monthly accounts showing their cash position. If Mr. Goschen should see his way to bring forward a scheme carrying out his suggestions, the interest in it will undoubtedly be greater than that excited by any financial measure for many years. It will be a bigger thing even than the debt conversion.
————————————
The Crisis of 1890
The year 1890 will be remembered as the year in which the great house of Bering Brothers aud Co. collapsed. The fall of this famous firm impressed the public so much that there was some little danger of cause being mistaken for effect—some danger of its being thought that there was a crisis because Barings got into difficulties, and not that Barings got into difficulties because the whole situation was such that a crisis sooner or later was inevitable. It is, however, now generally recognized that many other firms besides Barings had undertaken engagements beyond what was prudent, though happily to a smaller extent, both absolutely and relatively to their resources, than that house. Throughout 1888 and still more in 1889 an enormous number of new issues were made. A large proportion of these were conversions of existing private concerns into limited liability companies, and many were for undertakings in foreign countries, more especially breweries in the United States and elsewhere, but the most important engagements into which capitalists and speculators entered were connected with Argentina. The British public also became interested to a very serious extent in the land mortgage bonds of certain Argentine banks known as Cedulas, in connexion with which it has since been ascertained that grave irregularities, to use no stronger term, have occurred. These Cedulas were introduced in Europe by one or two respectable London houses without any regular prospectus, and were bought by investors who trusted the firms in question, on whom a heavy responsibility lies for not having taken more pains to ascertain and make known the nature of these obligations and the means of those who issued them. So far as Messrs. Baring are concerned, the primary causes of the state of things which was revealed to the public on November 15, 1890, may be traced back to the autumn of 1888. The capital of the Buenos Ayres Drainage and Waterworks Company was offered by Messrs. Baring Brothers in November of that year, and the difficulties in which this great firm ultimately became fatally involved arose to a large extent from the fact that the issue was a failure. The capital had thus to be taken up by Messrs. Baring and their friends, who had 'underwritten' it. If this had been the sole heavy commitment of Messrs. Baring it is conceivable that they might have carried it out successfully, but they had many other undertakings on hand, and, as it has since become known, were to an astonishing degree unconscious that their liabilities could not be increased in this manner without danger, especially as they were at the same time steadily enlarging their acceptance business. The chief of the firm appears to have thought that their command of money was so great that there was no need for the ordinary calculations and precautions which sound men of business adhere to by a kind of second nature.
Towards the close of 1889 many shrewd people had come to the conclusion that the financial condition of Argentina, the enormous engagements of leading firms here towards that country, and the very
