Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1893-11-25
BANK OF ENGLAND SCANDAL
Great Surprise at the Attitude
Toward the Cashier.
%Financiers Puzzled That the Great lnstitu.
ton Should Allow the Matter TO Be.
coma Public. EFF ect on the
Public felred.

BosToN, Nov. 1o.-The Herald's Lon
don correspondent sends the following
regarding the trouble in the Bank of
England:
'Sone days ago it was publicly an-
nounced that Chef Cashier L. May of
the Bank of England had resigned his
post after twenty years Of service ana
would retire on IA pension literally
voted by the directors. ltnow appears
that Cashier May, SO ! am informed,
not only ~retircs, but his resignation
was demanded by the directors and no
pension is given TO him, for the reason
that he has involved the bank in a
heavy loss.
" Ne cashier was intrusted with al
mo ,solute power in making invest
me. \ short time since the direct
ors cause TO question the sound
ness ~ Judgment, which was sub
%jectinA ,hc bank to unaccustomed loss,
They voted To retire him on half PEN
sion. After a further investigation of
the nature of his investments they de-
cided To retire him peremptoriiy and
refused To pension him. 1T seems hat
this officers son was chairman or lead
ing director in some of the SC called
trust companies, of which DO many
have gone To the wall during the past
twelve months, revealing n lamentable
state OF financial ~upsoundness.
"ln the companies in which his son
was SO deeply interested h cashier of
the Bank of England invested large
sums OF the banks money by virtue of
the discretionary power intrusted to
~
him The collapse of the companies
swampcd these investments of the
Bank of E%ngiand's money. The amount
is not yet definitely known, but | am
told hat 1t is not less than 81, 600, 900
and it may possibly be 1900, 900 or
SO, 00O, 600. One of my i~nfor-ants,
whose word is authority in this city,
says he believes the Bank of England
has lost several hundred thousand
pounds. The cashier has been sum
marily removed, but the bank prob
ably has no means of proceeding
against him. because there is no indica-
ton of dishonesty on his part, but only
of exceedingly bad Judgment, and it is
said that he acted within the limits Of
his authority. But the revelations wall
come cut in a curious way, for the
cashier, being discharged, has not Il
penny to his name and his creditors are
about to proceed against him in the
bankruptcy court, whore q full investi-
CATION will be demanded.
II am also informed that an applica-
ton in bankruptcy will be made this
week. The papers are already drawn
up. The marvel is hat the Bank of
England permits this, for the result
must show how fallible its adninistra-
ton is and public confidence will be Sc
riously disturbed. Financial men cam
not understand why the bank allowed
matters to come to the verge of this
dangerous disclosure. Why did not tho
bank do for itself in this case what it
did for the Earrings in their historic d.
lemma? The obvious course would have
been to have quietly paid the cashiers
debts and SO avoided not only the
disclosure of the banks loss, but
what is even more important, the Pc
culiar state of the administration, which
gave an individual unquestloned au-
thority to exercise such faulty and
costly judgment. 1t reveals "a weak
spot in the strongest financial institu-
ton in the world and will not enhance
the credit of English tinanciering.
And this is the result most to be
feared, for if the British public, in the
present depressed condition Of affairs,
should have any reason to lose the sim
gle grain of its implicit faith in the
wisdom of the Bank of England, there
is no fortelling the result TO this al.
ready disturbed community. OF course
nobody imagincs that the Bank of En-
gland could be seriously affected in a
purely monetary point of view by any
loss in which an unfortunate official
may have involved it. The bank is
strong enough to withstand many such
losses, but to abate one little of its
prestige for sound administration is
another matter, and. couple this with
the strange faulty which permits its
ex-cashier to be subjected to bank
ruptcy proceedings with the curious
disclosur of the banks management
which must of necessity ensue, il
surely an error in judgment on the part
of the directors. However, it is no,
yet too late for the bank to prevent the
bankruptcy proceedings against the
long trusted cashier, but it has no,
done so yet. 1t is n strange thing.
give the ruInor for what it is worth,
but add that | see no reason to doubt
its truth, considering the authority
from whence it comes to me and the
fact hat ! have always found state
ments from that source absolutely
trustworthy