This section is from the book "Banks And Bankers", by Daniel Hardcastle, Jun. Also available from Amazon: Banks and bankers.
The stoppage of the Marylebone Bank is easily accounted for, by the proof of negligence and misconduct on the part of the directors and manager. According to the statement made at a public meeting of the shareholders, the manager's account had been constantly over drawn for five years; he owed the Bank in this way 1,742l. in 1837, and 12,516l. in 1841. When the directors were reproached with the fact, they declared that it had taken place without their knowledge. The Bank when it stopped owed 30,000l.; its paid-up capital (only 24,000l.) was lost, and its good assets were valued by the accountant at 17,000l.; and yet the shares were 40,000 in number, for twenty-five pounds each, and eleven pounds a share had been called up. With these resources the Marylebone Bank kept a house in Lombard-street, another in Cavendish-square, besides a branch in the City Road. A heavy superstructure this to rest upon such slight foundations. Amongst the private Bankers Hammersley's house was about the first to stop, and presented circumstances more singular than any of the rest. The date of the stoppage was September 20th, 1840, and the estimated amount of deposits at the time 650,000l. Mr. Hugh Hammersley's death took place the day before, and it was then announced, for the first time, that he had long been the sole partner. The Bank, it was therefore submitted, could not but stop, because, in point of fact, there was no longer a Banker to it. The case was without a parallel; but it looked suspicious, and, as the event soon proved, not without reason. Mr. Hugh Hammersley left a will, in which he named his brother legatee of the business and the property belonging to it. The brother, in the course of a few days, issued a circular-letter, in which he disclaimed and renounced the bequests, but took upon himself the character of executor, and engaged to prove the will, time being allowed for an affair of such magnitude. This proposal was not opposed; the will was proved, and, to the surprise of all parties, the property was put into Chancery for distribution.
A conclusion so uncommon was not inconsistent with the history of the house, which was sui generis. The Bank was founded some fifty years ago, by Thomas Hammersley, a clerk in the house of Her-ries and Co., who prevailed upon Messrs. Morland and Rarasbottom to set up a new Bank with him. This was done, and for a few years they carried on business under the name of Morland, Ramsbottom and Hammersley, but dissolved partnership, it is said, with a loss to each. Thomas Hammersley, who seems to have been a man of bold character, as well as considerable talent, succeeded in forming a still stronger firm, of which he placed himself at the head, - that of Hammersley, Monte-lieu, Greenwood, Brooksbank, and Drewe. From such an association an excellent business was to have been expected; two of the names - Montelieu and Greenwood - being well known as those of wealthy and well-connected men; but the result proved the reverse. The principle upon which the Bank was founded was bad and illegitimate; the amount of real property invested in it, I suspect, was trifling; the partners relied for success on the reputation of their names, and a dexterous use of the credit system, which, though common enough amongst many town and country Bankers during the suspension of cash payments, was altogether fictitious, and not a whit better than kite-flying. I am not in a situation to say that these were the practices by which Hammersley's lost 160,000l. through a Bank at Honiton; but it was generally understood when the Honiton Bank broke, that Hammersley's, for the sake of pushing business, had propped it up very improperly and very injudiciously. They are also said to have lost as much as 40,000l. by an office-bearer in the Treasury, and 80,000l. by a patent soap manufactory which they set up in the Borough.
These reverses must have produced their natural effects in some quarter or other. The mystery in which the affairs of the Bank have been wrapped up, does not enable us to trace them distinctly, nor to explain the precise period or circumstances under which the different partners withdrew or dropped off. All that appears certain is, that Mr. Hugh Hammersley, who succeeded his father Thomas, the founder of the Bank, is declared, as soon as he dies, to have been the sole partner, although no one had an idea that the firm consisted of that gentleman only. Under such circumstances, the conjecture is not improbable, that the Bank was insolvent during the lifetime both of the father and the son. Such, however, is not the aspect the matter was made to present to the public. Appearances are well kept up; the concern is made to last the time of those who had devised and depended upon it; and when the last who had enjoyed it dies, and the next of kin to whom it is bequeathed as a means of excellent sustenance declines the inheritance, it ceases to exist. No fiat can issue against a dead man; and after an interval of suspense, the estate is made to yield ten shillings in the pound, by some arch process or other carried on in an obscure corner of the Court of Chancery. When the former partners left, on what conditions, and with what liabilities, if any, is either not asked, or at least not publicly explained. And so ends the story of Hammersley's Bank.
A lesson of this kind is not often read, and ought to be instructive. Here is a Banker's clerk, who leaves his employers, and sets up a Bank of his own. He is joined by gentlemen whose names and characters are a guarantee for the possession of property. After a short interval they withdraw, losers by the connexion; but the adventurer promptly finds other persons, still better known for wealth, to fill the places of the retiring partners; these, too, leave him, but not until he can do without them. He had no apparent property to start with. The firm encountered heavy losses; nevertheless, such is his address and dexterity, that the scheme has taken, and he has acquired a name, got credit, gained deposits, and dies a man of reputed substance and fair character. He leaves his Bank - insolvent, but with a yet untarnished name - to his son, who follows the example set him; sustains the unsubstantial but artful and imposing fabric at the head of which he finds himself, with a tact and presence of mind worthy of such a father, draws a handsome subsistence from it, lives well, moves in choice society, enjoys life, is considered a trust-worthy, honourable man, until he dies; and then his next of kin, not having nerve enough to play the game out, the fabric tumbles to the ground, and the creditors lose half their money. In this predicament they are offered one consolation,- they are assured by those who profess to be in the secret, that if the house had broken down, as it might have done, ten or fifteen years before, there would not have been eighteen-pence in the pound!
 
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