The Sun.
London, England, 1857-11-26 00:00:00

[PRIM 4D, STAMPED 5D .]

COMMERCIAL FAILURES.

Another large (pP°rrovnintchiealnjmoie.)
nst-stock bank has
stopped. The draughts of the Northumberland
and Durham District Bank were returned this
morning by their London agents, an application to
the Bank of England for assistance on behalf of
the establishment having been yesterday declined.
Their paid-up capital is 652,8911., and there was
professedly a reserve fund of 90,8741. The liabli-
ties are thought to be very great—probably not
much lets than three millions—and the general
opinion as to the character of their assets is far
from favourable. They are understood to have
made enormous advances on colliers and ironworks,
and at the time of the failure of Messrs. Carr
Brothers at Newcastle in August last for 720,0001.
they appeared as large creditors on that estate, the
claim being secured by a mortgage ofextensive coal
mines. The head office is at Newcastle, and there
are branches at Alnwick, Berwick, Hexham,
Morpeth, North and South Shields, Sunderland
and Durham. The concern has been in existence
21 years, and at the date of the last return the
number of shareholders was 408. Terrible distress
is likely to be felt throughout the entire district
and among all cla-ises. The average weekly amount
paid for wages alone through this bank is stated to
have been about 35,0001., and it is feared that by
the catastrophe several thousand persons will be
thrown out of work. The Bank of England have a
branch at Newcastle, and every effort will be made
by them, and also by other institutions, to mitigate
the evil in this respect as far as possible. The bank
was formerly a bank of issue, but of late it has
adopted the circulation of the ank of England.
In London this morning the suspension was an-
nounced of Messrs. Rehder and Boldemann, a
young but respectable house in the German trade.
It is thought their liabilities may be about
100,0001. Annexed is the circular issued :

" 14, London-street, Nov. 25.

" Gentlemen,—lt is with extreme regret we have to
inform you that, in consequence of the failere of many
houses upon whom we hold bills, we are compelled to
suspend •ar payments.
" We have placed our books in the hands of Messrs.
Quilter, Ball, and Co., who will prepare a statement of
our affairs, and lay the same before our creditors at the
earliest opportunity.
" We are, gentlemen, your obedient servant.,
" RENDER AND BOLDEMAWN."

It is stated that Messrs. J. R. Thomson and
Co., Cape merchants, who suspended on Friday
last, with liabilities for 200,0001. or 300,0001., have
obtained assistance from the Bank of England, and
that they will resume business to-morrow or next
day. At the time of their stoppage it was under-
stood that their assets, although nut immediately
at hand, were sufficient to promise a surplus of
200,000/.

THE WOIVERHAWPTON AND STAF-
FORDSHIRE BANK.

At a meeting of the shareholders' committee on
Tuesday the following resolution was moved by
Mr. T. Bolton, seconded by Mr. Wynn, and car-
ried. une.niwously :—" That it is essenlial for the
oz:intim-Lance of the b ,nk on a safe and permanent
basis that a great effort be m-.de by the share-
holders generally to do all they can to place suffi-
cient funds in the hands of the executive, and that
for that purpose a subscription list be opened, and
that each shareholder be requested to subscribe an
amount (in addition to the call of 5/. per share),
for which notes of the bank shall be given, payable
in two or three years, bearing interest at 51. per
cent. Such notes to be redeemable by till bank
on giving two months' notice ; or such notes to ba
received in payment of any future calls, should
such become necessary."
A copy of the above, with the following circular
annexed, hay been forwarded to every shareholder :
" Wolverhampton and Staffordshire Bank,
Noy. 23, 1857.

" I beg to call your attention to tho annexed resolu-
tion passed at an adjourned meeting of the shareholders
held this evening. I shall be glad to receive a letter
from you stating whether you are willing to subscribe
to the pros 6.ed fund, a d for what amount.—l an, &c.,
BIJPERT KETTLE, Hon. Sec. of the
Shareholders' Committee.'

Yesterday (Wednesday) it was stated in Wolver-
hampton that the creditors generally were signing
the agreement to accept payment by fo r instal-
ments, as proposed by the directors, and adopted
at the meeting on Tuesday. The beat feeling pre-
vails amongst all parties, and the impres•i^.n is
that the bank will ro-open on Monday or Tuesday.

THE UNION BANK OP LONDON.

(Front a Correspondent of the Morning Advertiser.)

