Charitable Corporation
Encyclopedia
The Charitable Corporation was an institution in Britain
intended to provide loans at low interest to the deserving poor, including by large-scale pawnbroking. It was established by charter
in 1707. Its full title was "Charitable Corporation for the relief of the industrious poor by assisting them with small sums upon pledges at legal interest". It became dishonest, and Smollett
called it a "nefarious corporation". Certain of the directors
speculated wildly and lost most of the shareholder
s' money.
.
The company published a pamphlet
in 1719, setting out its practice. The procedure was that a borrower took goods to one of the corporation's warehouses and signed a bill of sale
. The warehouse keeper valued the pledge and he and an assistant signed a certificate. This was passed to the bookeeper for entering in the corporation's accounts, and then to the cashier who paid the borrower his loan. Both the warehouse keeper and the cashier were required to give security, and there were surveyors of warehouses to act as a check on the warehousekeepers. Furthermore the books were signed every night. Unredeemed pledges could be sold after a year. The borrower had not only to pay lawful interest (five per cent), but also fees of a similar amount, so that the company was actually receiving considerably more than "lawful interest". These systems should have been sufficient to prevent fraud, but in the late 1720s, compliance with the procedure became lax, opening the way to fraud
on a massive scale.
The original warehouse was at Duke Street, Westminster
, but was in the company's early years replaced by one at Spring Garden near Charing Cross
, London. By the mid 1720s, the main warehouse was in Fenchurch Street
, London
but that at Spring Garden was retained. The Spring Garden warehouse was on the site of 39-41 Charing Cross.
Committee, little business was done until 1725, when a new committee (Board of Directors
) was appointed in October 1725, consisting of Sir Robert Sutton
, Sir John Meres
, Sir Fisher Tench
, Dennis Bond
, Archibald Grant
(later Bt), and others. They proceeded to appoint officers, including John Thomson
as warehousekeeper and Mr Clarke as surveyor in November 1725. Following a deficiency at the Spring Garden warehouse, the surveyor was required to report weekly to the Committee concerning pledges at the Fenchurch Street warehouse, but Thomson the warehouse keeper instead procured his dismissal in May 1726. William Burroughs joined the Committee in March 1727, and William Aislabie and Hon. Walter Molesworth in December 1729. Assistants were also appointed from 1726, including William Squire, George Jackson and John Torriano (disqualified from office in 1729).
The accomptant's key was removed from him and handed at Thomson's request to a menial employee, giving him control of all three keys. Thomson's creatures Richard Woolley and Thomas Warren were appointed as his assistants. This had the effect of removing the checks on the officers. Previously, two officers had been needed to conduct any business, but the effect was to give Thomson unrestricted access to the warehouse. When they discovered that the checks had been removed, Sir John Meres resigned from the committee, as did Sir Fisher Tench, though Viscount Percival
blamed him for allowing his son to remain as cashier. Sir Fisher Tench left on 22 December 1726, and Sir John Meres on 23 December 1729. In 1726 and 1727 orders had been made for weekly accounts to be available for the Committee to inspect, but this was not done. Thomson also did the cashier's work in the absence of William Tench, and the accomptant's in the absence of Jeremiah Wainwright, but Walter Molesworth, George Jackson and John Torriano. The Committee also authorised more than £1000 to be lent on one pledge - up to £2000, and more with the consent of the Committee.
do so. By October 1731, over £101,000 in notes had been issued.
. They bought shares in it, and those shares rose in value.
While Grant was in Scotland, they needed to buy more shares at a time of difficulty in February 1728, due to the petition of the City of London. The chronology of this is confused as the petition was later (see below). These shares were bought for the account of four partners (excluding Grant, who was in Scotland about mines). All this was financed by borrowing money from the Company on false pledges. At one point they thought that the profits would redeem all pledges, except Robinson's. The management of affairs was left to Thompson. The purchases were made by various persons as trustees, but Robinson persuaded the trustees that their pledges to transfer the stock to the rest of the syndicate were lost, and got the shares issued to himself, further swindling his partners to the amount of £100,000.
