ILLINOIS

UNIVERSITY OF ILUNOIS AT URBANA-CHAMPA1GN

PRODUCTION NOTE

University of Illinois at
Urbana-Champaign Library
Brittle Books Project, 2014.COPYRIGHT NOTIFICATION

In Public Domain.
Published prior to 1923.

This digital copy was made from the printed version held
by the University of Illinois at Urbana-Champaign.
It was made in compliance with copyright law.

Prepared for the Brittle Books Project, Main Library,
University of Illinois at Urbana-Champaign
by

Northern Micrographics
Brookhaven Bindery
La Crosse, Wisconsin

2014•vv ;•-,?* -hiV'/#'A ■-■-='

*"'i ' i AV ? •' * "

A

H : •_*/ #v #.# / "• •
V % 'v. -•■' i*



-m* '4C v ^ f •"•
?7i*.

*;>T~ Jj '-

^\. e *3#F	*• # , #1 # \?» H

' •'••■ •-.^- -e-f. v-f-4 M.

REPORT -1)1H JOINT- STOPOANKS
WITH THE MINUTES OF E VIDENCE

• "; ■ JK'ATPEfiffiX

•; "! •NrjjP# 0 ;
*

r.

-* ,>

fcV *

» --• <

. , - •• , ' * ". " . ,i
" ^ V':'	" f't* JP 1 ' >

v-v -	' ".y***

*, * \: * • ; . ; -• ' -w ; i - ' »	. .• • ~ Jt

*:•' •■ xy\ *■ '	"'

V

■ ■ '£- v.	-r r \

, 5 3 K	~ '

• • • <	- , "

': ..'	*■ ■<'*..

; V"

:; .

> .#
I

§:

' ■ ' '■■ ■*■■ " • * * '' / 'v
a ;V. ; ,

. ' ■ J: *•, " v j i •
" .	.r'"V • •

':• ii * t 1 :." - '"- ^ -/ * '4

»-. ¥ ^ ^ • *
'• 1 ■...

^ ? v - •* ,	mTHE UNIVERSITY
OF ILLINOIS
LIBRARY

From the collection of

Julius Doerner, Chicago

Purchased, 1918.

<» 332 IR E P O R T

FROM THE

SECRET COMMITTEE

ON

JOINT STOCK BANKS

- .J'"'.

l**-	y-K "■

TOGETHER WITH THE	. v**

vvk"^%-'

■/

MINUTES OF EVIDENCE,

AND APPENDIX.

STATE *;

state

Ordered, bjr *Tbe House of Commons, <o be Printed,
20 August 1836*

591-[ ii ]

Jovis, 12* die Mail, 1836.

Ordered^ That a Select Committee be appointed to inquire into the Operation of the
Act of the 7th Geo. 4, c. 46, permitting the Establishment of Joint Stock Banks, under
certain Restrictions, and whether it be expedient to make any Alteration in the Provisions
of that Act.

Ordered, That the Committee be a Committee of Secrecy.

Lunce, 16° die Maii, 1836.

And a Committee was appointed of,—

Mr. Chancellor of the Exchequer.

Sir Robert Peel.

Mr. Poulett Thomson.

Sir James Graham.

Mr. Clay.

Mr. Goulburn.

Mr. Francis Baring (Portsmouth).
Mr. Loch,

Mr. Morrison.
Mr. John Abel Smith.
Mr. Pattison.

Sir John Wrottesley.
Mr. Mathias Attwood.
Mr. Strutt.

Sir Thomas Fremantle.

Ordered, That the Committee hare power to send for Persons, Papers and Records.

Ordered, That Five be the Quorum of the Committee.

Ordered, That the Petition of Thomas Toplin be referred to the Committee.

Sabbati, 20° die Augusti, 1836.

Ordered, That the Committee have power to report the Minutes of Evidence taken
before them to The House.

THE REPORT - - - - - - - - - - ■- P- ™

MINUTES OF EVIDENCE - ... - .. . - p. i

APPENDIX - - - - - - - - - - - - P- I8*

PLAN.—Topographical Sketch ofthe District Plan of the Northern and Central Bank
of England.A 33£-/

' Crl^/u

i8 34
_frPp ft-

[ Hi ]

R E P O R T.

THE SECRET COMMITTEE appointed to inquire into the Operation of the
Act of the 7 Geo. 4, e. 46, permitting the establishment of Joint Stock
Banks under certain Restrictions, and whether it be expedient to make
any Alteration in the Provisions of that Act—Have considered the
Matters referred to them, and have agreed upon the following REPORT:

A LTHOUGH their inquiries have not been yet brought to a close, Your
-*"*■ Committee feel it to be their duty to state that the Evidence already
taken before them has fully proved, not only the expediency, but the urgent
necessity of having instituted a close and searching examination into the
laws which regulate Joint Stock Banks, the principles on which those
Establishments are conducted, and the consequences to which they lead.
No subject at the present moment more deeply important to the interest
of the Public, as well as to the interest of individuals, could have engaged
the attention of Parliament; and Your Committee have endeavoured to apply
themselves to the execution of their duties with diligence, attention and zeal.

In order to bring before Your Committee the more important facts of the
case, their Chairman was instructed to address to the several Joint Stock
Banks throughout England and Wales a Circular, to the following effect:

(Private Circular.)

Gentlemen,	Downing Street, May 21.

In pursuance of a Resolution of the House of Commons, adopted unanimously on the
13th instant, a Committee has been appointed, "to inquire into the operation of the Act of
the 7 Geo. 4, e. 46, permitting the establishment of Joint Stock Banks, under certain
restrictions, and to examine whether it be expedient to make any alterations in the pro-
visions of that Act." Of that Committee I have the honour to be Chairman, and at th€ first
meeting I was requested to obtain from the Joint Stock Banks such information as may
enable the Committee to execute the duties confided to them by the Legislature.

As it was considered just to the parties concerned that the Committee appointed should
be one of secrecy, for the purpose of avoiding any disclosure of private transactions not
required by the public interest, in place of transmitting to you the usual order of the Com-
mittee, issued under the power and authority of the House of Commons, it has been judged
more advisable that this communication should be addressed to the Joint Stock Banks by me
as Chairman, and that your reply should be addressed, under cover, to " The Chancellor of
the Exchequer," and marked " Confidential Bank Returns." I inclose two papers calling
your attention to the particular points on which the Committee require information, and you
will be so good as to fill up the return with as little delay as possible. The account of \ ^
liabilities and assets (No. 2.) should if possible be furnished for the three last half yearly
periods to which your accounts are made up, and the answers to the questions in the paper
(.No. 1.) may be made in reference to your last period of balance. This may, I hope, diminish
the trouble imposed upon you; and the returns called for may also limit the examination of
witnesses. You will not hold yourself precluded from adding any explanations not coming
within the scope of these inquiries; and I can assure you that whilst I place every con-
fidence in the zeal and readiness with which you will promote the objects of this inquiry, it
is at the same time the earnest desire of the Committee so to govern their proceedings as
most to conduce to the convenience of all parties concerned,

I am, &c.,

(signed) jP. Spring Rice.

The questions and form of account alluded to in the Circular are as
follow:

Questions.	Answers.

1.	Name of the joint stock bank, and date of commencing
business ?

2.	Number and situation of branches, and distance of each
from central bank ?

591.	3. Amount

4672R0REPORT FROM THE

Questions.	Answers.

8. Amount of nominal capital ?

4.	Number of shares, and nominal value of each share ?

5.	Number of shares issued ?

6.	Amount of paid-up capital ?

7.	Date of the several calls for paid up capital, and amount
of the several instalments paid up ?

8.	Number of shares (if any) which may have been for-
feited for non-payment of instalments ?

9.	Rate of declared dividend ?

10.	Variations in rate of dividend, and date of such varia-
tions ?

11.	Date of deed of settlement, and number of persons who
have signed such deed ?

12.	Copy of deed of settlement; when it has been printed
and published ?

IS. Copies of the last reports and accounts laid before
the proprietors; a statement of the nature of the audit and
examination to which such accounts are subjected, and of the
responsibility under which such reports are prepared?

14.	Statement whether the Bank holds any and what
amount of its own shares or stock, either in trust, as security
for advances, or in its own right ?

15.	Places at which promissory notes and bank post-bills
are made payable ?

16.	At what date or sight bank post-bills are issued ?

17.	Rate of interest paid by the bank, whether on deposits
or balances of account?

18.	Variations in such rate, and date of such variations ?

19.	Date to which the account is made up ?

No. 2.—ACCOUNT of the Liabilities and Assets of the Joint Stock Bakk of

LIABILITIES.		ASSETS.	
Amount of Promissory Notes pay- able on demand Bank Post-Bills - - Other original Bills drawn or ac- cepted by the Bank - Bills bearing the endorsement or guarantee by the Bank -  Deposits:  1. Bearing Interest, and at what  rate - J » 3. Not bearing Interest - *  Balances of Accounts Current due from the Bank :  1.	Bearing Interest, and at what rate - - - - ' -  2.	Not bearing Interest  All other Liabilities, not included as above  Total Liabilities - £.	£. #. d,	Cash in Coin and Bank of Eng- land Notes ^ -  Stock:  1.	Government Stock, Exchequer Bills, Bank of England Stock, India Stock or Bonds  2.	All other Stock and Shares in Public Companies; distinguish- ing the amount (if any) of its own shares or stock held by the Bank itself, or in trust for the Bank •  Bills of Exchange - -  Distinguishing the amount (if any) overdue -  All other Securities, not included as above -  Total Assets - £.	£» d.
			

No. 2.—ACCOUNT of the Liabilities and Assets of the Joint Stock Bakk of

An objection was at first raised on the part of some few of these Establish-
ments against furnishing the information required; but this objection was

veryCOMMITTEE ON JOINT STOCK BANKS.

very soon abandoned, and the greatest readiness was generally ex-
pressed on the part of the Joint Stock Banks to lay before Your Com-
mittee the most minute details illustrative of their mode of transacting
business.

Your Committee cannot avoid remarking that this readiness to meet
inquiry is in itself the surest pledge and guarantee of the sound principles
on which these or any other Establishments are conducted, and of the
fidelity with which the duties confided to Directors or Managers are
performed. Had the objection been persisted in, Your Committee would
not have hesitated in reporting the facts specially, confident that The House
would not have permitted any individuals whatever to impede an inquiry,
instituted by Parliamentary authority, and with a view to the public
interests.

Your Committee have felt it to he their duty to submit the Evidence to
the reconsideration of the several Witnesses examined, in order that they
might be enabled to express an opinion whether the same might be pub-
lished without risk or inconvenience.

To this rule they made one exception; in the case of the Norwich and
Norfolk Bank, which has now ceased to exist, and in respect to which the
same motives for reserve could not be held to apply, Your Committee
have published the whole Evidence as it was given, without any second
communication to the Witnesses. That case illustrates most forcibly the
evils consequent upon a misapplication of the principle of Joint Stock
Banking, and the danger resulting from mismanagement and irregularity.
At the same time, Your Committee must guard against the inference that
the disclosures made in that case by the three Witnesses examined, furnish
any evidence of the mode in which the Joint Stock Banks of England are
generally conducted. On the contrary, many of the Establishments appear
to be prudently conducted, and though an inattention to the sound princi-
ples on which banking operations should be conducted, is exhibited in
several cp \es, the ultimate solvency of the Banks, and their power of fully
meeting teir engagements, must not be brought into doubt.

The Evidence taken before Your Committee and the Returns from the
Stamp Office establish the fact, that these Banks are rapidly extending in
all directions ; that new Companies are daily forming, and that an increased
number of Branches and Agencies are spreading throughout England, even
in small Towns and Villages,—that a principle of competition exists which
leads to the extinction of all Private Banks, and to their conversion
into Banking Companies. The mode in which this is effected, and the
principle on which the issue of transferable shares acts at once on Private
Banks, and generally on commercial credit, is fully developed in the
Evidence.

Your Committee have had before them the Deeds of Settlement of the
greater number of the existing Joint Stock Banks, and they proceed to
submit to The House an analysis of some of their leading provisions.

Though the general objects of these establishments are much alike, yet
there are some variations in their Deeds of Settlement, which it may be
material to point out.

First, as to the power of altering the regulations of the company.

The active duties are generally delegated to a small body, called the
Directors, while the main body of Proprietors reserve to themselves the
591t	b	powervi

REPORT FROM THE

power of selecting the Directors, and of altering from time to time the rules
by which the Directors are to be governed. Indeed it might have been
expected that the Proprietors would always have reserved to themselves
this power ; nor should this general rule have been noticed, had it not been
necessary to point out a signal exception to it, in the case of one particular
company, in which all the powers of the company are vested in the Directors
of the Central Bank till January 1838, and even after that date this autho-
rity is only to be controlled by the " General Board of Directors," consisting
of the Central Directors themselves and of the Local Directors of Branch
Banks appointed by them. The Deeds of all the other Companies expressly
give a power to the Shareholders to make new laws and regulations.

Secondly, as to the mode of conducting the business of banking.

This is for the most part set out in general terms. Some Banking Com-
panies content themselves with defining the business to be " banking in all
its branchesin other cases it is called " the business of bankers."

Advancing money on real security is in no instance forbidden. The Deeds
of three Companies are silent on the subject; the rest expressly allow it.

The majority of the Deeds are silent on the subject of the purchase of land.
The '	Banking Company expressly allows it. The --Bank-

ing Company and the Union Banking Company expressly forbid it.

An advance of money on mining concerns is in no instance expressly
allowed; in many it is expressly forbidden; in the majority it is passed over
in silence.

Advances of money upon any " public foreign government stock or the
stock of any foreign chartered public company," is directly sanctioned in
the Deeds of four Banking Companies. Investment in foreign government
stock or funds is allowed by the Deed of another Bank. Such advances are
expressly forbidden by many of the Deeds, and are passed over in silence
by many others.

In no instance is the Company forbidden to become the purchaser of its
own shares; but, on the contrary, power is expressly given to do so by
means of the Deeds, and that to any amount. The only modifications
of this power which Your Committee have found, are in the case of one
Banking Company, in which the Directors are authorized to purchase
shares in the case only of a refusal to admit as a Proprietor the person
proposing to buy; and in the case of another Bank, in which the number
of shares to be bought in by the Directors is restricted to 40.

Thirdly, as to the degree of publicity to be given to the proceedings.

No principle seems to be more attended to or prominently put forward,
than that of preserving secresy as to the state of the accounts of the
customers of the Banks. To this principle there does not appear to be an
exception.

The Directors are in general required to sign a declaration, pledging
themselves to observe secresy as to the transactions of the Bank with then:
customers, and the state of the accounts, of individuals. • In some of the
Companies this declaration is also to be signed by all the clerks and officers.
One Banking Company goes so far as to require an oath to this effect* If
the Proprietors are dissatisfied* with the statement of accounts made by the
Directors, a power is generally reserved to appoint auditors or inspectors for
the examination of the books, but these auditors or inspectors are required
to sign a similar declaration of- secresy.COMMITTEE ON JOINT STOCK BANKS.

*	No Proprietor, not being a Director, is entitled to inspect any of the books
of the company.

•	The Directors are in general bound to exhibit to the general meeting of
the Shareholders a summary or balance-sheet of their affairs, and to make
such further statement or report as the Directors may deem expedient and
conducive to the interests of the Company. In the case of one of these
Banks even this is not obligatory by the terms of the Deed, which leave it to
the discretion of the Directors whether they do or do not exhibit a balance-
sheet. In a very extensive Bank the Proprietors annually appoint auditors
to examine the affairs of the Company and to report thereon.

In some of the Companies the principle of secresy is carried still further;
two of the Directors selected from the rest are the exclusive depositors of
the power of inspecting the private accounts of customers. These persons
are sometimes called " Confidential Directors." This provision is stated to
be made " in order that the credit and private transactions of individuals
may be preserved inviolate." Sometimes they are called " Managing
Directorssometimes " Special Directors."

In other Companies, though all the Directors have the power of inspection
of the accounts of customers, two of the Directors are selected to inspect
Bills and Notes, " in order to prevent the exposure of such Bills of Exchange
" and Promissory Notes as may pass through the Bank." These two Direc-
tors are called the " Bill Committee." In two of the Companies a single
person called the " Manager" has the exclusive power of inspecting Bills
and Notes.

Fourthly, as to the terms on which the Company is to be dissolved.

The Deeds of all these Companies contain some provision for Dissolution
in certain contingencies. It is in general provided that a Dissolution of the
Company Shall take place by reason either of a certain amount of loss, or
of a voluntary agreement. Dissolution by reason of loss in the great
majority of the Deeds is provided for in the following manner:

It is necessary to premise that the Directors of each of these Companies
are bound to set aside a certain portion of the profits to form a fund to meet
extraordinary demands, which fund is sometimes called the " Surplus Fund,"
sometimes the " Reserve Fund," but more usually the " Guarantee Fund."
The ordinary provision for Dissolution is to this effect: that if the losses
sustained shall at any time have absorbed the whole of this Guarantee Fund,
and also one-fourth of the Capital paid up, then any one Shareholder may
require the Dissolution of the Company, which shall take place accordingly,
unless two-thirds in number and value of the Shareholders shall be desirous
of continuing the Company, and shall purchase the shares of those Pro-
prietors who wish to withdraw. In one Bank the dissolution of the Com-
pany takes place upon a loss of one-fifth instead of one-fourth of the
Capital. In two other Banks no mention is made of the ^Guarantee Fund.

The provision of the great majority of Deeds, as above stated, is, that in
the event of a given amount of loss, any one Shareholder may propose the
Dissolution. In some three Shareholders are required. In the Banking
Company A. the requisition for dissolution must be made by 10 Share*-
holders, holding 200 shares; in the Bank B., by one-fourth of the Com-
pany ; but if the loss amount to one-half of the Capital, then by any single
Shareholder.

By the general provisions of the great majority of Deeds, the Dissolution of
the Company, though duly proposed, may be averted by two-thirds of thePro-

591.	b 2	prietors;REPORT FROM THE

prietors ; but in some there exists no sueh restriction; and on the occurrence
of a given amount of loss, the Dissolution, if proposed, must necessarily take
place. In other instances, on the appearance of a given amount of loss, the
Dissolution is to take place immediately, even though no Partner should
propose it.

The Banking Company C. has provisions for Dissolution peculiar to itself,
and, among others, it is set forth that the Partnership shall determine on
the 1st January 2001.

The Bank of D, besides the usual provision for Dissolution in case of a loss,
has a provision for Dissolution if the Company shall not repay a contribution
to a Shareholder who shall have been compelled to pay a debt of the
Company.

A Dissolution, by voluntary agreement, may in general be directed by a
majority of two-thirds of the Shareholders in number and value, but with
the concurrence of a certain number of the Directors.

In some Companies a voluntary Dissolution may be effected by three-
fourths of the Shareholders, in others by a majority j in a few others there
is no provision for a voluntary Dissolution.

The House will see from this Analysis that these Deeds of Partnership, on
which depend the whole transactions of the Banks and their responsibility
to the Public, so far from being framed according to one common and
uniform principle, differ materially from each other in many most important
particulars; and in some instances the Deeds contain provisions open to
very serious objection, as entailing possible consequences highly injurious to
the interests of the Public and of the Banking Establishments themselves.

Your Committee will now call the attention of The House to some few
facts which illustrate the present system.

Subject to the local restrictions imposed for the protection of the privilege
of the Bank of England, it is open to any-number of persons to form a Com-
pany for Joint Stock Banking, whether for the purpose of deposit, or of
issue, or of both.

1.	The Law imposes on the Joint Stock Banks no preliminary obligation
beyond the payment of a license duty, and the registration of the names of
Shareholders at the Stamp Office.

2.	The Law does not require that the Deed of Settlement shall be considered
or revised by any competent authority whatever, and no precaution is taken
to enforce the insertion in such Deeds of clauses the most obvious and
necessary.

3.	The Law does not impose any restrictions upon the amount of nominal
Capital. This will be found to vary from 5,000,0001. to 100,000/., and in
one instance an unlimited power is reserved of issuing shares to any extent.

4.	The Law does not impose any obligation that the whole or any certain
amount of shares shall be subscribed for before banking operations com-
mence. In many instances Banks commence their business before one-
half of the shares are subscribed for, and 10,000, 20,000, and 30,000 shares
are reserved to be issued at the discretion of the Directors.

5.	The Law does not enforce any rule with respect to the nominal amount.
of shares. These will be found to vary from 1,000 /. to 51. The effects of
this variation are strongly stated in the Evidence.

6.	The Law does not enforce any rule with respect to the amount of Capi-
tal paid up before the commencement of business. This will be found to
vary from 105/. to 5l.

. "	7- TheCOMMITTEE ON JOINT STOCK BANKS.

ix

7- The Law does not provide for any publication of the liabilities and
assets of these Banks, nor does it enforce the communication of any balance
sheet to the Proprietors at large.

8.	The Law does not impose any restrictions by which care shall be taken
that dividends are paid out of banking profits only, and that bad or doubts
ful debts are first written off. ,

9.	The Law does not prohibit purchases, sales and speculative traffic on
the part of these Companies in their own stock, nor advances to be made on
the credit of their own shares.

10.	The Law does not provide that the Guarantee Fund shall be kept apart
and invested in Government or other securities.

11.	The Law does not limit the number of branches or the distance of
such branches from the Central Bank.

12.	The Law is not sufficiently stringent to insure to the Public that the
names registered at the Stamp Office are the names of persons bond fide
Proprietors, who have signed the Deed of Settlement, and who are respon-
sible to the Public.

13.	The provisions of the Law appear inadequate, or at least are disregarded,
so far as they impose upon Banks the obligation of making their notes pay-
able at the places of issue.

All these separate questions appear to Your Committee deserving of the
most serious consideration, with a view to the future stability of the Banks
throughout the United, Kingdom, the maintenance of Commercial Credit,
and the preservation of the Currency in a sound state.

The most important facts which have come under the consideration of
Your Committee, are connected with the operation of the Joint Stock Banks
on Credit and Circulation. It appears that a great extension has been given
to both, and that if the operations of all Banks, whether private, or formed
on Joint Stock principles, are not conducted with prudence and with caution,
measures adopted by the Bank of England with a view to the state of
the Foreign Exchanges, and of the consequent demand for Bullion, may be
counteracted by the advances and increased issues of Country Banks. The
following Table will exhibit the progress of the Circulation for some time
past, and it is .to be inferred from the increased issues of Joint Stock Banks
at periods when the Bank of England was endeavouring to limit the amount*
of Paper in circulation, that a due attention was not given by them to the
Returns published in the Gazette under the Act of the 3 & 4 Will. IV. c. 98.

AN ACCOUNT of the aggregate Amount of Notes circulated in England and Wales by Private

Banks, and by Joint Stock Banks and their Branches; distinguishing Private from Joint Stock

Banks.—(From Returns directed by 3 & 4 Will. IVV c. 83.)	-

Quarters ending
■28 December 1833
29 March - 1834
28 Jure - —

27	September —

28	December —
28 March - 1835
27 June - —
26 September —
26 December —
26 March - 1836
25 June -

Private Banks.

8,836,803

8,733,400

8,875,795
8,37°,423"
8,537>655
8,231,206
8,455.114
7,912,587
8,334,863

8,353,894

8,614,132

Joint Stock
Banks.

1,315,3°*
1,458,427

1,642,807
1,783,68 9
2,122,173

2,188,954

2,484,687
2,508,036
2,799 551
3,094,025
3,588,064

TOTAL,

10,152,104

10.191.827
10,518,682
10,154,112

10.659.828
10,420,160
10>939?8°I
10,420,623
n,i34,4i4
11,447,910*
12,202,196

Stamps and Taxes,1
2 August 1836. J
591.

John Wood.

b 3x	REPORT FROM THE

BANK of England.

	Circulation.	Deposits.	Bullion.	Securities.
28 December 1833 -	17,469,000	15,160,000	10,200,000	24,576,000
29 March - 1834-	18,544,000	13,750,000	8,753,000	25,787,000
28 June — -	18,689,000	15,373,000	8,885,000	27,471,000
27 September — -	18,437,00a	12,790,000	6,917,000	26,915,000
28 December — -	17,070,000	13,019,000	6,978,000	25,551,000
28 March - 1835-	18,152,000 I7fi37>00°	9,972,000	6,295,000	24,533,ooo
27 June — -		U,753,000	6,613,000	25,221,000
26 September — -	17,320,000	13,866,000	6,284,000	27,724,000
26 December — -	16,564,000	20,370,000	7,718,000	31,764,000
26 March - 1836 -	17,669,000	12,875,000	8,014,000	25,521,000 28,847,000
25 June - — -	17,184,000	i5,730,ooo	6,868,000	

BANK of England.

Your Committee cannot too strongly recommend to all parties engaged in
banking the utmost caution and prudence in these respects, both at the pre-
sent, and in their future operations.

It was under the consideration of Your Committee whether the Law, and
the practice which they have described, did not require the interposition of
the Legislature even during the present Session. They have been led to
decline pursuing this course, because their inquiries are incomplete, and
because they feared that more inconvenience might have resulted from an
imperfect measure than from allowing the evils of the. present system to
continue without legislative remedy till the next Session of Parliament.
If a Bill had been introduced, prospective only in its enactments, an inference
might have been raised contrary to that which is the decided opinion of Your
Committee, namely, that the existing Banks are subject to any revision of
the Law which Parliament may "enact. The right of the Legislature to inter-
fere, not only in respect to Banks to be established hereafter, but in respect
to existing establishments also, is a principle which Your Committee are
prepared to assert in the strongest manner. They have now before them
the accounts of the existing Joint Stock Banks, exhibiting in very minute
detail their mode of conducting their business. If, as Your Committee
strongly recommend, it should be the pleasure of The House to renew this
inquiry at the opening of the next Session, a continuation of these accounts
would necessarily be called for. It is the earnest hope of Your Committee
that the comparison of these two series of accounts may prove that the bank-
ing operations during the recess may have been conducted with prudence and
caution, and more particularly that those who assume the responsibility of
issuing notes payable on demand, have felt it to be their pressing duty to
examine accurately the state of the Exchanges, the proceedings of the Bank of
England in reference to its issues, and may thus guard against the dangerous
error of an imprudent extension either of Credit or of Circulation when an
opposite course was rendered necessary.

Your Committee, in conclusion, feel it their duty not only to recommend
caution to the Directors and Managers, but vigilance and attention to the
Proprietors of Joint Stock Banks also. By several of the Deeds of Settlement,
imperfect as many of those Deeds are, it has been already shown thattthe Pro-
prietors are entitled to an inspection of the balance-sheet, and in some instances
to an examination of that account. When it is considered how great is the
responsibility which the Law imposes on these Shareholders, Your Committee
cannot but hope that these functions will be strictly exercised by the Pro-
prietors. On this check much will depend during the interval which must
elapse before Parliament is called upon to interfere further.

20 August 1836.COMMITTEE ON JOINT STOCK BANKS.

xi

PROCEEDINGS OF THE COMMITTEE.

Mercurii, 18° die Maii> 1830.

Present, Mr. Chancellor of the Exchequer.

Mr. Loch.
Mr. Strutt.
Mr. M. Attwood.
Mr. Morrison.
Mr. P. Thomson*
Sir James Graham*

Mr. Clay.

Sir J. Wrottesley.'
Mr. Pattison.
Mr. F. T. Baring.
Sir T. Fremantle.
Mr. John A. Smith.

Veneris 7 24° die Junii, 1836.

Present, Mr. Chancellor of the Exchequer.

Mr. Clay.

Mr. Loch.

Sir R. Peel.

Mr. Strutt.

Mr. John A. Smith.

Mr. Pattison.

Sir J. Wrottesley.
Mr. F. T. Baring.
Sir T. Fremantle.
Sir James Graham.
Mr. Morrison.

SUB-COMMITTEE.

Luna, 27° die Junii, 1836.

Present, Mr. Chancellor of the Exchequer.

Sir R. Peel.
Mr. Clay.
Mr. P. Thomson.

Sir T. Fremantle*
Sir J, Wrottesley.

* GENERAL COMMITTEE.

Veneris, 8° die Julii, 1836.

Present, Mr. Chancellor op the Exchequer.

Mr. Clay.
Sir James Graham.
Mr. Strutt.
Mr. Morrison,
Mr. Goulburn.
Sir T. Fremantle.
Mr. M. Attwood.

Mr. F. T. Baring.
Mr. P. Thomson.
Sir R. Peel.
Mr. Pattison.
Mr. John A. Smith.
Mr. Loch.

Veneris, 12® die August i, 1836.

Present, Mr. Chancellor of the Exchequer.

Mr. Clay.
Mr. F. T. Baring.
Mr. Morrison.
Mr. Pattison.

Mr. P. Thomson.
Mr. John A. Smith.
Mr. Loch.

b 4[ xii ]

LIST OF WITNESSES.

Lunae, 6° die Junii, 1836.

Mr. Edmund Burdekin	- - - - - - - ~	~ p. 1

Mr. John Stanway Jackson - - - -	- - -	- p. 4

Veneris, io° die Junii, 1836.

Mr* Robert Gilbert - - - - - - - - - - - p* 10

Martis, 140 die Junii, 1836.

Mr. Thomas Nimmo - - *	. - ' ■ .. * - - - - p. 20

John Amery, Esq. - - -	- - - - - - - " P« 35

Veneris, 170 die Junii, 1836.

Paul Moon James, Esq.	- p. 43

Martis, 21® die Junii, 1836.

Mr. Joseph Gibbins - - - - -- --	p# gg

Veneris, 240 die Junii, J 836.

Vincent Stuckey, Esq. - - - - - - - - - - - p» 80

Martis, 28° die Junii, 1836.

Mr. Walter Gibson Cassels - - - - - - - - - - p. 94

Veneris, 1° die Julii, 1836.

General Austin r * * - - - » • - - - r - p, 116

Martis, 5* die Julii, 1836.

Mr. John Harding - - - - - - - - -	- p. 131

Martis, 12° die Julii, 1836.

Simon Martin, Esq. - * : * *' *■ ^ - -	-*	- p. 140

Mortis, 190 die Julii, 1836.

John Wood, Esq. » - - - - - - - , - , - p. 153

Veneris, 220 die Julii, 1836,

Samuel Gurney, Esq. ~ - - - - - - r - - - p, l*

Martis, 26° die Julii, 1836.

Mr. Samuel Bignold - - - - - - - - * - - p. 16
My. Daniel Robertson - - - - - - r - - ' - - p. 17[ 1 ]

MINUTES OF EVIDENCE.

Luna, 6° die Junii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Sir John Wrottesley.

Sir James Graham.

Mr- F. Baring.

Mr. M. Attwood.

Mr. T. A. Smith.

Sir Robert Peel.

The Right Hon. The CHANCELLOR of the EXCHEQUER,

in the Chair.

Mr. Pattison.
Mr. Loch.
Mr. Strutt.
Mr. Clay.

Sir T. Fremantle.
Mr. P. Thomson.
Mr. Goulburn.

Mr. Edmund Burdehin, called in; and Examined.

1.	Chairman. \ ARE you connected with any of the joint stock banks?—With Mr- Burdehm
the bank of Manchester.	T~ ~

2.	What is the title of the firm ?—The Bank of Manchester.	une 1 3 *

3.	Are you the manager?—I am.

4.	Are you the person whose name is subscribed to the circular now shown you ?

—I am.

-(A.)-

Gentlemen,	Manchester, 23 May 1836.

The Chancellor of the Exchequer, as Chairman of the Committee appointed under
Resolution of the House of Commons, on the 13th instant, "to inquire into the operation
of the Act of the 7 Geo. 4, c. 46, permitting the establishment of joint stock banks under
certain restrictions, and to examine whether it be expedient to make any alterations in the
provisions of the Act," has addressed a circular to the banks with which we are respectively
connected, requesting answers to certain questions, and a return of liabilities and assets;

which circular we presume has been also addressed to all other joint stock banks.

Convinced as we are, that a fair investigation of the principles and of the practice of the
management of joint stock banks will tend to increase the confidence of the public in
their security, it appears to us nevertheless that answers to these questions, and the
returns sought, will, in several particulars, involve disclosures which are not required for
the public good, and are therefore unnecessary, and which will be prejudicial to the
interests of joint stock banks, and should therefore be declined.

In pursuance of the duty imposed upon us as members of the committee, appointed at
the meeting of deputies from joint stock banks, held at Morley's Hotel, London, on the
29th ultimo, " to take measures for protecting the interests of joint stock banks against
any prejudicial effects which may arise from the Bill to consolidate the Stamp Acts now
before Parliament, or from the motion of Mr. Clay, for a Committee to inquire into the
operation of the Act 7 Geo. 4, c. 46," we have determined to summon our colleagues,

for the purpose of soliciting an interview with the Chancellor of the Exchequer, in order to
remonstrate with him upon the objectionable requirements of the documents enclosed in
his circular; and we submit to you the propriety of deferring any reply to that circular
until the result of such interview has been communicated to you, which may require
another general meeting of deputies from the banks interested.

We are, gentlemen, yours obediently,

Edmund Burdehin,

John S. Jackson.

5.	Who is the other person who has subscribed it?—Mr. Jackson is the manager
of the Manchester and Liverpool District Bank.

6.	By what authority was that circular issued?—We are members of a com-
mittee, formed a short time since, for the purpose of watching the proceedings
respecting the Stamp Act, and the inquiry under Mr. Clay's motion, and as x
members of that committee we issued that circular.

7.	Was it issued by you two upon your individual responsibility, or in concert
with any others ?—On our individual responsibility.

0.92.	b	8, To2	MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. E. Burdekin. 8. To whom was that circular addressed?—I believe one was addressed to each
1 ■ ■ ■	of the joint stock banks.

6 June 1836. g. What is the government of your bank ; is it governed by a board of directors
or any other authority ?—By a board of 12 directors.

10.	Was this letter submitted to your board of directors?—The manuscript was
shown at the board prior to its going to the printers.

11.	Was it approved or sanctioned by them?—I believe it was approved of by
them, but it formed no part of their proceedings at the board.

12.	Are you one of the directors ?—I am.

13.	Was it shown by you to your co-directors?—It was.

14.	Was there any entry made in the minutes respecting this circular?—None
whatever.

15.	Do you consider that you had the sanction of your co-directors for issuing
it ?—I considered that the circular shown to them had their approval, but it was
not as a director of the Bank of Manchester that I signed it.

16.	Have you obtained answers to it ?—We have not; we did not expect any;
we have received, I believe, some letters, acknowledging the receipt of it.

17.	It appears upon this circular that you and Mr. Jackson communicated to all
the joint stock banks of England that, in your judgment, the replies required by the
circular of the Chairman should be declined ?—Certainly, there is that expression
in the circular; but I wish distinctly to state that, as I have before expressed, we
are anxious that the fullest information should be given to the Committee, con-
sistent with a proper security to the joint stock banks, and we were fearful that
the enlarged account required by the paper, No. 2, might involve a disclosure of
matters connected with our respective establishments, which, without a very sufficient
explanation, might not be fairly understopd by the Committee, or by the public, if it
found its way to the public j and therefore we were anxious to avoid any preju-
dicial effect which might casually arise by hastily filling up the statement required.

18.	Are the Committee to understand you saw no difficulty or objection to
giving answers to all the questions in the first paper r—Not the slightest.

19.	But that the difficulty you have raised applies to the amount of liability and
of assets pnly ?—It does ; we have no desire whatever for any concealment in the
establishment which I represent; we are anxious that the Committee should pos-
sess the most extensive information ; but this impression certainly did exist with
us, which I presume I am at liberty to state, that the disclosure of our private
affairs was perhaps more than is usually required by a Parliamentary Committee;
and we especially considered that if a balance-sheet of our affairs is required to be
laid before the Committee, the same ought to be required from all other bankers,
both private and public ; that was the feeling we had.

20.	Are the Committee to understand that your objection lay against the prin-
ciple of the furnishing that balance-sheet, or against the manner in which it was
required to be furnished by you ?—Against the mode.

21.	You have no objection to furnishing the same information in another mode,
avoiding the objections which you see to this sort of account ?—Of course I cannot
pledge the board to that; I have no instructions from the board on that point;
but 1 think I can answer for the directors, that they would be very willing to
furnish to the Committee every information that would not be a disclosure of any
private affairs of the bank, which as directors they are of necessity intrusted with
by the proprietors, whose interests are confided to their care.

22.	What disclosures do you refer to as likely to be made by that account, which
are not required for the public good, and are therefore unnecessary and prejudicial
to the interests of joint stock banks?-—I allude more particularly to the extent to
which the liabilities would be swollen, if the amount of all the bills of exchange
which are current, and bearing the endorsement of the company, be placed as liabi-
lities to the debit side of that account, without the account having credit for the like
amount as assets ; such a statement would present in figures a large sum on the one
side, without having, as it ought to have, an equal sum on the other side. And if
a statement so made were to go forth to the public, without a proper explanation,
an erroneous conclusion might be drawn from it, prejudicial to the company; indeed
any company would appear insolvent with such a statement.

23.	Do you not consider that those endorsements do in fact constitute liabilities?
Most certainly.

24.	Then how would it be possible to obtain an account of liabilities, and the
assets of the bank, excluding from such account those liabilities ?—If it be, as I have

beenSELECT COMMITTEE ON JOINT STOCK BANKS.

3

been given to understand is the fact, that this Committee has the power to compel Mr. E. Burdekin.
us to render a statement of our liabilities, it is of course totally impossible for us ————
to make that statement without including every bill of exchange on which we have 6 June J®36'
endorsed our name; and I beg it to be understood that it was in ignorance of the fact
that the Committee does possess such power that the objection was first taken.

25.	Did you consider that circular as the circular of an individual, cautiously
marked as such, rather than as an order from a Parliamentary Committee ?—I con-
sidered the circular certainly as coming from yourself, as Chairman of the Com-
mittee.

26.	Did you consider it as conveying the order of the Committee ?—Certainly
not.

27.	Mr. Atfwood.~\ You considered that a literal compliance with the order
would have given, an account of your affairs which would not have been in effect a
correct account ?—-The account would have been a correct account, because it
would have embraced the amount of the whole of our liabilities on bills of exchange;

but my impression was that such a statement, not having credit given it for the
assets contained in the security of those parties whose names on the bills precede
ours, would have a prejudicial effect on the minds of the public, and even of the
Committee, if unexplained; because the liabilities, if thus shown, would far exceed
in amount the assets placed on the opposite side, and thus an impression might be
created by such a statement prejudicial to the joint stock banks generally.

28.	Do you consider that the return, which required you should give your
endorsements on bills you had parted with as part of your liabilities, would also be
accompanied with a power of putting those same bills among your assets on the
other side of the account 1—That is a question on which there are two opinions.

My opinion was, in the first instance, (I have not given it much consideration since)

that if I were compelled to make out the statement in question, I should put the
current bills as liabilities on the debit side of the account, and take credit for the
same amount as assets; considering that the guarantees of the endorsers and
drawers were my guarantees against any loss from their non-payment.

29.	That would have given a correct impression of the affairs of the bank ?—If
that statement had been so made it would.

30.	If not so made it would not give a correct impression of the affairs of the
bank ?—My impression is that it would not.

31.	You were in some doubt as to the manner in which the order required you
should enter those bills on the credit side of the account ?—We were in doubt
altogether as to the mode in which the facts should be stated.

32.	You wrote that letter under a doubt how it was to be filled up, considering
that if it was filled up in one way it would convey an erroneous impression of the
situation of the bank?—-Yes; or rather that an erroneous impression might be
taken from it by those who would not consider all the bearings of the subject. ,

33.	Chairman.] You are aware that the circular contains a statement that the
banks may add any circumstances of explanation, in reference both to the questions
in the first paper and to the account in the second ?—Certainly.

34.	Would it not be open to you in filling up the account, therefore, to append
any observations which are likely to bring before the Committee the particulars to
which you have now adverted in respect of the endorsements upon those bills?—

I think we could scarcely have made such an explanation in writing as would have
been sufficiently explanatory of the facts, or satisfactory to the minds of the Com-
mittee; but had there been'no objection felt by the board of directors to making
such a return, we should have accompanied the statements with the most extensive
explanations upon every point. Our objection is not to giving such information
as may be necessary to enable the Committee to make a proper report to the House
of Commons; but we have felt that we were called upon for more, under the cir-
cumstances, than we thought the Committee (using the word with great deference)

had a right to call upon us for. If I am to understand that the whole extent of
information which the Committee chooses to call for we are bound to give, then of
course 1 will make that communication to my co-directors, and it will be for the
board to decide whether the requirements of the Committee shall be complied with
or not; for, as I said before, I have no instructions from the board on the subject.

We have always recommended publicity to such an extent as should be a sufficient
and satisfactory security to the public ; for we wish that the system of joint stock
banking should be made indisputably secure, so that no question could be raised as
to the possibility of an unsafe or urfsound company.

0.92*	b 2	35. Do4

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. E. Burdekin. 35- Do you consider that the inquiry before this Committee could be complete
•—— without an account of the liabilities and the assets of the joint stock banks ?—I am
6 June 1836. not prepared to give an answer to that question, because it is a matter I have not
sufficiently considered. I have looked at the inquiry in this light, that we ought all
to be placed on one footing; and if it be in the power of the Committee to compel
a disclosure of our private affairs, we can have no objection to comply with that, if
the same power be exercised over the private bankers.

36.	Do you think any inquiry into the principle of banking, whether of the
Bank of England, or of joint stock banking, or private banking, could be effectually
carried on without considering the assets and liabilities of the respective banks ?—
I should consider that such an inquiry might be made without requiring a state-
ment of the assets and liabilities, as would satisfy the Committee at all events of
the security of joint stock banks; but it cannot be doubted that if such an inquiry
as that now instituted against joint stock banks were to be instituted against the
private establishments, some of the latter must of necessity declare their own
insolvency.

37.	The question does not apply to this particular account of the assets and
liabilities, but to any account of assets and liabilities; do you think that a Parlia-
mentary examination of the principles on which banks are carried on could be
complete if it did not embrace an inquiry into the assets and liabilities of banks ?
—It perhaps might be considered that it could not be complete,

38.	Do'you think that the assets and liabilities could be satisfactorily inquired
into if the amount of the bills guaranteed by the respective banks, or bearing their
endorsements, were excluded from such accounts ?—Certainly not.

39.	Mr. Clay7\ You would have no objection to furnish the amount of bills
under endorsement by the company at the period specified, if you were permitted
either on the opposite side to state those very bills that had been discounted in the
nature of assets, or to accompany the statement by a full explanation of the cir-
cumstances ?—I cannot answer that question, for the reason I have before assigned ;
I am not authorized by the board to say we would do so; the board would have
to decide that question on the receipt of a positive intimation that they must furnish
such an account.

40.	Have you any opinion individually whether there could be any legitimate
objection to the account with the accompanying explanations stated ?—One
objection, among others, is that the liabilities of banks on bills of exchange will vary
very much according to circumstances. In the north of England especially it is
the practice (and has been throughout the whole of my remembrance) for bankers
to rediscount the bills they receive from their customers, because the payments in
the current course of trade in those "districts are made almost exclusively in Bank
of England notes, and not in bills of exchange. The consequence is, the bankers
are required to furnish for the use of their customers large amounts of Bank of
England notes, when their receipts of such notes are comparatively small: this is
particularly the case in Manchester, where payments for commodities are made by
the merchants and manufacturers in cash or Bank of England notes, supplied to
them by the bankers, in exchange for bills drawn on London and elsewhere ; the
bankers then go into the London market with their bills, and discount them, in
order to continue the supply of cash which the business of their customers may
require. The liabilities therefore on bills of exchange of such bankers must of
necessity be greater than those of bankers in districts where no such custom pre-
vails, but their security to the public may not be the less on that account.

41.	You consider that practice a legitimate and proper one?—Certainly.

42.	Is there then any difficulty in stating that?—I see no objection, if it be
required from bankers generally.

43.	Is there an objection to any other item?—I may say that the objection felt
generally is that the inquiry is instituted against one class of bankers only.

Mr. John Stanway Jackson, called in ; and Examined.

Mr. J. S. Jackson. 44. WHAT is your connexion with the district bank of Manchester?—I am its
------- general manager.

45.	Is the government of that bank vested in a court of directors ?—It is in a
board of directors.

46."	Is this circular which has been issued, and which bears the signature of
John S. Jackson, a circular of yours (Paper A) ?—Yes.

47. DidSELECT COMMITTEE ON JOINT STOCK BANKS.

5

47.	Did you write it of your own authority, or did you submit it to the board of Mr* J- Jackson.
directors of the district bank ?—I submitted it to the board of directors.

48.	Was it approved of by them?—It was.	6 June 1836.

49.	To whom was it addressed ?—It was addressed, as far as I know, to all the
joint stock banks already in operation.

50.	Have you obtained replies ?—No replies, as far as I remember, have been
sent to me ; but I think several replies have been sent to the Old Hummums.

51.	You allude in this circular to a committee appointed of the deputies of the
joint stock banks in London; what committee is that ?—-The Chairman is aware
that the deputies of joint stock banks have had the honour of an interview with him
on another subject; from the tenor of that interview it was thought unnecessary
they should all remain in town, and six individuals were selected by them as a com-
mittee particularly to watch those measures to which their deputation related, and
to communicate with the deputies as occasion might require.

52.	Do you consider that the Committee has the consent of the whole of the
joint stock banks, or, if not the whole, what proportion ?—Such proportion as have
assented to the measures for the formation of that committee.

53.	Can you lay before the Committee the names of the banks connected with
the committee ?—Yes.

54.	Was this written with their assent and approval ?—Certainly not; it was
written by two members of that committee, and it declares their intention to
summon their colleagues.

55.	Did you consider the circular addressed by the Chairman of this Committee
to the joint stock banks as being a letter from him, and not a definitive and final
order from the Committee ?—As being a letter from the Chairman j and we were
encouraged by the interview with which we had been favoured before to think that
another interview with the Chancellor of the Exchequer would do away with
difficulties, which we considered worthy of his consideration, and that of the Com-
mittee through him.

56.	Do you feel any objection to answer the questions in the paper No. 1 ?—>

Not any.

57.	What are the disclosures which you consider not required for the public
good, and which you state should be declined, contained in the answers to the
paper No. 2 ?—Considering it only respectful to the Chancellor of the Exchequer
that notice should be taken of his circular, I submitted for the approval of the
Board of Directors of the Manchester and Liverpool District Bank a memorial
containing these objections, which I will beg leave to present.

"To the Committee appointed in pursuance of a resolution of the House of
Commons on the 13th May last, 4 to inquire into the operation of the Act of the
7 Geo. 4, c. 46, permitting the establishment of Joint Stock Banks under certain
restrictions, and to examine whether it be expedient to make any alterations in
the provisions of that Act.'

" The humble Memorial of the Directors of the Manchester and Liverpool District

Banking Company,

" Showeth,

k' That your memorialists have received a private circular from the Right
honourable Thomas Spring Rice, as Chairman of the said Committee, request-
ing answers to certain questions inserted in a paper, numbered 1, and a return
of liabilities and assets in a paper, numbered 2. Your memorialists are willing
to afford the most ample means of investigating the principles and practice
of management in the bank under their direction; but they respectfully
submit, that they ought not to be called upon to answer such questions as
involve disclosures which may be prejudicial to its interests, or which may be
prejudicial to the interests of joint stock banks generally, by placing them unfairly
before the Committee, unless the same inquiries be made in reference to the
practice of private banks, the issue of whose notes so far exceeds that of joint stock
banks. And your memorialists beg leave most respectfully to allude especially to the
return required in paper No. 2, of ' bills bearing the endorsement of or guaranteed
by the bank,' which is intended, as they suppose, to show the amount of bills
which have been rediscounted, and to remonstrate against such an inquiry, if put
to joint stock banks alone, for the following reasons : first, because the practice of
rediscounting or paying away bills has ever been a legitimate part of the business
of bankers, and is not confined to joint stock banks, but, as your memorialists
believe, is also extensively adopted by many private banks, and has been practised
0 92.	B 3	with6	MINUTES OF EVIDENCE TAKEN BEFORE THE

Kir J S Jackson. grea^ success by one or more of the highly respectable firms whoge business is
'	carried on in the same town with the head office of the Manchester and Liverpool

6 June 1836. District Bank ; it is not therefore attributable to the operation of the Act of the
7th Geo. 4, c. 46 ; secondly, because the return would lead to very erroneous
conclusions, inasmuch as a bill may bear the endorsement of several joint stock
banks, and would necessarily be included in the return of liabilities from each of
them ; consequently, so far as such bills are concerned, the aggregate of liabilities
of joint stock banks would appear considerably more than it actually is; thirdly,
because the danger of the practice of rediscounting bills depends upon the cha-
racter rather than upon the amount of such bills, and that this danger is not great,
so far as the Manchester and Liverpool District Bank is concerned, your memo-
rialists beg to submit, that, during the half year ending 31 December 1835, which
may be considered an average of similar periods, the bills which were returned
dishonoured (and many of which were subsequently paid) amounted only to
7 s. 4 d. out of every 100/. of such bills as had been so rediscounted.

" By order and on behalf of the Directors of the Manchester and Liverpool
District Banking Company."

58.	Have you any other objection to an account of the liabilities and assets,
except that raised upon this paper ?—I think an objection would lie against the
disclosure of the deposits and of the loans, but I am not prepared to consider this
objection so important as I do the objection to the return of liabilities on bills
endorsed or guaranteed by the bank.

59.	Do you consider that an inquiry could be prosecuted into any branch of
the banking business, whether the Bank of England, the joint stock banks, or
country banks, without examining the state of the liabilities and assets of such
banks, the question not alluding to this particular form of account, but some account
to reach the same object?——I think it possible the Committee may obtain all the
information which the motion, under which it is originated, requires, without that
exposure, to which any bank would feel an objection.

60.	Do you think that the Directors of any bank that may give to the pro-
prietors an account of their own transactions, can give to them such an account of
the transactions of the bank as would be satisfactory, if it did not include an
account of the liabilities and assets?—I am prepared, in furtherance of the
assurance of my directors of their 'willingness to afford this Committee every
suitable information, to lay before it, if required, an abstract of our general ledger,

*	weekly laid before the board ; and I would leave it to the Committee to consider

1	whether such an account of the bank was not in all respects a satisfactory one.

61.	Do you consider that the directors could furnish to their own proprietors
such an account of the concern as would be satisfactory, if it excluded an account
of the assets and liabilities of the bank ?—Certainly not.

62.	Do you consider that such an account could be satisfactory if it excluded
solely from the liabilities of the bank the amount of bills which were guaranteed
by them, or which bear their indorsement ?—I think it might.

63.	Do you consider those bills to be or not to be a part of the liabilities of the
bank ?—Liabilities certainly.

64.	How then can an account of the assets and the liabilities be satisfactory if
a part of those liabilities are excluded ?—Because against the liabilities on those
bills there is the security of parties liable to the bank, namely, previous endorsers,
with the drawers and acceptors, where such latter parties exist, and the pro-
prietors must rely on the discrimination of the directors as to the worth of such
security.

65.	Does not that apply to many other particulars of the account as well as
this ; how could an account be complete, excluding that item of liability ?—I think
that that item of liability could not be inserted without an analysis of such bills,
because it is impossible, in my opinion, to form an estimate as to the extent of such
liability, unless the Committee are informed of the character of every bill, and the
names indorsed on them previous to the liability of the bank making the return.

66.	You are aware that by the circular the bankers are invited to accompany
their answers with any explanatory observations they think fit; will it not be open
to them, together with that account, to give the explanations which you suggest ?—
I think it will be obvious to the Committee that it will be almost impracticable to
give a history of every bill, and that without this the Committee could not judge
of the relative value of assets and liabilities which were included in the return
made under that head j I would beg also to offer an obiection to the amount of

past-dueSELECT COMMITTEE ON JOINT STOCK BANKS.

7

past-due bills being distinguished from the amount of bills in hand ; I do it, not	S. Jachoa.

because there is the least hesitation on the part of the bank I represent to state ——————

the amount of past-due bills, but because I think the difference of practice amongst 6 June 1836'
joint stock banks with respect to past-due bills, would occasion a difference in the
amount of their several returns, which might give rise to a false impression in the
Committee, both as to the probable loss to be apprehended by any particular bank,

and as to their relative position with each other. I beg to explain that we are in
the habit of placing to the account of past-due bills, every bill which is not paid at
maturity, and which is not eharged to some particular account: a bill may not be
charged to a particular account, in order to preserve such security as is specially con-
nected with some of the endorsements upon it, or is held collaterally with that
particular bill. The gross amount, therefore, of our past-due bills does not show
at all what could be supposed to be the probable loss on the part of the bank, for
many bills charged to the nominal account of past-due bills are absolutely good.

And we are in the habit every half year of making an estimate of the probable
loss on all past-due bills as well as upon all current accounts, and as a provision
for this, to write off a certain amount from our profits, placing that amount to the
credit of an account which we call the reserved fund for losses; we cannot charge this
account with the whole of any past-due bill till the precise loss be ascertained;

but it will be evident that from the amount of past-due bills must be deducted the
sum so estimated and placed to the credit of the account referred to; whereas
by the return we should be compelled to state the entire amount of all past-due
bills, without any such deduction.

67.	Sir John Wrottesley. When you place a bill to the debit of the account of
the person who has endorsed it to you, do you not give him up the bill at the same
time, so that it would cease to form part of your liabilities or assets ?—We should
certainly give up the bill to him if required, and to prevent such a necessity, we
place the bill to this nominal account of past due bills, that we may retain it.

68.	Sir Robert Peel,'] All the bills on which the bank gives its name, are
liabilities, are they not ?—Certainly.

69.	For all those bills you have some collateral security, the endorsement of
some other parties, or some equivalent security ?■—Upon all of them.

70.	What can be the objection then to state the amount of bills for which you
have liabilities, and also the amount for which you have guarantees ?—The objec-
tion, I think, arises in that both these liabilities and assets are contingent, but not
absolute, and that it would place joint stock banks unfairly with other banks.

I have not the slightest objection to furnish it, if other banks alike furnish it; but I
cannot see why there should be a line of demarcation between public and private banks.

71.	Your objection is not an objection then which can affect the security of any
particular bank, but that it makes an invidious distinction between two classes of
bankers ?—Partly so ; and partly that it is impossible to form an opinion of the
solvency or otherwise of any individual bank from its answer to this inquiry.

72.	Do you think it would be likely to raise in the mind of the public, if it
came before them, a very unjust suspicion of the solvency of any bank P—I think it
would affect all bankers' credit.

73.	If the security held by the bank is a good one, why should it affect their
credit ?—The public will not so generally understand the nature of the security as
they will comprehend the extent of the liability.

74.	Supposing the return was of this nature, an account of bills for which the
bank has incurred liabilities, say 100,000 L, and that on the other side they have
collateral securities or endorsements for an equivalent amount, do you think the
notoriety of that fact could affect the credit of the bank ?—I think so, for this
reason : that supposing the bank has 500,000 I. under discount, and in its return
it places 500,000 /. as assets under the securities already alluded to, it will be
obvious that before those assets are available, the bank must be called upon to pay
this 500,000 I.; the question will then arise whether the bank, independent of any
reliance upon these assets, is in a situation to meet this liability. I think it will be
satisfactory to the Committee if I refer to the statement of our memorial as a proof
of the great difference betwixt the contingent and the actual liability on endorse-
ments, in order to show that a very small portion of that 500,0001, would have
become an actual liability, we having had in bills dishonoured (many of which were
afterwards paid) only 7 s. 4 d. out of every 100 /. of the bills we had rediscounted
in one half year, which, I believe, is a very fair criterion of previous half years.

O.92.	B 4	75. Supposing8

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. s. Jackson. 75• Supposing you made a return that the amount of the liabilities of the bank

-- for bills of exchange is, say 100,000/., the amount of collateral securities of the

G June 1836. bank by the endorsements of other parties is, say 100,000/., and an account
accompanying which showed that the whole amount of bills returned was only
7 s. 4 d. per 100 L, do you think the publication of those facts, accompanied with
that explanation, could affect the security of the bank ?—I think it would.

76.	Is it not perfectly notorious to the public at large that this is the mode of
transacting the business, that every one knows there is the liability of the endorse-
ment of other parties generally, and if the hazard of the bank is not increased,
would the knowledge of the extent to which they do business of that kind affect
the security of a well-conducted bank ?—I think it would; but that is not the only
objection : there are bills of exchange which have passed through many joint stock
banks, and as each joint stock bank must make a return of all these bills as
liabilities, an impression would be made upon the public that the aggregate lia-
bilities of joint stock banks were much greater than they really are.

77.	Each banker must hold a collateral security for that bill, and if each bank
returned that among its assets would that not correct an erroneous inference which
might be drawn from the amount of liabilities ?—A bank making a return of a
bill as a liability, which was endorsed previously by another joint stock bank, would
be returning as a liability to itself that which had been returned also by the bank
which had previously endorsed it, and would return as an asset against this
liability the security it held in such previous endorsement, consequently in respect
of such a bill the aggregate of liabilities and assets would be doubled.

78.	If the bill was for 70/., though endorsed by all the joint stock banks, that
would not appear in the account for more than 70/. ?■—If it had been endorsed by
40 joint stock banks it would be included as a liability for 70 /. from each of them,
and would consequently make an aggregate liability of 2,800/.

79.	Would not the statement of the endorsements remove any impression against
the bank ?—I think not, nor could the banks furnish a statement of all these prior
endorsements.

80.	If the assets are as great as the liabilities, where is the practical evil of that;
if they are not, why should not the public inquire ?—Because I conceive it is
impossible to place the character as well as the amount of those assets before the
public.

81.	Sir John Wrottesley.] Suppose you discount a bill for 100/. you give cash
or bank-notes for that bill ?—Yes.

82.	Would not you immediately place that bill as part of your assets?—Yes.

83.	Would not that counterbalance the liability on the other hand?—This
question refers to a bill discounted by the bank ; the previous questions related to
bills rediscounted; if I understand it, there is no liability by the bank upon this bill,
so long as it is not rediscounted ; but if I pay that bill into the Bank of England*
or to any other ' party, it is then rediscounted by me, and becomes a liability ; but
the parties endorsing previously to our bank are liable to it in case of the dishonour •
of such bill, and I consequently must include its amount in my return of assets.

84*—	_	/	_ ::	! _

85.	Is there any objection, provided your assets are considerable, to stating the
amount, your liabilities being in the same proportion?—I think the same objec-
tion would lie on assets connected with balances of account current as assets con-
nected with endorsements on bills of exchange; for the character or stability of the
parties must be matter of explanation to the Committee.

86.	The assets and liabilities will be precisely balanced; the difficulty applies as
to bills over-due, and not placed to any account; those you state you place to the
account of a reserved fund for losses; do you mean to say that it is possible, that
account being brought before the public, they may entertain a stronger opinion of
the losses that have been incurred upon those bills than is actually the case, you
having securities upon them, which, although not immediately available, may he
paid at some future period; is that your objection to bringing those forward ?—
Partly so, and partly because the amount will appear greater than it actually is ;
and 1 do not see how I can make a return in the terms required by this Committee
without involving that discrepancy.

87.	Can you not state, in opposition to those bills which have not been paid, the
eircumstance, that upon those bills you have taken there are endorsements, which
you conceive the greater spart of them will be ultimately paid; would not that come

underSELECT COMMITTEE ON JOINT STOCK BANKS.

9:

under the special circumstances you are directed to detail ?—Unquestionably it Mr. J. S, Jackson.
would.	-

88.	Mr. Atfrwood.] The mode pointed out of making the returns of joint stock 6 "*une 1®36>
banks, including in it not only the liabilities for the bills so rediscounted, but also

in its assets the very same amount of bills, in that mode of stating the amount
there would be no balance of liability against the joint stock bank?—None.

89.	Should you say that an account by which the liabilities would appear great,

but by which their effects would appear great also, would make an unfavourable
impression on the credit of joint stock banks amongst the public ?—I think, unless.

a return was made as well from private as from public banks, it would have a very
serious effect, and be a considerable injury to joint stock banks ; for this reason,

that the aggregate of those liabilities would appear very large; and it is obvious
that, supposing the bills to be bad, they must be met by other assets than those
placed against them before the assets so placed against them are available.

go. You are aware that the amount of the assets of those joint stock banks
would appear equally large?—The question is as to available assets: supposing
20 millions of bills are under discount by all the joint stock banks, and suppose
20 millions is placed to the credit side of the return as assets, before any portion
of that 20 millions of assets could be available to those joint stock banks they
must be in a situation to take up the whole 20 millions of liabilities; it will be
evident, therefore, that the banks must be furnished with a sufficient capital or
resource to meet those contingencies; and I wish to show that the liabilities so
enumerated would appear far greater than they ought to be estimated at.

91.	Carrying your view to a state of things in which a reverse of times should
come, would the amount of those liabilities be an object of anxious consideration
to those joint stock banks themselves ?—That is a question I cannot answer for
other banks, but I should be satisfied with respect to our own. The safety of
joint stock banks depends, in my opinion, more upon their management than upon
any other question.

92.	Suppose it was a time in which the channels through which the joint stock
banks have procured their discount of a large amount of bills were not available,

and that they should be unable to avail themselves of the rediscount of other
bills, do you think that would endanger the payment of the bills they had dis-
counted ?—To assume that such would be the fact would greatly endanger the
safety of all banks.

93.	Would it not follow, that in proportion to the larger or smaller extent of
the liabilities of this kind, the bank would be subject to some difficulty, more or
less, when a period should arise which should make it difficult for that bank to
rediscount its bills with the facilities with which they had previously done ?—The
same difficulty would apply to all banks, I apprehend, and not to joint stock
banks only.

94.	A change in the times, which should render difficult the rediscount of a
large amount of bills, would affect the safety or the regular payment of the bills
which the banker himself held ?—I do not think it would have any effect that
would be prejudicial to joint stock banks greater in extent than it would be preju-
dicial to private banks.

95.	Your answer is, that to a private bank so situated it would be prejudicial ?

—Unless the resources of either the public or the private bank, independently of
the money market, were sufficient to meet a contingency of that kind, there would
be a difficulty.

96.	You are of opinion that the publication of those accounts, including the
liabilities and assets, might convey to the public, and might be calculated to convey
to the public, an impression of the bank's liability to be placed in difficulties in any
change in the money market, which would render it impracticable for it to get the
usual extent of rediscount ?—The resources of joint stock banks are so different,

that no general answer could be given to that question: some have a certain
engagement for a given amount, which cannot fail them.

97.	A certain amount of rediscount?—Yes, for which they are not dependent
on the money market.

98.	Mr. Smith.] Do not you consider that the amount of returned bills on a
certain quantity of bills discounted is a perfectly sufficient mode of testing the
general character of the bills discounted by a bank, if taken over a sufficient average
of time ?—I should consider that it is.

0.92.	c	99. Should10

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. S. Jackson.	Should not you consider the amount of 7 s. 4 d. per cent, returned bills

6 June^8<j6 conclusive as to the prudence and judgment of a bank in discounting those bills ?
une 30. —J should submit it was an indisputable test.

100.	Sir Robert Peel.~\ What is the object of the frequent rediscounting of the
same bill ?—I might call them paid away or rediscounted; it is, in fact, the same
thing.

101.	Mr. C7«j/.] You retain, of course, on a bill which has passed through
your hands, a perfect record of a transaction of that description ?—Not perfect,
as far as the endorsements on the bill are concerned.

102.	Still you have the name of the bill remaining on your books, and the
amount for which it is drawn ?—Certainly.

103.	The amount of that transaction you could state to the Committee*, and
that would show whether your liabilities exceed the assets, or the contrary ?—
Certainly.

[The Witness withdrew.

After a short time the Witnesses were again called in, and informed by the
Chairman, that the Committee were of opinion that the accounts required
must be furnished; that returns had been received from thirty of the banks,
who had not alleged any inconvenience 01* made any objection, but had given
the information required; that the Committee were willing to consider the
order not having been obeyed as resulting from its being understood to be' a
private communication of the Chairman, and not in disobedience to the direc-
tion of a Committee of the House of Commons; that the directors of the
banks, for which the Witnesses appeared, were at liberty to accompany the
return with such explanations as they considered expedient to give a correct
' view of the situation of the bank.

Mr. Burdekin stated, that he would immediately communicate to the board
of directors the decision of the Committee.

Mr. Jackson requested to be informed whether he was to insert the amount
for which the directors were responsible as receivers for Government duties,
having given a counter security to those who have given bond for the due
transmission of the monies, and was informed, that the fact of their having
given that bond might be stated, but, of course, would not come into the
column of the amount.

* The reply, " Certainly," was intended to apply to the query as far as the word Committee only.
The Witness does not see how any excess of liabilities or assets could be shown thereby.

Veneris, io° die Junii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Sir Thomas Fremantle.

Sir John Wrottesley.

Mr. Poulett Thomson.

Mr. Strutt.
Mr. Loch.
Mr. Clay.
Mr. J. A. Smith.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

Mr. Robert Gilbert, called in ; and Examined.

Mr.Robert Gilbert. 104. Chairman.] WHERE do you reside?—I reside at Norwich, in the hamlet
- of Thorpe.

10 June 1836. 105. Have you been connected with the Norwich and Norfolk Joint Stock
Bank?—Yes, I have.

106.	For what period of time?—It commenced the 5th of April, or thereabouts,
in the year 1827.

107.	How long did it exist ?—I think they finished some time this spring; I
cannot say exactly the day, but about Lady-day.

108.	Were you a director the whole of that time?—No, I was not.

109. WheuSELECT COMMITTEE ON JOINT STOCK BANKS.

11

109.	When did you cease to be a director?—In February 1835.	Mi. Robert Gilbert.

110.	You were also a proprietor in the bank ?—Yes; I was a shareholder j we ——
are obliged to be shareholders to a certain amount to be directors.	10 June 1836

111.	What was the amount of qualification that was required?—Twenty-five
shares.

112.	What was the value of each of those shares?—£. 200 shares.

113.	How many directors were there, and can you state their names ?-—There
were five.

114.	Who were the gentlemen who were your colleagues in the direction ?—

Edward Temple Booth, Samuel Bignold, George Morse, Hammond Fisk was one
at the first commencement, and Robert Gilbert, myself; those were the five. Mr.

Fisk died, I think the second year ; he lived a very short time after the commence-
ment ; then there were only four left.

115.	Were all those directors co-ordinate 5 had they the same duties, or was
there one more particularly managing or acting director ?—There were two ; Mr.

Booth was a managing director, and Mr. Bignold was resident director; he
resided at the bank ; there were no other directors resident at the bank.

116.	What were the peculiar functions which distinguished their duties from
those of any other directors ?—I considered in looking to the account of the
business at the bank. Mr. Booth was very near, and Mr. Bignold being in the
house, any cheques the clerks might not be quite clear in cashing, those two gen-
tlemen might be applied to; being always at hand, they had that business more
than any other directors; the other directors went only once a week, an hour or
two only, to look over the outstanding accounts, and to say what money should be
given credit for to different customers.

117.	Do you conceive that more active management and more responsibility
rested with those gentlemen in administering the affairs of the bank than with the
other directors?—Just so.

118.	What was the number of shares of the Norwich and Norfolk bank?—A
thousand shares at 200 I. each to be issued, but they were not all taken.

119.	How many were issued at the time of the commencement of the bank?—

There were a great many issued at the time ; but there were some not for a con-
siderable period ; I am not exactly able to say to the number; perhaps 700 at first,

afterwards nearly 900 out of the 1,000.

120.	Were those reserved shares kept in the possession of the bank itself?—

Y es.

121.	When was the first call made ?—At the commencement.

122.	To what amount was that first call?—Twenty pound a share I think was
the first call.

123.	At what period was that made ?—It was the 5th of April 1827.

124.	Was that paid up ?—It was paid up, the 201, a share.

125.	When was the second call made ?—I cannot say exactly the time; it was
not made for two or three years afterwards; I think there were two other calls,

which made it up 30 /. a share, 5 I. each time ; I do not recollect the amount.

126.	The second call was a 5 I. call ?—I cannot recollect.

127.	Can you inform the Committee at what period that call was made ?—No,

I cannot; the 301, was the whole that was paid up.

128.	Can you inform the Committee whether the second call was paid up?—

It was paid up at the time they were called for; I cannot state when it was.

129.	Mr. Clay.] Do you know when the additional 200 shares were issued?—

No ; in the course of three or four years ; there were a considerable number taken
at the first start, and then in three or four years there were a good many more
sold, and then there was rather a stop.

130.	Do you think there were ever more than 900 issued?—No, I think not.

131.	Do you recollect the premium at which those sold subsequently were sold ?

—They were sold at a premium of 10 /. a share, which made the price 40 I.; that
was when about 200 shares were sold.

132.	Do you recollect the period when those 200 shares were sold at a premium?

I cannot state the time.

133.	Was it about the third year after the formation?—I think about the
third year.

134.	The calls amounted altogether to 15 per cent.?—Yes.

135.	Sir Thomas Fremontle.] Did the company sell those shares at the premium ?

—Yes, on the number that were sold.

0.92.	c 2	136. Were12	MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. Robert Gilbert. 136. Were the whole 20osold in that manner?—No.

——-— 137. Chairman.] Can you say what was the amount of capital paid up within

10 June 1836. three months after the bank began business ?—No, I cannot.

1 ^,3. Was there a greater amount than would be produced by a multiplication of
thi shares issued at the 20 /. call?—No ; the shares were paid up according.to the
amount I have stated, and I suppose that after the time I mentioned there were
nearly 900 shares paid ; there was about 26,0001, or 27,000 I. paid up.

139.	The question refers to a period shortly after the formation of the bank ;
was there, within three months after the bank began business, more paid up than
the 20'/. on each share ?—No; there was no more stock than arose from the sale
of those shares in the first instance.

140.	Was there any penalty imposed on shareholders who did not pay up the
amount of the calls ?—I do not recollect.

141.	Was there any forfeiture or penalty by the deed of settlement?—I cannot
say; I of course read over the deed of settlement once or twice, but I cannot state
the particulars.

142.	You cannot inform the Committee whether there was any penalty on the
shareholders who did not pay up, or any forfeiture in case they were not paid up
in time ?-—I think there was a forfeiture of shares in case they were not paid up
when called for, and there was a restriction that not above a certain amount should
be called for at a time, and the distance of time at which the call should be made,
which I think was six months.

143.	Was that forfeiture enforced in cases in which the calls were not paid up ?
—No, there was not any cause to enforce it, that I am aware of; there was riot a
case came before the directors of any neglect of money being paid up; if the
money was paid lip, of course there was no penalty.

144.'	Were you accustomed to prepare balance-sheets of your assets and liabilities,
and to render accounts to your proprietors ?—No, that was not done; there were
accounts drawn out, but they were not submitted to the proprietors.

145.	During any part of the period in which you carried on the bank were
accounts rendered to the proprietors?—I do not recollect that there were any;
there were no balance-sheets shown up at the general meeting, which was once a
year.

146.	Were there any rules established by your company with respect to the
principles upon which loans and advances were to be made?—No, I do not recol-
lect that there were any principles laid down.

147.	Upon what principles were those loans made; was there an entire dis-
cretion vested in the board ?—Just so ; it entirely rested with the board.

148.	Was that discretion exercised by the directors generally, or by the acting
director, or resident director ?-—It was by the managing director chiefly, because
I considered there was some fault somewhere, for there were many accounts over-
drawn very much before they came before the board of directors ; therefore the
general board could only say, when they saw the account, that they were surprised
that those advances should be made without being laid before the board ; then
when they were made it was difficult to get them paid up ; then there was gene-
rally conversations held upon them as to the sum to which they should be reduced;
but there was great difficulty in getting them reduced after they had once got the
money; there were great losses on that account.

149.	Can you state the amount of losses which arose in the first year?—-No, I
cannot, for I never could get a proper statement of losses. I have mentioned it
several times; all I could get from my partner directors was, that they had not
got the dividends from those bad debts, and therefore they could not say what it
was ; but there were debts to a considerable amount no doubt, which will be proved
when the bank comes to be closed; but I have left a twelvemonth, therefore I
cannot say anything as to what has been going on the last twelvemonth.

150.	The question refers to the statement of the account the first year; at the
close of your first year did you not strike a balance-sheet for your own informa-
tion?—There was a balance-sheet struck by the clerk the first year; but from the
clerks and others not being so conversant with the accounts, we had not an
account at the end of the first year; I think it was half a year afterwards before
we had anything like a clear account drawn out.

151.	At what period did you declare your first dividend At Midsummer 1828,
one year and a quarter after the bank was opened.

152. HadSELECT COMMITTEE ON JOINT STOCK BANKS.

152.	Had you struck a balance-sheet before you declared your first dividend ?— Mr. Robert Gilbert.
Yes j there was a balance-sheet made out at Midsummer 1828.	-

153.	Did that balance-sheet exhibit the amount of losses sustained and the 10 June 1836.
amount of profit during the period to which the account referred ?—No, certainly

not, because the bad debts were taken according to the sum that they stood to the
credit of those persons without deducting the loss from it, which were of the value
of no more than they could get from the dividend on the bankrupt's estate;

therefore they made out "the balance of profit which stood upon the books without
deducting the sums which made the bad debts; and that was one reason that I
never saw what the losses were, because I never could get an account drawn out with
those bad debts deducted as they ought to be.

154.	Do you consider that the bank could fairly ascertain whether its resources
enabled it to pay a dividend to its proprietors, without ascertaining in the first
instance the profit and loss which it had sustained in its business ?•—Certainly not.

155.	What was the amount of the first dividend ?—That I cannot state exactly,

whether five 01* six per cent.; that was at Midsummer 1828.

156.	Did you consider that the state of the account and transactions at the bank
at that period warranted such a declaration of dividend P—No, certainly not.

15^. Do you know what the amount of capital which was paid up at that period,

Midsummer 1828, was?—I should think nearly 17,000/. I have no account that
can state that positively; but I think about 17,000/.

158.	What do you conceive the losses on the transactions of the bank up to
Midsummer 1828 may have been?—That I cannot state. There were two or three
bad debts made, I think, whether in the first year or the second I cannot say; but
I think they were in the first year. There was one very heavy loss just at the end
of the first year or the beginning of the second; when I say the second year,

I mean from April 1828 to April 1829.

159.	Was there a general meeting held of the proprietors at Midsummer 1828 ?

—Yes, there was.

100. Was any report made from the directors to the proprietors on that occa-
sion ?—I do not recollect that there was any report made.

161.	Can you state whether the deed of settlement provided for the necessity
of rendering any reports to the proprietors ?—No ; I think not.

162.	Can you have reference to your deed of settlement?—No; I have entirely
done with it. I had nothing to do with the deed ; that was kept in the hands of
the solicitors of the bank ; it was in their possession when I left j Bignold, Pulley
and Mawe, who were the solicitors of the joint stock bank.

163.	Was there any provision made in the deed of settlement for the establish-
ment of a reserved fund ?—Yes.'	•

164.	Was that provision complied with by the establishment of any reserved
fund ?--No, it was not.

165.	Was the non-compliance with that provision of the deed of settlement ever
communicated to the shareholders of the bank ?—Not that I recollect.

166.	How was that reserved fund to be applied or invested ?—That was to be
invested for the benefit of the company ; but there never was any reserved fund that

1	knew of to invest.

167.	Nevertheless there was a declared dividend, and the payment of that
dividend to the shareholders ?—Yes, there was.

168.	Can you inform the Committee whether the five per cent, on the two calls
of 5 /. each was paid up during the second year?—No, I think not; I think it
was not paid up till the third year, and am not certain as to there being one or
two payments.

169.	The paid up capital was not increased during the second year, except by
-the amount of reserved shares, which might have been issued during that period?

—Just so.

170.	Mr. Clay.~] You say at Midsummer 1828 the paid up capital was about
17,000 I.; that is assuming that the whole of the shares were sold, and the whole
paid up upon those shares ?—I do not suppose that the capital was so large as that j

2	could not state that without referring, to the account.

171.	If there were only 700 shares sold, the capital paid up would be only about
14,000 I. ?—No, I should think not.

172.	Chairman?^ At the second Midsummer was there a dividend declared?—

Yes; there has been a dividend declared every Midsummer.

. 0.92.	c 3	173. Was14

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. Robert Gilbert. 173. Was that to the same amount as in former years?—There was as high as
———— seven per cent, paid one year, and as low as four per cent, paid another year.

10 June 1836. x 74, Do you recollect what the amount of the dividend was the second year ?—
I think it was five per cent.

175.	Was any account or balance-sheet prepared for the information of the
directors before the declaration of that dividend ?—Yes.

176.	Did that balance-sheet show the profit and the loss on the banking trans-
actions during that second year ?—No, it did not. The losses were not deducted;
they made out the balance-sheet with the profits made by the bank without deduct-
ing off the losses.

177.	Had there been any considerable losses during that second year r—Yes
I think there had been.

178.	Was there not one loss of 16,000 I., and another of 5,000/. ?—I cannot
say what the losses were, because I never knew what the dividend received upon
the debts was ; but I think one was nearly 20,0001. What they got back as a
dividend I never knew; it was never stated in the account of the directors that
ever I saw.

179.	Were the losses which were sustained during that year, in your opinion,
such as to swallow up all profits that might have been made on the banking trans-
actions?—Yes ; certainly. -

180.	Are the Committee to understand that a further dividend was declared
by the directors ?—Yes ; I think that one; year when there was such a heavy loss
the dividend was only four per cent., but I cannot speak to that particularly ; I
know there was one as low as four, and another as high as seven; I cannot speak
to the period unless I had the books with me.

181.	Was any account furnished at the time to show the state of the bank, or
any balance-sheet laid before them ?—Not any that I can recollect.

182.	Are the Committee to understand that your place of business was at
Norwich ?—Yes.

183.	Had you any branches?—We had branches besides; the principal house
was at Norwich.

184.	Where were your branches ?—We had several branches; Swaffham, Lynn,
Fakenham, Dereham, Bungay and Harleston.

185.	Were those branches or agencies ?—They were agencies or branches; the
banking was carried on by those agents for the joint stock.

186.	Were they so far considered as branches as to be contained in your licence
from the Stamp-office ?—Just so, I should think ; the whole were, I believe, paid
for at the Stamp-office as branches.

187.	What notes were issued by you at those places ?—The same as at Norwich
I think.

188.	Were they dated from the places of issue, or were they dated from Nor-
wich ?—I think there was some difference; I think the Swaffham were made out
differently from the others.

189.	Was there a branch at Framlingham?—Yes; and there was a serious loss
on that branch.

190.	Was there one at Watton?—No.

191.	Were the notes issued at those places dated at the place of issue, or at
Norwich, the central bank?—I think they were dated at Norwich chiefly, and
issued from Norwich, unless at Swaffham; I know there was some little difference
between the Swaffham notes and the others.

192.	Were they made payable in London ?—No, not till quite the latter end of
the time; at first they were not payable in London, but there was an understand-
ing that they would be discounted at Wrights & Co., our town bankers, at the
commencement.

193.	Did you sustain any, and what amount of losses at those branches?-—The
Framlingham branch was the one where we sustained the greatest loss. I do not
remember that there was any other, at which we sustained a loss.

194.	Mr. P. Thomson.] Did your agent at Framlingham fail ?—He failed, and his
father too; he was a young man who was clerk, and his father guaranteed him; the
father was a brewer, who had very considerable property, and when the deficiency
was found out (for the young man made up false accounts and sent to Norwich),
he put down sums so as to balance the account; and I think the bank suffered
"very considerably by him.

195.	Can you remember to what extent?—The total amount received from the

dividendSELECT COMMITTEE ON JOINT STOCK BANKS.

dividend I cannot say, but I think the sura total of the deficiency was about Mr- Robert Gilbert.
12,000 /.

196.	Was not the deficiency 21,000/. ?—That was for the father as well, for the 10 Jnne l8s6'
father had a deficiency as well as the son, I think ; but there was a considerable

property, which was seized on and sold; several public-houses, and so on, at Fram-
lingham ; the amount I was never able to ascertain.

197.	Had you an agent at Harleston ?—Yes ; he was the man that recommended
the others.

198.	Did you lose anything at Harleston ?—Not by the agent; there might be
a small account or two, but not to any great amount I think; but where we
suffered mostly at Harleston was, that he recommended the Framlingham man that
we lost so much by.

199.	Was not there one account at Harleston for which the bank sustained a
a loss of nearly 9,000 L, a miller r—There was a very considerable sum lost by
him.

200.	Did that happen in the second year of the banking transactions ?—No, I
think that must be the third or fourth year.

201.	Do you happen to know what your losses at Dereham were?—No, I do
not; there was one I know of, a cattle dealer, about 1,500 I. or 1,600 I., and there
were other losses besides, but I cannot state what they were.

202.	You have stated that there was one loss at Dereham; were not there several
others ?—I think there were several others.

203.	Can you state what the total amount of loss at the Dereham branch was?

—No, I cannot.

204.	Was it not at least 10,000 I. or 12,000?. ?—I cannot say.

205.	Chairman.] What system of control was exercised by the directors at
Norwich over the transactions of those branches ?—They had the account laid
before the board at Norwich.

206.	Did the directors visit those branches, and ascertain by inspection the
mode of transacting business, and the correctness of the account furnished to them ?

■—The directors visited the branches several times I know; I think Mr. Booth and
Mr. Moss were the two directors who visited those branches; they went round to
them all I think.

207.	Was it left to the unrestrained discretion of the agent whom you em-
ployed in those branches to discount paper and to make advances or loans, or were
they subject to any rules emanating from the directors at Norwich ?—There
were rules laid down so far, that they were not to give credit unless they thought
the people were trustworthy; and then when the directors saw the sheet and the
amount due which came into the bank they marked all those that they thought
ought to be reduced; but they ought not to have suffered them to incur the
debt; there was a difficulty in getting the money back again when once they had
got it.

208.	Was there any restriction imposed upon them as to the date of the
securities they discounted, or the nature of the security upon which they made
advances ?—Yes; respecting the date there was.

209.	What was that rule ?—Not to go more than six or nine months at longest.

210.	Was that on bills ?—Yes.

211.	Was there any rule imposed upon them not to make advances on bills
unless those bills represented bond, fide commercial transactions ?—Just so; but
there was some, I have no doubt, that were accommodation bills ; but there was a
direction that they should not discount bills that were not commercial transactions.

212.	Do you consider that there are many commercial transactions within that
district that would fairly lead to bills of nine months' date ?—I think that they
ought not; but there have been a good many of that description as long as nine
months.

213.	The general date of commercial bills founded upon bond fide transactions
would not, according to your judgment, have gone to nine months ?—No.

214.	Were you in the habit of receiving deposits?—Yes.

215.	What interest did you allow upon deposits ?—Two per cent.

216.	Was that a uniform rate?—Yes, in all cases; there was a difference of
interest during a time; that was the reason of its commencement, because the
other banks were going to follow up the London system of not giving any interest
for deposits ; that was the occasion of this company being formed, of opening a bank
to allow interest on deposits, and I think it was at first two and a half; and then the
other two banks, which began with not giving any interest, were obliged to give

0.92.	c 4	way16 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. Robert Gilbert, way and give interest, and they gave two per cent., and then I think the joint
-	stock lowered down to the same standard of two per cent.

10 June 1836. 217. You convey to the Committee your distinct impression that the rate of
interest on deposits was a uniform rate, and not varied by any discretion of the
director or of the managers of your branches?—Just so; it was an uniform sum
of two per cent. paid.

218.	Was there an establishment at Norwich with which you had an account,
called the Life Insurance Office ?—Yes.

219.	What were the transactions that occurred between your bank and the Life
Insurance Office ?—All we had to do with the Life Insurance Office was in their
cash account with the joint stock bank, in rotation with the other two banks in
Norwich, because their deposits were very considerable.

220.	What was the general state of their account; were you in advance to
them ?—No ; the Life Insurance Office had from 20,000 I. to 25,000 I. deposited in
the bank, as I understood, therefore it was a very heavy account to a bank to be
called upon for that amount without any notice.

221.	By whom was that account opened at your bank?—That I cannot say ; it
merely stood in the bank as the Life Office account; who it was that entered the
account I cannot say.

2.22. Do you recollect who drew the cheques for them P—No, I do not.

223.	Who was the principal manager of the Union Life Office?—Mr. Samuel
Bignold.

224.	Was that the same gentleman who was also a director of your establish-
ment ?—Yes, and likewise the Fire Office.

225.	Sir John Wrottesley.] Had the Fire Office an account also with your bank ?
—Yes.

226.	Was that a large one ?—>1 think it was a pretty large one.

227.	Chairman.] Do you know what amount was due from you to the Life
Office, if any, when you declared your second dividend at Midsummer 1829?—
No ; I cannot speak to what the balance was, whether there was any either way.

228.	Can you state what the average balance was during the time you were a
director?—No, I cannot; of course I should suppose the accounts were closed
when we gave up the year ; we held it only alternate years; the joint stock had for
one year and the others two, because they had it in succession ; there were three
indeed ; Thompson's began before we dropped.

229.	Sir John Wrottesley.] When your year was over did you pay over the
balance to the bank that took the account after you ?—Yes, to the best of my know-
ledge, that was the mode.

230.	On your resuming that the bank would pay you the balance in their
hands?—Yes.

231.	Chairman^] Your recollection is, that there was generally a considerable
balance due from the bank to the Life Assurance Office ?—Yes.

232.	Were any arrangements made with the directors as to the rate of interest
that you should pay the Life Office ?—No.

233.	It came under the general regulation?—-Yes; whenever we accommodated
customers with money they paid the bank five per cent.; that was the usual thing,
except one or two, perhaps, that were very considerable ones; perhaps they were
accommodated at 4 or 4 J, but the general interest was five per cent, on all over-
drawn accounts.

234.	Did you object at any time to the amount of over-drawn accounts and the
advances that were made by the bank ? —Yes, I did.

