CHAPTER IX.

HOW TO SATISFY ONE'S CREDITORS WITH WASTE PAPER.

_Payment suspended--Sympathy for the ruined man--An important letter--How worthless shares enabled a man to deceive his creditors and make a fortune._

The following unpleasant circular was placed in my hands one morning some ten years ago:--

"Dowgate Hill, E.C.,

"February, 7th, 1870.

"Sir,--It is my painful duty to inform you of the suspension of my business. The liabilities are more than covered by securities, but which, unfortunately, cannot be realized at present. I have placed my books in the hands of Messrs. Bowen, Young & Co., the accountants.--I am, &c.,

+ALFRED GEORGE GIBBS+."

On turning up my ledger I found that Mr. Gibbs owed me no less than £3,560 14s. 6d. He had never been in my debt so much before, and the heaviest of his acceptances were on the eve of becoming due. It was a piece of bad luck for me that he should fail at this time. A few days more would have made all the difference. The business we transacted was in soft goods, which he exported to Australia.

If ever a human being appeared to carry his character plainly written on his face that man was Mr. Gibbs. He was openness itself; nothing secretive or cunning about him. His whole manner invited confidence. His age was about thirty-five, and he had in the course of seven or eight years made a great name for himself, and his dealings must have been on a large scale, as after an examination of his books the accountants announced that the liabilities amounted to £125,000, against which they could only place real property amounting to £9,000 and some doubtful assets.

The failure took everyone by surprise, and the questions immediately asked were, How has the money gone? He always seemed such a careful man. Does he keep a mistress? Has he been betting or dabbling on the Stock Exchange? As the money involved in the crash was considerable, certain wrathful creditors instituted a searching examination into Mr. Gibbs' mode of life, in the expectation of finding that he had been leading a double existence--playing propriety in the City and the fast man at the West-End, but they were disappointed. He was a model husband and his establishment was conducted on anything but extravagant lines. There was no young woman of doubtful virtue inhabiting an elegant villa at South Bank, with sets of valuable diamonds and elegant equipages in the background. He was unknown on the turf, and nobody had ever seen him bet even half-a-crown. The result of the enquiries showed that the bankrupt was a steady man, not given to drinking nor to dissipation of any kind, and that he was most punctual in all business matters. The people he employed were never tired of singing his praises, and no man was better served in the City of London.

How such a perfect business man could fail was a mystery until the accountants came to write on the credit side of the balance sheet the particulars of the doubtful assets. There never was such a lot of rubbish; the secret was revealed at last. He had been speculating in stocks, but such stocks! Every rotten Company for many years back seemed to have had him for a subscriber. He had embarked his money in the wildest schemes; Honduras bonds, Peruvian loans, Colorado mines, Spanish railways and Turkish waterworks. Nothing unsound came amiss to him, and the shares, which came to an immense amount, were simply unsaleable.

If men will go into things which they don't understand they must put up with the results. Poor Mr. Gibbs may have had a thorough knowledge of his own business, which, taken by itself, showed handsome profits, but he was evidently not an adept at "bulling" and "bearing." He was terribly "cut up" at his downfall, and no creditor, however irate, could listen long to his explanations and laments without feeling some sympathy for the man. He owned his fault, and said he had acted the fool and must take the consequences, but that it was hard luck after having the ball at his feet to have to commence the world afresh. His bankruptcy did not make him seclude himself at home as it would other men; he kept his usual hours at the office, and was always ready to see any one and to give any explanations.

Before the first meeting of his creditors was held he did a very politic thing. He called on each of them and asked how to act in the, to him, grave emergency. One or two wealthy firms were so convinced with his statements that on his promising to leave the Stock Exchange alone in future, they offered to advance him money to pay a dividend, and said they would do what they could to get his name taken off the list of bankrupts. An overwhelming majority agreed to the terms proposed, and Mr. Gibbs was reinstated in his former position. He had been unfortunate everyone thought, but not culpable, and the dividend of 2s. 6d. in the pound was duly paid.

