THE GREAT CHOWSEMPOOR BANK. [From Dickens' Household Words.]

New Zealand Spectator and Cook's Strait Guardian, Volume VIII, Issue 763, 24 November 1852, Page 4

THE GREAT CHOWSEMPOOR BANK. [From Dickens' Household Words.]

It has 'long been a prevalent idea with that benighted creature, "the million," that to follow the avocation of a banker requires a long 1 life of, training in the deep, mysterious -.workings' of complicated accounts, interest-tables, and 'something more than mere multiplication : that to become an expert and successful banker, involves deep and patient study, long practice, and an unblemished career ; in short, that bankers, like bishops, can hardly be worth anything until. their hair is grey. It has been the task of the AngloIndian community of the present century to demonstrate the hollow tress of this long-cherished belief. The wise men of the East have flung the antiquated , Lombard-street creed far into the shade *, they have demonstrated to a nicety that what Lord Byron once wrote of criticism, may now be equally applied to the banker's draft. A man must serve his time to every trade, Save banking,-:— bankers are ready made. Under the genial influence of a tropical climate, the development of a hank far outstrips the fabled worth of Jack's magic beanstalk. While some institutions on the old system, in the old country, would be issuing circulars end preparing their ledgers ; in the East, young military subs and beardless civilians spring up into full-grown "first-chop" bank directors. It was in the latter part of the year eighteen hundred and something — not so long since, but that I perfectly remember all the circumstances, and I am not an old man yet, — when a party of officers and civilians sitting round the mess-table at Blankpoor, a military station in the largest presidency of our Indian-Empire, agreed among themselves to " get up " a bank ; the want of "accommodation" being then much felt in' that part of the world. Before they rose from the table, the amount of capital had been agreed upon, the scrip apportioned, the " direction " filled, and the secretary and managers appointed. No time was lost. It was discovered that what looked so beautifully rose-colour after a dozen of Champagne, wore an equally cheerful aspect wlien looked at the following morning over Bass' pale ale. The thing was not long in embryo. Within a week the Great Chowsempoor Bank was a fact. The Bank had directors and a regular working staff; the directors had shares ; and by some complication of circumstances, before a dozen accounts were opened, the shares got up to a premium. Residents at the other neighbouring stations, military and civil, thirsted for Bank honours, and scrip w<*s applied for from all quarters, and' in any quantity. For some brief period the Chowsempoor institution wore an appearance of intense humility and modesty. It would not for the world have been thought ambitious or even presuming. The young captain of light-infantry, who condescended to act as secretary on three thousand rupees a month, informed the public, in the virgin Chowsempoor circular, that their capital was intended to be limited to a lac, or fen thousand pounds. But, the ten thousand became augmented to twenty and then to fifty thousand. Neither was it very 'ong before the majors, and collectors, and -magistrates, forming the Board, discovered that such places as Blankpoor and Auditorbad, and other minor hill stations, were far too circumscribed a field for their growing operations: they must extend their influence through other channels ; they mast have a ' branch establishment at the great metropolis of the Presidency. Accordingly a branch was forrried — a branch which was fated to outgrow the parent institution in more respects than mere extent of operations. By way of a little variety, a few merchants were admitted into the branch direction ; this imparted fresh vigour to the system, and the Hoodly Bund Branch of the Great Chowsempoor Bant bade fair to do all in its power to develope the resources of that portion of British India, on the most approved modern principle. A spacious building was appropriated for the' "-Branch " in the most commanding and expeh-! sive partof the capital. The house was fitted and furnished in true Oriental style and costliness,' and was tended and 'guarded by a little army of retainers. Not the least splendid were the suiteof apartments devoted to the local manager — a skilful penman, a mighty warrior in figures, a special pleader in conversation, in deeds some-, thing mere ; in short, precisely the man to make such a child as he had in hand walk alone before it was a year old. It was perfectly marvellous to see how the institution grew and throve. People were lost in amazement at it. Even the