By March, 1879, the liquidators were ready to make the second call, having gained considerable experience in the realization of the first, and having been able to form a more accurate judgment as to the capabilities of the remaining contributories. But they deemed it expedient, before making the second call, to await the issue of the appeal to the House of Lords by Murdoch's trustees already alluded to.
On the 7th of April judgment was given in this case against the appellants, as was fully expected; and on the 8th the liquidators made their second call, amounting to £2,250 per cent., payable on the 22nd of the same month. The nominal amount of this call upon the stock held by the then solvent contributories was £7,814,000, and it actually realized by the end of the second year of the liquidation the sum of .£3,405,452.
The two calls having thus realized the large sum of £5,814,000, or nearly as much as covered the estimated total loss, no further call was deemed necessary. "With this sum, together with the sum of £5,851,657, realized out of the good assets of the bank during the two years, the liquidators were enabled to pay dividends to the creditors as follows, viz.:-
in the £ on 28th February, 1879.
20th June, 1879.
17th October, 1879.
25th February, 1880
23rd March, 1880.
9th July, 1880.
In addition to this the liquidators were enabled towards the end of 1879, by the aid of an advance from the other Scotch banks, to offer payment in full to such of the creditors as chose to forego the interest on the unpaid balance of their claims. This offer was taken advantage of to a very large extent; and it can be said that practically every creditor was paid his 20s. in the £ within a year and a quarter of the.failure of the bank. The creditors who did not take advantage of this offer were few in number, and their claims were comparatively small in amount.
The all but universal ruin of the shareholders, and the searching character of the calls made by the liquidators, will be evident when it is mentioned that, of the original capital of one million pounds stock, the holders of only £88,722 were left solvent after the payment of the second call. This solvent stock was held by 129 individual shareholders, and by 124 trustees, out of the original number of 1,819 shareholders of all kinds. Of the million of capital, however, £160,313 was held by the bank itself, and by several bankrupt debtors to the bank from whose estates there was not a penny forthcoming to meet the calls. There was thus only £839,687 of stock in the hands of the public; and it will be evident, therefore, that holders of stock to the amount of £750,965 were absolutely ruined.
From the foregoing facts an idea can be formed of the immense labour involved in the liquidation. We have seen that the liquidators were parties to over 400 cases in the law courts, but that must give but a faint idea of their labours, as it is evident they must, in addition, have made arrangements with some 1,500 of the shareholders who failed to pay both the calls, and surrendered their stock. The course the liquidators followed in such cases was to require from the surrendering shareholders a statement of their affairs, with a declaration as to its truth before a justice of the peace. These statements were then carefully examined and tested by the liquidators, and on their bases an arrangement was come to, which arrangement was then submitted to a committee of shareholders for approval, and thereafter to the Court of Session for its sanction.
It may be interesting to note as bearing upon the question of the stability of bank shareholders, that two-thirds of the surrendered stock was exhausted by the first call of £500 per cent.
We have given but a mere outline of the history of this disaster, a disaster which for its magnitude, as well as for the grossness of its surroundings, is unprecedented in the history of banking. In Scotland it was felt to be a national disgrace, but it had the effect of setting forth the national character in some of its best lights. There were few bright spots on the face of the whole wretched event, but such as there were ought in justice to be mentioned.
It ought to be mentioned to the credit of the shareholders, for instance, that at their meeting on the 22nd of October to receive the investigators' report, they did not enter upon unmeasured denunciations of the directors for their cruelty in leading them into such a position. By the day of the meeting the report had been in their hands for three days, and they had therefore ample time to consider the hopelessness of their position and the enormous deficit they would have to make good. Strong language, therefore, would have been excusable, but instead of resorting to that they one and all faced their difficulties in a calm, manly, courageous manner, and expressed their determination to keep faith with their creditors to their uttermost farthing. How well they kept their pledge is well known; but unfortunately in the result, in many cases, absolute penury was the least evil that befell them, for some, in addition to this, lost their reason, and all that made life worth having, thereby laying an immeasurable load of responsibility upon all those who had a hand, directly or indirectly, in bringing them to such a pass.
It ought also to be mentioned to the credit of the Court of Session and the liquidators, that, animated by the prevailing sentiment, they put their shoulders to the wheel in such earnest as to dispose of the large number of cases already mentioned in a few months, thereby rendering it possible to pay practically all the creditors of the bank in full within a year and a quarter from the date of the stoppage.
It ought further to be mentioned to the credit of the general public, that immediately it was seen how very ruinous the disaster would prove, a subscription was opened for the relief of ruined shareholders, which in a month or two reached the large sum of nearly £400,000, which was almost entirely subscribed in Scotland alone.