The New York Herald Newspaper, July 28, 1875, Page 3

A TEAVY FAILURE, Duncan, Sherman & Co. Suspend Payment. EXCITEMENT IN WALL STREET. The Probable Assets and Liabili- ties Not Yet Disclosed. 2 Sets) A CARD FROM THE FIRM. Interviews with Prominent Banking Firms. NEW YORK HERALD, WEDNESDAY, JULY 28, 1875—TRIPLE SHEET. were meresy arawn together by pure curiosity and a morbid desire to see al! that 6 on, LETTERS OF CREDIT. There was some uneasiness manifested among the friends of those travelling abroad in regard to the letters of credit they had obtained from Dan- can, Sherman & Oo., and which, itis supposea, will be invalidated by their fatlare, As wiil be seen by Mr. Duncan’s statement, it would appear that some provision bas been made for this class of creditors, Should these measures not prove effective there will likely be @ sudden stampede for home om the part of hun- dreds of tourists who made use of the old and wellknown house to pass their {unas for use at different points in their tray A CURIOUS FACT. One singular point which appears to be not gen- erally known in connection with this failure, and one which is looked upon by some peop'e as a proof that the stoppage of the firm wus not altogether Unanticipated, is that about a fortnight since the house commenced discharging @ number ot 113 clerks, and contiaued tne process until some twenty or twenty-five had been disposed of, A VISIT TO THE BANKING HOUSE. AHERsLD reporter sought admittance at the rear entrance to the banking house and found the Iron gate locked, A lively tattoo brought outa messenger, who said that the members of the firm did not want to see anybody, A second mes- sage was replied to vy Mr. Duncan to the effect that a Statement would be sent to all of the even- ing papers showing the status of the frm. Mean- while the legal advisers of the firm were pass- WHAT THE COTTON BROKERS SAY. eee Ex-Judge Shipman pointed Assignee. Ap- A Flurry and a Rally on Wall. Street. STATEMENT BY MR, W. BUTLER DUNCAN, Shortly before eleven o’clock yesterday morn- ‘Ing it was rumored that the oid established and well known bauking house of Duncan, Sherman & Co., at the corner of Pine and Nassau streets, haa suspended payment and closed its doors. At first this rumor was looked upon as @ hoax, and there ‘were but few who gave any credence to it. A few minutes, however, put the matter beyond d@oubt; for an ofMcial bulletin had been sent to ana read in the Stock Exchange giving notice of the failure. Then, tgo, 1t became known that the checks of the firm, which are usually passed through the Clearing House by the Bank of the State of New York, which acted ag agent for Duncan, Sherman & Co., had been thrown out, Even then the news was hardly believed to be true, and hundreds of people at once POSTED OFF FOR THE BANKING HOUSE to satisly themselves, On arriving there no room was jeft for doubt. The heavy iron front doors were closed tightly, as also was the door leaaing to the private entrance. Many who were tn- terested to the extent of some hunereds or thon- sands of dollars endeavored to effect an entrance, but without avail, Jor to all knocks and attempts made for admission no reply was returned other than an echo, Each moment, a8 the pews secured wider tircula ion, brought fresh additions to the crowd, which assembled on the sidewalks and in the ruaaway, Men stood there discussing the siiua- on and peering curiously in at the clerks, whose heads couid just be seen above the window sills, *tooping over their books, regardless of the heat and the danger of sunstroke. There were natu- Tally all kinds of reasons stated to account for the stoppage. Some said tiat it -was on accouut of heavy losses im grain. Others advanced the theory that it was over-speculation !n gold, Then again some one else would say that he bad positive informa. tion that the frm bad been swamped by carrying too much cotton, while yet again it was laid to connection with certain English houses which have lately failed. What THE IMMEDIATE CAUSE OF THE FAILURE Was bas yet to be ascertained, tor no direct or positive Information in this respect could pe ob- tained yesterday, The members of the firm throughout the day refused to see any one but their legal adviser and most intimate irienas, and, beyond the card which is published eise- where, they stated their inability to aford any in- formation at present even as to the probabie ex- tent of their liabilities or assets, Later on in the evening, however, an interview was obtained with Mr. W. Butler Duncan, the head of the firm, published elsewhere, which wilt be read With tuterest, as it contradicts distinctly and decidedly many and most of the rumors which Ooated around throughout the day. THE PEBLING ON THE “STREET? and among bankers generally appeared to be one of sympathy for and regret that such an old estad- Ushed house should have been compelled to “go by the board.” For, a3 was said on every hand, Duncan, Sherman & Co. bad always haa the confidence and esteem of every one ia commer- cial and financial circles, Those who are usually well informed on such matters expressed their utter inability to account for the failure, With some of the more prominent bankers the idea ap- peared to prevail that the firm had been jor some time meeting with {heavy losses on cotton, botn On contracia and on cotton shipped to Liverpool. They aiso argued that # large number of the drafis which Duncan, Sherman & Co. held on cotton houses and spinners on the other side bad been returned lately unpaid and had to be provided for, which, taken into consideration with the sup- posed large amount of funas the firm bad locked upin unmarketable securities, so crippled its credit as to compel it to adopt the only course left open—viz, to suspend. The firm is credited with being largely interested in the ponds of the Mobile and Ohio Railroad, which it will be