n LIBRARY OF THE UNIVERSITY OF CALIFORNIA. CLns 4 f-! LIBRARY OF THE UNIVERSITY OF CALIFORNIA. Class i BKITISH BANKING STATISTICS; REMARKS ON THE BULLION RESERVE NON-LEGAL-TENDER NOTE CIRCULATION UNITED KIISGDOM. BY JOHN DUN, GENERAL MANAGER OF PARR'S BANKING COMPANY, LIMITED. -t Or T i li^ ' ^.- I UNIVERSITY _ OF LONDON : EDWARD STANFORD, 55, CHARING CROSS, S.W. 1876. ^.£^\Ai^f^^ ^^^ f\ c\\ i" HABEISON AND SONS, tElNTEES IN OEDINAEY TO HEE MAJESTY, ST. maetin's lane. PREFACE. The following paper is reprinted from the Journal of the Statistical Society. In Sections I to \1 tlie author has in a great measure trodden in the track traced by ]\Ir. Newmarch in 1851, and Mr. Palf^rave in 1872. That he has carried the investigation of the banking liabilities and assets of the United Kingdom to a point not previously attained, is due to the circumstance that in 1875 much more copious data were available for tlie purpose than in 1851 or even in 1872. In the course of the paper many important practical points in connection with the constitution and management of banking institutions are dealt with. Attention is specially directed to the utter inadequacy of the present ultimate bullion reserve. Section VII is devoted to the discussion of non-legal-tender note issues. The Chancellur of the Exchequer has intimated to a deputa- tion of English bankers, that the Government have it in con- templation to legislate on the subject of banking and note issues " in a broad and comprehensive way, with a view to giving " proper effect to the principles of Sir Eobert Peel's measures" of 1844-45, and he has explained these principles to be "that " you should separate your dealing with issue and with banking ; " and that with regard to banking you should endeavour to " make it as free as possible, while with regard to issue the " State should provide proper regulations to prevent excess or " regulate issues." In common ^\•ith many of the mature statesmen of the •present day, Sir Stafford Northcote has imbibed liis currency 109447 ideas from Sir Eobert Peel, and it may be feared that he botl overrates the advantages and underrates the disadvantages to the public of an exclusive State or State-bank issue ; whilst at the same time he underrates the advantage to the public of a well regulated system of non-legal-tender issues supplementary to the legal-tender issues of the State or a State bank. Be this as it may, the author trusts that the collation of facts in this paper may be found of some service in the contro- versy which must ensue when the subjects of banking and currency are again brought before Parlia,ment with a \dew to legislation. The author is under great obligations to Mr. Newmarch for valuable information and advice upon many of the most im- portant points embraced in the paper. He thankfully records his acknowledgments for the ready response which his inquiries almost invariably elicited from the officials of banks whom he had occasion to trouble for infor- mation. He would also gratefully acknowledge the invaluable assist- ance received from Mr. W. D. Hughes and other officers of Parr's Banking Company, Limited, in compiling and checking the tables and in making and verifying the innumerable calcu- lations which the investigation involved. Although no effort was spared to secure perfect accuracy, it cannot but be, where such masses of figures had to be dealt with, that some errors have crept in, and any reader who detects an inaccuracy, will confer an obligation on the author by pointing it out by letter addressed to him at Warrington. Warrington, June, 1876. CONTENTS. PAGE I. — Enumeeatiok and Gekeeai Review of Joint Stock Banks 9 Number of Joint Stock Banks in UnitL-d Kingdom 9 Tabic I. Purely London Banks ; Date of Establishment ; I'uid-up Capital ; Reserve Fund ; Number of Proprietors ; Number and Amount of Shares, Dividends, Price, and Yield 10 11. London and Provincial Banks, ditto , 10 in. Purely Provincial, English, ditto 12 IV. Scotch, ditto 18 V. Irish, ditto 18 VI. Number of Joint Stock Banks, classified according to Date of Establishment 20 Remarkable lull in the Establishment of Joint Stock Banks in England from 1810-G2; causes thereof 21 Table VII. Number of Banks (Joint Stock and Private) in England and Wales, 1860, 1865, 1870, 1875 22 Progressive Diminution in Number of English Provincial Private Banks; Increase in Number of Joint Stock Banks 22 Table VIII. Number of Banks and Bank Offices in United Kingdom 23 „ IX. Proportion of Banks and Bank Offices to Inhabitants in England and Wales, Scotland, and Ireland 24 Comparison with previous Investigations 24 Table X. Paid-up Capital of Joint Stock Banks 25 Proportion of Paid-up Capital to Population, England and Wales, Scot- land and Ireland 26 Liability of SnAEEnoLDERS 26 Table XI. Number of Limited and Unlimited Banks 26 Seven old-established Unlimited English Provincial Banks transformed into Limited Banks 26 Bank of England, Bank of Ireland, Bank of Scotland, Royal Bank of Scotland, and British Linen Company, Limited, Banks 27 Obvious advantage of Limited Liability 27 Necessity for Substantial Margin of Uncalled Capital , 27 Table XIL Calls made in Liquidation of Failed Banks 28 „ XIII. English Limited Banks ; Proportion of Uncalled to Paid-up Capital 29 Advantage of an Uncalled Margin on Shares of Unlimited Banks 30 Table XIV. English Unlimited Banks; Proportion of Uncalled to Paid- up Capital 30 „ XV. Reserve Funds of Joint Stock Banks of United Kingdom 32 „ XVI. Paid-up Capital and Reserve Funds of Joint Stock Banks of United Kingdom 33 Purposes and Formation of Reserve Fund 33 Twelve English Provincial Banks of which Reserve Fund exceeds or nearly equals Paid-up Capital 31- Reserve Fund equal to one-half of Paid-up Capital quite ample 34 B PAGE Table XVII. Nuhbee of Propeietoes and Proportion to Population ; England and Wales, Scotland, Ireland 34 „ XVIII. Dividend and Bonuses j England, Scotland, Ireland .... 35 „ XIX. Peejiium per cent, on Paid-tjp Capital; England, Scotland, and Ireland 36 „ XX. Yield per cent, to Purchaser 36 Circulation of Notes 37 II. — Published Balance Sheets of Joint Stock Banks 38 Tables of Balance Sheets and Analyses thereof 38 Tables XXI, XXII, and XXIII. Purely London Banks 38 „ XXIV, XXV, and XXVI. London and Provincial Banks 41 ' „ XXVII, XXVIII, and XXIX. Purely Provincial English Banks 44 „ XXX and XXXL Scotch Banks 54 „ XXXII, XXXIII, and XXXIV. Irish Banks 58 Publication of Balance Sheets ; Advantages thereof 60 Items of Liabilities and Assets 60 All Joint Stock Banks should be required by law to publish Balance Sheets in a prescribed Form ,... 61 Table XXXV. Pro forma General Balance Sheet and Statement of Profit and Loss 63 III. — Analysis of Liabilities 64 Ratio per cent, of Uncalled Capital to Liabilites to Public 64 Proprietors' Funds, i.e.. Paid-up Capital, Reserve Fund, Balance of Undivided Profit 64 Ratio of Proprietors' Funds to Liabilities to Public 65 Table XXXVI. Ratio of Proprietors' Funds to Liabilities to Public; London and Provincial and Purely Provincial English Banks ; Small Banks ; Medium-sized Banks ; Large Banks ^Q ,, XXXVII. Ratio of Proprietors' Funds to Liabilities to Public; 44 Purely Provincial English Banks : without branches; with 1, 2, or 3 Branches; with 4 to 10 branches; with more than ten branches 67 „ XXXVIII. Ratio of Proprietors' Funds to Liabilities to Public, London and Provincial Banks and Purely Provincial English Banks by Districts 69 Ratio of Proprietors' Funds to Liabilities to Public, Limited and Unli- mited Banks 69 Circumstances which should determine the Proper Ratio, viz.. Nature of BusineSfS, Character of Money lodged and of Advances, Local Position 69 Lowest and Highest Ratios shown by Banks in various Territorial Divisions , 70 Mr. Gilbart's Opinion that Capital should never be less than one-third of Liabilities 70 The Fair Proportion of Proprietors' Funds to Banking Liabilities would seem to be 15 to 20 per cent 71 Proprietors' Funds of London Banks too small 71 Advantage of large Paid-up Capital in keeping down Rate of Dividend 71 Money Lodged; Amount held by Joint Stock Banks , 72 3 PAGE Tabic XXXIX, Number of Depositors and Amount of Deposits iu National Provincial Bank of Enj^land and in Scotcli Banks classified according to Amount at credit of each Depositor 73 Proving Jloney lodged in English Banks to be held in similar Amounts and from same Classes as in Scotch Banks 73 Prooeess of Monet Lodged 73 Table XL. Progress of London Joint Stock Banks, 1811-74 74, Progress of Money Lodged, Scotch Banks, 1815-75 74 Irish Banks, lSlO-74 75 Table XLI. Progress of Savings Banks Deposits, England, Scotland, and Ireland; Total, 18M-74 75 „ XLII. Progress of Money lodged in certain English Banl;s, 1870-7i 76 „ XLIII. Progress of Money lodged in Scotcli and Irish Banks, 1870-71 77 Increase iu English Provinces greater than iu Scotland and Ireland 77 AcCEPT.vxCES ; Amount; Classification according to their Nature 77 General Remarks 78 Acceptances of London Banks ; large 78 Amount in Case of City Bank; doubtful if it be profitable 78 Increase of Acceptances of Scotch Banks established in London 79 Estimated Distribution of Liabilities 79 Table XLIV. Percentage of Items of Liabilities to Totals; Purely London, London and Provincial, Purely Provincial, English, Scotch, Irish .... 80 IT. — Analysis of Asssets. Items of Assets 80 Cash and Siteplus Funt)S 80 Five Lines of Defence : — 1. Cash in hand, 2. Cash at Call. 3. Ileadily available Investments. 4. Notice-Money. 5. Bill Case 80 Practice of Rediscountiug Customers' Bills; Objection thereto 82 Three Classes of English Country Banks: — 1. Deposit Banks without a Banking Outlet for their Eesources. 2. Deposit Banks with sufficient Banking Outlet for Pvcsouvces. 3. Banks with a good Banking Outlet but insufficient Deposits, requiring therefore to Eediscouut 83 Scope for Amalgamation of Banks 83 Difficulty of correct Analysis of Cash and Surplus Funds 83 Average Ratios of Cash and Suepltts Funds to Liabilities to Public; Enghsh, Scotch, and Irish Banks 84 Highest and Lowest Ratios 84 Fair Proportion of Cash and Surplus Funds 25 to 30 per cent, of Liabi- lities to Public 85 MoNDT Lent : — Proportion of Bills to Loans to Customers or Overdrafts depends on local circumstances 8o Bills preferable to Advances on Loan or Current Account 85 Tendency of Loans or Overdrafts to Increase during Time of Pressm-e .... 85 Practice of Country Banks as to Overdrafts 86 Practice of London Banks as to Loans to Customers 86 Few Banks distinguish between Bills and Advances in their Balance Sheets 86 b2 4 PAGE Thirteen Purely Provincial English Banks which do; Calculation there- from of proportion of Bills to Advances on Current Accounts 87 Verification of Calculation by Rebate of Discount 87 Practice of Banks as to Rebate 87 Estimated Proportion of Bills to Advances on Current Accounts ; Scot- land, Ireland 88 Calculation of Proportion of Bills to Advances, London and London and Pi'oviucial Banks, by means of Rebate 89 General Result of Calculations 90 Peopertt Accoxjnt 90 Estimated Distribution of Items of Assets 90 Calculation of Distribution of Items of Assets of Scotch and Irish Banks from data in Tables 90 Table XLV. Estimated Percentage of Items of Assets to Total: London, London and Provincial, Purely Provincial, English, Scotch, Irish 92 „ XLVI. English Provincial Joint Stock Bank Balance Sheets, 1870 92 XLYII. Scottish Bank Balance Sheets, 1866 and 1870 96. „ XLVIII. „ Dividend, Price, Yield, 18G6 and 1870.... 98; -Working Expenses, Profits, Price and Yield to Investor : — - Charges or Working Expenses 99 General Remarks 99 Table XLIX. Ratios per cent, of Charges to — 1, Net Profits, less Charges; 2, Liabilities to Public; 3, Total Resources lOO Profits : — "Economist's" mode of Calculation of Net Business Profit earned on Cash Deposits ; fallacy thereof 100 Employment by Mr. Gairdner of "Economist's" mode of calculation to estimate gain of 1,125,000/. per annum to People of Provincial England by adoption of Scotch Margin of Banking Profit ; Utter Fallacy of this Estimate 101 Ratio of Net Profits to Total Resources. Purely London, and London and Provincial, Purely Provincial, English, Scotch and Irish Banks 102 Highest and Lowest Rates of Profit on Total Resources 103 Circumstances which modify Rate of Profit 103 Table L. Rate of Profit, London and^Provincial and Purely Provincial English Banks, by Districts 104 Illustrative Remarks 105. Table LI. Rate of Profit, Scotch and Irish Banks 107 Illustrative Remarks 107/ Table LII. Rate of Profit, with Features tending to modify the same, England, Scotland, Ireland ° 108: Illustrative Remarks 10& Market Price and Yield to Investors 109 Considerations which regulate Market Price 109 Table LIII. Profit, Dividend, Price and Yield of London and Provincial, and Purely Provincial English Joint Stock Banks 10^, I'AGE VI. — Attempted Estimate of Total Banking Liabilities and Assets OF United Kingdom Ill Data alreatly Ascertained Ill Calculation of Liabilities to Public of 17 Euglisb Purely Provincial Joint Stock Banks from Paid-up Capital ; from Average Liability per Office ascertained for 49 Banks; from Average Liability per Bank ascertained for 49 Banks Ill Table LIY. United Kingdom Joint Stock and Private Banks ; Returns of Capital and Deposits, supplied to Committee on Banks of Issue, 1875 112 Confirmation of above Calculations from this Table 113 Calcxilation of probable Liabilities to Public of Private Country Bankers from Liabilities per Office of Country Joint Stock Banks..., 113 Attempted Verification from amount of Private Banks' Note Circulation 114 Further Verification from Returns to Committee 114 Estimate of Liabilities of London Private Bankers 115 Capital and Liabilities of London Discount Houses 116 Capital and Liabilities of Bank of England 116 Total Bills tjndee Discount 116 Independent Confirmation of Mr. Palgrave's Estimate of Total Bills Current in United Kingdom 117 Estimated Amount of Funds on London Market for Discount of Bills .... 117 Estimated Average Amount of Bills Discounted Daily ' in London Market 117 -Comparison of Estimate of Total Bills Discounted in London and Locally with Mr. Newmarch's Estimate for 1850 117 Tabic LV. Estimated Total Liabilities and Assets of all the Banks of the United Kingdom in the form of Debtor and Creditor Balance Sheet 118 Total Banking Liabilities 120 Stupendous Amount 120 Table LVI. Comparison of Present Estimate of Capital and Liabilities of Banks of United Kingdom with Previous Estimates of Mr. Xew- luarch, 1850; Mr. Palgravo, 1871; Mr. Moxon, 1873 121 Geeat Alteeation in Relatite Weight of Bane of England in Monet Maeket since 1844 121 Estimated Discounts and Banking Loans of Bank of England com- pared with those of other Banks and Discount Hour.es 122 Secondary Position of Bank of England as a Lending Bank in Ordinary Times ' 122 Consequent Loss by Bank of England of Control over ilarket Discount Rate and Weakening of Action of Bank Rate on Foreign Exchanges.... 123 Estimate of Total Money Lodged with Banks bt the Public 123 Table LVII. Estimate of Banking Liabilities Resting ultimately on Bank of England Resee'^-e, and Comparison with ilr. Palgrave's Estimate for 1871 124 Dangerous Inadequacy of Sole Ultimate Bullion Reserve compared with Banking Liabilities 125 Constitution of our Monetaey Ststem 125 Panics; Suspension of Bank Act 125 Management of Bank of England « 126 .Augmentation of Bullion Reseete absolutely necessary 127 6 PAGE Bank lias to serve Two Mastei-s 12S Effect on Bank of England Reserve of London Banks holding their own Bullion Reserve 129 Necessity of prompt United Action by London Banks to secure adequate Bullion Reserve 130 One Reserve System no longer Possible or Safe 130 Plurality of Reserves Essential ISC' Suggested Monthly Return by each Bank of Average Stock of Legal Reserve 131 Proposal to reunite Issue aud Banking Departments ; Objection thereto 131 Proposal to legalise Suspensory Power ; Objections thereto 132 Only practicable Legislative Solution of Difficulty, the Transference of Issue Department to State 133 Largest possible Bullion Reserves unavailing if Credit Overstretched .... 134 Mr. Bagehot's Objection to State Dei^artment of Issue 134 Discreditable that Question should continue to be shirked 135- Pendhig Inquiry and Legislation London Banks should hold their own Bullion Reseives, with means of rapidly increasing them 135 Table LVIII. Purely Provincial English Joint Stock Banks j Balance Sheets of Forty-four Banks, 18v3 136 „ LIX. London and Provincial Joint Stock Banks; Balance Sheets for Year 1873 138 „ LX. Analysis of Balance Sheets of Forty -four Purely Provin- cial English Joint Stock Banks, 1873 UO „ LXI. London and Provincial Joint Stock Banks j Analysis of Balance Sheets, 1873 142 „ LXII. Dividends and Prices of Forty-four Purely Provincial English Joint Stock Banks, 1873 144 „ LXIII. London and Provincial Joint Stock Banks; Dividends and Prices, 1873 145 VII. — Nox-MGAi-TiiirDirR Note CiECiri.ATioK'. Introduction 145 SiATrTOET Co>i)iTioirs of Xon-Legal-Tender Note Issues in Ekg- XAICD, and their Operation 146 Table LXIV. England and Wales, Issues Authorised, 1844, since Lapsed and now Remaining , 147 „ LXV. Lapsed Issues classified according to cause of Forfeiture .... 148- Joint Stock Issues show greater permanency than those of Private Banks 149 Amount of Authorised Issues Lapsed Quinquennially since 1844 149 Stability of Enghsh Country Issues 119 Statutoet Conditions of Note Issues in Scotlant) 149 Their operation l''^^ Statutoet Conditions of Note Issues in Ibeland 151 Their operation 151 Advantages of Scotch and Ieish Banks oe Issue ovee English CouNTEY Banks of Issue. No small Notes in England. No excess of Issue possible in England 151 Table LXYI. Scotch and Irish Banks; Average Excess of Issue and Coin held 153- PAGE Englisli Banks Return — Monthly Average of Daily Circulation. Scotch and Irish Banks — Monthly Average of Wciekly Circulation 153 In England Restrictions on Amalgamation of Issues ; in Scotland and Ireland none 151 In Scotland, Monopoly of Banking as well as Issue IS-t Distribution and Actual Position of Non-Legal-Tendee Note Circulation in United Kingdom 155 Table LXVII. Distribution 155 „ LXVIII. Actual Circulation per Bank, England, Scotland, and Ireland 15G „ LXIX. English Joint Stock Banks of Issue, classified according to Amount of actual Average Circulation 157 „ LXX. English Private Banks of Issue similarly classified 159 LXXI. Results of Tables LXIX and LXX 162 „ LXXII. English Joint Stock Banks of Issue ; Relations of Authorised Issues and Actual Circulation to Paid-Up Capital 10:5 „ LXXIII. Scotch Banks ; the same 1G5 „ LXXIV. Irish Banks of Issue; the same 165 „ LXXV. English Joint Stock Banks of Issue classified according to Amount of Paid-Up Capital 166 Possible Legislation : — Abolition of all Non-Legal-Tender Issues 166 Erroneous Views of Sir Robert Peel 167 Table LXXVI. Bankruptcies of Private Bankers in the years 1839-43.... 167 Change in Relative Employment of Notes since 1844 168 Overissue and Depreciation impossible if Convertibility maintained Legal- Tender Note Issue a Function of the State ; not so Non-Legal-Tender Note Issue 169 Sole advantage of confining Issue to State or a State Bank, undoubted security for every Note , 170 Estimate of Profit to State from Suppression of English Provincial Issues; but Issuers must be compensated 170 Value of Issues : Direct Value ; Indii-ect Value. Mr. Seebohm's testi- mony on the latter point 171 Adequate compensation to Issuers must entail considerable loss to State.... 171 Postponed compulsory Forfeiture of Issues without Compensation would be Confiscation 172 Stability and Acceptability of Country Issues ; Note Holders entitled to protection against Loss 172 Special Merits of English Country Circulation : — 1. Ready Convertibility ; Bank of England Notes not readily Convertible 172 2. Freedom from Forgery ; Testimony of Mr. Seebohm 173 3. Cheapens Banking to the Public; no Compensation to Issuers could ever compensate Public; Testimony of Mr. Bagehot .... 173 4. Promotes Extension of Banking; Mr. Seebohm's Evidence 174 5. Periodic Expansions do not affect Bank of England Reserve .... 174 Scotch Circulation, estimated Value thereof , 175 Irish Circulation, „ 175 PAGE Profit and Loss to State from suppression of all Non-Legal-Tender Issues 1^6 Retention and Proposed Reform of Non-Legal-Tendee Issues; their Solitary Defect no Security but Solvency of Issuer 176 Remedies Proposed: 1. To make Notes a First Charge on Estate of Issuer ; 2. To Require Deposit with State of English Government Secnrities to cover Authorised Issue ; Insufficiency of such Security in certain circumstances; Cost to Issuer 177 3. To make Notes a first charge on Issuer's Estate, and to require Government Security for part of Authorised Issue 179 Cost to Issuer.... 180 Proposed Extension of Non-Legai-Tendee Issues 180 Monthly Return of Legal Tender held 180 All Provisions against Amalgamations should be abolished 180 Mode of avoiding Multiplicity of Issuers 181 Extension of Country Issues on Security would facilitate Formation of Larger Legal Tender Reserves 181 Estimated amount of Gold and Bank of England Notes in hands of Public ; comparison with Legal Tender in Reserve ; more should be in Reserve, less in Circulation 182 Scheme Proposed would relieve Bank of England Reserve of Strain of Periodic Expansions of Scotch and Irish Issues 181 Would remove Inequalities of Privilege between Bank and Bank ISI- Cases of City of Glasgow Bank and British Linen Company compared 184 Monopoly of Issue and Banking in Scotland would be abolished 185 Intrusion of Scotch Banks into England; why should Public be deprived of Advantage of Competition of Scotch Banks on English soil ? 186 1. Justice to English Banks 186 Diverse dealings of Legislation with Scotch and English Banking ; Scotch Monopoly the most remarkable instance of Protection extant 186 2. Justice to Scotland forbids Ramification of Scotch Banks beyond Scotland .■ 187 Table LXXVII. Progress of Scotch Banking, 1845 to 1875 188 Scotch Banks forfeit their Scotch Privileges when they cease to be purely Scotch Banks 188 Sound and Intelligible Principle of Mr. Goschen's Bill 188 Case of National Bank of Scotland and Bank of Scotland several years in London 188 Under one State Issue, Banking in each division of United Kingdom ■ivould be free to Banks of any other 189 If Non-Legal-Tender Note Issues Secured and Extended, Objections to Scotch Competition on English soil would be in a great degree removed ■••■• 18 J THE BANKING INSTITUTIONS UNITED KINGDOM. I — Enumeration and General Review of JnixT Stock I3a.\K!<. The " Banking Almanac" for 1875, jDublished in December, 1874; gives tlie joint stock banks in England and Wales as 121. Omitting the Bank of England, two Isle of Man banks, tlie Cheque Bank (Limited), and the Shropshire Banking Company, since absorbed by Lloyd's Banking Company (Limited), the City and County Bank (suspended), and adding the Ludlow and Tcnbury Bank, which, though a bank of issue, does not appear in the " Almanac," the total number stands at 116. These are — Number. Purely London 12 London and Provincial 7 Purely Provincial 97 Total England and Wales 116 Add— Isle of Man 2 Scotland 12 Ireland 9 Total joint stock banks, United Kingdom 139 The following tables, compiled from the " Investors' Monthly " Manual" for August, 1875, the " Banking Almanac " of 1875, and the balance sheets or statements of the banks where these were available, show the date of establishment, number of offices, number of shareholders, paid-up capital, reserve-fund, shares, dividend, market price, and yield to the investor : — Table I of the Purely London Banks. ,, II of the London and Provincial Banks. ,, III of the Purely Provincial Banks, roughly classified in districts. ,, IV of the Scotch Banks. „ V of the Irish Banks. 10 Table I. — Purehj London dumber, 9 10 11 12 Names. LOXDOX ASD 'WESTlIiySTEIl BANE London Joixt Stock Bank Union Bank of London City Bank Impeeial Bank, Limited Alliance Bank, Limited Centeal Bane of London, Limited Meteopolitan Bank, Limited St. James' Baiik, Limited W. London Cohml. Bank, Limited Loudou Banking Association, Limited^ ... Merchant Bankg. Co. of London, Limd Totals Averages 1 Date of Estalj- lisli- ment. Year. 1834 '36 '39 '55 '62 '62 '71 '63 '67 '71 '66 72 '63 Nurabev of Offices. Ko. 8 6 5 6 40 Paid-up Capital. 2,000,000 1,200,000 1,395,000 600,000 675,000 800,000 100,000 190,583 6,620 22,269 375,000 7,361,472 II banks, 669,497 Reserve and Balance after last Dividend. £ 667,501 522,713 4ii>i23 137,554 97,132 1/0,000 25,260 2,500 100 981 103,980 2,138,844 1 1 banks, 194,440 * 90,160?. of capital consisting of deferred shares received no dividend, f The business o£ this Association is not that of ordinary London bankers, and their Exchange. Table II. — London and Provincial Kumber. Name. Estab- Date of lish- ment. Number of Offices. Paid-up Capital. Reserve and Balance after last Dividend. National Peotincial Bank ofEnglattd "| ," New, 1874 J London and County Bank LONKON AND SoUTH-WeSTEEN BANK, "I Limited J Consolidated Bank, Limited Midland Banking Company, Limited.... London and Peovincial Bank, Limited London and Yoekshiee Bank, Limited Totals Averages Year. 1833 '36 '62 '63 '63 '64 '72 No. '38 149 27 4 28 £ 1,462,500 1,425,000 166,180 800,000 300,000 150,000 121,284 £ 742444 719,657 14,012 125,876 45,000 34,818 2,331 412 59 4,424,964 632,138 1,684,138 240,591 11 Joint Stock Banks, 1875. 5 6 7 a y 10 11 1;^ Number of Propi'ictors. Number of Sliares. Amount per Share. Paid per Share. Dividend and Honus per Cent. for 13 Montlis. Price per Sliarc, August, 1875. I'reniium per Cent. yield per Cent, at Price. Number. No. No. £ £ Per cut. £ Per tnt. £ s. d. 4,800 2,500 2,800 830 100,000 8o,ooo 90,000 60,000 100 50 50 20 zo i5i- 10 16 18i- 15 9 64^ 47 44 13 222 .V 213 \ 1831 30 4 19 3 5 17 II 5 5 9 6 18 6 1 2 3 4 530 45,000 50 15 8 17^ 16.^ 6 17 2 5 1,21.0 80,000 25 10 7 I -2 25 5 I- - G 350 zo,ooo 10 5 8 8 GO 5 - - 7 500 1 28 18,031 6,849 10 10 20 10 ID 5J 9l Discoiiul — 8 9 109 4,005 10 3 to 6 5 — — — 10 11 12 260 15,000 100 25 10 36 41 6 18 II 14,007 — — — 1 1 banks. — — 8 banks. 1,167 ~~' — — 11 "^ 5 i8 8 shares were privately subscribed for and no quotation applied for on the Stock Joint Stock Banks, 1875. 5 6 7 8 9 10 11 13 Number of Number of Amount per Paid per Share. Dividend and Bonus per Cent. Price per Share, August, Premium per Cent. Yield per Cent, at Price. Number . Proprietors. Shares. Share. 12 Months. 1875. No. No. £ £ Per cut. £ Per cut. £ s. (L r 20,000 50 21 23 85 3044. 5 13 74 1 3,312 < 77,500 20 12 23 49 308i — \ 1 I 28,125 20 4 23 36 — — J 3,250 60,000 50 20 18 62 210 5 i6 2 Z 580 8,309 100 20 8 24 20 6 13 4 3 1,650 200,000 10 4 10 74 874 569 4 887 15,000 100 20 9 27f 38 J 6 10 4 5 625 30,000 10 5 10 94 90 5 5 3 6 539 13.476 50 9 4 54 Discount 6 10 II 7 10,843 — — 1,549 "^ "^ 11 f ~ 5 19 £^ Table III. — Purely Provincial English jS'ame. [//«?!«— Small or Large — denote Banks of Issue, CAPITALS— Italic or Plain— Banks which publish Balance Sheets.] I. Cumberland, Northumberland, and Westmoreland. CARLISLi: CITY AND DISTRICT BANK..... CARLISLE AND CUMBERLAND BKG. CO CUMBERLAND UNION BANK, Limited BANK OF WHITEHAVEN, Limited WhiteJiaven Joint Stock Bank Bank of Westmoreland North Easterx Banking Company, Limited Indttsteial Bane, Limited, Newcastle NoETHN. Counties' Banking Co., Limd., Newcastle II. Liverpool. Bank of Liverpool Liverpool Union Bank ,, Commercial Bank, Limited North Western Bank, Limited, Liverpool National Bank of Liverpool, Limited .... Adelphi Bank, Limited NORTH AND SOUTH WALES BANK... III. Mancliester District. Manchester and Liverpool District Bank ,, County Bank, Limited Salford Bank Union Bank op Manchester, Limited Manchester Joint Stock Bank, Limited Lancashire and Yorkshire Bank, Limited Lancaster Banking Company Preston Banking Company „ New A Shares Parr's Banking Company, Limited, "Warrington Bunk of Bolton Bury Banking Company Rochdale Joint Stock Bank, Limited Ashton, Stalybridge, &c., Bank IV. Yorkshire. Darlington District Bank SWALEDALE, Sfc., BANKING COMPANY..... Knare.sljorouqh and Claro Banking Company YORKSHIRE BANKING COMPANY York City and County Bank 1 2 When Number Estab- of lished. Offices. Yeai-. No. 1837 6 '36 6 '29 i8 '37 4 '29 6 '33 •. '72 17 '72 I '71 2 1831 '35 I '32 I '64 I '63 3 '61 ■» 1836 57 1829 i{Z '62 27 '36 9 '36 21 '73 2 '72 9 '26 14 '44 7 1865 17 '36 3 '36 I '72 I '36 I 1831 8 '36 4 '31 6 '43 2 2 '30 15 Paid-up Capital. 80,162 75,000 225,000 98,530 45,000 25,680 260,000* 20,323 21,690 625,000 600,000 350,000 405,000 450,000 130,110 420,000 905,000 660.000 600,000 440,000 90,000 250,000 275,000 191,484 50,000 290,000 225,000 109,080 22,656 50,000 68,000 63,000 unknown 250,000 125,000 * Viz., 40,000 ordinai'y sliarcs- on the latter. -6/. paid and 1,000 zol. shares deferred ; no dividend as yet 13 Joint Stock Banks, 1875. 4 5 C 7 8 ■J 10 11 1-' Reserve Dividend Price aiul Balance Number Nuiiiljcr Aiiioun t Paid-up per Cent. per Annum forl2Montlis, per Premium Yield after of of per per Sliarc, per Cent. per Cent, at | Last Dividend rrojirietors. Sliares. Sliare. Sliare. including; Uonus. August, 1S75. Price. £ No. Is'o. £ £ Per cnt. & I'er cnt. £ S. d. 93=0- <; 413 6,413 25 111 20 44* 254 5 13 - 103,836 325 15,000 20 5 21 22a 350 4 13 4 85-7-4 780 18,000 30 12^ 18 44 252 5 2 3 9^.797 301 9,853 30 10 20 37i 272^ 5 7 4 28,195 209 3,000 100 15 25 64 3261 5 17 2 15,000 lOG 2,140 100 12 10 19 58i 6 6 4 80,412 1,028 40,000 20 6 m si Dis. 3 18 3 1,500 211 6,873 5 3 10 3i 8i 9 4 8 1.777 36 723 50 30 7f 34 13} 6 i6 9 3 '7,778 527 50,000 100 i-i 16 25I 101 7 79 2 164,365 15G 30,000 20 20 10 29 45 6 18 - 205,729 280 35,000 20 10 12^ 18 80 6 18 loi 101,179 367 54,000 20 7i 7 10 33} 5 5 - 106,400 752 30,000 25 15 ^r i7l 15 g- 5 18 - 7,194 357 13,011 20 10 5 to Par 5 - - -i5^y-^ 852 42,000 10 10 18i 324 227i 5 14 6 57^,774 1,250 90,500 20 10 20 ■M 2G5 5 9 7 354,885 730 44,000 100 15 15 40 § 170 5 1 1 I 250,000 230 75,000 20 8 iH 14 75 6 7 7 150,097 384 40,000 25 I X 12 23^ 113^ 5 12 4 31,630 263 15,000 20 6 10 12i 104i 4 17 II 34,145 450 25,000 20 10 6 »3i 38f 4 6 5t 276,216 324 T x,ooo 25 25 30 155 520 4 16 9i 49,900 110 2,000 100 100 Nil "^ — Nil 2,000 25 25 10 33 32 7 II 6i 85,768 265 14,500 100 15 60 200 5 - - — 247 I<,000 20 15 G 2li m 4 3 9 120,000 151 18,180 10 6 23 24 300 5 15 - 4.44^ 148 5,664 20 4 7i «; 25 5 16 - 16,005 148 12,500 10 4 101 8 100 5 6 3 29,416 78 4,000 100 17 lot 23 35} 7 7 10 33,000 121 8,400 100 7i 20 X — — 24,000 104 — — 20 15 — — 163,000 425 2O,0CO 25 12i 24 57 356 5 5 3 100,000 167 5,000 100 25 18 70 180 6 8 7 Num- ber. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 ■24 25 26 27 28 29 30 31 32 33 34 t And also il. per share added to capital. J Shares Tcrj rarely dealt in. 14 Table III. — Purehj Provincial English Name. \llalics — Small or Large — denote Banks of Issue, CAPITALS— Italic or Plain— Banks which publish Balance Sheets.] IV. Yorkshire— Coii/f?. YorTc Union Banking Company Hull Banlcing Company Bane of Leeds, Limited Leeds and County Bane, Limited Exchange and Discount Bank, Limited, Leeds .. BRADFORD COMMERCIAL BANKING CO... „ BANKING COMPANY Beadfoed Disteict Bank, Limited ,, Old Bank, Limited Halifax Joint Stock Bank HALIFAX COMML. BANKING CO., Limited.. Halifax and Huddersfield Union Bank Hitddersfield Banking Company West Riding Union Bank Wakefield and Barnsley Union Bank Barnsley Banking Company Sheffield Union Banking Company SHEFFIELD AND ROTHERHAM BKG. CO. SHEFFIELD BANKING COMPANY AND HALLAMSHIRE BANK.. v. Midland Counties — Ag-ricultural. Chesterfield and North Derby Bank Derhy and Derbyshire Bank Derby Commercial Bank, Limited BURTON, UTTOXETER, Sfc., BANK Nottingham and Notts Banking Company Moore and Robinson's Notts Banking Company, Limited Nottingham Joint Stock Bank, Limited Lincoln and Lindsei/ Banking Company STAMFORD, SPALDING, ^-c, BANKING CO Pares's Leicestershire Banking Company LEICESTERSHIRE BANKING C031PANY Coventry Union Banking Company ,, and Warivicli'shire Bank Leamington Priors and Warwickshire BanJc Northamptonshire Banking Company Union Bank VI. Black Country. Lloyd's Banking Company, Limited Biemingham, Dudley, and Disteict Bank. When Estab- lished. Year. 1833 '33 '64 '62 '66 '33 '27 '62 '64 '29 '36 '36 '27 '32 '32 '32 '43 '36 '31 '2,Q 1834 '33 '68 '39 '34 '36 '65 '33 '32 '36 '29 '36 '35 '35 '36 '36 1865 '36 Number of Offices. No. Paid-up Capital. 132,000 90,990 151,300 230,000 89,250 193,500 408,000 227,500 423.160 150,000 120,000 250,000 382,500 200,000 100,000 40,575 180,000 160,704 293,160 183,200 35,000 62,500 30,000 130,000 203,500 203,000 95,500 87,500 200,000 310,000 275,000 56,000 78,080 32,000 78,000 132,500 400,000 228,160 15 Joint Stock Baids, 187 5 — Contd • 4 6 6 7 8 9 10 11 12 Rc^crvG Dividend Price and Balance ^'umbe^ Number Amount Paid-up per Cent. per Annum for 12 Mouths, per Premium Yield Num- after Last Dividend. of of per per Share, per Cent. pei Cent, at ber. Proprietors. Sliai-es. Share. Share. including Bonus. August, 1875. Price. £ No. No. £ dS Per cnt. £ Per cat. £ s. d. 76,234 179 6,600 100 20 20 60 200 6 13 4 35 80,892 207 6,066 100 15 20 54^ 263 i 5 10 I 36 4-.327 111. 6,052 100 25 7 3if 27 5 10 3 87 65.385 374 9,200 100 25 91 404 61 5 18 38 39,000 311. 20,000 10 5 121 loi 105 6 I iii 39 163,558 250 10,000 100 20 18 61 205 5 18 40 264,574 211 6,800 100 60 25 183 205 8 3 1 1 41 1 15.554 21G 6,500 100 35 11t 90 157f 4 1 1 4 42 108,904 3G2 2.1,158 50 20 Ml 60 200 4 15 10 43 106,445 4.10 15,000 25 10 18 28 180 6 8 7 44 7o,oco 297 12,000 20 10 14 24 140 5 16 8 45 183,080 458 25,000 20 10 17i 29i 192i 5 19 8 46 124,269 330 17,000 100 22*- 10 422 88f 5 5 loi 47 32,346 320 20,000 100 10 15 26 160 5 15 4i 48 85,014 193 8,000 50 12^ \n 38i 208 5 13 7i- 49 37,273 77 2,705 100 15 20 52 2461 5 15 4?^ 50 50,000 252 15,000 20 12 lU 25 108-^ 5 8 51 86,169 289 5,022 100 32 18f 86 168i 6 19 6i 52 106,404 232 1 1,500 3,000 200 50 ■J?} " { 308 75 120 114^ 7 14 6^ |53 55,581 326 7,328 100 25 15 57 128 6 II 7 54 13,049 90 2,500 100 14 10 21 50 6 13 4 55 20,000 184 5,000 50 I2J 8 20 60 5 56 3,000 160 6,000 20 5 5 8 60 3 2 6 57 67,469 213 13,000 20 10 20 27 170 7 8 if 58 35,000 230 8,140 50 25 8 38 52 5 5 4 59 100, coo 320 50,575 10 4 15 io| 162i 5 14 3i 60 34,477 208 10,000 50 10 S5 i5f 57i ■ 5 7 "i 61 71,400 225 1,250 200 70 25 280 300 6 5 62 102,577 307 10,000 20 20 16i: 70 250 4 H , 1 3* 63 148,201 440 j 20,0C0 12,000 12i 121 ■1} u { 141 164 195 5 6 1 }- 87,000 296 1 5,000 10,000 100 25 40 1 7i; u { 95 20 1371 166J 5 17 lof }65 17,000 144 8,960 20 6i 12 13 108 5 15 4i 66 21,000 130 9,760 50 8 10 i4i 78J 5 12 3i 67 H>555 60 3,200 20 10 12i 21I 115 5 16 U 68 18,612 324 15,600 20 5 9 8 m 5 12 6 69 146,056 726 26,500 25 5 16 T8i 265 4 7 8 70 200,000 1,130 50,000 50 8 20 26i 2281 6 I lof 71 87,934 384 1 25,000 7,040 20 10 :} 12h [ i6f 8i 111 5 18 5 J72 IG Table III. — Purely Provincial English JN umber 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 Name. [ll/dics — Small or Large — denote Banks of Issue, CAPITALS— Itidic or Plain— Banks which pubUsh Balance Sheets.] VI. Black Country — Contd. BiEiiiNGHAJi Banking Company, Limited „ Joint Stock Bank, Limited Birmingham and Midland Bank COUNTY OF STAFFORD BANK. W0LVERH3IPTN. AND STAFFDSR. BKG. CO. Staffoedshire Joint Stock Bank, Limited STOURBBIDGF AND KIDDERMINSTER BK. VII. Western and Southern Counties. Bala Banking Company, Limited Glamorgan sliire Banking Company Swansea Bank, Limited Whitchurch and EUesmere Banking Company I/iidlotv and Tenltury Bank* WORCESTER CITY ^ COUNTY BANK, Limited W. OF ENGLAND AND S. WALES DIST. BK Devon and Coentvall Bank Heist on Banking Company Theee Towns' Banking Company, Limited Sti'.ckey's Banking Company County of Gloucester Bank Gloncestei-shire Banking Company North Wilis Banking „ WILTS AND DORSET BANKING COMPANY... Bucks and Oxon Union Bank, Limited HajVipshiee Banking Company North Kent Bank, Limited Totals Averages 1 WJien Estab- lished. Year. 1866 '61 '36 '36 '32 '64 '34 1864 '36 '73 '40 '40 '40 '34 '32 '36 '63 '26 '36 '31 '35 '35 '66 '34 '64 Number of Offices. Js'o. 9 14 H 43 15 34 \z 27 16 50 9 29 Paid-up Capital. 82: 97 banks. 19,361,993 93 banks. 208,193 £ 158,070 i 203,900 300,000 60,000 100,000 174,500 100,000 8,155 250,000 170,784 250,000 750,000 128,000 50,000 301,900 181,000 450,000 85,000 250,000 80,000 150,000 22,390 The general business of the Ludlow and Tenbury Bank is merged iu the Worcester City and 17 Joint Stoch Banl's, 1875 — C'ontd. 4 5 G 7 8 9 10 11 12 Reserve Dividend Price and Salancc after Last Dividend. Number of Proprietors. Kunibcr of Shares. Amount per Share. Paid-up per Share. per Cent, per Annum for 12 Months, including Bonus. per Share, August, 1875. Premium per Cent. Yield jicr Cent, at Price. Nuni l,er. £ No. No. £ £ Per cnt. & Per cut. £ s. d. 132,866 569 31.614 50 5 15 i4t 187^ 5 4 4 73 221,219 581 20,390 100 10 20 Hi 233$ 5 19 lo 74 266,229 249 6,000 50 50 20 170 240 5 17 7f 75 34,982 100 12,000 10 5 18 I6J 222i 511 7i 76 41,526 162 10,000 50 10 10 i8| 88$ 5 5 I'i- 77 64,542 273 10,000 100 20 8f 29 45 6 - 8i 78 96,58- 191 10,000 25 10 20 28i 1821 7 I 7 79 5.462 145 j 5,000 1,137 1 10 5 } - _ _ ^ , 80 184,874 226 1 2,000 10,000 100 10 100 5 } - { 200 i5i 100 200 7 10 - 5 - - }- 31,453 716 28,464 20 6 7i 9 58^ 4 14 8$ 82 — 32 — 20 32 12i 6 71i 7 5 93- 83 — 11 — — — — — 84 101,044 447 20,000 50 I2i 121 25i 100 6 3 9 85 i5o>356 1,808 50,000 20 15^ 14 28 90 7 7 4 86 83,000 320 4,000 100 32 16i 80 150 6 10 - 87 0— 9 — — — — — — 88 900 163 2,000 50 25 5 18 Dis. 6 18 10$ 89 150,864 111 — — 50 — — — — 90 69,068 383 7,240 100 25 10 48 92 542 91 194,792 650 20,000 50 22J 13i 52I 135 5 13 5i 92 86,484 192 17,000 25 5 20 20 300 5 - - 93 155,213 796 25,000 15 10 22 4ii 315 5 6 -i 94 18,100 350 16,000 25 5 20 i7i 250 5 H 3i 95 40,220 281 15,000 50 10 16 30 200 568 96 1,600 30 2,239 50 10 8 12 20 6 13 4 97 9,150,236 32,105 — — — — — — — 93 banks. 94 banks. 91 banks. 98,390 331 — — — ]4i — — 5 '7 3 'ounty Bank, but it has retained its note circulation, and in that respect has a separate existence. 18 Table IV. — Scotch Numljer. Name. [All are Banks of Issue, and all publish Balance Sheets.] 1 Date when Esta- blished. 2 Kuiuber of Offices. 3 Paid-up Capital. 4 Reserve and Balance after last Dividend. 1 BANE OF SCOTLAND Year. 1695 1727 '46 1810 '25 '25 '30 '36 '38 '38 '39 Ko. 77 107 68 lOI 92 41 117 47 80 23 123 £ 1,000,000 2,000,000 1,000,000 1,000,000 1,000,000 252,000 1,000,000 320,000 1,000,000 150,000 1,000,000 £ 401,493 527,301 430,311 407,294 418,300 117,608 403,195 100,295 519,133 78,362 461,519 2 ROYAL BANK OF SCOTLAND 3 4 5 BRITISH LINEN COMPANY BANK COMMERCIAL BANK OF SCOTLAND NATIONAL BANK 6 7 ABERDEEN TOWN ^ COUNTY BK. UNION BANK OF SCOTLAND 8 9 10 11 N. OF SCOTLAND BANKING CO CLYDESDALE BANKI^^a COMPANY CALEDONIAN BANKING COMPANY CITY OF GLASGOW BANK Totals — ^75 79i 9,722,000 883,820 3,864,811 35i>346 Averages Bonus of 2.^2: per cent., cliicfly from a special fund. Ordinary Table V. — Irish Joint Name. [Italics — Small or Large— denote Banks of Issue, CAPITALS— Italic or Plain— Banks which publish Balance Sheets.] Bank of Ireland Northern Banking Company Hibernian Bank Provincial Bank of Ireland Belfast Banking Company NATIONAL BANK ULSTER BANKING C03IPANY EoTAL Bank of Ireland ]y[uNSTER Bank, Limited Totals Averages Date of Est ahlish- ment. Yeai-. 1783 1825 '25 '25 '27 '35 '36 '36 '64 Number of Offices. No. 50 44 44 36 106* 44 5 40 401 44^ Paid-up Capital. £ 2,769,230 300,000 500,000 540,000 250,000 1,500,000 250,000 300,000 350,000 6,759,230 751,025 Reserve and Balance after last Dividend. £ 1,072,000 170,000 239,216 213,255 196,080 150,000 291,568 200,670 167,251 2,700,040 300,004 * In 19 BanJcs, 187£ . 5 6 7 8 9 10 11 12 Number Xuiuber Amount PiiiJ-up Dividcud and Price Yield Nnm- Bonus pur Cent. per Annum fur \i Months. Premium of Proprietors. of Sliurcs. per Share. pet Share. per Share, August, 18/0. per Cent. per Cent, at Price. her. No. No. £ £ Per cut. & Per cnt. £ s. d. 1,409 Stock — ICO 14 305 205 4 n 10 1 1,468 — 100 9^ 220 120 464 2 1,208 — 100 13 576 176 4 14 2 3 1,170 )> — 100 15 504 204 4 18 8 4 1,623 — 100 16 309^ 209i- 5 3 4 5 81-i 36,000 20 7 12i i8> 157^ 4 16 4 6 1,250 Stock — 100 15 272 172 ^ 10 4 7 1,420 80,000 20 4 12i III 1961 4 4 2 8 1,383 Stock — 100 16i* 268 168 6 3 2 9 801 60,000 10 =^ 14 7k 200 4 13 4 10 1,212 Stock — ICO 11 227^ 127V 4 16 8 11 13,788 — — — — — — 1,253 — — — 13^ — 176 4 18 - diridend 14 per cent., at xvliicli yield per cent. 5Z. 4s. 6d. Stock Bonis, 1875. G 7 8 9 10 11 12 Number of Number of Amount per Paid-up per Dividend and Bonus per Cent. per Annum Price per Share, Premium per Cent. Yield per Cent, at Num- ber. Proprietors. Shares. Share. Share. for 13 Months. August, 1675. Price. No. No. £ £ Per cut. £ Per cnt. £ s. d. — Stock — 100 13 306 206 4 5- 1 1 718 1 5,000 92 30 15 91i 205 4 18 4 1^ 5,000 ICO 30 7i 46 53i 4 17 8 1,880 20,000 TOO 25 12 57i 130 5 4 4 3 2,000 1 20,000 4,000 100 10 25 \ 10 ; i8 r 88i 1 34i 253 5 2- 5 5 1 1^ 648 1 5,000 5,000 ICO ICO 25 25 20 8 103i 4U 313 65 4 16 10 4 16 11 ¥ 4,000 50.000 ^0 30 11 69i 131! 