Fall of the house of Carne
IN the light of the Northern Rock bank crisis and all the other financial and trading difficulties being experience by the money markets, comparisons cannot help but be drawn with West Cornwall's most infamous banking collapse, that of the Batten, Carne & Carne bank of 1896.
Just as now, it rocked people's faith in their bank and discredited several worthy gentlemen formerly considered pillars of their community, perhaps the best known being Charles Campbell Ross.
The Batten, Carne & Carne bank was the result of the amalgamation of two major Penzance family interests.
The Carne part owed its existence to local grocer and merchant, William Carne, who opened the Penzance Bank in 1797, with associates Batten and Oxnam at 15, Chapel Street.
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The Battens were an old and well respected Penzance trading family that had given several mayors to the borough from its ranks.
In 1823 William's famous son, Joseph Carne, joined the partners of the bank to give it the name it was to have for the next 73 years.
Joseph, like his father, had made money from the Cornish Copper Company, but had then resigned as its manager five years earlier and moved from Phillack to Penzance.
For two score years he was one of the chief movers and shakers in Penzance society, being involved in both the formation of the Penzance library and geological society, as well as writing several learned papers on mineralogy, mining and natural history.
He lived with two of his four daughters, Caroline and Elizabeth, in the large end house on the east side of Chapel Street opposite St Mary's Church.
When his father, William, died in 1836 there was an enormous turn-out of people for the funeral service. Upon Joseph's death in 1858 his daughter, Elizabeth Carne, a highly respected woman in her own right, became a partner in the running of the bank, his four sons having followed different callings.
It was during Elizabeth's time on the Board that an impressive new building was constructed in Market Place and the bank moved there in 1864 (today's William Rogers Insurance).
But it was a move overshadowed by the death of 20-year-old Archibald Ross-Carne who joined the partners of the bank two years before and lived with his aunts Caroline and Elizabeth Carne before succumbing to scarlet fever.
The Ross family involvement in the bank came from its links to the Carnes via Mary, Joseph's eldest daughter, who married a Dr Ross of Lanarkshire.
Archibald was her second eldest son and he added Carne to his surname when he joined the bank. Charles Campbell Ross was his brother and the youngest of Mary's four sons.
CC Ross was born in Henrietta Street, London, in 1849.
Just when he came to Penzance is unknown, but as he said in 1896 that he had been involved with the bank for 30 years this indicates he joined in a junior capacity not long after his brother's death.
Perhaps he felt the need to fill the place left by his dead brother. Certainly by the age of 22, in 1871, he was thought responsible enough to be secretary of the committee that ran the Infirmary and Dispensary in St Clare Street. It was the first step toward becoming one of the leading figures in the town.
In 1873 he moved into Morrab House having earlier taken lodgings at the closed national school at the end of Queens Street.
He joined the Royal Cornwall Geological Society at St John's Hall and became its librarian.
Meanwhile, the bank continued to enjoy firm local confidence and many in the Cornish establishment invested large sums.
When the esteemed Elizabeth Carne died in 1873, the bank was still seen as a rock solid business in which to save and invest, and secure loans.
Now, with his aunt's death, being the only senior male Carne relative involved in the bank, CC Ross increased his influence on the board, becoming a senior partner in 1875, and eventually chairman of directors.
In so doing, by the end of the 1870s, he had managed to become one of the most prominent figures in the Penzance establishment.
Charles Campbell Ross first emerges in the public arena in 1877 when he was chosen to be mayor of Penzance, a position he held for two more consecutive terms.
After a break of a year he attained the office again in 1881 and 83. Building on his local power base, he was also the local MP until 1885.
It was during these years that he made his name as the doer of good public works, continuing the Carne family tradition of local philanthropy.
One of his first good deeds was to gift to the town the land originally called Carne Avenue but which in fact became Morrab Road, and that of the site of the new school of art, although with the philanthropy came business interests because Ross owned property and land that the opening of the new road helped him develop. Ross was also deeply involved in the new 'wet' or 'floating dock' scheme of the early 1880s that incorporated the construction of Wharf Road, the viaduct and bridge – a bridge that was named for him because of his efforts to bring the new roadway into being.
It was at this time, with his star in the ascendant, that he set about building Carne (today's Boskenwyn manor), a large house set in its own estate on rising land overlooking the Treneere fields to the north of Penzance, a project that involved a considerable outlay of personal capital, something that perhaps speaks to us of the self-esteem of the man when other successful men in Penzance at the time were content with more modest dwellings.
He employed five servants, and a coachman in the adjacent lodge.
As mayor of Penzance, Alderman, county JP, and local MP, Ross was the man people deferred to.
