STRAHAN, PAUL, BATE4S, AND OTHERS.

Lyttelton Times, Volume V, Issue 321, 28 November 1855, Page 6

STRAHAN, PAUL, BATE4S, AND OTHERS.

Ii is not the smallness of the sum "in the pound" that Strahan, Paul, and Co. will pay, which constitutes the startling feature in their case. Their liabilities are estimated at £680,000, exclusively of deficiencies or surplus in the securities, and their a>sets are taken at £150,000, or £100.000 exclusively of sums advanced on foreign railways, representing £%27 6.000 Some moivauiile houses have shown an uglier account; hut the worst trait in this case i» the breach of trust. A number of persons, representing th-it various thing called '* soeielv,'' piaeed faith in the house of Strahan, Paul, and Co. collectively, and individually in the family of Paul, "raced as that family has been with a title, and making apparently not unfounded pretensions to a high social character. The position of the English gentleman, the English merchant, and the English banker, were combined. It anything distinguished the bank near Temple Bar from oilier banks, it was that species of personal character. The fact that the firm has riohed into debt does not at ouce stamp it with turpitude ; for it isadmiited that a banker may legitimately trade in the capital of his customers. Fake the case of a bank first set up in a small country towu. A gentleman with a good round sum easily | realized nuts it into a strong box and establishes a bank: other people loiige their money there until iney want it; a tolerable average can be struck of the sums wanted for current demands, and the rest is invested: the bank exists. The gentleman can henceforward live up to his own fortune most honestly, «md make a second fortune by employing his customers' capital most legitimately—so that he trade legitimately. It often happens that a man holds property in ona form but wants it fora time in another form : he has an exchequer bill worth a'umt £1.000, but will be able io employ at a profit thai sum in cash, and will pay for the accommodation : the banker lends him the value of somebody's £,!0)0 -ulnus the discount: pockets the profit, an<l has run no risk. That is legitimate trading. What if the security offered be railway shares ? then the risk is greater: but the "private fortune" will cover the margin on that transaction, and a few mm? ; and then again'a few more, until perhaps the private fortune will not quite cover all the aggregate margin. Now ihe banker is bound to run ho risks of that kind; but 'ne follows she fashion of commerce, and the I c->u)inerciHl world is nut inclined to make ; theoretical distinctions between the duties of banks ami those of merchants' houses or trading ; firms. StrahaM, Paul, and Co.. however, are stated to have srone a step further. The accounts disclose the alanninsr fact that there are private bankers in the capital ot England who will take the seciuines deposited by their customers and pledge or sel! them. This, if proved, is not constructive breach i»: tru>>. nut actual misappropriation, like embezzlement or stealing. Ii is li unlawfully p!e<ign«g" on an enormous scale, ami briuus via '.oisdeuieaaant under the cognizance oi die criminal-law. The hankers must !>aie known wl;-u :r,oy were about, f.u i;ie_v souirht to obtain ?.he q;;-?5oonceof >ome njisasi customers by ass!ira:r^> tlsat the property wa- vdV. nhvr it had h eti iH<: );^e i o'"; au-i iheit by u^.^eai-: ad inisenr.)!M!,i!:;. Warrants for their "tpprihensi -. v beusg- i-^ueii, shey surrender to answer the cnarg-f.- a,'.iin-t them.—one of i.iiem after he was sipnosed to have escaped ; and ihey make a full a:>el»sure «f the property uiihi-.viullv a[)[>ro:":]al*'d. A cor;e<p Mirh-nt of the Times poiiits mt; that til's discii.s'ire, made i>efo>e actual indiciniesst, nriietes the misdemeanants from the c..n-euuft:ices of a pariii-uar statute, under which :hey wo-.iid ..t.-ic-r^i- .- h,v^ f.e-n liable i o Uaiisp 'r'.i.iioij for sev,-ii <t :.>u:-;-.-eij yc-ars. J'lie persi;:? l;;;,, ricc-irat-iy c--mpo-;it)/ li.finsi'lvt'S a:ii:u ihij -A-vrst rucks of the penal law are Kn^hsh b.Hik'.-r- aiid •Jt'U'i-ilii.-U. N^r <U> m?y stait'i apme. I»i tiicir accounts arp-'-irs t i:e firm uf .l,le->r>. O^een!. Gurtiey, a:."l ■_:«'. n< p<r;:es with \v:;';:n suuir/ ii lc in;- ■pi'r-t:!r:ai'.--i seciuities havi; :>een lodged, h !- a r.-m-'i-vJiie <.-..•■ :ici-i«-iice, il,.a the ver\ fi ? :n ..i O.eie.id, Uurnry, a:\.l G».. »;,<! received v,,a\:<tni- yt .»;<!.-f <u>\- ■: i :u?uu from Davidson and U =:.]:)£:. c-ii;;r;,j il!»rt'!i.ci!S md inelal an-i OrtloJliai i.i.ik.ss. .»»., :,i«f a:.<ml to i.c J»r..Sfcillf.l i.y the C::y S.-ilci^i «>, il,- (.) \\ U ;i ,; r> f,, r v,.;iou>a!id extrusive iVau.is. I: is ,-,1, y remarkal'ig, tiiat ;.! :e ;-t '.me „; i::i- iicu ijuw ti!, tr:;ii :o "'v;sji:i!t-oti'ii Aiia uiie '•<' iiiir first Jainilie-, ana Uic_>- a,c i^,.h.,. a ii,t reauii ul luese proceed-

