The herald and mail. [volume] (Columbia, Tenn.) 1873-188?, 1875-08-13
The Failure of Duncan, Sherman & Co.
From the New York Post.

The Failure of Duncan, Sherman & Co
From the New York Post
/ The suspension, without premonition
of the banking house of Duncan, Sher
man & Co., which for many years haG
stood high in the estimation of the
public, both because of the character Of
its members and its supposed great
wealth, naturally created establishment.
The public at large were surprised that
it should have suspended at all and
the few persons who were not wholly
unprepared for the event could not un-
derstand why it should have occurred at
this particular time.
| According to the published card OF
the firm, and according to what those
agents who are authorized to speak for
| it, say its real weakness was but recently
discovered, and as soon as it was known
to the partners, and it was further as
certained by them that new capital,
sufficient to pay every debt if demanded,
could not be procured, it was decided
that the proper course to pursue was to
stop payment and 60 into liquidation.
The only other way open to them was to
abuse the credit of the firm, which was
good enough, If properly pressed, to
have commanded millions of dollars
and TO continue III business with the
chance of making profits sufficient to
put the house again into a solvent con-
| dition. That the honorable course,
under these circumstances, was instantly
taken, affords no surprise to anybody
who knew the members of the firm to
be men jealous of their personal honor
and good name. Wherein they will be
blamed will be in that they managed
their business so loosely that they did
not know the true condition of their
affairs until after they had drifJed to the
point where they could not be rescued
without external help.
There is no intimation from those per-
sons who are best qualified to speak on
the subject tlSat the losses of the firm
were of very recent date. On the con-
trary, the inference is warranted that
the house has been subjected to a series
of misfortunes during a series of years,
beginning with unfortunate railroad
complications, and ending with mis-
judged transactions in cotton.
If it could be shown that the firm was
driven into suspension by the stress OF
the times-that is to say, that its EN-.
DdIIhEBuCubb NCLO CduhCO bhO COhhA-
ton of trade rather than by its own in
dividual errors of judgment, both in re-
spect to its railroad connections and its
transactions in cotton-then there would
be reason for suspectiTg general I'M
soundness in the business community,
and for exr Getting more failures from the
same general causes. To speak more
plainly, it is not the fault of the times
that stocks of the Atlantic and Great
Western, the Erie, and the New York,
Boston and Montreal railroad compa-
MES, and others of the sort, are not
good securities. Nor can the times be
held responsible for the decline in the
price of cotton. Advances on cotton, or
transactions in it, which, to adopt term
from Wall street, have proved "bad
business" should be credited to errors
of Judgment on the part of those who
made them, and not the fault of the
country at large. If there are similar
special reasons for other failures, they,
of course, will ensue but it is not fair
inference that the suspension of Dun
can, Sherman & Company shows any
general underlying reason for the down.
fall of other banking houses. What
ever failures may occur by reason of
losses on account of this suspension are
susceptible of calculation, The house
had a large number of wealthy deposit
ors Who never put all their eggs into
one basket, and who can not be serious
ly distressed by the failure of one of
their bankers. It also had others on q
smaller scale, who will be embarrassed
if they are to lose a considerable part
of what they have on deposit. Travel
ers holding the letters of credit of
the house will be Inconvenience
and troubled, but their troubles
are not of the kind which cause
mercantile suspensions. The house, we
are told, had outstandin a comparative
ly small amount of unaccepted bills,
estimated at from ESQ, 900 to G75, 900.
Assuming the larger amount to be cor
rect, it will probably be distributed
among from a dozen to twenty buyers
of bills, and certainly no enc of these
ought TO be forced to suspend on &C
count of his loss. With the south the
connections of the house were extern
sive, and it is estimated, perhaps tncor-
rectly, that the larger part of the losses
in this country will fall there. There
may be no consequent failures IN the
south, but it is possible that there Will
be. The banks here. we are assured,
will lose nothing which can make any
appreciable difference with them. 1t IL
possible that the losses to Europe,
where it is understood that the larger
part of the debt of the firm is held, may
cause trouble, but we have seen within
month losses incurred and sustained
there which by the side of the total
liabilities here make the failure OF
Duncan, Sherman & Co. look small. 1t
ia understood that the Union bank OF
London and Barring Bros. were both
protected. The house had scarcely any
connection with stock exchange inter
ests. and was as free of the specIlations
which center there as if its regular and
main business had been in shipping or
cotton manufactures.
Properly understood, therefore, tins
failure ought not to be alarming, and IT
can be made 80 only by nisrepresenta,
lions. It IS due TO the house to say that
there has been no suspension for years
which has brought out more sincere
expressions of sympathy and regret