4 15 - 6 1,020 100,000 10 2h 20 lOV 320 4 15 3 7 1,350 30,000 50 10 14* 291 i97i 4 17 6 8 1,163 100,000 10 3i 12 8t 150 4 16 - 9 12,279 — — — — — — — 8 banks, 1,535 — — — 15 — 21 2 4 16 8 Ireland. cii 20 Date of EstahUsJwient. The first column in these five tables gives the date of establish- ment, and from it is compiled Table VI, showing the number of the existing banks founded previously to 1826, between 1826 and 1830, thence in successive periods of five years down to 1870, and in the four years 1871 to 1874. Table VI. — United Kingdom. Number of Existing Joint Stock Banh, December, 1874, exchisive of Bank of England, Classified according to Date of Establishment. Period English Banks. Scotcli Banks. Irish Banks. Total, United King- dom. of Establishment. Purely London. London and Provincial. Purely Provincial. Total. Before 1826 1826-30 1 2 1 4 z 2 1 1 4 1 10 26 31 3 i8 3 8 10 28 34 3 1 26 5 11 6 I 4 I 4 1 1 2 1 10 '31-35 29 40 4 '36-40 '41-45 '46-50 '51-55 '56-60 '61-65 27 5 '66-70 '71-74 12 7 99 118 12 9 139 Before 1841 1 8 2 5 67 3 29 72 4 42 11 1 8 1 91 5 43 1841-60 Since 1860 12 / 99 118 I 2 139 The following are the noteworthy features of this table. None of the English banks date from before 1826, as that was the year in which the establishment of joint stock banks in England was first 21 made legal. Of the existing English banks seventy-two wore fonndecl during tlic period 182G to 1840, three during the period 1841 to 1845, only one, the City Bank, London, from 1846 to 1800, and forty-two since 1860. In Scotland six, and in Ireland four of the present banks were already in existence before 1826. In Scotland eleven banks, being all the present banks of issuo, were established before 1841. The North British Bank, established in 1845, docs not carry on banking business, and is, I am informed, to all intents and purposes, in liquidation. No bank has been successfully established since that date. The monopoly of banking in Scotland, given to the eleven banks of issue by the legislation of 1845, is thus complete. In Ireland eight of the nine banks were established before 1841, none from 1841 to 1860, and one since 1860, viz., the Munster Bank, Limited, in 1864. That only one bank in Ireland is of more recent foundation than 1845 is probably due in a great measure to the legislation of that year. The lull in the establishment of joint stock banks in England between 1840 and 1862 is very remarkable. The gross abuse of joint stock banking prior to 1840 doubtless created an ignorant prejudice against its use. This prejudice was both evidenced and fostered by the course of the parliamentary inquiry of 1840 and by the speeches of Sir Robert Peel and others in the debates on the banking legislation of 1844. That legislation prevented the estab- lishment of any new bank of issue, and the public were slow to learn that provincial banking could be profitably carried on without the privilege of issue. But by far the most powerful bar to progi-ess lay in the liability of any shareholder to have judgment decrees and orders against the company enforced against him individually, whether he were a member at the time the cause of action arose, or had been a member within three years. This liability was abolished by an Act of 1857. The banking failures of 1847 and 1857 no doubt contributed likewise to retard the development of joint stock banking, and it was reserved for the much abused principle of limited liabihty under the sanction of the Companies Act of 1862 to inaugurate a fresh point of departure in the extension of joint stock bank enterprise. The forty-two banks of England and "Wales, which date their foundation since 1860, are all limited companies, as also is the sole Irish bank established since that year. Xiirnher of BcdiIs. Tabic VII has been compiled from the Banking Almanacs, to show the variations in number of joint ^tock and private banks in Eno-land and Wales since 1860. 22 Table VII. — Nuniber of Banls {Joint Stock and Private), excluding the Bank of England, existing in England and Wales, including the Isle of Man, hut excluding the Channel Islands, at Dates as under. • 1860. 1865. 18'70. 1875. Joint Stock — Piu-ely London Loudon and proyincial Prorincial 7 2 85 11 9 93 12 8 92 12 7 99 Total joint stock 9i 1 15 112 118 Private — Purely London Provincial 53 239 46 21 1 47 207 5^ 196 292 -57 251 ~^i Total ioint stock and private 8SG 370 3G6 369 It will be seen from Table VII that during the last fifteen years there has been a decided diminution in the number of private banks in the provinces of England and Wales. Against 239 pro- vincial private banks in 1860, there are now only 196, showing a diminution of 43. Of these 28 disappeared between 1860 and 1865, 4 between 1865 and 1870, and 11 between 1870 and 1875. The revival of joint stock banking after 1862 induced a good many private bankers to transfer their business to joint stock com- panies. This tendency received a rude but, as it appears, only a temporary check, from the events of 1866, which revealing a fearfal amount of reckless and dishonest management on the part of new banks and financial companies, threw discredit for the time on the joint stock system. The public is now, however, convinced that it was neither the joint stock system nor its modern phase of limited liability which was at fault, but solely the vices of management. It must not be forgotten that two of the most scandalous smashes of 1866, those of Overend, Gurney, and Co., Limited, and Barned's Banking Company, Limited, were in reality failures of private banks, both concerns having been insolvent when within a year of their suspension they were converted into joint stock companies. The joint stock banks in England and Wales have increased in number thus since 1860 : — Purely London 5 London and ProTincial 5 Proviueial, including Isle of Man 14 Total 24 It will i^robably be found that three or four have been added in the provinces during 1875. 23 Number of BanJi Offices. In the following table tlic number of bank ofl&ccs and tlic average number of offices per bank arc sliown for the whole United Kingdom : — Table VIII. — Nicmher of Banks and Bank Ofjices in the United Kingdom, December, 1874. Banks. Kumbcr of 13aiiks. Number of Bank OfBces. Average Number of Offices per Bank. England and Wales — Joint Stock — Bank of England I 12 7 97 11 40 412 823 1 1 Purely London 33 London and provincial C9 Purely provincial 8'- Isle of Man 117 1,28G 9 1 1 4i 119 1,295 1 1 Peitate — 5S 196 6 61 523 6 I -li 1 Total private -57 590 , i_ Total joint stock and private 376 1,885 5 Scotch — Joint stock II 875* 79i Private IrisJi — 9 3 409* 3 45 I Private Total Irisli i; 412 34 Grand total 399 3,172 8 * Including London offices. The joint stock bank with the largest number of offices is the London and County, with 149 ; next comes the National Provincial Bank of England, with 138 ; then the City of Glasgow Bank, with 123 (now 126). The Union Bank of Scotland has 117, and the National Bank (Ireland), 114. In the English provinces the banks having the largest number of offices are : — Mancliester and Liverpool District Bank <2 Wilts and Dorset Banking Company ijo West of England and Sout/i Wales District Bank.... 4? 24 Twenty of the purely provincial English joint stock banks have no branches at all. These banks are chiefly in Liverpool and the manufacturing towns of Lancashire and Yorkshire. Table IX. — Proportion of Banks and Bank Offices to Inhabitants, December, 1874. Locality. Number of Banks. Number of Inliabitauts to One Bank. Number of Bank Otiices. Number of Inhabitants to One Bank Office. England and Wales (includ- 1 ing Bank of England) J Scotland 376 11 12 63,700 3i7>75o 44i>477 1,885 873 404 ii,6oo 4,000 1 ;,ioo United Kino'doni 399 8z,ooo 3,162 10,^00 These figures bring out in salient relief one great distinguishing characteristic of English as compared with Scotch and Lish banking. In England there are many small local banks and few banking offices. In Scotland and Ireland there are few or no small banks and many banking offices. The comparatively local character of English banking is in a great measure the result of the maintenance, till 1826, of the monopoly of the Bank of England, by the restriction of banking to jDrivate firms with not more than six partners. In England a comparison with previous investigations gives the followina: results : — 1851. Mr. Newmarcli .. '54. Mr. G-ilbart '70. Present Inquiry. '75. ,, Number of Bank Oftices. 962 1,651 1,885 Number of Inhabitants to One Bank Office. 18,700 16,500 13,500 12,600 In Scotland the progress in the number of bank offices, according to Table LXXVII, p. 188, which brings the figures down six months later than I have done, has been Scotland. Number of Bank Offices. 1845 '55 '65 382 480 654 884 Number of Inhabitauts to One Bank Office. 7,178 6,200 4,870 .^'954 25 lu Ireland a comparison Avitli provions investigations gives these results : — 1851. Mr. Newmareli ... '72. Mr. ralgrare '75. Present IiiquirT... KutiilaT of Bank Ofliccs. 170 305 401. Numl)er of Iiiliiibitants to One Hank Ollice. 38,300 14,800 1 3 , 1 00 FakJ-up Capital . The total paid-up capital shown by Tables I, II, III, IV, V, with the addition of that of four London discount dmpanies and of the Bank of England, is as under : — Table X. — United Kingdom, Capital puid-np of Joint Stock Banks as 11 nder, August, 1875. [OOO's omitted.] Number | of Banks. 7 93 4 2 II 9 137 4 141 Locality. Paid-ui) Capital. Average per Bank. 14= jEnf/Jand and Wales — £ £ Purely London banks 7,361, i 669, London and provincial Ijl^S, (>},^i Purely provincial 19,362, j 308, ,, not stated, say 250, ; 50, Isle of Man 59, I 30, Total England and Wales Scotcli Irish Total United Kingdom To whieli add — London Discount Companies Add further- Bank of England Grand total. United Kingdom.... 65,211, 4;c 31,460, ' 9,722, 6,759, z6i, 884, 751, ' 47,941, 2,717, 350, 679. 1 50,658, 1 11,553, 359. i4'553. Xext to the Bank of England, the following are the banks with the largest paid-up capital : — £ Bank of Ireland 2,769,230 London and Westminster 2,000,000 Royal Bank of Scotland 2,000,000 National Bank (Ireland) i,£;oo,ooo National Provincial Bank of England 1,462,500 London and Cotmty I,42^,ooo Union Bank of London 1,391;, 000 London Joint Stock 1,200,000 Seven Scotch bankf, each 1,000,000 Manchester and Liverpool District 905,000 Alhance Bank, Limited 800,000 West of England and South Wales District 750,000 Note. — Banks of issue are distinguished bv italics. 26 The proportion of paid-up capital to population is : — Per head. £ s. England and Wales, including Bank of England i i8 „ excluding „ i 6 Scotland , z i6 Ireland i 6 Tlie value of this comparison is much diminished by the circum- stance that it cannot include private banks, of which there are 251 in England and Wales, none in Scotland, and 3 in Ireland. Licibility of Shareholders. It will be seen from Table XI, that of the 139 joint stock banks of the United Kingdom, 84 are under unlimited and 55 under limited liability. Table 'Kl.— Number of Limited and Unlimited Joint Stock Banks in the United Kingdom, December, 1874, Banks. Unlimited. Limited. England and Wales — 4 2 63 8 London and provincial 5 34 Isle of Man Total England and Wales S cotland G9 8 7 50 S Ireland Total number United Xingdom 81 ss All the joint stock banks established in England since 18G0, 42 in number, are on the principle of limited liability, whilst the following seven old established banks have since 1862 transformed themselves into limited companies : — Established. Cumherlancl Union Hanking Comptmy 1829 Liverpool Commercial Bank '32 Salifax Commercial Banking Company '36 Union Bank of Manchester '36 Moore and Robinson's Nottinghamshire Banlc '36 Bank of Whitehaven '37 Worcester City and County Bank '40 The five banks printed in italics arc banks of issue : but the Act of 1862 provides that the limitation of liability shall not apply to notes in circulation. 27 Adverse opinions have been expressed in various quarters, and even very recently, as to tlie soundness of applying tlie jirinciplc of limited liability to banking. Tlie principle is, however, by no means an innovation. The liability of the proprietors in the Bank of England is absolutely limited to the capital paid up. The same is the case with the Bank of Ireland and Avith two Scotch banks, the Royal Bank of Scotland and the British Linen Company, both of which are incorporated by royal charter. In these four cases the proprietors are liable to no further calls in any event ; the principle of limited liability is in fact pushed to its extreme. So far as I am aware, the only instance in which this extreme has been essayed by any bank established under the Companies' Act was that of the MetropoHtan Bank, Limited. In that case the experiment did not succeed, and has been departed from. The Bank of Scotland is under limited liability, having been constituted by Act of Parlia- ment. Its capital is 1,500,000/., of which 500,000/. is uncalled. It should be explained that in the case of the three Scotch banks in Avhich the liability is limited, there is no express limitation in the Act of Pai'liament or royal charter, as the case may be, but incor- poration at the periods at which these banks were established may be held to infer limitation of liability, although some lawyers do not consider this point to be quite clear. Fortunately, the case has never had to be tried, and is never likely to be, considei'ing the stability of the banks in question ; but the report of the Committee of 1840 on Banks of Issue sujjports the view in favour of limited liability; Sir Robert Peel stated again and again, in the debates on the Bank Acts, that the liability of the three senior Scotch banks was limited, and these banks are specially exempted by the Act of 184-5 from making any retui'n of their partners, the reason being that the public could not look to the stockholders as indi- vidually responsible. The obvious advantage of the system of limited liability is that each shareholder knows exactly the utmost amount he can possibly lose in the event of the failure of the bank. This unquestionably tends to attract as shareholders men of substance, who might decline to undertake an indefinite liability. It cannot be denied, however, that from the creditor's point of view the limited bank exposes itself to unfavourable comparison with the unlimited bank, unless it maintains uncalled an adequate margin upon its shares. To ascertain what margin may fairly be deemed adequate, let us look at the calls made to liquidate banks which have failed in recent years. Through the kindness of the liquidators, or from other reliable sources, I am enabled to compile : — Table XU.— CalL made in Liquidation of F ailed Banls. Failed Banks. Date of Failure. Amount per Share Paid-up at Date of Failure. Total Calls per Share made during Liquidation. Proportion of Calls to Paid-up Capital. Amount per Share since Returned to Shareholders. LiTcr]20ol Borougli Eank .... Royal Bank of Liverpool Orerend, Gurney& Co.,i Birmingham Banking Co Bank of London 1857 '67 -J '66 '66 '66 '64 '57 '57 £ lO lO original loo preference 15 10 10 15 10 50 £ 5 } - 1 150 25 10 nU 170 40 125 I3 I 4 -2 £ s. 3 12 5 16 58 3 10 1 - 6 10* Leeds Banking Company .... ^s'^ortbumberland and Dm-- "1 liam Dist. Banking Co. / Western Bank of Scotland.... 10 -t uilj 68 - * In addition to an apportionment of Atlantic and Great Western shares and bonds. f A most exceptional case of mismanagement. X Paid creditors 19s. Sd. per pound. Barned's Banking Company, Limited, is not included in this table, because its business proved to have been hopelessly insol- vent at the time it was taken over from Messrs. Barned and Co., a year before the failure of the Company. The case of the Leeds Banking Company is so extremely exceptional that it may fairly be left out of view. The calls required in the other cases Avere : — Xorthmnberland and Dm-ham 4 times the paid-up capital. Western Bank of Scotland z^ „ Ovcrend, Gurney, and Co., Limited i| „ Royal Bank of Liverpool i| „ Birmingham Banking Company eqnal to tlie paid-np capital. Liverpool Borongh Bank half of „ Bank of London no caUs. From these data the conclusion seems to be justified that a limited bank with an uncalled margin of three times the amount paid up on its shares is, cceteris paribus, so far as regards security to its creditors, practically as safe as an unlimited bank. The following table contains a list of the limited banks of the United Kingdom, with the amount per share, the amount called per share, and the ratio of the uncalled margin to the amount paid up :^ 20 Table XIII. — England and W(des, Limited Banks^ Proportion of Uncalled to Paid-vj) Ctqiitid, 1875. Limited Baiil K 3 66 C{0 30 66 20 10 100 20 n 166 2< 15 66 20 10 100 lOO 15 -^ee 2< 11 127 20 6 ^ii 20 10 100 lOO 20 400 20 4 400 lOO 25 300 lOO 25 300 lO 5 100 lOO 35 186 ^o 20 I'^O 20 10 100 20 5 300 IC 4 li^O .'i;inl)cr of ]:;:i,l>s. Locality. Faia-iip i r.eserve j Enj^laud uiui Wales — Piirelv London £ 7,364, 4,425, 39,612, 59, £ 2,139.. 1,684, 9,150, £ 9 503 7 97 London and provincial 6,109, 98 762 Purely provincial Isle of Man 79, 00, 1 117 31,460, 9,722, 6,759, i-,993. 3,S65, 2,700, 41,453, 13,587, 9,459, 9 li-ish L nited Xingdom 47,941, ip.'i^S, r,*/ 400 4 To which add— Loudon Discount Companies Add further — I3ank of Enolaud 2,717, 668, 3,385, HI 50,658, 14,553, 20,Z26, 70,881, 1 r n.-,7 Grand total 142 65,211, --i.jjo, 1 ssr.n The purposes of a reserve-fund are-^ — 1, to enable a bank to meet large and exceptional losses without an infringement on its paid-up capital, or with as little reduction in dividend as possible ; 2, thereby to give steadiness to the market value of the shares ; y, to increase the basis of proprietors' funds upon which the lia- bilities rest, and so to strengthen public confidence in the stability of the bank. Generally speaking, the reserve-fand is formed by the gradual accumulation of undivided profits ; but so essential a featui-e is it now deemed to be, that there have been sevez'al recent instances in which, on the establishment of a new bank, the shares have been issued at a small jjremium in order to create a reserve-fund at the yeiy outset. This practice seems to be a sound one, and it can readily be carried into efiect in most cases, and especially where the bank is foi-med to take over an existing business. Whon the shares of an established bank have attained a fair premium in the market, and an increase of capital is found desirable, a considerable acces- sion to the reserve fund may be very advantageously secured by issuing new shares at a premium, and carrying the amount of the premium to reserve-fund. This has recently been done by many of the English provincial banks. The new shares are frequently D 34 allotted amongst the shareholders at a price cousiderably below their actual market value, and thus the operation, besides its other . advantao-es, yields a welcome bonus to the proprietors. It is worthy of remark that in the case of the following purely provincial English banks, the reserve-fund, including undivided profit carried forward, exceeds or nearly equals the paid-up capital. Banks. [Banks of Issue printed in Italics.'] Paid-up Capital. Reserve and Balance I'oiward. Dividend and Bonus per Cent. 1. Carlisle C'dii and Dhtrict Banlc .... 2. „ and^Ciimherlnnd Banl-g. Co. 3. Bank of Whitehaven, Limited 4. Lancaster BanMng Company £ 80,162 75,000 98,530 275,000 109,080 90,990 40>575 132,500 203,900 300,000 100,000 85,000 £ 03,025 103,836 96,797 276,216 120,000 80,892 37,273 146,056 221,219 266,229 96,582 86,484 £ 20 21 20 30 23 6. Torlc Union BanVutrj Company .... 20 20 16 9. Birmingham Joint Stock Bank 10. , ,, and Midland Bank .... 11. Stourhridge and Kidderminster 12 North Wilts 20 20 20 20 Nine of these twelve banks are banks of issue. As might naturally be supposed, the banks which have reserve-fands so large in relation to their paid-up capital, are found to pay very high divi- dends. In the above Hst eight of the banks pay 20 per cent., one 2 1 , one 23, and one 30 per cent. In ordinary circumstances, a reserve fund equal to one-half the paid-up capital is quite ample. When it considerably exceeds that proportion, it may be good policy to capitalise a portion of it. and several instances might be adduced of English country banks which have treated part of their accumulated profits in that way. Xumher of Proj^rietors. Table XVII. — United Kingdom Joint Stock Banks. Froprieto}-s, December, 1874. Number of England and Wales — Purely Londrn London and provincial Purely provincial Isle of Man Total for England and Wales (ex- "1 eluding Bank of England) J Scotland Ireland (esclii.«ire of Bank of Ireland not"! ascertained) j Total for United Kingdom .... Proprietors. No. 14,007 10,843 32,105 574 57,529 13,788 12,279 83,596 per Bank. Ko. 1,167 1;549 331 287 487 i>-53 610 Proportion of Proprietors to Population. 1 Proprietor in 416 253 433 391 35 The figures in the last column indicate that banks are more popular as investments with the Scotch than Avith the English or Irish, Dividend. Table XVIII. — United Kingdom Joint Stock Banks. Dividend per Cent, per Annum, including Bonus, Ticelvc Months ending June, 1875. Locality. Lowest. ' Highest. Average. Englaud and Wales. Piu'ely London — ^ senior banks '5 5 18i 10 i^iV •S others Total II banks 5 ! 18 i- .London and provincial — z senior banks (unlimited) <; other banks (limited) x8 23 4 10 84 Total 7 banks 4 ! 23 Purely provincial — si issuino' banks 8 30 3i 1 23 1 6i 4i non-issuing banks Total 94 purely prov'. banks. ^55- ' 30 143- Scotland, ii banks 9^ 16J i3i Ireland, 9 banks II 20 15 The absolutely highest dividends are : — Per Cent. Lancaster Banking Company 30 Whitehaven Joint Stock 25 Bradford Banking Company 25 Lincoln and Lindsey Bank 25 Yorkshire Banking Company 24 National Provincial Bank of England 23 Bury Banking Company 23 Wills and Dorset Banking Company 22 Carlisle and Cumberland Banking Company 21 ^'ote. — Banks of issue printed in italics. Market Price. For the purpose o£ comparison the premium per cent, on the capital paid up is the readiest measure of the market price. The .averoges are as follovs's : — d2 0/» T.iEi.E XIX.— United Kingdom Joint Stock Banks. Pixmium per Cent, on I\:id-up Capital, AugvAt, 1875. Localitv. England aiiA Wales. Purely London — 3 senioi* banks 5 others 1 „ at a disco tint 2 ,, uo return London and proTineial — 2 senior banks, unlimited 4 others, limited I „ at a disconnt Purely proTincial — • 49 issuing banks t; „ no return 39 non-issuing banks 1 ., no return z ,, at a discount. I ,, at par Scotland Ireland It is worthy of remark that only four of the banks in our tables; are at a disconnt. For eight there is no market price ascertained. The absolutely highest premium is that of the Lancaster Banking Company, 520 per cent.— their 25/. share selling at 155/. Yiel.d to Investor. Table XX.— United Kingdom Joint Stock Banks. Yield 'per Cent, to Purchaser at Market Price of August, 1875, and at the Rate of Dividend and Bonus per Cent, per Annum paid for previous Tifdve Months. Ilioilicst yield. Average Yield. Banks. England and Wales. Purely London — 3 senior banks e, others 8 banks. London and proTincial- 2 senior banks 5 others 7 banks. I arely provii-cial — 49 issuing banks 42 non-issi ing banks 91. banks Scotland, \ \ bank^ Ireland, 9 banks Lowest Yield. £ s. d. 4 19 3 c, - - £ s. d. 5 17 11 i G 18 G £ s. d. 5 7 7> 654 4 19 G IS G 5 IG 2 G 1:3 1 5 14 1° 614 5 5 3 G 13 4 5 19 6 4 7 8 6 8 9 3 4 11 8 5 5 18 15 6 10 3 ~ 6 9 •1 S , 3 17 3 4 4 - G .", - 4 18 - 4 5 1 5 •1 4 4 16 8 . 37 WLILsL tlio snu.llut\s.s of the yield to the investor at tlie market price, and dividend and bonus per cent., may bo taken in the easu of established banks to be the test of th'j estimation in wliich the bank stands in the eyes of the public, allowance must be made for the circumstance that in very recently established banks the market price geneia!l\- represents, more or less, the expectation rather than the actual realisation of success. The absolutely lowest yield to the investor amongst the English banks was, at the date of my figures, 3^. 2s. 6d. per cent., in the case of the Derby Commercial Bank, fj'iinlted. The absolutely highest yield is 9/. 4.S. 8(7. per cent, in the case of the Industrial Bank, Limited, Newcastle-on-Tyne. The appreciably lower yield shown by the Scotch and Irish banks evidences the greater popularity of bank shares as an invest- ment in these parts of the United Kingdom. I revert to the yield to the pui-chaser, and the circumstances -which regulate it, in dealing with the tables of banks wbieh pub- lish balance shctto. Circidatton of Kotce. The following is the number of the joint stock banks of issue of the United Ivingdom : — Bank of England i Of the muctj-scTen purely provincial English banks 54 All the Scotch banks 11 Of tlic nine Irish banks 6 Total joint stock banks of issue The circulation of these banks was as follows on the aveingc cf the year 1874. (See Mr. Palgrave"s Tables) : — Joint Stock Dank;. 1 Bank of England.. ^^ English provincial 1 1 Scotch 6 Irish Total joint stock banks ArtiKil Avera'^u Ciuulatiou, lS/4, :i!- |.er Mr. Pal''i-.n e's Tab cs. :^, 766,4 — £ 23,26 1. 000 2,:3G(»,0C0 ufJJ'O.OOO GJ69,000 11,203,000 This branch of my subject is fully discussed in Section VII. 38 >'umbei-. II. Published Bala-nce Sheets of Joint Stock Bakks. Tahles. All the purely London joint stock banks ai*e understood to- publish balance sheets, but I have been able to obtain those of only seven, which are tabularised and analysed in Tables XXI, XXII , and XXIII. All the seven London and provincial banks publish balance sheets, and these are treated in Tables XXIV, XXV, and XXYI. Of the ninety-seven purely provincial English banks in Table III, fifty-six publish their balance sheets, and forty-one, sO' far as 1 have been able to discover, do not. Of the fifty-four English banks of issue, twenty-two publish balance sheets and thirty-two Table XXI. — Purelj/ London Joint Stock BavJ; Balancf [OCO's omitted, tlius Purely Lonilou Banks. Esta- blished. Subscribed Capital. Liabilities. Unc:il!ed Capitiil. raid-up Capital. London and Westminster Bank. London Joint Stock Bank Union Bank of London City Bank Imperial Bank, Limited ... Central Bank, Limited ... Alliance Bank, Limited * 1834 '36 '39 '55 1862 '63 '71 I0,0OO, 4,000, 4.5CO' 1,200, 200, 2,000, 8,000, 2,800, 3,105, GOO, 1,575. 100, 1,200, 2,000, I,20C. 1-395' 600, 6'/5- 100. 800, Totals Arernffes , 14,150, 7,450.' 17,380, 2,4S3, 967. * 49,450?. appearing on both sides of balance sheet as outstanding f Estimated. 30 appear not to do so. Of the forty-three banks of non-issue, thirty- fotu" publish balance sheets uud nine seem not to do so. In Tables XXVII, XXVIII, and XXIX have been summarised and analysed the balance sheets of forty-nine purely provincial English banks, of ■which twenty-two are banks of issue and twenty-seven are banks of non-issue, twenty-four are unlimited banks, and twenty-five arc limited banks. For facility of comparison the banks are classified in districts as in Table III. The balance sheets of the Scotch banks, all of which publish their accounts, will be found in Table XXX and their analysis in Table XXXI. Of the nine Irish banks, the balance sheets of only five are published. These are treated in Tables XXXII, Xxiail, and XXXIV. Sheets for Tivelce Months ending December, 1874. 80,233 = 30.235,000?.] 5 C 7 Liabilities. 8 Totd Resources. p 10 ■ 11 1:: Assc:.s. Reserve, including Balance of Profit Carried Torward. Money Lodged, including Dividend Due. Acceptances. Bills and Advances. Government and other Securities. ■ Cash . Properly Account. Number. 1,015, 515, 482, 174, 94, 23, 191, 30>-35> l6,I32,t i4>227, 3-3 1 S, 2,142, 773. 1,922, 1,038, 4,52 7,t 4,9o7,t 3,261, 1,068, 532, 34.-88> -->374. 21,061, 7,3 53> 3,979> 896, 344r> 26,428, 18,871, 12,698, 6,181, 3,309, 591, 2,726, 3,999, 1,080, 2,941, 3-9, 7-, 82, Si, 3,861, 2,297, 5,139, 788, 577, 186, 638, 126, 285. -54, zz 37, 1 2 3 4 5 6 7 2,194, 356 68,749, 9,821, 15,383, 2,198, 93.-396, J3>34-, 70,804, 10,115, 8,584, 1,226, 1.3,486, 522, • 1,5-7, — accoixuts of old bank to be realised is omi<^ted in these columns. X Cover in hand, amounting to 7,590,154?. 40 Table XXII.— Pm/vZ^ Lrnl.j.i Joint Stock Bank Balance Shrets [OO's omitted in Columns - and t] « 1 2 Ann!} i 5 G Ratio Net Ratio per Charges Ratio 1 Ratio per Number. Pnrely London Banks. per Cent. Pr(,(it, Cent, per or per Cent. Cent, per of Reserve Fund less Cliarges. Annum of Kel Profits \\ orkini; i;.\penses. of Charges to ' Annum of ; Charges to to Paid-up [OO's to Total [GO'S Act Liabilities CapiiaL omitted.] Resources. omitted] Pi-oiits. to Puhlic. Per cnt. £ Per cut. £ Per ent. Per cnt. 1 Loiidou aud AVestminster Bank... t;! 412,0 I'ZO 151.5 S^'S 0-48 2 London Joint Stock Bank 43 269,2 1*20 88,8 33"o 0-43 3 Union Bank of London 34 255,5 ,..{ IN'ot stated } - — 4 City Bank -9 14 23 24 61,6 0-84 42,6 69-1 39*i iz'ro 41-6 0-G5 5 Iini3ei"ial Bank, Limited 59,4 23.8 i 0-12 6 Central Bank, Limited 11.3 66,3 1-26 1-92 14,2 27,6 1-84 1-12 7 Alliauce Bank, Limited'* G Bunks Totals 1,135,3 348,0 C Banks ; G Banks Averages 37 162,2 I"2Z — 39'6 0-54 * 49,45 o^- appearing on both sides of balance s licet as itstanding Table XXIIL— Purehj Londoii Joint Stock Banks. Profits, dividends, and I'rices, Januar?/, 1875. Purely Loudou Banks. 1 J 3 4 5 G Dividends and Prices. Xuni- l)er. Ratio per Cent. of Net Profits to Pui i-up Capital. Dividend per Cent, per Annum, inekuling Bonus. Amount per Share Paid. Miukct Price, Jan., 1S75, Ex. Div. PiC- mium per Cent. i'leUl ])er Cent. at Market Price. 1 2 Loudon and Westminster Bank... London Joint Stock Bank :o-6 22-4 '8-3 io'3 8-8 "•3 8-3 21 21 17^ 10 S 8 8 20 I*; 10 15 5 10 75 51 45 13i 18 8 13 ^75 240 1903 20 60 30 £ s. d. 5 12 - 6 3 6 3 Union Bank of London 6 - G 4 Citv Bank 7 10 11 5 Imperial Bank, Limited 6 13 4 6 Central B;ink, Limited 7 Alliance Bank, Limited 6 3 1 Totals 16 8 13^ — _ ! _ Avera f es G 3 4 for TweltH 41 jfonihs ending/ Dc'ieinhM; 1874, Aiiahjsis. [DOD'ri omiUcil ill Culiiiiiiis S. '.), Id, ;iiul 1:'..] 7 b 9 lu a u l:i U Analysis. K.I til) Kiitio Number Av(ra|,'c; Lialiililies I.ialjililifs I'ro- per (3eiit. of \)n- Cent. Govcnimeut per Ciiil. (,f iVnnilicr. of )., Public to priutiirs' I'ropriclors' J'ihkIs ol Uncallcil Ca])ltill to Lialiilitics Scciirities, Govei niiient Seciiiitics, nifiits. at each riiblif. lunds. to Lialiilitifs to Casli. &c. Cn>l.,.Ve, to l.'al;;!itirs Oilii'c. Tulilio. to I'uljlic. to I'lialic. Ko. £ £ £ Per int. Per cut. £ Per cut. 8 3,9U9, 31>i73> 3,015, 9-6 25 -G 7,8Co, 25-1 1 6 3, 113, -0,659, 1,715, 8-3 136 3,377, lG-3 2 5 3, bo 7, 19,184, 1,877, 9-8 lG-2 8,c8o, •12-1 3 6 1,09G, 6,579, 774, 11-8 91 ',117, 17-0 4 3 l/'70, 3,210, 7G9, 24-0 49-1 64V, 20-2 5 s 155, 123, 16-0 13-0 268, 31-8 6 1 2, 15 1, -.•454, 390, 40-4 48-0 719, 29-3 7 34 — B4.133, 9,263, — — 22 c;o, — 5 2,174, 12,019, 1,323, I ro 20-7 3,153, 2G-2 iccounts of old bank to be realised, is omitted in these columns. Tx\.BLE XXVE. — London and Profinriul Joint Stock Banks. Pro/its, Dividends, and Prices Xurabcr. London and Provincial 13anLs. 1 lta!io [ler Cent. of Net Profit to Paid-nj) Capital. Dividend per Cenl. i)ir Annum, ineUiding Bonus. Anicunt per Sliarc Paid. 1 Market Piicc, ■laiuiary lS7u. Premium pel- Cent. G Yic)(l per Cent. :it Piicc. 1 2 National Prov. Bank ot England.. Per cut. 24-41 18-58 1 i"i8 9-60 9-81 14-66 3-96 Pel ci.!. '^3 20 10 9 7i 1(1 ■1 £ {■i 20 4 2C 20 5 £ 84 ■18 29i G5:} 27i 22.', ~8i G I'er ciif. 30c 1 3C0J 88^, 228J 72 , -! Vzl 6<; Pis. £ s. d. 5 15 - 2 6 9 6 18 3 4 5 6 7 Consolidated Bank, Limited Midland Banking Co., Limited ... London and South- Western, J^imd. „ Provincial B., Limd. „ Yorksliiio B., Limit. Totals 5 16 4 6 10 11 G 13 4 G 1 3 6 - - 17-6 12 — — n9i _ Averages G 2 8 42 Table XXIV. — London and Provincial Joint [I'OO's omitted thus Loudon and Provincial Banks. 1 When Estab- lished. 2 Subscribed Capital. 3 Uncalled Capital. 4 5 Liabilties. sumbe^-. Paid-lip Capital. Reserve, iricludins Balance of Profit Carried Por-.vard. i5 „ 207.= 562,5007. J London and Comity Bank 1833 '36 1863 '63 '62 '64 '72 3>II^; 3>75o.- 2,000, Iji^OO, 831, 300, 632, 1,731, 2,402, 1,200, 1,200, 665, 150, 518, 1,378, 792, 1 1,348, 1 697. 3 4 5 6 7 Consolidated Bank, Limited Midland Banking Co., Limited .... London and South-Wcstn,, Limd. ., Provincial B., Lim.... ,, Yorkshire B., Lim Totals 800, 300, 166, 150, 114, 118, 45, 14, 31, 2 — 12,125 1,732. 7;869, 1,124, 4,256, 1 1,699, 608. i 243. Averages Include? Table XXV. — London and Provincial Joint Stocl- [OO's omitted in Columns 2 and 4-, thus 336,5 = 33B,;00?.] London and Pi-ovincial Banks National Prov. Bank of England. London and County Bank Consolidated Bank, Limited Midland Banking Co., Limited ... London and Soutli-\Yestn., Limd ,, Provincial B., Lim.. Yorksliu'e B., Lim... Totals Averages 1 Kalio per Cent. of Reserve I'und to Paid-up Capital. 2 Net Prcfit, less Charges, [OOO's omitted.^ Per rnt. 57 52 15 15 8 20 2 £ 336,5 250,5 894 28,8* 16,3 22,0 4.-5 40 748,0 ic6;9 Ratio per Cent. per .\nnum of Net Profits to Total Resources. Per cut. 1-28 1-00 209 1-62 1-48 1-46 0-88 Charorcs or Work- ing Ex- penses. [OO's omitted] £ 298,9 29:3 25^9 23.1 3^.5 10,3 663,6 Ratio per Cent. of Charges to ISct Profits. Per cut. 88-8 98-0 32-8 90-0 141-7 138-7 22S-9 88-7 Ratio per Cent, per .Annum of Charges to Liabilities 10 Public. Per cnt. 1-24 i-c8 2-62 AYithoi'.t deduction of 5,ccc/. taken from reserve fund to cover exceptional loss. 43 it'tocL- BanJcs. Balance Sheets for year 1874. 3,11-3, ^ 3,112,000/,] 6 7 « 9 10 11 12 Liabilities. Total Resources. Assets Money Lodged, including Dividend dnc. Aceeiitances. Bills and Advances. Gcvcrnmcnt and other Securities. Cisli, &c. Property Account. Xu'.r.l;er. i3)0<53> 1,043- 2G,276, i5,'53 7, 6,056, 4,168, 415, 1 20,072, 2,780, 21,897, 16,893, 2,083, s^s^^--. 408, 2: 3,115; i>+32> 916, =46, I, 4,277, 1,778, 1,097, 3,089, i,3-9. 393." — 1,510, 508, 9-6, 457, 361, 198, 5'> 22, 16, 0- 7 50..318, 4,070, 60,311, 39.304 8,712, 11,230, 1,105, 7,i8S, — 8,621, — — — — acceptances. Banh. Analysis of Balance Sheets, 1874, [OOO's omitted in columns 9, 10, 11, and U.] 7 8 9 10 11 12 Eatio per 13 Ratio per U 15 Ratio per Number Number Liabilities Liabilities Pro- Cent, of Proprietors' Cent, of Uncalled Govern- ment Cent, of Government Number. :of of Sub- at each 'Office, to prietors' I'unds to Liabilities Capital to Liabilities Secui'ities, Securities, Cash, &c., to Branches. Branches. to to Cash, &c. Liabilities Pnb:ic. Public. to Public. No, No. £ £ £ Per cnt. Per cnt. £ Per cnt. 131. 3 178, 24,106, 2,171, 9-0 — 10,22:;, 42-4 1 list 153, --,852, 2,045, 8-9 — 7,-556, 33-2 a 3 840, 3,319- 919, 27-7 1,016, 30-6 3 22 5 62, 1,43-, 346, 24-1 83-8 229, 16-0 4 26 34, 917, 180, 19*6 72-5 261, 2S-4 5 54 — 24, 1j3=9, 181 13-6 11-3 562, 4.2-3 6 10 — 36, 393, 116, 29-4 132-0 SS' 14-0 7 397 8 — 54:348, 5,958, — — I9.-944. — 57 — 1,346, 777,0, 851, io'9 — — 36-7 t Includes 5ub-branc' les. N.!e. —For Tab e XWI, see p. 41. u Table XXVII. — Purc^n Proriiictal English Joint Stock [OOO's omittcil, Ihus 2(.0, = 2G0,O0O?., Purely Provincial Banlvs. [Banks of Issue ai'c in IlnUcs.'] I. Cumberland and Northumberland. Carlisle ami CHmbcrland Bau/c ... Cumherlaiid Union B. Co., Liiidd. Carlisle CUtj and District Banlc... Bank of Whitehaven, Limited ... North Eastern B. Co., Limited ... II. Liverpool. Adelphi Bank, Limited Liverijool Commercial B. Co., Lim „ Union Bank National Bauk of Liverpool, Lim. North Western Bank, Limited ... Xorth and South Wales Bank III. Manchester District. i>Iancliester and Liverpool Dis- trict Banking Company Manchester and County B., Limd. Union B. of Mam-^icstci; Limited. Lancasliire and Yorkshire B., Lim. Manchester Joint Stock B., Limd. Parr's Banking Company, Limited IV. Yorkshire. SwaJedale and Wen.stej/dale B. Co. Bradford Banking Company ,, Commercial J. Stock B. „ Distinct Bauk, Limited „ Old Bank, iiHi^Yec? Bauk of Leeds, Limited Halifax Commercial B. Co., Lim. Yorkshire Baaking Company Sheffield Bankiny Company Capital. 1,500 shares at -IW.l. = ".O'Mifir;?. 2,37(5 „ S'l^. = US.^OU?. When Esta- blislieil. 1S3C '29 '37 '37 ISGl '32 '35 'G3 'G-l 1S3G '29 '62 '36 '72 1873 'Go '36 '27 '33 '62 '%\: 'G4 '38 '43 '31 Pate of Balance 1&71. Dec. Dec. Doc. June Dec. Dec. June Dec. Subscribed Capital. 300, 540, 160, 800, 700, 600, 75o> 1.080, 4;o, 4 4c o. 947, ^00, S40, 1.020, '968, 6co, 983. 605, 240, 4i9> Uncalled Cajiital. 225, 315, 80, 123, 540, 130, 350, None 300, G75, 36, 905, 3,710, 531, 250, 202, 1,1G0, ^/■7, 612, 774, 422, 590, 454, 120, 250, 126, 6 Lialjilities. Paid-up Capital. Reserve, iueludiug Balance of Profit Carried Fornard. 75. 80, 99> :6o,* 130. 600, 45o> 405, 384> 905, 660, 417, 2£;o, 86, 290, 63, 408, 194' 2-7, 151, 120, 250, -93, 104, 83, 91, SI, 81, 5, 204, 164, 93, 101, 212, 572, 350, 123, 34, 18, 86, 33, 265, 163, 112, 137, 42, 70, 148, 108, * Of the capital of this bank 20,000/. is in d. '('erred shares given in payment of the preliminary t Bills rediscounted, 131,600?.; credits, drafts, &c., 97,900?.; total, 229,500?. 4 J Banks. Balance Sheets of Fortij-Xi le Eanls, lh74. 1 except in Col. 15.] 7 8 y 10 u u 10 11 13 1 LiabiliUcs Totiil Assets. Aiillioriscd Money Cir- ■ Covcrnment Number. Lodjied, inchulin^ culitii.n Acrejit- r.esourei-s. Hills and . , . . ::!id other C;;s!i, S:c. Property Issue. Dividend of aiices. .\dvanccs. 1 „ Securities. .\eeount. due. Notes. £ 617, 22, — 818, — 808, — 9, 25,610 1 i,8;6, 35, — 2,ig:s, i,'534> 75, 4'3, 47, 35,395 2 658, 20, 850, V \ J 5, 19,972 815, 3 597, 27, — 813, /'5, 41, 49, 8, 32,681 4 3 J 4. 5, G5'.i, 5 '", 5G, 32, 13, 5 189, 321, 268, 34, 22, 6 I.i27, — — 1,781, 1,540, — 91, 150, — 7 2,571, — 774, 4,109, 2,947, — 1,126, 36, — 8 621, — 40, 1,201, 1,071, — 108, 25, — 9 1,125, 3,^91, 62, 2iO,t 59, 1,860, 4,007, 1,686, >. T41, 33, 85, 63,951 10 1,2. 33, 11 i2>445, _ 150, 14,071, 9,645, 1,115, 2,860, 151, 12 V ; 5,794, — — G,S04, — G,7G6, 1 — 3S, — 13 1,588, 67, 2.195, 1,93c, 232, 33, 14 626, — 909, 31G, 754, — 1 '2, 3, — 15 -41, — 344, 9 — 16 2,904, — 3,280. 1,848, 101, i,3C0, 3^! — 17 i 747, 2,071, 49, 49, — 892, 2.702, 6.-8, 1^ < J 5, 54,372 49,293 234, J 18 2,787, — 19 570, 20, 917. — 937, — 9, 20,084 20 1 716, — 1,055, — 1,035, — 20, — 21 1,165, — 1.G95, — 1,675, — 20. — 22 423,1 388, 11, GIG, 590, 577, — 32, 7, 4, ■3,733 23 — 585, — 24 2,444, 112, 2,954, — 2,886, — 68, 122,532 2a 1,456, 37, 1.S93, — 1,870, — 23, 35.843 26 expenses, tlie amount of which appears among the assets inclnclf d in the item " bills and advances." X Including acceptances. 46 Table XX VII. — Purehj Fi-Qciackd English Joint Stock [flCO's omittetl, tlius ! 1 2 3 i 3 6 Piu'ely Proviucial Banks. [Bauks of Issue are in Italics.'] Wlien- Estab- lisbed. Date of Balance, 187-1. Subscribed Capital. Uncalled Capital. Liabilities. Number. Paid-up C' pital. Kesorve including iialauce of Profit Carried I'uiward. 27 28 29 Sheffield and Sallamsliire Bank „ HotJierham Sank .... SliefBeld Union Banking Company 1836 '36 '43 June Dec. June c;o2, zS7, 550, 311, 115, 161, 17-, 55, 86, 17, 30 31 32 1 33 v. Derby, Notts, Lincoln, Leicester. Burton, Uttoxeter, S,-c., TJnion B. Nottingham Joint Stock B., Limd. Stamford, Spalding, and Boston "1 Banking Company J Leicestershire Banking Company 1839 '65 '32 '29 Dec. 260, 477, 2C0, 500, 130, 382, None 250, 130, 95, 200, 250, 69, 32, 103, 90, 34 35 VI, Black Country. Staffordsliii-e Joint Stock B., Lim. County of Stafford Bank 1864 '36 Dec. S7-, G9S, 60 i;4> 60, GO, 35, 36 37 38 39 Lloyd'sBanking Company, Z//M?Y(?rf Birmingham Joint Stock 'B..Lim. „ Banking Co., i/;«iYerf ToM-n and District B. '65 '61 'm '36 June 2,l8l, =,039, i.-549> 400, 1,832, 1,835, 1,394, 240, 549, 2C4, 160, 129, 219, 121, 61, 40 1 Wolccrhampton and Stafford- \ shire Banking Company J '32 Dec. 5 CO, 400, 100, 11, «{ -{ VII. "W. and S. Covmties. Stourbridge and Kidderminster \ Banking Comjxiny J Worcester City and County'] Banking Company, Limited .... j 1834 '40 June 250, I,CCC, 150, 750, 100, -50, 86, 102, 43 44 1 Bucks and Oxon TJnion Bank,ij;«. West of England and South\ Wales District Bank .'. J ■60 '34 Dec. 400, I, ceo, 320, 250, 80, 750, 18, 150, 45 46 47 48 49 Devon and Corn-wall Banking Co. Thi'ee Towns Banking Co., Limited Wilts and Dorset Banking Co Hampshire Banking Company .... North Kent Bank, Limited '32 '63 '35 '34 '64 J 400, 100, 375> 750, 65, 272, 50, 125, 600, 43, 128, 150, 87, 1, 155, 41, 2 Totals ' — — 3 Mi 3, 743, 23,873, 487, 11,940, 244. 5,282, 108, Arerages * Cash and brokers ' bills. 47 Banks. Balance Sheets of FoHy-Nine Banks — Contd. ?33 = 733,000?., except iiiCol. 15] 8 9 Liabilities. Money Lodged, including Dividend due. Cir- culuiion Accept- or auccs. Notes. 549 > i,6i8, 458, 1,206, 576, 1,265, i>349. 685, 4i-> 4-974. 1,632, 1,1 19, 943. 878, I. -133. 1.023, 702, 4436, 1,699, 46, 3,o86,t 2,116, 80, 00 53, [ — ■18, [ — 4G, G3, 0. ! — ■9.175. 1,616, IG. 49, — 906, 1,325, Total B.CSOUITCS. 809, 1,918, 658, 1,453, 704, 1,614, 1,752, 920, 51G, 5,452, 2,054, 1,395, 1,164, 1,030, 1,368, 1,377, 800, 5,416, 1,914, 97, 3,567, 2,306, 101, 98,625, 2,013, 13 i:i .\8SctS. 11 Bills and Advances. Government and other Securities. 965, 1.237. 796, 400, 804, 1,904, 653, 1,432, 689, 410, 265, 37, 40, Ciisli, &c. Property Account. 80, 1,647, 1,084, 1.033, 5,395, 224, 55, 48, t,coi. 1,036, 4,406, 93. 1.553. 1.43 1, 91. 54, 164, 234. 63. 30, 279. 173. 786, 502, 418, 1,914, 1,572, 311, 4. 395, 524, 15, 21, 15, 28, 17, 8, 56, 18, 22, 19, 27, 27, 13, 90, 46, 40, 2, Authorised Issue. Number. £ 23.524 52,496 60,701 55.721 S6,o6o 9,418 55.378 56,830 6,848 S3-535 76,162 Includes acceptances. 48 1 Table 'XXYUL—Anah/si's of Balance Sheets 1 of Forty- 1 [OO's oni ittcd in Columns 3 an d 4, thus 18,7 = 18,700/.; * |" 1 ~ 3 4 5 6 » R;ilici Ratio Ratio Ratio per jS'uniber. Purely Provincial Eauli^. per Cent, of Net Profit, per Cent, per per Cent. of Cent, per A.nnum of [Banks of Issue art' in l/tilics.'} lleserrc I'und lo lees Annum of Net Profits C'largcs. Cliarijes to Cliarjjes to Lialidities Paid-up Cluir^'e^. to Total Net to Capit;.]. Resources. Profiis. Public. I. Ctimbsrland and Northumberland. li Per rut. £ Per cut. £ Per cut. Per cnt. ^ 1 Carlisle and Cumherland HaiiJc .... 