The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-10-03
A FIFTY MILLION FAILURE.
WHY THE CITY OF GLASGOW BANK
SUSPENDED.
Said TO Have Been Because OF Large Ad-
vances on American securities-No Fears
Of Danger Here, but Quite the Contrary.

vances on American securtttes-No Fears
Of Danger Here, but Quite the Contrary.
LONDON, Oct. "A despatch from Glas-
gov says: "A circular. signed by all the Scotch
banks. has been issued stating that the City Of
Glasgow Bank will not open for business to-
day. and will also cease to issue notes. In or
der TO lessen any Inconvenience to the public.
the other Scotch banks will accept its notes as
usual. The City Of Glasgow Bank has a paid up
capital OF fl 100000. held by 1.249 subscribers.
whose liability is unlimited"
The liabilities OF the City Of Glasgow Bank are
stated at $50. 100000. The liability OF its share
holders is unlimited One-hundred pound
shares OF the bank were dealt In yesterday at
over 200. and within week at 237. The bank
was established in 1889. and had fifty TO sixty
branches. This is the heaviest bank failure in
Scotland since 1857. when this concern also sus-
pended. The other Scotch banks were asked
for assistance. hut after examining the books at
meeting yesterday. refused to do more than
redeem, the note circulation OF the City OF Glas-
gov Bank. which is stated at three and quar-
ter million dollars The failure has caused
great excitement throughout Scotland and in
the London Stock Exchange. where there was
a heavy fall in Scotch railway securities in con-
sequence OF n pressure OF Scotch holders to
sell. The failure OF the bank is believed 10
have been in consequence of large advances in
American securities, grain and real estate. the
values of which are largely depreciated
The Echo says the failure Is very important.
and is not less than national disaster: hut, as
usual In such cases. it has been foresnadowed
by innpmernhle occurrences. and II is hardly
likely that il will do more than bring down the
commercial firms which are involved in the bill
transactions which have overwhelmed the bank.
EDrNBuRGH, Oct 2.-Thc precarious condition
OF the City OF Glasgow Bank has been suspected
In financial circles for some days. Tho bank.
with a capital OF but one million sterling, has
been doing very extended business. and the
bad state Of trade has caused II many heavy
losses. With its head Office at "a Virginia
Hanover H street Fdinbureh % and branches ~ M at ii4
other places throughout scotland. Its London
agents are the Lyndon JOINT Stock Bank and
Prescott Co. The state OF trade In Glasgow
has for some time past been exceptionally bad
The City Of Glasgow Bank has discounted very
largely. and many OF its customers have for the
last lew weeks been asking for extensions and
renewals. The immediate cause OF its suspension
IS SAID 70 have been the demand made upon 1t
by the Bank OF Scotland for the repayment OF q
the Bank Of scotland. the Royal Bank Of Scot
co%meTeiai Sn ere f Bank f of scoiSna The N National 5
| Bank OF Scotland. all OF which are in Edin-
burgh; the Union Bank Of Scotland, the Clydes
Aberdeen Town and County Bank. and the
| North of Scotland Banking Company. both in
pany at Inverness. Each OF these has many
| branches; but none so many as the suspended
Bsnks ans SrnchSs b1t nj IL baved rn oh nome a n
| them will succumb TO IT,. The note holders OF
| the suspended bank will lose nothing, NJ they
are secured. but 1t is feared that the losses OF
the depositors may be serious. although the
liability of the shareholders is unlimited.
In Wall street the news OF the failure OF the
City OF Glasgow Bank with liabilities said to
reach the enormous total Of $4,000. 900. was
some OF the leading bankers. who were aware
| OF its true condition. As the hank had agency
here Tor years. its failure excited less excite
meni than might have been expected. In the
stoeis but % oeinons dersd as uspa to whether ii i
was brought about by the failure or by natural
and speculative causes. 1t was said that a
graphed TO his firm here TO sell out his securi-
ties. adding that Great Britain was on the eve
Of great panic. which could scarcely fail 70
| affect this country. Another sign that the fail
ure was looked upon as likely 10 unsettle conf
denee here was the temporary stifening OF tho
money market.
The head oi a BANKING firm whose business is
largely with Great Britain, said There is no
Bank has not been thoroughly sound for some
time, and more than two weeks ago its probable
failure was spoken OF in this office. Our des-
patches indicate a .panicky feeling in London
and Glasgow, but this need not materially af-
feet US We have been trading and living on a
sound retrenchment basis since the panic OF
| 1873, and the condition Of our currency is such
that we are not apt to be affected by European
will probably be the withdrawal of a considera-
| BILE amount OF specie from this country. but
don't think il will have any effect on resump-
| ton. Had this failure occurred three or four
years ago. when we were still in the throes OF
our PANIC. It's effects would have been disas-
| trous. Now we are prepared for IT,
A few shares OF Erie and a few United
| States bonds may be thrown overheard: that is
| all. and they will be soon picked up again. In
| deed. the more panicky the feeling there tho
better for us. and the stronger the chances
| that while getting out OF their own securities.
people will try 10 seek safety IN ours. Business
| men over there have been taking advantage Of
| our misfortune during the war. and have made
| money out of IT,. Now our turn has come. With
| n balance OF trade Of $500. 900 900 in our favor.
| they cannot pull on US: but We can on them.
| They cannot get either gold or silver from this
side. and will have 10 pay cash for ali the cotton
| grain, and provisions we send them. We have
| grown to be the feeders of the world They can
| not live without us: but We can without them"
| Another banker said there might be danger to
| this country in case the panic caused by the
| failure spread to London and Liverpool and
ruined some Of the, houses there that are en-
| gagged in trade with us. The City OF Glasgow
| Bank. he said. had advanced heavily to the
Scotch and English iron trade. which is In bad
| condition. but he thought from the dispatches
| that it might make favorable settlement. The
| Western Bank OF Scotland failed in the univer-
sal panic Of 1857. but since that time no bank
! failure had been recorded in that country. In
| deed. the Scotch banks were looked upon as
among the most conservative and trustworthy
| in hea