235.	Were those objections acquiesced in or overruled ?—They were overruled
a great many times; there was one, in the first instance, that of 16,000/., which
has been referred to; the person lived near me, and I had not much opinion of
his account; I thought they were wrong in taking it.

236.	How many dividends were paid during the time you continued a director ?
—We had a dividend every year; I was a director nearly eight years.

237.	At any one period of striking those dividends, do you conceive that if the
losses sustained by the bank had been deducted from the profits of your business,
a dividend could have been declared ?—Certainly not.

238.	When you retired was your place supplied by another director?—No, it
was not.

239.	Do you know whether by the deed there is any provision made for sup-
plying vacancies in the board of directors ?—From what I recollect, the share-
holders had the liberty of meeting and appointing directors at the meeting; and

theySELECT COMMITTEE ON JOINT STOCK; BANKS. 17

they likewise had the liberty of giving notice of holding a meeting at any period Mr. Robert Gilbert.
of the year; but I had not an opportunity of looking the deed over before I came '— ~
up, the notice being rather short. I do not know that I could have got the deed 10 June 183 '
if I had desired it. I am merely speaking from memory, having read it over six
or seven or eight years since ; but there was one clause in the deed that they
should be filled up by the shareholders.

240.	In this case they were not so filled up ?—They were not.

241.	Do you know what regulations were made by that deed with respect to the
transfer of shares ?—Yes ; I think the transfer of shares was to be sanctioned by
the directors, and it was necessary to find substantial persons, persons in good
credit, to take those shares, otherwise the directors were not bound to receive those
parties who were purchaser^; it rested with the directors whether they would take
the purchaser or not; there was an option of that sort in the deed.

242.	Was there any other control exercised by the directors over the transfer
of shares with a view to ascertain the responsibility and property of persons to
whom shares were assigned?—Yes, there was; they generally looked at the time
there was a transfer made whether they were likely to be worth the amount of the
shares they purchased.

243.	Have you known cases in which objections were raised to the transfer of
shares to a person, from a want of confidence in the property or character of the
assignee?—No; I do not recollect that there was one instance where a bargain
and sale was prevented on account of directors objecting to the circumstances of
the purchaser.

244.	Do you know under what circumstances the company closed its business
in February last ?—No, I cannot say.

245.	Are you still a shareholder?—No, I am not. I quitted in February 1835,

and sold out my shares, and likewise gave up being a director.

246.	Are you aware whether the deed of settlement contained any directions as
to the settlement to be made in winding up the affairs of the company?—No,

I cannot say that I am aware of the circumstance.

247.	Was there any public meeting of the shareholders called for the purpose
of winding up the affairs of the company ?—I have not been a shareholder for the
last 12 months, and therefore I cannot say what settlement was made, but I have
not heard of any meeting to wind up the affairs.

248.	Do you know whether the company has altogether ceased and closed its
business, or made any arrangement for the transfer of its business to any other
bank?—I can only speak from hearsay on that, not being one of the directors. I
understand that Mr. Bignold had made a bargain with a new joint stock bank, and
that he had got a premium for the goodwill and profits of the joint stocky and had
made a very good bargain, but that I cannot say; that he was to take all the out-
standing accounts, and the joint stock was to insure their keeping up that for one
twelvemonth, and that they were to be engaged 00 the new bank; they had taken
the same shop that we did for the joint stock, and had agreed to pay, I understood,

20,000?. for the goodwill, and to take the accounts in that way; that I believe
they did with respect to 20,000 I., but how far the other goes I cannot say, as to
taking all the outstanding debts, and being kept up for one year by the joint
stock.

249.	Suppose the paid up capital to amount to a sum not exceeding 25,000 I.,

do you consider that the losses the bank may have sustained are equal to or greater
than that sum?—The losses the bank sustained are considerably larger than that
sum, I think.

250.	Mr. Thomson.] Were you an original former of the bank ?—I began at
the commencement of it; when the bank opened at first I was one of the directors.

251.	How was the bank set on foot at first ?—It was set on foot by several gentle-
men that were disposed to start something in opposition to the other banks not giving
interest; there were one or two substantial men. Old Alderman Moss, who was
a man of very large property, and several other gentlemen, who were shareholders,

not acting in the business of the company, but who held shares; that made the
bank very responsible, so far as to the deposits which were put in ; they were liable
to make good the deposits that were lodged in the bank ; therefore the bank got
into very good trade indeed, almost immediately from their commencement.

252.	Were you conversant with banking before?—No, not at all.

253.	You were asked to become a director and agreed ?—Yes.

d	254, WhilstMINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. Bobtrt Gilbert. 254. Whilst you were a director did you take an active part in the manager
—-- ment ?—I always attended regularly every week.

10 June 1836. 255. There were weekly meetings?—Yes.

256.	Were you one of the directors specially charged with the management of
the bank, or had you a paid manager ?—We had a paid manager in the bank as
well.

257.	Was the account of the transactions submitted to the board of directors
weekly?—No, not weekly ; there was always the ledger to look at if any of the
directors thought proper; and I, as one of the directors living about four miles
from Norwich at that time, considered Mr. Booth a respectable man to look to if
anything went wrong, to lay it before the board, and not let anything go wrong
from week to week; that Which was the great evil was in not restricting more
persons getting into credit with the bank.

258.	Who were the other gentlemen who were joined with you in the direc-
tion ; were they gentlemen previously acquainted with banking, or like yourself?—
Mr. Bignold was. I think his father was in a bank in Norwich; formerly he had
a fire-office, then he opened a bank ; but he never did much business; and 1 think
Mr. Samuel Bignold was with him as clerk at the time.

259.	You say you attended weekly meetings j did you attend meetings at
which the accounts were made up also?—Yes.

260.	On the first occasion of making a dividend, when you say there was no
real means of making a dividend, inasmuch as the losses had been heavy, and the
profits not sufficient, did you remonstrate against making a dividend?—The matter
was mentioned, and what dividend should be made; and if there had been no
dividend made there would have been no credit given to the bank. The dividend
on the sum, we will say 15,000/. or 18,000 ?., was a small sum compared with the
business the bank was doing ; the paid up capital was as small as 1,5,0001, or
18,0001., and five per cent, was not considerable while we were doing business to
a considerable amount.

261.	Chairman.] Can you state the extent of your business in anyone year?
—I think we had more than 40,000 I. of notes out, and perhaps deposits to
the amount of 100,000 I., and 40,000 I. or .50,000 I. besides. If the business
had been conducted properly, there might have been something very handsome
made by it. They would, by their business, have made 4,000 I. or 5,000 I. if there
had been nothing to show against it; if we had not had to take the losses from it,
we should have showed up a very good amount in respect to the profits which
would have been made, but which were not made.

262.	Mr. Thomson.] What weighed with the directors in declaring a dividend
in spite of there being no profit; was it the fear that the credit of the bank might
suffer if there was no dividend declared ?—That was my idea; and it was that of
others also, I believe.

263.	Mr. Smith.] It was declared with a distinct knowledge on the part of the
directors that there was no profit?—It was quite evident that there was no profit
to pay the dividend.

264.	Sir Thomas Fremantle.] Was that generally known, or was that fact con-
fined to the five directors ?—<-I think it was confined to the directors.

265.	Mr. Thomson.] In the second year, when your losses were still more heavy,
and a dividend was again declared, did you not remonstrate against making a
dividend?—Yes; I had no doubt we were wrong in making a dividend unless we
could show up a better account; but the other directors thought that it ought to be
done ; that we should bring up the thing ; that if we were certain of making good
profits, we might bring, the thing round; and there was one year we paid only
4 per cent. That was the year when there was so much loss.

265*. You complained year by year, during the whole time you were engaged,
that although your profits were considerable your losses were greater than your
profits?—Yes.

266.	Therefore you had no dividend to make ?—No.

267.	But you continued making it, fearing your credit would suffer?—Yes;
we did not know what those losses were exactly, and vfre hoped we should over-
grow those bad debts. There was evidence that if the business was conducted
properly it might have been profitable.

268.	At the end of the year 1830 or 1831, was not your whole capital which
had been paid up, of 23,000 I., completely sunk?—I should think it was ; it must
have been nearly all sunk certainly.

269. YetSELECT COMMITTEE ON JOINT STOCK. BANKS.

269.	Yet you continued making a dividend from the fear of your credit?— Mr. Robert Gilbert.
Yes. -

270.	What was the price of your shares in 1829 or 1830, did they bear a pre- 10 Jyne 1836.
mium in the market?—There was a premium upon them before those bad debts

were generally known. When I say the shareholders did not know anything of
them, they knew nothing from the bank, but there were such and such losses that
could not be kept secret.

271.	From anything that the bank told the proprietors, they would not have
been aware of the bad debts?—No; there was no account shown up to the com-
pany. Mr. Booth, as the leading director, generally stated the dividend that was
' recommended to be paid, and when it was four per cent, he stated that we had had
losses, which we were always subject to; it would be only therefore four per cent.;

he laid it down there had been considerable losses, but did not say what they
were.

272.	When he made this statement, he did not accompany it with any.state-
ment of account ?—No.

273.	None of the proprietors ever asked for it?—It was put forward I think at
one meeting that they shctald like to have a balance-sheet if they could.

274.	What did the directors say to that?—Mr. Booth I think answered that
it was not a usual thing to make out a balance-sheet for shareholders; that it
would be injurious to the concern.

275.	They were satisfied with that?—Yes; there was no dissatisfaction that
I remember; if there had been, they could have called a meeting, according to
the deed.

276.	Do you recollect at what price your shares were sold in 1829 ?—I do not
recollect further than that there was the period when they were sold at 10 I. a share
more than the original price paid up; the price paid up was 30 I. a share, and
there was 401, paid for it.

277.	The public took off those shares readily at 40 I. ?—There were some, and
there were some that were transferred from different holders; some were selling
at one premium and some at another.

278.	Sir Thomas Fremantle.~\ How many years was it after the opening of the
concern that they got up to this premium ?—That I cannot state.

279.	It was after the two or three calls had been made that the price was 40 I. ?

—Yes, I think the calls had been made.

280.	The calls were not made till two or three years after the opening of the
concern ?—No.

281.	Mr. Clay.] Were there assemblies of the proprietors in each year?—

Yes, there was a meeting of proprietors in each year, at Midsummer, regularly
advertised in the Norwich newspapers.

282.	Previously to declaring the dividend?—Yes.

283.	What was the name of the cashier during the time your were a director?

—Mr. Nimmo was the cashier and head clerk.

284.	Do you know where he is now ?—He was taken on with the new bank, with
two or three of the other clerks.

285.	Do you know Mr. Butcher?—Yes; he is an.auctioneer.

286.	He is a dealer in shares, is he not?—Yes.

287.	Does he reside in London ?—No, Norwich.

288.	Do you know Mr. Brightwell ?—Yes.

289.	Was he ever one of the directors of the bank?—No.

290.	Was he one of the directors of the Life Insurance Company ?—He is either
in the Life Office or the Fire Insurance.

291.	Is he an attorney ?—Yes, I think he is.

292.	Is he a partner with Bignold's brother ?—No, I think not.

293.	Have any legal proceedings been instituted as far as you know against the
Norwich and Norfolk Banking Company ?—Not to my knowledge.

294.	Is not the banking company, the affairs of which are now wound up,

largely indebted to the Life Insurance Company?—Not that I know of.

295.	Are you aware of any legal proceedings having been commenced against
them ?—No.

296.	You have had no intimation of any being likely to be commenced against
yourself?—No; I do not consider that I am responsible for anything that took
place after I left.

297.	Chairman.] Supposing that the directors had been required by law to

i) 2	have20

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. Robert Gilbert, have furnished the proprietors at a general meeting with a balance-sheet, showing

- the profit and loss, verified by their affidavits, do you think the system that you

10 June 1836. have described, by which dividends were paid to them where no dividends were
warranted, would have taken place ?—No, certainly not; if they had been on oath
they could not have done that.

298.	Do you conceive that a compulsory publication of the liabilities and assets
of the bank, analagous to that imposed upon the Bank of England, would in like
manner have prevented proceedings such as that you have described ?—I think it
would.

299.	Sir Thomas Fremantle.] Had you, as a director, access to the books and
accounts of the company?—Yes, I had.

300.	You had the full power of inspecting them as much as you pleased ?—I do
not know that there was any opposition to any of the directors looking at any
particular accounts.

301.	Were you in the habit of looking at them ?—I have looked at some few
accounts; I did not interfere with the books, because I considered that Mr. Booth's
department.

302.	Was the state of the affairs of the bank read to the court of directors at
every weekly meeting ?—-N0, it was not.	v

Martis, 14° die Junii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Clay.

Sir John Wrottesley.

Mr. Strutt.

Mr. F. Baring.

Mr. J. A. Smith.

Mr. Morrison.

Mr. Loch.

Sir Robert Peel.

Sir Thomas Fremantle.

Mr. Pattison.

Mr. Goulburn.

The Right Hon. the CHANCELLOR op the EXCHEQUER,

in the chair.

Mr. Thomas Nimmo, called in; and Examined.

Mr. T. Nimmo. 303. Chairman.] WHAT has been your connexion, if any, with the Norwich

_ and Norfolk Joint Stock Bank ?—I acted in the capacity of chief clerk.

14 June 1836. 304. How long did you fill that office ?—Ever since the commencement, from
April 1827 till the 28th of February last.

305.	That bank has now Ceased to exist ?—It has. ,

306.	How long?—Since February last.

307.	You attend in consequence of a summons from this Committee. 1 do,
a0s! Which summons directed you to bring certain documents: have you

those documents ?—I have brought them to town; but if the Committee will
allow me, I will explain, that from the bank's transactions with the public
having ceased, and as none, excepting the proprietors and directors, have any
interest in the issue of them, I should from those motives respectfully decline
producing the documents, unless compelled to do so. I have no wish to throw
any improper impediment in the way; but as the matter now stands, the ban
being virtually closed, they having received a high consideration from the
East of England Bank for having relinquished the business m favour ot it, I

should rather decline producing the documents.	. c ^

309.	Mr. Clag.~\ You say you were with the bank from its first commence-
ment ?—I was.	^	. , j ,,__

310.	When did you declare the first dividend?—Our year terminated on the

5th of April, and the dividend, I think, in terms of the deed, was declared three
months afterward, at the annual meeting in July 1828.

311. WhatSELECT COMMITTEE ON JOINT STOCK BANKS.

21

311.	What was the amount of that dividend?—I think it was five per cent,; Mr. T. Nimmo.
I am not quite certain.	,	'

312.	Had the bank made any bad debts in the period from the beginning in 14 June 1836.
1827, April 1827, up to the time when the statement of the account was made

with the view to the declaration of a dividend?—I cannot speak distinctly as to
the precise date; there was a very bad debt made somewhere in the year 1828,

but I cannot state the precise date.

313.	What was the amount of that bad debt ?—I should think the loss ulti-
mately, after getting all we could from it, was not less than about 16,000 I.

314.	What was the amount of the debt in the beginning of 1828, when it
became a bad debt ?—It exceeded 30,0001.

315.	Was that previous to the period at which the value of the assets was
taken with reference to declaring the dividend ?—I cannot speak precisely to
that point; I do not recollect the precise date.

316.	Will not the papers you have in town enable you to fill in that date ?—

I am afraid not; certainly not.

317.	ChairmanBut you are sure it was in the early part of 1828 ?—Yes ;

the account was opened, if I do not mistake, somewhere in February 1828.

I cannot speak precisely whether the bad debt was made in the latter part of
the year or earlier. -

v-n~,. 3i8_..M2y,Cfo8y.j Was that in the shape of an overdrawn account ?—Bills
discounted chiefly.

319.	Did you declare another dividend in July 1829?—Yes ; in fact, I may
say, generally, we declared a dividend yearly.

320.	Wbat was the amount of that seeond dividend?—We have divided, in
one instance, seven and a half per cent, and six per cent., and once five; but
the particular years I have not in my memory.

321.	Have you the means of giving those facts from the papers you have in
town ?—No.

322.	What do you think was the dividend in 1829 ?—Not exceeding six per
cent.; but I do not exactly recollect whether five or six.

323.	In each case your balance of account was taken in the month of April ?

—The books were closed and interest cast; and in terms of the deed the
annual meeting of the proprietors was held in the beginning of July.

324.	The annual statement of the concern included from the April quarter	'
in one year to the April of the next year ?—Yes, the 5th of April.

325.	Between April 1828 and April 1829 had you made any more bad
debts ?—It is impossible for me to give the dates.

326.	Can you from your papers in town ?—I can, from the papers in town,

give a statement of the amount of bad and doubtful debts, as they have existed
the last three years. I have brought up the papers, (which I have expressed my
disinclination to lay before the Committee,) for the last three years, and none
other, thinking that they would be sufficient to show the final state of the com-
pany's affairs.

327.	Have you any document from which you could inform the Committee
what bad debts occurred between April 1828 and April 1829?—By reference
to the company's books, I can state the whole of the bad debts.

328.	You must have the means of enabling yourself to answer those questions
precisely ?—I beg leave to state that, as the company have ceased to exist, I
would rather decline going into those particulars, not now being an officer of
the company, but the manager of the East of England bank; I receive no
salary from them, therefore I am not authorized; The directors of the bank
I am quite satisfied would have no wish to withhold anything that could
obviously tend to the public good; but I would wish to decline giving any
evidence that would affect them as with the proprietors.

329.	You either do not recollect or are unwilling to state the amount of bad
debts between April 1828 and April 1829 ?■—I do not recollect the amount.

330.	Did you declare another dividend in July 1830 ?—We did.

331.	Do you recollect the amount of that?—No, I cannot recollect the pre-
cise dividend each year; I can recollect only the minimum and maximum.

332.	What was the minimum ?—Five per cent.

333.	What was the maximum ?—Seven, and a half per cent.

334.	What bad debts occurred between 1829 and April 1830?—I cannot
recollect.

335.	Cannot you particularize the bad debts which have been made, the

d 3	whole22

MINUTES OF EIVDENCE TAKEN BEFORE THE

Mr. T.Nlmtno. whale amount ofthem, and the amount recovered (m each?—By reference to

—the books I can, but I cannot do it from memory.

14 June 1836. 336. Cannot you do it in any particular case from memory ?—If the name is
given I can state whether they had a bad debt so and 30.

337.	Under whose orders did you act principally?—-Under the orders of the
directors.	" ■

338.	Under the orders of which directors ?—Mr. Bignold was the principal.

339.	When was the East of England bank established ?——It began business
on the 29th of February last.

340.	Have they agreed to take all the accounts and concerns of the Norfolk
and Norwich bank ?—I can answer that question only in this way, they paid
the Norwich and Norfolk Joint Stock Bank a certain consideration for the good-
will of the business; the Norfolk and Norwich bank transferred all their inter-
est in favour of the East of England bank as far as they could, for which they
received a consideration.	«

341.	Do they hold themselves responsible to the creditors of the Norfolk and
Norwich bank ?—No, by no means, certainly not.

342.	Have the debts due by the Norwich and Norfolk bank been paid ?•—
They have all been paid, excepting a few of the bank-notes that are in circula-
tion, and a certain amount of deposit money.

343.	What is in fact the amount of the deposit money remaining unpaid ?—
I should think not less than 10,000?. or 12,000/.	>

344.	Has the Norwich Life Assurance Company received the whole of its
demand on the Norwich and Norfolk bank ?—-Yes, to the best of my knowledge
it has, certainly.

345.	What is the amount of notes still in circulation ?—I should think 5,000?.
or 6,000?.; I do not think it exceeds that.

346.	And 10,000/. or 12,000?. the amount of the deposits 'Yes, but that
fluctuates ; it may have been paid, or some part of it, since I left home.

347.	Was any general meeting called previous to the sale of the concern to
the East of England Bank ?—I believe not.

348.	No general meeting of the shareholders ?—I believe not.

349.	By whose authority was the sale made?—By the authority of the di-
rectors, I believe ; I was in town at the time the transaction was made.

350.	How many directors were there then ?—Three.

351.	What were their names ?—Mr. Bignold, Mr. Booth and Mr. Morse.

352.	They transferred the whole concern, wound up the concern in the bank,
and sold it without having called previously a meeting of the shareholders3—
No, the concern was not wound up, because it would take a considerable time
to do that.

353.	They agreed to do this without the consent of the shareholders ?—-I be-
lieve so ; I was not a party to the transaction.

354.	What was the sum paid for the good-will of the bank ?—£.20,000.

355.	The East of England bank has not rendered itself liable to any of the
creditors of the Norfolk and Norwich bank ?—Certainly not, excepting for the
amount of accounts.

356.	The actual money transferred?—Yes, standing to the credit of the ac-
count at the time of the transfer, with the consent of the parties.

357.	The whole of the money due to depositors from the Norfolk and Nor-
wich bank has been repaid, with the exception of 10,000?. to 12,000?. ?—-To the
best of my knowledge.

358.	And the whole of the balance the Norfolk and Norwich life Assurance
had in the hands of the Norwich and Norfolk bank has been repaid ?—The whole
of it, and the Fire Office as well; that is to say, the balance has been transferred
to the East of England bank; in transferring the balances of the account to the
East of England bank, the Life Office account was transferred as a charge against
the East of England bank, to the credit, of course, of the Life Office, and we have
paid the amount into the East of England bank.

359.	What was the amount of that balance when transferred to the East of
England bank ?—I cannot speak decidedly at this moment; I do not recollect.

360.	Sir John Wrottesley^] Was it 20,000?. ?—More than that.

361.	Was it 30,000?. ?—I should think more than that.

362.	Mr. Clay!] Was it 100,000?. ?—No.

363.	Was it paid over in money, or was security given for it ?—We trans-

ferredSELECT COMMITTEE ON JOINT STOCK BANKS.	23

ferred all our bills of exchange, London bills, and provincial bills, and so on, Mr. T. Nimmo.

over to the East of England bank, for which they gave us credit, and I believe —-—r

that the whole, or nearly the whole, of them now are paid, with the exception 14 ^une
of an over-due bill, amounting to 100/. which will be paid.

364.	You mean to say that the depositors have credits for those balances
which were due to them from the Norfolk and Norwich bank from the East
of England bank ?—Yes, and the Norfolk and Norwich bank have accounted to
the East of England bank for the amount of those balances.

365.	They have accounted partly by the bills of exchange in their hands ?—

The bills of exchange in their hands were transferred, and placed to their
credit in account; the amount is discounted if any advance had been made
upon them previous to their becoming due.

365*. Supposing there was a very large balance from the Norwich and Nor-
folk Bank to the Life Assurance Company, do you think there has been any
security given for that by the Norwich and Norfolk bank?—No, certainly not.

In fact, I may say the directors of the Norfolk and Norwich bank are to-mor-
row ready to pay up the whole amount of the balance, if any, due to the East
of England bank. I am quite satisfied of that.

366.	Sir Thomas Fremantle7\ Do you mean the directors or the shareholders?
—The directors.

367.	Mr. CYay.] Have you an account of the whole amount of bad debts
made by the Norwich and Norfolk bank during its existence ?—I should beg
to decline answering that question unless I am compelled; being no longer in
the service of the company it may be improper; but, in fact, it is impossible to
know the real amount of those debts; for, generally, when an account was
inoperative we transferred that to the ledger of bad and doubtful debts, and
gave that account credit for any sum that might be received in liquidation of
the debts.

368.	Will not that enable you to state precisely the real amount of loss sus-
tained by the bank ?—As soon as the account is made up.

369.	Cannot you state the present amount of them ?—I should rather de-
cline it.

370.	Did any directors attend at the last meeting when a dividend was
declared ?—Yes, one or other of the directors must have attended.

371.	Who did attend?—I think it was Mr. Morse. I think Mr. Bignold was
in town on some inquiry before the House of Commons, and also Mr. Booth.

372.	Have any persons bought shares in the Norwich and Norfolk bank at
a premium within the last twelvemonth ?—Shares have been sold at a premium
within that time, I believe.

373.	Did a person of the name of Newton buy shares at a premium within
that time ?—No; not within that time, certainly.

374.	How long ago did he buy any shares ?—I cannot recollect.

375.	Did you recommend to him to buy any shares ?—That I cannot re-
collect.

376.	Did Messrs. Page & Co. buy any shares at a premium ?—I do not know
any firm of that name.

377.	Do you know a person of that name ?—There are several I know.

378.	Did any gentleman of that name buy any shares in that concern on
your recommendation ?—I do not recollect now; I cannot speak positively to
it. There is a Mr. Samuel Deyns Page, who is a shareholder in Norwich, but
I cannot speak to the date of the purchase of shares, or the number of them.

379.	Mr. Temple Booth was a director ?—Yes.

380.	Do you recollect whether any money was advanced to him ?—To the
best of my belief there generally was a large balance standing to the credit of
his account.

381.	Was there ever a period in which he had a large advance ?■—Not to my
knowledge.

382.	Do you recollect the names of Mr. Robert John Turner, Francis Turner,

and Turner and West?—Perfectly.

383.	Were there any considerable advances made to any of those gentle-
men ?—Yes; I think to each and all of those.

384.	Have those advances all been repaid ?—No; there has been no dividend
that I am aware of.

385.	Sir John Wrotteslegi] Of what description were the bills which Mr.

D 4	1	Battley24

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. T Nimmo. Battley sent in ?—-They were of a very bad description. I was then a stranger
, *	' in the county, and I myself was not personally acquainted with the parties.

14 June 1836. The bills were discounted, and put to the credit of the account, with the appro-
bation of the directors.

386.	Did you make any inquiries of Mr. Battley as to the foundation of
those bills, whether they were real transactions, or what they were founded on ?
—We made inquiry of another banking-house in the city, by whom we were most
grossly deceived. I believe they had done business with him, and they gave
him a very flaming character; and then shortly after they had led us into the

* mess they sent notice by a mutual friend that they believed we had better be
careful.

387.	Was Battley a bankrupt —He was.

388.	He was in the Gazette ?—Yes.

389.	Sir Thomas Fremantle.] What was he originally ?—He was a timber
merchant, a sort of general merchant in fact.

390.	Sir John Wrottesley.] Have you reason to believe that the produce of
the bills he discounted with you was applied to his debt with the other bank ?
—I cannot swear to the fact; but I have the strongest possible reason to be-
lieve it, for I can prove that the checks drawn on us were not sent direct to
the bank, but through the medium of another party to whom they were
paid.

391.	Were you in the habit of inquiring the nature of the transactions of
those persons for whom you discounted bills ?—Certainly, to the best of our
ability we inquired.

392.	You took pains to get all the information you could upon the subject ?
—Yes.

393.	At the meeting of proprietors at which you declared the dividend, what
was the nature of the account you gave to the proprietors ?—The fact is, if I
answer that question, I may just as well produce the account itself, which
I beg leave to decline, unless I am obliged to produce it.

394.	Was not the account you prepared publicly read in the meetings ?—It
appears so ; I was not always present; it was drawn up by the accountant.

395.	Have you any knowledge, at any period, of the directors stating to the
proprietors the losses they had incurred?—I do not know that the directors
ever stated to the proprietors the amount of losses; but to the best of my
belief, they did state that the losses amounted to a considerable sum in certain
years.

396.	What was the first statement of that description made after the forma-
tion of the bank ?—It is impossible for me to know that.

397.	Was there, at an early period, an account given by which the affairs of
the bank became known ?—The only way in which any light can be thrown
upon that question will be by reference to the books.

398.	Upon transferring the account, the Norfolk bank opened an aceount
with the East of England bank, of which you are now the cashier ?—The sub-
manager.	......

399.	You know the amount of all the accounts that have passed between
those two banks ?—-Yes, the books will show that.

400.	Do you keep one account, or more than one, with the Norfolk bank ?
—Only one account.

401.	In that account you give credit for all the bills you received from the
Norfolk and Norwich bank, and charge it when those bills are returned unpaid ?
—Yes ; in fact we charge them with all disbursements on their account.

402.	Has any statement ever been made to the proprietors of the transfer of
the account from one bank to another ?—Not that I am aware of.

403.	Has their consent ever been asked ?—No; I should say not; the annual
meeting would not take place till July, and therefore, so far as the deed is con-
cerned, I do not think it has been at all vitiated.

404.	There was a meeting last July ?—There was.

405.	Was there any intention of a transfer of the account to the East of
England bank at that time ?—The East of England bank was not then in
existence.

406.	Chairman.] How long have you been engaged in the banking business ?
—About 36 years.

407.	Where were you engaged previously to your connection with the Nor-

folkSELECT COMMITTEE ON JOINT STOCK BANKS.	25

folk and Norwich bank ?—I went apprentice to the British Linen Company in
Edinburgh in the year 1800. I was in their service for 15 years. I then was
engaged in agriculture, which I abandoned, and became engaged with the
Norfolk and Norwich Banking Company.

408.	Having experience of the banking business, do you consider that prior
to the declaration of a dividend on the part of a bank, it is just and expedient
that a deduction should be first made for the amount of losses on the bad
debts which the bank has sustained ?—'That depends, in a great measure, upon
the nature of its losses, and upon the state of the bank, because, although in
the course of time an amount of bad and doubtful debts will accrue, if there be
forthcoming assets for their liquidation, the directors cannot say what the
precise loss will be.

409.	Do you think a dividend can be rightly declared by a bank without
making out a balance-sheet, showing whether the affairs of the bank are such
as to warrant any and what dividend ?—I should say that the proper way of
making out the balance-sheet is to make out an account of bad debts, and to
estimate the probable value.

410.	Do you not consider that any balance-sheet which might be prepared
would be attended with delusion, unless some allowance was made for the loss
which had been sustained on bad debts, which might be more or less productive
of loss ?—I should certainly think so.

411.	Sir John WrottesleyI\ If that principle had been followed up in the case
of the Norfolk bank, would there have been a shilling dividend ?—I wish to
clear up these points ; I beg to state that the Norwich and Norfolk bank never
divided the whole amount of their profits ; on the contrary, they carried a very
large amount annually to the account of undivided profits to meet bad debts,
and there is still a large amount in that account.

412.	Chairman.] How are the Committee to understand that the amount of
undivided profits could be ascertained without deducting first the amount of
losses sustained?—I should have said there are two accounts, one for bad and
doubtful debts, and the other for creating a fund called the undivided profits,
or under any other title which the bank may choose ; but this money was set
aside yearly to be applied to the bad debts as soon as they were closed.

413.	Could that account, when the balance of undivided profits was struck,
be in itself complete without introducing the amount of losses that had been
sustained ?—If you look into the account in the books, the one stating bad
and doubtful debts, and the other the account under the title of undivided
profits, you see by the two how the matter stands.

414.	Was the account of bad and doubtful debts in the Norwich and Norfolk
bank ever brought under the consideration of the proprietors ?—That I do not
know; not to my knowledge.

415.	Have you brought with you the deed of settlement?—I have a copy
of it.

416.	Was it printed ?—It is a written copy; I got it from our solicitor, being
less bulky than the deed itself.

417.	Can you state whether the deed of settlement contained any provisions
respecting the winding up of the affairs of the company?—I can only answer
that question by saying, I shall have great pleasure in referring to it, but I do
not think I have read it through in my life.

418.	Sir Thomas Fremantle.] You stated that there were two accounts made
out, one which stated what the amount of the largest profit made by the bank
in any one year was, deducting the expense of the establishment, but without
taking any notice of the bad debts?—Yes; I stated in the outset that I had
brought those accounts with me for the last three years. Since I have gone so
far in the evidence it is matter of little importance, but my objection is that
private parties should not be affected by my stating these particulars.

[The Witness was directed to withdraw.

[The Witness was again called m.]

419* Chairman^ The Committee will require you to furnish the copy you
have brought of the deed of settlement; it shall be returned to you?—I have it
in town, but not here.

420. Chairman.] The Committee also wish you to furnish an account of the

e	annual

Mr. T. Nimmp.

14 June 183.6.26

MINUTES OF EVIDENCE TAKEN BEFORE THE

M T N. annual dividends declared by the bank, and the date at which such dividends
r. . vmmo. were declared?—Then I must write to Norwich for that; I will write, and if
14 June 1836. they choose to send it, of course I will bring it here.

421.	Chairman.] I am directed also by the Committee to apprise you, that
with respect to certain other heads of information, they ask for them not with
a view to any individual purpose, but for the purpose of illustrating the working
of the system, and that they shall be received by the Committee confidentially,
if that is considered desirable by the parties furnishing them. The further
accounts they are desirous of having are, first, an account of the profits of each
year; next, the amount written off in each year since the establishment of the
bank to the account of bad and doubtful debts, and of the sums received and
written to the credit of such account in each year; and lastly, the gross amount
of such bad debts, and of such receipts, with the balance of that account, either
to the present time or to the latest period at which it was made up. These
may be given in confidentially if it is thought desirable by the parties they
should be so considered ?—May I take the liberty of asking whether it is im-
perative upon me to render those accounts, or a matter of choice ?

422.	You are aware the Committee have the power of making an order for
that information; if you see any reason why they should not exercise that
power, you will state your objection?—I consider that the matter rests in a very
small compass; it rests merely between the proprietors and directors to wind
up the concern ; how it may terminate at the time of the account being wound
up, or the debts outstanding being recovered, I know not, therefore as the
public is in no way concerned, and as it is merely a private matter among
those parties, I should almost be induced to request, that if that could be done,
the accounts should not be divulged.

423.	If the accounts are furnished confidentially, and the inconvenience can
be only an inconvenience between the directors and the proprietors, do you
conceive that the objection you have stated would fairly apply to making such
a confidential return as that alluded to ?—It occurs to me that as the directors
are men of large property, and men of honour, and if they have at all com-
mitted themselves by not having made inquiry of the proprietors in regard to
the disposal of the business of the bank, it rests with the proprietors to bring
an action if they see cause; and knowing the directors as I do, it is almost
a matter of supererogation, in my view of the matter; they are personally liable
if they have committed errors in any way.

424.	In thte event of these accounts being received solely for the information
of this Committee, and not communicated to the public, do you see any incon-
venience in furnishing them?—Might I ask whether the House of Commons
might or might not find it expedient to order the Report of this Committee to
be printed, is that impossible ?

425.	This Committee is a Committee of Secresy; the only inconvenience
stated by you being the possible disclosure of those accounts, so as to affect
transactions between the directors and the proprietors, if that inconvenience
is guarded against by considering the accounts as confidential, will there be
any, and what, objection to furnishing those accounts ?—I beg it may be under-
stood in this way; the only difficulty that would arise, would be as between
the directors and the proprietors; no other individuals but those have anything
to do with it. I do not express any opinion, or wish any opinion to be enter-
tained, that the directors have acted unfairly to the proprietors in disposing of
the business to the East of England Bank; I think they have acted with discre-
tion. I shall certainly write to the directors in Norwich, stating the question
has been put to me, and requesting them, if they see proper, to furnish me with
the account.

426.	Mr. Clay7\ Do you think it possible to settle those accounts between
the proprietors and the directors without the statement of those particulars to
the directors ?—I am neither authorized nor competent to give an opinion upon
that particular, as I am not now in the employ of the bank.

427.	Chairman.] Supposing the Committee to Call for those accounts, whose
duty would it be to furnish them, as you state you are no longer in the employ
of the bank?—I should presume the resident director, or any one of the

v directors.

428.	Are you in possession of the accounts from whence those statements
could be made out?—No ; I stated that I have brought up, as respects the last

threeSELECT COMMITTEE ON JOINT STOCK BANKS.	27

three years, a statement of the profit and loss account, thinking that might be Mr. T. Nmma.

be sufficient for the purpose, and that I have also brought up a copy of the ---

deed.	14 June 1836.

429.	There is no difficulty about the deed ?—None that I am aware of.

430.	Mr. Clayi] In whose custody are the accounts of the Norfolk and Nor-
wich Bank ?—I believe they are kept in a room in Mr. Bignold's house. I beg
to state, that only part of the books are so placed, and that the remainder are
in a room in the East of England Bank.

431.	Are they in the custody of Mr. Bignold?-—I cannot say; there are
two young men employed in winding them up for Mr. Bignold, one of the
directors.

432.	No accounts have been destroyed ?—Decidedly not.

433.	These questions might be answered from the accounts ?—I should
conceive so.

434.	When the Committee have asked for the profits in each year, they do
not mean with reference to the amount of bad debts which you have yourself
kept separate, but they wish for that account which you, the Norfolk and
Norwich bank, have considered to be profit in each year, the amount carried
out in each year ?—With regard to that question, I beg to refer to my evidence
in answer to the question, whether I considered that, without deducting the
amount of bad debts from the ex facie profit, you can keep a fair statement of
profit; I was asked whether, from my experience in banking, I conceived that
any such statement would not be a delusion. Perhaps gentlemen living in
London may be more able to give explanation on that point; but in the case
of Fauntleroy there was a bad debt of 360,000 I. Perhaps some gentleman
can tell whether the Bank of England deducted that from their profits for the
year.

435.	The object is not to canvass your opinion, but to know that you under-
stand the question proposed to you. The question is, what amount the bank
itself wrote off to profit and loss in each year; you have stated that you kept an
account called the account of bad and doubtful debts ?—We did.

436.	To the debit of that account you at once placed any debt which you
considered to come under that description ?—We did for several years; for a
few years they were generally kept in the ledger; in fact, there was no separate
account, but for several years past the account has been headed and kept.

437.	When you opened that account, you transferred to it all debts you con-
sidered bad or doubtful ?•—The whole of them.

438.	Did you transfer the whole of those debts, and the assets on the other
side, or only the account of the balance ?—The actual balance at the time of
the transfer was transferred to this general account, and if any assets were after
received, those assets would appear upon the credit.

439.	You would still be able, by referring to the separate accounts of indi-
viduals who were indebted, to answer the question which the Chairman of the
Committee has put, namely, the amount of bad and doubtful debts incurred
in each year?—It might be possible to estimate the thing; we can give the
exact balance as it now stands in the books, but it is quite out of the question
to say that is a statement of the actual losses, for there are amounts still to be
recovered.

440.	Can you state the amount of bad and doubtful debts owing in each
year, and the amount received in dividends to set against those debts ?—I
should conceive so.

441.	Sir John Wrottesley.^ Have you any objection to state whether, having
transferred the bad debts to the separate account, there remained on the books
any profit on the profit and loss account in any year ?—It is impossible for me
at present to give an answer to that question.

442.	Chairman.] Can you state the amount of paid-up capital ?—£.23,080.

443.	Sir Robert Peeli] Are your difficulties on the ground of your having
filled a confidential situation ?—Having left the service of the bank altogether,

I am not now an officer of it; but I should be betraying my own feelings if I
said that I came here with any other view than to give a fair expose as far as I
could, so that the interests of individuals should not be affected.

444.	The wish of the Committee would not be to press you, though of their
power there is no doubt, to make any statement against your conscientious
conviction of duty; but supposing it were understood that the evidence should
not be printed, that you should have an opportunity of seeing it; that this

0.92.	E 2	being28

MINUTES -OF EVIDENCE TAKEN BEFORE THE

Mr. T. Ximmo- being a committee of secrecy, any evidence, though taken down, the Coni-
——■— mittee are perfectly competent to withhold from the House, and that they do
*4 June l836* not wish to make any use of the knowledge they gain against individuals, but
only for the purpose of taking precautions against similar occurrences in future;
should you have any difficulty in stating the whole of the weak parts of this
case on that understanding ?—I should not exactly like, on any debate which
may take place in the House, that the Norfolk and Norwich Joint Stock Bank
should be put forth, for I am sure, from some of the names of parties and
questions put, that a malm animus exists somewhere, and that the directors
have been very much maligned.

445.	Supposing you are correct in that assumption, is it not right that, on
the other side, the Committee should know the truth as far as you can tell it?
—As I am no longer the servant of the bank, I should wish to consult the
directors as to the extent of information proper to be given. If they have no
objection to give the information, it is for them to do it; and I am sure that
the directors will spare the Committee any unnecessary trouble On the subject;
and I take the liberty of stating the feeling I entertain generally upon the
subject of the losses which have occurred. When we began business, land was
of much higher value than it has been of late years ; if we had real securities
on houses and lands, those have for the, last six or seven years deteriorated;
and now any bank beginning business have a better chance of succeeding
than we had, because, from the prosperity of the country, it is likely those
securities may improve, though they have hitherto been decreasing in value.

446.	Notwithstanding you saw that your securities were falling in value you
have made dividends ?—-We have made dividends every year; but my view of
matters has always been, that with such a business as we had, and with the large
amount of undivided profits, that if matters did improve, and agriculture did
improve, on which we mainly depended in Norfolk, the company would still be
in a sound and flourishing state; the distinction between banking in an agri-
cultural and a commercial or manufacturing place is so very great. Our monies
are lent out to farmers, on accounts current chiefly; and if we had accounts
~with individuals who sold goods in a manufacturing country, those are at cash
price, or a certain credit; they are immediately furnished with the money, and
can always realize their assets much more easily than we could do, which has
affected us considerably. There has been very great irregularity in regard to
the securities; a system has crept into Norfolk and other parts of England, by
which letters of guaranty has been given, have been made use of, and upon
those papers or documents the government have lost the stamp duty altogether;
for the letter of guaranty being given on plain paper, supposing any parties
stopped payment, and the security taken was to be enforced, they have said,
if we must pay this do not put us to the expense of a stamp, we will pay the
debt, and you shall give up the guarantee; and I wrote a memorial on the
subject of securities, which I forwarded to Sir James Scarlett. When Sir John
Campbell was bringing forward the motion relative to the law of arrests, I
suggested that the bankers might be allowed to take real or personal security ;
"but that in all cases where money was lent on personal security for floating
balances on accounts current, a form of personal bond, similar to that acted upon
in Scotland and Ireland, should be used, and its use rendered imperative; and
the scale of duties should be reduced, because I am quite satisfied that govern-
ment would get a great deal more money at half the duty.

447.	When you made the dividends, did you not profess that they were made
out of the clear annual profits of the concern?—The ex facie profits of the
concern showed a large profit yearly; there was one account of bad and
doubtful debts, and another account of profits, which has been accumulating
from year to year in our books as a fund to meet the bad debts on" the other
side.

448.	Parties seeing the dividends made had a right to assume that they were
made out of the clear annual profit; and when a share was on sale in the
market, and a person bought it, was not he deceived by the course you pur-
sued ?—I acted only in the capacity of chief clerk, and was not entitled to con-
travene the conduct of the directors.

449.	What was the amount of the nominal capital ?—£. 200,000 the nominal
capital; 1,000 shares, at 200 l. each.

450.	What amount was actually paid up ?—The whole of the shares were not

disposedSELECT COMMITTEE ON JOINT STOCK BANKS.

29

disposed of; the company held some shares, on which no dividend was paid; Mr. T. Nimmo.
.they were never sold; there was 30 I. paid upon each share sold.	-

451.	The whole sum paid was 23,0001. ?—rl think so, or thereabout.	14 June 1836

452.	If the whole 30 I. had been paid on the whole of the shares it would
have been 30,000 I. ?—The bank held a certain number of shares to dispose of
to people who kept accounts with us, and to increase their influence in the
country.

453.	How did you proceed to apply this capital ?—We lent it out in the usual
way on account current, in the discount of bills, and in stock, and so on.

454.	Have you held any stock ?—We have not for some years held any.

455.	Any Exchequer bills ?—Yes, but not lately.

456.	How was the loss sustained?—There was one individual by whom
the Bank of England lost 38,0001.; the debt with us was about 5,000 I. or
6,000i.

457.	Was he a shareholder in the bank ?—No.

458.	Was any peculiar accommodation given to the shareholders?—None,

on the faith of their shares.

459.	Did they come to the bank for accommodation ?—Merely on their own
credit as customers, not as proprietors.

460.	Had the directors their bills discounted ?—Mr. Bignold is not in busi-
ness ; he is secretary to the Life and Fire office. Mr. Morse is not in business.

Mr. Booth is in business.

461.	Did they borrow money of the bank?—Yes, Mr. Morse may have had
a few hundred pounds upon his account ; being a man of immense wealth, he
might have got it, but merely for a temporary purpose.	'

462.	What was the interest charged on that advance to him ?—We charged
five per cent, on all advances, except in special cases; but the directors or share-
holders enjoyed no advantages in which the public did not participate.

463.	What constituted the undivided profits?—Suppose you take the ac-
count of profits produced for the year, you state on the other side of the account
the interest due by the bank, the amount of expenses paid by the bank; this is
classified, for stationery, for law, and, in fact, every other disbursement; and
then the balance between the amount received and paid shows the apparent profit.

464.	You include salaries ?—Yes.

465.	You took the actual profit on the balance between the interest due to
the bank, and the interest due from the bank, and then deducted the whole
charge of the establishment, and all the permanent outgoings, and there was
a certain sum left?—Yes.

466.	But you did not take into account the bad debts?—Every charge was
inserted but the bad debts, and the account of undivided profits operated as a
set off against the bad debts that might be made in carrying on the business.

467.	The shareholders were deceived by not taking into account the bad
debts?—No, I do not say they were, because it was impossible to know the
precise amount of these; but the large profit that appeared on the books was
such that, had we not sustained a very severe loss lately, I have not the least
doubt the bank would have been in a very flourishing state at the present time,
for independent of the money actually engaged in the trade, the constituency
was so highly respectable that they could have withstood any shock.

468.	Was the sum on such undivided profits increasing or not?—Yearly
increasing.

469.	Was the dividend the same year after year, or did it vary?—There was
one year seven and a half per cent, paid on the paid-up capital.

470.	Was that paid out of bond fide profits; was there a bond fide profit
justifying that dividend of seven and a half per cent. ?—It certainly must have
been the opinion of the directors at the time that it was so. I recollect that
the affairs of the bank appeared to be in so prosperous a situation, that I believe
I myself recommended it.

471.	That is to say, you said we appear to be going on very prosperously;

we had better give a fillip to the bank by dividing seven and a half per cent.;

but that was rather a calculation of the future, than having the money drawn
from profit, was not it ?—No ; I think it was guided entirely by the amount of
the profits for the year; I do not mean to say that we had no bad debts, or
might have none, but that the general account of the concern was so good that
we might do that.

472.	After having paid the whole of the bad debts ?—Yes.

e 3	473. Salaries30	MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. T. Nimmo. 473- Salaries and house-rent ?—Yes, and everything.

-- 474. What was the amount of the permanent outgoings ?—I have that

14 June 1836. aecountwith me; I can refer to it.

475.	The question refers to the balance of profit and loss in that year in
which the seven and a half per cent, dividend took place ?—I cannot recollect
the particular year in which that occurred. I think it was the year after
Messrs. Thompson, Barclay & Ives declined business. I have a general state-
ment of the receipts and payments between the 5th of April 1832, and the 5th
of April 1833; the agency expenses amounted in gross to 8561. 18 s. 10 d.-,
clerks, 1,488/. 16 s.; directors, 3701.

476.	Is that a payment to the directors ?—Yes, it is usual, I believe, in most
banks. Licences, 120I.; rent,50?.; postages,stationery,taxes,&c., 424/. lis. 11 d.;
law charges, 3701. 10 s. 5 d., making a charge of 4,055 I. lis. 2d.; against
which we have a credit on the balance of interest beyond 9,610?. 14 s. 6 d.;
profit arising from Swaffham agency, 5001.; leaving an apparent balance of
6,181 I. 3s. Ad.

477.	Does it appear what was the dividend declared?—No; the dividend
was declared at a meeting at which I was not present.

478.	What was the amount of the dividend?—I cannot state on recol-
lection.

479.	If it was five per cent, it would be only 1,1501. ?—That would be the
whole.

480.	Then you had such a profit you carried forward a balance of nearly
5,0001. ?—Yes, to the undivided profits; that was the source from which the
undivided profit account arose.

481.	Chairman.] Is the first item in the account of interest to the bank the
interest actually paid to the bank, or the interest paid and due to the bank?—
Paid and due, with this qualification, that the money due to the public on money
deposited (not accounts current), was deducted from the interest at the credit
of profit and loss.

482.	Sir Thomas Fremantle.] That which you had received from interest
you gave yourselves credit for?—Yes ; but the amount of bills of exchange in
an agricultural county is limited.

483.	Sir John Wrottesley7\ Did you make up your account quarterly ?—The
interest account yearly, but we balanced our books monthly.

484.	Sir Robert Peel.'] What was the period referred to in the account before
you?—April 1832 to April 1833.

485.	What was the year in which the bank was formed ? —1827.

486.	What was the year in which you had a great loss?—Some time in
1828.

487.	There does not appear to be a reference to that loss; were you justified
in making a dividend without reference to that debt?—That was a matter for
the directors; it was not for me to give an opinion, for I was not consulted
upon it.

488.	Was that statement laid before the proprietors ?—Yes.

489.	Was the fact of the loss concealed from the proprietors ?—It was well
known to them. I do not know that the particular amount of loss was given,
for I was not at all the meetings. I did not go unless I was directed to do so.
I directed the clerks to make up the statement as I was directed myself.

490.	Chairman.] Was that account you hold in your hand communicated to
the proprietors ?—Yes.

491.	Was the former account, or the balance of the former account you
have described, as showing the loss sustained on bad debts, ever made known
or communicated to the proprietors ?—I cannot answer the question. I was
neither authorized nor asked to make it known; if the directors wished they
might do it.

492.	Was it ever made known within your knowledge?—No.

493.	You were the cashier of the bank ?—I was chief clerk.

494.	Could it be communicated to the proprietors without your knowledge ?
—If any proprietor had asked the question at any of the annual meetings, I
have no doubt the directors would have answered him or not answered him,
but I cannot say.

495.	The directors are sufficient authority upon that subject, are they ?—I
should conceive so.

496.	Sir John Wrottesley.] The dividend was calculated upon the statement

youSELECT COMMITTEE ON JOINT STOCK BANKS.	31

you hold in your hand?—This is a copy of it. The next year, 1833 to 1834, Mr. T. Nimrm.
shows a profit of 7,407 I. 8 s. 4 d.	1 -

497.	Is that again struck upon the same principle as you have before *4June l836-
described ?—Yes.

498.	Have you any other?—I have another. This appears more detailed;

1834 to 1835 ; the result was, balance of apparent profit 6,998?. 16 s. 9 d.;

the interest on the debit and credit sides is here specified, in the place of the
general balance of interest received and interest paid.

499.	You have stated that you were for a certain time engaged in the
British Linen Company; according to the system of accounts pursued in
Scotch banks, is a dividend struck without taking into account the losses which
may have been sustained by bad debts ?—In those years the profits of Scotch
banking were so large, particularly those of the British Linen Company, they
had always an immense amount to carry to undivided profits, and their bad
debts were comparatively very few; but I believe their bad debts, before they
make a dividend, are invariably deducted; if they do not know the result they
make an estimate of the supposed result.

500.	If you had the uncontrolled management of a bank yourself, do you
.consider that you could declare a dividend, in justice to the establishment,

without first deducting the bad debts, and ascertaining, not the ex facie profits,

but the actual profits within the time ?—I should certainly think every charge
that could affect the actual profits of the bank ought to be deducted.

501.	You have stated in your evidence that a certain number of shares were
reserved, and were issued by the bank to persons who became customers of the
bank?-—Yes.

502.	Do you consider that an issue of shares by a bank becomes a means in
this way of acquiring a greater number of customers than would be acquired if
there was not that system of shares ?—Yes, for this reason, that in cases of a
run, or any untoward circumstance of that kind, the more widely you can
connect the interests of individuals with the interest of the bank, the less likely
are they to be run on, as, supposing we have a principal and two securities, it
is quite obvious that if there was any rumour afloat to the prejudice of the bank,

we have three people instead of one, who would have an interest in maintaining
our credit rather than make a run upon us.

503.	The question refers to this : do you conceive a bank issuing shares in any
great city or town acquires, by the issue of those shares, facilities in gaining
custom and extending their business ?—No; I consider that by selling shares-—

in fact, getting a connexion is of service, as in London, forming connexions
with individuals—it gives them an interest in the company, and they recom-
mend their friends to do business with the bank ; but I reprobate the practice
of speculation in shares, which is going forward at this moment.

504.	Do you conceive the reserve of shares on the part of a joint stock bank,

who have the power of issuing under such conditions as they think fit, is a safe
system ?■—It depends upon the choice they have of their partners. If the
directors have the choice of their partners, which they have in the case of a veto
being given in the deed of settlement, they have the power of preventing any
improper persons being shareholders if they exercise the power the law vests in
their hands. I think the great security of joint stock banks rests entirely in
the extent and the wealth of its constituency.

505.	In proportion as the bank itself holds a reserve of shares, is not the
wealth and security of its constituency diminished ?—Just so; but I should say
in all cases if the bank holds shares, and divides upon those shares which are
not actually sold, and claims a certain amount of profit upon those shares, it is
injurious ; but if they merely hold the shares till a fair opportunity occurs of
selling them, and do not claim any profit, it is perfectly justifiable.

506.	Is not the security to the public for the engagements of the bank pro-
portioned to the amount of property and responsibility for those engagements ?

—'Certainly.	,

507-8. Is not that amount of property diminished by the amount of shares
held as a reserve by the bank itself ?—Certainly; because if those shares were
sold there would be a larger constituency, and of course more property.

509. If the bank retained shares in its own hands, being aware of the periods
at which'dividends are likely to be augmented or diminished by the increased
or reduced profits of the bank, has it not the means of issuing those shares in

0.92.	E 4	the32	MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. T. Nimmo. the market so as to be more or less valuable, the directors knowing that which,

—--— is not known to the public generally ?—Unless the affairs of the bank are made

14 June 1836. public it is quite clear that the directors, as in every other bank, must have the
best information ; and if they choose to avail themselves of it they can, but I
never saw it done.

510.	Do not you think that a danger which ought to be guarded against ?—
I am clearly of opinion that if you do not require, for the purposes of business,
a real capital, equal or nearly so in amount to that set forth in your prospectus,
you ought not to delude the public by holding forth a large amount of mere
nominal capital, but should limit yourself to the amount you suppose you may
actually require to carry on the business, because that leads, in my opinion, to
speculation to a very large amount; at least I think such has been the case
lately.

511.	Do you think it leads to false credit, and transactions extended beyond
what sound policy would justify ?—No, I do not think it leads to false credit;
but from making the instalments on shares very small, it enables a class of
persons to speculate in them, which is, in my opinion, a mere species of
gambling, and which may ultimately be productive of mischief.

512.	You conceive shares issued for 10 I. and 201., for the purpose of carry-
ing on joint stock banks, are disadvantageous to the public interest ?—Not so,
provided that the shareholders are in a great degree confined to the particular
district in which the bank carries on its own operations, then there is a con-
nexion formed between the two, and which may be advantageous to both.

513.	Would the speculation in those shares augment in proportion to the
capital represented by those shares at different amounts. Is there not likely to
be a more active speculation in 10 I. shares than in shares of 2001. ?—That
might be the case to a certain extent; but if the shares are so very small, they do
not afford sufficient inducement for investment; if they were larger, perhaps
individuals might find it for their interest, in thriving companies, to invest a
considerable portion of money ; but where they are so exceedingly small, it is
not worth while; the chief danger arises from individuals who have money
transferring shares from one to another, leaving at last some men liable who
are not able to pay.

514.	Is it not to be collected from your last answer, that in proportion as
the shares are small, they will be less a subject matter of bond fide investment ?
—Certainly; the smaller the shares are, the less will they be the subject matter
of bond fide investment.

515.	Do not you think the stability of a bank is more promoted by that
system under which the shares of the bank are matter of investment, rather
than of speculation ?—Certainly.

516.	What branches had you in your bank?—Seven; namely, Swaffham,
Lynn, Dereham, Foulsham, Fakenham, Bungay and Harleston.

517.	What control was exercised over the issues of those branches by the
central bank r—The agents in all cases, I believe, gave security for their actual
intromissions; they were not liable for bad debts; if they were guilty of any
irregularities in their own conduct, of course they were liable for them, but
nothing further; but their allowances were small.

518.	Mr. Smith.~\ Were not they liable for discounts made by them?—-
No.

519.	Chairman.] From your experience, should you say there was a greater
chance of losses sustained at the branches of your bank, than at the central
bank at Norwich?—I am clearly of opinion that unless the system of inspec-
tion is of the most rigid and perfect nature, they will lose more money at the
branches than under their own control.

520.	Are not those difficulties augmented in proportion as the number of
branches is increased, and the distance from the parent bank is augmented ?—
Talking generally, it may be so; it depends very much upon the system of
management adopted.

521.	What promissory notes did you issue at the branches?—We had no
separate issue except at Swaffham.

522.	When the notes were issued at those branches, were the notes dated at
Norwich and payable at Norwich ?—Yes ; and in London, since the Act was
altered, allowing us to make them payable in London.

523.	They were not payable at the place where they were issued, nor did

theySELECT COMMITTEE ON JOINT STOCK BANKS.	33

they bear the date of that place?—No; they were precisely on the system of Mr. T. Nfamo.-
the Scotch banks, but that theirs are not payable in London.	....... ,

524.	Had you any agencies, independent of the branches ?—Yes, I believe 14 June
there was an office of agency attached to the Swaffham branch.	.

525.	What is the distinction you would draw between an agency and a
branch ?—According to the fashionable technicality adopted now a days, I think
they call them district banks, and then those district banks have a jurisdiction
over those minor agencies, those are styled agencies.

526.	Are licences taken out for agencies as well as branches?—Yes, to the
number of four; I think four covers the whole.

527.	Sir Thomas Fremantle.] Among the losses you experienced, were any
of them occasioned by the branches ?—Yes, they were; there was one great loss
by a branch.

528.	Did the great loss to which you have before referred occur at one of
the branches, or the head office ?—At the head office.

[The Witness was directed to withdraw.

[The Witness was again called iw.]

529.	Will you be pleased to put in the deed of settlement ?—A copy of the
deed of settlement has been put in.

530.	State the amount of dividends paid in each year by the Norwich and
Norfolk bank, the rate of such dividend,'and the time at which it was declared ?

—I have written to Norwich for them.

531.	For the purpose of greater accuracy and clearness, please to put in, in
a tabular shape, the accounts which you have already given in, and which
appear upon the minutes in answer to questions put to you.

[The following Tables, marked A. B. and C., were delivered ira.]

(A.)

Norfolk and Norwich Joint Stock Banking Company,	<

General Statement of Receipts and Payments between 5th April 1832 and

5th April 1833.

Dr

Masterman & Co., for conducting London Agency	-

Government, for duty on circulation of Notes -	-	- - -
Agency expenses, viz.: £. g.- d.

Fakenham - - - - - _	„	124 10 6

Foulsham	jg0 u s

Bungay - - - - -	-	136 10 3

Harleston ... - . -	.	^4 4 6

Dereham . - -	.	110135

Lynn - - - - - -	-	164 9 y

Clerks - - - - - „ -

Directors - - - - ' ' - - - „ „ . „

Licences - - - . . „

Rent - - - -• ' - ... . _

Postages, Stationery, Taxes, &c. - - -
Law Charges - - -

Balance - - „ - - - r »	-

&

o

Balance of Interest and Commission on the general operations of the
Profit from Swaffham Agency

£.

0.92.	F	~

£. s. d.

300 - -
161 14 -

856 18 10
1,488 16 -

370	-	-

120 -	-

50	-	-

424 11	ii

323 *0	5

4.095 11 2
6,081 3 4

10,176 14 6

£. s. d.

9,610 14 6
566 - ~

10,176 14 634

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. T. Nimmo.
24 June 1836,

;	(B.)

Norfolk and Norwich Joint Stock Banking Company.

Genekal Statement of Receipts and Payments between 5th April 1833 and

5th April 1834,

B*

Masterman & Co., for conducting London Agency	-
Government, for duty on circulation of Notes

Agency expenses, viz.:	£. s- d.

Bungay......-	-	143 5 -

Dereham - - - - - . -	-	11048

Fakenham - - - - - -	-	117 2 8

Foulsham - - - - - -	-	136 17 >

Harleiton - - - - - -	-	183 - 1

Lynn -	164 18 , %

Clerks - - - - - -

Directors - - -- -- -- -- -
Licences - - - - - • ~ - - -
Rent - - - - - - - .

Postages, Stationery, Taxes, &c.

Law Charges

Balance - -- -- -- -- --

£•

C*.

Balance of Interest and Commission on the general operations of the
Bank - - - - - - - - - - .
Profit from SwafFham Branch - - - - - - ' -

£.

£. $.
300 -
153 6

855 7
1,556 14

370 -
120 -

5° -
601 6
218 14

4,225 8

7.407 8

3

4

11,632 16 7

£. s.

11,061 16
571 ~

d.
7

11,632 16 7

(C.)

Norfolk and Norwich Joint Stock Banking Company*

General Statement of Receipts and Payments between 5th April *834. and

5th April 1835.

Dr

Interest allowed on Accounts Current at 5th April -

Ditto - - on - - ditto - - in the course of the year, and
Interest paid on Deposits - - - - " . •	"

Interest due on Deposits •* - - -
Ditto on SwafFham Branch account - - • £.126 6 8
Deduct Interest on Lynn circulation - 6110 -

Discount paid to Masterman & Co., and Sanderson & Co/
Masterman & Co. (Commission) - ■ -
Duty on Circulation of Notes for 1833-34 -
Bittb - - - ditto - — for 1834-35 - - £.143 10 -
Deduct duty on SwafFham circulation - 24 3 -

Bank Licences - -

Deduct Swaffham Licence

£.120
30

Agency expenses - - - - -

Law expenses - -- -- -- -- -
Quarterly disbursements, incidental expenses^ rent, stationery, books,

&c. - - * - - - • -
Balance, as apparent profit - - - - - - - - -

£■* s+ ■	d*

5.175 1	10

1,115 5	6

401 10	5

64 16	8

459 9	-

300 -	-

157 3	-

119 7 -

90 - -
918 11 10
154 13 6

2,624 19 —
6,998 16 9

18,579 14 6SELECT COMMITTEE ON JOINT STOCK BANKS.

35

O

Mr. T. Nitnnto,

Interest charged on Accounts Current at 5th April -

Ditto - - - - ditto - - in the course of the year, dis-
counts, &c. -----------

Commission on Payments in London, &c. -

Profits of Swaffham Agency --------

£.	s. d.

15»288	9 5

2,664	211

177	2 2

460	-

18,579 14 6

14 June 1836.

John Amery, Esq., called in; and Examined.

532.	Chairman.] WITH what bank are you connected?—The Stourbridge John Jmery,Esq.
and Kidderminster.	■■■

533.	What office do you hold in that bank ?—I am the general manager.

534.	How long have you been connected with that banking-company ?—

Ever since its establishment in 1834.

535- Were you previously connected with any other bank ?—I had the sub-
management of the Birmingham Branch of the Bank of England for seven
years ; previous to that period I was for a short time a private banker myself;

and antecedent to that I served an apprenticeship to banking.

536.	Therefore for many years your attention has been turned, and you
have been practically concerned in the management of banks?—For about
four and twenty years.

537.	The Committee observe, in the return with respect to the Stourbridge
and Kidderminster Bank, you have two branches and four agencies ?—We
have.

538.	Have the goodness to describe to the Committee what is the distinction
between a branch and an agency ?—At a branch we have a regular establish-
ment formed, with a person appointed by the directors as manager thereof,

who gives security to a considerable amount, having the power of drawing bills
on London, or of giving credits. At an agency the powers are limited, and
they do not draw bills or give credits; they have a certain amount of cash sup-
plied them for current purposes, an account of which they render to us every
week, together with a statement of all receipts and payments.

539.	Do they discount and issue promissory notes ?—They issue the notes of
the parent bank; but no notes originate at the agencies.

540.	How do they employ the money which is received by them on account
of the bank ?—In the way of discounts, and upon advances, which may be
sanctioned by the head bank ; but they take no responsibility upon themselves.

541.	Mr. Smithy Do they before they make advances apply to the parent
bank ?—Invariably.

542.	Chairman.] A system of control is exercised by the central bank over
those branches and agencies beyond the mere payment made by them ?—Yes,

weekly accounts of the assets, and the liabilities are sent in detail to the parent
bank; and occasionally visits, for inspection of accounts, &c., are made by me to
the branches and agencies.

543.	Can you furnish the Committee with an account of the assets and liabi-
lities so called for by the central bank from any of the agencies ?—It is in detail
very similar to that I had the honour to present the other day as required by
the Committee.

544.	What description of promissory-notes are issued by the branches and
agencies on account of the parent bank?—The promissory-notes are those
created at Stourbridge, Kidderminster and Stratford-upon-Avon, and are pay-
able there ; and alto at Messrs. Smith, Payne and Smith's, in London, on
demand.

545.	Are those notes payable on demand at the places where the branches
or agencies are established where they are issued ?—No, not payable where we
have agencies, but at the branches, the agencies being considered only auxilia-
ries to the branches ; nevertheless we always allow them a sufficient amount of
bullion to protect any notes sent to them for payment.

546.	Sir John WrottesleyAre the notes issued at the agencies made payable
at the agencies ?—No.

0.92.	f 2	547. Chairman^]36

MINUTES OF EVIDENCE TAKEN BEFORE THE

John jlmcry, Esq. 547- Chairman.] Are they described as such as distinguished from notes
—issued at Stourbridge and Kidderminster ?—They are not.

14 June 1.836. 548. Do you carry on your business with the capital which is derived from
the re-discount of bills ?—Not at all;

549.	Do you consider that to be a safe mode of carrying on a banking busi-
ness ?—We consider it to be a departure from the system of country banking,
and unsafe.

550.	It is not an accident which has led to your abstinence from re-discount,
but a resolution come to in relation to a principle which you hold to be mate-
rial ?—We are not in a situation to require re-discount; but if we were, I doubt
whether we should not pay up a larger portion of capital and abstain from it.

551.	Have you any regulation with respect to the nature of the securities,
and with respect to the dates of bills of exchange on which you make advances ?
—Bills of exchange vary from one month to six ; six months is considered a very
long period; we have no particular limitation as to the time.

552.	At what date do you draw upon your town bankers?—As a general rule
we never exceed 21 days date, or seven days sight.

553.	What is the nominal value of your shares ?—Five and twenty pounds
each.

554.	How much is the amount paid up ?—Five pounds per share.

555.	Are your shareholders mainly persons connected with the towns and
the neighbourhood in which you carry on your business ?•—They are.

556.	Do you consider that the issue of shares is instrumental in procuring
custom, and extending the connection of a bank ?—I should think it is.

557.	Are any peculiar facilities given beyond the mere establishment of
a connection to the holders of shares who may apply for discount or other
accommodation ? —Not any.

558.	Are any advances made by your bank on the security of your own
stock ?—Not any.

559.	Does your bank hold any reserve of its own shares unissued ?—We
have unappropriated 1,000 shares, which are stated in my return.

560.	Mr. Clay7\ Have your bank sold any shares at a premium?'—They
have.

561.	Do you recollect at what premium, and how many shares?—The pre-
mium has varied from the time we commenced ; the present premium is 61. 10s.

562.	With how much paid up ?—With 51. paid up, making 111. 10s.

563.	At that rate the bank has issued some ?—Yes.

564.	You have been asked whether joint stock banks have any power of pro-
curing business; do you not think those powers are very large as compared
with the power of any private bankers ?—They certainly might hold out much
greater inducements to persons who would become customers; but we have
never held out any.

565.	Are you aware whether that has been done ?—I am not.

566.	If the bank were to offer shares to persons willing to bring accounts,
those shares being at a premium in the market, that would afford great facili-
ties in the carrying on a banking business ?—That will depend very much upon
the circumstances of the persons to whom shares were offered; men of high
character would resist the temptation for the mere advantage of premium.

567.	Would it not hold out a temptation to any one that he might partici-
pate in the benefit of the concern ?—No doubt every man who is a shareholder
becomes to a certain degree his own banker.

568.	Would it not, in fact, in many instances, afford the joint stock bank an
advantage ?—Undoubtedly.

569.	If, for instance, the head of a family, with numerous branches, were to
become possessed of 50 or 100 shares in your joint stock bank, that it will be
an inducement to all those persons who have the means of opening a banking
account to keep their account with you ?—He might have an inducement, but
I have never known an instance where it has been exemplified; it is naturally
an inducement.

570.	Have not, in point of fact, within your own knowledge, many private
bankers gradually been either withdrawing from business or merging their se-
parate banks in joint stock banks ?—A great many.

571. HasSELECT COMMITTEE ON JOINT STOCK BANKS.	37

571.	Has not that process being going on more rapidly of late?—Very JohnAmery,
much. --

572.	Is not the inference from that, that the joint stock banks will be likely J4 June
to absorb most of the business of the country ?—It is so.

573.	Do not you think, at a period more or less remote, :t must all merge
into them ?—I do.

574.	You state that you do not consider discounting and re-discounting a
safe process; if it should appear that any bank had at any moment an amount
of bills bearing its name of five times the amount of its paid-up capital, should
you consider that a safe state for any bank to be put into ?—I should not.

575.	Should you consider it eminently unsafe ?—A great deal would depend
upon the character of the paper ; it is a question more of character than of
amount.

576.	Supposing the bank were to have invested in discounts the whole, both
of its paid-up capital and its deposits, without any money in stock or Exchequer
bills, should you consider that a safe state ?—Not at all.

577.	Should you consider it eminently unsafe ?—LI should.

578.	Is it safe for a bank, which may be called upon for cash payments at
any time in consequence of the balance of customers making deposits, to have
no other reliance than that placed on bills which may be discounted in the
London market ?—I should not think it safe.

579.	Your head establishment is at Stourbridge ?—It is.

58©. You have a branch at Kidderminster, and a branch at Stratford-on-

Avon?—We have.

581.	Where are your bank-notes dated?—Stourbridge, Kidderminster, and
Stratford.

582.	They bear those three names upon the face of the notes ?—Yes, they
are issued respectively at the places from whence they are dated.

583.	Of course, as of right, payment might be demanded in each of those
three places ?—No ; for they do not bear the name of each place, but of the
place where each is issued.

584.	You have notes bearing the date of Kidderminster, notes bearing the
date of Stratford, and notes bearing the date of Stourbridge ?—We have.

585.	And you would consider those notes as demandable in the place which
they respectively bear on their face ?—Yes.

586.	And they are all payable in London ?—Yes.

587.	Should you consider you were doing what was right, or infringing the
law, if you were to issue notes, bearing the date of Stourbridge, at Kiddermin-
ster ?—I should consider that an infraction of the law.

588.	If, subsequently to a note being so issued at the place of which it bore
the name, payment should be refused on the ground that it was not there
issued, you would consider that you had done that which was unjust and dis-
honourable ?—Certainly.

589.	Mr. Smithy Is it your ordinary practice to pay at Stourbridge a note
issued at Kidderminster, if presented there ?—Invariably ; the notes of all are
paid wherever presented.

590.	Mr. Pattison^] You state that you disapprove the system of discounting;

you apply that to your own bank as a bank of issue, and to all issuing banks ?

—Yes, to our own bank, but not exclusively to all issuing banks ; though my
remark bears more strongly on the banks of issue, than on those which are not,
the amount of the dependence on re-discount must be materially affected by
the state of the money market.

591.	You of course take that into consideration when you issue your own
notes ?<—-Yes ; but many banks, which are not banks of issue, discount far beyond
the proportion of what would be the amount of their average (circulation, if
they issued their own notes.

592.	Mr. Clay7\ For instance, is it not possible that a bank that did not
issue notes at all, and had no engagement with the Bank of England to any
amount, having paid up a capital of 50,0001., to re-discount bills bearing their
name to the amount of a million ?—No doubt of it; and I am persuaded that
when the returns ordered by this Committee are examined, it will be found that
those banks which are not banks of issue, incur upon an average liabilities by
re-discount to the amount of six or eight times their paid-up capital.

593- Mr. Pattison.^ Is not that in some degree necessary from the circum-

f 3	stance38

MINUTES OF EVIDENCE TAKEN BEFORE THE

John Amery, Esq. stance of their paying a higher price for their circulation than you who issue
'	your own notes ?—No; it appears to me to arise from their combining the

14 June 1836. practice of country banking with that of bill broking.

594.	Mr. Smith.] Have you ever made a calculation of the profit upon your
issues ?—I have, several times; it varies with our different stations.

595.	What da you consider the interest on your issue?—The cost of our
issue, with the protection which we keep in bullion, about one and a half
per cent.

506. Sir John Wrottesley.] Do you keep a larger sum in the hands of your
London bankers in consequence of your issuing notes ?—Undoubtedly.

597.	Do you include that' in your calculation ?—We are liable to have
demands on our London bankers, of a different nature from the issue of
notes; we therefore keep a balance in proportion to our probable wants of
every kind.

598.	Do you include the possible sum you are obliged to keep in the hands
of your bankers in London, in the expenses of your circulation ?—Yes, we do.

599.	And stamps ?—Yes.

600.	Mr. Smith.What would be the profit ?—The profit would vary; taking
four per cent, as the rate of interest derivable from our issues, it would be two
and a half. I am now receiving three and a half per cent., which would make
the profit upon our circulation two per cent.

601.	Sir John Wrottesley.] Supposing banks do not issue their own notes, in
what manner can they be supplied with cash if they do not discount ?—They
must discount, if they do not issue their own notes for a supply of cash.

602.	Mr. Clay 7] Why must they do so, have they not two sources from
whence they may accommodate their customers: first, their paid-up capital,
and secondly, the amount of deposits of their customers ?—Yes, if they are
equal to their wants.

603.	Is not that a legitimate source ?—I should say it is; and it may be seen
from our returns that we merely trade with our deposits and our amount of
circulation, keeping in reserve our actually paid-up capital to fall back upon.

604.	Is not in your opinion the legitimate profit of a banker the collection
and re-distribution of money, the bank lending to A. what they receive in
deposit from B. ?—I think so.

605.	Would you think it a wise course for a bank to invest in discounts the
whole amount of their paid-up capital, and the money they have in deposits
from their customers ?■—No, I think it unwise.

606.	Do you think that if a change took place in the money-market in Lon-
don, it might be difficult to procure money even upon good bills ?—Yes.

607.	Are not such periods of more common occurrence than periods when
there would be difficulty in getting money on Exchequer bills or consols ?—
It would depend upon the character of the bills; first-rate bills would, in my
opinion, be on a par with Exchequer bills.

608.	Would not that depend upon the date of the bills also ?—Yes, I mean
bills of short date and of high character.

609.	Mr. Smithy What rate of interest do you pay on your deposits ?—Our
rate varies from two to three per cent., depending upon the value of money at
the time, the amount and the probability of its remaining in our hands for
a certain period.

610.	Do you conceive, during the last year, such a profit was to be made by
lending money on good security as to allow three per cent, upon it?—No
doubt of it, upon the average of the last year.

611.	Mr. Pattison.] You state that you get only three and a half per cent,
on the money issued?—We have a certain amount to be accounted for on
demand, invested at three and a half per cent.; but by far the larger portion of
our deposits bears a lower rate of interest than three per cent.

612.	Sir John Wrottesley.'] What rate of interest do you charge on current
accounts ?—Five per cent.; we discount good bills at four per cent.

613.	Do you make up your accounts quarterly or half yearly ?—Half yearly.

614.	What rate of interest do you allow on current accounts ?—We allow
from two to two and a half per cent.; it is less on accounts current than on
deposits.

615.	Chairman.] What account do you communicate to your proprietors at
your annual meeting?—We are,by our deed of settlement, compelled to submit an

abstractSELECT COMMITTEE ON JOINT STOCK BANKS..	39

abstract of the accounts, but the proprietors have a right to appoint auditors John Amery, Esq.
who may examine in detail the accounts from which the abstract is made.	—-

616.	In the report you have furnished to the Committee (a copy of an annual "*une l836,
report made in 1835), the directors stated to the proprietors, that there was

a clear surplus profit of 3,372 l, being upwards of 10 per cent, on the paid-up
capital, and recommended a dividend of six per cent, should be declared, and
that a balance of 1,360 I. should be carried to the guarantee fund account, pur-
suant to the deed of settlement; will you have the goodness to state to the
Committee whether, in striking that balance of profit, you would feel that it was
your duty to deduct any losses which had been sustained in the year, if any
such had occurred by bad debts or otherwise ?—Decidedly I should,

617.	Should you consider that a system of declaring dividends, without
adverting to and deducting the amount of losses by bad debts, was any other
than a delusive statement of account, and an insecure mode of carrying on
banking business ?—I should consider it delusive and insecure.

618.	Sir Thomas Fremantle.~] If you felt an assurance that 10 s. in the pound
would very speedily be paid, would you consider that the whole was a bad
debt, or only consider the half as a bad debt ?—I should not consider the whole
in that case lost, but I should write off a certain proportion, before the dividend
was declared, that on a fair calculation might be equivalent to the probable
loss.

619.	Chairman.'] Do you consider that any publicity of accounts, not only
for the information of the shareholders themselves, but of the public at large,

might justly and without inconvenience be required from banks in general ?

—I can scarcely speak to the question as regards banks in general; for our
own part we should feel no difficulty.

620.	Do you conceive it would be wise and expedient that deeds of settle-
ment, before a bank commenced its operations, should be made subject to
some authoritative revision, to see that they contained no clauses that might
be unjust between the proprietors and the directors, or disadvantageous to the
public ?—I think it would be very desirable.

621.'Mr.	Clay.] Have you thought of any alterations in the existing laws
which might be useful ?—I have not.

622.	Assuming this system of an almost indefinite extension of the practice
of re-discounting, and thus enlarging, to a degree which you think dangerous,

the liabilities of those establishments to exist, are you aware of any legislative
remedy that could be applied to that evil r—I am not; it appears a question
for the exercise of judgment and discretion on the part of the banks them-
selves.

623.	There is no mode occurs to you by which you could stop thatpractice?
—Not immediately.

624.	Supposing that a period should have arrived when the banking of the
country should all be conducted by those establishments, and that this practice
of re-discounting, not stopped by any legislative regulation, should have grown
a very general one, and a revolution of prices should occur, should you not
consider that our monetary system was in very great danger ?—I should.

625.	Would you not think it desirable to apply a remedy, if one could be
found ?—I should.

626.	But none has occurred to you ?—None has occurred to me,

627.	Mr. Pattison.] Do you conceive the re-discounting system is more dan-
gerous than the issuing system —That is a question of degree, depending upon
the amount of issues, and the amount of re-discount, as compared with the
resources of the respective banks to meet the liabilities one way and another.

628.	Mr. Clay.] Do you not think that if a bank had a charter of limited
liability, a check would be found to their power of re-discounting, in the caution
that would be exercised by persons taking paper having the name of any such
bank upon it ?■—I am not aware that that would check the evil.

629.	Would it not check it in this way ; what check is there at present to a
private banker re-discounting ?—None whatever.

630.	What check, practically, prevents their doing it ?—It is considered rather
degrading to the character of a private banker, placing himself in the character
of a bill-broker.

631.	Why is it considered degrading ?—Because he incurs a certain exten-

F 4	sion40

MINUTES OF EVIDENCE TAKEN BEFORE THE

John Amery, Esq. sion of liability by his endorsement, and raises a suspicion that he has not
"——— sufficient capital to carry on his business.	. ,

14 June 1836. 632. You have stated that it is degrading to the character of a private
banker, and that it would raise suspicion that he was incurring liabilities beyond
his means ?—Certainly.

633.	Would not the same inference apply to a bank having a charter of
limited liability, inasmuch as the amount of their means of discharging their
liabilities would then be definite and fixed. Would it not be at once said that
bank of limited liability was known to have a positive capital of 10,000 L, and
no more; and is it not probable that persons would look with suspicion on
their discounting if they had their names on one million of bills?—Cer-
tainly.

634.	Would there not be that same check on the discounting, as there exists
now on the discounting by private banks ?—-Probably there might.

635.	Has not, in point of fact, that consideration practically operated so as
to check in a great degree the practice of private individuals discounting ?-—I
am not aware to what extent private bankers may discount ; it was formerly
considered a departure from sound principles.

636.	You do not consider that there has been anything like the amount of
re-discounting by private bankers, which has been for some time carried on by
joint stock banks ?—Certainly not.

637.	Do not you think that the practice of re-discounting has arisen from an
impression that those joint stock banks have an aggregate amount of wealth
in their partners, which renders it safe ?—I think that many persons would
take bills with the names of those banks, when they would have refused them
from private individuals.

638.	Sir John WrottesZep.] Have you ever made any demand oil the share-
holders for an increase of capital since the foundation of your bank ?—No,
not any.

639.	Has that arisen from not being able to get desirable investments ?—It
has arisen from the circumstance that we find we have sufficient means without
an extra call on the proprietors.

640.	You find greater difficulty in procuring good investments than in pro-
curing cash ?—Generally, I think.

641.	Has there been within the last twelvemonth a great facility for procur-
ing good investments ?—-Not a greater facility.

642.	Have you found your circulation increased in consequence of the
improvement in agricultural prices ?—Very little.

643.	Have you found any positive increase in consequence of the improved
state of the iron trade ?—Not so much as inconsequence of the accession of
customers.

644.	Of what nature are those customers ?—Chiefly manufacturers, and some
agricultural at our branches.

645.	It depends on the situation of the bank ?—Entirely.

646.	Chairman.] Under the law as it at present stands, as we see in every
newspaper, prospectuses for joint stock banks are given to the public without
any very distinct declaration of the parties who make themselves responsible
at the first creation of those banks, do you conceive it would be an useful
alteration in the law, that in any proposition for the creation of a joint stock
bank, the persons who were made bond fide responsible for such undertakings
should be compelled to add their names ?—I do think it would.

647.	Do you consider it would be prudent and advisable to prohibit any
Ranker from commencing business until a certain amount of paid-up capital
had been actually received ?—-Every bank ought to have a certain amount of
paid up capital; the difficulty I see would be in fixing the amount adequate to,
but not exceeding, the wants of the district.

648.	Suppose it was said, in relation to the nominal amount of capital, that
the actual amount of capital should be defined by law ?—That might be done.

649.	Do you see any objection to a system of joint stock banking, by which
a very large nominal amount, consisting of millions, sho.uld be connected with
a very small amount, say of 11, or 2 1. upon the shares paid up?—That might
lead to misapprehension in the minds of many persons, who might judge more
by the nominal capital than the capital actually paid up.

(659. Do you conceive that a safe system of banking will be best attained by

encouragingSllcf COMMITTEE OH JOINT STOCK BANKS.	41

encouraging the purchase of shares as matter of investment, rather than as j„hn Arnb v, Esq.
matter of speculation for sale again ?—Certainly.	.-»■.»■ ——

651.	In which mode do you think bank shares are most likely to be matter of 14 Julie >836.
investment, and not of speculation, whether by shares of a very small amount, as

of 10/., or shares of a larger amount?—I think that it does not depend so much
upon the amount of shares as Upon the discretion of the directors who have
to allot those shares. Our shares are 25 I.; and I think I may venture to say,

there are few proprietors more respectable and more wealthy than ours : with
only one exception we have not had a transfer of any share from a resident in
Stourbridge.

652.	Applying the question more generally, under which system, a system of
I I. paid up, or a system of 10.1, or 201, paid up, is the purchase of shares most
likely to be a permanent investment ?—The larger denomination I should think
would be more likely to be permanent.

653.	Do you consider that the banking system would be improved if the
prescribed mode of furnishing the accounts of the bank, showing the actual
profit and loss, was enforced in all cases as between the directors or managers
and the proprietors ?—I am not aware that it would ; a great deal must neces-
sarily depend upon the character of the parties, and the way in which they
managed their affairs. The well-established fact that a bank is prudently con-
ducted, will do more to Satisfy the public mind than any mere statement of
figures, which a number of persons would scarcely understand.

654.	Do you consider that the power reserved to the proprietors, under your
deed of settlement, of appointing auditors in order to inspect the accounts in
detail, and to be furnished with satisfactory evidence that the general state-
ment made by the directors is correct, is a useful power in your deed of settle-
ment?—I do, and giving the public all the protection that they can want.

655.	Do you consider that it would be desirable by law to provide that such
a power should be reserved to proprietors, in respect to all joiiit stock banks ?—

I think it would be desirable that all joint stock batiks should be under the
same control.

656.	Mr. Baring.] Have the proprietors ever exercised tlie powef?—Nb;

we have had but one meeting.

657.	Chairman.] Should you see any objection to the publication of accounts
from joint stock banks, similar to the accounts by law now furnished by the

- Bank of England of their assets and liabilities?-—Not if private banks, over
which we have no exclusive privileges, were compelled to make the same return.

658.	Do you consider it expedient that banks should be allowed to create or
issue any number of shares beyond the number included in the original pros-
pectus, in place of requiring additional capital from the existing shareholders ?

—-Individually I should prefer to call additional capital, if required, from the
existing shareholders, rather than increase the number of shares.

659.	Do you think the present system of the formation of joint stock com-
panies for banking, by the issue of scrip receipts, requires any, and what amend-
ment ?—I am not aware of the practice of issuing receipts ; we are very parti-
cular in the allotment of shares ; and all that we give is a certificate, which is
simply a memorandum of title, the same as a stock receipt.

660.	Do you think any account, giving on the one side the amount of depo-
sits and of circulation, and on the other the bullion and the other securities,

will furnish all the information upon which the credit of a private bank would
depend ?—I think it would.

661.	Sir John Wrottesley.~] Do you think a return under the general head of
securities would show the actual condition and solvency of the bank that made
that return ?—It would be impossible to show the solvency of any establish-
ment by the designation of securities, unless the nature of those securities
were investigated.

662.	Would it not depend very much upon the periods at which tno&'e banks
should write off the bad debts they had incurred ?—I presume that banks now
write them off every half year; that would be our practice; but most fortu-
nately we have had no bad debts to insert, but they would be brought before
the proprietors simultaneously with the statement of profits.

