The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1890-11-18
THE HOUSE OF rings.

Inc suspension OF the great EuSllSH bdHh-
ins-house of Barring Bros. & Co. means that
the Wall-street panic is not over, and that
when it does end, it will leave deep sears
behind. In every mercantile community
there are concerns which present lair
aspect on the outside. but which are really
rotten; when a financial panic takes place
they collapse, as house whose foundation
is deeayed falls down when a gale blows.
This was the condition of the Barings.
The house was an old one, having been in
the banking business in London for 40
years. The first prominent member of it
was the Sir Francis Barring who was friend
of Pitt, and mad a vast fortune i'll the
loans If the Napoeouic wars. But the
greatness of the house was the work of son
and a grandson of this Sir Francis. The
grandson was likewise named Sir Francis,
and rose to high political rank; he filled
successfully the Offices of Lord of the
Treasury, Chancellor of Me Exchequer, and
First Lord Of the Admiralty. The son was
Alexander Barring, better known by his title
of Lord AShburton. 1t was he who nego-
tiated with Mr.. Webster the AShburton
Treaty, by which this country surrendered
its uHquestionable claim to British Columbia.
He married an American, and through him
two Americans. Joshua Bates and Russell
SturgiS, became partners, and ultimately
controlling partners, in the FIRM The house
has for nearly century been known in
London as an Anglo-American house, ante
dating in this particular the houses of Pea
body and T. S. Morgan & Co. 1t has kept
the account of the United States for three
quarters of a century. In 1872, when this
country was at war with Great Britain and
there was no communication between the
two countries, Barring Bros, without instruc-
tons and without remittanceS, faithfully
paid the interest on United States bonds
held in England; and in 1864, when the
British Government refused to seize the
rebel rams without bonds amounting to
over a million pounds sterling, Barring Bros
gave the bonds, trusting to Mr.. Lincoln to
! indemnify them.
1t seems that of late years the firm under
took to carry the Argentine Government
through the system of Internal improve
ments which il had resolved on. These con-
sisted of large bounties to INN grants and
OF vast stretches of railroad through coun-
try which, though fertile, was unsettled,
| and could, OF course. afford no immediate
traffic. Some of the Argentine bonds found
a market among the British public. but the
great bulk could not be disposed of as fast
as the money was required. Barring Bros.
! shouldered them, con nting on being able TO
! sell them in course of time. Recent fnan-
! cial troubles at Buenos Ayres impaired the
| popularity OF the securities, and for the first
! time IN their history The great house of
| Barring became borrowers instead of lend
| ers. From that moment the end was newt
| able. 1t was sure to come whenever money
n "a
among collaIerals.
The newspapers state that the Bank of
England, the Rothschids, and other bank
| ers, have agreed to advance enough money
| to the Barings to tide them over the present
| crisis, and that Lord Salisbury stands ready
/ to suspend the Bank Act, so as to permit
the bank to issue paper money without pro-
portion 10 its metallic reserve, in case the
| step should be necessary. But bank credit
| when once blown upon is irrecoverably
tainted. There is nothing to be done by a
! banking-hou which has had to seek help
from its rivals except to liquldare. The es-
sential condition of successful banking is
the preservation Of public confidence. That
the Earrings have lost. People will not leave
| their money with them any more.
The crisis appears to have been precipi-
| tated by the withdrawal of a large deposit
| by the Russian Government The opera
tiVn seems smarter than it really was. The
| Russian Government has saved its money,
but it would probably have lost nothing If
it had let it lie where it Was. And the
Treasury Department at st. Petersburg will
find it difficult to get another clearinghouse
strong enough to keep its account. That ac-
count is oyerdrawn three-fourthS of the time
sometimes for very large sums, indeed.
Such a house rs the Rothschjlds will be
slow to accept an account which may re-
! quire them to advance millions at a time on
no better security than Russian honor, if the
dealer is likely to draw out his balance
| when lie has one-just at the moment when
| the banker can least afford to pay it.