ings with a decree of wretchedness that cannot ha described." Again, then, wo encounter a combination of the characters of British irentlcm;in and merchant. Here arc three linns brought tujrciher in connexion with the unlawful use of pawning or selling securities. In Norfolk street, Strand, was the house- of 4i llallord and Co., army agents,'1 which was solvent in itself; hut this apparently separate house ..as Strahau. Paul, and Co., under anothei name. The practice of an alias is recognized in cotnnierce. A .Mr. Gladstone holds Mr. Lindsay's contracts with Government : and Baron Lionel de Rothschild, .M.P., claims not to lie identified with iM. N. Rothschild and Sons, Government contractors In connexion with the subject of securities, it is remarkable that a complaint has been laid bef"!*e the Committee of the S'oek Exchange agiinst the senior partner in a we]i known house, of misappropriating securities that came in'o his possession as trustee. How far do these strange practices and these veiled connexions extend in British commerce? There are some other questions which will occur to every reader on the spur of the moment, and will be dismissed almost as suddenly, because they wili not appear 10 ailinit of an answer. Y-.'t they do a-imit of some, answer, and they -are of vital concern to the very existence of commerce. We have said Urn Strahan, Paul, and Co. do not exhibit the worst of asset accounts in the annals of bankruptcy. We see in the South Staffordship failures just reported, that the estate of Jefferies of Hartshill is likely to realize ss. in the pound ; in the ca«e of nickman, the creditors would accept 2s. 6 1. at three, six, iin.l nine months, and a further navment of 2s. (>d. in two years ; Wlmehon<=e arid Jeff.M-ies will probably yield 2s. in the nound. Here again it is remarked that the Dudley and West Bromwicu Bank is severely censured for having; encouraged snocuhnion by fnvino- "unlimited credit' to its customers. Of all the bankrupts who appear in the Gizette.it is roughly and popularly estimated that they do not pay ten shilling's in the pound. But immense numbers of bankruptcies are superseded by com position. Some are concealed by the forbearance of creditors dreading the consequences; for it is remarkable that one bankruptcy produces many,—in itself a proof how much of the apparent capital in trade is fictitious. Now what is the gross s;ini thus annually sacrificed ? No one can tell. The few ]un announced above —Strahan, P.nil, and Co., Davjd-o-i im d Gordon, Hicktnan, Tefieries and Whitehouse•nakeaii a-gr^nte of £l.<! 00,000; and James Hey wood ami Co., of Derby, have claimed temporary protection of iho bankruptcy laws. Millions sterling- have -one iv die bankruptcies d<scu<sed within on- we»k. What was lost in the last rush, brought on by Oliver at Liverpoo!, who purchased ships until he had a fleet to t'orestal the contract market, and then went inu. the Gr/.-tte? What is the a^rej-ate fora whole \ear? Another most important question —what is U.e proportion „f c^vtal invented, and of false c.'.i.iiai empluye-i under the" unlimited credit?1' 1 nis als. H.,. one can ,-mswer; but there is ev'ideuce that .