Eureka daily sentinel. [volume] (Eureka, Nev.) 1871-1887, 1878-10-11

m.~hote financial world is naturally
a;~tprhrd bv the failure Of the Bank Of the
CITY of Glasgow. The Scotch banking
svstem Is very peculiar, says the New York
grcp1ic. The Scotch banks allow interest
nm deposits; they have a note circulation
varying from one-half TO th~ree-quarters Of
tbeir paid-up capital; they discount largely,
ls.dinx The money Of their depositors upon
commercial bills and upon collaterals in
railway and otler debentures. In many
respects the system seems to violate prin-
ciplcs Of sound banking as they are else
where understood; but in the face Of this
fact, il has generally succeeded and has
been profitable to those engaged in it-so
profitable that, for instance, even the
shares Of this rotten bank. a week before
In failure, we're worth f237, which was
sh85 above their face value. This failure,
bowexer NAV show that there was some
hing more than i~mprudence in the man
m of the bank, that there was some
thing rotten in Denmark. According to
the cable dispatches, the failure was due to
large advances on debentures and securities
representing coal and iron interests, which
have At present no marketable value.
whether there was anything worse than
this is not yet known. The share
holders will be compelled to make good
the circulating notes Of the bank, amount
ing 10 about So, 100000 but even this will
cause terrible distress in thrifty Scotland.
II Il should turn out to be true, as re-
ported, that the total liabilities Of the bank
are Sc. 900, 900, and that its assets are COM
parativeIy small, there will be few Of its
l.9l9 shareholders who will escape ruin.
They are said to be generally wealthy, but
some Of them will be found to be insolv-
emit, and as the liability Of each is I'M
limited. the wealthy ones will be COM
PEELED to make up for the deficiencies Of
the impecunious.
We ere inclined to believe, however, that
therp were e the bottom Of this failure
some larger inc more portentous causes at
work than mere imprudent banking or or
binary commercial depression. We have
pointed out from time to time the fact that
the United States we're now, and for some
time have been. supplying their " mar
kets. The iron, wooden goods, cotton
fabrics, glass ware, paper, dry goods, cut
lery, and 50 on, formerly bought by us
from England, are now supplied to us by
our own manufacturers-while, at the same
., the cereals, meats, cotton, provisions,
hides and other articles which the
dsnsely populated regions Of Western Eu-
rope must nave from US, are supplied by
n i greater abundance than ever. The
result is inevitable. After returning to
~ he evidence Of our Indebtedness, which
had accumulated in their hands during
our period Of imitation, the people Of En-
gland and Of Europe must pay us in
money. The time is q hand-yea, 1t is
even now, when they must send back to US
70 pay for their purchases, gold and silver.
The result must be, when this process
shall have gone on for a certain length Of
lime, 5 veritable panic on all the European
D0urses, md the first indications Of this
1orfheoming disturbance will probably be
1nrnished by the Bank Of England. The
cutting on Of the supply Of from sixty to
eighty millions Of dollars in gold and sill
YER, which we we're in the habit Of sending
each year to Europe. is in itself a matter OF
the Rravest moment to our transatlantic