The daily gazette., 1878-10-05
FOURTH EDITION
From the N. Y. Herald, Oct. A.
Failure of the Glasgow asank.

This same Bank of the City of Glas-
cow failed in 1857 at the same time with
the Western Bank, OF the same city,
which had n still heavier capital. The
failure of those two important Scotch
banks in 1857 brought on the general
Britain, by creating large sudden
demand for gold, which led TO contrac-
ton of bank accommodation in England
The Western Bank was utterly prost. a
ted, but the Bank of the City of Glasgow
recovered from that calamity, and has
since had a career of such high apparent
prosperity that on the very day before
this recent failure its stock was selling in
the market at more than two hundred
per cent above par, having for long
time past paid regular annual dividends
of twelve per cent 1t Is not surprising
that the closing of its doors caused a
sudden shock, although an attempt is
made by the London press to smooth it
over by statements that an inner circle of
of bankers had some previous kno wledge
of its tottering condition.
1t is legitimate enough for the English
press to try TO allay apprehensions, but
two or three days must elapse before the
extent OF the consequences can be mea-
snred. The stockholders, like those of
all the Scotch banks, are individually
liable, so that its depositors will probably
receive at last the full amount due them.
But meanwhile large proportion of
them will be ruined in their business,
because their resources for conducting
business will be locked up until after the
conclusion of dilatory legal proceedings.
The merchants who have forty million
dollars deposited in the Bank of the CITY
of Glasgow are deprived of their means
of transacting business or meeting their
maturing liabilities, and it is in the
natural course of things that there should
be large crop of mercantile failures.
Among othe imprudent transactions the
Glasgow bank has been making heavy
acceptances of India bills The first inn
portant consequence of shutting the
doors of the bank was the failure in
London yesterday of Smith, Fleming x
Co, one of the largest and oldest East
India houses, with liabilities amounting
to several million dollars. There will
probably be other large failures of
houses engeged in the India and the
Australian trade, which are the two
branches in which the Glasgow bank has
committed It's most fatal iudiscretiops.
The full consequences of the failure will
not be disclosed until the mercantile
houses involved have bad "A few uays
to look about them, see how they stand,
and ascertain whether they cannot find
friends or resources to tide them over
this sudden disaster.
The ultimate recovery from the stock
holders of the amount due to the deposi-
tors will be but a partial reparation of
their losses, There are probably large
number of opulent men among the stock
holders, ant all stockholders are liable to
the full extent of their property, both
real and personal. But there are prob
ably large number of Stockholders of
moderate means who have been tempted
by the twelve per cent. dividends to
purchase shares in this apparently solid
and prosperous bank. Their unlimited
liability will bring distress and ruiz upon
the small stockholders, At any rate,
this was one result of the failure of Wet
ern Bank of glasgow in 1857, thousands
OF people of moderate means having been
reduced to want and b. ggary by the col
lapse of that institution. They lost not
only their shares but all of their other
| property. This second failure of the
Bank of the City of Glasgow is supposed
to be absolute and irretrievable and will
bring great distress upon all who have
been connected with the bank either AZ
stockholders or as depositors, or who
otherwise have become entangled with
! 1t.