cunning old'foxes of natives were not prepared for it — i and they are usually prepared for a good deal. , Brahmins and Zemindars became envious of the Great Chowsempoor Bank, and determined to become shareholders. It was not long before • the list of directors contained the reverend names of Baboo Futty Maund, and Dustomiewallah Dutt. The resources of the Presidency were- now being fully developed — in vulgar words, the exports were doubled ; credit was lavishly given, and as freely taken. Small men of a few odd thousands shipped produce to the extent of hundreds of thousands, and they were not over particular as to what they shipped,. Shopkeepers swelled into merchants. Merchants expanded into princes. Civil servants turned up their official noses at their dry roptine of duties, thought seriously of retiring from the service, and, as they revelled in the winning hookah, gave themselves up to dreams which in fairy splendour and impossible magnificence, could only have found a rival in the Arabian Nights' Entertainments. To their imaginative vision the fabled Pagoda Tree appeared to be putting forth its glittering foliage, and ripening its tempting fruit < with magic rapidity. ' That was aright merry season 'for, the bold j

rand the, venturesome ; and- ..everybody became bold and venturesome. Each. member of the Hooghly Bund community appeared to possess a chip of the real original philosopher's stone, a touch of which . transmuted every object into the precious metal. Many ami brilliant were the evening parties, and the dinners, and .the nautches given ,by the ilite, &nd .the. non-Mite,, at which the 11 Lions" were ,sure lo be pne or two directors, with perchance .the Manager- of , the Hooghly Bund Branch of the Great Chowsempoor Bank. The shares of the Bauk continued to rise until they reached one hundred per cent, premiiim ; where they remained, either lacking the courage to go any higher, or feeling that they had done their duty. It may be as well to state here the principle which regulates : 'the allotment of the new shares, j of which the Bank's enormous success warranted >the issue,' as it> will. at. once- show the immense superior management of Indian banks to that of the old school. The new scrip was- not permitted to find its way at once among the vulgar crowd. It was -apportioned among the existing 'shareholders in an exact ratio with the number of shares held by them, and of course made over to them at par — i.e. each share of fifty .pounds,' 1 was handed to them at that figure, although worth,' in the share market, double 'that amount ; and, inasmuch as most of these same proprietors bad taken as many shares as they could find cash to pay for, the Bank very considerately gave them the new scrip on credit. The fortunate possessors of this fresh stock- at once turned their acquisitions to good account, by selling them for cash at the ruling high rate of premium ; paying in, to their account at the bank, the price at par, and comfortably pocketing the- difference. This simple and good natured process was repeated several times over, infinitely to 1 the satisfaction of those in the secret. In order to prevent the possibility of any serious decline infthe market price of these new shares, and to make assurance doubly sure, the wary manager watched the course of events ; and, on any appearance of their being more sellers 1 than buyers, went in and bought' up all, at a trifle below full rate. On account of the bank ? Not at all : purchases were made with the bank funds it is true ; but in the names of the directors, in equal proportions. Injtime, the crafty bank manager contrived to monopolise every share as it fell in' the market, and thus buy-j ers went to him, as a sheer matter of course, as "the only chance of obtaining a share ; so that, not only was the price well-maintained, but something handsome was turned over in the shape of profit for division among the " direction." , ; Far and wide the bank share mania spread. 1 The cholera and the plague travelled at a mere 1 snail's pace — and a v|ry infirm old snail's .pace' too — compared with the rapid raging of this joint stock fever. High and low, lich and poor, washed and unwashed, Christian and Heathen, Jew and Gentile, were alike struck down. The judge upon the bench, the pleader at the bar, the* priest' in the pulpit, the poorect clerk, the meanest money-changer, — al) bowed ihe knee to the new golden image, which they of Chowsempoor Jiad set up. A bank director was thrown from his borse'on the parade : quick as thought, half-a-dozen doctors rushed to the disabled man ; and, as the foremost and most fortunate among them felt bis pulse, whispered in his ear an inquiry about a few of the next issue of shares. The trustee of> a Benevolent Fund for Widows and