The Sun.
London, England, 1837-06-05 00:00:00

MONEY MARKEI.

( From the Alaniny Chronicle.)
A very long list of failures has been handed abatis during Sa-
kurtlity, but the suspension of payment of only three has been
gniarly announced, namely, Messrs. Bell and Greet, Messrs.
Gowan and Marx, and Messrs. Schmidt and Meugens. All
these were highly respectable, as well as of considerable stand-
ing in the City, and were not in the least suspected being
mixed up seriously in the difficulties of the three. A° ve have
before stated, it is wholly impassible) thaitfOre, to ascertain
who is not affected ; so that ever hsanch of comattrae must
he at a stand still selitli the state of the metropolis is known
throughout country. the The anxiety which is felt by all
•
hous 'eees " allot be described. No less a number of mercantile
than between 130 and 140 had bills upon the American
firsns which have stopped returned upon theist and this was
not by any means a severe day in that respect, the heaviest
amount becoming due about the 20th of this month. As a
strong feeling prevailed up to the last moment that the Bank
would continue its assistance, this event was generally unex-
pected ; so that it is quite uncertain how far the parties con-
Mondhave been prepared, and what the result may be ; but
Tlue''oes- we fear, will bear unfavourable testimony of its con-
It will be remembered that one-half of the bills,
ot more, received by the three American packets which
arrived within a few days of each other in April, was pro-
tee for non-acceptance ; consequently, whatever inconve-
ce attaches to this part has been contended with and has
sc woarceld rke its mischief already. The remaining portion can
y, a
therefore, exceed a mill2,on stling, a large prt of
Which we may fairly surmise Is in theer hands of the houses
Which have succumbed, es may be found ensconced in the
_soffers of the Bank of England, playing the part of col-
;lateral securities : 'but the remainder in such times as these
s'Llfficient to cause much embarrassment, if not prepared
tor "f°r'shand. Another most important and alarming fea-
tsre
n as been the return of acceptances to a large amount
Vral the manufacturing interests in the country. One
41 sent back was for 25,0001. About the middle of the
Week we shall, perhaps, be made acquainted with the ef-
lect of this ; for although it would be a trifling sum in
Ordinary times, the difficulty of obtaining money promptly at
The present moment makes it of more magnitude. The Bank
Srefused everything accepted by Messrs. George Wilde and
0., who referred all matters to that establishment, which
• has tended much to increase the embarrassments, as nine
persons out of ten were fully convinced that the Bank had
guaranteed to carry them through, and readily took their
Paper under that impression. This is a very serious thing,
en may, Perhaps, be the means of crushing parties who had cautiously abstained from taking anything but what they con-
sidered undeniable !security. It is useless, however, to argue
upon it, for it is ;mpossible to understand what the Bank
means,and are believe it will be more fully gone into in a
Court
,o,f . but every person asks why that establishment
wetittrns P,_eurad Mess'rs. Wilde and Co. to wind up its affairs if it
e,, Ir 4 the same condition as the others, and only obtained ac- '4%modation upon security.
A number of idle rumours are afloat respecting the share
*Bich the American Government has had in either bringing
about, or at least adding to, the panic which exists in the
United States. It is said that that Government is at all
events not displeased at the turn affairs have taken, inasmuch
44 it must lead to a general bankruptcy or compromise on the
endpart of the mercantile community with the British creditor,
s)
hereby enable the Executive to retain the specie in thebu
eatry. /Ile cotton crop, they say, will' pay Bs. or 10s. in
.Pound, without rendering it necessary to disgorge its
that" I°ll, and every thing will begin afresh. We need not add,
ttiWe do not attach the slightest importance to these impu-
ons on the American Government. If such were the case,
"" • Van Buren and his colleagues would have calculated most
erroneously ;instead of securing their bullion and re-
n"ling their comnaercial relations, they would have to send
eo, almost every dollar, and every branch of commerce would
Lie crippled. The Americans would be wholly deprived of
their power of drawing bills upon London, which has given
them great facilities in their commercial operations, and in
*rite of themselves they would be compelled to take specie
Wherever they went.
theor the year ending Saptember, 1836, the imports into
i
_United States exceeded the exports by upwards of
it.dsooo,oooL, and this kas been increased yearly ; from which
is easy to see that tlisa Americans must either relinquish a
_arge portion of their luxuries and superfluous wants, or con-
merit to give up their precious metals.
The receni, advices from New York, in reference to the
the ; for the most gloomy rumours were very in-
dustreausly circulated, and it was currently stated the next
rs from this country would announce the failure, not only
°‘ the firms which have already fallen, but of others of still
greater importance. This is stated to be the chief cause of
the panic in the United States, and led the Bank of England
to decide so fatally upon this important point. The next an_
rivals from that quarter, if the vessels have reached New York
from England, will be much more cheering, as a contradiction
Will not only be given to their apprehensions, but they will
learn that succour has been afforded to the houses in diffi-
culties. The Bank of England will also find that they have
legislated upon fallacious data.
The joint liabilities of Messrs. Bell and Grant and Messrs.
Gowan and Marx arc supposed to be rather more than half a
tiaillion; but as it is known they have traded with large ca-
pitals it is expected they will be able to pay in full eventually,
and may in all probability shortly resume business, should re-
mittances be forthcoming from America, the non-arrival of
which has been the immediate cause, we understand, of their
suspension of payment. Messrs. Gowan and Marx, it will be
ternernbered, were the contractors for the recent Cuba loan.