The loss I incurred through Mr. Gibbs came at an inopportune time, and crippled my financial affairs to such a degree that had it not been for the assistance of a friend I must have paid a visit to Basinghall-street myself. However, I managed to weather the storm, and had never any occasion to regret my future transactions with Mr. Gibbs, who was, strange to say, soon doing double his former business, and making a fortune rapidly. He was not forgetful of the kindness of his creditors, and when it was in his power they had always the preference in his dealings.

Years rolled on, and the loss I sustained had been erased from my mind, when in the latter part of 1879 I happened to run against a Mr. Murray and the whole proceedings were revived. Murray had been on the Stock Exchange, but "bearing" Egyptians settled him, and he was now not in the best of circumstances, doing what he could outside the sacred precincts. The man had been useful to me on different occasions, and I took him into a wine place and gave him some sherry. After he had finished the narrative of his own difficulties he all at once said:--

"What a fortunate man is Gibbs. Do you still transact business with him?"

"Occasionally," I replied. "Since he dropped speculating on the Exchange everything has prospered with him, and he is now reputed very wealthy."

"What is that you say about the Stock Exchange? He never speculated there to my knowledge, and I ought to know, as we were at one time very intimate, and I lived next door to him for many years."

"But you are surely aware that it was his losses on the Stock Exchange which compelled him to pay 2s. 6d. in the pound."

"No, and I don't believe it. I never could induce him to try a single time bargain. I understood the bankruptcy was quashed, but I never heard the particulars."

"Well, it is a fact that when he suspended payment he had in his possession an immense number of worthless shares. There never was such a stack of rubbish, and nobody could understand how a man with his wits about him could have thrown his money away on such abominations."

Mr. Murray laughed loudly, and I looked at him in surprise.

"You have not got a list of his valuable shares?" he asked.

"I believe I have," I answered; "the accountants' balance sheet contains one."

"Bring it here to-morrow and I will meet you. We may be able to make some money."

My suspicions were aroused, and you may be sure that I kept my appointment with Murray, who was punctual. I had been successful in finding the list, and handed it to him.

He laughed loud and long, and it was some minutes before I could get a word out of him. When he had exhausted himself, he observed--

"This is a splendid joke. After deducting the dividend, how much did you lose by our unfortunate friend?"

"I had to write off £3,115, and could ill afford it at the time. Why do you ask?"

"This is a business matter between us. How much will you stand out of that sum if I show you how to get it?"

"I know there is no hope of that; but what would satisfy you?"

"Will you give me 25 per cent?"

"Willingly, but what chance is there?"

"Never mind; you go to him with a letter I will write, and if he does not pay you there and then I shall be astonished."

The letter came next day. It was addressed to Mr. Gibbs, marked private and sealed. It seemed a ridiculous errand, but still, as I had promised to deliver the missive, I took it round to Dowgate Hill. I found Mr. Gibbs in his private office, and he welcomed me with the usual smiles.

"What can I do for you?" he asked, in his blandest manner, pointing to a chair.

"I want to see if there is any answer to this letter?" I answered.

He took Murray's epistle from my hand, and on perusing it he became terribly pale and shook like a leaf; when he spoke I could not recognize his voice. His eyes would not meet mine, and were fixed on the desk before him.

"On your honour do you know the contents of this letter?" he asked, hoarsely.

"I do not."

"I believe you," he said. "Now that I have recovered my position I shall have much pleasure in paying your account in full with 5 per cent. interest, on one condition, that you say nothing to my other creditors."

To this I willingly agreed. It takes a man all his time to look after his own affairs.

In exchange for my receipt he handed me a cheque for the proper amount. On rejoining Murray, who was close at hand waiting the result of the experiment, I tried to get an explanation, but did not succeed then.

A few days afterwards, however, when, to the astonishment of everybody, Gibbs sold his business and went to South America, the mystery was cleared up. He had cleverly managed to throw dust in the eyes of his creditors. The bankruptcy had been carefully planned so as to enable him to put an immense sum in his pocket. The various stocks, which he returned as assets, and which he alleged had ruined him, did not cost more than a few pounds. _The worthless shares were not purchased from time to time as the various companies were launched, as was imagined, but were bought by weight in one lot through Murray a few months before the bankruptcy occurred, at an average price of 4 s. the lb._