re- membered, was lately placed in the hands of a receiver, Then, also, itis said to have invested heavily in Atlantic and Pacific stock, in Alabama bonds, in Great Western bonds and also in Erie. WHICH 18 THR CORRECT THEORY & few days’ time will prove. A friend of the firm stated that the Rouse was not burdened with any outstanding foreign exchanges not yet presented, and that it is not in any way involved in advances upon cotton, but that the failure is the direct re- sult of large aavances to Southern and South- eastern railways, which have never paid. The same gentleman stated that the credits of the Rouse are mainly held on the other side and in the South, and that New York wouid not suffer py the suspension. Cotton men, on the other hand, assert that the failure wiil not affect any of their number, and altribate the suspension entirely to dealings in railroad securities, They,’ however, reluctantiy admit that the firm did a considerable business in cotton, but that it has no complications here, and that whatever the trouble, if any, that has arisen from this cause was brougkt on by the failure of certain houses with which Duncan, Sherman & Cv, may have done business. No failures or com- Plications are expected to follow this failure among the members of the Cotton Exchange. There will be, it is thought possivle, some few minor bankers and banking nouses who will have to follow in the wake of tnis larger and better known firm; but they will, it 1s believed, be so small in amount a8 to cause mo concern to the public generally, In tact the , EFPRCT OF THIS STOPPAGE appears to have already been discounied. ! As the afternoog advanced tne crowds aronnd | the bank grew larger and more aense; but there ‘was an absence of the scenes which are usually to be witnessed in the closing of the doors of a bank by reason of failure. In this instance there were no aged widows and others concérned, on the first sound of alarm, to eagerly Nock to the inati- tution wherein was their little all, in the hope of being allowed to withdraw it, but, in fact only to mees with a rebuff, and then to go wandering around bewailing their lot, or else to clamor at door for entrance. The | | Duncan last night upon the balcony of his elegant ‘residence at Staten Island in company with one | stories which you will be compelled to contradict, ing rapidiy to and irom the ofice through the iron grated door on Pine street; bus no one would re- veal the secret of the failure, At last the re- porter sent in to Know at wnat time the state- ment would be reaay, Mr. Dancan replied, “Don’t bother me.’? THE STATEMENT. After @ few minutes the Joilowing statement was given by the firm. It was wriiven in the wellknown hand of Mr, 8, L, M, Barlow, and read :— TO THE PRESIDENT OF THE NEw YORK Srock Ex- CHANGE: — Sin—A careful examination of our business and affairs SHOWS us Most unexpectedly that, through iosses and misfortunes, our available assets are 80 Much reduced that we are compelled to go into liquidation, We reach this conelusion with tne ceepest regret; but the fact that UP, vo the latest moment our most uneXamplea credit baving re- mained unimpaired, would have compelled us, if we continued business, to hazard new obligations and receive new confidences, which we were un- willing to assume. For the protection of our creditors, Witwout distinction or preference, we have this Gay made a general assignment to Hon. Wilam D. Shipman, of ths city, whose ad- dress for all matters connecied with our affairs whl be at our late banking house, No, 11 Nassau sireet, DUNCAN, SHERMAN & CO, As soon as this letter came upon the strect, which was at about twenty minutes past eleven A, M,, the news spread like wildfire, Loans were called in, and the price of money advanced from two per cent, at the opening, to five per cent be- fore noon. Stocks fell off all along the list from Ulree to four per cent, and all the scenery for a panic was ready to shift upon the Wall street market, Happily, the good sense and cool judg- ment of the older financiers stopped the play. THE FIRST EFFECT, Early in the morning the news came from the Clearing House that the Bank of the Staie of New York had thrown out the checks and aratts of Duncan, Sherman & Co, The gold brokers jumped at the conclusion that the late firm had sold large amounts of sterling exchange, and toat those bills would come back; therefore an immediate demand for gold was created, and the quotations rose rapidly from 112% at ten A, M. to 113 at nalf-past ten A. M., reaching 113% at eleven o’clock, 114 at nalf-pasv eleven and 1165 at noon. The highest price of gold during the day was 126%. The frightened brokers then recovered theif senses and started out their scouts to learn the extent of the disas- ter. A few moments intervened and then the story was told. Facts were plainly set forth and the reaction of the gold market showed that the disaster had been oOverest'y sed, Gold began falling and at three o’clo: Gat 114%, INTERVIEW WITH MR, W. BUTLER DUNCAN, The HERALD reporter found Mr. William Buuler of his lawyers, Mr. McFurland, When the reporter approached him and presented his card, Mr, Dun- can said:—“A!l that I] can say at present has been already spoken. How can I say more at this hour ?’