it is customary for firms in London,
Paris, and Marseilles, to grant open credits to
such of their correspondents as ship produce to
them on commission. Thus in our house, in
order to obtain shipment of produce from
Smyrna, Alexandria, and Odessa, we gave our
correspondents—or rather our constituents,
being the small native firms for whom we did
business in London—leave to draw bills upon
us at three months' date, the only stipulation
being that these bills must be covered by other
remittances before arriving at maturity. The
system is most unbusinesslike, and extremely
dangerous, inasmuch as the firm that accepts
these drafts is not covered in any way at the
time of doing so; and, as a matter of course,
whether the remittances come or not at the
proper time, the bills that have been accepted
must be met when due. With purely English
firms this custom has never prevailed; but with
all foreign houses it is very common, owing to the
great competition existing to obtain shipments
of produce on commission. So well aware of the
existing competition are all the native Greek,
Egyptian, and other small firms in the Levant,
that if their custom be worth having, they will
not ship to any house that does not consent to
grant them what is called a banking credit
for three, four, or five, thousand pounds at a
time.

We did business with several of these native
Eastern firms, all of which we were obliged to
grant open credits of various amounts. The
object the native merchants of the Levant have
in obtaining these credits, is, partly to try and
make a profit by the rates of exchange, but
chiefly to be able to raise money whenever
they need it for the purposes of trade, by
selling the bills drawn upon Europe. As
almost all the native trading community is
engaged in this bill-drawing and dealing, and, as
each in their turn require remittances on Europe,
these bills of exchange find a ready sale,
provided the credit of the drawer be tolerably
good, and the drawee known to be a pretty safe
firm.

Having formed a very extensive connexion at
Smyrna and other places with small native firms
that shipped produce to us for sale on commission,
we had granted a number of these banking
credits, as they are called, none of which were
very large, but which taken together made up a
very considerable sum. At the time of the
crisis coming on, we could not have had less
than three hundred and twenty or five-and-
twenty thousand pounds of bills for which
we were under acceptance, and which we should
have to meet before long. As time went
on, some remittances to cover these arrived in
due course, others did not arrive, and many
of those which came to hand were upon houses
that had either already failed, or were on the eve
of bankruptcy. In some instances the bills were
perfectly good when they arrived in our hands,
they were duly accepted by the firms on which
they were drawn, and were then accepted and
passed on to our bankers; but, just before they
were due, the acceptors declared themselves
under the necessity of suspending payment, and
as we had discounted them with the bank, we
had to make them good at once.

To pay out money freely, and receive little or
none, would soon bring the bottom of the longest
purse to light. To save exposure, and in daily
hopes that things would mend, we held on as
long as we could, but all to no purpose. The
inevitable day came at last. The board of the
Onyx Bank began to look very shyly at my
partner, and the directors of the Discount
Company regarded me with but little affection;
for rumours had gone abroad respecting the
vast amount of our liabilities, which, though
startling enough, fell short of the truth.
The rates of discount grew higher and higher
in the City, until at last both the joint-stock
banks and the discount houses refused to take
any save the most undoubted paper, and very
little of that. Our credit fell so low, that
although we were able, by discounting at ruinous
rates, for a short time to stave off the evil hour,
it came at last, and the monetary article of the
Times contained the announcement that "the
bills of Messrs. Velardi, Watson, and Co., were
returned yesterday." Also, that "the liabilities
of this firm are said to amount to three-quarters
of a million; the assets will depend chiefly upon
how certain bills now running are met by various
firms connected with the Levant trade, in which
the house that has just stopped was largely
engaged. The books have been placed in the
hands of the well-known accountants, Messrs.
Blank, Blank, and Co."

        NEW WORK BY MR. DICKENS.
In Monthly Parts, uniform with the Original Editions of
           "Pickwick," "Copperfleld," &c.
   Now publishing, PART XIII., price 1s., of
               OUR MUTUAL FRIEND.
               BY CHARLES DICKENS.
          IN TWENTY MONTHLY PARTS.
      With Illustrations by MARCUS STONE.
London: CHAPMAN and HALL, 193, Piccadilly.