The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1891-04-08
LOND0N'S FINANCIAL HERO.
HE RAISED se5, ooo, 900 IN FOUR DAYS.
For the First Time In EngIand's History n
Banker Becomes q Popular Idol
Honors 20 He Who Saved the
Barring Brothers,

everyday, typical English banker. Tvs
name is Lidderdale and his position is
that of governor of the Bank of England.
The story of the financial difficulties of
the house of Barring Brothers is still fresh
in the public mind, but the full details of
the manner in which they and scores OF
other minor firms involved in their
success or failure were saved from the dis
aster were not made known until yester-
day, when Mr.. Lidderdale submitted the
facts to the general court Of the Bank OF
England. The attendance was very large
and those present evidently had an ink
ling of what was coming. for they
greeted the entrance of the self-possessed
banker with cheers such rs were never
heard before at meeting OF staid finan-
ciers and proverbially suspicious stock
holders.
The story as told by Mr.. Lidderdale,
even in the matter-of-iact language which
he affected, is full Of dramatic interest
when one considers the fabulous amount
of money and the number OF people con-
cerned in the Barring trouble. After max
ing the usual formal preliminary, Mr..
Lidderdale said;
"Before asking you to consider the &C
counts. / think that the special clrcum-
stances which have marked the past half
year as an exceptional one in financial
history call for some notice on my part.
So much, however, has already been said
and written upon the subject that | need
not occupy you very long. You must all
have learned from the press that in
the second week OF November it became
known to the bank that the great
IF
For an announcement that the firm
was embarrassed by their operations
In South America the governors would, to
some extent, have been prepared, but not
for the actual facts The situation was at
once recognized to be very grave, and to
demand prompt and decided action on
the part OF the directors. We had a re-
serve ample for ordinary requirements,
but not for the demand certain to come
upon the hank the moment Messrs. Bar
ing's difficulties became known. The Old
and well-proved remedy OF raising the
rate would not have met the urgency OF
the case, as the condition of financial
affairs in several countries in Europe as
we'll as in the United States, made IL GER
tain that gold to the required extent
could not be attracted here except slowly,
and then only by rates so high Is To in
volve much suffering to our own trading
and mercantile community. Itwas there
fore decided to adopt exceptional
measures, even at a considerable sacrifice
10 the bank.
I'm the course OF a couple of DAYS we
secured by sale of Exchequer bonds to
the State Bank of Russia the sum of
~ 100000 in gold, and obtained from
Paris, as loan, by the prompt and liberal
action of the Bank of France, a further
~ 0OD OOO addition 10 rsrtr
sources. Four DAYS of that week weru 90
cupied in the preparation and examination
of statement of 1lessrs. BariDgs posi-
ton, and on the l4th OF November l was
enabled to assure the heads OF her ma
jesty's government that there was good
reason In believe, without committing
myself TO definite figures, that the assets
would yield substantial surplus over the
liabilities if sufficient time were allowed
Tor liquidation. Without this belief in
their IN j eventual soivency nothing could
have been done TO save the firm.
when / tell YOU that the liabilities
of Messrs. Barring were over e2l,-
100000, you will realize that the burden
OF carrying over their difficulties was not
70 be lightly undertaken, even by the
Bank of England, and that the risk of do
ing so was more than the bank was called
upon 10 bear alone. 1t was necessary,
therefore, to invoke the aid and support
OF the financial community in forming a
guarantee fund to Justify the bank in pro-
vidiny the money required. l am glad to
hckHOw edge the promptitude OF the re-
spouse made. Cheers. Ii was nearly )
o'clock on the afternoon of Friday when
the guarantee list was opened and headed
with el,O0O.0O0 by the Bank OF England.
In half an hour the amount had reached
100000; by II next morning-Saturday
it was e6,500,000 and at II | was able to
announce that the liabilities of the firm
would be duly met. lCheers.
This, however, did not prevent large
further additions to the guarantee fund,
which eventually reached .e17 ,25O. 900,
rendering il certain that, even if the liqul-
dation proved Disappointing. the loss to
any individual guarantor could hardly be
serious. You will no doubt wish to know
how the liquidation has proceeded, and
will therefore give an outline of the ac-
count. On the LIST OF November the liza
bilities stood at about e2l 100000; the as
sets, apparently, at about ga, 100000.
Since then numerous entries have
been made on both sides of the
account, additional drafts having
come forward and remittances been re-
ceived, but on the LIST of March the liabil-
tiles To the public had been reduced to
G3,522, 000 The debt to the bank, how
ever, had reached e6,650,00O, making a
total OF e1O,172, 900 still due. The assets in
bills and cash were were on the LIST of
March Esi0.000, and the debts due to the
firm 1864, 900, making a total of e4,2l3,-
OOO. To cover the difference of nearly
s6,0O0O00 there were securities in hand to
a considerably larger extent. OF these
the partners lands, houses and private
property represent over q, 100000. and
the securities, Of which the value is readi-
ly ascertainable. about 81 10000. The
balance consists OF South American Sc
curitles, and these are much more difficult
TO estim ate. Whenever there are quota
tons we have taken the very lowest; in
other cases we have put on low prices, and
can only say again, without committing
myself TO figures, that, although the mar
ket for South American securities has Sc
riOusly declined since the lst of Novem-
Der, there is still, TO all appearances, a
substantial surplus over the liabili-
ties-a surplus, in my judgment,
quite sufficient to protect the
guarantors. [Cheers In illustration of
our estimate / may take single item
that of an unissued Uruguay per cent.
loan of e3,OOO,OOO. Tits we have taken at
so. the quotation for similar bonds now on
the market being 90 to 81. The interest
on this unissued oan has been regularly