FARROW'S BANK

Evening Post, Volume CXVIII, Issue 93, 17 October 1934, Page 18

FARROW'S BANK

FAMOUS CRASH RECALLED

DEATH OF FOUNDER

The death, at the age of seventy-two, of Thomas Farrow, recalls ono of the most disastrous financial crashes of recent times, says a writer in a London

paper. Farrow was tho founder of Farrow's Bank, which failed in 1020, a catastrophe which meant ruin to thousands of small investors, and involved him in a criminal prosecution and a sentence of penal servitude.

It was in 1904 that Farrow's Credit Bank, Ltd., began. It rapidly attracted small tradesmen and others by paying interest on approved credit balances, in addition to offering substantial rates for deposits for fixed periods. The founder himself had won a considerable reputation by his championing of tho victims of moneylenders. It was largely through Farrow's agitation that a Select Committee was appointed by the Government, and the Moneylenders Act was passed in 1900. Farrow's project, which was advanced as a means for defeating the smallscale usurer, was enthusiastically supported by bishops, Nonconformist leaders, and eminent lawyers. Tho bank was registered as a public company in 1907 with a capital of 9 100,000. From timo ,to tiino the capital was increased, until in 1920 it stood at £1,000,000. In September of that year the capital authorisation was increased to £2,000,000. At that time it had 60 branches in all parts of the United Kingdom, and its assets wero believed to havo reached £4,657,000. Tho crash carno dramatically, just before Christmas. On December 20, 1920, notices wero placed in the windows of overy branch stating that payment had been suspended. Questions asked in the House-of Commons revealed that tho Government had been aware of the bank's position for some time. The accounts were of such a character as not to warrant any assistance being given by the great jointstock banks. SENT TO GAOL. News of Thomas Farrow's arrest followed. His trial provided sensational evidence of systematic falsification of accounts. There was a deficiency in June, 1920, of £2,685,000, and tho bank had actually sustained annual losses since 1909. Farrow was sentenced to four years' penal servitude. Tho sentence was served at Parkliurst. Farrow was ill when it began, and nearly the whole of his term was spent in hospital or doing clerical work in connection with the hospital side of the prison. On his release Farrow settled down ultimately in the quiet village of East Hampnott, two miles from Chichestor. Ho had very little company or money, but up to the time of his death he was firm in his expressed determination to vindicate his honour. Born at Catton, Norwich, Farrow came to London in his twenties, and no' long after became ono of tho private secretaries of Mr. W. 11. Smith, M.P., remaining in that capacity after Mr. W. H. Smith became First Lord of tho Treasury. Later bo was private secretary to tho lato Mr. E. Yerburgh, M.P. for Chester, and was honorary secretary of tho Agricultural Banks' Association, in which Mr. Yerburgh was greatly interested. It was while'occupying that position that he came into prominence with his campaign against moneylenders. Farrow leaves three sons and three daughters. In a letter written about eighteen months ago, Farrow declared: "I was the largest shareholder in tho bank and lost everything—indeed, more than anybody else, including my freedom.... Neither I nor any member of my family received one penny to which we were not legally and morally entitled."