The Otago Witness.

Otago Witness, Issue 1476, 28 February 1880, Page 17

The Otago Witness.

WITH WHICH IS INOOBPOBATBD THE 'HOUTHBBN MBBOUBT.'

DUNEDIN, SATURDAY, 28th FEBRUARY, 1880

On the Ist of October, 1878, the City of Glasgow Bank suspended payment with liabilities then roughly estimated at £13,000,000. The result was, as it were, a financial earthquake. Substantial mercantile houses tottered to their fall, while ruined homes through the length and breadth of tlie land testified to the terrible extent and severe character of the shock. The unhappy consequences to hundreds of individuals is now a matter of history : the great body ©f shareholders were absolutely ruined, and persons holding stock merely as trustees, through a curious anomaly of the law, were held to be personally responsible to the full' exj tent of their own property, and thus, although perfectly innocent, were dragged into the common vortex. By the last English mail we read that the liquidators have presented a report of the conduct of their trust up to October 22nd last, from which we are enabled to gather thefollowing interesting and sufficiently significant particulars. The total amount received by the liquidators up to the date indicated waa £9,300,000; out of this sum £4,452,000 has been realised from the first and econd calls, and the balance has retilted from the liquidation of assets and the settlement of debts due to the Company. The claims of creditors have been satisfied to the extent of 13s 4d in the pound, and a further dividend was soon, the report states, to be paid, bringing 1 the total up to 15s in the pound. The liquidators express full confidence that the remaining 5s will be eventually forthcoming, but not probably for some considerable time. The liquidation of assets has, say the liquidators, benefited and may still more benefit by the effect of the general rise in the prices of securities. A con* spicuous instance is mentioned. The Bank held bonds and stocks in the Western "Union Eailway of the Uniteli States, which were valued by the investigators, at the time of the stoppage of the Bank, at £475,000. This, the liquidators observe, was a perfectly fair estimate, but tne actual sum rea* lised was £687,300, and they express a hope that the interest of the Bank in the New Zealand and Australian Land Company will also turn out more valuable than the estimate ; but no attempt appears to have been made to realise this interest, pending, it may be presumed, a more prosperous state of things in the Colonies. As we have noted above, two calls have been made on the unhappy shareholders. The first call was £500 in respect of every £100 stock, and it produced the sum of £2,101,286, reperesenting nearly 18a in the pound of the total amount which could have been received. The second call was £2250 per £100 stock, and was intended to cover the total ultimate deficiency. It produced only £2,351,080, very little more than thefirst call ; the indication being plain enough that the enforcement of the £500 call had ruined the great majority of the .shareholders. Attached to the report is the list of the contributories, and it appears that out of the 1368 whose conditions or occupations are specified, 244 were spinsters, 177 married women, and 73 widows— or 494 women in all j 74 clergymen, 39 medical men, and 17 teachers. In commenting on this list when originally made public, the London Times observed :—": — " We are not so much astonished at the falling-off of contributories after more than £500 per £100 had been called, as at the extent to which this first call was satisfied. The amount paid , in full has already exceeded £2,224,000, and the amount expected to be paid in full, part of which has been already received, is nearly £1,050,000; so that while compositions have necessarily been made with a large number of contributories, an enormous sum has been, or will soon be, extracted from solvent shareholders." The widespread misery may be well understood when we consider that certainly one-half, possibly a larger proportion, of the contributories were in all probability possessed of very small independent means to satisfy such unexpected and crushing demands. It is indeed marvellous that the calls were satisfied to the extent realised — namely, more than four millions of money. Our readers are of course aware that some of the directors have been criminally punished for, the deception and frauds towards the shareholders and the public of which they were guilty. The liquidators etate in the report that they bay? in*

Btituted civil proceedings against the directors in office at the time of the stoppage of the Bank for £6,231,000, for losses directly sustained by the institution through their misfeasance. They add, however, that except in the case of Mr Lewis Potter the value of the estates of the directors is comparatively small, and that in his case the claim will be disputed in the courts. The result they acknowledge to be exceedingly doubtful, as the principle of the civil liability of directors is by no means clear under existing legislation.

The Public Works Commission is, it seems, at last fairly constituted, and if we may trust the latest of several statements made on the subject to be the correct one, the names are Mr M'Cosh Clark, of Auckland, Colonel Pjearce, of Wellington, Mr Oswald Curtis, ©f Nelson, MrE. G. Wright, M.H.R., of Canterburyyand Mr John Reid, of Elderslie, as representing Otago. We believe others ■were asked, who in some respects would have been more suitable men, but for one reason or other declined. Mr Richardson, Mr J. T. Thomson, and Colonel Trimble have been mentioned, and we believe overtures were made to some or all of these gentlemen. However, the die is, we presume, now cast, and it ■would be invidious to single out any name and object to it merely on the ground that some better man might have been found. We do not suppose any of these gentlemen— who are all of good standing, and with some stake in the country — will regard themselves each one as an advocate for his own distriot. They are appointed, as we understand, to exercise »omeoheckon the wasteful expenditure of money on public works ; and whether those works which come under this head 6re in Ofcago, or Canterbury, or Nelson, Or Auckland, we hope the Commissioners will speak their mind 'witheut fear or favour, and support their verdict by An array of faots and figures that will not be easily answered. The great difficulty is that the task they are Undertaking is a gigantic one, and the time at their disposal up to the meeting of the Assembly very short — scarcely three months. To do any good at all, they ought to start at once, and work diligently and incessantly during the period at their disposal, so that at least an interim report may be presented early In the. session. The task is one of extreme importance. We are by no means fiure that the men are strong enough for the work before them, but we must hope for the best. We hope there will be no unnecessary delay, and would suggest that operations should be commenced in Otago, the farthest south and most important of all the Provinces. We shall jrecur to the subject at an early opportunity.