The abortive sale of McLennan & Urquhart

This is a really weird story. Of a very unusual flotation. And it shows what a litigious bunch they were back in the 19th century.

Let's start with the article:

"DALKEITH BREWER'S PROFITS.
In the Court of Session on Tuesday, Lord Low closed the record in an action by Menzies, Bruce Low, & Thomson, W.S.. Edinburgh, and Robert Menzies, a partner of the firm, against McLennan & Urquhart, Dalkeith, for payment of (1) £480, (2) £62 14s 9d., and (3) £40 13s 4d. In May, 1889, Mr Menzies was authorised, if he could find a suitable purchaser, to enter into negotiations for the sale of the Dalkeith Brewery, he was to receive a commission of 1.5 per cent. on the purchase price. The pursuers state that in 1889 a sale was effected for £32,000, and the first sum sued for represents the amount of the commission on the price, while the second sum is the commission at 1.5 per cent, on the valuation of the stock-in-trade. The purchaser of the brewery made a deposit of £5000, but as the balance of the price was not paid, he forfeited that amount, and the defenders retained the brewery. The purchaser had arranged for the sale of the brewery to a limited company, and when the prospectus was issued to the public, it came, the pursuers state, under the observation of the officials of the Inland Revenue that the amount set forth in the prospectus as representing the profits of the brewery for 1885, 1886, 1887, and 1888 — the four years preceding — exceeded by £18,072 the amount set forth in the defenders' annual returns of income to the Commissioners of Inland Revenue for the period mentioned. The sum which duty had been paid for these years were respectively £965, £980. £1018, and £2040. The Inland Revenue accordingly claimed £545 18s 6d, in respect of duty on £18,072. The third item sued for represents account incurred in adjusting an  arrangement with the Inland Revenue and other work. The defenders, who deny that they are lucratus by the pursuers' services, maintain that no commission is due, on the ground that the pursuers did not obtain the price arranged for, and did not effect a sale; but the defenders state their willingness to pay the business account, subject to taxation."
Dundee Courier - Thursday 24 May 1894, page 2.

I'll summarise: the owners sold the Dalkeith Brewery to a third party who then wanted to convert it into a limited company. He paid a £5,000 deposit but, not being able to pay the other £27,000 of the purchase price, didn't acquire the brewery and lost his deposit. Quite an expensive exercise, £5,000 being a considerable sum.

I'm going to make a wild guess here. The unlucky purchaser must surely be the mysterious Mr. Beal mentioned in the prospectus. I suppose his plan was to use the money raised from the flotation to pay Mr. McLennan and Mr. Urquhart the balance of the purchase price. It's an odd -  and ultimately unsuccessful - way of selling a company.

Did the flotation ever really happen? Was it scuppered by the attention of the Inland Revenue? As the company was still a partnership in 1896, I suppose not.

Those tax officials, they have eyes everywhere. Lying about your income and then putting the real figures in a prospectus is just asking for trouble. £545 18s 6d is about 3% of £18,072. A pretty low rate of tax. I assume that was corporation rather than income tax.

It's a bit of a cheek claiming commission on a sale that fell through. Especially after waiting five years. I'd have told Menzies, Bruce Low, & Thomson to bugger off, too.

"Lucratus", another Scottish legal term, means having made a profit. I suppose McLennan and  Urquhart had made money from the transaction: the £5,000 deposit. Maybe letting the lawyers have 1.5% of that sum would have been fairest.

McLennan & Urquhart goes public

Prospectuses. What wonderful sources of information they are. Though, bearing Pattison's in my mind, it's unwise to trust everything in them as gospel.

This is one of the more modest flotation, the share capital amounting to just £52,000. That reflects the size of the brewery, which was nothing like as large as McEwan or even Aitken.

A couple of other things are odd about this launch. The date is one. 1889 is pretty early for a Scottish brewery flotation. Especially for such a small brewery. Most took place in the period 1895 to 1900.

Then there's the matter of exactly who was selling the brewery to the shareholders. Usually it was the partners in the private company. But this time they had already sold the company to a third party. It was he who was selling shares in the new limited company. McLennan and Urquhart had been attempting to offload the brewery for a while, as we will discover later.

Time for all the legalese:

"The SURSCRIPTION LIST for the undermentioned Capital will be OPENED on MONDAY, the 14th day of October, and will be CLOSED on or before WEDNESDAY, the 16th day of October, 1889.