The failure of Messrs. Bell and Grant is especially regretted.
The latter gentleman was looked upon as the model of an
benglish merchant, prudent, circumspect, yet generous, and
• was a subscriber to and strong supporter of most of the
charitable institutions in the city.
(From the Times.)
The great blow, so long held in terror over the city, having
fb4llen, the investigation into its causes and consequences has
,e,gun, and observation has been vividly on the alert, to learn
ail that it has been possible to collect on the subject. One
ern avhich might have been fairly anticipated has followed
.5 cicse upon it—that is, the failure of several houses, otherwise
good character and undoubted credit, who had linked their
late with that of the three great American houses, by giving
guarantees on their behalf to the Bank. The conclusion to
l
,hich many persons had come yesterday, and which we were
ed to
a adopt, that in general this had been resorted to to
tv,scpe from a greater sacrifice, and that but few compare-
it,velY had compromised themselves by so doing, will, as
,cla now feared, turn out a wholly mistaken one •
' but
11 the very important question arises, how the
Bank
to be secured if the guarantees stop payment. As
e matter now stands, it is tolerably certain that large
advances have been made by the Bank beyond the sup-
lt).osed guarantees, and if these also break down, their situa-
tele.,.bccomes a very perilous one indeed, the guarantees ex-
Trit.)!lng, as it is admitted, to something more than 1,250,000/.
to t`2!° is notion abroad, however, whether of Bank origin or
th. 1t is impossible to say, that in givinr, these guarantees for
larnerican houses, an engagement 'has at the same time
fatlureentered into, to give a preference to the Bank, in case of
over all other creditors. This supposition has been the
oject of much remark and discussion, in general of a very
mignant description. That the Bank should take their chance
the Power of making their own selection of the parties, and
i.,'tselfcluiry into their solvency, was a position injurious enough in
to to the body of creditors ; but that they should be permit-
ped, by a secret arrangement, to absorb the whole of the pro-
rty in the event of
any serious disaster, is what any man who
._lB exposed to suffer by it will at once pronounce a downright
robbery. This is a matter which it is highly proper that
the trading interest should understand, and mako them-
elves fully masters of ; it is an idea only just started, but
they may be assured that it will be a long time before they
thinear the last of it. And out of this, too, thy will learn some-
ng, of art iniquitous principle which is involved in any Bank
nterference to support, or as the approved and admirable
Phrase is, "bolster up" certain houses. If they are allowed to
fall when their own indiscretion has brought them into a situa-
tion to apply for such support, all the creditors obtain their
fair proportion of the assets ; but this bolstering enables a few
artful men to secure all that is owed them, and leave little or
nothing to the rest. The fact is notorious, that where houses
have received Bank assistance, and have afterwards failed, as
is, by tl.,e way, generally the case, the division among the great
body of creditors has been uniformly a very small one. This is
a bearing of the question, leaving the consideration of private
i.arantees out of the case, which—and they can very seldom be
dispensed with—are attended with consequences of a very cruel
hater°, to which they ought never to have been subjected. They
nre exposed, not only to the loss of their money, but of their
credit, for having taken so imprudent a step. Some are
cajoled, others threatened into it, or induced by the fear of
:esing the connections of those by whom the guarantee is
ccited- If the secret history of these American guarantees
ould be trade known, it would disclose in that respect a
ghtful picture. The extent of it, too, must have been
enormous, for as few took engagements for.more than 20,000/.,
t° the average probably did not exceed 10,000/., from 100
150 houses must have got thus entangled with the Bank and
American houses they were endeavouring to " bolster up."
f` is well known, that when these circumstances reached
tZreign countries, for concealment in such a case was altoge-
t, er out of the question, they produced a general distrust of
kne merchants of London, who were all, as it could not. be
prude who did assist, involved in the general censure of im-
iei_en This is a state of things, one of the consequences
Rt.:" "bolstering" system, which is a positive evil of the
L -"est magnitude, and must not be lost sight of when the
dog acute come to sit in judgment, as they must undoubtedly
vi,n the conduct of the Bank in this whole affair.
of ttle,way to deal with the matter—and this is the view taken
ißssome very intelligent men in the City—would be to
f‘tii tute an inquiry into the situation of the houses which have
theed at the time of their first application to the Bank, and at
‘vh Utile of the failure. It would thus be made to appear
Nat creditors had got paid in full, under the protection of
uhnk interference, and what was the situation of the remainder
Nroetinidthe wreck of property was made over to them. It
par) ear also, which is a still more material part of the
°Nair
mein 3, what innocent persons had been led into new engage-
pro:s with these houses, on their faith in the efficacy of Bank
caged"eti, and who, but for that confidence, would have es-
e altogether without loss. Such an inquiry would settle
for "t imPortant question, and provide also excellent materials
fereneem. ming in future the value and propriety of Bank inter
is little
dosibbte.netnal imprudence of the Bank, for so, there
a, it
will be visited,
will now be termed in taking this step,
hirgelgrO,°w Pretty evident, bv a severe retribution. A very
takepi nei absolute loss must Le incurred, We have heard_it.
" as a rough estivate at. 700,0001., but we should