THE CITY OF GLASGOW BANK AND "KITE-FLYING."

Evening Post, Volume XVI, Issue 284, 30 November 1878, Page 1 (Supplement)

THE CITY OF GLASGOW BANK AND "KITE-FLYING."

The same process of " kite-flying " of accommodation bills, " drawing posts," and all the paraphernalia of a system of fictitious finance which characterised the practice of shaky firms at the time the disastrous disclosures wero mado on the failuro of tbe Western Bank of Scotland twenty-one years ago, have been repeated by some of the debtors of the City of Glasgow Bank. The Financier says :•— lt is morally certain that all the firms concerned in this sort of circular bill-flyiDg must succumb. One house in Scotland and Australia is concerned in this paper to the extent of £l,00(h000 ; one doing 1 business in Scotland and the East, £500,000 ; ono located in ludia owes the bank £1,600,000 for acceptances, and £700,000 for cash advances. Three other affiliated Indian houses aggregate an indebtedness of £1,250.000. The Financier eUimates that the shareholders of the City of Glasgow Bank fiautt net a deficit

of £4,000,000, placing the failure among the most disastrous on record. The Glasgow Herald says rumors are current that some of the directors of the City of Glasgow Bank received enormous advances out of the funds they were administering. The Bank of Mona, local branch of the City of Glasgow Bank in the Isle of Man, held £300,000 to £350,000 deposits, about all the spare money on the island, and many persons are left destitute. With a view to afford relief to depositors as soon as possible, a committee of other Scotch banks is making arrangements to pay ten shillings in the pound so soon as the banks have found that they will be safe in making an advanco to that amount. The BullioQist announces the following as some of the advances made by the City of Glasgow Bank:— To James Wright, £500,000 ; Wm. Scott, £133,000; J- Morton, £190,000; Wm. Nicol and Co., of Bombay, and F. Wing and Co., of Kurrachee, £1,200,000 ; L. Potter, £180,000; R. Salmond, £100,000; W.Taylor, £170,000 ; Buchanan and Co., £100,000. It has been discovered since the report of the examiners that foreign correspondents had used open credits to the extent of £17,000, most of which will be lost. A Glasgow telegram says : — This city is absorbed in melancholy contemplation of the terrible picture of crime and rum presented in the official roport of the examiners on tho broken City of Glasgow Bank. The figures and facts are so overwhelming that even financial minds, familiar with figures and cash books, seem utterly to fail to grasp the situation. A review of the effect on the Scotch trade since j the disaster shows a dreadful extent of damage. The list of works stopped is not extensive, but includes the iron works of Henderson, Dymock and Co , the Heatheryknowe colliery and brick works, Miller's spinning mill of Dundee, several pits in Ayrshire. Hannah. Donald and Wilson, engineers!, Paisley, with liabilities of £70,000, and several building yards. The following is a list of the reduction in wages already intimated as decided upon : — Clyde shipbuilders, 7A per cent; Edinburgh masons, Id per hour;*Dalkeith ironworkers, 10 per cent ; miners, 6'd per day; laborers, Is per week; Baillieston miner*, 6d per week ; Shotts ironworkers, 10 per cent ; Merry and Cunningham's tradesmen, 10 per cent; Edinburgh joiners, £d per hour; furnace men, Is per day.