The COMMERCIAL BANK OF SCOTLAND (Limited), Edinburgh, London. and all its Branches, are authorised to RECEIVE APPLICATIONS for the undermentioned Share Capital.

MCLENNAN AND URQUHART (Limited), DALKEITH BREWERY, EDINBURGH, the Brewery having been established over Fifty Years.

Incorporated under the Companies Acts, 1862 to 1886, whereby the liability of each Shareholder is limited to the amount of his Shares.

SHARE CAPITAL, £70,000.
FIRST ISSUE OF
2,600 Five per Cent. Cumulative Preference Shares of £10 each        £26.000
2,600 Ordinary Shares of £10 each .......                 26,000
In all .......                                £52,000

500 of the Ordinary and 300 of the Preference Shares have been applied for by the Directors and their friends, and will be allotted in full.

The Shares are payable as follows:- £1 on Application, £4 on Allotment, £2 10s. on the 1st of December next, and the balance of £2 10s. per Share on the 1st of January, 1890; but Shareholders will have the option of paying up their Shares is full on Allotment, and interest will be allowed in advance of the call at the rate of 5 per cent. per annum.

Messrs. A. McLennan and W. Urquhart have agreed to lend £10,000 at 5 per cent. on the security of the Heritable Property for a period of 5 years.

DITRECTORS.
WILLIAM URQUHART, Esq., Dalkeith Brewery, Dalkeith N. B., Chairman.
James McLennan, Esq., Dalkeith Brewery, Dalkeith N. B.,
James Mackintosh Gow, Esq.. Banker, 66, George. street, Edinburgh.
* Alfred H. Beal, Esq. (Messrs. Beal, Son, and Chartres) 20. Regent-street, London.
* Will join the Board after Allotment.

BANKERS.- The Commercial Bank of Scotland (Limited). Edinburgh, London, and all Branches.
SOLICITORS. Messrs. Menzies, Bruce-Low and Thomson, W. S., 16, Duke-street, Edinburgh.

BROKERS.
Messrs H. Gilmour and Shaw, 18 St. Ansdrew's- square, Edinburgh.
Messrs. Oliver and Verity, 17, St. Ann's-square, Manchester.
Messrs. Lightbody and Forsyth, 35, Throgmorton. street. London.

AUDITORS.-Messrs. F. and F. W. Carter, CA., Edinburgh.
SECRETARY (frs tem.).-Mr. William Thomson W.S., 16 Duke-street, Edinburgh.
REGISTERED OFFICES,-The Brewery, Dalkeith.

PROSPECTUS.
The Company has been formed to purchase, carry on, and extend the old-established Brewery business of Messrs McLennan and Urquhart, at the Dalkeith Brewery, Edinburgh, which has been acquired from them by Mr. Alfred H. Beal, of London.

The partners of the late firm have subscribed for such a number of Shares as will give them a substantial interest in the business, and Mr. Urquhart has agreed to take the position of Chairman on the board of Directors for a period of five years, upon terms highly favourable to the Company. Mr. J. McLennan, the junior partner, who has been actively engaged in the management of the Brewery, will remain as Manager for a minimum period of five years, with a seat on the Board.

The business has been established for over 50 years, and commands a high reputation for its ales, and by the medium of a joint Stock Company with increased capital it is expected the trade can be largely extended.

The Property to be taken over by the Company is as follows:-

(1.) The Freehold Brewery, together with Cooperage, Coopers' Store, Cask Stores, Stabling, Stores, General and Private Offices, Chief Clerk's Residence, &c,
(2.) The Brewery Plant, Machinery, Horses, Drays, Carts, Casks, and Utensils of Trade.
(3.) The Freehold Malting, adjoining the Brewery, of 70 quarter capacity, Beer Stores, and Cask Yard.
(4.) The Goodwill of the Business.
(5.) Two Freehold Blocks of Dwelling Houses,
(6.) The Freehold "Railway tavern" Public House, adjoining the Brewery.
(7.) The loans to customers, &c., as they stand in the books of Messrs McLennan and Urquhart, on the 1st October, 1889.
(8.) The stock-in-trade of Beer, Malt, Hops, and other stock of any description, of the value of £4,220 1s. 11d., on the 1st of October, 1889.

The book debts due up to the 1st day of October, 1889, will be collected by the Company and handed to Messrs. McLennan and Urquhart, as received.