13S iS,7 2-28 — — — .' 2 Cumberland Union B. Co., Limtd. 37 45,6 2-10 15.9 34-9 0-85 g Carlisle Citji and District Bank.... 113 - ' -3 2-50 — — ~ 4 Bank of TF/iitehanen, Limited .... 93 i8,c 2'21 4,0 22'2 o'64 5 K'ortli Eastern B. Co., Limited .... 31 11,9 1-80 9>4 79-0 z-96 - II. Liverpool. ' 6 Adelphi Bank, Limited 4 58 9,8 43-7 3-02 2-45 s .Z 53-1 rjG 7 Liverpool Commercial B. Co. ,Lim. 8 „ Union Bank 27 89,3 3.^.4 2-17 1 9 National Bank of Liverpool, Lini. 20 2-94 — — — 10 IS'"ortli Western Bank, Limited .... 25 3 7,9 2-04 — — — 11 XoriJi and South Walcf Bank .... III. Manchester District. 55 66,4 1-44 37,5 56-5 0-93 -{ Manchester and Liverpool Dis- 1 trict Banking Company J G3 ZII,I 1-50 95,2 44-1 0-74 13 Manchester and County B., Limd. 53 129,4 1-90 57,1 28-7 0*64 14 Union B. of Manchester, Limited 30 63,8 2-90 --,3 34-9 1-35 15 Lancashire and Yorkshire B., Lim. 14 19,5 2-14 9,- 47-2 1-47 16 Manchester Joint Stock B., Limd. 21 10.1 2 '92 5'- 51-5 z"i5 17 Parr's Banking Company, Limited IV. Yorkshire. 29 68,6 2-09 --,5 32-8 0-77 18 Swaledale and Wensleydale B. Co. 52 15,9 1-78 4,4 27-7 o'55 19 Bradford Banking Company G5 7-, 3 2-51 — — — 20 „ Commercial J. Stock B. 81 4c,o 4"22 — — — 21 Bradford District Bank, Limited 50 3 --5 3-08 7,3 22-5 \'cz 22 ., Old Bank, Limited 35 55,1 3-25 — — — 1 23 Bank of Leeds, Limited 28 14,0 2-27 ^,- 22-8 0*76 24 Halifax Commercial B. Co., Lim. 59 i7>i 2 "92 — — — 25 r York-shire Banking Company Sheffield Banking Company .,.."| 59 90>- 3-05 " ~ 26^ Capital. L 1 ,.500 shares at iM)l. = "00,(i(i i/. [ 3G .^-■•5 2'77 — — — L 2,370 „ .'iO/. = 11S,00(V. J 27 Sheffield and Hallamnhire Bank 30 i7>9 r,Ji. — — — 28 „ liotherham Bank .... 53 3 1 -4 i-r;:3 — — — 29 Sheffield Union Banking Company 28 ii.9 '•}'■} ~ 49 Nine Purdj Provincial English Joint Stock Banks, Ls74. COO's omitted in CoU-. 9, 10, 11, and U] 7 8 Niimljcr Number of of Sub- Brandies. ]!r;incljcs. No. 5 No. 13 '1 4 3 _ 14 ~ 1 — — — 2 — — — 27 9 41 lO 17 14 9 6 G 2 1 9 7 3 — 1 — 2 — 1 14 7 3 — 4 — 2 I I 1 9 Average Liabilities to Public at each Oflice, ex Subs. £ lUG, 133, 13G, 15G, 21, 94, 1,227, 3,345, 220, 1,354, 143, 300, 322, 110, 89. 121, 290, 199, 2,120, 590, 358, 388, 423, 200, 170, — 373, 571, 334, 14G, Liabilities (0 Public. £ 639> i,86o, 678, 318, 1,227, 3,345, 661, 1,354, 4,01 1, •2,594, 5,794, 1,655, 626, 241, 2,904, 796, 2,120, 590, 716, 1,165, 423, 399, 2,556, 1,493, 571, 1,671, 438, Prn- jiriftors' l'lliul3. £ 179, 308, 171, 190, 341, 135, 554, 764, 543, 506, 59G, 1,477, 1,010, 540, 284, 104, 376, 96, 673, 357, 339, 530, 194, 190, 398, 400, 238, 247, 220, 1:: Ratio per Cent, of Proprietors' Funds lo Liabililics to Public. Per cut. 28-0 i6-6 25-2 30-5 io7'3 71-7 45' 1 37-4 14-8 11-7 17-4 32-6 45'3 43'3 12-9 60-5 47"4 45*5 45'8 47*7 i5"5 26-8 41-8 14-8 50-2 13 Riilio per Cent. of Uncalled Capital to Liabilities to Public. Per cnt. 16-9 19-8 17-0 68-9 28-5 45-4 49-9 59-0 50-6 107-4 30-1 Govern- ment Securities, Gas)), &c. 89, 89, 33, 91, 1,126, 108, 141, 4,275, 232, 152, 1 ,40 1 , 234, 32, la Itatio j)cr Cent, of Government Securities, Casli, &c., to Liabilities to Public. Per cnt. 26-2 14-4 27-9 17-S 7-4 337 16-3 10-4 30-7 33-9 14-0 24-4 48-2 29-4 ••7 50 Table XXVIII. — Analysis of Balance Sheets of Forty-Nine [OO's omitted iu cols. 2 and 4, tlius 27,5 = 27,500^. Xaniber 30 31 33- 33 34 35 36 37 38 39 40- 41 1 42 1 43 44 1 45 46 47 48 i9 Purely Provincial Banks. [Banks of Issue arc in Ttalics.'i Ratio per Cent. of Reserve Fund to Paid-up Capital. Net Profit, less Charges. v. Derby, Notts, &c. Burton, Uttoxeter, Sj'c., Union B. Nottingliam Joint Stock B., Limd. Stamford, Spalding, and Boston "1 Banking Company J Leicestershire Banking Company VI. Black Country. Staffordshire Joint Stock B., Lim. County of Stafford Bank Lloyd'sBaukingCompany,iJmJife(/ Binuingliam Joint Stock B., Lim „ 'Bankmg Co., Limited „ Town and District B Wolverhampton and Stafford- 1 shire Banking Comp any j VII. W. and S. Counties. Stourhridge and Kidderminster Banking Company Worcester City and County Banking Company, Limited Bucks and Oxon Union B., Lim. West of JEnglaiul and South\ Wales District Bank J Devon and Cornwall Banking Co. ty\ Three Towns Banking Co., Limited Wilts and Dorset BanJcing Co. Hampshire Banking Company .... North Kent Bank, Limited Totals Averages , 53 34 51 36 35 58 37 107 78 38 41 86 41 23 20 68 2 62 27 7 44 27,'5 io,7 32>4 37,3 21,1 12,3 88,1 48>7 30,8 i5>5 -96 33>3 18,1 IZ6,2 27>8 2,6 55>3 33>3 i>9 Ratio per Cent. per Annum of jS'et Profits to Total Resources. Charges or Working Ex- penses. ,046,;, 42,1: 1-89 1-52 2-01 2-13 2-2g 2-38 1-61 2-37 2-21 2-62 1-49 2-lG 2*42 2-26 2-33 1-45 2-67 1-55 1-44 1-82 Ratio per Cent. of Charges to Net Profits. 2-07 18,5 56,7 1,6 33>4 26,5 4i8>3 8>5 48-6 Ratio per Cent. ]5«r Annum of Charges to Liabilities to Public. 55-5 44-9 Gl-5 (30-4 79-6 20 banks 42-7 0*90 1-25 3 '45 i"o6 1-25 20 banks •95 51 Purelij Provincial Eiiglish Joiat Stock B'.'.nls — Co aid. OOO's omiticd iu Cuh. 9, 10, 11, and 1 1,] 7 b 9 Average 10 11 12 Katio i)Ci' Cent, of 1:5 Eatio per Cent. n Govern- 15 Ratio per Ccut. of Xuiubcr of Number of Sub- Liabilities to Public at cadi Oflice, cx-Subs. Liabilities to Pro- prietors' Proprietors' Funds of Uncalled Capital ment Securities, Govcruraent Securities, Number Brandies. Branches. Public. Funds. to Liabilities to Liabilities Cash, Sec. Casli, &c., to to to Liabilities Public. Public. to Public. £ £ £ £ 2 — ilS, i.-54> 199, 15 "9 — — — 30 5 — 9G, 57^, 128, 22-2 GG-3 — — 31 9 9 131, I-31I, 303, -3'i — 621, 47-3 32 8 7, 157, i,+ i^, 310, 24-1 — 498, 35-3 33 7 86, 685, 235, 3 4' 3 101-9 117, 171 34 " — 421, 4-i> 95, --'5 — 108, 25-8 35 23 12 207, 4=9 74> 478, 9-6 36-8 — — 36 2 — 51 1, ifiy-, 423, -S'O 112-5 381, 23-8 37 1 — 559, 1,119, 276, -4"7 124-6 ^89, 25-8 38 7 — 118, 943, 221, -3'4 — III, 11-7 39 — — ■ S91, «94. 141, .5-8 — — — 40 12 I 98, 1,182, 186, 15-8 3C4, 25-7 41 9 + 102, 1,025, 352, 34-3 73-2 227, 22-1 43 8 — 78, 702, 98, 14-0 15-6 — — 43 38 4 116, 4,-5'5; 900, 19-9 — 919; 20-4 44 li — 113, i>^99> 215, 12-6 — 45 — — i6, 46, 51, 109-9 108-0 4> 9-3 46 il 8 75, 3. 161, 405, 12-8 — 1=967, 62-2 47 29 — 70, 2,116, 191, 9"o — ^iS, 39-5 48 1 — 40, 80, 21, 29-9 53-7 II, 13-7 49 403 8 97 180, 81,404, 1,661, 17,221, 351, 21-15 25 banks 555 16,126, 29 banks Cy banks 30-9 E ii 62 Table XXIX. — Profits, Dividends, and Prices of Forty-Nine Purely Provincial English Joint Stocl- Banks, 1874. 1 2 3 4 5 c Purely ProTincial Eanks. Ratio per Cent. Dividend per Amount Market Premium Yield Kuniber. [Banks of Issue are in Italics^} of Ket Profit to Paid-up Cent, per Annum, including per Share Price, January, per Cent. per Cent, at Capital. Bonus. Paid. is:5. Price. I. Cumberland and Northumberland. £ s. d. 1 Carlisle and Cumber-land BanJc .... 25-0 22 '; 19i 2974 5 10 8 2 Cumierland Union B. Co., Limtd. 20"; 18 12I 40 220 5 12 6 3 Carlisle City and District Bank.... 26-6 20 1^4 44 252 5 13 7 4 Bank of WhiteJiaven, Limited .... i8-3 20 10 381 285 5 3 10 5 North Eastern Banlimg Co., Lim. II. Liverpool. 4-6 H 6 6J 124 4 12 5 6 Adelphi Bank, Limited 5 10 9 Dis. 5 11 1 7 LiTerpool Commercial B. Co., Lim. 124 10 18 80 6 18 10 8 ,, Union Bank 14-9 7'9 10* 20 29 45 84 6 17 11 9 National Bank of Liverpool, Lim. 61 15 16i 6 3 1 10 North Western Bank, Limited .... 9'4 7 7i 91 30 5 7 8 11 No7-tTi and South Wales BanJc .... III. Manchester District. 17-3 20 10 31 210 6 9- -{ Manchester and Liverpool Dis- "1 trict Bauking Company J 23"3 20 ID 35i 255 5 12 8 13 Manchester and Coimty B., Lim. i8-2 15 15 42 1 8c 5 7 1 14 Union Bank of Manchester, Lim. i5'3 II3 II 21| 94^ 5 16 7 15 Lancashire and Yorkshire B., Lim. 7-8 6 10 134 35 4 8 10 16 Manchester Joint Stock B., Limd. 6-c 10 6 lU 874 5 6 8 17 Parr's Banking Company, Limited IV. Yorkshire. 23-7 15 20 524 1624 5 14 3 18 Swaledale and Wensleydale B. Co. 25*2 20 7i — — — 19 Bradford Banking Company 17-7 25 40 154 285 6 9 10 20 „ Commercial J. Stock B. 20*7 18 20 584 1924 6 3 1 21 ,, District Bank, Limited i4"3 101 35 714 i04f 5 2 10 22 „ Old Bank, Limited i4'o 131 20 50 150 5 10 - 23 24 Bank of Leeds, Limited 9'3 i4'3 7 25 10 311 27 5 10 3 Halifax Commercial B. Co., Lim. 14 23| 138I 5 17 3 25 Yorkshire Banking Company 36-1 24 izi 50 300 6 - - 26 Sheffield Banking Company i8-o 17 140 274 9. 19-1 i5"5 Dividend per Cent, per Annum including Bonus. 29-5 I3'3 22-6 i6-8 21-7 5'- 22'I 8-5 20 17 13s 18 20* 20 Idi lU 10 20 12f 20 11 1G| 5 22 13 \mount per Sliarc Paid. •i ■J .Market Premium Price, per .lanuarv, Cent. 1875. {% 20 m 27 15 67 k 90 I5h 28i in 29 34 ii IGi 18 25i lv4 33i 75 18 40 23 par 41 i 220 262I 240 So i-3i 134s Di?. 3CO I ;o •to banks Yitld per Cent. C s. d. 7 8 2 5 13 4 5 11 2 2 4 8 8 G 3 11 5 12 6 5 10 4. 5 17 7 4 11 8 5 10 8 5 11 1 8 - - 6 2 9 5 14 3 6 5 4 7-9 5 10 - 5 13 - 46 banks 5 19 6 * Profits equal to 63 per cent, on old capital capitali.«^d. 54 Table XXX. — Scotch Joint Stock Bank Balccnce [OOO's omitted, Bants. [All are Banks of Issue] Bank of Scotland Royal Bank of Scotland British Linen Companj Bank .... Commercial Bank of Scotland .... National Bank of Scotland Union Bank of Scotland Clydesdale Banking Company .... City of Glasgow Bank f Aberdeen Town and County \ \ Banking Company J J jSTortli of Scotland Banking \ \ Company J Caledonian Banking Company .... Totals I Averages -I When Esta- blislicd. Bate. Sul>- scribed Capital. 1695 /'Feb. 1874 V „ '75 ,H.^^. r Sept. 1873 1746 1 1810 1 1825 1 Apr. 1873 „ '74 Oct. 1873 '74 Nov. 1873 Oct. '74 1830 { ^P^- 1^,^^ Stock 1838- 1839 Dee. 1873 » '74 1 June 1873 „ '74 1825 j I ^^"- ^h \ \ „ 7o 1836 1838- 720, r Sept. 1873 1,600, L „ '74 f June 187 I „ '7 3 ! 500, 74 4 5 G 1 Liabilities. Uncalled Capital. Paid-np Capital. Reserve, including Balance of Profit Carried Fonvard. 500, J3 1,000, 371, 401, Nn 2,000, 509> Nil 1,000, 361, >y :> 39o> Nil 1,000, 394> 407, Nil 1,000, 394> 418, Nil 1,000, 389> 4033 Nil J? 900, 1,000, ^5Zy 519, Nil 870, 313. " 1,000, 45 1 > 468, 252, 116, 118, 1,280, 820, 85, :> )! 100, 450, 125, 63, 63, 9,467, 9,697, 3>349> — 861, 882, 304, ■345) ^ (1873-74) including balances due by otlier banks,, - ( '73) viz., on open accounts, i.,3 73,300?., bill's •' ( '73-74) including property account. ^ ( '73-74) including cash in hands of London agents ^ ( '73) heritable property yielding rent 6 1,400/., bank '' ( '73-74) drafts and acceptances. " ( '73) viz., on open aceoimts 2,505,100?., bills ^ ( '73-74) also Bank of Mona has 40,000?. under 65 Sheets for the Years 1873 and 1874. thus 252 = 252,000/.] 1 7 8 9 10 11 12 13 u 1.5 [jabiliUes . Total Resources. A.sscts. Authorised Issue. Money Notes in Accept- Bills Goveninicnt and Cash &c Troperly Number Lodged. Circula- tion. ances. Advances. other Secxirities. Account. 10,4SG, 10,881, 628, 6:^7, 2,060, l,4r43, i4.545> i4>352, 10,175, 10,208, 3,830," 3,522, 346, 426, 194, 196, 343, }> 10,597, 10,54G, 84^> 865, 378, 423, 14.326, H>355> 9,987, 10,431, 3,248,' 2,800, 940, 951, 151, 172, 216, }^' 8,118, 7,957, 610, 676, 332, 329, 10,421, 10,352, 7,086,7 7,493, 2,706," 2,222, 502, 513, 126, 124, 438, }^ 9,358, 9,588, i,o::4, 785, 473,c 433, 12,250, 12,213, 8,383, 8,585, 2,796," 2,878, 937, 606, 133, 143, 375, }* 10,480, 11,034, 588, 5S8, 1,356,*' 1,224, 13.918, 14,265, 9,901, 10,515, 3,417,' 3, '50, 476, 475, 123, 124, 297, }^ 9,874, 9,965, 947, 77^, 305, 219, 12,515, 12,364, 9,030, 8,645, 2,694, 2,977,' 638, 586, 152, 155, 454, }« 6,776, 6,859, 7S-) 717, 275, 256, 9,035, 9,351, 6,319,2 6,472, i,597,« 1,705, 952,> 1,006, 168,5 168, 274, }' 7,998, 8,489, 896, 8cj8, 929, 793, 11,007, 11,631, 7,955,3 8,798, 2,059,' 1,877, 993, j 957, See Bills and Advauccs. } 73,^ » "1 J 1,640, 1,848, 172, — 2,180, 2,410, 1,460, 1,880, 418, 251, 270,1 240, 33, 39, 70, J, }' 2,204, 2,479, 340, 397, — 2,949, 3,296, 2,109, 2,334, 516, 564, 291,1 357, 33, 40, 154, }:o 942, 1,053, 97, ii3> — 1,227, 1,354, 813, 897, 266, 248, 125,' 184, 23, 26, 53, }" 78,572, 80,699, 6,877, 6,635, 6,109, 5,120, 104,374, 105,943, 73,217, 76,258, 23,548, 22,195, 6,470, 6,301, 1,137, 1,187, 2,749, 2,749, 8 Banks. 7,143, 7,336, 625, 603, 764, 640, 9,489, 9,631, 6,656, 6,933, 2,141, 2,018, 588, 573, = 250, 250, and cash iu London. 4,945,500/. ; (1874) on open accounts, 1,904,200?., bills 4,567,400?. and shoi't loans. buildings 106,400/. ; (1874) heritable property yielding rent 62,400/., bank buildings ic6, 4,781,100/.; (1874) on open accounts, 2,784,100/., bills 4,708,700/. Manx ^cts. (1873-74) including short loans in London. 00/, 56 Table XXXl.- Amd>jsis of Scotch Joint Slock Bank [OOO's omitted in Kuni ber. ' Banks. Bank of Scotland < Eoyal Bank of Scotland .... -j J Britlsli Linen Company "I t Bank '../ / Commercial Bank of Scot- "1 I land / National Bank of Scotland <. Union Bank of Scotland.... ^ {Clydesdale Banking Com- ~l pany J City of Glasgow Bank < {Aberdeen Town and "1 County Banking Co / r North of Scotland Bank- 1 1_ ing Comjjauy J {Caledonian Banking"! Company j Totals {%:::::::z . ri873 Averages | ,^^ Ratio per Ceut. of Reserve Fund to Paid-up XJapital. 31-4 39 1 Net Profits, (Less Charges). [GO'S omitted.] £ i99>3 202,2 I34>2 163,4 165,8 199,0 184,6 160,1 161,5 146,1 114.7 129,8 3^,9* 34.3 40,2 45.2 18,7 18,7 1,383,8 1,429,6 125,8 129,9 Rate per Cent. per Annum of Net Profits to Total Resources. Per cnt. 29 1-33 1-35 Numljer of Branches 100 106 61 67 96 100 87 91 116 76 79 44 46 19 ^35 562 76 78 Average Liabilities to Public at each Office. £ 171, 168, 117, 111, 146, 132, 112, 107, 142, 140, 95, 94, 101, 98, 80, 83, 46, 52, 56, 61, 52, 53, 108, 106, Liabilitie; to Public. £ 13,174, 12,951, 11,818, 11,834, 9,060, 8.962, 10,855, 10,805, 12,524, 12,847, 11,126, 10,960, 7,783, 7,832, 9,824, 10,181, 1,812, 2,041, 2,544, -^875, 1,0^9, 1,166, 91,558, 92,453, 8,405, Proprie- tors' I'unds. £ 1,371, 1,401, 2,509, 2,521, 1,361, 1,390, 1,394, 1,407, 1,394, 1,418, 1,389, 1,403, 1,253, 1,519, 1,183, 1,450, 368, 370, 405, 420, 188, 189, 12,816, 13,489, 1,165, 1,226, * (1873) including 3,iooZ. "extra or casual profits t ( '74) also 25,000?., or 22 per cent, distributed 57 Balance Sheets for the Years 1873 and 1874. Cols. 3, C, 7. and 10] 8 9 10 11 IJ l.S li 13 10 17 Ratio per Cent. of I'rojirit- tors' Funds to Liabilities t ) the ■Public. Ratio per Cent, of Uncalled Capital to Liabilities to Public. Govcrn- meut Securities, Cash, &c. Ratio per Cent, of Govern- ment Securities, Cash. &.C., to Lia- bilities to Public Ratio per Cent. of Xet Profit to Paid-up Capital. Profits, Dividends, and Prices. Dividend per Cent. per Annum including Bonus. Amount per Share Paid. Market Price, Jan., 1874 and ISTo. Pre- mium per Cent. Yield per Cent. at Market Price. N'umber. Per cut. Per cnt. £ Per cnt. Per cut. Per cnt. Per cnt. £ s. d. 10-4 10-8 3-86 4,176, 3,948, 31'7 30-5 16-52 17-56 13^ 14 Stock 292 315 19a Z15 1 12 4 8 6 11 1 1 - Nil 4,188, 3,752, 3 5 '4 3i"7 9-96 10-11 9 91 Stock )5 19Si 230^ 98^ 13OS 4 10 4 2 8 5 1 ^ i5'o 15 "5 Nil 3,209, 2,735, 3 5 '4 13-42 16-31 13 Stock 275 286^ 175 186^ 4 14 4 10 6 9 1 ^ ia-8 i3'o Xil 3,733, 3,184, 34"4 3-'- 16-58 1682 15 Stoc'i 303 311 203 21 1 4 19 4- 16 5 1 ^ I r'o Kil I) 3,894, 3,626, 3fi 28-z 19-90 18-46 16 Stock 306 313 206 213 5 4 5 2 7 2 f ^ I 2'5 i;-S xn 3,332, 3,563, 29-9 3^*5 16-01 16-15 15 Stock 5) 295 195 5 1 5 1 8 8 1 6 i6"i 19-4 Nil 2,549, 2,711, 3--7 34-6 17-08 14-Cl 14 14t Stock 279 284 179 184 5 - 1 18 4 7 } ^ Nil 3,052, 2,833, 3i'i 27-8 13-18 12-98 10 11 Stock 224 236 124 136 4 9 4 13 3 3 1 ^ =0-3 i8-i 22-9 687, 491, 37'9 24-0 13-06 13-61 12i 7 151 "9t^ i53i 5 13 4 18 10 7 1 ^ 15-9 14-6 41-5 807. 922, 3i"7 3-'i 12-56 14-12 10 Hi 4 9J lOi 143J 1718 4 2 i 2 9 jio i8-i x6-z 38-6 391, 431, 37-6 37-0 14-96 14-96 14 2j 7V 8 200 220 4 13 4 7 4 6 111 30,019, — — — — — — — 28,497, — — — — — — ,4-0 )4-6 — — 32-8 30'8 14-62 14-74 12-91 13-20 — — 167 183 4 16 4 13 6 during tlie year." among the shareholders, being exceptional profit realised in sale of old bank premises. 68 Table XXXII. — Irish Joint BtocW BoiXamm- [nOO's omitted in Columns Num- Ijcr Banks. [Issuing Banks in Italics^ Hibernian Eank ■> Mnnstcr Bank, Limited < National Banlc < Royal Bank of Ireland -j Ulster BanJcing Com- T 2}anii J" Totals M'hen Esta- blished. 1825 1864 1835 1836 1836 Bate of Balance. Oct., 1873 ... '74 ... Dec, 1873 ... '74 ..., Dec, 1873 ... '74 Aug., 1873 ... '74 ... Aug., 1873 ... „ '74 ... 1873 '74 Subscribed Capital. 2,OCO, I,O00, J? 2,500, 1,000, 8,000, 8,000, Uncalled Capital. £ 1,500, 1,000, J> 1,200, 750, Liabilities. Paid-up Capital. 500, 350, 1,500, 300, 250, 2,900, 2,900, Reserve, iiiL'ludiug Balance of Profit Carried I'orward. £ 241, 239> 169, 167, i34> 156, 200, 201, 288, 292, ,032, ,055, (1873) bills 1,151,0007., adrances 809,400?.; (1874) bills 1,265,200?., advances 891,700?. J (1873) bills 1,350,500?., advances 555,300?. Table XXXIII. — Analysis of Balance Sheets of Irish [OO's omitted in Cols. 2 and 4, thus 61,3 = 61,300.] IS" limber Banks. [Issuing Banks in Italics.'} Hibernian Bank -| Munster Bank, Limited < National BanJc A Eoyal Bank of Ireland .. < Ulster BanJcing Com- J pantf t 1873 '74 Areragej, 1873 .... '74 1 2 Ratio per Net Profit, Cent, of Reserve less Fund Charges. to Paid-up [OO's Capital. omjtted.j Per cnt. £ 48 61,3 48 58,3 48 44>5t 48 43,8 9 i79>3 10 187,1 67 Si'"^ 67 47,0 115 '^8,4 117 53,6 — 3 9 ^',5 — 3^9,8 35 33 — Ratio pel Cent, per Annum of Kct Profit to Total Resources. Per cut. 2-78 2-42 1-64 1-47 1-60 1-62 2-29 2-02 1-40 1-26 1-75 1-66 Charges Working Expenses. [OO's omitted.j £ 30,9* 36,1 40,4 130,8 i34>8 20,5 22,1 Ratio per Cent. of Charges to Net Profits. Per cnt. 53-0 81-1 92-2 73-0 72-0 38-7 47-0 4 Ijanks. G7-9 6 Ratio per Cent, per Annum of Charges to Liabilities to Public. Per cnt. 4 banks. I '44 * T;iken from retiu'ns to Committee on Banks of Issue. 59 Sheets for the Years 1873 and 1874." headed L', thus 210, = 2tO,000/. 7 8 9 10 11 VZ 13 11 l.j Lial)ilities. Total Resources. Assets. Authorised T-sue. Money Lodged, iueludiiig jN'utes in Acccpt- Bills and Govcrnncnit and other Cash, Sec. Property N'uniljcr. Dividend Due. Circulation. .\dvanccs. Securities. Account. £ £ £ £ £ £ £ £ £ 1,162, — — 2,203, 1,960,* 195, — 48, None 1 , 1,GG0, — — 2,408, 2,157, 190, — 62, f ^ 2,194, — — 2.713, 2,217, 200, 259, 37, None 1 •> 2,458, — — 2,975, 2,493, 17'?, 240, 66, r - 8,200, i>3'-) 36, 11,181, 7,069,t 2,448, 1,419, 244, 852, }' 8,571, 1-344' — 1 1,";;!, 7,095, 2,679, 1,549, 248, 1,813, — — 2,313, l,906,t 380, 27, Nouo }■> 1,824, — — 2,325, 1,827, 468, 29, ,, 3,025, 6o<, — 4,168, 3,320, ;ii, 1 537, 311, 1 . 3,121, 589, — 4,25', 3,292, 311, 648, — " / " 16,694, 1. 917, 36, 22,578, 16,472, 5,749, 356, 1,163, 17,643, 1-953- ~ 23,530, 16,864, 6,261, 405, 1,163, t (1873) bills 4,697,iooZ.,f iclvauces 2, 372,300/.; (1874) bills 4,683,100 I., advances 2,41 1,90c/. (1874) bills 1,419,700/., ad vances 407 100?. Joint StocJc Batiks for the Years 1873 and 1874. [OOO's omitted in Cols. 9, 10, 11, and U, thus 61-, = W.OOO/.] 7 h 9 10 11 12 13 14 15 Number Numltcr Average Liabilities Inabilities Ratio per Cent, of Proprietors' I'uuds to llatio per Cent, of Govern- Ratio per Cent, of of Branches. of Sub- Branches. to Public at each Office, fo Public. Proprietors' I'uiids. Uncalled Capital to Liabilities ment Securities, Government Securities, Cash, &c., to X um- ber. e.\ Suljs. Public. to Public. Cash, &c. Liabilities to Public. No. No. £ £ £ Per cnt. Per cnt. £ Per cnt. 22 3 64, 1,462, 741, 50'7 102-7 195, I3"5 |l 27 4 60, 1,669, 739, 44" 3 89-9 190, 11-4 34 5 63, 2,194, 519, 23-6 29-6 459, 20'9 L2 34 5 70, 2,458, 517, 2I'I 26*4 416, 16-9 83 29 114, 9,548, 1,634, 17-1 10-5 3,867, 40- £; la 83 29 118, 9,915, 1,656, i6*7 lO'l 4,228, 42-6 4 — 363, i,8n. 500, 27-6 66-2 380, 20'9 I4 4 — 365, 1,824, 501, 27-4 66-3 468, 25'7 40 — 88, 3,630, 538, 14-8 20'7 848, 23 '4 Is. 43 — 84, 3,710, 542, i4"6 20*2 959, 25-8 183 37 — 18,647, 3,932, 5,749, 191 38 — 19,576, 3,955, — 6,261, — — — 102, 3,729, 786, 2I'I 27-2 30-8 102, 3,915, 791, 20"2 26-0 — 52-0 t (1873) also 75,000/., being prcnunm on new i;?siie. GO Table XXXIV. — Profits, Dividends, and Prices of Irish Joint Stock Banks for the Years 1873 and 1874. Banks. [Issuing Banks in Italics.'] 1 Ratio per Cent, of Net Profits to Paid-up Capital. 2 3 4 5 6 Dividends and Prices. Kuniljer. Dividend per Cent, per Annum, including Bonus. Amount per Share Paid. Market Price, January, 1874" and January. 1ST5. Pre- mium per Cent. Yield per Cent, at Market Price. 1 Per cnt. IZ"0 II-7 i;-7 i = '5 IZ'O 17-7 i5"7 21-4 Per cnt. 12 12 12 13 10 11 15 15 20 20 -5 3^ )) 30 10 zl £ 60 81 9 571 67 i: 28.1 30i 101 Per cnt. 1312 140 '53t 1571 125 iS7i 205 315 £ *. d. 5 3 8 2 r Munstci' Baukj Limited s 5 - - 4 14 7 3 National Sank <, 5 11 5 4 7 4 4 17 9 5 4 4 5 Ulster Hanking Company < 4 18 4 4 16 5 4 16 5 i3"7 i3"4 13-8 112 — 176 5-8 1S8 i -l 18 9 '74 1 Puhlication of Balance Sheets. If a bank be sound in position and ably managed, I venture to think it lias much to gain and nothing to lose by the regular publica- tion of a clear statement of its assets and liabilities. The public surely have a right to know something of the position, and the extent and character of the business, of the banks to which they entrust 61 tlioir money. The opinion that a 1 a^oncc slicct gives confidence to tlie public, and tlms tends to enhance the value of a bank's shares in the market, seems to bo corroborated by a comparison of the yield per cent, to the investor of publishing and non-publisliing banks as shown in Table III. The Whitehaven Joint Stock Bank, which docs not, I believe, publish a balance sheet, yields the investor 5/. ly.*. id. per cent., as against 5/. 4.9. yielded on the average by the four other Cumberland banks of issne, Avhich do publish balance sheets. The shares of the Bank of Liverpool with, it is understood, the largest business in Liverpool, but not publishing, stand to yield 7^. 195. 2d. per cent., against 61. 18.?. and 61. i8s. lod. yielded respectively by the Liverpool Union Bank and the Liverpool Commercial Bank, ^Yhieh do publish ; whilst still less is 3-ielded by the other Liverpool banks which publish. The Manchester and Salford Bank, not publishing, yields to the investor 6/. 75. 7c/. per cent., against 5Z. lis. per cent, yielded on the average by the three other leading banks of Manchester. The Darlington District Bank, as compared with the banks of its disti'ict, which publish, seems also to be a case in point. Ten Yorkshire banks, which do not publish, yield on the average 61. los. 6d. per cent. ; thirteen, which do publish, yield on the average 61. is. id. per cent. In Group V, midland counties, agricultural, eight non-publishing banks yield on the average 5Z. 12s., against 5Z. 6s. id. per cent, yielded by five pub- lishing banks. In addition to its other advantages the publication of a balance sheet is calculated to exercise an appreciable effect in preventing the managemciit from straying far from the recognised lines of sound banking. The knowledge that the balance sheet must run the gauntlet of adverse criticism, may, without discredit, be admitted by directors and managers as an incentive to keeping advances Avithin due limits, and maintaining ample reserves readily available for any emergency. I have never heard any valid aro-u- ment against the publication of balance sheets. It is sometimes said that it holds out a temptation to competition ; but how little there is in this objection becomes evident when it is considered that the success of banking can, irrespective of any balance sheet, be tested by the amount of the profits, the rate of dividend, and the market price of the shares, all of Avhich are matters of publicitv. It has been urged that the figures of a balance sheet afford little reliable information as to the real position of a bank ; because although the assets may amount on paper to the totals stated under the various heads, half the bills may be rotten and half the loans irrecoverable. I must dissent strongly from this view. Balance sheets differ in the amount of information which they give, but they are issued with the imprimatur of the directors and of the auditor, Avho is generally a public accountant of standing, and the 62 •character of these gentlemen for business capacity, and even for veracity, is staked upon the correctness of the published accounts. This is no small safeguard to the public. It is satisfactory to note that the practice of publishing balance sheets seems to gain ground. Table XXVII contains the balance sheets of forty-nine purely provincial English banks. For a similar table, which was prepared for 1870, and is printed at p. 94, the balances of not more than thirty-five jjui^ely provincial banks could be obtained. The Manchester and Liverpool District Banking Company, by far the largest joint stock bank out of London, published its balance sheet for the first time in the beginning of 187-5 ; and we may hope that year by year the banks which practice concealment will rapidly become fewer in number. A bank's liabilities consist of two chief sections. (1) Those to the proprietors, comprising the paid-uj) capital, the I'eserve-fund, and the balance of undivided profit ; (2) Those to the public, comprising money lodged, drafts current, note circulation, and acceptances. These liabilities constitute the total resources. The mode of their employment is shown by the items of assets, which consist of: — (1) Bills and advances to customers; (2) Govern- ment and other securities and investments ; (3) Cash on hand and at call ; and, (4) Property account. Although averse on general grounds to legislative interference with private enterprise, yet I would, in the interests of the public and in those of sound banking, advocate that all joint stock banks should be constrained by law to publish their balance sheets once a-year in a prescribed form, the chief features of which should be that (1) acceptances, (2) note circulation and (3) bills redis- counted, should be distinguished from one another and from (4) money lodged, and that on the other side of the account (1) bills, (2) advances on open accounts, (3) cash, (4) Covernment secu- rities, and (5) other investments, should each be shown separately.- The current expenses should also be stated. I submit a form of balance sheet and relative account of profit and loss, which will serve as a key to the manner in which the various balance sheets have been summarised in the tables. As m.ay be supposed, numerous difficulties have arisen in making these summaries, from diversities of practice on the part of the various banks in the classification of items, especially on the creditor side of the account. G3 Table XXXY .—Pro forma General Balance Sheet, ?Ast December, 1875. "Note. — The bracketed number opposite eacli jirincipal item refci-is to tlie column in the tcabulariscd summary in which it is iuchuled in Table XXVII. LIABILITIES. Dr. To THE Public. S, Due on current and de- T ,, ^^^ ^nn ■ , , /~\ >■ u,UUU,(JUU posit accounts (/) .... j Drafts current (7) 200,000 Note cii'culation (8) 500,000 Acceptances (9) 700,000 Bills rcdiscouuted or "| other endorsements > 100,000 current (7 or 9) J Total to the public... To THE Shaeeholdees. 'Capital paid up, 50,000 shares at zol. per share (5) Beserve fund at last "1 jon nnn balance J ' Now added 20,000 (6) 7,500,000 I;000,000 Balance of Profit — Dividend to be now paid at 10 per cent, per annum (7) Bonus of c; per cent. "1 (7) :.. / Balance carried forward 1 (6) / 500,000 1,500,000 50,000 50,0C0 10,000 I 10,000 9,1 10,000 ASSETS. Lent to Customees. £ Bills 3,500,000 Advances on open account 2,210,000 Acceptances as per contra 700,000 Total lent to customers 1 ^(11) : / ~ Bills rcdiscouuted or") other endorsements current as per contra (11) J Cash and Suepltjs Funds. English Government Se- "1 , „„^ «^« curities (12) j- 1,000,000 Other first-class avail- T ^-t'n nnn able investments (12) J '^".^UU Cash on hand (13) 375,000 Do. at call and short"] notice with Com- I ^, panys bankers, f "^> '-"^ brokers' bills, &c. (13) J Total cash and surplus "1 funds J Peopeety Accoitnt. Bank premises and fiu'- "1 uitui-e (14) J Cr. 6,410,000 — 100,000 — 2,500,000 100,000 9, IT 0,000 Fro ft rma Profit and Loss Account for the Year 1S75. rC £ £ To current expenses, in-" By balance brought forward 30th "1 December, 1874 j eluding directors' and 7,500 auditors' fees, sta- y — 75,000 By gross profits for twelve months, T tionery, rent, taxes, including rebate from previous and all otlier charges year, and after providing amply | 267,500 To rebate of discount carried forward _ . -- 20,000 for bad and doubtful debts j / To balance of profit for 12 mouths — Dividend paid for half ' year, to 30th June. - 50,000 Reserve fund as above. .. 20,000 Balance of profit car-" ried to general ^ balance sheet , 110,000 180,000 275,000 275,000 64 Some banks publish, twice a-year, some only once. It is, I think, scarcely prudent for any but yery large banks to publish their accounts more frequently than once a-year. Six months seems too »short a time to bring the results of a moderately-sized business regularly within the law of average. III. Analysis of Liabilities. Beginning with the debtor side of the balance sheet, I shall discuss seriatim the various items of the liabilities. Batio of Uncalled Cajyital to Liahillties to Public. The ratio per cent, of the uncalled capital to the liabilities to the public is found to be as under : — Pui'ely London — Per Cent. 4 senior banks, unlimited, average i8'7 Lowest — City Bank 9"i Highest — London and Westminster 25-6 3 other banks, limited, average 44*7 Lowest — Central i3"o Highest — Lnperial 49*0 London and provincial — 2 senior banks, nnlimited, average 8'8 Lowest — National Provincial Bank y'z Highest — London and County io"5 5 other banks, Umited, average 5o'3 Lowest — The London and Provincial Bank .... 11 '3 Highest — London and Yorkshire i3i'o Purely provmcial — 24 mihmited (I have not thought it worth "1 while to work them out) J 25 hmited, average 55-5 Lowest — Cumberland Union i6'9 Highest — Birmingham Banking Company .... i24'6 Proprietors' Funds and their Batio to Liahilities to Pnllic. The proprietors' funds, consisting of (1) the paid-up capital, (2) the reserve fund, (3) the balance of undivided profit carried forward, form together the working capital of the bank, the basis upon which its business rests, and it is of much imj^ortancc to ascertain the proportion which this basis bears to the super- structure of credit which is reared upon it. This is found to be as follows. 65 Ratio of proprietors' funds to liabilities to public :— Purely Loudon — , , Percent. 4 senior banks . . 3 other „ 29"3 Average j^.q London and provincial — : senior banks .... 9'o 5 other 23-4 ^"fcrage . iq.q 49 Purely Prorincial, average „, ,. , , „ " 21'0 2; banks of issue.... zro zi banks of non-issue... 20*0 ^ " exceptional omitted II Scotch 4 Insli 20-2 Various considerations combine to determine tlie amount of proprietors funds which should form the basis of the business of a Banks of recent establishment, not hadng had time to acquire business m relation to their paid-up capital, will naturally show a larg^ proportion of proprietors' funds to liabilities to the public Limited Bunks. Ratio of Established. I P''«P"et°>-s' Funds to Liabilities to Public. Xorth-Eastern Bank Lancashire and Yorkshire JManchester Joint Stock ... London and Yorkshire 1872 '73 Per cut. 107-3 45*4 43'3 29-4 Small banks may be said to require a laro-er pronortinn ^P prietors' funds than large banks. " Propoition of rro. (if. Table XXXVI. — England and Wales. London and Frovincial and Pivrely Provhxcxi Joint Stock Banks. Ratio of Proprietor^ Funds to Liabilities to Public. Smcdl Banl s Medium-sized Banks, and Large Banks. [OOO's omitted in Columns headed £.] Locality. Small Banks. Liabilities to Public undei- (,coo,ooo?. Medium-sized Bants. Liabilities to Public I,000,CXX3;. to Z,CCO,OXll. Number of Banks. Liabilities to Public. Pro- prietors' Funds. Ratio per Cent. Number Liabilities Pro- of to prietors' Banks. Public. Funds. Ratio per Cent . Limited Banks — No. 9 2 £ 4,865, £ 1,941, 296, Per cnt. 39'9 zz-6 No- £ £ 8 11,037, : 3,490, 2 ! 2,761, 526, Per cut If ft London and provincial ... 19-1 Total limited 11 6,175, 2,237, 36-2 10 13,798, 4,016, 29 I Unlimited Banks — 9 5.970, 1,719, 28-8 7 10,022, ! 1,890, i8-8 London and provincial .... Total unlimited 9 5>97o, 1,719, 28-8 7 10,022, 1,890, i8-8 Total limited and 1 iinlimited J 20 12,145, 3,955, 32-6 17 23,820, 5,906, 24-8 Total purely pro- 1 vincial J Total London and \ provincial J 18 2 10,835, 1,310, 3,659, 296, 3 3-8 22-6 15 21,059, 2 2,761, 5,379, 526, 25*5 19-1 20 12,145, 3,955, 32-6 17 23,820, 5,905, 24*8 Large Banks. Liabilities to Public over 2,000,000'. Total. 1 Locality. Number of Banks. Liabilities to Public. Pro- prietors' Funds. Ratio per Cent. Number of Banks. Liabilities to Public. Pro-* prietors' Funds. 1 Ratio per Cent. Limited Banks — Purely provincial London and pi'o vincial .... No. 3 £ 13,671, £ 1,864, Per cnt. 13-6 |No. 20 4 £ 29>S73> 4>07i, £ 7,294, 822, Per cut 247 20-2 Total limited 3 i3>67i, 1,864, 13-6 24 33.644. 8,116, 24-1 Unlimited Banks — 8 2 34.4i9> 46,958, 5,403, 4,216, i5'7 9-0 24 2 50,410, 46,959. 9,012, 4,216, 17-9 9-0 London and provincial ... Total unlimited 10 81.377, 9,619, 11-8 26 97.369, 131,013, 13,228, 13-6 Total limited and 1 unlimited J 13 11 2 95,048, 11,483, 12*1 50 21,344, i6-3 Total purely pro- 1 vincial J Total London audi provincial J 48,089, 46,959. 7,267, 4,216, 15' I 9-0 44 6 79.984. 51,029, 16,306, 5,038, 20"J. 9"9 13 95,048, 11,483, I2"I 50 131.013. 21,344, 16-3 This table hIiows that the eighteen small purely provincial Itaiiks therein tabulatefl, whose respective liabilities to the public did nctt exceed 1,000,000/., had proprietors' funds equal to 33"8 per cent. The til'teen middle-sized purely provincial banks whose respective liabilities to the public were between one and two millions, showed proprietors' funds equal to 25*5 percent.; whilst the eleven large purely provincial banks, having respectively liabilities to the public of over 2,000,000/., showed proprietors' funds equal to 15 per cent. Banks confined to great mercantile centres, finding a ready outlet for their resources, and not collecting deposits by means of country branches, requu'e a comparatively large basis of capital. Table XXXVII. — Ratio per Cent, of Proprietors^ Ftcnch to Liabilities to the Public of Fortij-four Purehj Provincial English Banks, classified according to the Xumber of their Branches. I. Banks wifliout Branches. [OOO's omitted.] B;iMk5. Lialiilitics to \ Pro])i-ii-tors' Public. 1 Juiitls. 1 Rati.. piT C'L-ilt. 1. Liverpool Coitimercial Bkg. Qo., Limited.... 2. ,, Union Bank £ 1,227, 3,345, 1,354, 2,120, 590, 423, £ 554, 764, 506, 673, 357, 45-2 22-8 3. „ North-Western Bank, Limited.. 4. Bradford Baukhig Company 37-4 317 5. ,, Commerrial Joint Stock Bank.... 6. Bank of Leeds, Limited 60-5 45-8 7. Sheffield and Hallamsliu-e Bank 571, Z38, 421, 9<;, 894, 141, 41-^8 8. County of Stafford Bank 22-5 9. \Yolyerhampton and Staifordsh. Bkg. Co. 15-8 10,944, 1 3,523, 32-2 II. Banks with One, Two, or Three Branches. [OOO's omitted.] Banks. Lialiilities to Public. Proprietors' lands. Ratio per Cent. 1. Bank of Whitehaven, Limited 2. National Bank of Liverpool, Limited* .... 3. Swaledale and Wenslevdale £ 623, 661, 796, 716, 1,165, 399, 1,493, 438, 1.254, 1,632, 1,119, 80, £ 19c, 543, 96, 339, 530, 190, 400, 220, •99, 4^3, 276, -4> Per cut. 30-5 82-0 12-1 47-4 45-5 47-7 26-8 50-2 15-9 25-9 24-7 29-9 4. Bradford District Bank, Limited 5. ,, Old Bank, Limited 6. Halifax Comm. Banking Co., Limited 7. Sheffield Bankina Company 8. ,, Union Banking Company 9. Burton. Uttoseter, and Ashbourn Union.... 10. Biraiinghani Joint Stock Bank, Limited.... 11. ,, Banking Company, „ 12. North Kent Bank, Limited 10,376, 3-430, 330 Branches in Liverpool and Birkenhead only. f2 68 Table XXXVIT. — Ratio per Cent, of Proprietors' Fund — Contd. III. Banks tvith Four to Ten Branches. [OOO's omitted.] Liabilities to Public. Proprietors' I'uiids. Ratio per Ceut. 1. Carlisle and Cumberland Bank £ 639, 678, 1,671, 576, 1,412, 685, 943, 702, £ 179, 171, -H7, 128, 340, 235- 221, 98, 28-0 2. ,, Citv and District ,, 25-2 3. Sheffield and Rotherbam „ 14-8 4. Nottingbam Joint Stock Bank, Limited .... 5. Leicestershire Bankino' Coinpany 22-2 24-1 6. Staffordshire Joint Stock Havik, Limited.... 7. Birniiugbam To^rn and District Bank 8. Bucks and Oxon Union Bank, i/iHi/VecZ .... 34-3 23-4 14-0 7,306, 1,619, 22-2 IV. Banks ivith more than Ten Branches. [OOO's omitted.] Liabilities to Public. Proprietors' Funds. Ratio per Cent. £ 1,860, 4,011, 2,904, 5,794, 1,655, 12,594, 2,556, 1,311, 4,974, 1,182, 1,025, 4,515, 1,699, 3,161, 2,116, £ 308, 596, 376, 1,010, 540, 1,477, 398, 303, 478, 186, 352, 900, 215, 405, 191, 16-6 2. North and South Wales Bank 14-8 3. Parr's Bankiuf Company, Limited 12-9 4. Manchester and County Bank, Limited .... 5. Union Bank of Manchester, Limited 6. Manchester and Lirerpool District Bank... 7. Yorkshire Bankin'>' Company 17-4 32-6 11-7 155 8. Stamford, Sjjalding, and Boston Company 9. Lloyd's Banking Company, Limited 23-1 9-6 10. Stoiu'bridge and Kidderminster 15-8 11. Worcester City and County, Limited 12. W. of England and S. Wales District Bank 13. Devon and Cornwall Banking Company.... 14. Wilts and Dorset „ 15. Hampshire Banking Company 34-3 19-9 12-6 12-8 9-0 51,357, 7,735, 151 Note. — The following banks are omitted, their figures being, from their recent establishment or other circumstances, quite exceptional, and calculated to disturb the representative ratios, viz., Adelphi Bank, Limited; I;ancashire and Yorkshire Bank, Limited ; North-Eastern Bank, Limited ; Manchester Joint Stock Bank, Limited; Three Towns Banking Company, Limited. This table shoAvs ratio of proprietors' funds to liabilities to the public : — Per Cent. 9 purely provincial banks without branches 32 iz „ -with I, 2, or 3 branches 33 8 ,, with 4 to 10 ,, 22 15 „ with more than 10 branches .... 15 t)9 Table XXXVIII. — Ratio per Cent, of Proprietorii' FvMtls to Liabilities to Public. English Purehj Provincial ., and London and Provincial Joint S'tocl- Biiids by Districts, 1874. Pistiicts. Number of Banks. Average Number of Omces per Bank. Liabilities to Public. [OdU's omitted.] Proprietors' I'uuds. [U(J0'8 omitted.] Ratio per Cent. 1. Cumberland No. 4 4 1 4 12 4 No. 8 u 37 29 4 4 £ 3,800, 6,587, 4,011, 22,946, 12,938, 4,553, £ 848, 2,367, 596, 3,403, 3,881, 970, 1,869, 2,371, Per cnt. 22-3 35*9 14-8 14-8 30'0 21-3 17-5 i6*4 2. Liverpool 3. North and S. Wales Bank.... 4. Manchester 5. Yorkshire 6. Derhy, Notts, Lincoln, &c.... 7. Black country 8. West, and South. Counties .. 8 ' 16 1 14,480, 9. London and provincial 44 ! ! 