne in the interests of his clients. The chief witness under examination was Mr Percy Sanderson, of the firm of Sanderson and Co, bill brokers, of Lombardstreet, whose suspension in May last inaugurated the commercial crisis. This firm was the principal channel through which the Collies passed their fictitious bills into circulation. The total amount of this paper rubbish manufactured and issued is believed to be from a million and a half to a million and three quarters sterling, and the loss falling to the share of the London and Westminster Bank is estimated at between £200,000 and £BOO,OOO. The contest will evidently rage around the question as to what constitutes an accommodation bill. Much evidence will be forthcoming beyond that supplied by Mr Sanderson and others as regards the value placed in the city on certain marks and words on the face of a bill. It is the custom, the unwritten law of the city, which has to be elucidated before the measure of responsibility for these particular titles can be ascertained. Sergeant Ballantyne strives to show that the practice of adding after “ value received” the words, "goods account,” and such marking of initials as would be on a bale or on a bill of lading, would not necessarily mean that the goods in question were under the control of the drawer or acceptor. This contention appears to be that goods drawn for may have been parted with, resold, and another bill drawn in respect of them, and that the marking referred to would not indicate that such could not be the case, or that there were no goods represented by the amount drawn. But all this quibbling and hairsplitting leaves untouched the great moral principles which should regulate all dealings between man and man. Even if defendant’s counsel is able to prove ever so clearly that the practices resorted to by the Collie clique for obtaining vast sums of money are of frequent occurrence in the city, those practices are not on that account less culpable or dishonest, nor should the guilty ones, when detected, be suffered to escape the punishment due to their crimes.

Almost every day is bringing to light some fresh iacts showing the ramifications of this scandalous commercial conspiracy. Last week a meeting was held of the creditors of Messrs Alexander, Son and Co, when a state of affairs was revealed that might startle the whole community out of their apathy. This was one of the confederate firms who co-operated with the Collies in their public plundering. The liabilities are found to be £210,535, while the assets are only £34.254. But it transpired at the meeting that Alexander Cflllie has since 18G7 been a senior partner in this firm, and to the extent that he was so drew bills on himself up to 1874. It does not appear that the Alexanders got a commission for accepting the Collie bills, but about that time Collie accommodated the firm by taking over bills afloat to the amount of £178,000, asking no questions as to their value. Collie’s share of the capital, supposed to belong to the firm, was £IO,OOO, but there is no record to show that that sum was ever paid in by him.