Page 139 - The_story_of_the_C._W._S._The_jubilee_history_of_the_cooperative_wholesale_society,_limited._1863-1913_(IA_storyofcwsjubill00redf) (1)_Neat

The Industrial Bank Fails.
"
to the refusal of certain other societies to join, and to the con-
tinued hesitation of the Industrial Bank," they decided to purcliase
the whole concern for £26,000, to retrieve an equal amount aheady
at stake. The remainuig creditors received, ultimately, Is. 3]d. in
the £. Under the name of the Tyne Engine Works the busmess was
kept going by its new owners through the bad trade of 1879, being
helped in 1878 by an £11,000 contract for the s.s. Pioneer ; but in
1881 it was sold for £23,000. The creditors were paid in full; and
the shareholders received 5s. in the £. The Wholesale Society's loss
was about £8,000, a larger sufferer being the Halifax Society.
Naturally, the first Ouseburn failure, in 1875, was disastrous for
its financial partner, the Industrial Bank. In September, 1876, a
transfer of the latter enterprise to the C.W.S. was under arrange-
ment; and the Wholesale's bank manager went to Newcastle to
mediate between the C.W.S., the Industrial Bank, and some northern
societies. On October 5th, 1876, the draft agreement for the transfer
was being considered by the C.W.S. Finance Committee. They had
just decided that the terms of the Industrial Bank could not be
entertained, because " contrary to the spirit of previous resolutions,"
when a telegram dramatically announced that the northern bank
had stopped payment. It was at once resolved to open a branch of
the C.W.S. Bank at the Wholesale's Newcastle offices, and to acquaint
the northern co-operators. Some of the latter were almost panic-
stricken. CramUngton Society was less badly hit than Consett and
Blaydon, but the Cramlington jubilee history narrates that, out of
a capital of £26,000, the society had £10,531 locked up in the
Industrial Bank at the time of its closure. The Wholesale Society
was doubly affected. It had to face a sudden withdrawal of
retail societies' loans while meeting equally urgent applications for
overdrafts.
And the Wholesale Society itself was in a difficult position.
Yielding, as the bankers of the movement, to the spirit of expectation,
it had allowed substantial overdrafts to unsound, and largely
unco-operative, companies in other places than Newcastle. These
concerns banked with the C.W.S., and their apphcations had been
excellently supported, and securities given. Productive societies,
also, had turned to the Wholesale for funds. One of these, \Nhich
afterwards went into liquidation, at uiie time apphed for £1,500
on the security of goods valued (by the producers) at £2,000,
which were to lie in the warehouse of the C.W.S. until redeemed !
When the Committee dechned to make BaUoon Street the pawnshop
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