? REPORTER—Can you not give me some idea of the causes which led to your unexpected suspen- sion? MCFARLAND (the lawyer) Interrupting—How can be? lt was the product of circumstances which have been developing for months past, REPORTER—Mr. Duncan, I’m sure the morning papers will stare yeu in the face with numerous May I ask you a few questions? Mr. DUNCAN—AsK me whatever questions you please; I am at your service. You alone have found me out, Iam ready to be interrogated. Reporter—The founder of your house was Alex- ander Duncan, was he not? Mr. DuNcaN—He was, RerPorTeR—Mr. Alexander Duncan has recently resided abroad? Mr. Duncan—He has, ReporteR—Where is he now? Mr, DuNcAN—He ts abroad still. Reporter—Is 1% true that about two or three months ago you, anticipating what nas. to-day happened, went to Europe to consult Mr. Alex- ander Duncan, for the purpose of securing his aid to negotiate new loans and extend the credit of your firm? Mr, DuNcAN—It 1s not true; it ts false, REPORTER—It 18 Said that you applied to Ba- ring Brothers, Brown & Brothers and other rep- resentative European banking firms for assistance and that such assistance was denied, Is this true? Mr. DuNcaN—There is not a word of trath in it, RerorrerR—Is the report, published in an after- noon paper, to the effect that the Union Banking Company, of London, sustains heavy losses on account of your suspension true or false ? Mr. DuncaN—The company you speak of is not involved even tothe amount of a farthing, I read the article in tae Commercial, and desire yon particularly te contradict it, It Nas not tue slightest foundation in fact. RerorreR—What, Mr, Duncan, was the real cause of your failure ? Mr. McFARLAND (the lawyer) —No one thing, but a hundred things combined, sir, RerorteR—Did the fali of three per cent in cot- ton during the past three montus nave anytuing to do with your suspension ? : Mr. DuncaN—All that will presently be made known by the proper authorit1 i cannot speak one way or the other to-night. REPORTER—Well, did you have in your posses- sion certaim ralroad securities, such as those of the Mobile and Ohio, Atlantic ana Great Western, along with Bric, and was it because you could not turn these securities into Immediate use that you were compelled to close your doors ? Mr. Duncan—Wailt and » The proper authori- thes will do all this work for you. I don’t mean to Keep back anything. Everything I have is at the service of all to whom | owe any debts. The Statement of our firm will be rendered at the earliest possible moment, The public will mot have to walt long. RePorTsR—But how will it be with those Ameri- cans now abroad who have tn their possession your letters of credit? ‘ Mr, DuNcaN—Assure all the friends of such par- ties that every arrangement has siready been made to prevent them frem experiencing any trouble, They are all right; neitner toey nor their friends have any occasion to borrow trouble. They aroin such @ situation that they can move hither and thither precisely the same as if noth- ing had happened tous. You have now secured all that I can at present possibly communicate, I can give you at this hour no further particulars, I have already said more than I wisned to, Mr. Duncan was also asked if ne could give any idea of the extent of his Habilities ana assets, but be replied that he Was at pi nt utterly unable to do 60, but that @ statement woulda nortly pe made public. HISTORY OF THE FIRM, Breaver part of thosg wag assembiad rastarday | wh¢ Arm pf Duagan, Shepmag & Co, wea) establishea in 1851, by Alexander Duncan, Sr. Watts Sherman and William Butler Duncan. The first named wus before this connected with a leaa- ing banking house at Providence, R, 1. Mr. Sher- Man had also carried on a large banking business &t Albany. The present firm, which consists of Wm, B. Dun- can, Wm. W. Sberman and F. H. Grain, was formed some ten years since, on the death of Mr. Watts Sherman, and the retirement of Mr. Alexander Duncan, The principal correspondents of the firm in England were Messrs, Baring Bros. & Co. and the Union Bank of London. They also had aumerous correspondents throughout the United States, although their principal business lay with the South, They banked here with the Bank of the State of New York, and up to the time of their Jailure yesterday were supposed to possess unlim- ited credit, IN THE STOCK EXCHANGE, Just after tue first call the sitaation was as calm 4$ @ summer evening. The idle brokers catted and cnaffed and bethought themselves of DO more serious business than the passing away of @ pleasant nour, The races at Saratoga oc- cupied their thoughts rather than the relative values O! shares, for the market had opened With about the quotations o! the previous even- ing, and there was no indication of any “move ment.” Murmurings of __ . LAKB SHORE AND v. P. and Northwest, were curiously mingled’ with Opinions about the chances of Olitipa, Countess and Trouble. Trouble came in second in the steeplechase, but frst by long odds in the Stock Exchange, The rumor that the banking house, which had withstood the terror of Black Friday, and had maintained its credit intact during the trying panic of September, 1873, had at last euc- cumbed to financial difficulties gaimed credence but slowly. It was whispered about cautiously at first, and the effects produced may be compared, figuratively, to those of the gusts of wind which precede the hurricane, Groups of confidential brokers gathered and discussed as to the possible truth of the rumor, When, at last, it was con- firmed, the scene was simply indescribable. Such a scramble to get rid of stocks 1s only rarely wit- nessed ina lifetime. Western Unton Telegrapn, which opened at 82%, during the quiet nour pre- ceding the storm advanced \4 per cent, but in the whirl which followed it sold as low as 73, a fall of over 9 per cent; and, as it appeared to be the Most active stock on the list, the losses or gsins, as the case may be, of the operators must have been enormous, ‘4’ll sell a@ thousand Western Union, 80, seller three,” shouted an excited look- ing Cuban. “Sold,” cried a tall, Hthe individual, well known for the length of bis limbs, and the Memorandum was made; but, a few moments after, W. U. went begging at 75, and somebody certainly was “out.” The group in which Union Pacific is usually dealt in were also to all appear- ances on pins and needles, and the positive riot in tne Pacific Mail crowd showed that the “boys” were having a very lively time among themselves