The following is a copy of the certificate of Messrs. F. and F. W. Carter, Chartered Accountants, of 6, St, Andrew-square, Edinburgh, and Messrs. Lees and Graham, of King-street, Manchester, Chartered Accountants:-

We have examined the books of Messrs. McLennan and Urquhart, of the Dalkeith Brewery, for the four years ending 1st of April, 1889, and certify that the net profits of the business during that period have amounted to the sum of £23076 6s. 6d., or an average of £5,768 16s. 7d. per annum.

This result is arrived at after making ample provision for bad and doubtful debts, discounts, &c, and writing off a sufficient amount for depreciation of plant and buildings.
F. and F. W. CARTER, C.A.
LEES and GRAHAM, C.A.
Edinburgh, Sept. 12 1889.

Taking the above profits as the minimum likely to be maintained, it shows £5,765 per annum, available as follows:-

To the payment of 5 per cent. interest on Mortgage        £500
To the payment of 5 per cent. on Preference Shares         1,300
To the payment of 10 per cent. on Ordinary Shares        2,600
                                £4,400

Leaving a balance of about £1,368 a year for Manager's salary, Directors' fees, &c., which, in the opinion of the Directors, is in excess of what will be required.

Prospectuses and Forms of Application can be obtained at the Offices of the Company, or at the Offices of the Bankers, Brokers, Solicitors, and Auditors."
October 9th, 1889.
Pall Mall Gazette - Monday 14 October 1889, page 8.

Generous as ever, I've thrown in a contemporary map of the brewery. It even shows the Railway Tavern. You can also see just how small the brewery was.

£5,768 sounds a pretty decent profit for a company that only cost £52,000 to buy. That's more than a 10% return. I wonder why the partners had been so keen to sell? What's weird is that, through the shares they were took, they were buying back part of the brewery. I'm confused. The partners had also promised, as is usual in these sales, to stay on for a certain number of years after the flotation.

Who was the mysterious Mr. Beal? He doesn't seem to have taken a very active role in the brewery he owned. Maybe that's why he was quick to turn it into a limited company. Of course, if he really was based in London, it wouldn't be very easy to be involved in the day to day running of the brewery.

Next time I'll be revealing the abortive sale that preceded Mr. Beal's purchase. Through the medium of - what else? - a court case.

McLennan & Urquhart beers 1922 – 1954

I seem to remember promising you details of some McLennan & Urquhart beers. Well here they are. Sorry about the delay. I was distracted by Pattison's.

Not that I have very many McLennan & Urquhart beers. Just eight. Most of them Pale Ales.

Let's start at the beginning, it the 1920's. I've no idea what that Old Fashioned Ale was in terms of style. It could be a strong Pale Ale. But that's just a guess. It's a similar strength to the top-level Pale Ales brewed in London. How about seeing those London Pale Ales in table form? You'll find it after the McLennan & Urquhart table.

Courage, Charrington, Watney and Barclay Perkins all brewed Pale Ales with gravities over 1050º. Though none has as high attenuation as the Old Fashioned Ale. And they were all a good deal paler. 30 Lovibond is about the darkest London Pale Ales got. Most were somewhere in the 1920's.

Moving on to the PA and Dalkeith Ale, it's hard to find an equivalent London beer, except for Whitbread IPA* and Watney Pale Ale. Both bottled beers. And that could explain the why the  McLennan & Urquhart beers have lower gravities. They were bottled beers, too. Quite often in the interwar years bottled versions were weaker than draught ones. That was certainlythe case at Barclay Perkins, where their Ordinary Bitter, XLK, was 1046º draught, but only 1038º bottled.

Almost forgot, I've a description of the flavour of Dalkeith Ale: "Pleasant. Slight after bitter. Nose & taste of fresh hops." That's interesting, because most of the Pale Ales in the Younger Gravity Book aren't described as being bitter or hoppy.

Next 1930 Dalkeith Stout. That's a typical looking Scottish Sweet Stout. Low attenuation, low ABV. It's not the most extreme I've seen. Some have attenuation lower than 50%. I won't bother comparing it with London beers, because London brewers didn't make anything like it.

Those two 1930's Pale Ales are an odd pair. The Export looks very much like a London Ordinary Bitter, such as Barclay Perkins XLK. It also isn't that far away from a modern Scottish Export.

Dalkeith Special Pale Ale is "special' in a peculiar way: it's especially weak. I struggled to find London Pale Ales as weak. In fact Truman's Sparkling Pale Ale was the only one I could find. That's why I've included examples from provincial English breweries. I could find a few under 1030º that came from England, but the vast majority were Scottish.

