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Norris at the Arsenal part 2: heading for liquidation and the first thought of moving elsewhere

This article continues from the opening of the series on Henry Norris at the Arsenal, and is part of a series that will outline all of Norris’ work with the club from 1910 onwards.  The aim is to unwind the myths that surround Norris’ work and reveal exactly what happened during his 17 years association with the club.


By Tony Attwood

Arsenal were having a tough time in the 1909/10 season, but two home wins in late January against Bolton and Blackburn gave some extra income, and a little relief to the club’s league position.  The finances were also helped by the cup match on 5 February which had an attendance of 30,000, (which gave Arsenal an extra £375) but the result meant that this was going to be the end of the FA Cup for another season – Arsenal fell at the second hurdle, and the score of 5-0 to Everton did not bode well for neither the club’s financial position, nor its continuation in the first division.

However there then appeared the first sign of Henry Norris’ serious interest in Arsenal, as a friendly match was announced for 19 February 1910 between Fulham, where Norris had his footballing and property development base, and the beleaguered Arsenal.

Friendly matches during the season were commonplace at this time, and Arsenal had already played The Rest of Kent, Barnsley, Tottenham (supporting the London PFA Charity Fund), and Shorncliffe Garrison & District XI, sometimes putting out their first team, sometimes reserves, often a mixture.

Thus another friendly was not that unusual, especially as Fulham had been knocked out of the FA Cup in the second round on 5 February and thus like Arsenal had a blank day in the calendar.

But Fulham, sitting 5th in the second division by the time of the game were not exactly a huge draw.  For Arsenal it was Chelsea and Tottenham that drew the crowds and although it could have been argued that as Fulham only had Clapton Orient in the league for a London derby, the chance to play another London team was of interest, the fact is that away support was still limited.  Arsenal did it, and organised special trains for supporters, but I am not sure Fulham had that tradition at all.

Arsenal played a mixture of first team and reserve players in the game, and one notable name on the team sheet was Joe Shaw who made a welcome return at full back after missing four games through injury.

This match must have been organised either on or soon after the meetings on 22 January, when Norris turned up to the public part of the meeting, seemingly unexpectedly.

We don’t know the crowd size for the Fuhham game, but the gate money take for the game was reported as being only £35, which suggests a crowd of around 2,000.  But then the away friendly against Tottenham (who were already Arsenal’s great rivals, along with Chelsea) earlier in the season only attracted 4,500.     The score was 2-2.

‘Inside-Left’, who had a regular column in the local newspaper the Kentish Independent railed against the fans for not turning up, in an article that reinforces the notion that everyone knew about Arsenal’s financial problems – not just those who had attended the special meeting.

It is also suggested by Sally Davis that it was the lack of support for this game, with everyone knowing that Arsenal urgently needed more money, that convinced George Leavey, the club’s prime benefactor, that the only way forward was to put Arsenal into voluntary liquidation.

I think it might be helpful to pause just for a moment here and explain what this meant.  Limited companies and limited liability is all about.  It might seem a dry subject but it is highly relevant to what follows.

The notion of an organisation with limited liability goes back to monasteries in the middle ages, but the law in a form we would recognise today dates from 1855.  The idea is that limited liability companies (usually designated with the letters Ltd after their name) must fully abide by the laws of the land, as of course must their directors, but if the company has difficulty continuing (as Arsenal did at this time) then it was the company that was liable for its debts, not the directors or shareholders (unless of course the directors had voluntarily given an agreement to be liable for specific debts, such as bank borrowing).

The reason for the Act was to encourage companies to take reasonable risks (which the directors on their own might never take, for fear of ending up in a debtors prison, and having their families removed to the workhouses) and to encourage people to invest in the shares of enterprising companies.  The argument has always been that without limited liability, companies would not be able to raise money from investors, and directors would always play everything so safe, that no one would take any risks at all.  In short it is limited liability that encourages enterprise and helps the economy to expand.

It is interesting to note however that Arsenal only became a limited liability company in 1893, when it joined the Football League.  Until that point the directors had resisted the notion, but the league insisted.  Indeed the change of the name of the club to Woolwich Arsenal came about because the law did not allow limited companies to claim or imply royal patronage in their name.  Hence there could not be Royal Arsenal FC Ltd.

Returning to Arsenal in 1910, several matters came to a head at once.   The small crowd on 19 February for the friendly game against Fulham, which had come after a disappointing crowd of just 7,500 for the match at home to Blackburn the week before showed Arsenal could not get out of trouble on crowd receipts alone.  Then Arsenal had a further home game against Sunderland on 26 February which only drew 8,000.

Worse was to follow with just 5,000 at the away draw with Nottingham Forest (although such a figure was hardly the fault of Arsenal fans) and then just 6,000 for the away game with Everton (again not Arsenal’s fault, but certainly not helping to club’s coffers).

Finally on 12 March Arsenal played a goalless draw with Manchester United.  Davis quotes and attendance of 4,000 for this game.  Ollier gives 5,000.  Either way it was small.

Thus it was not just the low crowds that tipped the balance, but also the results: five league games without a win, and an exit from the FA Cup.   And that had another implication: the league table showed Arsenal back in the relegation zone (the bottom two clubs going down).