In the Board there was little speculation as to the causes of the failure. The interests at stake were too large and the business to be transacted was limited as to time, While the excitement lasted it was indeed terrific, But, as every one knows who has bad experience in Wali street matters, the recovery 18 even more rapid than the beginning, and before the hour for closing the Ex- change order not only “reigned in Warsaw,” but stocks had recovered to almost their opening fig- ures and a hopeful and confident feeling prevailed, THE GOLD Room was almost entirely deserted between ten ana half-past ten o’clock, ‘The American Deer” was sadly missed, as nis tall form has bitherto been Telied upon to fill any Momentary vacuum. John Schultz stood at the entrance, talking to the aoor- keeper, whea a boy handed fim amemorandum. Allofasudden “the bloude of thé Gold Room” jumped into the inner circle, and, brandishing his note book at Jake Rubino, offered 113% = for = $100,000. +=A war dance was immediately inaugarated around the foun- tam, All the gold that the mines of California ever produced changed bands over and over again in the brief space of half an hour, The Belcuer and Virginia Consolidated were exkausted of their precious metal almost before @ price could be made, The days of the old Fisk combi- nation, when the indicator marked changes of one, two and five ber cent at each revolution of the wheel, were recalled and the excitement was almost as intense &s thea. The apathy in the gold market has been so pro- longed that when the sudden change did come even the old bands were for the moment at their wits’ end. Fourteen for twenty ; one-quarter, half, fifteen, haif, sixteen; five-eighths, shouted an agitator, and as an imperturable genius cried ‘‘sold,” and booked the transaction, the highest point in the market was reached. Thus, in the space of three minutes, at the lowest calculation, the price of gold had fuctaated over two per cent, ana many a fortune had been made and lost, But during ail this mad whirl there was no clink of coin, A noa, @ motion or a wink concluded a purchase or sale, and it is to-day, when the differences are to be made and the balances adjusted, that the wisdom or ioliy of the operators will become apparent, AT THE COTTON EXCHANGE. At the Cotton Exchange, when the announce- ment was made of the failure there was great ex- citement among the members; in fact, so much, that for the moment all business was suspended in order that the situation might be talked over. Time, however, was too precious to be lost in dis- Cussing the misfortunes of others, and busiiess was resumed, The market at the opening had shown:signs of weakness, and up to the time of the announce- ment of the failure bad fallen off about three- eighths on fature deiiveries and one-sixteenth on “spot” eotton, The market then showed signa of steadying, but as soon as the dealers got to work again, after’ the pause, there was another stampede, and prices again went ofl, with all sellers and no buyers, Threc- eighths were added to the morning decline on contracts for forward delivery, and from a six- teenth to a quarter more for parcels on the spot and for immediate shipment, There was thena slight rally and the Market closed steady, bus without any recovery. The general feeling ap- peared to be an unwillingness to admit that Dun- ean, Sherman & Co. were in any way whatever interested in transactions in the cotton market, The impression sougat to be conveyed in answer toeacn and every inquiry was that the failure was rather to be attributed tospeculations or ad- vances on Southern railroad securities, It was, however, admisted that the firm nad, doubtless, large dealings with the Southern States, and had possibly made large ADVANCES ON CONSIGNMENTS OF COTTON, It had also, it was thought, been in the habit of purcnasing large quantities of cotton, which it shipped to Liverpool to J, N. Beach & Co., their agents there, who “placed” it among the spinners, Duncan, Sherman & Co.'s losses on cotton were thought to be small and of no moment, Superintondent Powers, of the Cotton Exchange, said he was not aware that the suspendea orm dealt largely in cotton, other than what it bougnt for immediate shipment and to fill orders, lt might, however, be said to have dealt in con- tracts for forward delivery, but he had 20 means of knowing that, Me was rather inclined to be- lieve that the failure of Duncan, Sherman & Co, had been occasioned by their connection with cer- tain Southern railroads, to which. it wae erally supposed, they had made large loans. The Mobue and Ohio Ratlroad was notably one of these, and the fact of this property having been placed in the hands of a receiver and of it being impossibie to do any business with the securities Must have greatly embarrassed them. Then, also, \t was reported that the frm was largely interested in other stocks which have re- cently declined in price considerably. The effect of the failure, ne thought, would not be felt on the Cotton Exchange beyond the falling of in prices that had occurred after the fret announcement of the suspension, a ‘The market closed steady and showed no signs of being further disturbed, THE BANK OP THE STATE OF NEW YORK, Mr. George W. Duer, President of the Bank of the Stave of New York, said tvat he had no inti- mation of the difficulties under which Mess: Dancag, Sherman & O > prise. | to have anything to do with it, He believed that yesterday morning. Just before clearing hours he heard, not directly from the frm, but through another party whom be supposed came trom the firm, that there was trouble there. He, therefore, directed bis clearing house clerk to throw out the checks of Duncan, Sherman & Co., and it was done, He said that he knew nothing further about the house, except that ite name had bees connected with the Mobtie and Unio Katiroad, Atlantic