79,982, 6 1 l-i3i j 53,995, 16,305, 5,840, 20-4 10-8 50 1 133,977, 22,145, i6-5 yote. — In this table the following banks, whose figures are exceptional, have been omitted, viz., the North-Uastern Baidcing Company, Limited, Lancashire and Yorkshire Banking Company, Limited, Manchester Joint Stock Bank, Limited, and the London and Yorkshire Bank, Limited, which are all of quite recent establishment ; and the Adelphi Bank, Limited, and Three Totvns Banking Company, Limited, which arc both on a small scale. This table takes tlie banks by districts, and it will be remarked that the highest ratio is 36 per cent, in the case of the four chief purely Liverpool banks — the next being 30 per cent, in the case of the Yorkshire banks. If the figures of the Yorkshire Banking: Company, the only bank of tliat district which has numerous branches be left out, the remaining eleven Yorkshire banks show a ratio of 33I per cent. Amongst the purely provincial banks the district in which the ratio is lowest, is that of Manchester, showing neai'ly 1 5 per cent., and the four Manchester district banks com- prised in the return have all numerous branches. Distingulshiug limited from unlimited banks, the ratios are — Per Cent, Limited — Purely provincial 24^ „ London and provincial 20 Together 24 Unlimited — Purely provincial 18 „ London and provincial 9 Together 13^ The nature of the business done is of course an element of 70 |)iuue itupoi'ttiuoe in determining the proportion which, proprietors' futids should bear to liabilities. The charuoter of the money lodged must be taken into special eousideration. Creditor bahiuces of parties engaged in commercial busiuessf are not held on uearlv so certain a tenure as the sums generally known by the term of deposit money. Large sums are usually held on a more uncertain tenure than small sums. The basis of pivprietors' funds should be larger in proportion to the uncertainty of the tenure of the money lodged. If the loans or advances on current accounts, which cannot be said to be immediately or even proximately available, form a pre- ponderant item in the assets, the proprietors' funds should be of solid proportions. If the advances are cliietly in the shape of bills, a smaller proportion of pixiprietors' funds will suffice. If a btmk has a much lai"ger amount of deposits than it can employ in its orv.liuary business with its customers, it may with sttfety work wich a comparatively small stibotratum of proprietors' funds. Hence it is necessary, before jumoing to the conclusion that any bank has. too small a basis of proprietors' funds, to see what proportion of its liabilities to the public are held inmiediately or proximately available outside of its business with its exLstomers. Generally speaking, banks in a rural district being subject to cvimparatively few ductuations in the demand for money, may with propriety carry on business on a smaller basis of capital than banks placed in large commercial centres. In the tables the absolutely lowest ratios of proprietors' funds to liabilities to public twre that of the London Joint Stock Bank, 8*3, and amongst the purely provincial banks, 9 per cent, shown by the Hampshire Banking Company, and 9.J per cent., shown by Lloyd's Banking Company. Limited, of Birmingham. The London and County Bank and the National Provincial Bank of Engkind show each 9 per cent. Both these banks, as well !fis Lloyd's Banking Company, Limibed, are increasing their capitad by the issue of new shares. Th'i absolutely highest ratios are cio per cent, in the case of tiie Three Towns E»anking Company, Limited, and 107 per cent, in the case of the North-Eastern Banking Company, Limited, the former till very small coacern. and the latter of recent establishment. In iScotland the highest ratio bs at'} in the case of the Royal Bank, and the lowest to'S in the case of the Bank of Scodand. In Ireland the highest ratio is 44*5 for th.e HibemiaEL Bamk. and the lowest t+."6 for the Ulster Banking Company. So tar as I am aware, the only authoritative dictum which, we have on this branch of our subject is that of the lace ilr. Gilbart. who makes tihe twllowina: remark in Ilbs "• Practical Treatise on 71 " Banking :" — " Although tlie piojjortiou which the capllal ol' u bank " should bear to its liabilities may vary with different banks, pcjrhaps " we should not go far astray in saying it should never be less " than one-third of its liabilities." It is well known that under Mr. Gilbart's own management this rule was widely departed fioiu by the London and Westminster Bank, whose proprietors' funds at 31st December, 1874, bore the proportion of 9*6 per cent, to their liabilities. I should be sorry to attempt to lay down any hai'd and fast rule upon the point, but should bo disposed to think that for a well established bank, wb eh holds considerable deposits and systemati- cally keeps readily available reserves to the extent of about one- third of it.s liabilities, the fair proportion of proprietors' funds to banking liabilities should be something between 15 and 20 per cent. The leading London joint stock banks have not only very large deposits of their own, but also hold the balances of a great many of the country banks, and these balances are specially liable to be drawn at a period of commercial distrust or financial pressure. The acceptance business of the great London joint stock banks is also naturally much more extensive than that of any of the provincial banks, and I hope I shall not be considered presumptuous if I venture to suggest that their proprietors' funds ought to bear a much more substantial proportion to their liabilities than they now do. An incidental advantage of a large paid-up capital is that it keeps down the rate of the dividend. The bloated dividends of some of the principal banks have been remarked upon, and in many cases where the dividend reaches 20 per cent, or upwards, it will be found that the ratio of proprietors' funds to liabilities to the public is feeble. It would seem to be sounder policy to pay a good dividend on a substantial capital than a very large dividend on a small capital ; and one advantage of this policy is that it tends to prevent the shares from rising to a dangerously high premium on the Stock Exchange. >y Money Lodged. Tlie various tables show this item as foHows : — [OOO's omitted.] Joint Stock Banks. 7 Purely London 7 London and prorincial 49 Purely px-ovincial II Scotch < Irish Total. 68,749, 50,318, 79>i75. 198,242, 80,699, 17,643, £ 9,821, 7,188, 1,616, 3,147, 7,336, 3,529, The column of money lodged includes the amount of the dividend due. It comprises money held on current account and on deposit, and also such balances as are held from other banks. For the most part the money lodged is repayable at call ; though in the country there is frequently an understanding, sometimes expressed, sometimes merely tacit, that a few days' notice will be given before any very large sum is ■withdrawn. It has been frequently asserted that the Scotch banks, as com- pared with the English, hold a larger proportion of their deposits in small amounts, that in fact the}" act much more than the English banks do as savings banks for the people. In support of this view it is pointed out that the total savings banks deposits of England and Wales amount to 2I. js. per head of the population, whilst the Scotch savings banks deposits are only il. 10s. lod. per head of the population in Scotland. The National Provincial Bank of England is the most eminently representative provincial bank of England. With its head office in London, it has one hundi'ed and thirty- five branches in the provinces, and there is scarcely a county in England in which it has not an office. That bank and the Scotch banks submitted to the Committee on Banks of Issue in 1875 returns of their depositors and deposits classified according to the sums at credit of each depositor. These returns are embodied in : — 73 Table XXXIX. — Nuinher of Depositors, and Amount of Deposits in Natioixal Provincial Bank of England, and in the Eleven Banks of Scotland, classified according to the Amount at Credit of each Depositor , [tOO's oiiiitlctl in Cols. 3 and .').] 1 2 3 1 .'1 7 8 y edit, according National Provincial Bank ol' England. Tlic Eleven Scotch Uanks. Ratio Per Cent, to Totals. Classification of Sums at Ci National Provincial ]5ank of England. Scotch Banks. Number Amount Number Amount Number Amount Number Amount of Deposi- tors. of De- posits. of Deposi- tors. of De- posits. of De|iosi- tors. of De- posits. Deposi- o»De- tors. posits. No. £ No. £ Per cut. Per cnt. Per cnt. Per cnt. 83,723 ^,603 290,885 11,768 68-24 i';-68 69-65 i';'44 13-52 \ ii-66 Above loo/. and not above 200?. 16,780 2,518 56,4t5 8,849 13-68 10-97 Abore 200?. and not above :!00?. 7,430 1,866 23,253 6,1 1 1 6-06 8-21 5-56 8-02 „ 300/. 400?. 4,027 i>+3- 12,395 4,562 3-28 6-2^ 2-97 5-83 „ 40oZ. 500?. 2,896 1.339 8,921 4,600 2-36 5-83 2-14 6*04 Above 290. 2,110, 770, 1,922, 300, 88,604, The increase of money lodged here shown is no less than 10 10 per cent. ; an enormous augmentation, even if allowance be made for the absorption of several large private banks. Mr. Palgrave obtained returns from thirty-six issuing banks in Eno-land in 1874 as compared with 1844, and these showed an average increase of 250 per cent, in other words the money lodged in 1874 was 3^ times as large as it was in 1844. The evidence of Mr. Davidson, Treasurer to the Bank" of Scotland, on the progress of Scotch banking at intervals of ten years from 1845, exhibits the following results as regards money lodged : — Scotland. Moiiev Lodged. Proportion to 1815. 1845. '55. '65. '75. 33,192,000 43,271,000 56,185,000 78,405,000 100 130 169 239 Comparing Mr. Palgrave's figures for thii-ty-six English pro- vincial banks of issue with the Scotch figures, it would appear that the increase of deposits has been more rapid in England than in It. Scotlimd. But the progress in Ireland bus been still more re- mai'kable. Dr. W. Neilson Hancock, in his Report to the Irish Government, on " Savings Invested in Ireland " (Midsummer, 1875), gives the money lodged in the Irish banks as follows : — 1840. '74. .Money Lodged. £ 6,125,000 31,700,000 Proportion to 1840. 100 518 Dr. Hancock remarks, "the increase of tleposits and cash " balances in the Irish joint stock banks from 6,125,000?. in 1840, " to 31,815,000/. in 1875, or of 25,690,000/., is the most important " figure" of the growth of savings invested in Ireland during that period. "Making every allowance," he adds, " for the extension of " branches and the increased facilities of intercourse bringing to the " banks money that was hoarded or kept in cash boxes and shop tills, " this increase of 25,690,000/. must represent a very large and sub- " stantial increase of wealth." It may be interesting to note heie the progress of the savings bank deposits in England, Scotland, and Ireland, during the period 1844 to 1874. Table XLI. — United Kingdom Savings Banks Deposits, 1844 to 1874. [OOO's omitted.] England and Wales. Scotland. Year. Old Savings Banks. Post Otftce. Total. Proportion to 1S4J. Old Savings Banks. Post Office. Total. Proportion to 1844. 1814 '54 '64 £ 25.713 30>i97 34.728 34,521 £ 4.688 21,826 £ 25.713 30,197 39,416 56,347 Per cnt. 100 117i 153 219 £ 1 ,043 1,932 2,819 4,969 £ 124 418 £ 1,043 1,932 2,943 5,387 Per cut. 100 185 282 '74 616i Ireland. Total United Kingdom. Proportion to 1844. Year. banks'"" i^-'Oi^-- Total. Proportion to 1844. 1844 '54 '64 '74 £ 1 £ 2,749 ' — 1,608 — 1,97; 182 2,016 914 £ 2,749 1,608 2,155 2,930 Per cnt. 100 58Jr 79 107 £ 29,505 33,737 44.514 64,664 Per cnt. 100 114i 151 219 76 From tlie " Commercial History aud Review " of tbe years 1870 and 1874, published by tbe " Economist," and from tlie Table of balance sheets of thirty-four purely provincial English banks, prepared for 1870, and printed on pp. 92 to 95, and from Table XXVII, I am enabled to give the following view of the progress of deposits : — 1st of seven purely London banks. 2nd of five London and provincial banks. 3rd of thirty-four purely provincial banks. Table XLII. — Progress of Money Lodged in certain English Banks, Four Years, 1870 to 1874. [OOO's omitted in columns headed i] Ekgi.ani). Purely London — London and Westminster „ Joint Stock (estimated) Union City Imperial Central Metropolitan London and Provincial — National Provincial London and County Consolidated Midland London aud South.- Western Purely Provincial — 4 Cumberland banks 4 purely Liverpool 1 North and South Wales 3 Manchester district banks ... lo Yorkshire banks 3 Dei'by, Notts, and Lincoln... 5 Black Country 4 West and South Counties ... 34 banks. Total Money Lodged. 1870. £ 21,980, 14,000, 11,210, 2,440, 49,630, 1,530, 470, 540, 2,540, 15,735, 13,390, 29,125, 2,340, 1,035, 540, 3,915, 433, 186, 157, 924, 250, 400, 481, 362, 33,193, 1874. £ 30,020 16,000 14)1-0 3>-90 Increase 01' Decrease. 63>43o ,1 10 770 ^00 3,180 zz,953 19,890 4->843 3,070 i>43^ 910 5,412 3-739 5>544 3,890, 10,285 1 1,581 9.35i 7>94i 55.428, £ + 8,040, + 2,000, + 2,910, + 850, + 13,800, + 580, + 300, - 240, + 640, + 7,218, + 6,500, + 13,718, + 730, + 397, + 370, + 1,497, + 1,306, + 2,358, + 1,733, + 5,361, + 4v-f31, + 696, + 3,871, + 2,579, + 22,235, Increase Decrease per Cent. Per cnt. + 37 + 14 + 26 + 35 + 2^ + 38 + 64 - 44 + :<; + 46 + 48 + 47 38 68 ;8 + 54 + 74 + 80 + 109 + 60 + 29 + 71 + 48 + 67 77 Table XLIII. — Progress of }foney Lodged in Scotch and Trii 9,965. 6,8';9, 8,489, 1,848, i,479> 1,01;?, 2,654, 1,860, 674, 2,055, 2,752, + 1,669, + 20 -4- 1,566, + 29 + 2,382, , + 39 + ^100, , + 28 + 617, -r r-, + 312, + 42 80,699, + 16,941, + 26 + 7,334, ' + 30 It will be observed tbat in tbe.se fota- years tbe increase of money lodged in tbe Englisb provinces has been greater tban tliat in London, Scotland, or Ireland. Accei)tances. Tbe tables sbow tbe acceptances to be as follows : — [OOO's omitted.] Joint Stock Banfts — £ 7 London 15,383, 7 ,, and provincial 4,070, 49 purely provincial i)3-5, II Scotch ■ 5,120, I Irish (the others not stated) 36, Tbe acceptances of a London bank may be classified as follows : I. Acceptances of tbe drafts of its country correspondents drawn at seven, fourteen, or twenty-one days, for purposes of remittance. II. Acceptances at various dates up to ninety days against credits estabbsbed by banking correspondents in tbe country. 78 TIL Acceptances on account of foreig"]! and colonial hanks having head offices in London. IV. Acceptances to mercantile firms and companies abroad. Acceptances of Class I are pex-fectl}^ legitimate and unobjection- able. Those of Class II are likewise unobjectionable Avhere the position of the country correspondent is undoubted. Acceptances of Class III should be kept within judicious bounds, aud slmuld be well covered by available securities. Those of Class IV are probably best avoided entirely. Being generally drawn against shipping documents surrendered to the bank on acceptance, they are much more within the province of the merchant than of the English bank or banker. Acceptances differ from ordinary advances to customers simply in this, that instead of being made in cash, they are made by means of the bank's obligation to pay at a future fixed date. Their ultimate payment to the bank may, for argument's sake, be assumed to be as well secured as if the accommodation had been given in the shape of cash advanced. But the bank is committed to meet them as they become due. If the securities held are such as are certain of realisation before maturity of the acceptances granted against them, then the risk of the business is reduced to a minimum. If, however, the customer fails to provide for the acceptances, and the securities lodged cannot be realised in time to meet them, the bank must take them up. A bank largely under acceptance has need therefore to keep at all times a much larger reserve of cash and surplus funds in a readily available shape than a bank which confines its /iccepting business within strictly moderate limits. The acceptances of the London Joint Stock Bank as included in the above amount are merely estimated. They were stated at December, 1873, to amount to 4,517,000/. I have assumed them at 4,527,300/. The reserves of this bank in cash and Government securities bear the ratio of i6'3 per cent, to its total liabilities to the public. The absolutely highest amount of acceptances shown by any of the banks is 4,957,000/., in the case of the Union Bank of London, who mention having cover in hand amounting to 7,590,154/. Their acceptances are in the ratio of very nearly 35 per cent, to their money lodged. They have cash and Government securities amount- in o- to 42*1 per cent, of their liabilities to the public. The City Bank has acceptances equal to rather more than four times the amount of its proprietors' funds, and actually equal to the total of its money lodged, a very unusual feature. Its reserves in cash and Government securities are 17 per cent, of its liabilities to the public. Nor is it at all clear that the City Bank derives a commensurate 79 accession of profit: from tlie extended use of its credit in accepting. The net profit earned by the three senior London banks is at the rate of I'Z per cent, on tlioir total resources, including acceptances, or at the rate of i'4 per cent, on their total resources, excluding acceptances. The net profit earned by the City Bank is at the rate of 0*84 per cent, on its total resources, including acceptances, or at the rate of 1*5 per cent, on its total resources, excluding acceptances. Either, therefore, the general business of the City Bank must be very much less profitable than that of its neighbours, or the profits of its large acceptance business must be very inadequate. The latter seems to be the more probable inference of the two. As a rule the acceptances of the purely country banks are nil. The Liverpool banks accept to a moderate extent, and the London and County Bank, in virtue of its meti'opolitan position, is led to do a considerable business in that way. When the capital and surplus funds of a bank and its locale warrant it, and when sufficient security is invariably held, such a use of its credit to a moderate extent may be legitimate. The Bank of England does not accept. The New Grerman Bank Act provides that no bank of issue shall accept bills, and several witnesses before the Committee of the House of Commons on Banks of Issue, stated as a probable result of the Scotch banks establishing themselves in London, that they might be tempted to enter more largely on the business of accepting than might be prudent for banks entrusted with the responsible function of providing a sound note currency for their own countiy. In justification of this view it will be observed that the Bank of Scotland and the National Bank of Scotland, who have both been established in London for some years, accept more extensively than any of the other Scotch banks, the figures being for these two banks 2,667,000/., against 2,453,000/., for the other nine. I'Jstlvtatcd iJisfrlhut'tun of Ite)iis of Liahilities. The various items of the liabilities having thus been discussed systematically, it may now be instructive to calculate and collate the percentages of the individual items to their total in each of the territorial divisions of the investigation. Adopting the figures of the tables in the case of the purely London, London and provincial, purely provincial English, and the Scotch banks, and basing on Dr. Hancock's figures for the Irish banks, we have the following results : — 08 Table XLIV. — United Kingdom Liabilities of Joint Stock Banh. Estimated Percentage of Items to Total Resources, 1874. England and Wales. Scotland. Items of Liabilities. Purely Loudon. London and Provincial. Purely Provincial. Ireland. Capital paid-up Per cnt. 7-3 2-7 Per cut. 7"I -'9 Per cut. 12-1 5-4 Per cut. 9-j y6 Per cut. 14-0 5-6 Reserve fund Proprietors' fuuds 10-0 1 lo-o 1 17-5 ii-8 19-6 Money lodged 73-5 1 83-i 80-3 — 1 — 0-9 • 16-5 j 6-8 1-3 76-1 4"9 65-5 14-9 Note circulation Acceptances 90-0 90-0 82-5 87-i 80-4 Total 100-0 mn-o inO'O lOO'O 100-0 i IV. Analysis of Assets. Tims far we have considered only the debtor side of the balance sheets before us, the total resources of the banks, and the various heads under which they fall. We now turn to the creditor side of the balance sheets, showing the assets of the banks, and it should be premised here that as the divei-sity of practice in making up the balance sheets renders it imjiossible to attain perfect consistency in arranging the assets under their various heads of (1) Cash ; (2) Government securities and other investments ; (3) Bills and advances, the results attained must be understood to be by no means so accurate as could be desired. Cash and Surplus Funds. These are the cash balance and the Government and other securities and money placed in a readily available position outside of the business of the bank with its customers. A bank's first line of defence against a possible demand for money on the part of its customers must be the actual legal tender in its coffers. This should always be sufficient for ordinary require- ments, with an ample margin for sudden emergencies. The extent of that margin must be regulated according to the locality of the bank, and the rapidity with which it can replenish its actual cash balance from its second line of defence, which consists in its balances at call, especially with the Bank of England. Banks situated in London, or in close proximity to a branch of the Bank of England, may regard their balances with the Bank of England as practically 81 equivalent to cash in hand. Banks less favourably situated must of course be more fully supplied with actual legal tender. Issuing banks of undoubted credit, and in a position to add freely to their circulation at any moment, may work with a comparatively smaller balance of legal tender. The Appendix to the evidence collected by the Committee of 1875 on Banks of Issue, contains amongst other interesting particulars of the National Provincial Bank of England, the follow- ing return of their actual cash balance at 31st December, 1874. £ Gold 524,390 Silver 90,043 Bank of England notes 467,045 1,081^478 Notes of other banks 1 13,875 •.i95>355 This is as nearly as possible 5 per cent, of their liabilities to the public, and it may bo assumed that a non-issuing country bank, with branches, requii'es to maintain nearly that proportion of its liabilities as till money in the shape of legal tender. The tliird line of defence lies in readily available investments. In the first rank of these come English Government securities, which are generally available either for immediate sale or as security for an advance. Amongst the other readily convertible investments suitable for a bank are the Government securities of India and the Colonies, first class English railway debenture stock, and, to a moderate extent, well selected foreign government seciirities ; the last named having this great advantage, that being saleable on foreign markets, they are less liable to depreciation than English securities during any financial pressure affecting only the London market. Metropolitan corporation bonds ai'e held by many banks, and good local corporation bonds may also be taken to a moderate extent, but these ai-e seldom realisable to any large amount on a sudden emergency. Every investment held by a bank should be written down to such a price as it would be certain to realise under unfavourable circumstances, otherwise the risk is run of a serious inroad upon profits at the veiy time when these are specially apt to be diminished by bad debts of exceptional amount. It is customary, therefore, with the best banks to hold their English Government securities at or under 90, and all other investments should be treated on a similar principle. All the principal London and London and provincial banks, all Q 82 tlie Scotch banks, and all tlie Irish banks, which publish balance sheets hold English Government securities. So also do most of the English provincial joint stock banks. Twenty-three out of the fifty-six purely provincial English and London and provincial banks in Tables XXVII and XXIV, do not appear from their balance sheets to have any English Government securities. Several of the English country banks hold fii'st-class home railway debenture stocks. The Birmingham Joint Stock Bank gives the following detail of its investments : — £ Consols J 00,000 Americau G-overnment securities 20,000 Indian „ 10,000 English railway debenture stocks 70,000 ZOOjOOO Under this line of defence may be included the bills discounted for bill brokers, which are generally and legitimately available for rediscount at any moment, and doubtless many of the banks which hold no Government securities prefer to see their reserves in first- class brokers' bills rather than in consols. The fourth line of defence is money at short notice, generally three, seven, or fourteen days, with the London discount houses, on security of first-class bills, and with stock brokers of high standing on first-class stocks, with a margin. The last named class of business should of course be kept within narrow limits. When there are surplus funds on hand beyond what are required to furnish amply these various lines of defence, the remaining balance may be employed, without undue risk and with a fair profit, in loans for one, two, or three months, on first class home railway stocks, with a good margin. The fifth line of defence of a bank lies in the best of its bills discounted for customers. ISTothing, as I have indicated, can be more legitimate than for a bank to bring into the discount market, as occasion requires, the bills it may have previously discounted for the discount houses; but it is also by no means uncommon for English provincial banks in mercantile centres, and without large deposits, to rediscount their customers' bills frequently, if not habitually. This, however, is a custom more honoured in the breach than the observance, for it is evident that the bank habitually dependent on rediscounting is exposed to the risk of finding its usual channels of discount siiddenly stopped during a period of financial difficulty. The rediscounting of customers' bills is a consequence of what may be styled the one-sided character of a >^3 good many of the English pi'ovincial banks. There may be said, speaking broadly, to be three classes of English country banks : — 1st. Those which are chiefly deposit banks, and have not a sufficient outlet for tlie employment of their money lodged in customers' bills or advances. Such are many banks in the agri- cultural districts. 2nd. Deposit banks which from having offices in commercial centres have a sufficient banking outlet for the funds at theu* command. 3rd. Banks which being situated in large commercial centres, and not holding large deposits, have to draw from the London bankers and brokers, by rediscounting their own customers' bills, a considerable portion of the funds whicli they employ in the business of their district. In consequence of the gi'cat increase of money lodged during the last twenty years, banks of the third class ai'e now much fewer in number than they used to be ; but habitual rediscounting being a practice to be deprecated, the interests of sound banking would be served by the extensive fusion of banks of Class 3 with those of ■Class 1. A careful comparison of the balance sheets analysed has con- vinced me that it is impossible to deal with the three columns, "bills and advances," "Government and other securities," and " cash, ^9S' 469, 438, 267, 386 1,830, 645> 59o> 5io> 283, 9.630, Advances on Current Accounts. £ 637, 1,219,* 1,153, 1,712, 915, 970, 410, 2,097, 759, 439, 444, 613, 250, 11,618, * Inchides advances by acceptance, 773,000?. Tn calculating from these data it must not be forgotten that they are not sufficiently representative or extensive to form a basis for any absolutely certain conclusion. The result of the fig-ures is that bills represent 45 per cent, and advances 55 per cent, of the aggre- gate total of the two. I have endeavoured to check this calculation by means of the amount of rebate. The practice of banks varies somewhat in the matter of rebate. In strictness the proper rate of rebate for each bill would be the rate at which it was discounted, but this would involve such multiplicity of calculations that it is not generally adopted, though I am informed it is the practice with the Bank of England and the London and Westminster Bank. The ordinary practice is to rebate all the hills on hand at a general balance at one rate, which may be, (1) an approximate estimate of the average rate at which the bills were discounted, or (2) the Bank of England minimum rate of the day, or (3) the outside market rate of the day, or (4) a fixed rate of say 5 per cent. Probably the best practice is to adopt the Bank of England rate of the day, but never less than 5 per cent. Some few banks may set aside a lump sum sufficient amply to cover rebate without making any detailed calculation, "but these must be quite the exception. From inquiry and reflection, I am of opinion that the average unlapsed currency of the bills held by country banks may be taken as forty-nine days. Eight purely provincial banks show in the aggregate bills and advances 20,458,000/. and rebate 85,000/. Assuming the rebate to be at 5 per cent., the market rate of 31st December, 1874, the bills at forty-nine days to run would amount to 12,660,000/., showing bills to be 62 per cent, of the conjoined total of bills and advances. But these eight banks are all in commercial districts, where customers' bills are more abundant than in rural areas, and I venture to think that for the whole of provincial England the bills and advances may be taken to stand to one another in the very equal ratio of 50 to 50. Only two of the Scotch banks separate their bills from their other advances : these are — Scotch Banks. British Linen Company Clydesdale £ 4,709,000 4,567,000 9,276,000 Current Accounts. £ z, 784,000 1,904,000 4,688,000 If these two banks might be considered fairly representative, it would appear that relatively to the total of bills and open accounts, bills stand in Scotland for 66 per cent, and open advances for 34 per cent. A few years ago the figures of a third leading Scotch bank showed the ratio of 70 to 30. As the bills include brokers' bills, and the amount of these held must fluctuate greatly, the normal ratio of bills to advances can at best be little more than a matter of conjecture. After inquiry and reflection, I think that in placing the average ratio for the whole of the Scotch banks at 60 to 40, I shall not be very wide of the mark. None of the Scotch 89 banks publish the amount of their rebate, so this estimate cannot be checked by that means. In Ireland, three out of five banks publishing balance shee(s separate bills from advances. These are — [OOO's omitted] Irish Biiiiks. Hibernian National .. Koval £ 1,265, 4,683. 1,421 ', Advances on Current Accounts. £ 892, ,4' 2. 407, 7,368, These banks show the following percentages to the total of bills and advances : — Per Cent. BiUs 67 Advances on open accounts 33 These ratios cannot be verified by means of the rebate. I will therefore set down the ratio as the same as for Scotland, viz., 60 to 40 on the average of all the banks. With regard to the London and London and provincial banks, the only means of estimating the joroportion of bills held is through the rebate. We find that seven purely London banks with bills and advances amounting to 44,461,000/. show rebate amounting to 80,000/. At 5 per cent, and forty-nine days to run, this would show bills amounting to 12,000,000/., or 28 per cent, of the conjoined total of bills and advances ; but as it is represented to me that the average unlapsed currency of the bills in the hands of the London banks is somewhat less than forty-nine days, I adopt the following per- centages : — Per Cent. Bills discouuted 30 Loans 70 No small portion of the loans of the London banks, be it remem- bered, is against bills lodged in security. The smallness of this proportion of bills is accounted for by the fact that not only short loans on stocks, but also notice-mone}', is by the London banks ranked under " bills and advances." Five London and provincial banks, with aggregate bills and 90 advauces of 23,222,000/., show a total rebate of 75,000/. Assuming tlie average nnlapsed currency in tliis case at forty-nine days, and taking tlie rebate at 5 per cent., the bills would anionnt to 1 1 , 1 80,000/., or 48 per cent, of tlie aggregate total of bills and advances. From information kindly furnished to me, I am, however, satisfied that the following percentages rather understate the proportion of bills in this section of banks : — Per Cent. Bills 50 Adrances <;o It will be remembered that with these banks " bills and advances" include short loans on stocks, but not notice-money. To recapitulate, my estimates of the separate proportions of bills and advances in the column for '' bills and advances " in the various tables are : — Banks. Purely London London and pi'Dvincial Purely provincial Scotcli Irish Bills discounted. Advances 30 70 50 50 50 50 60 40 60 40 These figures do not show the proportional amoiints of bills ■ held by the difierent classes of banks. They simply show what proportion of the column " bills and advances " consists of bills. Property Account. The column for property account seems to call for little remark. It need scarcely be pointed out that all property should be held at or under its realisable value, and that where it is held on lease with less than twenty years to run, sufficient sums must from time to time be set aside to replace its cost before the expiry of the lease. Estimated Distribution of Items of Assets. An estimate of the distribution of the assets of the banks of the various divisions of the United Kingdom may now be attempted, althouo'h it will be evident that the endeavour is much more of a leap in the dark than that made with regard to the debtor side or liabilities. The items of the purely London and of the London and pro- vincial banks are contained in the tables, and bills may be reckoned as 30 per cent, in the former case, and as 50 per cent, in the latter case of the aggregate of "bills and advances." 91 With the purely provincial English banks it is not so eas}- to determine the proportional relations of the various columns of assets. I have, however, endeavoured to calculate them in tlie followinsr manner : — Number of Banks. No. 26 26 27 47 Total Resources. [OOO's omitted.] £ 55,445, 55,445, 56,481, 95,820, under, included in Total Resources. [OOO's omitted.] Bills and aclrances GoTernment and other securities Cask at call and notice Property accoxmt £ 40,140, 5,231, 9,226, 1,332, Tercentagc to Total Resources. Per cnt. 73-5 9*5 i6-5 1*5 Assuming that the hills bear to the bills and advances the ratio of 50 per cent., as already estimated, the assets of the purely pro- vincial banks would seem to be distributed in the following- proportions : — Bills discounted ^C'z Advances on open accounts 3')'3 GoTcrnraent and otlier securities 9'5 Cask at call and notice i6"5 Property account i'5 ioo"o Pursuing the same method with the Irish banks, we have Number of Banks. Total Resources. [OOO's omitted.] Items as under, included in Total Resources. [OOO's omitted.] Percentage to Total Resources, nearly No. 4 £ 19,280, 18,797, 18,797, 19,280, Bills and advances £ 13,572, 3,165, 2,437, 406, Per cnt. 69 16 3 3 Cask 13 4 100 And di\dding the percentage of bills and advances in the aggTC- gate, between bills and advances in the proportion of 60 to 40 already arrived at, we have for the Irish proportion of assets : — Bills discounted 4i'5 Advances 27'5 G-overnment securities, &c 160 Cash i3'o Property 2'o lOO'O 92 For the Scotch banks vre possess all the items, and have simply to separate bills from advances in the ratio of 60 to 40. Placing the projDortions side by side Ave have : — Table "XLA^. — United Kingdom Joint Stock Banks ; Estimated Percentage of Various Items of Assets to Total, 1874. Items of Assets. Eills discounted Advances Together GoTernment securities, &c Cash Together Property Purely ' London Ywrti'; i and •' Scotch. London. : Provincial. Provincial. Irish. Per cnt. Per cut. ai-8 32-5 450. 449> 405, 300, £ 44, 67, 81, 38, 201, 238, 58, 54, 160, £ 424, 1,155, 409, 506, 783, 1,765, 323, 715, 2,316, 5-0) 1,446, «c69, 617, i>333, 2,453. 830, 1,174, -,776, £ V £ £ £ 10, IS, 5, 9, 150, 35, 21, 33, 1 2 CIO, 1,025, 1 ^6-., 1 320, 3 4 5 6 359, 977, 2,162, 739, 1,041, 1,785, £64, 176, 74, 206, 256, 71, 100, 7 8 Jfat. of Liverpool, Lmtd. N.-Western, Ld., L'pool. N. & S. Wales, Liverpool. 9 99^, Half- 93 Here aud at pp. 13G to 14-j arc printed tables of Engli.sli provincial balance sbects for 1870 and 1873, London and provincial balance sheets for 1873, and Scotch balance sheets for 18GG and 1870. These tables may be useful for comparison with those of Section II. Sheets for 1870, u-ith Analysis, Dividends, Prices, and Yield. thus 225 - 225,000?., except in Col. 9.] 9 10 11 12 Analysis. 13 Divideiul per Cent, per Annum. \i Amount per Share Paid. 15 Market Price, January, 1871. IG Yield per Cent, per Annum at Market Price. JCet Profits, less Charges. Ratio per Cent. of Net Profits to Total Resources. Government Securities, Cash, &c. Ratio per Cent. of Government Securities, Cash, &c., to Liabilities to Public. Num- ber. £ 13,7 27,4 16,8 13,2 32,7 70,3 12,7* 36,1 52,8 Per cut. 3 2f 3 3 >-5 £ 386, 250, 206, 256, 71, 100, 99i> Per cnt. 33 49 26 14 21 14 42 Per cnt. 20 12 20 10 10 5^ 20 5 12J 12^ 10 10 15 15 10 15 28 39 30 16 22 12 7 24 £ s. d. <5 13 4 5 7 2 682 5 8 4 6164 7 5 10 5 17 10 8 6 8 1 2 3 4 5 6 7 8 9 j^ear's profits. 94 Table XLVI. — English Provincial Joint Htock Bank Balance Sheets Bank. 1 2 3 Liabilities. 1 Total Ke- soiu'ces. 5 6 7 Assets. 8 / 1 i ber. Paid-up Capital. Reserve and Undivided Profit. Money Lodged anil other Liabilities to Public. Bills and Advances. Govern- ment and other Securi- ties. Cash, &c. Property Account. 10 11 12 Parr's B. C, Ld., Wrgtn. Manchr. County, Lmtd.. Union of Manchr., Lmd. Bradford Bkg. Company Cornl. J. S. Bk. „ Dist. Bk., Lmd. Old Bk., Lmtd. Bank of Leeds. Limited Yorkshii-e Banking Co.... Sheffield Bkg. Company „ and Hallamsli.. , , and Rotherliam „ Union... £ ICO, 6oo, 417, 220, 165, i95> 386, 151. 250> 29-> 183, 161, 120, 13c, 79, 105, 174. 305. 204, 109, 157, 85, 250, 80, 750, 128, £ 48, 226, 100, 235, 123, ^3, 131, 22, 67, 97, 53, 79, 23, 59, 15, 67, 45, 86, 216, 41, 28, 7, 107, 10, 105, 66, £ 1,093, 2,963, 885, 1,323, 308, 335, 733, 352, 1,746, 1,097, 427, 993, 248, 1,092, 472, 886, 432, 2,549, 1,225, 839, 436, 560, 794, 522, 2,726, 1,320, £ 1,241, 3,789, 1,402, 1,778, 596, 593, i,2t;o, 526, 2,063, 1,486, 663, i>233, 391, 1,281, 566, 1,058, 651, 2,940, T,645, 989, 621, 652, 1,150, 612, 3,581, 1,514, £ 932, 3,756, 1,189, £ 76, £ 227, 197, 1 £ 6, 33, 16, K, 18, 20, 10, 40, 21, 5>^ i5> 4' 6, 16, 7, 41, '9> 23, i4» 7, 28, 12, " / 13 14 15 16 17 18 1,054, 496, 1,923, 1,773, 578, 586, 118, 100, 58, 20, J 19 20 21 22 928, 645, 589, 2,598, 1,303, 832, 537, 533, 956, 1,465. 658, 1,218, 387, Burton, Uttoxeter, &e., "1 Union J NottingLam J. S. Bk., ic?. Stamford, Spalding, "1 &c., Banking Compy. J Staffdsli. J. S. Bk., Lmtd. Lloyd's Bkg. Co., Ld., "1 23 1 24 26 27 { 28 29 30 31 32 34 560, 218, 56, 226, 37, 113. 7, 179, 41, 249, 98, 94, 34, 112, Brmnglim. J. S. Bk.,irf. Bkg. Co., Ld. „ Town & Dist. Dudley & W. Bromwicli Wrcstr. City & Coty., Ld. Bucks & OxonUn., Lmtd. W.ofEng.&S.WalesDis. Devon and Corn. Bkg. Co. Totals 33 34 2,912, <- 600, 308, 276, 35 1,5 14, 8,180, 3,055, 34,752, 45,989, 29,266, - ~v- 11,7 1,602, 51, 2,612, 762, * Half-jea r's prof ts. t Tliis summat ion is ar •ived at )y doul )liug the 1 95 )/• 1870, v:ith Analysis, Dividends, Prices, and Yield — Contd. 9 lU 11 13 13 11 10 10 Analysis. Dividend per Cent, per Annum. Amount per Share Paid. Market Price, Jannarj', 1871. Yield per Cent, per .\nuum at Market Prii e. Net Profits, less Charges. DO'S omitted.] Ratio per Cent. of Net Profits to Total Resources. Government Securities, Casli, &c. Ratio per Cent, of Government Securities, Cash, &c., to Liabilities to Public. X um- ber. £ Per ent. £ Per cnt. Per cut. £ S. d. 32,7 41,9* 44,7 2| 2i 303, 197, 28 22 8 9 10 15 11 18 24 15 4 8 lo <; 12 6 7 17 « 10 11 12 48,3 28,2 11,6* 21,0* 12,5 32,6* -,3. -4 4f 4 3t 2f 3* 7i. 176, 20, TOO, 5 24 5 6 zz\ i8 6 Hi 5 20 40 20 30 20 25 121 119 45 10 37 22 39 7 II 3 8 - - 4 10 - 6 t 7 5 13 7 682 13 14 15 16 17 18 38,1 21,3 2| 3i — — I2f III 140 25 255 44 7 - - 6 12 I 19 20 31,2 15,0 2i 4 — — i6i 9f 32 12 72 20 7 10 - 5 12 6 21 22 10,2* If 347, 31 14 10 23 6 I 8 23 8,0 if — — 5 10 9 5 II I 24 22,6 2-|- 397, 45 15 10 27 5 II I 25 21,5 3i 55, 13 ih 20 21 7 2 10 26 24,0* if 305, 11 12^ n 14 6 13 i I 27 43,8 18,5 15,7 4,3 if i| i '34, 71, "3, 26 16 16 20 20 6i 7i 5 10 5 8 10 30 10 19 6 <5 13 4 3 2 6 6 - - 8 6 8 28 29 30 31 13,1* zk 166, 21 loj 12^ 19 6 18 z 32 15,7 65,1 2| If 584, 21 i6i 8 5 15 17 7 I 2 33 34 18,0 li — — I2i 32 70 5 14 3 35 l,102,4t Average 2§ 5,623,. Average 22 — — Average 6 7 2 •ofit in the case of those bants in which it is given for the half-year only. 96 Table XLYII. — Scottish Bead- Balance [OOO's omitted in all money columns ICum- ber. Banks. { 9- 10 11- Bant of Scotland Central Bant of Scotland B. of ScotJd. witli Central Royal Bank of Scotland ■<. British Linen Company -j Commercial Bant off Scotland \ National Bank of Scot- / land 1 Union Bant of Scotland -i Clydesdale Banting J Company \ City of Grlasgo-sv Bank i Aberdeen Town and/ County Bant \ North of Scotland Bant Caledonian Banking f Company \ Totals < Date. Feb., 1866 '66 „ '70 Sept., 1865 » '70 April, 1866 » '70 Nov., 1865 » '70 Dec, 1865 „ '70 April, 1866 „ '70 Dec, 1865 „ '70 June. 1866 '70 Jan., 1866 '70 Sept., 1865 „ '70 Jime,1870 „ '70 1865-66 '69-70 Paid-up Capital. 1,000, 100, 1,000, 2,000, 2,000, 1,000, 1,000, 1,000, 1,000, 1,000, 1,000, 1,000, 1,000, 900, 900, 870, 870, 156, 182, 280, 320, 125, 125, 9,431, 9,397, 3 4 Liabilities. Reserve Fund and Balance Carried Forward. £ 275. 55; 304, 343. 437, 3i6, 346, 275. 362, 3i3> 406, 259. 374, 304, 339, 312, 56, 25, 82, 43, Money Lod?ed. Circu- lation of Notes. Accept- ances. £ £ 7,159, 898, 8,227, 604, 50, 614, 8,128, 8,686, 707, 673, 7,322, 7,283, 454, 540, 7,089, 7,533, 697, 709, 7,016, 8,282, 679. 629, 8,299, 8,296, 686, 620, 4,579, 5,293, 408, 484, 4,956, 6,109, 642, 697, 1,401, 1,448, 139, 153, 1,716, 1,862, 223, 276, 702, 70, £ 199, 947, 200,* 198, 382, 293, 350, 333, 500,* 1,119, 341, 148, 164, 172, 564, 667, 93,! — 2,549, 59,263, ' 5,359, |2,699, 3,018, 63,758, I 5,488, 3,878, Total Resources £ 9.238. 1,103, 11,092, 11,378, 11.994, 9,.475> 9,462, 9,4", 9.937j 9.508, 11,436, 10,5-84, 10,439. 7.189, 7.^59. 8,653, 1,752, 1,808, 2,300, 2,516, 940, 1,015, 79,302, 85,540, * Estimated. 97 Vteets for Years 1856-66 and 1869-70. xcept No. 15, in which OO's are omitted.] y 10 Assets. Bills and rVdvanccs. £ 6,317, 522, 7,668, 8,207, 8,486, 6,362, 6,782, 6,179, 7,090, 6,737, 7,903, 8,158, 7,766, 5,163, 5,467, 5,232. 6,236, 1,343, 1,829, 1,687, 1,742, Government and other Securities. 51c, 2,708, 2,7^0, Coin, Notes, &c. Property Account. 532, 53, 464, 494, 686, 270, 2,160, 395, 2,622, 2,203, 515, 532, 2,076, 2>905, 593, 500, i)4i3> 2,110, 848, 406, 621, i>043, 475, 562, 1,182, 1,398, 642, 803, 276, 132, 165, 610, 501, 676, ^34, L16, 252, 89, 100, 1 12, 113, 123, 124, 95, 112, 101, 128, 165, 157, 96 .16, .02, 216, 26, 38, 3, 21, 17, ^3, i;i u Analj.sis. Net Profits less Charges. [OO's omitted.] £ 128,6 20,0 123,7 177,9 175,6 131,4 136,0 130,9 152,1 132,1 145,9 136,3 135,6 112,1 121,7 94,5 94,2 27,9 20,1 35,7 34,5 17,0 17,2 Ratio per Cent. of Net Profits to Total Resources. Per cnt. i^ If Liahilitics to Public. £ 7,962, 948, 9,788, 9,035, 9,556, 8,158, 8,116, 8,137, 8,575, 8,195, 10,030, 9,325, 9,065, 5,150, 5,949, 6,161, 7,471, 1,539, 1,600, 1,939, 2,139, 771, 835, Govern- ment Securities, Cash, &c. £ 2,790, 563, 3,238, 3,059, 3,394, 2,990, 2,556, 3,137, 2,735, 2,669, 3,405, 2,261, 2,516, 1,095, 1,605, 1,824, 2,201, 442, 610, 753, 316, I'atio per Cent, of Government Securities, Cash, Sec., to .Liahilitics to Public. 30 33 34 36 30 34 39 32 32 34 24 28 21 29 29 30 25 25 31 35 38 Num- ber. •10 11 55,908, 834, 61,145, 16,218,1 6io,J 18,29; 4,642, 4,866, 1,089, 1,232, 1,144,8 1,157,2 Average 1-44 I '3 5 66,373, 73,124, 20,906, 23,161, 31^ 31 :J t Exact amount cannot be ascertainetl. 98 Table XLVIII. — Scottish Banks. Dividend, Price, and Field to Investor, 1866 and 1870. Banks. Eank of Scotland Central Bank of Scotland B. of Scotld. -vritli Central Eoyal Bank of Scotland -I British Linen Company ■! Commercial Bank of Scotland National Bank of Scot- land Union Bank of Scotland -j Clydesdale Banking f Company \ City of Glasgow Bank....