The partnership of five also invested in the Duke of Argyll's mines in Morvern
and Mull
, Grant and Burroughs buying (at a premium) in April 1730 the lease granted to Sir Alexander Murray in 1727. The Morvern mines were in fact at Glendow. They took mines on Kinlochalin and on the estate of MacLean of Kingairloch, also mines at Aar and Sandhall in Norway
. All these were financed by loans on false pledges.
petitioned the Parliament of Great Britain
in March 1731, for relief against the "unreasonable and exhorbitant rates" charged and the low prices achieved on sale of unredeemed goods. This was supported by a petition from merchants and other traders in London and by the silkweavers and worsted manufacturers of Spitalfields
. They alleged that pledges were often sold at 20% below the production cost; this discouraged industry and encouraged fraudulent bankrupts. The Company procured opposing petitions, which claimed that the Company did nothing contrary to their charter and their powers "greatly conduce to prevent usury
". Pamphlets published at the time referred to pawnbrokers charging 30%. The matter was rapidly considered by House of Commons (in Committee of the whole House) who heard witnesses, several of whom were in prison for debt. The Committee reported:
A bill was introduced accordingly, but had only been passed by the Commons, when the king prorogued Parliament. on 7 May 1731
, but soon after the whole financial edifice collapsed. In October 1731, Thomson and Robinson absconded, going off suddenly to France. Robinson was back by 25 November and appeared before the General Court of the Company. By 18 December, he was in hiding again because the Company would not supersede the Commission of bankruptcy against him. He had "seen fit to absent himself from the kingdom", according to William Goostry, his attorney. The bankruptcies of Robinson (called a banker and broker) and Thomson (called a merchant) were advertised on 26 October.
The General Court of the Company appointed a committee to investigate, and this reported on the magnitude of the fraud committed against the company the following January. The accounts showed nearly £400,000 due from borrowers, but there were certificates only for £150,000, out of which £44,000 had unsigned certificates. However, less than £40,000 worth of goods were lodged in the warehouses as pledges.
Parliament quickly passed an Act to compel Robinson and Thomson to appear, or be guilty of a felony
. The Commons appointed a Committee to investigate, and this produced a detailed report on the affair. At the end of the session, two further Acts were passed. One appointed Commissioners to determine the rights of the shareholders and creditors; for the Charitable Corporation to appoint an assignee in bankruptcy in respect of Thomson and Robinson, and to compel John Thomson. the warehouse keeper's father to appear before the commissioners in England on pain of being declared a felon. The other required, Sutton, Grant, Bond, Burroughs, Wooley and Warren to deliver particulars of their estates to the Barons of the Exchequer. William Squire was required to surrender himself and do the same, while Burroughs was committed to the Fleet Prison
until he complied. All of them (except Squires) delivered inventories accordingly, and they were printed by order of the Commons Committee. It is probable that Squire remained abroad, as no further reference to him occurs in the London Gazette
.
Neither Robinson nor Thomson complied. However, during the next session, Thomson offered to return under certain conditions, and an Act was passed extending time and requiring him to appear before Parliament (or a committee of it) by 30 March 1732 and before his bankruptcy commissioners by 4 April. If he complied, he would be rewarded with a fifth of the assets overseas, which he delivered up, and one tenth of those in Great Britain. Thomson complied and appeared before a Commons Committee, which produced a further report. Two further Acts were passed at the end of the session. One was to confirm an agreement between the Charitable Corporation and its three-quarters of its creditors and make it binding on those under disabilities. The other authorised a lottery for the relief of those who suffered from the frauds, specifically excluding Robinson, Thomson, Wolley and Warren from benefitting. It also extended the time for submitting claims to the Commissioners. A further Act was passed in 1735, extending the time for claiming prizes.
proceedings against George Robinson and John Thomson continued for a long time, evidently due to litigation. They ended with a dividend
being paid from Robinson's estate in 1748, and from Thomson's in 1747. Proceedings were taken against Sir Robert Sutton, leading to judgment being given in 1742 against him, that he was liable to make the Company's losses though the Five Partners were primarily liable (see The Charitable Corporation v Sutton). Following the decree, the company sought to obtain an Act to assist with the enquiries directed by the Court of Chancery
on 18 August 1742, but this was rejected. In 1743, Sutton and the Company entered into a deed of mutual release.
The subsequent history of the company remains unclear.