and Great Western and Brie. AT THE BANK OF NEW YORK. Shortly after the suspension of Messrs. Duncan, Sherman & Co. became known there Was @ rumor started on the “street” that the Union Bank of London had stopped payment, For that bank, it Was Said, the suspended firm acted as correspen- | dents, On inquiry at the Bank of New York, | which acts as the sgent of the m Bank tm this city, 18 Was found that there was round for | the rumor at ail, and it could only be accounted for, said the cashier, by the fact that cables had come over to the effect that the Usion Bank, of London, bad refused to honor the drafts of | Duucan, Sherman & Co, This oficial also | stated that the fauure of thie frm | had been & complete sarprise to Bim, and he could only account for it oy sapposing tne popular rumor to be true, that they were largely interested in cotton and in several arms which had failed on the other sige of tne w: Tre failure would not, be thought, bring about any disastrous results te other banks, and there was noranon the New York Bank auticipsted, He could give us DO provable idea of the extent of the losses orof the probable assets of Dunean, Sherman & C2, To doubt the Union Bam« of Lon don, he finally deelared, would be the same as mistrusting the Bunk of England, WHAT PRESIDENT TAPPAN SAYS. Mr. Tappan, the President of the Gallatin Na tional Bank, in answer to Inquiries pat to him | yesterday, sal “Tne fuilure of Dancan, Sher- man & Co, was one that took us ail by sur- Such an event was entirely unlooked for, and came upon the ‘street? like a thunder clap, ‘The firm was looked upon as one of the highest Standing, although it has, to some extent, been supposed to have been engaged in speculative transactions. Notving has been known about it for the past two or three years, and no positive Information could ever be procured as to its financial condition, It was supposed to be doing @ large Southern business, and tt was in | the habit of making large shipments of | cotton, which, i¢ was imagined, the | firm had either bought from or advanced | against to their correspondents and friends in the South, The firm’s dealings in cotton on time contracts were not, as faras I have any knowl- edge, considtred to -be very large. Ii has also been supposed, and, in fact, generally understood, that Duncan, Sherman & Co. were largely inter- ested In numerous railway enterprises, but what — particular lines they financed |cannottell, The | principal cause of their failure 1 look to de the decline in values whick has occurred in cotton, not only in the South ana New York, but in Liverpool. There was no intimation given that they were in diMculties, and their paper could be | readily sold, as it was general'y supposed, inde- | pendent of the reliableness of the members of the firm themselves, that the frm was supported by Baring Brothers and the Union Bank of London, as well as by the original founder of the firm. I can give no idea as to the probable amount of the firm’s liabilities or of the assets likely to be realized,” THE BROADWAY BANK. A HERALD reporter called. at the Broadway Bank, where he found Mr. J, L. Everitt, the cashier, amd ascertained bis views, The Prest- dent of the bank, Mr, Everitt stated, haa made up his mind a year ago not to purchase any more of Duncan, Sherman & Co.’s paper. It was noticed that it was put upon’ the marketina large quantity, and from the fact that 1t seemed to be torced the President deemed it prudent not in the Western States many banking houses would suffer from the failure of Duncan, Sherman & Co., ag they wer more likely tobe influencea by the highest interest. Persons travelling abroad, a great number of whom, it is likely, have letters ef credit from the house, will be much inconvenienced, Ho did pot think tnat 'y local embarrassment would be occasioned, as the banks, he surmised, bad not recently been buying the paper of the failed firm, The-failure can scarcely influence the general money situation and will only to a serious extent affect the suspended firm itself, The losses, Mr. Everitt thought, would be scattered, The house had & considerable number of depositors and these, of course, would suffer, The disaster to the firm was very unfortunate at this time, as hope was just beginning to be felt thas confidence was restored. There 1s no comparison at all be~ tween this failure and that of Jay Cooke & Co. SHOE AND LEATHBR BANK. ‘The President of the Shoe and Leather Bank, at the corner of Broadway and Chambers street, was called on by & HERALD reporter for his views of the suspension. He said that it w most dis. astrous affair, and, he believed, entirely unex- pected, It would have the effect of making bank- ing houses look more ciosely after the paper offered for sale. The Shoe and Leather Bank had oiten bought Duncan, Sherman & Co.’s paper largely, but had not done so for the last twelve months. There was so much paper in the market that, he thought, it was not sufficiently well scrutinized, There was no fear of this crash having any effect upon the bustaess of the city, It would affect Connecticut and Rhode Island especially, as, he believed, the paper of the house was largely circulated in those States. In the Western States also many nouses would more or less suffer, Ho was afraid that the trouble to Duncan, Sherman & Oo. arose irom their going outside of their legitimate business and engaging in buying gold and stocks. Krom the facts belore him he could not say what would probably be the future of the house, FISK & HATOH. The members of this firm said that they could nottell the cause of the suspension, Duncan, Sherman & Co. had always borne a first class rep- utation, but it had been reported om the street jor s long time that the firm made large advances on the bonds of the Mobile and Ohio Railroad, and that it was carrying large amounts of cotton, From what {miormation