A rapid decline of trade during the last few months was given as the cause of the crises which led to James Hugh Nicholson, boot and shoe manufacturer, Victoria-road, Rushden, calling together his creditors, who met at Messrs. A.C. Palmer and Co.’s Rushden office on Wednesday afternoon.
Mr. J. Stevens, of Messrs. Stevens and Co., Leicester, was voted to the chair, and the statement of affairs was presented by Mr. H. Claude Palmer. The amount owing to unsecured creditors was £2,130, and the net value of assets was £804, leaving a deficiency of £1,375. The assets included a balance of £336 from securities in the hands of Messrs. England, Smith and Co., who are partly secured creditors for £1,742. Debts were valued for realisation at £180, stock-in-trade at £180, loose plant and machinery at £82, and a motor car at £25.
Mr. Palmer stated that the debtor, who had been in business in Rushden for many years, much regretted that he had to meet his creditors as the present depression in the trade had so reduced orders that it was impossible for him to carry on any longer. The item of £2,180 due to unsecured creditors, represented mostly trade goods supplied. The creditor fully secured was Messrs. England, Smith and Co., who in March, 1924, advanced £1,400 on security of the factory and a dwelling-house in Manton-road. There was also a goods account with interest, but he believed Messrs. England Smith contemplated the question of foregoing the claim to interest. The advance of £1,400 was used in paying off the bank overdraft, which in December, 1923, amounted to £1,377.
The real property in Victoria-road had cost Mr. Nicholson £2,499, and it now stood in the books at £2,364. The factory was well arranged and capable of turning out 2,000 pairs per week, but owing to the extremely depressed state of the property market, and particularly boot factories, it had been valued at the low figure of £1,200. The house was valued for the purposes of the statement at £550.
Mr. Nicholson’s accounts had been regularly made up and audited during the whole time he had been in business. His net profits to August 31, 1921, were £971, his drawings £339 and the capital remaining £2,450; for the 14 months to October, 1922, there was loss of £263, and the drawings were £516. Subsequent figures were: Dec., 1923, loss £869, drawings £33; Dec., 1924, loss £180, drawings £337; 1925, profit £872, drawings £293; 1926, net profit £445, drawings £289; 1927, profit £281, drawings £244; 1928, loss £103, drawings, £339; 1929, net profit £580, drawings £313, capital remaining £825.
From that date up to the present statement, there was a net trading loss of £84 only, and the debtor’s drawings were £111, which left his capital on the balance sheet at £806.
The trading accounts showed in 1925 a turnover of £20,139; 1927, turnover £21,508, wages 26.3 per cent., gross profit 10.5 per cent; 1928, turnover £24,403, wages 23.7, gross profit 8.1; 1929, turnover £18,318, wages 25.2, gross profit 13.4; and the subsequent 4½ months a turnover of £4,495, wages 25 per cent., gross profit 8¾ per cent.
It would be seen from these figures, added Mr. Palmer, that Mr. Nicholson was fully justified in expecting his business to revive, as although the sales for 1929 had fallen, the gross profit had actually increased, and his percentage was raised. Unfortunately these hopes had not been realised, as the sales for 1930 had progressively fallen until there were practically no orders left to execute a common complaint in the industry to-day. Trade during March was £972, April £564, and the portion of May £89.
“I think Mr. Nicholson has been perfectly honest in every way,” said Mr. Palmer in conclusion. “He is quite unable to make an offer, and he has no faith in the trade.”
The chairman commented that if Mr. Nicholson had pulled up at the time of the mortgage made by Messrs. England Smith his portion would have been worse than it was now.
Very few questions were asked, and it was decided to circularise creditors with a view to a deed of assignment being executed in favour of Mr. H.C. Palmer. A small committee of inspection was appointed.
Creditors for amounts over £10 are as follows :- W. L. Hector, Ltd., Higham Ferrers £281, J. Carter and Son, Ltd., London £255, Stevens and Co., Leicester £243, R. R. Brown, Rushden £218, J. Bland and Sons, Stanwick £213, Standard Engineering Co., Ltd., Leicester £12 14s., Jonathan Harris and Son, Ltd., Cockermouth £44, J. W. Wood and Co. £66, G. H. Fracknall and Co., Northampton £58, Anglo-American Chemical Co., Leicester £33, British United Shoe Machinery Co., £36, F. Toseland and Son, Northampton £26, W. J. Neville, Rushden £10, E. A. Chettle and Co. £79, Seddon and Arlidge, Ltd., Kettering £83, Goodyear Rubber Co., Wolverhampton £24, J. Joyce, Rushden £20, J. S. Clipson, Rushden £11, W. L. Grant, Leicester £71, J. Lilley, Rushden £16, Job Lee, Ltd., Kettering £13, Geo. Tucker Eyelet Co., Birmingham £13, T. H. and J. Daniels, Ltd., Stroud £32, Gilpin Bros., Birmingham £24, Rushden Gas Co., £32, A. C. Palmer and Co. £75.