663.	Supposing a bad debt were made, part of which would be realized;

would you write that off ?—Not entirely, we should write off a certain portion;

0.92.	G	it42

MINUTES OF EVIDENCE TAKEN BEFORE THE

-jahnAmery, Esq. it might happen we should write off more than was actually-lost, the excess

-— would in that case be added to the profits of a subsequent year.

14 June 1836.	Supposing the bank did not write it off at all, but returned it among

its securities, that would give a very fallacious idea to the public ?—No doubt
of it.

665.	Chairman Supposing the case of a bank having several establishments
very distant, more so than Kidderminster and Stourbridge, and that through
some system of agencies bank-notes were issued, payable in a very remote part
of the country, and to be payable only at the other banks in discharge of their
engagements; do you not consider that an unfair system would be adopted as
between the public and those joint stock banks r—I do.

666.	Are you aware of any system of agencies being established at the
present moment, where notes have been issued by the agents of banks not
having branches in the neighbourhood, and where such bank-notes were pay-
able only at a distant place ?—I am not.

667.	If such a system exists, do you consider it objectionable?—Unquestion-
ably.

668.	Do you issue any bank post bills ?—Very few.

669.	Do you issue those for your customers having remittances to make?—
•Yes.

670.	If there was a substitution of bank post bills, payable so many days
after date, do you not consider that the bank issuing those bank post bills as a
substitute for bank-notes, payable in gold, would also have an advantage over
the banks issuing notes payable on demand ?—I am not aware of any great
inconvenience that would arise from bills of this description, provided they are
at short dates, and for a limited amount.

671.	Supposing bank post bills enter to any extent into circulation as a sub-
stitute for bank-notes payable on demand, do you not consider that would be
a dangerous state of things ?—I do not apprehend that it would, for the parties
may present them for acceptance, and on non-acceptance may note them.

672.	Chairman.] Supposing bank A. issuing bank post bills at seven days,
and bank B. issuing promissory notes payable on demand, came to exchange
at the end of the week, and that bank B. gives 5001, in bank post bills, payable
at seven days, to be exchanged against promissory notes payable on demand,
would not you think one had the preference as compared with the other? —
Undoubtedly.

673.	Sir John Wrottesley.] Do you never pay away bills with your endorse-
ments ?—As a general rule we do not.

674.	Do you consider it incorrect ?—I believe, since we have established the
bank, we have not paid away four bills.

675.	Are you aware that it is the general practice of banks in the country ?

-I am aware it is ; but I think it is objectionable, as exposing the connexion of

parties in the way of trade.

676.	Mr. Smithy Would there be the same facility in issuing an equal amount
of promissory notes payable on demand, and post bills at seven days sight ?—
No. I should say post bills are given for a certain purpose, viz. that of remit-
tance, and generally in broken sums.

677.	Chairman.'] Any extension of their issue beyond legitimate purposes is,
in your mind, a misapplication of the principle on which they ought to be
issued?—Certainly.

Stourbridge and Kidderminster Bank,
Sir,	Stourbridge, 7 June 1836.

•	I have the honour to enclose two papers, received in your private circular of the
, 21st ultimo, with the blanks filled up, together with copies of our annual report and deed

of settlement, for the information of the Committee of Secrecy, appointed to inquire into
the operation of the Act 7 Geo. 4, c. 46, permitting the establishment of joint stock
. banks.

Allow me to state, in explanation of the principles which govern our proceedings, that,
as a bank of issue, we deem it inexpedient and unsafe to carry on any part of our business
with capital derived from re-discounts ;* and also to make advances for a longer period
than six months, except upon good security, and then only in special cases; that we do

•	not re-issue any bills of exchange, or, as a general rule, draw upon our London bankers at
a longer date than twentyrone days. Our proprietory, which is strictly local, consisting
chiefly of persons who reside in or near the towns in which we have banks or agencies,

embraces,SELECT COMMITTEE ON JOINT STOCK BANKS.	43

embraces, besides the principal traders, manufacturers and merchants, many very wealthy j0hn Amery, Esq. *
landed proprietors, and persons out of business ; and no one can become a shareholder, by r..

purchase or otherwise, except with the approbation of our board of directors, testified in jUIie
writing. It is not our intention to pay a higher dividend than six per cent., until we have
secured an ample guarantee fund, in addition to our paid-up capital.

J also beg to mention that, since our bank has been established, we have not incurred
any loss from discounts or otherwise; that we have not a single overdue bill in our pos-
session; that we should decidedly object to renew dishonoured bills, without additional
security ; and that our return (No. 2) shows an excess of assets, over our liabilities of every
kind, of 62,306/., or 17,306/. over and above our present paid-up capital.

I have, &c.,

Right Hon. the Chancellor of the Exchequer,	J. Amery, Manager.

&c, &c. &c.

Veneris, 17° die Junii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Clay.

Sir John Wrottesley.

Mr. F. T. Baring.

Sir Thomas Fremantle.

Mr. Loch.

Mr. Strutt.

Sir James Graham.

Mr. Pattison.

Mr. PoulettThomson.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chaib.

Paul Moon James, Esq. called in; and Examined.

678.	Chairman.'] WHAT is your connexion with joint stock banking?—Paul Moon James,
A proprietor and manager of the Birmingham Banking Company.	Es1-

679.	How long has that been established ?—Seven years.	" ~~,

680.	Had you any practical knowledge of the banking business previously to 17 June 1 3 »
the opening of that bank ?—For 23 years I was a private banker, in the firm of

Galtons and James, and upwards of five years I have been a joint stock banker
and manager.

681.	Has your bank any branch ?—It has not; it had one branch, but that
was discontinued after it had been open about one year; it was withdrawn from
Wolverhampton.

682.	Are there other joint stock banks established in Birmingham?—At pre-
sent there is one joint stock bank, and two others announced; there are
branches from several other joint stock banks, the head bank of which is chiefly
at Manchester, and one, I believe, in London.

683.	What is the title of the other joint stock bank ?—The Bank of Birming-
ham.

684.	Has the Bank of Birmingham any branches ?—It has not.

685.	Do you issue paper?—We do not; only notes of the Bank of England
and gold.

686.	Do you consider that a joint stock system of banking acts in any respect
in a different manner upon the general trade of banking from what private
banking does?—Private banking, some time ago, was perfectly suited for the
trade of the country, and possessed public confidence, but several things, amongst
others the attack made on the private banks by the then Government, shook
the confidence of the public to a certain degree in private banks; there was
not that full confidence which there had been formerly, and which was neces-
sary for them suitably to carry on the trade of the community: there is an in-
creased trade, and the public favour runs very much in the direction of joint
stock banks; and, under present circumstances, I consider that joint stock
banking is better adapted than private banking to the extended trade of the
country.

0.92.	g 2	687. DoMI WPS' OF EVIDENCE. TAKEN : BEFORE THE

Paul Moon James, 68 7. Do you think the tendency of joint stock banking is now to increase in
Esq.	the country?—Too much so.

' , ■. .	688. In the event of its increasing, do you conceive the tendency of joint

17 June 1836. stock banking to be to supersede private banking generally ?—It has that ten-
dency to a considerable extent.

689.	You would think that joint stock tanking acts in a different manner,
upon commercial transactions from what private banking does, applying the
question to the facility of obtaining credit and money accommodation?—I do.
With the extensive trade of the country, and under the effect of past circum-
stances, the new system is better adapted to it; its individual responsibility, being
actually legs; the desire to afford commercial assistance is greater, and if losses
are incurred, the joint stock system enables the banking company to pass off
those losses by calls on a great number of proprietors, without stopping or ex-
citing alarms in the community. Losses that have occurred to some joint stock
banks would have shaken the credit of private banks.

690.	Reverting to the question, do you consider that the relation which ex-
ists between a joint stock bank and a great commercial community, being pro-
prietors or shareholders, affords any increased facility for acquiring custom 011
the part of the bank and obtaining accommodation on the part of the cus-
tomers ?—I think it does, every proprietor becoming a customer.

691.	Does not the issue of shares consequently give to the joint stock bankers
the means of acquiring custom and extending connexion, which does not exist
in relation to private banks ?—That depends upon the principle upon which
joint stock banks are conducted. The system of joint stock banking is liable
to abuse, and has been abused exceedingly lately. The first joint stock banks
that were established made it a rule that they would not advance upon the
shares as a security ; latterly I believe that in some of the new companies that
rule is not observed.

692.	Do you consider that that rule is a salutary rule, and one that ought to
be adhered to by a joint stock bank ?—Most certainly I do.

693.	If a system has been pursued of advancing to the parties subscribing
that capital for shares an amount equal or possibly exceeding the amount of
paid-up capital on the credit of those shares, do you not consider that the secu-
rity tp the public is greatly diminished ?—I consider it wrong in principle and
insecure in its operations to the public.

694.	Do you believe that such a practice exists ?—I ha.ve reason to believe so.

695.	Do you consider it desirable that such a practice should be prohibited
by law ?—If the practice could be prevented it, would be for the public service.

696.	If a joint stock bank keeps a reserve of its gwn shares, liable tp be
issued at its own will and pleasure, do you conceive that such a practice is for
the public interest ?—I consider it not for the public interest. If a rule or law
could be enforced that no bank should begin to transact its banking business
until its shares are paid up and subscribed for, I believe that would tend to
the public benefit.

697.	Do you consider that that rule would be still more advantageous in itsi
operation if no bank were tp be permitted to begin business until an amount
of paid-up capital," bearing some fixed relation to the nominal capital, was
actually received ?•—I do.

698.	Would the tendency of such an enactment be to draw a line between
a bank intended to be conducted on bond fide banking principle, and a bank
that was engaged ki a speculative concern, and mainly directed to the sale of
the shares of the company ?—I am not perhaps enabled to answer precisely
what the effect of a bank announcing a nominal capital, and at the same time
paying up a disproportionate amount of real capital, would be in regard to spe-
culation in those shares; but perhaps I may be permitted to observe, there is
more of absurdity, than intention to deceive, in announcing a great nominal
capital. It was taken up, I believe, from the insurance companies. In the
instance of the bank with which I am connected it was intended at the outset
to establish branches in various parts of the midland district, therefore it was
contemplated to make the paid-up capital much nearer in amount to the nomi-
nal capital; but there should be some fixed relation between the paid-up capital
and the nominal capital.

699.	Do you think the establishment of a bank of a nominal capital, we will
say of two millions, and a paid-up capital amounting to 10.?. a share, is founded

onSELECT COMMITTEE ON JOINT STOCK BANKS.

45

on a principle that will conduce to the public interest ?—Certainly not; I think Paul Moon James,
it is very absurd; it is fallacious in itself, and a deception attempted tp be i-sq-
practised on the community.	---

700.	Do you conceive it important that joint stock banking should be con- *7 June in-
ducted on a principle that -will make the stock of such banks rather sought for

as matter of investment and the employment of capital, than matter of specu-
lation as to the value of the shares in the market ?—It should be so conducted
that it should be sought for as an investment; it is very injurious to the bank
itself, and certainly not beneficial to the public, to make the shares a subject of
speculation.

701.	Is the Committee, then, to conclude that it is your opinion that a trans-
fer of the shares as a marketable commodity should be rather considered as an
incident of such property than as the object of it ?-—It should be an incident of
such a company, certainly not the object of its formation.

702.	Supposing two banks established, one on 1001, shares, and the other on
shares of 10/. each, in which case do you consider the shares would be the
most employed as modes of investment, and not principally' as an object of
speculation ?—Judging from what has passed, the smaller the amount of the
shares, the more they become a subject of speculation in reference to a large
amount of shares; what would be the settled practice would depend I think on
the circumstances of the bank.

703.	If it be desirable to promote the creation of such stock as a matter of
investment, and to withhold any undue encouragement from the creation of
stock, which is a mere matter of speculation, do you consider that it would be
advisable to fix a minimum of nominal value, below which no shares for joint
stock banking ought to be issued ?—I do.

704.	What amount do you think might be so fixed with advantage ?—It
would vary very much with the district, and the trade of that district. In
Liverpool, for instance, the required capital is much greater than would be
required in Birmingham.

705.	You will observe the question does not now point to the amount oi
required capital, but to the nominal value of each share by which that capital
might be obtained ?—It would be very difficult to fix a minimum that should
apply equally to all parts of the country: the staple of Lancaster being cotton*

and the staple of Warwickshire iron, a very different amount of capital is
required in the two instances, and shares of a given value might be raised in
one district but not in the other.

706.	Do you think it in any case desirable that the stock for banking should
be created by the issue of shares below 50?., the nominal value ?—They should
not be less in amount, in my opinion.

707.	Supposing the issue of shares of 507. nominal value, what proportion
do you think it might be expedient to require as paid-up capital, before the
bank began its operations ?—One half; 50 per cent.

708.	You have stated that in some respects you consider that the present
extension of joint stock banks is open to abuse, and might require amendment ;

in what respects ?—I think the joint stock banks have been set afloat very
lightly, in order to speculation in shares; that they have not been founded on
the wants of the community, but rather upon the avidity for gain on the part
of the speculators and persons subscribing for shares.

709.	You have already stated that those disadvantages would be, in your
opinion, checked were a greater amount of paid-up capital required before the
bank began its operations, and if shares were not less than 501, in nominal
value when issued by those banks ; do you consider that a certain responsibility
on the part of the bankers originating the joint stock bank is also requisite ;

that there should be no prospectus put forth without the names of the persons
starting it being announced with it ?—That is very desirable; I think it would
afford a useful check if it were the practice not to suffer the announcement of
any bank without the names of the parties being at the same time announced,

to whom the public could look with regard to the solidity and safety of the
proposed banking company.

710.	Mr. Clay^] You have been asked whether you think there should not
be, by law, some fixed relation between the nominal and the paid-up capital.

You have stated, in answer to another question, that you think that the spirit

0.92.	G 3	of46

MINUTES OF EVIDENCE TAKEN BEFORE THE

Puui Moon jamcs, of speculation is fostered rather by small shares than by large?—Yes, that is
Esq.	my opinion.

- 711. Is it not rather the relation which the paid-up capital bears to the

17 June 1836. nominal capital which will discourage speculation, rather than whether the
share be either large or small ? —I think that the deposit being small, and then
the shares being allowed to be sold, has fostered to a very great degree the
system of speculating in bank shares. I maybe permitted to give an instance:
a new bank was announced; the parties were respectable; the first deposit to
be 1 I.; applications were made by a great number of persons for shares ; those
persons went to share-brokers. They had applied for shares in a mere spirit of
speculation, without any intention of retaining them ; a bargain was made that
those shares should be taken by the brokers at 2 I. premium on the 1 I.
deposit.

712.	Do you recollect the nominal rate of those shares ?—£. 50 shares ; the
proposed amount of paid-up capital was to be 5 I.

713.	Then in that case the large nominal amount did not prevent the specu-
lation ?—It did not.

714.	Supposing that on shares of 101., 51. were required to be paid up,
or on a share of 1001., only 11, should be required to be paid up, in which of
those two banks do you think the spirit of speculation would be most likely to
abound ?—It is very difficult for me to give an opinion on that which has not
fallen under my notice ; but those shares of small amount are more subject to
speculation than those shares of larger value.

715.	Supposing of the small shares one-half the amount were required to
be paid up, would they be the subject of speculation ?—I think they would be
less the subject of speculation than at present.

716.	Would a regulation that no share should be below 501, of itself,
without regard to the proportion of paid-up capital, have any tendency to
check speculation ?—I think the two must go jointly to effect the check.

717.	You quoted a case in which there was great speculation, in which you
said the shares were 50 I. ?—Nominally.

718.	Will any nominal amount of shares have the effect of checking specu-
lation, unless it is combined with a positive regulation as to paid-up capital ?—•
I think it would not, unless it was combined with a positive regulation.

719.	Chairman.] Supposing 100/. share upon which 10?. was paid up, or
20 I. share upon which 10 I. was paid up, the apparently paid-up capital being
the same in both cases, but the value of the shares, and the consequent respon ■
sibility of the shareholder for further calls, being greater in the one case than
in the other, which description of shares do you think would be most the
subject matter of speculation, the 20 I. shares or the 100?. shares?—The
smaller amount of liability to pay up I believe would be most the subject of
speculation.

720.	Sir T. Frernantle.~] Will not the amount of paid-up capital required
depend very much upon the sort of neighbourhood ?—It will, clearly.

721.	You must first begin by ascertaining what amount of capital will be
required for carrying on the bank ?—Yes.

722.	You would require that that amount, or nearly that amount, should be
paid up in the first instance?—I should propose one-half of the nominal
capital.

723.	Do you mean that the nominal capital should be the capital you con-
sider requisite for the capital of that particular bank, or the paid-up capital ?—
The paid-up capital should be the capital absolutely necessary for working the
bank, and the other should be a reserve, to be called in in case of the extended
business of the bank.

724.	Is it very material whether that capital is obtained by paying up 501.
on 50 I. shares, or 501, on 1001, shares ?—The class of shareholders would be
different; the smaller amount would diffuse the shares among a greater number,
and would give rise among that number to a certain extent of speculation.

725.	Do not you think it very desirable that in a small town the shares
should be extended among the tradesmen residing in that town ?—I can only
speak of the probable effect; how far it would be desirable must depend on
circumstances. If the sole object is to establish a bank where one does not
exist, and to render that accommodation to the town not already afforded

thereSELECT COMMITTEE ON JOINT STOCK BANKS.	47

there, it may be desirable to interest a certain number of tradesmen as share- pmi Moon janes,
holders in the new banking company; but that must depend on circumstances.	Etq.

726.	Do not you consider that the distribution of shares in a neighbourhood -

gives greater strength and solidity to the bank, and protects it against the 17 June 1836.
chance of any run or panic ?—So far as those shares are held by the original
subscribers they afford security, and thus protect the company from a run;

but if from the smallness of their amount they become the subject of specula-
tion, that security is considerably lessened.

727.	Chairman.] In proportion as the shares of a bank are largely diffused,

more particularly, as by the last question, among the tradesmen of a place,

will not that extension of shares amongst those tradesmen have the effect
of increasing the demand upon the bank for accommodation, and probably
for the issues of the bank in consequence of those demands ?—I am not aware
that that would be the effect as a consequence, because the bank will be bene-
fited probably by the deposits of those persons. In a prQsperous district the
customers are the great support of the bank by their deposits ; the advances
are incidental, arising out of the nature of their account, only made occa-
sionally, not systematically as the consequence of opening an account.

728.	In proportion as the shareholders may be more or less weak will not
the tendency be that the account will become an account of advance rather
than an account of deposit ?—Certainly amongst a set of needy customers it
would, and the smaller the amount of shares the greater the probability of the
need of the customers.

729.	Mr. C7ay.] You stated that you consider it an unwholesome practice to
reserve shares on the part of those joint stock companies ; why do you con-
sider that ?—Because ostensibly it would appear to the public that the whole of
the shares have been taken up and subscribed for, and the public are not aware
of the shares held in reserve.

730.	Do not you conceive it holds out temptation to a bank having a reserve
of shares to get up by contrivances, which it would be easy to imagine, their
shares to a premium, that they may derive a benefit from the sale of them ?-—

Such has been the practice. I apprehend that the extent of the evil would
depend upon the number of shares reserved; if a small number are held till
the bank is well established, those will inevitably be sold at a premium ; but if
a small part are sold, and a large part kept back for the purpose of being sold
at a premium at a future time, I think under such circumstances no bank can
be secure, as the proposed amount of capital haS not been subscribed for, and
thus there is a deception practised upon the community.

731.	Is it not, in point of fact, a temptation to any banking company having
a reserve of shares to endeavour to get their shares up to a premium in the
market ?—Certainly it is, if they are kept back for the purpose of selling them
at a premium; it may arise out of the necessity of the moment that they
cannot find purchasers for their shares at first, or they may gain customers by
granting them shares subsequently.

732.	You have stated that joint stock banks have been set on foot by parties
not calculating precisely the wants of the country, but to create speculation;

is it within your knowledge that many banks have been so established ?—Yes,

it is.

733.	Do you think it important that shares in joint stock banks should be
held for investment ?—It is important that the shares in a banking company
should be rendered so secure as to make them a desirable investment for
persons of capital.

734.	Supposing they had a charter with limited liability, would not that make
them an infinitely more desirable investment ?—I think it would not. The
unlimited responsibility of a man worth 5,0001, would afford a security for
5,000 l.; the limited security of a man worth 100,000/. for 1,000/. would only
afford a security for 1,0001.

735.	The question refers to parties wishing to invest their money ?—I take
the same view of it in that case.

736.	You think that a person having 5,0001., who wished to invest it in a
stock yielding interest, would consider it as desirable to become a partner in
a bank with unlimited liability, as become shareholder in a bank having limited
liability, like that of the Bank of England ?—I understood the question to have
reference to the public security.

0.92.	g 4	,	737. The48

MINUTES OF EVIDENCE TAKEN BEFORE THE

Paul Moon James, 737. The question is, whether the shareholders having a charter, as in the
Em1> ease of the Bank of England, such stock would not be considered by the public
1 Jan 18 G a more <®es*ra'Me investment than when the purchasers of the stock became
1.7 une 1 3 - liable for the whole amount of their property ?—I am not enabled to give any-
thing more than an opinion, with perhaps not sufficient grounds for that
opinion ; but with regard to the actual practice of parties who invest, they are
generally influenced by their views of the state of the concern rather than by
the degree of liability. I observe that the circumstance of unlimited liability
does not prevent persons from embarking in joint stock banks properly con-
ducted,

738.	Is it your opinion upon that, as a simple proposition, that a j<oint stock
bank in which the shares were subject to unlimited liability would be as
much desired as the shares in a joint stock bank in which they were subject
to limited responsibility only?—My own opinion is that unlimited respon-
sibility at present offers no objection or difficulty in the way of investment.
I am not able to form a conclusion, for I am not aware of any limited respon-
sibility being established in the case of joint stock banks.

739.	It is in the Bank of England?—Yes; that is under peculiar circum-
stances; but the unlimited responsibility of some joint stock banks has not
prevented great increase in the value of their shares.

740.	How has that effect been produced?—By great prosperity, prudent
management, and reserving part of the profits.

741.	You say you think one-half of the nominal capital should be paid up;
why do you fix on one-half rather than any other proportion?—In the first
place, because the one-half being paid up ought to secure a sufficient capital for
the bank; and next, the extended trade of the bank is not likely to require
more than a doubling of the capital. I think to go beyond what is necessary
would be inconsistent with a due economy of capital.

742.	Chairman.] You are probably aware that amongst the joint stock
banks of Scotland there are some chartered banks with limited responsibility^
and other joint stock banks with responsibility unlimited; can you state whe-
ther there is less disposition to purchase the stock of those banks which are
without charter, and in which the responsibility is unlimited, than the stock of
the chartered banks ■?-—I am not sufficiently acquainted with the relative cir-
cumstances of those banks in Scotland; but with this I am acquainted, that
the shares of the bank in which I am a proprietor, and where the responsibility
is unlimited, are worth as much relatively as, I believe, the shares belonging to
any Scotch bank.

743.	If it is to be collected from the evidence you have already given that
there may be considered a somewhat too great disposition at the present
moment to an extension of joint stock banks, can any apprehension con-
sistently be entertained that there is a disposition to invest capital in joint
stock banking ?—There certainly is a disposition to invest capital in joint stock
banking; but the mania for speculation has been extended to all joint stock
shares recently in an extraordinary manner.

744.	You do not consider that there is any necessity for any alteration in
the law or the banking system, in order to afford additional encouragement to
the investment of capital in joint stock banks ?—I do not.

745.	Mr. Clay I] Supposing that the law were at present that banks should
be with limited liability, but that the whole nominal capital should be paid up,
do you think that such banks would be as much the object of speculation by
the present law, by which, though with unlimited liability, there may be a,
nominal capital, and no capital really paid up, or a very small proportion ?—
The law will be met in this way, that at the commencement of the bank the
paid-up capital would be merely that neeessary for conducting the banking
business; the stability of the bank would not be so well established in the
public opinion as when the amount actually wanted has been paid up, with a
reserve of another equal amount in case of necessity.

746.	Supposing, in connexion with limited liability, the law was that all the
capital should be paid up, would such a state of law more foster the spirit of
speculation thanbanks where the responsibility is unlimited, but where it is not
necessary for persons taking shares to pay up any more than a very small pro-
portion ?—I am scarcely able to answer that question.

747.	Supposing that a bank with 500,0001, were established, and with a

*	limitedSELECT COMMITTEE ON JOINT STOCK BANKS.

49

limited liability, but by law the whole money should be paid up; supposing, Paui Moon JameS}
on the other hand, a bank of 100,0001., with unlimited liability, but Esq.
requiring that only a part should be paid up; in which do you think the ————
speculator would be most likely to embark, the one in which the whole must 17 June !836-
be paid, or with the bank beginning its business with little or no capital paid
up ?—In proportion as the liability was limited, so would be the inducement to
speculate, because there would be less risk in becoming a partner.

748.	The contemplation of unlimited liability, you were understood to say,

you did not think that it operated to deter persons at all ?—It certainly has not
that effect in practice.

749.	Is a bank in which a large amount of absolute money must be depo-
sited as likely to be the subject of speculation as one in which no amount of
money is likely to be paid up, but in which there is unlimited liability ?—I am
not acquainted under any circumstances with a bank with no amount of
capital paid up; so far as regards the amount of paid-up capital, that bank
would be an object of speculation in which there was a small amount of
capital paid up, and it would have reference to the amount of capital paid up
rather than to the extent of liability.

750.	Chairman.] Have you turned your attention to the effect that would
be produced by requiring from the joint stock banks a periodical publication
of debts, liabilities and assets ?—I have.

751.	Do you consider such an alteration of the law would be conducive to
public interest ?—I do.

752.	In what form do you conceive such an account could justly be required
and safely given ?—It might be required in much the same manner as the
Bank of England is required to publish its accounts, perhaps with the addition
of the number of shares actually taken and the amount of capital actually
paid up.

753.	In what mode would you propose that the accuracy of such accounts
should be tested ?—Their accuracy must rest, I believe, upon the good faith of
those who make the returns, the directors and managers of each company.

754.	Do you not consider that it would be important that if such accounts
were furnished they should be furnished upon the oath of the accountant or
the cashier who makes them up, accompanied by the certificate of the directors
that they believed them to be true ?—The directors themselves, as far as my
experience goes, examine and verify the correctness of the accounts them-
selves, and their oath would be as necessary, were any oath required, as that of
the accomptant; but I am not aware that an oath would be necessary, or would
produce a more correct account than without an oath; and under any circum-
stances, the statement of the liabilities and assets of a banking company would
not positively ensure the true and whole state of the trade, whether prosperous
or adverse, of that banking company.

755.	Do you not consider that, independently of accounts of assets and
liabilities, to which you have adverted, every joint stock bank should be com-
pelled, either by law or its deed of settlement, to render such an account of its
profit and loss within the year to its own proprietors as to inform them from
time to time of the state of that bank ?—-It should do so.

756.	Should you see any objection to an enactment that such a clause should
be included in every deed of settlement, and that a just compliance with that
enactment should be enforced as between the directors and proprietors of each
banking company ?—I believe that such a clause is introduced into almost
every deed of settlement, and that such accounts are generally made up for the
meetings of proprietors annually.

757.	Do you consider that at the present moment there is adequate security
taken on behalf of the public that the deed of settlement upon which banking
transactions are conducted does contain all those clauses which are safe as be-
tween the directors and the proprietors, and advantageous to the public
interest ?—As far as I am acquainted with deeds of settlement, they do contain
all that is necessary.

758.	The question refers to this : is there security taken on the part of the
public, before the formation of a joint stock bank, that the deed of settlement of
that bank shall be such as is just between the parties, and will conduce to the
public interest ?-—So far as I am acquainted with the deed of settlement, it is
printed, or if not printed it is engrossed, and presented to each proprietor be-

0.92.	h	fore50

MINUTES OF EVIDENCE TAKEN BEFORE THE

Paul Moon James fore signature, so that he has every opportunity of seeing what the clauses of
Esq. ' that deed of settlement are.

"—-— 759. Upon the transfers of shares and the alterations of proprietors, do you

17 June 1836. conceive that a fluctuating body like the proprietors of a joint stock bank have
adequate knowledge of the contents and provisions of the deed of settlement ?
—That depends upon the practice of each company; in some companies upon
every transfer of shares the new proprietor is presented with a copy of the deed
of settlement.

760.	If, as you have stated, it would be expedient that in every deed of settle-
ment a copy of the profit-and-loss account to be submitted to the proprietors,
showing them from time to time the state of the bank, is requisite and impor-
tant to the public interests, would it not be desirable that some previous in-
spection by a competent authority of the several deeds, before the commence-
ment of banking operations, should take place ?—I think it is very desirable.

761.	Do you not think it also desirable that if such a provision were intro-
duced into the deed of settlement as the one referred to, namely, the publication
of a profit-and-loss account to the shareholders themselves, some means should
be taken to enforce it ?—That depends upon the precise nature of that state-
ment ; if it were to include, for instance, a list of the bad debts minutely, it
might do great mischief. I think that it is a matter which requires great
caution, and that the accounts should be generalized in such statement, rather
than particularly or minutely stated.

762.	If a bank has existed for several years, and in its annual declaration of
dividend has had no reference whatever to the amount of its bad debts, but it
has periodically declared a dividend without calculating such a profit-and-loss
account, do you not conceive a system of that description is erroneous, and
ought to be guarded against by legal enactment?—It is very bad, and ought to
be guarded against; but it could not go on so long.

763.	Mr. Clay7\ You have stated that you think the system of joint stock
banking better adapted to public convenience, and you have given us a reason
for it, that in the present extended state of the trade of the country joint stock
banks would be disposed to extend their accommodation wider, because the
shareholders would not feel so acutely or so directly individual responsibility ?
—Yes.

764.	Do you think that any private bankers have at any time declined safe
business ?—Safety is a relative term. Under the circumstances of a joint stock
bank, assistance has been rendered to a British merchant, which no private
banker in the same district would have rendered him, and the event has proved
conducive not only to the interest of the British merchant, but to the interest
of the community at large.

765.	You state this as a matter within your own knowledge, that, compared
with private bankers, there has been a greater readiness to afford accommoda-
tion on the part of joint stock banks ?—Under the whole range of circumstances
which have occurred of late years, I am prepared to answer that question in
the affirmative.

766.	You have also stated that you think losses can be divided among the
proprietors of a joint stock bank without exciting alarm ; has that happened
as a matter of fact ?—It has.

767.	Where large losses have occurred?—Yes, to a very large amount. It
was not in our district that it occurred; there has been 110 loss to interrupt an
accumulation of capital, beyond the dividend, in the bank with which I am
connected.

768.	You know a case in which a joint stock bank sustained that loss ?—Yes,
and the bank is going on with good credit; that loss impeded the dividend and
lowered the value of shares for a time, but the public were secured.

769.	Was that by a call upon the proprietors ?—There was a call that fol-
lowed this loss.

770.	A call equal to the amount of the loss ?—Much more, I believe.

771.	Do you happen to know whether there were many instances of defaulters
in that call ?—I believe not.

772.	How long ago was this circumstance ?—It was one of the earliest joint
stock banks established; being one of the earliest established, the proprietors
were very] responsible, and though they were dissatisfied, of course, with the

managementSELECT COMMITTEE ON JOINT STOCK BANKS.

51

management of the bank, and what had been done, they paid up the calls Paul Moon James,
without hesitation.	Esq.

773.	Do you know how much per cent, that call was ?—I do not.	--

774.	You have stated that the joint stock banks have a greater facility of 17 June 1836.
acquiring business ?—So far as the proprietors are enlisted in the interest of

the bank, they of course bring customers.

775.	Has that means of extending the business of the bank a very consider-
able influence ?—Very much so ; every individual proprietor considers himself
a little banker, and he has a pride and pleasure in interesting his friends in
support of his bank.

776.	Do you infer from that that there is a tendency in joint stock banks to
supersede private banking?—It has that effect.

777.	Have you many persons customers with you who never had banking
accounts before ? —Yery few; the proprietors are chiefly persons who formerly
kept accounts with other bankers in the town.

778.	They have removed their accounts from private bankers to you ?—

Yes.

779.	Is your bank in the habit of re-discounting bills to any considerable
extent ?—So far as it regards the Bank of England; by an agreement with the
Bank of England, they undertake to furnish all our needful circulation with
their own notes, and to take bills of exchange, at a certain rate of interest, in
payment for that circulation; of consequence there is a certain amount of bills
always under discount.

780.	You do not re-discount otherwise than by the assistance of the Bank of
England ?—In a very limited manner we have connexion with country bankers,

who furnish us with their surplus cash, and take in return our bills. The Bank
of England holds nearly four-fifths of the total amount of bills re-discounted.

781.	Is the amount you have from the Bank of England a fixed amount ?—

The fixed amount is 150,0007.; it fluctuates, from convenience and alterations
in trade, between 150,000 I. and 190,000 I.

782.	Is it at your own discretion what sum you shall take from them ?—'The
agreement is that it shall not be lower than 130,000?., nor larger than
150,0001. The trade of Birmingham is very considerable, and requires a very
large amount of circulation; from the circumstances of the extended trade, the
bank latterly have been very considerate, and have allowed us under that circum-
stance to go to an extent beyond the 150,000 I., to 190,000 I., and it is nearly
that at present.

783.	Do you ever issue your own notes ?—Never.

784.	Sir J. Wrottesley.] If it should exceed the amount the Bank of England
have allowed, you discount with the private bankers in your neighbourhood,

do you not ?—Yes ; we do it as a matter of mutual convenience. They used to
purchase Exchequer bills; the low rate of interest upon Exchequer bills has
induced them to make their investments in bills of exchange; that pays them a
better interest.

785.	Chairman.] Do not you think the extended re-discount of those com
mercial bills at the present moment produces an effect on the Exchequer-bill
market ?—I am not aware of the effect; I only speak from my knowledge that
Exchequer bills are not held by the country bankers as they used to be.

786.	Then must not that produce a diminution of demand for Exchequer
bills, and a fall in the price of those bills ?—Yes, it must. If the interest on
Exchequer bills be further reduced, it will have that effect of course still more ;

if the rate of interest should be raised, bankers would be "glad to purchase
them again.

787.	Does not the use to which you have adverted, of bills of exchange for
the purpose of investing capital by country bankers, necessarily tend to reduce
the demand for Exchequer bills in the market ?—Certainly, provided the amount
of Exchequer bills remains the same ; if there is a smaller amount of Exchequer
bills out than used to be, the premium would not be so much affected.

788.	Mr. Thomson.] Could you, under the circumstances of your paying
only two and a half and three per cent, upon deposits, afford to hold Exchequer
bills ?—We could not afford to hold Exchequer bills.

789.	Sir John Wrottesley.~] Would not, under any circumstances, a large
abundance of bills have the effect of keeping down the premium on Exchequer

0.92.	H 2	bills?—52

MINUTES OF EVIDENCE TAKEN BEFORE THE

Paul Moon James, bills ?—So far as they absorb that capital that would otherwise be invested in
Exchequer bills.

17 June 1836 79°- Mr. Clay.~\ You do not carry the system of re-discounting beyond that
you consider safe, but you can conceive it might be carried to an unsafe extent
probably ?—I believe that it is carried to a great extent in some instances.

791.	It is clearly possible, in your opinion, that it might be carried to an
unsafe extent ?—I think so, and I will give this reason, that it is not consistent
with the security of a bank not to have a reserve in bills of exchange, or some
convertible security, always in its own possession, and if the bank has parted
with that convertible security by a re-discount of bills, it is in an exhausted
state, and therefore not in a safe state.

792.	If a bank had its indorsement on a million of bills, and by successive
re-discounting of those bills they were in circulation, while their paid-up capi-
tal was not more than 100,0001., you would not consider that a safe proceeding
on the part of the joint stock banks?—The circumstance of re-discounting
would not affect the safety of the bank; as to its liability upon the bills re-dis-
counted, the bank's responsibility is only conditional, on the non-payment of
the bills; the bills form, independent of their indorsement, part of the securi-
ties and assets of the bank; they may come back, but then the bankers have
their security on the other parties to the bill.

793.	Do you not consider that a bank with 100,0007. paid-up capital, having
its name on two millions of bills, that is a state of risk ?—If the bills are all
good there is no risk.

794.	Is it not at least possible the bills may not be good ?—It depends on
the circumstances in which they have been discounted, and the circumstances
under which the trade of the bank is conducted.

795.	Supposing there were three millions ?—The greater the amount the
greater the risk, no doubt.

796.	There are circumstances under which there will be a risk ?—Certainly;
in the most prosperous times there will be some portion of bills not eventually
paid.

797.	Suppose there is an amount of re-discount which is indiscreet, can you
suggest to the Committee any legislative check on such practice ?—I cannot.

798.	Are you constantly in the habit of sending up to the Stamp-office any
transfers of your shares ?—Returns are made of all the proprietors from time to
time, J believe twice a year, to the Stamp-office.

799.	Supposing a share is sold, do you immediately send up notice of that ?
—We do not until the termination of the six months.

800.	At the termination of the six months do you make a point of including
every transfer that has taken place ?—Yes, we return every transfer made by
any proprietor, unless he has been a proprietor before, and his name is returned
to th,e Stamp-office. The last list exhibits a perfect statement of the proprietors
of the bank.

801.	Sir John Wrottesley Is that given in on oath ?—Yes, it is.

802.	Mr. ClayJ\ You do not consider that it is necessary to keep any deposit
either of Exchequer bills or Government stock ?—I do not; perhaps I may be
allowed to give a reason, which may operate amongst other bankers as well: at
the time of the panic in 1825, the bank in which I was a partner held Exchequer
bills and Government stock, and our losses were very great in being forced to
sell these investments ; other banks which held commercial bills re-discounted
them with little or no loss. Private credit, in times of great excitement, is bet-
ter than public credit.

803.	Sir John Wrottesley\\ You stated that under no circumstances would a
true account be rendered ?—I do not mean to say that a true account will not
be rendered, but that it might conceal the true state of the affairs of the com-
pany.

804.	In what way would that occur ?—If there were bad debts reckoned as
good debts, they would appear under the head of assets ; if there were bad bills
reckoned as good bills, they would appear as assets of the company.

805.	What system of account would you recommend as to transferring to
the bank the loss, if any, on those accounts ? —I think that a true account of
the affairs of a bank must arise out of the good faith and the good conduct of
the directors, (who are chosen by the proprietors,) in so managing that bank as
to render a faithful account at their annual meeting; the proprietors will then

seeSELECT COMMITTEE ON JOINT STOCK BANKS.	63

see the real state of the hank, and whether the directors, in recommending a Moon James,
dividend, are recommending that dividend out of the profits of the bank or not.	Es1"

It is the vote of the proprietors that decides the dividend.	1 jun 18

806.	Would it not be, even to the directors, a very difficult thing to ascertain une 1 3
the amount which ought to be placed annually to the account for loss on bad

and doubtful debts ?—No difficulty at all, I conceive.

807.	Are there not many debts owing to banks, the amount of which will be
ultimately recoverable ?—Those would be written off in full, and the dividends
received would come in under the head of profits in a future year; that has
been the practice of the banks with which I have been concerned.

808.	Do you think that if the Legislature were to require publicity, that is
the principle on which the account would be furnished ?—In a well-regulated
bank that would be the case ; but there is a temptation to conceal from the
proprietors the bad debts falling on the bank; and where the directors are pro-
prietors, as well as directors, of the banking company, there may be a tempta-
tion to deceive themselves, and to call bad debts good; but that does not apply
more to joint stock banks than to private banks, or than to traders generally.

809.	That would have a material effect on the correctness of the account
rendered by that bank ?■—That system could not be continued very long; if the
dividend was made, not out of profits, but out of the capital of the bank, that
would show itself in subsequent years, and the misfortunes of that bank would
be aggravated.

810.	Might it not happen that the bank might sustain a very considerable
loss, and, notwithstanding that, make a handsome dividend to its proprietors ?

—I believe such has been the case.

811.	Sir James Graham.] Did you mean to say there was a certain per-
centage invariably adopted on discounts ?—Fluctuating according to the value
of money.

812.	In ordinary times at what should you put that per-centage ?—The dif-
ference between the rate charged for the discount of a bill and the rate charged
for re-discounting it fluctuates from a half per cent, to one per cent, in ordi-
nary times.

813.	With reference to the case of a million, two millions in circulation, in
ordinary times you would reckon that risk at one per cent. ?—-I had mistaken
the object of the question. No bank is safe without making a reserve beyond
its capital for casualties and losses that might fall on the bank, which losses are
not at all evident in the balance-sheet.

814.	Mr. Thomson.'] At what do . you value the del credire on the total
amount of the bills discounted?—-In point of fact it has not averaged, within
my own experience, one per cent.; the whole apparent amount of loss has been
written off; then if eventually an unexpected part of the debt has beexi reco-
vered,' that has gone to increase the profit in subsequent years; but I am speak-
ing of the practice of some individual banks. I believe other banks are not so
careful in writing off.

815.	In your statement you put amongst your assets balances of account
current due to the bank, which you state at a certain sum; are the Committee
to understand that from that sum, as thus returned, you have deducted all bad
debts which might have accrued on that account ?—Everything that was either
bad or appeared likely to be bad has been written off; and, beyond that, for
any that could not be foreseen, there has been a reserve fund accumulated to
meet the emergency of debts good at the time proving afterwards to be bad.

816.	Are you to be understood that if a customer failed owing you 1,000 7.,

you would have written off that 1,000I., though there might be a probability
of his paying you6 s. or 10 s. in the pound?—If there was a certainty of his
paying 10 s. in the pound, apd such a dividend were within sight, the amount
written off would be 500?.; if there was any doubt about it the larger sum
would be written off.

817.	You would only write off that sum which it would appear tolerably
certain you should lose?—We should write off the Sum not certain of being
recovered.

818.	Sir James Graham.] Who exercises that discretion ?—The managers
and the directors, the balance-sheet has not been generally exposed to the
view of all the directors; but is taken by those directors not in business them-
selves. They look over it, and ascertain every balance in the ledger, and from

0.92.	h 3	their54

MINUTES OF EVIDENCE TAKEN BEFORE THE

Paul Moon James, their knowledge of the trade of the town they are enabled to ascertain its cor-
S(*' rectness and its validity.

17 June 1836. 819. You have spoken of the strong tendency of bankers to deceive them-
selves ; does not that refer to all bankers equally ?—Yes; and to all persons
in trade. I know banks where there is supposed to be that tendency; time
will show whether the surmise is well founded or not.

820.	You speak of that as a strong natural tendency ?—Where there is a bad
management, bankers as well as others will endeavour to conceal their difficul-
ties from themselves.

821.	If you could give the fullest effect to that which would lead to a true
account, you would recommend that every debt not actually paid up, should
be written off ?—I should, certainly. I mean bad debts.

822.	You would await the dividends, and bring them to your credit as far as
they were actually paid up ?—If the dividend is within sight, and certain assets
of the bankrupt may be seen, and the amount to be divided known, there is no
occasion to write off the full amount of the debt, but only the balance.

823.	It is only where it amounts to something like certainty that you make
any reserve r—I should prefer always writing off bad debts in full.

824.	Sir Thomas Fremantle.] Estimating the losses up to a certain day, sup-
posing no dividend received on the bad debt, you would give an accurate
account of the loss up to the day ?—That statement I referred to should be
accompanied with a statement of a reserved fund to meet contingencies.

825.	Supposing you were called upon to submit to the proprietors the actual
amount of profits on one side, and the actual amount of loss on the other,
according to the plan you have adopted, the loss side would show the! actual'
amount of loss up to a certain day ?—It would always show the real excess, if
any, beyond the actual loss, from the manner in which I have stated it; it would
depend entirely on the mode of making up the accounts.

826.	Mr. Clay 7^ You have been connected you say with this banking com-
pany for six years ?—Upwards of five years.

827.	Do you suppose that you could ascertain the amount of loss on all the
bills that the company has discounted in that time; have you ever tried to
ascertain what that loss would amount to upon the whole sum ?—I have not
ascertained the loss upon bills separate from other losses; but there could be
no difficulty in ascertaining it.

828.	Supposing you have discounted, for instance, a million and a half or
two millions of bills, what do you think would turn out now, after the six years,
to be the ultimate loss upon that million and a half of bills so discounted ?—It
would be very trifling; bankers in general do not re-discount bills that are at
all doubtful in their estimation; they re-discount bills that they think to be
good, and therefore the risk upon their return is not great.

829.	The question refers to the amount of bills which in six years you have
discounted, without reference to re-discounting; what would be the loss sus-
tained by the process of having discounted those bills ?—I am not able to
answer that question at present; a reference to our books would enable me
without difficulty.

830.	Have you any conception of the per-centage ?—The losses of the bank-
ing trade generally arise out of bad bills, more than out of balances of account,
and therefore to answer that question I should have to set the greater amount
of losses against the profits of the bank.

831.	Sir James Graham.~\ Can you conceive a better test of the prudence or
imprudence of the mangement of a banking concern than the loss per cent, on
the bills discounted ?—It is an imperfect test of prudence, because a banker
may have made a very injudicious or imprudent loan which may turn out a
loss.

832.	In a series of years, is there any better test of prudent or imprudent
management than the loss per cent, on the bills discounted ?—I think the test
of the entire loss will be much better, taking it generally, than having reference
to one source of loss only.

833.	Where do the dividends come in here to the credit side of the account ?
—There is nothing exhibited here but profit; there has been no loss to the
bank but what has been deducted previous to the declaration of profits; the
profit there is the net profit after all losses of every kind had been deducted.

834.	Mr. P. Thomson.] In an answer you gave to a question just now, did

youSELECT COMMITTEE ON JOINT STOCK BANKS.

55

you mean to say that in estimating the del credire at less than one per cent., Paul Moon James,
you meant the del credire upon the balance of the account current, or upon the	Esq.

balance of the account current and the bills of exchange ?—There were two
questions asked respecting the relative per-centage; one, the per-centage of bad June 183
bills; the other, I believe, had reference to the per-centage on the losses of
trade generally.

835.	Do you mean to say, that in stating the value of the del credire at less
than one per cent., you meant upon the whole of the balance of the accounts
current, and as well the bills discounted, or only upon the accounts current ?

—I meant to include the accounts current and the bills, after all of both appar-
ently bad had been debited to profit and loss.

836.	In this account before the Committee there is a sum of 638,000?. for
bills of exchange, and for overdue bills only 1441.-, is that the usual proportion ?

—When a bill comes back and is not charged to the account, it is held over
with a view to collect its amount; and on the 31st of December, when that
account is made up, that was the total amount of unsettled bills.

837.	The real fact on that day was, that you had only that small sum of
overdue bills ?—We had no more whatever ; all others had been taken up, or if
bad, had been written off to the debit of profit and loss.

838.	Sir John Wrottesley.] That would not show the amount of the returned
bills ?—Certainly not.

839.	Any bill which you had discounted for a solvent customer you imme-
diately charge to his account r—Yes; and it would appear in reduction of his
balance, if he had one; they cease to be overdue or unsettled bills as soon as
they are paid or charged to a solvent account.

840.	Chairman.] You have alluded to the expediency of establishing a
reserved fund; do you not consider that is an essential condition, which ought
to be imposed upon themselves by all persons carrying on the banking business ?

—No bank is safe without that; I can speak of that from experience ; in 1824
and 1825 all our losses fell back on the reserved fund, and that established the
prudence of the practice, in my judgment.

841.	If there were any revision, by a competent and impartial authority, of
the deeds of settlement of the various banking companies prior to their com-
mencing business, would it not be expedient to impose upon each and all of
them an obligation of providing such a reserved fund ?—It would be expedient,

and I believe is already contained in many deeds of settlement.

842.	Do not you think it ought to be contained in all?—Yes.

843.	Sir James Graham.] Have you a fixed opinion as to the proportion that
reserved fund ought to bear to the liability ?—I have not; it must depend
altogether on the circumstances of each bank and the district so much; a
larger amount might be necessary in one district than another; I speak only
as to the general principle of every bank reserving part of its profits as an
accumulation.

844.	Mr. P. Thomson.] Do you think any legislative enactment could have
the effect of compelling parties to make up perfectly clear and correct accounts
of their transactions as between themselves and their proprietors ?—I believe
not; at the same time, proprietors will find out incorrect accounts which the
public would not detect, or which, if they were sent to any branch of Govern-
ment, I think the Government might not detect.

845.	Is it not the case that through bankers over-rating their profits, or
under-rating their losses, they might frequently make incorrect returns of the
state of their concerns ?—I believe they might be tempted to make incorrect
returns; but these errors could endure only for a short time; the next account
would probably correct the former error, and show that they were not correct
in the estimate of their affairs previously made.

846.	Might not the next account, though it corrected the errors of the two
years back, still bear upon its face considerable errors of the preceding year, of
which it pretended to give the account ?—The consequence of paying dividends,

which ought to be out of profit, when there was no profit, would be a reduction
of the capital of the bank ; the truth would be found out in time, and the bank
working on insufficient and reduced capital would inevitably show its real state
eventually.

847.	Might not a bank go on for three or four years doing that ?—It might,

and has done so.

0.92.	H 4	848. Chairman^]56

MINUTES OF EVIDENCE TAKEN BEFORE THE

Paul Moon James, 848. Chairman.] In a deed before the Committee there is a clause introduced
Esq. for enabling the proprietors, if they should think fit, to appoint one or two
1* June 18 6 members of their body as auditors, to verify the account of profit and loss sub-
/ une 1 3 • mitted to them by the directors ; do you consider such a provision in a deed of
settlement to be a salutary one, as a check upon possible mis-statements of the
company?—To a certain extent it would prove a salutary check, but not
needful, except for the purpose of particular investigations, because at
meetings of proprietors the proprietors are very inquisitive, and make inquiries
on any dubious points with regard to the position of the bank; the directors,
moreover, are elected by the proprietors, and, in point of fact, are auditors.

849.	If by the deed of settlement the directors always felt they were liable
to such audit if required by the proprietors at large, do you not think it would
produce additional strictness in the management of the bank on the part of the
directors ?—I think it would be considered exceedingly objectionable on the
part of the proprietors; they are exceedingly jealous of having their private
accounts laid before even all the directors, although they elect them; and that
jealousy would be much increased, and it might tend to break up the banking
establishment, if any part of the proprietors were to have the revision of all the
accounts of the bank.

850.	Sir Thomas Fremantlei] In the account you have furnished to the
Committee there is an item of bills of exchange under the head of assets;
does that include the bills of exchange which are re-discounted and handed
over to the Bank of England ?—Yes, it does; because if they were all to fall
back to the banking company, they will still come with the names of the
drawers, acceptors or endorsers upon them.

851.	At the moment you present this account they are not assets in your
hands ?—Neither are they liabilities; because if we receive them back, the
money we have given is secured to us.

852.	It appears that your liabilities on deposits amount to 524,000I. ?—Under
different heads.

853.	Do you consider that a capital of 50,000?. is sufficient to carry on
a business of that magnitude ?—It has been found so, consistently with
perfect safety; for those deposits are represented by bills of exchange, which
are even as good a security as Exchequer bills, and are convertible readily to
repay those deposits if suddenly called for.

854.	Would you consider that the affairs of the bank stood in a better
situation, if, instead of borrowing money to the amount of 130,0001., the funds
of the bank were increased to that amount, and they were able to conduct
their business without borrowing from another ?—I consider that the prosperity
of the town is extensively promoted by this account with the Bank of England;
for by their furnishing this amount of capital upon good bills of exchange,
there is capital found for every purpose of the trade; and in that very active
and increasing town we find the necessity of economy in the use of capital;
and it is one of those arrangements which we consider beneficial, and conducive
to the prosperity of the town.

855.	That applies to the general principle of re-discounting ; you think that
if a bank has not a sufficient capital for the whole amount of its discounts, it
would be prudent to re-discount the bills they have ?—Provided they do not
re-discount beyond a certain extent.

856.	Would the affairs of the bank be better if you called up your own
capital, and employed that instead of raising it in this way ?—Not at all. So
long as an increased amount of capital is within call, I think it would be better
employed in the trade of the town than called into the bank before it is
wanted.

857.	Is it not a general principle in banking that a banker should not
extend his transactions beyond the amount of his own capital ?—I never heard
of such a principle in practice; neither private bankers nor joint stock bankers
ever limit their transactions to their own capital.

858.	Mr. P. Thomson Do you think any bank could be carried on if it
went on such a principle as limiting its transactions to the amount of its paid-
up capital ?—Certainly not; it would not be worth while to open a bank. The
same applies to merchants and tradesmen generally. If the re-discounting is
done to a limited amount, and a sufficient reserve is made to answer the calls
of the bank, I think it is not inconsistent with sound principles of banking.

859. SirSELECT COMMITTEE ON JOINT STOCK BANKS.	57

859.	Sir Thomas Fremantle.^ Is not the fact of your re-discounting bills a paul Moon James,
-proof that your capital is not sufficient for the demands of the neighbourhood Esq.

for commercial accommodation ?—Certainly it is, so far as regards the paid-up

capital of the bank; but then it is supplied by re-discounting to a limited 17June 1836.

amount, and this without issuing our own promissory notes, which might

furnish a capital. The town would not be better served if the proprietors paid

up their full amount of capital equal to the amount of discounted bills.

860.	Under the head of balances of accounts current due to the bank,

111,000/.; is there any security for those balances?—We have-security on
many of them; they are advances made to the most prosperous and most sub-
stantial men in the town, whose property and general reputation in business
render loans to them perfectly safe and secure.

861.	Can they be properly called assets in your hands?—They are not
described as in our hands. Such occasional advances are so much involved in
the whole principle of banking, and the practice of banking to make occasional
loans to customers is so general, that the security of the customer having those
advances must be reckoned as part of the assets of the bank.

862.	Mr. Clay7\ Are any large proportion of those proprietors, or any of
them directors ?—There is no reference whatever, in making an advance to a
customer, whether he is a proprietor or not; if he is in good credit, keeps a
good account, and wants an occasional advance, we consider him entitled to it.

863.	Of the 111,0001., is any proportion, and, as far as you can recollect,

what proportion, advanced to shareholders ?—I am totally unable to answer
that question, for the reason I have just given; of the proprietors, 305 in
number, so far as most of them are customers of the bank, it is probable that
some of them want an occasional advance, and from the general tenor of their
accounts we consider them entitled to it.

864.	Sir Thomas Fremantle.] Do you in your transactions consider those
advances as constituting a lien upon their shares if not repaid ?—The deed of
settlement expresses that in the case of the failure of any customer, he being
proprietor, the value of his shares shall be set off against the debt due to the
banking company.

865.	You do not require any special acknowledgment to that effect?—He
signs the deed of settlement. In that statement sent up to the Chancellor of
the Exchequer there are a great many debts covered with good security ; if a
person wants money, and does not appear to have sufficient property of his
own, we require security before we make the advance.

866.	Is any money lent on mortgage and real security ?—We do not lend
on mortgage ; we lend frequently on the deposit of writings, on what is con-
sidered as an equitable clai n upon such writings. It may happen a gentleman
is called upon to pay off a mortgage of 5,000 I.; he comes and says the money
is not ready, but he asks to have it for a week; we will lend him the 5,000 l.,

and he will leave his writings; it is a common practice to lend in that way, and
it affords a great accommodation.

867.	Chairman.] You consider that not to be a permanent investment on
mortgage, but rather a temporary accommodation on a collateral security ?—Pre-
cisely so. Tradesmen also are in the habit of bringing their writings, and ob-
taining a loan upon the deposit of them for a few months.

868.	Sir Thomas Fremantle.] Does that continue two or three years ?—It
does not.

869.	Have you adopted the Scotch system of opening cash credits, on the
security of two or three individuals, with the person to whom you make an
advance ?—-We have not; such securities are not part of the settled practice
of the bank, but sometimes adopted.

870.	Mr. P. Thomson.] What is the general rate of interest you charge on
discounts ?—Four per cent, at present; it varies with the value of money.

871.	Has it been lower than four per cent. ?—It has been three and a half;

I speak now of large transactions and good bills; it is governed by the value
of money in London and Liverpool.

872.	With respect to those deposits which you have distinguished in your
paper as deposits bearing interest, are those left with you for a fixed period of
time?—There is an understanding and stipulation, that unless the money lies
three months no interest is allowed, to prevent money being left one week and
called out the next.

0.92.	1	873. Are58

MINUTES OF EVIDENCE TAKEN BEFORE THE

Paul Moon James, g-o# Are the Committee to understand, from the separation you have made
in the account of deposits and balances of account of deposits due from the
17 June 1836. bank, what are termed deposits are sums left there for a fixed time ?—They are
not; they are left liable to 14 days' notice; a person may have it after having
left it for three months; if he draws it out before three months he receives -no
interest; he may have it at any time afterwards by 14 days' notice.

874.	Why do you make a distinction between deposits bearing interest and
the balance of accounts current ?-—The account was made out in correspond-
ence with the direction of the Committee. There are certain accounts but
little disturbed on which large sums are left, but still subject to be called out
without much notice, and for those we allow a smaller rate of interest.

875.	How do you class those ?—Balances of accounts bearing interest.

876.	What are included under the head of " balances of accounts current
bearing interest" ?—The running accounts with our customers, on which all
deposits of cash are left, on which, by agreement, we allow interest. The
railway companies, for instance, having large sums lying beyond an agreed
deposit to defray the charges on their account, they expect we shall allow
them a small interest.

877.	Is there a considerable portion of those deposits on which you have
allowed two, two and a half, and three per cent. ?—There is but a small
amount; the standard rate of interest allowed by the bank is two and a half
per cent. Recently, from the increased value of money, as being worth now
four per cent, in London, we have been obliged, in order to retain some of
our large deposits, to allow three per cent, instead of two and a half; that is a
rate liable to fluctuation.

878.	What do you consider to be the fair difference between the interest you
pay and the interest you receive ?—One per cent.

879.	You are satisfied with one per cent ?—In general we are; we get more
if we can.

880.	Sir T. Fremantle.~\ What are the deposits not bearing interest ?—We
have many customers that agree to leave a certain sum without interest
always floating on the surface of their account, as compensation for any charge.

881.	Mr. P. Thomson.] You state that the del credire on the whole of the
transactions may be estimated at rather under one per cent. ?—There has been
a per-centage of return instead of a per-centage of loss; the calculations of
losses to the bank actually written off have exceeded the eventual amount of
loss.

882.	You state that you consider the one per cent, between what you pay
and what you receive as sufficient to afford a profit to the bank ?—There is a
commission besides upon certain current accounts.

883.	Out of which you have, of course, to deduct the amount of loss upon
the transaction, under the head of del credire ?—Certainly.

884.	You have, besides this difference, in fact, a commission ?—Yes, in cer-
tain cases a commission.

885/What is the amount of that commission ?—A quarter per cent, on
returns of account. The commission on bills of exchange is almost discon-
tinued in the midland district; from the facilities of getting bills discounted in
London without commission, we have been obliged to discontinue that charge
in regard to bills of exchange.

886.	That being discontinued, the profit is merely the difference between
the rate of interest you pay and the rate of interest you receive ?—Yes.

887.	With regard to the accounts current, do you charge a quarter per cent,
commission ?—We charge a quarter per cent, or take an equivalent in the
shape of a deposit; the charge is made twice a year. What payments we have
made for a customer, we charge him upon those payments a quarter per cent.,
or receive an equivalent, if he chooses to leave a deposit.

888.	Sir T. Fremantle.~\ Have you a large number of commission accounts ?
—-We have a good many.

889.	Is it a great accommodation to tradesmen with small capital to be
enabled to open commission accounts, instead of being expected to keep a
balance in your hands ?—Yes.

890.	Chairman^] Have you turned your attention to the extension of branch
banks over the country;—Yes, I have.

891.	Do you c'onsider it expedient that such branch banks should be dealt

withSELECT COMMITTEE ON JOINT STOCK BANKS.

59

with as if they were parent banks; if you do not, in what respect do you con- Paul Moon jame*,

sider them to differ from parent banks ?—I think they are liable to many ^scl-

objections : they are opened in remote places, with little or no responsibility ; "

and at present the branches do not all pay licences, although they come into a 17 June 1 3 '

town where the banker of the town is made to pay a licence ; the branch itself

does not pay a licence.

892.	Do you consider that they ought to pay the same licence which is paid
by the parent bank ?—Yes, I do, on the principle that they transact the busi-,

ness of a chief bank.

893.	Do you consider that the transactions are less liable to be controlled,

and effectually checked, than those of the parent bank ?—They certainly are,

in practice.

894.	Is not this difficulty then increased in proportion as the branches are
multiplied, and as their distance from the parent bank is increased ?—-Very
much, and probably a foundation is laid for great future evils.

7- 895. Is this a part of the law which, in your opinion, requires amendment ?

— I think it does.

896.	Are you aware whether any issue of bank paper has taken place at any
of those branches, not being the paper of those branches, but being the paper
of the parent bank, dated at such parent bank, and payable on demand only
there ?■—I am not able to answer that question.

897.	If such a system prevails, namely, that branches are allowed in remote
places to issue promissory notes, not payable at the places where they are
dated, but paid at another and remote place, namely, the parent bank, do not
you consider that that is open to considerable objections ?—I conceive it is
open to considerable objections, and ii\ violation of the law, which directs that
all bank-notes shall be payable at the place where they are issued.

898.	Are you aware of any system of agencies being established as subordi-
nate both to the parent bank and the branches, under which the banking
business is carried on and issues of money take place ?—I believe there are such
agencies, both of joint stock banks and of some private banks.

899.	Do you consider that those agencies ought to be brought under the
same regulations that would be applicable to the branch banks ?—I do, as
being pregnant with similar dangerous consequences.

Martis, 210 die Junii, 1836.

/

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Attwood.

Mr. Clay.

Sir John Wrottesley.

Sir Robert Peel.

Mr. Goulburn.

Mr. Loch.

Sir James Graham.
Mr. J. A. Smith.
Mr. Strutt.

Sir Thomas Fremantle.
Mr. Pattison.
Mr. P. Thomson.
Mr. Morrison.

The Right Hon.

the CHANCELLOR or the EXCHEQUER,

in the ChAIII.

Mr. Joseph Gibbins, called in j and Examined.

900* Chairman.] HAVE you turned your attention to the establishment of Gibbins.
joint stock banks in this country ?—I have.	--

901.	Are you individually connected with any of them ?—With several.	21 June l8s6,

902.	With what joint stock banks are you connected ?—The Birmingham bank-
ing company, the Gloucestershire banking company, and the Hampshire banking
company. I hold some small interest in several other companies.

903.	Are you a director of any of those banks, or merely connected with them
as a holder of stock ?—I am a director of the Birmingham banking company.

904.	How long have you been so P—I was the originator of that company, and
took the management for two years; since that time I have been one of its
directors.

°>92*	1 2	905. Have6o

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.J. Gibbins. 905. Have you been the originator of any " of the other companies you have
————— named?-—The Gloucestershire banking company, and the Hampshire in part.
ax June 1836. g06. Have you been concerned in originating any other joint stock banks ?—
Not in originating them; I have had shares in the early period of some of the
others.

907.	Have the goodness to state the dates at which those several banking com-
panies commenced ?■—As far as my memory goes the Birmingham banking com-
pany commenced on the 1st of October 1829, the Gloucestershire banking
company on the 2d of July 1831, and the Hampshire banking company, I
think, the 1st of May 1834.

908.	Where do you reside ?—I reside near Birmingham.

909.	The Birmingham banking company being the first of those, and you
having stated that that originated with yourself, will you state to the Committee
the steps you took in order to promote the formation of that company ?—I was
solicited by a company then in existence, called the Manchester and Liverpool
district banking company, to take the management of a branch of their company
at Birmingham; I considered Birmingham was of sufficient importance to have a
joint stock bank of its own, and I called upon a few individuals in Birmingham to
inquire whether they were disposed to unite in such an undertaking ; they were
disposed, and we then formed a company.

9ig. When you say you formed a company, what steps did you take in the
formation of the company ?—We issued a prospectus, with a subscribed capital of
500,000/., 10,000 shares of 50/. each, 5/. paid up on the ist October, with a
further call of 5 I. to be paid in February, or at any subsequent period the directors
might require.

911.	Was that prospectus signed by you and any other individuals, when it was
given to the public ?■—I do not recollect; the prospectus stated the parties who
would unite as the first directors of the company; I can furnish a copy of that
prospectus, but I have not one in town.

912.	That implied a sort of proposed arrangement for the formation of the
company?;—It did.

913.	What were the steps you took for the completion of that project, and the
ascertainment of the opinion of the mercantile company at Birmingham, in favour
of the project?—We never advertised in the paper, we only distributed some of
the prospectuses to such persons as we were desirous should unite in the concern ;
and as soon as a certain number of shares were subscribed for, we considered the
company formed, reserving the other shares to be distributed among the persons
who were likely to promote the interest of the bank.

914.	What proportion of shares were so distributed, and what proportion were
reserved ?—I think the company was considered formed when 5,000 shares were
subscribed for.

915.	Did you consider the company formed on the subscription for those
shares, independently of the payment of the portion of capital which you required
at the first formation ?—The prospectus was issued about two weeks before
the 1st of October, when 1 I. a share was paid on subscribing, and the remaining
4 I. was payable on the 1st of October, the day the bank opened.

916.	Was the whole amount of 5/. deposited upon the subscribed shares paid
up on or before the 1st of October ?—Yes; there might be a few exceptions for a
few days, but not longer.

917.	Will you inform the Committee how many shares were subscribed for
previously to the opening of the bank for business, and what proportion were
reserved?—I think upwards of 5,000 were subscribed for and paid up.

91 8. Was the deed of partnership prepared at that time?—It was prepared at
that time, and signed soon afterwards; it bears date, I think, on the 1st of
October.

919. Was the deed of partnership signed before 01* after the opening of the
bank for the purposes of business ?—I believe it was signed after ; there was a pre-
paratory deed signed previously ; there was not time to prepare a deed, therefore
there was an agreement prepared by our solicitor, and we required the parties so
subscribing to sign the deed as soon as it was prepared.

. 920. Under what management was the bank conducted after it opened for
business ; was it under the provisional directors, or by the appointment of a new
board of directors?—The provisional directors were appointed directors for the
first year,

931. BySELECT COMMITTEE ON JOINT STOCK BANKS.

61

921.	By what mode of appointment?—A general meeting of subscribers was Mr.J.GMms.
called, when the provisional directors were proposed to be directors for the first year. -

I was the manager for two years.	21 June 1836.

922.	At that period you have stated 5,000 out of 10,000 of the shares have
been subscribed for; what steps were taken with respect to the issue of the re-
maining 5,000 shares ?—The remaining shares, I cannot say whether exactly 5,000,

but about that number, were retained and distributed by the directors to such
individuals, in such manner as was thought most likely to promote the interest of
the bank, and they were distributed by the board of directors; they had meetings,
and applications being received, they distributed them in such numbers as they
thought proper.

923.	When you state that they were distributed in such manner as was most
likely to promote the interests of the bank, will you state to the Committee what
you mean by that ?—To individuals whose respectability and influence were likely
to bring business to the bank.

924.	The distribution of those reserved shares was with a view of establishing
and extending the connexions of the bank P—It was.

925.	Do you consider that that is the effect of the distribution of the shares of
a joint stock bank ?—If they are judiciously placed.

926.	Then comparing the operations of a joint stock bank and a private bank,

you consider that the distribution of the shares enables the joint stock bank to
acquire a more extended connexion and greater business than a private bank could
do ?—I do, if they are judiciously placed.

927.	You think that the effect of that principle is the extension of joint stock
banks, arid the substitution of joint stock banks for private banks pretty generally
throughout the country ?—I think that joint stock banks are increasing throughout
the country, and private banks are, of course, diminishing; many of them are
merging their concerns with the joint stock banks.

928.	By whom was your deed of settlement prepared?—By Arnold & Haines,

solicitors of Birmingham.

929.	Was that submitted to any legal authority in London?—I believe it was.

930.	Did the directors give any special instruction as to the covenants that were
to be introduced into that deed of partnership ?■—The directors went through the
deed with the solicitor and read it cairefully over; the deed is printed.

931.	What other calls were made upon your shareholders?—No other call has
been made.

932.	Have all the shares been subsequently distributed ?—Yes. ,

933.	Have you a branch ?—No, we had one, but it was relinquished.

934.	What were the grounds of relinquishing that branch ?—Becayse we
thought the business might be transacted at Birmingham ; it was a branch esta-
blished at Wolverhampton; when the Wolverhampton company established their
bank there we thought we might transact our business at Birmingham without the
expense of a second establishment at Wolverhampton.

935.	Do you consider that the difficulty of carrying on a banking business
through a company is considerably augmented by reason of the multiplication of
branches, and the distance they may be at from the parent establishment ?—Cer-
tainly, where they are distant.

936.	Was the course you have described as having been pursued in the forma-
tion of the Birmingham bank, the same as you adopted in the formation of the
Gloucestershire and Hampshire banking companies ?—We adopted the same course
in the Gloucestershire banking company at first.

937.	In what points did the course differ from the Birmingham ?—The Bir-
mingham banking company is not a bank of issue, neither was the Gloucestershire
banking company for the first 15 months.

938.	In the formation of the court of directors, in the issue of shares, and in the
other particulars you have described, with reference to the Birmingham company,

were the same steps taken by you with respect to the Gloucestershire P'—They were
very much the same.

939.	Have you any connexion with Gloucestershire?—Yes, as concerned in
the banking company.

940.	Before the formation of the banking company, had you any ?—Not any.

941.	What steps did you take to establish the Gloucestershire banking com-
pany?—Several gentlemen of Gloucestershire thought that Gloucester presented

0.92.	33	a goojJ62

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. j.Gibbins. a good opening for a banking company, and were desirous that my brother and

___ myself should unite in forming one.

3i June 1836. 942. They applied to you ?—Yes.

943.	Did you visit Gloucester on that occasion ?—1 did.

944.	Was any public meeting held on the subject ?—Yes, by circular ; we never
advertised in the paper; merely a circular to suqh individuals as we were desirous
should unite in the concern.

945.	What was the number of shares it was agreed to take in the Gloucester-
shire company 1—The same number of shares and the same subscribed capital, but
the company was considered formed when 4,000 shares were subscribed.

946.	That is to say, upon a prospectus of 10,000 shares of 50 the company
was considered to be farmed upon a subscription for 4,000 ?—-Yes.

947.	How much was to be paid upon those ?—Five pounds each.

948.	At what date did the Gloucestershire banking company commence busi-
ness in the year 1831 ?—On the 2d of July.

949.	Was that amount of 51, paid up before the commencement of the company?
—It was paid up on or before the 2d of July.

950.	Was the deed of settlement at that time signed by the holders of the 4,000
shares?—It was not ready for some days afterwards; the proprietors undertook to
sign the deed as soon as it could be prepared.

951.	How long after the commencement of the banking operations at Glou-
cester was the deed of partnership signed ?—In a few weeks by most of the
parties.

952.	Was that deed of partnership submitted to any general meeting of the
proprietors, before it was finally decided on ?—It was read through by the directors
with the solicitor; it is similar to the deed of the Birmingham banking company;
nearly a copy.

953.	Do you not consider that it is essential that each deed of partnership
should contain covenants regulating the duties of the directors of the company, in
reference to the proprietors at large ?—Yes.

954.	Do you not consider it advisable that such deeds of partnership, "though
they may be prepared by the directors, should also be submitted to the considera-
tion and approval of the proprietors, who will be bound by that deed ?—Every
proprietor may be furnished with a copy, and if he has anything to submit, it would
claim the consideration of the directors and solicitor.

955.	But there was no previous consideration of the deed of partnership on the
part of the proprietors at large?—No; I think it would be found inconvenient for
the proprietors at large to go through all the deed.

956.	Are they not bound by it?—They are, certainly.

957.	Do you not consider that before a banking company commences its opera-
tions, by the result of which operations the proprietors at large, as well as the
directors, will be bound, the directors should have the means of ascertaining whe-
ther the provisions of that deed are such as will conduce to the prosperity and
benefit of the company ?—The directors are appointed by the proprietors, whom
they place confidence in, and the directors look over the deed and see whether the
provisions are such as in their opinion will protect the proprietors.

958.	You have already stated that you consider it reasonable that there should
be provisions in that deed to determine the responsibility of the directors to the
proprietors at large; would it not follow from thence that the approval of the pro-
prietors at large before the bank commences its operations, is necessary for the
promotion of the interests of the company ?—The prospectus contained some infor-
mation upon those points, the prospectus pointed out the deed shall be prepared
containing certain clauses.

959.	What steps have been taken in the Gloucestershire banking company with
respect to the 6,000 reserved shares 1—They were distributed by the directors
among persons likely to benefit the establishment.

960.	Were those issued at par, or were they issued at a premium?—They were
issued first at par, but subsequently they have been issued at a premium.

961.	Has the distribution of the whole of those shares taken place 1—Yes.

962.	Mr. Clay.] You have a strong opinion as to the facility of procuring
banking business by reserving shares to distribute among persons in the neighbour-
hood ?—Yes.

963.	Having had much experience in forming these banks, do you think any
private banker, speaking generally, is capable of enduring competition with them for

;	a seriesSELECT COMMITTEE ON JOINT STOCK BANKS. 63

a series of years, taking into consideration the facility just referred to ?—I think it Mr. J. Gibbins.

must depend very much on circumstances, on the district, and on the way in which -------

the private banker conducts his business, and the way in which the banking com- 2i June 1836.

pany conduct theirs. The banking companies vary in their mode of conducting

business.

964.	Have they, or not, in your opinion, very decided advantages in competing
with private banks ?—I think they have advantages.

965.	In the places where you have established banks, they have taken a very
considerable amount of business from the private banks, have they not?—They
have.

966.	Have most of the persons dealing with joint stock banks been persons who
had previously accounts with private bankers ?—Yes.

967.	Were some of them shopkeepers and others who had had no banking
account previously ?—Some of them were.

968.	Take the Gloucestershire bank, for instance; are you a director of that
now?—I am not a director; according to the regulations I could not be a
director of a second company. I am a director of the Birmingham banking
company.

969.	What proportion of the customers of the bank do you think are persons
who had not previously banking accounts with a private bank ?—I should think
the proportion was very small; I cannot say what part.

970.	A quarter part?—No, I should say not.

971.	A tenth part ?—-Perhaps a tenth.

972.	The effect, in fact, would be this; there is a power in these banks, if the
shares are distributed judiciously, of gaining business from private bankers already
established ?—Certainly, because they hold out an inducement.

973.	The inducement being the participation in the profits their own accounts
create?—Yes.

974.	Do you think that the branches are not profitable, or that they are dan-
gerous?— That they are dangerous when too far extended.

975.	From what peculiar source do you think the danger arises ?—Because
they cannot be so immediately under the inspection of the directors where they are
widely extended; nor can the individuals who manage them in general be so well
acquainted with the local circumstances of those places.

976.	Must not each of them, in fact, be considered to have all the risks of an
original bank substantively?—Yes, I consider so.

977.	If, therefore, a branch has less, either of discretion or capital or local
knowledge than would be necessary for a bank established in that town, it becomes
less safe than if it were a single banking establishment ?—Less safe to its pro-
prietors.

978- You say that the Birmingham banking company does not issue notes?

—No.

• 979. But the Gloucestershire banking company does issue notes ?—Yes.

980.	How soon after its establishment did the Gloucestershire banking com-
pany begin to issue notes ?—About 18 months.

981.	Did they attempt to get an advance from the Bank of England ?—They
had a small discount account with the Bank of England.

982.	With any engagements for an advance of money?—There was an under-
standing that they should have a discount account with the Bank of England to a
certain extent; but that was to a small extent.

983.	Why did they relinquish that and take to issue notes ?—Because upon the
union of a bank at Gloucester, the Gloucestershire banking company thought it
would give them advantages.

984.	What was the peculiar advantage you anticipated as compared with the
issue of notes ?—Part of the business could not, without positive loss, be 'conducted
by the issue of Bank of England notes, and which can be done with our own
notes.

985.	What interest had you paid for the advance to the Bank of England?—

Three per cent, to a limited amount.

986.	Would it have been necessary to pay interest on a certain portion of the
advance the Bank of England might be willing to make to you, whether you
used it or not ?—No, not as the Gloucestershire banking company stood, it would
not.

987.	What is the nature of the engagement between the Birmingham banking

14	company64 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. j. Gibbins. company and the Bank of England ?—There is an understanding that the account

-- shall always be to a certain extent under discount; there is a minimum and a

21 June 1836. maximum.

988.	Do you consider that there is an inconvenience in keeping to that mini-
mum, that you might have to pay interest for a sum you did not use ?—The Bir-
mingham banking company have not felt that inconvenience materially, but it
might arise in some ; the Gloucestershire banking company, for instance.

989.	There they would either be compelled to pay interest on money they did
not use, or to find or create business in which to employ that money?—'The
Gloucestershire banking company have a large surplus of money which they are
now obliged to employ in the London market; consequently they could not take
money from the Bank of England while they are so situated.

990.	What is the amount of circulation of the Gloucestershire banking com-
pany ?—I think it is 130,000 /.

991.	Does it vary considerably at different periods of the year?—Not very ma-
terially.

992.	What rest or reserve, in your opinion, is it necessary to keep always in cash
or Bank of England notes, with reference to the circulation of notes payable on
demand?—We have an amount more than equal to our circulation, which we con-
sider always available.

993.	In what shape is that?—Money at call in London with the brokers.

994.	Do you mean money with your correspondents in London?—Yes, and
with the bill brokers, at interest at call, and in bills we have from them.

995.	Bills which could be rediscounted ?—Yes.

996.	When you say you have a sum more than equal to your whole circulation,
you include a certain amount of bills, procured on discount?—Yes, we include
first rate bills, and money, and Government securities.

997.	Having procured bills on discount, and invested money you had in your
own notes, is it your practice to re-discount those bills ?—It is not; we find those
bills daily fall due, by which we regulate our cash account.

998.	Are you aware that the practice has been carried to a considerable extent
amongst joint stock banks of re-discounting bills?—Yes, because we have fre-
quently discounted for them.	1

999.	What is your opinion of that as a practice ?--I think that it may be
carried to an improper extent; an occasional discount under certain circumstances
I do not consider objectionable.

1000.	Supposing it were carried to this extent, that the bills bearing the
endorsement of a banking establishment should at any time be three times or four
times the amount of the paid-up capital of that bank, should you consider that an
injudicious mode of carrying on business ?—That would depend upon the nature of
those bills.

1001.	Would there not be this inconvenience, that if they were in the habit of
accommodating to that extent persons in business in that neighbourhood, the power
of controlling that accommodation would not be in themselves, but vary with the
state of the London market?—It would vary with the state of the London
market.

1002.	Is not that an inconvenience quite apart from*the character of the bank,
which may arise from the system of re-discounting?—I think it is to a degree.

1003.	Might it not produce a necessity for a very sudden contraction of the
accommodation before afforded?—Yes; where bankers relied on re-discounting
it might have such an effect.

1004.	Is it not evident that that might be productive of serious injury in the
neighbourhood of such bank ?—It might be attended with very serious incon-
venience.

1005.	Has it been the habit of the banks of which you have taken the manage-
ment to keep a portion of the money, either of their own paid-up capital or in
money confided to their care, in Government stock or Exchequer bills ?—We had at
first, in the Gloucestershire banking company, some in bank stock and in the three
and a half per cents., but we consider the best mode is to keep it in bills, because
they are not subjected to the same fluctuations.

1006.	You do not run the same risk of losing money when you are compelled to
turn them into money ?—No.

1007.	Do you think they are assets always as available as Government stock
or Exchequer bills ?—Yes, as they are falling due every day, if we found a pressure

onSELECT COMMITTEE ON JOINT STOCK BANKS. 65

011 the money market, instead of sending them up to be renewed for other bills, Mr. J. GAbins.
we should reserve the cash proceeds.	_

1008.	Your opinion of the immediately available nature of those bills must a 1 June 1836.
depend a good deal on the length of time they have to run ?—We generally have

them from two to three months.

1009.	Is a three months' bill in a difficult state of the money market at all times
negotiable in London 1—Generally.

1010.	Is that true to any considerable extent ?■—Yes.

1011.	Is it not beyond the period the Bank of England would discount ?—No,

not three months.

1012.	Do they continually discount to the extent of three months?—Yes.

1013.	Recurring to the opinion you have expressed on the subject of re-dis-
counting, does any mode occur to you by which, supposing such practice to be dan-
gerous, the Legislature could usefully interfere to check it ?—No, I do not see how
they could.	1

1014.	Is there generally in the present state of the law, as you have had much
experience in the working of the system, any alteration of the law which you think
it expedient to suggest to the Committee ?—I think in reference to the localities of
banking companies, that the distance of their branches from the head office might
be limited, and with reference to the amount of their shares, this might be
defined.

1015.	Do you think the shares ought to be all of large amount, and of what
amount ?—I should incline to say from 50I. to 100?., not less than 501.

1016.	Chairman.'] What would your opinion be of the principle upon which
a banking company was established, which raised its capital by 100,000 shares of
5 I. each ?—That would depend upon how they were distributed.

1017.	Having already stated that you would consider it expedient that a mini-
mum should be imposed upon the value of the shares issued in the market of 50 l.t
what would be your opinion of a banking company that, in place of taking the mini-
mum you have stated, took in lieu of 501., five pounds?—I should not incline to
take shares in such a company.

1018.	In which case do you think that the shares are more likely to become
matter of permanent investments by capitalists, or mere objects of speculation to
those who bought and sold ?—The larger the amount of the share, the more likely
to be permanent investment, I think.

1019.	Which do you think most the object of a bank, to have its stock for per-
manent investment, or for the purpose of speculation ?—For permanent invest-
ment.

1020.	Mr. Clay.] You would consider that the object most important to ascer-
tain, with regard to those companies, would be the high respectability of the share-
holders'?—Yes.

1021.	You would think that any legislative regulations and provisions might
fail in effect in securing good conduct, unless the perfect respectability and sol-
vency and wealth of the shareholder could be insured?—Yes.

1022., What do you conceive to be the most important object to be kept in
view ?—To have a respectable proprietary.

1023.	More important, probably, than any legislative provision as to the mode
of conducting business ?—Yes j for I think such a proprietary will exercise dis-
cretion in conducting its affairs.

1024.	Connected with your opinion, it is more expedient to have shares of some
amount, that is, from 50/. to 100?., than shares of smaller nominal value; you
would consider that the real amount of money called for would be still more
important than the nominal value of the shares in preventing their being objects
of mere speculation ?—The amount paid up 1 must depend upon the • extent of
business.

1025.	The question refers to the effect in checking the spirit of speculation;

would not the money absolutely required from the shareholders, bearing a large
proportion to the amount of the shares in the market, be of great importance ?—It
should bear a larger proportion than it generally does.

1026.	You would consider that as likely to check the spirit of jobbing?—It
might, in some degree, check it. I do not know that it would effectually.

1027.	Is it not more embarrassing to the mere speculator to have to pay a large
sum of money at once than a smaller one ?—Certainly.

0.92.	K	1028. Does66

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. Gibbms. 1028. Does not he like to have counters to play with that cost 110 money?—
si June 18 6 Certainly.

a une ' 1029. Chairman.] You have spoken of the mode adopted by the banks of issu-
ing the shares they had reserved for the purpose of increasing their connexion,
and you have stated that shares are under such circumstances sometimes issued at
par, and sometimes at the premium which they bear in the market?—Yes, at a
premium in reference to what they bear in the market.

1030.	Supposing the issue of 100 shares, which in the market bore a premium
of 10/. per share, and the transfer of those shares, for the purpose of acquiring
business, at par, is not that, in point of fact, the purchase of so much business for the
price of 1,0001. ?—Yes, if they would fetch that price in the market.

1031.	Where the shares were issued either at par or at a premium, was that done
at the discretion of the directors acting on behalf of the company ?—Yes.

1032.	Was the amount of reserved shares which were in the hands of the direc-
tors, which in one case amounted to 5,000 out of 10,000, and in another to
6,000 out of 10,000, ever made known to the public at large?—Yes, it was made
known to the proprietors at large at their annual meeting; it was reported how
many shares were taken and how many reserved, and also what premium had been
received on any which had been issued at a premium.

1033.	Do you consider the reserve of shares, particularly where it amounts to a
considerable sum, in regard to the discretion of the directors, to be a safe system
df carrying on banking business ?—I do not see the bearing of that question.

1034.	Do you consider it safe that a bank should commence its banking opera-
tions with a very large reserve of shares which have not been subscribed for ?—If
the parties commencing are well known and sufficiently responsible persons.

1035.	Do you consider it matter of indifference whether the number of shares
put forth in the prospectus were actually subscribed for or not ?—It is not material
that they should be subscribed for immediately; indeed there is an advantage in a
bank having shares for distribution for a time.

1036.	Is that advantage any other than the advantage you have already de-
scribed, as giving to the bank the means of acquiring extended business ?—In other
ways ; for if the shares rise to a premium it is an advantage to the first subscriber.

1037.	Do you not consider it important that the public should have some test
as to the amount of capital and the extent of responsibility which is pledged for the
security of the bank 1—The shareholders in the company with which I am con-
nected have the statement at their annual meetings.

1038.	Have not the public as much interest in this as the shareholders and
directors?—No, I think not; the public are safe whether the shareholders lose
or not.

1039.	Is not the security of the public in proportion to the amount of capital
pledged to the bank?—No, it does not depend upon that entirely.

1040.	On what does it depend then ?—The proprietors are liable to the extent
of any loss that might arise.	,

1041.	In the case of the Gloucestershire bank it would appear that the amount
paid up on the commencement of the business was 20,000 L, namely, 5 I, upon the
4,000 shares paid ; if the whole amount of shares had been subscribed for, there
would have been a capital subscribed of 50,000/.; do you think it a matter of
indifference whether a bank4 commences its business with 50,000 I. or 20,0001.
—I do not see that it makes any difference to the public.

