The Sun.
London, England, 1857-11-12 00:00:00

To-day the panic has increased to a must alarm-
ing extent. From the hour of opening to the hour
of closing, the Union and City of Glasgow Banks
have been blockaded to such an extent as to require
a large police force at each establishment to pre-
serve order and to admit the public inbatches. The
demands at both banks were fully and promptly
met. Although the number of deposits called up
was very large, it is gratifying to learn that the panic
i s mostly confined to small traders and others, having
but small accounts. Men of business have univer-
sally fall confidence in the different banks. The
cause of the run upon the Union is believed to be
in a great measure owing to rumours that tdat bank
is largely involved in discounting transactions with
Messrs. Dennistoun and Co. This, we believe, is
quite unfounded, and any advances made to that
firm are well secured. The pressure en the City
of Glasgow Bank is no doubt greatly caused by an
absurd panic -which occurred among the depositors
with their savings branch last night. An immense
crowd of depositors gathered at the branch bank
in a very nervous condition, and although their
united deposits would not amount to many thou-
sand pounds, their number caused a serious panic.
At the National Security Savings Bank to-day the
numbers of withdrawing depositors were immense,
and considerable alarm existed. The Lord Provost
addressed them on the groundlessness of their fears,
and seemed to produce a beneficial effect. All the
claims were promptly met, and the bank closed at
the usual hour, with the intimation that it would
open to-morrow at ten o'clock as usual. and explain-
ing the nature of their securities. Western Bank
notes have changed hands at a discount of from
10 to 15 per cent. ; while some shopkeepers are
trying to turn the suspension to advantage by
offering to take these notes in payment of goods
bought. In order to allay the alarm existing, the
Lard Provost and magistrates met to-day, and
ordered the following notice to be issued, and
which is now being posted through the city;—
" BY TRH LORD PROVOST AND MAGISTRATES.—It is
with the utmost regret that the Lord Provost and ;magi-
strates have observed a very unfounded and uncalled-for
alarm in the city with reference to the stability of the
several banks. They lament to observe the unwarraee
able distrust on the part of many persons who have been
calling up their deposits with the banks ; and they feel
it to be their public duty to assure their fellow-citizens
in the most solemn manner that no cause whatever exists
for any distrait of the perfect responsibility of the dif-
ferent banks to meet every shilling of their obligations.
Even with reference to the bank that has found it neces•
nary, temporarily, to suspend payment, no risk whatever
exists as to the ultimate security of the depositors. The
inhabitants may rest satisfied that the magistrates would
not give them this assurance except from the most per-
fect conviction of its correctness : and they trust that
the good sense of their fellow-citizens will restrain them
from farther disturbing the monetary condition of the
city, which cannot fail, if persisted in, from occasioning
the utmost distress to the commercial and industrial
interests of the town.

"ANDREW GALBRAITH, Lord Provost.
"Council Chambers, Glasgow, Nov. 10, 1857."

The following circular has been issued by the direc-
tors of the Western Bank to the shareholders :

" Glasgow, Nov. g, 1857.
"Ladies and Gentlemen,—lt is our painful duty to
intimate to you that a concurrence of circumstances of
al adverse nature, both in this country and abroad, affect-
iog our pecuniary resources and credit, has clinpelled
us to come to the resolution this day of suspending pay-
ment of the company ob igations, both at head-quarters
and at the branches.

" We can assure you that this resolution has not been
adopted without anxious and persevering endeavours to
obtain such support, from kindred establishments both
in England and Scotland as, without involving much
risk to them, might have enabled us to tide over our
present difficulties, and avert a catastrophe which, on
public as wall as private grounds, we shall never cease
to deplore. This does not appear to us the proper time
to enter into explanations as to the manner in which
our applicatirns for aid were met. All that is necessary
to say is, that the leading Scotch banks, after conceding
assistance to a limited extent, on security, have seen it
right to withhold all further aid.
"In regard t 3 the future, two courses of action seem
open to the bank, and to those who are involved in its
embarrassments, whether as creditors or as shareholders.
These two courses, although pointing at different ra•
sults, may both be pursued simultaneously, and, we are
advised, ought to be adopted for the interests and safety
of all concerned. To understand this it will be neces-
sary to say a few words as to the position of the affairs
of the bank.

