Wright, Whitaker (DNB12)

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WRIGHT, WHITAKER (1845–1904), company promoter, was born in the north of England on 9 Feb. 1845, and at the age of twenty-one, equipped with some knowledge of inorganic chemistry and assaying, started as an assayer in the United States, and invested in a few mining shares in the west. He next bought a claim for 500 dollars, and by the sale of a half share in it covered all his outlay and provided working capital. The mine proved successful, and was the foundation of his fortune; to use his own words, ‘after the first 10,000 dollars was made, the rest was easy.’ He was one of the pioneers of the mining boom in 1879 at Leadville, where he made and lost two fortunes. Leaving Leadville, he acquired the Lake Valley mine in New Mexico, and built a branch railway to it. After these western adventures he came east and settled in Philadelphia, was for many years a member of the American Institute of Mining Engineers, and became chairman of the Philadelphia Mining Exchange; he was also a member of the Consolidated Stock Exchange of New York. At the age of thirty-one he was more than a millionaire. He had now resolved to retire from business, but his American career ended disastrously, owing to the failure of the Gunnison Iron and Coal Company, in which he was largely involved, and the great depreciation in other securities.

Returning to England in 1889, he brought out the Abaris Mining Corporation in 1891, but this enterprise gained little market or public attention, and was wound up in 1899. He became better known as a company promoter in 1894, when he floated the West Australian Exploring and Finance Corporation, a promoting concern. Next year he brought out a like venture, the London and Globe Finance Corporation. Both companies had for a time very prosperous careers. Wright's profits from these two undertakings were 238,436l. The times were favourable to Wright's special qualifications. He had personal knowledge of mining camps, could talk of them plausibly, and from his experience in Philadelphia knew the weak points of the average speculator. During 1896 the Lake View Consols was floated by the London and Globe with a capital of 250,000l. Other companies were formed for opening up mines in Western Australia, the most notable being Mainland Consols, Paddington Consols, and Wealth of Nations. Early in 1897 he acquired the assets of the two companies, the London and Globe and the West Australian, and floated a new combination as the London and Globe Finance Corporation, of which he became the managing director. The new company had a capital of 2,000,000l. in 1l. shares, of which Wright received 605,000l. The names of the Marquis of Dufferin as chairman and of Lord Loch as a director were substantial assets; the shares went up to 2l., and the promotion work of the new company was very profitable. It acquired the Ivanhoe mine at Kalgoorlie from a small colonial company with a capital of 50,000l. and refloated it in London with a capital of 1,000,000l. in 5l. shares, the issue being a great success. Meanwhile (in October 1897) Wright started the British America Corporation with a capital of 1,500,000l. to acquire mining interests in British Columbia and the Yukon region. This company and the Globe became jointly interested in floating the East and West Le Roy companies, the Rossland Great Western, Kootenay, Caledonia Copper, Nickel Corporation, Loddon Valley, and other companies, the shares of each reaching substantial premiums. Wright's personal gain from these operations was 50,000l., apart from the profit obtained by his companies. In Feb. 1898 he started the Standard Exploration Company to take over the Paddington Consols, Wealth of Nations, and several other companies floated by the original undertakings, which had become unsuccessful.

Nearly all these undertakings were worked by one office (43 Lothbury), with a single staff of clerks, and were under Wright's direct control. The shares of the new London and Globe proved a popular instrument of speculation. The company constantly engaged in large market operations in shares of the companies under Wright's control, particularly the Lake View Consols. Alarming reports were occasionally spread as to the company's financial position; the Baker Street and Waterloo Railway Company, which was one of its promotions, was known to be a severe drag upon its resources. In spite, however, of evil reports, the Globe continued to pay small dividends at intervals until October 1899. During that year Lake View shares rose from 9l. to 28l. through the discovery of a rich patch of ore, the Globe making large profits in the shares. A sharp reaction soon set in, based on the knowledge that the rich find was exhausted. Wright, apparently misled as to the condition of the mine, made strenuous efforts to support the market. The results were disastrous to himself and to the company, which lost three-quarters of a million in Lake View shares in 1899. The crisis was reached on 28 Dec. 1900, when the Globe company announced its insolvency, and the Standard Exploration Company which was involved in the commitments of the Globe went also into liquidation. The disaster involved the failure of many members of the Stock Exchange, the liquidation of many subsidiary companies, including the British America Corporation, and the ruin of numerous small investors. The reports of the official receiver showed that the companies had long been on a false financial basis, the accounts having been manipulated in such a way as to conceal deficits, and the dividends paid by the Globe not having been earned but provided by means of loans from Wright and the other companies. The resources of practically all the undertakings under his control had been employed in his recent Stock Exchange operations.

