New-York tribune., 1878-10-04
THE GREAT sooTcH FAILURE.
CONFIDENCE RETURNING.

THE soLvRNcY OF THK CITY OF GLASGOW BANK
FOR SOME TnME poUBTED-THE CAUSE OF THE
CRASH.
LONDON, Thursday, Oct. 3, 1873.
In its financial article this morning, The
Times says: The City OF Glasgow Bank had l35
brauches 1t has paid progressively increasing dly-
deud for past until t reached IL per cent
1t would be Incorrect that the disaster was unex
pected On the contrary banking Circles 1t created
SURPRISE for the bank had been losing credit gradu
ally for ten years past Yet the Scotch banks in London
possession OF information which showed that
the end was actually until Tuesday morning Rn
OF the bank being difficulties had been so often
circulated BEFORE within strictly banking circles tnat
the repetition OF them did not excite particular interest
this occasion The business Of the bank had been
conducted for years upon very unsound principles and
from the fact OF the Scotch banks having decdfd
TO let tho bank stop, it Is inferred that t u very bd
case. Operations upon enormous scale had been ind
recty entered into in Iudian produce and Australian
WOOL 80 800 900 OF bills having been accepted lOr
the account of firms. Very large advances hhti
been made to firms in the iron trade m the hofb ana
builders.
"The immediate cause OF the failure was the mpossi-
bility Of any longer getting bills drawn from India ON
the bank IN Glasgow discounted in the London market
circumstance which expains to some extent t1e lev
ersh oscillations for months past In tho rates de-
nanded for loans These bills had been sold IN India TO
Indian banks. ostensbiy against the shipment OF pro
Guce and ultimately came upon the discount marfot
The terms demanded for negotiating them having
steadily advanced. instructions were at length tee-
graphed % the Indian branches TO take no more bts
ana Is it was no longer possible 10 Keep tDe
open credit system going anu the paper anoa tho DnA
closed It's doors.
The liabilities Of the bank estimated at $50, ,OOO-
900 the aceeDtances slightly below Yl3OOOOOO; tne
deposits $4,000 600. The unlimited liability Of The
shareholders may perhaps. secure the depoatOrs Tue
authorized note circulation was only 3I2,OOO. out ae,
eOrding last accounts the between 460O0oO
and 100000, AGAINST sarly all OF which the Law cOni-
pes the bank 10 hove gold We believe we are correct
saying that tlis depOrabe catastrophe Is, with refer
Scotch banks whole, entirely an exception,
and other banking institution In Scotland Is III
any way mixed mp with the City OF Glasgow Bank, or
has been engaged business OF the kind which lea 10
failure.
Attempts have been made in the city to cOmplicate
matters by saying that there panic but there mas
breu panic The Bank o England is In an exception
ally strong position relatively TO the extent OF the Dus
going and the state Of affairs Is very dHcrent 10
what would have been had the disaster happened TO
bank whose sOmdness had been above suspicion
The Fnaae,er anticipates additional bank failures
but Il mercantile failurrs can hafOiy De
avoided which may extend into the iron districts VI the
North Of England.
HEAVY FAILURE IN LONDON
Smith, Fleming a. Co., East India merchants az NOS.
II aud Is Leadenhall-s London, have TAILED. Ihelr
liabilities are severat million dollars.