1042.	Would not the result be that there would have been 50,000 I. paid-up
capital available, and next that the capital represented by the 6,000 shares which
were actually in the possession of the shareholders, and the private property of
those shareholders, would have been ultimately responsible to the customers?—Yes,
but in commencing the business it was very small, therefore the 20,0001, in con-
ducting the business was quite equivalent to a larger sum now.*

1043.	Supposing those shares had fallen to a discount?—Still it would have
been competent to the proprietors to have made a call upon their shares.

1044.	Suppose it had fallen to 5 s. discount, how could they issue the further
shares ?—They could not.

1045.	Then would not the security of the public in that bank have been pro-
portionably diminished?—The proprietors who first formed the company had a
responsibility quite equal to any engagements the company entered into.

1047. That

* 1836, Aug. 18.—This capital is now increased to 100,000/., besides having a guarantee fund
of more than 20,0001.SELECT COMMITTEE ON JOINT STOCK BANKS. 67

1046.	That responsibility would have been infinitely increased if the whole had Mr. j. GMina.
been issued?—Yes.	"~~T

1047.	^ the principle of reserved shares be adopted, does not it follow that a 21 •*une 1 3 •
banking company with 20,000 shares might commence business with 500 shares
subscribed for?—That is an extreme case; it would have been very different, if

those shares had been reserved for years; but it was only for a few months, or a
a year or two. It is to the advantage of the company to be select in the disposal
of them, rather than let every applicant have them.

1048.	If the extreme case is objectionable, where is the line to be drawn; to
you think that would be safe without one-half being subscribed for ?—1 think it
would be right to begin with one-half, and probably the Gloucestershire banking
company had, in a very few weeks, one-half of their shares disposed of.

1049.	D° not you consider it desirable that there should be a certain amount
of capital proportioned to the nominal capital of the bank actually paid up before a
bank is authorized to commence business ?--—I do not see how they could commence
without a portion being paid up.

1050.	You are aware that by the law, as it now stands, there is no obligation
on a joint stock bank, with respect to the amount of capital to be paid up before it
commences business; do you consider that state of the law expedient to be
continued ?-—Certainly, it is necessary ; I think that a certain payment should be
made before a company can commence business.

1051.	Do you consider that the paid-up capital ought to bear a certain relative
proportion to the nominal value of the shares ?—I think it should bear a proportion
to the business generally with regard to the transactions.

1052.	Supposing 20,000 I. required for the starting of a bank, should you consider
it a matter of indifference whether that was acquired by 1 s. deposit on each share,

or 5 I. paid up on each share ?—I do not think any company should commence
with less than 5 /. paid up on a share.

1053- Supposing shares of 100 do you think a paid-up capital of 5 I. on
shares of that amount, would be sufficient to render it expedient to commence
business with?'—I do not think it would on 20,000 /. divided into 200 shares of
100/. each.

1054.	Mr. Clay.~\ With regard to the advance of the Bank of England to the
Birmingham banking company, does the manager of the branch bank of the
Bank of England to whom you apply, or direct the directors of the parent establish-
ment in London, exercise an opinion on the quality of the paper on which the
advance is made ?—'The manager at the branch bank at Birmingham exercises an
opinion; I suppose the bills are sent to London and undergo the inspection of
parties appointed in London as well.

1055.	Is "it in your recollection that any paper so submitted to the Bank of
England, or the agent of the Bank of England, as part of the security for an
advance, has been rejected as not good ?—There have been certain bills that have
not come within the regulations of the Bank of England at the time I was the
manager of the Birmingham banking company, at the early formation of it, that
were objected to; for instance, bills which were beyond the date, or bills on which
thei'e had been some alterations.

1056.	Any that were not strictly mercantile accommodation bills?—I do not
recollect any bills rejected on account of their being accommodation bills, because
we did not send such to the Bank of England.

1057' Will the Bank of England, on account of the public, take any bills as
security for the advance of capital they afford, that would not be discounted by a
bill broker in London ?—*-1 am not aware that they would ; I think they would not.

1058.	Then in what consists the advantage of having money from the Bank of
England, more than sending those bills up to a bill broker to be discounted ?—

Frequently the terms of the Bank of England are lower than those of bill brokers.

1059.	That is to say, you get an advance from the Bank of England lower than
the market rate in London?—When the Birmingham company made an arrange-
ment with the Bank of England, the understanding was, they were to have an
allowance of one per cent, under the usual rate, which was then four.

1060.	You stated that the Gloucestershire banking company would not find
it advisable to have an advance from the Bank of England ; have the goodness to
explain to the Committee why it was not advisable to take an advance from the
Bank of England ?—Because they would not have a use for the money; they are a
bank in an agricultural district as well as a commercial, where they have an excess

0.92.	k 2	of6$ MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. Gibbins. of money ; the Birmingham banking company, on the other hand, resort to the
—r—— Bank of England for discounts, where they can employ the money.

21 June 13. 1061. Do they discount at a rate that would not allow them a profit, that would
not be sufficient difference between the rate they would have to pay and that they
would have to receive, or is it that these could not find sufficient employment for
money they already have ?—The Bank of England in giving a discount at three
per cent, would expect that a banking company so transacting its business should
re-discount with them the bills of the district which they had discounted, and not
employ their cash in the London market.

1062.	The Gloucestershire company has more money from paid-up capital or
deposit than they can employ ?—More than they can employ in Gloucester.

1063.	Is there a certain amount of money deposited with you for which you pay
interest?—Yes.

1064.	Is there any notice required for calling it out?—If the amount is
considerable.

1065.	What notice is required to be given?—A few days' notice.

1066.	In any instance longer than a few days ?—I do not recollect that, there is
perhaps seven or eight days.

1067.	You state it to be, in your opinion, of paramount importance to acquire a
highly respectable proprietary; do you think that the having a charter of limited
liability would have a considerable effect in inducing respectable persons to purchase
the shares of a banking company for a permanent investment ?—-I think that it
might.

1068.	Do you think there would be some concomitant evils, and if so, have the
goodness to state what they are ?—It might make the directors more negligent in
looking after the concern, if they knew that their liability was limited.

1069.	Do you not think the respectability of the proprietors, which you have

stated to be so important, would have the effect of securing the affairs of the bank

being better looked after, than with a less opulent or less vigilant proprietary, and

if so, might not that counteract the danger you have spoken of?—It might in

many banks j but I think there might be a danger to the public in limiting the

liabilitv.

•/

1070.	The danger you apprehend is, that it might render the directors less
cautious in their management ?—In some companies I think it might; a company
might be got up perhaps that were less careful in their management.

1071.	Is there any other danger you apprehend?—No, the public would not be
so well protected of course.

1072.	Supposing it should be matter of fact, that in the banks with unlimited
liability, as at present, there has been found great indiscretion in the management,
would that alter your opinion ?—It falls on those who associate themselves with
such banks.

1073.	Do you think that, supposing a bank to have gone beyond in its accommo-
dation the means strictly at its own disposal, namely, its paid-up capital and money
on deposit, by the process of re-discounting, or in any other mode of changing
money, the call on the proprietors of such a bank, at the moment of emergency,
would be likely to be attended to, so as to prevent temporary embarrassment ?—
That would depend on the respectability of the proprietors.

1074.	Do you think from your knowledge of the mode in which calls are paid
up, and the command persons have of ready money, it is likely that a call of that
nature would be attended to ?—I think in the Birmingham and Gloucestershire it
would.

1075.	Mr. Smith.] In your deed of settlement is there any covenant as to the
time when a call may be required ?—On three months' notice; but the second
instalment of 51, per share they can call at any time; we cannot call at a subse-
quent time without three months' notice.

1076.	Mr. Clay.] In how short a time might that be required to be paid?—It
was to be paid on the following February after the bank opened, or on such future
day as the directors might appoint.

1077.	Supposing you wanted increased capital, within what time could you call
for it?—We might issue notice requiring it to be paid up directly.

1078.	The next day?—Yes.

1079.	Mr. Smith.] You think it would be paid at a day's notice?—1 do not
think that the company would require it, but I think the larger amount would be
paid directly in case it was called for.

1080. WhatSELECT COMMITTEE ON JOINT STOCK BANKS,

1080.	What would a 5 /. call produce in the Gloucestershire bank ?—£.50,000. Mr. J. Giblins.

1081.	What is the object of that particular provision as to the notice in making *-

the calls?—I do not know that there is any further object,but that at the formation 21 J°ne l8^6-
of the company the payments were to be made under certain regulations, subject

to three months' notice on calls of 51.

1082.	The calls being made are to provide for any necessities of the bank; that
being the object of making the call, with what view is that length of notice required ?

•—That persons may have time to convert their property without inconvenience.

1083.	Does not that consult the convenience of the proprietors in preference to
the safety of the bank ?—I do not think that it places the bank in at all an unsafe
position.

1084.	Does not the provision of requiring that notice consult the convenience
of the shareholders in preference to the safety of the establishment of the bank,

and the convenience of those who deal with it, in case of difficulty ?—Not unless the
bank is imprudently conducted. A bank ought never to be in a situation to require
it to be paid up in that way.

1085.	Chairman.] What is the alternative provided in the event of parties not
paying up the call ?—It is provided in the deed of settlement that the shares shall
be forfeited and sold.

1086.	Mr. Goulburn.] Have you had any shares forfeited?—No.

1087.	Mr. Smith.] Does that destroy the liability of the shareholder?—Not
till the shares are passed into other hands.

1088.	Sir John Wrottesley.~\ Have you no other remedy than the forfeiture of
the shares, in case they do not pay up the capital?—I believe not, otherwise than
•selling the shares.

1089.	Mr. Attwood.] Are the proprietors chiefly customers of the bank?—Yes.

1090.	If you were to make this call of 50,000 would not they draw it out in
their account ?—Those that have money to their account might give a check
if they choose to do so.

1091.	Do you think the others would be able to pay up their calls?—Yes*

I should conceive so ; or they might, if they pleased, sell their shares.

1092.	Chairman.] Your answer, as to the forfeited shares, applies to the Bir-
mingham company, does it not ?—It applies to both ; there are some shares in the
Birmingham company fallen in to the company through bankruptcies.

1093.	Mr. Smith.] When a share is forfeited, you conceive the person who was
the owner of that share, ceases to be a partner in your establishment?—There have
not been any shares forfeited, but I should think that would be the case.

1094.	Supposing a share is forfeited, do you not conceive that after the forfeiture
of that share the previous owner of that share is released from future liabilities as
regards the bank ?—In case of forfeiture of a share, I take it that the com-
pany would sell that share to other individuals, and pay over the balance, and that
the person purchasing it would become the responsible person, and that the liability
of the person who previously possessed it would cease.

1095.	Do you conceive his liability would not cease till the sale of the share ?—•

Not to the company, nor to the public for three years.

1096.	After the forfeiture of the share, the individual would cease to participate
in the profits of the bank ?—Yes.

1097.	Do you not conceive that ceasing to participate in the profits, he would
cease to participate in the risks of the concern, whether that share was or not sold
to a new holder?—The company would sell the share.

1098.	Chairman.] Suppose the state of the market was such that they could
not sell it ?—We have had no such case, therefore I do not know how to conceive
of it.

1099.	Are not the chances of the forfeiture of shares greatly increased if the
amount paid up upon the share is but very small ?—If the bank was in bad repute,

and the shares were at a discount; but if the bank was in good repute they are not
likely to be forfeited.

1100.	Is not the chance of forfeiture of a share greater if a party has paid only
l 7. upon that share than it is if he has paid 50 I. ?—Certainly.

1101.	Then in proportion as the amount of the paid-up capital is small, the
possibility of a forfeiture by non-payment of the call is increased?—Yes.

1102.	Is not the power of making a call, and increasing the available capital for
the purposes of the bank, an important advantage both for the protection of the
-public and the protection of the bank itself?—Yes.

O.92.	K 3	1103. It70

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. GMins. 1103. If you had a very small amount of paid-up capital, would not both the

- public and the bank have a diminished power over calls which they would have to

21 June 1836. make upon the shareholders ?—That must depend very much upon circumstances.

1104.	What are those circumstances ?■—Whether those shares are at a premium
or a discount.

1105.	The whole question of forfeiture implying that shares are not at a pre-
mium, will not the circumstances be those supposed by the question ?—If a bank
was in that state that the shares were-at a large discount, of course the difficulties
would be increased as to the forfeiture of shares if they were not taken up,

1106.	Are transfers suspended in the bank you are connected with till the calls
are paid up ?—They are not transferred till they are paid, but our calls have
generally been paid up to the day.

1107.	What calls have they made in the Gloucestershire banking company?—*
They have made a further call of 2 I. 10 s., and a further call of 2 I. ios. payable
next July; many of the parties have anticipated the latter call by leaving money
in the bank.

1108.	Making 1 o I. on each share ?—Yes.

1109.	In the Hampshire bank what call has been made?—Only the first 51.

1110.	In the Birmingham?—£.5.

1111.	Therefore in two of those banks no call whatever has been made beyond
the original deposit, and in the third only two separate calls of 2 /. 10 s. each ?—
Yes.

1112.	Mr. Attwood.~\ What is the capital of the Gloucestershire banking com-
pany.—£. 100,000. when the last-mentioned call is paid.

1113.	Mr. P. Thomson.] What lien has the bank on its proprietors ?—
According to the deed of settlement, there is. a lien on the shares belonging to
any individual who is indebted either by way of discount or in any other way.

1114.	Is there any other power than the forfeiture of shares?—Proceedings
may be taken against a debtor; I know that proceedings have been taken against
proprietors.

1115- The question refers to a proprietor in a bank refusing to pay a call made
upon him ; within your knowledge, have any proceedings been taken in such a
case?—I have not known of an instance where they have refused to pay calls; the
shares would be liable to forfeiture ; therefore if they could not meet the call they
would sell the shares.

1116.	Do you think it would be possible for the bank to proceed against a pro-
prietor for not paying up his calls ?—That is a legal question I cannot answer.

1117.	Mr. Smith."] Can the shares be sold without the approval of the directors ?
—No.

1118.	Mr. Patlison.] In the first distribution of shares the bank of course are
anxious to select, as the proprietors, persons of property and influence in the neigh-
bourhood ?—Yes.

1119.	In the sale of the reserved shares is there the same object in the selection
of the persons to whom they are to be transferred ?—Yes.

1120.	Have you ever known instances of the original subscribers selling their
shares at a premium at the same time that the bank were issuing their new shares
at a premium in the market?—Yes, because they sell them from various causes,
removing from the district, or uniting with another banking company, or various
causes, as they would sell canal shares or any other property.

1121.	Then the first distribution of shares to those individuals was not anything
like a permanent investment, but a traffic in shares? —In numerous proprietaries
there will be some individuals who will dispose of their shares from various reasons.

1122.	Mr. Attwood.] Has that happened to any great extent in either of those
companies?—No.

1123.	The shares have not been held by persons who shortly sold them out
again?—No, not to any extent; one of the clauses of the deed of settlement
provides that shares shall not be transferred till after the expiration of twelve
months from the time they were granted.

1124.	Mr. Clay.] Taking into consideration the answers you have made, that
in case of a call, where your proprietors have money deposited with the bank, they
probably would pay the call by a check upon the bank, and taking into considera-
tion that hitherto, as the shares of those banks have been at a premium, there has
been a motive for paying the calls promptly, and that in bad times, or with the
shares at a discount, there might not exist the same motive, are you not of opinionSELECT COMMITTEE ON JOINT STOCK BANKS. 71

that the security such a bank has against times of emergency must depend more Mr. J. Gibbins„

upon the prudence with which it is managed than on any reliance upon calls -

from the proprietors?'—Certainly it must depend very much upon the prudence at June 1836.
with which it is managed, in connexion with the responsibility of the proprietors.

1125.	The responsibility would rather be with reference to their immediate
capability ?—-The immediate capability of the parties.

1126.	Supposing a bank found it necessary to extend the means at its command,

it would rely much upon the assistance to be gained from a call upon the pro-
prietors ?—I should conceive the proprietors in a situation immediately to assist the
bank, but that the bank must be very badly managed to get into a situation to
require it.

1127.	Do you think that if a bank had a charter of limited liability, and it was
perfectly certain that the proprietors were not liable beyond the extent of their
shares, there would be more caution on the part of the public in dealing with them ?

—I think that they might not trust them to the same extent, but that would very
much depend upon the character of the persons engaged in the bank.

1128.	The public would probably look at the proceedings of such a bank as they
now look at the proceedings of an individual; that is to say, if they observed the
bank, having limited liability, was extending its accommodation very much beyond
the known amount of its capital, a suspicion as to its paper would arise ?—It would.

1129.	They would exercise the same judgment as is now exercised with
regard to individuals ?—Yes.

1130.	Does any other difference beyond that you have stated, that there would
be less caution with banks of limited liability, occur to you 1—Less protection to
the public, because the protection to the public would be limited.

1131.	That is to say, that ultimately they might not be so likely to be solvent
as banks with unlimited responsibility ?—Yes.

1132.	Are you at all aware of private country banks which have failed where
dividends have been paid ?—Yes.

1133.	For instance, since the year 1826?—I do not know what the aggregate
has been.

1134.	Sir John Wrottesley.~\ What was the motive for making the call payable
next July with a considerable amount of capital in hand ?—It was done at the
wish of many proprietors; some would have preferred paying it up at once, but
the other proprietors thought they could not use the money, and therefore wished
to defer it.

1135.	Did you make that call at that distant date in consequence of the un-
certainty of being able to invest that money profitably ?—It was made as a matter
of prudence, considering that as the company had extended its business it was
desirable to have a larger amount paid up and invested in the best way they could.

1136.	Did you not state that there was a considerable surplus of capital in the
hands of the company?—Yes.

1137.	How do you reconcile that with making a fresh call?—Because we con-
sidered, from the extent of business the bank was transacting, it ought to have a
larger paid-up capital.

1138.	Have you determined in what manner that fresh capital is to be invested ?

—We shall invest it in bills and money with the brokers.

1139.	Have you been able with the present capital to procure a sufficient
quantity of bills ?—Not in the district in which the bank is ; we always can do so
in London.

1140.	Your object in making that call is not merely to enable you to discount
out to provide for any emergency ?—The object is to have a large fund in case of
any pressure upon the country, that we may assist our friends at the time.

1141.	In what manner do propose to invest it?—In negociable bills.

1142.	Have you not stated that you cannot procure a sufficient number of nego-
ciable bills?—We can in London always.

1143.	Sir Thomas Frematitle.~\ At what rate ?—It depends upon the rate at the
time ; it is now three and a half per cent.

1144.	That is higher than the rate at which the Bank of England and its
branches make their advances ?—Yes, to banks using Bank of England circulation.

1145.	Do not you consider that the advance of the Bank of England at a lower
rate of interest than they would pay in the market, has a tendency to put in cir-
culation in that part of the country a larger amount of money than otherwise would

O.92.	k 4	beMINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. Gibbins, be in circulation?—No, I do not see that it has that bearing; we purchase bills ;
-- we do not sell our bills in the market at three and a half per cent.

21 June 1836. 1146. You have certain bills in your hands which you wish to re-discount ? —
No ; we do not re-discount; we send our cash up to London to purchase bills in
the London market.

1147.	Mr. Smith.'] What is the ordinary rate of discount in Gloucestershire r—■
Four per cent, merchants' accounts.

1148.	Sir Thomas Fremantle.~\ The question referred to the case of Birmingham
only; were you to re-discount with the Bank of England, would the bank at
Birmingham be able to obtain from the Bank of England 130,000/. at three per
cent, for the purpose of discounting bills so as to make a profit ?—Yes.

1149.	At what rate of interest could they.be able to obtain bills in London?—
It would depend upon the state of the market; sometimes at two and a half per
cent., sometimes at three per cent., sometimes three and a half.

1150.	Can you obtain bills at those rates?—Yes, in London and Liverpool.

1151.	If the rate of interest rose beyond that, would they still obtain cash from
the Bank of England ?—Yes; there is an understanding that the Bank of England
is to have always an open account with them.

1152.	Supposing the necessity of the neighbourhood did not require you to have
such an advance, how would it answer your purpose ?—We must then make a fresh
arrangement.

1153.	Has not the obtaining this advance from the Bank of England a tendency
to reduce the rate of discount in that neighbourhood ?—It has a tendency to
equalize it, I think ; because if we have to give a higher rate of interest we must
charge a higher rate of interest.

1154.	Having it at three per cent, you can afford to lend it at four ?—Yes, and
if we have to pay four, we must charge four and a half.

1155.	Mr. Pattison.] Your arrangement with the Bank of England at Bir-
mingham is in lieu of the circulation which otherwise your bank there might issue ?
—Yes.

1156.	Mr. Smith.] You issue at Gloucester?—Yes.

1157.	Have you ever turned your attention to the cost of your issue ?~I do not
know exactly what it may be, but it is not much; perhaps one per cent.

1158.	Sir Thomas Fremantle.] The bank at Birmingham has no branches and
does not issue notes ?—No.

1159.	Supposing you chose to issue notes, what amount of notes do you suppose
it possible you could keep out in constant circulation ?—It is difficult to say, but
I should think from 130,060/. to 150,000/.

1160.	As much as you obtain from the Bank of England by your arrangement
with them?—Yes ; with respect to our arrangements with the Bank of England,
we made that arrangement with them at the commencement; it has gone on
pleasantly, and we do not wish to disturb it; we have paid a good dividend to our
proprietors, and our Bank holds a high place in the estimation of the public.

1161.	Sir Thomas Fremantle.] If you could keep out in circulation notes equal
to the amount you receive from the Bank of England, and your paper costs you
two and a half per cent., and you pay to the Bank of England three per cent., why
do not you, in justice to the proprietors, issue your own notes ?—The difference
between that would not be an object.

1162.	Supposing it'one and a half per cent., would not it be an advantage to
them ?—It might be some advantage to them, but it would not be the same advan-
tage as it is in an agricultural district; but the company have never seen it right
to adopt it.

1163.	Mr. Pattison.] In fact you have preferred the Bank of England circula-
tion, for which you are not responsible in any measure, but they are ?—I do not
know that that is exactly the case, but the Birmingham banking company were the
first who commenced with the Bank of England, and we have been always desirous-
of continuing that connexion.

1164.	Sir Thomas Fremantle.] The great difficulties arising from any change
would be, that you would not receive the great assistance from the Bank of
England you do, under the arrangement not issuing your own notes, if you
were a bank issuing your own notes?—We should not; but if we were a
bank issuing our own notes we should not require the Bank to discount for us, at
least that is our opinion.	1

1165.	Mr. Attwood.] You say that the company have a lien on the shares, does

thatSELECT COMMITTEE ON JOINT STOCK BANKS.

73

that lead to the practice of the shareholders in the bank obtaining advances by Mr.J.Gibbias.

over-drawing their account ?—Not with the Birmingham 01* Gloucestershire banks ; —-

certainly there is no stipulation of that nature. If ah individual is known to have ai June 1836.
100 shares in the banking company, they know there is no risk of advancing occa-
sionally ; but they do not make it a practice to advance on shares.

1166.	Would not a proprietor think himself entitled to an advance in conse-
quence of that ?—Customers sufficiently in their confidence occasionally have an
advance, whether they have shares or not.

1167.	Chairman.] Do you think the practice of making advances on the shares
of shareholders is a safe or a prudent one ?—I do not think it is a principle to be
held out.

1168.	Is not the principle admitted in the covenant to which reference has been
made ?—-There is a covenant that there shall be a lien upon them.

1169.	Is not that an admission of the principle, that the shares are made avail-
able as securities for the purpose of obtaining accommodation ?—They are available
for that if accommodation is given, but there is no stipulation on behalf of the
directors to make advances on those shares; if advances are made in any such way,

the bank has a lien on the shares of such parties.

1170.	Is not the practical result the same, that by your deed of settlement those
shares are available as securities for advances ; that by special contract between the
parties those shares were pledged to the bank ?—In one sense it would make it
almost compulsory upon the bank to make the advance, and in the other it is
optional.

1171.	Without assuming it to be compulsory on the bank, but leaving it to the
bank to exercise its own discretion, would that discretion, if wisely exercised, in
your mind, lead to advances in the deposits of its own stock ?—Not certainly to
any extent, but occasionally it might do so with safety.

1172.	You state that under the arrangement you have made with the Bank of
England, and the mode in which your bank is conducted, you have been enabled to
declare a satisfactory dividend to your proprietors ; what have been the dividends
you have declared ?—In the Birmingham banking company, 10 per cent, on the
paid-up capital from the day of commencing business.

1173.	On the 50,000/.?—Yes.

11 74. In what way are your annual accounts made up, and your balance struck
before you declare that dividend ?—The annual accounts are made up by the
general manager, and submitted to the directors, who appoint three auditors to
examine the accounts, which are signed, and allowance made for any debts which
may be considered doubtful; so much allowance has been made, that every year we
have had to write back a profit from loss account, the bank having received more
than the amount at which they have estimated the debts.

1175.	How are the auditors appointed; by what body ?— By the directors.

1176.	Are they appointed by the shareholders at large or the officers of the
establishment ?—Generally the officers of the establishment, who report to the
shareholders at large, that the accounts have been audited by such and such indi-
viduals.

1177.	But in no case are the dividends declared without writing off the amount
of bad debts ?—Anything which is considered doubtful is brought before the
directors, and the amount is written off' that they consider fully adequate to any
loss which can arise.

1178.	If you suppose the management of a bank, in which year after year divi-
dends have been declared without writing off the amount of bad debts, should you
consider that a just and equitable mode of conducting a banking establishment ?—

Certainly not; if there were any debts that were at all doubtful, an allowance
ought to be made.

1179.	Sir Thomas Fremanlle.'] What amount of net profit at the end of the
year have you been in the habit of dividing among the proprietors ?—It has been
a little more than half.

1180.	You have reserved half of the net profits for a contingent fund ?—Yes,

nearly so.

1181.	Does that reserved fund form a part of the profits of the next year?—

No, it is carried to what is called the guarantee fund ; we had a guarantee fund at
Birmingham at the end of last year of about 26,000/., that is, rather more than
50/. per cent, on our capital.

0.92.	l	1182, Chairman.]74

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J. Gibbins. 1182. Chairman.] Do you consider a guarantee fund to be an essential principle
■	of a bank?—Yes.

21 June 1836. 11 S3. Is that provided for by your deed of settlement ?—Yes.

1184.	Do you think it ought to form part of every deed?—I think it ought.

1185.	Are you aware that there is no provision by law which will enforce the
insertion of such a provision in deeds of settlement ?—No.

1186.	Do not you think it desirable that such an alteration of the law should
take place ?—I do not know what the bearing of that might be, it might operate
unfairly to the present shareholders if it was so settled.

1187.	Do you think it essential to the safety of the bank, and the due conduct
of those persons, that some guarantee should be provided ?—I think it highly
desirable.

1188.	Sir Thomas Fremantle.] Take an unfortunate year that the net profits
should not be sufficient to give a dividend of 10 per cent., should you think it
right to make up the dividend of 10 per cent, out of the guarantee fund ?—That
would depend upon the amount of the deficiency, and the prospect for the
future.

1189.	Supposing there was a good prospect for the future, you would not think
it unfair to draw on the guarantee fund ?—That must be a matter of consideration
with the directors at the time.

J190. Chairman.] Do not you consider it a fairer mode of proceeding on the
part of the directors that the loss which occurred should rather fall on the dividend
of the year than on the reserved fund of the bank?-—Perhaps it may be, but that
reserved guarantee is a guarantee fund to meet any extraordinary loss that may
occur.

1191.	Sir Thomas Fremantle.] Do you suppose the capital of your bank is fully
adequate for all the ordinary purposes of the bank, and that it might be applicable
to meeting any extraordinary losses?—Yes ; but we have never, in any year, had
losses to such an extent as not to leave us a profit.

1192.	Chairman.] Do you consider the ultimate object of the guarantee fund
to be a security for the protection of the public with the bank, or the keeping up
a particular rate of dividend for the proprietors ?—I consider both.

1193.	Which is the primary and which is the secondary object?—The protection
of the public certainly.

1194.	Mr. Pattison.'] Has that reserved capital arisen from the profit of the
bank, or the sale of reserved shares ?—It has arisen chiefly from the profit of the
bank; in the Gloucestershire bank the premium on the sale of shares has been
appropriated to other purposes.

1195.	How has it been appropriated in the Birmingham bank ?—It has been,
appropriated partly to the reserved fund and building the office.

1196.	Chairman.] To what purpose has the premium on the shares been applied
in the Gloucestershire company ?—In the purchase of two banking concerns.

1197.	Will you explain what you mean by the purchase of two banking
concerns ?—The buying up the goodwill of two private banks; the premium on
the shares is not considered to form any part of the profits.

1198.	Have you any objection to state what was made by the sale of reserved
shares at Birmingham or Gloucester?—I cannot tell without reference.

1199.	Mr. Pattison.] What is the paid-up capital of the Hampshire bank?—
It is 5 /. a share; I do not recollect whether it is 6,000 or 8,000 shares.

1200.	Have you retired entirely from the management of that ?—I never had
anything to do with the management otherwise than in the formation at
first.

1201.	Chairman.] Does the Gloucestershire bank invest any portion of its capital
in mortgages of real property ?—Not in mortgages ; in temporary loans.

1202.	Secured by deposits of deeds or other liens on the property?—Yes.

1203.	Is that to a considerable extent?—No.

1204.	Do you consider that it is expedient that banks should be enabled to
establish any certain number of branches, however great their number, 01* however
remote their distance from the central bank ?—Certainly, I think not; I think it
is attended with very great evil, and I should be very glad to see a check put
to it.

1205.	Are you aware of the establishments which have existed in some parts of
England, which are called agencies ?—Yes.

1206.	Do you consider that those agencies are, in point of fact, equivalent to

branchesSELECT COMMITTEE ON JOINT STOCK BANKS.

75

branches in their effect on the general banking interest of the country ?—That Mr. J. Giblins.

depends very much on circumstances; an agency may be established connected--

with some bank, to the great convenience of the district; for instance, a banker 21 June 1836.
may attend at a market once a week, where there is not a sufficient business to
pay for an establishment, and may be rendering great facilities by the transacting
that banking business there.

1207.	What notes are issued there ?—The notes of the bank.

1208.	Would not that in fact be a deviation from the existing law, which
imposes on banks the necessity of providing for the payment of the notes issued
in any particular place, and the further necessity of dating the notes at the place
of issue ?—It is considered to issue from the bank, otherwise than that the banker
conveys it to a given point for the convenience of his customer, and takes back
what he has to pay in.

1209.	It having been the intention of the Legislature that no issue of paper
should take place at any town unless the parties issuing such paper were responsible
for the payment of those engagements at the place of issue, may not the policy of
that law be altogether defeated if, under the guise of agencies, parties irresponsible
for the local payment of those issues are permitted to make issues ?—It certainly
may; it is liable to that abuse.

1210.	May not the chance of that abuse be much increased if the multiplication
of agencies is allowed to go on without limit ?—I think so.

1211.	What would be the effect of the circulation of a certain district in respect
of the exchanges between banker and banker, if the agents of a bank in Northum-
berland were allowed to make their issues in Cornwall, in competition with the notes
issued by the banks in Cornwall and payable in the county of Cornwall ?—In general
it is more convenient to the banks to make the notes payable in London than in any
country district; the notes payable in London the bankers cfin always negociate.

1212.	The question alludes to bankers issuing notes not payable in London, but
in another district?—I should say that is out of their district, and attended with
great inconvenience.

1213.	Would it be a legitimate mode of banking ?—No.

1214.	Would it not lead to great practical injustice to the banks in the district?

—I think it would.

1215.	Sir Thomas Fremont le.] How many branches are thereof the Glouces-
tershire banking company ?—They have one at Evesham, one at Tewkesbury, one
at Stroud, and one at Cheltenham, and a sub-branch at Newnham.

1216.	Have they any at other places?—No, they are put into the licence, but
they have no other branches.

1217.	They have no agencies at any other places?—At Alcester they have an
agent on the market day.

1218.	Chairman.~\ What control is there over the proceedings of that agent ?

—That agent is a very responsible person, formerly the proprietor of a bank carried
on for his own benefit, but now merged in the concern of the Gloucestershire
bank; they hesitated some time before they would have a bank so far off as
Evesham, which is 22 miles from Gloucester ; but considering their manager there
a good banker and a very prudent man, they were reconciled to taking that with
other establishments connected with the concern.

1219.	Sir Thomas Fremantle.] Is there any difference in the notes issued at
Gloucester and at the different branches ?—Yes.

1220.	Are the notes issued at all the branches made payable at those branches?

They are.

1221.	And in London?—Yes, and in London.

1222.	But not at the head office or the other branches ?—No, but they are
indeed paid at any of the branches.

1223.	Sir Robert Peel.] What do you consider the average annual expense of a
branch ?—It varies very much.

1224.	There is the rent of the house and the salary of the clerk ?—Yes, and
the salary of the manager; it depends upon the manager and the business he has
to transact.

1225.	Does the salary of the manager vary ?—Yes.

1226.	Within what limits ?—From 200 I. to 500 I. or 6001.

1227.	Sir Thomas Fremantle.] Do you trust a person with 200 I. a year with
the management of a branch?—It depends upon the situation, and the party.

1228.	Mr. Pattison.] Does he give any security ?—Yes.

l 2	0	1229. Sir7 6

MINUTES OF EVIDENCE TAKEN BEFORE THE

ulr. J. Gibbins, 1229. Sir Robert PeeL\ What is the discretion he exercises as to discounting

--bills and making advances within the town ?—A discretion is given to him ; he

21 June 1836. reports to the parent bank once or twice a week any transactions.

1230.	In the banks you have been speaking of, are parties allowed to overdraw
their credit?—Yes, if they are parties we consider entitled to credit, to a small
amount.

1231.	Do you not limit the amount ?—According to the person's station in
life.

1232.	If a person has a share in the bank, has he a greater facility afforded to
him in overdrawing his account than another who has not?—No, it depends upon
the estimation of the party.

1233.	What interest does a person whose account is overdrawn pay ?■—Five per
cent.

1234.	What would he receive on a balance belonging to him in the hands of the
bank ?—Two and a half.

1235.	Is that the maximum ?—in some cases it has been a little more under
special agreement.

1236.	Is there a commission charged for discounting a bill ?-—Not always ; it
varies according to the district, the custom, and a variety of circumstances.

1237.	When there is a commission what is it?—Sometimes a quarter per cent.,
sometimes an eighth ; it varies according to circumstances and the value of money.

1238.	Does the rate of interest vary ?—Yes ; for instance, if a banking company
sends several thousand pounds for discount, we discount for them at the rate of the
money market in London perhaps.

1239.	Suppose there is a manager at a country town, is he allowed to exercise a
discretion as to the rate of interest to be charged in discounting bills, or must he
refer to the chief authority at the bank ?—It depends upon the custom of the
place; he would have instructions to discount at the usual rate of the place,
accordingly as other banks were doing.

1240.	Supposing a bank should have returned among its assets over-drawn
accounts to the amount of 50,000 what would that mean ?—It would mean that
they were debit balances, but those balances might be covered by securities.

1241.	Should you consider that a legitimate asset, an over-drawn account ?—I
should consider that so far as the capital is paid up a bank would be justified in
advancing.

1242.	It might advance to the extent of money deposited, might it not ?—No,
- because the deposits are always liable to be called for; but capital is not liable to

be called for ; it is under the control of the bank, therefore to the amount of its
capital and guarantee fund it might go on advancing, but in case of a pressure the
bank should provide for paying out the money deposited.

1243.	What is the usual practice with respect to the receipt of money
bearing interest; in case of the receipt of money do the banks undertake to pay
drafts at sight ?—They do; if it be a large sum we should expect, perhaps, some
few days' notice to allow of a letter from London. London is the place on which
we depend for getting money on bills converted; we send them up to London,
and have the bank paper by return of post.

1244.	If a party lodged 5,000 I. with you, bearing interest, you would not allow
him to draw it out immediately?—We should say, as this is an interest account,
to be employed as money, we should expect some notice, enabling us to convert
the securities in which we employ it,

1245.	How should you employ that money ; in discounting bills ?—Yes.

1246.	Suppose he actually drew a draft, what should you do?—We should
pay it.

1247.	Here is a case of a bank with a capital of 50,000 I., balance of accounts
current due to the bank 111,606 1.1—That exceeds the capital, but it may be
secured in a satisfactory manner. I consider it a safe rule for a bank to keep its
advances within its subscribed capital; nothing can hurt a bank so constituted.

1248.	Suppose you had a greater amount of capital applicable to the dis-
count of bills, could it be employed 7-—Not at Gloucester, because we have now
a large surplus which we employ in the foreign market, that is the London market,
and elsewhere.

1249.	Supposing you saw an opportunity of employing more capital on discount,
should you forthwith take the necessary steps for requiring the payment up of
shares?—If it would be for the advantage of the proprietors ; if it was only a

temporarySELECT COMMITTEE ON JOINT STOCK BANKS.

77

temporary thing, as we have a large surplus fund, we should employ it, and not Mr. J. Gibbim.
call on the proprietors.	-

1250.	In the Birmingham bank there are no notes issued?—No.	21 June 18 6.

1251.	The interest on deposits there is from two to three per cent.; under what
circumstances is three per cent, paid?—Under a special agreement, where perhaps
another banker may have offered that amount, and rather than let that go into our
competitor's hands we have taken it.

1252.	In that case should you require the party to keep it there any length of
time?—We should require it to remain six months perhaps, and clog it with a
notice; we should not willingly allow three percent.; we should endeavour to clog
it with some restriction to show it was not a general rule.

1253.	The bank which allowed three per cent, indiscriminately on all balances
could not conduct its affairs to a profit ?—Many banks do that.	«

1254.	Have you any suggestions to offer which in your opinion would afford
security to the joint stock banks ?—I would not allow them to extend too widely.

1255.	Do you mean you would not allow them too many branches ?—Not too
great a circuit; I would confine them within a limited district of the parent bank.

1256.	You would not impose a limitation on the number of branches, provided
they were within a district of the parent bauk?—No.

1257.	Would you impose any limitation on the amount of shares, that they
should not be under 50 I. ?—Some regulation of that kind might be desirable.

1258.	You do not think it would be desirable to fetter the discretion of the
directors as to the proportion of shares they might require to be paid up, to provide
that one half the nominal amount should be paid up ?—If that was provided they
must lessen the number of shares; the Birmingham banking company and the
Gloucestershire banking company do not allow any person to hold less than five
shares; they generally hold from 5° to 100; they must remodel their concerns,

and reduce their 10,000 shares to 2,000.

1259.	Do you think it would be wise to impose any obligation on joint stock
banks to vest any certain portion of their capital in Exchequer bills or Government
securities?—I think that would cripple their operations very much.

1260.	Do you draw any distinction between banks of issue and banks of deposit;

do you think that the public have a right or an interest to impose on banks of issue
a restriction that they have not on banks of deposit 1—I do not know that they
have; a bank of deposit is also liable to be called upon suddenly as a bank of issue,

unless there is a stipulation made that they shall not be.

1261.	In one case they do not add to the circulating medium, in the other they
do ; they issue what is equivalent to coin in the one case and not in the other, for
any banks of deposit and not of issue could only discharge their obligations in coin
or Bank of England notes ?—If they were banks of issue, they could only discharge
their obligations in the same way; the Gloucestershire banking company, for
instance, make use of their notes merely for the wants of the public, they do not
take any means to extend the issue of their notes.

1262.	There is a profit on the issue of their notes?—Yes.

1263.	The bank which issues 100,000 I. of its own notes, must find in it a
source of profit?—Yes, it is so in Gloucestershire, for they are issued in a district
where they do not quickly return.

1264.	Suppose their issues were carried to an excess, what would be the conse-
quence?—They would return upon the bank, they treat their notes as they
would a Bank of England note or gold; persons in trade in the country have their
choice, whether to have bank paper or gold, or the Gloucestershire company's
bank notes.

1265.	In the Gloucestershire bank, where notes are issued from each branch, do
they promise to pay in Bank of England notes or gold, at the branch or the parent
bank ?—Any note issued by the Gloucestershire bank is paid at any of its branches.

1266.	Is the name of the town where it is issued upon the note?—Yes, the
name of Tewkesbury is on the note, and Cheltenham, and so on.

1267.	Is the Cheltenham branch bound to give Bank of England notes or gold
for the note of another branch ?—I do not suppose they are bound by law, but they
always do it.

1268.	What are the words on the face of the note?—We promise to pay here
on demand, or in London we have an account with Jones, Loyd & Co., and
Williams, Deacon & Co.

0.92.	l 3	1269. Is-78

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. J.Gibbins. 1269. Is there a stock of gold at each branch ?—Yes, to answer any demands
__ that may be made for gold.

21 June1836. 1270. Mr. Clay.] Have you any proportion you adhere to between gold and
Bank of England notes?—No, we have no particular proportion.

1271.	Sir John Wrottesley.~\ You of course take care to have so much Bank of
England paper or gold as is likely to be required ?—Yes, according to our demand,
we make no distinction between gold and Bank of England notes; we issue what
the parties require ; gold frequently accumulates with us.

1272.	Mr. Clay.~\ Speaking of the amount you think it necessary to keep in
hand, do you bear in mind what is gold and what is Bank of England paper ?—
No, we keep more gold than Bank of England paper.

1273.	Chairman.'] Under the law as it stands, Bank of England paper being a
legal tender in exchange for your engagements, have you any inducement to keep
gold in preference to Bank of England paper, except from the additional accom-
modation which it affords in consequence of there being no bank note under the
value of 5 1.1—We keep gold more for the accommodation of the parties.

1274.	It costs you no more to keep gold in your coffers than Bank of England
notes ?—No.

1275.	Sir Robert Peel.] Would it cost you no more to keep 1,0001, in sove-
reigns for a year than Bank of England notes ?—I do not think it would, we get
an excess of gold at Gloucester.

1276.	Should you not charge interest on 1,000/. in sovereigns kept in the
bank ; how much loss should you consider it ?—We should consider what we were
making of money; if we were making three per cent., we should consider there was
a loss of three per cent.

1277.	There is no case in which you make so little as three per cent., is there?
—Yes, frequently we get bills from London at three per cent.

1278.	When you charge a commission of a quarter per cent, what is the interest?
—We do not charge a commission of a quarter per cent, for discounting, unless it
is small bills.

1279.	Where a party paid in 1,000/., and desired a corresponding credit in
London, what would be the charge in Birmingham ?—I believe we should do it
at half-a-crown; the Bank of England would do it at that sum, and we must do
the same; we have no desire to reduce banking charges.

1280.	Would you do it for any person, or only a customer?—For any person.

1281.	Sir Thomas Fremantle.] In those transactions which the Bank of England
has with its branches, the commission would be much higher, would it not?—I do
not know; that would depend on circumstances; it depends upon the competition ;
the competition in banking now is very great.

1282.	Sir John Wrottesley.] That governs the commission you charge, and the
-interest you charge ?—Yes ; we endeavour to retain our business if we can for
some profit safely.

1283.	Chairman.] You have been asked with regard to any alterations of the
law which in your mind might contribute to the safety of joint stock banks;
have you turned your attention to what might be the effect of the publicity of the
accounts of country banks ?—I think the difficulty is to get banks to make those
returns so that they may be understood, for they may return a large annual balance,
but that does not show the character of the bills.

1284.	With respect to the amount of circulation, do you not think that is matter
of public concernment which it is desirable to have known?—Yes, that is known
now.

1285.	The total amount is known, but not the amount of each bank?—That is
returned to the Stamp-office.

1286.	Those are confidential accounts ; should you see any difficulty in giving
those returns to the public ?—No.

1287.	Do you think that it would be desirable to the existing banks to know
a little more than they now do of the operations of other banks, more especially as
relates to the issue of promissory notes payable on demand ?—I do not know what
to say to that question, because it would be exposing a bank to its competitors.

1288.	The question refelvs to the giving to the public generally that account
which is now furnished to the Stamp-office, of the amount of circulation of every
bank; do you not consider that it would be of considerable importance to the
existing banks to watch the progress of the circulation of other banks within their

district ?—SELECT COMMITTEE ON JOINT STOCK BANKS.

79

district ?—I do not know whether that would beany advantage, nor do I see that Mr. j; Gibbins.
it would be any disadvantage.	-

1289.	The amount of paid-up capital being notorious, and the amount of 21 June 183©.
nominal capital being also notorious, is it not important that the progress of the
circulation issued by each of those banks should from time to time be made known ?

—I think it might, I see no objection to it.

1290.	Sir John Wrottesley.] Is not the circulation of any private banker tole-
rably known to the bankers in his own district with whom he exchanges ?—I do
not see what means they can have of knowing precisely; they can make a guess.

1291.	Sir James Graham.] For the security of your banking operations, would
you like to know a little more accurately in point of time, what is the state of the
assets and liabilities of the Bank of England ?—No, I should think not; I do not
know that that concerns us much.

1292.	You do not think that would concern you in your business as a banker?

—No.

1293.	Mr. Pattison.] Do you ever watch the publication at all ?—No, I see it
in the papers.

1294.	Sir James Graham^] You do not regard it at all ?—No.

1295.	You do not consider it any index by which a public bank or a joint stock
bank may safely extend its operations ?—I think they may learn whether the Bank
of England is going to contract its issue, and may take their measures accordingly.

1296.	As the publication now takes place, do you pay any attention to it ?—

We have never paid any attention to it.

1297.	Do you consider it of any use in its present state?—It may be useful to
some parties.

1298.	Do you know as it is now published, until the operation has taken place
for some time, what is going on with regard to the expansion or contraction of the
currency?—No.

1299.	Chairman.] If you saw upon a series of returns from the Bank of England,

that the amount of bullion had been gradually lessening, and that there was a drain
upon the resources of the Bank of England, do you conceive that that would be
a matter to which it would be your duty to give attention as a practical banker in
the country ?—We have not the charge of providing bullion to pay our notes, that
charge rests with the Bank of England to provide bullion.

1300.	Do you consider it perfectly immaterial to you, as the contraction or
expansion of the currency must affect every banker, whether there is a demand for
bullion on this country or not ?—Our currency is provided by the bank ; we do
not do anything to contract it or otherwise; it is not our discount that increases the
currency, it is the wants of the country.

1301.	Do you consider the knowledge of exchanges of this country wholly
immaterial in regulating the concerns of joint stock banks, you having stated your
connexion with three considerable joint stock banks ?—I do not say that it is wholly
indifferent.

1302.	In what way would it guide you in your operations?—If we saw an
indication of money heing scarce, instead of taking three months' bills we should
require them from the brokers at shorter dates, and increase our cash in hand.

1303.	You would consider an unfavourable rate of exchange, and a lessening of
bullion in the hands of the bank, to be a warning to you, as a country banker, to
be more guarded in your transactions ?—Yes.

1304.	Is not that information communicated now by the account furnished by
the Bank of England ?—It is ; but we do not know from those accounts the dis-
tinction between silver and gold; and we do not know what part is in sovereigns
and negociable, and what is not.

1305.	If you saw that on the whole, under the head of bullion, there was a
gradual increase or a gradual decrease, comparing that with the state of the
foreign exchanges, would it not lead to the inevitable inference that there was an
increase or decrease of gold in the hands of the bank?—It would not; I do not
know that it affects a country bank much.

1306.	Does not the state of exchanges, and the amount of gold in the hands of
the Bank of England, affect the country banks of this country ?—I do not think
it does in general; I think it only operates with a very few banking companies.

1307.	1 hen in proportion as the banks are larger, in that proportion is it more
important for them to be guided in their operations ?—Certainly; the larger their.

0.92.	l 4	obligations8o

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.j.Gibbins. obligations the more important ; where a bank's operations are confined very much
-----within itself, it is not so important.

21 June 1836, 1308. Taking the whole banking interest of the country, would the effect on
the circulation be much the same if a hundred banks have a given amount in cir-
culation, or that was put out by one single bank ?—Yes, the circulation of country
banks depends in some degree upon the prices; where prices are high the circula-
tion is larger, where prices are low the circulation is smaller, for it takes a larger
amount to represent it.

1309. Is not the effect on the circulation the same whether a hundred banks
put out 1,0001, each, or 1,000 banks put out 100/. each?—Yes.

1.310. Sir James Graham.~\ If this publication of the Bank is to be a guide
to you, it is most important it should be a true and accurate guide at the time
you make your decision?—Yes.

1311. In the mode in which the Bank publish their account, it shows that their
bullion is diminishing, but before they obtain a sight of it the exchanges have
turned, and the bullion has returned; would not that give to the country bankers
a false idea ?—I do not think that it has much effect on country banks ; they
look to what their demands are likely to be, and regulate accordingly.

Veneris, 24° die Junii, 1836.

members pkesent.

Mr. J. A. Smith.
Sir John Wrottesley.
Sir Robert Peel.
Mr. F. T. Baring.
Sir James Graham.
Mr. Pattison.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Clay.

Mr. Loch.

Mr. Strutt.

Sir Thomas Fremantle.
Mr. Morrison.

Vincent Stuckey, Esq. called in ; and Examined.

V. stuckey, Esq. 1312. Chairman.] YOU are connected with a banking company which trades

- tinder the title of the Somersetshire Banking Company ?—I am.

24 June 1836. 1313 That was one of the first banks established under the Act of the 7th of
George the 4th, was it not ?—I think it was one of the very first. We did it as
soon as we could make our arrangements under the new Act.

1314.	You have carried on business under that firm ever since ?—Yes, having
been bankers in the county for nearly a century.

1315.	The existing banking company is in fact an extension of a previously-
existing private bank ?—Yes, the private bank consisted of about eight partners ;
we have now extended them to nearly 40 shareholders, and are still increasing.

1316.	You have turned your attention generally to the principles on which
joint stock banks are managed, and to the law under which they are conducted ?—
Very much.

1317.	Do you consider that that law might, advantageously to the public
interest, be amended in any and what respect ?—I think it might.

1318.	Have the goodness to state what amendments that law, in your judgment,
requires ?—I think no share should be less than 1001, nominal value, with at least
25 per cent, paid up upon it.	.

1319.	What is your reason for making that suggestion ?—I think it would get
banking into what I call respectable hands, and prevent speculation in a great
measure.

1320.	When you state that you consider it would prevent speculation, do you
mean thereby that it would prevent speculation in shares, or prevent speculation in

tradeSELECT COMMITTEE ON JOINT STOCK BANKS. 81

trade generally?—I think it would tend to both ; but more particularly speculation V. stuckey, Esq.
in shares.	---

1321.	Do you consider that its tendency would be to make the stock of banking *4 June 1836.
companies sought for as a matter of permanent investment, rather than as matter

of mere speculation on the possible rise of shares ?—I think it would be sought for
as permanent investment.

1322.	Does that appear to you to be a result advantageous to the public interest
and advantageous to the banks themselves ?—Very much so in both cases.

1323.	You have stated your opinion that it would be desirable that the minimum
value of shares should be 100 but you have added also you conceive 251, per
cent, should be paid up ; upon what grounds is your second recommendation
given ?— Merely as before, to keep banking in respectable hands, that there should
not be people become shareholders who could not put down 251.

1324.	Do you conceive it is advisable that the amount of 25 per cent, on each
share should be paid up before the bank commences its operations and enters into
engagements with the public r—I think before they are permitted to issue any
cash notes, it should be paid up; another suggestion I would make is, that no
bank should have an agency or a branch beyond a certain distance from the parent
bank.

1325.	Will you confine your observations first to the branch, and state what
limitations you consider it might be expedient to place either on the number of
branches, or the distance of those branches from the central bank ?— I would have no
branch more than about 50 miles from the parent bank, or, if possible, I would
confine the operations of the company to one county, if that county were tolerably
large, or if not, to two.

1326.	What is your reason for that recommendation ?—The parties who would
most likely be managing that bank, would be residing in that county, and there-
fore would have an opportunity of seeing the operations of that bank going on
every day.

1327.	Do you conceive a central bank can exercise as effective a check and
control over the operations of a branch, more particularly if that branch is distant,

as it can exercise over the transactions of the central bank?—No, I do not think
it could if it is at a considerable distance, certainly not.

1328.	Is the risk to the bank and the risk to the public augmented in proportion
as the means of check and control may be diminished on the part of the central
bank ?—I should think very materially so.

1329.	You have used the word agency; in what respect do you consider an
agency to differ from a branch ?—An agent is a person who lives in a town, who
is probably a shopkeeper, and issues the notes where there is not' a clerk ; a branch
is distinguished by having an officer of its own.

1330.	Do you not conceive the risk of banking transactions is greater if carried
on through the means of agency, than through the means of an established branch ?

—Yes, it may be more so; but we have our agencies very much under control by
having them within a limited distance.

1331.	What notes are issued at your branches ?—At each branch we issue notes
payable in London and at the place where they are issued.

1332.	Do they bear the date of the place at which they are issued ?—Yes, they
do, and if the agency is within seven or eight miles of this branch, the agent issues
them dated from the place where the branch is situated; for instance, here is a
note dated Langport, where we have an establishment, and within seven or eight
miles we have an agency ; such has been the competition in banking, that many of
the joint stocks are going into places where we never contemplated going, and our
friends say, " If you do not come there, you will lose business."

1333.	Where agencies are established, are the Committee to understand that
the notes issued by those agents are the notes of the nearest branch at which they
carry on their business ?—Exactly so.

1334.	Then the agents do not issue notes payable at the place where those
agencies are established, and where the issue takes place ?—No } but at the nearest
branch.

1335.	Do you not conceive that that system, of banking is in itself open to
some objection, namely, the issue of notes not payable on demand at the place of
issue, but at other places ?■—It has always been our practice to pay them where
issued, if demande^.

0.9?.	m	1336. Supposing182 MINUTES OF EVIDENCE TAKEN BEFORE THE

V. Stuckey, Esq. * 1336. Supposing the principle to be admitted, would it not lead to this result,
——.—_ that banks might establish agencies and issue notes, payable at very distant parts?

24 June 1836. ■—That bank would, I think, soon lose its credit. I never knew it done in
England.

1337.	Were such a course resorted to, would it not lead to considerable incon-
venience?—Undoubtedly it would; but it would not answer to have notes made
for very inconsiderable places.

1338.	Are there any other suggestions which you are prepared to make?—I
have written a short pamphlet lately on the subject. My first suggestion is the
100/. shares; the next is, that the branches should be within a limited distance
of the district or mother bank; and a third, that every bank should occasionally
publish its assets and liabilities. I have stated every six months, on the principle
that the Bank of England publish theirs.

1339.	Is the account you would suggest as being that which banks ought to be
called upon to render, the same form of account which is rendered now by the
Bank of England ?—Yes, very much the same. I should not make it up exactly in
the way in which the questions have been asked in the circular of this Honourable
Committee; and it should be, perhaps, a little more diffuse than that of the Bank
of England.

1340.	Have the goodness to state a little more distinctly the form of account
which you consider it might be for the public interest to require ?—Liabilities,

,	circulation, including cash, notes, and bank post-bills, deposits, including money at

interest, payable on demand, and on current accounts; in short, to include all
that a banker owes; then the assets, cash and bank-notes, Government securities,
bills of exchange, and other securities available. Those, I think, would be sufficient
to publish.

1341.	Do you not conceive that in that last item it might be very desirable to
separate any advances which were made of a permanent nature, such as mortgages,
from securities that might be held as available at a short notice P—Perhaps it
might.

1342.	Supposing a banker should advance money on mortgage in preference to
available securities, would it not be desirable that the account required to be
rendered should specify that?—Undoubtedly; but provincial bankers do not
generally advance money on mortgage, at least we do not, but we endeavour to
keep all our resources available.

1343.	You do npt consider that any injustice or inconvenience would be pro-
duced as affecting banking operations, if an account of that description were
required to be rendered by a bank ?—I should think, after a time, it would not.
On the other hand, I think that it would have tended to great good if it had been
done long before.

1344.	What would be the beneficial consequence in your mind of requiring
such an account ?—It would keep banks from going into improper speculations;
if this had been the law 40 years ago, I would submit whether banks would have
got into the difficulties they have done, if they had known that they must publish
their accounts every half year, upon the principle of the returns of the cash-note
circulation to the Stamp-office. It is not that a banker may not make up an
improper account; but the great principle is, that it very much tends to prevent
their getting into improper banking and difficulties. There was a bank in the
west of England, with a circulation of near 50,000 /.; it stopped payment many
years ago, and has not paid more than 6d. in the pound. This, in my judgment,
could not have gone on to such a disastrous state if that bank had been called
on to publish periodically its liabilities and assets. But I admit it is not a perfect
system, but an improvement.

1345.	Sir John Wrottesley.~\ Would you not add the amount of capital paid up
to your assets?—I see no objection; but some years ago it was the plan with
many to carry on banks without capital; indeed, in some cases they did not want
it; they had a business of deposit and of circulation, which gave them a capital as
much as they required without employing their own; and it is better to have
available resources than a locked up capital.

1346.	Sir Robert Peel.] Here is a bank, the amount of the nominal capital of

whichSELECT COMMITTEE ON JOINT STOCK BANKS. 83

which is 500,000 , the number of shares is 50,000, at 101, each ; the number of
shares issued is 32,500, and the amount of paid-up capital 325,000 I., that is to
say, the whole amount of nominal capital has been paid up on the shares sold ;
why should you prefer a bank, the shares of which are 100 /., requiring 25 per cent,
upon the nominal capital to be paid up, to a bank which has 10 I. shares but
requires the whole to be paid up?—Because there would be a less nume-
rous party engaged in the company; and I think on all systems of banking it
is better to have a less numerous party, consisting of respectable persons, than to
have a very numerous proprietary of small shareholders; but in each case the pub-
lic are safe.

1347.	Should you prefer a bank with nominal shares of 100 /., and 25 I. paid
up, to shares of 25 L, with the whole paid up?—Yes, for I think the 1001, share
would make it more respectable; and by having the power to make further calls,
and be enabled to add to the capital in case of necessity, in point of fact it might
be considered as a reserved capital.

1348.	In your account it is stated "all other securities not included in the
above, namely, notes of hand, bonds, &c. tangible j" do you think a publication
of that kind does, in point of fact, give any useful information to a person who
is a stranger; does not the confidence attached to that bank depend upon the
knowledge of the character and solvency of the partners in it ?—Yes, but I think
that would be increased by publicity, and, as I have before stated, I would make
the account more diffuse.

1349.	Suppose the securities were not very valid ones?—Then they ought
not to be included; still I think a publication would satisfy a great part of the
public that the bank was going on properly, and the very publication would make
the bank look with attention to their securities.

1350.—

1351 —

1352.—

*353-—

1354.	Supposing this publication took place under the provisions of an Act of
" Parliament, would not a kind of tacit guarantee be given to those banks which

under the Act of Parliament published this account ?—Yes.

1355.	It would appear as if it were an account with the sanction of the Legis-
lature ?—Yes, in some degree it would.

1356.	Would it not be of peculiar importance that if an account was published
under the authority of the law, that account should be fully sufficient for its pur*
pose ; would it not be just to those banks which were really solvent that the in-
formation required should enable the public to distinguish those which were secure
from those which were insecure ?—Of course that would be the great object of the
publication.

1357.	In the account you have rendered there is, " Cash in coin and Bank of
England notes and other cash notes;" will you have the goodness to point out
what is the meaning of " other cash notes ?"—The cash notes of the neighbouring
banks as well as Bank of England.

1358.	They do not all stand on exactly the same footing, as that must depend
qn the solvency of the bank ?—Yes, but we send the country notes away; perhaps
they are not kept two or three days.

1359.	Do you not think that other cash notes ought to be entered under a
separate head P—Yes. We answered the questions as they were put in the circular,
but in making up the account we should state particulars.

1360.	Do you think any bank could object to having that distinction made ?•—
No, not the least.

1361.	Under the head of stock you have first, " Government stock, Exchequer
bills, Bank of England stock, India stock or bondsthere can be no doubt as to
those?—No.

1362.	The second is, " All other stock and shares in public companies, dis-
tinguishing the amount (if any) of its own shares, or stock held by the bank itself
or in trust for the bank?"—-That is nil as far as we are concerned; we never
advance on shares, nor do we hold any stock of the 4escription mentioned.

°-92*	m 2	1363. What

V.StuckeyfEsq.

34 June 1836,84

MINUTES OF EVIDENCE TAKEN BEFORE THE

V Skwhty Esq 1363. What is the exact meaning of the account with respect to the over-due

_' bills of exchange ?—A bill which is not paid at the day, perhaps it is taken up in

24 June 1836. a week or a fortnight; every bank has some of those.

1364.	Out of that 3,300/. which you have, what amount should you consider
bad ?—I should think not 5001.

1365.—

1366.	Then comes the last item, " All other securities, not included as above
what are the different heads into which you would divide that one general head,
in order to give the public as full an account of the state of a bank as could be
given, without prying too much into the mode of conducting its affairs, and without
overloading the public with unnecessary intelligence, and therefore inducing them
to disregard it altogether, from its apparent complexity ?—In the manner I have
answered in the previous questions.

1367.	What are " notes of hand " ?—Notes of hand of a variety of parties, such
as the agriculturists, tradesmen and merchants.

1368.	What is the operation by which you lend a farmer 100/. ?—If he comes
and asks for 100 /., if we know him to be an honest man, we lend it him on the
security of himself and one other, unless he brings with him his title deed of his
house, or his orchard, or whatever it may be. He generally comes in the winter
and takes back his title deeds.

1369.	In general you require another signature ?—In general we require two
signatures, but the practice of late has been more to deposit some security ; we
lend without any security when we know the man to be an honest and industrious
one.

1370.	For what time do you advance it ?—For three or four months; we begin
at two months, but extend it to four.

1371.	It is in fact a cash credit?—Yes, on the plan of the cash credit in Scot-
land ; within these few years almost all the farmers have begun to keep accounts
■with a bank, and I will state a conversation which took place in our bank the other
day. A farmer had an account with us ; he came to town and sold his oxen for
400 /. in Smithfield; that was paid in on the Monday. I happened to be at the bank j
he came to me on the Tuesday, (this was in Somersetshire) ; he said, " To-morrow
is my rent-day ; you have 400/. of mine paid to you yesterday. I owe 400/.;
I should like to pay the whole, but it is Exeter fair to-morrow, and I want 200/.
to purchase more oxen; will you lend it me ? " I did, and I wrote upon the
cheque " This will be honoured when presented." He went and paid his rent
with the 400went to Exeter fair and returned the same day; there was his whole
rent paid, his stock replaced, and no actual money passed at all but the money
paid originally in London ; all done by transfer; the cheque for the rent was paid
to a gentleman who kept cash with us.

1372.	What rate of interest did you charge hitn for the advance —At the rate
of five per cent, per annum.

1373.	No commission ?—No.

1374.	What is meant by " bonds"?—From gentlemen and others. It fre-
quently happens that noblemen or gentlemen borrow on bond ; if a gentleman
is going to buy an estate and says, " I have to pay 10,000/.; I have 6,000/.;
will you lend me 4,0001. ?" and we do that if we know the parties.

137,5. You mean on mortgage?—No, not on mortgage; on a mere deposit of
the title deeds, being a temporary advance.

1376.	Do you conceive that any valid objection could be stated by a bank to
rendering that account of all other securities, under the following heads: first,
amount of money lent on mortgage ; secondly, on notes of hand; thirdly, on
bonds; fourthly, on title deeds, or other securities of a similar description?—Not
the least.

1377.	Would not that be necessary, in order to enable the public to form a
correct estimate ?—I think it would be much more satisfactory to the public to
have it in the way suggested. We followed the plan adopted by the Bank of Eng-
land ; I think the more you enter into particulars the better ; but I fear there will
be great difficulties in doing it; but what has been suggested may do much good.

1378. SirSELECT COMMITTEE ON JOINT STOCK BANKS. 85

"1378. Sir Thomas Fremantle.] Is the amount of overdrawn accounts included	y. $tudey, jLsq.

in the head of other securities P—Yes.	——--

1379.	Is that a very considerable item ?—We endeavour to keep it down.	a4 June 1836.

1380.	Your transaction with the farmers would appear in this account ?—-Yes.

1381.	Sir James Graham.'] What interest do you charge on an overdrawn
account?—That depends upon the agreement with the party; sometimes four,

sometimes five per cent.

1382.	Never less than four?—Very seldom.	.

1383.	Sir Robert Peel?] How long has it been the habit for the country or
joint banks to issue bank post-bills ?—It is their own post-bills ; if we draw a bill
at a short date, it is called a post-bill.

1384.	Chairman.] Are those drawn specifically for the purposes of remittance?

—Yes ; but we frequently order money to be paid in London at the request and
on the application of the parties, at our London agents.

1385.	Is that transaction subject to a stamp?—No; it economizes circulation,

and is advantageous to the public in many ways; and it would in my judgment be
impolitic to impose duties on such transactions.

1386.	Sir James Graham.] What should you charge them for payment in Lon-
don?—A very small commission, about one-eighth per cent.

1387.	Sir Robert Peel.~] Supposing one of your customers who had 1,000/.

lodged in your bank, and wished to make his payment in London, was in London,

in what mode would he make his payment?—We should authorize him to receive
it through our London agents.

1388.	Can he do that by cheque upon you without being subject to the stamp
duty?—No, his cheque would be on the London bankers, on our account.

1389.	Is not that a violation of the Stamp Act?—No.

1390.	Mr. Morrison.] A gentleman being in London, could direct you to give
any, person credit for the amount?—Yes.

1391.	Sir James Graham.] You say that the Provincial Bank of Ireland have
been driven from large shares to small ones; what is the occasion of that ?—There
has been a meeting within the last few days, with Mr. Dawson in the chair; from
what passed, the real necessity appears to be, that the O'Connell Bank, as it is
called, are issuing small shares, and in order to compete with them, the Provincial
Bank are obliged to have small shares also.

1392.	Does any necessity exist in the impossibility of banks with large shares
competing with banks with small shares ?—It appears so, particularly in Ireland,

1393.	If banks with small shares increase here, you think it will be impossible
for the banks with large shares to compete with them?—I think it may be so,

unless some legislative provision is made.

1394.	Do you see any distinction between private banks consisting of less than
six partners, or of six partners, and banks consisting of a smaller number than six
partners, in respect of the necessity of furnishing accounts?—I should make all
banks of issue do it.

1395.	If joint stock banks of issue should be compelled bylaw to publish their
accounts, on what principle can banks of less than six partners, also banks of issue,

resist the doing that ?■—I can see no reason at all.

1396.	The object of publication is, that those who issue money which circulates
freely as the King's coin, should make a public declaration of their solvency?—

Yes, if that had been done heretofore, the mischief I have pointed out could
not have happened.

1397.	If that is sound, it applies to all banks of issue?—Undoubtedly.

1398.	That being a principle applicable to banks of issue, do you think the same
principle applies to banks of deposit only ?—I do not, and I will take the liberty of
stating that several gentlemen were a little indignant because the Committee required
a return of them when they did not issue paper.

1 399. In your opinion there is a broad distinction between banks issuing paper
and banks of deposit ?—Yes ; I think those issuing paper take upon themselves
that which belongs of right to the King; that they ought to convince the public
that when they issue promises, they have some means of performing them ; that
has been my principle for many years, and was Mr. Huskisson's.

0.92.	m 3	1400. Do86

MINUTES OF EVIDENCE TAKEN BEFORE THE

V. Stuchef,Esq. 140Q. Do you not think the question as to banks of issue, is somewhat varied:

------ since the suppression of one-pound notes ?—Yes; but still the principle applies*

*+ June 1836. whether it is one-pound or five.

1401.	It is now a note promising to pay in coin when demanded, and does not
supply the place of 20s. as a 205. note used to do?—No; the country has now
a circulation of sovereigns and silver, and I think the circulation on the whole is
in a wholesome state; it appears to me we have about 20 millions of sovereigns, 10
millions of silver, 19 millions of Bank of England paper, and 11 millions of joint
stock banks and private banks. ,

1402.	Do you, in regulating your issues, attend to the state of the exchanges?
—Yes, always at every quarterly meeting the first thing entered is the price of
the precious metals, and the exchanges of Paris> and Hamburgh, as I conceive
those are the principles on which the circulation of the Bank of England is
arranged.

1403.	At your meeting that question is always entertained in reference to your
own circulation?—Always, because if the Bank of England draw in, the well-
regulated banks must be on the alert.

1404.	Do you attend to the periodical publications of the Bank of England
with respect to their assets and their liabilities?—Very much so; from the very
first day they were published till the present day, I have every particular in our
account-book, as well as the circular of private and joint stock banks.

1405.	Do those accounts furnish the precise information you feel necessary for
the exercise of a sound judgment?—As far as the Bank of England goes it does,
but it might be a little extended for joint stocks and private banks.

1406.	It does not give you precise information when the precious metals are
flowing into or flowing out of the coffers of the Bank of England, at the time you
are making your issues?—It shows what they have in store, and on looking
at the exchanges and the price of the precious metals, you have all necessary
information.

1407.	It shows what they had some time before ?—Yes.

1408.	You attend more to exchanges than to that amount ?—I look at the
Bank account, and consider they are acting on the right principle. It appears to
have been done very lately ; they have touched the string, and made money scarce.

1409.	From the manner in which the accounts are furnished, should it not
appear that gold* were drawn from their coffers at the period at which the publica-
tion takes place, and would not that statement, in reference to a time which is past,
lead to a false impression ?—I do not think it would.

1410.	The account published by the Bank furnishes sufficient information, in
your opinion, to guide the discretion and conduct of banking affairs?—Yes, I
think so; if we see that the exchanges are against us, we act accordingly; we
observe that something is wrong, and that at once renders us doubly prudent.

1411.	For the management of your affairs with reference to the exchanges, and
the amount of precious metal in the coffers of the Bank, you require no more
information than you have ?—I do not.

1412.	Sir Robert Pee/.] Supposing in the place of " all other securities" you
substituted a return of this kind, do you think it would be full and complete in
the first instance; and secondly, do you think that any bank could reasonably object
to the publication: first, of promissory-notes payable on demand; secondly, advances
made by the Bank, to be distinguished under certain heads: first, the advances
made on mortgages or equitable mortgage; secondly, on notes of hand ; thirdly, on
bills or investments in London, payable on demand; third, balance of accounts
current due to the Bank; fourthly, the Bank promises and so on, and any other
security, such as freehold property, not included in the above, and the amount of
that. Could any bank reasonably object to that ?—I think certainly not.

1413.	Would that afford the public a tolerably clear insight into their affairs ?
—I think so, if it was made up by the accountant-general, and countersigned by
the chairman, that would be an accurate and satisfactory account.

1414.	Sir James Graham.'] Have you understood that the Bank of England
has advanced to joint stock banks money at three per cent, to a considerable
extent?—I have.

1415.	Do you consider that, in reference to the monetary transactions of the

country,SELECT COMMITTEE ON JOINT STOCK BANKS. 87

country, a prudent transaction f— I take the liberty of saying I do not think V. Stuckey, Esq.
it is, and as a proprietor of Bank stock, I have so stated to some of the ■■■■ ;«, ■
directors.	24 June 1836.

.1416. Is not that a measure very stimulating to iihprudent speculation ?—I
think so; but I wish to give my opinion on this point with considerable doubt, as
the directors of the Bank of England have much better opportunities of judging
than I can have.

.1417. If the money be advanced at three per cent., to render it a profitable
transaction some interest must be made of this money in their hands, which could
be created only by rash speculation ?—We have had nothing of this kind in the
West of England, but it was stated in a public discussion, by a gentleman from
the north, that if there was any mischief likely to result from the joint stock banks,

it might arise from those banks which had borrowed from the Bank of England,

and having their cash at less than the market rate of interest, they had been
induced to lend it again improperly in Lancashire.

1418.	In your opinion, is as much danger to be apprehended from such advances
at three per cent, on the part of the Bank of England, as from over-issues of joint
stock banks?—Yes, perhaps some banks do issue cash-paper improvidently, but
they are kept in check by being liable to pay their cash-notes on demand in gold.

1419.—

1420.—

1421.	Chairman.] You suggested publicity as desirable to be imposed on banks
of issue; if there be a danger connected with banks not issuing their own
paper, but issuing the paper of the Bank of England, do you not consider that
it would be desirable to obtain from them the same publication of their transac-
tions which is required from banks issuing their own paper?—Yes, but it might
be cured in another way, by the Bank of England conforming to the market rate
of interest.

1422.	But assuming that the Bank of England, in the exercise of its discretion*

advances its capital at a lower rate of interest, and in your judgment those transac-
tions may, by possibility^ lead to as great inconvenience as in the case of banks
issuing their own paper, is it not as necessary to apply a test of publicity in the one
case as in the other?—Under those circumstances it certainly appears so, but this
applies more to the north of England than to the west.

1423.	Mr. Clay.'] You state that you think a branch should not be more than
50 miles from the parent establishment; why do you fix on that precise distance ?

—I took our own county most in my view; all I mean is, that there should be
county or district banks.

1424.	What is your object for this ? —That they may have the whole business
quite under their eye; I defy any persons who have banks in every county in
England, or in many counties, to have the whole of its concerns under their
own proper vigilance.„

1425.	Do you mean to say that the transactions of each day shoald at the ter-
mination of the day be transmitted to the parent bank?—No; I will suppose a
banking company situate in London, having branches in Warwickshire, Lincoln-
shire and Devonshire j it is impossible that all of them can communicate with each
other in a few hours ; but that may be done in the same county, and within fifty
miles, in a very short time.

1426.	You think they should be within the reach of a few hours' communica-
tion with the parent bank?—Yes, on various accounts.

1427.	Subject to occasional inspection ?—Yes, with occasional inspection.

1428.	You think that danger increases with the increased distance from the
parent bank ?—Decidedly so.

1429.	You state that an agency differs from a branch, inasmuch as there is no
office ?—No office belonging to the bank. The agent has probably an office of his
own; he has very likely also the power of accepting a draft, or ordering a draft to
be paid in London.

1430.	Has he the power of discounting a bill?—Yes, they discount frequently ;

but it is looked at by the director of the district.

1431.	Then the difference consists more in the magnitude of the transactions

m 4	than88

MINUTES OF EVIDENCE TAKEN BEFORE THE

V. Stuchey, Esq. than in anything else ?—Yes, it does in some measure; but all agencies and branches
--— ought to be constantly investigated.

24 June 1636. 1432. In looking through your account, it appears that you have in Government
stock, Exchequer bills, Bank of England stock, &c., to the amount of 216,0001, ?—
That was7the sum then.

1433.	It appears also you have no bills bearing the endorsement or guaranteed
by the bank?—No, except in our own possession.

1434.	It has not been your practice to re-discount at all P—We never re-discount
a bill.

1435- Is it your opinion that the principle of re-discount, carried to any extent,
is subject to danger ?—I think it is if it is carried to a great extent.

1436.	Will you explain why it is dangerous?—I think it is dangerous for a
bank always to depend for its resources on re-discounting. I have known more
than one period when they could not discount at all for three or four days; in
1825, in the panic, it was so. I have known other periods of great difficulty.
Therefore a bank should not depend alone on re-discounting; at the same time a
good bank and a strong bank may have occasion to re-discount, and may find it a
convenient mode of raising money ; and in the north it is much more the practice
than in the west of England.

1437.	Supposing you should find an opportunity of investing money in good
bills in your neighbourhood, you would think it better to enlarge the capital of
your bank than to re-discount ?—Yes, I should.

1438.	You consider that safer, perhaps?—I do. I should be exceedingly sorry
to conduct a bank depending for its resources on re-discounting alone.

1439.	Do you not conceive it matter of great inconvenience to the neighbour-
hood that the bank should alter greatly from time to time the extent of accom-
modation it affords?—Yes, very great inconvenience.

1440.	Is it not necessary, where a bank depends upon the London market for
its resources ?—I think it is, particularly if it depends alone on re-discounting.

1441.	Inasmuch as when the market is in a state which renders it difficult to
discount, a bank which has not resources of its own must contract its operations ?—
Yes; I have said before, that a bank which depends on re-discounting must be
subject to those difficulties.	.

1442.	Do you not conceive that a bank, in the process of discounting and re-dis-
counting, if carried to a very great extent, and also if to that be added, making
advances on overdrawn accounts, even without issuing promissory notes, may run
into very dangerous engagements ?—I do, for the reasons before stated.

1443.	That danger would be increased if they issued notes ; but without issuing
promissory notes it is quite conceivable that, by other means, they might engage
in a system of very great extension of credit, and therefore be liable to very great
danger?—I think so.

1444.—

1445.	You would not consider it a safe state of any bank, having large liabilities,
to be wholly without Government stock or Exchequer bills ?—I should not.

1446.	In 1833, in giving evidence before the Bank Committee, you expressed
an opinion that charters of limited liability would tend to produce banks of greater
respectability and solidity ?—I did at that period.

1447.	Have you seen any reason to alter that opinion ? —No, I have not seen
any very material reason; and I still think it would produce very respectable
banks. It may, perhaps, be less necessary now, for I have seen men of very large
property since that join banks, which was not the case in 1833.

1448.	Do you think the fear which deterred persons then from joining banks
of unlimited liability is very much diminished ?—I think it is.

1449.	In so far, your reason for forming your opinion is lessened?—Yes;
banking was at that time blown on, if I may use the expression; but that is not
so now; a gentleman has stated that the shareholders in a joint stock bank in
the north was worth very large sums indeed.

1450.	Is it not matter within your knowledge that persons of great wealth and
respectability would join joint stock banks of limited liability, which they would
not even now join with unlimited liability ?—That is certainly within my know-
ledge*

1451. IsSELECT COMMITTEE ON JOINT STOCK BANKS.

80

»' 1451- Is it not most important that the shares of those banks should be held by .jr-. Stucky* Esq.

respectable persons in the nature of investment ?—Yess that is what we have endea-

voured to do in our bank. We have none but respectable shareholders, and the 24 June 1836.

private property of the shareholders amounts now to upwards of half a million

sterling, exclusive of their paid-up capital, so that the public are, in all respects,

quite safe.

1452.	Do you not believe that the tendency of rich men to enter into such
concerns would be increased by the knowledge that their whole fortunes were not
liable?—I think it would.

1453.	Is not the very best security for the good conduct of a bank the respecta-
bility and wealth of the proprietors ?—Certainly.

1454.	Is not any measure which tends decidedly to prevent this a most impor-
tant provision in regard to banks ?—I think it is.

'455> -Are you aware of any objections which can be stated to giving to banks a
limited liability if that is connected with a paid-up capital ?—-There are objections,

•because I have seen and heard the subject debated in Parliament.

f 1456. What are the objections in your opinion ?—They say it is contrary to the
laws of this country altogether; but I believe it is the case in France.

1457. You are now stating what is the existing law; but, setting aside the
existing law, what are the other objections to limited liability connected with a
paid-up capital?—I think if men had it for banking, they would want it for some
other things as well.

, 1458. Do you mean that as an objection ?—I mean it as a political objection,

that if they granted it to bankers they might be required to do it for merchants ;

, I consider it an important question of political economy, and one which I should
not be very well able to decide.

1459.	Chairman.] Do you think there is any advantage in having, as an
available fund to meet the resources of the bank, the power of making certain calls
on the shareholders, supposing a respectable body of proprietors to exist?—1 think
that having the power to make calls is very important.

1460.	With respect to your own bank, what is the proportion existing between
the nominal amount of the shares and the amount paid up ?— All new shareholders
pay up one-half, and the 50/. on each share so paid, is all carried to the capital
of the company. In 1833 I published the stock and liabilities of our concern,

since that period our capital has been more than double, and is every day
increasing.

"1461.'' Is not one of the advantages you possess for the conduct of your business
the power of calling up the further capital beyond that paid ?—Certainly.

1462.	Do you conceive the public will have an equal security with respect to
"the cautious and prudent management of banks if the partners be responsible only
for the amount they have subscribed, and relieved from further responsibility to
'the extent of their private property being pledged to the public ?-<-1 should think
not quite so, certainly, and this is a reason against limited liability.

1463.	Mr. Clay*] Has the consciousness that men's whole fortunes were liable
insured prudent banking within your memory ?—I think it has in some,measure,

and with a few wholesome checks it may be still .further improved ; and when I see
gentlemen with 10,000/. a year joining joint stock banks, that is surely another
reason against limited liability.

1464.	Chairman.] At the present time is there any existing indisposition on the
part of persons of property and of capital to take shares in joint stock banks, sup-
posing them well managed ?—I should think not at this time.

1465.	Do you think the inconvenience existing at the present moment arises
from an indisposition on the part of the public to establish joint stock banks, or
from too little an anxiety to establish them ?—I think there is too much anxiety to
establish them at the present moment.

1466.	In your mind, would that anxiety to establish them be increased or
diminished if there was a power to establish them under limited liability ?—If you
require a very large paid-up capital, of course you deter many who call themselves
bankers now from ever being bankers at all.

1467.	Mr. Clay.'] Does the anxiety of the public now to enter into joint stock
- banks induce generally wealthy and respectable persons to join them, or is it rather
.an anxiety of persons who can join themnow without advancing any money at all ?—

* There are some persons joining who can advance little or no money, but I every
_ day hear of gentlemen of property taking shares.

0.92.	1468. Asgo

MINUTES OF EVIDENCE TAKEN BEFORE THE

V. Stuckey, Esq. 1468. As a man of great experience, and having an intimate knowledge of 4

—- very wealthy district of England, do you believe that many highly respectable per*

34 June 1836. sons 0f jarge property would join banks of limited liability who would not join the
present?—Yes, I know that they would.

1469.	Is it your opinion that it might be ah useful legislative provision to make
it a condition of the charter to be granted to banks, that a certain amount should
always be vested in Government securities ?—I do not know ; I should certainly
have a certain amount of capital paid up, but to regulate the resources and
management of a bank by law is difficult.

1470.	Under the three heads to which your account presented to the Committee
refers, in one of them you have a large sum vested in Government securities; from
which it may be inferred that it is your own opinion that that is a prudent course ?

—I deem it so.

1471.	Do you think it would be wise to enforce that on all banks?—No, for in
a panic or difficult times all the assets may be wanted.

1472.	Would it obviate the objection, if there was a necessity only of its being
so vested with a power of removal, but with an obligation of being replaced ? —This
in some measure would lessen the objection.

1473.	In making that provision do you think this qualification would be useful ?
—It might be of some use; but I think a few other regulations, as have been
suggested, would improve the present system.

1474.	Sir Thomas Fremantle.] What is your reason for keeping so large a
sum in Government stock?—I have always found from my experience, except two
days in my life, that I could get money more easily upon those securities than any
other.

1475.	Is it easier, in times of emergency, to obtain money on Government
stock than on good mercantile bills ?—I have always found it so.

1476.	You do not concur with any witnesses who state that they have found good
negociable bills more easy to obtain money upon than Government stock ?—No ;
I have never found that with a good bill, even of the house of Baring, I could get
money more easily than on Government stock.

1477.	Mr. Smith.'] Do you not consider that, generally speaking, in London the
rate of interest at which you borrow money on Exchequer bills and stock is
notoriously lower than that at which you borrow on bills of exchange?—Yes, it is
lower, andffor that reason we generally adopt it.

1478.	Sir John WroUesley.] At the time of the panic did you sell any
Exchequer bills ?■—Yes.

1479.	At what loss?—I cannot recollect, but at a loss.

1480.	Are you aware that they were at four per cent, discount at that time?—
Yes.

1481.	Was there any indisposition at that time on the part of your London
agent to discount your bills at five per cent. ?—Yes, I apprehend very great
indisposition in every bank in London during the panic. The Bank of England,
I believe, did not discount for a day or two, but after that they discounted liberally,
and very properly, in my opinion.

1482: Did you discount any bills of exchange during the panic?—None at all;
but having Government securities, we got through the panic without discounting
any of them.

1483.	Were you charged more than five per cent, for discounting any of them ?
—We did not discount them.

1484.	Mr. Clay.'] You conceive Government stock or Exchequer bills the
most secure ?—Yes, I think a bank of issue ought to have them.

1485.	You think no bank is safe without them ?—No, I think not.

1486.	Mr. jMorrison.] Is not the capital paid up in your bank sufficient for all
the purposes of the bank ?—For every purpose.

1487.	Would it not be an inconvenience to you to have the other 50 I. on each
share paid up ?—It would ; our difficulty is often the proper application of our
resources.

1488.	Is it not better that there should be, beyond the capital paid up, a
liability on the part of the subscribers, looking to the public advantage ?—I think
so, certainly, because a full paid-up capital we should not know how to employ
prudently, and perhaps be induced to embark in improper speculations j and locked-
up capital should be avoided.

* L	1489. WouldSELECT COMMITTEE ON JOINT STOCK BANKS.

1489.	Would it not be an inducement for bankers occasionally to advance their jr. stnckey, Esq.
Hioney on bad securities?—It might possibly have that effect, as before stated.	—--

1490.	Upon the whole you are rather in favour of the present system ?—1 am 124 June 1836.
more inclined to the present system than I was when I was examined before the
Committee on the Bank Charter, because I see the difficulty of carrying some of

the suggestions into execution, and I also see there are gentlemen inclined to joint
stock banks now who would not look at a bank after the panic ; still I think the
existing law may be improved.

1401, You exercise a control as to the admission of shareholders into your bank ?

•>—We do.

1492.	You admit none but persons known to be persons of respectability and
property ?—Just so ; they must have the approbation of the directors.

1493.	Mr. Clay.~\ Do you think the disposition to take shares in a joint stock
bank would continue if one joint stock bank were to stop payment ?—That would
certainly act as a damper, and I think the late discussion has done some good.

1494.	Setting aside your own bank, which is most highly respectable, do you
think that the disposition of persons of property to embark in banks their whole
fortunes being subject to liability, would survive the instant of one joint stock
bank failing, and the individual partner being called uppn to pay up ?—Perhaps
not; but as this has not happened, I can only speak theoretically, and I think the
joint stock system, under proper regulations, the safest and best.