Kingdom of Great Britain
The former Kingdom of Great Britain, sometimes described as the 'United Kingdom of Great Britain', That the Two Kingdoms of Scotland and England, shall upon the 1st May next ensuing the date hereof, and forever after, be United into One Kingdom by the Name of GREAT BRITAIN. was a sovereign...
intended to provide loans at low interest to the deserving poor, including by large-scale pawnbroking. It was established by charter
Charter
A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified...
in 1707. Its full title was "Charitable Corporation for the relief of the industrious poor by assisting them with small sums upon pledges at legal interest". It became dishonest, and Smollett
Tobias Smollett
Tobias George Smollett was a Scottish poet and author. He was best known for his picaresque novels, such as The Adventures of Roderick Random and The Adventures of Peregrine Pickle , which influenced later novelists such as Charles Dickens.-Life:Smollett was born at Dalquhurn, now part of Renton,...
called it a "nefarious corporation". Certain of the directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
speculated wildly and lost most of the shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s' money.
Origin
The original object was that small tradesmen might obtain loans by depositing a pledge in the corporation's warehouse, so that they might not have to sell goods at an undervalue when suffering cash flow difficulties. The initial capital was £30,000. This was increased to £100,000 in 1722, then £300,000 in 1728, and finally £600,000 in 1730. In effect, the corporation was a pawnbrokerPawnbroker
A pawnbroker is an individual or business that offers secured loans to people, with items of personal property used as collateral...
.
The company published a pamphlet
Pamphlet
A pamphlet is an unbound booklet . It may consist of a single sheet of paper that is printed on both sides and folded in half, in thirds, or in fourths , or it may consist of a few pages that are folded in half and saddle stapled at the crease to make a simple book...
in 1719, setting out its practice. The procedure was that a borrower took goods to one of the corporation's warehouses and signed a bill of sale
Bill of sale
A bill of sale is a legal document made by a 'seller' to a purchaser, reporting that on a specific date, at a specific locality, and for a particular sum of money or other "value received", the seller sold to the purchaser a specific item of personal, or parcel of real, property of which he had...
. The warehouse keeper valued the pledge and he and an assistant signed a certificate. This was passed to the bookeeper for entering in the corporation's accounts, and then to the cashier who paid the borrower his loan. Both the warehouse keeper and the cashier were required to give security, and there were surveyors of warehouses to act as a check on the warehousekeepers. Furthermore the books were signed every night. Unredeemed pledges could be sold after a year. The borrower had not only to pay lawful interest (five per cent), but also fees of a similar amount, so that the company was actually receiving considerably more than "lawful interest". These systems should have been sufficient to prevent fraud, but in the late 1720s, compliance with the procedure became lax, opening the way to fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
on a massive scale.
The original warehouse was at Duke Street, Westminster
Westminster
Westminster is an area of central London, within the City of Westminster, England. It lies on the north bank of the River Thames, southwest of the City of London and southwest of Charing Cross...
, but was in the company's early years replaced by one at Spring Garden near Charing Cross
Charing Cross
Charing Cross denotes the junction of Strand, Whitehall and Cockspur Street, just south of Trafalgar Square in central London, England. It is named after the now demolished Eleanor cross that stood there, in what was once the hamlet of Charing. The site of the cross is now occupied by an equestrian...
, London. By the mid 1720s, the main warehouse was in Fenchurch Street
Fenchurch Street
Fenchurch Street is a street in the City of London home to a number of shops, pubs and offices. It links Aldgate at its eastern end with Lombard Street and Gracechurch Street to the west. To the south of Fenchurch Street and towards its eastern end is Fenchurch Street railway station...
, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
but that at Spring Garden was retained. The Spring Garden warehouse was on the site of 39-41 Charing Cross.
Expansion
According to the subsequent report of a House of CommonsHouse of Commons of Great Britain
The House of Commons of Great Britain was the lower house of the Parliament of Great Britain between 1707 and 1801. In 1707, as a result of the Acts of Union of that year, it replaced the House of Commons of England and the third estate of the Parliament of Scotland, as one of the most significant...
Committee, little business was done until 1725, when a new committee (Board of Directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
) was appointed in October 1725, consisting of Sir Robert Sutton
Robert Sutton (diplomat)
Sir Robert Sutton KB was an English diplomat and then politician.-Early life:He was the elder son of Robert Sutton of Averham, Nottinghamshire, and his wife, Katherine, the daughter of the Revd William Sherborne of Pembridge, Herefordshire...