-! Aberdeen Town and J County Bank \ North of Scotland Bank | Caledonian Banking J Company \ J 1865-66 Totals.... I ,g9_yQ Diridend, Price, and Yield. Dividend per Cent. per Annum. 125 7h H Average 10 Amount per Share Paid. £ s. Stock Stock Stock Stock Stock Stock Stock Stock Stock 6 - 7 - 3 10 4 - 2 10 Market Price. January, 1866. 154 231 236 190 7097 140 i3t 7 li January, 1871. 270 180 267 282 275 212 227 189 14 Yield on Purchase Price, January, 1871. £ s. d. 4 8 10 4810 4 17 9 4 19 6 4 14 6 4 19 2 4 17 10 4 15 2 5 - - 5 - - K — — Average 4 16 6 99 V. Working Expenses — Profits — Price and Yield to Investou. Charges or Worhiag Expenses. In dealing -witli the column foi* charges and the columns of ratios based upon it, we must remember that perfect accuracy of compa- rison is rendered impossible by diversity of practice on the part of various banks. Some pay their dividends free of income tax, and the tax on the dividend then swells the expenses, but the chief diversity doubtless arises in the matter of rent. If a bank owning its premises does not debit charges with rent, its current expenses will show an unduly favourable comparison with those of a bank which cither pays rent or debits its charges account with an equivalent sum. In the tables two ratios have been calculated in reference to charges — first, their ratio to net profits, and second, their ratio to liabilities to the public. A third is supplied below, viz., their ratio to total resources. The Scotch banks have not been in the practice of stating chai'ges in their balance sheets, but the total amount of their charges for 1874 was returned at 888,458^. to the Committee on Banks of Issue. The Irish banks' return of charges supplied to the committee ■omits one bank of issue, and is comparatively valueless, as the aggregate liabilities of the banks making the return are not known. Only thi'ee of the five Irish banks whose balance sheets I have tabu- lated give their charges in their published statements. As two of these three are banks of non-issue, I am enabled to supply the charges of the third non-issuing bank from the return furnished to the Parliamentary Committee. The returns of charges furnished to the Committee by thirty- six English joint stock banks of issue, and by forty-five English joint stock banks of non-issue, oxe valueless for purposes of comparison, because in neither case are the aggregate liabilities of these banks ■either stated in the evidence or otherwise ascex'tainable. If we might assume that the thirty- six issuing English banks whose charges are stated in the Appendix to the evidence, at pp. 554 and 555, showing a total of 424,369/., were the same thirty-six banks whose total deposits Mr. Palgrave was enabled to return as 42,342,294/. (Appendix, No. 14, p. 548), the ratio of their charges to their deposits would appear as i per cent., and this, it will be seen, approximates very closely to the ratio shown below for the twenty country banks whose charges are stated in the accounts summarised in Tables XXYII and XXVIII. h2 100 The subjoined table (No. XLIX) compares charges proportionally witli net profit less charges, with liabilities to public and Tvith total resources. Table XLIX.— United Kingdom Joint Stock Banks ; Ratios per Cent, of Charges or Working Expenses, 1874. Locality. To Net Profits, less Charges. To Liabilities to Public. To Total Kesources. England — Piu'ely London — 3 senior banks (no retm'n fori Union) J Per cnt. 38-1 47 '5 Per cnt. 0-i8 1-01 Per cnt. 0-44 0-78 39"5 92-8 74"o 0-54 1-14 1-60 0-48 1 '06 London and provincial — I"50 88-7 42-7 1"22 0-95 I '10 o*8o Scotland — ii banks 6z-z 0-96 0-84 67-9 1-44 i-i8 I find that generally the larger the number of branches, the higher are the expenses relatively to the -ultimate net profit realised, and also that the ratio of expenses to liabilities to the public is smallest in those banks which show the largest average of liability at each office. This is precisely what might be expected. Where the rate of profit earned on the total resources is small, the expenses bear a correspondingly high ratio to the net profit earned. Amongst the purely provincial English banks, the absolutely lowest ratio of expenses to liabilities to the public is 0*55 in the case of the Swaledale and "Wensleydale Bank, a bank of issue. The highest ratio, excluding three exceptional banks, is i'8o, in the case of the Worcester City and County Bank, Limited.. Profits. For some years past the " Economist" has published half-yearly analyses of the London joint stock bank balance sheets, and in order to arrive at the net business profit earned on the cash deposits, has deducted from the actual net profit earned 4 per cent, on the capiial and reserve fund. 101 The rationale and modus operandi of the calculation arc stated \)j the " Economist " as follows : — " The profits of banking are derived from two sources, first from the income obtained by the investment of the paid up capital and the reserve of undivided profits ; and, secondly, from the profits arising from the employment of funds belonging to customers — that is to say, deposits and balances of current accounts — supplemented by commissions for agency business transacted for country and foreign banks, for acceptances given on behalf of customers and correspondents against securities of various kinds lodged by the parties as collateral guarantee. The first may be called investment, and the second, business profits. It is .reasonable to suppose that the bauks realise quite 4 per cent, per annum on the investment of their paid up capital and reserves, and if the amount representing this interest be deducted from the total sum which remains at credit of profit and loss, after providing for bad debts, for interest allowed on deposits and credit balances, for depreciation and repair of premises and property, for rebate on current bills held under discount, the figures which remain will of necessity represent the amount of profits yielded by the business apart from the invest- ment of capital and reserves; and the most satisfactory mode of exhibiting the ultimate result will be by calculating the percentage of the business profits on the •amount of the cash deposits. It is clear, for example, that a bank employing its deposits chieHy in the discount of bills of the highest class, in the purchase of securities of the most solid and most marketable character, and deriving but little profit for commissions on acceptances and credit, will exhibit a smaller percentage of profit on deposits than the case of banks managed on principles less rigid." Now it seems to me that this calculation of net profit on cash deposits is entirely fallacious as a basis of comparison between bank and bank, unless it happens that the figures of the banks bear very nearly the same proportional relations to one another. If the calculation be applied to two banks the proprietors' funds of which are in one case 50 per cent., and in the other case 10 per cent, of ■the money lodged, the results will be veiy misleading. If the pro- prietors' funds are large relatively to the liabilities, they will naturally and legitimately be partially employed in the ordinary business of the bank, and will thus earn, on the average, more than 4 per cent., and whatever they earn beyond 4 per cent, would go to swell fallaciously the profits apparently earned on the deposits ; whereas if the proprietors' funds are small relatively to liabilities they may earn considerably less than 4 per cent, overhead, and whatever they earn less than that rate would, on the " Economist's " basis of calculation, serve to diminish the rate apparently earned on cash deposits. This fallacy in the "Economist's" system was completely over- looked by Mi\ Charles Gairdner, one of thj Scotch witnesses be!ore the Committee on Banks of Issue, 1875, when he put in the follo\\ ing -calculatioa : — 102 Percentage of net business profits : — On cash deposits of 2 1 EnglisTi provincial banks ' ,, 1 1 Scotch banks £ s. d. 113 z per cent. Difference And from this difference, assuming tlie English provincial deposits at 200,000,000?., he calculated there would be "a gain of 1,125,000^ " to the people of provincial England by the adoption of the Scotch " margin of banking profit." Mr. Gairdner omitted the working expenses from his calculation, but this is immaterial, as it is found by Table XLIX that they bear very nearly the same ratio to liabili- ties in provincial England as in Scotland; but it was a most unwarrantable straining of the " Economist's " mode of calcula- tion to treat its results as an index oC the comparative cost of banking to the piiblic ; and it was pertinently pointed out by Mr. Rae in his evidence, that as all the Scotch banks are bound by one scale of interest, discount, and charges, the very return upon which Mr. Grairdner's estimate was based exposed the' fallacy of his reasoning, for it showed the net profit on deposits of the British Linen Company to be ih 7s. lOfZ. per cent., whilst that of the City of Glasgow Bank was only 175. 2c7. per cent, a difference of 106!. 8f?. per cent, between two banks whose terms of business to the public are identical. I have not adopted the " Economist's " basis of calculation,, because it would be misleading when applied to banks differing widely in position and characteristics. Ratio of ISfet Profits to Total JResoiirces. Believing the best test of a bank's annual profits to be the ratio they bear to the total resources employed in its business, I have calculated that ratio in the various tables ; but it must not be supposed that the rate of profit affords any reliable index to the comparative cost of banking to the public. It will be interesting to compare the annual ratio as shown by the joint stock banks of the different districts : — Lociility of Banks. Kumbcr of Banks. Rate of Net Profit on Total ResoiuTcs. Purely IJondon 7 7 49 11 5 Per cut. I'ZZ London and provincial 1-24 2*07 Purely provincial Scotch. I'S"! 1-66 Amongst the London banks the absolutely highest rate of profit is 1*92, shown by the Alliance Bank, and the lowest "84, shown by the City Bank. The three senior banks show great equality in the rate of their profit, viz., 1*2 per cent. Amongst the London and provincial banJcs the absolutely highest rate of profit, 2-09 per cent., is shown by the Consolidated Bank. Amongst the purely provincial English banks, the lowest rate of profit earned on the resources is i '44, for the North and South Wales Bank and the Hampshire Banking Company, and the highest, 4'22, for the Bradford Commercial Banking Compan}', Limited. The rate of the Manchester and Liverpool District Bank, the largest of the purely provincial banks, is 1*5 per cent. The rate of profit earned on the total resources will naturally be modified by local circumstances, but, speaking generally, we may expect it to depend in a great measure on (1) the character and activity of the business, (2) the proportion of proprietors' funds to liabilities to the public, (3) the proportion of the resources held in cash or in a readily convertible shape, and (4) the working expenses. Where rediscounting customers' bills is practised, the rate of profit will necessarily be increased. Where the proprietors' funds are large relatively to the money lodged, the profits should be cor- respondingly enhanced. On the other hand, where large reserves are held at unremunerative rates, the rate of profit must necessarily bo diminished. Where not only all the proprietors' funds, but also a considerable proportion of the money lodged, are held in cash and low-interest-bearing securities, the profit will be comparatively smaller than where not only all the money lodged, but likewise a portion of the proprietors' funds, are employed at a banking profit in accommodating the customers with discounts and advances. The working expenses naturally tend to increase with the number of branches. Table L places in juxtaposition the net profit earned on the total resources, the ratio of proprietors' funds to liabilities to public, the ratio of cash and surplus funds to liabilities to public and to proprietors' funds, and the number of branches and sub- branches, in the case of the London and provincial and purely pro- vincial English joint stock banks. 104 Table L. — London and Provincial and Purelj/ Proviiicial English Joint Stocl- Banks ; Rate of Profit Earned, 1874. Kum- ber. Londou and Proviuciul and Purely Provincial English Banks. [Banks of Issue in Italics ] Eateof Net Profit earned on Total Resources. Number of Branches and Sub- Branches. Ratio of Proprietors' Funds to Liabilities to PubUc. Ratio of Cash and Surplus Funds to Liabilities to Public. Ratio per Cent, of Cash and Surplus Funds to Pro- prietors' Funds. 1 2 LONDON AND PROVINCIAL. National ProTiucial Bank of England Per cnt. i-:8 1"00 2"09 1-62 1-48 1 "46 0-88 2-z8 2"I0 2-50 2"2I i-8o 3*02 2 "45 2-17 2-94 2-04 1-44 1-50 i"9o 2-90 2-14 2.92 2-09 1-78 4-22 3-08 3*-5 2-27 2-92 3"05 2-77 3 '44 No. 137 148 3 27 26 54 10 5 17 4 3 16 1 2 36 51 26 20 8 1 16 3 1 2 1 21 3 4 3 Per cut. 9-0 8-9 -7-3 24-1 i9'6 13-6 29-4 28-0 i6-6 = 5 "4 30-5 107-3 7i'7 45'- 22-8 82-0 37-4 14-8 11-7 17-4 3^-6 45 "4 43'3 12-9 I2"I 3i"7 6o'5 47-4 45 '5 45 "8 47 -7 26-8 41-8 14-8 50-2 Per cnt. 42-4 33-2 30-6 16-0 28-4 42-3 14-1 26-2 14-4 27 9 Per cut. 471 371 3 III 4 5 6 7 1 Midland Banking Company, Limited Loudon and South-Western Bk., Limd. „ Provincial Bank, Limited * „ Yorksliii-e Bank, Limited PURELY PROVINCIAL. I. Cumberland and Northumberland. 66 144 310 48 2 3 4 Cumberland Union Bkff. Co., Limited Carlisle City and District Bank Bank of Whitehaven, Limited 158 47 26 5 *Nortli-TiIastern Bank, Limited 6 II. Liverpool. *Adelplii Bank, Limited 17 7 33 16 10 30 8^ 4 7 3 4 7 25 16 147 20 28 7 8 Liverpool Commercial Bkg. Co., Lmtd. „ Union Bank 9 10 National Bank of Liverpool, Limited North-Western Bank, Limited 11 North and South Wales Bank 207 290 43 53 373 243 12 13 14 15 16 17 18 19 III. Manchester District. Manchester and Liverpool District .... ,, County Bank, i/«i«7ec^ Union Bank of Manchester, Limited *Lancaslure and Yorkshire, Limited .... Manchester Joint Stock 'Bank, Limited Parr's Banking Company, Limited .... IV. Yorkshire. Swaledale and Wensleydale Bkg. Co. Bradford Bankinn Companii 33-9 14-0 24-4 48-2 29-4 7-7 20 21 22 ,, Comml. Joint Stock Bank Bradford District Bank, Limited „ Old Bank, Limited — 23 Bank of Leeds, Limited iii 24 25 Halifax Comml. Banking Co., Limited Yorkshire Banking Company 26 Sheffield Banking Company 27 28 ,, a)id Hallamshire Bank ,, and EotJierham Bank — 29 Sheffield LTniou Banking Company .... — — * For note see next page. \. 105 TAr.i.K 1,.-- London and Prooiiicial and Parelij Proviiicid Eiif/Jish Banks. — Contd. Num- ber. 30 31 32 33 34. 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 London aiul rnivinciiil and Purely Vio\ iiicinl English B:ink3. [Ranks of Issue in Italics.'] v. Derby, Notts, &c. Uiirioii, L'llo.veler, c^'c, Union Bank... NotLingliara Joint Stock HAwk, Limited Stamford, Spalding, and liu.tfon Hank Leicestershire Banking Company VI. Black Country. Stafforclshirc Joint Si . Bunk, Limited County of Stafford Eank Lloyd's Banking Company, Limited ... Birmingham Joint Stock Bank, i/;)H7e(^ „ Bkg. Company, Limited „ Town and District Bank Wolverhampton and Staffordshire VII. W. and S. Counties. Stourlridge and Kidderminster Bank Worcester City and Countif, Limited Bucks and Oxon Union Bank, Limited W. ofEnrjld. and S. Wales List. Bank Devon and Cornwall Banking Comp. *Three Towns Banking Co., Limited Wilts and Dorset Banking Company... Hampshire Banking Company *Xorth Kent Bank, Limited Rate of Net Profit earned on Total Resources. Per cut. •13 -■-9 i-6i ^•37 Z*2I 2-6z 1-49 2-l6 2-42 2"26 2-33 1-45 2"67 1*55 1-44 rSz Number of Branclics and Sub- Branches. No. 2 18 10 1 35 2 1 7 13 13 8 42 14 49 29 1 Ratio of Proprietors' Funds to Liabilities to Public. Per cut. i5'9 -3' I 24' I 34"3 22'5 9-6 33'4 15-8 15-8 34"3 i4'o 19-9 12-6 109-9 12-8 9-0 -9"9 Ratio of Cash and Surplus Funds to Liabilities to Public. Per cnt. 17-3 35-3 171 25-8 23-8 25-8 11-7 25-7 22'2 20-4 Ratio per Cent, of Cash and Surplus Funds to Pro- prietors' Funds. Per cut. 204 147 50 114 9- 104 163 64 9-3 8 62-2 39-5 13-7 485 438 46 * Banks indicated thus are exceptional, either in consequence of their recent establishment, or of the small extent of their business. In this, as in the other tables, the names of the banks of issue are printed in itaUcs. On comparing their rate of profit with that of the non-issuing banks, I cannot find that the results are much, if at all, different. The National Provincial Bank and the London and County cai'n net profits of i"2 8 and i per cent, respectively, with very small proportions of proprietors' funds, a very large number of branches, and handsome proportions of cash and other reserves. Amongst the Cumberland banks the smallest rate of profit on total resources is earned by the Cumberland Union Bank, whose cash and surplus funds exceed its proprietors' funds by 53 per •cent. Amongst the purely Liverpool banks the highest rate of profit is earned by the National Bank, with the highest ratio of proprietors' funds, and a moderate x-eserve of cash and surplus funds. 106 Amongst tlic banks of tlie Mancliester district, the lowest rate of profit (i| per cent.) is earned by the Manchester and Liverpool District Bank, with the smallest ratio of capital to liabilities, a large number of branches, and large cash and other reserves, of which a great proportion is in English Government seciirities, yield- ing of course a comparatively feeble profit ; whilst the highest rate of profit (2-9 per cent.) is earned by the Union Bank of Manchester, with a large proportion of proprietors' funds, and apparently small proportions of cash and other reserves. The Yorkshire banks generally present by far the highest rate of net profit, along v>'ith such very large proportions of proprietors' funds, as go far to account for their exceptionally high return. The highest rate of profit in this group, and indeed in the whole table, is earned by the Bradford Commercial Joint Stock Bank, with the unirsually large ratio of 6o§ per cent, of proprietors' funds to liabilities to the public. The smallest rate of profit but one in the group is earned by the Swaledale and Wensleydale Banking Company-, with a moderate ratio of propi-ietors' funds to liabilities to the public, and very handsome proportions of cash and reserves. The Yorkshire banks, as a rule, do not state their cash and reserves, and the very high rates of profit which in many cases their resources yield, though no doubt accounted for, to some extent, by the gene- rally high proportion of their proprietors' funds and by the great activity of trade in the district, suggest the inference that in these cases the reserves employed at unremunerative rates are small, and that in some instances the profits may be enhanced by recourse to the practice of rediscounting. None of them, except the Yorkshire Banking Company, have numerous branches. Amongst the black country banks, Lloyd's Banking Company, Limited, with by far the smallest ratio of capital, and by far the greatest number of branches, shows all but the smallest rate of profit. Amongst the banks of the Avestern and southern counties, omitting two exceptional instances, the highest rate of profit is shown by the Worcester City and County Bank, with the highest ratio of pro- prietors' funds, whilst the lowest rate of profit is shown by the Hampshire Banking Company, with the smallest ratio of proprietors' funds, twenty-nine branches, and a very goodly proportion of reserves. Similarly the small return of 1-55 per cent, of profit showh by the Wilts and Dorset Bank, is doubtless due to its moderate ratio of proprietors' funds, 13 percent., its numerous branches, forty-nine, and its enormous ratio of cash and reserves, 62 per cent, to liabilities to public, and no less than 485 per cent, to proprietors' funds. 107 Table LI. — Scotch and Irish Joint Stock Banls, R"D — Piu-elv London .... 1'22 Il'O 2,475, z6-z 238 0-48 London aud pro- 1 vincial J [1-24 io'9 59 135, 36-7 335 I"IO Pui-ely provincial . 2-07 2I-I 11 148, 30-9 148 o-8o Scotland 1-35 14-6 79 lOf),* -,o-8 211 0-84 Ireland 1-66 20"2 47 100, 3-'o 158 i-i8 * Taking the figm-es shown iu Table LXXTII, Progress of Scotch Banking, the average liability to public per ofEce -n-ould be 101,000/. In the case of tlie London banks the large average HabiHty per office, and the consequently small ratio of working expenses, should enhance tlie profit, whilst the small ratio of proprietors' funds to liabilities to the public depresses it. The profit of the London and provincial banks is depressed by their large proportions of cash and surplus funds to liabilities to the public, by their comparatively high rate of working expenses, and by the small proportion of their jDroprietors' funds to their liabilities. The profit of the purely provincial English banks shows the highest rate of all, which is accounted for in great measure by the larger proportion of their proprietors' funds, and their satisfactory average liability per ofiice as compared with the Scotch and Irish fio-ures. The average sustains also a very appreciable increase from the enhanced rate of profit earned by those banks w^hich rediscount their customers' bills. The English provincial working expenses compare most favourably with the Scotch, when it is considerd that tbe scale of salaries is very appreciably higher in England than in Scotland. The Scotch working expenses are, indeed, singularly low, when the enormous extension of their S3'stem of branches is considered. It may be estimated that so far as the public are concerned, some 400 of their branches are superfluous. Reckoning the average cost -of these at the low rate of 600Z. per office, it would appear that the total cost to the banks of their superfluous offices amounts to 240,000/. per annum, which if added to their profit for 1874, would bring the rate of that profit on the total resources to i"58 per cent. The large sums very prudently held by the Scotch banks in 109 English Government securities tends to depress llic rate of profit wliicli tliey earn. Marlict I'rice and Yield to Investors. The market price of bank shares and their yield to the investor are regulated by a variety of circumstances : — 1st. Public opinion as to the safety of the bank, the nature of its bnsiness, and the soundness of its management. 2nd. The amount of reserve fund -which is designed to protect the proprietors against great fluctuations of dividend and possible loss of capital. 3rd. The actual amount of dividend and bonus paid. 4th. The prospects of increased dividend. If the actual amount of the profits mnch exceeds the amount of the dividend and bonus paid, investors are encouraged to expect an increased distribution, and this expectation is discounted in the market price. 5th. In the case of recently established banks, the market price naturally represents the dividends expected rather than those realised. Table LI II is designed to illustrate some of these points. Tablk LIU. — London and Provincial and Purely Provincial English Joint Stcck Banks ; Profit, Dividend, Prire, and Yield ijer Cent, to Investor, January, 1875. London and Provincial and Purely Provincial English Banks. [Banks of Issue in Italics.'] Ratio Profit Dividend Premium per Cent. per Cent. and per Cent, of of Reserve Fund to Paid-up per Annum on Paid-up Bonus per Cent. per Shares in Market, January, 18T5. Capital. Capital. Annum. Per cnt. Per cnt. Per cnt. Per cnt. 57 24--4 23 300 C^Z 18-6 20 2281 15 11-2 10 72 15 9-6 9 37i 8 9-8 7* 12^ 20 14-7 10 65 z 4-0 4 discount 138 25-0 22 297i 37 20-3 18 220 H3 26-6 20 252 95 18-3 20 285 31 4-6 5* 12^ 4 7*5 •; discount <;8 12-5 12^ 80 27 14-9 10 45 20 7-9 6i H 2-; 9-4 7 30 55 17-3 20 210 Yield per Cent. Per Annum at .Market Price. 6 7 8 9 10 11 LONDON AND PROVINCIAL. National Provincial Banli of England London and County Bank Consolidated Bank, Limited Midland Banking Company, Limited .. London and S. -Western Bank, Limd. „ Provincial Bank, Limited * „ Yorkshire „ PURELY PROVINCIAL. I. Crnnberland and Nortliumberland. Carlisle and Citmberlaiid Bank Cumberland Union Bkg. Co., Limited.. Carlisle City and District Bank Bank of Whitehaven, Limited *Nortli-Eastern Bank, Limited £ s. d. 5 15 - 6 I 8 5 16 4 6 10 II 6 13 4 6 I 3 f, - - 5 10 K 12 8 2 6 3 7 3 10 : 5 II. Liverpool Banks. *Adelphi Bank, Limited Liverpool Commercial Bank, Limited. ,, L^nion Bank National Bank of Liverpool, Limited. Nortli-Western Bank, Limited North and South Wales Bank 6 18 10 6 17 II 6 3 I 5 7 8 6 9 - * For note see next page. 110 Table 1,111.— London and Provincial and Parely Provincial English Banks.— Contd. London and Provincial and Purely Provincial English Banks. [Banks of Issue in Ilalics.'] Ratio per Cent. of Reserve Fund to Paid-up Capital. III. Manch.ester District. Maucliestcr and Liverpool District.... ,, Co-antj^ank, Limited tJiiiou Bauk of Maneliester, Limited .. ^Lancashire and Yorksli. Hzxik, Limited Manchester Joint Stock Bank, Limited Parr's Banking Company, Limited .... IV. Yorkshire. Swaledale and Wenslei/daU Blrj. Co. Bradford BanJcing Company ,, Commcl. Joint Stock Baal: Bradford District Bank, Limited Old „ Bank of Leeds, Limited Llalifax Commercial Bkg. Co., Limited Yorkshire Banking Company Sheffield ,, J, and Sallamshire Bank „ „ Bofherham Bank Sheffield IJnion Banking Company ... V. Derby, Notts, &c. Burton, Utto.reter, ^'c, Union Bank.. iS'ottingham Joint Stock Bauk, Limited Stamford, Spalding, and Boston ... Leicestershire Banking Company ... VI. Black Country. Staflbrdshire J. Stock Bauk, Limited County of Stafford Bank Lloyd's Banking Company, Limited .... Birmingham Town and Dist. Bk., Lini. ,, J. Stock Bank, Limited „ Bkg. Company, Limited Wolcerhampton and Staffordshire ... VII. "W. and S. Counties. Stourbridge and Kidderminster TVorcester City and Coty. Bk. Co., Ltd. Bucks and Oson L'uion Bank, Limited W. of Engld. and S. Wales List. Bank Devon and Cornwall Bkg. Company.. Three Tovras Bkg. Company, Limited Wilts and Dorset Banking Company Hampshu-e Baukmg Company *North Kent Bank, Limited Per cnt. 6; 14 21 ^9 65 84 50 ;<; zS .<9 59 36 28 53 34 36 58 37 107 78 38 41 86 41 -3 20 68 62 27 7 Profit per Cent. per Annum on Paid-up Capital. Per cut. 23-3 18-2 15-3 7-8 GO 23-7 17-7 20-7 14-2 14-0 9-2 14-2 361 18-0 15-2 19-5 12-7 21-1 11-2 16-2 15-0 12-1 20-5 25-2 23-9 19-9 19-1 15-5 29-5 13-3 22-6 16-8 21-7 5-2 221 22-2 8-5 Dividend and Bonus per Cent. per Annum. Per cut. 20 Premium per Cent, of Shares in Market, Januarv, 1875." I Of i3f 7 14 -4 17 15 i8i 20 8i I3t 20 122 14 i6i 5 13 Yield per Cent. per Annum at Market Price. Per cnt. 255 180 9^ 35 87i lG2i Shares v change 285 192i 104f 150 27 138i 300 954 99 161 75 170 50. 236i 125 41i 220 262h 240 200 1031 SO 150 102 250 123i 1341 discount 300 130 par £ s. ^ 12. 7 f- 16 7 8 10 6 8 14 5 ery rarely hands. 6 9 10 6 3 I 5 2 10 5 10 - 5 ^° i 5 17 5 6 - - 8 i; 8 710 9 7 3 8 7 2 10 782 5 13 4 ^ 1 I 622 17 4 I 14 * Banks indicated thus are exceptional, either in consequence of their recent cstabiishmeiif, or of the small extent of their business. Ill VI. Attempted Estimate of Total Banking Liaijimties and Assets of the United Kingdom. LialiUlies already Ascertained, and those Ttemainlnrj to he Est i mated. The tables give substantially the capital and liabilities of all the London banks, of all the London and provincial banks, of all the Scotch banks, of forty-nine out of ninety-seven English purely provincial banks, and of five out of nine L'ish banks. The aggre- gate deposits of all the Irish banks arc given by Dr. Hancock, from figures furnished to him by the various banks, as 31,700,000/. at 31st December, 1874. The average Irish circulation of the four weeks ending 26th December, 1874, was 7,151,000/., making the total liabilities to the public of the Irish banks 38,851,000/. If, therefore, we can estimate the liabilities of the forty-seven English pui'cly provincial l)anks, whose balance-sheets we have not had access to, and of the private banks, provincial and London, we shall be in a position to attain an approximate estimate of the grand total of the banking liabilities of the United Kingdom. Fttrely Provincial English Joint StocJc Banlcs. The forty-nine English purely provincial joint stock banks in Table XXVII show paid-up caj^ital 11,940,000/., liabilities to public 81,404,000?. Other forty- four English purely provincial banks are known to have a paid-up capital of 7,422,400/., and estimating them to have liabilities in the aggregate in the same proportion to paid-up capital as the forty-nine banks whose liabilities are ascertained, the amount of their liabilities Avould be 50,600,000/. There are three other banks whose capital is not stated, and whose liabilities we cannot estimate at more than 1,000,000/. This gives an aggregate liability to the public for the purely provincial joint stock banks of 133,000,000?. The calculation may be verified by other methods, thus : — The forty-nine purely provincial banks in Table XXVII show five hundred and forty-nine offices, with aggregate liabilities to the public of 81,403,700/., or 148,000/. per office. At the same rate per office, the other two hundred and seventy- four offices of the English provincial joint stock banks should show an aggregate liability to the public of 40,600,000/., making a total for the English purely provincial banks of 122,000,000/. against 132,000,000/., found by the calculation based on the capital. But this calculation calls for some rectification. The 49 banks •with 549 offices, show an averge of ii| offices per bank, whilst the remaining 48, or really 47 banks, as one does not do banking busi- ness, having 273 offices, show an average of 5f offices per bank. It is found generally that the fewer the offices per bank the larger the 112 liabilities per office. Amongst the 49 banks wbose liabilities are ascertained, the 25 wliicli liave fewer tban 6 offices per bank, sbow an average liability per office of 400,000/. Deducting from these the 7 largest with i office each, the average liability of the remaining banks is 270,000/. per office. If the average liability per office of the 47 banks whose liabilities we seek to estimate were taken at 250,000/. per office, the total would be 68,000,000/., which added to the ascertained liabilities of 49 banks, would yield a total for the 96 banks of 150,000,000/. Again, calculating roughly by the number of banks : — £ 49 show liabilities of 81,400,000 Deduct the 5 largest with liabilities of 31,900,000 Leaving .... 44 with liabilities of 49,500,000 In the same ratio per bank 47 would have habilities of 53,000,000 Making ....96 with liabilities of 134.400,000 Let us see how far these conclusions are verified by the figures published in the Appendix (N^o. 18) to the evidence given to the Banks of Issue Committee, 1875. The table there given I have here reprinted. Table LIV. — United Eingdoni Joint Stocl and Private Eanls. Beturn» Cajiital and Deposits supplied to Committee on Banks of Jssue — Sess 1875. [Eeprintcd from AppeniILK No. 18 to the Committee's Report and Evidence.] Banks. Numljer. Ueturns. Capital. Sent. Not Sent. Subscribed. Paid-up. London banks — Joint stock 29* 6ot 19 19 10 41 37,723,600 13,805,074 Private Total London banks. 89 38 51 37,723,600 13,805,074. Country banks — Joint stock, England „ Scotland ,, Ireland Private, England 99 12 9 189 3 88 11 8 143 II I I 46 3 60,329,805 8,000,000 13,750,257 9,697,000 5,190,000 ,, Ireland Total country banks. 312 248 6+ 68,329,805 28,637,257- Grand totals .... 401 286 115 100,053,405 42,442,331 * This number evidently includes discount companies and London and provincial banks, t This number includes bill brokers, and other houses not properly speaking bankers. ; 113 Table LIV.— United Kingdoui Joint Stock and Private Banks — Contd. Banks. Rest or Reserve of deposits. Undivided Profits. From Public. From Banks. Total. London banks — Joint stock £ 4,033,410 £ 108,235,092 31.803,561 £ 6,623,366 7,161,820 £ I 14,858,458 38,968,381 Total London banks. 4,033,410 1 140,038,653 13,788,653 153,826,839 Country banks — Joint stock, England .... ,, Scotland .... ,, Ireland Private, England . . 8,912,118 1,134,000 2,326,135 1 18,053,863 31,781,747 60,525,661 1,708,617 296,125 147,806 1 19,762,480 78,401,000 32,077,872 60,673,467 ,, Ireland Total country banks. 12,402,553 210,361,271 2,152,548 290,914,819 Grand totals .... 16,435,963 350,399,924 15,940,734 444,741,658 Note. — This return must be looked upon as to some extent conjectural, as the missing Irish returns may possibly have been sent in anonymously and posted in England, so that the postmark woidd give no indication of their origin. The total deposits of eiglity-eiglit of the English country joint stock banks are here shown to be 119,762,480/., or an average of 1,360,000/. per bank. Eleven banks gave no return, but as we have found the total number of English purely provincial joint stock banks to be ninetv-seven in 1874 (not ninety-nine, as stated in the Committee's return), and as one of these was ascertained to exist only as a bank of issue, I will calculate the remaining eight, at the same rate per bank as those which furnished figures to the chairman of the Committee, though this may be leather an over estimate. The calculation will then stand thus: — England and Wales Joint Stock Countri/ B'inks, 1874. £ Ascertained deposits of 88 banks 119,762,000 Estimated, at same rate per bank, 8 banks 10,890,000 Circulation of 54 banks 2,276,000 Acceptances 2,100,000 Total estimated liabilities to public i35,028,o--)0 These figures amply confirm the calculations already ari-ivcd at, quite independently, l\v tlie present inqniry; and 1 alopt 1 114 i34)000)OOo/. as my estimate of the liabilities to the public of the purely provincial English joint stock banks. English Provincial Private Panhs. The calculation by offices enables us to attempt an approximate estimate of the liabilities of the private bankers in the provinces. I have stated the number of the offices of the private banks in the English provinces as five hundred and twenty- three. As the number of the offices of these private banks per bank is only two and three-quarters as against eight and a-half offices per bank in the case of the purely provincial joint stock banks, and as we find that in the joint stock banks which have not more than thi'ee branches the average Hability to the public per office is 436,000/., I confess I should have thought it quite possible that the average habilities of the private country banks might be reckoned as high as 2 50,000/. per office ; but this estimate so very much exceeded that of Mr. Palgrave for 1871, viz., an average of 130,000/. per office for capital and deposits of all the country banks, joint stock and private, that I at once decided to reject it, and preferred to assume the average liability per office of the private banks to be only a little more than that of the joint stock banks, or say 160,000/. per office. This would yield a total liability to the public for the private country banks of 84,000,000/. I have endeavoured to verify this approximation by a calcula- tion based on the amount of note issues. Fx'om Mr. Palgrave' s valuable evidence of 1875, it appeared that in thirty-six joint stock banks of issue the proportion of circulation to deposits was 4 per cent, in 1874. The average circulation of the one hundred and sixteen private banks of issue was in 1874 2,600,000/. If the note circulation were 5 per cent, of their deposits, the latter w^ould show a total of 52,000,000/. or 450,000/. per bank. At the same rate per bank, the money lodged of the eighty private country banks of non-issue would show a total of 36,000,000/., and the calculation would stand thus : — England and Wales Private Country Banks, 1874. 116 issuers — circulatiou 2,600,000 ,, money lodged 52,000,000 80 non-issuers 36,000,000 Total 90,600,000 The table of the Committee on Banks of Issue fuimishes another and a surer means of testing the estimate of the liabilities of the private country banks. It gives the number of private provincial 115 banks as one kundred and eiglitj-nine, I make them one hundred and ninety-six. It gives the deposits of one hundred and forty-three as 60,673,467/., which is equal to an average of 424,000/. per bank. Reckoning the deposits of the remaining fifty-three at the same rate, they should amount in the aggregate to 22,472,000/., and the account would stand thus : — Enghtnd and Wales Private Coventry Banks, 1874. £ Ascertaiued deposits - 143 bauks 60,673,000 Estimated ,, 53 „ 22,472,000 Note ciruuLition 2,540,000 Total estimated liabilities 85,685,000 Here again my own independent estimates are sti-ikingly con- firmed by the statistics furnished to the chairman of the Committee. I adopt therefore 85,000,000/. as a reasonable estimate of the liabi- lities to the public of the private country bankers. London Private Banhs. Following the " Banking Almanac," I have in Table VIII set down the number of London private bankers as fifty-five, but th.e list will be found to include many houses which are bill-brokers, exchange and bullion dealers, or merchants, and I find on sifting it that there are in the city fourteen, and in the west end twelve, private bankers strictly so called. After inquiry and reflection, I estimate their money lodged at 60,000,000/., their acceptances at 10,000,000/., and the proprietors' capital employed in their business at 10,000,000/., equal to a total of 80,000,000/., as against Mr. Palgrave's estimate for 1871, endorsed by Mr. Newmarch, of 75I millions. (See "Notes on Banking," by R. H. Inglis Pal grave ; London, John Murray, 1873, p. 2.) Mr. Palgrave stated this as an under estimate, and there must have been some increase of money lodged with the private banks, as we have found there has been with the joint stock banks since 1871. Mr. Richard Seyd, in his instructive " Estimates of Amounts of Capital engaged in the " City of London Wholesale and International Commerce," sets down the capital of twenty-two London private bankers as 15,000,000/., and their deposits as 90,000,000/. ; but the latter sum seems to be quite an over-estimate. The table of the Committee on Banks of Issue already referred to does not unfortunately supply the means of testing any estimate of the money lodged with the London private bankers. It states the number of these to be sixty, and thus necessarily includes bill bi'okers and others, not in strictness entitled to be ranked as i2 nr. bankers. Of these it states the deposits of nineteen as amounting to 38,968,38 1 Z., which is equal to an average of 2,051,000/. per bank ; but as it is probable that several of the private bankers did not make any return, the figures of the table are valueless as a basis for a calculation of the total money lodged of the London private banks properly so called. Discount Houses and Bank of Engla)id. From the "Commercial History and Review" of 1874, I find that the capital and liabilities of the three discount companies therein tabulated are : — Capital. Reseive. Deposits. Three London Discount Co.'s.... £ 2,600,000 £ 685,000 £ 16,947,000 The author of that publication reckons the other discount houses to have in the aggregate resources amounting to 47,210,000/. These may, I assume, be distributed thus : — Other discount houses Capital and Reserve. £ 4,000,000 Deposits. £ 43,210,000 At 30th Decembei', 1874, the figures of the Bank of England stood thus : — [OOO's oniittecl.] Capital. Rest. Deposits. Active Circulation and Bills. Bank of England £ 14,550, £ 3,090, £ 26,500, £ 26,140, Synopsis of Results. From these various data I am enabled, with the assistance of the percentages of items to totals estimated in Table XLIV for liabilities and Table XLV for assets, to construct the following table* of the estimated total liabilities and assets of the banks of the United Kingdom : — Estimated Total Amount of Bills in Circulation. It may here be incidentally remarked that the figures in col. 9 of the table* quite corroborate the calculation of the # See pp. 118 and 119. iir total amount of bills in circiilation made by Mr. Palgrave by an entirely different method. In his "Notes on Banking," Mr. Palgrave computed that "the aggregate of bills in circulation is probably " not more than 300 to 350 millions at one time, including foreign " bills." Col. 9 of our national !)ankiiig balance sheet gives the total amount of bills under discount as 274,300,000/. From this there must be deducted say 30 millions for bills which being rediscounted appear twice in the total, and there must be added at least 80 millions for bills held by foreign and colonial banks, and undis- counted in private hands, and say 20 millions for bills held collaterally against advances and acceptances ; making a total of 344 millions. Previously to Mr. Palgrave in 1871, Mr. Newmarch had esti- mated the bills current for Great Britain at 180 to 200 millions for 1856, and at 116 millions for 1843—46, whilst Mr. Leatham's figures were for the United Kingdom 132 millions, for 1839, and 89 millions for 1832. [See Statistical Societifs Juunud, vol. xiv, part 2, pp. 160 and 167, and Mr. Palgrave's " Notes on Banking," p. 36.] It may be further remarked that col. 9 affords the means of estimating the amount of the loan fund ordinarily available in the London market for the discount of bills, thus- — Bills Estimated. £ London discount 'Houses 49,800,000 Bank of England (say in London) 6,000,000 London and provincial banks, say about one- 1 half of their total bills | "^.000.000 Purely London banks, joint stock and private .... 