1495.	Chairman.] Your bank is carried on under a deed of partnership?—It
is j I sent the deed to the Committee.

1496.	jSo are other Joint stock banks ?—Yes.	,

1497.	Do you consider it desirable before a bank, particularly a bank of issue,

commences business, there should be some careful revision, by an independent and
impartial authority, of thp deed of partnership under which the proceeding was
to take place ?—Yes; our deed was drawn by an eminent conveyancer.

1498.	As all the joint stock companies that are or may be established are under
deeds of partnership, do you not think all transactions, as well between the directors
and the proprietors, as between the company and the public, depend very much
upon the nature of the covenants of the deeds of partnership ?—Yes.

1499.	Do you not consider that it might be advisable that, on the part of the
public and the State, some revision should take place of the deeds of partnership
before the new banks are established, in order to see that the covenants in those
deeds are such as may conduce to the public interest ? —Yes, I do not see the slight-
est objection to that; and I think it might be frequently attended with advantage.

1500.	Do you consider it advisable that in all prudently managed banks a
provision in the nature of a reserved fund should be made ?—Certainly.

1501.	Are you not disposed to recommend that such a covenant should be
inserted in all deeds of partnership ?—I have no objection to that.

1502.	Should you consider it also necessary that before the payment of an
annual dividend to the holders of stock of each bank such a settlement of account
should be made, and such balance struck, as should ensure to the proprietors that
the dividend paid was out of the profits of the bank, and not from any other
sources ?—Of course I should think that a very proper provision, and it may be
done by auditors.

1503.	Is there any security at the present moment against banks being esta-
blished without comprising in their deeds of partnership either their own money
or securities, which it might be desirable to insert therein ?—I am'. not aware that
there is any such security.

1504.	Have you any objection to there being by positive law a supervision, on
the part of the Privy Council or the Board of Trade, of all the deeds of partnership,

that security may be taken that those necessary conditions shall be introduced into
all deeds of partnership?—I see no objection.

1505.	Do you consider the system to be a safe one which enables a bank to
conduct its business with 1,000 shares, of which it issues a small number, we will
say, for example, 200, keeping in its possession a reserve of 800 shares to be
issued either at par or a premium, as circumstances may render it expedient ?—-
X think it is not a safe system, particularly if the shares are small.

1506.	Is not that reserve of shares frequently made use of, if not always made
use of, for the purpose of buying custom, and extending the connexion of the
bank ?—I have no doubt but it is frequently done.

0.92.	n 2	! 1507. Will92

MINUTES OF EVIDENCE TAKEN BEFORE THE

V. Sinqle^Ssq. 1561. Will not the facilities of extending connexion and acquiring custom be

——-increased in proportion as the number of shares is increased, and in proportion asr

H:^vae 1836. those shares are small shares ?—I think so.

1508.	Is that one of the dangers which you contemplate as likely to arise in
case no limitation is imposed upon the nominal value of the shares to be issued r—■
It is, and therefore I think it should be altered.

1509.	Was that the cause which, in your mind, led to the necessity, if there be
no limitation of the nominal amount of shares in banks, in order to keep their own
business and extend their connexions, having subdivided large shares into small
ones?—Yes, that is just what I consider the Irish Provincial I3a.nk has been under
the necessity of doing.

1510.	Do you consider that the system of making advances on shares by the
bank itself is a prudent course of proceeding ?—Certainly not.

1511.	In order to avoid the possibility of dividends being declared and paid
without looking to the amount of debts which may be justly considered as bad
debts, do you not consider that the proprietors at large should have some means of
ascertaining the principles on which the balance of the bank is struck?—I think it
very desirable.

1512.	Does that balance sheet state the profit and loss on the half year's transac-
tions ?—It does.

1513.	Is that balance struck after writing off the amount of debts which appear
to the bank to be bad debts ?——It is ; the bad debts are all taken into consideration
before the account is made up.

1514.	Mr. Morrison.] You always give an estimate of what you suppose will be
the final produce of any debt, known to be a bad debt, but the amount paid being
an unascertained sum ?—Yes, we do the best we can; we make up our accounts every
six months ; we look at every debt and take care never to go beyond the fair point.

1515.	Have you found any inconvenience arising from that free communication
between yourself and the shareholders at large ?—None at all, as far as we are
concerned.

1516.	In the event of a company, consisting of a large number of shareholders,
do you apprehend that persons from curiosity, or adverse banking interest, might
perhaps require disclosures by becoming possessors of stock, which disclosures could
not be made without inconvenience to the bank ?—I think this may possibly happen
with a large number of shareholders.

1517.	If any such apprehension was felt, should you think that might be
avoided by vesting such a power in the shareholders as that of appointing proper
auditors to make that audit of the accounts?—I think that would be desirable.

1518.	Would not the appointment of auditors be a proper safeguard against any
improper and improvident act on the part of the bank ?—I think it might.

1519.	Sir James Graham.] Is there any other provision which you would consider
advisable to render joint stock banking as conducted satisfactory, than requiring the
shares to be of a certain amount, and a certain portion of that to be paid up, together
with a periodical publication of the state of the account, in the form in which it is
given by the Bank of England ?—I should recommend that the accounts of the
banks of issue should be returned every six months, and sent to the Stamp-office,
so that they may be published in the Gazette. It would also be most desirable that
there should appear in the same Gazette the market price of gold and silver, the
exchange with Paris and Hamburgh, the amount of Bank of England circulation,
and the amount of country and joint stock bank circulation.

1520.	Is there anything else you have to suggest to this Committee which you
consider necessary to render the system of banking satisfactory and safe?—No,
nothing but what I have before mentioned.

1521.	Mr. Clay.] Without meaning to ask you an expression of opinion
relating to any individuals whatever, does your experience as a banker lead you to
the opinion that there has been imprudent conduct on the part of joint stock
bank establishments ?—I think with some of them certainly.

1522.	Do you think there is a tendency, at the present moment, indiscreetly to
extend that accommodation that banks are in the habit of giving?—I think so ;
and I think that by going all round to the country towns, and inducing little
people to become shareholders, and offering to lend them money, great risk
results.

1523. DoesSELECT COMMITTEE ON JOINT STOCK BANKS. 93

1523.	Does it come within your own knowledge that indiscreet advances have been V- Stvektf, Esq."
made ?—Yes, I know of instances where indiscreet advances have been made, and

I know more instances where indiscreet shareholders have been admitted.	24 June 1836*

1524.	Do you think that within the last 12 months there has been so much of
indiscreet banking as at any time within your recollection ?—No, I should not say
that, for there was a great deal of indiscreet banking before the panic|in 1825.

1525.	Has there been a considerable extension of bank accommodation?—It is
going on now; I hold in my hand the proceedings of an establishment, they
appear now to have near 50 branches in different parts of the kingdom.

1526.	Is it consistent with your knowledge that agents from joint stock bank
establishments have been to different towns in England, and that the result has
been the giving what you would consider indiscreet accommodation?—I have
known it done, and I apprehend it is going on now.

1527.	Are not gentlemen now in the habit of taking offence with their bankers
if they do not give them accommodation ?j—Yes, in some cases.

1528.	Has there been considerable facility within the last 12 months of getting
accommodation?—1 think there has.

1529.	An indiscreet facility ?—I think in some cases it has been so.

1530.	Sir James (jrraham.~\ Is not that inherent in competition ?—It is in a
measure, but I think it is the duty of the Legislature to do all it can to prevent
panics or convulsions.

1531.	Can you effectually do that without destroying the competition in bank-
ing?—Yes ; if the law is a little amended I think it maybe done ; even a Legisla-
tive resolution would have a very good effect.

1532.	Facilities will always arise from competition?—No doubt they will. "

1533.	In an open account, constantly operated upon, do you charge interest
according; to the state of the account ?-—Yes.

1534.—

1535.	Do you mean day by day ?—No, not day by day; if a gentleman were1
to desire interest upon the money in our hands, I should say you had better take
it out of the general account, and place it on the deposit account.

1536.	That principle of daily interest on money received and paid is, as you
are probably aware, universal in Scotland?—So I understand ; the joint stock
banks there have been longer established, and are at a greater distance from
London; but I want to know how a person is to give daily interest for that which
he may be called upon to pay at any hour.

1537.	Wherein consists the danger, being aware, as you are, of the Scotch system
of banking?—-They promise to give two per cent, on the balance on their hand to
the very day of payment, but they charge much more for commission than we are
in the habit of doing.

1538.	Would not that danger only arise by anticipating the charge, whereas the
account is made up only to the end of the quarter?—It appears to me to be an
unsafe system of banking, to allow interest for a sum which may be called for at
a moment's notice.

1539- Yours is a bank of issue; have you ever turned your attention to what
your issue costs?—Yes, I should think it is somewhere about two per cent.,

hardly that.

1540.	Can you give an opinion as to the character of the shareholders in the
joint stock companies ; are they men of property generally, or the reverse ?—In
some of the joint stock banks improper people, in my opinion, have been admitted,

not persons of much property, certainly.

1541.	Do you think they have the means of paying subsequent calls ?—I think
I have known shareholders that would find great difficulty in paying subsequent
calls.

1542.	Chairman.] Are not those the banks in which the shares are small?—

s Yes, I think they are.

1543.	Sir James Graham.'] Is not your issue the most profitable part of your
business ?—No, I think the money on account is the best.

1544.	Is that a large proportion of your business ?—Yes.

1545.	Mr. Clay.] What do you consider, in ordinary times, the amount of the
rest in a bank issuing should be, in proportion to its circulation ?—I should say
a twentieth; if there is anything like alarm, we increase it; but such is the facility

0,92.	n 3	ofMINUTES OF EVIDENCE TAKEN BEFORE THE'

V. Stuelcey, Esq}, of .communication now, it requires less, and we have never found any inconye-
——— nience on this point.

24 Jane 1836. 1546. You must have a much larger sum immediately under your hand ?—Yes,
we have it in Government securities or with our agents in London, so as always to
command a very large sum.

Martis, 28* die Junii, 1836.

members	present'.

The Right Hon. the Chancellor of	Mr. Pattison.

the Exchequer.	Mr. Loch.

Sir John Wrottesley.	Mr. F. T. Baring,

Mr. Clay.	Sir Robert Peel.
Mr. Attwood.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

Mr. Walter Gibson Cassels, called in ; and Examined.

Mr. W. G. Casseh, 1547- Chairman.] ARE you in connexion with the Northern and Central Bank
—--- of England ?—Yes, and agent for them in London.

28 June 1836. 1548. How long have you been in connexion with them ?—I was brought from
Scotland to take the management of the Northern and Central Bank of England at
Manchester in January 1834; our business in London increased to a large amount,
and became so important in consequence of our having a number of branches to
correspond with, I was appointed agent in London in April 1835.

1549.	Up to the last-mentioned date you were employed in the Central office at
Manchester ?—As manager there.

1550.	From the returns which are before the Committee, it appears that there
are in connexion with the Northern and Central Bank of England 25 branches
and 15 sub-branches ?—Yes, in all 40.

1551.	Can you explain to the Committee the distinction between a branch and
a sub-branch?—Yes ; what is called a branch communicates directly with the
head office at Manchester ; a sub-branch communicates with one of the branches,
and through them with the head office. For instance, the branch at Worcester
corresponds and keeps its accounts entirely with the head office at Manchester
the branch at Evesham corresponds almost entirely with the branch at Worcester^
sends its remittances and carries on its correspondence with it, and consequently is
called a sub-branch to Worcester.

1552.	Is the business done at the sub-branch the same in character as that
which is done at the branch ?-—The very same.

1553.	Subject to the same responsibility?—Yes, the same reference and the
same control.

1554.	Discounts are effected at the branches and sub-branches ?—They are.

1555.	And promissory notes issued?—Bank notes are issued.

1556.	Are they the notes of the Northern and Central Bank which are issued,
or Bank of England notes?—Bank of England for ordinary business; every
customer that comes to a branch or sub-branch is asked what kind of money he
"wishes for the operation, and what he wishes, and they give him either Bank of
England notes,-gold, or Northern and Central Bank notes, if preferred.

1557.	How many different forms of note have you in reference to the date and
the place of issue?—We have only one form of note, I mean one engraving, and
the name of the place is filled up in writing; every note that is sent to the branches
is first of all made out and signed at the head office, and thereafter sent to the
branches, and, before issue, signed by the manager at the branch; but a record is
kept of all notes at the head office, and the managers at the branches debited for
those notes as funds put into their hands.

1558.	Are those notes that are sent to the branches sent with the date and the
place of issue in blank, and filled up at the branch?—They are dated at the

headSELECT COMMITTEE ON JOINT STOCK BANKS.

95

head office, but the name of the place from which they are to be issued is left to be Mr. W- G- Vtfflfls
filled in at that place.	' ■" -m.u.

1559.	Where are they made payable ?—All notes, agreeably to Act of Par- a8 Jan# 1836.
liament, at the place where dated, and in London, at the option of the bank.

1560.	Every bank note of the Northern and Central Bank issued at the branches
bears the date of the branch at which it is issued, and is consequently made payable
there as well as in London ?—Yes*

156 j. How is this in respect of the sub-branches ?—It is the same.

1562.	So that in all cases of the sub-branches, as at Carnarvon or Holywell,

for instance, the notes of the bank are dated at Carnarvon and Holywell respec-
tively, and made payable there as well as in London ?—They are.

1563.	Should you think that you complied with the Act of Parliament if at
those several 15 sub-branches you issued notes bearing the date of Manchester or
any of the branches to which those sub-branches are subordinate, those notes being
payable not at the place of issue, but at a branch such as Manchester, as the case
might be ?—I think it would be a very extraordinary thing if they were so issued;

it would be contrary to our regulations.

1564.	Do not you think that would be a mode of doing business inconvenient
to the public interest ?—I think it would be absolutely necessary, if such a thing
took place, that persons to whom they are paid should be informed at the time
it was done, and that it should be done only in the event of the branch having a
scarcity of notes with their own place upon it, and rather than disappoint a
customer who wished to have notes of the bank ; I think that is the only case in
which that should be done, and that only if notes dated at the one place happen
to come into the possession of a branch. No notes are sent from the head office
that could be used in that manner.

1565.	If they were so sent, and through a bank with 25 branches and 15 sub-
branches, bank notes were put into circulation payable at Manchester only, do you
not conceive that rural establishments in the exchange of those notes might be sub-
jected to some inconvenience and delay?—The thing is not possible; according to
the Act it cannot be done.

1566.	Upon the face of the returns before the Committee, it appears that the
stock of the company consists of 100,000 shares at 10/. each, of which 71,186 are
now issued, leaving a balance in the hands of the bank; can you inform the Com-
mittee how many shares were subscribed for before the bank commenced its opera-
tions ?—I think before the bank commenced its operations, even before the directors
were chosen, there were about 35,000 shares subscribed for out of 100,000.

1567.	Under what circumstances were the remaining shares, namely, the dif-
ference between the 35,000 and the 77,186 shares, issued ?—They were always
issued on applications from influential and valuable shareholders, who could, in the
estimation of the directors and managers of the bank, bring business to it in a safe
and prudent manner.

1568.	By valuable shareholders you wish the Committee to infer that the test
of value was bringing safe and profitable accounts to the bank?-—Certainly, a
profitable and safe account. I may state here that many applications to a
very large amount were made, which were rejected, because either there was some
objection to the party, or it was a mere matter of investment, and could not be
profitable to the bank. A number of ladies who were rich wished to have shares,

that they might have a good return for their money : those were not considered
generally valuable shareholders in the bank.

1569.	As between two applicants, you preferred that applicant who was likely
to become a profitable customer to an applicant who merely furnished you with
capital, and purchased the stock of the bank as an investment?—I should say
that we did ; at the same time influence and high respectability and very great
wealth were always considered when the applications were made; there were gen-
tlemen who made applications for shares, retired from business, worth from
100,000 I. to half a million, and it was hardly thought right to refuse them as
shareholders, as, even if they had not a very valuable account, they might be
valuable from their influence, and likewise as depositors.

1570.	Do you consider that the issue of shares which has taken place subse-
quent to the commencement of business, has had the effect of enlarging the
connexion and extending the business of the bank?—Very greatly indeed, in pro-
portion as we have been established; we have from time to time acquired greater

0.92.	n 4	stability,; g6 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. W. Q. Castek. stability, and our proprietary has very much increased, both in number anil
.	— in respectability.

*8 June 1836. . 1571. Do you think the fact of your acquiring your business and extending
your connexions in a just and safe manner has been to a degree by reason of 10?.
shares being issued rather than 100 I. shares ?—I confess, if I give my opiiiion
individually, I never cared much about the nominal amount of the shares ; I think
it was much the same to have a nominal share of 100I. or 101. a person taking
10 shares at i o I. was equal to one at 100 I. ; it might be said that it was liable to
the objection that persons with a trifling sum of money might become the pro-
prietors in such a bank; but the invariable view of the directors was to avoid
taking those very weak persons, and their applications were scarcely ever
listened to.

1572.	According to your idea., what might be considered the average number of
shares taken by rich individuals?—That was very various; we have 1,200 share-
holders, arid it would require a very nice calculation to make out that.

1573.	Is the deed of partnership signed by as many as 1,200?—I apprehend
it is signed by every one, for they cannot receive their dividends without signing
it, and the names are regularly given in to the Stamp Office, according to the Act
of the seventh of George the Fourth.

1574.	Under what circumstances were the shares issued after the commence-
ment of the business j were they issued at par, or at any premium which they
might bear to the market ?■—For a very long time they were issued at par. The
object in retaining a number of shares was that the directors should have it in

' their power to give shares to influential shareholders in the immediate neighbour-
hood, and that the various branches in the country might have shares to give out
in those districts, to acquire strength and to raise a business in the places wher e

•	they establish themselves. If a branch was established at Worcester, we said w e

' will give off 5,000 or 6,000 shares to shareholders at Worcester, or at Liverpool,

or at Birmingham we will give off 10,000 shares, and in other places according to

*	the business and the demand for them.

1575.	When they ceased to be issued at par were they issued at the premium
they bore in the market at the day ?—I do not recollect when they first com-

' menced charging a premium upon them, but it was always taken into considera-

*	tion by the directors and the manager Of the bank from that time, and every appli-

•	cant was informed he could not have shares unless he paid a premium.

1576.	That was the premium of the day, not a premium arbitrarily fixed by the
directors?—It was fixed in consequence of what was paying in the market by those
who were selling.

1577.	At the period at which those shares were issued the directors were, as
they still are, in possession of a considerable number of unissued shares?—
Yes.

1578.	Had they not the power of varying that premium more or less by the
number of shares which at that particular time they judged it expedient to
issue ?—I think the directors must have had that power; but I must say I think
they were always actuated in giving out shares by feelings of propriety and for
the good of the bank.

1579- Is there a communication to the proprietors generally of the number of
shares which remain in the possession of the court of directors unissued ? —At every
general meeting it is, because the amount of paid-up capital is always stated
there.

#

1580.	To what account was the premium received upon the shares which you
issued carried?—To the profit and loss of the bank generally, so that every share-
holder should have an equal participation pro rata.

1581.	The sale of those shares becomes one of the elements upon which you
strike your balance and declare your dividend ?—Certainly.

1582.	Wh.at dividend has been declared ?—-The bank commenced business in
March 1834; and the first balance was made on the 31st December of that
year, upon which a dividend, at the rate of five per cent., from March to December,
was paid.

1583.	Mr. Clay.'] Do you mean 5 I. per cent, per annum, or,for the half year ?
—At the rate of 5/. per cent, per annum. Then in 1835 the balance was from

" the commencement of the year to the end of that year ; a fourth call of shares took
place on the 22d of March 1835, and seven per cent, was declared, with the

-	exceptionSELECT COMMITTEE ON JOINT STOCK BA^KS.

97

exception of the difference of dividend from the 1st of January to the 22d ^larch, Mr. W. G, Cassela,
on 21. 10.?.	.	.

1584.	Chairman.] That dividend you declared, taking into account the amount 2	3 *
of the premium on those shares which were sold ?•—Yes, the premium on shares
previously received was considered part of the profit, but there was above 20,000 I.

laid aside as rest.

1585.	Can you state how much was received as the profit on the issue of those
shares?—No j I am not prepared to state that, without reference to the. books,

having long been removed from the head office,	.

1586.	Do you know what premium they bear now ?—Previously tp the payment
of the last dividend, they bore a premium of 7 /.; what cost 10 I. was selling in the
market at 17/,

1587.	When was the last dividend paid?—The general meeting was held
the last Thursday in April, and the dividend was payable about a fortnight
afterwards.

1588.	There have been about 36,000 shares issued by the bank subsequent to
the commencement of its operations ; can you inform the Committee what propor-
tion of those were issued at par, and what proportion at a premium?-—No j having
been so long removed from Manchester, I cannot state, but I can procure the
information in the course of a post.

1589.	Does the company purchase shares in its own stock as well as isspe and
distribute them ?—They have been obliged, under certain circumstances, to
purchase a few shares; it is never considered a desirable thing to do it, but
circumstances have occurred that rendered it necessary to purchase shares
sometimes.	-

1590.	What was the'nature of the circumstance which rendered it expedient
for the company to purchase their own shares?—Sometimes they have been
obliged to take shares in consequence of requiring the payment of debts due to
them; there was one very remarkable circumstance occurred in which they might
take shares of the bank ; for a number of gentlemen who were managers at the
different branches, who were shareholders, in the event of any circumstance taking;

place, and it was necessary to bring them into court, were incapacitated from being;

witnesses, and the directors came to the resolution that all those gentlemen should
sell their shares; I think the bank may have taken some of their shares in conse-
quence of obliging them to sell.

1591.	Those circumstances were special circumstances, and the purchase did
not arise, on the part of the company, from any inclination or desire to become
purchasers?—None.

1592.	Do you think such a, practice would be objectionable?—I think it
would.

1593* T>o they make advances 011 the deposit of shares ?■—That is a part of the
business of our bank which is very ill understood ; there is an article in the pros-
pectus which states that shareholders may have an advance of one half ther
amount paid up by them, on the principle of a cash or credit account; in conse-
quence of this circumstance, the world has given it out and it has been laid hold
of by many, that a man could purchase 1,000 I. stock of our bank one day,

and borrow half the money of a friend, which enabled him to do it, and go and
take it out of the bank the next day; but that is the most absurd idea; that was
ever entertained ; the wording of the clause is very clear when looked into, that
the directors may grant an account to the amount of one-half of the paid-up
stock, to be operated upon as a cash or credit account; but the invariable rule in
granting that is, that it must be an account constantly operated upon, and that
whenever it assumes the appearance of a loan, or dormant in any way, whatever
the individual's respectability, it is instantly called up.	-

1594.	With that explanation is that described as a species of account which was-
to be so opened with the shareholders, which it would not have.been advantageous
for the bank to have opened with the same parties, if they had nof been share-
holders ?—I think any person who had not shares might have the same advantage
fey merely giving security, either personal or heritable.

1595,	It the shareholders; purchased subject to that explanation, were they not
in a different position from what a person would be who was not a shareholder?

—I think that rendered the negotiation more simple, and the security given, was
done at no expense,	,

1596- Has that system been acted on by you to any extent in your transactions

0	with98 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. W. G. Cass els. with the shareholders of the bank ?—Much less than could be imagined ; to a

-- very small extent indeed.	1

28 June 1836. 1597- Are there any other transactions of the bank by which advances are
obtained, on the security of shares or the stock of the company ?—I think no
advance can be got except through the medium of an account; everything
must appear through the books in the shape of an account, and the debtor and
creditor are shown there at once.

1598.	Are there any facilities beyond those you have described, afforded to
any shareholders, which are not afforded to the rest of the customers of the bank ?
—I think not.

1599.	Mr. Clay.] In the account which has been sent up from the Northern
and Central Bank of England, it appears that the amount of promissory-notes,'
payable on demand, is stated to be 279,935/. under the date of the 31st of
December last, bank post bills 60,625 ^ j what date are bank post bills payable?
—Invariably at seven days' date.	*

1600.	Are they ever at sight?—Never at sight, I consider; when I give this
answer, I mean in our bank.

1601.	You consider them liabilities of the same kind as promissory notes ?—•
The same as the drafts on our bankers ; they are just bills on the bankers, under
a different name.

1602.	The next item is "original bills drawn or accepted by the bank,"
amounting to 63,613/.; those are bills drawn, to suit the convenience of your
customers, at longer dates ?—Varying from 7 to 14 and 21 days ; one month and
two months, and sometimes three months.

1603.	What is the nature of the operations which gave rise to those bills on
the part of the bank ?—Customers come to the bank office, and for their own
purpose they got a bill at the date at which it will be convenient for them to have
bills on London; sometimes they have to make remittances, sometimes to send
them to London to meet certain payments of their own; sometimes they have to
send them to a distance, and by the time they get round and come to London,
they are approaching to maturity. I have known bills sent out from us to North
America as a remittance.

1604.	You do not look upon them at all in the same light as your circulation ;
they are bills drawn by the bank itself to meet the views and convenience of your
customers?—Entirely.

1605.	What is, generally speaking, the ground on which the bank accepts
bills?—The occasions are very rare, and not to a very large amount; a house at
Leeds wishes to make a purchase at Hamburgh; they have an accredited agent
there, to whom they must send a credit on London ; they apply to us to furnish
this credit; I merely apply to Barnett, Hoare & Co., or Prescott, Grote & Co.,
and they write to Parish & Co., at Hamburgn, to give negotiation to the bills of
such a person pointed out upon them to such an extent; when Parish & Co.
see that portion of Barnett, Hoare & Co.'s letter authorizing them to negotiate
those bills, they are given, and will be accepted, and they are of course called
acceptances by the bank, payable at their bankers.

1606.	They are accepted by you, payable in London?—They are accepted by
Barnett, Hoare & Co. for us.

1607.	Adverting to the amount of circulation of the bank, and adding to the
amount the promissory notes and the bank post bills, it is in round numbers
340,000/.; can you state to the Committee what has been the progress of that
circulation ; has it increased regularly since the first establishment of the bank ?'■
—-It has increased regularly; the first week we began to issue notes, the amount
sent out was between 3,0001, and 4,000 /.; in about a fortnight or three weeks
it got up to 14,000 /. or 15,000 /., and it gradually progressed in amount about
5,000 /. a week. I have known it to amount to 10,000/. a week; but it was
iSfren checked a little, perhaps, until it amounted, when I left Manchester, to about
180,000/. or 200,000/.

1608.	When you state the amount of promissory notes, payable on demand,
you refer to those in circulation, taking those in the hands of the parent bank
and the different branches?—Certainly ; when a certain number of notes are
prepared for circulation, the moment they are signed and ready to be circulated,
either the head office or the branches to which they are sent are debited with the*
amount; to check the amount in circulation, the head office and all the branches
send a weekly return, and from the amount with which they are debited, as

originallySE.LECT COMMITTEE ON JOINT STOCK BANKS.

99

.originally sent to them, they deduct the number of notes in the office not at the Mr. W. G, Caste**.

.moment in circulation ; a return is likewise sent of all the notes which have been -;——

retired by our bankers in London ; taking those accounted for in that way, we ^UIie 1^36.
consider the jest as circulation.

1609.	Have the directors of the bank laid down any rule, or fixed any limit to
the amount of circulation ?—That has been frequently the subject of conversation.

We have sometimes speculated in argument about the amount we might put in
circulation ; but I never have heard any idea beyond half a million,

1610.	Is there, independent of the discretion of the directors of the bank,

practically any check to the amount you can keep in circulation ?—The circula-
tion never could be increased beyond the demand for those notes; if any bank
, issue more than their own shareholders and the public can conveniently keep in
circulation, they immediately return ; if one bank issues more in proportion to its
business than another, they invariably find their way to other banks, and come
back on the bank which has over-issued.

1611.	You find, practically, that in providing for the circulation of Manchester,

confining it to that for the moment, anything beyond that required for the general
business, the bank would not be able to keep in circulation ?—We could not; we
cannot force the circulation.

1612.	Do you think, then, as an inference from that conviction, that the cir-
culation of your bank can be carried to a greater extent ?—In my opinion it never

- can as long as we are obliged to pay in gold or Bank of England notes, when the
notes are presented to us.

1613.	Has your circulation been restricted by any interference on the part of
the Bank of England ?—I myself entertain a pretty good idea upon that subject;

but it is difficult to convey it to another person. The Bank of England, by the
mode under which they have proceeded generally, have had in view to increase
their own circulation, and to cripple as much as possible the circulation of other
banks; but I humbly would give my opinion, that in the district of the country
where the demands of trade, and the convenience of the public, require a certain
amount of local bank notes to be constantly in circulation, if there be four banks
in Manchester, and one of those gives up the circulation and circulates nothing

but the notes of the Bank of England, the circulation of local banks by the other /

three would be thereby considerably increased.

1614.	You think the general effect of one bank out of four in Manchester
withdrawing their own notes and circulating the Bank of England notes, is to
increase the circulation of paper in Manchester ?—No; to increase the circulation
of the other three banks.

1615.	Is it not also to increase the circulation of paper in Manchester, if you
take into account the circulation of that fourth bank ?—I do not understand the
question.

1616.	You say that if one bank in Manchester withdraw its own circulation,

and circulates Bank of England notes, the other three would increase their own
circulation P—Of their own notes.

1617.	Do you not suppose that the total circulation, including Bank of Eng-
land notes, must be increased by the circulation of one bank circulating Bank of
England notes?—The circulation of notes issued by the other three banks will not
be increased more than if all the four banks were circulating.

1618.	Supposing the bank that circulates Bank of England notes, circulates as
many Bank of England notes as were previously circulated of its own, and the
others circulate an equal amount of their own notes, will not the whole be
increased ?—No, I think only one will be increased ; but suppose each of the
banks were circulating 100,000 of their own notes among the four banks, that will
be 400,000 ; if one of those banks withdraws that circulation, I think'the other
three banks, instead of circulating 100,000, might circulate 120,000 each.

1619.	That will be 360,000?—Yes ; I do not mean to say that approaches tta
amount, but I am putting a case.

1620.	That would be 360,000 for the three banks, in lieu of their 300,000
before?—Yes.

1621.	Do you not suppose that the fourth bank would circulate as many Bank
of England notes as it did previously of its own?—No, certainly not.

1622.	Instead of 100,00c)/., it circulated only 40,0001. ?—They would send
. out as many Bank of England notes as they had been used to send out of their

own notes and Bank of England notes.

1623.	Would thfere be art increase?—No, for they will soon find their way into

02	other100 MINUTES m EVIDENCE TAKEN BEFORE THE

lit. W. G. Cassels. other banks. Suppose the Bank of England give 500,000 /. to a branch who issufe
■—— them to the Manchester and Liverpool district bank ; if there is not a demand for
June 1836. them as soon as they are sent out to the public, they find their way to the other
banks or to London, and do not find their way amongst the community, conse-
quently they come back to the Bank of England.

1624.	Is ^ your opinion, that under the circumstances you have named, of four
banks originally circulating 400,000 /., and upon one of them withdrawing its
circulation, and the other three circulated 360,000the permanent addition of
the fourth bank would not be more than the 40,000 /. to make up the 400,000 /. ?
—I think it would not; but when I stated those sums, it was merely a hypothe-
tical argument; but I beg to state to the Committee, in answer to a question, that
the fourth bank I alluded to was the Manchester and Liverpool district bank. The
circulation of that bank was never any object; their chief circulation was in the
potteries in Staffordshire, and I have an authority for saying that circulation
altogether never exceeded 60,000/. at any one period, so that the giving up the
circulation amongst Us was of no consequence ; it was understood that the circu-
lation of their notes was not so great an advantage to them as the offer of engaging
tvith the Bank of England, and getting discounts at a lower rate than other mer-
cantile and banking concerns were receiving.

1625.	Do you not imagine that the Manchester and Liverpool district bank
now circulate a larger amount of Bank of England notes than they did circulate
of their own notes ?—Not in the immediate neighbourhood of Manchester, for
they never did circulate their own notes there.

1626.	Have the Northern and Central Bank any account with the Bank of
England ?—None whatever.

1627.	The banks which do not circulate their own notes, have some advantage
probably with the Bank of England?—They have both a transmission account
and a discount account.

1628.	What do you mean by a transmission account ?—Supposing a bank in
Manchester has 10,000/. in London, which it is necessary to transfer to the office
at Manchester for the purposes of their business, the 10,000 /. is paid in by their
agent in London to the Bank of England, and an order is made to make an equal
payment in Manchester to that; that we call a transmission account. The facility
of receiving the money at one place instead of the other without expense, is very
great, and also from one branch to another. If a bank at Manchester has- occasion
to transmit a Sum of money to Leeds or to Birmingham, they generally pay that
amount to the branch at Manchester, and the next day the party can at the other
place, where the Bank of England have a branch, receive the precise amount
without any expense whatever.

1629.	To fevert to the question, do you not think the Manchester and Liver-
pool district bank circulate a larger amount of Bank of England notes than they
did previously of their.own; do you conceive the circulation of the Bank of
England is in nowise increased by their contracts with those different banks ?—*
I must qualify my observation with another: in consequence of the great facility
given to the Manchester and Liverpool district bank, in having a larger amount of
discounts with the Bank of England, I conceive their business is greatly increased;
and as their business is greatly increased, consequently they will use more Bank
notes than they formerly did.

1630.	Then in point of fact they do circulate a larger amount of Bank of
England notes than they did of their own ?—It is a matter I have not looked
into lately, whether the circulation of the Bank'of England has increased or
decreased, but it is all made public.

1631.	With regard to the advantage which other joint stock banks, not issuing,
receive from the Bank of England, that consists in discounting?—Yes, the Bank
of England, in consequence of their not issuing notes, grant them a discount
Account at a moderate rate of interest.

1632.	Do you know what that rate is ?—I think I am right in saying it £3
three per cent.

1633.	What, in your opinion, is the effect of that accommodation afforded by
the Bank of England; what effect has it upon the operations of the banks to
which it is granted?—It facilitates their operations, and enables them to discount
more paper than they otherwise would be enabled to do.

1634.	Does it give them a confidence in affording accommodation to their cus-
tomers which in your opinion they would not with their own circulation of notes ?
•—Undoubtedly it does j I should think if a larger quantity of paper were pre-
sentedSMECUJC0MMITEEE ON JOINT STOCK JBANK&

101

sented to that bank which has a constant discount account with the Bank of .¥/•,Wr- <*• CQttefc.
England, they would be encouraged to discount a larger amount; because they —. ■ ■ ■
know that by going to the Bank of England and giving in those bills again, under June l83(>-
their agreement with them, they will be pretty certain of their being discounted by
the Bank of England ; the other banks, which have not an account with the Bank
of England, must make their discounts in proportion to their means.

1635. Is it, as far as your experience goes, a facility, which has tended consi-
derably to increase the amount of accommodation given in the town of Man-
chester?—I understand it has increased very much the business of the Manchester
and Liverpool district bank, which is the only one I know of at present. Of the
banks established two or three months ago I do not know anything ; but of the
four banks established previously to the commencement of this year, I think it has
increased the business of that particular bank that they have continued their
intercourse with the Bank of England.

1*636. By enabling them to discount freely, does it force upon other banks not
having the same engagement with the Bank of England, the necessity of more
freely.supplying their customers?—I think it does in this way, that where cus-
tomers are liberally supplied at one bank, those in the same line of business with
them, and possessing equal means, and whose business could be done with'equal
safety, say, " Why cannot we have our business done in the same way theirs is done;

it is very strange that you should pinch us ;" and I think it is their interest to
increase, as far as they safely can, therefore it has an effect upon the whole.

1637.	Therefore that must tend to foster speculation to the extent to which
such accommodation is increased ?—I should be sorry to say it fostered specula-
tion. I consider a circulation, founded on the trade of that part of the country,

to be a circulation perfectly safe, and I do not think that they have gone further
than prudence justified.

1638.	In whatever degree the accommodation may tend to increase the dispo-
sition to trade to that extent, the accommodation afforded by the Bank of England
has had that effect ?—It has rendered it more easy.

1639.	In your opinion, has it any effect on the London market for interest ?—

I think it has a little effect upon it.

1640.	In what way'has it that effect?—If all the four banks of Manchester,

for instance, had no account whatever with the Bank of England, for anything that
they re-discount they must depend upon the floating capital of the country, which
generally centres in London ; anything done in the country bears a small propor-
tion to that done in London. I think there is generally a large amount of floating
capital required to be vested for a temporary purpose, or for a certain period.

Banks in the country send their bills to their broker and agent in London to
re-discount; if four of them were bringing all their bills to bear upon the floating
capital, that would make a very great demand upon it; if that was confined to
three-fourths of that demand, the floating capital will not be affected to so great
an extent as it otherwise would be. In that way, perhaps, if a fourth part of the
whole demand for re-discount be transacted by the Bank of England, that takes
away from the demand upon the floating capital, and I think those other three
banks will obtain their discounts at a cheaper rate than if all four were competi-
tors for it.

1641.	Do you know the extent to which the Manchester and Liverpool district
bank has tliQ power of discounting with the Bank of England?- I have heard it
is to the extent of 400,000 /. or 500,000/., constantly running; I do not give that
as a matter of fact I am acquainted with, but I have no reason to believe it is
incorrectly given.	-

1642.	Supposing it to be, for illustration, 500,000 /., the effect is, it gives
greater accommodation to the business of the bank having that accommodation?

•—Certainly.

1643.	It has a tendency to compel other banks also more freely to accom-
modate their customers?-—They would not do it except they complain of it, but
it is an inducement.

1644.	It also, by the assistance it affords to the bank having that account with
the Bank of England, has a tendency to lower the general rate of interest?—

I think so; that must follow.

1645.	Sir John Wrottcsley.] Do you mean that it lowers the market rate of
interest in London or Manchester ?—In London«

1646.	Do you mean that many bills being sent from Manchester to London
• o 3	fora 02

MINUTES OF EVIDENCE TAKEN BEFORE THE

-Mr. W. Cr. Cassets. for discount, will lower the rate of interest in London?—Bills being sent front

---— Manchester to London for discount, will increase the rate of interest ; but the

28 June 1836. Bank of England giving a greater facility, and preventing one-fourth part of the
bills coming to London, prevents the interest on money being so high in London.

1647.	You exclude the bills sent up to the Bank of England ?—They are sent
in to their branches.

1648.	Mr. Clay.] In regard to the expense of your circulation, you think it
necessary to keep a certain amount of money as a rest, in places, to pay the note? v
as they come in ?—We consider that we have always ample funds to pay every
such demand.

1649.	From the ordinary course of circulation, you think it necessary to keep
a certain amount of Bank of England notes to pay the notes as they are brought
•in?—Of course everything of that kind is to be provided for.

1650.	Supposing a bank to have a circulation of 100,000/,, what is the neces-
sary amount of rest you would think it prudent for such bank to keep ?—I think
it would not be prudent to have less than about one-third part by them in Bank
of England notes and gold.

1651.	When that liability is taken into consideration, supposing you to have a
circulation of 300,000 your whole effective ability to discount cannot be calcu-
lated at more than 200,0001.; that does not give you an additional capital of
more than 200,000/, ?—No, certainly not.

' 1652. Have you any opinion as to the relation the nominal capital should bear
to the paid-up capital in the present state of the discounting banks ?—I believe,
according to the state of the law, it is quite optional either to be all paid up, or
only a portion paid up; my own opinion individually is in favour of all the capital
declared being paid up.

1653.	You would make no difference between the nominal and the paid-up
capital ?-—That would be desirable if it could be done ; but there are many cir-
cumstances, arising from experience, which prove that banks which have declared
their capital to be very large, and have called up only a portion, have been con-
ducted as prudently and with as great safety to the public and to their share-
holders as those who have had their capital all paid up; but viewing it abstractedly,
I think that capital being paid up is by far the safest foundation of a bank.

1654.	You think it tends to prevent speculation in shares?—I do not know
that it tends to prevent speculation in shares, because I rather think it would add
to the value of the shares; that when the public know no more shares can be given
out, they would be inclined to pay a higher rate to become shareholders of such a
bank.

1655.	What are the peculiar advantages you anticipate from all the shares
being paid up?—The great advantage is, that it prevents, in the first place, all
speculation respecting it; and when they really know they have the full amount
of their capital paid up, and they can command no more, they proceed the more
steadily to make their arrangements, and conduct their operations in every respect
prudently.

1656.	It takes away the temptation to endanger any of the actual means in
possession of the bank ; it takes away the temptation afforded by the power of
calling up further capital ?—I think it does; if a bank declares its capital to be a
million, and it has only half a million, but at the end of three months they can
call up another 100,000 /. or 200,000 L, they may say, if we go a little too far, we
can make a call, and that at once will produce the .money; but I should rather
say, here is the limit to which alone we can go, and we must regulate our affairs
accordingly.

1657.	You can make no further claims?'—No ; ours are all paid up, but the
bank have shares which they can give out to shareholders where that is desirable.

1658.	What is your opinion as to the available effect of calls if money should
be wanted on an emergency for the purposes of a joint stock bank?—-It would,
generally speaking, to a very large amount, I doubt not, be readily paid up ; but
there may be a proportion of shareholders to whom it would be very inconvenient
to advance more money; and I think a portion of those shares would then be
thrown upon the market. If a person held 5,0001, of stock, and he could not pay
up any more, he must sell a part of his stock to enable him to pay up the additional
call. '

1659.	Suppose shares were to fall in value, would that not prevent the payment
by shareholders who would not have the means if inclined?—I think they would

allSELECT COMMITTEE ON JOINT STOCK BANKS* 103

all pay readily ; we have never known any sort of difficulty in that ease; they jfr- g. Cassdi.
have all been readily paid up.	--

1660.	Have you any opinion as to the propriety of joint stock banks keeping 28 June 1836:
a reserve of money in the funds, or in Exchequer bills ?—Yes, I have a very

strong opinion upon that subject. I think it would be highly desirable to do it;

but there are some forcible objections and difficulties in the way of it. The great
difficulty is, what funds to choose; for instance, if we were to make up our minds
to purchase in the three per cents., if we paid 92 it would be a very awkward
thing for the bank if any transactions in the country were to bring down the three
per cents, to 60, and if the bank were called upon to sell that stock. It is gene-
rally in times of pressure that stock is sold at a much less price, so that they would
be subjected to sell at a much less price than they paid or it. If they had it in
other Government funds, such as Exchequer bills, the purchase now would not
be at a very high premium ; it is only about 10 s. or 11 s. per cent.; but if you
vest a large sum in Exchequer bills, you have only an interest of about two and
a fourth per cent., which is laying out your money at a very low rate indeed.

1661.	Is it not practicable to obtain money on the deposit of stock or Exche-
quer bills without actually selling ?—Certainly, to a certain extent.

1662.	Is it not desirable for all banks engaged in large operations to have the
resource of Government stock or Exchequer bills ?—I think it is most desirable
for all banks to have it.

1663.	Is it your opinion that the practice of re-discounting bills, if carried to
any considerable extent, is safe and prudent on the part of the bank?—When it is
considered that there was prudence in discounting in the first instance on the first
presentment of the bills, and when parties are certain they can prudently and Safely
give their property for those bills, I can see no difficulty or danger in again turn-
ing them into money.

1664.	Is not that subject to this inconvenience, that in times when it is easy to
procure money in London, it enables the banker to engage in a greater circulation
and accommodation than he can generally; and that in case of a change in
the money market in London, it would become more difficult ?—When money
become^ dear in London it will check the discounting of bills in the first
instance.

1665.	Must not you have reference to every possible contingency and variation
affecting the circulation arising from the operations of the bank, and the accom-
modation it will afford ?-—I would say not, unless it be carried to a great extent

indeed, not necessary for trade and manufactures; and I conceive it could not be	,

carried to a great extent, unless it is done to discount accommodation bills, and to
encourage speculation in trading, which we set our faces against in every way.

1666.	You are still of opinion that by enabling a bank to give this accom-
modation beyond the resources under its own immediate command, no danger i»

produced by the amount of that accommodation so afforded, inasmuch as the bank
cannot always command the resource of discounting bills in the London market ?

—It cannot always, certainly.

1667.	Mr. Pattison.] You stated that the Bank of England took means to
reduce the circulation of other banks?—I stated my opinion that I believed that
the policy and mode of doing business by the Bank of England, by refusing
accounts to banks of issue who circulate notes, arose from a wish on their part to-
discourage the circulation of those notes.

1668.	What district do you particularly allude to ?—To Lancashire and York-
shire.

1669.	Was there any other circulation in your recollection than that of the
Bank of England in Lancashire?—Until the Northern and Central Bank of'

England and the Bank of Manchester began to circulate notes, and the Commer--
cial Bank of England, the circulation of Lancashire was almost entirely confined
to Bank of England notes.

1670.	How can you say that the Bank of England took means to discourage^

your circulation, which did not exist till the period of your starting the Northern-
and Central Bank of England ?—The Bank of England certainly took means to
discourage the issuing of our notes, and offered to give us a transmission account
and a discount account if we did not issue notes.	,

1671.	To whom did they offer that?—To the manager of the dauk

1672.	Can you recollect by whom it was offered ?—I can name one gentleman,

Mr. Turner, of Liverpool, who distinctly told me so.

0.92.	04	1673. Mr.104

MINUTES OF EVIDENCE TAKEN BEFORE TIIE

Mr .IF. G.Cas?els. 1673. Mr. Turner, of Liverpool, stated to you the principle upon which the
—- bank guided its transactions as to issuing and non-issuing banks ?—-Yes, he men*
s*8 June 1836. tioned that in conversation to me.

1674.	You canpot state that there Was an offer made to you?—Not a written
offer.

1675.	But only an explanation made of it ?—Yes.

1676.	Sir John Wrottesley.~\ From that which they did as to some, you
judged what they would, do for others ?—Yes.

1677.	M.v. Pattison^\ You re-discount largely?—Pretty largely occasionally.

1678.	Do you conceive that is a practice generally pursued by issuing bankers?
-r-Yes, I think it is ; I think the whole of them re-discount occasionally.

1679.	Throughout the country?—-Yes ; in different parts of the country some
very respectable banks are considered banks of deposit, and others banks of dis-
count ; a Devon and Cornwall bank, a Whitehaven bank, and a bank at Lan-
caster, and very many others, which have a very large command of deposited
money. In those particular districts there is no call for discount; and those bank&
send their money to the banks at Manchester, and Leeds and Liverpool, and
elsewhere, where the demands upon them for discount are very large, and it suit&
the purpose of both; consequently, the capital that would be lying idle in one
quarter is used, in another.

1680.	Would not your observations apply to private banks of issue also ?—L
think it would.

1681.	Did you ever know a private bank of issue of high respectability
discount, except in cases of great emergency indeed ?—I cannot pretend to say

' what they do; it may be done in a different way. There are private bankers in
Manchester wiio supply, their customers; perhaps they do not re-discount the
bills they receive, but they draw very largely on their London houses to meet
the bills discounted payable in London. I consider that pretty much the same.

1682.	The bank at Manchester used to draw very largely upon you, did it
not?—No, to a very small amount; indeed, any sums they have drawn upon ma
have been comparatively small sums.

1683.	What is the market rate of interest you are now paying in London ?—
We are paying as high as four and four and a quarter per cent.

1684.	What is the lowest rate you ever paid?—Two and three-quarters; that
was for a very short period in 1834.

1685.	You. never knew a bank of issue discount under th&t?—I never heard of
their discounting under three per cent.

. 1686. Have you re-discounted largely at three per cent, in the market?-—Very
large sums.

1687. Consequently, you have got bills discounted in the London market
quite as cheap as if you had made an arrangement with the Bank of England ?—
At times, but,not often, The changes of the rate of interest in London are very
rapid and very sudden.; I have known a difference of three-quarters per cent,
during the course of a week. I have been discounting at three and a half, and
I have seen it rise to four and a quarter during one week.	•

. 1688. Sir John Wrottesley.] Have you ever made any comparative calculation
as to the profit arising from taking money from the Bank of England at three per
cent., or issuing your own notes ?—Yes, we have,

1689.	Can you state it?—I can state that the result was that we gained more
by our own circulation than by having the circulation of the Bank of Eng-land at
three per cent. I thiqk on our circulation we gain rather more than three per
cent., and then we do not depend upon the rate of the market; for instance, if
money in London now costs four and a quarter, our circulation becomes very
valuable to us,

1690.	What is the value per cent., that you conceive to be profit, after deduct-
ing stamps, and the increased establishments which you must have both at Man-
chester and in London for the payment of your notes ?—I think about three per
cent, on 300,000/.; the gain will be about 9,000/. a year.

1691.	What are the expenses?—The expenses of stamp duty under the com-
position which we pay, is at the rate of 7 s. per annum for every 100 /. constantly
in circulation, and the expense of paper and engraving, and other things, are not
a very great deal.

1692.	Do you add the rest yoi must have in your London banks, and in your

• .	coffers,;SELECT COMMITTEE ON JOINT STOCK BANKS. -105

coffers, paying no interest ?—-We must keep a little more in consequence of Mr. W.G.Cassds.
having a circulation.	-

1693.	At what do you put that ?—I do not know that it will be above one- 28 June 1836.
eighth per cent.

1694.	You do not think that the expense of your circulation altogether is
more than 10s. per cent.?—No, for we are necessarily obliged to keep a large
sum of money, even if we.have no circulation.

1695.	Do you mean to say that the difference in your favour in consequence
of issuing your notes, as compared with paying the Bank three per cent., would
be three per cent. ?—The difference between the getting our bills discounted at
three per cent.,and having a profit on our circulation, is so much in favour of cir-
culation that we could not listen to the temptation of having our bills discounted
at a low rate by the Bank.

1696.	You state the expenses of your circulation at about 10 £. per 100/., and
you would be obliged to pay the Bank three per cent., leaving a difference of
profit of 50 s. ?—It is a different description of account altogether ; money to us in
the shape of notes constantly in circulation, supposing we are paying four per
cent, in London, is so valuable in making an estimate of the value of those to
the Bank, we can take only the difference between the three per cent., and that
constantly paid on 300,000 Z. or 400,000 I. employed in re-discount, throughout
the average of bills at three months, would be four times the amount in a year.

1697.	You state that you occasionally draw bills at three months; will your
London agents accept bills at three months?-—Yes, they do; there was some
difficulty at first, but when it was represented that our neighbours, Jones, Loyd
and Co., would do it for them, and that it suited the convenience of our cus-
tomers, that they came and demanded bills at three months; we had no inclina-
tion or wish to have them beyond two months, but we do it to accommodate them,

and when we refused to do it beyond two months, they said, " Then we will step
over to Jones, Loyd & Co., they will give it;" we were consequently obliged to
do it, and our friends in London gave up their feeling against it.

1698.	Are you acquainted with the nature of the deed of settlement of the
Northern and Central Bank?—I am.

1699.	Will you explain this: "Date of deed of settlement, and number of
persons who have signed such deed ? Ans. The deed of settlement is dated the
1st of July 1834, and the number of persons who have signed the same, is 1,265,

who by the existing law are liable to the engagements of the company to the
utmost extent of their means, but it must be observed that by clause number 26
Of the deed, should 25 per cent, of the capital at any time be lost, the company
will then stand ipso facto dissolved, the responsibility of the shareholders being
thereby limited to that extent only." What do you mean by the last sentence ?—

The meaning of that is, at the general meeting, where the state of the affairs of
the bank is exhibited to the shareholders, that then if it should appear through
misfortune or imprudence the means of the bank are reduced from a million to
750,000/., any individual partner may get up and move that this bank shall no
longer carry on business, but be wound up, and that they will not subject them-
selves to a management which has involved them in losses, and then by the deed
of settlement the co-partnership ceases; that is provided in the deed, that no
director or manager shall say " In spite of your desire, we will go on till we have
lost all your moneythey (the shareholders) may say " You shall go on no longer."

1700.	The words " responsibility of the shareholders being thereby limited to
that extent only," apply to the co-partnership, and not to the liabilities which,

under the 7 & 8 Geo. 4, the individual shareholders are liable for to the public?

-—That applies only to the account between the partners themselves, it does not
take away the responsibility of the partners to the public; that must remain, and
if it should turn out that the half is lost, they must make up that.

1701.	Sir James Graham.] You think a single individual, in case of a loss to
that extent, may break up the bank ?—Yes, may compel them to wind up, and say
they will not trust them any longer.

1702.	That is the original agreement, binding on all ?—Yes.

1703.	Mr. Jttwood.J What is the amount of capital' paid up?—Nearly
800,000 I.

1704.	What is the amount which the bank have lent out, for which they hold
no convertible securities ?—I think it must be a very small amount lent out in that
way, it must consist entirely in the houses and the property they possess.

0.92.	p	1705* Whatio6 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. W. G, Cassels. 1705. What security do you hold for the balances of current accounts due to

--—- the bank, 1,080,099 ^ ?—We have all the parties to go to, to demand the balance

•28 June 1836. when we find it convenient to call them up.

1706.	You have the names of certain debtors who have drawn that amount?—
Yes, and we can desire them to pay up their account at any period.

1707.	Do gentlemen borrow money on the understanding that you have a right
to demand it from them at any moment ?—Instantly.

1708.	Have you found in practice that they pay it whenever you demand it ?—■
Whenever we have had occasion to call up money, it has been settled within a
reasonable period.

1709.	Do you mean that you can recover, at any moment, any amount of this
million of money paid out ?—I think we can recover a very large proportion of it
in a very few days.

1710.	You have not had occasion to take measures to recover any considerable
part ?—No, we have never been in a situation to require it in any considerable degree.

171 x. What do you think would be the effect on trade or the customers of the
bank if this one million, or any considerable part of it, were demanded payment of in
a few days ?—I think it might produce temporary inconvenience.

1712.	Do you think it would not produce great failures and stoppages of pay-
ment?—I think not; in the first place, before those advances were given, the most
prudential inquiries were made regarding the propriety of giving those occasional
advances; we never give without the most prudential consideration, and to
houses considered perfectly entitled to them.

1713.	Supposing that any time of pecuniary difficulty should arise, which may
be the time when banks in general have most occasion to demand payment of
debts due to them, would they be-able to get payment of any material quantity
under such circumstances as those ?—Yes, I think they would get payment of a
very material amount.

1714.	Supposing other banks were demanding payment at the same time, do
you think you will get a large proportion of them ?—I do not know any respectable
houses which generally do business with more than one bank.

1715.	Would not you consider that one means by which the parties would get
the money, would be by borrowing of other banks ?—I think that a good many
might resort to other banks.

1716.	Would they obtain assistance if other banks were demanding payment of
their customers at the same time you were demanding of yours?—I think that is
an extreme case.

1717.	Have you had much experience in banking in England or Scotland?—
I have had much experience in banking in Scotland since 1817.

1718.	Since that time have you not met with cases of the nature described ?—In
the banks I have been connected with, I have never met with any cases to occasion
a moment's uneasiness.

1719.	So as to compel you to call up the money to answer the demands upon
you?—No ; the only cases in which we do it is, where the accounts are lying in
a dormant state, where the parties are doing no beneficial business, and making
it what we call a dead loan, there they are invariably called upon to pay.

1720.	Are you speaking of banks which have lent out on a dead loan more
than their whole capital?—No, that is not on a dead loan, that changes its
character every week.

1721.	The question refers to a loan in which there are no bills of exchange?—
We do not call that dead loan where operations are constantly going on.

1722.	If you have over-drawn accounts beyond the capital of the bank, should
not you anticipate inconvenience ?—We cannot suppose but that such a case
might occur; but it is, in my opinion, a very distant probability.

1723.	There are 25 branches connected with your bank ?—There are 40 ; it
is a pity to draw a distinction, for there is a separate business done at every one
of them; but some are called sub-branches.

1724.	That would leave about 17,500 £ paid-up capital for each branch ?—If
you average it; but then some of those 40 branches are placed where very little
business is done, and where they require no capital at all. There are two descrip-
tions of branches, one a branch debtor to the head office, and many others which
are creditors to the head office; for instance, the deposits of money which are
obtained at the branch, go to supply the demands in other places where they are
called upon for large discounts. There are a number of branches in various parts

whichSELECT COMMITTEE ON JOINT STOCK BANKS. 107

•which require no assistance, and where the discounts are almost nothing, but Mr. W. G. Casseh.
where the deposits amount to 30,000/. or 40,000/.	-—

1725.	The capital is equal to about 17,000/. for each branch and sub-branch, 28 June 1836.
and the money lent out is about 27,000 /. for each branch?—Great part of that is

lent out in trading manufacturing districts; a great proportion is at Manchester,

Liverpool, Leeds, Nottingham, Birmingham and Sheffield.

1726.	Did you commence in March 1834?—We opened our head office on
the 17th of March 1834.

1727.	When was the latest branch established?—There was a change very
lately ; we had a small sub-branch at a town called Bradford, and within these
1 o days the business at that bank has increased so much that the directors have
b^en induced to adopt it as a branch.

1728.	Is that included in the 40 ?—We have given up two branches; we gave
up Bristol, thinking that it was too far from the head office. We were induced to
go to Bristol, because a private banking house offered to give up business in our
favour; that was the bouse of Haythorne and Wright; they offered to give up
their banking premises ; but we saw there was a prejudice against branches being
so far from the head office, and we have given that up. t

1729.	That at Bradford existed as a sub-branch?—Yes, as a sub-branch to
Keighley.

1730.	How long has it existed as a sub-branch?—I think about 18 months.

1731.	Have you established any sub-branch or branch within the last six
months?—I should think not.

1732.	They were all established between March 1834 and the end of 1835 ?—

Yes.

1733.	Have you an establishment at each of those branches, a manager and
agent?—Invariably.

1734.	At the 40 branches and sub-branqhes ?—Yes.

1735.	Were all those managers selected for that number of 40 in the 18
months ?~ Yes.

1736.	Who had the selection as to the fitness of those gentlemen ?—We applied
to different banks and different institutions, and called the attention of gentlemen
who had been brought up as bankers, by advertisement, to make applications, I
think, for situations in our bank; during the first three or four months after the
bank was established in Manchester, we had about 300 or 400 applications on
our list.

1737.	Was it the board of directors who selected the gentlemen to do the
business of this bank and the branches out of the number applying?—Yes;

after making every inquiry and getting proper testimonials, they were all bound
to produce securities for their transactions.

1738.	There are two descriptions of persons who have accounts with your
banks; some are shareholders ?—Some of them are.

1739.	Is that a large proportion ?—I cannot say whether it is a large pro-
portion considered; generally speaking there are shareholders; many of our
customers come under that description.

1740.	Of those two classes, does that of shareholders form the main part of
the customers or the smaller proportion?—I think in our bank a very large portion
are shareholders.

1741.	Do you lend money to those customers who are not shareholders?—

Yes, if they are wealthy influential persons.

1742.	If they are wealthy influential persons you would still lend them money r
though not shareholders ?—Yes.

1743.	Supposing persons of equal claims came to borrow money from the bank,

the one a shareholder the other not a shareholder, would you treat them both
alike?—[ think there might be a little bias in favour of the shareholder ; I think
it is natural to suppose that might be so.

1744.	Would not that lead to the greater part of the money on overdrawn
accounts being due from your own shareholders ?—It might lead to that, cer-
tainly.

1745.	Supposing such an unlikely circumstance were to arise as a state of
pecuniary difficulty and embarrassment generally, and large claims were made
upon your bank, and suppose the case of some other bank, not conducted so well
as yours may be assumed to be, should stop payment, and a demand be made
upon all your forty branches in consequence, do you think you are fully prepared

0,92.	p 2	toi o8 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. W.G. Cass els. to meet an emergency of that kind ?—I confidently say we should be as well
—- prepared as any other establishment we have known or heard of.

2S June 1836. 1746. Do you think generally as well as banks round about you ?—I think so ;

the first great demand that would be made upon the bank would be that of
notes, the second of deposits ; our notes are distributed over such a large portion
of country, and a proportion payable only at a particular place, I cannot think a
very large amount would come bearing upon one point. I think it would be done
in such a way that supplies could easily be found to meet emergencies.

1747.	From what fund would you propose to derive that supply?—In the first
place, we have a large amount of gold and Bank of England notes lying at the
head office; in the second place, we have very great facilities altogether in
London, which we could make available at the shortest notice.

1748.	Do you mean by facilities, modes of raising money?—We have it in our
power to go to a very considerable extent with our bankers, but we never have
asked them for loans of money in anyway, though in case of emergency they are
bound to supply us.

1749.	When you spoke of facilities, you meant modes of raising money, not
usingyour own?—Yes ; and even we might say to our bankers in London, " If you
have the benefit of our business, if we have occasion at any time for 50,000 I. or
100,000 I. will you give it us ?" and they say, " We will do so."

1750.	Do you think that is a thing to be taken into consideration ?—I do not
think we have felt the necessity of taking it into consideration.

1751.	Have you not heard of periods at which bankers in London have been
obliged to take care of themselves, and not encumber themselves with such
engagements ?—There have been such times, no doubt.

1752.	May they not occur again ; and if so, where are you ?—I do not think
any bank, and the Bank of England among others, would be able to do so.

1753- Does the item in this account, " Cash in coin and Bank of England
notes," include the balances In London ?■—Nothing whatever; that is merely the
balance of the head office and different, branches,

1754.	There is nothing here showing the balance in London?—I did not
know that was called for; it is a very fluctuating circumstance, the balance
we have in London.

1755.	Was not there any balance in London on the 31st of December?—There
is no return sent to the head office; it depends upon our situation with our
bankers and brokers.

1756.	If you had a balance in the hands of your bankers in London, would not
that alter the amount of your total assets?—No, 1 think not; for it is put in as
bills, against which the endorsement or guarantee is placed; I have not seen the
return.

1757.	Have the goodness to look at the account, and say whether the balance
in London ought not to appear there ?—Opposite to the liabilities there are " Bills
bearing the endorsement or guarantee of the Bank;" we take credit for exactly
the same amount; in that is included the balances of money lying in London in
the hands of our bankers and our brokers, or our repositaries, in the sum of
1,326,000/.

1758.	In the account of current account due to the bank is included money lying
in your London bankers' hands r—-Yes, and which lies in our brokers' hands and our
own; for instance, after that account was made out I might have 300,0001, or
400,0001, of bills in my bill-case; it does not follow that we have actually disposed
of those bills, because I may have in my possession one-third part or one-fourth
part. I may have gone to Gurney, Overend & Co., or other eminent houses, and
have offered them those bills, and I say, "Let the money lie with you till
I want it;" I can get it in a moment; it is no unusual thing for me to have
100,000/. in their hands.

1759.	Do they allow you interest upon that?—They do not charge me the
discount till the money is drawn out; that is a part of the arrangement with them.

1760.	They discount bills for you, allowing you the option of drawing the
money as you want it, and charging you a discount from the day you draw
money ?—Y es.

1761.	That is the manner in which you keep your money in London?—Yes.

1762.	Are you in the habit of having money from brokers in London ?—
Yes.

1763. HaveSELECT COMMITTEE- ON JOINT STOCK BANKS. 109

1763.	Have you been used to keep much money in the hands of your bankers ? Mr. W. G. Casseh.
—Our bankers allow us no interest, and therefore we keep them as bare as we can. -

1764.	Sir JohnWrottesleyJ] Do you pay them a commission upon the business 28 June 1836.
they do?—Yes, we pay them a commission upon the business done; we do not

leave a balance in their hands.

1765.	Mr. Clay.~\ Who are your bankers?—Barnett, Hoare & Company, and
Prescott, Grote & Company.

1766.	Sir John WrottesltyI\ Will they pay promissory nqtes which are presented
at their house without having any cash in their hands?—I always take care to
supply them for their demands during the day ; they are never in advance.

1767.	You balance that account at the end of every day?—We have a cash
balance announced every morning, or rather the night before; generally it is in
our favour; the bankers send to us and say the payments during the day will be
so much, and I provide for it.

1768.	How can you estimate the promissory notes?—They debit us with all
that they know of; but frequently bills, and particularly bank post bills, are
floating about the country for months, instead of coming in at seven days' date,

< and then they come with an immense number of names upon them.

1769.	You provide for the amount of their payments which they may make
during the day ?—Yes, and in case of the payment of our notes, we cannot tell
how many of them may come in during the day.

1770.	Supposing more notes came in during the day than you had provided
for in the morning, would they pay them ?—They would.

1771.	Then occasionally you run into debt?—I think very rarely; it scarcely
ever occurs to any extent.

1772.	Sir James Graham.] As you studiously keep your London bankers, as
you term it, bare, do you expect that at any moment they would advance
100,0007. for you on an emergency ?—We would.find that 100,0001, for them.

1773.	Considering that there may have occurred times of extraordinary pres-
sure, can you anticipate they are bound to advance you 100,000 /. ?—The de-
mands upon our bankers, of course; we give them notice of all the bills drawn
upon them and accepted by them; but they are always covered by funds in their
possession.

1774.	Considering that there may occur times of extraordinary pressure, can
you anticipate that they are bound to advance you 100,000 /. ?—It depends upon
the agreement we have with them.

1775.	Have you such an agreement with them, that in case of emergency they
would advance you 100,000 I. ?—I do not know that. I am not at liberty to give
a direct answer without consulting them upon it.

1776.	Have you been conversant with banking for a long time ?—Yes, I
have.

1777.	Were you conversant with it:in-18.2.5?—Yes; I was then one of the
managers of the National Bank of Scotland ; the panic had no effect upon us.

1778.	You had not come to London at that period ?—No. -

1779.	From what you heard at that period, do you conceive that your baukers
would .advance 100,000/., you studiously keeping them bare?—I do not know
what might happen. I do not know how 100,000/. demand could come upon
our bankers; the only thing that would, come upon them would be a portion of
notes coming upon them. The only extraordinary call that could come upon them
would be a part of our notes in circulation.	(

1780.	Are you not aware that during the year 1825 there was a pressure on
the bankers for the payment of their outstanding notes ?—I am quite aware that
there was.

1781.	If that was to occur again, you would have that pressure at your 40
branches?—Yes, if it came upon the whole at once.

1782.	Would you like, in such circumstances, to have your London bankers
ready to advance you 100,000/. ?—It would be very advantageous to have that
facility.

1783.	Do you think, without special agreement, they would advance you
100,000/. ?—1 really cannot say how far they would go.

1784.	Is that arrangement with your bill-brokers of a permanent character, or
might they terminate it to-morrow 'They might refuse to discount any of our
bills at any moment.

1785.	That is determinable at the will of your bill-brokers ?—Yes.

p 3	1786. And110

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. W. G. Cassels. 1786. And in a moment of pressure would be in nowise binding upon them ?—

—- Perhaps that comes under the description of the bargain with our banker; it is

<i8June 1836. rather delicate to answer that question; but I have had communication with
certain brokers that they bind themselves to a certain amount per week for us.

1787.	Do your managers give security?—Invariably, at every place.

1788.	What is the power of the managers to make advances ?—'They are always
under the direction of local directors or the committee; without authority they
cannot give advances without writing to the head-office. They cannot discount
paper without being authorized by the committee or the directors.

1789.	Your local directors are mostly men in business?—Not always; we have
a good many who have not any business; men who have retired from trade.

1790.	They are all proprietors, of course ?—Yes.

1791.	They do not all bank with you ?—They are chiefly depositors with us.

1792.	Have many of them overdrawn accounts 1—Not much.

1793.	Has the manager any check or control over their overdrawing their
accounts ?—-The same as any others; it is referred to the directors at the head-
office.

1794.	What proportion of the whole sum do the overdrawn balances of accounts
bear?—Those are sums advanced upon current accounts.

1795.	They are all overdrawn; the 1,080,000 I. is all overdrawn?—It is the
amount overdrawn on all the accounts.

1796.	What proportion of that is in the hands of proprietors?—I cannot tell;
it would require a very minute inspection of the books to make that out.

1797.	Is it a million ?—I cannot tell; a great proportion of our shareholders
are customers of the bank, consequently that would appiy to a great proportion.

1798.	Had you any security for that ?—Always.

1799.	Of what nature?—Either real security, titles to property or personal
security; but in some cases the overdrawing is allowed to houses where they are
considered very safe, and generally acknowledged to be men of large capital.

1800.	When you say real security, do you mean the lodgment of deeds ?—
Yes.

1801.	In cases where it is personal security, have you any other security than
the person overdrawn ?—Collateral security.

1802.	One name, in addition to the drawer?—Generally two names.

1803.	Are the proprietors considered as security to the extent of their shares?
—Certainly.

1804.	You consider that as security?—I consider that we-have a security upon
them.

1805: That is provided by the deed?—Yes.

1806.	Supposing the party is a proprietor, and has paid up to the amount of
1,500/., do you allow him to draw upon his account to that extent without
security ?—It would be an inducement to let him overdraw.

1807.	Then as a departure from the general rule, you would not require
security ?—To that amount we should not require security j I think that would be
unnecessary.

1808.	Are there quarterly meetings of the directors?—There are daily meet-
ings.

1809.	Do you know the principle on which they would direct their issues?—
Certainly I do ; there is a weekly return from every office laid before the directors
on the morning of every Thursday of the exact amount of advances and issues of
notes, and every other item that can come under their notice is distinctly stated
there.

1810.	Have you any principle except the demand for your notes, and the
security you can obtain, which regulates the amount of your issues and notes ?—
We have never made it an object to circulate our notes. If a customer .comes in
and begs to discount 1,000 /., and he says, to induce you to do it, " I will take the
whole proceeds in your notes," I would immediately say " No; we will not do it upon
that principle ; we make no difference between our notes and Bank of England
notes and sovereigns ; you shall have that you prefer; we should wish to give it
according to your preference."

1811.	Do you regulate your proceedings at all with reference to the proceed-
ings of the Bank of England or the exchanges ?—I do not think that we regulate
our proceedings with reference to the Bank of England at all.

1812.	Do you attend to the question of the quantity of gold in their coffers ?—

I thinkSELECT COMMITTEE ON JOINT STOCK BANKS. m

I think that is more a matter of curiosity ; but we like to see that there is a good Mr. W. G. Casseh.
stock.	' ' '

1813.	If you saw the stock of bullion decreasing, would that have any effect a8 June 1836.
upon you ?—I think it would.

1814.	Do you practically attend to that ?—We do indeed.

1815.	You were understood to say you thought that a matter more of curi-
osity ?—I thought the question referred to the mode of transacting business; we
pay great attention to the amount of gold in the Bank.

1816.	If you saw the quantity of gold diminishing in the coffers of the Bank,

and the Bank diminishing its issues, you would be disposed to diminish the
amount of your issues?—I think it would be a check upon us.

1817.	Do you practically attend to that?—We really do.

1818.	Have you any Bank of England stock and Exchequer bills ?—We have
none whatever. The reason I stated early in my examination, that we have con-
siderable difficulty in regulating our business in that way. When the bank was"

established, we held out that all our means were to be employed in real legitimate
proper banking, and in no speculation whatever; we have never made up our
minds to lay out a very large proportion of our funds in Government stock,

because there might be a heavy loss upon it. Suppose 100,000/. vested in it,

and it fell, it would be a serious loss; but if we vested in Exchequer bills, we are
receiving only the interest of two and a quarter per cent., which our share-
holders might consider very badly invested. I had very serious conversations with
very well informed gentlemen of the city of London, who are constantly engaged
in the monetary operations, in particular with Mr. Gurney, and he has always
upon that subject said it would be very desirable; but his own opinion has always
been, if you have plenty of remarkably good bills, prime bills in your bank, you
run no risk.

1819.	Mr. Attwood.] Is he not a bill-broker ?—He is.

1820.	Sir James Graham.'] Your cash in coin and Bank of England notes,

which is your rest, immediately available, does not appear more than one half of
your amount of promissory notes payable on demand ?—Much about that.

1821.	If from any temporary pressure your rest in cash and coin and Bank of
England notes were exhausted, and there was an influx of your notes payable on
demand when you were so exhausted, what is the resource to which you would
have recourse ?—We have many other resources.

1822.	Which is the first to which you would turn?—The money in London in
the hands of our bill-brokers.

1823.	You are understood to say that you had no money in the hands of your
bill-brokers except under contingent arrangements, that would be made to operate
to the extent of 100,000/. ?—If I discount to the extent of 100,000/., this money
remains with them to be drawn for.

1824.	Have you constantly a balance in the hands of your bill-broker to an
extent to make up the difference between the balance of cash and coin, and Bank
of England notes, and, on the other hand, promissory notes payable on demand ?

—Certainly not.

1825.	The balance in the hands of your bill-broker would not supply the
deficiency?—-No.

1826.	Feeling that, what is the next resource?—We generally have considered
that if we had something like the proportion the Bank of England generally
have, it is pretty f^ir; their circulation is about 18 millions; they have seven
millions in their repositories, we have a greater proportion in ours.

1827.	You have 279,000 /., the amount of promissory notes payable on demand,

and your cash in coin and Bank of England notes is 137,000/.?—Yes; if it
is in an equal proportion with the bullion in the possession of the Bank of
England, I consider it a prudent amount, and we have more.

1828.	Mr. AttwoodI\ Does that 137,000/. include the notes of other bankers
lying for change ?—They never remain in our hands half a week.

1829.	Can you give a general conjecture what the amount would be on any
particular day, in all those 40 branches, of notes, not considered as articles to be
paid away in your business?—The way we manage that is, that on two days in
a week, Tuesdays and Fridays, or on other days which suit the convenience of
parties, we meet together, and if we have 10,000 of their notes, and they have
15)000 of ours, we pay them the balance in bank notes, or an order on London at
sight.

0.92.	p 4	1830. What1i2 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.W.G. Casscls. 1830. What amount remains in those branches of notes of your bank which

------- you reserve to exchange with them ; will it be less than 50,000 ?—They never

28 June 1836. remain in our hands, we change twice a week.

1831.	They remain in your hands for two days?—Two or three days.

1832.	Supposing your exchange with any particular bank should be 6,000,
you will constantly have in your hands of that bank 3,000?—Yes.

1833.	Do you think you have ever less than 50,000 of those other banks in
your different branches ?—It may amount to that.

1834.	Does that form a part of 137,000 ?.?—Yes, but that takes the same
amount of our notes out of circulation, for the one is given for the other, and that
diminishes, therefore, the amount for which we are liable.

1835.	there is so much to be struck from the amount of your cash in hand?
—I consider that the promissory notes of those banks which we hold, and which
banks are stable and solid, are as good property as we can hold.

1836.	The question refers to the circumstances in the event of the public
demanding the payment of the residue, which is 130,000?.?—When a demand
comes upon us for our notes in circulation, the quantity held by any bank of our
notes, if we held an equal quantity of theirs, of course they are just balanced, or
all the difference which can come upon us is merely from those of whom we hold
nothing.

1837.	Suppose that the demand should not come from those bankers, but from
the public, and you hold a certain proportion of their notes, you could not apply
those in payment of the public, who presented your own notes ?—Certainly not,
we should never pay away the notes of others.

1838.	You have been acquainted with the Scotch system of banking, is there
a system of joint stock banking in Scotland, independent of the holding a certain
amount of public stock or Exchequer bills?—I think it is more the practice of
Scotch banks to have considerable funds in London, vested in the funds of the
country, in the public funds.

1839.	Would your experience induce you to say that it is a constant course for
them to have funds in England, which they can immediately convert into cash ?—
I believe it is their habit to have a certain amount.

1840.	You rely on an advance from your London bankers for 100,0001. ?—
I am not very fond of starting the question on the 100,0001., but I think we
might rely on anything reasonable.

1841.	Supposing you found yourself at the end of your resources, what might
be the effect on your 40 branches ?—The demands on those 40 branches would
be so divided, I do not think any risk would occur; suppose one bank has
300,000 I. in circulation, and we have 300,000 /., it is only a certain proportion
could come against any branch.

1842.	Sir James Graham.] You did not witness the run in 1825 ?—No.

1843.	Mr. AttwoodP\ Suppose the demand did arise, would you be able to meet
that demand in case your London bankers disappointed the expectation you
entertained ?—I think we have the means of raising such a fund that we should
not be hurt materially, even if all our notes came in upon us, but it is an extremely
improbable event.

1844.	Your system has not provided against any extreme difficulty in the money
market ?—If it is brought to such a nice point that it is dangerous to have such
an amount in circulation, and that we must have money to meet it, there is no
advantage in having it out.

1845.	Sir James Graham.~] Have you not deposit accounts with you ?—Yes.

1846.	Are there none of them bearing interest?—We pay interest on every-
thing deposited.

1847.	Is there any bargain with the parties depositing that they shall not
draw without notice ?—For large amounts; that they shall give a certain inti-
mation of their intention to withdraw.

1848.	Is that the uniform operation?—We uniformly make an agreement that
they shall give us due notice.

1849.	Of 379>000^> how much may be drawn out without notice?—I
suppose, perhaps, over all, it might be 100,000/.

1850.	That is to be added to the 279,000/. payable on demand on notes
outstanding?—Yes; in answering that question I only say the thing is possible.

1851.	That is to be added to the 279,000/.?—I think it reasonably may.

1852.	Your liabilities, therefore, amount to nearly 400,000/.?—Yes.

1853. ThereSELECT COMMITTEE ON JOINT STOCK BANKS. 113

1853.	There is a rest to meet that of 137,000/.?—Yes; and there is money Mr. W. G. Cassels.
in the till, which of course will go against our notes that are out.	—■—,—-—.

1854.	The bank post bills are 60,000/.?—I am sorry there is such a name as 28 jHne 1836.
bank post bills, because I consider those as a draft upon our bankers; it comes to

the same if I sit down to give a bill on London at seven days after date; I con-
sider that the same thing. I think it is a part of the business of a bank which
will be better given up, not to call them bank post bills; it arises from a childish
idea that they resemble the bank post bills of the Bank of England j they have a
currency in the country, and many persons are not anxious to present them on
the day they become due, and consequently some 50,000 /. or 60,000/. may
wander about the country, and not come in for two or three months. The bank
post bills of the Bank of England are of a very different description, for they are
after sight, and though they travel about the country they are not payable for
seven days after sight, because they must be accepted; but the persons, the
moment they receive them, may go to the same office and get them accepted;

and then, consequently, it is payable in seven days after it is given.

1855.	In a moment of pressure, the Bank of England need not cash theirs ?—

They must pay it. Suppose I buy a bank post bill on the 1st of June, it is
accepted the 1st of June, it is due the 8th; if I keep it till the 8th, on that day
the Bank of England must pay it.

1856.	Suppose your bill-broker and your bankers, at the time of extreme
pressure, refused you that accommodation, which they are not bound to give, but
only in their discretion, you having no Government securities, what is your
remaining resource ?—We should be in exactly the same situation as all other
similar establishments; there might be a certain inconvenience.	,

1857.	Would not stoppage be the necessary consequence?—I cannot conceive
such a thing.

1858.	If your rest should be exhausted, and your bill-brokers and bankers
refuse advance, where do you place your reliance against stoppage }■—The sup-
position is so extreme, I cannot possibly go into it in such a concern as ours. If
there were the least difficulty, and we were to make an appeal to our shareholders
that we wish assistance, I know we should get assistance to a large amount at a
very short period; and we have had the assurances of exceedingly influential
gentlemen of very large capital that such would be the case.

1859.	Mr. Attwood.] Is it your practice, in providing money for your London
agents to meet their daily payments, to draw bills upon them to provide the cash?

—Never, at no time whatever; we never draw bills for the purpose of raising
money upon them. There was an occurrence took place, through the Bank of
England, with Barnett, Hoare and Co., which brought forth an explanation upon
the subject. They stated that very large bills had appeared* and it was supposed
in London to be for the purpose of raising money on credit. I know another
bank in Manchester would not give any explanation upon the subject; but, as
manager of the northern and central bank, I took a different mode of proceeding,

and instantly sat down at the moment I got the letter, at three in the afternoon;

by that evening's post I wrote back to Barnett, Hoare & Co., and inclosed to them
the bills, and directed them to keep them in their possession till their maturity*

saying there was no intention on the part of our bank to raise money on the credit
of any one.

1860.	Mr. Pattison.^ Had you not bills afterwards drawn upon you ?—r-To a
small amount.

1861.	Was not that4n consequence of Barnett, Hoare & Go. refusing to accept ?—

They had an objection to accepting large bills at three months, and we were
obliged to give considerable bills at three months to our customers in Liverpool;

they were obliged to make their settlements, to the satisfaction of the sellers;

those bills were objected to by Barnett, Hoare & Co., who did state that feeling,

that they did not like to put their names to bills of very large amount, in conse-
quence of which we have never drawn upon them to a very large amount since.

1862.	They have drawn upon you ; who was your agent in London ?-—They do
occasionally draw bills upon me as the accredited agent in London, because I
manage their concerns in London.

1863.	You were their agent, and Barnett and Hoare were their agents ; in
consequence of Barnett and Hoare refusing to accept those bills, they drew upon
you, and you accepted ?—Barnett and Hoare never refused ; it was at the time I
was not resident in London, but in the country.	;

O.92.	q	1864. Mr.MINUTES OF EVIDENCE TAKEN BEFORE THE

*lr. W. G. bassets. 1864. Mr. Attii'ood^] They drew upon you in consequence of Barnett, Hoare
———— & Co. refusing to accept their bills ?—They had no objection to our drawing
28 June 1836. bills to a small amount; the objection was to the date of the bills ; it had not
been the practice in London for bankers to accept beyond two months; but when
we pointed out that in consequence of the facilities given by Jones, Loyd & Co.,
if we did not give that facility, they would go to them, they then withdrew the
objection.

1865.	Would not that objection have been at once obviated on the part of the
bankers by their discounting that bill ?—It would.

1866.	But they hesitated about the date?—They stated if the parties do not
make any objection we will give the money for it.

1867.	But they wrote to the bank at Manchester, that they would rather
decline having bills drawn upon them?—If they were called upon to give cash
for them. They were not called upon to do that, but they volunteered to do it.

1868.	Mr. Clay.J You have stated that of the deposit account, amounting in
round numbers to 380,0007., you think 100,000/. may be immediately payable ?:
—On a pressure that might be immediately called for, certainly.

1869.	There is another sum, the balances of accounts current, amounting to
325,000/., they are payable immediately on demand ?—Sums lodged with us,
overpaid on account.

1870.	There is another sum amongst the liabilities of 325,000/. balances of
accounts current, they are all immediately demandable ?—Accounts current are
of two descriptions; frequently the parties upon those accounts current have
money a.t the bank, and frequently the bank owes money to their account; at the
period when this was made out those were the respective sums, but that is con-
stantly fluctuating.

1871.	At that period the parties having this demand might give a cheque for
it ?—Yes, they might.

1872.	That added to the previous 100,000 /. is 400,000 /. ?—Yes.

1873.	The bank post bills are 60,000/. ?—Those are provided for in London,
and always covered by remittances.

1874.	They are a liability?—They must go as bills on London in any shape.

1875.	There is, including bank post bills, 425,000/. immediately payable, ta
which must be added 280,000 £, the amount of promissory notes, together making
a sum for which an immediate demand of payment might be made of 705,000/.;
the Committee understand that the resources to meet that consist of 137,940/.,
stated to be cash in coin and Bank of England notes, but from that must be
deducted about 50,000 /., the notes of other banks ?—No, I cannot allow that to
be deducted ; if you take that from it, you must take it from the 280,000 /. also.

1876.	Supposing it were deducted from the 705,000 /. of liabilities, that would
leave 655,0001.1—Yes, the better way would be to deduct it from the amount of
notes.

1876*. Deducting 50,000/. would leave 87,940 I.; the further resource would
seem to be 601,774/. bills of exchange; the Committee apprehend that must-
include the money which you state yourself to have at your bill brokers ?—Yes, it
must include that certainly.

1877.	When you state that the bills bearing the endorsement on the part of
the bankers of 1,326,961 I. 5 s. are any resource to meet this, it must be from
misapprehension of the question, as those are bills to the same account as those
on the other side which are already parted with ?—They are not parted with ;
this sum of 1,326,961/. 5 s. is the gross amount of all bills which bear the
endorsement or guarantee of the bank ; we take credit for them on the opposite
side, because they liquidate those in proportion as they come to be paid off ; we*
are not bound to the payment of those bills.	'

1878.	But, in point of fact, they are parted with at the time they are charged to
the credit of the account you have with the bankers ?—A great proportion of
them.

1879.	Will you satisfy yourself whether they are not, in a proportion, bills in
the possession of the bank ?—Certainly ; I have a large proportion in my bill-case
at this moment falling due every day; I see by the account the sum of 601,794 /.
is the amount of bills we are now in possession of, the others have been parted
with.

1880.	To meet the liabilities which may be made immediately available against
the bank, your first resource would be the amount of cash in coin and Bank of

EnglandSELECT COMMITTEE ON JOINT STOCK BANKS.

"5

England notes, which would come, according to your present account, to 87,9401; Mr. W. G. Cassek.
and further the sum of 601,794/. which the bills would produce?—Certainly. ..

1881.	Then your subsequent resource would be either upon the persons who «8 June 1836.
had overdrawn accounts with the bank, or upon your shareholders for further

advances of money ?—Certainly.

1882.	Mr. Attwood.] Those 601,794/. of bills you resort to in the first instance
are those bills least available for discount, perhaps?—No, I do not think there is
any distinction; for instance, bills which I have retained in my possession, falling
due every day, to the amount of 6,000 /. or 8,000/. or 10,000/., are the best bills
we have.

1883.	Would not there be many bills remaining behind which the bill broker
knows nothing about, and would have nothing to do with?—They would have
to do with them if I wished it; from the transactions I have with them we find
no hesitation, as our brokers, in taking such paper as we give them.

