INSOLVENT DRAPERS.

Taranaki Daily News, Volume LVI, Issue 224, 21 March 1914, Page 4

INSOLVENT DRAPERS.

MOREY AND MOORE. DISSATISFIED CREDITORS. LEI.JAL ADVICE TO BE TAKEN. At tlic adjourned meeting of the creditors in the bankrupt estate of Morey and -\loorr, x of New Plymouth, drapers, held at'the oll'iee of the D.O.A. (Mr J,. S. S. Medley) yesterday, there was an attendance of ten creditors and their representatives. Mr A. Be-wley appeared for the firm and for Mr Morey, and Mr D. Hutchen for Mr Moore,

Mr A." Bewley, in reply to a question from the D.0.A., stated that he could make no oiler on behalf of the bankrupts. He hud hoped to be able to make an offer on behalf of Mr Morey, bufr this was impossible. AN ACCOUNTANT'S VIEWS. :

Mr Hugh Baily, accountant and auditor, then reported at some length on the position as he had made it out from the book 3 of. the bankrupts. He had first taken out the cash transactions as shown by the bank books for the past 12 months, and these showed little. to be wrong. It was when he turned to the cash accounts in the bankrupts' book* that he began to see the position more clearly. After quoting figures at length, he pointed out that in the last 12 monthsVMorey drew £3lO (including the loan o! £135 from Mr S. J. Smith) and Moore £39 15s, the sum of £9 Is being handed to the D.O.A. The difference between the loans paid and tho3e received was accounted for by the assistance given by merchants to protect their paper. In 1913, excent for a shortage -in the cash and the drawings by Morey, there was nothing wrong. In order to try and account for the position into which the firm had got, he weut back through the whole period in which they bad. been in business, and found that in practice the bankrupts had frequently held cash in hand, according to the books, up to as much as £2OO. but thi3 cash was not alwavs there, being represented bv 1.0.U.'s for interim drawings, which were from time to time charged up to the partners' separate accounts. In everv instance where these 1.0.U.'s were redeemed, it appeared that it was by borrowing money... that this was made -lossible. These loans the. bankrupts had been repaying at a. ridiculous rate. To one Srm alone £4 Tier week had been naid from 1910 to 1912. This firm had been lending the bankrupts £SO from time to time. From this the position had arisen that this £4 per week'was a drawing. From September, 1911, to May, 1912, £220 had been paid in this way. Then £5 per week had been paid to'another firm, so that drawings had freauentlv been £9 per week in addition t% wages, which at one time were £3 10s Der week each.

SOME PERTINENT QUESTIONS. Tlie bankrupts at this stage Imd.a brisk altercation with Mr Baily, in which they alleged that the amounts borrowed were put into the business, und could not be called drawings. Mr Baily rejoined that it was a si»nifieant fact that the loans and the repayments of cash shortages, were always simultaneous. Repayment of borrowings at times amounted to 'f 10 per week, and that was where the monev had gone. '

Mr Sole asked for details of the outside borrowings. Mr Baily replied that these were not in the books. On one occasion the bankrupts had borrowed £l5O in September and paid buck £l7o' in Mav. Mr drey asked if the drawings decreased when the business fell off. Mr Baily said that in 1911 and 1012 they were at their highest. • Mr Grey: That looks as if they were at their highest when things were slack. Considerable discussion on the lines of that indulged in. at last meeting then ensued.

Mr Baily* gave particulars of loans amounting to £930, all on promissory notes, which they wpaid as shown, and the money went into the business when tile cash shortage was too heavy to stand it. In reply to a question 'from Mr Grey, be said that if, the 1 bankrupts had not made the drawings they would not have needed the loans.

The bankrupt Moore: Then had we no right to draw any money at all? Mr Baily: I am not charging you with taking the monc<- but simplv explaining the position to the creditors In reply to Mr Weston, he said that Morey bad £232 up to October 7 out of the last year. He - could onlv presume that Morey's drawings were equal, as the latter said thev had periodical' balances. ' '

Mr grey: That's ,not such a great deal Mr Baily: Not if. the business warranted it. In .1013 Morev had £3OO. and there was a shortage in the cash of

The bankrupt Morey said that the •drop in turnover, stated at £2OOO bMoore, was ridiculous. He quoted the books to show that from 1003 (£4000) to 1013 (£4200) the turnover had been consistent. After a little discussion, Mr Baily said the turnover had not fallen off it was the consistent drawings that had done the trick. , Mr Ramson finally'asked for an explanation of the deficit. It was no use beating about the bush. Would th" bankrupts say where 'the money had gone? The bankrupt Morey said it went in doctors' and chemists' bills, health trips interest on loans and on small personal bans. He had given an explanation at the previous meetiiw. Creditors stated that this wa? t«o vague. Mr Morey said 'he had told them on-e where it had gone. Mr Sole: That amounts'to savin" .vou had it; £I3OO was -one, and onlv £SOO traced. Further heated eross-qucstionin« ensued. Mr Ramson said the deficit was so' large that creditors began to think it was due to outside causes. Mr Baily said the position was that the bankrupts had drawn too heavilv when there were no profits. Thev might or might not, have known their position. Mr Sole: Tt looks as if thev did. FURTHER PROCEEDINGS.

Hie bankrupt Morey was then severely cross-questioned as to his doinjrs. He stntod that he was penniless, and took no money out of the business. He had done no betting. Mr Bewley thought that Morey had really been muddled in the matter. Mr Baily said that the books were muddled. That was the real position. The bankrupt' Morey said he would take the blame. He had not got help from -Auckland, because the man to whom he was going to'apply had gone to Wellington, He asked for a further