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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 “ :-

                          Loans            Estates
     1890        £1,654,355       £221,602
     1897          2,202,879         786,071
     1900          1,915,843         940,593
     1910             694,099      1,810,748
     1920             324,344      2,051,560
     1930             348,202      2,607,676
     1931             333,897      2,695,672

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.

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CHAPTER 5

COURAGE'S BUSINESS METHODS
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