, Sir John Meres
John Meres
Sir John Meres knight, FRS of Kirby Bellars, Leicestershire was the director of a number of companies in the early 18th century, including the Charitable Corporation, the York Buildings Company, and Company of Mineral and Battery Works...
, Sir Fisher Tench
Sir Fisher Tench, 1st Baronet
Sir Fisher Tench, 1st Baronet was a City of London financier, who was a Member of Parliament and a director of several companies.-Background:...
, Dennis Bond
Denis Bond (MP)
Denis Bond , of Creech Grange, Dorset, was English Member of Parliament for Dorchester, Corfe Castle, and Poole. He was also a director of the Charitable Corporation at the time of its collapse...
, Archibald Grant
Sir Archibald Grant, 2nd Baronet
Sir Archibald Grant , 2nd Baronet in his early life was a company specualtor and the Member of parliament for Aberdeenshire, 1722–1732...
(later Bt), and others. They proceeded to appoint officers, including John Thomson
John Thomson (fraudster)
John Thomson was warehousekeeper to the Charitable Corporation, but participated in a fraudulent scheme that deproved it of the bulk of its assets.- Charitable Corporation :...
as warehousekeeper and Mr Clarke as surveyor in November 1725. Following a deficiency at the Spring Garden warehouse, the surveyor was required to report weekly to the Committee concerning pledges at the Fenchurch Street warehouse, but Thomson the warehouse keeper instead procured his dismissal in May 1726. William Burroughs joined the Committee in March 1727, and William Aislabie and Hon. Walter Molesworth in December 1729. Assistants were also appointed from 1726, including William Squire, George Jackson and John Torriano (disqualified from office in 1729).
The accomptant's key was removed from him and handed at Thomson's request to a menial employee, giving him control of all three keys. Thomson's creatures Richard Woolley and Thomas Warren were appointed as his assistants. This had the effect of removing the checks on the officers. Previously, two officers had been needed to conduct any business, but the effect was to give Thomson unrestricted access to the warehouse. When they discovered that the checks had been removed, Sir John Meres resigned from the committee, as did Sir Fisher Tench, though Viscount Percival
John Perceval, 1st Earl of Egmont
John Perceval, 1st Earl of Egmont PC, FRS , known as Sir John Perceval, 5t, from 1691 to 1715, as The Lord Perceval from 1715 to 1722 and as The Viscount Perceval from 1722 to 1733, was an Anglo-Irish politician....
blamed him for allowing his son to remain as cashier. Sir Fisher Tench left on 22 December 1726, and Sir John Meres on 23 December 1729. In 1726 and 1727 orders had been made for weekly accounts to be available for the Committee to inspect, but this was not done. Thomson also did the cashier's work in the absence of William Tench, and the accomptant's in the absence of Jeremiah Wainwright, but Walter Molesworth, George Jackson and John Torriano. The Committee also authorised more than £1000 to be lent on one pledge - up to £2000, and more with the consent of the Committee.
Issue of Notes
To increase the funds available to them, the Committee decided (contrary to the provisions of their charter) to issue notes. Initially they employed Thomas Jones to circulate these. Later they authorised George RobinsonGeorge Robinson (swindler)
George Robinson was an English stockbroker and swindler in the 1720s and early 1730s. A banker in Lombard Street, he was appointed the circulating cashier of the Charitable Corporation...
do so. By October 1731, over £101,000 in notes had been issued.
The Partnerships of Five and of Four
A little while after Thomson became warehousekeeper, several of those involved in the management of the Corporation started speculating in shares on a very large scale. This seems to have begun because Grant owed money to Thomson, and both he and Burroughs had debts to Robinson from earlier stockjobbing. The Partnership of Five consisted of Sir Alexander Grant, William Burroughs, William Squire, George Robinson, and John Thomson. In October 1727, they began to buy the Corporation's shares, this all being handled by Robinson who was a broker in Exchange Alley. They then heard of lead mines in Scotland belonging to Sir Robert Sutton and others, whose sale they proposed to the York Buildings CompanyYork Buildings Company
The York Buildings Company was an English company in the late 17th and early 18th centuries.-Waterworks:The full name of the company was The Governor and Company for raising the Thames Water at York Buildings...
. They bought shares in it, and those shares rose in value.
