The New York herald., 1879-08-08
CANADIAN BANK CRASH.
Failure Of the Exchange
Bank Of Montreal.
STOCKHOLDERS RUINED
Sir Francis lIinckS and the Exploded COnsOli.
dated Bank Management.
[DY TELEGRAPH TO THE HrnALD.l

some days ago. rumors have been rife the posi-
tion of few other mushroom concerns which COM
menced business q few years ago in the hope that
the wave of prosperity which had given the Montreal
bank its very strong position would watt thom on
10 fortune. The Exchange Bank was strongly limited
At. but up to early hour this morning the
directors insisted that nothing that could come
against the bank would disturb its position
They contended that it could not go down.
and the manner in which they met the
run them had in some quarters nearly restored
confidence in it, Atabout aquarter to eleven o'clock
however, it was announced that they had reached
the end of the tether and that they must suspend
payment. In few moments there the most
intense excitement upon the street. and brokers and
bank directors with anxious faces could be counted
by the score standing upon the street and
discussing the situation. OF course the failure
entails heavy loss upon those trusting peo
pie who. not knowing how to invest their
money in active business. place it in bank
stocks, content with the tact of the business
men who at tho head of affairs One million
dollars is the amount of paid up capital invested in
the concern. and the widows and orphans dependent
upon the earnings OF the bank many. They will
be utterly ruined. in less than hour after tho
close of the banks doors the bills selling at
eighty per cent, with the prospect of going much
lower.
CAUSE OF THE FAILURE.
The reasons given for the disaster are gross mis-
management on the part of the directors. who seem
10 have understood their individual interests much
better than banking business. A lady who had been
told that the bank was shaky and who had already
been badly bitten sent friend to bank Official
with a request that her stock be sold for what it
sould bring in the market. The reply of the bank
man was. eve all right. Nothing can hurt
U.S." The lady. who is q widow. and but
ma Of xyhn invaa afal fbair in f1a
concern, Is to-day ruined. The Star to-day charges
that the statements submitted at the last annual
meeting were cooked" and that the bank then
in serious dicultes that the bank directors actu-
ally of the speculation in stocks in
dulged in by former cashier OF the bank, G. Il.
Murray who contracted large overdraft last winter
And then abscondpd that the directors did not want
a VINO th understood ms business and never
loan of quarter Of million dollars to run them
through was false; that the present cashier. Mr..
Thomas Craig, had no banking experience, but made
up for il III executive business ability and. had he
had fair chance. might have succeeded.
HISTORY
The banks charter members NJ. H. Gault,
member of Parliament; Thomas Caverhul A. w. Ogil-
vie, Thomas Tiffen, L. X. Green William Rodden
and Sir A T. Gait Member OF parliament Its capital
stock OO000 in TO- 900 shares OF 500 EACH At
the first meeting OF the shareholders in July 1872 the
charter members elected directors, Mr.. NJ II.
Gault being president and Mr.. Thomas Caverhil
vice president The Board OF Directors has continued
Gait and Mr.. William Rodden, the former having
tired to accept seat on the Board Of Directors Of
".
snder Buntin. and. Mr.. Rodden resigning, was re-
placed by Mr.. James Crathern.
POPULAR ExCITEMENT.
The savings department. represents o large number
Of losers. chiefly mechanics and poor laborers who
are in despair OF ever seeing cent of their
money. The news OF the suspension created panic
aud people went whispering about the OF half
dozen other banks which they hold will suspend
within the month There was all sorts OF talk about
arresting the directors of Furnishing them with the
utmost rigor Of the law. Public opinion. however.
s callous, and although there Is little doubt that
q nm
Of these bloated spectators in money and would
nave most samtaSy effect there is no such good
yame directors to be held to strict account tor
heir abuse OF the trust reposed in them there would
be fewer bank failures in tho future and much loss
reckessness in their management Of other peoples
money.
PooR PROSPECTS, FOR CREDITORS AND sHAnEHoLDERs
The Montreal Bank offered to lend the bank money
enough to tide over the difficulty and maintain the
credit OF tho bank and country but these directors
refused the offer. This gives the impression that
the whole concern will realize nothing to tho share
holders. little nothing to tho dcpostors and not
great deal to holders of the banks bills. The di-
rectors reputed to be exceptionally rich and
cessfu business and according to the last
list. heavy stockholders. Indeed the boast of the
directors and their friends has been that they owned
30 large portion OF the stock that they would not
tao of be Seeyed to be- s s
posits about similar amount and tlo loans out
including DISCOUNTS are stated to be 81. .562
meeting OF shareholders will probably be held to-
morrow.
LAPsE-THE RESPONSIBILITY PLACED UPON
RENNIE, THE MANAGER-rHE WRECK OF THE
EXCHANGE DUE TO THE SINKING oR THE
LARGER CRAFT
bY TELEGRAPH TO THE HERALD
TORONTO. Ont August Z. 1870.
Sir Francis Hncks. president Of the Consolidated
Bank of Montreal, which suspended recently. in
town to-day. He looks wan. careworn and detected.
and will not talk upon the banks affairs except
old friends. This is probably owing to a prosecu.
ton being in the wind Sir Francis loses $50 900 by
the suspension, which will unload him completely.
Hc has. however. q pension of $4,000 annually
hom the home government. being Ex-Governor Of
Barbados. the windward Islands and Brit
ish Guiana. An ex-membcr of Parliament
for of the Yorks is said be about to prosccu
the directorate of the Consolidated Bank. he when
about to unload, having doubled, his stock owing to
the representations of the directors. Sir Francis
FREQ from suspicion all the directors ara believed
to have had dust thrown in their eyes by tho late
mo advance of $1.70o, 900 TO parties who are not
worth $1O0.OO0. Rennie " mental wreck at pres
ent and to save his ile his physicans viii not per-
or the bank. Tho failure to-day of the Exchange
Bank of Montreal win not affect banking in Ontario
FAILURE or THE ExcHASGR BANK.
!. II was expected whom the Consolidated caved In
that the French habiant class who hold largely Of
Exchange Bank shares. would be scared and begin =
run. This was tho more likely. as the shares wero
quoted Vt about thirty trile those of the
Consolidated. To their alarm at seeing that great
institution failing is attributable the suspension OF
the lesser one owing to 2 three days drain The
subscribed capital OF this Exchange Bank
S10U0.0 .000 and It's directorate composed OF busi
moss men OF capacity and reputation. M. II. dault.
Member of Parliament, the president. stands high In
the mcrcial world, and do Clavcrhill, Green.
Og.lvic. Buntin Tifln and Crathern. The holders
of arc secure, tho shareholders liable
for double Their late cashier, Murray, cleared out
not long ago. Tho officers OF the bank say that their
loss by him only about $4,000 IL has boon
open that they lost $4,000 through his
defalcations
In consequence of the suspension of the Exchange
Bank a run set in to-day upon the Banguo Vile
Marie. OF Montreal. for suspccting whose sovoncy
there Is no reason. however, The small French cap
italists are unreasonable and further complications
may be ahead, owing 60 thoir unsettedncss.
OFFICIAL RETURNS OF THE EXCHANGE BANK-