"Although no balance has been made of the books
of the bank since the annual balance in May last, and
although, no doubt, severe losses have been incurred
piece that date, yet we have reason to hope, if time be
given for the gradual winding-up of the affairs, that the
company's assets will be more than sufficient to pay the
whole debts. This, however, will much depend on the
state of commercial affairs in this country and in Ame•
rica during the next six months. But, at all events,
the undoubted means of the individual partners of the
company, if rendered available by a judicious system of
realisation, are greatly:more than sufficient to guarantee
payment Of all its deposits and other liabilities.
" In these circumstances, the course which it appears
to es would decidedly be most advantageous for all
parties to pursue, would be an extension of time for pay-
ment of the debts and obligations of the company—
'coupled with a system and management of its affairs
under inspection—and eventually, perhaps, an amalga-
mation of its business with that of some other bank. It
belongs, however, to the creditors of the bank to express
their opinion whether such a plan is the one most de-
sirable to be followed ; and for that purpose we propose,
as soon as possible, to call together district meetings of
tke creditors, at the places most convenient for them,
that they may appoint some one to represent them
should they not find it convenient themselves to attend
at a central meeting to be held in Glasgow. It is quite
obvious that this mode of arrangement assumes great
forbearance, if not hearty co-operation on the part of
individuals; but, where such extensive and widely-
raraified interests are at stake, it is thought not unrea-
sonable to hope that, should there be a diversity of
view among them, the minority will yield to the majo-
ity.

"The other course to be pursued is that of at once
taking the preliminary steps for winding up in a legal
way. Although this plan would entail great sacrifices
in the realisation of the assets both of the company and
of the shareholders, it became neceeiisary to resort to
it. It is fortunate that an act of Parliament was passed
last session to enable banking companies to place them-
selves under the operation of the Joint-stock Act of
1856, in all respects except as regards limited liability.
The shareholders and their estates must, under all
circumstances, remain liable t ) the full extent
fur the debts of the bank. The adoption of this
act would, in our estimation, be of importance, were the
business to be carried on. But the act contains, besides,
-very valuable and judicious clauses, enabling a company,
placed in circumstances like the present, to be wound
uti, and the means of the individual partners to be made
available for the early liquidation of thedebts. To adopt
this act requires only the resolution of a special general
meshing of the shareholders. eve have therefore resolved
on immediately calling such a meeting, to provide for
t)ie eventuality of such a course of action being pre-
ferred by the creditors, or forced on the company by ad-
verse circumstances.

"In conclusion, it is hoped you will see that we have
been actuated by the single desire to do our duty to the
creditors as well as tho shareholders iu the unfurtunate
position iu which they have been placed ; and, at the
tattiest practicable moment, to take the instructions of
Vuove who are legally entitled to direct us to all further
proceedings,—I am, ladies and gentlemen, your most
obedient servant (by order of the directors),

"J. S. FLEMING, Manager pro tern."
'the suspension of payments as officially noticed above,
crisAted considerable excitement at the hcad-office and
the various branches in Glasgow on Monday. Miller-
-8 reet presented quite a some; in fact, t ie entrance
from Argyle-street was literally blocked uo, not, we
gliquld say, by men who had any interest in the stoppage
or the bank, but paitymlarly by thrift whose curiosity
10 I them to create a crowd, and to look for sompthiug
Of interest, bec.tu,e of the want of anything else t, in-
to,rest theonseives. During the afternoon many parties
who had a few notes of the Western were to be eeen
anxious for change, and no doubt their anxiety was
B,)criewhat justifiable, for in all likelihood, as the Mar-
tinmas term Occurs on the following day, and they may
have depended upon paying their rents from their small
savings, the loss of immediate exchange is more dims-
trims than many
people, otherwise circumstanced, can
well imagine. The crowds that besieged the principal
blinking office diapered thernelves about 5 o'clock, and
there was no attempt a.: riot.
About seven o'clock at night tilere.wa:
egation of people in front of the bl'alnacrhgeofc theon
r "
City of Glasgow Bank, in Trongate.TVllll3,o°depositors were
eager for admission to withdraw their savings ; but how
their fears had been excited we (Daily Mat!) have
been
unable to learn. Such was the result of the confno
however, that hats were kaceked off, and an imisende
amount of jostling took place. The police succeeded in
cierAriog the streets, and we have no doubt that to-day ,
the C;ty of Glasgow Bank will be equal b the demandsl

