Pundits pour over the reasons behind the current credit crunch, searching for the straw that broke the bankers’ back. In 1861, however, the reason for Preston’s credit crunch was clear: it came with the sudden death of Edward Pedder.
In 1861 Edward Pedder was the only active partner in Preston Old Bank. The bank was one of the most venerable institutions in the county, with a history stretching back to 1776.
As safe as Pedder’sAccording to the pamphlet A Brief History of Pedder and Co: ‘During its time there were many crises but the bank withstood them all. Following a monetary crisis in 1792 only about 50 banks in the whole country kept their doors open and Pedder’s was one of them.’(1) According to People of Old Preston: ‘Consequently, in those days the common saying in Preston and district was, ‘As safe as Pedder’s’.(2)
Not so safe
As with the current credit crunch, it didn’t take long for panic set in once the events began to unravel. Edward Pedder died suddenly at the age of 51 on the night of the 21 March 1861, despite being, according to a local newspaper: ‘in enjoyment of his usual excellent health’(3) the day before.
It soon turned out that he had made no plans for how the bank would continue on the event of his death.
Silent partner
The only other partner in Preston Old Bank was Edward’s brother, Henry Newsham Pedder. He was an officer in the army and was not involved in the day-to-day management of the company at the time of his brother’s death. Henry soon discovered that balance sheets had not been created for a number of years. As the numbers were tallied, it was quickly discovered that they didn’t add up.
According to A Brief History of Pedder and Co, £600,000 in deposits had been made to the bank – it was clearly a successful ongoing business . £700,000, however, was owed to debtors. A closer look at the figures reveals that £200,000 of that debt was due to the overdrawn accounts of Edward Pedder and Henry Newsham Pedder. £200,000 – in 1861!
Closure
There were no government bailouts at that time and no clever mergers were engineered. Henry sent out a note to creditors which included the following: ‘ After a close consultation with some of my best friends I have come to the conclusion that […] I had better close the bank.’(4)
Less than three weeks after Edward’s death, the people of Preston were shocked to see the following note posted on the door of Preston Old Bank: ‘In consequence of the death of the late Mr Edward Pedder, the bank is closed, and the business will be wound up.’
Bank rush
In scenes remeniscent of the Northern Rock bank at the height of the recent credit crunch, when Preston Old Bank reopened the following Monday, there was a huge surge of people rushing to take out their bank deposits. A committee of inspection had been formed, and proceeded with great haste.
The two partners’ families were asked to vacate their homes. Ashton House on today’s Ashton Park, and Whinfield House, which has since been demolished, were both sold off to pay the debts, amongst many other Pedder possessions. The Pedders left Preston, never to return.
The debts were all, eventually, paid off, but the event came at one of the worst times in Preston’s history, just as the cotton famine was taking hold and thousands of people were were receiving poor relief.
Other people’s money
Seen through today’s eyes it’s easy to conjure up images of fat cats plundering the wealth of the hard workers of Preston. Perhaps it is worth adding, therefore, that Edward Pedder was, according to People of Old Preston: ‘An open-handed contributor to every worthy project, he was a magnificent subscriber to countless charities’. (5) Modern critics might point out, however, how easy it is to be charitable with other people’s money.
Bibliography:
- People of Old Preston, Keith Johnson
- A Brief History of Pedder and Co, Preston Old Bank, FS Moxon
References
- A Brief History of Pedder and Co, Preston Old Bank, FS Moxon
- People of Old Preston, Keith Johnson
- As reported in A Brief History of Pedder and Co, Preston Old Bank, FS Moxon
- As reported in A Brief History of Pedder and Co, Preston Old Bank, FS Moxon
- People of Old Preston, Keith Johnson
Thanks
Thanks to Jim Goring for doing all the legwork and finding the sources for this information.
Comments
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Having found out that indeed it was the same family I found it to be intriging and yet chilling that they had once enjoyed wealth (and the power that naturally must go with it),social influence and had commanded a respect that many of the inhabitants of Preston could not imagine having access to.............only to have all these things swept away virtually overnight due to the untimely death of one man ( Edward Pedder) and thenceforth the uncovering of the true state of the banks standing.
It is a very sad and sobering tale of how even those who seemingly have whatever they wish within their grasp can lose the lost via the fortunes of fate............
Their beautiful sepia photographs display them in all their sumptuous (and yet restrained) monied pomp - top hatted, crinolined, carriages and coachmen at the door of the rambling and substantial Whinfield House, the epitome of the financial ruling class.
And then suddenly, all gone....................
Yours faithfully
Margaret McLaughlin
Thanks for this excellent comment Margaret. It is, as you say, a sobering tale. If only today's bankers had learned the lessons.
Perhaps worth adding that in my research one writer (can't remember who) pointed out that the closure of the bank was a bit of an overreaction, that something could have been salvaged if they hadn't been so quick to close everything down - the bank, as pointed out in the article, was still quite a successful going concern with £600,000 in deposits despite its debts.
As a footnote to this, at least two Pedder descendents (from totally different branches of the family) have been in touch with ashtononribble.com over the years. They seem to be doing fine now!
Simon