Charitable Corporation

From Wikipedia, the free encyclopedia

The Charitable Corporation [1] was an institution in Britain intended to provide loans at low interest to the deserving poor, including by large-scale pawnbroking. It was established by charter in 1707. Its full title was "Charitable Corporation for the relief of the industrious poor by assisting them with small sums upon pledges at legal interest".

It became dishonest, and Smollett called it a "nefarious corporation". The directors gambled wildly with the shareholders' money.

George Robinson was appointed the cashier of the Charitable Corporation. He entered a scheme to loot the company. He, William Burroughs (a director), William Squire (a subordinate official), and John Thompson (the company's warehouse keeper) obtained loans on falsified pledges, pretending to be "industrious poor". The plan was to invest these loans in stock of the Corporation, as its value was anticipated to rise enough to repay the loans and interest and yield a profit. But Robinson, who was entrusted with the money, took much of it himself, and pledged the stock to raise money for himself.

His partners, however, were much in his debt, and saw no way to be revenged upon him without ruining themselves. Two more directors, Sir Archibald Grant (2nd Baronet) and Sir Richard Sutton were now brought into the scheme. They were to arrange for lead mines in which they were partners to be sold to the York Buildings Company, whose stock would thus rise in value. The partners were, through trustees, to invest heavily in the stock and thus be able to settle their debts. The management of affairs was left to Thompson, as Robinson was no longer trusted. However, the cunning Robinson persuaded the trustees that their pledges to transfer the stock to the rest of the syndicate were lost, and got the shares issued to himself, again swindling his partners to the amount of £100,000.^[1]

In the end the Common Council of the City of London petitioned the Parliament of Great Britain to dissolve this "dishonest concern", on the ground that the Charitable Corporation, by affording an easy method of raising money upon valuables:

Furnishes the thief and pickpocket with a better opportunity to sell their stolen goods.
Lets a man intending to become bankrupt buy goods on credit and dispose of them for ready money, defrauding his creditors.

Various other speculations by the directors, using further loans from the company, failed, and the Charitable Corporation collapsed in 1731. With the aid of Grant, George Robinson (who had become M.P. for Marlow) and Thompson escaped to France with their gains in October 1731. Less than £30,000 was left of a capital which had once been twenty times as much.