Orphans was so anxious to add to the means of these poor dependent creatures that, on his own responsibility,, and in secret (as good should ever be done), he invested the whole of the moneys in his haad3 in Chowsempoor Bank Stock. The young and rather speculative firm of Hookey, Walker, and Company, went boldly to work in the way of " developing the resources of the country ;" which signifies literally, making enormous shipments of raw produce. They made large purchases of silk, indigo, rice, gums, r.nd, in short, of all the roost valuable products of the land ; and, having shipped them to England, they found not the least difficulty in obtaining from the very useful Chowsempoor! institution an advance, in cash,- quite equal to the entire value of the goods. The rule bad been, to advance no more than two- thirds of the prime cost ; but by an ingenious process, known as " salting the invoice,", -the articles were made to appear as worth fifty j per cent, beyond theft real value. Thus the en-! terprising firm recovered on the spot all they had; paid for their shipments. Moreover, Messrs. Hookey, Walker, andj Company, were largely interested in Indigo Fac-i lories ; that is to say, they possessed several ex-j tensive estates producing that article. The firm, finding how well the system worked with their' shipments, determined to launch out in planting; matters. One of the partners being a director of the Bank, there was no difficulty in obtaining " accommodation ;" in other words, a loan of a' few lacs, (a lac is only teu thousand pounds) to; enable these enterprising merchants to extend their operations, which they accordingly did in! the most approved fashion. Among many other' transactions of that time may be -instanced the] sale, by this same firm; of an indigo factory in the interior, at a rather heavy figure. Payment was made in bank post bills of the other Hoogbly establishment — the "Junction Bank" paper — which was then fully thirty, per cent, below par. ! Our friends, Hookey, Walker, and Company took! .these bills to the Chowsempoor Bank, who, not; wishing to refuse.good customers, obligingly cashed the paper at its full loriginal value. i To any ordinary mind this would appear a somewhat losing game. But, oh dear, no ; the , Manager of the " Chowsempoor " was too clever for that, and soon backed out of the difficulty. An " advance " happened to be wanted by a customer, on a rather shaky sugar concern ; and the hawk-eyed, clear-headed man of business consented to make the- loan, on condition that it 'was taken in the unfortunate bank post bills, valued at par. It is true this sugar estate turned out a very sorry affair, indeed ; and it was soon after evident that unless that Bank assisted the proprietor with a further loan of rupees to keep it in good cultivation, the property would go to utter ruin, and the directors would find their first advance scattered to the winds. That mattered little; further aid was granted; the, owner was still embarrassed ; and it ended in the factory reverting" to the Bank as their own property, whilst the directors and managers chuckled at the increasing' extent of their operations. But, ihe benevolent Bank did not shower its golden favours on commercial men alone. It was.

particularly indiscriminate in its generosity. The directors, doubtless, bending under the weight ,of : gold raohurs and Company's rupees,, smiled com- ' placently on all mankind, and appeared, by their distribution of worldly riches, to be imbued with Conrraunist principles. The young cadet, basking in the sunshine of college life, crippled and fettered by his paltry allowance from, the Honourable Company, of four hundred rupees- «- mouth, besought the, friendly offices of this truly charitable institution ; and not ia vain, for one of the directors was his uncle's most intimate .fritod. A few strokes of the pen, and the embryo civilian possessed the means of ,dfivipg , his tandem, drinking champtgne at tiffin^ giving crack parties, frequenting the gaming table ; in short, of qualifying himself for a* perfect model Hooghly , Bund Sahib. .So long'as the gold and silver stream swept gaily- and smoothly over the land, all. went well. Trade flourished and' traders prospered. Employment) was good, and prices rose enormously. Imported goods were consumed in huge (quantities, at' lavish rates. Exports swelled to an unusual amount ; ships were no sooner ia the river and unloaded, than they were freighted with costly goods for Europe. The collectors of revenue were faint with the effort o£, receiving so many taxes:' the treasury of "John, Company " was well nigh bursting open its massive doorsj so vast were the piles of glittering coin within. Indeed all allowed that there never bad been such a prosperous time within