A BANKRUPT FARMER.

Shannon News, 4 June 1926, Page 2

A BANKRUPT FARMER.

MEETING OF CREDITORS. There was a large attendance 01 creditors present at a meeting called in respect to the bankrupt estate of Edward Bloomfleld McGill, farmer, oi Koputaroa.

Those present were the D.O.A. (Mr C. E. Dempsey), Means A. A. Langley, A. S. Fake (Public Trust Office), P. Larcomib (Abraham and Williams), E. D. Bell, H. Fowler (Johnston and Co.), J. McDowell (CollinsQn and Gunninghame), W. P. Shortland (Farmers' Federation), 14 H. Hutchinson (Mrs McGill), H. J. Harvey, T. J. Rogers, A. Palmer (Hayward Vulcanising Co.), Taylor (New Zealand Loan and Mercantile), James McGill, P. Stuart (Manawatu Mills', Ltd)., W. Newlands (Broadway Motors), F. Hall and H. F. Wilson (Mauson and Barr). THE WRITTEN STATEMENT.

In his written statement, bankrupt stated that he, was set up in business as a dairy farmer toy his father in 1920. In conjunction with aMr Spiers, bankrupt and his father acquired, a block of land at Koputaroa from the late Mr Walter Bock. It was part of the purchase arrangement that he should take over an area of 196 acres at £SO an acre. In addition to this, it was arranged that the deposit ot £2500 which was paid to Mr Bock in respect of the whole property should be credited against his purchase money. Bankrupt found no money, his father finding whatever Was paid. Bankrupt purchased, stock for the pro perty out of an overdraft which was provided for him and he also spent a fair amount of money in putting the dwelling into a reasonable condition. His operations were not very successful and he was forced to approach Mr Bock for concessions. Mr Bock. appareutlv, realised that bankrupt had paid too much for the land and agreed to a .re-arrangenienit of the whole transaction. This enabled bankrupt to sell 100 acres at £35 an acre, receiving £SOO cash (which MiBock allowed him, to (retain) Mir Bock taking ' the remaining £3OOO as part satisfaction of the liability and granting bankrupt a reduction of £5 an acre all over. This reduced his indebtedness to Bock to £3300. Out of the £SOO, bankrupt paid Bock £l7; back interest, and the balance was to be expended in drainage and banking ■' works. Even alter the adjustment, the farming operations were not successful. Finally in 1924,/he borrowed £ISOO from his wife, giving her a second mortgage over the land as security. £3OO of this was used to purchase a motor car. His bank overdraft was then guaranteed toy his wife and father, the bank taking securities over the stock and a submortgage; of the security given' to his wife. He had hoped that the improving of the banking and drainage would make the land productive, but these hopes had not been realised. The land had been constantly flooded every year during his occupancy; crops had been destroyed, grass-seed-ing and stock lost and generally a large amount of expense incurred. Bankrupt had kept no books, but all money received frcun the farm, which was his only, source of income, had ■been paid into his account at the National Bank of New Zealand and all payments had been by cheque. From this should be excepted certain advances secured against cream cheques. The receipts for butter-fat for the past three seasons were as follow: 1923/24, £657; 1924/25, £511; 1925/26 (to date), £323. Bankrupt could only attribute, his failure to the nature of the property purchased by him, which from the very start was a losing proposition, and he had no offer to make to his creditors. FURTHER EXPLANATION.

In answer to the D.O.A. bankrupt stated that he was on the farm lor six years and his stock was under mortgage to the National Bank. There was no security on the instruments. He did li'Oit place them in his list of assets, lor he was under the impression they were under security to the Bank. The motor-car was included ,iii the list of assets and was not secured to anyone. The furniture belonged to his wife, it being insured in her name for two years or more . It had never been insured before that. .The. £253 liabilities for the two motor gara.ges, was partly incurred by repairs to a tractor lent to bankrupt and another portion of the sum was the balance on the car. The account

due to the butcher's had been running far about three years, mid the ■bills for the New Zealand Wine CO., and Johnstons, Ltd., were for wine and spirits respectively. The account of Booth, McDonald was for a disc plough on the farm, which was'not under impediment. There was £SO owing to Mr Mark for rent of a, piece of ground. There was twelve months interest owing to the Public Trust Office. He had never owned, kept or been .interested in a race-horse. The reduction in the .butter-fat was due to floods. The milking plant was not under security.

To Mr Larcoinb, bankrupt stated that the £ISOO received from his wife in 1024 was used to buy the car, reduce his overdraft from £1350 to £OOO, to pay Manson and Bar,r about £29:) and he used the remainder to pay sundry accounts and for repairing the flood-protection bank. How much this cost he could not tell and dt was not yet finis'hed. Some of the money from Mr 'Bock was also used for this purpose. To Mr Short-land, bankrupt stated lie bought the car two years ago. He i did not know, the exact date and would not deny that he .bought it on April 28, 1024, depositing £2s' and paying a further £3OO on Ootoiber 20, 1924. Mr Shortland: "You saw fit to> purchase a car when your butcher's and' household accounts had not been paid for twelve months previous?"—"The

car belonged to my wife, but I made all the arrangements. No interest had been paid on the mortgages to my wife or father." '

"According to your statement, during the lasit three years you have received something between £4OOO and £SOOO on income from, the farm and loansi received; can, you tell us how much you have paid out in interest in that time?"—lnterest £l9O, rates £45, and insurance £l2. As bankrupt, could not remember what his outgoings were, he said he would produce a statement for the D.O.A.

In reply to Mr Shortland, bankrupt said he had not done much backing on race-horses. He had bet £IOO on one occasion on commission.

Mr Shortland: "I think it would i:o safe to say that you. were following the very keenly and betting heavily."—No. "Is it true, that vouj made boasts in your district that as soon as you got your discharge, you would obtain finance for another farm?"—lt is a lie. The D.0.A.: When did you realise you were bankrupt?—Three or four months ago. Mr Shortland: Did you make any attempt to economise? As an example you could have cut out this car ra et?—l never used the .car very much. Your wife at any rate realised your financial difficulties two years ago, when; she lent you the £1500.-1 don't think she knew at all. To Mr Larcomb: There are-about 40 tons of seed potatoes under mortgage to the Manawatu Mills. The bailiff has taken possession and they are worth about £4 a ton. He toi.i Abraham and Williams that he was putting the fertiliser on someone else's ground. The bailiff was claiming £6l. There was nothing in the assets to show that there was £loj profit on the crop of potatoes. There was about 10 acres laid down.

To the D.0.A., bankrupt stated that the Bank held his wife's mortgage as security for his own overdraft. She was not a rich woman and gave all she had and was still liable as his guarantor. The meeting was adjourned sine die.'