The morning call., 1893-11-17
SOME SHADY WORK
Stories About the Bank
of England.
VERY BAD FINANCIERING.
The Old Lady of Threadneedle
Street Is Sound.
VERY BAD FINANCIERING.
BUT SOrlEBODY HAS ERRED
Transactions That Go Pretty Close to
the Crude American Notions
of Bank Wrecking.

officials continue to maintain silence re-
garding the rumOrs of bad nanciering
upon its part. 1t is stated on good author
ity, however, that the hanks connection
with bad financiering is practically limited
to its transaction in South American and
Mexican companies, which has been ven-
tilated in the courts. The irregularities
have been confined to allowing favored
customers to substitute less desirable secur-
tiles for those upon which money was
originally lent.
Following is the statement of the Bank
of England: Reserve increase, e1S7. 600;
circulation decrease, e277, 900; other secur-
tiles decrease. 81. 600; Government
securities decrease. 100000; bullion de-
crease. S69,46
The Telegraph in its financial article
this morning SAYS: 1T is stated that the
total loss of the Bank of England through
Chief Cashier Mays advances on unsound
securities will not exceed 100000. There
is no reason to expect that there will be
any important reduction in the next divi-
dend."
| The Times in its financial columns en-
phasizes yesterdays denial. and says the
character of the rumors is now well un-
1
have been repurchasiug. 1--WE still think,
however, that the bank would be well
advised to break its customary reticence,
and make known how small is the basis Of
| fact on which the rumors rest"
NEW YORK, Nov. 16.-The reports cir
culated from London regarding alarming
rumors affecting the management OF the
Bank Of England are not credited in Wall
CT nd xpfth Eprnnnan
connection are satisfied from their adyices
| that tie rumOTs are unfOunded.
| A cable dispatch to the Evening Post
from London says: The bank of England
scandal is dying out. No formal CONTRA
diction has been. issued, but it is under
stood the loss is trifling. The chief cashier
exceeded his functions by permitting the
substitution of securities pledged. without
the authority of his superior. He was dis
missed last week. There has been no
fraud-only Irregularities. One director is
known 20 he financially weak. but the
rumor of his retirement is contradicted.
| The feeling generally is reassuring.
The Bank of England. the heart of the
world of finance, was founded in 1894.
Its principal protector, Mr.. William
| Paterson, was afterward engaged in the
| Inflated Darien enterprise. The English
| Government being at the time much dis
| tressed for want of money. partly from
! the defects and abuses in the system of
taxation. and partly from the difficulty of
| borrowing because of the supposed in
stability of the revolutionary establish
ment, the bank grew out of loan of
| 81. 100000 for the public service. The sub
scribers, besides receiving per cent on
the sum advanced as interest and $4,000 a
year as the expense of management, in all
| $1,000 year, were incorporated into
society denominated the Governor and
Company of the Bank of England The
| charter is dated the 9th of July, 1894, the
management of the corporation being CON-
mitted to the Governor and twenty-four
| directors, and the charter confines the in
stitution TO a banking business in the
most strictly limited sense of the term.
In 1896, during the great recoinage, the
bank was involved in great difficulties and
was even compelled to suspend payment
| of its notes, which were at heavy dis
count. Owing. however. to the judicious
| conduct of the directors and the assistance
of the Government, the bank got over the
crisis.
The Bank of England has frequently
been affected by pauics among the holders
of her notes. In 1745 the alarm occasioned
| by the advance of the Highlanders, under
the Pretender, as far as Derby led to
run upon the bank. and in order to gain
time to effect measures for averting the
run. the directors ado pied device of pay
ing in shllings and sixpences.
| The charter OF the bank was renewed in
1897. again in 17OS. in 1713, in 1742, in 1764,
in 17S1 in 1S00 in 1883. in 1874 and in 1861.
1t was under the charter renewal of 1914
that the bank secured. in effect, the
monopoly of the note issue of England, the
notes being exempted from taxation, and
the subsequent charter in 1861 allowed
large increase in the issue.
1t is not at all probable that the present
trouble will be anything more than has
already been indicated in the dispatches,
but capital is very sensitive, and whatever
touches the Bank of England naturally
| causes worldwide uneasiness.
| --