THE CITY OE GLASGOW BANK.

Nelson Evening Mail, Volume XIII, Issue 271, 22 November 1878, Page 5

THE CITY OE GLASGOW BANK.

["London Tiraea," October 3.] Our Glasgow Correspondent telegraphed last night :~ " The resolution of the directors of . the City of Glasgow Bank to stop payment, which was known to only a few persons on Monday evening, feil with woeful suddenness on the commercial community of Glasgow yesterday, j Among the various jHnt-stoek banks • r which are established in Scotland, none i occupied a more favourable place in the .estimation of the public than did the City of Glasgow. With the small trading community especially it was regarded as one of the safest sources of investment to be met with, and among the Bhopkeeping class there are few who did not do more or less business with what was considered as a pecu« liarly local bank. The other banks, of course^ have all good connections in Glasgow, but, no doubt, partly from its name the City of Glasgow was pre- . ferred by the majority of small business people; as a consequence the collapse has fallen very severely on our well-'o-do tradespeople, though they alone, if reports are to be believed, are not the oniy sections of society which are in- . voJved. Many of our most substantial merchants are. deeply concerned, and ; blready rumors are rife of stoppages on 'a giganfeicscale, such as have not been heard of since the unfortunate times of Western Band notoriety. It appears that the stoppage; though it has come -most unexpectedly on the general public, was not unlooked-for io certain quarters. Laet week a rumour was ; current here that a Scotch bank was not in a good way, but no one gave credence to the story, and even when the name of tho bank was mentioned the report, met with little acceptance. Only some few weeks back, at tbe usual balf-yearly meeting of the shareholders ii large' dividend was declared,-— a proceeding which gave no sign of un~ ,i healtbiofesa; and no later than Monday, las showing the confidence which was placed io the- stability 0 f the concern, the. stock was.quoted. in the. market af £236; The first tffleial intimation of how matters stood was made at a meeting of bank managers held yesterday evening.Jo the Bank of Scotland premises, Edinburgh. After deliberation on the report bf the accountant of the City Bank/which Was submitted, all were satisfied that it was impossible for them to assist. Tbey intimated this to the deputation of the directors and the manager, of the Glasgow B*nk, and .thereupon the latter at once atated that they could not continue without assie-. tance, an 1 Ihey must resolve that on Wednesday they would not open their doors. Upon this the other banks, for the -pablic Interest, and with the view of sustaining as far as possible the credit of tbe country, resolved to accept the notes of the City of Glasgow in the ordinary course of business when presented. Thia wise couree will prevent, it is hoped,, any "panic "similar to that j which shook Glasgow to the centre in 1857, when ihe other banks refused to cash tbe notes of tbe Western Bank. In the case of tbat benkall depoeitors were paid in full, with 5 per cent, interest,, and so far as can bb known at present : it.may be hoped that the depositors of the City of Glasgow Bank may be eQually fortUDnte, if the word * fortunate' cau be applied to a result the remoteness of which will in some cases be A itself a ' great, .hardship. Tbe shareholders are responsjbjd; for every penny, nod the full meaning of this will be apparent when it is mentioned that the deposits amount to fully £8,000,000. Tho bank, is composed of 1264 partners, with a paid-up capiial of £1,000,000, and an authorised ncte circulation of £72,921. For many jeirs past dividends of 9 io 12 per Cc-nt. hove been paid, and tbe price of £100 shares has reached close upon £240. The -stopping, as already stated, naturally caused considerable excitement in the city, and all this morning there was a crowd around the closed doors of the bank oflice in VrginiaStreet, ■■ The constables in the vicinity of the various offices of the bank were instructed by the. Chief Constable to inform people coming with City Bank notes that they could be cashed at other banks, and also to say to iaquirersthat it is believed the depositors will [ultimately be settled witb. A large number of the notee have beeu changed for gold at other baok?. At the Koyal buildings, too, the excitement was very great. The news came like a thunderbolt to thousands of business people io tlieir homes tbis