1884.	There will be 88,000 /.bank of England notes and gold and silver?—Yes.

1885.	That divided between 40 branches would give about 2,400/. on the
average in gold, silver, and notes, to each branch ?—Yes, but the proportion sent
to our larger places of business is greatly beyond the average, and the amount
kept at some is very little; for instance, at some branches, such as Knutsford,

little cash is required.

1886.	You say that the bank have bought shares under some circumstances;

you stated one case where the managers of the bank were advised to dispose of
their shares?—That was when the directors found it necessary that the managers
should dispose of their shares; being possessed of those shares, they were pre-
vented being witnesses in any case the bank might be engaged in.

1887.	Do you remember any purchases of shares made by the bank under
other circumstances ?—Very few indeed.

1888.	What might be the amount ?—I cannot say.

1889.	What might be the object ia buying those shares ?—The only object
must have been to have balances paid up ; the accommodations to parties holding
the shares; and they were sure if they wanted to sell them they could do it the
next day again without loss.

1890.	Sir James Graham.'] Have the managers no power at the branches of
incurring liabilities affecting the whole of the proprietors, without the consent of
the directors ?—They have no right whatever to give advances without applying
to the Directors at the head office; they have no right even to discount paper at
the branches, without the authority of the local directors or the persons whom
they are desired to apply to for that purpose who are well acquainted with the
localities. •

1891.	What security have you for the managers acting on that principle ?—

.According to the regulations laid down, the sureties joining in the security to the
hank would be liable.

1892.	What is the average amount of security ?—It depends upon the amount
of salary and the amount of business done; from 1,500 /. to 8,000 /. or 10,000 /.

1893.	Have you any security under 1,500/.?—I think none under 1,500 /.

1894.	And none above 10,000 /. ?—The largest within my knowledge is
7,000/.

1895.	In point of fact, do not those managers enter into engagements without
the sanction of the directors, on the spot, occasionally ?—I have known the thing
done, but it has been instantly discountenanced and prevented as far as possible.

1896.	But you have "recognized the transaction ?—The bank must recognize it
if it is done ; it would be unfair to the public if it were otherwise.

1897.	Do you not see in this very liability a great and inevitable danger in the
multiplication of branches?—The danger can only apply from a departure from
the regulations laid down, and for which the individuals and their sureties would
be held answerable.

1898.	Mr. PattisonJ] Is Bristol the only branch which has been relinquished
"by your bank ?—No, we have withdrawn one branch from Wakefield also. -

0.92.MINUTES OF EVIDENCE TAKEN BEFORE THE

Veneris, l* die Julii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Loch.

Mr. F. T. Baring.

Sir John Wrottesley.

Mr. Strutt.

Sir Robert Peel.
Mr. Clay.
Mr. Attwood.
Sir Thomas Fremantle.
Sir James Graham.
Mr. Pattison.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

General Austin, called in; and Examined.

General Austin» 1899. ARE you connected with the management of the North of England
*• joint stock banking company ?—lam.

1 July 1836. 1900. How long have you been so connected ?—Since it opened on the 1st of
December 1832 j I was always a director of that bank from its commencement, bilt
I did not take an active part in the management till the year 1834.

1901.	Previously to that time were you acting in conjunction with others as
a director?—I was, and had the particular charge of a branch of the bank at
Sunderland, where I then resided, or at least near Sunderland. In consequence of
my connexion in and about that neighbourhood my brother directors thought fit
to give me the charge of the Sunderland branch, at the head of which I was
placed, until a change took place in what we call the managing direction j there
were two, called managing directors. In the year 1834, we found it necessary to
change the executive in Newcastle, and' I was appointed managing director, in
which situation I have continued till now.

1902.	Having previously to that been at Sunderland?—Yes, but always as 4
director.

1903.	You had not been in any other bank previously to your becoming a
v director of the North of England joint stock bank?—No, I never had belonged to

any bank.

1903*. You had had no commercial experience previously to that?—Wheii
young I was in a mercantile house, before the breaking out of the French war, so
far back as the year 1790 ; the mania which took all our young men of that
period, struck me, and I got into the army, but since that, till the formation of
this Bank, I had no connexion in business, except that acquired on staff situations
in the army.

1904.	Previously to your appointment as a director of the joint stock bank, you
had not had any experience in the management and direction of banking con-
cerns ?—Certainly not.

1905.	How many colleagues have you in the direction?—We had it directors
originally, but they are reduced now to eight; the reason of that was, that we
considered that the customers did not like their accounts being exposed to so
many directors.

1906.	When you had the management of the Sunderland bank, had you any
person concerned with you in that management, or was it entrusted exclusively to
yourself?—Entirely to myself, under the control of the directors ; but the branches
report every day to the central bank, particularly the branches so near as Sun-
derland, only 12 miles ; there is a daily communication with the branches a6 to
what is going on. I had not any one associated with me, except clerks 011 the
establishment acting under my orders.

1907.	Among the other directors, were there any, and how many persons that
had experience in banking affairs ?—I believe only one, Mr. Batson; he, I under-
stand, had experience in banking affairs; he was considered among us as a
banker.

1908.	Is he on the management now?—No ; he is still a shareholder.

1909. PreviousSELECT COMMITTEE ON JOINT STOCK BANKS.

117

1909.	Previous to the formation of that bank, had you any experience in the General -Austin.
direction of banks ?—No, I had not then.	---

1910.	Were you a party to the original formation of this bank?—I was, I got 1 l836-
into it as most other people do, without reflection; I took shares in it, as many

other persons did, as an investment; I had no notion at the time of becoming an
active member of the bank at all, but I was elected a director, and principally
because I was a man out of business, for the customers are naturally jealous of
those in business in the towns where they are established, lest persons in a similar
line of trade might get an insight into their affairs ; most of us were chosen on the
principle that we were out of business, or had so little business that it amounted
to nearly the same thing.

1911.	With whom did the company originate?—It originated with several
gentlemen in Newcastle, who published a prospectus, as all those companies do ;

one individual after another took shares, and myself among the rest.

1912.	Was the number of shares, and the value of shares, stated in the pros-
pectus, the same which at present exists?—Precisely 20,000 shares of the
nominal value of 1001, each, making a nominal capital of 2,000,000?.

1913.	Can you state what amount of those shares were subscribed for before
the bank commenced business ?—Pretty nearly ; I would say between 12,000 and
13,000.

1914.	The amount of shares issued at the present moment being returned at
16,000, can you inform the Committee under what circumstances the number of
shares differing from the amount subscribed for at the time of the opening, to the
amount now issued, have been given to the public?—They were issued at par at
first; as soon as the bank opened, or a little after the bank opened, we found there
was an increasing demand for the shares, and we put them at a premium of 1 I.,

and I should suppose that I am pretty nearly correct, but not being prepared for
this question, I must trust to my memory ; I conceive we must have issued some-
where about 1,000 shares, at a premium of 1 I. 1 think the profit put to the credit
of profit and loss amounted to about 1,000?., that was latterly, not immediately
after the opening of the bank; that I may take as the last 1,000 shares issued*

1915.	Are the Committee to understand that the amount made by the bank	!
by the issue of shares at a premium, was carried to the profit and loss account ?—

Yes, to what we call the guarantee fund, which is the same thing; it is an item of
the guarantee fund as it is called ; however, the guarantee fund and the profit and
loss are but different names for the same thing ; the guarantee fund is the reserved
fund ; we close the profit and loss account every six months, and carry whatever
surplus there is, and appropriate it by general meetings to the guarantee fund, to
meet losses.

1916.	That is, after striking the dividend ?—Yes, certainly.

1917.	Is your proceeding then, to strike a balance upon that profit and loss
account, to diminish your dividend, to deduct the amount of that dividend, and
then carry the balance to the guarantee fund?—No, I think the most correct way
of doing it, (but I cannot exactly say what is the practice, for it amounts to the
same thing) the most correct way would be to carry the profit and loss to the
guarantee fund, and then by the guarantee fund to pay the dividend; it may be done
either way; whether our manager has done it the one way or in the other I cannot
say, but it amounts to the same thing.

1918.	You have 4,000 shares still unissued ?—Yes.

1919.	Are those in the hands of the bank ?—They were never allotted ; there is
no dividend upon them; when we divide we divide upon the 16,000 allotted
shares.

1920.	With respect to the issue of those 4,000 shares that remain, have you any
regulation under which the directors propose to issue them to the public ?—No,

there is not, they have long been held over, and there is not any demand for them;

in fact we suspended them, perhaps three years ago, for the purpose of holding them
for the accommodation of persons who might be useful to the establishment; that
is the reason they were suspended originally.

1921.	When you state that they were suspended for the accommodation of
persons who might be useful to the establishment, will you explain what you
mean?—I mean, instead of being given out to persons living at a distance, who
can never do any business with the bank, nor recommend business, we wished to
reserve them for gentlemen in the counties of Durham or Northumberland for the
purpose of increasing our business.

Q. 3	1922. AreIiS MINUTES OF EVIDENCE TAKEN BEFORE THE

General Austin. 1922. Are your shares at the present moment at a premium or below par ?—

—-—- They, are not at par; we have 15 I. paid up, and the selling price of our shares is

1 July 1836. 141.; the dividends have been so small they do not encourage persons to purchase
them, they are at a discount of about 1 I. in 15 I.

1923.	Your shares being of 100 I., upon which 15 I. has been paid up, do you
look to the possibility of further calls as a means of increasing your capital, if it
should be necessary for you to do so?—We must look to it, if it is necessary for us
to do so ; but in consequence of the bank not paying so well as the shareholders
expected, they would naturally be reluctant to pay up any further calls; still if
necessary they must do it, but we endeavour to do without it.

1924.	Is not the amount of shares which is held by the bank itself, and upon
which no further calls could be made, a diminution of the means which-you might
otherwise resort to for the increase of your capital ?—If we could sell thos6
4,000 shares it would be so much increase to our capital, but as the shares are at a
discount, we prefer not doing so, not ourselves at any rate, lowering our own shares
in the estimation of the public ; we manage to get on with the shares we have.

1925.	In proportion as a joint stock bank holds, either in deposit from5others
or as a reserve, an amount of its own shares, does it not precisely in that amount
lower the extent of the security which it holds out to the public for the discharge
of its engagements ?—It assuredly does, if they hold the stock themselves ; but in
this case I apprehend not, because those shares have never been allotted ; I would
consider the bank as having but 16,000 shares ; it is true the public do not know
that they are not allotted.	, > , f

1*926. The public being ignorant of the number of shares issued, they can know
only by your prospectus that the whole amount of capital is two millions, raised
on 100/. shares?—But they cannot, of course, know whether the whole of the
shares are issued or not.	®

1927.	Have not the directors the means of acting at once on the prices o£?theif
own stock, by issuing reserved shares ?-—Yes, they could evidently, and we have
acted upon it by reserving those 4,000 shares; but if the shares had been all
allotted, the only way in which they could act upon it would be by purchasfftg
those shares back again, and paying the value of them out of the funds acquired.

1928.	Do you think that operation would be a just and equitable one, namely,
the purchase and sale of shares by the directors of a joint stock bank ?-^-Certainly
not; I think it would be a very false proceeding, inasmuch as it would be a seelret
proceeding, and totally unknown to the public, and that would lead also to traffic in
shares among the directors, which would, I think, be very improper, even though it
•were for the benefit of the bank ; but there are circumstances in which it may be
necessary for the directors to take shares at the value of them. Suppose a share-
holder became indebted to the bank to a certain amount, and he surrendered his
■shares, it would be fair to take them in cancelling the debt, and then to sell them
again, but certainly not at more than their value, whatever they got them at.

1929.	Do you mean, to sell them at the rate at which the bank took them in a
settlement of the account, or at the rate at which they would sell in the market ?—
The market price ; for they ought to give the market price for them, and sell them
'again at the same price, ,	i	• ;

1930.	Are not some of the inconveniences to which you have adverted as being
the consequence of a bank buying and selling its own shares, also connected with
the system of a bank reserving a certain portion of its own shares, and issuing
them at its own discretion and its own will and pleasure, and at such prices as it
thinks fit?—Yes, certainly; but with respect to our own particular case, we
reserve the shares, and have for a long time, because we cannot get a sale for
them unless we take less than the paid-up capital on such shares, which would be
a sort offelo de se on the part of the directors, a destruction of their own property,
and therefore we go on with the 16,000.

N 1931. How many shareholders are there in your bank ?—I have the license
here, and I think it is 550 at this moment, at least when the last license was issued.

1931*' Is the deed of settlement signed by all your shareholders?—No, it is
not ; but whenever a transfer takes place there is a deed signed by the transferrers
and by the transferree, and by the managers and directors of the bank, which deed
is lodged with us, and remains in the bank; and according to the legal opinions we
have had from the beginning, and at the time when the deed of settlement was
formed, it is equally binding as if they had signed the deed of settlement, because
they enter into a contract to abide by the deed of settlement in all its clauses.

1932. AreSELECT COMMITTEE ON JOINT STOCK BANKS. 119

1932.	Are the names of the persons to whom shares have been so transferred General Austin.

notified to the Stamp Office?—Periodically 5 we have instructions from the"Stamp —-

Office on the subject, which we follow; I do not mean to say at the very instant a 1 ^uly j836.
change takes place, but at certain periods.

1933.	Are there any cases in which transfers are made without their being so
noted ?—Certainly not; they are reported to the Stamp Office in a short time, but
not at the moment; a transfer cannot take place without the name reaching the
Stamp Office sooner or later; their names are included in the returns sent to the
Stamp Office.

1934.	Except upon the legal interpretation of the deed of transfer which you
have stated to bind the parties to the deed of settlement, the persons becoming
shareholders by transfer do not sign the deed of settlement?—They do not; but
they sign that other deed, which is considered a substitute for it. A transfer might
take place by a man in Cornwall to a man in Scotland, and we should have to send
this immense deed all through the country, which would be very expensive ; a
small deed is substituted to save that, and a great many of the proprietors have
signed those deeds which are in our possession.

1935.	You state that the issue of those shares is for the purpose of extending
the connexion of the bank ?—The retention of the 4,000 shares, that was the
original motive ; since that the shares have rather declined in value, they are
rather below par, and therefore we do not choose to issue them.

1936.	How would the issue of those shares to particular persons tend to increase
the banking transactions ?—Very obviously; if they were men in business they
would give us their accounts, and promote our interest in every way ; if they had
business that afforded commissions, they would give it us.

1937.	Mr. Clay.] Are a large proportion, or not, of the persons having accounts-
with the bank shareholders of the bank ?—A very large proportion, but I am not
prepared to say how many ; it is impossible, unless I were to have recourse to the
books, and to compare the shareholders' names with the ledger.

1938.	Is it your impression that a very considerable proportion are customers -
of the bank ?—Yes.

1939.	Your impression is, that the bank owes the business it possesses in a
very great measure, to the circumstance of having so distributed its shares with a
view to obtaining business ?—Partly, and to their influence in getting their friends
to deal with the bank.

1940.	Partly that the shareholders have themselves opened accounts, and
partly that they have been the means of procuring further accounts ?—Yes, and.

many shareholders not in business at all have got their friends to deal with us.

I have myself'friends of my own who have given accounts to the bank.

1941.	Have you ever attempted to ascertain what proportion of the persons
having accounts with your bank were parties who never had had banking accounts
before, or such as had accounts with private banks before?—No, we have never
attempted to ascertain that; we did not feel there could be any object whatever,

in it.

1942.	Is it your impression that a large proportion of the persons having
accounts with your bank had previously accounts with other banks ?—l think the
greater proportion of those having accounts with us, must have had accounts
before with private banks, for they are principally men in business.

1943.	What is your impression of the result of the system of joint stock banking^

as to its power of successful competition with private banks ?—I think it has more-
power, from its extended connexion.

1944.	Is it a power to that extent, that in your opinion must ultimately tend to
absorb the banking business of the country into jc>int stock banks, if the system
should spread widely?—Yes,' if the blanks are properly conducted; if they are*

not properly conducted I think they will produce their own defeat.

1945.	Suppose no casualty should happen to the system, is it your opinion
that it contains within itself the power of absorption of the banking business of the
country ?>■—Yes, that is my impression ; provided it is conducted as it should be,

I have no doubt it will j but that is only an opinion.

1946.	The first shares were all issued at par, previously to commencing busi-
ness?—Yes.

1.947*■ A thousand were afterwards issued at 1 I. premium?—About 1,000.

1948. There have been no others issued at a premium ?•—No, those would be
about the last 1,000 shares of the 16,000.

0.92.	q, 4	1949- The120 MINUTES OF EVIDENCE TAKEN BEFORE THE

General Austin. 1940. The whole profit derived from the bank from selling shares is about
i___—.— 1,0001. ?—About that amount.

1 July 1836. 1950.—

1951

1952

1953

1954

1955

1956

1957

1958
*959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1080

1981

1982

1983.	Sir John Wrottesley .} Of the bills bearing the endorsement or guarantee
of the bank, what proportion have been re-discounted by you, and what pro-
portion are bills you have paid out to your customers ?—£< Only about
one-third of those bills are paid into the London markets, the other two-thirds
are paid away by us in our regular business to parties wishing to make remittances,
or remitted by us to country bankers for collection; we return those bills which
are stated in account. If it is wished to ascertain what we really re-discount,
that is, send into the London market, it is about one-third of that; the other two-
thirds are used in carrying on our business.

1984.—

1985.—

1986.	Can you discount good bills at Newcastle at a greater rate than four
per cent.?—Our rate of discount at Newcastle, for bills beyond 90 days, is five
percent.

1987.	How much for short bills?—Under 90 days four per cent.

1988.—

1989.	Mr. Attwood.] You state in a memorandum at the bottom of the return
that the assets would give a balance in favour of the bank of	, provided
the bank have credit for the , which appears among the liabilities for
bills bearing the endorsement of the bank ?—-The fact is, those are bills we have
paid away,* and if they never come against us, and we have every reason to
suppose they are good till they do come against us, they ought not to be consi-
dered as liabilities.

1990.	Or they ought to be put among the assets as well ?—Yes, that could
have been done, but we did not like to alter the form of the paper.

1991.—

1992.—

1993.—

1994.—SELECT COMMITTEE ON JOINT STOCK BANKS. 121

*994-	General Austin,

,995-—	--

199^«	1 July 1836.

1997-—

iqq8.—

1999-—

2000.—

2001.—	' "

2002.—

2003.—

2004.	How many branches have you ?—A branch at Sunderland, a branch at
Shields, a branch at Morpeth, and a branch at Berwick.

2005.	Does this item of cash in coin and Bank of England notes, include the
notes of other banks which you keep in your different branches ?—In banking
phraseology, cash means coin and other bankers' notes, or Bank of England,

2006.	Can you give an opinion what proportion of the	would be
represented by demands on other bankers P—I cannot say exactly, it fluctuates
very much, it might be ; sometimes we have heavy balances to pay
them, and then the next week perhaps very heavy balances to receive from the
same bankers ; there is a very great difference week by week with reference to the
notes taken by the banks; but I think it would be a proportion of about one-fifth.

2007.	That would leave about	in the four branches in Bank of England
notes?—Yes.

2008.	In the item " Ledger balance due to the bank	" were those
overdrawn accounts ?—Yes.

2009.	Is there any amount of that sum you could rely on calling up quickly,

if you should have occasion for it ?—A great deal, perhaps the greater part of it,

might be called up immediately ; we have very often contracted our advances to
our customers, and we have found no difficulty in doing it very shortly, if
necessary.	,	.

2010.	The persons from whom you have demanded it probably have obtained
advances from other banks to meet the call?—I do not know how they have got
the means but by debts due to them ; they might have got bills from their debtors
and discounted them with ourselves ; I would call that payment, as available matter
to liquidate the balances.

2011.	They might have it from debtors who owed them money?—I will sup-
pose a trader or coal owner may give credit, and when we call upon him to
reduce his balance, he goes to the man to whom he has given credit, and says,

" You must give me bills," and if they are good bills they are the same as cash; if
they are bad bills the debt cannot but remain; he may discount them with us
or with another bank.

2012.	In case of a general pressure for money, would not you calculate that you
would find greater difficulty, under circumstances like those, of obtaining payment
of your credit balances ?—We should perhaps find the same difficulty as to our-
selves, that would extend not only to banks, but to every establishment in the
neighbourhood of banks.

2013.	Of the deposits bearing interest, do you take the running accounts ?—

Not our common business accounts; we at first started with the understanding
that the deposits were to remain three months without being disturbed ; but some*

other banks have adopted the plan of allowing interest the moment they are put in
till they are drawn out, and we now do the same; they are no longer deposit
accounts in the usual acceptation of the term ; but they are accounts current, they
are drawn out by checque.

2014.	The whole is payable on demand ?—Yes.

2015.—

2016.—

2017.	You find an increased number of shareholders important in bringing
business to the bank 1—Decidedly.

2018.	Is it the habit of the shareholders and directors to solicit banking
accounts ?«—I do not know that it is to be called solicitation ; but a person's friends
probably give their account to the bank when they think they have an interest in
it; a friend, if he has no interest to oblige any other person, gives it to the bank inu.

which that person has a share.

O.92.	k	2019.—122 MINUTES OF EVIDENCE TAKEN BEFORE THE

General Austin.

1 July 1836.

2019.—

2020	.-

2021.—

2022,-

2023.-

2024 —,

2025.—

2026.—

2027.—

2028.-

2029.—

2030	.-

2031.—

2032.-

2033.—

2034.—

2035.—

2036	.-

2037.—

2038	.-

2039.—

2040.—

2041.—

2042.—

2043.—	\

2044	.-

2045.—

2046	.-

2047.—

2048.—•

2049.—

2050	.-

2051.—

2052.—

20 53.—

2054.—

2055.—

2056	.-

2057-—

2058	.-

2059.—

2060	.-

206l.-

2062.-

2063.	Chairman."] Is there any clause in the deed of settlement with respect to
the guarantee fund, and to what are the obligations imposed upon the directors ?
-—Yes.

2064.	Have the goodness to read it?—In the 36th clause of the deed of settlement
it runs thus, " Unless the directors shall, in their discretion, determine the contrary,
no dividend of the profits of this company shall be made for the period ending on
the 31st day of Decemher 1833." This was drawn up after we had, in fact,
formed the company, and has reference to matters which are precedent in point
of time to that very moment; but the operation of the bank afterwards will
develope itself as I go on. " Unless the directors shall, in their discretion,
determine the contrary, no dividend of the profits of this company shall be made
for the period ending on the 31st day of December 1833, but the same profits,
after defraying the expences of establishing this company, sh9.ll be retained, and
form part 6f a fund, to be called the ' Guarantee Fund" that was, in fact,
applying the whole of the profit the first year to the guarantee fund; then it
proceeds, " and in each succeeding year during the continuance of the company,
such proportion of the net profits which shall have arisen and accrued to the
company during the preceding year, not exceeding one-fourth part of such profits
as the directors shall think requisite, may be retained for the pur pose of forming
and maintaining the said guarantee fund; and the residue of such net profits shall

beSELECT COMMITTEE ON JOINT STOCK BANKS.

be divided half-yearly or yearly, as the directors shall determine, amongst the General Austin.

shareholders respectively, according to the number of their shares, but the dividend -—-—

to be made for any year shall not be reduced by the setting apart of any such 1 July *836.
profits as aforesaid to less than five per cent, per annum on the then paid-up
calls or instalments on the subscribed capital of this company."

2065.	Chairman.] Did it ever occur to the directors as a mode of replacing the
lost capital, and as a means of increasing the funds applicable to the payment of
their engagements, that it might be expedient to make further calls on the share-
holders ?—Yes, but the fact is the concern has been so unprofitable to the share-
holders, I believe we should find it very difficult to get them all to consent to it.

2066.	Have you not a power through your deed of settlement to make the
call ?—We had originally, but it was altered, and I think very properly altered ;

I think no directors should have any such power; the directors must now
call a general meeting, or apply to a general meeting to sanction the call; then
they call for it whenever they like; for instance, whether it is five or ten per cent.,

it is first sanctioned by the body, then the directors may call for it as they want it,

but we have never done that.

2067.	Are the Committee to understand, that whilst the directors have the
power of extending the engagements of the bank with respect to calling up capital,

they have only a limited power of extending the capital of the bank to meet the
engagements they have contracted ?—Precisely so ; the power we originally had
is in a certain degree limited, inasmuch as they must first have the sanction of
a general meeting before they make a call.

2068.	What do you suppose would be the effect of a call equal to the instal-
ments already called up ?—They were each five per cent.

2069.	Supposing five per cent, called up now P—I think a great proportion of
our proprietors would pay it willingly, and a certain proportion would not.

2070.	In the event of persons declining, what would be the result?—If the
majority of a general meeting determine it shall be done, they must comply.

2071.	Supposing a call legally made, do you consider that it would be paid by
the shareholders ?—They have no mode of escaping from it, that I see ; they must
pay it, we should then have authority to proceed against them by action, in fact,

to force them to pay it.

2072.	Have the goodness to state what mode of proceeding you could resort to
against the shareholders, in case they declined paying up the call ?—I will read
the clause in the deed of settlement, which is the best answer I can give to the
question : at the time this deed of settlement was made, there was 10I. called
for, and the first part of the clause has reference to that: " In addition to the pay-
ments amounting to 10?. per share required to be made by each shareholder,

under the provisions hereinbefore contained, the directors shall have full power to
require and call for the further payment by each shareholder of the sum of 901
on every share held by him, by such instalments and at such times as they shall
think fit, together with interest thereon after the rate of five per cent, per annum,

from the time or respective times appointed for payment thereof, until the same
shall be fully paid, but so that no such call exceed the sum of 5 I. per share, and
so that not more than one such call be made in any one succeeding year, the next
succeeding year to commence from the day when the second call shall be
appointed to be made : provided that notice of such call expressing the time and
place, when and where the payment is required to be made, and stating the sub-
stance of the provision next hereinafter contained, relating to the forfeiture of
shares for,the non-payment of calls, be given to every shareholder two calendar
months at least before the time appointed for payment of the same, and the
directors shall have full power in the name of one of the public officers, to sue for
and recover the amount of every such call, and interest thereon, from every person
refusing or neglecting to pay the same as aforesaid, and also if they shall think
fit to enforce the forfeiture of the shares held by such person, in pursuance of the
two provisions next hereinafter contained, or to adopt either or both of such pro-
ceedings at their discretion." We can take all shares thus forfeited and sell them
to anybody else, or bring an action.

2073.	Do you know whether that would be an effectual remedy, supposing of
actions directed to be brought against shareholders?—I am not sufficiently versed
in equity law to know how that could be managed, but it is the usual way in which
those deeds are drawn up.

0.92,	K 2	2074. You124

MINUTES OF EVIDENCE TAKEN BEFORE THE

General Justin. 2074. You being a managing director of the company, would you rely upon it

—- as an effectual means of enforcing a call?—I should certainly, eventually j but if

1 July 1836.. people chose to resist it, and throw their causes into a court of equity, Heaven
only knows when we might calculate on receiving the money.

2075.	There is another provision by which the forfeiture of shares is provided
for ?—Yes.

2076.	The forfeiture of the share being, under the second provision of the deed,
the mode by which you enforce the payment, if an instalment is called for in cir-
cumstances of difficulty, when the shares are at a discount, may it not be con-«
ceived that the parties would rather forfeit the share than pay up a call leading to
a problematical profit ?—It depends upon the state of affairs at the moment;
if the shares were at a very great discount, and the price of the share did not
amount to much, I suppose they would, but we can have recourse to them after
that for the deficiency.

2077.	Sir James Graham.] Were any shares actually forfeited on any such
call ?—We never had a share forfeited; we have had shares returned to us in
consequence of the lien we held upon them, the shares of bankrupts; but they
were not what could be called forfeited, for a forfeiture of a share could be only
for the non-payment of a call; all'the calls were punctually paid.

2078.—

2070.—

2080.—

2081.—

2082.—

2083.—

2084.—

2085.—

2086.	Sir Robert Peel.'] What was the object of inserting that condition in the
deed of settlement, that under certain circumstances a single shareholder in the
bank might propose the dissolution of the company?—To give to the shareholders,
I presume, such a controul Over their own affairs, as would render it impossible
for the directors in opposition, or even the majority of the company, in opposition
to the minority, to keep on the business of the bank, or in other words, to enable
any individual who found that his property and his possessions were placed- in
jeopardy, to extricate himself from that jeopardy by stopping the bank j it is a
discretion no individual ought to have, for it might be exercised by an individual
having only 10 I. to the prejudice of a man having 50,000 I.; if the bank werte
allowed to work its own way, that man having the large property might get out
without injury, or the bank might become prosperous, though by the immediate
dissolution he might be ruined.

2087.	The responsibility will extend to the whole of a man's fortune ?—
Certainly.

2088.	Was it conceived that by dissolving, they might limit their liability to
one-fourth ?—No, their liability does not become limited up to that point, but that
they might dissolve the bank on that|proof of what they considered bad banking.

2089.	It was quite understood by the shareholders, that for all transactions
previous to the dissolution of the company, the proprietors still continued in their
•own persons liable, and must, if necessary, apply their property ?—I conceive there
is not a shareholder in. the company who does not so understand it; in fact "the
Act of Parliament is very explicit upon that point.

2090.	You mentioned that you had failed in two law suits, will you describe
. • the particular nature of the transactions?—One was not a law suit, but the adjust-
ment of an account; there were certain charges in that account made which a
person disputed, and sooner than go to law we wrote them off, and allowed that
sum.

2091.—

2092.	What was the point the party contested?—That we charged too much
commission; that our charges were more than they ought to be for transacting
his business.	,

2093.	Before he commenced banking with you, did he understand what the
amount of the commission was ?—Not exactly, it was done between his agent
and the agent of the bank, very much in the nature of a verbal understanding;
we found one said one thing and another another thing, and we thought it best to
give up the matter altogether.

2094. HaveSELECT COMMITTEE ON JOINT STOCK BANKS.

2094.	Have you corrected that practice under which such a thing could
prevail ?—~We have corrected the practice, but this was a very peculiar case which
will never occur again.

2095.	There was a loss of	likewise?—Yes, that was a verdict we lost;
we had an alkaline work with its stock mortgaged to us ; the mortgagor failed,
and we took possession of the alkaline work and stock, and sold the stock. The
assignees commenced a suit against us, and a jury of our country gave it against
us, that the stock could not be sold, that we did not take legal possession of
it; consequently we were obliged to pay the amount of the verdict.

2096.	The money had been originally advanced on mortgage?—The mortgage
was given to cover the account; therq, were deeds deposited, and a certain kind
of possession given of the alkaline works, but the stock being fluctuating, the
stock we took possession of at first was not that which came into our hands after-
wards, and it was upon that point we were defeated at law, that it was not the
game stock; nor was it, but then we did not suppose it possible there could be
such a construction of law as that; the stock was raw material, sulphur, and salt
$nd lime, and other things used in the production of alkali, and that stock we got
possession of some two years before, which was not the stock we sold ; the former
had been worked up, and other materials had come in.

2097.	Had you a deed of sale with that mortgage?—We had a power of sale,
and did sell upon that, and put it to the credit of that man's account; we were
obliged to pay that sum back again.

2098.	In the case of other debts, what was the general character of them; did
the bank advance money on mortgage of land ?—Never; we have occasionally
had small mortgages given as collateral security, but we never advance money in
•that way, though we do get mortgages to cover an account as collateral security,
and this was one.

2099.	To what do you attribute those losses of	and the	?—The
was not properly a loss, it was a disputed account; it was said we had

charged too much, and sooner than quarrel with the person who is a first-rate cus-
tomer, it may be supposed, where such matters were disputed as the matters of
difference between us, we waived it; we thought we ought to charge commission
on the account, a great account; there has been a cash credit, in fact, of nearly

2100.	The first sum was only a loss of so much supposed profit ?—Yes; but
Haying been included in our account, it was a debit to be deducted.

21Q1, What was the system adopted which led to the preceding losses ?—A
reckless system of giving credit to adventurers and persons who were not deserving
•of,it; in fact, over-trading ourselves, and encouraging improper speculations in
our customers, which led at last to bankruptcy, and consequently we became the
victims, having furnished the supplies from the beginning.

2102.	Have the shareholders in the bank any preference in getting accommo-
dation ?—I am sorry to say our principal debtors were shareholders, but there is
no such expectation raised by the deed of settlement; it provides that they shall
have no such claim ; it is to be given at the discretion of the directors.

2103.	Suppose a shareholder opened an account with you, and became a bank-
rupt, what would be done with his shares ?—We put them to his credit for the
amount paid up; we have a lien upon them,

2104.—

2105.—

2106.	You cannot alter the deed without the consent of the proprietors ?—-No ;
but we mean to submit the necessity of altering it to the proprietors; a general
meeting of our proprietors can alter it.

2107.	Do you think those proprietors who insisted on the dividend of five per
cent., when they knew there would be nothing reserved, will consent to the
alteration of the deed ?—Yes, I think they will; for they argued on principle, as
they thought the very persons who insisted on the division of the whole acknow-
ledged that it was imprudent and unusual; but, they said, the deed of settle-
ment obliges us to divide five per cent., or as far as it goes; and when they
were doing so they acknowledged the propriety of the recommendation of the
directors.

2108.	What would the depositors say to the bank not having any dividend;
would it not shake their confidence in the bank?—:No, I should think not, for the
depositors have increased since.

0.92,	»3	2109. Do

General Austin.
1 July 1836,126

MINUTES OF EVIDENCE TAKEN BEFORE THE

general Austin. 2109. Do you know whether the dividend was made out of anything but
■' 1 ■ ■'— profits ?—It was made out of the profits of that year, but without reference to the
1 July 1836. former debts.

2110.	Was that known generally to the customers of the bank?—I should
apprehend it was.

2111.	Did not that affect the credit of the bank ?—Decidedly not.

2112.	In- the course subsequently adopted, have you endeavoured to take
precaution?—We have made no division of profits since, nor shall we till
February. We mean at the next general meeting, which will be in August, to
alter those clauses which we have found in the working of the bank to be injurious,
and that is one of them.

2113.	What is the power of the directors to call for an instalment on the
original share ?—They have none now; because after our mistakes and bad
management in the beginning of our career, at the general meeting they passed a
resolution that the power which the directors possessed by the original deed of
settlement, of making a call until they had called up the whole, should be
abrogated; they said the directors shall not make a call until they first have the
sanction of a general meeting.

2114.	Under the deed of settlement, the proprietors having the power to
control in that way, the proprietors might, they say the directors shall not
exercise that power ?—Yes, they can control the directors. I will read the
clause which gives them that power, if it is wished.

2115.	Then they can control the deed of settlement, in fact?—Yes, they can
alter the whole if they like.

2116.	What is the inducement to a person like yourself to undertake to act as
director, when you are not allowed to act on your own discretion, and may be
over-ruled?—It is very hard for a man to know what induces him to get into a
thing; but when he has got in, and his property is at stake, it is better he should
act himself than let others do so. Mine is not a pleasant situation; I am
placed in a situation that I am constrained to do that which is not agreeable to
my own feelings.

2117.	Your object is to prevent bad getting worse ?—- And that things should
get better. The bank is getting up again.

2118.	If you were giving advice for a new deed of settlement, would you permit
the proprietors to have such a power?—You cannot bind men to stay in a com-
pany ; it would be very hard if the proprietors found the directors were recklessly
disposing of their property, and had. no remedy; there could be no relief but from
the body itself, from which the directors emanated.

2119.	Mr. Attwood.] You think that a wholesome power on the part of the
proprietors?—Yes; I would belong to no institution or bank where I had no
power of checking the improper conduct of the managers.

2120.—

2121.	Chairman.] You stated that you find many imperfections in the deed
of settlement; do you consider that it would be advisable that before such deeds
of settlement are executed, binding the shareholders and regulating the conduct of
the directors in so serious a matter as the establishment of a large bank, some
supervision of those deeds of settlement should take place, to see that they con-
tained all the clauses which it might be expedient to introduce into them ?-—
Certainly ; the way in which a thing of this kind can be regulated is by submitting
it to somebody learned in the law; persons must associate as they like for them-
selves ; and if I choose to associate myself with nine or ten others, I do not see
what control could be established over them; they may say, we choose it shall
be so, or so.

2122.	Do you not think that the public is largely interested in the construction
of such a deed of settlement as may bind the parties carrying on the bank to safe
and legitimate operations ?—Certainly.

2123.	Then do you not think the public has a right to see that the deeds of
settlement are such as will most conduce to the general interest ?—-I do conceive
it would be very desirable if there was some control exercised over joint stock
banks, to place them on a more satisfactory footing than they appear to be at
present; and if I were allowed to enter into the subject, I could give very strong
reasons for it, and I do at this moment, though I am obliged to attend here, hail
this inquiry as a precursor of a better and more wholesome system of j oint stock
banking than does exist.

2124. Supposing

iSELECT COMMITTEE ON JOINT STOCK BANKS. 127

2124.	Supposing any alterations to be made, do you not consider that one of General Austin.

the first of those alterations ought to be some precautionary measure on the part -

of the public before the bank begins its operations, to see that the deed of settler » July 1836.
ment is such as will at once conduce to the interests of the bank when established,

and to the public interest at large ?—I do not see why it should not be very
desirable, except that men who associate together with very different views would
not be willing that an officer of the Crown should control the specific objects of
each individual. One man will say, I wish for unlimited responsibility; another will
say, I wish to have my responsibility limited ; two parties might come forward on
those different principles, and how would the law officer of the Crown decide,

unless Parliament were to say that those banks shall be all on the same footing.

2125.	Are there not certain particulars to which you have adverted in this deed
of settlement, the power of the directors of the company under certain circum-
stances to do certain acts which it would be desirable to exclude?—-I think there
are clauses which ought not to exist, but probably it might be hard to say parties
shall not so bind themselves.

^ 2126. Do you not conceive that the establishment of a guarantee fund is also
useful to the interests of the bank, and conducive to the interests of the public ?—

Decidedly.

2127.	Do you not consider therefore that it would be expedient that some
person on the part of the public should see that the deed of partnership did not
contain a clause, which like the clause you have stated, would be prejudicial to
the general interest, and that it should include the security which you state to be
conducive to the public interest ?—Undoubtedly; everything which will be inju-
rious should be excluded, everything desirable should be included.

2128.	Is it not desirable there should be an authority vested somewhere to see
that those deeds of settlement should include those provisions which are essential
to the public interest?—Yes, I do think so ; but I think that authority must be
guided by the intentions of the contracting party.

2129.	You state that you anticipate benefit from this inquiry; will you have
the goodness to make any suggestions which you think might be beneficial to the
public?—I conceive the great utility of joint stock banks, and in fact the
principal argument in favour of them is the security they afford to the public
in the case of stoppage of payment, above private banks, who do not afford
that security; that they do so is unquestionable, and I have no hesitation in
saying that I do not think it requires any great power of reasoning to
prove that they do. I have thought if they are desirable, it would be
also desirable that the security 40 the public should be placed on a basis not
to be shaken by mismanagement; and I think that can be done, at least as far as
human institutions can be made perfect; there are three or four points which I think
every joint stock bank should be based upon; there is a great difference of opinion
as to unlimited liability and limited liability. I think that a middle course may be
steered ; for instance, a million of money may be the nominal capital, or two mil-
lions; speaking of our own bank, 20,000 shares, of 100?. each; limited liability,

in the common acceptation of the word, would imply that no one could be called
upon having paid up 100/. on account of each of his shares, if that capital should
be thrown away and lost by the misconduct of the directors. Now the whole of
each shareholder's fortune is liable for the operations of the bank up to the period
of closing it. I think unlimited liability discourages a great many wealthy
persons from taking shares. A party reasons with himself very justly, why should
I, who have property, subject my property to loss on the chance of the trifling
dividends I can obtain in a bank? If the liability was limited, he would not
so view it; there would be a better class of shareholders. I would say, let the
directors have power to call up the whole of the money, the whole proposed
capital; and let the shareholders be responsible for just double of that; if
there was no power of calling more than the original capital, that would be
two millions of money; then there might be two millions more for which the
subscribers must be liable, without throwing their whole fortunes open to the
transactions of the bank; that is a mere suggestion of mine, either that or unli-
mited liability, as it is now; limited liability to the amount of nominal capital
would cause those banks to fall into the hands of men perhaps of no means at all,

but by a middle course of that kind I think that respectable men would be Still
retained as shareholders in those banks, and they would be prevented falling into
the hands of mere adventurers; paid-up capital is desirable as far as the nominal

0.92.	r 4	capital128 MINUTES OF EVIDENCE TAKEN BEFORE THE*

General Austin, capital goes. In our own case, two millions is too much, or for any country bank-;

__. under the deed of settlement I would reduce it to a sum which there would be

i July 1836. means of employing; no shareholder would willingly pay up now, for we must
invest it in the funds or in exchequer bills at low interest; I would reduce the
capital to what might fie reasonably expected to be the sum required for carrying
on the operations of that bank in which it is invested.

2130.	Mr. Clay.~\ It would come to the same point if it were insisted that 50
per cent, and no more of the nominal capital should be paid up ?—Yes, one-half,
with the other to be called fo*- in case of need; I think that would be a just
medium between the two extremes of limited liability and unlimited liability;
they must be both injurious.

2131.	Chairman.'] You are aware that under the law, as it stands, there is no
objection to creating a bank with shares of 5/. each; do you not consider that
shares of so small an amount are highly objectionable?—Yes ; I do consider that
every shareholder should have stock ia the bank to the amount of 100/., otherwise
they will degenerate into savings banks; servant-men and women, and little trades-
men, will put their money in such joint stock banks, hoping it will yield a little
more interest, while men of rank and fortune will shrink from such a course of pro-
ceeding when they see such persons returned to the Stamp Office, and those persons
present themselves at a general meeting. The mania which has taken possession
of the people in my neighbourhood is such, that within these three months there
have started five joint stock banks in Newcastle and its neighbourhood ; the shares
of some are 10/., and as an inducement they say that any man taking shares shall
be entitled to a cash credit at the discretion of the directors, of course to the extent
of two-thirds of the amount he has paid; the consequence of this is, if that man
holds 300/. stock, he immediately gets an advance of 200/., and he in fact pays up
but 1001, Now if any shareholder can do that, the objection to the principle
must be very evident. It is very lamentable,

2132.	Do you think the transactions of a bank which is formed with 5/. ono&
shares, and is open to advances to shareholders similar to those you describe, is as
likely to be prudently and well regulated as a joint stock bank with shares to the
amount of 50/. or 100/. each?—Certainly not; we are all prudent or otherwise
according to the stake we have in the thing ; the directors of those banks, as the
stock is so very small, would be a different class of people from the directors of
banks where the stock was greater. We will suppose the same number of shares to
qualify a director, suppose 50, whether the shares are 1001, or 51.; 50 shares in
quantity will require 5,0001, to be advanced in one case, and only 250/. to be
advanced by the other; it is very plain they will form very different classes, and
that when the directors come to be elected men more reckless and of less weight
will be chosen, and of less property. Each share should be at least 100/., or each
proprietor should hold as many shares as will make 100/.

2133.	Do you consider the present state of the law, which enables any number
of branches to be established at any distance from the parent branch, to be con-
ducive to the public interest ?—I think branches ought to be established within a
very short distance from the parent bank, for the purpose of supervision ; when they
are very far distant the directors cannot visit and examine into the books so easily;
they cannot exercise that vigilance they would if they were within a reasonable
distance. For instance, our branch at Sunderland, if I want to see anything, or
do anything, or examine into anything, I can step into a public conveyance, or ride
a horse, and I am there in an hour and a half; I can make the examination and
return to my business at the bank the same day; but when it is 60 or 70 miles
from me, I cannot do it in less than two or three days; they ought to be, 1 should
think, within 20 miles.

2134.	You acted as manager of a branch yourself ?-r-Yes.

2135.	Supposing you had been at 100 miles' distance from the parent bank with
which you had transactions, do you conceive the parent bank could have exercised
a due control over your operations, and have a sufficient and prudent knowledge
of the character of the transactions you conducted?—Certainly not5 there is
another objection to its being so far off; the transmission of notes, money, and so on^
creates a greater risk; inconsequence of the expenses they must be entrusted to
the .guards of coaches, or some other; whereas in an hour and a half's ride a clerk
can be sent to convey money or bring it back.

2136.	Are you acquainted with the system of agencies which have been esta-
blished as distinct branches?—I understand they have not the power of the

branchesSELECT COMMITTEE ON JOINT STOCK BANKS. 129 V

branches; the branch has the same power as the parent* bank, with a little differ- General Austin.
ence ; the agency is much restricted.	———-

2137. When an agency is established for the purpose of going round to different 1
markets and fairs, do you consider that as objectionable?-—That is an itinerant
kind of banking, which no man of respectability would engage in, in my opinion.

2138 —

2139.—

2140.—

2141.—

2142.—

2143	—

2144	—

2145.—

2146.—

2147-—

2148. Mr. Clay."] Is there any clause in your deed of settlement which gives
permission to the proprietors, or auditors appointed by them, to investigate the
state of the company's books?—Yes, if they choose to appoint auditors they may
do so. In a public meeting it was tried once; the gentleman who proposed that
could get nobody to second his proposition ; it fell to the ground in a meeting of
200 members; there was not any person except one who was anxious even to
audit the account.

<■ 2149. Mr. Attwood.] Have there been many changes in the proprietors lately ?

—Not lately; in consequence of the rage in our neighbourhood for joint stock
banks, our shares are not much spoken of; there is no demand for our shares.

2150.	Have many been sold at 141.1—Yes, a great many.

2151.	Have the sales been principally by the original shareholders?—It
appears that a certain set of men have associated for the purpose of trafficking
in our shares ; very few of our original shareholders have sold; but the traffic
in our shares is entirely in York, Leeds and Manchester. I know there are the
same shares bandied about from one to another; that they are speculating merely
to make a profit on them, just as by buying and selling in the stocks j there are
very few changes of late.

2152.	Chairman.] Do you think the tendency would be more in favour of this
kind of jobbing speculation in shares if the shares were very small in amount, 101.

shares, for instance, than it would be with 100I. shares ?—Decidedly ; that is the
great evil of the system ; where they have changed the shares from 1001, shares
to shares of a trifling amount, an inferior class will in consequence get into such
companies, and if the funds should be squandered away, the persons engaged
in it being of an inferior class, there will be nothing to meet the demands upon
the company.

Sir,	London, 5th July 1836.

AS you were pleased to say that you wished me to communicate to you, in writing, my
views on joint stock banks, as bearing on the Parliamentary inquiry now pending, I take
the liberty of addressing you accordingly.

That what are called joint stock banks, if composed of a numerous and respectable
proprietary, and if carefully and prudently conducted, offer to the public a greater security
than any private bank can possibly do, is unquestionable.

Parliament should interfere with these banks only as far as is necessary for the security
of the public, imposing on them by law such restrictions and obligations as may be con-
ducive to that end. And this I think Parliament is called on to do; for there are afloat at
this moment a number of new schemes for the formation of joint stock banks, which I
consider fraught with danger, and which, if not controlled by Parliament, may lead to
the most disasterous consequences. In short, if those projects are not immediately
checked, the banking business of the country will pass into the hands of adventurers and
insolvents.

The foundation of public security with reference to these banks is the perfect solvency of
the shareholders, taken as a body ; that is, their having in the aggregate available property
equal to all the liabilities and engagements of their respective co-partnerships, over and
above the capital they may invest in them, and their own personal engagements; that in
case of stoppage by mismanagement or the loss of the capital paid up, there hiay be
property sufficient amongst them to pay up all the creditors 20 s. in the pound.

The principal object, therefore, in forming and maintaining a joint stock banking com-
pany, is to induce men of means and respectability to become shareholders in it, by

O.92.	s	carefullyMIJWTES Of EVIDENCE TAKEN BEFORE THE

General Austin* carefully selecting from the applicants for shares such men, and then to conduct the
^ L	' undertaking in such a way as may secure a succession of such shareholders.

l July 1836. As the prudent and profitable management of a joint stock, bank must entirely depend
upon the skill and integrity of those to whom that management is intrusted, all details in
this respect should be left to the shareholders themselves; but there are a few fundamental
rules which, without at all interfering with the right of individuals so associated to
conduct their own affairs, might, I think, with much propriety, become matter for Parlia-
mentary consideration.

I would therefore suggest (and I do it with great diffidence in my own competency for the
task) that a lawT should be passed for amending the existing laws, fixing the minimum
value of shares at 100 L; or when shares of less value exist, that the shareholders be obliged
to hold at least as many shares as would in the aggregate make 100/. stock, and that no
share be divided into fractional parts. This provision would have the effect of preventing
these banks from degenerating into mere savings banks, and of preserving a respectable
proprietary, which cannot be the case as long as shares of less than 100 I. value are suffered
to be held by individuals, and particularly if shares of the value of 5 L and 10 L be admitted
to exist.

The capital should be paid up, This provision would also tend to preserve the respecta-
bility of the proprietary, and check the appearance of those ridiculous schemes, in which
an immense nominal capital is the leading feature, and which cannot, nor never was,
intended to be paid up.

In the liability of the shareholders consists the superiority of joint stock over other
banks, and it is a very difficult question to deal with. Unlimited liability prevents many
wealthy and respectable persons from joining these establishments ; and I think a middle
course, between limited liability, as it is generally understood, that is, to the amount of
the subscribed capital only, and unlimited liability, might be adopted with sufficient
security to the public, at the same time that it would have the effect of inducing respectable
and wealthy persons to take shares without the great risk to which they are liable under
the existing hw. By this middle course, I mean fixing the liability of shareholders at a
sum equal to and beyond the subscribed capitaL, or at double or treble that amount, as may
be judged best.

The directors or managers should not have the power of calling up one shilling beyond the
fixed value of the shares, the remaining liability of the shareholders being considered as a
reserved fund to fall back upon in case of the subscribed capital of the company being
entirely lost, in which case the company should by law stand dissolved, except for the pur-
poses of winding up*

The directors should be obliged half-yearly, by means of reports and balance-sheets, to
lay before the shareholders a full and true state of their affairs, suppressing only the details
of'customers' accounts, respecting which the most inviolable secrecy should be observed;
and the aggregate amount of those debts and credits only introduced into the balance-
sheets as assets and liabilities, without any allusion to names or particulars.

In order that the directors may not be able to continue the business of a bank after it
should by law stand dissolved; and in order to see that the reports and balance-sheets are
correct, auditors, not directors, should be appointed annually by the shareholders to inspect
the books and accounts, with the exception of the customers' accounts, which, for this
reason, should be kept in a separate ledger, and the aggregate amount of debts and credits
only furnished to the auditors.

With the exception of the transactions with the customers and their accounts, the,greatest
possible publicity should be given to the transactions and state of these banks, as nothing
would tend more to produce good management and give general satisfaction to the public,
or check a vicious and improvident system of banking.

The auditors should be obliged, under penalties, to execute the duties of this office, that
the public may not be misled by false appearances or evasions of the intentions of the
Legislature, and the reports and balance-sheets should be authenticated by their signatures;
and in like manner the directors should be subject to penalties if they in any way wilfully
act so as to delude the public or evade the law.

All deeds of settlement should be submitted to his Majesty's attorney or solicitor-general,
in order that these officers may see that in drawing them up the security and interests of
the public are provided for, and that they are according to law.

This is all that occurs to me to say at present respecting jpint stock banking ; but should
you be pleased to honour me with any further commands on the subject, I shall be most
happy to receive and execute them to the best of my ability.

I have, &c.

John Austin,

Managing Director North of England Joint Stock Bank.
The Right Honourable the Chancellor of the Exchequer.

P. S.~I beg to add that I think copies of the reports and balance-sheets, authenticated
by the signature of the auditors, might, with great propriety and advantage, be submitted
to the Treasury or some public office.SELECT COMMITTEE ON JOINT STOCK BANKS.

Martis, 5° die Juliiy 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Pattison.

Sir John Wrottesley.

Mr. Strutt.

Mr. Goulburn.
Mr. Clay.

Sir Thomas Freemantle.
Sir James Graham.
Mr. Loch.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

Mr. John Harding, called in; and Examined.

2153.	Chairman.] WHERE do you reside?—At Burlington, in Yorkshire. Mr.John Hardin

2154.	Are you a banker?—lam.	*

2155.	Where is your firm established?—At Burlington, and at Driffield.	5 juiy 1836.

2156.	How long have you been a banker?—The bank at Burlington has been
established from 30 to 40 years ; I have been there about 25 or 26 years, and have
had the sole management.

2157.	Have you turned your attention to the extension of joint stock banks of
late years ?—Yes, it has occupied much of my time and attention.

2158.	Are there many joint stock banks, or branches or agencies to joint stock
banks, established in your neighbourhood?—Throughout the East Riding. In
the town of Driffield, which consists of about 2,500 inhabitants, we have four
banks, two private and two joint stock banks.

2159.	Is that a place of any considerable trade?—A considerable corn-market,

but nothing more ; the private banks have been long established there, the joint
stock recently.

2160.	Are the commercial transactions of that place such, in your opinion, as
to present a reasonable prospect of the advantageous establishment of four

banks ?—None whatever; there is no chance of success for all.	i

2161.—

2162.	Are there similar circumstances occurring in any of the other towns
within the district?—I may say in all the towns; and in many of the villages of
the East Riding the new joint stock banks have established themselves.

2163.	Does this extension of the establishment of joint stock banks produce a
very active competition between them ?—It does ; and a reduction of prices, much
below a reasonable profit.

2164.	Has it produced, within your observation, any extended credits, which,

under the older system of banking, might not have been granted ?—Knowing the
character and credit of almost every individual in the town and neighbourhood,

we have granted accommodation as far as we conceive the parties entitled to it.

Since the settlement of these new banks we have found that parties have been
accommodated by them without having paid off the balance due to us, so that
thev have got double advances. It is only accidentally we have discovered the
fact; but having discovered it, we close the accounts, not considering ourselves
safe with parties who keep two accounts.

2165.	Do you think the principle of joint stock banking, and the connexion
which exists between the directors of a bank and those who take shares in that
bank, give them inducements to extend credit, and facilities in acquiring custom,

which are not to be found in the old system of private banking?—I think it
pushes banking to an extent which is unsafe for themselves, unsafe for the

0.92.	t	country,132 MINUTES OF."EVIDENCE- TAKEN BEFORE THE

Mr. John Harding, country, and which must in the end, if it is not checked, overturn the present
—- currency regulations altogether.

5 July 1836. 2166. State how it affords the credit, and leads to the result yoti have stated
in general terms ?—One of the worst features of the system is that it promotes
speculation among people who have neither the judgment nor the capital at
bottom to carry it through with safety to themselves. If the speculation is not
successful the loss will fall upon the bank; if the bank is strong enough to bear
the bad debts without calling in its resources from good customers, the thing
stops there, and no harm arises to the country beyond the loss to the parties;
but if the bank itself is on a bad foundation, those losses are severely felt,
the bank is compelled to call in its loans from sound good customers, and general
distress ensues.

2167.	Is there any distinction between those results when they arise out of
joint stock banking, and the results which would be consequent upon a very active
competition between private banks ?—I have never known so very active a com-
petition among the powerful private banks as to produce anything like the results
that we now witness. The partners in private banks are generally men of pro-
perty and experience, who well know the danger of indiscreet advances, and who
will not risk either their property or their character by urging their connexions to
push a too extended trade upon a borrowed capital.

2168.	Your observation would nearly raise an inference that private banks
were more likely to be managed with prudence and discrimination than joint
stock banks; but are there any peculiar circumstances connected with joint stock
banking which promote the extension of their discounts and circulation, and
advances of all descriptions, which do not apply to private banks ?-—I think there
a.re circumstances, in consequence of the great number of partners; we find those
partners all promiscuously assembled, good, bad and indifferent; every one has
an interest in extending the business of the concern within his own circle, and it
is impossible that so great a number should have the discretion or knowledge of
the true principles of banking to make that extension in a judicious and proper
manner.

2169.	Will not that still depend more on the conduct of directors than upon
the desire of shareholders ?—rSo far as competent directors themselves attend to
the business, and have it under their own eye; but when a bank has 40 or 50
establishments, many perhaps not under the eye of competent directors, it is
impossible that the eagerness of partners to extend the business should be under
prudent control; and the managers or agents, being mere paid servants, will
naturally recommend themselves to their employers by a zeal which may frequently
want both knowledge and discretion.

2170.	Have you ever known any cases in which an extension of the transac-
tions of joint stock banks has been produced or promoted by the issue of their
own shares and the multiplication of their proprietors ?-—Frequently ; I believe it
is a common occurrence.

2171.	How is that carried into effect?-—Those who take shares in the newly
established banks seem to consider themselves, and I think are considered by the
company, as not only interested in getting but engaged to get all the shareholders
and all the business they can.

2172.	Are those shares ever issued in such a manner as, in fact, to represent a
valuable consideration to the parties, and do they afford a bonus on their carrying
on their business at the bank ?—I conceive in all cases, if they find difficulty in
getting hold of an account they consider desirable, they offer shares as a con-
sideration for getting that account, and that shares are always reserved for this
express purpose*

2173.	You have spoken of the risk of management, and the danger of an
unwisely extended credit, increasing in proportion as the number of branches or
agencies were multiplied ; is that the result of your own observation, or is that
merely upon the theory of the case ?—It is the result of my own observation.

2174.	Where a branch bank is situated at a considerable distance from the
parent bank, do you consider that such a constant control and supervision can
be exercised over the affairs of the branch by the directors of the central bank as
will insure the wise and prudential conduct of its affairs ?—It is impossible.

2175.	Upon your own experience as a banker, supposing that in place of

beingSELECT COMMITTEE ON JOINT STOCK BANKS. 133

being the head of a private bank you were the manager of a bank having its Mr. John Harding.

centre at Birmingham or elsewhere, do you believe that the bank of Birmingham —--

could exercise such a full control over your transactions as ought to be exercised 5 July 1836.
by the bank which is ultimately responsible ?—It is not possible.

2176.	Do those observations apply as well to agencies as to branches, and if
they differ, do they apply in a greater or a less degree?—In a much greater
degree to agencies.

2177.	Will you explain to the Committee what you understand by an agency,

and the description of operations carried on under that name?—An agent is
generally a man who follows some other business as his principal occupation;

shopkeepers are preferred, because they are always upon the spot, and can insure
their own business, and part, perhaps, of the business of their customers and
connexions.

2178.	Do you mean by that shopkeepers of a small class?—I mean linen-
drapers, grocers, and so on.

2179.	Have you known any instances where shopkeepers whose occupations
have not made them conversant with banking business, have been so employed?—

I have known few agents whose experience and good management would justify
their having so important a trust committed to them.

2180.	When you use the word shopkeeper you do not include what might be
considered as a merchant ?■—Certainly not; I mean a retail shopkeeper.

2181.	What description of retail shopkeeper have you known administering the
affairs of a bank as agent ?—A retail grocer, draper, stationer and spirit dealer,

such as are found in small country towns and the larger villages.

2182.	In that case does he carry on the bank in the shop ?—Sometimes in the
shop, sometimes in a room adjoining.

2183.	How are those transactions of the agents carried on; what do they do ; do
they discount bills?—-In the newly established banks they generally ask their friends
and others, such as farmers, jobbers and cattle dealers, to exchange notes, to give the
notes of their own joint stock bank for any other notes the party may hold, and
this some do keenly and eagerly to such an extent as to make it a considerable
item in their transactions; they press this exchange, and as an inducement, I have
known a glass of ale or other liquor offered.

2184.	Is this with a view to substituting the circulation of the joint stock banks,

for which they are agents, for the notes of other banks 1—It is.

2185.	Do they discount paper ?—They do.

2186.	Do they receive deposits?—They receive deposits and draw bills on
London, and there is a most important danger ; in all cases I am acquainted with,

they seem to have an unlimited power to draw on London.

2187.	Drawing on the London correspondents of the bank ?—Yes; if they have
it at all it can hardly be limited ; I never knew but one account limited to
1,0001. A customer came in and brought a transaction to the amount of 1,200 I.;

he drew a bill for 1,200/.; the banker, in London, refused accepting it; the
transaction was to meet acceptances, which came back in consequence, and the
agents powers were immediately extended.

2188.	Have you received, in the course of your own business, any of those
bills on London drawn by the agent ?—Constantly; we do it weekly.

2189.	They are signed by the agent?—Yes ; we have transactions with the
agents, which will prove that at once; we receive in the course of business a
number of West Riding local notes.

2190.	What do you mean by West Riding notes?—I live in the East Riding ;

those are local West Riding notes, which we cannot conveniently negotiate or
send home without a heavy loss of postage; we therefore take them to those
agents, either one or the other, it is matter of indifference, and receive their
draft on London at 21 days for them weekly.

2191.	Do you exchange notes with those agents?—We do.

2192.	In the event of a difference' between you and them, which is to be paid,

how is that difference paid ?—It is paid either in Bank of England notes, cash
or payment in London, at the option of the payer, that is the understanding.

2193* In the event of the option being exercised of taking the payment of the
difference in exchange, by a bill on London, at what date is that bill drawn, bv
\vhom is it drawn, and on whom is it drawn ?—The cash balance is never paid by

O.92.	T 2	bill';(

134

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. John Harding, bill; the bill is only given for local West Riding paper, which we cannot conve-

__. niently negociate, and upon which we allow 21 days; that we may save expense

5 July 1836. and trouble we prefer a bill at 21 days.

2194.	Independently of these transactions, in which they give you a bill at
21 days for the payment of notes, which they pay as matter of convenience, but
not as matter of strict obligation, is that bill drawn upon the London cor-
respondent of the joint stock bank, and drawn by the manager or agent?—It never
is a bill; it is an order by letter to their London bankers to pay over to our
London bankers the amount; we never draw a bill on such an occasion.

2195.	For what purposes are the bills issued, which you have described as
being drawn by the agents upon the London correspondent, and not being issued
for the purpose of paying those differences between banker and banker?—They
are paid us in exchange for the West Riding paper, which we do not consider
cash ; and we have the option either of giving them a compensation in discount,
or taking a bill at time, which is equivalent.

2196.	Mr. Clay.~\ By West Riding paper do -you mean the paper of any one
bank?—I mean the paper issued in the West Riding generally, and only payable
there.

2197.	Chairman.] You stated that bills came into your hands drawn by those
agents on the London correspondents, for what purpose do you conceive those
bills to be issued?—Issued generally to travellers who collect local notes, take
them into the joint stock banks, and obtain a bill for the convenience of remitting;
to farmers or jobbers and others, who find occasion in the course of their business
to make remittances or pay bills.

2198.	What description of notes are issued at the branch banks in your neigh-
bourhood, excluding for the present all consideration of agencies ?—Notes pay-
able at the branch, and generally in London as well, but not invariably so.

2199.	Are those notes dated at the branch where issued and made payable
there, as well as in London ?—They are dated at the branch, and made payable
there, and generally in London as well.

2200.	What description of notes are issued at the agencies?—Those notes,
however distant the agency may be, are the notes issued.

2201.	Are the Committee to understand by those notes, notes dated and made
payable at a branch other than the agency, but issued at the agency, although
dated and made payable at another place ?-—That is the practice.

2202.	Is that the invariable practice?—It is invariably so, as far as I know.
There is a bank which issues at four or five agencies in our neighbourhood, notes
dated at Beverley; now Beverley is 24 miles from Burlington, and that is.the
nearest branch ; but as the agents must, in the course of their business, receive
the notes of their own bank, dated at other and more distant branches than
Beverley, it appears to me probable that they would re-issue those notes rather
than have the expense and trouble of sending them back to their home.

2203.	Have any. of those banks, agencies and branches making paper and
issuing it in the West Riding?—Those banks have both branches and agencies
in the West Riding.

2204.	Supposing, in your neighbourhood, that Burlington, an agency, were to
issue promissory notes, payable on demand, bearing the name of a town in the
West Riding, and made payable there, would not the result be that, if you held a
considerable proportion of those notes, and wished to exchange them with that agent,
you would have to exchange them at the disadvantage that you have formerly
described, namely the taking of a bill at 21 daiys?—We were once exactly placed
under those circumstances ; we held 12,5 /. in their notes, dated at Beverley,
York, Thirsk, Leeds, and various other places, the notes belonging to one of those
agencies; we presented those notes to the agent, and he refused to give value for
them. He said he was not authorized to do so ; that they had not been issued
at Burlington. I wrote immediately to the parent bank, wishing to know how the
exchanges were to be arranged, and the director said that we should in future
receive value for any notes at the agency belonging to their bank.

2205.	You are aware of the provisions of the Act of Parliament for regulating
joint stock banks ?—Yes.	,

2206.	Are vou not aware that in one of the clauses in that Act there is a direct
prohibition against issuing any bank note not dated and made payable at the
place of issue 1—I am.

2207. DoSELECT COMMITTEE ON JOINT STOCK BANES.

2207.	Do you not consider that this practice, which you have described as Mr. John Harding.

taking place through the operation of agencies, is in direct violation of that clause? --•

—It is decidedly.	5

2208.	Do you consider the enforcement of that clause, namely, the obligation
on parties issuing bank notes, to make those notes payable at the place of issue,

is one which is important for the public interest to be observed ?—Absolutely
necessary; without which it is impossible the public can compel cash at an agency,

as they cannot prove the place of issue.

2209.	You are aware of the present state of the law as affecting the number of
licences taken out ?—Yes.

2210.	Do you consider that branches ought to be dealt with in like manner
with the parent bank as far as fiscal regulation, and that agencies, if continued at
all, ought to be subject to the same regulations, and the same duties as are imposed
on the parent bank ?—Undoubtedly; there can be no reason why they should
not.

2211.	Sir James Graham.] Would not that operate as a great check on mul-
tiplication ?—It would check them; the smaller agencies would not have been
established if that had been the law.

2212.	Is anything more wanted in the Joint Stock Bank Act to produce this
salutary check ?—A full charge of licence would tend to stop all the smaller
branches and agencies.

2213.	That is all you think necessary to stop this multiplication ?—All notes
should be dated at the place of issue; agencies as they are now understood ought
to be abolished; every establishment should be a branch that the public may
know where to go for value.

2214.	You have stated that the prohibitory clause in the Joint Stock Bank Act
is now evaded, in order to ensure its enforcement, what do you consider neces-
sary?—Nothing more can be required than that every establishment should be
a branch, dating its notes from the place of issue, and liable to take them up there,

and at the parent bank, taking out a licence.

2215.	You think that would be all that is necessary?—Yes.

2216.	Chairman.] Supposing that alteration made in the law, do you consider

it expedient the law should continue unaltered, under which a bank established at

Newcastle can create to any extent branches throughout the whole of Cornwall

and the western counties?—It is an extremely dangerous power both to themselves

and the countrv.

«/

2217.	Sir James Graham.] If they were compelled to take out separate licences
for each branch, would they multiply those branches to that extent ?—It would
tend to check the multiplication of small branches.

2218.	Chairman.] Supposing the stock of a bank to be raised upon 100/.

shares, with 251, paid up, or to be raised upon 5 /. shares, with a given proportion
paid up, do you consider that the operations of those two banks, although the
paid-up capital might amount to the same sum, would be conducted upon the
same principles, and with the same due regard to the public interest 1—They
would have a different class of partners, one a much lower class than the other.

2219.	Have you any bank in your neighbourhood in which the stock is raised
in small shares, or are they all banks in which the capital is raised on larger
shares ?—All at present established, I think, are on 100 /. shares ; but there is one
now advertised in York, the advertisement of which I saw last week, on 5/.

shares.

2220.	What do you think will be the effect of an establishment of a bank on
5 I. shares ?—That butlers, ladies' maids, and all sort of persons, will get in; it will
be composed of the lowest classes.

2221.	What proportion is proposed to be paid up ?—One-half, I think.

2222.	Do you consider that those purchases of shares would be made for the
sake of permanent investment, or for the sake of speculation?—For jobbing in
shares.

2223.	Has that extended to a large amount?—To a very great extent.

2224.	Do you think that would be promoted by companies with shares to a
small amount?—Very much, because the trifling premium upon the 5/. shares
will make a large bonus to the jobbers. I believe many thousands have been
gained in the city of York, which is not a place of much trade, by jobbing in
shares, and those who establish such a bank are fortunate to get out at a premium.

2225.	Has a trade arisen in those districts with which you are acquainted, of

T 3	selling136 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. Join Harding, selling the shares, and are there offices and brokers for the sale of shares ?—Yes ;
■"	and those shares are hawked about by the partners themselves, who endeavour to

5 July 1836. raise the value of them. They are sometimes held by very improper people ;

40 shares in one of those large banks are held by a person, said to be a man
of no property, he boasts of being a shareholder of forty shares, it is probable
that he borrows of the bank itself all that he has paid in for his shares, and as he
carries on a considerable trade, has probably borrowed still more; if any
call is made, such a partner cannot answer it, but must sell his shares or borrow
more; this is not a singular case, T believe there are many such: another case
occurs to me of a person who, a few years ago, failed for a large sum, and paid
less than 1 s. in the pound, he has established himself again on borrowed capital,
and is a shareholder in one of those banks.

2226.	Do you consider it would be advisable to fix a minimum below which
the value of those shares should not go ?—Very advisable, with a paid-up capital

" to an adequate extent.

2227.	Sir James Graham.'} The cases you allude to are those banks with 100/.
shares?—Yes, with but 101, paid up.

2228.	The extent of shares would be of no consequence if it were not paid up?
—None whatever.

2229.	As between ioo/. and 51, there is no distinction, unless the proportion
paid up is larger ?—Better have fewer shares and pay up the whole.

2230! Without insuring a large portion being paid up, the amount of the share
is no security against the danger, even though the amount of the share should be
large ?—It is some security, because a small payment on a large share will be more
than a large payment on a small one, one-half a 51. share is 21. 10 sten per
cent, on 100/. is 10/.

2231.	In the case of the banks in your neighbourhood, do you not find they
are on 100 /. shares ?—Yes, I believe with 10 /. paid up.

2232.	Mr. Clay.] All the banks established in your neighbourhood are on
100/. shares?—Yes, except the Hull.joint stock bank.

2233.	It is with reference to banks having shares of 1001, the errors you
Speak of have taken place, which have been animadverted upon in your evidence ?
—Yes.

2234.	It is not the 1001, share of itself would alone furnish a sufficient pre-
caution against mismanagement?—Certainly not; the amount paid up is a great
security.

2235.	You stated that the advances had been so freely made by those joint stock
banks, that you thought in many cases it had tended to induce persons to over-
trade and get out of their depth?—Yes, I have known it in several instances ; I
can perhaps illustrate it in taking a street of shopkeepers, every one having from
the old bank as much as he could use profitably and prudently in his business;
if the new joint stock banks or others lend each of these shopkeepers an additional
500 /. or i,oooi., without at the same time increasing his business, he naturally
increases his stock; he increases competition, increases his expenses, becomes
careless of his economy, and in a very few* years a large proportion of them will
fail.

2236.	Chairman.'] Might not the same effect be produced, if, instead of a joint
stock bank affording additional capital to shopkeepers in the way you have
described, a private banker were to be admitted to the banking transactions of
that place, and were tc furnish the additional capital you have objected to?—It
makes no difference whether the inducement to over-trade is furnished by a joint
stock bank or a private bank ; but there is this marked difference between the two ;
private bankers, however powerful, however large their resources, never offer
those resources to the public; they never ask for business, they wait till they are
solicited. If the wants of the country require an additional capital, parties come
and ask for a loan and state the" objects of it, enabling the banker to judge whether
the result is likely to be successful, when, if the security be satisfactory, it is granted.
The management of the recently formed joint stock banks is the reverse of this; they
seek business; they send repeated circulars, make repeated tenders of service, and
offer their capital at a lower rate of interest in order to get business ; so that one
party may be considered as cautiously administering to the legitimate wants of
the country, whilst the other urgently presses that which the public does not ask
for, in order to get business.

2237.	Mr. Clay,'] Not looking for the moment to the difference between joint

stockSELECT COMMITTEE ON JOINT STOCK BANKS. 137

stock and private bankers, are you not of opinion that without accommodation Mr. John Hat ding.

bills, without bills of a bad character, but merely discounting bills relating to real .....

bond Jide transactions, if advances are freely afforded those dangers you have 5 J"ly *836.
spoken of arising from over-trading may take place, and yet nothing in the charac-
ter of the bills themselves, on the face of them, lead to the detection of that ?—Yes,

that is quite clear.

2238.	You mean to say a man may be urged ta extend too far what he may
call legitimate business ?—He may; I have known a parcel of goods bought and
sold five times in one day, every sale might give rise to a new bill* so that out
of an original transaction of 1,000 I. five bills of 1,000/. each maybe created, the
whole of those might be discounted, and 5,0001, of cash or capital thrown into the
market. Such transactions might be multiplied to an indefinite extent.

2239.	You think that without reference to advances made to insolvent persons
in discounting bad bills, but an undue extension of the system of banking itself
leads necessarily and immediately to a danger of overtrading ?—Undoubtedly an
undue extension will do this.

2240.	Do you recollect the year 1825 ?—Perfectly.

2241.	Do you know whether any joint stock banks at present in operation have
advanced money indiscriminately, and tended more distinctly to produce this over-
trading than private bankers did at that period?—The private bankers did not
do it at that period j the panic was not the consequence of the mismanagement of
private bankers.

2242.	Without reference to mismanagement, do you believe that advances are
more freely made by joint stock banks than they were made at that period by
private bankers ?—Decidedly so.

2243.	The great evil you seem to anticipate from the establishment of the
joint stock banks, is an extreme extension of the facility of banking?—That is the '

necessary effect of their loose construction, incautious management and over-
whelming number.

2244.	Do you think that the circumstance of their having very many partners
may lead to extension ?■—I think the number of partners is a very great advantage
under proper regulations, but without proper regulations very dangerous.

2245.	It has great power in procuring them business ?—It has.

2246.	On the other hand, does not it render more caution necessary with the
directors, as it would be more difficult to refuse advances to partners ?—Much
more.

2247.	That is a peculiar source of danger to which a private banker is not,

exposed?—It is a source that ought to be stopped; no partner should be allowed
to overdraw his account.

2248.	The private banker, having merely to judge upon the merits of the
application made, not having the additional motive to give advances, the party
applying being not a partner of his own?—Yes; I consider that the great danger.

of the whole system is that partners are allowed to overdraw their accounts, and, '

that so large a proportion of them are money-borrowers, men who in difficult
times will require further support, but can render none to the bank.

2249.	Do any of the joint stock banks in your neighbourhood issue promissory,

notes ?—They do.

2250.	Do you consider that if they do not issue promissory notes they may
still by their operations tend to create this over-trading ?—I think not, that their
capital is not strong enough to do it, and the profit would not be adequate to
the risk.

2251.	Might not they .do it by the practice of re-discounting?—Not to any,

great extent; that resource would soon be stopped; it would injure their credit
so much that the brokers in London would not take their bills. Some of the
weaker banks that have re-discounted largely in London have suffered in their
credit by it.

2252.	That is a source whence a bank having no circulation of promissory
notes, and no large paid-up capital, is enabled to make advances ?—It is the only
source if they have no deposits and but little paid-up capital, but it is one upon
which they cannot rely with safety.

2253.	When you say they have suffered by it, do you mean themselves 01* their

t 4	bill-138

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. John Harding, bill-brokers ?—The credit of the bank has suffered. No prudent banker would
......11 11 ■- do it.

5 July 1836. 2254. What has induced the brokers to take so large an amount of bills to
re-discount for these banks ?-«—Their own profit.

2255.	Have they got a profit in doing it?—Yes; they receive either a com-
mission or an equivalent for it on all their transactions; the. broker generally
guarantees to the banker or party to whom he parts with the bills. The joint
stock banks, I believe, always indorse, a broker seldom or never indorses. I have
constantly received guarantees by letter, but have never had the broker's indorse-
ment.

2256.	Do you think they might have failed to attain the power of re-discounting
to the same amount, if they had been banks of limited liability ; that is, limited in
the responsibility of the shareholders ?—The broker would then have desired to
know the amount of paid-up capital, and would have been more cautious.

2257.	It would have rendered the persons re-discounting the paper sent up
more cautious as to the paper itself?—Certainly.

2258.	As far as you know, have the persons banking with those joint stock
banks been parties who previously had banking arrangements with private bankers,
or had they been parties who never had the facility of a banking account before ?
—Generally, they have had it before.

2259.	The person holding 40 shares, whom you allude to, for instance?—Yes,
in some way or other, 1 should suppose.

2260.	Had he an account with a private banker before ?—I do hot know.

2261.	Do you think that the great majority of the customers of those joint
stock banks, as far as you are aware, were persons who were taken away from
old private banks, who had been induced to leave the private banks, or parties who
never had had an account with a bank ?—Generally, I should think, parties who
have had accounts with the old banks.

2262.	You think there are none who have for the first time opened an account
with the new r—Some, no doubt, there are.

2263.	When you speak of those joint stock banks having greatly extended the
facilities afforded by banking, you do not mean that they have opened accounts
with persons who never had banking accounts before, but that they have given
accommodation more freely to persons who previously had accounts with private
banks ?—Yes ; that they have advanced more freely and on lower terms, in order
to get the business of the private bankers.

2264.	Have they overbid the private banks in your neighbourhood in the
interest they were willing to give on deposits?—I believe not. In the rate of
interest they have charged, they have outbid us ; we have never lent for less than
five per cent, in open cash accounts; good bills for the corn-factors we sometimes
discount at four.

2265.	Do you mean to say that if a person has an account with you, and over-
draws that account, you charge five per cent.?—Yes, and sometimes com-
mission.

2266.	Of course the five per cent, will act upon the balance?—Yes.

2267.	They have offered the same accommodation at four per cent. ?—'Yes,
and in many cases without a commission.

2268.	What interest do they pay on sums deposited with them ?—I cannot
answer that question.

2269.	Is it in that particular that they have attempted to overbid the private
banker ?— I do not know.

2270.	Sir John Wrottesley.~\ You state that the practice of issuing notes at
other places than those from which they are dated is contrary to law; do you
recollect by what Act of Parliament that is provided ?—1 believe it was in Lord
Lansdowne's Act, being introduced by him. I recollect that addition being made
to the Act when the Act was about to pass.

2271.	You have stated that those agencies endeavour to exchange their own
notes for those of private bankers; is that a practice which has been much
adopted by private banks since 1826?—Such an exchange is sometimes made at
the request of the holder.

2272.	It has been considered a disgraceful practice by the trade generally?—
It has, when done at the request of the banker.

LETTERSKiECT COMMITTEE ON JOINT STOCK BANKS.

139

_	#	>	Mr. John Harding

LETTER to the Right Honourable the Chairman of the Select Committee on Joint

Stock Banking;.	K Tl 1 _ Qo^

Sir,	Burlington, July 14,1836.

I avail myself of your permission to add a few observations to my evidence. If this
country should happily remain at peace, we may look forward to the time (and that not a
distant one), when our commerce and manufacturers will probably be doubled; and as the
increase of circulating capital and credit will be chiefly supplied through joint stock banks,

it becomes a matter of great importance that they should now be established upon such
principles as will admit of their unlimited extension with perfect safety to the country.

Attention to the following points seems essential:

1.	Adequate paid-up capital. I much prefer that the partners, however numerous*

should be select, as in a private bank ; that the number of shares should be fewer, of larger
value, and all paid tip. A nominal capital is a delusion ; if called for in times of difficulty
and distress, it could not be obtained.

2.	That no partner be allowed to over-draw his account, without full security, over and
above the value of his shares. Partners who support themselves by borrowing of their own
bank, are a source of the greatest danger; and where this is allowed, numbers are weakness,

not strength; for in times of depression they will require further aid, and instead of
supporting will pulldown the bank,

3.	That branches and agencies be restricted as to number and distance. That all notes
be dated where they are issued, and taken up there and at the parent bank; as in the ease of
Bank of England notes. All branches or agencies should be charged with the fall licepce,

or great injustice is done to those bankers with whom they compete, and who are too
prudent to extend themselves so much. I consider numerous branches very liable to bad
management, and a source of great embarrassment in difficult times. Skilful arid prudent
management is of more importance to safety than mere Capital.

4.	The publication of accounts. This I fear would be obnoxious and unpopular, easily
evaded, and without an adequate advantage. A partnership on the principles of No. 1,

2 and 3, would be so sound as to property and management, as to prevent the necessity
for this regulation. To Government an account must be rendered, in order to show that
the* regulations^of No. 1, 2 and 3, are faithfully adhered to.

5.	Apart from security, and merely as affording important information to Government
in the regulation of the currency, it would be desifabje that all banks in England, Scotland
and Ireland, should make a periodical return of the amount of gold and silver in their
possession ; but I fear that in order to make a handsome show of gold, the banks would
cpnvert a large proportion of their Bank of England notes into cash, and by holding more
than would be necessary, exhaust the reserve of the Bank of England and cause embarrass-
ment. Scotland at present enjoys the benefit of unlimited issues, and keeps neither gold
nor Bank of England notes; contributing nothing towards the cost of regulating the,

exchanges, though these may have been deranged by her own excessive issues. When
the joint stock banks are placed on a sound footing, it is necessary that a good understand^

ing should subsist between them and the Bank of England ; for they will become powerful
enough to draw out every sovereign from the bank, and if any occasion should arise to
iqduce them to do so, the Bank of England would be quite at their mercy* This power,

combined with the vast political influence which they will presently possess, will enable
them tb exercise a very dangerous control ove^r both the Bank of England aod the
Government.

I have, &c.

John Harding*

0.92.	aMINUTES OF EVIDENCE TAKEN BEFORE THE

*

Martis, 120 die Julii, 1886.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Slrutt.

Mr. Morrison.

Mr. Goulburn.

Sir Thomas Fremantle.

Mr. Clay.

Mr. Attwood.

Mr. Patlison.

Sir James Graham.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

Simon Martin, Esq., called in; and Examined.

S. Martin, Esq. 2273. Chairman.] YOU are a banker ?—lam.

2274^ In what firm ?—The firm of Gurneys, Birkbeck & Martin, of Norwich ;

12 July 1836. only of the Norwich firm.

2275.	How many years have you been engaged as a banker ?—I have been in
the firm 1 o years as a partner; I have been engaged in the banking line I
may say for 45 Or 46 years; I was for many years in a leading banking
house in London.	"

2276.	Have you turned your attention to the banking operations carried on,by
joint stock companies ?—Yes, I have considered them very much, both in regard
to the public, and for our own interest in the management of our business.

2277.	Are they extending within the district to which your knowledge applies ?
—They are extending, but doing very little business at present.

2278.	Are they extending in their branches?—Yes, they are branching out
everywhere, particularly, I think, the National and East of England banks, two
banks that are just formed in our district; they are, in fact, establishing agencies
in all the market towns and large places in the counties of Norfolk and Suffolk.

2279.	What notes do they issue at those agencies ?—The 5 I. and 101, notes of
the mother banks.

2280.	Being the 5/. and 10/. notes of the mother banks, ar6 they made pay-
able at the city or town where the mother bank is situate, or made payable at the
place where they are issued r—I believe only where the mother bank is situate, not
•where they are issued ; I have never seen any that were so drawn.

2281.	Without raising the question of whether such an issue is conformable to
the existing law, do you consider that a safe system of banking which authorizes
the issue of notes in a variety of branches, those notes not being made payable on
demand at the place where they are issued ?—No, I think it is wrong, because
recourse would be so difficult to the holders of . those notes at a distance from the
mother bank.

2282.	Does not it also produce a necessary inconvenience in the exchanges
between bank and bank, if the notes of bank A. are payable at the place of issue,
and the notes of bank B, which are exchangeable with them, are made payable at
another, and possibly a remote place?—The notes are all drawn to be paid at the
central bank ; I have never seen any directed to be paid by the agents of those
banks.

2283.	Supposing a bank established in the city of Norwich, and issuing paper
which was made payable at Birmingham, and that another bank was also esta-
blished at Norwich, issuing notes made payable at Norwich, would there not be
an inconvenience in the exchanges, if the one bank gave notes payable on demand
at the very place where the exchange took place, and the other gave notes that
were payable at Birmingham or a more remote place ?—That is presuming that
the Birmingham bank might have branches; I have never seen anything of the
kind in our district; I think a circulation of that kind would hardly be hazarded.

2284.	Which is the mother branch of those joint stock banks which have com-
menced their operations in your neighbourhood ?—Norwich is the seat of one; I

hardlySELECT COMMITTEE ON JOINT STOCK BANKS. i4»

hardly know where the seat of the other is, but I apprehend they must have S. Martin, E*q.
different issues ; Yarmouth and Ipswich, I believe, are considered as the head- ~ ~~g
quarters of the National bank, and those notes, I believe, are payable at Ipswich
and Yarmouth, but the East of England bank notes are not so drawn ; they could
not issue their notes unless they were referred to leading places from which they
were issued.

2285.	Assuming the facts as they are supposed in the question just put, that
there is a bank of which the centre was Birmingham, and the branches were in
Norfolk on the one hand, and in Devonshire on the other, the notes being made

payable at Birmingham only, would not that lead to inconvenient exchange ?---

Yes, so inconvenient that I think the old-established banks and the public would
not receive the paper; they would be shut out for want of those facilities on the
part of the old banks ; they would only receive them by charging their customers
postages, and forwarding them to London.

2286.	It would lead to additional charges on the principle of drawing at a
certain number of days' date?—Yes, clearly so.

2287.	Do you consider that this system of a central bank, carrying on business
with branches to an unlimited distance from the central bank, enables those who
direct the bank from the centre to exercise an adequate control over the proceed-
ings of the branch ?—I should say, certainly not.

2288.	You consider it as a system which yourself as a banker would not wish
to apply to your own house?—Certainly not, our system is diametrically opposite,

where we go to a distance ; we have a separate establishment managed under the
same rules and regulations as the central bank, by resident partners to inspect
and look over the business of all our different establishments ; we should think
impracticable, and therefore very unsafe to rest on such grounds.