-■ y ,>od round sum onn be made to d:> duty several u: !le s uvev. The ;)! ivate banker m i:.e country-I«, An plunffe-? in;,, innumerable M'tjcular,,,!!,. i^cuis, f .veryi....iy knows that in any one transact!..,, the banker can " bnv up everytinutr." A man i> .mnLninr : , h P »e t'Ttune ... a primin- hiuim-ss, anil he spends the same ion .me in !,•„„!, a ...ansi,,,,. and ironttan.a.MV \uuig. The securities Ul-eci with Mr.hunJ*,..!, and CV were doin-dutv for the ; nw:,-rs me i>a»k,.r N ami the recipient o f ,h e | pied^e ; jn>t us D.m,l M >ii and Go.don's wamuits yv e re ao, :iy - triple duty. There is even an idea |hi tra.:e t,..-.i tins is " iegiiinuite," because bankers «to n»t need cash to meet all the notes with com at any «,,e moment. .\f,,d»rn speculation j places c:.sr, ami capita- under the same restriced | respon^Hitv-.,,,,] ! !( ,!ds that !t U! an n,av m>,',hl ,ri i ....ii^ni.l a sear out of three hundred,"so that jhe .my s and St .j| s f ast *,„„„„„. r nqni ; f j ! c.,..1.i I .e i >, ; '.,,i suffideiMlv far, would dinner j some ratm memnt of ira.le c.irrieil j m "?•"» iK-ut...us (ihati N , ltl ) capital, an.l the amount never realised, bu, lost iv (he shape o( j ten st.sll.njrs in th« pfHinil which if> t i F l |.' lw: v,, ! c ll ,T(,m,.s to an rn.km.wi. numI i>er»nn ! li,.., lSS , c . | .| I11!rt , ve| . y V! , n) . Inlurmaii..., <„, t l, ese KK \ xl ;. luU h is emnp.vauv.ly nsel,.s. h,enuse it lies apart. | * heu il^runt C:lsftS ncwTi l{ . ire r Ta ' rded !as ex-eptimml; ,h M l!r h we enuu K h to make lu= aouuL wh«iuer u.ey ure exceptional in unv

thing more than their excess—whether they are more than extreme cases of numerous classes. Experienced men must know, each iv his own wav, how the taint extends, and how it is now constantly spreading ; but how can they brinir their information to bear, and especially how can they brimr it together ? Tii<; experience of the merchant, the banker, the B.nkruptcy Commissioner, the nsreut, the lawyer, is accessible ; hut there is no machinery for combining- it. The courts of law will examine the cases, and leave them apparently individual and exceptional. Tie survey of the whole, however desirablo, se-ms ultra vires to every tribunal, save mic, tlu! Grand Inquest of the Nation. It is an neciu.ion for a wholesome exercise of the larjfe powers lying iv t' c House of Commons, proper to be performed by a committee of that body. The information nt first available for collection miglit not be absolutely perfect, but it would no much better than any that has hitherto been put into a connected shape, on the present state of commerce. Once collected, it would alone, though no " measure*" were founded on it, ha valuable for tin: correction and guidance of commercial a flairs. But it would in itself (^jdginate the best suggestion whether any mensiiro outrht to be founded on it or not •, and if any, of what kind. We do not pretend to anticipate such a suggestion, for the plain reason thai, in common with the best informed, we are in the dark—sailing in a troubled sea without chart or soundings. — Spectator.