New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-11-15
DISTRUST IN ENGLAND.
CREDIT SHAKEN GENERALLY.

LONDON, Oct.I5.-I was at Brighton on Sunday,
in company with man who understands that bril-
liant resort better than I do. | noticed that the
Kings Road was much less thronged in the after
noon than it usually is at this season. and that the
number OF well-urned-out private carriages was not
large asked why. 1t is the fashion just to
crbe everything that goes wrong the City of Glas
gov Bank and was quite prepared TO hear that the
failure OF ktehying concern in Scotland had thin
ned the drive of the most popular waterng-pace in
England. And so it proved. lyon see" said my
FRIEND 1T is not the arstOcracy which fills Brigh-
ton just at this season. There are good many of
the upper-ten here but the people who come in
greatest force wero City peOple-successful stock
brokers and the world of high finance in general.
They are feeling the pressure very much aud the
first thing they cut off Is their trip to Brighton. IL
they have house here they close it tor let it, If they
were in the habit of going to a hotel, nothing
ls easier than to stay at home. They save
their Motel bills (which at Brighton are something
to open your eyes), and the conveyance of their
horses and carriages by rail. and much beside. No
sort OF economy is easy. III you put down your
cauiage or stop giving dinners or retrench in your
wfe's wardrobe, 80 that she wears the same dinner
dress twice to Mrs. Browns it is noticed. But no.
body knows or cares whether you go to the seaside
In October OF stay at home.
My friend is a man who is in the City, but not of
t. lie told me the other day he had never in ms
hle bought or sold 4 share, except for investment
save snce when he went into q "sure thing"
which cost him few hundred pounds before he got
ont of It, stock gambling" he remarked, Z" is like
gambling on the turf Ii YOU take your chance as
an outsider, 1t is just poss ible you may sometimes
win. But the man who buys or sells on tip
ai,cdys loses" This repeat to show you how good
s.1.,. 4. IL
promenade
There can be dOubt that the feeling in the City
is very blue. II say anything Oh subject which
lies out VI my beat, 1t is because all the City men
whom | meet agree in saying that the ordinary
financial organs tell but part of the truth. The
financial writers In the daily journals have been en-
gagged for days past III rose-cOloring all their
news They are right enough, perhaps, in doing
what they can to hinder the outbreak of
panic. But they certainly do not reflect
the views which prevail among people who
do business IN money. All the signs which COM
monty precede great crash-Or at any rate many
OF them-may now be observed. The failure of the
City of Glasgow Bank, serious as 1t is, would be
nothing If it stood alone il its failure due
to ordinary causes. But it does not stand alone,
and the causes Of it are such as to sap the very
foundation of general credit, viz, confidence. Nay,
some of the worst facts in the were known
or suspected in advance by many Scotch
business men. Ii was known that this bank
had abandoned legitimate banking business for
gigantic speculations in New-Zealand corner-ots
and East Indian cotton. II was known to have en-
gagged tsolf so deeply with certain houses that it
must go down when IL ceased 10 be able to advance
more money. It was known that its acceptances
were being hawked about London. where sound
Al. understand Uh hoDE-
paper should be in the hands of bill-brokers
at al. It was known or suspected that
some Of the directors were large debtors
TO the bank, on doubtful security, or on no
security at all. Lattcrly it began to be whispered
that its IL per cent dividends had never been
earned, and that the price Of tho bank stock had
been kept up by purchases on behalf Of the bank
a suspicion fully justified by the revelation that
something like onesiXth of tho capital stock stands
in the name of the bank, and has been but lately
acquired. All this time the depostaries of these
secrets held their peace. They were content TO sell
out their own shares and escape liability
handing over shares and liability together to
the small tradesmcn, half-pay officers. widows,
and other people Of moderate means who
were tempted by the high rate of interest. and who
in many cases embarked their whole fortunes in
this rotten ship only year or two before 1t foun-
dered They suffered half of Glasgow to pour in It's
deposits, the half which trusted its money TO the
bank being mostly people in moderate way of
business, shop-keepers. small manufacturers, and
the like. The question they all ask now is, Why
were we not warnedp
The community asks the same question. IL is too
late to save tho victims of this particular bank.
The prospect to-day is that the shareholders Whose
liability for the debts of the bank is Unlimited may
be ruined one and all. before the creditors are
paid But the distrust thus generated affects other
banks and most classes Of business, One house
after anotheri in London in Glasgow, in Manchester,
topples over. direct consequence OF the
failure OF the bank which had buttressed them
hitherto. But that is nothing. 1t Is not
what has happened, but what may happen,
that fills the City with gloom and spreads alarm
all over the country. Such common signs OF distress
as the raising of the bank rate the decrease of the
bank in spite of all efforts TO keep it up;
the sudden increase of bank Deposits the rapid fall
in all securities. consos Included; the general
stringency Of the money! market anybody may
read and the significance of this Is plain to the
dullest But go to stock-brOker in large way OF
business and he will toll you that he is Hooded with
orders to sell stock that cannot be sold-stock
that in ordinary times is as marketable
as Bank of England note. Go to bill-broker and
he will tell You that when he has discounted every
thing he knows to be good to tho limit OF his own
capital he applies to tho private and joint stock
banks alike In vain for money to invest in the most
securities Go to these banks yourself
and you will find that instead of increasing their
loans they are refusing applications from their best
customers, and calling in all tho money they can
lay hands on. You can hardly borrow 100000
on consols; and if you get the money you
are made to understand that you get 1t
by great favor, and the margin the bank requires
is broad enough to allow for an earthquake. Surely