had been given to them they believed that Duncan, Sherman & Co. bad not been issuing large amounts of sterling ex- change, ama the circular letters of credit, al- though numerous, were not for large amounts, In the opinion of this firm the effect would not be feit among the bankers of New York, for, sincethe last panic, the money business of New York has been conducted on a conservative plan. No large loans had been made on doubtful securitics, and the result of the failure would be to shat up only such small business men as are always looking for anexcuse to fail under under the shadow of a great name. As @ consequence Fisk & Hatch, who deal only in governments, say that the cails for loans on vernment securities were larger yesterday than on any other day since they have | been in dusiness, WHAT DREXEL, MORGAN & CO, THINK. Speaking of the failure, Messrs. Drexel, Morgan & Co, said that they “know nothing of the causes which led tothe suspension, Duncan, Sherman & Co. Was @ favorite banking firm for all European | travellers, and its bills have been taken in prefer. ence to many other houses here, It has peen known among the banking fraternity that Dun can, Sherman & Co, have been largely engaged in cotton tramsactions, their agent in London being Mr. Kitchen, of Colie & Co., who placed all cotton shipped by the firm, making his sales of cotton to arrive to spinners in England and on the Conti- nent, Within the last four weeks cotton has fallen about three cents per pound. Now, supposing that they haa 25,000 bales in transitu—not a large amount for them, but a heavy amount for other firms—their 108s would be about $875,000—cer- taimly not enough to send them under; but we hear that they are also largely inter a in Mo- bile and Obie, Atlantio and Great Western and 3 Co.'s cirewiar letters of credit would Rov ow m- | ings in Duncan, Sherman & Co.’s paper, as I con~ comvenienoed by the failure of that house longer | sidered them 10 be at the best doubtful, I meam thaa the time required to receive answers tO | by this that they were known among more con- telegrams to Bome frienas. All purchasers of | servative houses to be very speculative, and letters of credit abov or ten pounds sterling Geposit securities to the amount of their letters Of credit, These deposits are special deposits | and the securities cannot be used for any ot berpose than meeting the Crafts made on suck circular letters. Therefore, In the event of the tatlere of the banking mouse whien has issued them, the holders of the letters CRD telegraph to their iriends at bome to with- | draw ine auexpenced amount of the securities | On deposit, place them im any other banging | house and telegraph new letters of credit to ‘em. As this & the recognieed law among | baabers, inere will be tileer Bo inconvenience | to travevers abroad. | In reference to the effect on exchange. Brown, | Brothers & Co. said that the Dusiness for the day had been very ¢uil. No changes bad been made from the opening price at ten A. M.. part'y because Were was no stcamer to-day and partiy vecanse everybody wes watung for fartaer developments. BEFORE, MORTON, BLISS & CO. } ‘The reperter learned from this firm that the suspension wes Bot unexpected. Duncan, Sber | man 4 Co. had been carrying cottes, Movie aod | Ome, Great Weevern sed Erie end held iarge | amounts of securities that they could Bot Drompuy realize irom, That the knew ibis Was evident (rom the fact that Mr. W. B. Duncan t to Barepe to see bis fesker, Mr. alexander } Duncan, the founder of the house, bas been living tu Burope for several pears, It was under. | stood om the street that the visit Was for the pur- pose of obtaining e@ extension of creait for the | New York house, Asali cile drawn om London | ere made payabie at Baring Brothers ts was sup- posed that they Would extend the requires cour. | teay. So far ase knowa Baring Brothers deciined: other Grms declined to make advances on & fail- ing cotton market, aad, therefore, Mr. William | Butier Duncan reterned, accompanies by Mr. Alexander Duncan, bots arriving bere some days ago, What bas been gone since We Go not know, DRAKE BROTHERS, | the prominent be me, of No, 14 Broadway, baa their pariors full Of excited speculators ai day. From the conversation going on there it was learned that two weeks ago Duncan, Sherman & Co, decided to reduce their clerical force, First the clerks having wealthy parents who could pro- vide for t were discharged; then the next class followed, that during the week tweaty accountants w told tbat their services woud be no longer required, | JOSBPH SELIGMAN ON THE SITCATION, ‘This gent frm of J. & W. Seligman & Co,, bankers, stated that in Bis opinion the fauure of Duncan, Sherman & Oo, was, to say the least of | Tt bad, upon as@ particalarly said, always been looke: sold firm, although there might be found, now that disaster had overtaken it, plenty ot people who would start op and say they bad feared, aod even expected, just such # result as bad occurred. He was at & loss, ho stated, to account for the sudden collapse, although be surmised thas the occasion of 1t could, with justice, be attribated | to heavy losses on cotton, The failure of the several large firms largely engaged in the cotton trade in England, of which notice has lately been published, was probably, he thought, a primary cause of this suspension, for the reason that Dua- can, Sherman & Co, had made large shipments to them of cotzon from both New York and Souchern ports. The failure of th parties et thelr draits when presen‘ed for payment im the oridi- nary course 0/ business must naturally have con- siderably embarrassed them, Then, again, said Mr. Seligman, MISFORTUNE NEVER COMRS ALONE. When one thing goes crooked everything else goes the same way. They naa, douvtiess, large lines of cotton, both afloat and for fucure deliv. | 6ry, to carry, and the recent