had been many years in business in London, he
appeared to be made a victim by every one who
wanted to exchange worthless paper for hard
sovereigns or crisp bank-notes. Here I would say
a word respecting the general opinion that bank
managers are invariably to blame for the bad
bills discounted by the establishments they
govern. This, although true in theory, is a
mistake as to practice. In most instances—in
almost every case when a bank is young, and
very often when it is old—all heavy discounts
made are to parties introduced by individual
directors, and cannot, therefore, be well refused
by the manager. It was so in our case. Nearly
all, I may say all, our large mercantile discount
accounts were introduced by Mr. Francatello,* a
Levantine commission agent, who was one of our
directors, and it was, therefore, almost impossible
for our manager to refuse discounting bills, the
goodness of which was vouched for, and in many
cases endorsed, by one of the board, one of his
masters. It was—afterwards, when too late, as
is generally the case—found out that this same
Mr. Francatello was himself largely engaged in
the discount of indifferent and bad paper. That
is to say, he would take the bills of foreign and
other merchants, who were in a very small way of
business—bills that no respectable bill-broker,
or no bank of any standing would so much as look
at—and discount them at say ten or twelve per
cent, whilst he endorsed them and re-discounted
them at our bank at four or five per cent, thus
making a clear four or five per cent by the mere
act of writing his name across the back of a bill.

* See page 496, volume xii.

So long as the commercial barometer marked
"set fair," this little game of "heads I win,
tails you lose," was an exceedingly pleasant one
to our Levantine director. He had accepted
office in our bank for the sake of carrying out
his own views, he had been paid some four or five
hundred pounds for joining our direction, and
could lose nothing by his speculations, because,
as I said in my previous paper,? he had nothing
whatever to lose. If the fine commercial
weather lasted, he was safe to make money.
The questionable paper of his foreign and other
friends would be sure to be met, and if the
mercantile glass fell, and the paper he had
discounted at our bank came back upon him, he
had only, as the Yankees say, to "crack up"
and start afresh: in other words, three or four
ten-pound notes, a clever solicitor, a good
accountant, and the Court that works in Basinghall
street, would act as a wet sponge, and wipe out
the score he had run up on the slate of our
unfortunate bank.

? See "How we Floated the Bank," page 493,
volume xii.

Mr. Francatello was not the only one of
our directors who managed to make his seat
at the board a means of profit. By the hands
of Mr. Spencer and of Colonel Frost came the
military, and through Mr. May the legal, paper
to be discounted. The first of these—the
military stamped paper—was less pretending as
to its soundness, less hypocritical as to the
probability of its being paid, but much more
—theoretically—profitable as to its rates of
interest, than any other class of bills brought
to us. These little documents had their peculiar
characteristics. They were always drawn in
even sums—thirty, forty, fifty, or one hundred
pounds each—and invariably for the full amount
which the stamps on which they were written
would bear. There was no sham of odd
shillings and odd pence being tacked on to the end
of the pounds, to give them a commercial air.
They were wholly, solely, and altogether,
"accommodation" bills, but they had the honesty
to avow their character openly. They were
generally drawn by one military man say "G.
H. Tomkins, Lieutenant in the 110th Regiment,"
at Aldershot—upon—another say "F. A. Jones,
Captain in the 23rd Hussars," at Dublin. And
so sure as the bill of Tomkins upon Jones was
brought to us upon the Monday, as certain
before the Saturday night would that of Jones
upon Tomkins be offered to us for discount.
The parties who brought us this kind of paper
were two of our directors, Colonel Frost and
Mr. Spencer—chiefly the former, who—as we
found out later—derived the main part of what
little income he had by "touting" for West-end
military and other bill discounters, gentlemen
who do business chiefly in the sixty per
cent line. When these bills were offered to our
manager, they were invariably said, by those
who brought them, to be both drawn and
accepted by officers in the army of "large private
fortunes, sir." But when the paper arrived at
maturity, it was generally found that the drawer
had sailed for the Cape or for India, whilst the
acceptor had probably sold out, or gone on half-
pay, or was otherwise returned as non est
inventus. If the manager could get paper of this
kind renewed, happy was he; but, as a general
rule, he had to hand it over to our solicitor, who
charged—either the bank, or the non-paying
acceptor, or the drawer of the bill, or perhaps
all three—six and eightpence for each letter he
wrote, and then began the game of serving
writs, so that in the end if our shareholders
lost, why somebody else made, money, and
therefore it would be unfair to complain, for
what more would you have? And then were
not the—imaginary—profits great? Were these
bills not discounted at forty, fifty, and sixty per
cent? It is true that a large commission was
given to those who brought them to us, but still,
after all said and done, the bank stood to gain
at the rate of forty or fifty per cent per annum—
provided the bills were paid, which they seldom
or never were. Forty or fifty! Why,  I remember
one bill drawn by an ex-Lifeguardsman, and
accepted by a gentleman who was then—but is
no longer—in the Foot Guards. It was drawn
for one hundred pounds at two months after
date. For this little document the bank gave
seventy pounds, or, in other words, charged
interest at the rate of one hundred and eighty per
cent per annum!

There were also what I may call the legal bills,