2nd October 1878 - City of Glasgow Bank Collapse

2nd October 1878 - City of Glasgow Bank Collapse

 

On 2nd October 1878, the City of Glasgow Bank was forced to close its doors as a result of liquidation

The City of Glasgow bank was established in 1839. Its offices began on Virginia Street in Glasgow in 1842 before moving premises to Glassford street in 1851. As well as boasting 1,819 shareholders, the bank facilitated loans which helped many local businesses. The organisation eventually grew to accommodate 130 branches across Scotland and contributed to the growing economic success of Glasgow in the mid-19th century. 
 
However, this success was short lived. The bank lost capital through becoming involved in various foreign business transactions as well as poorly managed lending. Directors attempted to hide this with “creative accounting” strategies, however, it ultimately lead to their collapse with over 7.3 million pounds worth of debt.
 
At the point of collapse, shareholders not only lost their investments but were liable to pay a portion of the bank’s debt in relation to their shareholding. 1, 565 shareholders were left bankrupt as a result. Local businesses also lost their accounts which had a knock on effect on the previous success of the local business economy. Seven of the bank’s directors were found guilty of many offences, including fraud, and subsequently imprisoned. Glasgow City Archives holds a variety of records which provide an insight into the liquidation. 
 
GCB List Of Partners.jpg
​1. A printed list of partners of City of Glasgow Bank (ref: T-HB 125) – This item was printed in 1853 and lists the bank’s 1,819 shareholders as well as its directors.
GCB Bank book.jpg
2. The front cover of a City of Glasgow Bank bank book (ref: T-HB 129)  – This belonged to a Mr David Keith, a ship chandler who held accounts at the Trongate branch of the bank between 1851 and 1858.
Pass book.jpg
​3. A page from a City of Glasgow Bank pass book (ref: T-HB 131– The pass book belonged to a Miss Isabella Baillie who remained with the bank between 1864 and 1867. The above page shows a regular payment of ten pounds into her account as well as a sum of interest that she received.
GCB Last cheque.jpg

4. A cheque drawn by Messrs. Arthur & Co on the 5th of August 1878 (ref: TD 220) - This is believed to be the last cheque cashed before the collapse of the bank.

   

 

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