The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-09-28
NG TELEGRAPH PHILADELPHIA, FRIDAY SFprp,Dnn - -

partner, acenj, or deputy 10 the distrc, q, ,,s.,-
the eoUGs are consigned, ana thnt bsi,~g ~uscn a
ccptcd, is available Tor the paytnent OF 0, ots
already contacted IN that part on for immed ate
transmission homC or 70 some third place, Tor
use ia any way thaC is ound desirable In 1ch
ways as theSe-and they are numberiess-a very
small amount of actual money goes TO the b MD
ing up, on the one side, OF a vast structure OF
credit, and, on the other, ct vast structure OF
commerce.
There was a hazy comprehension of this sys-
tenn long centuries ago. "It you were Ignorant
of thls, that credit is the greatest capital OF all
towards the acquisition OF wealth." sGld DemOs-
themes, you would be utterly Ignorant" Bat
tue modern theory OF credit is very mouerh ~
deed, having almost its tirst eXempl1hcatlon on
a large scale, in the establishment OF OVercnd,
Quincy, d Company. This house, as we saw,
was established TO make II business OF bh'uls-
counting, much more complete and extensive
than the chance trade in bills that had formerly
been, and that continued TO be, carried on Dy
bankers, merchants, and all sorts OF irregular
money-lenders. Very soon after the time OF
Samuel Gurney's supremacy in it, 1t began 10
assume gigantic proportions, and II was, Tor
some thirty or forty years, the greatest discount
ing house in the world, the parent OF all che later
and rival establishments that have started up In
London and elsewhere. AT first only discount
ing bills, its founders soon saw the advantage OF
lending money on all sorts of other securities,
and then cellars came to be loaded with con-
stantly varying heap of doc&-warrantS bills OF
lading, shares in railways and public com
panies, and the like. To do this, OF
course vast funds were necessary, very
much in excess of the immense wealth
accumulated by the Gurneys in Norwich
and elsewhere. Therefore, having proved the
value and stability of his business, samuel Cur
ncy easily persuaded those who had money TO
invest to place IL in his hands, they receiving
for he same "a fixed and fair return of interest,
and he obtaining with II as much extra profit
as the fluctuations Of the money market and the
increasing needs of trade made possible. He
became, in fact. new sort OF merchant, buying
Credlt-that Is, borrowing money-on the one
hand, and selling credit-that IS, lending money
on the other, and deriving from the trade his
| full share OF pTOhts.
Great help came to his money-making and to
! his commercial influence from the panic OF
| 1925. That panic arose partly from the tinan-
| cial disorganization consequent on the enforce
ment OF Sir Robert Peel's act of 1919, very good
| in itself, but promOtive of much trouble until it
| baG brought matters into healthy condition.
| Its more immediate cause, however, was the
| excessive speculation in joint stock companies
| at home as wen as IN continental mines
| American cotton, and other branches oil
| foreign commerce. Several London banks
failed, and at least eighty country banks fell to
| the ground, the Bank OF England itself being
| only saved by the accidental finding of two mil
| lion one-pOund notes that had been packed
! away and lost sight OF some time before. Even
| Joseph John Gumey, much more of phIlan-
| thropist than banker, suffered from the pres
| sure. 'BUsiness has been productive OF trial to
me, he wrote in characteristic way In his jour.
nal, land has led me to reflect on the equity of
| ment, even in this world, 20 the rich as well as
the poor. [ can certainly testify, that some of
| the greatest pans and most burdensome cares
| which have had to endure have arisen out OF
| being what is usually called a moneyd man.'h
tls BROTHER however, was much mixed up in
the turmoil. knowing Intimately as he did the
| suiferings which awaited those who could no
| longer command credit or OBTAIN supplies from
| other quarters said one of Samuel Gurney's old
friends, "his anxiety was felt more on others
account than on his own,"-the fact being that
his own financial dealings were so sound that he
had no fear of himself, and only had TO settle
how to make most money with most secondary
advantages to those ne dealt with. His desire, y
it is addeu, was TO act talry and Justly with his
| feuoW-Creatures, as well as to himself; and
thus did he move onwards cautiously, and
step by step, through those troublous
times, lest he should lead any into
error by his judgment. lr was remarkable
sight to witness him plunge day by day into the
vortex OF City business, and return thence to
his own domestic hearth without any trace OF a
mammon-loving spirit We can we'll believe
that the honest Quaker was reasonably free
| from the ''mammon-loVing spirit, - but he knew
well how to seek and secure his own advance
ment, and this he did very notably, by lending
TO many houses money enough to enable them
TO ride through their difficulties, and so bringing
70 himself much fresh favor and much new Gus
tom during the following years. From this
time forth ne came to be known as bankers
banker, taking the place, for many, of the
Bank OF England. Hundreds of private banks
tell INTO the way OF sending him, from time tC
time, their surplus cash, finding that they
were as sure Of getting it back whenever they
wanted it, as If they had lodged it in the
Bank OF England, and that IN the mean
while they were getting higher interest for /
than the Bank would have granted. 1--WE dc
not feel the slightest dependence upon the Banl
of England" said one OF the number, Mr.
Robert Carr Glyn, before the Bank Charter Com
mittee in 1882, nor do we feel the slightes
obligation to it in any way.n
Samuel Gurney was thus the cause of al
injury 10 the Bank OF England for which he wa
not easily forgiven. And in other ways the ole
Bank privileges were being assalled during these
years. In 1926 an act was passed sanCtionins
the establishment of jolntstock banks through
out the country, except III London, and within
a distance of siXty-fve mics thereof. eth
present system of law as TO banks" said LOrt
Liverpool, in supporting the measure, "mus
now be altered in one way or another 1t is tn
most absurd, the most inefficient legislation;
has not one recommendation to stand upon
The present system is one of the fullest libert,
as 10 what is rotten and bad, but of tn
most complete restriction as to all that l
good. by it CObbler, or a cheesemongeT
may issue his notes, without any proof OF hi
ability to meet them, and unrestricted by an
check whatever; while, on the other hand
more than six persons, however respectable
are not permitted TO become partners in banI
with whose notes the whole business OF tn
country might Oe transacted. Altogether tn
| whole system is so absurd, both IN theory ant
practice, that 1t would not appear TO deserV
the slightest support if 1t was attentiyey con
| sideIed, even Tor a single moment.n 1t WoulC
! certainly have been altered long before, but to-
the influence of the Bank OF ENGLAND directors
eager TO have as much OF monopoly as pOsslbl
in their own hands. This BILL permitting joint
stock banks at distance, however, was passe
in 1876, anc a few years later the wonderful dis
| COyery was made that ioint-stock banks weT
+ legal even in London, and had been so from tn