While Grant was in Scotland, they needed to buy more shares at a time of difficulty in February 1728, due to the petition of the City of London. The chronology of this is confused as the petition was later (see below). These shares were bought for the account of four partners (excluding Grant, who was in Scotland about mines). All this was financed by borrowing money from the Company on false pledges. At one point they thought that the profits would redeem all pledges, except Robinson's. The management of affairs was left to Thompson. The purchases were made by various persons as trustees, but Robinson persuaded the trustees that their pledges to transfer the stock to the rest of the syndicate were lost, and got the shares issued to himself, further swindling his partners to the amount of £100,000.
The partnership of five also invested in the Duke of Argyll's mines in Morvern
Morvern
Morvern is a peninsula in south west Lochaber, on the west coast of Scotland. The name is derived from the Gaelic A' Mhorbhairne . The highest point is the summit of the Corbett Creach Bheinn which reaches in elevation....
and Mull
Mull
-Places:*Isle of Mull, Scottish island in the Inner Hebrides*Sound of Mull, between the island and the rest of Scotland*Mull , Anglicisation of Gaelic Maol, hill or promontory**Mull of Galloway, Scotland**Mull of Kintyre, Scotland...
, Grant and Burroughs buying (at a premium) in April 1730 the lease granted to Sir Alexander Murray in 1727. The Morvern mines were in fact at Glendow. They took mines on Kinlochalin and on the estate of MacLean of Kingairloch, also mines at Aar and Sandhall in Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
. All these were financed by loans on false pledges.
Brokers to the Company
Richard Woolley and Thomas Warren acted as brokers to the Company (in opposition to Thomas Jones, who claimed the sole right), procuring pledges for the company and earning a 1% commission for themselves. However, they presented bills of sale long after the money was advanced. When William Tench suggested to Thomson that the money was misapplied, he threatened exposure, until Robinson paid him an additional salary. The order authorising loans ovcer £1000 was obtained specifically so that money might be obtained on false pledges for Robinson to buy the Company's shares Richard Woolley and William Squire had a separate business dealing on commission with country clothiers, and hoped they would support them with petitions, but Woolley lost this business by becoming a gentleman with a carriage and country house.Petitions
In the end, the Common Council of the City of LondonCity of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...
petitioned the Parliament of Great Britain
Parliament of Great Britain
The Parliament of Great Britain was formed in 1707 following the ratification of the Acts of Union by both the Parliament of England and Parliament of Scotland...
in March 1731, for relief against the "unreasonable and exhorbitant rates" charged and the low prices achieved on sale of unredeemed goods. This was supported by a petition from merchants and other traders in London and by the silkweavers and worsted manufacturers of Spitalfields
Spitalfields
Spitalfields is a former parish in the borough of Tower Hamlets, in the East End of London, near to Liverpool Street station and Brick Lane. The area straddles Commercial Street and is home to many markets, including the historic Old Spitalfields Market, founded in the 17th century, Sunday...
. They alleged that pledges were often sold at 20% below the production cost; this discouraged industry and encouraged fraudulent bankrupts. The Company procured opposing petitions, which claimed that the Company did nothing contrary to their charter and their powers "greatly conduce to prevent usury
Usury
Usury Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate . In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law...
". Pamphlets published at the time referred to pawnbrokers charging 30%. The matter was rapidly considered by House of Commons (in Committee of the whole House) who heard witnesses, several of whom were in prison for debt. The Committee reported:
The Charitable Corporation have lent money in large sums which under colour and pretence of reasonable costs and charges they have exacted after the rate of [5%] over and above lawful interest, and therefore ought to be regulated.
A bill was introduced accordingly, but had only been passed by the Commons, when the king prorogued Parliament. on 7 May 1731
Collapse
George Robinson was elected as Member of Parliament for MarlowGreat Marlow (UK Parliament constituency)
Great Marlow, sometimes simply called Marlow, was a parliamentary borough in Buckinghamshire. It elected two Members of Parliament to the House of Commons between 1301 and 1307, and again from 1624 until 1868, and then one member from 1868 until 1885, when the borough was abolished.-History:In the...
, but soon after the whole financial edifice collapsed. In October 1731, Thomson and Robinson absconded, going off suddenly to France. Robinson was back by 25 November and appeared before the General Court of the Company. By 18 December, he was in hiding again because the Company would not supersede the Commission of bankruptcy against him. He had "seen fit to absent himself from the kingdom", according to William Goostry, his attorney. The bankruptcies of Robinson (called a banker and broker) and Thomson (called a merchant) were advertised on 26 October.