avy decline in | values bas been too much for them, e=peciatiy when the + is taken into consideration that they were aiso largely interested in Southern Tatiroads, whose securities they held, The prin- cipal losses in this latter regard, however, t should put down at not more than $250,000, which Ought nov to have affected a firm tke Duncan, Sherman & Co, Their liabilines in thie class of securities inciuded, I believe, a large amount of Mobile and Obio Railroad bonds and Alabama State bonds. It is also said that they carried @ few Atlantic and Great Western Rail- road and Erie Railway bonds, These, however, Ithink, Were a very small part of tee genera losses. Of course I um, said Mr. Seligman, merely giving you my opinion and the general talk that I hear, jor I have no positive knowleage on the sudject. I cannot give any estimate as to the probable liabilities or assets, THELR GENERAL BUSINESS as bankers lay, 1 should say, among the smaller bankers and brokers in Wail street, who were the principal depositors, and aise a large number of planters and merchants in the Southern Staves, to | whom they made advances agaimst produce, The failure is not likely to affect any people in very modest circumstances, such as would be the case | were the frm @ national bank, although there may be a few of the “smaller fry” on “che street,’’ who will have to “go by the board.” There may possibly be, too, a large number of travellers and tourists abroad who will be suddenly callea upon to return home througn fatiure to get their dratte cashed, and who have paid into the firm the muney they expected to draw for use on their trips. The losses principally will be felt, I tniuk, by foreign houses, ‘The firm has acted honorably in the mat- ter, for, had it pleased, it could have undoubtedly | gone on selling drafte on London for several days toa large amount, The journey of Mr. W. Butier | Duncan to Europe was undoubtedly made in view of the complications that he saw arising from she failures of houses with which the firm was con- nected, and to endeavor to secure the co-opera- tion of his father, Mr, Alexander Duncan, and others to help the concern through, and to obtain extensions of credit, His return, after an unsatis- jactory conclusion to his endeavors in this regard, doubtless precipitated matters, I am of opinion, however, that the failure will turo out an honor- able on d without discredit to any of the arm,’ A PROMINENT BANKER’S VIEWS, The representative of a prominent banking house in William street was called on, and was | asked if the suspension of Duacan, Sherman & Co. would affect the Baring Brothers, of London, or if the former could have been pulled down by troubies of the Union Bank of London, a rumor of which was current, Im reply to the first question the banker said:—‘‘ There was a gentleman once went to Rotnschiid in Englana and expressed sympathy fur him in a recent heavy loss of money. he had sustained. ‘1am sorry,’ said the gentl man, ‘you have lost such a large sum of money.’ ‘Weil,’ said Rothschild, laconically ; ‘my dear sir, don’t be; I can afford to lose it.’ And go it is with | Baring Brothers, So far as Duncan, Sherman & Go. are concerned the Baring Brothers can afford | to lose all that it is likely they bad at stake with this New York house. But I don’t suppose that Baring Brothers do business in 9 way that would leave them at any loss at ali.” In regard to the question as to the Uniou Bank, the banker aforesaid stated that the connection between the Union Bank of London’ and the sus pended Rouse must be merely # rumur,’ané unfoundod one. oubdtiess the ramor arose irom the fact wnat Duncan came to this country right from the Union Bank in London, and when this failure became public specalation associated his house with the London bank. The gentleman whose opinions are given above also ed that he dia not anticipate avy more crushes, Yet this faliure would burt the feeting of confidence that seemed to be setting in. Two years ago it was his busin to inquire into the affairs of Duncan, Sherman & Oo,, and he then found that they were perfectly sound, In common with all the banking firms he felr, great sympatny for,the distressed house, He did/ not believe that slightly in Erte, What their labiities and assets are we do not know, The news came to us like a clap of thunder from a clear sky.’’ BROWN BROTHERS & CO. were asked for their theory of the failare, but refused to give it, In fa ir conversation they MAE Jabering YAU] old Ja jraycilers Dolding Duncan, Aagrman &) naayswa_yeayad haya declined to dav, we should have any serious failures, but no doubt | @ few small concerns would “go mnder,” A BILL BROKER'S OPINION, « Mr. Fogg, the well knowm bill broker, when questionea in regard to his opinion of tne fall- ure, said:—“It came upon us like a thunder clap, it was sosudden, Yet, for my own part, I must say [was notso very greatly surprised. For the | There being no steemer to-morrow, when a firm indulges in speculation, no matter What line, ttonly becomes a matter of time as when the end wilicome. Duncan, Sherman & Co.) have been largely interested lor ‘years in! all kinds of Southern securities, and es- Pecialily have they dealt in cotton, They have oubtediy made large advances to their friends in the Soup, and have, vesides, shipped’ immense titles of cotton on thelr ewa account. They have also, I am led to believe, been dealing in contracts for (uture delivery of cotton., These things, taken into consideration with th tate failures of houses which dealt largely 1 cotton in London and Liverpool, have precipi-| tated the crisis. Tueir bilis for some time bhava’ been selling oo the market at from five to sx per! cent, and Saving turce to four months to ran. Ft b been understood that the firm bas beem Dacked ap by Baring Brothers, of London, and also soted as correspondents of the Union Ban’ of