Several reports having acquired considerable circula-
tion with reference to the Union Bank, we are enabled
to supply tome particulars which may be deper.ded up, 1
as perfeotly reliable. There is no truth whatever in the
reports that the bank has suffered by the commercial
crisis in America—that it has hut a great Ameri-
can house in Old Broad-street 400,0001., —or that it
has suffered a bee of 60,0001. by the alleged for-
geries of Might, the corn merchant, of Hull. The
circulation of statements to this effect at a mo-
ment like the present has, of course, tended to
depreciate the shares of the Bank in common with
those of the other joint-stock establishments in the
metropolis, and an opportunity has been taken to lower
their value upon the Stock Exchange. The circumstance
that the Bank could lend any one firm nearly hag a
million sterling, would, if true, be a cogent illustration
of its strength, but it is not true that the Bank gave
assistance to the firm in question t.) anything like the
amount named.

The facts of the case are thee. The American
firm of the solvency of which there is no question,
applied to the Bank of England for a credit of 800,0001.
to be extended over six month'. Securities, consisting
for the most part of American bonds and other paper of
the highest class, and far in excess of the accommodation
required, were tendered, het the Bank of England re-
quired the guarantees of English houses of the first cha-
racter. A. meeting of the managers of six or eight
banks was then held to consider the propriety of gua-
ranteeing the advance, and ultimately it was arranged
that the London Joint-Stock, the Union, and the Ot-
toman Banks should guarantee the Bank of England
the advance of 800,0001., the basks ti be tenured
in their turn by the acceptances of the American firm,
and the deposit of securities with a margin of many bur.-
dred Thousand pounds. The Union Bank agreed to find
150,000/..' not 400,0001., and the balance of the 800,0001.
was guaranteed by the London Joint-Stock (with which
the American firm keeps its account) and the Ott,iman
Bank. The Union Bank, it is known, transacted the
largest English agency business with America. They are
the agents of Duncan, Spearman, and Co., one of the
first houses in New York, and other firms of the
highest standing ; but their business was solely confined
to agency, and they are in no way affected by the crisis
in Wall-street.

The general publicity given to the statement that the
Union Bank was the agent of the Western Bank of
Scotland and the City of Glasgow Bank, naturally led
to an apprehension that it might be seriously compro-
mised by the suspension of those establishments. The
bank, however, is not only covered to the utmost shilling,
but the fact is that it will have to return something like
150,0001. to the estate of each of the suspended banks.
The impression that the bank was a serious loser by
the forgeries and failure of Bright, of Hull, may be traced
to the fact, that it claimed to prove on the bankrupt's
estate for a considerable sum ; but the fact that the bank
merely proved, in its capacity of agent for a firm in
Montreal, is a sufficient answer to the allegation. Of
the soundness of the Union Bank, in common with the
other great joint-stock establishments, there can be no
doubt, although it is quite possible that the future
dividends of those concerns will be declared in a spirit
of greater caution.
The facilities which the joint-stook banks haveafforded
to the trading community, have, no doubt, mainly con•
tributed to the present extraordinary crisis in the com-
mercial world. Overtraiing and speculation were the
necessary consequences of unlimited accommodation,
and the joint-stook banks will probably find that a larger
reserve and a reduced dividend will be the policy to
adopt for the future. The joint-stock banks are now
charging their customers 11 per cent. for discounts, while
at the same time they allow 9 per cent. upon deposits
and balances on drawing accounts. The difference be-
tween the amount paid by the bank and the amount
charged to the customers for accommodation is but 2 per
cent., and the margin is far too small to enable a hank to
pay its establishment charges and run the risk of hisses
on disoount transactions. The principal sources of profit
in all banks, whether private or joint-stock, are the
balances to the credit of the smaller class of customers.
The number of small accounts in the London and Wet-
minister, the Union, and the joint-stock banks must
amount to many thousands, and as no interest is allowed
on balances below 1001., the consequence is that the
banks can employ a considerable portion of this money
at the highest rate of interest prevailing at the time.
The profits derived in this manner are however sensibly
curtailed in moments of panic, and we believe we ar
justified in stating that the directors of the leading • f
mg jon _-
stock banks, mindful of the necessity of a'la-r.ger ret.erte
to meet the demands of the class of small derettrrs
made at moments of panic, will net for the future recom-
mend, a continuance of the heavy dividends and bonus's
heretofore paid, until the reseved funds bears a juattr
. proportion to the liabilities of the bank.