the memory of the oldest civilian. The public prints were loud in their exultations, and their praises of the judicious management of the Banks. They pointed with exultation to the- enormously increased trade of the country, .and gave all honour to those noble .and useful institutions,- which thus iostered the commerce of; and added fresh lustre to, the brightest gem in the crown of Britain ! This state; of things was not destined to 4 last for ever. Some evil genius, envious of 'the Chowsempoor career, , stepped ,in and .spoilt' the pleasant game. Time rolled on ; half-yearly meetings of shareholders were held, -and most cheering prospects were developed tfy eloquent directors in Sanguine speeches, and attested, by kind auditors in glowing accounts. Easy,' bowever, as it was to, cook up pleasant reports, it became somewhat less easy to continue providing the usual dividend of twelve per centiper annum. Accordingly, after a little delay, the twelve was reduced to six, and proprietors wereitold to thank .their stars it was not four. A change came over the doings in the East. Heavy shipments outward and homeward overstocked both markets ; prices fell seriously ; and, as everyone wanted to sell, no one wanted to buy, and of course matters did not improve. Some merchants were so pressed by heavy losses, that they actually ventured to sell out Chowsempoor stock. The effect of this upon the market was •not long in being felt ; for fear is contagious, like many other complaints ; and the fashion of converting scrip into real rupees soon became prevalent, much to the mortifioaiion of and managers. It was found impassible to continue the old plan of buying up shares from the market, since everyone who could, became a seller ; the stock rapidly fell to par, and then to much below that moderate point, until all the world had shares to sell, but no buyers were left. -And then, but not until then, the price ceased to fall any lower, for the shares had no price ; they fell to zero. The next general meeting was an anxious and an unpleasant meeting for all parties. Still the directors' report spoke confidently of the future. No actual panic had then occurred, and although heavy losses on all sides were matters 6*f notoriety, the considerate auditors had put down no more than a few thousand rupees as bad debts. To be sure, the dividend of five. per cent.' boldly declared on the current year, would have had to be paid out of the capital, but it was dreaded that it would be very difficult for the manager to discover any capital whatever. This difficulty was soon mastered ; the directors were not put to the trouble of -fishing for capital in empty coffers, and an infinite amount of vexation and declaring of accounts was saved them by the far more simple process of suspending payment, which was done not long afterwards, to the terror of many, and the astonishment of more. It was then clearly demonstrated that whilst the great Chowsempoor Bank had been so ardently bent upon " developing the resources of the country," the, directors had -overlooked the necessity of developing the resources of the Bank, The stale old maxim about being just before generous had found no place in* the managers' creed, and when the hour of trial and difficulty came, they who had been. so lavish towards others found there was not a single friend or supporter for themselves. Of the scenes which passed in and about Hooghly Bund, after the stoppage of the Great Chowsempoor Bank, it would fnot be. less difficult v than painful to treat. To such firms as Hookey, Walker, and Company, it was no 'doubt distressing and inconvenient to & degree ; to the Insurance Companies it was perhaps more- so ; while the young, confiding, embryo -civilians, &nd the juvenile captains and innocent ensigns, ail of ' whom had learnt to look -at the Bank as greatly honoured by the accommodation accorded them, considered it extremely hard to be called upon to "pay up " their accounts — so very hard indeed, that scarcely any attended to the call. But if it proved harassing* and annoying to all these, bow was it with the poor friendless widows and orphans, whose all in this world had been engulphed within the fatal vortex of the banking mania 1 Terror would be a faint term to apply to the feelings of these stricken people when they learnt the extent pi the blow — -that they were not only friendless, but penniless ! Their official trustee was exceedingly sorry for what had occurred j.-but he had acted for the best ! As for the Great Cbowsempoor Bank itself, its affairs are still being wound up, with do prospect of a dividend,; although some very clearheaded, sharp-dealing individuals have contrived to realize fortunes out of the scattered wreck; how, it is scarcely necessary, foe me to relate.