New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-03-12
WASHINGTON GOSSIP.
INTERPRETING RECENT EVENTS IN THE
WORLDS FINANCIAL HISTORY.


Washington. March IA strangely interest
Inc picture of the London financial situation was
oiven TO me to-day by a gentleman who has lived
twenty-five years in the London financial world
opd has the most intimate knowledge of its
inner history There is something magnificent in
tbo incidents Of his description of the events that
have recently taken place and that are now going
nm In the story there is q stately march Of
millions of pounds sterling Enormous interests
arc involved great financial giants are the actors
and the financial honor of England has at times
becn threatened. In the midst of this chaos
there stands to-day great American bank, whose
directors are the masters of this modern situation
which threatens to place England in the most
embarrassing position and marks the first step
in the decline of her supremacy as commercial
mower One of the interesting features Of this
situation is that the greatest houses in England
today are the which are embarrassed. 1t
is the smaller houses which s;and the best
For several years London has been interested
In the development of the Argentine Republic
The enormous specuatons of that rich country
have found the readicst cncourag cement in the
London market. 1t was late last summer that the
first public distrust began regarding these securi-
Ties The first embarrassment came like a shock
10 the financial world in the knowledge that the
great house Of the Muricttas was in difficulties
This is an old house and had credit almost equal to
that of the Bank of England. This knowledge
was confined to n few of the leading tinanclcrS
A few whispers heard in the outer circles
but they were not credited. The Muriettas found
themselves early in September, confronted with
the imp0ssbity of meeting their engagements
unless they had help. They went TO the houses
of Barring Brothers and the Rothschilds and en-
planned the situation. They said that unless they
had help they would have to suspend payment
and that such suspension would naturally bring
about financial crash. These two houses ad-
vanced to the Muriettas 81 100000 sterling, and
this sum helped them through the crucial period
In this negotiation this gentleman says that Baron
Rothschild learned something of the weakness of
the Barngs This house had been a great rival
of the Rothschilds in foreign business, and the
astutc Baron saw his opportunity of weakening
his rivals and crippng their power for the future.
The Barring Brothers were then in weaker
position than he knew. Lord Revelstokc had in
volved the Barings with the Argentine Republic
by assuming tic financing" of the enormous loan
Of c1OO,O 900 sterling Upon this hr had the
guarantee of a large commission, but tie public
had refused to subscribe to the securities, and
consequently the house was not IN position where
il could stand any kind Of unusual strain. AT the
same time that Baron Rothschild contemplated his
movement to limit the power of the Earrings, the
Russian Government had with them deposit Of
some 100000 sterling. This he caused to be
withdrawn through a Russian agent in Paris.
This sudden demand of So, 100000 was stag
cerinc blow TO the house and to It's associate, the
Martins The draft was paid. Lord Rcvelst0ke
saw that his house would come down with a
crash within the next two weeks unless lac could
have help. lie in turn mace an appeal u the
Rothschds. Baron Rothschild then came to his
rescue 10 q certain extent, and made certain con
ditlons for the obtaining Of help from the Union
Bank The Union Bank. when it came 10 go
over the books of the Earrings and the Martins,
declined TO have anything to do with the move
mcnt. and said that the two houses would have TO
20. if its support was to be depended upon.
Lord Rcvelstokc in his desperation. then went
20 Lord Salisbury, who sent for Mr. GoSchcn, and
10 these gentlemen Lord RcvelstoIc said that he
had drafts upon his house from all parts OF the
world 10 tie amount of Gl1,O0O,OOO stcrllhg' OF
So, 900, which would foil due within the
next two weeks and that unless he had some
means TO meet them the bank would have TO
suspcnd and a financial crash would follow winch
would run throughout the WORLD. The colossal
effects Of such crash were clearly seen pE inc
two Ministers. \ meeting woS hastily called pE
tbr Governors of the Bank OF England ana TO thlH
meeting were summoned tho directors oil all Ihe
Joint stock county banks of England. Tie hoths-
cllilds were also called III. The Rothschiid9 ana
the Bank of England then agreed to carry
over the business OF the Earrings proNde1 lhe
couutv banks would guarantee the Indebtedness
If ,Lc Earrings in cooperation with the Roths-
childs The bulk of the Indebtedness lies now
with the county banks. IL is TO be met within
the next three years The sum OF Inc
pledges is about Slj0,00O,0OO III the Ar
ccrtine Republic could have Tomorrow an
honest and conservative management, these securl-
ties could perhaps he relied upon 10 BRING OUT
this heavy Indebtedness and save the Cnlted hihNs
Of F6olond from serions loss but the Argentine
Administration is SATURATED with dishonesty ana
incapacity, and there is little immediate nope
in that direction This is the financial coud Which
hanss over England, and there VIII he 10 re!ici
Of ,,,e financial situation there until this ire
mcndous Indebtedness can be met III some way.
II is estimated in round numbers that England
stands to-day the holder Of Argentine securities
T. the amount Of cl2O,OO0, 900 sterling, or 5000,
ooo oOO The holding of this enormous sum OF
donrcciotcd securities has seriously embarrassed
tho Rank of England itself. II was never placed
in a more humilating position than when IL was
obliord 10 90 to the Bank of France for the grea'
loan which it negotiated following the settle
ments of the embarrassment Of the house Of Barring
Rrotbcrs This embarrassment which at one time
threatened even 10 cripple the great financial
institution of the world, the house of RothschlIds
has not yet wholly passed away.
No English clearinghouse stands to-day with
tho Same soliditv as the house of j. S. Morgan d
90 This house has kept free from the Argentine
spcculations. and it occupies such commanding
noSition that the Bank of England was only too
clad IN transfer 10 il the financial management
Of the Argentine securities. IL is practically to-
day the receiver for the enormous interests In
volved. and nothing but the incest kind Of man
agcment in England and some corresponding
ability in the Argentine Republic can prevent the
failure of mapy important institutions Of England
within the coming period Of three years OF constant