THE GLASGOW BANK CRASH.

Lyttelton Times, Volume LI, Issue 5584, 17 January 1879, Page 7

THE GLASGOW BANK CRASH.

The following items respecting the great commercial crash of 1878, are from the London correspondent of the S. A, Register : TUB RUINED SHAREHOLDERS. Great sympathy is felt for the shareholders who without the* slightest fault of their own are plunged into terror of beggary. Many are already ruined, for their whole property was invested in the shares they held. The very wealthiest among them cannot be sure that they will be able to pull through it, there is such a painful uncertainty even yet as to what the realisable assets may yield. The deficiency is variously estimated at from a million and a half to four millions. At the lower estimate the shareholders might escape with the loss of ail their capital, but at the higher and I fear more probable one they will have to meet calls to the extent of £4OO or £SOO per share. The latter prospect is so frightful for all parties and dangerous even to the depositors, that a desperate effort may be made to carry on. It has been mooted by some of the principal shareholders, who shako in them shoes at the thought of having to make good the poverty of the poor ones. Of these there is a very large proportion. An analysis of the list gives the following gloomy result: — Average. Each.

A BOENB OP WIDESPREAD MISERY Nominally there are between twelve and thirteen hundred shareholders, but the number is made up by reckoning trustees and all the partners in joint holdings. The largest category is that of gentlemen without a profession. They hold to the extent of a quarter of a million, and though a number of them are wealthy the generality are only in easy circumstances. The next largest in number includes spinsters, widows, and matried women—in aU 360. Two-thirds of these could not pay a coll of £IOO per share. Many hod their whole property in the Bank and lived on the interest, and the few who have some other small investments will hardly bo able to realise them in the panic which has followed. 1 have heard of a good many cases of ladies consulting their law agents about the practicability of getting out of the country with any remnant of their property they can save. In the ill-assorted list there are also many more ministers than there should be—thirty-nine in oil — holding £24,000 of stock. Most of them are Free Churchmen and Congregationalists. The Directors were connected with these two orders.

