The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-12


doubt would be found to be rather over than
under the OF four hundred millions Of dollars or
about eighty million pounds sterling. According to the
process Of calculation, appears that the average
Of each frm estimating before by the average
Of those which have been published about
600; which shows that the bankrupt firms viii not be
able TO pay more than shlngs sterling the pound
or according currency ten centsin the dollar As
however, this result is obtained gIeat part from est
mates ana we desire 10 allow the widest margin, may
the assets at four shings on the pound, or
twenty cents on the dollar comparison Of the total
liabilities and assets gives the following fgures-
Total habihties. .SsooovvoV
Total assets eo,VVo0VV
This certainly does speak we'll for the manner in
which tho British commercial communitywhich has h!th
been held up model Of honesty and perfection N
ne business woYd-conducts its financial transactions
appears these figures that they have been engaged
in speculation upon purely imaginary bass-upon cap
tai which had existence. In other words that the
firms whose bankruptcy been brought
light by the revulsion have gone doing business al
most wholly a credit basis, and with the knowledge
Of their inability to fulfil their engagements.
In the case of nearly all Of the nsolvcnt firms which
have been brought into court facts and circumstances OF
remarkable character were elected II was found that
of them could not pay than shilling IN the
pound and that they had been going for years bor
rowed means conscious of their insolvency.
many instances also appeared that they had obtained
credit TO large amounts by the exhibition OF notes and
promises to pay which they knew would never be re
deemed
Facts of somewhat surprising character were brought
out the examination Of the bankruptcy case Of John
Monteith Co., in the Glasgow Shern7s Court 1t ap
peared from the testimony OF the head Of the firm that he
began commission agent February, ls4s, on
. capital of 81 500, and from that date this had
transacted business the amount of hundreds OF
sands He stated that although three his firm
Of the insolvency of the parties he granted them
accommodation, and continued his accounts with them
because they had threatened to fail unless he
enabled them to continue in business. ] was,
he stated, often left in the lur;h with their
bills, and obliged to provide for them. He had, he
further stated difficulty in getting renewals ofthe bills
with the Western Bank, but had great difficulty with
McAlan's bills Zone of the partes) the City Bank
the Edinburg and Glasgow, and he was "oblsed pay
some of Wardlaw Co.'s (anoher Of the parties) tha,
fell due in the Union Bank. 1t appeared that the firm
creditors TO Atterbury, Jr, Co., New York
house, the amount Of about $3.50 0co but which they
unable 10 obtain in consequence Of Aerbury hay
ing stopped payment. Mr.. MonteNh further said
When commenced doing business with them, from
Western Bank informed that they had this character
them the Bank Of England and the Western Bank
preference
we deal, with At the time have learned that Atterbury
himself is coming TO Glasgow TO make an arrangement
with the bank bv do not know what that to be-
how much they may be ahlc to pay. Tho proximais
causes Of our bankruptcy bad debts We lost by
Begbe, Wsemsn Co., OF Glasgow, nearly f8 900; by
Robert Johnston Co., Of London nearly 60 800 Latham
Brothers. Of Liverpool, above "a 500 MGachan Co. OF
Liverpool 81 200, and Isaac Hadwn Of Liverpool 600
All tese bad debts have made within the last twelve
monshs None Of the bis by Ateroury o. current at
tbs date OF our bankruptcy. were accommodation bills
IN the of
since our first delivery for the spring trade OF E55 Ny
statement shows losses by bad debts clos o92 5s ID
charged bills which should have been paid by the
scceptors, they having received full vae and which
tened f16s O47 l6s 3D. OF these debts and Iabilues
about G300 900 have been incurred during present
year The charge for interest and discounts during the
last four years amounts 10 923 19s I'd The loss on
l02 Western Bank shares purchased st fT2 e. 34s On
these shares no value at present be placed Ny claim
on the Manchester concern e as before mentioned,
6se 200, tho bills for whi,h with the Western Bank
The following exposition Of tbs system, which WA.
brought out In Of the Scotch Sequesaon Courts may
be read with interest and proni II has been made by
one who appears to be thoroughly posted the matter
TIE case OF Messrs. Mckenzie, Ramsay Co, pending
the Dundee Se2ueetraton Court affords another lament
aoie instance Of the evils nseparabe from system OF
trade based upon accommodation paper
happcars that thsfrm commenced business in lsay az
commission merchants, with capital Of Ct 100 and a.
has since transpned, at time when Mr NcKcnzie was
f2oo behind the world so tina, the capital Of the hrm
really that sum ioss than its stated amount In 1850
they began TO manufacture goods for the American mar
het and during their brief they thought proper 20
advance f2 800 10 nrm they started in business ~ pow.
er loom factors; they sank further OF "a 600 in
bIsacbheld they had transactions in year with bank
amounting 70 he sum Of e47 4o and they pay sm
One naturally led 10 inquire how small n capital in
amanufacturng business could command such cJmpara-
Mr. Mckenzie In his examination cnghters the unini-
ta'ed and communicascs the mode in which ms firm
Quoted their business The yarns were ordered a spin
nd sent IN warn
beacher who accepts bill for their value and holds the
yarns a. security. These yMns when oleached are sent
other bill, the proceeds of which applied 10 pay for
the weaving the manufactured article Is sent
aoo<her bill and holds lien the goods These bill
laden goods when finished must he replaced by others 70
secure the accepors Of the bs against loss and then
consisned New York commission house and another
bill drawn on the home house Of the American hrn for
sum within the cost TO secure them against loss from de
probation.
The fire, shipments Of goods consignment TO the Anne
rcan market generally realize fair reuDeraive Prices
but WI happen that The goods IN . market not1-
rousy hactuatng and uncertain az that OF the United
states are not sold with that punctuaiy with which bills
D.ca s -, sn.n snn nnen suen eo.urreooes 90 ~.e
take up the bi the goods sold 10 meet a. al what
they vii bring, and the unfortunate consgnor sstans
The history Of Messrs Mckenzie, Ramsay n % ~
identical with that Of all needy houses that conssn goods
much loss 10 their creditors, rfea injury to those en-
raged IN the same trade and benefit only to the commis
sicn houses
The lrncrc.ns renar. lat for one such house ruined
ny consrnmeDts to shcr market there three other
oos readyi TAKE y place With whom, then, rests ,hs
power 10 stay lessen the evil that acts iniurously to
he prudent hcr 81 trader9 credit not gyen 40
readily, N ", ,ies or raising money curtaed aud
law passed punish criminally all who engage In &C
'ommodaton biil ransstons, much loss would be pre-
vented Another evil from creditors drsadlns The
expenses Of the Bankrupt Court Guessing over the clrcu
nces Of the dishonest trading OF the sovcn 70 secure
be best possible dividends. II surely would be more
lgnfed and IN the end moro profitable 10 ycfse ACCENT
Of any dividend save through the Bankrupt Court
U cases were trading has been carried on With the aid o
ent had been lost
From The foregoing exposition idea may be form
Of the manner in which business conducted and this
ase pretty fair illustration Of many which have been
rought TO light by the crisis
Another fact may be worth mentioning here One OF
e firms that vas announced among the l,t OF bank.