Leadon, Tost the Baring Brothers, however, baa GONE THE LENGTH OF THEIR TETHER is proved vy the fact that the suspension occurredy which 8 that Wuey were in as aeep as they cared to be, Had it not been that the Barings were known to be backing Dancan, Sherman & Oo., | beleve,” said Mr. Fogg, ‘that the latter firm would bave nad its paper reiusea on the market jong ere this, Their failure, as far as I cag judge,” continued Mr. Fogg, Ul not be likely to immediately affect any of the other banks if this city, although it may cause the suspension of several email brokers and so-called bankers on the ‘Street,’ who bave their deposits with the euse pended Grm. Yeti am of the opinion that we ard now only seeing the COMMENCEMENT OF A CRISIS similar to what we had in 1873, This is merely ‘tee beginning, and before many days pass over several other banks, which Row looked upow ®* beyond doubt, will go under, The stagnation in trade ana other causes bave for some time been operating to bring about such a result. Tha Princtpal loss in the case of Duncan, Sherman & ©, Will be felt abroad rather than here, Tha fatlare of sach id establishea Orm cannot bi bring about distrust in Ouanctal circles, and mu Grag down some few other houses which nave been tottering to their fall for some time. ‘Tee market for foreign exchanges has not been affected by the failure to avy appreciabia oe and prices remata about the same—viz., sixty Gays, $4 80, and three days sight, $4 90, there wad no real demand, and the failure bas made ail buyers bold of to await results. BPPECTS OF THE SUSPENSION. One of the unfortanate consequences of this sas- pension afects the government of Mexico. Mgnort dean Navarro, Consul of Mexico, placing full con- fiden Dunean. S| Co., deposited with them bis own private fortune and ali of the mon eys delonging to his Consulate. These are now ands of the assignee, and Signot law loosens them, Abother peculiar case is that of a gentle. man who arrived from Mexico a few days since, He sold all the gor that be brought with him, Gepositved gteenbacks wita Doncan, pherman 4 Uo, Expeetung Bis wife to arrive to- day oa the stenmer, be appeared at tho banking bowse yesterday afternoon to draw, #8 be said, gold enougd to pay duties on the goods nis wile was bringing With ber. When told of the failure of the houre burst out isughing, and said, “Well, thav’s just my luck; now I've got to bor. row money to pay for my voard. Weill, loan do it, 1 guess.” THE FAILURE ELSEWHERE. BXCITEMENT IN BOFTON, Boston, Jaly 21, 1876. State street hoe Hot Witnessed, since the War, gree of excitement as prevatied there went Upon the reported fatl- | ore of Da Sherman & Co, Of New Yoru. Too | gold market opened at 112, and When the now: | Of the faijare Was received, gold Was selling at 113. WIthin the short space of Gfteen minutes, quotations bounded up to 116%, and aft ceded to Lidh. The effect of these was to entirely Gemoraiize the market, Tue highest transaction reported was at 11)}s. Tue stock Market Was also affected, stocks de clined from 3 to 6 per cent, followed by a slight | rally. | THe RFPRCT aT NEWPORT. | Newronr, &. 1 | The failure of Duncan, Sherman & Co, axe caused a decided sensation here and everybody At the hotels is teiking tit, W. Wat» ber. | man, ® member of the # occupying a vim | on Bellevue avenue. re to-night jor, | New York, im the course of MAB at this place. The comtractor was notified tow evenme by | George Peabody Wermore, Mrs. Sherma faiture Would not interiere wit | the future progress on the honee. Anumber of promisent New Yorkers who ara Spending the summer here took the Fall Rived steamer to-night for the metropolis, Duncan, Sherman 4 Co. there, They were the New York finauctal agents of this city, The balance with them now 18 (he smallest for yearn, being only & few thousand collars, and whether this will be included in weir general habilimes Temains to be se The Chamberlain yesterday mailed ‘aft for $26,000 to pay the Aveust interest. This was poe received beiore the suspensios, add is doubt sa all right. TRE BYPLCT IN PATLADSLPHTA, POILavELraia, July 2, 1675, & 0e., The failure of Duncan, Sheri, here about noon, caused intense #xcitement, Gold Jumped at once Lo Lis), Out has now fallow to 14 As jar as can be learned none of the Phila. celphia banks or banking Orme are seriously af fected by the suspension. THE FEELING AT BALTIMORE. Batiwone, Md., July 27, 187%, The failure ot Duncan, Sherman &. Oo, xcitement on "Ctaege it i ssa thee no serious sustained. Thee correspondents here ~™ private banging bowse) will not be adected, a usand dollars boing’ the extent of their loss. Paper of the New York honse, to the amount Of $90,000, was offered on re the past week, but was nos me XO LOSSES IN CHARLESTON, CHARLESTON, July 27, 187 | are no losses here in consequence of ine failure of Duncan, Sherman & Co, THE FAILURE AT SAN FRANCISCO. San FRANCISCO, July 27, 1975. So far as can at present be ascertained the faile ure of Duncan, Snerman & Co. produces ad marked effect here except @ slight depression Mainly confined to mining stocks, GROCERY FAILURES. 7” The ramora that prevailed yesterday le regaré to the failures im the grocery trade found contra ation im the fact that the bouses of Wor & Watson, No, 183 Doane street, and Mat) tin G. Buon & Co,, corner of Jay ana Greenwict streets, suspende The Uabuities of the former ‘are $60,000, The latter's could not be ascertaine® though they are small, The house has for somé time been considered in a weak state, aod thelt fatiure maJ be simply considered the winding of of the affairs, It is reported that the rm will De able to pay 100 cents on the dollar, Worth & Wae son have always been considered 000 and thels faliure rather surprises those with whom did business, Asyet they have made no ment of their affairs fursher than to Weatlon iy deal. extemt of ineir labilitics