both of which will suffer severely as creditors and shareholders. About 110,000 of the S ostentation Fund of the Free Church is locked upjin the Bank, representing five months’ income, which had been accumulating for the half-yearly salaries, payable this month. Many country ministers had their whole savings sunk in it. One who came into some property a few weeks ago had resigned his charge, and was going to remove to Italy—his wife in fact had started for Florence—had every penny in it. His congregation at once met and invited him to withdraw his resignation, which ho did. The two best known Congrcgationalists in Scotland—the brothers William and John I'ulsford—arc both mined by it. The Rev John Pulsford is pastor of nn Edinburgh Church in which one of the Edinburgh Directors was a deacon. The Edinburgh Directors, I may say in passing, have a very small share of the awful responsibility attending the disaster. They were not awaro of the doings of the Glasgow Board, and some of them did not know of the Bank’s difficulties until they were told that suspension had been decided upon. One of them, a Mr Somerville, a papermaker, put £20,000 in it, representing £II,OOO of stock, and apparently advised by him Mr Pulsford bought shares from time to time. At the stoppage ho had £4OOO invested. He had borrowed money from the Bank to pay his latest purchased shares, and a day or two before the failure ho had paid in his quarter’s salary. From being a comparatively rich man he became at once penniless and has hanging over him a liability for hundreds of pounds ' on every share he holds. Professional men are particularly hard hit, not only ministers, but doctors and lawyers of all grades. No less than £IOO,OOO of stock ,has been held in trust, and 58,000 more by executors. There must be hundreds of orphans reduced to beggary, as the whole estate becomes liable for calls ; not only so, but the trustees are personally liable after the estate has been exhausted. This is a draconian view of joint-stock law which was applied by the House of Lords in the Western Bank liquidation. A very singular case was then contested, and furnished a precedent which should have frightened every trustee in the country out of unlimited liability investments. The lato manager of the Western Bank bad settled shares of the Bank upon his children during their minority. For each child a trust was created, and the shares so settled were the whole funds of the trust. When called upon by the liquidators the trustees pleaded no effects, and the Court of Session sustained their plea j but the House of Lords rejected it, and they had to pay the calls. A HEAYT MANCHESTER FAILURE. It was inevitable that Manchester should have its share of the disasters which are going. Its regular trade has been worse than even in Glasgow, and for a long time it has been understood that the Lancashire Banks were under heavy advances to cotton-spinners and manufacturers. The stoppage of the City of Glasgow caused a crop of rumours about them, and also about one or two young Banks in Yorkshire. But the trouble came in another form. On Oct. 11 it was bruited on ’Change iu Manchester that Heugb, Balfour and Co were in difficulties. They were said to have been attempting to get assistance in London. After hours it became known that they had issued a circular, and there was a very painful excitement throughout the city. The liabilities were estimated at two and a-half millions, bnt only £200,000 of them unsecured. They did the largest shipping trade in Manchester, and they were the last to continue the consignment business, which most bouses abandoned a year or two ago as being ruinously unprofitable. Thejr had connections in Canada, the States, India, China, and Siam. About one-fourth of the goods shipped from Manchester to the East passed through them, and latterly they were buying at the rate of £50,000 per week. The house nad been in existence half a century. Its founder, Mr Heugh, was the son of a Dissenting minister in Glasgow, who removed to Manchester and pushed his way up. There had been no Dunlop in the firm for some years. Mr Heugh lived mainly in London, and was Director of a number of companies. His financing was done there, and when the finance houses stopped supplies he was pulled up. The bills of Heugh, Balfour, and Co. ore well spread among the billbrokers and the Indian banks. The estate is expected to turn out fairly should the Indian markets not get still worse than they are. A BLACK LIST. From the date of the stoppage of the City of Glasgow Bank we hare had on an average a large bankruptcy a day. On the day the investigators’ report was published four or five houses suspended, and over since stoppages have been reported at the rate of two and three a day. Most of the estates are like Heugh, Balfour and Co.’s, said to show well on the books, but it may be a different matter what they realise in the present state of the markets. Various firms with large obligations held within a small area hare not announced themselves, but they have placed their books in the hands of accountants and referred their creditors to them for information. Subjoined is a rough list of the principal stoppages, beginning with the Bank and including all its ramifications. They are given in the order of their occurrence: — £

City of Glasgow Bank 12,404,297 Smith, Fleming and Co., London 3,000,000 Potter, Wilson and Co, Glasgow 216,177 Lewis Potter, Glasgow 16,451 William Simons and Co., Kenfrew 40,000 Colin 11. Dunlop and Co., Glasgow 30,000 T.D. Finlay and Co., Glasgow... 200,000 T. Bowman and Co., Glasgow ~. 8,000 M. Dunlop, baker, Glasgow ... 12,000 Brown, M‘Leod, and Adam, Glasgow 16,000 B. Wotherspoon, Glasgow ... 5,000 John Young and. Son, Paisley ... W, E. Baihe, stockbroker, Heugh, Balfour and Co., Manchester 2,500,000 Win. Leigh, Firgrove, Rochdale 11,000 Chapman, Horn and Co., Blyth 20,000 Westwick and Kock, London ... 70,000 Gordon Bros., Manchester ... 5,000 Lalour and Watson, Leith ... Coupor and Scott, and Co., Glasgow James Sawers and Co 250,000 J. W. Shakeshaft anil Co., Manchester 9,000 James Davis, Leamington ... 7,000

206 Spinsters bold 154 Married women and £48,9064 £237 widows 51,6534 355 98 Executors 57,6634 689 76 Trustees 99,460 1,308 5 Miscellaneous holders 900 188 8 Teachers 1,950 244 62 Tradesmen 20,540 331 28 Farmers and feuars... 51 Bankers and Bank 13,389 *4424 otlicials 29 Insurance agents, fac22,601 417 tors, &o 16,090 555 39 Ministers of religion 24,270 622 389 Gentlemen 253,619 652 37 Solicitors, ic. 28,866 766 99 Merchants 92,850 9324 24 Medical men 24 Manufacturers, bleachers, coalmas25,220 1,050 tors, &o. 4 Shipowners and ship40,678 1,679 builders 9,100 2,275 19 Paper makers 66,017 6,602