With reference to the stoppage, the Glasgow Daily
Mad remarks :
"Such an event has long been unknown in Scotland,
and it would be difficult to describe the feelings wt ich it
excited in this large community. &mug dissatisfy sstion
was expressed at the refusal of the older Scotch bee ks to
lend the necessary aid in this severe crisis to the We: tern,
and this dissatisfaction is likely to be increased the more
the circumstances become known. The bad managei rent
and bad debts of the Western Bank are now notorious.
The diminished resourcee arising from these seilf-iii-
flicted calamities was the evil to begin with. But the
greath wealth of the proprietary, and the healthy field
of business that remained to the bank, were amply suf-
ficient to have surmounted this difficulty. There was no
run upon the bank for gold, no discredit attached to its
notes, no suspicion in any quarter of the solvency of the
institution. Bat there began against the bank a process
of what we may call 'sap and mine,' by the withdrawal
of deposit accounts in the city, and of interest deposits
in the country branches. Persons not receiving the
accommodation to which they were accustomed, or fear.
ful of not receiving it, withdrew their accounts ; and
carrying out the notes of the Western Bank de-
posited them in other banking establishments. A
heavy balance was thus formed against the West-
ern in the weekly exchanges of notes, and
these balances, according to custom, had to be met by
Exchequer Biala. It was to enable it to clear off this
bi-weekly liability that the aid of the older and
chartered banks was invoked, and in the first instance
granted. But these concerns soon pulled up, It was
really but a reasonable demand after all that was made
upon them. They were daily receiving from the public
the deposits the withdrawal of which was thus crippling
the Western ; and what was asked was that they would
not employ the advantage thus obtained against a sister
institution in a manner fatal to its existence. For any
risk they ran they had the unlimited liability of a pro-
prietary as numerous and wealthy as any of their own,
and on a credit precisely similar to which they them-
selves hold 30 or 40 millions of deposits from the public.
Every effort was made last week by deputations to
Edinburgh, even of parties not connected with the Wes-
tern, and by proposals of various kinds, to induce the
directors of these banks to extend the requisite assist-
ance in averting what could not fail to be a public catas-
trophe. A plan was even arranged for the amalgama-
tion of the Western and Cydeedale, by which the aiding
banks would have had the security of two great un-
limited proprietaries instead of one. But this, too, was
rejected, and it eves evident that the cc-operation which
had been expected, and the first promise of which bad
sent a thrill of joy and pride through all Scotland, was
not to be obtained. Such is the feeling excited in this
city by these circumstances, that we should not be sur-
prised to s- e the most effectual measures adopted to put
an end to the petty and ruinous jealousy of banks taat
tail from Edinburgh against Glasgow banks, and banks
that have charters against banks that have none. In
the meantime, the suspension of the Western is a blow
to the whole community, and cannot fad to have some
most unfavourable consequences. The first resolutino of
every man who has the well-being of Glasgow an of
Scotland at heart should be to prevent by all possible
meats any movement on the part of depositors against
other banks. Every bank in Scotland affords perfect
security to depositors. On the other hand no bank what-
ever can stand against a run for deposits. The money
lodged in our banks yields an interest to its owners. It has
consequently all to be employed and invested in some
profitable way, and while every bank keeps as much cash
in its till as is sufficient to meet the ordinary demands
of depositors, it is impossible that all can be served on
the same day. We trust that every effort will be made
to discourage withdrawals of accounts and deposits in
the meantime from one bank to another. We understand
that there has been a run this evening on one of the
savings banks. This was to be feared, as the Western
has; departments for savings in its various branches
throu'ghout the town ; and the disappointment of its
savings depositors was apt to be communicated to others
of the same class. In order to check this movement, we
would suggest to the directors of the Western Bank the
propriety of paying off its small savings depositors at
once."