The General Court of the Company appointed a committee to investigate, and this reported on the magnitude of the fraud committed against the company the following January. The accounts showed nearly £400,000 due from borrowers, but there were certificates only for £150,000, out of which £44,000 had unsigned certificates. However, less than £40,000 worth of goods were lodged in the warehouses as pledges.
In Parliament
The shareholders then petitioned Parliament in February 1733, and the House of Commons enquired at length into the matter. In March, an Act was passed to "encourage and compel George Robinson and John Thomson (sic) to appear ... and disclose the effects" of the Charitable Corporation A Royal Proclamation was made on 17 March for apprehending Burroughs and Squire with a reqward of £500 from the Treasury. The assignees in bankruptcy advertised a reward for those who would disclose his effects, reminding them of the penalty in that Act for not doing so.Parliament quickly passed an Act to compel Robinson and Thomson to appear, or be guilty of a felony
Felony
A felony is a serious crime in the common law countries. The term originates from English common law where felonies were originally crimes which involved the confiscation of a convicted person's land and goods; other crimes were called misdemeanors...
. The Commons appointed a Committee to investigate, and this produced a detailed report on the affair. At the end of the session, two further Acts were passed. One appointed Commissioners to determine the rights of the shareholders and creditors; for the Charitable Corporation to appoint an assignee in bankruptcy in respect of Thomson and Robinson, and to compel John Thomson. the warehouse keeper's father to appear before the commissioners in England on pain of being declared a felon. The other required, Sutton, Grant, Bond, Burroughs, Wooley and Warren to deliver particulars of their estates to the Barons of the Exchequer. William Squire was required to surrender himself and do the same, while Burroughs was committed to the Fleet Prison
Fleet Prison
Fleet Prison was a notorious London prison by the side of the Fleet River in London. The prison was built in 1197 and was in use until 1844. It was demolished in 1846.- History :...
until he complied. All of them (except Squires) delivered inventories accordingly, and they were printed by order of the Commons Committee. It is probable that Squire remained abroad, as no further reference to him occurs in the London Gazette
London Gazette
The London Gazette is one of the official journals of record of the British government, and the most important among such official journals in the United Kingdom, in which certain statutory notices are required to be published...
.
Neither Robinson nor Thomson complied. However, during the next session, Thomson offered to return under certain conditions, and an Act was passed extending time and requiring him to appear before Parliament (or a committee of it) by 30 March 1732 and before his bankruptcy commissioners by 4 April. If he complied, he would be rewarded with a fifth of the assets overseas, which he delivered up, and one tenth of those in Great Britain. Thomson complied and appeared before a Commons Committee, which produced a further report. Two further Acts were passed at the end of the session. One was to confirm an agreement between the Charitable Corporation and its three-quarters of its creditors and make it binding on those under disabilities. The other authorised a lottery for the relief of those who suffered from the frauds, specifically excluding Robinson, Thomson, Wolley and Warren from benefitting. It also extended the time for submitting claims to the Commissioners. A further Act was passed in 1735, extending the time for claiming prizes.
The aftermath
The result of the frauds was to deprive the Charitable Corporation of the bulk of its assets. BankruptcyBankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
proceedings against George Robinson and John Thomson continued for a long time, evidently due to litigation. They ended with a dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
being paid from Robinson's estate in 1748, and from Thomson's in 1747. Proceedings were taken against Sir Robert Sutton, leading to judgment being given in 1742 against him, that he was liable to make the Company's losses though the Five Partners were primarily liable (see The Charitable Corporation v Sutton). Following the decree, the company sought to obtain an Act to assist with the enquiries directed by the Court of Chancery
Court of Chancery
The Court of Chancery was a court of equity in England and Wales that followed a set of loose rules to avoid the slow pace of change and possible harshness of the common law. The Chancery had jurisdiction over all matters of equity, including trusts, land law, the administration of the estates of...
on 18 August 1742, but this was rejected. In 1743, Sutton and the Company entered into a deed of mutual release.
The subsequent history of the company remains unclear.
See also
- The Charitable Corporation v Sutton (1742) 26 ER 642, the case where the directors were held liable for taking the corporation's money
- History of pawnbroking (1600 to 1800)