ABSTRACT
It is not the first time in its history that such an event occurred. On November 11, 1857, two days after the stoppage of the Western Bank of Scotland, the City of Glasgow Bank closed its doors for a time. In about a month from that date it was able
to resume, and so strong was the confidence in it then that the business and the circulation both rapidly extended themselves. The old habits, however, of doing bad business unfortunately appear to have clung to the concern, and even to have grown with its further development after its second starting. When the investigation is made, the rock on which the concern split will be found to be the old one of a direction working in a vicious circle and recklessly advancing large amounts to themselves and their own friends. With scarcely an exception the directors were connected with the names on the bills in circulation, and with the firms to which the advances were made. It is very little use attempting, at present, to give any detailed statement as to the extent of the liabilities and value of the assets. Till further particulars arrive, we must withhold all observations on these points. The fact that the other Scotch banks are willing to take up the notes of the City of Glasgow Bank appears to support the belief that all the liabilities of that bank will be met in full. The danger of discrediting the circulation may, however, have had some influence on the other banks in determining their action in this matter, and till a reliable statement can be prepared we can only speak with the utmost caution. Several points, however, call for a few remarks. The first relates to the state of business generally. This is in a totally different position now from what it was in 1857, when the former failure of the City of Glasgow Bank took place, in conjunction with that of several other banks. Though the City of Glasgow Bank has done an extremely bad business, it does not by any means follow that any other Scotch Bank has countenanced transactions of a like nature. No rumour of this character exists. The amount of the acceptances of the City of Glasgow Bank in circulation is estimated as being not less than £2,700,000 or £3,000,000. It is necessary to speak on this point with the utmost reticence till the exact figures are published. The amount of acceptances now stated to be in circulation is certainly very largely in excess of that named in the last published balance sheet, but the statement which may shortly be looked for will doubtless explain the discrepancy. At present only an estimate can be made. The acceptances are understood to be held generally by those who can well afford to wait till the
bare a good deal of the reckless manipulations by which the losses of the bank on some half-dozen accounts were raised, in the course of a few years, to six or seven millions sterling.
