The New York herald., 1878-10-05

many firms selling stocks largely to
strengthen the balances at the banks pro-
viding against possible returned bills. All
securities are considerably lower, except
United States which remain firm. the banks
taking them more freely and with less
margin than Indian stocks even.
CANNY ARRANGEMENT.
No trust funds of considerable amount
are concerned in the crash. The managers
and directors of savings banks as well as
other influential people in Scotland long
foreboded the fate of the Glasgow
Bank. Within a few years the entire
list Of shareholders has changed. Where
as formerly rich merchants were among
the proprietors, there does not now appear
a single great Scotch financial name on the
list. This change took place some years
ago. The difficulties of the bank appear
to have been tided over at that time in
order that year might elapse without q
crash, thus relieving the great proprietors
from being called on as unlimited share
holders, under the provisions Of the law,
to pay the losses.
CONSEQUENCES.
Nicoll & Co., Of Bombay, branch of the
Flemings, is known to have drawn largely
on other London firms, and there is great
suspicion about the solvency of some of
these. AS far as the Caledonian Bank is
concerned it remains to be proved whether
they hold their shares in trust and whether
the transfer was purely formal. In conse-
quence of the failure, pig iron warrants
sold yesterday for 43s. Cd. (s1O S4), the
lowest price in the past thirty years.
GRIM CONSOLATION.
It is not probable that crisis or panic
similar to those in 1857 and 1866 will result,
but several firms in London and Glasgow
will suspend, and perhaps bank in Lam
C0SnlrG. Inc Fl11Qnc2eT S1yS:-
consolatory point is that, although the
figures are large, the whole business affected
seems to have been travelling in a circle. A
widespread system Of unsubstantial credit
based upon paper is about to be disclosed.
1t is morally certain that all the firms con-
cerned in this sort of circular bill flying
must succumb. One house, located in
Scotland and Australia, is concerned in
this paper to the extent of SIS, 900, 900 one
doing business in Scotland and the East,
So, 5O0 600. One located in India owes
the bank So, 600, 900 for acceptances and
So, 5OO 600 tor cash advances. Three other
affiliated Indian houses aggregate the in
debtedness Of Sc, 25O 600.
WHERE IT WILL HIT.
The Nnancier estimates that the share.
holders of the City Of Glasgow Bank
must meet deficit Of $20,OOO,OO0. AL
though the failure will rank among the
most disastrous on record, the bulk Of the
loss falls upon this circle of paper-fying
houses, and, of course. the Scotch share
holders will suffer terribly.
SMITH, FILMING co.'s FnLuRr.
The total of the liabilities of Messrs.
Smith, Fleming & Company, East India
merchants, London, whose failure was an
nounced yesterday, is estimated at over
$40, ,OOO 600. The liabilities Of their corre-
spending firms which fail with them
William Nicol & Company. of Bombay,
and Fleming & Company, of Kurrachee-
are doubtless considerably less. 1t is un-
derstood, however, that in consequence Of
exchanges of paper between the City of
Glasgow Bank and the Indian houses the
same set of liabilities will be found re-
peated in the balance sheets of all these
failed establishments.
THE ''TIMEs" ON THE FAILURE
The Times, in its financial article this
morning, says:-
The revelation of these further details
is accompanied with no fresh signs of
disturbance in the money market, and
calmer feeling, if anything, prevails.
That the condition of the city should
be the same as if nothing had happened is
not to be expected, but beyond little diff
Guilty in dealing in some public securities,
which as rule are readily negotiable. moth
ing unusual has occurred. Money is in
rather moro demand, and about four and
half per cent is obtainable for the best three
months remitted bills. call for Bank
of England notes by bankers and others
made the bank return worse in its proper
tioA of liabilities to reserve by nearly nine
per cent than would otherwise have been
the case, and the reserve has fallen about
RI zoo 900 our;rer 70 4bo NTH l.a.u.l L.