Finally it's the turn of the two post-war beers. The Pale Ale is typical of austerity-era Ordinary Bitters. Just a shade over 1030º. Gravities would creep up later in the 1950's and reach around 1037º. Though some breweries did continue to brew Pale Ales at 1030º or so. The Stout is, well, a bog-standard Scottish Sweet Stout, with a high FG and not much alcohol.

All in all, a very Scottish selection of beers. Not really so surprising, given the brewery’s location.

McLennan & Urquhart beers 1922 – 1954
Year	Beer	Style	Acidity	FG	OG	colour	ABV	App. Attenuation
1922	Old fashioned Ale	??		1010	1056	40	6.01	82.14%
1926	PA	Pale Ale		1008	1040	40	4.16	80.00%
1929	Dalkeith Ale (carbonated)	Pale Ale		1015	1041	No. 11 Same as our dark.	3.36	63.41%
1930	Dalkeith Stout	Stout		1019.5	1040.5		2.70	51.85%
1932	Export	Pale Ale		1011	1049		4.94	77.55%
1932	Dalkeith Special Pale Ale	Pale Ale		1011.5	1025		1.74	54.00%
1947	Ale	Pale Ale		1012.5	1030.5		2.32	59.02%
1954	Dalkeith Stout	Stout	0.06	1019.7	1037.1	450	2.23	46.90%
Sources:
Younger, Wm. & Co Gravity Book document WY/6/1/1/19 held at the Scottish Brewing Archive
Whitbread Gravity book held at the London Metropolitan Archives, document number LMA/4453/D/02/002
Thomas Usher Gravity Book document TU/6/11

Here are the London Pale Ales:

London Pale Ales 1925 – 1927
Year	Brewer	Beer	Style	Price	size	package	FG	OG	colour	ABV	App. Attenuation
1925	Barclay Perkins	PA	Pale Ale		pint	draught	1012	1053.1	30	5.35	77.40%
1925	Barclay Perkins	XLK	Pale Ale		pint	draught	1011	1046	24	4.55	76.09%
1925	Barclay Perkins	XLK	Pale Ale			bottled	1007.5	1038.2	16	4.06	80.37%
1926	Watney	Pale Ale	Pale Ale	8d	pint	draught		1053.7
1927	Watney	Watney Pale Ale	Pale Ale			bottled	1010.1	1041.9		4.13	75.89%
1926	Whitbread	PA	Pale Ale				1013.5	1046.2	23	4.33	70.78%
1926	Whitbread	IPA	IPA				1009.0	1036.9	22	3.69	75.63%
1926	Courage	Pale Ale	Pale Ale	8d	pint	draught		1052.2
1926	Charrington	Pale Ale	Pale Ale	8d	pint	draught		1057.9
1926	Charrington	Pale Ale	Pale Ale	7d	pint	draught		1045.9
1926	Truman	Pale Ale	Pale Ale	7d	pint	draught		1049.7
Sources:
Barclay Perkins brewing record held at the London Metropolitan Archives, document number ACC/2305/01/612
Whitbread Gravity book held at the London Metropolitan Archives, document number LMA/4453/D/02/001
Whitbread brewing record held at the london Metropolitan Archives document number LMA/4453/D/01/091
Truman Gravity Book held at the London Metropolitan Archives, document number B/THB/C/252

And here the English Light Pale Ales:

English Light Pale Ales 1933
Year	Brewer	Beer	Style	Price	size	package	Acidity	FG	OG	colour	ABV	App. Attenuation
1933	Truman	Sparkling Pale Ale	Pale Ale	6d	pint	bottled	0.04	1004.6	1029		3.17	84.14%
1933	Morgans Brewery	Light Bitter	Pale Ale	6d	pint	bottled	0.05	1008.2	1029		2.69	71.72%
1933	Simonds	Dinner Ale	Pale Ale		pint	bottled	0.05	1004.8	1030		3.28	84.00%
1933	Fremlin	Dinner Ale	Pale Ale		pint	bottled	0.05	1004.9	1031		3.39	84.19%
1933	Fordhams	Light Bitter Ale	Pale Ale	7d	pint	bottled	0.04	1008	1029		2.72	72.41%
1933	Beer & Rigden	Kent's Best Pale Ale	Pale Ale		pint	bottled	0.04	1006.4	1028	25.5	2.80	77.14%
Source:
Whitbread Gravity book held at the London Metropolitan Archives, document number LMA/4453/D/02/001

* Someone ought to have told them that it's tantamount to fraud calling a beer below 1040º as IPA.