2289.	In what respects do you consider an agency to differ from a branch?—

They are generally considered with us as a convenience for distant customers,

and I believe all our agencies arose from the alteration of the stamp duties, which
prevented our customers, living at a certain distance, drawing upon us without
being subject to a large duty for stamps; we appointed agents to meet that
case; I think that is the ground of all the agencies of the Norwich bank.

2290.	Have you many ?—We have only three belonging to Norwich.

2291.	Have those agents who transact business on your behalf, the power of
granting accommodation by advances ?—Not the least; they refer everything to
us; we never suffer them to act on their own judgment.

2292.	Mr. Morrison.] You do not consider your banks at Lynn and Yarmouth
as branches ?—No, they are distinct establishments, and managed on the same
principles as our own, by resident partners.

2293.	Chairman.] Are the agencies established within your own knowledge
by joint stock banks, conducted on the principles which you describe to govern
your agencies ?—Yes, I think professedly so, but they have not been well guarded ;

I dare say they meant to regulate them as we do, but they have certainly failed
to do so; some of their agencies have taken upon themselves to do acts for them,

and they have suffered in consequence by them.

2294.	The acts which those agents have done to which you have adverted are
probably the discount of paper?—The advance of money to different persons
living in their vicinity, without reference I should imagine, or they could hardly
have been done in a manner so exceedingly absurd.

2295.	Have those advances been carried to any considerable extent on the
part of the agents ?—No, I should apprehend not to any very considerable
extent, though considerable considering the scale of business of the particular
bank to which I am now referring, namely, the late Norwich Joint Stock lJank. I
should think all great and important acts have been done by themselves, and
that their large losses have been sustained under their own mismanagement.

2296.	Do you consider that a joint stock bank, distributing shares and having
a body of shareholders within the district in which its operations are carried on,

acts in a different respect on the public credit of the district from what a private
banker would do?—Yes; I should apprehend that a great many of the original
framers of these banks, have looked very much to their owji interests, and have
accommodated themselves, if I may use the expression, very injuriously to the
bank in many cases.

• 2297. Do you mean that the connection between the directors and the share-
holders is likely to lead to any more extended system of accommodation, and any

0^92.	v 2	greater14?

MINUTES OF EVIDENCE TAKEN BEFORE THE

S..Martin, Esq. greater extension of credit than would arise out of the ordinary connection
lajul 1836 between a banker and his customers ?—Yes, I am clearly of opinion that
it does.

2298.	Is the issue of shares made subsidiary to the increase of the business of
banks and the transference of accounts from existing establishments to the new
banks r—The shares are issued partly with that view, but it was a most decided
failure as far as the late Norwich joint stock bank is concerned ; few persons did
business with that joint stock bank, at its origin, but those interested or under
the control of those who got up the establishment. I think we lost no valuable ac-
counts, but with our brother bankers we certainly got rid of a number of very bad
accounts, and I should say the joint stock bank was of great use to us, decidedly so.

2299.	You think it was of equal use to the public, in the operation it has
effected on those bad accounts ?—No, quite the contrary ; I think in propping up
those accounts, that they did great injury to the public, and that is one of the
evils of inexperienced persons conducting banking concerns; the evil does not
stop with them, for if those persons had not been propped up by them, the
public might have saved 50,000 I. or 60,000 I., losses incurred through individuals
in consequence of their being kept up.

2300.	Mr. Attwood.] Those unsafe men were propped up by the joint stock
banks, and extended, their operations, and the ultimate loss became the
greater?—Yes; I could mention a firm who were supported by the joint
stock bank and its connections; one of the partners absconded to America;
the losses sustained certainly must have amounted to 60,0001, or 70,0001.;
if they had been stopped three or four years before, the bank would have saved
much of their money, and protected the public also from severe losses.

2301.	Mr. Clay^\ Some joint stock banks have been established in Norwich ?
■—We have only the East of England bank, into which the business of the Norwich
and Norfolk joint stoqk bank merged.

2302.	What led to the establishment of the Norwich and Norfolk joint stock
bank; was it any want of accommodation to the trade of Norwich ?—Decidedly
not; there was no want of accommodation to the trade of Norwich; I was
informed, on good authority, that the propectus for that institution was got
up and published by an individual without any previous consultation with
any other person, who afterwards joined the establishment through his in-
fluence.

2303.	As far as your observation has extended, they have been got up without
reference to the wants of the neighbourhood in respect of banking accommoda-
tion?—I never heard a joint stock bank mentioned or suggested for Norwich,
till I saw the prospectus in our paper.

2304.	Mr .Attwood.] Had there been any failures of private banks in your
neighbourhood?—Kerrison failed to a very large amount; he had 700,000/. of

■ public money in his hands tvhen he failed; this was locked up in land; it sold
well, and a good dividend was paid.

2305.	In what year was that?—In the year 1808; the Days', a very small
bank, failed in 1825,1 think.

2306.	Mr. Clay.] You have expressed an opinion that the joint stock banks
which have come under your observation have given indiscreet accommodation,
and by bolstering up houses in bad credit have eventually caused greater loss to
the public ?—'That is my opinion.

2307.	Are you of opinion that that has acted to stimulate over-trading in the
country ?—With reference to the bank in Norwich, the large advance referred to
was not made to a trading firm. The parties were solicitors and money-dealers.
There was very little in amount advanced to tradesmen in Norwich, but
by paying off over-drawn accounts to the old banks. The advances to Richard
Batley and to the Brereton's excepted.

2308.	What is your opinion generally as to the effect of joint stock banking on
the trade of the country; it appears to be your opinion that they make advances
more freely than the private bankers ?—It appears to me that the leading facts,
as to the establishment of joint stock banks, are, that they have been chiefly
formed on speculation, and to serve purposes of the projectors; the instances
are very few, in my opinion, where they have been called for or required by the
public ; where they have been called for by the public, it has been in those
districts where the old establishments have caused dissatisfaction by not reasonably x

yieldingSELECT COMMITTEE ON JOINT STOCK BANKS. 143

yielding to the ^ered state of the money market, and by persisting in charging 8. Martin,*Esq.

large commissions, whichj by the altered state of trade and profits, could not bo ——-*-

afforded. In the instance of our bank and its management, when we dropped 12 **uly *836.
our interest on deposits from three to two per cent., we thought it justice to the
public also to lower our charge on terminable loans and discounts.

2309.	Is it your opinion, speaking generally, that there was a want of spirit of
accommodatioh on the part of the private banks ?—No, quite the contrary; I
think all the respectable houses in our district have had more money than they
knew how to employ usefully and safely at home; we should have been glad so
to have used it.

2310.	Speaking of the town with which you are best acquainted, was there
any one who could give good security that could not get money ?—None; we
were always glad to accommodate them, and after the change of our rate of
interest, t6 discount at four per cent., on suitable securities.

2311.	It is your opinion that there was no necessity for the establishment of
joint stock banks, arising from want of accommodation ?—There was no want of
fair accommodation to the trade from the old banks anywhere, so far as I have
had the opportunity of observing; and my experience teaches me it is better for
the community to have accommodation rather scarce than otherwise, for the sound
management of business in general.

2312.	You mean to express a doubt whether great facility of obtaining credit
is a matter of unmixed advantage?—I think it by no means a matter of unmixed
advantage, but that it frequently leads to great distress and great loss by
encouraging speculation and over-trading.

2313.	There is a practice which has been carried to a great extent by joint
stock banks, of procuring money by re-discounting largely in London?—I think
it cannot be called a new system; I remember its being done at a former
period, when there was a terrible explosion at Liverpool.

2314.	Was the practice general at the period when you state it to have been
attended with great calamity ?—Yes.

2315.	You mean to say it was followed by a period of great national calamity ?

—It was.

2316.	Have the goodness to state your recollection of the occurrences at the
period in question ?—I cannot exactly recollect the year; there were some
immense failures ; some of the first houses in Liverpool were stated to have lost
from 80,000 I. to 100,000 I. each by failures, in consequence of their liabilities on
re-discounting bills.

2317.	Was that in the period between 1810 and 1812 ?—I think it was.

2318.	It followed a period of considerable excitement in the year 1809?—

Yes; I think the concussion took place in 1812.

2319.	Mr. Attwood.] Were those bills drawn on houses in London of im-
portance ?—They were such bills as were drawn by Lowndes and Bateson, and
speculating houses of that description, on the deposit of goods or invoices,

which could not be turned into bank notes, and the property represented fell
so rapidly in value, there was nothing left, after deducting interest and charges,

to meet the bills, they were indirect bills; A. on B. on Liverpool, payable in
London ; bills of accommodation many of them, and all of a mixed character.

2320.	Mr. Clay^\ Since the period to which you refer, has the practice of re-
discounting been as prevalent as now ?•—I think it is getting more prevalent,

and is now as extensive as I have ever known it to be.

2321.	It is more prevalent than at any period except that ?—Yes, it is more
branched ; I think it was confined more at that time to Liverpool.	x

. 2322. Have you had occasion to consider the sort of bills sent to the London
market for re-discount ?—I turn over a vast quantity of bills in the year, and for
my own protection study them as well as I can.

2323. Have you any objection to state the sort of bills submitted to you for
discount ?—Perhaps I may say that I believe the bills so submitted are, generally '

speaking, safe, and of a fair character; with reference to the bills re-discounted
by the joint stock banks, the injudicious system of conducting business, and the
overweening anxiety there always is in persons so placed to appear great before
hey really are so, render the general complexion of their bills not to me
atisfactory.

0.92.	o 3	YouMINUTES OF EVIDENCE TAKEN BEFORE THE

Martin, Esq. 2324. You see a great amount of bills in the course of the y^ir?—Yes, many

.......... millions in amount pass under my review in the course of the y^r.

12 July 1836. 2325. In addition to the sort of bills you speak of, which have a peculiar class
and character, is there no other species of bills that you have observed lately to
abound a good deal?—I should not wish to say what I do not consider correct;
there are some which appear to me bills of mere accommodation. I do not mean
to say that they form a large proportion of the amount that comes through
my hands.

2326.	Is there no peculiar character attaching to some of the bills ?—I should
think many of them are taken for re-discount, to meet current cash advances from
day to day, by the parties re-discounting. I should say some of them are wholly
accommodation, though not forming a large proportion ; but a very large portion,
are not what bills ought to be, according to my views of what really a good bill
is, being drawn against the deposits of goods or securities, instead of against
actual sales. I call a good bill a bill drawn against an actual sale; every other
to me is of doubtful character. My experience shows me, that where I have
ascertained that a bill is drawn for goods sold and delivered', whatever the cha-
racter of the parties may be, such bills are seldom dishonoured.

2327.	Mr. Attuood.] The bills which have come under your view of late have
been of a more dangerous description than has been generally the case?—
Yes. '

2328.	Except at particular periods?—Yes; and the system was not then so
extended. »"

2329.	The bills you now see are of a more dangerous description than those
you have been accustomed to see ?—Yes, decidedly.

2330.	With respect to the bills brought under your review, and offered for
discount, do you form an opinion that they depend a great deal for their payment
on the re-discount of other bills of the drawer and the acceptor?—Yes, I think
that class of bills is increasing.

2331.	If there was any great obstruction in the discount market, do you think
a vast number of those bills would be unpaid ?—I do j or at any rate the regu-
larity of their payment is very questionable.	'

2332.	Would you say a larger proportion than you have been accustomed to
see?—Yes, and more extended ; they are spread more over the country.

2333.	You have relied on the indorsation of those bills you have discounted ?—
In some degree, though I have not had implicit faith in the joint stock banks'
indorsements in some cases.

2334.	Do you believe that if there was a general difficulty of discount, those
joint stock banks might be greatly inconvenienced by the refusal of payment of
the sort of bills they discount?—I think it would throw the trading part of the
country into a worse situation than I have ever known it to be.

2335.	And that there would be greater difficulty in the discount of such papers ?
—Yes.

2336.	You think that would create a greater destruction of commercial credit
than you ever witnessed ?—Yes, I think so.

. 2337. Mr. Clay.'] Will you explain more particularly the peculiar character of
the bills you allude to ; bills drawn not on real transactions, but on the security of
the deposit of goods?—I have already stated my opinion as to the character
of these bills. Mr. Clay's question was as to consequences. In case of
any eyent which would alter materially the quantity of bank notes in London,
the consequences that would follow are very evident; it would place the trade
and commerce of the country in a fearful state, for the Bank of England, when
it found it a necessary duty to lessen their issues, would hazard the knocking
down both of good and bad, in a crisis of that sort.

2338.	Mr. Attwood.~\ Is our present commercial state of affairs very well cal-
culated to meet such a state of things ?—No, less than ever, owing to extension.

2339.	Mr. Clay.~\ Have the goodness to state whether there is any other class
of bills upon which you have any remarks to make?—Yes, I would refer to bills
drawn on the first-rate houses in London and Liverpool, which, in my opinion,
are objectionable; they are drawn against shipments to their houses of agency,
which it is desirable for them to feed. The acceptors take a large margin to
cover losses, commission and charges; and frequently they stipulate that the
drawer, if called on, should provide for the bills at maturity; I have known many

1	casesSELECT COMMITTEE ON JOINT STOCK BANKS. 145

cases of serious and ruinous consequences resulting to the drawer from such bills, S. Martin, Esq.
which are not legitimate transactions.	------

2340.	Do you think the joint stock banks have given greater currency.to bills 12 July 1836.
of that description than was the case with the private banks?—Yes, in many of

the commercial and manufacturing districts.

2341.	And thereby that they have created a species of dangerous credit ?—Yes.

2342.	Mr. Morrison.] Have you not reason to suppose that the bills you refer
to are frequently accepted on the understanding that they are to be renewed?—Yes.

2343.	Mr. Clay,] Do you re-discount bills yourself?—We never pass our
indorsement in any way to raise money.

2344.	You never attempt to raise funds on the credit of such a house as yours ?

—No.

2345.	And never have since your house was formed.?—No, never.

2346.	You consider the practice of re-discounting an evidence that a bank is /

giving accommodation beyond its own resources, and therefore is in the power of
the money-market at any time ?—Entirely so.

2347.	Therefore subject to all the fluctuations of the money-market?—Yes.

2348.	You consider that the credit in the aggregate of the shareholders of
those banks is dangerously used, if employed to obtain funds by re-discounting
on the money-market in London?—Yes ; I think they ought to depend mainly
on their own available funds.

2349.	Mr. Morrison.'} You live in a district that may be considered chiefly
agricultural ?—Yes.

2350.	You have therefore generally an excess of money, which you seek
employment for in the London market ?—Yes, always.

, 2351, The practice, therefore, of re-discounting could not take place in the
case of the Norwich bank, which is circumstanced very differently from banks in
manufacturing towns ?—Yes, that is true ; though, great as our resources are, it
would be possible to outstep them.

2352.	The money paid into your house is employed in discounting bills sent
up from the manufacturing towns ?—Yes, and the trading and commercial
interests.

2353.	Mr. Attwood.} How long has your house been established ?—About 60

years.	,	'

2354.	It is very extensively connected with the town of Norwich and the
agriculture of Norfolk?—Principally with the agriculture of Norfolk ; that is, the
main support of the whole of the banks of Norfolk, except that the savings
of the inhabitants, in a population of 60,000 in Norwich, must be something
considerable.

2355- Your banking transactions have grown up with the growth of the
country ?—Y es.

2356.	You state that your house gives accommodation to the trading and agri-
cultural community ?—Yes.

2357.	Is it the fact that the growth and increase of trade at Norwich, and the
improvement of the agriculture around, has been materially assisted by the
operation of your bank and other banks similar to yours?—No, not further than
that all well-conducted banks have that tendency. The farmers are generally a
provident race of men; they were perhaps too much lifted up by high prices
during the war.

2358.	You cannot trace that it has given material assistance?—Excepting in
facilitating transactions, we have made it a point particularly notv to lend capital
to agriculturists. We have liberally given them temporary assistance, which to
those who are respefctable we never decline.

2359* You are in the habit of giving assistance to both the traders and the
agriculturists?—Yes; during the panic we went beyond our usual line; we
saved many from ruin, and lost nothing worthy of notice.

2360.	If they required it, you could give that assistance with more discrimina-
tion and security to yourselves than it Could be done by the joint stock banks ?—

There are very few in the agricultural districts of Norfolk and Suffolk that require
assistance permanently ; temporarily we never hesitate to respectable applicants.

2361.	The desire for assistance on the part of the agriculturalists has grown
up of late years, perhaps ?—1 think there is a great deal more said about the
distress of the agriculturists than is really true ; I should rather call it depression
than distress.

0.92.	v 4	*362. Doi46 MINUTES OF EVIDENCE TAKEN BEFORE THE

S. Martin, Esq, 2362. Do you recollect whether your house formerly rendered considerable
—— assistance to the agricultural community of Norfolk?—No; but we have lent
is July 1836. more in times of depression than we did in the good times, certainly.

' 2363. With regard to such accommodation as you give to the city of Norwich
or the country round, do you think such a house as yours could give that
assistance with more discrimination than it could be done by the joint stock
banks ?— The experience of half a century would enable us to judge better where
to give it.

. 2364. Would a party desiring assistance be more likely to apply to a private
bank like yours than to a numerous body of directors ?—I think they would. »

23651. Mr. Clay.] With regard to the circulation of bank notes, do you think
that it makes any very material difference in the power of the bank to afford
accommodation, either discreetly or indiscreetly, whether it issues promissory
notes ?—-I think the issuing of notes in a manufacturing district, where the deposits
are small, affords useful accommodation ; but with us it is as nothing compared
■with the extent of our deposits.

2366.	Would it materially prevent a bank giving this indiscreet stimulus to
trade, to which you have alluded, if they did not issue notes, or are there means
of re-discounting, or otherwise, by which they might give it without?-—According
to my feeling on the subject it avails them but very little. I will give my notion
of the theory of a bank circulation; I consider the circulation of country banks
of issue to be this : I never could see how it could be permanent unless founded on
bank notes or their equivalent; a country bank note is in fact but a circulated deposit
voucher; the bank issuing that stands debtor to the bearer by number, instead of
to A. or B. on account ; the amount of those deposit notes, circulated by
respectable old establishments, bears a very small proportion to the amount of
the money which is deposited in their hands j with us it does not amount to more
than one-sixteenth of the deposits.

2367.	You mean to say that your circulation does not exceed one-sixteenth df
the money deposited in your hands?—It does not.

2368.	It would seem then to be your opinion, that a bank discreetly con-
ducting its business may give accommodation, and may have it in its power to do
so, and thereby promote over-trading, even without issuing its own notes?—Yes.

2369.	You suppose even that the circumstance of issuing or not issuing" notes
would not have any material influence upon their power?—Not very material
with us; I can prove by documents that it is not more than one-sixteenth of
our power.

2370.	Do you consider it a safe practice for a bank to lend any considerabl6
portion of their money on mortgage?—It may be safe, but it is not prudent; it
has been our practice never to advance money on mortgage, or permanently on
security of any kind, beyond the amount of the balances of the partners of the
bank.

2371.	That is, the private property of the partners of the bank?—Yes, such as
is deposited with us, with that we do as we please; but we never lend on
mortgage, or set fast any sums deposited with us, which are liable to be called for
from day to day; we consider it necessary to be in a position to attend t6
the daily calls which may be made upon us, so as to meet demands as fast as
they could well be made.

2372.	Chairman.] You consider it an essential principle in a well-conducted
bank, that the whole amount of those deposits should be invested in convertible
security ?—I should always hold that as a golden rule.

2373* Mr. Morrison.] Are you not anxious to get rid of the capital of the
partners as part of the total capital of the bank?—So long as we can employ it
with satisfaction, we have no anxiety to get rid of it.

2374.	Would you not consider that the creditors of any bank would have a
better security where the private fortunes of the partners were invested in other
ways than if they were employed in the bank?—Yes, but I am speaking only of
that part of their property deposited with us; I look to the private property of the
partners of the bank so deposited, as a capital security to the public when invested
in mortgages and interminable securities of the first class ; we have no objection
to do that as far as our private means will afford.

2375.	You get a higher rate of interest than by discounting bills ?—Yes.

2376.	Your banks being placed in an agricultural district, you have pretty
good opportunities of knowing the condition of the agricultural body in ypuf

neighbourhood?—SELECT COMMITTEE ON JOINT STOCK BANKS. 147

neighbourhood ?—-Yes; I do not know that I have sufficiently considered that s Martin, E*q.
question, but I think there has been a great deal more said about agricultural	TT

distress than there was any occasion for.	2 u y 3 .

2377.	Have you not a good opportunity of knowing, from the amount of
money paid into your bank, whether there has been or not that state of distress
which has been supposed ?—In the last xo years our deposits have scarcely varied,

taking 1 o as the governing numeral, one out of the 10.

2378.	Chairman.] In a former answer you stated that you considered that the
joint stock banks to which your attention had been turned, had been chiefly
fprmed for the purposes of speculation, that the purpose of those who engaged in
them was to make money by means of speculation ?—I think I stated that they
had not been called for by the public in the districts where they have been
formed; that many of them are got up for the purpose of speculating in the
shares in the first instance, and afterwards speculation as to accommodation to
be afforded to those who manage their concerns.

2379.	That principle of speculation in shares is a .principle which is not
icommon to joint stock banks and private banks, but is rather peculiar to joint stock
banks ?—I think entirely so.

2380.	Do you consider that the formation of those joint stock banks more as
a matter of speculation in the disposal of shares than as matter of permanent
investment, is attended with inconvenience and danger?—Yes; I think that it
leads both to inconvenience and. danger.

2381.	Do you consider that that speculative character is at all varied by reason
of the nominal amount of the shares which are put into circulation; that is,

would the concern be more or less speculative if it was conducted on 5 L shares,

and 5 s. paid up, or 1001, shares and 25 /. paid up ?—I am sorry, and I think it is
very much to be regretted that any shares were ever permitted under 500/., and
also that there is not an enactment to prevent the splitting or transferring those
shares.

2382.	You consider the power of issuing shares, of a very small amount, to be
inconvenient and dangerous ?—I think so.

2383.	In what respect do you consider that it is so ?—That they get a very
inferior constituency by having small shares, and it leads to gambling to a certain
degree in the community.

2384.	In any alteration of the law, should you think it desirable that some
minimum should be fixed below which the shares of joint stock banks should not
be permitted to go?—Yes.

2385.	Are you aware that in many of those joint stock banks now formed, the
directors commenced their operations without the whole amount of their shares
being subscribed for?—Yes, that I think was established in the joint stock
bank of Norwich ; I do not think that all their shares were subscribed for or even
paid up; there was a deficiency of 4,000 I. or 5,0001. in amount.

2386.	In the event of all the shares not being subscribed for, a certain reserve
of shares must remain in the hands of the managers or directors, to be issued by
them at par or at a premium, as the case may arise; is that a system which you
ponsider advantageous ?■—I think it is not a proper system.

2387.	Supposing it should happen that with a reserve of shares the market has
been fed so as to produce a premium upon the shares, and that premium has been
carried to the profit and loss account, and the dividends paid out of the balance,

do you consider that a proper application of the fund ?—I think not.

2388.	Should not the dividend be payable out of the actual bona jide profits of
the bank, and not out of the accidental amount of premium which results from
the sale of shares ?—The premiums never could be very large ; but, as a guard
against adverse times, I think they ought to be made a reserve or contingent
fund to meet such times : that would be its legitimate use.

2389.	You are aware that at the present moment any joint stock bank may
pome into operation without any revision of its deed of settlement by any inde-
pendent authority ?—Y es.

2390.	Do you consider that it would be an improvement of the law, if, before
any joint stock bank was allowed to commence its operations, the deed of settle-
ment on which its operations were to depend were subject to revision in the same
manner as if a charter were to be granted by the Crown?—I am decidedly of that
Opinion, that that would be a salutary regulation, and whether altered or not, all
existing deeds of all joint stock companies ought to be so looked at.

2391.	It has been given in evidence before this Committee with reference to a

x	bankMINUTES OF E VIDENCE TAKEN BEFORE TIlE

S: Martin, Esq. baiik which hiis no# ceased to exist, that for sofee years, during which, «o #f
. "■ ^ from making any profit at all, the bank had sustained annual and continued losses,
ia July 1836. dividends still continued to be paid to the shareholders?—I believe that is noto-
rious in a case which has come under my own knowledge, and that the bank was
officially announced as flourishing.

2392.	Ought not that to be guarded against in some way ?—Yes, it ought
but it is very difficult to make enactments to guard against falsifications of that
kind; my opinion is, that it should be made imperative ; that the deed should be
registered at some public office in London.

2393.	Would it not be desirable also before the deed is executed, some inde-
pendent authority, acting for the protection of the public, should see that it con-
tained all those covenants which the public interest and the security of the share-
holders should require, and that it Contained nothing adverse to those interests ?
—Yes, but such regulations must, I apprehend, be founded on a special Act of
the Legislature.

2394.	The event contemplated by the question is founded on a supposed
change of the law ?-—I think it would be very advantageous to the public and to
the proprietors of those banks, to have those regulations ; the great evil in the
case referred to is, that the power of the original establishment has been usurped
in the hands of one or two persons ; there was the case of one of the directors
of the Norwich joint stock bank, who resigned. I never heard that any steps
were taken to replace him by any other director, whether they were empowered
by the deed which the public could not refer to, I cannot say; but that is a proof
that the deed ought to be in a state of reference.

2395.	Do you not consider that the branches which are established throughout
the country at unlimited distances from the mother bank, ought to be in any
degree checked 1—1 have a strong feeling that for the security of the public, they
ought to be circumscribed ; that wherever - the mother bank is, a circle of 30 or
40 miles, or some limit, ought to be prescribed.

2396.	Has any definite limit occurred to you?—I think that 30 miles would
be quite sufficient. .

2397.	Do you not think that the limit might be the power of communicating
within one post the transactions one with the other ?—That might be a distance of
100 miles; that would be too far.

2398.	Would you not rather say that it should be within such a distance that
a person might go from the parent bank, examine the accounts of the branch,
and return within the same day ?—I should think a circle of 36 or 40 miles would
be the best; to refer to the East of England bank, I have an analysis, by which it
appears that of the number of original shareholders, not one half reside in
Norfolk and Suffolk, though it is called the East of England bank.

2399.	Do you consider a bank can conduct its operations on just and sound
principles, without having some portion at least of its capital invested either in
Government stock or Exchequer bills?—Unless they know their business well,
and can rely on their own judgment for discounting mercantile bills, or making
temporary adyances, they had better do so.

2400.	The question applies not to the deposits with them, but their own'
capital ?- I think it very proper that a part of their capital should be invested
either in Government stock or Exchequer bills.

2401.	Where a guarantee fund is directed to be provided under the deed of
settlement, do you consider that it is essential to the character of that guarantee
fund that it should be invested in some way, so as to keep it separate and apart
for the ordinary concerns of the bank?:—Yes, otherwise it would be a very slender
guarantee.

2402.	Under the law as it exists at the present moment, a joint stock bank of
any supposed extent of nominal capital may commence its proceedings with the
smallest possible, or without any deposit paid up; should you consider it an
improvement of the law if it rendered it necessary as a condition (precedent) to
their commencing operations, that some certain and definite amount of capital
should be paid up ?-—The whole capital ought to be paid up within a' twelve-
month of the institution, and the law should fix as a minimum for shares 5007,;
there ought to be none under 300/. at all events.

2403.	You think there should be an arrangement preventing the formation of
shares of less than a certain amount, and that the whole should be paid up within
twelvemonths?—Yes; and if they want an additional capital owing to their busi-
nessSELECT COMMITTEE ON JOINT STOCK BANKS.

ness-accumulating, or the occurrence of a certain loss, they should call their share- s. Martin, JEsq.
holders together, but all which is pretended to be subscribed should be paid up _________

at once ; this would give a more respectable constituency, and also a better secu- 12 July 1836.
rity to the public, which is evidently imperative.

2404.	Banks established on 51, shares, not subscribed for to the full extent of
the number of shares, and upon which only a small amount of paid-up capital has
been deposited and made available, is in your mind an insecure system 1—I think
so indeed, quite a joke as far as relates to the protection of the public.

2405.	Do you not consider it not only a joke, but a system full of public danger ?

•—Yes, I think so; it is a joke as far as security is concerned.

2406.	In your judgment does it require the interposition of the Legislature to
correct the system which has been established ?—I think it does, but it appears
a very difficult point, they have run ahead of the Legislature by their establish-
ment'; whether it would be considered right, or rather whether it be practicable,

to bring them to a new modelled system, may be a question.

2407.	Referring the question, in the first instance, to the point of the evil
spreading, do you think it would be of itself a benefit, though not a benefit to the
full extent you could wish ?—Yes, decidedly a prospective benefit.

2408.	Do you think that is called for ?—I think it is; the system has gone too
far, and there ought to be a timely check for its proceeding; if joint stock banks
were fairly and properly arranged and managed, I have no unreasonable prejudice
against them.

- 2409. Do you not consider that a system of the publication of the assets and
liabilities of joint stock banks would be one of the remedies thafc it might be
expedient for the Legislature to adopt?—If it were honestly done it would, but
whether that would be so may be a question.

2410.	You conceive there i s a great difficulty in imposing a sufficient check on
these things?—Yes, there would be the benefit of moral responsibility, if moral
people should be at the head of those banks, otherwise any statements might be
drawn out.

2411.	In some of the deeds of settlement under the consideration of the Com-
mittee, it is provided that a balance sheet showing the profit and loss, and the
operations of the bank within the year, shall be laid before the proprietors ante-
rior to any declaration of dividend, that the proprietors shall have the power of
appointing auditors from among their own number, who shall examine and verify

,those accounts, and that the actual statement of profit so verified by the auditors,

having been submitted upon the responsibility of the directors, should be made
, the foundation of all declarations of dividends ; if that were honestly administered
and enforced in all cases, would it not be some check to the evils of the present
system ?—It would be certainly a moral guard against the falsification of accounts ;

. I have imagined it might be thus: "We, the undersigned, do declare, that we
have carefully revised the accounts of the institution, and that in our opinion this
^ abstract is a full and faithful statement of its affairs, after making a sufficient
reserve for all bad debts not written off, and that we have performed our respective
functions according to the deed under which we act." This should be signed and
attested by all the directors and officers.

2412.	Have you turned in your mind, in the event of such a form of account
being by law enforced, as between manager and shareholder of the society, what
extent of information it would be just to enforce?—I would make the pro form&

statement thus ; they ought to charge themselves of course with their capital; with
their deposits on receipts, with their deposits on account, and with their circu-
lation; then, on the other side, they should credit themselves by advances without
security.

2413.	Over-drawn accounts?—Yes, those on which they have no collateral
security. Advances on security, whether real or equitable, investments .in
Government securities, shares in the stocks of public companies, &c., would .form

.other items; after which, their bills discounted and their cash ought to show
their surplus or deficit, and what ground they: have for making or declaring a
dividend..

2414.	Supposing that account honestly made and subjected to the check
already pointed out, would it not, in point of fact, guard against the abuse to which
your attention has been drawn by a former question,, namely, paying a dividend
when the bank, in place of making a dividend, have sustained a losnt—Yes; I

:: 0.92.	x 2	: think150

MINUTES OF EVIDENCE TAKEN BEFORE THE

S. Martin, Esq. think it would be doing all which can be done, unless it could be arranged for
■ . . persons to examine their books who are independent of the concern.

-12 July 1836. 2415. Were you to be understood, in reference to the amount of shares, that
you consider provision by law ought to be made to prevent the splitting of shares
into a smaller amount?—Yes, or it would be non-effective ; a man would take a
certain number of shares, and sell certificates of them, and there might be the
same number of shareholders there is at present; no transfer should be admitted
but to a bond jide buyer, and for the entire share.

2416.	Mr. Clay.'] What is your opinion on the subject of the expediency
of limited responsibility ?—1 do not see myself any public advantage or security
to be derived from limited responsibility ; in the case of a bank, which has been
before the Committee, it might have been very ruinous to the public if it had
gone on as it proceeded, on limited responsibility ; from my knowledge of the
constituency of that bank, many could have paid up their responsibilities, but a
very large portion could have paid up nothing ; therefore it would have been in-
jurious to the public in that case, to have had only a limited responsibility ; and I
think a limited responsibility would make the managers of those banks more reckless
and adventurous.

2417.	Chairman.'] Do you consider that there is any existing evil, or any
apprehension which deters persons from adventuring in joint stock banks, or that
the tendency is really to embark too freely in such speculations?—There is so
much activity among the projectors, and the fever is by no means over ; I thiuk
it is increasing; there is a scheme now to buy up all the private banks.

2418.	Mr. Clay.] Do you believe that many respectable persons at this moment
are disposed to enter very generally into joint stock banks?—As far as my obser-
vation goes, certainly not.

2419.	Referring to a part of the evidence you have given, the Committee
would be glad if you would answer this as a general question ; looking at the great
opportunities of observation you have, from the large amount of bills which pass
under your hands, is it your opinion that latterly there has been an unsound and
dangerous extension of bill accommodation?—I think there has, or rather of the
improper foundation of bills; I give that as my opinion, decidedly.

2420.	Has that encouraged a dangerous spirit of over-trading ?—I think so.

2421.	Is it further your opinion, that the species of bill accommodation has
been much fostered by the joint stock banks ?—Very much fostered and increased,
in my opinion.

2422.	Is it your opinion that bills will obtain circulation in the London market
from the indorsement of those banks, which would not have obtained circulation
without the indorsement of those banks ?—Certainly.

2423.	The persons who have discounted them looking to the aggregate wealth
of the proprietors of those banks ?—Yes; I should say not looking imprudently,
as in nine cases out of ten the bill would be paid eventually; but it is still danger-
ous as affecting the currency, the credit, and the circulation of the country.

2424.	You consider the indorsement of those bills as a strengthening plaster?
—Yes, I believe I have said so.

2425.	Mr. Morrison.] When youspeak of the accommodation those banks render,
are you speaking of the present time, or of the state of things which existed 12
months ago?—As far as my observation goes, I should not think it greatly checked.

2426.	Chairman.] Is there a considerable activity in different parts of England
to establish and extend the connexions of those joint stock banks ?—I should think
from the advertisements we see, and also from two or three new establishments,
whose indorsements I have seen from Liverpool within the last fortnight, that it is
going on as rapidly as ever.

2427.	Is the character of the new establishments rather lower, thus increasing
the danger you have adverted to, than otherwise?—Yes, decidedly, I think so ;
they are of an inferior grade, in my opinion.

2428.	Smaller shares ?—I do not know as to the constitution, but of an inferior
grade. As to the paper that comes before me, I should judge from that their con-
nections are not respectable and trusty.

2429.	Do you consider this likely to go on unless some interposition is applied ?
—I think so, unless it is checked.

2430. YouSELECT COMMITTEE ON JOINT STOCK BANKS.

2430.	You have already drawn a line of distinction between the remedies S. Martin, Esq.

"which should be given prospectively as against future establishments, and those r~~,-r

which it might be safe or expedient to apply to establishments already existing; if 12 July 1836.
there be any considerable delay in the interposition with respect to future esta-
blishments, do you consider that with respect to banks already in existence, regu-
lations might be imposed on their conduct which would place them on sounder

principles ?—I should think an Act of the Legislature might impose certain
regulations and certain acts on the part of the banks which are established, to act
as a safeguard to the public.

2431.	What are those which occur to your mind ?—I think in the first place
the deed should be registered in an office of public record ; the certificates of the
shares ought either be printed or annexed to a copy of the deed j that the share-
holder should have an official copy of the deed rendered to him; no bye-law or
alteration affecting the constitution of the society should be permitted without the
assent of the whole body of shareholders ; every shareholder ought to be served
with an official circular of every alteration made, and those alterations should be
appended to the original deed, in some office of record ; a regulation about the
directors, I suppose every deed contains ; some penal clause might be introduced
against their wilful and corrupt acts ; a portion of the directors should go out
every three years, and not be eligible for re-election for a certain period; on the
death of resignation of a director, his place should be filled up within a certain
period ; a periodical statemfent of the affairs of the bank, and a meeting of the
shareholders, ought to be regularly convened by public advertisement, to
receive such report.

2432.	Mr. Morrison.'} Would you not have the statement of accounts signed
by a certain number?—Yes, by every officer, every director; they should all
take a part of the moral responsibility attached to such a document; the auditors
and public officers of the institution ought to attest their knowledge in such
a way that they could not afterwards escape from it, and throw off the responsi-
bility on others.

2433.	Do you think any extension of bills, bearing the indorsement of joint
stock banks, and sent up to London for the purposes of re-discount, and.supplying
capital to large establishments, has any effect on the Exchequer bill market of
London ?—Unless Exchequer bills are directly operated upon by the bank, it
cannot affect the quantity of bank notes. The money now employed for the joint
stock banks in the discount of bills, was very much before their establishment, used
by the old bankers. It does not follow, therefore, that the discount and re-discount
of bills of the joint stock banks have required any additional means, but that
means have been drawn from old to new channels ; or if any addition to the means,

it must have arisen from the Bank of England in some way; bank notes may
increase bills, bdt bills can only increase bank notes by the operations of the Bank
itself.

2434.	Would not Exchequer bills, bearing the indorsement of joint stock banks,

and of which, therefore, subject to the observations you have already made, there
is an ultimate security for the payment to a certain extent, if they are increased
largely and bear a higher rate of interest, supersede the use of Exchequer bills

in the London market?—I think it would hardlv run to such an extent as to

•/

do that.

2435.	As far as they went, must not they operate to that effect?—Yes, the
operation would be that way.

2436.	Sir James Graham.} Do those joint stock banks issue post bills to any
great extent?—No, I believe very little; in truth, half the joint stock banks in the
north of England are merely bill-brokers.

2437.	Would you see any grave objection to their drawing post bills to any
extent, superseding bills payable on demand?—That would depend very much on
circumstances; in the first place, on whom their agent might be in London.

2438.	Would it diminish the security of the public ?—If they were not strong
at both ends, decidedly so.

2439.	Chairman.] Supposing they draw branch on branch, at seven or ten
days, and consider them not for the accommodation of the remitter, but for the
purpose of substituting them for promissory notes payable on demand?—That
would be a very objectionable plan, leading to a system of assignats, to the
payment of paper by paper.

.	x 3	2440. Sir152 MINUTES OF EVIDENCE TAKEN BEFORE THE

S. Martin, Esq. 2440. Sir James Graham.] Have you observed any tendency on the part'of

—-—— joint stock banks, to an issue of that kind ?—No, it has not come under my notice'

1 a July 1836. at all; on turning over many millions of bills in the year, I can see almost every
transaction in that direction which is going forward in England; and I find their
transactions to be mostly in the line of discounting.

2441.	Chairman.'] What is the legitimate use and object of the issue of a bank
post-bill?—It ought to be for the conveyance of cash from one place to another ;
the stamp duty is almost entirely avoided by the mode of payment in London,
adopted by country bankers; by the issue of post orders, you call at the
London bankers and receive so and so; in former times we used to draw bills
for those payments.

2442.	Do you think the system of drawing checks from places out of the
distance is also used ?—It can hardly be avoided.

2443.	Are you aware that by a late decision a banker cannot obtain credit in
case of a bankruptcy, for a check paid by him, though perfectly ignorant of its
being drawn out of the distance ?—Yes, and I know we are all in the same predi-
cament.

2444.	Sir James Graham.] Are you aware of any peculiarity of the law of
partnership between joint stock bankers, which would place them in regard to
notice, in sl. different situation from other parties ?— No; I never considered the
Act sufficiently to answer the question; I suppose that that must arise under
some clause in the Act; I think there would be the greatest possible difficulty of
recovery under the bankrupt laws ; the recourse for note-holders, if joint stock
banks are permitted to be banks of issue, ought to be very clear and summary.

2445.	Have you reason to believe there is any doubt or difficulty ?—Yes, it is
considered that there is difficulty, that the Act is not sufficiently clear to give
prompt recourse ; not so prompt as there might be against a private establish-
ment. •

2446.	Not so prompt in enforcing responsibility against the partners in a joint
stock bank as in a private bank ?—Yes.

2447.	If it were desirable that joint stock banks should regulate their issues by
periodical returns of liabilities and assets, as the Bank of England does, do you
think the publication of such liabilities and assets as now takes place is sufficient
for the purpose of so regulating the conduct of joint stock banks?—I cannot
point out a more efficient mode.

2448.	You are aware that the publication has reference to an antecedent date,
,and is not conclusive of the state of things at the period when the publication
takes place, so that there may appear to be an amount of coin in the coffers of the
.bank, when in point of fact the exchange shall have turned ?—Yes, and I think it
impossible to guard against an objection of that kind.

2449.	Would not that lead to a false conclusion ?—Certainly.

2450.	If that publication is to influence the conduct of other parties, might it
not mislead them ?—Yes, it might mislead in favour, or to the prejudice of the
public; or the banks.

2451.	It might lead the joint stock banks to contract their issues under the
supposition that gold was going out of the coffers of the bank, whereas the fact
might be the reverse ?—Yes.

2452.	Mr. Morrison.] It appears that a very large sum of money is employed
in London in there-discount of bills, previously discounted by the joint stock
banks ; in what way was that money employed before the establishment of these
joint stock banks?—

2453.	Do you think any considerable proportion of that money was formerly
invested in Government securities?—I would prefer answering these questions by
referring them to quest. 2433*

2454.	Do you conceive there is a much larger sum employed in London now,
in the discount of commercial bills, than there was some years ago ?—Yes, I think
there is a larger sum; but the only control is with the Bank of England; they
may alter the amount at their own pleasure.

f 2455. Chairman.] Do you not consider that the capital of the country has
accumulated considerably ?—Yes, I think it has, and that that has carried many

ofSELECT COMMITTEE ON JOINT STOCK BANKS. 153

of those speculative concerns through, which otherwise must have fallen; and so S. Martin, Esq.
far, an additional issue of bank notes is properly accounted for.

2456-7. Mr. Morrison.] In what way is that large sum supplied ?—It must be iaJulyi8'3G.
supplied originally by the Bank of England in the discount of bills, founded in a
degree on the increase of real capital.

Martis, ig'die Julii, 1836.

members present.

Mr. Strutt.

Sir Thomas Fremantle.

Mr. Baring.

Mr. STRUTT, in the Chair.

Mr. Pattison.
Mr. Clay.

Sir James Graham.

John Wood, Esq., called in ; and Examined.

2458.	Chairman.] YOU are chairman of stamps and taxes?—lam.

2459.	Are banker's licences issued by the Commissioners of Stamps and John Wood, Esq.

Taxes?—They are. By the 55th Geo. 3, c. 184, s. 24, no bank can issue any •--

promissory notes for money payable to the bearer on demand, which are re«issuable, 19 July 1836.
without taking out a licence yearly for that purpose. That licence is directed to

be granted by the Commissioners of Stamps for the time being; and every such
licence is to specify the town or place where such promissory notes are to be
issued, and the proper names and places of abode, and the name of the bank or
partnership, name, style or firm, under which such notes are to be issued; and
where any such licence shall be granted to persons in partnership, the same shall
specify and set forth the names and places of abode of all the persons concerned in
the partnership, whether all the names shall appear upon the promissory notes to
be issued by them or not.

, 2460. Mr. Clay.^ This is the Act which ,regulates the formalities necessary to
obtain the renewal of a banker's licence?—Yes ; that Act was passed many years
before the Act for establishing joint-stock banks ; but the regulations for granting
licences apply equally to both. By the Act of 7 Geo. 4, c. 46, s. 4, 5, 6, 7
and 8, it is enacted that before any co-partnership, exceeding the number of six
persons in England, shall begin to issue any bills or notes, or generally to transact
business, an account shall be made out according to the form contained in
Schedule (A) of the Act, which shall set forth the true names, title or firm of such
intended co-partnership, and the names and places of abode of all the members
thereof, and of all the partners concerned or engaged therein, and also the name or
firm of every bank to be established by such co-partnership, and the names and
places of abode of two persons who shall be appointed public officers, and who
may sue and be sued as therein provided ; and a registry of such names is to be
kept by the Commissioners at Somerset-house, which registry any person shall
have liberty to inspect at any time upon payment of 1 s. All these particulars are
to be complied with before a licence can be granted to any such co-partnership.

2461.	What is the licence you now allude to?—The banker's licence, which is
provided to be issued by the 55 Geo. 3.

2462.	Does the Act from which you are now quoting refer to the Act
55 Geo. 3?—Not expressly; but all bankers are subject to its provisions. By
7 Geo. 4, c. 46, s. 4, no joint stock company in England can issue notes or
sue without a licence, nor issue any bills or notes which are reissuable, owe or
borrow, or take up any money. By the 5th clause it is enacted, that such return
as required by the Act shall be made out by the secretary or other person, being
one of the public officers appointed as aforesaid, and shall be verified by the oath
of one of them, and that such account or return shall, between the 28th day of
February and the 25th day of March in every year, after such corporation or
co-partnership shall be formed, be in like manner registered with the Commis-
sioners of Stamps. By the 6th section a copy of any , such account or return so
filed or kept and registered at the Stamp-office, being certified under the hands
of one or more of the Commissioners of Stamps, shall be evidence in all proceed-
ings, civil or criminal, as proof of the appointment and authority of the public

0.92.	x 4	officers154 MINUTES OF EVIDENCE TAKEN BEFORE THE

John Wood Es officers named in such account or return, and also of the fact that all persons
* named therein as members of such corporation or co-partnership were members
Jol 1836. thereof at the date of such account or return. By the 7th section the Commis-
sioners are empowered to give certified copies of affidavits, (that is, of the registry
that is sworn to,) on payment of 10 s., to everybody who shall require it. By the
8th section it is enacted that the secretary or other officer of every such corpora-
tion or co-partnership shall be required from time to time, as often as occasion
shall render it necessary, to make out upon oath, and cause to be delivered to the
Commissioners of Stamps, a further account or return in the form of Schedule (B),
of the names of any new or additional public officers of such corporation or co-part-
nership, and the names of any persons who shall have ceased to be members of
such corporation or co-partnership, and also the names of any persons who shall
have become a member or members, and the names of any additional towns or
places where such bills or notes are to be issued, and where the same are to be
made payable. It then requires that such further accounts shall from time to
time be filed and registered at the Stamp-office, so that by this Act it is necessary
that before any joint stock bank can begin to do business they shall send a com-,
plete register of the names and places of abode of the partners in that bank ; that
they shall continue to do so in every year between the 28th of February and the
25th of March, and that they shall also from time to time, as often as occasion
requires, send in an amended return; if they issue re-issuable notes, they must also
have a licence under the 55 Geo. 3, which expires on the 10th of October; and
in order to obtain a renewal of that licence it is necessary they should send in a
list of the then partners.

2463.	The Act of the 7 Geo. 4, which permitted the establishment of joint-
stock banks, required, in addition to the names of two parties as officers to sue
and be sued, the names with the residences attached of all the proprietors of the
bank?—Yes.

2464.	You are understood to say that it further required a similar account to
be given in between the 28th of February and the 25th of March in each year,
whether there had or had not been in the course of the preceding year any change
in the proprietory ?—Yes.

2465.	It further required notice in a form prescribed by the Act of any change
of proprietors?—Yes, in the form of Schedule (B.)

2466.	Do you conceive that under the terms of the Act it is imperative on a
co-partnership to return any additional names of proprietors who were not substi-
tuted for old ones ?—Yes, I think the, 8th section is imperative ; but that the clause
is defective, inasmuch as it merely states that the officer of such co-partnership is
required "from time to time, as often as occasion shall render it necessary," to
make out such supplemental account.

2467.	You do not consider that those words render it absolutely imperative
upon the managing officer of the co-partnership immediately to notify any change
of proprietors or admission of new proprietors?—The words are not conceived to
be imperative \ because I believe that in practice such supplemental returns are
seldom furnished to us.

2468.	The Committee understand you to have said, that a second return of the
names of all the proprietors must be sent into the Stamp-office, but that such
necessity arises, not from any provision of the Act of 7 Geo. 4, relating to joint-
stock banks, but from one of the provisions of the Stamp Act, 55 Geo. 3?—
Yes; the provision which compels bankers who intend to issue re-issuable pro-
missory notes to take out a yearly licence?

2469.	That provision of 55 Geo. 3, would apply only to those banks which
issue their own notes ?—To those only which re-issue their own promissory
notes.

2470.	Those joint stock banks which do re-issue their notes are in point of fact
to give a complete list of the proprietors twice a year to the Stamp-office?—
Yes.

2471.	Those who do not issue send only once a year, supposing there is no
change in their proprietory r—Yes.

2472.	Have you, in point of fact, reason to believe that the clause of the Act
which requires a return to the Stamp-office is strictly adhered to ?—Mr. Cockell,
the keeper of the register, has prepared a return of all the joint-stock banks, and of
the number of times they have sent returns under Schedules (A) and (B) to the
Stamp-office, since the dates of their respective establishments.

2473. TheySELECT COMMITTEE ON JOINT STOCK. BANKS. 155

2473.	They are the returns required respectively by the Acts of 55 Geo. 3, " j0hn Wood, Esq.

and 7 Geo. 4?—Yes. In this return there are 89 joint-stock banks; and on ----

inspection it will appear that they have almost invariably made their returns half- 19 July 1836.
yearly in form of Schedule (A) ; but that the intermediate returns of changes of
proprietors in form of Schedule (B,) must almost as invariably have been omitted.

I conceive it is very improbable that changes of proprietorship have not taken
place in these banks, looking at the great number of partners of which they consist.

The alterations by death, independent of any sale of shares, would have caused
more numerous returns if the Act had been strictly adhered to.

2474.	Chairman.'] You conclude that, in a great number of those instances, the
Act cannot have been complied with P—It is impossible.

2475.	The Act directs that the residences shall be entered with the names; do
you think that those residences amount to more than the name of the town or
place at which the person is resident?—No, very seldom.

2476.	For instance, supposing a partner is resident in London, is it A. B. of
London, or does it name the street where he resides in London, or the number of
the house?—I do not recollect that I have seen any list of joint-stock bank pro-
prietors where the proprietors resided in London.

2477.	Speaking of any other large town, is the proprietor described as A. B., of
Manchester, or of Liverpool?-—Generally he is so described, without any more
particular designation.

2478.	The Act permits liberty of inspection to any person on payment of a cer-
tain sum; are you aware whether many individuals have availed themselves of
that permission?—I have reason to believe that they have, particularly of late ; and
the applications for certified copies of the names have been also more frequent
of late.

2479.	Since what time has that inclination on the part of the public been
manifest ?—I have observed an increase of that during the last twelvemonth.

2480.	Chairman.'] You have had a copy of the deed of settlement of the bank
of Manchester placed in your hands, dated the 25th of March 1829 ?—I have.

2481.	Have you compared the list of names of the proprietors attached to that
deed of settlement with the list in your office of the same bank, dated the 19th of
March 1829 ?—I have had it\compared with the return sent into the Stamp-office
six days previous to the 25th March ; Mr. Cockell, the registrar, has done it under
my direction.

2482.	Do you find that the lists agree?—I find that the printed list contains 46
names which are not in the return sent in to us on the 19th of March ; and I find
that the return sent in on the 19th of March contains 15 names which are not
in the printed list attached to the deed of settlement.

2483.	In the course of six days 15 names must have been withdrawn and 46
added ?—Yes ; and that is a corroboration of my previous statement, that I have
reason to believe that the returns under Schedule (B), are very incorrectly given.

2484.	Those lists having been given in at an early period of the formation of the
bank, you would expect the variations to be more frequent at that time than during
the later operations of the bank ?-—It is very likely that they would be; it is pro-
bable that all the shares were not taken, and that frequent changes might take
place in the names of the proprietors. I do not mean to say it was done with any
intention to deceive, but that it exemplifies the laxity of making returns under
Schedule (B), of registering changes in the proprietory as frequently as they occur.

0.92.i56 MINUTES OF EVIDENCE TAKEN BEFORE THE

Veneris, 22° die Jiilii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer.

Mr. Baring.

Mr. Loch.

Mr. Attwood.

Sir Thomas Fremantle.
Mr. Strutt.

Mr. Clay.
Mr. Pattison.

The Right Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

Samuel Gurney, Esq., called in ; and Examined.

Samuel Gumey, 2485. Chairman.] HAVE you turned your attention to the system of joint stock
Esq.	banking, extending as that system is now throughout England ?—Yes, I have.

—--2486. Are you of opinion that that system stands in need of any regulation

32 *836. beyond that which is now prescribed by law ?—I think it does.

2487.	Limiting the inquiry in the first instance to the creation of joint stock
banks, do you consider that it would be advisable that any, and what restrictions
should be imposed upon the creation of joint stock banks, so as to define the
principles upon which they were to be established ?—I think in each case of the
establishment of a joint stock bank, it should receive the sanction of a board of
commissioners.

2488.	Do you mean by a public board of commissioners, a board of commis-
sioners representing the public interests, and taking care that an establishment is
not formed without a due protection to those interests ?-—That is what I mean.

2489.	How do you consider that such a board of commissioners could be
appointed ?■—Either by the Crown or Parliament.

2490.	Do you not consider that if such a board of commissioners were to be
established, it would be absolutely necessary, in order to prevent a capricious or
a partial exercise of their power, that they should be subjected to certain defined
rules, and that there should be certain restraints imposed upon the respective
banks, a compliance with which it should be the duty of those commissioners to
enforce ?■—I am of opinion that there should be regulations by law, which should
in a general manner govern them in their decisions and proceedings.

2491.	Do you comprehend within the functions that should be exercised by an
official board of commissioners, the revision and approval of the deeds of settle-
ment of joint stock companies, previously to the commencement of banking opera-
tions ?—Most decidedly.

2492.	Are you of opinion that any, and what limitation should be put ilpon
the value of the shares upon which the capital employed in joint stock banks is
proposed to be raised ?—I think there should be a limit, below which shares should
not be allowed to be created.

2493.	Are you aware that by the law as it stands, there is no such limit at the
present moment, and that joint stock banks are created upon shares of the nominal
value of 10/. and even of 51. ?—I am aware that there is no limit by law, and that
shares have been created of a very low nominal value.

2494.	What are the disadvantages which have occurred by the creation of
capital on shares of the nominal value of 5 1.1—The creation of shares of small
value, leads to trafficking in shares, and also places them in hands that are
not suitable to be responsible for the monied transactions of the country.

2495.	Do you consider that the connexion which must exist between the
managers and shareholders of a joint stock bank, with a very numerous proprie-
tary, has a tendency to act in a different way on credits and advances from the
ordinary connexion between a banker and his customers ?—It does tend to give

facilitiesSELECT COMMITTEE ON JOINT STOCK BANKS. 157

facilities by way of credit beyond what has been considered prudent by the bank-
ing interest heretofore.

2496.	Do you think that tendency will be increased in proportion as the
number of proprietors is enlarged, and in proportion as they are extended to
a lower and less opulent class in the community ?—I rather doubt whether it would
have an effect in that respect.

2497.	Supposing a bank with a capital of a million, established on shares of
51, each, and another bank with a capital of a million established on shares of 100?.
each, do you consider that the relation of the one bank and the other is likely to
be the same as affecting advances and the general credit given ?—My apprehen-
sion is, that a bank established upon shares of a high value, would have a superior
connexion to one with shares of a low value, and also a superior mode of trans-
acting their business.

2498.	In proportion as they were lowered as to be unworthy of credit at all,
would not the security of that bank be diminished, and consequently the interests
of the public be endangered ?•—Undoubtedly.

2499.	Do you consider it desirable that, as far as is practicable, the system of
raising capital for banking purposes should be such as would promote the invest-
ment of money as an investment seeking for a return of interest, rather than as
a speculation seeking a profit upon the advance of shares ?—Most decidedly; it is
the only safe and respectable course that such investments should be made with
the real intention of deriving a return from banking profits.

2500.	In what way do you think a bond fide investment for profit is most pro-
moted, by the larger shares or by the smaller ?—I cannot doubt but that the profit
on the stock of a bank would, on an average of years, be larger as well as safer
from a large scale of shares than a small one.

2501.	You are awa,re that at the present moment it is competent to a bank to
begin its operations without having obtained a subscription for the whole or for
any defined number of its shares ?—I am aware that that is the case.

2502.	Consequently a bank with 100,000 shares, may commence its operations
with only 1,000 shares subscribed for; do you consider that that system is a safe
one ?—I think it is a system dangerous, and requiring regulation,

2503.	The application of this principle leads necessarily to a number, greater
or less, of reserved shares being kept in the hands of the bank itself; do you con-
sider that that system of reserved shares is one either safe for banking purposes,
or conducive to the public interest?—It is a point that requires great care in its
regulation. A reserve of shares, however, to a limited extent, may be of use to a
new establishment, and under limitation, without danger to the public.

2504.	Those shares reserved must be issued in the market ; are they likely to
be issued in any market, unless those shares are at a premium?—My apprehen-
sion is, that they are not often disposed of by being sent into the market for sale,
but rather that they are distributed to individuals from whom business and con-
nexion are likely to arise.

2505.	Does the habit to which you have adverted in that answer, constitute
the peculiar distinction of joint stock banks, and give them the means of acquiring
customers in a different way from private banks?—Very decidedly so; and I think
not in a legitimate or respectable manner.

2506.	Will you describe the operation of that system ?—I will describe the
operation by stating a fact: I know a case where 1,000 shares have been offered
to a house of business at par, upon the condition of having the banking connexion
of the firm, those shares bearing a premium of 5 /. a share, thus offering a
bonus of 5,0001, against the private banker who had not the same temptation
to offer,

2507.	Must not this practice have a double operation, as tending to absorb
within the principle of joint stock banking, first the custom of the country, and
next the existence of private banks?—Undoubtedly it has that tendency.

2508.	Has it come within your observation that to a considerable extent it has
not only had that tendency, but that such has been the result, and that many
private banks have already been absorbed in joint stock banks, and converted into
joint stock banks ?—Such has been the case in a great many instances, and is an
operation rapidly progressing.

2509.	Do you consider it likely to advance?—Undoubtedly,

2510.	Is it in fact possible for a private bank, except under a very great
stability and importance, and long established connexion,1 to carry on its business
• 0.92. t 2	in

Samuel Gurney
Esq.

22 July 1836.158 Minutes of evidence taken before the

Samuel Gumcy, in competition with a joint stock bank that has such means of extending its
Esq.	custom, and of increasing its connexions ?—It is difficult for a private bank, under

—- such circumstances, to withstand so powerful an influence ; but private banking is

22 July 1836. go p0pUjar jn places, that they do withstand this powerful influence. There have
been great premiums given by joint stock banks to private banks for the good-will
of their business.

2511.	Do you believe that cdses exist in which the business or good-will
of private banks has been bought up by joint stock banks ?—In very many
instances.

2512.	Do you, consider that the law and the practice under the law as they
now stand, under which bankers are allowed to commence their joint stock opera-
tions without any defined proportion of paid-up capital, is one which is conducive
to the public interest ?—I think it is not conducive to the public interest, and
that there is danger in it; it is a point that requires regulation.

2513.	If there were a board of commissioners appointed in the manner sug-
gested in your former answer, do you consider it would be the duty of that board
of commissioners to see that no bank commenced its operations until some given
proportion of capital was not only subscribed for, but paid up?—It would be one
of their most important duties; also that there be in all cases a suitable proprietary •
and further, that a joint stock bank is desirable for the community wherever
proposed to be established.

2514.	Would it be possible, a priori, to define the minimum amount of the
value of shares which it might be expedient to establish, whether 100 I. or 501.
or any other given sum ?—I think it would be difficult, inasmuch as the nature
of banking is various in different districts; that which would be requisite in manu-
facturing, might be too high in agricultural districts.

2.515. In any case do you consider that 5/. shares are desirable?-—I think,
under all circumstances, 5 I. shares are very much too low.

2516.	What would you say of 20/. or 501.1—I should think 20/. would not
be an unreasonable limitation in agricultural districts, and that 50 /. was suffi-
ciently low in manufacturing districts.

2517.	Supposing an issue of 20/. or 50/. shares, how much do you consider
it would be expedient for the commissioners to require to be paid up before the
bank commenced its operations ?—'This must greatly depend upon the business
transacted in the country where such an establishment is to be created.

2518.	In any case should you consider it desirable that a bank should commence
its operations -without some money paid up ?—Decidedly not; in respect of capital
to be applied to banking business it is difficult to make any general rule. Capital
may be usefully employed for the benefit of banking in manufacturing or mer-
cantile districts, whereas in such as are purely agricultural it is a burden to have a
large capital.

2519.	Maintaining that obvious and clearly-defined distinction, do you con-
sider that it would be important in all cases before a bank commences its ope-
rations that a minimum amount of capital should be paid up, not so much with a
view to the employment of that capital, as with" a view to the stability of the bank
and the prevention of the establishment of mere bubble companies ?—With that
view I am of opinion there should be no bank established in any district without a
respectable paid-up capital.

2520.	You are aware that many of the joint stock banks are now establishing
branches or agencies, extending over immense districts, many of which are remote
from the central or managing bank; do you approve of that system?—I very
much disapprove of that system when carried to a great extent j and I
am of opinion there should be a limitation as to the distance from the head
establishment, without which branches or agencies should not be allowed to be
established.

2521.	Has any limitation in point of distance or limitation of any other kind:
occurred to you, which would permit the establishment of branches under safe
regulation, and might exclude those which you consider to be dangerous to the
credit of the country?—I have not turned my attention to any specific limit as to
distance. I prefer rather a narrow than an extended one. I feel confident that
if any catastrophe did happen to any establishment so very widely extended, it
would have a very extensively injurious effect.

2523. In what respect would the establishment of 10 banks, With 10 branches
each, differ practically from the establishment of one bank with 100 branches ?—

IfSELECT COMMITTEE ON JOINT STOCK BANKS.

159

If any catastrophe happen to a branch of any bank having many others, it sets those Samuel Gurncy,
others fast; whereas if such happen to a bank without" branches, but having many
neighbouring independent banks, those others are able to carry on the business of
and support that country.	22 uyx 3 »

2523.	Following up the hypothesis of the 100 branches of one bank, if those
100 branches were extended in 10 different districts, each district having a different
interest, as shipping, mining, manufactures, agriculture, and so forth, if a pressure
Comes upon any one of those interests, is it your belief that by the connexion of
those branches with the principal bank it might be extended throughout the other
districts?—Without any catastrophe affecting credit happened to any branch under
such circumstances, one particular interest would support the other, but not in a
greater degree than if the various establishments were independent of each other.

2524.	You have used the word agency as well as branch; what do you under-
stand to be the distinction between the two r—A branch is a more important esta-
blishment than a mere agency. An agency implies that the individual carrying it
on is engaged in other business.

2525.	Do you connect with an agency a distinction between the nature of the
promissory notes issued by the agent as to payment, place, and date, from the
notes issued by a branch?—-An agent is not a responsible issuer, and is not the
payer of the notes which he circulates.

2526.	It appears upon the evidence that in many cases notes are issued, both
by branches and by agents, not payable on demand at the place of issue; do you
consider that a safe system ?—I am of opinion that a branch ought to pay "the
notes that it issues, the same principle cannot be applied to a mere agent.

2527.	Do you think the system of agencies is a sound system of banking ?—It is
liable to difficulties; it is, however, a great convenience to small towns.

2528.	A convenience to them as bringing money to them in place of their going
for money; is it more than that?—Perhaps not more ; but that is a great convenience.

2529.	In the application of the joint stock banking principle, have not those
agencies within the district to which you have referred led to very considerable
losses, and to the embarrassment of the bank which established them ?—-It has
been stated that it has led to considerable losses.

2530.	Do you consider that if the deeds of settlement of those joint stock banks
were revised in the way you have suggested, it would be desirable to permit, under
any circumstances, the advance of money on the part of the bank upon its own
shares, or permission to traffic in its own shares?—There may be circumstances
under which it would be unreasonable that a joint stock bank should be prevented
making advances upon or purchasing its own shares; the re-sale of them would
follow of course.

2531.	When you say it would be a hardship under certain circumstances to the
bank, do you refer to the cases in which, in satisfaction of a debt, they are induced
to take the shares of their own proprietor like any other amount of assets in his
hands?—I allude to cases of that character.

2532.	The actual advance of money upon the deposit of shares or the purchase
Or sales of its own stock do not appear to you a practice which it would be expe
dient to permit?—I think it is not expedient, speaking generally.

2533.	Is not the tendency of the system under which either advances are made
on shares or purchases made in the market by the bank, of the shares of its own
company, an absorption of capital and the limitation of the responsibility which the
public has a right to look to in discharge of the engagements of the bank?—Most
undoubtedly.

2534.	You are aware that at the present moment, although the total amount of
promissory notes issued by joint stock and private banks is made known to the
public by the Stamp-office, the separate amount of promissory notes issued by
each is not given; do you consider that it would be expedient that a true account
of the issues of promissory notes payable on demand by each of those establish-
ments should be given in a separate account ?—I think that every establishment
should make a separate return for itself; but I do not see that much advantage
would arise from its publication.

2535.	Do you conceive that the publication of such accounts could interfere
with the legitimate rights of those banks ?—1 think not.

2536.	Are there any other particulars that you consider might be given to the
public without inconvenience and with a view to the public interest ?—I am not
aware of any other particular that requires publication for the benefit or safety of

0.92.	y 3	theMINUTES OF EVIDENCE TAKEN BEFORE THE

Samuel Gumey, the public. I am not in favour of publication for the benefit or safety of the public,
Esq. because it is liable to so much abuse, and consequently tends to mislead.

—- 2537. Are the Committee to understand that you would draw a line of dis-

22 July 1836. tinction between the publicity which the public at large has a right to require, and
that publication of transactions which ought to be made as between the governing
body of the bank and its proprietors ?—I do draw a distinction in favour of share-
holders, who are responsible for all the transactions of the bank ; they are entitled
to publication in the minutest detail. As it relates to the public they have not a
right to the same minute detail.

2538.	Supposing the directors of joint stock banks were required to lay before
their proprietors such a detailed account of their transactions as would prove to
the proprietors the real state of the bank, and ascertain that the amount of
dividend declared was paid out of bona fide banking profits, do you consider that
that ought to rest on the mere responsibility of the directors, or to be subject to
some examination on the part of the shareholders before whom the accounts are
laid ?—I think the shareholders should have the power of the most accurate inves-
tigation, independent of the directors, should they wish it.

2539.	In some of the banking establishments which are before the Committee,
there are restrictions which prohibit the proprietors from the inspection of the
books and the examination of the accounts; is the continuance of such a restric-
tion as that consistent with the last answer you have given of what you consider
to be a sound principle of joint stock banks?—It is not consistent with that
answer, neither is it consistent with the rights of individuals, the whole of whose
property is at stake.

2540.	In many of those deeds of settlement there is a provision contained,
limiting the proprietors at large to select from their own body one or more
auditors, who are directed to examine the accounts, and on whose certificate after
audit and examination a dividend is declared ; do you consider that such a pro-
vision should be uniformly introduced into all, and that its practical application
should be enforced ?—I think that such limitation of inspection to auditors should
not be in deeds of settlement; but if shareholders are inclined so to resign their
rights of inspection from time to time, it should be a regulation between them-
selves.

2541.	You mean that the publication of the most full and detailed account, as
between the directors and the proprietors, should be enforced ?—I think so.

2542.	In many of the deeds of settlement there are provisions reciting the con-
tingencies under which the company is to be dissolved ; in some cases it is dis-
solved on the absorption of the guarantee fund, in other cases it is dissolved on
the loss of a certain proportion of the subscribed capital; in some cases it is done
at the will of the majority, in others, at the.will of certain proprietors ; do you not
consider that all those contingencies creating the dissolution of the company
should be made strictly according to one principle, known to the whole world, and
enforced by law ?—I think it should be by a regulation applying to all.

2543.	Can you furnish the Committee, either at the present moment or at any
future time, with the heads of an account which, in your judgment, would convey
from the directors to the proprietors that information which they justly have a
right to demand ?—I could not do it now. It is a difficult thing to point out a
*orm of account which will do it with sufficient precision.

2544.	In many of the deeds of settlement a given amount of guarantee fund
is directed to be reserved out of profits, but no provision appears to be made
with respect to the preservation of that guarantee fund or its separation from the
ordinary banking transactions; do you consider that it would be advisable that
all guarantee funds should be invested in Government securities ?—I should not
attach much importance to such an arrangement, inasmuch as the particular sum,
as compared with the general assets of the bank, is small; and if the accounts are
fairly stated, it is as safe in the bank as so invested.

2545.	Supposing a form of account inscribed as between the managers and
proprietors, one of the items of assets necessarily must be the account of bills of
exchange; would the separation of bills over-due from bills which are current be
a distinction which, in your judgment, it would be desirable to enforce?—It
would be quite needful to draw such a distinction. Generally speaking, the item
of over-due bills would strike a man of business as of a very dubious nature.

2546- Supposing it fairly given periodically; if there was an increase in the
amount of over-due bills, would not that be some test of the management of the
hank; at least, would it not be negative evidence if the amount of over-due bills

wentSELECT COMMITTEE ON JOINT STOCK BANKS. 161

•went on increasing?—If the amount of over-due bills went on increasing, it would
be direct evidence of the bad management of the bank.

2547.	Suppose, as another of the items in such account, the amount of over-
drawn accounts was required to be rendered ; do you think it would be important
to the proprietors at large to know periodically whether that item was an increasing
or a diminishing one ?—It is important that they should know j they should also
know the length of time such accounts had been standing.

2548.	Do you consider that it would also be of importance that in such period-
ical accounts so rendered to the proprietors, the amount annually written off as
bad debts should be accurately stated ?—It should be accurately stated.

2549.	Would not that also be a conclusive test as to the management of the
bank ?•—It would be a test.

2550.	Would it not be a conclusive test in the negative if the amount of bad
debts written off annually was an increasing amount P—It would in that case be
conclusive in the negative.

2551.	Mr. Clay.] You are very extensively engaged in the procuring the dis
count of bills ?—I am.

2552.	Is there a very large amount of discount business transacting at this
moment in the money market?—Very considerable.

2553.	Is it as large or larger, or smaller, than at certain periods within the last
year and a half?—I do not think it ever was so large as within the last t?vo
months.

2554.	Larger than at the commencement of this year ?—I think so.

2555.	Larger than at any period of last year?—Larger than at any period of
my experience.

2556.	Do those bills discounted in such large quantities consist of bills sent up
from the country, or has the increase taken place in bills for London transaction# ?
—The increase has taken place both from the country and in London.

2557.	Has the increase of country paper been in a larger ratio than the increase
of London paper ?—I think the increase from the country, perhaps, may have been
rather larger; but the increase in London has been very considerable.

2558.	Since when has the increase in London taken place?—It has been gra-
dually increasing for the last 12 months; but it has been, as I have stated, larger
"within the last two months than I ever before knew it.

2559.	Did the increase in the country paper take place prior to the increase in
the London paper ?—I think not.

2560.	Did not the augmented commercial activity which has been observable
•within the last year and a half or two years, first show itself in the manufacturing
districts of England rather more than in London ?—I am not aware that such
increase of business showed itself first in the manufacturing districts.

2561.	The Committee are to understand that the result of your opinion is, that
the increase has gone on pari passu pretty nearly the same ?■—Nearly so. If there
be a difference, it is rather in favour of the manufacturing districts.

2562.	The Committee wished to ascertain in what districts of the country this
increased activity first manifested itself according to your judgment ?—It is difficult
to answer with accuracy ; there has been great activity for the last two years in the
manufacturing districts of Lancashire and Yorkshire; also in the iron districts.

2563.	.The Committee may consider the result of your judgment to be, that
there having been a great increase of activity in the commercial and manufacturing
districts in the country and in London, you think the increase has been somewhat
greater in the manufacturing districts of the country, and at somewhat an earlier
period ?—That may have been the case; but it is extremely difficult to define with
accuracy.

2564.	That is the result of your opinion, but not very strongly expressed?—
Just so.

2565.	In the increase of bills sent up from the country for discount, has that
increase taken place through the agency of joint stock banks, or of the old private
banks?—Chiefly through joint stock banks, but not confined to them.

2566.	Supposing the amount of bills sent up for re-discount in London, or dis-
count, by private banks and by joint stock banks, to come into operation as a
fixed quantity, has that fixed quantity increased or diminished?—The fixed
quantity has increased; but whether the relative proportion to the quantity
in London is a matter of uncertainty. The proportion of our business for

0.92.	y 4	discounts

Samuel Gurney,
Esq.

22 July 1836.162 MINUTES OF EVIDENCE TAKEN BEFORE THE

Samvd Gurney, discounts from the manufacturing districts, 20 years ago, was as great as it has
Esq.	been of late.

—------2567. Do you mean to say from the same parties ?—From the same line of

as July 1836. country ; the parties are somewhat changed.

2568.	Do you mean to say there has not been an increased amount of bills sent
up from the country since the establishment of joint stock banks ?—There has
been an increased amount; but 1 do not think that there has been an increased
proportion as compared with what was the case 20 years ago.

2569.	You have stated that there has been within a very short period a very
great extension of discounting business, consisting of bills sent up from the country %
—There has.

2570.	Of that great increase, has the larger proportion been through the agency
of joint stock banks ?—Certainly.	>

2571.	Have the joint stock banks resorted, as far as you know, more freely to
the system of procuring money by discounting, on the London market (you having
perhaps more extensive experience than anybody else), than was formerly the
practice of private bankers?—Upon the whole, I think they have; bijt it is a very

»	difficult question to answer with accuracy. In former years the amount of dis-

counts for private banks was very large in the London market, especially from the
year 1808 to 1815.

2572.	Do you think that there is any perceptible difference in the quality of
the paper that is sent up from the joint stock banks, speaking of that generally as
compared with what was formerly sent up, or is now sent up by private banks ?—
I think that the paper that we now receive from the joint stock banks in Lanca-
shire and Yorkshire, is of a better and more'legitimate description than the paper
that we used to receive from the private banks many years ago. There are,
however, exceptions.

2573* When you speak of legitimate description, what do you mean?—I mean
that the bills arise from transactions more purely commercial, and from parties
more adequately capitaled to meet their engagements. This, however, is speaking
generally.

2574.	That relates to former times ; what is your opinion as to the comparison
now ?—The bills sent for discount to the London market are generally very good,
whether from joint stock or private bankers, perhaps equally so.

2575.	Has any change in the character of that paper taken place within the
last two or three months; has it become better?—I am not aware of any particular
change.

2576.	Chairman.] When you speak of the quality of this paper, do you refer as
well to the number of the individuals who are concerned in that paper, as to the
fact of its representing bon&jide legitimate transactions ?—I mean that the parties
are unexceptionable in themselves, also that it represents transactions highly
creditable and respectable.

2577.	Mr. Clay.~\ Do you think that, speaking generally, there has not beeii
a large amount of joint stock bank paper discounted on the London market,
which it might have been difficult to discount without the indorsement of tfiose
large associations ?—There has been paper discounted in the London market, that
would not have been current without the indorsement of joint stock or private
banks ; this arises from all the parties to the bills residing in the country, and not
being known in London. The paper may, however, be of equal character; there
is not now a larger proportion of such paper than was the case formerly.

2578.	Are the Committee to understand that that has not happened to a consi-
derable extent r—It has happened to a considerable extent.

2579.	Have not bills been discounted upon the strength of the indorsement of
joint stock banks, to which the private bankers of former times would not have
put their names ?—Not to any important extent.

2580.	Have not bills to the amount of some thousands of pounds, of a cha-
racter like this, been seen in the London market, with the indorsement of joint
stock companies ?—Certainly not to a great extent. Some such paper has come
up, which we should not have discounted without such indorsement, but inasmuch
&s it was so indorsed, we have passed it without much inquiry.

2581.	You have given a degree of faith to the indorsement upon the bill, which
you would not have given to the bill itself?—We have.

2582.	Chairman.] Is that degree of faith greater than you would have given to
former Lancashire paper, supposing it sent to you bearing the indorsement of one

ofSELECT COMMITTEE ON JOINT STOCK BANKS. 163

of the respectable houses which then existed ?—It has always been the case that Samuel Gurney,
the indorsement of such houses would have induced us to discount it.	Esq.

2583.	Mr. Clay.'] Would those houses have discounted that paper and sent it	mnV . .■
up to you ?~I cannot say, but I presume that they would. 22 July 1836.

2584.	The Committee are to understand the result of your opinion td be, that
the joint stock banks have not, as far as your judgment goes, given currency
to much paper of a doubtful character?—-I think they have not to any great
extent. ■

2585.	You qualify that by saying, that to some extent it may be true ?—To
some extent it is true.

2586.	Chairman.] Supposing one of those joint stock banks managed inconsi-
derately had sent up a certain proportion of their bills to London for discount, do
you think they would send their best or their worst ?■—It would depend upon the
state of the money market, and the character of the establishment by which they
are sent to London for discount.

2587.	Is it not possible that in those transactions in which they send up by
preference to you their best bills, the character of the bills bearing their indorse-
ment in the London market may be good, and yet the amount of bills which they
hold generally may be of a lower character than those which were ordinarily taken
by previously existing banks?—I think that is not a necessary conclusion. Speak-
ing in general, the discount business has been conducted by those establishments
very well.

2588.	Mr. Clay.'] Admitting the high importance of your testimony as to the
quality of the bills sent up, is it not quite conceivable that those establishments
might very greatly promote over-trading, and an injurious extension of credit
without anything in the quality of the bills themselves immediately leading to the
detection of such circumstances ?—I quite think that may be the case.

2589.	Is it not quite consistent with that opinion, that the bills sent up to you
should both have respectable names upon them and appear to be for real transac-
tions ; that individual customers of those banks may have received a far greater
amount of assistance in their business than they had previously received from
private bankers, and been tempted by such accommodation to transact business
much more largely than was prudent ?—I think it is quite consistent, and
I have no doubt that it is the case in many instances.

2590.	Will you explain how that is done 1—It is done by the advance of capital,

independent of the discount of bills.

2591.	It is perfectly consistent with the goodness of the bills discounted, that
the operation of those joint stock banks might be a dangerous system as to over-
trading ?■—It is quite consistent.

2592.	Mr. Clay.—-Has there been any change of late in the state of the London
money market ?— There has been a gradual increase in the value of money.

2593- What do you consider to be the current rate of money?—It is 3I to 4J
per cent.

2594. To what do you attribute that altered state of the money market in
London ?—One cause has been the exportation of bullion to foreign countries ;

but I apprehend the main cause is, the circulating medium existing in Europe and
the mercantile parts of America is not increased in proportion to the transactions,

and that the same quantity of circulating medium, or perhaps even a reduced
quantity, has to perform a much larger amount of transactions

2595- Would not the effect of it, if owing to that to which you alluded, be
rather indicated in a fall in the money prices of commodities ?—That is the
tendency of it; but there are conflicting causes that have marvellously maintained
the value of commodities generally.

2596.	A portion of money employed in discount in the London market is
sent up from different parts of the country ?;—'Yes, a great deal of cash comes to
London to be so employed.

2597.	From some parts of the country you have bills sent up for discount, and
from other parts cash to employ in discounting?—Yes.

2598.	Has that supply of money become less within a short period?—Not at
all, I think.

2599.	I* is n°t to the diminution of money sent up you attribute the rise in the
London market?-—Not at all.	^

2600.	Depending upon the part of the country in which they are sflaate ?—In
degree so.

0.92.	z	2601. From164 minutes of evidence taken before the

SamuelGumey, 2601. From the east and south of England, have you much money sent up?—
Esq.	We have a great deal.

; - 2602. From the north and north-west of England you have bills sent P—From

32 July 1836. the north and north- west we receive bills for discount; but we have connexions
in the north and north-west that send up cash also.

2603.	Depending upon the locality of the bank?—-In great degree it is so.

2604.	When you state that there has been an exportation of bullion, you con-
clude that from the mode in which such a fact would operate on the transactions
of the Bank of England ?—Yes.

2605.	Has there been a diminished issue of late ?—I think there has.

2606.	At the increased rate of interest there has been no diminished facility of
discount at the Bank of England?—We have no diminished facility at the Bank
of England if we pay their price.

2607.	In what mode does a difficult state of the money market manifest itself}
is it by rendering persons who have money at their command, fastidious in the
choice of their bills, or making them take bills which have a shorter period to
run?—We have had no state of the market for some years, in which a scarcity
of money could be truly said to exist 5 it has resolved itself into a question of
price only.

2608.	Supposing the difficulty of obtaining mcmey to become more serious,
would it not be indicated by an increased fastidiousness as to the length of bills
or the nature of the indorsements ?—If it is accompanied by that which shakes
credit, such would be the case.

2609.	The same paper which would be discounted six months ago will be dis-
counted now without increased difficulty ?—Yes, if the holders are willing to pay
the increase of price.

2610.	You recollect the period of the panic in 1825 ?—Perfectly.

2611.	Was not that a period when it was difficult to obtain money on the best
bills?—It was a period when it was difficult to obtain money on the best bills;
but I do not think that the panic is to be looked back to as probable to
occur again, the rate of discount not being limited by law to five per cent., and
the good understanding between the bank and the moneyed interest would be a
prevention of alarm to the same extent, even under similar circumstances.

2612.	Supposing a state of things to occur, for instance, in which there should
be any doubt thrown on the credit of one or two joint stock banks ?—That has
been the case already.

2613.	Supposing the same thing to occur much more strongly, cannot you con.
ceive a state of the London market in which it might be difficult to obtain money
on bills having the indorsements of such establishments ?—I can contemplate a
state of things in which price would not settle all the difficulty; but if the bills
were of an undoubted character in themselves, they would not be the less current
because so indorsed.

2614.	Would not the result from that opinion be, that a properly conducted
establishment, whether a private or a joint stock bank, should have some Govern-
ment securities or Exchequer bills, on which always to rely as a resource in a
moment of such emergency ?—Experience has shown that that is not needful;
bills of exchange are quite as good a security to hold in time of difficulty as
Exchequer bills or stock ; in most respects very much better.

2615.	Cannot you conceive a state of things in the money-market, a state of
mercantile discredit, for instance, when it might be possible to procure money on
Government securities, when it could not be procured on private security in the
shape of bills ?-—Such difficulty may possibly exist under very peculiar circum-
stances ; but I repeat my opinion that bills of exchange have proved themselves to
be a better investment for bankers than stock or Exchequer bills.

2616.	It is quite intelligible why in ordinary times bills of exchange should be
a preferable investment for money, inasmuch as there is no risk of loss by variation
of premium in the purchase and re-sale ; but would you wish the Committee to
suppose that in the case supposed by the question, of a great degree of mercantile
discredit and doubt, an amount of Exchequer bills would not be a more certain
security on which to raise money than the bills of private merchants?—That is a
difficult question to answer ; I doubt it.

2617.	Chairman.] Supposing a period of difficulty to arise, and two country
bankers came up to London, one who could exhibit Government stock to the
extent of 25,0001, and 25,000 i. in bills of exchange, and the other banker exhibiting

50,000/.SELECT COMMITTEE ON JOINT STOCK BANKS. 165

50,0001, in bills of exchange only, which do you think would have the best means Samuel Gurney,
of procuring accommodation in the London market to pay his engagements ?—My	Es1-

apprehension is that they would both get their supplies upon any particular emer----

gency : it is my judgment that to a banker a good supply of bills of exchange of 22 1 3®"
first rate character is a better investment for his funds, for which he is liable to be
called upon on demand, than Exchequer bills or any Government security,

2618. Mr. Clay.~\ You mean that answer to apply without reserve as well to
ordinary times as to periods of commercial doubt, difficulty, and distrust P—I
apply that without reserve to all circumstances.

2019. Have you the means of forming a judgment, or can you give the Com-
mittee any means of ascertaining the comparative value of the bills sent up to the
London market, or bills discounted in the London market, between this and any
given former period which you can state ?—Many years back we used to have to
discount remittances from Lancashire to a very large extent; it was as large a
proportion of our business 25 years ago as it is now; the amount, however, both
from Lancashire and London, are much larger now than they were then.

2620.	You state that there is a very great increase, in your opinion, in the bill
transactions of London ?—Undoubtedly that is the case.

2621.	Have you estimated that on any given ratio; that it is one-third or one
half more, or in what proportion ?—I think the amount of discounts in this town
is double what it was five years ago.

2622.	Compare that with two years ago ?—I cannot answer with any accuracy.

2623.	Chairman.] You have suggested in the early part of your evidence cer-
tain evils and inconveniences, which in your mind appear to require a remedy, as
arising on the present law and practice of joint stock banks; do you think that
those inconveniences are extending themselves in the country ?—'They are at this
time.

2624.	Do you consider that they call for an early remedy ?-—I think they do.

2625.	Do you consider that public inconvenience would arise from the post-
ponement of such a remedy as it would be desirable to introduce ?—I think that
public inconvenience would arise.

2626.	In reference to the system of joint stock banks, do you conceive it would
be an improvement, or a disadvantage, to the present system if joint stock banks
were permitted to be established with a limited liability ?—I think it would be
a very serious addition to the evils of the case.

2627.	On what ground do you form that opinion?—I think we should retain
all the evils of both systems, and none of the advantages of either.

2628.	Mr. Clay.'] Have the goodness to state what are the evils we should
retain of the system of private banking ?—We should have a security inferior to
that which most private banking establishments give ; and, generally speaking, a
less safe system of management.

Martis, 26° die. Julii, 1836.

members present.

The Right Hon. the Chancellor of

the Exchequer,

Mr. Clay.

Mr. Baring.

Sir James Graham.

Sir Thomas Fremantle.
Mr. Strutt.
Mr. Goulburn.
Mr. Loch.

Mr. Poulett Thomson.

The Eight Hon. the CHANCELLOR of the EXCHEQUER,

in the Chair.

Mr. Samuel Bignold, called in; and Examined.	Samuel Bigmld.

