COURAGE’S BREWERY was essentially a public-house, rather than a family-trade concern; and this was the case even when with many firms the family trade was the important part of their business; nor have Courages ever entertained catering for off licences or clubs. The firm’s method of dealing with its public house customers had been the loan method. Its practice was to lend money to businesses on mortgage of the freeholds or leaseholds of their houses. The pursuit of this method at one time led to the firm’s ceasing membership of Brewers’ Hall, which was enforcing restrictive regulations upon its members on the question of loans. To Courages it seemed best that the Brewery should have a free hand in the matter. As a result of maintaining this policy a very large number of public houses came within the scope of their trade. They would make the licensee a loan on first charge, which advance he would usually follow up by a second loan from Pale Ale brewers, such as Bass’s, Worthington’s or Allsopp’s, who thus got the Pale Ale trade, and by a third charge loan from distillers, who thereby secured the spirit trade—the licensee himself finding the balance of the needed capital. Under this system Courage’s outstanding loans would be at times as high as a million sterling; the actual figure in 1887, for example, was £955,675. That was during the days when the business was still a firm. A few years later much higher figures were attained. In the late Nineties came the great boom in the brewing trade. Cheap money and the lending of large sums by Banks and Investment and Insurance Companies, and competition among Brewers for the purchase of houses, were the features of the time, and the high prices which in consequence were commonly paid can certainly be described as inflated. With Courages, the new development meant a further big increase in their loans, which in 1897 reached the colossal figure of £2,202,879, and in that year the output reached 333,400 barrels. To meet these heavy financial engagements fresh capital was issued, and the Company bought a large number of houses; and though it withstood the prevalent temptation to pay almost any price for properties, it nevertheless did pay some very high figures. Later this inflated finance of the Trade had the unfortunate result of drawing the attention of the Chancellor of the Exchequer to a further source of revenue. It will be seen from the loan figure of £2,202,879 just quoted that financial arrangements in relation to the houses formed an extremely important part of the business. It was the custom of Licensees when they bought a free lease, to go to their Brewers for financial assistance, and thus a connection with the Trade was built up which was practically life long, the Brewers relying upon their customers for their judgment and knowledge of the trade, their stability and business capabilities. In this way the Brewers became Bankers to the Licensed Victualler. The extent of this banking side of the Brewers’ business may be illustrated by reciting the fact that the Company once advanced the huge sum of £100,000 to one man who had some fifteen houses under his control. His name was George Wyatt - a keen, clever, hardworking publican, and physically, it may be added, of monumental size and weight. If anything untoward were to happen to him the Directors felt there might be considerable trouble in managing his business. They therefore took out an Endowment Policy for a large sum on his life, but when he went to the Insurance Company he was so heavy that he could not be weighed in the scales, and large office ledgers were brought in, when he finally turned the beam at over 20 stone. It is pleasant to record that after all these precautions he outlived the Policy. The constant turnover involved in the paying off and renewal of loans amounted to between £1,000,000 and £I,500,000 per annum. Arrangements for repayment had to be made and carefully watched; customers overdue with interest had to be cautioned, or the loan might be called in (when in some cases it would be paid off by another Brewer); but as properties sometimes depreciated in value, loans on second mortgage were lost and had to be written off entirely, and the property taken over by the first mortgagees; in other cases the houses became the property of the Company itself as mortgagees in possession. As time went on, and loans decreased and businesses were taken over, the Company became more of a house-holding business than before. The following figures show the transition and the substitution of "Estates “ for “Loans “ :-
Thus it will be seen that the method of financing houses was in the course of a single generation entirely reversed. The 462 houses now provide the capital in ” Estates” ; the loans being secured on the Company’s properties.