WORLD WAR 1
Less than three weeks into World War 1, when the men of Dartmouth were enthusiastically signing up to fight, Dartmouth faced a crisis which had nothing to do with valour and everything to do with bad management and stock exchange gambling: the collapse of the Plymouth Naval Bank.
he Naval Bank had been operating since 1774 and all seemed normal until Friday August 24 1914 when the Dartmouth branch – on the site of the current Nat West Bank - failed to open. A sign on the door declared it would never open again. Businesses, individuals and even the Dart Harbour Commission used the bank and now it seemed as if they had lost it all. The directors of the bank, which had branches throughout the south West, were Frederick Thomas Bulteel – a descendant of one of the founders of the bank – and the stunningly named Mackworth Praed Parker.
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The pair were soon near-dragged to a meeting to answer for the failure of the bank after it was revealed that not only had the bank been in trouble for months, but that the pair had also known that they would have to wind it up on August 1 that year but had done nothing about it.
It transpired that they had been hoping for a magical upturn in savings deposits at its banks, so that they would not have to wind up the institution. The strategy failed spectacularly. The bank’s main assets at this time were in property – and values nosedived at the outbreak of the war. They were left in the red to the tune of £150,000. At current values, that figure amounts to £96,000,000. For a bank with only seven branches it was hard to see how
simple bad management could have resulted in a loss so great. Parker and Bulteel attended a public meeting in the guildhall, Plymouth. More than 2,000 creditors were waiting for them. It must have felt like going into the lion’s den. unlike Daniel, however, it’s clear these men were certainly guilty of something: at least negligence and possibly outright fraud.
At the trial, the revelations of mismanagement came thick and fast.
Their answers did not buy them any friends.
It turned out the bank had liabilities of £595,000 against assets of £307,000. It was worse than anyone could have imagined. Parker had paid nothing into the bank when he became a director – and had been taking £700 each year whilst being in charge of the risky investments that were the root of the bank’s problems. The pair also admitted the bank had been close to catastrophe before and had only just
avoided insolvency then. The pair were roundly booed and probably genuinely feared for their safety. It was then announced that the ‘best’ offer creditors could hope for was from Lloyds Bank. Lloyds had offered five shillings – or 25p – in the pound if the creditors opened accounts with them. In fact this was the only offer on the table and if the creditors refused, they were told bluntly, they would get nothing. Parker and Bulteel were charged with fraud – such was the anger in the South West it was decided they should be tried in London to avoid the danger of attack. At the trial the revelations of mismanagement came thick and fast. The bank had only made a profit twice in twelve years, and the few assets the bank possessed were used for riskier and riskier deals on the stock markets which had eventually resulted in its dramatic collapse. Parker and Bulteel were found guilty of fraud – but only received sentences of six months. scores of families and businesses
were left seriously out of pocket due to the crisis – the Harbour Commission lost £2,000 – around £620,000 today.
At a time of desperate loss and incredible heroism, many in Dartmouth faced hardship due to the greed and shortsightedness of two men who seemed to have been barely punished for their mistakes. •
The Naval bank was on the site of the current Nat West Bank visit
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