He was not to enjoy his success as a businessman, nor his local esteem, for long.
The first blow came at around Christmas 1888 when his wife, Isabel, died after a marriage lasting 19 years.
But a further blow was looming that was to ruin him personally and lost him his good name despite all the good works he had encouraged, helped and supported.
It is the nature of banks that when they fail it is sudden and unexpected, and the Batten Carne & Carne bank was no exception.
Right up to November 14, 1896, when it ceased to operate, no one beyond its innermost workings had the slightest idea the bank was about to collapse.
The first extraordinary meeting of shareholders was held at a packed St John's Hall on December 19, 1896 with people coming from all over the county, no doubt in a state of deep anxiety as to the fate of their money.
Charles Ross chaired the meeting and opened with a long, detailed speech to give shareholders his version of what had been going on.
He revealed that troubles had begun to appear the previous June but that the problem had begun as far back as April 1895.
At that time, in order to raise fresh capital in the desire to pay a bigger dividend, the bank decided on a new share issue as interest rates were favourably low at the time.
The issue was set at 7,000 new shares, but only 2,000 were taken up, many of these by current shareholders. A dilemma then confronted the board: did it scrap the issue and risk raising doubts about the bank's viability, or continue with the option with less than a third take-up? It decided on the latter.
Ross continued, the bank thought it could pay the interest on the shares, only then for it to realise the dividend would be even smaller.
A cut in the bank's interest rate would have left it more money but the blow to its confidence would have been considerable.
Allied to this was the bank's inability to put aside a substantial amount for contingencies.
Upon realising the situation, in the utmost secrecy to prevent a run on the bank, negotiations began with other interested parties that resulted on November 14 in the Batten, Carne & Carne bank ceasing to trade as it was taken over by the Consolidated Bank of Cornwall, the official name of the Bolitho Bank Co Ltd.
Ross elaborated the terms and conditions of the take-over, admitting that because the bank had not done so well between June and November they had sold it at a reduced price.
Even so, after the bank's liabilities had been paid he said a large sum should be left.
But Ross had been far from frank and honest, and he must have known that sooner or later the truth would out. As matters unfolded the independent insolvency committee advised he resign as liquidator. His departure was not surprising in light of the unravelling of the bank's true position by his successor, Mr Pezzack.
The complex matters in winding up the bank's affairs are too long to go into in detail but it is fair to say that Ross's name became mud as the awful truth began to emerge from the bank's accounts.
As year after year went by and the shareholders continued to meet, a gloomy picture emerged.
At the meetings shareholders jeered, laughed and hissed at the very mention of the name Ross as Mr Pezzack gradually disclosed what Ross and the Board had been up to.
The bank's total debt was a staggering £180,000, loaned in six years to people without proper security. Ross himself had a debt of £38,000, and he had even tapped his aunt, Caroline Carne, for £10,000.
Mr Pezzack's job was not made any easier by some of the 'most peculiar transactions' the bank had been up to.
Once a call had been made upon each shareholder of £6 to part clear the debt, two main problems faced Mr Pezzack: he could only raise just under £36,000 from debtors, property and other sources which was £20,000 shy of clearing the bank's debt; and to add to shareholder woes, interest rates rose which meant more to be paid the Bolitho Bank for the liabilities it had taken on.
But matters worsened. One shareholder, Mr Dale, took the liquidator to court over procedural differences and lost; and then in the High Court judges decided undue pressure had been used to get a Miss Reed to sign a mortgage with the bank. This meant a further £11,000 loss to the bank's assets. The Reed case was described by the chairman of the insolvency committee as “...another of the many painful incidents which...showed the abominable way in which the affairs of the late bank were managed....”
On February 6, 1903 the final meeting of the shareholders took place at the Alveme hall, Penzance.
Mr Pezzack, after five long years as liquidator, had completed a Herculean task by balancing the books thanks to a better return on property sales and the goodwill of the Bolitho Bank.
Mr Bowles, chairman of the investigation committee, spoke for many when he said: 'They would be very glad indeed when the name of Batten, Came & Carne, became only a matter of history, an unpleasant dream...' For shareholders it was more like a nightmare: they had lost all their money.
Carne, Ross's house, was sold and was quickly renamed Boskenwyn and the name Ross, and indeed to some extent the name Carne, was forgotten.
Charles Campbell Ross left Cornwall.
To earn a living, in 1901 he became curator of the newly opened Whitechapel art gallery, putting on 50 exhibitions in his time there as well as helping improve the cultural life of the people in London's East End.
He died aged 71 at the London Hospital while undergoing an operation on July 9, 1920. Few in Cornwall mourned his passing.