In 1902 his fellow directors of the London and Globe Finance Corporation brought an action against the promoters of the Lake View syndicate for the recovery of 1,000,000l., of which they had been deprived by misrepresentation. The case was heard before Lord Alverstone, lord chief justice, in June 1902. Wright was a chief witness for the plaintiffs. After a nine days' trial, a verdict was given for the defendants.

Meanwhile Wright had been examined before the official receiver in the London and Globe liquidation, but the public prosecutor refused to institute criminal proceedings. Public indignation was aroused, and on 19 Feb. 1902 an amendment to the address was moved in the House of Commons by Mr. George Lambert expressing regret that no prosecution had been instituted against the directors. The law officers stated that in the present state of the law a prosecution could not be confidently undertaken, but Sir Edward Carson, the solicitor-general, expressed his belief that a false balance-sheet had been issued. Mr. Balfour, the leader of the House of Commons, admitted the existence of ‘deep and profound indignation’ among the public, and promised that the law should be amended. Finally, Mr. John Flower, a creditor, obtained from Mr. Justice Buckley on 11 March 1903 an order for the official receiver to prosecute, and a warrant for the arrest of Wright was issued. Wright had sailed four days before from Havre to New York, where he was arrested by warrant on March and imprisoned. After resisting extradition for some months by every legal artifice, he suddenly resolved on 6 July voluntarily to return to England, where he arrived on 5 August.

Protracted proceedings at the Guildhall ended in his committal for trial. The trial, which began on 11 Jan. 1904, was held for greater convenience at the law courts instead of at the Old Bailey. The prosecution was not under any of the Joint Stock Companies Acts, but under the Larceny Act of 1861. The issues were directed to the questions whether the balance-sheets and reports of the London and Globe Company for the years 1899 and 1900 were false in material particulars; whether they were false to the knowledge of Whitaker Wright; and if so, whether these false accounts and false reports were published for the purpose of deceiving shareholders or defrauding creditors or inducing other persons to become shareholders. The judge was Mr. Justice Bigham, afterwards Baron Mersey. (Sir) Rufus Isaacs, K.C., conducted the prosecution, and Wright was brilliantly defended by (Sir) John Lawson Walton. The prosecuting counsel alleged that 5,000,000l. capital had been lost in two years, not a penny of which had been returned to the shareholders, whilst debts of about 3,000,000l. had been contracted besides. On 26 Jan. Wright was convicted on all counts and sentenced to the maximum penalty of seven years' penal servitude. After receiving sentence he was talking with his legal adviser Sir George Henry Lewis in the consultation room, when he suddenly died. At the inquest on 28 Jan. it was shown that he poisoned himself with cyanide of potassium. He was buried at Witley, and left a widow, a son, and two daughters.

Wright acquired for his country residence a large estate at Lea Park, Witley, Surrey, four miles from Godalming. There he surrounded himself with extravagant luxuries, erecting a well-equipped observatory and a private theatre. He constantly devised new effects in architecture and landscape gardening; hills which obstructed views were levelled, and armies of labourers employed to fill up old lakes and dig new ones. He was fond of billiards, which he played in a saloon constructed of glass beneath one of the wide sheets of water in his grounds. After Wright's death the property was acquired by Lord Pirrie. Wright had also a palatial residence in Park Lane, filled with art treasures. As a yachtsman he gained great notoriety by his yawl Sybarita. Wright's persuasive manners and his abilities as a public speaker were turned to good account at shareholders' meetings, and inspired confidence in his most disastrous undertakings. He bequeathed his estate valued at 148,200l. to his wife Anna Edith, whom he made sole executrix.

[Annual Register, 1903, p. 24; 1904, p. 17; Saturday Review, xcvii. 133; Illustr. London News, 30 Jan. 1904; The Times, 20–27 Jan. 1904; Financial Times, 27 Jan. 1904; Star, 27 Jan. 1904; Blackwood's Magazine, clxxv, 397.]