Worse, as can be seen, Arsenal had played more games than the two teams above them who also had 20 points, but had a better goal average (goals scored, divided by goals conceded.

To return for a moment to the rather dry subject of companies going into liquidation – there is one other point to be made.  The law has always provided for two types of liquidation – voluntary and compulsory.  In short a voluntary liquidation is organised by the company, in the latter, the creditors of the company force the issue.

To explain a little further, in the former case, which Arsenal contemplated, the company sees the nature of its situation (which could be a shortage of capital, a drying up of work, a wish for a leading creditor such as Leavey to extract himself or any one of a hundred other approaches), and works with a liquidator to wind up its affairs in an orderly way, ensuring if at all possible that all creditors are paid.   That is what Arsenal contemplated – and indeed with the help of Henry Norris, that is exactly what  they achieved.

Thus while we today here many tales of clubs being forced into liquidation by Revenue and Customs because of unpaid tax, and many creditors not being paid (mostly the Revenue and the local suppliers of goods and services who can least afford to lose money owing to them) we should note that Arsenal were looking to do the right thing by everyone.  They were a community club, and even when the community was letting the club down by not attending games, the club wanted to ensure that if possible no one suffered.

Sally Davis points out that the second biggest creditor, the London and Provincial Bank, Woolwich, was “not pressing for a reduction in the club’s overdraft; and other people who were owed smaller amounts – including two players who hadn’t received their money from benefit matches, and Chelsea FC, still owed gate money from a league fixture at the Manor Ground – were not yet insisting on being paid.”

And this is where matters start to get interesting, because the first thing that has to happen with company liquidation is that there has to be a meeting of directors and shareholders to start the process.   This meeting was organised for 18 March 1910 once again at Woolwich Town Hall, and we know for certain that Henry Norris’ right hand man, William Hall was there.

Now Hall was of course not a shareholder, and thus legally could not take part in the meeting (the law on liquidation is very precise in terms of procedure) and of course Hall and Norris (being highly successful business men both with their property businesses in Fulham and with Fulham FC) would have known this and all the other details of how liquidation works.

So it seems certain that the reason Hall turned up was to inform George Leavey of just how far Norris and Hall would go to help Arsenal so that Leavey could pass this knowledge onto the meeting of shareholders.

And indeed this is exactly the sort of thing that voluntary liquidation does – it acts as a public announcement that the company is going to wind itself up – unless someone wants to come along and take things over, or help out.  (Of course some companies actually don’t want to carry on, and they will perfectly properly and legally wind themselves up in order to move into another area of business with a completely new board of directors – but that was not happening here).

So although the creditors were not screaming for their cash at this moment, Arsenal’s directors were saying that they feared such a time would soon come.  They were in debt, they had just nine games left to play to bring in an income before the summer break (which took in the whole of May to August) and they had run out of cash to pay the wages – as well as everything else.

In terms of assets the club had its ground, but that was mortgaged, and under retain and transfer they owned the players who could be sold – but that was hardly a long term solution.

It would be wonderful to know what Hall told Leavey prior to the shareholders’ meeting, and indeed whether Leavey stayed behind after the meeting for further discussions, but we don’t know.  Leavey did move the liquidation process forward, as he had to do if he was going to manage matters properly, and there were apparently objections as to who the liquidator should be – as can happen.

Inevitably, following Davis report of the meeting, it seems that there was also a lot of anger about George Morrell and his purchases of players.  Was it not ever so in times of crisis?  In retrospect everyone turns out to be an expert on players.

Morrell was of course at the meeting, but was clearly not a man who at this point had the sympathy of the shareholders.  There was discussion of the issue of the new tramway from London to Woolwich which was being built, and of the new railway service that was arranged for matchdays with a special discounted return fare from the centre of London to Plumstead.

But also, and again it is Davis’ research that gives us this snippet, there was discussion of moving the club to a location that would attract a bigger crowd.  As she says, “it wasn’t an idea first put forward by Henry Norris and William Hall.”

In one way this should not surprise us, because the moving of clubs was not at all unknown at this time.  Arsenal’s local rivals were Millwall who had played on a variety of grounds on the Isle of Dogs and could attract crowds occasionally in excess of 30,000 at East Ferry Road.  And yet in 1910 – the very year in which Arsenal were discussing their problems with their location and the lack of transport to the ground, Millwall were preparing for themselves to move south across the river to the Den at New Cross which in the summer they did.

Thus although Leavey was apparently very much against the notion of moving the club, such changes can and did happen.  Arsenal had moved grounds in 1893 following the attempted coup by a small number of directors – although this move was merely across the road from the Invicta to the Manor Ground.  Other clubs moved further.

And so everyone knew Millwall were soon to move to a newly built stadium, and so it is not surprising the debate was to be had.  Some were for, some against, but it shows that when Henry Norris started to talk about moving the club later in the year, this was not just a story of his own invention.   Precedents had been set, but as is always the case when it comes to radical change, many are always against change.  That’s just how it goes.

The series continues.

Other recent series from the Arsenal History Society

 

 

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