39,400,000 English provincial, Scotch and Irish banks. without intervention of bill brokers f -°'°°0'0°o } 105,200,000 ;oo,ooo If we reckon the average currency of these bills at seven weeks, the average amount matui-ing each week would be 17,900,000/.. and the average amount maturing in each of the forty-two business days of these seven weeks would be very nearly 3 millions. I feel quite sure I am well within the mark in estimating that there are 3 millions of bills taken off the London market by discount daily, on the average of the business daj's of the year. Mr. Newmarch 's estimate for 1850, of the average amount of bills under discount in London at one time, was 78 millions. His estimates did not include Ireland, and ccmpare thus with mint^, less the Irish figures. [Sec p. 120.1 118 Table LV. — Estimated Total Liabilities and Assets Liabilities. [00,000's omitted, thus 6,8 = 6,800,000?.] England — Pur ell/ London — Joint stock Private Total London. London and Provincial. Purely Provincial — Joint stock, 49 banks., 47 „ Total joint stock. Private Total purely pro- 1 vincial j Total England Scotland Ireland ... Total Bank of England Three London discount I companies J Other London discount "1 houses J Total London discount 1 houses J Grand Total 1 Paid- up Capital. Reserve Fund £ 6,8 4,3 11,9 7,4 19,3 30,4 9,7 6,8 46,9 14,5 2,6 64,0 2,5 1,7 5,3 3,9 9,2 13,4 3,8 2,7 19,9 3,1 23,7 3 Pro- prietors' funds. Money Lodged. 9,3 10,0 19,3 6,0 17,2 11,3 28,5 8,5 37,0 62,3 13,5 9,5 85,3 17,6 3,3 4,0 — 7,3 110,2 68,7 60,0 Note Circula- tion. £ 128,7 — 50,3 79,2 50,4 129,6 82,5 212,1 391,1 80,7 31,7 503,5 26,8 16,9 43,2 60,1 590,4 0,9 1,4 2,3 2,5 4,8 6,6 7,2 18,6 25,9 44,5 Accep- tances. 15,4 10,0 25,4 7 Liabilities to Public. £ 84,1 70,0 154,1 4,1 1,3 ,8 2,1 2,1 31,6 5,1 36,7 .5 37,5 54,4 81,4 52,6 134,0 85,0 219,0 427,5 92,4 38,9 558,8 53,0 17,4 43,2 60,6 672,4 93,4 80,0 173,4 60,4 98,6 63,9 162,5 93,5 256,0 489,8 105,9 48,4 644,1 70,6 20,7 47,2 67,9 782,6 Note. — The figures ascertained are in common type. 11 'J of Banks of United Kingdom, December, 1874. Assets. [00,000's omitted, tliiis 21,2 = 21,2fO,OOOI.] 'J Hill3 Dis- couiiteil. 10 Loans and Over- drafts. 11 Total Lent to Customers 12 Govern- ment and Other Securities. 13 Cash, &.C. U Total Casli and Surplus Funds. 15 Property Account. £ 21,2 18,2 £ 49,6 42,6 £ 70,8 60,8 £ 8,6 7,2 £ 13,5 11,6 £ 22,1 18,8 £ ,5 ,4 England — Purely London — Joint stock Private 39,4 92,2 131,6 15,8 25,1 40,9 ,9 Together 19,7 19,6 39,3 8.7 11,3 20,0 1,1 London and Provincial — Joint stock }- — — — — — — Purely Provincial — — : : — — 92,8 92,8 185,6 24,3 42,2 66,5 3,9 Total purely provincial 151,9 45,7 20,0 204,6 30,5 13,4 356,5 76,2 33,4 48,8 22,2 7,7 78,6 6,3 6,3 127,4 28,5 14,0 5,9 1,2 1,0 Total England Scotland Teeland 217,6 248,5 466,1 78,7 91,2 169,9 8,1 Total 6,9 3,9 10,8 37,3 21,5 58,8 1,0 Bank of England — — — — — — — / Three London discount \ houses f Other London discount \ houses 49,8 6,8 56,6 — — 11,2 ,1 London discount liouses 274,3 259,2 533,5 — — 239,9 9,2 Grand Total thus — 23,4. Those estimated are in block type, thus — 203,4. 120 Estimated Bills under Discount in Great Britain. [OOO's omilted.J Bills Lfntler Discount. Mr. Newniarcli, 1850. Percentages. Present Inquiry 1874. Percentages. In London 78,000, 22,001), -8 125,000, 135,000, 48 52 Locally Total 100,000, 100 260,000, ICO Even allowing for a possible under-estimate of the amount of bills discounted locally in 1850, tliese figures indicate the very large increase in the banking resources and commercial business of Scot- land and the English provinces. Total Banhing LiahiUfies — Comparison with Previous Investigations. The total liabilities shown by the above approximate banking balance sheet of the United Kingdom may without exaggeration be characterised as stupendous. The amount, including the capital employed in the business, reaches a grand total of 782,600,000/., or 7 millions more than the present amount of the national debt, and about 173 millions more than the total capital, including loans, of the railway system of the United Kingdom. It should be observed that the amount does not include foreign and colonial banks, which hold in England, and especially in London, an amount of capital and resources which, if it could be approximately -esHmated, would add many millions to the large total shown in the preceding table. It will be instructive to compare the results of the present inquiry with those of previous investigations. The only complete estimates previously made are, I believe, that of Mr. Newmarcb for 1850, that of Mr. Palgrave for 1871, and that of Mr. T. B. Moxon, of Stockport, 1873. Mr. Moxon's able research, entitled, " The Banks of the United " Kingdom, their Resources and Reserves," and published for private circulation, in March, 1875, proceeds in so many respects upon methods identical with, or akin to those which I have adopted, that r owe it to myself to say that my own work was far advanced, and the method of it laid down in every part some time before Mr. Moxon's succinct little pamphlet came into my hands. In collating the figures of the various investigations for com- parison in the subjoined table, such alterations have been made in the mode and order of statement of each as were requisite to reduce them all to one common form. 121 Table LVI. United Kingdom. CapiUd and Liabilities of Private and Joint Banks, 1850, 1871, 1873, and 1874. [OOO.OOO's omitted.] Stock Mr. Newinurcli, 1850. I'ru- purtioiiS to Total. Mr. Palgrave, 1871. I'ro- portiutis to Total. Mr. .Moxon, 1873. Pro- portions to Total. Present Inquiry, 1874. Pro- portions to Total. Tjoiidon banks MId. £. 64, 97, Per cnl. 37 MIn. £ 174, 210, Per CD t. 26 3^ MIn. £ 211, 246, Per cut. -9 33 MIn. £ 234, 256, Per cut. 30 33 161, 36, 10, 62 14 4 384, 67, 78, 58 10 12 457, 70, 67, 62 10 9 490, 70, 68, 63 9 8 Bank of England London discount'] houses — capital and > deposits J Total England ... 207, 36, 17, 80 14 6 529, 92, 41, 8c 14 6 594, 95, 43, 81 I ^ 6 628, 106, 48, 80 14 6 Irish. ,, Total United 1 Kingdom .... J 260, 100 662, 100 732, 100 782, 100 lu this comparison my total for the London banks includes the London and provincial banks, some at least of which are certainly included as country banks in the estimates of Mr. Newmarch and Mr. Palgrave. Relative Weight of Banh of England in the Money Market. The great alteration in the relative weight of the Bank of England in the money market, is but faintly indicated by the fall in the percentage of its figures to the total in Table LVI, from fourteen per cent, in 1850, to nine per cent, in 1874. The figures of the Bank of England in the above comparison include the bullion held, Government securities in both departments, and other securities, which last figure for 21,200,000/. in the total. It is, however, well known that a very large proportion of the item of " other securities " in the Bank of England returns consists of investments rather than banking loans or discounts, and cannot practically be reckoned as money " on the market." It appears from a table in Mr. Palgrave's instructive "Analysis of the Transactions of the Bank of England," London, E. Stanford, 1874, that on the average of the year 1872, the " other securities" consisted of — 12-2 Bills discounted 6,900,000 Temporary advances 3,900,000 More permanent advances and investments 10,600,000 Total " other securities " 21,400,000 In this proportion I have distributed the total of the " other " securities" between cols. 9, 10, and 12 of Table LV. In order, therefore, to arrive at a just estimate of the feebleness of the normal power of the Bank of England in the money market, it is necessary to turn to that Table, where in col. 11 the total sum lent by the banks of the United Kingdom to their customers appears by estimate to be 533,500,000/., of which the Bank of England is reckoned to lend io,8oo,oooZ., or 2 per cent, of the whole. Taking bills under discount merely, the Bank of England is reckoned to hold only 2| per cent, of the total amount of 274,300,000/., estimated as held by the entire banks of the United Kingdom, exclusive of foreign and colonial banks. Again, the purely London, and London and provincial banks and discount houses, are reckoned to hold a total in bills discounted of 115,800,000/., and the proportion of that amount with the Bank of England is barely 6 per cent. Once more, restricting the comparison to purely London banks alone, the Bank of England's discounts in London and country are less than one-third of those of the London joint stock banks, and less than one-seventh of those of the London discount houses and bill brokers. Including loans and discounts, the Bank of Eng-land lends less than one-sixth of the amount lent by the London joint stock banks, and less than one-fifth of the amount lent by the London bill brokers. Two of the purely London joint stock banks, two of the London and provincial banks, and probably one of the London discount companies, hold bill cases individually equal in amount to or greater than that of the Bank of England. Finally, reckoning the average amount of bills daily discounted in London at 3,000,000/., the Bank of England's share in the amount, assuming the average currency of their bills at only four weeks, is only 250,000/., or only 8 per cent, of the total. All these striking figures, about the approximate accuracy of which there can be no doubt, prove beyond the possibility of con- troversy that whatever may have been the relative power of the Bank of England in the money market prior to 1844, the present extent of its transaction in discounts and ordinary banking loans is so small as virtually to place it in a secondary position as a lending bank inordinary times, and thus to take quilc out of its hands the contiol 123 of the money market. Hence it occurs that of hile years there has been between the Bank of England official minimum and tlie open market rate a divergence which tends so to increase both in amount and in frequency, that there is much reason to fear that it must impede seriously the action of the Bank of England rate upon the foreign exchanges, the control of which by means of the rate of discount is of such prime importance in the maintenance of the bullion reserve. The position is briefly this — rightly or wrongly, the Bank of England is charged with the maintenance of the bullion reserve for the entire United Kingdom, and yet the instrument by which chiefly that vital trust can be fulfilled is now virtually beyond its control. Money Lodged by the Public. In order to arrive at a fair estimate of the total money lodged with the banks by the public, it is necessary to deduct bankers' balances in the hands of other banks and discount houses. Mr. Palgrave estimated for 1871 that three-fifths of the deposits of the London discount houses were deposited by bankers. This would cause a deduction of 36,000,000/. According to Table LIV, London banks and bankers holding money lodged of 153,827,000?., held 13,789,000/, of it from other banks, but the return includes some bill brokers, and I reckon the total bankers' balances held by the London private and joint stock banks at 20,000,000/., and the total held by the purely provincial banks at 3,000,000/., and assuming the bankers' balances in the Bank of England at i o millions, we have : — Estimate of Deposits hy Private and Joint Stock Banks with Discmint Houses and other Banks. £ With discount houses 36,000,000 With London banks, private and joint stock, "j^ and with London and provincial banks J " ' ' With country banks 3,000,000 Bank of England 10,000,000 69,00c 000 The savings banks' deposits (old and post office) amounted at December, 1874, to 64^ millions. In order to estimate the total money lodged by the public with the banks of the United Kingdom, we must make the following additions and deductions : — 124 £ Total money lodged as stated iu Table 590,40o,o':c Deduct deposits by banks 69,000,000 Add sayings banks' deposits . 521,400,000 64,500,000 Total money lodged by the public with the "| banks of the United Kingdom, exclusive > 585,900,000 of Foreign and Colonial banks J This enormous total yields striking evidence of the wealth of the country. Total Banking Liabilities Resting on Banh of England Reserve. In his valuable "Notes on Banking," Mr. Palgrave makes an estimate of the banking liabilities resting on the reserve of notes and gold in the Bank of England, pi-actically the ultimate bullion reserve of the entire kingdom. Side by side with his figures I have, for comparison, placed those of the present inquiry. Table LVII. — Estimate of Banking Liabilities Resting ultimately on the Reserve of the Banking Department of the Bank of England. Baiiking Li^ibilities. Mr. Palgrave, lb71. Present Iiiquirv, 1«74. Mill. £ 34 335 32 82 34i 18 Mill. £ Liahilities to Public — Of English banks, London and country. Uisconiit Rouses — Two-fifths of deposits (say) Liabilities to Public — 24 92^ 39 Foreign and Colonial Banks — Z!^ 535* 631 The banks cannot be assumed to hold ordinarily a larger amount of leo-al tender than they require for till money, and in a period of pressure they naturally seek to strengthen their tills. The bullion reserve in the Bank of England is thus the basis upon which rests the enormous superstructure of credit calculated by Mr. Palgrave at 535,000,000/., and by myself at 635,000,000/. Let us see what tliis basis at present amounts to. 12", The total bullion held by tlir Bank of Enj^Iand in both dcjiart- ments was, at 8th December, 1875, 23,000,000/., but of this 12,000,000/. was tied up by the Act of 1844 to secure the notes in circuhitiun beyond the amount of 15,000,000/. issued under the Act against securities. The free bullion i-eserve was thus only 1 1,000,000/., or somewhat under i j per cent, of the liabilities which practically rest upon it. Even niakiny^ the largest possible allow- ance for such proportion of these liabilities as may not be payable at call, the utter inadequacy of the bullion reserve cannot be con- templated without a shudder. Two days' panic in the City and it would vanish, leaving behind it the shameful altei-natives of the infi'action of the Act of 1844, or of the suspension of the Bank of England, and of every banker and trader in the kingdom. Constitution of otir Monetary System. It must be confessed that our monetary system is a very peculiar one. Our whole scheme of credit and banking may be likened to the familiar peg-top of the schoolboy, which gyrates upon a small metallic point sufficient to support it so long as it spins with rapidity, but inadequate to the task when the rotatory force is relaxed. Credit is the rotatory force of our financial system. So long as this force is unimpaired the system spins mei'rily on, but when it fails the insufficiency of the small metallic basis becomes only too apparent, and the fabric topples to its fall. Metaphor apart, the case stands thus : bankers hold a certain amount of deposits, which I have estimated at about 600,000,000/. With part of these they accommodate the customers who discount bills with or take advances from them. Another part — generally a fourth or a third — they hold in Government or other good securities, and in cash at call or short notice with other bankers or bill brokers. The country banks keep balances with the London banks and with the bill brokers. The London banks and bill brokers trade with these balances, reserving in their turn a fourth or a third, and keep accounts with the Bank of England. The Bank of England, whose deposits are thus composed in a great measure of bankers' balances, trades with these balances, main- taining a reserve of notes to meet liabilities ; and this is the sole ultimate legal tender reserve of the entire counti'y. Panics. Such is the development of credit in this country, that it has been roughly calculated that 97 per cent, of the money transactions of the nation are ordinarily effected by cheques, bills, 126 and other expedients of credit, about 2| per cent, by bank notes, and about one-half per cent, by coin. But periodically it is found that credit has been over-stretched. Distrust -usurps the place of confidence. All who have commercial engagements to meet — merchants, manufacturers, brokers, bankers, alike — strive to strengthen their position. The mercantile world draws upon its reserve of money lodged or credit with the banker. The banker draws upon his reserves in London to strengthen or maintain his cash balances — perhaps to meet a run upon him by his depositors. As the crisis intensifies, bills and cheques, the ordi- nary instruments of exchange, are looked upon with suspicion, and Bank of England notes come into rapidly increased demand. Cautious or timid bankers and others seek to obtain increased supplies, and a great pressure on the Bank of England for advances is the result. The natural consequence is, that the reserve of notes in the Bank sufi'ers an alarmingly rapid diminution, and the panic rages with fearfully augmented intensity as the monetary barometer is seen rapidly to fall towards zero. Then Grovernment is implored to suspend the Act. No other course seems open, and the Act is suspended by authorising the extension of the issues against security — a measure which at once allays the severity of the panic. When it is found that in every panic since the Act was passed — alike in 1847, in 1857, and in 1866 — it has been necessary to suspend its operation, it is no matter for surprise that the onus of the break-down should be very generally laid upon the Act itself. So far as I can judge, however, it is in the one-reserve system of the country, and in the management of the banking department Tinder that system, rather than in the provisions of the Act itself, that the causes of its periodical suspension are to be sought. The Act serves the all-impoi*tant purpose of providing an undoubted security for the perfect convertibility of the legal tender notes, except in the unlikely event of the public ceasing to hold them to the extent of 15,000,000/. The simple reason why the Act was suspended in 1847, 1857, and 1866, was that, no other banks in the country holding bullion reserves, the reserve in the banking department had been permitted to fall in the first case to 2,000,000/., in the second to 581,000/., and in the third to 1,200,000/.; and as the Bank dii'ectors either could not or would not take steps to increase it, the banking department was practically unable to continue its business, and might at any moment have been compelled to suspend payments by a demand from two or three of the leading London banks for the repayment of their deposits. It certainly cannot be good management which brings tlio 127 leading bank of tlie kingdom — the pattern bank as it ought to be — periodically to such abject straits, that it is only saved from the crowning disgrace of failure by the arbitrary suspension of the law of the land. Whilst the Bank directors have no control what- ever over the self-regulating issue depai'tment, they have unfettered control over the banking department. Is it not clear that they are bound to administer that department in such wise tliat in all calcu- lable contingencies, however adverse, it shall continue, without assistance from the State, to carry on its transactions and meet the claims of its customers as usual ? The directors know the nature of the business they conduct; they know by experience the pressure to which their resources are subjected in times of crisis ; they know the state of panic which is produced as their reserve is seen to dwindle down towards a miserable million, and yet time after time they have permitted the Bank to drift into a crisis utterly unprovided against exigencies which stare them in the face. A commei'cial ctrisis overtakes them with no more — perhaps less — than their usual reserve of one-third of their liabilities. Beyond raising the rate of discount they stir no finger to maintain or increase their resources. They want notes. They cannot obtain them by the sale of English Govern- ment securities, for in a crisis there is generally no buyer of such securities, certainly no large buyer. They can have notes in exchange for bullion. They import no bullion, for they hold no foreign securities to give them the command of bullion in the European markets. Nay, more, they continue to trade with their deposits, which may be withdrawn from them at any moment. They drift towards the abyss of suspension with the happy con- sciousness that Government will interfere at the supi'eme moment, to avert, in the interests of the country, the consequences of their mismanagement. Would not the management of any other joint stock bank be condemned if, when a crisis came, it was unable to carry on its business without the assistance of a loan from Govern- ment ? Why, then, should the Bank of England be exonerated by State intervention from the natural results of its own mis- management ? Is there anything exceptional about the Bank which should render it exempt from the duty common to all bankers of maintaining at all times ample provision for the claims which are likely to be made upon it ? On the contrary, does not its posi- tion as the leading bank of the kingdom, the banker of the State, the bank of the bankers, tend only to render in its case that duty all the more imperative ? The Bull ion Reserve must be Aiujvieuted. But it will be said, What would you have the Bank to do ? 128 When a crisis is imminent it cannot restrict its advances ; it must deal liberally with its customers and the public, or panic would be precipitated, and unless its advan.ces are to be restricted the reserve must • dwindle to a dangerously low point. How is this to be avoided ? I reply, that the very occurrence of exhaustion proves that the reserve which becomes so rapidly spent by the strain of the crisis must have been inadequate at the outset. Since, then, the customary minimum reserve of one-third is found insufficient, why cannot the Bank habitually maintain a much larger reserve— say equal to one-half of its liabilities, and when it falls below that proportion raise the rate, and, if needful, import gold, so as to readjust the balance ? If the Bank could work habitually with a very much larger reserve, steadily maintained by means of the rate of discount, and when necessary by the importation of gold through the realisation of foreign securities, the frequency and intensity of the fluctuations in the official rate would be diminished, and the Bank would be enabled to support the banking and mercantile interests in times of pressure at least as freely as heretofore, without that exhaustion of its resources which has on past occasions superinduced monetary panic on commercial distrust. It will at once, however, be perceived that this policy would involve a great sacrifice of profit on the part of the Bank. The Bank is a joint stock trading company, and it is the duty of its directors to secure the best possible dividends for their shareholders. The habitual maintenance of even so small an additional bullion reserve as 5,000,000/. would diminish the dividend by about i| per cent, per anll^^m. The directors may very naturally shrink fi-om a policy which would entail such results. The private interests of the Bank as a dividend- earning com- pany are thus antagonistic to its supposed public duties as the custodian of the ultimate bullion reserve of the country. The directors are in the equivocal position of having to serve two masters — the public, who cry for reserves ; the shareholders, who call for dividends. The Leading London BanJcft should keep their otvn Ler/al -Tender Reserves. If the directors of the Bank of England, out of a natural and excusable regard for the dividends of their shareholders, persistently decline or omit to keep an adequate bullion reserve, it is quite clear that the instinct of self-preservation should compel those chiefly interested in the maintenance of banking credit to take the duty into their own hands. Tlie leading London joint stock and private banks are tlic 120 parties who are primarily imperilled by the maintenance of au inadequate bullion reserve. They habitually keep their reserve balances with the Bank of England. They do so only as a matter of convenience. They get no interest for these balances. If they were to withdraw them and hold them in notes or bullion in their own vaults, the Bank of England would lose, say 8,000,000/. of its deposits and 8,000,000/. of its reserve. This, at 8th December, 1875, would alter the position of the account as follows : — Banking Department. [OOO's omitted.] £ £ £ Liabilities 26,025, — 8,000, = 18,025, Reserye 10,795, — 8,000, = 2,795, Proportion of reserve to habilities 41 i per cent. 15^ per cent. leaving the Bank with less than 3,000,000/. of bullion wherewith to supply its tills and satisfy all demands for additional accommo- dation. This course would probably compel the Bank of England to add to its reserve at least 4 millions, thus securing a total bullion reserve in London of 15,000,000/. instead of 11,000,000/., which would be a very important step in the right direction. It will not surely be urged that the large London banks, joint stock and private, would not like to cut themselves adrift from the Bank of England, as they might require support from that institu- tion at a time of panic. I should be very sorry to hear such a plea of weakness put forth. These banks are, several of them, much larger daily lenders in the market than the Bank of England, and in the aggi^egate their transactions and their liabilities greatly exceed those of the banking department in Threadneedle Street. If these large institutions, the depositaries of 1 50 millions of money, the London agents of scores of country banks, are to conduct their business with an arriere pensee of reliance on the Bank of England, I have no hesitation in saying that they are unworthy of the con- fidence which they enjoy. It cannot be too strongly insisted upon, it cannot be too urgently repeated, that we have now to deal with a set of circumstances entirely different from those of 1844. The tables of this inquiry show the stupendous growth of deposit banking, and consequently of banking liabilities, since that date. Can those who are respon- sible for the maintenance of our banking, and, I may add, our international credit, calmly contemplate, nay glory in that growth, and yet shut their eyes to its fearful peril when they know that it is unaccompanied by any appreciable growth of the bullion reserve upon which it is based ? The danger must be firmly and honestly faced if we ai"e to hope at all for a timely remedy. The subject is no longer confined to the K 130 region of speculation. It is eminently and intensely practical, and urgently demands the prompt and earnest attention of practical men. It was prominently brought forward by Mr. Palgrave in his " Notes on Banking " and his " Analysis of the Transactions of the " Bank of England." It was mooted by B, an eminent authority, in the "Economist," on 5th December, 1874, and again on loth January, 1876 ; but no action has as yet ensued. It is to be hoped that the leading London banks, joint stock and private, will rouse themselves to grapple with the question ere it be too late. It is to be hoped that setting aside all private and conflicting interests, they will meet and discuss it, and come to the determined resolution to secure at all hazards and in the face Df all obstacles, an adequate bullion reserve for the gigantic banking liabilities of the country. It is to be hoped that if the Bank of England declines, as it is probable it may, to bear the burden, they will resolve to undertake it them- selves. I venture to think that if they took the initiative they might rely upon the co-operation of the country banks, who next to themselves are most vitally interested in the matter. After all it may fairly be urged that the banking fraternity which reaps large profits from its enormously extended liability for money lodged, should not in justice seek to shunt upon the Bank of England the cost and the responsibility of keeping the bulhou reserve which is necessary to sustain that liability. The vastly altered circumstances of these present times drive us irresistibly to the conclusion that the artificial one-reserve system which was possible, and might be 'safe, when banking liabilities were but a fraction of what they are now, and when the Bank of England was a triton amongst minnows, has ceased to be any longer either safe or possible. It should be remembered that the one- reserve system is neither a condition nor a corollary of the Act of 1844. Engendered by the old monopoly of the Bank of England, it has survived its ill-omened sire by half a century ; but its days are surely numbered. The free bullion reserve which safety demands should now be kept in this country cannot be placed at a less sum than 25,000,000^., which indeed would be equivalent to only 4 per cent, of the banking liabilities ultimately resting upon it. Tliis will be admitted to be a burden far too heavy to be borne by the Bank of England or l)y any other individual banking company. The artificial one-reserve system is thus in fact an anachronism, and must now give place to the natural system of a plurality of reserves, each leading bank bearing its fair share. But it will be asked what guarantee should we then have that the necessary aggregate reserve would be maintained ? What is every body's business is nobody's business. By relieving the Bank of England from a duty which it now partially acknowledges and 131 partially fulfils, we should lose a certainty wliicli, however inade- quate, is still so far a certainty, and we should gain an uncertainty which might as likely as not prove when put to the test, equally if not more inadeqiiate. Here then legislation must step in. Parlia- ment should require every bank to make a monthly retui'u of its average stock of legal tender at the close of each week. The pub- lication of such a return should, with the aid of public opinion and public criticism, secure the maintenance of a sufficient bullion reserve, and it would effectually put a stop to the pernicious practice which is said to prevail with some London joint stock banks, of accumulating large cash reserves at the close of each half-year, for the purpose of parading in their balance sheets a show of strength which they dj not normally maintain. It should also be considered whether every bank, joint stock or private, should not be required by law to make a periodical return for publication of the amount of its liabilities to the public. All this, and it is much, could be done without any alteration of the Bank Act ; but the leading banks which shared with the Bank of England the burden of bearing the bullion reserve, would of right claim a voice in fixing the ofiicial rate of discount, which is the regulator of the reserve. Possible Ltgislatiov, Many people consider, however, that no material change for the better can be made without an alteration of the Bank Act. It has been proposed by some that the separation of the issue department from the banking department, decreed in 1844, should be repealed, and that no portion of the bullion held by the Bank should be specially set apart to secure the note ; that, in fact, the stahis quo ante 1844, should be reverted to. This, I understand, is the course advocated by Mr. iN'ewmarch, who strongly insists that exclusive protection of the note holder is only attainable by |}ro tanto damaging the depositor. There is no authority in the country whose opinion on such matters is entitled to greater respect than Mr. Newmarch, and it is therefore with great diffi- dence that I venture to differ from him. If the Bank of England note were not legal tender his position would be unassailable ; but the State, in 1833, decreed the Bank of England note to be legal tender. By thus making it imperative upon the creditor to accept that note in payment of his debt, the law virtually invested it mth the national guarantee. It accordingly became needful to provide a more tangible safeguard for its absolute convertibility than the mere prudence of a board of fallible directors. The Bank of England had allowed its stock of bullion to dwindle in 1825 to the dangerously low figure of 1,000,000/., and again in K 2 132 1839 to 2,400,000/., as against liabilities in circulation and deposits to the amount of about 25,000,000/. ; and it is quite clear that a run for payment of notes, even to a very moderate extent, would in these circumstances have caused the Bank to suspend payments and its notes to be discredited. The prime merit of the Act of 1844 is that it provides effectually for the maintenance 'of the con- vertibility of the legal tender note. We cannot now afford to dispense with a legal tender note. We cannot face the possibility of having to return to the use of coin for large payments whenever it may suit the whim of a creditor to decline payment in any other shape. We must also have the convertibility of the legal tender note absolutely secured, and therefore we cannot, I think, return to the status quo ante 1844. It has been contended by some that the suspension in times of pressui'e of the restrictive clause of the Bank Act should be legally provided for under certain prescribed conditions. In 1873 Mr. Lowe, then Chancellor of the Exchequer, proposed the follow- ing provisions in his " Bank of England Notes Bill : " — ■" Whenever ' the First Lord of Her Majesty's Treasury and the Chancellor of ' the Exchequer, after communicating with the Governor and ' Deputy- Governor of the Bank of England, are satisfied : (1) That ' the minimum rate of interest then being charged by the Governor ' and Company of the Bank of England on discounts and tem- ' porary advances is not less than 12 per cent, per annum ; ' and (2) That the foreign exchanges are favourable to this ' country ; and (3) That a large portion of the existing amount of ' Bank of England and other bank notes in circulation is rendered ' ineflPective for its ordinary purpose by reason of internal panic ; ' they may, by order under their hands, empower the issue depart- ' ment of the Bank of England to make, in excess of the authorised ' issue,, a special and temporary issue of Bank of England notes by ' delivering the same into the banking department in exchange for ' and on the credit of an equal amount of Government securities ' to be transferred to the issue department." As the Bill was withdrawn it is unnecessary now to criticise the conditions of suspension which it imposed. It is sufficient to state that any suspensory power, whether exercised as heretofore at the sole discretion of the Government, or prospectively legalised by Act of Parliament, can be viewed in no other light than as an empirical and delusive remedy for the defects of the existing system. It " Will b\it skin and film the ulcerous place. Whiles rank corruptieii, mining all within, Infects unseen." It, in fact, offers a premium to that spirit of improvidence which is the great vice of our financial system. Everybody, from the Bank of England downwards, is tempted to speculate on the 133 suspensory power coming into operation to relieve them from the effects of tlieir own improvidence ; and those banks and merchants who, in the face of the temptation have, at a heavy cost, pei-sist- cutly maintained adequate reserves over a period of years find, when the pressure comes at last, that the suspensory power deprives them of the legitimate fruits of their self-denying forethought and enables their less provident neighbours to ride through the storm as securely as themselves. Again, the suspensory power must always be unjust in its incidence. If it come into operation to-day it vri]\ save the merchant or banker whose bills fall due to-morrow ; while the unfortunate individual, no less worthy of assistance, whose bills fell due yesterday has been compelled to succumb. Proposed State Department of Issue. Probably the best, if not the only practicable, legislative solution of the pressing difficulty would be the transference of the issue department to Government, coupled with a provision for a monthly return of the average stock of legal tender held weekly by each bank. Under this arrangement the State Department of Issue would hold securities for i 5,000,000/., and gold coin and bullion for the excess of issue beyond that sum. It might also with advantage act as a bank of deposit receiving from the bankers sums in notes or gold of not less than say ioo,oooZ. at any one time, and inscribing these to their credit, to be drawn out also in sums of not less than 100,000/. at any one time. The securities and bullion would thus ahvays equal the sum of the notes in circulation and the bankers' balances. Accounts might be published weekly in some such form as this : — £ £ Notes issued 30,000,000 Bankers' balances 10,000,000 40,000,000 Seciu-ities 15,000,000 Gold coin and bidlion. 21;, 000, 000 40,000,000 When notes were paid in, either an equivalent of coin or bullion would be taken out, or an equivalent increase would be made to the bankers' balances. When gold was paid in, either notes would be issued for the amount, or the sum would be added to the bankers' balances. When gold was taken out, either the notes issued or the bankers' balances would be correspondingly diminished. This would involve no interference with the principle of the Act of 1844, and would effectually cause the Bank of England, and all other leading banks to rely upon their own reserves, without resting upon that hope of assistance from the State in a period of pressure which, already three times realised, constitutes in a great measure the vice and perpetuates the weakness of the present system. 134 The result would be that in the aggregate a much larger bullion reserve would be held, and the duty of supporting banking and general credit by liberal advances in time of crisis, instead of being concentrated as hitherto upon one institution with, an inadequate reserve, would be distributed araongst several large institutions each holding a substantial reserve. The official rate of discount might from time to time be fixed by a committee of the clearing banks, under the presidency of the governor of the Bank of England, as suggested by " B " in his recent letter to the " Economist." If it be contended that this scheme would be most uneconomical of capital, it may be replied that is its very merit. We are now suffering the serious inconveniences and incurring the grave dangers of a system in which economy of capital is carried to a point far beyond the limits of prudence. The loss of interest involved in the alteration of that system to one of ampler reserves will count as nothing compared with the advantage of placing the enormous financial and banking engagements of this great commercial country upon a thoroughly sound and adequate basis of bullion. Here, however, it should be observed that the largest possible bullion reserves will avail nothing if credit be stretched beyond its proper limits. This is a matter that bankers have pretty much in their own hands. They are the chief administrators of credit. Truly it is a grave trust, but it is satisfactory to know that their own best interests lie in its steadfast fulfilment. An authority so eminent as Mr. Bagehot having declared emphatically against the transference of the issue department to the State, it is necessary to inquire into the grounds of his objec- tion. These are embodied as follows in his evidence before the Committee on Banks of Issue, 1875 : — " I think that in time of ' panic, if a State issue was the sole legal tender, there might be ' extreme and very dangerous pressure on the Government to lend ' money to persons to whom it ought not to be lent." " At present ' the loans are made by the Bank of England in time of panic, and ' the Bank of England knows how to manage, because it is a ' trader in the market ; but if the Government once began to lend, ' I do not know whether it would have the same discretion. I am ' quite sure it would never be thought to be equally impartial, ' because the Prime Minister or the Chancellor of the Exchequer ' might be member for a great commercial community, for London ' or Liverpool, and the public would never believe that his con- ' stituents did not get a benefit. For these reasons, under a Parlia- ' mentary Government like ours, I think a State issue would be ' exceedingly dangerous." Mr. Bagehot's objection is based on the assumption that Govern- ment would be called upon to lend notes, and would lend notes, in a 135 time of panic ; but surely tliat is a groundless assumption. Is Government called ujion to make advances, and does Government make advances in gold because the Mint is a department of the State ? Certainly not. And the functions of a State department of issue would necessarily be as purely meclianical as those of the Mint. Under existing circumstances, pressure is put on the Bank of England for loans in a time of panic, because it is a lending bank as well as the source of legal-tender issue. The combination of these two functions in the Bank is in fact one of the prime causes of the unsatisfactory operation of the existing system. If these functions were completely dissevered by the transference of the purely mechanical issue department to the State, the Bank of England and all other banks would be constrained, as I have indi- cated, to rely, in a time of pressure, upon their own reserves, and not upon any empirical and temporary addition to the legal-tender issues of the State. Very probably some of the suggestions which I have hazarded may be considered crude and impracticable. Perhaps they are ; but they are thrown out in the conviction that the subject urgently demands investigation and discussion in all its bearings. That a question so momentous shouJd continue year after year to be shirked, as it has been, is scarcely creditable to the vaunted prudence of bankers, to the discernment of Her Majesty's advisers, or to the wisdom of Parliament, and it will be well for the country if it be not some day rudely awakened from its ignorant indifference to the subject by a commercial and banking collapse totally unparal- leled by any previous experience. Precatitions suggested for Present Adoption. Parliamentary inquiry will no doubt come, but legislation will linger, and meanwhile it seems to be before all needful that instead of looking to and leaning upon the Bank of England, no longer jyrimus inter pares, those who in the centre of our national and international finance are the most deeply interested in the permanent maintenance of banking credit should themselves hold the command of such supplies of bullion as may suffice to stem the rising tide of distrust on the first symptoms of danger. The means thereto arc plain. Let the great London banks hold, besides their reserves of bullion in their own vaults and their securities immediately con- vertible in the Loudon market, such funds in readily available shape, money at calk short bills, saleable securities, in the chief money markets of Europe, as shall ensure by their realisation a free and immediate flow to Loudon of that bullion which is so needful when " distrust asleep," as credit has been well styled, threatens to awake and put on the fearful aspect of panic. 