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Copp Brothers Foundry
HOW A BANK CLOSED UP A BUSINESS.
WHEN some 20 months ago it was announced that The Copp Brothers Co., Limited, stove manufacturers, Hamilton, Ont., had been forced into liquidation a great deal of regret was expressed in many parts of Canada.
Those who then expressed regret will now, doubtless, find matter for gratification in the fact that the outgoing year of 1901 saw every creditor, direct or indirect, paid in full. But this is not all : in spite of the enormous sacrifices necessary in order to wind up the business so rapidly, a handsome surplus remains, and that without disposing of any of the company’s property except the foundry, or without discounting customers’ paper.
From the very fact that .the affairs of the company have been so satisfactorily wound up, one is naturally led to examine the circumstances which brought about the liquidation. As our readers are doubtless aware, the direct cause of the liquidation was the demand of the Merchants Bank for the immediate payment of the sum of $37,000 owing that concern. Why the bank should have made this peremptory demand is something we cannot understand.
As we have already intimated, the demand for a settlement of the liabilities to the bank was made early in 1900. The business of the Copp Company in 1899 was the largest in its history. And not only was its paper under discount of better quality than at any other period during 20 years, but it was reduced from over $44,000 in April, 1899, to less than $24,000 in 1900, while during that period the business of the company increased by over $15,000. It was true that the company was at the time a little hard up, because of a rather extra heavy stock on hand, but it must, we think, be obvious to most people that its financial condition was by no means unhealthy, particularly when we consider that the stove trade in Canada during the year or two previous to the demand of the bank being made was more than usually prosperous. Furthermore, the business of the company had been increasing in volume for some five or six years. And it has been estimated that, had it been allowed to continue in business, it would have closed 1900 with a profit of at least $20,000. This, in the face of the handsome surplus with which the liquidation proceedings have been concluded, certainly does not seem an exaggeration.
Another feature of the affair was that only four or five days previous to the demand for payment, which was to be satisfied by 3 p.m. of the day on which it was made, one of the members of the company was informed that the head office of the bank was agreeable to making the usual advance.
An effort was made to get accommodation from other banks, but, the action of the Merchants Bank having become known, it was, of course, abortive. Liquidation then followed.
That the action of the bank was a mistake is evident. If there was any doubt about the wisdom of it when the demand for payment was made on April 2, 1900, the result of the liquidation settles it beyond all peradventure. It was a grave mistake. And the Merchants Bank, no doubt, fully realizes it. In the meantime, however, an old and honorable firm has been forced out of business, for which even the satisfactory winding up of its affairs is but poor compensation.
The old firm whose career was thus closed began business in 1848. In that year Messrs. Anthony and William J. Copp commenced a general stove and tin business in Hamilton, which was carried on successfully for a number of years. Nine years later, viz., in 1857, the brothers bought the old Vulcan Foundry of Woodstock and went into the manufacture of
stoves, the business at Hamilton also being continued. The Woodstock Company was known as Copp, Finch & Co. The Woodstock business was successful but it was felt many advantages would be gained in consolidating all under one management. Consequently, in the year 1864, the foundry was moved to Hamilton, the first heat being taken off on August 5 of that year. At first the premises consisted only of a three storeyed building and moulding shop; to this were added from time to time various additions. In 1891 the old firm was incorporated under the style of the Copp Brothers Co., Limited, with William J. Copp as president and Harold E. Copp as secretary-treasurer.