My ancestor & the banana margarine business

Q: My ancestor Arthur Edward Spackman bought the patent and floated the British Banana Margarine Company Ltd in 1910. Can you help me with further information please?

Mr Spackman

A: This is one of the more unusual questions we have received. You later provided copies of an advert in The Grocer of 7 May 1910 in which the advertisers sought to raise £20,000 by the issue of 20,000 6% Cumulative and Participating Preference shares at £1 payable in instalments. The three directors, of whom A E Spackman (described as a merchant) was one, and their friends had underwritten 5,000 preference shares, or a quarter of the sum to be raised. I have not been able to find an online copy of patent 8279 of 1908 which is referred to in the advert. You would need to go to a patent library to get a copy. Nor have I been able to find any further details of the company online but there just might be surviving papers in such as The London Metropolitan Archives.

The total capital of the company was £50,000 of which £30,000 was in ordinary shares. There is no indication in the advert of who owned these or how many had been issued but an issue of at least 10,000 plus a further £5,000 in cash or shares was scheduled for 2 May 1910 in part payment for the patent rights. Of the overall payment £3,500 was for goodwill – a polite way a describing the difference between what was paid and what it was worth.

Ordinary shareholders are, in effect, the owners of a company and are entitled to a share of the profits by way of dividend payments. They also risk losing some or all of their investment if the company goes bust. Preference shares are a form of loan on which interest is paid and they usually rank higher for payment than ordinary shares if a company is wound up. 6% was quite a high interest rate for the time – the Forsytes were happy to settle for 4% Consols. No doubt the higher rate reflected the higher risk inherent in such a venture compared to government bonds.

Margarine was developed in France in 1869, mainly to feed the army and ‘lower classes’. Initially it was made with beef tallow but over the years there has been a wide range of ingredients, mainly animal fats such as tallow and lard and vegetable oils with yellow colouring added. The prospectus mentions that banana margarine was made with bananas, butter and other pure and wholesome fats. If so, it was unlike other margarines which tended not to include butter. I can find no mention of banana margarine anywhere other than in the advert and the London Gazette. There are a few recipes online in which bananas can be substituted for butter.

As you would expect the prospectus was full of hyperbole about the benefits of banana margarine. There are tell tale signs that all was not as one might hope. The auditor’s figures only covered the period 1 February to 29 March 1910 – an insignificant period in trading terms. There’s an extensive list of businesses said to be selling the product. Tellingly all those in London are in E, EC or SE districts. These were the less well off areas of London and there is no suggestion of sales in the wealthier parts.

I am slightly confused as to which company we are talking about. The advert is promoted by The British ‘Banana’ Margarine Company. It says it was taking over the business known as the ‘Banana’ Margarine Co Ltd (of which A E Spackman was also a director). Whether it ever succeeded in doing so is not clear as on 11 October 1910 a notice appeared in the London Gazette announcing that The Banana Margarine Company Limited was going into liquidation and there would be a meeting of creditors on 22 October. There are subtle name differences and, I believe, two companies. The fact the earlier one went into liquidation does not necessarily mean the later one failed at the same time.

It’s difficult to judge how well your grandfather did out of this. He probably got some of the shares in the new company issued on 2 May and may have had some of the cash alternative. He may have had some benefits from the new company which paid its directors £50 per annum and also traveling and other expenses. On the other hand, he may have lost money in the liquidation in October 1910. Overall the venture cannot have been a resounding commercial success sadly, otherwise we’d all be eating banana margarine now. DF