136 Table LVIII.~Pwr% Provincial English Joint Stock [OOO's omitted in columns Number, 5 6^ 7 8- 9 10 11 12- 13- 14- 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Piu'ely Provincial Banks. [Banks of Issue in Italics.] When Esta- blished. Date of Balance 1873. Subscribed Capital. Carlisle and Cumherland Bank ... Cumbld. Union Bkg. Co., Limd Carlisle City and District Bank... Bank of Whitehaven, Limited .... Adelphi Bank, Limited Liverpool Commercial Banking 1 Company, Limited J Liverpool Union Bank National Bank of Liverpool, "I Limited J North- Western Bank, Limited ... North and South Wales Bank ... Parr's Banking Company, Limited Manchester and County Bank, \ Limited j Union Bank of Manchester, "I Limited J Lancashire and Yorkshire Bank, 1 Limited f Bradford Banking Company „ Commercial J. S. Bk.... Bradford District Bank, Limited „ Old Bank, Limited Bank of Leeds, Limited Yorkshire Banking Company Sheffield Banking Company Sheffield and Hallamshire Bank... ,, Rotherham ,, .... Sheffield Union Banking Company Burton, Uttoxeter,Sfc., Union Bank Nottingham J. S. Bank, Limited... Stamford, Spalding, ^'c, Bkg. Co. Leicestershire Banking Company 1836 '29 '37 '37 1861 '32 '35 '63 '64 '36 1865 '62 '36 '72 1827 '33 '62 '64 '64 '43 '31 '36 '36 '43 1839 '65 '32 '29 Dec. Dec. June Dec. June Dec. Dec. Uncalled Capital. June Dec. June Dec. £ 300, 540, 160, 260, 70c, 600, 750. 4,400, 947, 485. 550, 680, 6«;o, 983, 605, 500, 4'9. 733, 502, 250, 260, 470, 200, 1^0, £ 225, 315, 80, 146, 130, 350, 75, 300, 675, 850, 3,740, 531, 243, 330, 510, 455, 590, 454, 250, 126, 550, 341, 100, 130, 376, 525, Paid-up Capital. 80, 74, 130, 350, 525, 450, 405, 300, 150, 660, 417, 243, 220, 170, 195, 393, 151, 250, 293, 183, 161, 150, 130, 94, 200, 225, * Includintr bills 137 Banks. Balance Sheets of Forty-Four Banks, 1873. lieaded £, thus SnO = ROO.OdO/.] 7 8 9 10 n 13 1.3 M 15 1 /iiibilities Tot ill Assets. Aiitliorisod Momiy Cir- Government Xiinibei. inchidiiig Dividend Pue. culation of Notes. Accept- ances. Resources. Bills and Advances. and otlicr Securities. Casli, &c. Property Account. Issue. 558, 1,791, 703, 626, £ 34. 28, £ £ 7.^5. 2,li8, 869, 770, £ 1,534, v. £ 727. 65. £ 489, J £ 8, 39. 5. 8, 25,610 35,395 19,972 32,681 1 2 628, 864, 62, 73, 3 4 178, — — 310, 258, — 31, 22, — 5 1,209, — — 1.763, 1,438, 175, 150, — 6 2,895, — 601, 4.231. 3,264, 930, 36, — 7 740, — 41, i.309> 918, — 366, 25. — 8 950, 3,286, 59. 350,* 108, 1,797, 3.9:4. 1,644, 2,910, - 120, J 32, 63,951 9 1,0 4. 10 1,972, — — 2,168, 1.285, 101, 771, 12, — 11 ' 5,378, — — 6.359, — 6,326, — 33. — 12 1,300, — 47, 1,871, 1,550, — 293, 28, — 13 499, — — 770, 609, — 160, J I, — 14 1,668, 1. 50,^ 58, 2,198, 808, 87T, 1,669, 608, 539, 1. 2,193, 794. 857, i,649> 79, J 5, 14, 4. 20, 10, 49,292 30,084 15 51 574, 1,141, 361, 2, 16 17 18 19 2,262, 1,596, 567, 1,562, •'9. — 2,751, 1.994. 805, 1,807, — 2,703, 1.972, 800, i>793. — 48. 22, 5> 15, 122,532 35,843 23,524 52,496 20 21 22 23 359, ~~ 547. — 543. — 5. '~~' 24 1,289, 558, 1,100, 1,282, 64, i,4«7, 681, 1.457, 1,659, 858, 1,135, 1.466, 670, 301, 265, 278, 244, 21, 10, 20, 15. 60,701 55,721 86,060 25 26 27 28 rediscountcd 214,823?. 138 Table 'LYJIL—Purehj P rovincial Englisfi Joint Stool- \ [OOO's omitted in column- | 1 2 3 ■i 5 6 Purely Provincial Banks. Wh€n Date Lialiilitics. Number. [Banks of Issue in Italics.'] Esta- blished. of Balance: 1873. Subscribed Capital. Uncalled Capital. Paid-up Capital. including I'.alance ot Piotit Carried Forward £ £ £ £ 29 Staffordshire J. S. Bank, Limited.. 1864 Dec. 874, 700, 174, f^i;, 30 Counii) of Stafford Bank '36 120, 60, 60, ^2, 31 Lloyd'sBaukiug Company, Limited '65 ,, ii03o, 1,726, 305, 128, 32 Birmingham J. S. Bank „ '61 ,, i,039. 1,835, 204, 2";, j 33 „ Banking Co. ,, '66 June 1491, 1,342, 149, 106, 34 ,, Town and District... '36 ,, 400, 240, 160, 49, 35 Dudley and W. Bromwich B. Co.. '33 Dec. 4i6, 341, 85, 6, 36 Wolvfrhptn. Sf Staffthh. B. Co '32 " 500, 400, 100, 36, 37 Worcester City and Coty., Limtd.. 1810 Dec. 1,000, 750, 250, 105, 38 Bucks and Oxon L^nion B., Lmtd. '66 400, 320, 80, 16, 39 W. of Engld. S^ S. Wales. Dist. B. '34 " 1 ,000, 250, 750, 129, 40 Devon and Cornwall Banking Co. '32 400, 272, 128, 80, 41 Three Towns' Banking Co., Limited •63 ^, ICO, 50, 50, I, 42 Wilts and Dorset Bankiny Co '35 „ 37"^, 125, 250, I';';, 43 Hampshire Banking Company .... '34 ,, — 150, 41, 44 North Kent Bank, Limited '64 " ^5, 43, 22, I, * Including casi Table LIX. — London and Provincial Joint [OCO's omitted in columns Kumber. Purely Provincial Banks. National Proyiucial Bank of] England I Capital. f 10,000 shtues at 100?. = 1,000,000?. 77,!J00 „ 20/. = 1,550,000?. J London and County Bank Midland Banking Co., Limited .... London and South-Western "I Bank, Limited J London and Provincial Bank, 1 Limited j London and Yorkshire Bank, 1 Limited J Totals 1 2 When Esta- blished. Date of Balance, 1873. 1833 Dec. '36 ,, 1863 Dec. '62 „ '64 „ '72 „ — — Subscribed Capital. £ -,550, 3,000, 1,500, 831, 254, 6/4, — — 8,809 Uncalled Capital. £ 1,200, 1,800, 1,200, 665, 127, 576, 5,568 5 6 Liabilities. Paid-up Capital. £ 1,350, 1,200, 300, 166, 127, OS, Reserve, including Balance ot Profit Carried Eor\\ard. £ 650, 624, 49, 1 1, 3.241 ^,IS- ISO Banks. Balance Sheets of Fort//- Four Banks — Contd. lieaded £, tliiis SnO, = SOn.OOdJ] 7 8 9 1(1 U 12 l:i It 15 jiabilities. Total Assets. Authorised Money Cir- Go\ernment -N'unibcr. iucluding culiition Accept- Resources. liills and and Cash, &c. Property Issue. Dividend of ances. Advances. other Account. Due. Notes. Securities. £ £ £ £ £ £ £ £ G38, — — 867, 739, 28, 96, 5, — 29 406, — — 499' 368, 35, 88, 8, 9,418 30 4,238, — — 4-671, 3,770, 852, 49, — 31 1,567, — — 1,985, 1,593, ^~IS' 138, I9> — 32 1,065, — • — 1,3^0, 1,080, S";, 160, 24- — 33 808, — — 1,017, 847, 45, 106, 19, — 34 974, i(h — 1,100, 976,* 117, — 7, 37,696 35 699, 10, — ^55> 827, — 24, 4, 35,378 36 1,012, 617, — — 1,367, 7i3> 1,140, 54, 144, 28, 12, 6,848 37 — 701, — 38 4,209, — — 5,088, 4,040, 507, 452, 88, 83,535 39 1,639, — — 1,847, 1,847, — 40 45, — — 96, 87, — 4, e., — 41 2,682, 75> ■ — 3,i6i, 1,471, 1,^7-, 378, 40, 76,162 42 1,849, — — 2,041, 1,300, 331, 374, i5' — 43 82, — — 106, 90, 14, 2, — 44 on hand. Stock Ba nks. Balance Sheets for Year 1873. hcadea £, tli us 2,530, = 2,550,000/.] 7 8 9 Liabilities. 10 Total 11 12 Asset i;5 s. li Money Lodged, Circulatinn Acrept- Hills and Government Propertv Number. including Dividend Due. of Notes. ances. Advances. and other Securities. Cash, &c. Account. £ £ £ £ £ £ £ £ 21,949, — 547, 24,496, 14,569, 5,-15, 4,299, 413, 1 18,248, — 4,070, 24,142, 16,835, 1,817, 5,209, 281, 2 1,416, — — 1,766, 1,575, — 168, 22, 3 808, - 36, 1,021, 799, — 199, 23, 4 1,052, — — i,iy6. 700, 227, 247, 21, 5 250, — — 349, 304, — 31, 14, 6 43,723, — 4,653, 5::,97o, 34,782, 7,-59, 10,153, 774, 1 140 Tabue LX. — Analym of Balance Sheets «f Fwrt^Fowr yi-'i onutted in Cols, 1 and S, t!ius 19. 2 = 19.;tX' ."• PirrelT ProTincial Banks. 1 Net Bittio per Ceat. s Ratio per Cent. of Ratio per Ceut Number Kmuber. ' Profit, . P^' , per Annum [Banks of Issue in Ilalief.'} less Charges 4nuuni of Net Profits to Total Resonires. Charges, Chiuges to Net Profits. of Charges to Liabitliies to PubUc, of Bnuielii^.' .€ I'er cut. £ Per cut. Per cat. No. 1 Carlisle and Cvmiberland B.vil- 1 -J,; 2-62 — — — 5 2 Ciembld. Union BJcg. Co., Limd 44,6 2"IO 14J 3i"8i 0-77 1: 3 Carlisle Citu and District Bank... 21,4 2-46 — — — 4 4 Bank of Whitehaven, Limited .... i8,i 2*35 3,7 20-58 0-56 5 AdelpKi Sank, Limited 44.1 2'70 2,9* 69*04 3'24 , "{ Liverpool Commercial Banking"! Company, Limited J 2-50 7 Lirerpool Union Bank 74.8 13.3* 1-76 __ si National Bank of Liverpool, 1 Limited J 2"03 — — I 9 North- West em Bank, Limited ... 40.3 2'25 — — — 10 N&rtk and South Wales Bank .... 70,3 179 33,7 47-95 0-97 27 11 Parr's Banking Company, Limited 42-7 1-97 15,9 37'i9 0-80 9 -{ Manchester and Coimty Bank, T Limited j 66,0* 2 -08 17,5* 2<>-53 0-64 »7 X3{ Union Bank of Manchester, 1 Limited J 52.0 278 19,7 3799 1-46 12 H Lancashire and Yorkshire Bank, \ Limited J 2'15 4,3* 5r8i 1-72 4 15 Bradford BanHnp Company «7.9 3 '09 _ _ 16 „ Commercial J. S. Bk 34.9 432 — — — — 17 Bradford District Bank, Limited... 1^,6* 3-58 3,5* 22'15 1-22 1 18 Old Bank. T,imited 28,7 3 "44 — "" — 2 19 Bank of Leeds, Limited 15.1 2*48 3,2 20 "95 1-52 20 Yorkshire Banking Company 43.5* 3-i6 14 21 ShetHeld Banking Companv 58.4 26^ 2-92 3-28 __ 22 Shejfield and Sallamshire Bank.... — 0^ 23 „ „ Botherham „ ... 37.5 2-07 — — — 4 24 SheflBeld Union Banking Company 20,4 3-73 — — — 25 Burton. Utfoxeter.Sc. UnionBank 14.3* 1-92 _ , 26 Nottingham J. S. Bank, Limited.. 13.7 2"02 4,7 3394 0S4 4 27 Stamford, Sj>aldin(;i, 4'c., Bkff. Co. 29,6 2"03 — — 9 28 Leicestershire Banking Compani/ 3^1 2-i8 — — — 8 29 Staffordshire J. S. Bank, Limited. ... 22,4 258 , 30 County of SfaJ^ord Bank 13.4 79.8 2-68 31 Lloyd's Banking Companv, Limited 1-71 — — — 1 + 32 Birmingham J. S. Bank, Limited... 49.4 2 "49 — — — ■ I 33 „ Banking Co., Limited 25.4 1*93 "-~ — — * ForhiUf 141 I' II, -el 11 Provhic'ud Kwjlkh Joint Stock Banks, I.S73. [OOO'a (.mittcd in Cols. 8, '.), 10, iiniliU('s I'loprietDrs' Kallo per Coit. of Ralio per Cuiit. of Uncalled Oijvcrii- inent R.ilio ncr Cent, of Goveinriiciit dumber. ol' Siili- I'lililic at to Pinpiictora' pnnit'kl tri Securities, .Securities, UriiMclicB. carli ()llliM% Pul.lic. I''llll(]9. Funds to Lialiilitit'9 to v^npiLill LU Liabilities to Public. Cosh, Ciisli, Sec, to Liabilities i-x Sulis. the Public. &c, to Public. No. £ £ £ Per lilt. Per cut. £ Per cut. . 93' 558, '77, 31-62 40-29 — — 1 1. 140, 1,H25, 303, 16-61 17-26 554, 30-38 2 1 4'^ 70: J, 166, 23-66 11 -'10 — 3 — 1^.4. G55, u6. 17-57 22-35 ^iS> 20-48 4 89. 178, '3i, 73-89 72-88 3'. 17-27 5 — i,iOy, 1,209, 554. 45-85 28-96 '75. 14-47 ]' — .^.+9''^ 3,196, 735. 21-02 2-14 930, 26-61 7 — 39'. 782, 5-7, 67-44 38-38 366, 46- 2 }« . 1,300, 1,300, 497, 38-20 51-91 120, 9-26 9 5 •23. 3,151, 470, 1361 — 1,014, 29-36 10 5 197, 1,972, 19^ 9-93 43-09 872, 44-20 11 7 -99. 5,378, 981, 18-24 69-54 — — }- 4 104, 1,347, 5H, 38-88 39-39 293, 21-72 }>3 1 100, 499, 27', 54-15 48-65 160, 32-09 }U i,ii8, 1,718, 480, 27-92 19-21 15 c,\z. 512, 296, 57-82 99-55 — — 16 287, 574, 298, 51-86 79-29 — — 17 380, 1,111, 529, 46-35 51-69 — — 18 419, 419, 189, 45-02 108-25 59. 1411 19 7 159. 2,380, 37'. 15-58 10-50 — 20 399, 1,59G, 397. 24-90 7-87 — — 21 . 5^' 7, 5G7, 2?8, 42 02 97-00 — — 22 3'^. l,5(i2, 246, 15-72 21-87 — — 23 — I iO, 359, 188, 52-29 27-82 — — 24 430, 1,289, 198, 15-36 10-09 25 . III, 558, '23. 22-05 67-48 — — 26 9 1 15, 1,153, 304. 26-39 — 579, 50-19 27 2 '5-' 1,3 17, 3'2, 2317 38-99 509. 37-79 28 80, 638, 229, 35-88 109-72 '23. 19-35 29 406, 406, 92, 22-76 14-77 122, 30-14 30 'J 282, 4,238, 433, 10-22 40-73 852, 20-10 31 — 783. 1,567, 4'9. 26-72 117-16 372, 23-77 32 — 1,064, 1,064, 255, 23-97 12-61 215, 20-22 33 year only. 142 Tabi E LX.- -Analysi s of Balance Sheets of Foi 'ty-Four ' [OO's oniittctl ill Col^. 1 and .3, thus 19,2 = 19,200/.] 1 2 3 4 5 G Xum'ier. Purely Provincial Banks. [Banks of Issue in ItaUcs.} Net Profit, less Cliarges. Ratio per Cent. per Annum of Net Profits to Total Resources. Charges. K;itio per Cent. of Cliarges to Net Profits. Ratio per Cent. per Annum of Charges to Lial)ilities to Puljlic. Number of Branches £ Per cut. £ Per cut. Per cut. No. 34 Birmingham Town and District ... 24,, 2 2-38 — — — — 35 36 Dudley and W. Brorawich B. Co.... Wolverhptn. Sf Staffdsh. B. Co 5'7 14,0 0*52 i"64 — — — 4 37 Worcester City and Cot if., Limtd.. 20,7*t y°i 9,8* 47-12 1-93 9 38 Bucks and Oxon Union B., Limtd. 18,0 2'!^2 — — 8 39 40 41 W.ofUngld. Sf S. Wales Dist. B. Devon and Cornwall Banking Co. Three Towns' Banking Co., Limited II8.4 27,4 2,6 2'33 1-48 2-71 51,8 1,7 43 '73 65'39 1-23 3-77 3 7 H 42 43 44 Wilts and Dorset Banking Co Hampshire Banking Company .... North Kent Bank, Limited 55>5 9* i'75 1-48 1-63 29,9 14,5* 53'94 96'02 1-08 1-56 41 24 I Table LXI. — London and Provincial Joint Stock [OO's oimtteil in Cols. 1 and .3, thus 397,1 = 397,10(7.] Purely Provincial Brinks. National Provincial Bank of^ England I CAPITAL. ( lO.WlO shares at imi. = l,000,000i. 77,.i"0 „ 20?. = 1,550,000?. J London and County Bank Midland Banking Co., Limited ... London and South -Western T Bank. Limited J London and Provincial Bank, \ Limited J London and Yorkshire Bank, 1 Limited J Totals 1 Net Profit, less Charges. 397,t 16,0* 8,1* 10,8* 3,1 Ratio per Cent. per Annum of Net Profits to Total Resources. Per cnt. 1-62 1'23 1-82 I '59 i-8o 0-89 Charges. 117,9* 11,6* 11,1* 13,9* 7,6 Ratio per Cent. of Charges to Net Profits. Per cnt. 79'-5 72'35 136-88 245-16 5 6 Ratio per Ceni. per Annum Number of of Charges to Lialiilities Branches. to Public. Per cnt. No. — 134 1-05 .48 1-63 21 2-63 23 2-64 46 3-03 7 — 3 79 For lialf 143 *urelij Prooincial I-jii 136, 25-85 9-01 18-90 29-71 33-76 55-60 150, 18-60 34 35 36 4 101, 1,012, ISS^ 3511 74-13 199. 19-66 37 — 68, 617, 96, 15-56 51-86 — 38 d. III, 4,209, 879. 20-88 5-94 960, 22-81 39 — loy, 1,639, :o8. 12-69 16-59 — — 40 4'^. 45, '^i, 112-42 110-85 4' 8-47 41 8 66, 2,757, 40"^, 14-54 4-53 i,6<;i, 59-30 42 = 74. 4i> 1,849, 82, 191, 24, 10-34 29-04 52-37 705, 14. 38-13 16-61 43 44 t Without deduction of rebate. anks. A naif/sis of Balance Sheets, 1873. [OnO's omitted in Cols. 8, 9, 10, and 13.] 7 « ;j 10 11 12 13 U Number of Snb- Btanclies. No. Average Liabilities to Public at each Office, ex ~'ubs. Liabilities to Public. Proprietors' Funds. Ratio per Cent. of Proprietors' Funds to Liabilities to the Public. Ratio per Cent. of Uncalk'd Capital to Liabilities to Public. Govern- ment Securities, Cash, &c. Katio per Cent, of Government Securities, Cash. &c., to Liabilities to Public. Number. £ £ £ Per cnt. Per cnt. £ Per cnt. 2 .67, 22,496, 2,000, 8-88 5-33 9.5 '4. 42-29 1 — 150, 22,318, 1,824, 8-16 8-06 7,026, 31-48 2 4 64, 1,416, 349, 24-66 84-76 i68. 11-89 3 — i?> 814, 177, 20-95 78-76 199. 23-54 4 — ~~! 1,052, 144, 13-66 12 06 474, 45-08 5 — 31' 250, 99, 39-53 230-33 31. 12-47 6 — — 48,376, 4-593. — — 17,41-. — year onlv. 144 Table LXII. — Dividends and Prices of Forty-Four Purely Provincial English Joint Stock Banks, 1873. 1 2 3 4 5 Number. Purely Provincial Banks. Dividend per Cent, per Amount per Market Price, Pre- mium Yield per Cent. [Banks of Issue in Italics.} Annum, including Share January. per at Purcliase Bonus. Paid. 1874. Cent. Price. £ *. d. 1 Carlisle and Cumberland Sank .... 22 5 19 280 5 15 9 2 Cumbld. Union JB. Co., Limd i6 12i 37i 200 568 3 Carlisle City and District Sank 22 12i 43 i 248 665 4 Bank of Whitehaven, Limited .... 22i 10 38i 285 5 16 10 5 Adelphi Bank, Limited Nil 10 7i ni Dis. Liverpool Commercial Banking "1 Company, Limited j iii 10 in 669 7 Liverpool Union Bank 10 IVi 15 25i Hi 454 6 17 3 6 17 1 1 H National Bank of Liverpool, "1 Limited J 6! Dis. 9 North- Western Bank, Limited .... 7 7i 8f 16f 6 - - 10 North and South Wales Bank .... i7i 10 31 210 5 I- lo 11 Parr's Banking Company, Limited 15 15 38 153^ 5 18 5 -{ Manchester and County Bank, "1 Limited J i3f 15 42 180 4 18 2 -{ Union Bank of Mancliester, | Limited J I of 11 i8i 70t\ 6 6 1 u{ Lancashire and Yorkshire Bank, 1 Limited J 6 10 12 20 5 - - 15 Bradford Banking Company 25 40 150 275 6 13 4 16 ,, Commercial J. S. Bk 18 20 '^9 iy5 62- 17 Bradford District Bank, Limited 8i 30 h'^ 911 4 8 8 18 „ Old Bank, Limited .... i3i 20 46 130 5 19 6 19 Bank of Leeds, Limited 7 25 3i 49 28 5 9 4 5 16 3 20 Yorkshire Banking Company 12i 292 21 ShefBeld Banking Company 17 140 270 92f 8 16 3 22 Sheffield and Ilalhimskire Bank.... H 25 47i 90 7 7 4 23 „ and Rotherham ,, 20 32 83 1591 7 14 2 24 Sheffield Union Banking Company 114 12 zo\ 76| 6 \i i 25 Burton, Uttoxater,S(c., Union Bank 17 10 26i 165 684 26 Nottingham J. S. Bank, Limited 8i 10 14 40 6 I 5 27 Stamford, Spalding, Sfc, B. Co. 16 20 64 220 5 - - 28 Leicestershire Banking Company i3i 40 80 100 6 5 - 29 StaflPordshire J. S. Bank, Limited 8J 20 2 jt 3 m 7 8 11 30 Countu of Stafford Bank 18 5 I ^T. 210 <; 16 I 31 ." J ^ M^ -.-Ftv/t/i. Lloyd's Banking Company, Limited 20 Ik 212 1861 619 6 32 Birmingham J. S. Bank, „ 20 10 35 250 5 14 3 33 „ Banking Co., „ iii 5 '3 160 466 34 „ Town and District .... 10 8 '32 681 5 18 6 35 Dudley and W. Bromwich ii. Co. 6f 10 13 30 <; ',10 36 Wolverhptn. and Staffdsh. B. Co. 10 10 16 60 6 5 - 145 Tadle liXIl.- -Dividends and Prices of Forty-Four Purely Provincial English Joint Stock Banks — Contd. 1 2 ;5 4 5 Nuinlier. Piu-ely ProviiK-ial Banks. [Banks of Issue in Jlalics.] Dividend per Cent, per Annum, including Bonus. Amount per Share P»id. Market Price, January, l!:74. Pre- mium pel Cent. Yield per Cent. at Purcliase Price. £ *. (/. 37 Worcester Citi/ and County, Limd. xzi 12^ 2li 72 7 3 'o 38 Bucks and Oxon Union, Limited 20 5 164 230 6 I 2 39 IF. o/Etiyld. and S. Wales iJist. Ji. 14 15 30 100 7 - - 40 Devon and Cornwall Bankini53.407 i.345>4i5 72 £ 3>495>446 84^.453 279 £ 8,648,853 Since ceased to issue .... Amalgamated with- 1 out loss of issue.... J 89 6 18 107 6 2,187,868 95 — — — 113 — Remaining 112 3,807,992 54 1,652.993 166 6,460,985 I. 'J 14S The diminution in the number of issuers since 1844 is 43 per cent, of the private issuers, 25 per cent, of the joint stock, and 38 per cent, of the total. Twenty-five per cent, of the total amount of issue authorised by the Act of 1844, has lapsed in thirty-one years ; 26 per cent, being the proportion lapsed in the case of the private banks, and 24 per cent, in the case of the joint stock banks. The average authorised issue per bank was in 1844 '75 (December) .. Private Banks. £ 24-895 34,000 Joint Stock Banks. £ 48,548 49,130 It will be interesting to tabularise the lapsed issues according to the caupcs of their forfeiture, and this is done in the following table, compiled from the Banking Almanacs : — Table l^XY .— England and Wales. Vieiv of Lapsed Issues, 1844-75, Classified accordb to the Causes of their Forfeiture. [Compiled from the Banking Almanacs.] Private Bai ks. J oiut Stock Banks. Together. Cause. Number of Issuers. Amount of AutLorised Issue. Pereentacce of Total Lapsed Authorised Issue. Numbei of Issuers. Amount of Authorised Issue. Percentage of lotal Lapsed Authorised Issue. Number of Issuers. Amount of Authorised Issue. Perceutag of Total Lapsed Autliorisec Issue. 1. Bankrupt or stopped pay- ment 1 33 £ 547,321 84,741 Per cnt. 41 6 2 7 £ 48,101 169,589 Per cut. 6 20 35 17 £ 595,422 254>35o Per cnt. 27 2. Closed or dis- solved 12 Together... 43 632,062 47 9 217,690 26 52 «*49>75- 39 3. Ceased to issue 1 (no reason r ^ 82,-^92 6 — — — 6 82,<92 4 named) 4. Arranged to J >12 issue Bank of England 194,992 15 — — — 12 194992 9 notes 5. Opened in London [- — — 1 442>37i 52 1 442,371 20 6. Amalgamated or transferred Us 435>759 32 8 182,392 22 3G 618, i^;! 28 business J 89 1,345,405 100 18 84-,453 100 107 2,187,858 100 149 It will be seen from this table that of the total amount of issues lapsed, 39 per cent, have been extinguished by bankruptcy or disso- lution ; 9 per ccnT. have been relinquished by ai-rangement with the Bank of England ; 4 per cent, have been given up without reason assigned ; 20 per cent, have been forfeited by a joint stock bank, the National Provincial, opening in London, and 28 per cent, have been forfeited by amalgamation. It will also be seen that of the amount of joint stock issues lapsed, 74 per cent, have been compulsorily forfeited under the Act, and 26 per cent, by bankruptcy or dissolution ; whilst of the am.ount of private bank issues lost, 32 per cent, have been forfeited compulsorily under tbe Act ; 2 1 per cent, have been given up volun- tarily, and 47 per cent, have lapsed by bankruptcy or dissolution. Tlicsc figures show that even with the disadvantage under which they rest in respect of amalgamation, there has been greater per- manency in tlie issues of the joint stock than in those of the private banks. The amount of authorised issue lapsed in each period of five years since 1844, and in the two years 1874-7-5, has been as follows : — Years. 184,4-48 '49-53 '54-58 '59-63 '6i-68 '69-73 '74-75 Authorised Issue Lapsed. 423,410 282,981 234>i74 753,814* 1 ';7,o99 163,178 2,187,? * Including Xatioual Provincial Bank of England, 442,371?. It is most improbable that the issues would continue to lapse at the same rate, because Avhen the weaker have been eliminated the stronger will show greater permanency ; but even if the same rate be assumed it would take ninety-three years to clear off the issues now remaining. This shows a stability on the part of the English, country issues which, could he have foreseen it, might have materially modified Sir Robert Peel's views. Statatorij Conditions of Note Issue in Scotland. The conditions under which the Scotch banks enjoy the privilege of issue are : — 150 1. They retain the il. note abolished in England in 1826. 2. They have, by the Act of 1844, a monopoly of issue in Scot- land. 3'. Banks amalgamating retain the aggi'egate fixed issues of the separate banks. 4. Banks may exceed the amount of their fixed issue to any extent on condition of holding at their head office gold and silver coin equal in amount, on the average of each four weeks, to the average excess of their note circulation during these four weeks — silver coin held in excess of one foui'th of the gold coin held not being reckoned as a basis for any excess of fixed issues. 5. A weekly return is required of (1) the amount of notes in circulation at the close of business on Saturday. (2) The amount of gold and silver coin held at head office at the close of business on each day of the week. (3) The total amount of gold and silver coin in Scotland held by the bank at the close of business on Satur- day. Every fourth week must be added (1) the average of the amount of notes in circulation at the close of business on each of the four Saturdays. (2) The average of the amount of coin held at the head ofiice on each of the four Saturdays. 6. For any issues in excess of the provisions of the Act, the penalty is the forfeiture of a sum equal to the excess. 7. Bank of England notes are not a legal tender in Scotland. 8. The Commissioners of Stamps and Taxes have power, with consent of the Treasury, to cause the bank's books containing accounts of notes in circulation and of coin held to be inspected, under a penalty of lool. for refusal. The variations in the number and amount of the fixed issues under the Act of 1845 have been as under : — Authorised Issues. Number of Banks. Amount of Fixed Issues. By Act of 1845 19 £ 3,087, :cy 6* 2 „ failure of Western Bank, "1 which included issue of Ayr- \- shire Bank J 337,938 8 Remaining, December, 1875 11 2,749>27i * The fixed issue of these six banks retained, notwithstanding amalgamation, amounted to 373,800^ 151 Stahdury Conditions of Note Isfsxic in Ireland. The statutoiy conditions under which the banks of issue enjoy that privilege in Ireland are as follows : — 1. The Act of 1844 prevents the establishment of any new bank of issue. 2. Notes untlcr 5/., abolished in England in 182G, are retained in Ireland. 3. The notes of each bank are payable in gold at every one of its branches. 4. The Bank of England note is not a legal tender in Ireland. 5. Banks amalgamating retain the aggregate fixed issues of the separate banks. 6. Banks may issue to any extent beyond the amount of their fixed issue on holding at their head oflices or principal places of issue, on the average of each four weeks, gold and silver coin equal in amount to such excess of issue, not reckoning silver coin to a greater extent than one-fourth of the gold coin held. 7. The returns of circulation and coin held are the same as those required from the Scotch banks, but the head offices or prin- cipal places of issue at which coin held may be reckoned against circulation may be not more than foui* for each bank, of which not more than two shall be situated in the same province. 8. The power of inspection by the Commissioners of Stamps and Taxes, and the penalty upon excess of circulation beyond the provisions of the Act, are the same as in Scotland. The number of banks of issue in Ireland, eight in 1845, has been diminished to six by amalgamation, but the amount of authorised fixed credit issue remains as it was in 1845, 6,354,494/. Advantages of Scotch and Irish Bauhs of Issue over English Country Banhs of Issue. The advantages which the Scotch and Irish banks of issue possess over the English country banks of issue may be thus briefly summarised : — 1. Notes under 5Z. ai'e prohibited in England but permitted in Scotland and Ireland. In Scotland the il. note constitutes 66 per cent, of the total cu'culation. In Ireland where notes of 3/. and 2I. as well as il. are used, the small notes form 45 per cent, of the total note circulation. (See Mr. Palgrave's tables.) This gives especially to the Scotch banks and to the Scotch nation a great economy of coin in circulation not enjoyed in England. 2. The issues of Scotland and Ireland are not subjected to the competition of the legal tender notes of any State bank, whilst the country issues of England have to hold their ground side by side IBS: I 15S t&? iMiit SifiJt Tniacs- £: ' .a»SK ^ou .ilT n j3 jec- 1!^3i;3: XLTL — SoatiaA xeaS #^ii McarSs^ Awr'nas -SaaesBS or ]hms^ xmS 'Dtikt MS£. t5r-4. -^•- - . ^C^ ?■.""•%-' 1 1. JLoriiucssL Ti' r""rrr rTT*''rincnnT Awnrwnff isass^ iir JUskut. sniL iidii _ ' I.' ^rW^TT' %lfr ^^fiHHIP^?tV- Z's: xac • iSA .1 t %ti3rT i|T^ iffTTTT ^TWlF TfT rfMff )'■»'- jr TiwlH" , ■r7»? lirrMr aao^s- jjin^ "nTt^ aesiHEu :r 4 inxnr: , ■'isM't/ mmmnxS:" oeshx. as t£ie zmni. "i is -mitfe lkt 'zi.--. . -. ,-^sg ajm Brao^ !~ ^ - TT-riEiif- Tfrn- Srtnssi. raTiiilii" - zErrf- imriTL ^ TTiKT jrjiU'i rr in. ^Tziitsiia^ : ^ ftf cxi. fesEiS' ~z~.ccm~ "lerare^ :nie tfsidiiELjiei. '**i' ii^:: toe laamafflaa. Bwr jBBWEffluarr 23C-3IOL. as: tsie ^s-rijEas^- euL iir .tBiii--fl«tsr im> iMm. Sbi^ftfiHiaif^ ~ iBrgrriianirc- _ 1 ^ itazor^ 32S'c»3VaBa:^&. ii vstwaiM » nt 3&sr m li^fenfe Ikt^i^ lire :isr in: i£crfiTLla.:s:t:ir 'tf' i STTT r:;. _. :._. .^. ^ .^ aBE- -^fetE err ijuiiszr A^rqyagg- .T.7rrrTK^r ,fTT- •nEJEKniTii. "vamjCTEi vHtier jajiiEffi' THanMOi CTirT" vil ?aiTiii ^i; ♦> sc Lisas' 3eipizi?3LtE 1 1 iiL iT^^sear si: IE- Cic KicT^e la^esg- ^iirngs ac:^ 3iar El u&e- "ntini :-; _ grr^isy^ gailims. "ITrtgr E^f- £x ani& jraEnis oi lie sai& (EKX- loer irf'gtir TfOErk "wnmiinn lis ^^ni^iiaaary" aJgiit^maA iHifr Jh'v-. iii'^v=i*''4r_ ^jT5s liiHn: lis iiniaBisflE aacd i^£mtt{£ iUHUf' -wn&iHiii vg^2Bci£ sii s^amESl ^ ibsch Hr«riliji asin^ -wnniisaitt: 154 normal amount of the Scotch cu'culation is actually on five days of the week in excess of the sum of the fixed issue and the amount of coin held. 5. In England the restrictions upon amalgamation of issues have operated to prevent the consolidation of issues, and have led, as has been shown, to the forfeiture of an appreciable proportion of the authorised circulation. In Scotland and Ireland there are no such restrictions ; and in both, but more extensively in Scotland, amalgamations have been effected without diminution of the amount of authorised issue, an advantage to the banks and the public not possessed in England. In Scotland the six banks incor- porated with the eleven existing banks had a fixed ci-edit issue amounting to 373,800^,, and it is certain that but for the privilege of amalgamating issues, the greater portion of that sum of credit issue would have been lost to the banks and the country. In England, whilst it is curious to observe in passing, that one bank, the Ludlow and Tenbury Bank, has had the ingenuity to retain its existence a.s a bank of issue, notwithstanding the transference of its ordinary banking business to the Worcester City and County Bank, it is found that the authorised issue lost by amalgamations amounts to 61 8, 1 5 1 /., or 7 per cent, of the issue originally authorised by the Act of 1844. It may further be held as certain that many banking amalgamations would have taken place in England but for the penalty of loss of circulation, and thus the natural and desirable consolidation of the country bank system has been repressed and hampered by this pernicious provision of the law. 6. In Scotland the monopoly of issue has practically produced a monopoly of banking in favour of the existing banks. 'No such monopoly of banking exists in Ireland, where there are three joint stock banks of non-issue ; nor in England, where there are amongst the purely provincial banks, eighty-three private and forty-three joint stock banks, which are not banks of issue. Several of the Scotch members of the committee, and notably Mr. Orr Ewing, argued in questions put to various witnesses that the actual monopoly of banking in Scotland must arise not from the monopoly of issue, but from the undoubted stability of the banks, the com- plete manner in which they covered the ground with their branches, and the liberal terms on which they conducted their business ; because under similar circumstances in Ireland three joint stock banks of non-issue were carried on successfully side by side with the six privileged banks of issue. In reply to this argument it may be stated that the privileges of the Irish banks of issue, though similar to those of the Scotch banks, are not so valuable. Their notes being by law payable at all their branches, they have to hold a stock of coin at every office. 155 a condition from which the Scotch banks arc exempt. Again, there were in Scotland in 1844 no established banks of non-issue, whereas in Ireland, the Hibernian Bank, established in 1825, and the Royal Bank of Ireland, established in 1836, were successfully carrying on business as banks of non-issue, when the monopoly of issue was decreed in 1844. Distribution, and Actual Position of Non-Legal-Tender Note Circulation in United Kingdom. Table LXVII. — Distribution of Non- Legal-Tender Note Circulation. [Based on llr. Palgrave's Tables.] Banks. Authorised Circulation. Average Authorised Circulation per Bauk. Average Circulation, 1874. Average Circulation per bank, 1874. ENGLiXD AND WaLES. 113 prirate banks 54 juiut stock banks £ 3,845,908 2,662,707 £ 34>034 49-309 £ 2,600,000 2,360,000 £ 23,009 43,700 167 banks 6,508,615 38,973 4,960,000 1 29,640 Scotland. 2,749,271 249-934 5,900,000 | 536,300 Ireland. 3,738,428 2,616,066 3,738,428 523.213 2,879,000 3,890,000 2,879,000 778,000 5 other joint stock banks .... 6 joint stock banks 6,354,494 i,o59,o8i 6,769,000 1,1 28,200 Even allowing for the absence of small notes in England, these figures show that in that division of the United Kingdom the right of issue is much naore diffused and in smaller hands than in either Scotland or Ireland. This discrepancy is purely the result of legislation. In Scot- land from 1716 to 1844, banking, including the issue of small notes, was entirely unfettered by law. This freedom led to the establishment and development of joint stock banks on a large scale. In Ireland banking and issue were exclusively in private hands until the establishment of the Bank of Ireland, by statute of 1782, which conferred on that bank the monopoly of joint stock banking in Ireland — a monopoly continued until 1821, when powers of banking and issue were extended to any partnership in Ireland exceeding six persons, provided they had no place of busi- ness in DubKn or within a circuit of sixty-five English miles round that city. In 1844 issue was restricted to banks then exercising that function, but it appears that ere that time the issue of notes by private bankers in Ireland had died a natural death. 156 In England tlie monopoly of joint stock banking, conferred on the Bank of England, and jealously upheld till 1826, confined the country issues to private bankers having not more than six partners, 'and kept the country banking of England essentially local and comparatively weak, whilst the banking of Scotland was growing national and strong. In 1826 joint stock banking with the power of issue was legally sanctioned in England under certain restrictions which were somewhat relaxed in 1883. From that time till 1844, when Sir Robert Peel laid an iron hand on the country issues, joint stock banking had not time to develops itself in England, and the financial troubles of 1836 to 1840 contributed to retard its infant growth. Thus it is that whilst in Scotland, and to a certain extent in Ireland also, the issues emanate from banks which are almost national in their importance as well as in the extent of their ramifications, in England, on the other hand, the issuing banks, since the IS'ational Provincial Bank of England ceased to belong to that class, are all such as restrict their operations, including the circulation of their notes, to districts more or less circumscribed. The following table will illustrate this : — Tabi.% ljXY1ll.--U7iited Kingdo7n. Banks of Issice. Actual Circulation per Bank, 1874. Locality. Lowest Actual Circulation per Bank. Highest Actual Circulation per Bank. Average Actual Circ'ulation per Bank. England and Wales — Private . . £ 1,825 1,191 £ 1-5^937 311,641 £ 23,000 43,700 Joint stock Together 1,191 31 1,641 29,640 Scotland 104,000 789,000 536,300 Ireland 476,000 2,879,000 1,128,200 These figures, as well as the following tables, are based upon copious tables prepared no less intelligently than laboriously by Mr. R. H. Inglis Palgrave for the Committee on Banks of Issue, and subsequently re-published in the " Bankers' Magazine " for 1875, and the " Banking Almanac " for 1876. In Table LXIX the joint stock banks, and in Table LXX the private banks, are classified according to the amount of the actual circulation of each bank on the average of the year 1874. 157 Table LXIX. — England and Wales. Joint Stork- Banks of Isstic, Classified accordinr/ to Amount of Actual Average Circulation, 1874. [Compik'il from Mr. Piils;rare's Tahlc*.] Bauk. Under io,coo/. 1. Barnsley Banking Company .... 2. Chesterfield and Js^ortli Derby 3. County of Stafford 4. Wliitchurcli and EUesmere .... 5. Ludlow and Tenbui'y 6. Worcester City and County .... 7. HeLston Banking Company .... Above lOjOCo?. and not above 25,000?. 1. Carlisle City and District 2. „ and Cumberland 3. Bank of Westmoreland 4. Bradford Commercial 5. Halifax Joint Stock 6. „ Commercial, Limited 7. Wakefield and Barnsley Union 8. Sbefiield and Hallamsliire 9. Derby and Derbyshire 10. Coventry Union 11. „ and Warwickshire 12. Leamington Priors, &c 13. Northamptonshire Banking Company 14. Wolrei'hampton and Staffordshire Above 25,000/. and not above 50,000?. 1. Cumberland Union, Limited 2. Bank of Whitehaven, Limited 3. Whitehaven Joint Stock 4. Darlington District 5. Knarcsborough and Claro 6. Bradford Banking Company 7. Hull Banking Company 8. Halifax and Huddersfield Union .\utlioriseil Issue. .Vvcnii-e Ciii-iilatii)ii, £ £ 9,063 8,968 10,421 9,868 9,418 9>o47 7,475 4-371 10,215 8,769 6,818 I, '91 1,503 1.494 55,41-3 43.708 19,972 19.857 25,610 24,826 12,225 10,61 1 20,084 19,786 18,534 17,391 13,733 12,440 14,604 13,906 23,524 22,748 20,093 •9.351 16,251 15.034 28,734 16,581 13,875 11.417 26,401 l8,62Q 35,378 •8,333 289,018 240,910 35,395 33.967 32,681 30,13*5 31,916 28,546 26,134 25.592 28,059 26,680 49.292 48,586 29,333 28,897 44,137 57.243 158 Table IaXYS..— England and Wales. Joint Stock Banks of Issue — Contd. Bank. Authorised Issue. Average Cii'culation, 1S74. Above 25,000/. and not above 30,000^ — Contd. 9. Huddersfield Banking Company £ 37,354 34,029 35,843 60,701 29,477 35,813 51,620 55,721 56,830 63,939 £ 35>55i 33465 46,257 25,603 30, '587 10. West Riding Union 11. Sheffield Banking Company 12. Burton and Uttoxeter 13. Nottingham and Notts 14. Moore and Robinson's, Limited 15. Lincoln and Lindsay 49,778 40,807 16. Stamford, Spalding, &e 17. Stourbridge and Kidderminster 48,303 18. North W^ilts Bankin"' Company 37,982 738,274 652,600 Above 50,000/. and not above 75,000/. 1. North and South Wales 63,951 64,311 54,372 71,240 52,496 59,300 86,060 84,356 76,162 59,698 59,342 2. Lancaster Banking Company 3. Swaledale and W^ensleydale sjIiOSo 4. York Union 69,965 5i,s05 5. Sheffield and Rotherham 6. Pares's Leicestershire 54,043 65.786 7. Leicestershire Banking Company 8. Northamptonshire Union t;8,i 72 9. Wilts and Dorset 73,^56 612,248 54--747 Above 75,000/. and not above 100,000/. 1. York City and County 94,695 83,535 144,352 90,91 1 81,256 91,615 2. West of England and South Wales District 3. County of Gloucester 322,582 263,782 Above 100,000/. 1. Yorkshire Banking Company 122,532 356,976 155,920 ii9,i'3 311,641 144,145 2. Stuckey's „ 3. Gloucestershire „ 635,428 574,899 150 V. Table LXX. — England and Waleii. Private Banks of Issue Classified according to Amount of Average Circvlation, 1874. [Compiloil from Mr. Palgnive's Tablc^^.] Local Name of Uank. Under 10,000/. 1. Eic-limond Bank 2. Loughboroiigli Eank 3. Godalniing Bank 4. Faversham „ 5. Bury St. Edmund's Bank .... 6. Penzance Bank 7. Harwich ,, 8. Lynn R. and Norfolk Bank 9. Wellington Bank, Somerset 10. Yaniiouth, Norfolk, andl Suffolk Bank J 11. Tavistock Bank 12. Thornbury (Gloucester) Bk. 13. Macclesfield Bank 14. Union Bank, Helston 15. Witney (Oxon) Bank | 16. Devonport Bank 17. Lymington „ 18. Royston „ 19. Tiverton and Devonshire Bk. 20. Towcester Old Bank 21. Oswestry Bank 22. Farnham „ 23. Sittingbourne andMilton Bk. 24. Winchester, Alresf ord, and "1 Alton J 25. Wivilcscombe 26. Southampton Tn. and Cnty. 27. New Sarum Bank 28. Wallingford „ 29. Rye Bank 30. Uxbridge Old Bank 31. Devizes and Wiltshire Bank 32. Barnstaple Bank 33. Salop Bank 34. Monmouth Old Bank Above io,oco/. and not above z^.oocl. 1. Hull and Kingston-on-HuU 2. Scarborough Old Bank 3. Bm4ington and Driffield Bk. 4. Whitby Old Bank 5. Miners' Bank 6. Thrapstonc and Kettering... 7. Tring and Chesham 8. Ashford Bunk 9. Knaresborough Old Bank .... 10. Derby Bank 11. Tonbridge Old Bank | Name of Firm. Ro]ior and Priestman Middleton and Co Mellersh „ Hilton and Rigden Worlledge and Co Batten ,, Cox and Co Jarvis ,, Fox „ Lacons „ Gill, Sons, and Co Harwood ,, Brocklehurst and Co Vivian, and Co., Helston, J. Williams, Clinch, and 1 Sons _) Hodge and Co S. Barbe „ J. G. Fordham and Sons. Dunsford and Co Mercer and Co Croxon ,, J. Knight and Sons Vallauce and Co Bulpett and Co W. Hancock Maddison and Co Pinckney Brothers Hedges and Co Curteis „ Hull „ Locke ,, Marshall „ Burton „ Bromage „ S. Smith Brothers and Co. Woodall and Co Harding „ Simpson „ Willyams „ Eland and Eland T. Butcher and Sons Pomfret and Co Harrison ,, Evans ,, H. S., A. T., and A.I Beeching j Authorised Issue. Average Circulation 187L £ 6.889 7,359 6,322 6,681 3,201 11,405 5,778 13,917 6,528 13,229 13,421 10.026 15,760 17,003 11,852 10,664 5,038 16,393 13,470 10,801 18,471 14,202 4,789 25,892 7,602 25,359 15,659 17,064 29,864 25,136 20,674 17,182 22,338 16,385 466,354 19,979 24,813 12,745 14,258 18,688 11,559 13,531 11,849 21,825 13,332 13,183 £ 6,676 6,876 5.472 5.630 2,672 8,208 4.I33 9,854 4,088 8,378 8,158 6,102 9-525 9,781 6,553 5,419 2.565 8,015 6,157 +,760 7,603 £:,662 1,825 8,872 2,365 7,620 4,5^2 4,631 7,231 5,982 4,659 3,8H 4,681 2,720 201,339 19,659 24,331 12,328 13,791 18,135 11,030 12,254 10,652 19-559 11,073 10,886 160 Table 'LX.'K. —Private Bcmh of Issue Classified — Contd. Loenl Xaiue of Bank. Name of I'iriu. Authorised Average Circulation, Issue. I xVii. Above io,oooZ. and not above 25,000^. — Contd. 12. Kentish Bank 13. Shrewsbury and Welchpool 1-4. GuQclford Bank 15. Warwick and Warwickshire 16. Naval Bank, Plymouth 17. Leicester Bank 18. Kingston and Eadnorshire 19. Ipswich Bank 20. Llandovery and Llandilo Bk. 21. Weymouth Old Bank ... 22. Newark Bank 23. Newmarket Bank 24-. G-rantham „ 25. Buckingham ,, 26. Canterbury „ 27. Brighton Union Bank ... 28. City Bank, Exeter 29. Len-es Old Bank 30. Broseley and Bridgnorth Bk. 31. Reading Bank 32. Banbury „ 33. Shrewsbui-y Old Bank 34. Cambridge Bank 35. Bicester and Oxfordshire Bk. 36. Colchester Bank 37. Exeter „ 38. Aylesbui-y Old Bank 39. Baldock and Biggleswade Bk. 40. Stamford and Rutland Bank 41. Bristol Bank 42. Saffron Walden and N. Essex 43. Newbury Bank, Berks .... 