DOI Page / Citation link:
https://doi.org/10.11588/diglit.22140#0100
84 INDUSTRIAL AND COMMERCIAL HISTORY.
trusted men who become bankrupt, and have trusted them un-
wisely. Occasionally people have acquired a character for honest
dealing and solvency which is wholly undeserved. Many years
ago, I suffered a severe prospective loss by the failure of Paul's
Bank. Sir John Paul had been insolvent all his life, but by an
ostentation of profound religious conviction, he continued to
hoodwink a number of people, and to persistently rob them. In
our own time similar tactics were adopted by the Greenways, with
the same success and the same results.
Occasionally, the phenomena of a serious collapse of credit,,
which, did it occur in ordinary business, would create a panic,
arises from an improvident extension of credit to a particular class
of traders. From the end of the Crimean War, to the final
adjustment of Europe after the Franco-German War, the rent of
English land was greatly exalted. I have referred to it before.
It is derivable of course, from the income-tax returns of farmersr
rents. It amounted to 26^ per cent, in twenty years, and I have
quoted these figures in order to substantiate other inferences. Now
during this period of inflation, banks in agricultural districts made
very free advances to farmers. It seemed obvious that men who
could compete for occupancy so freely and so boldly, must have a
wide margin to meet liabilities. At last, as we all know, the crisis
came, and rents began to fall and farmers to be bankrupts. In
two years, 10 per cent, of the British farmers, taking the Bank-
ruptcy returns and the census together, were swept away by
failure. Now at this time I was going to town with a well-known
London banker, and in conversation I suggested that the country
bankers had made great losses by farming failures. " On the
contrary," said he, " they have been the principal agents in the
collapse of the farming interest and the depression of rents. They
had, as you seem to see, made very large advances to the farming
class. But they began to be alarmed for their security. The
landlord, they knew, was protected, come what might, by the law
of distraint. But the banker had only a second or deferred
security. So they began to call in their advances, and precipi-
tated the ruin which was perhaps impending." Now, bankers'
advances are obviously a form of credit. But it is quite certain
that the staunchest advocate of our land system, and the most
1
trusted men who become bankrupt, and have trusted them un-
wisely. Occasionally people have acquired a character for honest
dealing and solvency which is wholly undeserved. Many years
ago, I suffered a severe prospective loss by the failure of Paul's
Bank. Sir John Paul had been insolvent all his life, but by an
ostentation of profound religious conviction, he continued to
hoodwink a number of people, and to persistently rob them. In
our own time similar tactics were adopted by the Greenways, with
the same success and the same results.
Occasionally, the phenomena of a serious collapse of credit,,
which, did it occur in ordinary business, would create a panic,
arises from an improvident extension of credit to a particular class
of traders. From the end of the Crimean War, to the final
adjustment of Europe after the Franco-German War, the rent of
English land was greatly exalted. I have referred to it before.
It is derivable of course, from the income-tax returns of farmersr
rents. It amounted to 26^ per cent, in twenty years, and I have
quoted these figures in order to substantiate other inferences. Now
during this period of inflation, banks in agricultural districts made
very free advances to farmers. It seemed obvious that men who
could compete for occupancy so freely and so boldly, must have a
wide margin to meet liabilities. At last, as we all know, the crisis
came, and rents began to fall and farmers to be bankrupts. In
two years, 10 per cent, of the British farmers, taking the Bank-
ruptcy returns and the census together, were swept away by
failure. Now at this time I was going to town with a well-known
London banker, and in conversation I suggested that the country
bankers had made great losses by farming failures. " On the
contrary," said he, " they have been the principal agents in the
collapse of the farming interest and the depression of rents. They
had, as you seem to see, made very large advances to the farming
class. But they began to be alarmed for their security. The
landlord, they knew, was protected, come what might, by the law
of distraint. But the banker had only a second or deferred
security. So they began to call in their advances, and precipi-
tated the ruin which was perhaps impending." Now, bankers'
advances are obviously a form of credit. But it is quite certain
that the staunchest advocate of our land system, and the most
1