morning. . There was, quite a ryakip bßsiaess, each man more anxious, than, another to get some one ; to talk over the matter with. "/ J " The Stock-Exchange opened with a serious panic. After a time ttie'tone much approved, and after official hours the tone was eveo firmer, considerable orders coming from the south for Scotch stock, which ten Jed to improve prices. No transactions were recorded iv Bank shares. Tho iron brokers under tho circumstances wisely arranged to hold no meeting. A meeting of the directors of the bank was held in the course of the day, and it was agreed to at once place the books ia the haads of a well known firm of accountants. Suspensions and. rumors of suspension consequent on the stoppage of ibe biink are everywhere rife, but of course nothing definite can be stated. Rather a strange bit of gossip is floating about the Exchange. Tbe bank hae, ii is said, been liberafin its advances, and one local firm who do an extensive trade with Australia, are Slid to have received £1,400,000 in ibis way.' From the list of shareholders it ia seen that- a large amount of the stock ia held in trust for minors and by women, whr, it may be sup-, posed, have invested their all in these shares, as affording a safe investment and a regular income in the dividend. During the last ten years the number of shareholders has largely increased. Large holders have, it is stated, been sailing out, and the stock has been gradually going out of the market id smaller lots The state of matters at the head office to-day is in striking' ooDtrast with the appearance yesterday. Ia place of the atir aad bustle a sort oi funereal Bolerxnuy prevails. Every ooe gOB 3 aboat on. tiptoe fashion, and conversation! scufcely rises above a whisper, . arid hardly any ..business is being done. Payment of tills due ia .being taken, but the tellers are not particularly pressed. Touobiog the matter of employes, it may be: mentioned that in the bead office there are some 80 clerks, and 'at the J 33 branches tbe average 'is five in : each, so that' the suspension; will affect about 750 persons. Like the general: public, the officials in the branch offices, koew nothing of the suspension, till this: morning, but instructions had been: sent to ihe whole of the district agents, iv time fo reach them before, the usual' opening hour this morning, to keep the j book 9 closed, i

In a later telegram cur Correspondent says : ; —

"The Stock Exchange was busy, this afternoon, but just before the close the feeling which had been prevalent among the ; members was intensified by the rumor that two Lancashire banks were, it was feared, in : ; , trouble ; and should this unfortunntely be tbe caee, it may seriously interfere with Glasgow relations. North British Stock waa unusually depressed, partly owing to the fact that, aa tho City of Glasgow were the company's bankers, it is state J ;lhat some difficulty may arise as lo the payment of the dividends which are now almost due. It is expected, however, that this will be: satisfactorily arranged by the other Scotch banks. Under the company's account it saems that ail shareholders '. who have sold oot within 12 months are liable to be called upon in tbe event of the present holders of the stock being able tb meet the demapcl made upon them; and this will involve a considerable unrabeir basides the published shareholders. AU over tbe. VVest of Scotland the expansion hss i caused tbe greatest excitement. Io several towns the' Gity -of Glasgow did a very large business.' : In some instances the banks were besieged by parties wbo would have nothing: biit gold, and tie panic was so great among acme of the smaller merchants that they would not accept a bankoote of any kind. A little, explanation, however, sufficed to renewed confidence, Even in tho city soma old lidies were observed to be going home well laden wi<h tbe goid which they had withdrawn from some of the banks. Among the many little items which have come to light as showing the inconvenience which will be caused by this untoward evenf, it may be mentioned that, a few days ago a man lodged £5,000 io the bank with tha view of starting a new branch of business; The crash has entitely paralyzed him, and unites som - of tho other banks come to his rescue he will be at a complete atuntjptill. Another tradesman put £800 into the bank on Tuesday, being all thj ready cash he had in his possession, and ihi , too, is, of course, looked up. It is

e^en^aid. that, soma Government servants are in a, bad fix, iuafctouch as tbe moiiey for the salaries of fhe Government official? had been received . about: ? week ago, and the gentleman who ia responsible paid the mony into the City of Glasgow Bank, and aa it is due to the clerks to-morrow, ha is rather in an unlucky position. There are a } eo other, gentlemen who only a day or. two a»o put money/into the bank, and these are al) in perplexity aa to what they are to do. In 'the midst of all Uliis calamity a cheering ray comes in the offer of Mr Henry L»ck, a probable candidate for the Ayr Burghs, who bas offared to subscribe 1,000. guineas to auy fund which may be started. ior aid of the stiffeters by tbe calamity .'?. .