44. Banbury Old Bank Above 25,oooZ. and not above 50,000?. 1. Pease's Old Bank, Hull 2. Derby Old „ 3. Leeds Union „ 4. Nottingham „ 5. Kendal Bank 6. W. Riding Bank, Wakefield 7. Leighton Buzzard Bk. Beds 8. Bedford Bank 9. Cambridge and Cambsh. Bk. 10. Oxford Old Bank 11. York Bank 12. Newark and Sleaford Bank 13. Derby Bank 11. Hitchin Bank, Herts 15. Dorchester Old Bank Wigan and Co Beck „ Haydon ,, Grreenway and Co Harris and Co T. andT. T. Paget Davies and Co Bacon ,, D. Jones ,, EHot „ Grodfrey and Riddell Hammond and Co Hardy and Co Bartlett „ Hammond and Co Hall, Lloyd, „ Milford, Snow, and Co. .. Whitfield and Co Pritchard „ Simonds ,, J. C. and A. Gillett Rocke, Eyton, and Co. .. Mortlock and Co G-. and H. Tubb Round, Green, and Co. .. Sanders and Co T. E. Cobb „ Wells, Hogge, and Co. .. Eaton and Co Miles „ Gibson „ Matthews and Co Cobb and Son Pease, Hoare, and Co. ... Crompton and Co Williams, Brown, and Co S. Smith and Co Wakefield ,, Leatham, Tew, and Co. ... Basset and Co T. Barnard and Co Foster and Foster Parson and Co Svvann ,, Handley ,, , Smith „ Sharpies ,, Williams ,, 19 25 14 30. 27. 32. 26. 21. 32. 16. 28. 23. 30. 29, 33. 33, 21, 44, 26, 37, 43, 43. 25, 27, 25, 37, 48, 37, 31, 48, 47, 36, ,895 ,336 ,524 ,504 ,321 ,322 ,050 ,901 ,945 ,461 ,788 ,098 ,372 ,657 ,671 ,794 ,527 836 ,717 519 457 191 ,744 090 ,082 894 461 223 ,858 277 646 787 153 1,240,863 £ 16,132 20,097 11,221 22,919 20,841 24,644 19-045 i5>i95 22,651 11,150 19,654 15,254 19,272 18,224 20,418 19,041 11,631 24.284 14,182 19,881 22,098 12,784 13>h6 11,885 17,124 21,397 16,581 12,402 19,062 18,366 12,247 16, 7-1 745.400 48.807 27,237 37,459 31,047 44,663 46.158 36,829 34.2^18 49,916 34.391 46,387 51.615 41,304 38,764 48,807 48,5 > 5 26,684 36,834 30,029 43,245 43,345 33,011 29,/95 42,703 29,228 39,606 42,605 32,969 30,620 35-768 161 Tablk LXX. — Private Banks of Issue Classified — Contd. Local Name of Bank. Name uf Firm. .\utliorised Issue. Circulation, 1874. Above 25,000/. and not above 50,000/. — Contd. 16. Brecon Old Bank VVilkins and Co 68,271 53,060 42,817 59,713 43,271 49,869 80,699 82,362 48,704 69,637 87,448 56,591 44.945 34.463 i6.477 35.467 25,018 28,424 43.829 44,116 25,664 44,441 26,881 17 Yarmouth and Suffolk Bank Guriieys ,, 18 Lvnn R. and Lincolnsh. ,, 19. Wisbech and Jjincolnsh. ,, 20. Reading Bank Stephens ,, 21. Cornish „ Tweedy , 22. Ipswich and Needham Mrkt. 23. Burj and Suffolk Bunk Alexanders and Co Oakcs and Co MiUs „ 25. Essex and Bishop Stortford 26. Worcester Old Bank . Sparrow ,, Berwick ,, 27. Huntingdon Town and Cntv. Veasej ,, Beckett and Co 1,360,044 960,937 Above 50,000/. and not above 75,000/. 1. East Riding Bank 53,392 77,154 75,069 52,071 74,005 59,851 2. Craven Bank Birkbeck „ 3. Boston „ Claypou, Garfit, and Co. . J. Backhouse and Co Smith, Ellison, ,, 205,615 185,927 Above 75,000/. and not above 100,000/. 1. Darlington Bank 86,218 100,342 105,519 112,280 404,359 84,789 91,074 81,720 81,131 338,714 2. Lincoln ,, 4. East Cornwall Bank Robin „ Beckett and Co Above 100,000/. 130,757 '25,937 The results of these two tables will be seen at a glance in Table LXXI, from which it may be calculated that 86 per cent, in number, and 58 per cent, in amount of the English issues are in siims of under 50,000/. each ; whereas the smallest actual circulation in Scotland is [04,000/., and the smallest in Ireland is 476,000/. 1G2 Table LXXI. — England and Wales. Banks of Issue, Joint Stock, and Private. Actual Circulation of 1874, Classified according to Amount for each Bank. Joint Stock. Classification. Number of Banks. Aggregate Authorised Issue. Aggregate Average Issue. Under 10,000? 7 14 18 9 3 3 55.443 289,018 738,^74 612,248 322,582 635.428 43 708 Above 10,000/. and under 25,000/ 240,910 652 600 ,, z^,oool. „ 50,000/ ,, 50,000/. ,, 75,000/ 542,747 263,782 574 899 ,, 75,000/. ,, 100,000/ ,, 100,000/ Average 54 2,652,993 49,129 2,318,646 42 938 Private Bants. Classification. Number of Banks. Aggregate Autliorised Issue. Aggregate Average Circulation. 84 44 27 3 4 1 466,354 1,240,863 1,360,044 205,615 404.359 130.757 201,339 745,400 960,937 185,927 „ 75,00c/. ,, 100,000/ ,, 100,000/ 338,714 125,937 Average 113 3,807,992 33,699 2,558,254 22,639 Classification. Tolal. Number of Banks. Aggregate Authorised Issue. Aggregate Average Issue. Under 10,000/ Above 10,000/. and under 25,000/ ,, 25,000/. ,, . 50,000/ ,, 50,000/. ,, 75,000/ ,, 75,000/. „ 10,0000/, „ 100,000/ Average 41 58 45 12 7 4 521,797 1,529,881 2,098,318 817,863 726,941 766,185 167 6,460,985 38,688 245,047 986,310 1,613,537 728,674 602,496 700,836 4,876,900 29,203 1G3 As the paid-up capital may be assumed to be a rough and i-eady test of the magnitude of a bank, [ have prepared the following tables, in which the authorised circulation and the actual average circulation for 1874 as worked out by Mr . Palgrave, are brought into juxtaposition and comparison with th B paid-up capital in the case of each bank. Table LXXII.- English Joint Stock Banks of Issue. Relation of Authorised Issues and Actual Circulation to Paid-up Capital, 1874. [Col?. 2 and 3 are compiled from Mr. Palgrare's Tables.] Name. 1 2 3 Ratio 4 5 6 Ratio 7 Ratio N'™- [Banks printed in ber. SMALL CAPITALS publish Authorised Average Issue of Actual to Autho- Nunibei of Paid-up of Authorised Issue of Actual Circulation Balance Sheets.] Issue. in 1874. rised Offices. Capital. to Paid-up to Paid-up Issue. Capital. Capital. £ £ Per cnt. No. £ Per cnt. Per cnt. 1 1 Carlisle Citt and Dist. i9'97- 19,857 99 6 80,162 25 25 2 Carlisle and Cuitbland. 25,610 24,826 97 6 75,000 34 Si 3 CriiBLAND. Union Ltd 35-395 33,967 96 18 225,000 16 15 4 1 B. OF Whitehaven, Ltd. 32,681 30,136 92 4 98,530 33 31 5 Whitehaven Joint Stock .... 31,916 28,546 89 6 45,000 71 65 6 Bank of Westmoreland .... 12,225 10,611 87 2 25,680 47 41 7 N. AND S. Wales Bank .... 63>95' 59,698 93 37 420,000 15 14 8 Lancaster Banking Co 64.3" 59,342 92 14 275,000 23 22 9 , Darlington District Bank... 26,134 25,592 97 8 68,000 38 38 10 SWALEDLE AND WeNSLEYD .<4,372 51,080 94 4 63,000 86 80 11 1 Knaresborongh and Claro.. 28,059 26,680 95 ^{ not stated not known not known 12 YoRESHiEE Beg. Co 122,532 119,113 97 22 250,000 49 48 13 York City and County .... 94>695 90,911 96 15 125,000 76 73 14 1 York Union ^ 1,740 -19,333 69,965 28,897 98 98 10 132,000 90,990 54 Si 32 15 Hull Banking Company .... 4 32 16 Bradford Commercial.... 20,084 19,786 98 1 193,500 10 10 17 Bradford Bkg. Co 49,292 48,586 98 1 408,000 12 12 18 Halifax Joint Stock Bank.. 18,534 17,391 94 3 1 50,000 12 12 19 Halifax Comm., Limited.] 13,733 12,440 90 2 120,000 11 10 20 Halifax and Hudders. Un. 44,137 37,243 84 2 250,000 18 15 21 Huddersfield Bkg. Co 37,354 34,029 35,551 95 98 4 382,500 200,000 10 22 West Hiding Union Bank 33,465 3 17 9 17 23 Wakefield & Barnsley Un. 14,604 13,906 95 3 100,000 15 "4 24 : Bari.isley Banking Co [ 9,563 8,968 94 2 40,575 23 22 25 Sheffield and Rotherm. ';2,496 51,305 98 5 160,704 33 32 26 Sheffield Banking Co. 35,843 35,530 99 4 293,160 12 12 27 Sheffield AND Hallamsh.i 23,524 22,748 97 1 183,200 13 12 Jl -J 164 Table LXXII. — English Joint Stock Banks of Issiie— Contd. 1 3 •t 5 6 7 Name. Ratio Ratio Ratio Num- ber. Average of .Vumbei of of [Banks printed iu SMALL CAPITALS publish .Authorised Issue. Issue .Actual to .Autho- of Paid-up Capital. Authorised Issue ActuHl Circulation Balance Sheets.] in 1874. rised Offices. to Paid-up to Paid-up £ £ Issue. Capital. Capital. Per cnt. No. £ Per cnt. Per cnt. 28 Chesterfield and N. Derby 10,421 9,868 94 1 35,000 30 28 29 Derby and Derbyshire 20,093 19,351 96 3 62,500 32 31 30 Burton and Uttoxetee 60,701 46,257 76 3 130,000 47 },(> 31 Nottiugliam and Notts 29.477 25,603 87 8 203,500 14 12 32 Moore aad Robinson's, Ltd 35.813 30,587 85 1 127,000 28 24 33 Lincoln and Lindsey 51,620 49,778 96 12 87,500 59 57 34 Stamford, Spalding, &c. 55.7^1 49,897 89 19 200,000 28 25 35 Pares's Leicestershire '^9,300 54,043 91 6 310,00c 19 17 36 Leicestershire Bkg. Co. 86,060 65,786 77 11 275,000 31 24 37 Coventry Union i6,2<;i 15,034 92 57 2 ';6,oco 29 27 16 38 Coventry and Warwicksh. 28,734 16,581 1 105,000 27 39 Leamington Priors andT Warwickshire Bank .... J 13.875 11,417 82 4 32,000 43 36 40 Northamptonshire Bk. Co. 26,401 18,629 71 4 78,000 34 24 41 Northamptonshii'eUu. Bk. 84,356 58,172 70 4 132,500 63 44 42 COFNTT OF StAFPOED .... 9.418 9,047 96 1 60,000 16 15 -{ Wolverhampton and " Staffordshire " 35.378 18,333 52 1 100,000 35 18 44| Stourbeidge and Kid- \ DEEMINSTER BANK ..../ 56,830 48,303 85 14 100,000 56 48 45 Whitchurch and EUesmere 7.475 4,371 58 4 not stated not known not known 46 Jjudlow and Tenbury Bank 10,215 8,769 86 1 ). J) „ «{ Worcester Citt and "1 County Bank, Limited J 6,848 1,191 17 ]4 250,000 3 oi 48 W. OF Eng. and S. Wales 83.535 81,256 97 43 750,000 11 11 49 Helston Banking Company 1.503 1,494 99 '{ not stated not known not known 50 Stuckey's Banking Co 356,976 311,641 87 34 301,900 118 103 51 County of Gloucester Bank 144,352 91,615 63 12 1 8 1 ,000 80 51 52 Gloucestersh. Banking Co. 155,920 144,145 92 27 450,000 34 i^ 53 North Wilts Banking Co.... 63.939 37,982 59 16 85,000 75 45 54 Wilts and Dorset 76,162 73,356 96 50 250,000 30 29 For For 50 Br.nks, 50 Banks, i. 652.993 2,318,646 87 489 8,816,901 30 i6 165 Table LXXIII. — Scotch Joint Stock Baids. Relation of Authorised Credit Issues and Actual Circulation to Paid-up Capital, 1874. [Cols. 2 and 3 are conipili'd from Mr. Palgrave's Tables.] Nuni- IXT. Nanuv Esta- l.lish- nient. 1 Autliorised Cieilit Issue. ■1 Average Cirnila- tiun in 1874. .'5 Pro])(jrti 77 59 79 79 101 54 69 67 10 Caledonian 11 City of Glasgow .... 2,749.271 5,900,000 214 875 9,722,000 28 61 Table LXXIV. — Irish Joint Stock Banks of Issue. Relation of Authorised Credit Issues and Actual Circulation to Paid-up Capital, 1874. [Cols. 2 and 3 are compiled from Mr. Palgi-ave's Tables.] 1 2 3 4 5 6 7 Num- ber. Naiue. Esta- blish- ment. Authorised Credit Issue. Average Circula- tion in 1874. Proportion of Circula- tion or 1874 to Authorised Issue. iN um- ber of Offices. Paid-up Capital. Ratio per Cent, of •Authorised Isfue to Paid-up Capital. Ratio per Cent. of .\ctual Issue of 1874 to Paid-up Capital. £ £ £ 1 Bank of Ireland .... 1783 3,738.428 2,879,000 77 50 2,769,230 135 IC4 2 Northern Bkg. Co. 1825 243.44c 477,000 '97 44 300,000 81 '59 3 Provincial B. of I. '25 927,667 885,000 95 44 540,000 172 164 4 Belfast Bkg. Co '27 281,611 476,000 169 36 250,000 112 190 5 National Bank '35 852,269 1,366,000 160 106 1.500,000 56 91 6 Ulster Bkg. Co '36 311.079 686,000 22. 44 250,000 124 274 6,354,494 6,769,000 107 324 5,609,230 113 21 1 166 From these tables are drawn the following results : — Nation- ality. Ratio per Cevt. of Actual Average Issue of 1874 to Authorised Issue. Per cut. 87 214 107 Ratio per Cent. of Authorised Issue to Paid-up Capital. Ratio per Cent. of Actual Average Issue of 1874 to Paid-up Capital. Average Authorised Cii-culatiou per Bank of Issue. Average Actual Average Circulation of 1874 per Bank of Issue. Average Actual Circulation of 1874 per Office of Lowest. Highest. Average. Lowest. Highest. Average. Banks of Issue. English Scotch.. Irish .... Per cut. 3 7 ';6 Per cut. 118 48 172 Per cut. 30* 28 "3 Per cut. 36 91 Per cnt. 103 101 274 Per cnt. 26* 61 121 £ 49,129 249,934 1,059,082 £ 42,938 536,304 1,128,167 £ 4,742 6,743 20,896 * For 50 of the 54 banks. The above figures show how greatly in Scotland, and still more in Ireland, the proportion of actual circulation to paid-up capital exceeds the like proportion in England. It will be seen that in Ireland, with one exception, the actual circulation of every bank is in excess of its paid-up capital. Taking the average actual circulation of banks in Ireland at 100, the average circulation in Scotland is 48, and in England 4 per bank. Table hXXV.— English Joint Stock Banh of Issue, Classified according to Amount of Paid-up Capital. Capital. Number | of Banks. Not stated ,, above 50,000^ Above 50,000?. and not above ico,ooo?. ,, 100,000?. ,, 200,000?. ,, 200,000?. „ 300,000?. ,, 300,000?. ,, 500,000?. ,, 500,000? Totals Total Paid-up Capital. 4 — 5 178,255 15 1,204,682 14 2,139,904 9 2,271,660 6 2,272,400 1 750,000 54 8,816,901 Authorised Issue. £ 47,252 78,000 482,636 738,012 500,765 722,793 83,535 Actual Average Circulation, 1874. £ 4i>3i4 69,410 410,751 611,120 451.131 653,664 8i,2';6 2,652,993 2,318,646 A bank with a paid-up capital of only 100,000/. must be regarded as quite a small joint stock bank, yet we find that 44^ per cent, in number and 22| per cent, in amount of the joint stock issues in England emanate fi"om banks whose paid-up capital does not exceed 100,000/. Possible Legislation. Such being the conditions under which the non-legal-tender circulation is conducted, and such its present position in the three i 167 kingdoms, it may now be considered what policy it would be practicable and at the same time judicious to adopt with regard to it. The various lines of policy advocated seem to be as follows : — 1. To abolish all non-legal-tender issues and to confine the note circulation to the State or the Bank of England, or to the Bank of England for England, and similar State banks for Scotland and Ireland. 2. To reform the present system. 3. To reform and extend the present system. Abolition of Non-Lcgal-Teuder Issues. This course would realise the ideas of Sir Robert Peel, who in introducing the Act which bears his name, avowed his intention of paving the way for the gradual absorption of all private issues. Sir Robert Peel had a prejudice, natural perhaps, but certainly mistaken, against private issues. He attributed to them a power for evil which they do not possess. He stated that being over- issued they became depreciated and produced speculation, inflation of prices, and consequently crisis. In fact he erroneously ascribed to a convertible note circulation the vices of an inconvertible note circulation, and to an over-issue of notes the calamities which really arose from the reckless advances and consequent losses made by bankers. In support of his arguments he gave the following table : — Table JjKXXJ.—DankrupU :ies of Pr ivate Bankers in the Years 1839-43. 1839 184.0 1841 1842 1843 Total. Number of Bank- } - 8 26 11 12 4 11 6 8z Of which were Banks of Issue 29 It would thus appear that out of eighty-two bankers who failed in the years 1839-43, only twenty-nine or 35 per cent, were issuing bankers. It seems certainly a stretch of imagination to ascribe these banking disasters to over-issues of notes when so prepon- derating a proportion of their number were failures of bankers who did not issue notes. From a statement in the " Bankers' Magazine " of 1847, page 364, it Avould, however, seem that Sir Robert Peel's figures included a large number of fiats issued against joint stock bank 168 proprietors, who were then styled bankers. The statement is as follows : — Bankruptcies of Bankers, 1839-43. ' Private banks of issue ^7 „ non-issue 8 Banks bankrupt 35 Duplicates of private bank fiats 2 Fiats issued against joiut stock bank shareholders 34 71 In fairness, it must be admitted that Sir Robert Peel's view.s have this plea for their partial justification, that at the period over which his experience extended, the desire to get their notes into circulation may have acted as a temptation to some bankers to make imprudent advances ; but it is necessary to observe that there has been a remarkable alteration in the relative use of the various instruments of the banking trade since those days. The advances made by a bank of issue to its customers may and do increase largely without its note circulation being augmented by 5/. In fact the part played by notes in the settlement of transactions is much more insignificant than it was five-and-thirty years ago. An o\'erwhelming majority of the transactions of a bank are now made by cheque and by advice, without the intervention of coin or notes. Mr. Palgrave in his evidence before the Committee on Banks of Issue, submitted the following statement from a bank in Man- chester : " In 1859 the cash payments, coin, and notes were about 53 per cent, of the total turn over of the bank; in 1864 they were about 42 per cent, of the total turn over; in 1872 they were almcst 32 per cent. In 1864 the coin was about 8 to 10 per cent., and the notes 92 to 90 per cent, of the total payments in cash ; in 1872 the coin was about 15 per cent, and the notes 85 per cent, of the total payments in cash." Mr. Palgrave added, "The progressive decline in the use of notes thus indicated is remark- able." The fact is that the development of the system of cheques, and the admirable machinery of the clearing-house, have relegated the note circulation now more than ever to the position of being merely the small change of commerce. Even in Scotland and Ireland, where issues are practically unlimited, the note circulation bears the insignificant ratios of 6j and 15 per cent, respectively to the total resources wielded by the banks. Therefore, to speak now of our convertible note issues exercising any influence whatever on prices is a glaring absurdity. High prices are sometimes a cause, but never an eifect of an increased circulation of convertible notes. Again, so long as notes arc paid in gold on demand they cannot 169 be either over-issued or depreciated. Tlie public take and keep out only such notes as they require for their minor payments and no more ; and a note for which five sovereigns can be had in the next market town can never be said to be de])reeiated. Hankino" is now in abler and stronjifer hands than it was fiv'e- and-thirty years ago, and thus the probability of abuse of country issues is much diminished, even if its possibility could be admitted still to exist. It is, however, argued that note issue is in reality a function of the State as much as coinage, and should not be delegated to a multiplicity of private hands. This, however, is both theoretically and practically incorrect. Legal tender issue is certainly the proper fu.nction of the State, and if delegated should be delegated to only one State bank, or at most to one for each division of the United Kingdom, but it is not so witli non-legal-tender issues. These area form of credit which theoretically every one has a right to use ; and practically that right shoiild neither be restricted nor withdrawn, unless it be clearly proved that I'cstriction or withdrawal is neces- sary in the interests of the community at large. The question is thus narrowed into one of expediency. Experience has demon- strated the expediency if not the necessity of restriction ; but the expediency of withdrawal has not been, and as T shall venture to contend, cannot be pi'oved. Before considering what advantage would be derived from con- fining the note issues to a State bank, it should be observed that the security and convertibility of the Bank of England note are abso- lutely assured, for the State having decreed it to be legal tender is bound to provide for its payment if the State bank should fail to do so ; and the Act of 1844 ensures convertibility, except in the unlikely event of the public ceasing to hold so much as 1 5,000,000/. of the bank's notes. No one can doubt the advantage of having an absolutely secure and convertible legal-tender note issue, and although Scotland and Ireland seem to get on well enough without any legal-tender note, yet if we had to choose in England between •a system of one issue only, and that a legal-tender issue, and a system of plurality of issues, none of which were legal tender, our suffrages would, I think, be pretty unanimous in favour of legal tender and a single issue. But no such alternative is before us. No one proposes to abolish the legal tender issue of the State or the State bank. The alternative we have to consider is between a single issue which shall be legal tender, and a single legal tender issue supplemented by a plurality of non-legal-tender issues. What, then, would be gained by the suppression of all nou- legal-tender notes P This much certainly that there would no longer be in circulation in the country any note about the security 170 and ultimate convertibility of -which there could for one moment be any doubt whatever. That is an important advantage ; but it is the sole advantage, and it may be too dearly purchased. It may be imagined that the State would derive some consider- able profit from the transference of the country issues to the Bank of England, and it may be well to estimate what this would amount to. The average circulation of the Bank of England for the year 1874 was 26,264,000/., and the profit thereon paid to Her Majesty's exchequer, exclusive of 60,000/. composition for stamp duty, was 138,578/., or a fraction over one- half per cent, per annum on the amount of circulation. But the Act provides, sec. 9, that the public are to have the net profits of any increase of authorised issue on securities allowed in respect of lapsed country issues. If the English country issues were suppressed, and the Bank were allowed under the Act to increase its issues on securities by two-thirds of the authorised issue of the country banks, the profit to the State might be calculated thus : — £ Amount of authorised country issue suppressed 6,461,000 Two-thirds thereof added to Bank of England autho- 1 - J ■ -.- r 4,?oo,ooo rised issue on securities J ^ Interest on 4,300,000/. securities at 3 per cent 1 29,000 Less Cost to Bank of notes and management at 1 1 J i. r 27,100 12*. 7 ia. per cent J 101,900 £ Less loss to State of Stamp Duty on 1 , ^ ^^^ 5,000,000/. at 75. per cent J ' And loss of part of Licence Duty of 30/. "1 , ^ ^^^ per ofEce, say J ' 32,500 Net Profit to State 69,400 or barely if per cent, on the amount of circulation suppressed, even on the unlikely supposition that the Bank did not stipulate for a more favourable arrangement. It will not surely be seriously argued that a paltry profit to the State of 69,000/. per annum would warrant the suppression of the country issues, unless that step were called for on well- established grounds of public policy. Moreover, justice forbids that the country issues should be deprived of their circulation without compensation. The direct profit derived by the English country banks from their issues may fairly be set dovm at 3 per cent, upon the amount in circulation. The average English country circulation of 1874 was 4,980,000/. The profit thereon at 3 per eeut. would be 149,400/. 171 but this sum by no means adequately represents the annual value of the circulation to the banks. The notes are not only a conve- nient and economical banking instrument, but they act as so many advertisements of the issuing bank ; they feed deposits ; and what is of still greater importance to the banks and the nation, when the authorised issue is not fully used they enable the bank to extend its branches to places where it Avould not otherwise pay to open a banking office. Therefore the actual value of their circulation to the English country issuers must be set down at very much more than 150,000/. The following extract from Mr. Scebohm's thoughtful CAadence before the Committee of 1875 will sufficiently illustrate this point. Question : " Will you explain the nature and value of local issues to " local issuing bankers ? " Ansn-er : " The value to the country " issuing banker of the issue is not at all, as is often supposed, its " being a monopoly ; the country issuing bankers value their issue " far more than they would value a similar amount of deposits, " because by the abolition of the issue they would lose not only the " interest realised on the amount in actual circulation, after deducting " stamp duty, licences, and expenses, and also the interest saved on " the amount of unissued notes kept behind the counter ready for " issue, instead of coin or Bank of England notes ; but they would " also (and this is really the chief disadvantage) lose that power of " accommodating their customers and others in small transactions " which, especially in the rural districts, is intimately interwoven " mth theii" business, and conducive to its success. If it had merely " been a monopoly of a certain amount, then probably it would be " simply a question of compensation in case of its withdrawal, but " seeing that it does enter into their mode of doing business, and " that it is so interwoven with it that it enables them to give facilities " to their customers which they could not otherwise give, the feeling " of the country bankers is, that if any change were made, at all " events all these points ought to be thoroughly taken into account, " and that no substitute for local issues would really be satisfactory " either to them or their customers, unless it afforded the same kind " of facilities as were now afforded by their local notes, and not only " as regards the larger transactions of trade, and the larger centres " of trade, but especially as regards the small transactions of busi- " ness in the agricultural and rural districts." It is thus abundantly e^adent that any adequate pecuniary compensation to the issuers for the suppression of their circulation must entail a considerable permanent loss to the State. It has, however, been hinted that to prevent injustice and to avoid pecuniary compensation, Parliament might fix a future date at which the right of private issue should cease and determine. If 172 the privilege of private issue be worth ten, fifteen, or twenty- years' purchase, Parliament might decree its prospective abolition at the close of such of these periods as might be determined upon. Just so. If land be, worth thirty years' purchase, Parliament might decree that at the end of that time all the land in the United Kingdom should become the property of the State. But this would be confiscation. Yes, and the abolition of the private issues ten, fifteen, or twenty years hence without adequate compensation would likewise be con- fiscation. That Government would be bold indeed which should make any such proposal to Parliament. What harm have the English country issues done, what harm are they likely to do that they should be suppressed ? In thirty-one years only 12 per cent, of their number, and barely 7 per cent, of their amount as fixed in 1844, have lapsed by failure, whilst 60 per cent, of their number, and 75 per cent, of their amount as fixed in 1844, still remain to attest their stability and acceptability in spite of all the legislative provisions then designed to promote their forfeiture. Such remarkable stability and acceptability would surely seem to indicate that they are an institution worthy of retention. The utmost harm that can happen from their retention is that now and then a bank may fail, and the note holders may suffer loss. The note holder is generally an involuntary creditor, and as such seems quite entitled to some legislative pro- tection ; but this could readily be obtained for him without a measure so sweeping and unjust as the abolition of a system which can be shown to possess practical merits far outweighing this its only real defect. These merits are : — 1 Ready convertibility. 2. Freedom from forgeiy. 3. Cheapening banking to the public. 4. Extending the benefits of banking over the country. 5. Relieving the Bank of England resei'veof a periodical strain. 1. Heady convertibility. — Bank of England notes are payable only at the head office in London and at the place of issue from which they are dated. Thus although it circulates and is legal tender all over England and Wales, a Bank of England note issued at one branch of the bank is not only not payable, but is actually and systematically refused payment in gold at any other branch of the bank. It thus lacks the prime requisite of ready convertibility within the area of its circulation ; and this defect cannot possibly be rectified except by the combination of two impracticable con- ditions : 1st. That the number of the country offices of the Bank, now only nine, be very largely increased ; and, 2nd. That the notes issued at one office be payable in gold at every other office. The 173 nou-legal-tendcr issues on llie oilier liand do not cireulate beyond the area occupied by the issuing bank's branches, and at these branches, though they may not be by law payable, they are never refused payment in gold. It must at the same time be admitted that change can be obtained at a railway station, a hotel, or a shop, for a Bank of England note more readily than for a local note which has strayed beyond the area of its circulation. 2. Freedom, from forgery. — Mr. Seebohm made the following statements on this point to the Committee of 1875. " The freedom " of the local note from the risk of forgery is readily ex2)lained by " the fact that its genuineness can at once be determined by pre- " senting it at the issuing bank," or, it may be added, at one of its branches. " The forged notes would have to be circulated in the " very district where they would be most easily detected. Many " days could hardly pass before a forged note would find its way to " the local bank, and the public would be made aware that a forgery " had been committed ; but with a single issue that does not apply, " because the forged note would probably be circulated in an outlying " part most distant from the office where the forgery would be readily " detected. That is well known by the public, and the constant " practice of the public in the agricultural districts is that, whilst " they will take a local note without much scrutiny, and without " taking its number, they will always take the number of a Bank of " England note, and frequently write the name of the last holder " upon the back of it." 3. Cheapening hanl-ing to the j^tWic. — The possession of the power of issue enables a banker to do business on cheaper terms for the public. He can cash in his own notes free of commission cheques upon other towns, whilst on these a non-issuing banker must make a charge for collection. Sums paid to credit with a banker in his own notes are cash to him and to his customer the moment they are received. Sums similarly paid in Bank of England notes are not equivalent to cash if the till be already full. The banker must forward them to London or elsewhere before they can be cashed. Directly or indirectly the customer has to pay for the delay, the expense and the risk thus involved, whereas he would have nothing at all to pay in these respects if local notes were used. There is great economy of capital in local issues. They enable a bank to hold a considerable proportion of its till money in its own notes, instead of at a loss of interest in legal tender notes, and the customers of the bank reap the benefit in more modei-ate charges. The boasted cheapness of Scotch banking to the public is due in a very great measure to the Scotch system of issues. Whilst then it might be possible at some cost to the taxpayer to compensate the English issuing bankers for the loss of their 174 circulation, it would be quite impossible to compensate tbe public for the loss of the facilities which they derive from that circulation. In conneption with this point I may cite the valuable testimony given before the Committee on Banks of Issue, by Mr. W. Bagehot, of Stuckey's Banking Company, the largest bank of issue in England. The chairman put to him the following question : — " If ' I understand you rightly, you make advances or you give ' facilities upon easier terms to very small people than you would ' do if you had not the right of issue, and if you had not that right ' of issue it would be a losing concern to you to give those ' facilities. If you had received ten times the value of your issue, ' once for all, I presume that you would still after a time desire to ' conduct your business in what would be the most profitable way ' to you, and that it would be impossible for Parliament to say you ' ought to have done this or that with regard to this or that par- ' ticular cow-keeper or withy-binder ? " Mr. Bagehot's reply was, ' Of course it would be diJficult, and, therefore, I think it is for ' the consideration of Parliament whether by abolishing the country ' issues it would be advisable to injure the public in this way." 4. The poiver of private issue promotes the extension of the benefits ofhanl-ing over the country. — It enables a bank to plant branches in places where, if the till money had all to be held at a loss of interest, branches would not pay. How important a part the extension of banking over the length and breadth of the country plays in the development, economisation, and utilisation of the national resources, requires no demonstration. The great development of the branch system in Scotland would have been impossible but for the power of issue. Mr. Seebohm stated in evidence before the Committee on Banks of Issue, that "the large bank in Somersetshire (Stuckey's " Bank) would have to withdraw a considerable numberof branches " if they had not their issue." 5. T\ie periodic expansions to which the English non-legal-tender note circulation is subject, tahe place without affecting the reserve of the Banh of England, and consequently without disturbing the rate of interest. Mr. Palgrave's tables show that on the average of the last ten years the English provincial circulation has expanded in obedience to the requirements of the public between August and October to the extent of 547,400/. per annum. This normal expansion subsides only gradually, and if it had to be provided for from the reserve of the Bank of England, in addi- tion to the November expansions of the Scotch and Irish circula- tions, the disturbance to the reserve of the Bank and to the rate of interest would necessarily be intensified at the very time wlien experience has shown the reserve is most liable to reduction and the London money market most keenly sensitive. 175 It can scarcely be seriously proposed to abolish the non-legal - tender circulation of Scotland. The banking system of that country has grown up with the aid of note issues. It would be utterly disorganised if these were withdrawn. The banks would suffer by the enforced suppression of a very large number of tlioir smaller branches. The public would suffer by the withdrawal of many of their accustomed facilities, and by the increase of banking charges which must needs follow on the loss of the profit now deri\x>d by the banks from tlieir circulation. The country is wedded to its system of note circulation, and would not listen for one moment to any proposal for its abolition. Finally, the cost to the State for compensation would be very great. The direct value of their circulation to the Scotch banks may be estimated by calculating what the banks would lose if deprived of their issues. £ 1. They would lose tbc profit on their notes in the liuiids \ of the public, amounting to J -'^ ' 2. They would require to hold in legal . tender ~| as til! money and reserves, say 6 per cent, of I c ioq Qr.n their liabilities, which, deducting circulation, [ ' ' are 86,500,000^ J They at present hold gold and silver 4,100,000 Additional legal tender to be held at a loss of interest 1,090,000 6,990,000 Loss on that sum at 4 per cent 279,600 Less present cost of circulation, at li per cent 73, 750 Estimated net direct annual value of Scotch cu'culation 1 „ tvith all these legislative advantages at their back, should be allowed to compete on English soil on equal terms with English banks which have no such advantages. The monopoly of issue and banking which the Scotch banks ■ now enjoy in their own country is in reality the most remarkable instance of protection which retains at this day the sanction of the British Legislature. The English non-issuing banks, including all the banks in London except the Bank of England, are not pro- tected at all, and the English banks of issue enjoy a measure of protection which is trivial compared with that allotted to the Scotch banks. Is it, then, consistent with free trade principles to admit these highly protected institutions to competition with institutions which are totally unprotected ? It cannot be supposed that the Legislature would sanction such a flagrant and unjust violation of the sacred principle of free trade, even if the prospective advantage of such a course to the English public were ten times as great as it can possibly be proved to be. 2. Justice to Scotland forbids the ramification of the Scotch banks beyond the confines of their privileges. The author of a pamphlet printed in Glasgow in 1875 for private circulation, points out with great force that Parliament having tied the people of Scotland to her banks, it is only fair that the banks should be tied to Scotland. " In other words," he says, "the ramification of " our banks beyond Scotland into fresh fields of business is not " fairly allowable, their depositors and note holders being not " equally free to find themselves new banks and new note issuers." The Act of 1845 confided to the Scotch banks the solemn and important trust of providing a sound bank note currency for their own country. This great trust was confided to them as purely Scotch banks, and it may justly be held that they betray that trust, and forfeit their right to their exclusive privileges, when by entering on the field of English banking they cease to be purely Scotch banks. There is no doubt the features of Scotch banking have already undergone a very marked alteration since 1845. Table LXXVII gives the progress since that date : — 188 Table LXXVII. — Progress of Scotch Banking, 1845 to 1875. [Compiled chiefly from the evidence of Mr. Davidson, of the Bank of Scotland, before the • Committee of 1875.] Num- ber of Banks. Paid-up Capital. Bank Offices. Mouey Lodged. Note Circulation. Num- ber. Propor- tiou to Number iul845. Number of Inha- bitants to each Office, Amount. Propor- tions to Amount in 1845. Amount per Head of Population. Amount. Propor- tions to Amount in 1845. Amount per Head of Popu- lation. 1845 £ 19 10,793,415 382 100 7,178 £ 33,192,105 100 £ s. d. 12 2 I £ 3,087,209 100 £ s. d. I 2 7 '55 17 11,456,055 480 126 6,204 43,270,612 130 14 10 7 4,104,582 133 I 7 7 '65 13 9,431,000 654 171 4,870 56,185,061 169 17 12 10 4,382,600 142 I 7 7 '75 II 1 9,785,888 884 231 3>954 78,405,261 239 22 8 8 5,904,586 191 I 13 10 From this table it is apparent that with an actual diminution of paid-up capital, the Scottish note circulation has been nearly doubled, and the deposits have been considerably more than doubled. Moreover, many of the Scotch banks, and especially those which are in London, have entered largely on the system of accepting bills, an entirely new feature in Scotch banking since 1845. The acceptances of the eight leading Scotch banks amounted in 1873 to 6,ioo,oooZ., and in 1874 to 5,120,000^. Four of them have entered on the comparatively unlimited field of business south of the Tweed. Without impugning the soundness of any Scotch bank, Parhament is bound, as guardian of the interests of the note- holders of Scotland, to consider whether the conditions under which so grave and responsible a trust was confided to these banks, are not now so seriously affected by the altered policy of several of them, as to endanger the soundness of the time-honoured note circu- lation of Scotland, and to render legislative interference not only desirable but necessary. On these distinct and weighty grounds of justice to English bankers, justice to the pubhc of Scotland, and consistency with the principles of free trade, it is contended that if under existing legisla- tion the Scotch banks are to retain their exclusive privileges in Scot- land, they should be required to confine their banking operations to Scotland. This is the sound and intelligible principle of Mr. Goschen's Bill, which was held in abeyance, pending the report of the Committee of 1875. The National Bank of Scotland and the Bank of Scotland have since 1864 and 1867 resj^ectively had banking offices in London, and the Royal Bank in 1873 obtained an Act altering its constitu- 189 tion so as to enable it to open a banking office in London, which it did in 1875. Whether the National Bank of Scotland and the Bank of Scotland have been in London all these years contrary to law is open to discussion, bat if not it would be a hardship on them to drive them away now without compensation. If the English, Scotch, and Irish issues were suppressed in favour of the issues of the State or a State bank, which I have endeavoured to show would be a most impolitic step, all the banks would be placed upon an equality, and those of one division of the United Kingdom need no longer be debarred from extending into the other divisions. Similarly if Parliament agreed to reform and extend the system of non-lcgal-tender issue in England, Scotland, and Ireland by admitting all banks on certain conditions to the privilege of issue, which I have ventured to advocate as the most politic step in the circumstances, banking in each division of the United Kingdom might faii'ly be thrown open to the banks of the other divisions. It is true that if iZ. notes continued to be prohibited in England the privileges of the English banks would not be on a par with those of Scotland and Ireland, but the Scotch privileges would have been docked of some of their profit, the Scotch monopoly would have ceased to exist, and the just objections now existing to the intrusion of Scotch banks on English soil would be in a great degree removed. &ARB1S0N AND SONS. PRINTEB8 IN ORDINABT TO HER MAJESTY, ST. 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