William Urquhart, Esq, Brewer, Dalkeith

What a stroke of luck. Actually managing to find an article about McLennan and Urquhart. They're one of the breweries that it's harder to track down information on. Despite them having lasted into the 1950's. They didn't fall to one of the usual predators, but Aitchison, who bought them in 1955. The Dalkeith brewery closed in 1958. Aitchison itself only lasted three years longer.

While the text below is mostly about William Urquhart, we do learn something about the Dalkeith Brewery. Mostly what a crap state it was in when purchased by McLennan and Urquhart.

"William Urquhart, Esq, Brewer, Dalkeith
President, Midlothian Licensed Trade Defence Association

Although born and educated in Edinburgh. Mr Urquhart. whose portrait forms the supplement to this week's issue, has been so long resident in Dalkeith that he must be looked upon as belonging entirely to the smaller centre. It is now wearing on for a quarter of a century since Mr Urquhart. in company with Mr Alexander McLennan, came to Dalkeith and took a lease of the Dalkeith Brewery from the then proprietor. The terms of their lease gave Messrs McLennan & Urquhart the option of purchasing the establishment outright, and this option they exercised within a few years after settling in the place. When they went to Dalkeith first, the partners found the brewery to be of the usual country town order, engaged mostly in the brewing and selling of sweet ale, and in bottling. They also found the brewery machinery very much in need of repair, and the water supply, which was obtained from shallow wells, deficient in quantity and very doubtful in quality. The nature of the business changed at the very outset, the local character of the trade being done away with, and the business conducted on precisely the same lines as the big breweries in Edinburgh. The machinery was also attended to. and most important of all, heed was given to the supply of water. A deep bore was sunk to a distance of nearly four hundred feet below the surface of the ground, and an abundant supply obtained of the very finest brewing water. In the hands of Messrs McLennan & Urquhart the business of the brewery greatly increased, and the improvements and extensions of the establishment were rendered necessary, and were carried out as occasion demanded with no sparing hand. The brewings of the firm are mostly in demand in the East country, but agencies exist in several of the large centres in Scotland and North of England, and the ale from Dalkeith is appreciated by many, as its merits deserve, in places far removed from the ancient Midlothian town. The firm is not now constituted as it originally was. Some five years ago. Mr Alexander McLennan, who was Mr Urquhart's first partner, retired into private life, and his brother, Mr James McLennan, was then assumed by Mr Urquhart as partner. The name of the firm is not altered, but the personality of the partners has undergone some change.

Mr Urquhart takes an interest in local affairs, and, for a matter of twelve years, he has served the burgh well on the Commission Board. He is presently the convener of the Water and Drainage Committee. A keen curler, he acts as president of the local club; and a still keener golfer, he is connected with no fewer than four golf clubs, viz: The Old Dalkeith Club (of which he was president last year), the New Dalkeith Club, the Glencorse Club, and the Luffness Club. In politics, Mr Urquhart is a Conservative, and in religious matters he is a staunch upholder of the Establishment.

As president of the Midlothian Association, it goes without saying that the subject of our sketch takes a keen interest In the Trade Defence Movement. He has been at the head of his Association since its formation, and he has had the pleasure of seeing it expand in membership and in funds, until now it is one of the most powerful affiliated associations in Scotland, apart from those connected with the large towns. We hope both it and its worthy president may continue long to flourish."
The National Guardian, July 31 1896.

The first thing that strikes me is the firm was still a partnership in 1896. In the 1890's pretty much every brewery of any size became a public company. Maybe they were just a bit slow off the mark.

The Dalkeith brewery sounds like it was a sleepy sort of business, still brewing the sweet Ale that had been long popular in Scotland. By the second half of the 19th century the demand for this type of beer was falling, with Pale Ale very much on the rise. Though it doesn't explicitly say so in the article, I assume that by run along the lines of a large Edinburgh brewery, they mean it produced Pale Ales in the modern way.

Once again, the importance of good quality brewing water is made clear. Was the need for better water also prompted by the brewing of Pale Ale? It seems to have been much less forgiving of poor or unsuitable water than other styles.

It would be easy to assume that brewers were all Tories. But they weren't. Archibald Arrol, for example, was a Liberal. Which could be quite bizarre, many temperance campaigners being Liberals as well.

What other material do I have for McLennan and Urquhart? A few beer analyses. Would you like to see them? Sure you would. They'll be coming soon.