26 29. Chairman.] WHERE do you reside?—At Norwich.	u

2630.	Have you long resided there ?—All my life.	«6 July 1836.

2631.	Have you been connected with the banking business at Norwich?—Since
the formation of the joint stock bank at Norwich I have.

0.92.	z 2	2632. Toi66

MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.	2632. To what joint stock bank do you allude ?—The one now dissolved, the

Samml Bignold. Norfolk and Norwich.

.	2633. At what period was that joint stock bank founded, and when did it cease

.26 July 1836. to exist?—It was founded in April 1827, and it ceased to exist in February of
the present year.

2634.	In what capacity were you connected with that bank ?—I was a director;
I was nominated the resident director; that was the character in which I stood as
a public officer.

2635.	Will you describe to the Committee your functions as resident director ?
—I do not know that I had any particular functions, more than being intimately
connected with the commercial concerns of Norwich ; my services, from local
information, were deemed of value to the bank.

2636.	Did your functions as resident director differ in any, and what, respect
from the functions administered by your co-directors ?—As resident director, I
was always on the spot, and could be referred to for information by the clerks ;
I had large other pursuits, and therefore could give but little time to the banking
business.

2637.	Except as far as your being resident on the spot, did you exercise any
control over the affairs of the bank greater than was exercised by your co-
directors?—I did not.

2638.	In all respects they were equal with yourself in authority and power ?—I
conceive so.

2639.	Who were the other gentlemen who were directors?—Mr. Edward
Temple Booth was the chairman, Mr. George Morse, Mr. Hammond Fisk (now
deceased), Mr. Robert Gilbert

2640.	How many shares were there provided for in the original formation of
the branch, and what was the value of each share One thousand shares was
the original number, at 100/.each.

- 2641. How many of those were issued on the commencement of the bank?—
I think about 700.

2642.	Were those issued before the commencement of the business of the
bank, or subsequent to the commencement of banking operation ?—I think the
far greater proportion of them before; there might have been some hundred or
150 afterwards ; I cannot give any precise number, but I think there were some
issued afterwards,

2643.	Were all the shares of the bank issued at the time it ceased to exist?—
No, not more than 700 or 720.-

2644.	With respect to those shares which were issued after the commencement
of the banking business, and prior to the dissolution of the company, were those
shares issued at par or a premium ?—There were some few issued at a premium ;
I think in the year 1829.

2645.	Do you know how many ?—No; I should say there were not above 100,
I think.

2646.	Do you know at what premium they were issued ?—£. 10 premium.

2647.	To what account was that premium carried ?—To the profit account in
the bank.

2648.	Upon which a dividend was declared ?—The general profit account of
the bank. /	■ ■

2649.	What was the first dividend you declared, and at what time was it
declared?—The first dividend was six per cent., declared up to April 1828.

2650.	You were then a director ?—I was then a director.

2651.	Was it under your authority that dividend was declared, in common
with the authority of your brother directors? Yes ; it was at a meeting of direc-
tors, on a general view of the position of the bank as warranting such a
dividend.

2652.	Upon what species of account was that dividend declared ?—We had
ascertained our profits, and their amount, to be sufficient to declare that dividend,
and leave a very handsome surplus.

2653.	Had you ascertained also your losses ?—As far as my recollection serves
me, we had no losses the first year.

2654.	On that occasion there was no writing off any bad debts ?—None ascer-
tained nor known, as I recollect; the chairman communicated to the proprietors
that there had been no bad debts the first year.

2655.	Had there been bad debts that first year, should you have felt it your

> dutySELECT COMMITTEE ON JOINT STOCK BANKS. 167

duty to have written them off before you declared the dividend ?■—Yes, of course	Mr.

we should have charged them to the doubtful debt account.	Samuel Bignoti,

2656.	Was there such an account kept?—Yes, as soon as doubtful debts arose, -———
but I am not aware of any at that time.	#6. July 1836,

2657.	Was there an account also kept under the head of bad and irrecoverable
debts ?—No, I think they were all carried to doubtful debts.

, 2658. Was there a dividend declared the second year?—Yes; there have been
dividends every year till the close.

2659.	What was the dividend in the second year?—I cannot charge my
memory; not so much as the first; I think it was five per cent. I have no
memorandum of that nature which enables me to give a precise answer.

2660.	Were there any bad debts contracted in the second year ?—Undoubtedly;

a very heavy debt in the year 1828-29.

2661.	Were those bad debts written off before the declaration of the dividend ?

-—There had been a heavy failure; I should say the amount of the loss the
company would sustain had not been ascertained ; there was a belief for a very
long time that the dividend on that debt would have been a very considerable one,

thereby not rendering it so destructive as it proved to be.

2662.	Was the failure and loss to which you refer, the failure of a Mr. Batley?

•—It was.

2663.	Was the loss that was sustained at that time upwards of 10,000/.?—>

Yes, I apprehend the proof was much more than that.

2664.	£• 16,000?—-I think it was thereabouts.

2665.	Were there any other losses sustained in the second year ?—I do not
recollect that there were.

2666.	Was that amount of 16,000 I. written off before the dividend was
declared ?—It was known there would be a considerable loss upon that debt, but
it was not known to what extent.

2667.	Was any portion of it written off?—I have no doubt the profits of that
year would bear a portion of that loss.

2668.	Was a deduction made from the profits before the dividend was
declared ?—The view the directors took of that affair was this: they had a concern
in their hands producing a certain profit; for the one year the losses might be a
little more, and for the other year a little less; if they had gone on, they
conceived the profits on the average of time would produce the dividend
declared.

2669.	What was the amount of paid-up capital at that time?—I thihk about
20,0001.

2670.	But a loss had been sustained by the actual bankruptcy of a customer of
the bank that was calculated at 16,000/. ?—The proof of the debt was to that
amount, but we did not know the amount of loss.

2671.	There was a debt proved to the amount of 16,000/. against the estate of
a person who was bankrupt ?—There was.

2672.	The whole capital of the bank at that period was little more than
20,000/.?—That was the fact.

2673.	Was there no deduction then made from the profits of the bank with
reference to that loss, and was the only calculation made that possibly the future
profit would guarantee that ?—'There must have been a deduction, for a dividend
of five per cent, on the capital would not absorb all the profits: if the profits were
4,000 /. a dividend of five per cent, would absorb only 1,0001.; that would leave
3,0001, to go against that loss.

2674.	Do you conceive the profit which had been made by the bank at the
time of declaring the second dividend was such as would not be absorbed by the
loss sustained in the bankruptcy of Batley ?—I cannot now carry back my impres-
sion of what might be our view at the time ; but I know the bank had very much
increased its connexions, and was deemed to be thriving in its business, with the
exception of that loss.

2675.	Are you aware what was the actual loss sustained upon that affair ?—I
cannot state what was the ultimate loss.

2676.	Was it 10,000 /. ?—I cannot say; I never investigated the fact; there has
been a large dividend.

2677.	Whether the loss was 1,000/. or 5,000 /. or 10,000 I. you cannot say?

—I know it was more than 1,000/.; but I cannot define whether it was 5,000/.

or 10*000 /., or what it was.

°-92-	z 3	2678, Howi68 MINUTES OF EVIDENCE TAKEN BEFORE THE

trfnLtrmid. 26-8. How many years were you a director ?—-To the close of the bank.

2679.	You cannot at present inform the Committee what was the amount of
a6 July 1836. loss sustained in that large transaction?—I am not able to say what was the loss

in that identical transaction.

2680.	Were there any other considerable losses sustained during that year?—
I think not; none occur to me.

2681.	What was the dividend declared on the third year?—I do not carry in
my recollection the annual dividend; it varied from, I think, four to six, or one
year I think it might go to seven per cent.

2682.	In that third year were there any losses sustained ?—That I cannot
charge my memory with.

2683.	Do you know a person of the name of Keer, of Framlingham ?—I do.

2684.	Was not there a very large loss sustained by him ?—Yes; he was an
agent.

2685.	Did not the amount that was due from him exceed 21,000/.?—I think
not.

2686.	You cannot state how much ?—I cannot, for I did not prove the debt,
nor take any management in the affair of Keer in any way.

2687.	The question now refers to the claim of the bank against him?—I really
cannot state what it was. I think it was not so much as that stated ; there was
a large sum that the bank was defrauded of by its agent at Framlingham there is
no doubt.

2688.	It was a considerable sum ?—It was j I should say near about half the
sum quoted.

2689.	Was there a loss sustained also in the affairs of a person of the name of
Cremer ?—Not separately; he was in connexion with Batley.

2690.	The loss sustained by him was included in the account to Batley ?—Yes;
that is my impression.

2691.	The books of the bank would show what the amount of loss sustained by
the agent at Framlingham was ?—Certainly.

2692.	Do you know a man of the name of William Tuck?—I did know him.

2693.	Was there not a considerable loss sustained by him ?—There was.

2694.	Do you know to what amount?—About 6,500/.

2695.	Do you recollect in what year that was ?—I think the year 1831 or 1832,
I cannot define which.

2696.	Have you agencies in different parts of the county?—We have six or
seven.

2697.	Have you an agency at Dereham ?—We have.

2698.	Was there a considerable loss by the account kept with a man of the
name of Cooper, at Dereham ?—I think not; I think there is' a dividend that very
nearly protects that loss.

2699.	He was insolvent ?—He was.

2700.	Was there a loss sustained at Dereham also to a considerable amount
upon the account of a man of the name of Miles ?—No, very little loss upon that
account; he was insolvent, but the bank held a judgment that enabled it to pro-
tect itself.

2701.	The amount of losses on those various accounts would appear upon the
books of the bank ?•—Yes, all of them, of course.

2702.	Are you acquainted with a man of the name of Boardman ?—I am.

2703.	What was his condition in life ?—He was a respectable tradesman in
Norwich, keeping a shop, and the principal shop in his line in the city.

2704.	What was his trade ?—A large woollen draper and tailor ; he kept one
of the principal shops in one of the principal parts of Norwich.

2705.	He was unfortunate ?<—He became insolvent, and compounded with his
creditors.

2706.	Are you aware what, loss was sustained by him?—That is not finally
settled ; I think it will be about 1,000 I.

2707.	Was there any guarantee for that account to the bank ?—Yes, there was.

2708.	What was the guarantee ?—It was for a few hundreds, I think, by a
cousin.

2709.	What do you suppose the total amount of those losses to be?—Of those
to which allusion has been made, about 30,000 /. or 40,000 /.

2710.	What do you conceive the total losses of the bank have been ?—I do not

carrySELECT COMMITTEE ON JOINT STOCK BANKS. 169

carry in my recollection what have been the total losses; there have been those
enumerated, I know.

2711.	Did they considerably exceed the whole of your subscribed capital?-
No, I think not, if there be taken into view the amount credited for the unappro-
priated profits and accruing dividends on the debts.

2712.	The allusion is made to the amount of paid-up capital on the part of the
company, which you have stated to be about 20,0001.; the losses referred to
exceed 30,000 /.; the whole of the capital then was absorbed in the losses ?—The
profits appropriated and not disbursed at the time exceeded 30,000/.

2713.	Not referring to profit, but to the subscribed capital that was entrusted
to the management of the directors, the whole of that subscribed capital was
absorbed in the losses ?—No ; I should say it would still remain if the losses were
protected by the amount of profits not disbursed.

2714.	During the years that the bank made those bad debts, were there con-
tinued dividends r—There were dividends every year till the last.

2715.	In the year 1829, you have stated that shares were issued at a premium
of 10/.?—Yes; that arose in this way : we had a bank in Norwich closed, and
that produced a very large accession of business to the joint stock bank; the
public were eager for shares, and we thought the prospects of the bank were
improving, and therefore we determined that any person applying for shares
should pay a premium of 10/., which was credited to the profits of the bank.

2716.	Were the losses which had been so sustained year after year communi-
cated to the shareholders r—Any information the shareholders had a desire to
receive, they had an opportunity of receiving at their annual meeting.

2717.	Did you make a report to the shareholders?—We made a report of the
result of our business, as it regarded the profit and expense, how much the dividend
would absorb of this profit, and what we should do with the rest; viz. that we
must apply it to the bad debts, which they must be aware, in a new concern, and
in new hands, must be large.

2718.	Did you ever state the amount of bad debts ?—If the inquiry had been
put, I am convinced we should.

2719.	Are you aware whether it was ever stated ?—No, I am not'aware; but
the losses in a provincial bank are so much matter of notoriety, I know that it
was as much known to every proprietor as if they had turned over the leaves of
the ledgers.

2720.	Do you mean that the losses sustained during the year were written off
before a dividend was declared r—If a debt was ascertained to be a bad or doubt-
ful debt, it was written into the doubtful debt account, before the balance was
struck.

2721.	That was writing off from that account on which the profit was declared
to another and separate account ?—Yes.

2722.	Does that account now exist ?—Yes; every document connected with the
bank now exists.

2723.	Mr. Clay.~\ The last question was, whether from the profit and loss you
wrote off the bad and doubtful debts; you did not do that ?—No, we did not read
to the proprietors the bad debts of the year.

2724.	You did not place it on a profit and loss account?—No, we carried it to
the doubtful debt account; and if we showed a profit on one of 6,000/. (from
5,0001. to 6,000 L, or 7,0001, per annum, was the profit of the last three years),
if our dividend consumed 1,200 /., there was the rest to go against the bad and
doubtful debt account, the difference of 4,8001.

2725.	Chairman.'] Was Mr. Batley's debt written off?—Yes, to the doubtful
debt account.

2726.	It was after that deduction the balance was struck and the dividend
declared?—If we had viewed that as a complete loss there would have been no
dividend declared, but it was in consequence of the prospects of the concern
it was thought fit to make a dividend.

2727.	Was there a difference of opinion among the directors as to whether any
dividend should be declared ?—No, we were all in favour of a dividend.

2728.	Mr. Clay.~\ You kept of course a profit and loss account?—We did.

2729.	What items were placed to the debit of that profit and loss account ?—
The charges of management and clerks, the office rent, the charge of the London
agent for conducting the account, the charge of various country agents (six or
seven of them), and any other item of expense, stationery and so on.

0.92.	,	z 4	2730. Was

Sir.

Samuel Bignold.

26 July 1836,17Q MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.	2730. Was there at any time any sum carried from the doubtful debt account,

Samuel Bignold. an(j therefore placed to the credit of the doubtful1 debt account and to the debit
„ ' . „ of the profit and loss account ?—Yes, I think one sum of 30,000 L was earned to
u ^	the doubtful debt account and to the debit of the profit and loss account.

2731.	In what year was that carried ?—I think about a twelvemonth or -.18
months ago.

2732.	That will be in the year 1834 or 1835 ?—Yes.

2733.	Was that the first instance in which any sum had been so carried from
the doubtful debt to the profit and loss account ?—Yes, that was the first.

2734.	IJad you an account which you called reserved profit account ?—'-No;
I recollect no other than the profit and loss account and the doubtful debt
account.

2735- It would have appeared at the time you wrote off that sum of 30,000/.
to the debit of the profit and loss, that there would have been a previous large
balance on the profit and loss account ?—Yes.

2736.	Of profits undivided ?—Yes.

2737.	Do you recollect what the amount of it was at the time ?—-No, I do
not.

2738.	Was it morte or less than the! sum written off?—Considerably more than
the sum so written off.

2739.	The reserved profits amounted to more than 30,0001. at that time ?—
—Yes. • . '

2740.	You could of course furnish the Committee with an account of the bad
debts as they occurred, from the establishment to the dissolution of the bank?—
Yes, I conceive they are all to be ascertained from the books.

2741.	You could state, beginning with Batley's bad debt, in order the bad
debts as they occurred, the amount of them, and the periods at which they were
respectively written to the debit of the doubtful debt account ?—Yes, I apprehend
that information is all capable of being obtained.

2742.	You can also furnish the Committee with a general view of that whole
account, either give in detail or now in its result, showing what the balance is at
present standing to its credit ?—I do not know; there are many postings, and the
accounts are now in a winding-up state.

2743.	Making every allowance for sums which are yet probably to be received,
it would be in your power to show the exact state in which that account now
stands in the books : for instance, if it should appear that'there was 150,000 I. of
had debts incurred, and 100,000 I. of assets recovered, that would leave an appa-
rent balance to the credit of doubtful debts of 100,0001. ?—Yes.

2744.	And then the 30,000 I. to which you allude should appear to the credit
of doubtful debts, which would leave a balance undisposed of, of 20,000 /. to the
debit of the doubtful debt account ?—There is another point; there may still be
very considerable sums recovered from dividends and from securities in the
doubtful debt account.

: 2745' It would be in your power to give the Committee an account in the way
put, including any items already received, saying nothing of course as to the
chance of further recovery from the insolvent estates?—The whole accounts are
in a perfect state, therefore any information could undoubtedly be given; any
information that the directors might be advised to give.

. 2746; You cannot inform the Committee at the present time the state of that
account, and upon that account the loss incurred during the transactions of the
bank?—No, I cannot.

2747* But an account could be furnished ?—The accounts have been accurately
kept; no doubt they are in existence.	'

2748.	You state Batley's loss at 16,000 /.?—Yeis, that is my impression.

2749.	The Committee had an impression that there was 30,0001, from the
evidence of a previous witness?—My impression is that it is 16,000/., but it is
nine years since.

2750.	A previous witness has stated the amount, after all the amount recovered,
to be 16,000/., but the whole amount 30,000/.?—The previous withess is more
closely acquainted with it than I have been ; my idea may be unfounded.

2751.	It has also been stated that that loss occurred previous to the declaration
of the first dividend ?—J think he must have been then under a mistake.

2752.	It occurred before the declaration of the second dividend?—Yes; I
think it was July 1828 it occurred.

2753. CanSELECT COMMITTEE ON JOINT STOCK BANKS. 1.7.1

2753.	Can you state the exact amount of the dividends in each year?—I could	Mr.
ascertain that, but I cannot state it at this moment. Samuel Bignold.

2754.	Chairman.] What was the amount of the reserved fund provided for " "
under your deed of settlement in the time during your management ?—I have no	1 ® '
recollection of there being any reserved fund.

2755.	It appears by the deed of settlement before the Committee that it pro-
vides that, on the 5th July 1828, out of the profits which shall have accrued to
the company during the establishment thereof up to the 5th day of April 1828,

and on the 5th of July in every year after the year 1828, the profits which shall
have accrued to the company during the preceding year ending on the 5th of April
immediately preceding, the board of directors shall set apart such a sum as the board
shall think fit, not being less than 25 per cent, on the amount of such profit for
the time being, and shall form therewith accumulations thereof from time to time
at compound interest, the fund to be called a reserved fund ; was any such fund
formed ?—There was no such fund formed.

2756.	Under no circumstances and at no time?-—Under no circumstances and
at no time.

2757.	What are the regulations under which the election of directors and the
filling up vacancies were authorized to take place?—They are expressed by the
deed ; I do not carry them in my memory. One of the first directors died in
the year 1830. At the first meeting that occurred afterwards, the annual
meeting of the proprietors, it was stated that, as they would be aware, a director
had died, and it was hoped they would supply his place; they did not, however,

proceed to do that. Again, subsequently, a director disqualified, and the same
thing occurred. We had the same desire expressed on the part of the directors
that some gentleman would qualify and come in his place, but none did so.

2758.	You consider that the act of the proprietors, in declining to act on that
information ?—The directors had no means of compelling persons to come into the
direction, they could only call for them.	x

2759.	Do you conceive, at the time of the periodical declaration of the
dividends, the state and transactions of the bank, taking into account the losses
that you had sustained, were such as to authorize such declarations of dividends?

-—Yes; from looking at the general position of the bank, with respect to its
prospects, and the fair estimate of goodwill which may be always calculated from
a concern which had got together 1,500 accounts, such as those were.

2760.	When you state prospects as being the foundation of dividends, do you
mean with the state of the accounts at the time the balance was struck, the future
prospects, by reason of the extended business and connexion of the bank ?—Cer-
tainly, on the future prospects, the profits to be realized by a close attention to
management.

2761.	Do you consider that a calculation, not from the profits the bank has
made, but with a view to contingent profit, which may be never made, is the
principle on which a dividend can or ought to be declared ?—It is not for me,

perhaps, to give an opinion upon that point; that was the principle on which we
acted.

2762.	W"as that the principle on which you acted in those continuous years?—

We put ourselves always in a situation to meet the dividend on the bank and the
capital of the proprietors, and we made a dividend on the general estimate of the
value of the bank and its assets.

2763.	The bank is now extinct, is it not?—The bunk closed its business in
February.

2764.	A return has been made to this Committee of its non-existence ; what
steps were taken to dissolve the company ?—Its dissolution arose in this way : we
had but three directors. Mr. Gilbert had disqualified, and Mr. Fisk had died ;

and at several annual meetings of the proprietors no individuals had been elected
to supply their places. Mr. Morse became in impaired health, and had come to
London to consult physicians ; he was recommended to go to Hastings for four
months, and probably to the Continent for two years ; that left only myself and
Mr. Booth. Mr. Morse felt solicitous to disconnect himself from the bank, and a
new joint stock bank commencing about that period, with which a partner of Mr.

Morse, a brewer in Norwich, was closely connected, a treaty was set on foot for

• turning over the business of the joint stock bank to this new banking company.

2765.	Was any public step taken by the directors in order to carry this into
effect?—If there had been, it would have been destruction to every object we had

0.92.	A A	'inMINUTES OF EVIDENCE TAKEN BEFORE THE

Mr. in view ; by proclaiming that purpose, every one of our 1,500 customers would have
Samuel Bignold. come upon us, and a lapse of 15 days might have scattered the whole connexion;

— ~"T the value of the connexion was in preserving it entire.

2 uyi 3	2766. What steps were taken by you and your co-directors to dissolve the

company ?—We entered into a treaty with the new bank to sell them the con-
nexion for a consideration. .

2767.	Did you enter into a treaty with the new bank on your own responsi-
bility ?—On our own responsibility.

2768.	Has the treaty been carried anto effect?—Up to this point it has; of
the instalments in the way of premium to come to us we have received two out of
four.

2769.	What are the Committee to understand by instalments in the way of
premium?—The instalments for the goodwill of the bank.

2770.	Have all those steps been taken by the directors without any communi-
cation with the' shareholders whom they represent ?—Without calling them to-
gether at a general meeting. Nearly every shareholder has individually applied
for information, and is satisfied that the transfer should take place in a smooth
and quiet way ; there is no complaint.

2771.	Is there any provision in the deed of settlement authorizing the directors
to make such an arrangement?—I am not aware that there is.

2772.	It appears that by the 20th clause of the deed of settlement provisions
are made under which, under certain contingencies, a dissolution of the company
may take place ?—I do not carry that in my recollection; I have no doubt it
is so.

2773.	It appears by the deed of settlement " that whenever two successive
extraordinary general meetings shall, upon the recommendation of the board of
directors, have come to a resolution to dissolve the company, the board shall cause
so much of the funds or property of the company as shall not then consist of
money to be forthwith sold, or otherwise converted into money, and shall, out of
the monies then composing the funds or property of the company, pay the debts
due and owing by the company, and shall cause the residue of the said monies to
be paid to and distributed amongst the proprietors and other holders for the time
being of shares in the capital of the company, or their respective executors, admi-
nistrators or assigns, in the proportions in which they shall be respectively entitled
thereto, in such manner, and at such time or times, and under such regulations as
the board of directors, in their discretion, shall think proper, and immediately
after such payment and distribution the company shall be dissolved; and these
presents, and every article, clause, matter and thing herein contained (except this
present provision), shall thenceforth cease, determine, and be void; and that if
25 I. per cent, of the capital of the company shall at any time be lost by the
transactions of the company, the board of directors shall thereupon forthwith call
such extraordinary general meetings as last hereinbefore mentioned, for the pur-
pose of taking the sense of such meetings as to the immediate dissolution of the
company; and if threQ-fourths of the qualified proprietors present at such meetings
shall decide on the dissolution of the company, such dissolution shall take place
accordingly." Do you consider that 25 /. per cent, of the capital of the company
has been lost 1—At the time we entered into the arrangements it was on the
footing of securing our proprietors the whole of their capital.

2774.	Then the consideration you are about to receive will be so employed?—
It will be so employed as far as it is capable of yielding the means of doing so.

2775.	During any portion of the time which you were connected with the
management of this bank, if the profit and loss account of the bank, together with
the amount of losses sustained on the doubtful debt account had been actually
considered, do you believe that 25 per cent, of the capital of the bank would have
been found to have been kept and reserved ?—Yes, I think there cannot be a
doubt that it would ; we always had our hopes of better times, and our expectation
of gain by that which we deemed a beneficial concern, and the connexions we had
formed.

2776.	Do you think, after the failure of Mr. Batley, there was 25 per cent, of
the capital of the bank lost?—I think there was, and every proprietor knew it.

2777.	Then how did it come to pass that this deed being imperative upon the
directors, they did not call this extraordinary meeting and dissolve the company 1
—The proprietors themselves did not require it, and the directors thought that
they should, with their prospects, recover their loss.

2778. DidSELECT COMMITTEE ON JOINT STOCK BANKS. 173

2778.	Did you conceive that that had regard to 25 per cent, of the paid-up	Mr.
capita], or the whole capital?—We conceived it to be 25 per cent, of the whole SamuelBignold.
capital; that would be 25,000/. on 100,000/.

2779.	Had there been a loss of 25,000/. or 25 per cent.?—No, I think not, 2 ^ 183
calling in aid the'profits and the dividends or bad debts.

2780.	Would that be the case if you included your payments from the new
banking company ?—No, certainly not; our arrangements were that we should be
able to accomplish the payment of the whole of the deposits.

2781.	Mr. Clay.] Are all the debts of the Norfolk and Norwich bank paid?—

There are still notes coming in every week, even after the lapse of five months.

2782.	Except the bills and promissory notes in circulation, are all the rest
paid ?—They are all paid in this way ; the directors of the old bank entered into
an arrangement with the directors of the new bank as follows: the new bank to
collect all debts due to the old bank, which the old bank directors consented to
guarantee on their individual responsibility (not pledging the shareholders), and the
new bank to pay all that is owing by the old ; therefore there has been no money
actually passing; it has been merely a transfer of accounts ; every person brought
in his pass-book.

2783.	When you speak of the debts due guaranteed to the bank, do you mean
sums due on overdrawn accounts?—Yes.

2784.	Do the new company take up in any way doubtful debts?—No, nothing
but current accounts.

2785.	They took them upon the guarantee of the directors of the Norfolk and
Norwich bank ?—They did.

2786.	The creditors of the Norfolk and Norwich bank would be divided into
two classes, the holders of notes, and persons who have money on deposits?—

Just so.

2787.	The notes are paid now as they come in?—Yes, by the East of England
bank.

2788.	What amount of notes do you suppose may be now outstanding ?.—The
actual amount, according to the books of the bank, would be something more than
4,000 /.; but it is fair to calculate upon a nine or ten years' circulation some of
them will be out of existence ; there is a return sworn at the Stamp-office up to
February, and a recent return of the present month, that will show how the notes
have come in, and the diminished circulation.

2789.	At the time of transferring the concerns of the Norfolk and Norwich
bank to the East of England bank, do you recollect the aggregate amount of the
deposit accounts ?—I should say it was about 200,000 /.

2790.	That the East of England bank acknowledged itself to those depositors
to be liable to that amount ?—Immediately; they gave them fresh pass-books.

2791.	Acknowledging itself, therefore, to be liable to persons having deposited
money with the Norfolk and Norwich bank ?—'Yes, on a specific day, on the 29th
of February.

2792.	Were the depositors all satisfied?—Yes, every individual was satisfied ;

he came and had his pass-book as soon as the course of business allowed.

2793.	Was security for that money taken by the directors of the East of England
bank ?—They were satisfied with the personal guarantee of the directors of the
Norfolk and Norwich bank.

2794.	Was that guarantee for the whole amount named, or was there a sum of
money or bills or negotiable securities paid over to them ?—We paid over all bills
and cash we had in the house, and turned over to them all debts due to us, and
against which they undertook all the debts that we owed, and for the balance they
accepted the personal security of the directors.

2795.	Do you recollect for what amount they accepted that guarantee ; that is
to say, what was the balance, after putting on one side all the cash and negotiable
securities handed over and the amount of good debts to the Norfolk and Norwich
bank, and placing on the other the sums due to the depositors; what was the
balance for which the new concern accepted the guarantee of the directors of the
Norfolk and Norwich bank?—No, I do not know; we paid them 100,000./, in
cash and bills of exchange on the day the transaction took place, and there Was
200,000/. of debts due to us on the current account, which was turned over to
them.

2796.	On overdrawn accounts ?—Yes; that would make a payment to them of

A A 2	300,0001.;174 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.	300,000/.; then whatever were our liabilities they took them, and they are per-

Samuel Bignold. fectly well content on the arrangement that subsists between us,

~ 2797. The directors of the late Norfolk and Norwich joint stock bank have
26 July 183 . guaranteed to the East of England bank, first, all the amount of over-drawn
accounts, and, secondly, whatever sum would be necessary to make up the dif-
ference between that sum and the debts of the Norfolk and Norwich bank ?—They
. have. I desire to make one remark, that the directors of the Norfolk and
Norwich bank have never derived any advantage to themselves by the transfer of
shares ; they have never had any wish but the benefit of the proprietors ; it may
ultimately wind up with a great personal loss to themselves, but they never have
derived a farthing on their private account, nor had one sixpence by the purchase
or sale of shares.

2798.	Have the proprietors of the Norfolk and Norwich bank received back
the amount of capital they paid in ?—No, they have not, neither has the Norfolk
and Norwich bank received the consideration that was to be paid by instalments;
they have received two sums of 5,000 /.; there are still two of 5,000/. to be
paid.

2799.	Have the proprietors received back any part of their payment?—No.

2800.	Are they applying for the return of it ?—They are content to wait until
the true state of affairs can be ascertained.

2801.	How is it invested?—£. 10,000 is not paid by the East of England bank;
, the 10,000/. which is paid is placed to the account of the Norwich and Norfolk

bank in that firm. I should state, in answer to a question which has been put,
whether any shareholders have been paid, that I paid off one individual 300 I.
yesterday, and paid off another a fortnight ago two shares.

2802.	Did you pay them in full?—Yes; I am myself holding in the proportion
of one-fourteenth of the capital stock, and Mr. Booth and Mr. Morse hold
another fourteenth.

2803.	Who were the last surviving directors ?—Mr. Morse, Mr. Booth and
myself.

2804.	Sir Thomas Fremantle.] Whatever loss falls upon the company will be
borne by the directors ?—The directors have guaranteed it; it is a matter between
them and the proprietors; a great many shares have changed hands at a very
depreciated sum, and I do not know that the directors will feel themselves bound
to pay the present holders a considerable profit.

Mr. Daniel Robertson, called in; and Examined.

2805.	Chairman.] ARE you connected with the National Provincial Bank of
Daniel Robertson. England?—lam.

——— 2806. In what capacity ?—As manager and agent in London.

2807.	Have you been connected with that establishment ever since its original
opening?—Very shortly after its formation.

2808.	What had-been your former occupations?—I have been about 11 years
in banking establishments; I was a short time in the head office of the Com-
mercial Bank of Scotland in Edinburgh, accountant at one of its branches,
accountant subsequently in the Glasgow Union Bank in Edinburgh, and afterwards
inspector of branches of that establishment in Glasgow.

2809.	And how long have you been engaged in the banking business ?—Eleven
years, as already stated.

2810.	Where is the business of the National Provincial Bank of England
carried on ?—In the country, beyond 65 miles; it has a board of control and
correspondence in London.

2811.	Is there a board of directors ?—Yes.

2812.	From the records of the Stamp-office, it appears that you have places
of business at Aberystwith, Birmingham, Brecon, Llandovery, Hay, Bath,
Shepton Mallet, Boston, Castle Carey, Somerton, Biddeford, Southmolton, Tor-
lington, Bury St. Edmunds, Cheltenham, Cardiff, Bridge End, Dursley, Glou-
cester, Hereford, Honiton, Stowmarket, Ipswich, Woodbridge, Lichfield,
Rugby, Tiverton, Wisbeach, Whittlesea, Chatteris, Long Sutton, Worcester,
Sudbury, Wootton-under-Edge, Yarmouth, Bristol, Norwich, Leicester and
Dolgelly; what sort of management have you at those places of business ?—We
have a local board of directors, manager and accountant.

2813.	Is there a local board of directors at each of those places ?—-At some of

themSELECT COMMITTEE ON JOINT STOCK BANKS.

V75

them we have not; we have a difficulty sometimes in procuring a proper person	Mr.

to fill that office, and where a branch is chiefly one of deposit only, a local board Daniel Robertson.
is not so much necessary.	-

2814.	Can you state the names of those places where you have a local board, 26 July 1836.
and the names where you have not ?-—I will state the places where we have a local

board: Bath, Biddeford, Brecon, Cardiff, Cheltenham, Dolgelly, Dursley, Glou-
cester, Hereford, Leicester, Tiverton, Wisbeach, Worcester, Wootton-under-Edge;

those are all.

2815.	What description of persons do you select as local directors?—We
select gentlemen of local influence, unconnected with business.	.

2816.	On what ground do you select gentlemen unconnected with business?—

Because, were they engaged in business, persons in the same line of trade would
not open accounts with us, as their transactions would be overlooked, and their
connexions known to their rivals.

2817.	How do you ascertain that men of influence, unconnected with business,

possess any adequate knowledge of banking transactions, so as to enable your
board of directors to confide to them the direction and management of a branch ?

—As already stated, we have a manager or accountant at each branch, who is tho-
roughly acquainted with the practical part of the business, and the local directors
generally possess the requisite local knowledge of parties to enable us to conduct
our business with safety.

2818.	What control is exercised by the manager over the accounts of the
local directors ?—Local directors cannot transact any business without the con-
currence of the manager. The duties imposed upon them are to see that the
manager and accountant faithfully perform their respective duties, to examine the
cash on hand weekly, and also into the accuracy of the weekly returns before
transmission to London, to review the whole affairs of the branch cnce a week,

and in particular to consider the. different loans, with a view of limiting or
extending the same as circumstances require. In short, to exercise a general
superintendence over every department of the branch, and to report from time to
time as may be necessary to the London board. '

2819.	Is the manager a check upon the local directors, or the contrary?—The
one is a check upon the other.

2820.	Is their joint assent required with respect to the discount of bills or the
making an advance?—Yes. In all cases where there is a difference of opinion
they report to the London board. I can give a copy of our instructions : these
are our instructions to the officers. [Delivering in the same.]

2821.	In the event of their assent, have they an unrestricted power of making
advances, giving accommodation ?—They have a discretionary power as to making
advances to a certain extent, but for any considerable or special advances they
report to and receive directions from the London directors.

2822.	In the places you have not designated as places where you have local
direction, what system of management have you adopted 1-—We have a manager,

who gives security to a considerable amount, and an accountant; and we have
also returns, which they send in weekly, from which we can easily know whether
the branch is prudently managed or not.

2823.	Will you show the Committee one of your forms of weekly statements ?—

We have a statement of liabilities and assets from each weekly in this form [pro-
ducing it], and we have also a copy of every transaction.

2824.	What notes do you issue ?—£. 5, 10 /. and at some places 20 I. notes ;

we have also issued at one place a few 50 I. notes.

2825.	Are all those dated at the places of issue?—Yes.

2826.	Have you as many different plates as you have places of issue ?—We
have five plates, one for each of our London agents.	-

2826*. Are those notes issued at those different branches all dated at the
place where they are issued ?—Yes.

2827.	Are they all made payable there?-—Yes, and in London.

2828.	Have you any agencies or sub-branches ?—We have a great number.

2829.	Where are they?—The Bath bank has three sub-agencies, Shepton
Mallet, Castle Carey and Somerton j Biddeford has two, Southmolton and Torring-
ton ; Brecon has two, Llandovery and Hay; Cardiff has two, Bridgend and
Cowbridge; Dolgelly has two, Mackynleth and Bala; Honiton has Exmouth ;

Ipswich has Stowmarket and Woodbridge; Pwllheli, Tremadoc ; Wisbeach has

0.92.	A A 3	Whittlesea,i76 minutes of evidence taken before the

Mr. Whittlesea, Chatteris, Long Sutton and Hoi beach ; Worcester and Ledbury, and
Damel Robertson Bromyard and Yarmouth, Lowestoft and Halesworth.

„ ~~~ 2830. Does your bank contemplate the extension of the number of those
2 UJ1 3 • branches and sub-branches?—We do.

2831.	You have no defined limits within which you restrict the establishment
of those branches?—We have not.

2832.	What notes do you issue at those sub-branches?—We issue notes of the
principal branch.

2833.	Those notes are not dated at the sub-branch where they are issued,
neither are they made payable there ?—No.

2834.	Sir Thomas Fremantle.] Practically, are they paid there ?—They are
invariably paid there.

2835.	Chairman.'] Have you any rule with respect to the proportion of cash
you keep at any bank or branch or sub-branch as compared with the amount of
the liabilities of that branch ?—We have no fixed rule. At branches which are
remotely situated we keep a greater supply of specie, for instance, at Cardiff and
Aberystwith, and all our branches in North and South Wales.

2836.	When you require cash at any particular branch, what steps do you take
to supply that branch with cash ?—If there is an extra supply at any branch near
it, we order that to be transmitted to the other, and if not we remit from London.

2837.	How do you procure it in London ?—From our agents.

2838.	In what way ?—By an order on our account.

2839.	Who are your agents?—Messrs. Ladbrookes & Co., Spooners & Co.,
the London and Westminster bank, Barnetts, Hoare & Co., Hanbury Taylor
and Lloyd.

2840.	They procure them from the bank ?—We do not know where they procure
them ; that is their business, as they must pay us the money which we keep in
their hands when we want it.

2841.	Mr. Clay.'] Do jou keep a balance in the hands of each of those agents?
—We keep a sum of money to meet our drafts and notes.

2842.	Do they advance you money ?■—No, we always keep them in funds.

2843.	In what way do you keep them in funds 1—They are chiefly kept in funds
by remittances from and payments made in London on account of our branches.
When these are inadequate, we discount; but it will be observed from our returns,
that it is necessary for us to do this to a very limited extent.

2844.	Do you discount with your agents?—We do, and with other parties,

2845.	It is by discounting bills sent up from your branches in the country you
provide funds when they are required ?—Yes, or by the lodgement of other
securities.

2846.	Do you retain a sum in cash at your principal bank in London ?—We
\ keep no money there, nor do any act of banking whatever.

2847.	Where do you keep a sum of money to answer immediate demands?—
In Exchequer bills we have 30,0001.; we have also, as already stated, always a
balance at our different bankers to meet our drafts and notes.

2848.	If any considerable demand were to arise for money, in what manner
would you provide for that ?—In the first place, we have 30,000 /. in Exchequer
bills, which would be immediately available, and we have bills of exchange to a
considerable amount, which we could readily discount.

2840.—

2850.—

2851.—

2852.—

2853-—

2854.—

2855.—

2856.—

2857.—

2858.—

2859.—

2860.—

2861.—

2862.—

2863.—

2864.—

2865.SELECT COMMITTEE ON JOINT STOCK BANKS.

2865.—

2866.—

2867.	Chairman.] What has been your dividend ?—Five per cent.

2868.	What is the principle of the account which you make up previous to the
declaration of the dividend?—I have not got the form of it with me. We state,
of course, on the one side our assets, consisting of bills, overdrawn accounts, cash
credits, bank furniture and property, of every description, and our cash in hand,
&c.; on the other side are our liabilities, consisting of deposits, balances on current
accounts, drafts and notes in circulation, capital, &c. The balance of this account
will then show the profit of the bank.

2869.	How do you strike that balance and deal with bad debts or losses that
have been sustained in a given time ?—Our reserved fund far exceeds the amount
of our losses, which fortunately are inconsiderable. The reserved balance upon
our account last half year was about 3,000 I.; since that we have issued upwards
of 7,000 20 I. shares, at a premium of 2... 10 s., and the remainder of the 100 I.
shares, which will give us a reserved fund of upwards of 20,000 I.

2870.	To what account do you carry the premium you receive upon those 20 I.
shares?—At present it is at the credit of premium account.

2871.	Did you carry that to the general account of the profits of the bank?—
No ; we intend to keep that as a reserved fund.

2872.	Do you contemplate no difficulty from the very great extent of your
branches, their number, and their distance from London ?—-No; we have no
difficulty whatever in the management of them.

2873.	Suppose great commercial difficulties should arise, do you consider that
the danger and risk of the establishment would be very much augmented by the
number of its branches ?—I can scarcely anticipate that there would be a run on
all the branches at the same moment; it might be on one district.

2874.	Supposing a run on one or two or three of them, so as to affect the credit
of the bank itself, do you not think there would be a tendency to alarm in respect
of the other branches ?—There might be ; but before such alarm extended to our
other branches we should be prepared to meet a run.

2875.	Do you think in the event of there being any alarm, extending over be-
tween 40 and 50 branches, the means of supplying resources to those branches
would be very available ?—I should think that we could in the course of a post
provide them with the necessary supplies to meet any run upon them, and more
time than this would be allowed us, as when a crisis of this kind takes place there
is always some indication of its approach.

2876.	Mr. Clay.] In the account furnished there is an item of managers' drafts
on London agents; are those bills which have been given for convenience-sake to
parties in the country who wish to remit to London ?—Just so.

2877-78. At what dates are those generally drawn ?—Seven days' sight, 14 days'
date, and 20 days' date ; we make the best terms we can with commercial travellers
and others.

2879.	Are they in large sums, in the nature of bank post-bills ?—From 20 I. to
1,000 I., and even larger.

2880.	Do you find that when they are not for large sums they remain out in cir-
culation, or is the payment usually demanded when due in London ?—Generally.

2881.	Chairman.] Are they payable to order ?—Yes.

2882.	They are, in fact, bills of exchange?—Yes.

2883.	Issued in the usual way of bills of exchange, and drawn on a stamp ?—
Issued in the usual way, but on plain paper, as we compound for the stamp-duty.

2884.	Mr. Clay.] You have issued 7,000 20 I. shares at a premium?—7,355}
9,000 were applied for.

2885.	How many shares have you yet unissued?—I do not know that the
directors have fixed the number of 20 I. shares. They made this issue from there
being a strong desire in the country for shares of a smaller denomination than the
original shares of the company.

2886.	Is there no amount of shares fixed by your deed of settlement?—Ten
thousand 1001, shares are fixed by the original deed of settlement, but the
directors have the power of creating an .additional 10,000 for the country,
with the view of securing local influence, should it appear to them desirable to
do so.

2887.	How many of those have been issued?—Ten thousand.

2888.	Then they have still the power of issuing 10,000 100 I. shares?—Yes.

2889.	Under what deed is that power given?—Under the original deed.

0.92.	A A 4	2890. Can

Mr.

Daniel Robertson*

26 July 183$.178 MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.	2890. Can they issue as many 201, shares as they think fit in their discretion ?

Daniel Robert ion. —Yes.

~	2891. By the power of the original deed?—Not by the original deed. Two

26 July 1836. general meetings of the proprietors, lately held, gave the necessary powers to the
directors to issue those 20 I. shares.

2892.	The proprietors conferred upon them the unlimited discretion of issuing
those 20 I. shares?—Yes.

2893.	What is the net sum received for premium on shares ?—I have already
said it is upwards of 20,000 I. The net sum I cannot state without reference to
our books,

2894.	Do you keep a separate account of that money ?—Yes, we do.

2895.	Has any portion of it been applied to dividends ?—Not a sixpence, and
we do not intend to do it.

2896.	Has there been any resolution of the proprietors, declaring what is to
be done with the money so obtained ?—No ; it is understood that it is to be kept
as a reserved fund, the 1001, shareholders and the 20 I. shareholders equally
participating in it.

2897.—

2898.—

2899.—

2900.—

2901.—

2902.—

2903.—

2904.—

2905.	On one side of the account you have bills bearing the indorsement of the
bank, 44,438 I.; are those funds included in the other side of" the account under the
general head of bills of exchange?—'No, I deduct it from the other side, because
they are disposed of.

2906.	They appear among your liabilities, not among your assets ?—Yes. I do
not call this a balance-sheet. The statement was prepared so as to show the
actual amount of bills we had in our possession for disposal.

2907.	Mr. Goulburn.] Is there a power of issuing 201, shares in addition to
the 10,000 100 I. shares?—I have already stated that the directors have received
such powers from the shareholders.

2908.	Mr. Clay.~\ You state yourself to have been connected some years with
Scotch banking ; of course you must have had in your mind the subject of joint
stock banking; have you any suggestions to make to the Committee with a
view to improving the existing law of England ?—I am not prepared to speak
as to any alteration in the existing law. The system of banking in England is
certainly different from that in Scotland ; I do not think it is conducted on such
safe principles ; I consider the system of over drafts in England unsafe, and what
we would not allow in Scotland.

2909.	In Scotland you would not permit the account to be overdrawn without
collateral security?—We would not.

2910.	Chairman.] Is there not also a very main distinction in the precautions
taken by the Scotch banks keeping a large investment in Government securities ?
—I do not think that generally they invest a large sum in Government securities,
provided they can more profitably employ their money. The nature of a joint
stock bank and the security which it gives the public is so well understood in
Scotland, that there is no chance of a run to any great extent.

2911.	With what Scotch banks were you connected?—The Commercial Bank
of Scotland and Glasgow Union Bank.

2912.	Have the Commercial Bank a very considerable sum invested inGovernment
securities?—I believe they have, but I cannot speak with certainty on the point.

2913.	Sir James Graham.'] Are not the chartered stock banks in Scotland the
greatest holders of Government securities?—I believe so.

2914.	Mr. P. Thomson."] You state that the Commercial Bank of Scotland
has invested money in public securities as a means of employing the large
balance they have in their hands; would they do so if they had the means
of employing those balances in discounting bills ?—They would, of course, prefer
the investment that would yield most.

2915.	They would consider it more to their advantage to employ their capital

inSELECT.COMMITTEE ON JOINT STOCK BANKS.

179

in discounting bills, if they could get good ones, than in Government securities ?	Mr.

—No doubt of it.	Daniel Robertson,

2916.	Sir James Graham,.'] The Commercial Bank of Scotland is not a chartered ~-—-

bank, is it ?—They have got a charter lately.	26 July 1836.

2917.	Their responsibility is not limited ?—I understand it is not.

2918.	They keep a small portion of their assets in Government securities, do
they not ?—I have already stated that I cannot speak with certainty on the point.

2919.	The Royal Bank of Scotland is a chartered bank?—Yes.

2920.	The responsibility is limited there ?—Yes.

2921.	They are the largest holders of Government securities?—I have been
told that they hold very largely.

2922.	Mr. Clay.] You state that the people in Scotland have great confidence
in the joint stock banking system?—They have.

2923.	They have not less confidence in the three chartered banks than the
others, have they?—I am not aware that they have. With reference to the prin-
ciple of limited liability, I may here remark that it might be adopted in every case
where the proprietary is numerous and wealthy, and where the paid-up capital is
large ; but where there are small stock banks, with small proprietaries, I think the
security which they would give to the public would not be of that unquestionable
description which it ought to be. In the case of the Royal Bank, the British
Linen Company, and the Commercial Bank, the proprietary is very respectable
and the paid-up capital very considerable.

2924.	Do you think the limited liability affords any security against a temporary
stoppage ?—I am not aware that it could.

2925.	Do you think, in cases of difficulty, it would be easy to call up money?

—More easy, I should say, where there is a large nominal capital. Under our
own deed we could procure additional capital in the course of a month.

2926.	From your experience of banking affairs, if there were a call on the
shareholders in a time of difficulty in the money market, would it produce a
supply of money ?—To a certain extent it would, although of course it would not
be so readily answered as if made at a more favourable period.

2927.	Mr. P. Thomson.] Is there any instance within your knowledge of the
shareholders in a joint stock bank with limited liability having been called upon
to supply funds beyond the extent of their shares ?—I am not aware of any case
of that description. The paid-up capital of a bank ought to be increased as its
business extends; and this can be done the more easily by having a large nominal
capital.

2928.	So as to leave a margin of subscribed unpaid up capital?—Yes.

2929.	Chairman.'} You state that you have inspectors?—We have two.

2930.	How often do they visit the numerous branches in your districts?—

Once at least in twelvemonths, and sometimes oftener; they are sent down
occasionally.

2931.	Do you send them down occasionally, in addition to their annual visits ?

—We do.

2932.	What species of inspection takes place when they visit a branch?—In
the first place, they count the cash in the possession of the manager; they then
balance the books, and thoroughly examine all the bills, vouchers and other
property of the bank in the manager's possession, and in particular they institute
the most rigid inquiry as to the responsibility of parties receiving advances at the
branch.

2933.	Do they report to you?—They do.

2934.	Sir James Graham.~\ Do all your agents at the branches give security ?

—They do.

2935.	To what extent ?—From 3,000 I. to 5,0001., none less than 3,000 I.

2936.	Have they any limit as to their power of discounting?—They have a
discretionary power.

2937.	Have they any general rule laid down limiting that discretion, or is it
left absolutely to the agents at the branches ?—It is left to their discretion, with
certain rules for their government in the exercise of it. In making large advances
they generally consult the London board.

591.	bb	2938. Is18o	MINUTES OF EVIDENCE TAKEN BEFORE THE

Mr.	2938, Is there a limitation in amount?—No, we do not limit them in amount

Damel Robertson. jn discounting bills, but if a cash credit is applied for, they report to the London

~ office, and the London directors reject or comply with the application, as they
26 July 1836. gee fit

2939.	The question respects the discount of bills ?—They have discretionary
power in that respect.

2940.	Every transaction entered into at your branches you are responsible for ?
—Certainly.COMMITTEE ON JOINT STOCK BANKS.	1S1

APPENDIX.

BB2182-8	APPENDIX TO REPORT FROM THE

LIST OF APPENDIX.

No. 1.—Hull Banking Company.........-p. 189

2.—Leeds	Banking Company - - - - - - - - - -p. 190

3.—York	City and County Banking Company ~ - - - - - -p. 191

4.—Lichfield,	Rugeiey and Tamworth Bank - - - - - - - -p. 192

5.—Coventry	Union Bank - - - - - - - - - - - p. 193

6.—West	of England and South Wales District Bank - - - - - -p. 193

7.—Stuckey's	Banking Company -.....- - - - p. 194.

8.—Dudley	and West Bromwich Bank - - - - - - - - - p. 195

9.—Coventry	and Warwickshire Banking Company - - - - - - - p. 196

10.—The	Liverpool Tradesmen's Bank - - - - - - - - - p« *97

11.—Bradford	Banking Company - -- -- ---- - -p. 197

12.—Bank	of Stockport - -- -- -- -- --p. 199

13.—The	Liverpool United Trades' Bank -------- p. 200

14.—Gloucester	County and City Bank - - - - - - - - -p. 201

15.—Leith	Bank Office - - - - -.....- - p. 201

16.—Pares's	Leicestershire Banking Company - - - - - - - - p. 201

17.—Birmingham	Banking Company - -- -- -- --p. 202

18.—Wakefield	Banking Company	- p. 203

19.—Darlington	District Joint-Stock Banking Company ------ p. 204

20.—Liverpool	Commercial Bank	- p. 205

21.—Whitehaven	Joint-Stock Bank - -- -- -- -- p. 206

22.—North	and South Wales Bank - -- -- -- --p. 207

23.—Union	Bank of Manchester - -- -- -- -- -p. 207

24.—York	Union Banking Company.........p. 208

25.—Wolverhampton	and Staffordshire Joint-Stock Banking Company - - - - p. 209

26.—Liverpool	Union Bank - - - - - - - - - - - p. 210

27.—Cheltenham	and Gloucestershire Bank - - - - - - - - p. 211

28.	-The Halifax Joint-Stock Banking Company.......p. 211

29.—Huddersfield	Banking Company - - - - - - - - -p. 212

30.—Saddleworth	Banking Company - - - - - - - - -p. 213

31.—Lincoln	and Lindsey Banking Company - - - - - - - -p. 214

32.—Stourbridge	and Kidderminster Bank - - - - - - - -p. 215

33.—Gloucestershire	Banking Company - - - - - - - - - p. 216

34.—East	of England Bank - - - - - - - - - - -p. 217

35.—Yorkshire	District Bank - - - - - - - - - - -p. 218

36.—North	Wilts Banking Company - - - - - - - - - p. 219

37.—Leeds	and West Riding Banking Company......-p. 220

38.—The	Hampshire Banking Company - - - - - - - - -p. 221

39.—Devon	and Cornwall Banking Company --------p. 222

40.—Barnsley	Banking Company - - - - - - - - - -p. 223

41.—Northern	and Central Bank of England (toith a Plan) - - - - - p. 224

42.—Commercial	Bank of England - - - - - - - - - p. 226

43.—Bank	of Liverpool - -- -- -- -- -- -p. 227

44.—The	Stamford and Spalding Joint-Stock Banking Company - - - - - p. 228

45.—Leamington	Bank - - - - - - - - - - - - p. 229

46.—Leicestershire	Banking Company - -	- - - - - -p. 230

47.—Nottingham	and Nottinghamshire Banking Company - - - - - p. 231

48.—Sheffield	Banking Company - -- -- -- -- -p. 232

49.—Chesterfield	and North Derbyshire Banking Company - - - - - p. 233

50.—Walsall	and South Staffordshire Bank - - - - - - - - p. 233

51.-—Leamington	Priors and Warwickshire Banking Company - - - - - p. 234
£2.——Bradford Commercial Joint-Stock Bank - - - - - - - - p- 235

53.—National	Provincial Bank of England - - - - - - - -p. 236

54.—Derby	and Derbyshire Banking Company - . - - - - - -p. 2 37

55.—Warwick	and Leamington Banking Company - - - - - - -p. 237

56.—North	of England Joint-Stock Banking Company - - - -	- p. 238

57.—Bank	of Westmorland -	.....---p. 239

58.—Manchester	and Liverpool District Banking Company - - - - - p. 240

59.--Wilts	and Dorset Banking Company - -- -- -- -p. 241

60.—Lancaster	Banking Company ----------p. 242

61.—Bank	of Manchester . .............- p. 243

62.—Bank	of Birmingham	- p. 244

63.—The	Royal Bank of Liverpool --------- - p. 245

64.—An	Account of all Places where United or Joint-Stock Banks have been established under
the Act 7 Geo. 4, c. 46, together with the Number of Partners therein, and the Dates when
such Banks respectively were established --------p. 246

65.—Returns	made by Joint-Stock Banks in each Year since their Establishment, in pursuance
of 55 Geo. 3, c. 184, and 7 Geo. 4, c. 46. - - - - - - - p. 250COMMITTEE ON JOINT-STOCK BANKS.

APPENDIX.

No. 1.—HULL BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
Answer.—The Hull Banking Company; 2d December 183:3.

2.—Number and situation of branches, and distance of each from central bank?

Miles.

9
14
18
24
32

Beverley -
Cave

Market Weighton
Howden -
Snaith

	Miles.		Miles.
Goole	- 25	Gainsboro*	- 37
Barton	- 7	Retford	- 46
Brigg	- 16	Market Rasen -	- 34
Caister	- 25	Louth	- 36
Lincoln	- 40	Grimsby -	- 16

No. l.

Hull Banking
Company.

3.—Amount	of nominal capital ?

£. 800,000.

4.—Number	of shares, and nominal value of each share ?

Eight thousand, of 100 L each.

5.—Number	of shares issued ?

Four thousand two hundred and twenty.

6.	Amount of paid-up capital?

£. 42,200., to which may be added 8,550 Z., part of a return of capital not yet called for
by the shareholders.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

1st November 1833 _-------£, 21,100

17th March 1834 ............- - 21,100

21st March 1835 - -- -- -- -- 21,100

Capital returned

£. 63,300
12,550

£. 50,750 as above.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

Nil.

9.—Rate	of declared dividend ?

1st year, 5 per cent.; 2d year, 6 per cent.

10.	Variations in rate of dividend, and date of such variations?

1st dividend of 5 per cent, payable 2d March 1835.

2d - ditto - of 6 per cent, payable 24th February 1836, being an increase of 1 per cent.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

23d October 1834. Number who have signed ------ 237

Number who have not signed the deed, but who have executed transfers, having
the same legal effect as signing the deed - -- -- -- 8

245

12.—Copy	of deed of settlement; when it has been printed and published?

A copy is sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared ?

Copies of the reports and accounts laid before the proprietors are sent herewith. These
have been audited and examined by five directors, who make annually a declaration that they
are severally worth 5,000 Z., and who must possess 50 shares at least to qualify as directors.
A statement of the liabilities and assets of the Hull Banking Company, varying little from
the account required by the Chancellor of the Exchequer, is laid weekly before the directors,
and compared with previous statements.

591.	b b 3	14.—Statement190

APPENDIX TO REPORT FROM THE

i	14.—Statement whether the bank holds any and what amount of its own shares

Hull Bankin	or	either in trust, as security for advances, or in its own right ?

Company	The bank holds none of its shares or stock, either in trust or in its own right, except so

far as the 63d article of the deed of settlement gives the bank a lien on the shares held by
persons to whom advances have been made, the amount of such lien being at this date
8,8421. 7 s,: but as all advances are made for temporary emergencies, and not for longer
periods than from one to four months, the lien ceases as soon as such advances are repaid.

15.—Places	at which promissory notes and bank post-bills are made payable ?

In practice, the promissory notes are payable at all the company's establishments, and at
Messrs. Barclay, Bevan 8c Go's, in London; but of right they are only payable at Hull,
Lincoln, Louth, Gainsborough and London, as declared on the face of them. The issue of
Louth and Gainsborough notes has been discontinued for the last 16 months. The post-
bills are payable in London only.

16.—At	what date or sight bank post-bills are issued ?

At various dates not exceeding seven days' sight, or 21 days' date; but usually either one
or the other.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Three per cent, per annum on deposits, provided the money remains two months in the
bank; if not, no interest is allowed. The same rate of interest is allowed on current
accounts, which are subject to a charge of one-fourth per cent, on payments made by the
bank.

18.—Variations	in such rate, and date of such variations?

None.

19.—Date	to which the account is made up ?

21st May 1836.

T. J. Buckton, General Manager and Secretary.

No. 2.—LEEDS BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business7
j^0 2	Answer.—The Leeds Banking Company; 10 December 1832.

Leeds Banking	2.—Number and situation of branches, and distance of each from central bank ?

Company.	No branches.

-	3.—Amount of nominal capital ?

£. 1,000,000.

4.—Number	of shares, and nominal value of each share?

Ten thousand shares of 1007. each.

5.—Number	of shares issued ?

1832: December. Applications for shares, 17,500; allotted up to 21 May 1836, 7,740.

6.—Amount	of paid-up capital?

£. 116,100.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

1832	: Dec. 10, First call of 51 per share.

1833	: April 1, Second call of 51. ditto.

1835 : Aug. 1, Third call of 5/. ditto.

8.—Number	of shares (if any) which may have been forfeited for non-payrrient
of instalments?

About 20 shares.

9.—Rate	of declared dividend ?

The dividend paid for 1834 was 7 \ per cent.; for 1835, 8 per cent.

10.—Variations	in rate of dividend, and date of such variations ?

An increase of one-half per cent., as above.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

19 November 1832 ; 554 signatures ; present number of partners, 461.

12.—Copy	of deed of settlement; when it has been printed and published?
Herewith sent; published in January 1833, and a copy delivered to each shareholder.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
j ected, and of the responsibility under which such reports are prepared ?

Herewith sent. The " Abstract Statement" submitted to the shareholders at the annual
meeting, is prepared by the manager, and is examined by the directors. If the proprietors
are dissatisfied, they may appoint auditors (not being directors.)

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

The bank holds none of its own stock; the reserved shares are sold to new customers;
the bank has a lien on the stock of the shareholder for any obligations existing.

15.—Places	at which promissory notes and bank post-bills are made payable ?
The notes of the Company are payable at the bank in Leeds, or at our London bankers,

Messrs. Smith, Payne 8c Smith,

16.—AtCOMMITTEE ON JOINT-STOCK BANKS.

191

16.—At	what date or sight bank post-bills are issued ?	No. 2.
Bank post-bills are issued agreeably to the Act, on unstamped paper, at any date not Leeds Banking

exceeding 7 a. * or 21 a. d.	Company.

17.—Rate	of interest paid by the bank, whether on deposits or balances of ac-
count ?

On deposits, 2 J per cent.; on accounts current, 2 per cent.

18.—Variations	in such rate, and date of such variations ?

No variations.

19.—Date	to which the account is made up?

To 21st May 1836.

Leeds Banking Company,	John Smith, Manager.

24 May 1836.

No. 3.—YORK CITY AND COUNTY BANKING COMPANY.

Question 1.—name of the joint-stock bank, and date of commencing business?	^.0# 3-

Answer.—York City and County Bank; commenced business the 9th of March 1830. c t if Id

2.—Number	and situation of branches, and distance of each from central bank ? Company.

Five branches, as follows: Selby, 14 miles from the central bank; Boroughbridge, 17 ______

miles ; Malton, 18 miles; Howden, 20 miles; Scarborough, 40 miles.

3.—Amount	of nominal capital ?

£. 500,000.

4.—Number	of shares and nominal value of each share ?

Five thousand shares; nominal value 100/. each.

5.—Number	of shares issued?

Five thousand shares, being all the number.

6.—Amount	of paid-up capital ?

£.75,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

February and March 1830, February 1831, and May 1835. Amount of the several
instalments paid up 15 per cent., or 75,000 /.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

Not any shares forfeited for non-payment of instalments.

9.—Rate	of declared dividend ?

For the year ending 31st December 1831, six per cent.; 1832, eight per cent.; 1833, 10
per cent.; 1834, 12 per cent.; 1835, 12 per cent.

10.—Variations	in rate of dividend, and date of such variations ?

Answered above.

11.—Date	of deed of settlement; and number of nersons who have signed such
deed ?

Twentieth of February 1830 ; 310 have signed the original deed, and 66 a supplemental
deed.

12.—Copy	of deed of settlement, when it has been printed and published?

Copy of deed of settlement sent herewith, labelled York City and County Bank.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

Copy of the last report and account laid before the proprietors, as follows: These periodical
statements are prepared by the manager of the company, audited by the board of directors
and published under its responsibility. The directors of the York City and County Banking
Company, in presenting the sixth annual report of the proceedings of the company for the
last year, are much gratified in being enabled to confirm the prosperity of the bank, notwith-
standing the increase of rival establishments in the immediate towns and vicinity of their
branches. It is the pleasing duty of the directors to report to the shareholders the continued
and uniform zeal and ability with which the head department of the company has been con-
ducted during the past year, The managing directors have frequently visited the branches,

and it affords them satisfaction to be enabled to bear their testimony to the efficiency and
good management evinced by the several agents of each branch. The directors have the
gratifying duty of laying before the shareholders the result of the balance-sheet for the year
1835, regularly made up to the 31st December, approved and passed unanimously by the
board; the total paid-up capital is 75,000/.; the number of shareholders is 270; after
deducting all current expenses and losses, there remains a profit of 12,580/. Os. 6d., of which
profit the directors recommend that the sum of 9,000 /. be divided among the shareholders,

being at the rate of 12 per cent, upon the paid-up capital, and that the sum of 3,580/. Os. 6d.

be set apart for supporting the surplus fund, according to the 47th section of the deed of
settlement, which, added to the present surplus fund, will make it 12,930/. 10 s. The
directors, in closing the report, beg seriously to impress upon the shareholders the absolute
necessity of their personal exertions in forwarding the prosperity of the York City and
County Banking Company, in which they have not only so much at stake, but from which
they have actually received so much benefit; the directors beg to assure the shareholders

591.	b b 4	that192

APPENDIX TO REPORT FROM THE

No. 3.	that all the ©ther rival establishments that have come under their knowledge are now exert-

York City and ing themselves to the uttermost to forward their individual banks.

Companyanking	(signed, by order of the court,) Thomas Price, Chairman,

'	'	14.—Statement whether the bank holds any and what amount of its own shares

or stock, either in trust, as security for advances, or in its own right?

The bank does not hold any of its own shares or stock, either in trust or in its own right.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Promissory notes made payable at the places whence issued respectively; viz. York,

Selby, Boroughbridge, Malton, Howden and Scarborough.

16.-—At	what date or sight bank post-bills are issued ?

No bank post-bills issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Interest paid on deposit, if two months in hand, two and a half per cent. If 5001. or
above, and engaged when deposited to remain 12 months, three per cent. On balances of
account two per cent.

18.—Variations	in such rate and date of such variations ?

Rate of interest on deposits two months in hand, advanced on 1st January 1832, one half
per cent.; and on sums of 500 1. and above, stationary 12 months, one half per cent, in
December 1834.

19.—Date	to which the account is made up ?

The 31st of December in every year.

N.B. It will be seen, according to the 35th section of the deed of settlement, that
a summary account of all dealings and investments of the company shall be made out for
the inspection of the directors four times in each year, and at the end of the month of
December the directors shall cause the books of the bank to be properly settled, adjusted
and balanced, and a full and explicit balance-sheet made out, containing all things requisite
for fully and explicitly manifesting the state of the affairs of the company.

No. 4.—LICHFIELD, RUGELEY AND TAMWORTH BANK,

l^0	Question 1.—Name of the joint-stock bank, and date of commencing business?

Lichfield, Rugeley Answer,—The Lichfield, Rugeley and Tamworth Banking Company ; November 1835.
and Tamworth	2.—Number and situation of branches, and distance of each from central bank*

Bank.	Two: Rugeley seven miles ; Tamworth seven miles.

--1-'	3.—Amount of nominal capital?

£. 100,000.

4.—Number	of shares, and nominal value of each share?

Ten thousand shares of 10/. each.

5.—Number	of shares issued ?

Five thousand four hundred shares.

6.—Amount	of paid-up capital ?

£. 26,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Fifty per cent, on each share paid on subscribing; no call since.

8.—N	umber of shares (if any) which may have been forfeited for non-payment of
instalments ?

None have been forfeited; about 150 of the number applied for and allotted have not been
taken up.

9.—Rate	of declared dividend ?

No dividend has yet been declared, the bank not having been in operation 12 months.

10.—Variations	in rate of dividend, and date of such variations ?

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

21 October 1835 ; signed by 92 persons.

12.—Copy	of deed of settlement when it has been printed and published ?
Now printing ; and a copy shall be furnished during the sitting of the Committee.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

No report has yet been made; but our accounts will be made up half-yearly, and presented
to the proprietors annually, under the responsibility of the three directors and two auditors.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

None whatever.

15.—Places	at which promissory notes and bank post-bills are made payable ?
We draw bills on Messrs. Glyn, our bankers in London, and 011 no other party whatever.

16.—AtCOMMITTEE ON JOINT-STOCK BANKS.

10.—At what date or sight bank post-bills are issued ?	# No. 4.

We draw bills varying in date from seven days' sight to two months' date, never Lichfield, Rugeley
exceeding the latter,	wA^worth

17.—Rate	of interest paid by the bank, whether on deposits or balances of account? *

Never more than three per cent, on deposits; less occasionally for other monies.	——

18.—Variations	in such rate, and date of such variations?

None have yet occurred.

19.—Date	to which the account is made up ?

No. 5.—COVENTRY UNION BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business?	-

Answer.—Coventry Union Bank; 16th May 1836.	Coventry Union

2.—Number	and situation of branches, and distance of each from central bank ? Bank.

At present, none.	_

3.—Amount	of nominal capital ?

£. 200,000.

4.-—Number	of shares, and nominal value of each share ?

Ten thousand shares, at 201, each.

5.—Number	of shares issued ?

Five thousand six hundred and ten.

6.—Amount	of paid-up capital ?

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

16th May 1836, first call of 51, per share; 28,050 Z. paid up.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None; the limitation allowed for paying up not expired.

9.—Rate	of declared dividend ?

NihiL

10.—Variations	in rate of dividend, and date of such variations ?

Nihil.

11.—Date	of deed of settlement, and number of persons who have signed such deed?

Dated 16th May 1836 ; signed by	proprietors.

12.—Copy	of deed of settlement; when it has been printed and published ?

The deed is not yet printed.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

Nihil.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

None on account of the bank; all are open for appropriation, at the discretion of the
directors.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Sir James Esdaile & Co.

16.—At	what date or sight bank post-bills are issued ?

Not exceeding seven days' sight, or twenty-one days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?

This must depend upon the nature and merits of each account.

18.—Variations	in such rate, and date of such variations f

Nihil.

19.—Date	to which the account is made up ?

1st June 1836.

18 miles,	Axbridge.
62 -	Dulverton.
27 —	Glastonbury.
66 -	Merthyr.
40 -	Stowey.
34 -	Somerton.
50 -	Willison.
110 -	Bideford,

District Bank.

No. 6.—WEST OF ENGLAND AND SOUTH WALES DISTRICT BANK.

Question lf—Name of joint-stock bank, and date of commencing business ?

Answer.—West of England and South Wales District Bank; 29 December 1834f	No. 6.

2.—Number and situation of branches, and distance of each from central bank ? ^^South'wd^
Nine Branches :

12 miles, Bath.

99 - Barnstaple.

34 - Bridgewater.

41 - Cardiff.

75 — Exeter.

29 - Newport, Monmouthshire.

85 — Swansea.

45 - Taunton.

21 - Wells.

3.—Amount of nominal capital ?

£.1,000,000.

c c	4.~Number194

APPENDIX TO REPORT FROM TEl

West of England
and South Wales
District Bank.

4.—Number	of shares, and nominal value of each share ?

Fifty-thousand shares, at 201, each.

5.—Number	of shares issued ?

Twenty-one thousand shares.

6.—Amount	of paid-up capital ?

£.209,882. 105.

7.—Date	of the several calk for paid-up capital, and amount of the several instal-
ments paid up ?

5th November 1834 - - - £*2 10 per share.

5th January 1835 - - - 2 10 —

15th July - 1835 - - - 5 - —

Total

- £.10 -

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

£. 5. per cent, per annum.

10.—Variations	in dividend, and date of such variations ?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed.

9th February 1835; 401.

12.—Copy	and deed of settlement; when it has been printed and published ?

A summary of the deed has been published and distributed, and a copy is sent herewith,,
9 February 1835.

13.—Copies	of the last reports, and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

A copy of last report sent herewith. Power to the proprietors assembled at any general
meeting in each year to elect 3 proprietors (three), each holding 50 shares, as auditors of the
summary and account produced to the meeting by the directors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable?
At the various branches of the establishment, and at Glyn, Hallifax & Co.'s, Bankers,

London.

16.—At	what date or sight are bank post-bills issued ?

Seven days' sight, or 11 days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

£. 2 per cent, on deposits left as such, repayable on demand, and 2 \ per cent, on a stamped
interest note, payable at 21 days' sight, with interest to the date of acceptance.

18.—Variations	in such rate, and date of such variations?

19.—Date	to which the account is made up ?

Saturday, 21st May 1836.	JoJm BateS) General Manager.

West of England and South Wales District Bank,

Bristol, 21 May 1836.

No. 7.—STUCKEY'S BANKING COMPANY,

7»	Question 1.—Name of the joint-stock bank, and date of commencing business ?

Stuckey s Banking J^nswer.—Stuckey's Banking Company (Somersetshire Bank); in 1826, immediately after
Company.	^ ^ Q.eo ^ c passed.

1	2.—Number and situation of branches, and distance of each from central bank ?

Sixteen, all in Somersetshire (Bristol included), and none exceeding 40 miles from the
central bank.

3.—Amount	of nominal capital ?

Original 200,000 I., additional 100,000 1.; vide the deed.

4.—Number	of shares and nominal value of each share ?

Two thousand original and 1,000 increased, £. 100 per share.

5.—Number	of shares issued ?

Two thousand eight hundred.

6.—Amount	of paid-up capital ?

About 60,000 L, exclusive of the reserve fund.

7.—Date	of the several calls for paid-up capital and amount of the several instal-
ments paid up ?

No call beyond the original; see the explanation annexed.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.	9.—RateCOMMITTEE ON JOINT-STOCK BANKS.

0.—Rate of declared dividend ?	No. 7.

£. 2 per share, half yearly.	Stuckey's Banking

10.—Variations	in rate of dividend, and date of such variations ?	Company.

None for the last three half years.	#	~

11.—Date	of the deed of settlement, and number of persons who have signed such
deed ?

1st September 18SI; 35 persons.

12.—Copy	of deed of settlement; when it has been printed and published ?

Inclosed.

13.—Copies	of the last reports and accounts laid before the proprietors, & state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

The accounts, according to the form sent, No. 2, are inclosed for the last three half years.

The accounts are made out at the branches respectively, under the view of the manager or
director of the branch, and the whole is examined by the chairman and the accountant-
general at the head office. The three last half-yearly accounts are herewith sent, according
to the form transmitted. The printed reports are also inclosed.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable?

At the places where issue in Somersetshire, and at Messrs. Robarts, Curtis &/Co., London.

16.—At	what date or sight bank post-bills are issued ?

Generally at 11 days after date, but never exceeding 21 days after date, or 7 days after
sight.

17.—Rate	of interest paid by the bank, whether on deposits or balances on
account?

On deposits from two to three per cent., but no interest on drawingaccounts; expla-
nation.

18.—Variations	in such rate, and date of such variations ?

No variation of importance.

19.—Date	to which the account is made up ?

30th June and 31st December in each year.

No. 8.—DUDLEY AND WEST BROMWICH BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business?	No. 8.

Answer.—Dudley and West Bromwich Bank y 1 January 1#34.	Dudley and West

2.—Number	and situation of branches, and distance of each from central bank ?	Bromwich Bank.
Business confined to Dudley and West Bromwich; no branches. West Bromwich is about *

three miles from Dudley.

3.—Amount	of nominal capital ?

£. 400,000.

4.—Number	of shares, and nominal value of each share?

Eight thousand shares, of 501, each.	✓ ,t

5.—Number	of shares issued ?	' ' ^

Six thousand and five shares, to 31 December 1835.

6.	Amount of paid-up capital ?

£.30,025.

7.—-Date	of the several calls for paid-up Capital, and amount of the several instal-
ments paid up?

One call made 1 January 1834, of 5 Z. per share.	-

8.—Number	df shares (if any) which may have been forfeited for non-payment of
instalments?

•\/.None.:'H-;

?9.-~Rate of declared dividend ?

Six per cent, for 1835.	,

10.—^Variations	in rate of dividend, and date of such variations ?

Five per centi dividend for 1834; six per cent, for 1835.

11.—Date	ofdeed ofsettlement, and number of persons who have signed such deed ?

30 December 1833 ; 209 persons have signed the deed.

12.—Copy	of deed of settlement; when it has been printed and published ?

Copy of deed was printed 30 December 1833; and distributed to shareholders early in

January 1834.

13.—Copies	of the last reportsand accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

The reports are made to the proprietors at the general annual meeting by the directors,

who see the abstract of accounts and balance-sheet. The individual accounts ate not
inspected by the directors ; but the manager and cashier give a general statement to them
quarterly, and at the end of the year, to enable them to mate their report.

591.	'	14,—Statement196

APPENDIX TO REPORT FROM THE

14.—Statement	whether the bank holds any and what amount of its own shares, or
stock, either in trust, as security for advances, or in its own right ?

The bank has a lien on all shares held by individuals for any sum they may at any time
be indebted to the bank, either by indorsement or otherwise. The shares not disposed of
are reserved for the purpose of being allotted to customers who may open accounts in future

15.—Places	at which promissory notes and bank post-bills are made payable?
Promissory notes are made payable at Dudley and West Bromwich, and also at Messrs. Wil-
liams, Deacon & Co., London; post-bills payable only at Messrs. Williams & Co., London.

16.—At	what date or sight bank post-bills are issued ?

At various dates, not exceeding 21 days' date, and seven days' sight, according to Act of
Parliament, on which a composition is paid.

17.-—Rate	of interest paid by the bank, whether on deposits or balances of account ?
Two, 2 | and 3 per cent, interest is paid upon deposits and balances, according to the

amount and time of such deposit.

18.—Variations	in such rate, and date of such variations?

On some balances which are occasionally fluctuating, and liable to be drawn out without
notice, no interest is allowed.

19.—Date	to which the account is made up ?

31 December 1835.

(signed) C. H. Molineux, Manager.
Dudley and West Bromwich Bank,	Thomas Lewis, Cashier.

Dudley, 1 June 1836.

No. 9.—COVENTRY AND WARWICKSHIRE BANKING COMPANY.

No. 9.	Question 1.—Name of the joint-stock bank, and date of commencing business

Coventry and	Answer.—Coventry and Warwickshire Banking Company ; commenced 1st January

Warwickshire 1836.

Banking Company.	2.—Number and situation of branches, and distance of each from central bank?

One at Nuneaton, eight miles distant.

3.—Amount	of nominal capital ?

Four hundred thousand pounds.

4.—Number	of shares, and nominal value of each share ?

Eight thousand shares, 501, each.

5.—Number	of shares issued ?

Seven thousand.

6.—Amount	of paid-up capital ?

£. 35,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

One instalment of 51, per share, paid 1st January 1836.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

Ten; in consequence of bankruptcy.

9.—Rate	of declared dividend ?

None,

10.—Variations	in rate of dividend, and date of such variations?

None.

11.—Date	of deed of settlement and number of persons who have signed such
deed?

28th December 1835; signed by 265 proprietors.

12.—Copy	of deed of settlement; when it has been printed and published ?
Not printed.

13	._Copies of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

None.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

One thousand shares not yet allotted; 100 shares held in security.

15	._Places at which promissory notes and bank post-bills are made payable ?

Promissory notes made payable at Messrs. Jones, Loyd & Co., London, and at the bank-*

ing-house, Coventry.

16.—At	what date or sight bank post-bills are issued ?

None.	. i 1	*

17	._Rate of interest paid by the bank, whether on deposits or balances 01 ac-
count ?

Varies according to circumstances.

18.—Variations	in such rate, and date of such variations ?

Two-and-a-half and three per cent.

19.—Date	to which the account is made up ?

No. 8.
Dudley and West
Bromwich Bank.COMMITTEE ON JOINT-STOCK BANKS.

197

No. 10.—THE LIVERPOOL TRADESMEN'S BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
Answer.—The Liverpool Tradesmen's Bank; registered at Stamp-office 21st March, and
commenced business 4th April 1836.

2.—Number	and situation of branches, and distance of each from central bank ?
Bank-office in No. 37, North John-street, Liverpool. No branches.

3.—Amount	of nominal capital ?

£. 250,000, with power given to the directors to increase such capital- to 400,000 Z., if
necessary.

4.—Number	of shares, and nominal value of each share ?

Twenty-five thousand shares, of the nominal value of 10/. each share.

5.	Number of shares issued ?

Eighteen thousand four hundred and twenty have been issued, and instalments paid
thereon; and more shares are being issued daily, as accounts are opened with the ba k.

6.—Amount	of paid-up capital ?

£.46,050, or 2Z. 105. on 18,420 shares; and 4,5771. 105. premium on such appropriated;
50,6271 10 5.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Notice of first call dated 12th March, and made payable on 4th April, date of commencing
business. Amount of instalment, as above, 46,0501.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments?

None.

9.—Rate	of declared dividend ?

No dividends yet declared.

10.—Variations	in rate of dividend, and date of such variations?

None.

11.—Date	of deed of settlement, and number of persons who have signed such deed?
Deed of settlement dated 6th April, and is now being daily signed by the proprietors;

174 have already signed it.

12.—Copy	of deed of settlement; when it has been printed and published ?

Is now in the hands of the printer; a copy will be forwarded to the Committee as soon as
possible.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,
and of the responsibility under which such reports are prepared ?

None. The reports and accounts will be prepared by the board of management, assisted
by the manager and accountant of the bank; such reports and accounts nevertheless sub-
jected to the examination, scrutiny and auditing of any two of the proprietors, appointed
specially for that purpose by the general annual meeting, at which report and accounts will
be made and exhibited.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

Holds all the unappropriated shares, namely 6,580, in trust for the general proprietary of
the bank; but are being daily issued to new partners, under the control of the directors.
The bank has a primary lien on the shares of all its partners or proprietors, for any debts or
obligations due to the bank; but cannot possibly specify the nature or amount of such, until
the contingency of liability occur. No proprietor can claim any advance in right or by
virtue of his holding shares.

15.—Places	at which promissory notes and bank post-bills are made payable?
Have no promissory notes, not being a bank of issue. Post-bills and drafts payable at

our London agents, Messrs. Prescott, Grote & Co.

16.—At	what date or sight bank post-bills are issued ?

Issued at seven days after sight.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?
Two-and-a-half per cent, on deposits; and from 3 to 4 per cent, on balances of current

accounts, according as such balances may arise from cash, cash and bills, or bills only.

18.—Variations	in such rate, and date of such variations?

None have yet occurred.

19.—Date	to which the account is made up ?

Our accounts will be made up to 31st December next; and subsequently, on every 30th
of June and 31st December of each year respectively, according to the general custom
of bankers.

No. 10.

The Liverpool
Tradesmen's Bank

No. 11.—BRADFORD BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?	11#

Answer.—Bradford Banking Company; commenced business 15th June 1827.	Bradford Banking

2—Number and situation of branches, and distance of each from central bank? Company.
Has no branches.

591.	c c 3	3.—'Amounttm

APPENDIX TO REPORT FR O M THE

No. 11.
Bradford Banking
Company.

3.—Amount	of nomiii&l capital ?

£. 500,000.	^

4.—Number	of shares, and nominal value of each share?
Five thousand shares of 100 /. each.

5.-—Number	of shates issued ?

Three thousand eight hundred and sixty-five.

6.—Amount	of paid-up capital ?

£• 77,300; besides a reserved or guarantee fund of £. 19,501
And -	4,345

Total - -

Total capital

£. 23,846 being made this sum at gene-
ral meeting of proprietors.

£. 06,801
4,345

£, 101,146

7.—Date of the several calls for paid-up capital, and amount of the several instal-
ments paid up?

First call of 10 L per share was made on the 15th June 1827; the amount of which paid
up is - - - - - - - - - - - - :	£.

Second call of 10 /. per share, made 1st January 1828, raised - - -
Increase of paid-up capital, by the issue of new shares in July 1831 -
By issue of shares in 1833 -	-

Total - - - £.

20.000
20,000
30,020
7,280

77,300

8.	—Number of shares (if any) which may have been forfeited for non-payment of
instalments ?

Not any forfeited.

9.—Rate	of declared dividend ?

Last dividend declared was 10 L per cent, per annum.

10.—Variations	in rate of dividend, and date of such variations ?

The dividends of this company are paid yearly, viz. in February of each year. The divi-
dends of 1828, 1829, 1830 and 1831 were 7 \ per cent, per annum. A farther issue of
shares having been made in June 1831, in 1832 it was determined that the old proprietors
should have a dividend of 8/. 105. per cent., and that both old and new proprietors should
have a further dividend of 5 L per cent.; viz.

Old proprietors - - - - £. 13 10 -
New ditto ^ * - - - 5 - -

Dividend 1833: the whole profits of the year, amounting; to 111 per cent, per anlium,
were divided; viz.

Dividend 1834 and 1835, 7 | per cent.

— 1836 -	10 per cent;

11.—Date	of deed of settlement, and number of .persons who have signed such
deed ?

Dated 1st Jui^e 1827; 199 persons have signed it.

12.—Copy	of deed of settlement; when it has been printed and published ?

Printed copy §ent herewith.	h

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

General Balance-Sheet of the Bradford Banking Company; 31 December 1&35.

Dr.

To 20 per cent, on 3,865

shares -
To amount of guarantee

fund - - -
To amount of lodgments,
notes in circulation, and
interest due on deposits -
To balance of profit and
loss - -

£.

£. s. d,	Cr. ; ;	£. 5. d.
	By balances owing to the	
77,300	Company, and amount	
	of bills, notes and cash	
19,325 - -	on hand - - -	428,775 8 1
323,482 19 9	By stamps on hand	358 12 -
12,026 - 4	By bank premises -	3,000 - r
432,134 - 1	, £.	432,134 - 1 12,026 - 4
	By Balance - £.	

This

ThisCOMMITTEE ON JOIFT-STOCK BANKS.

im

This balance-sheet was submitted to the last annual general meeting of proprietors, and No. n;
is abstracted from a full and minute individual statement of all sums owing by the bank and Bradford Banking ■-
to the bank, and of the amount of coin, Bank of England notes, bills and provincial notes, Company,

and other securities, in the coffers of the bank, which statement is examined, item by item, --

with the books from which it is made, by three or more of the directors, under whose respon-
sibility the reports to the general meetings of proprietors are made.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

This bank holds none of its own shares or stock, but by its deed of constitution it has
a lien on the shares for any advances made to the proprietors of such shares, but the ad-
vance so made has not been done on the security of the shares, the parties being, indepen-
dently of this consideration, entitled by their other property, station and respectability to the
advances which the bank has granted to them. The circumstance of holding shares i& the
bank does not preclude tliem from receiving that accommodation to which otherwise they
would be justly entitled. As a confirmation of this position, we decidedly and urgently re-
commend that the lien on shares be removed by Act of Parliament from all joint-stock
banks, being of opinion that this would, in a great degree, tend to prevent malpractice in
the formation and conducting of such establishments.

15.—Places	at which promissory notes and bank post-bills are made payable?

The promissory notes of this bank are made payable at Bradford only. It does not issue

bank post-bills. It draws ordinary bills of exchange upon Messrs. Jones, Loyd 8c Co., of
London, upon stamps, and under the pro visions of the Act for compounding for the duty on
stamps, according to circumstances.

16.—-At	what date or sight bank post-bills are issued ?

None drawn.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two-and-a-half per cent, per annum is paid on deposits which rein^in short of six months;

3 per cent, for six months, or a longer time; 2 J per cent, is allowed on balances of current
accounts, charging a commission of 5 s. per cent, on all sums for which the account stands
debited.

18.—Variations	in such rate, and date of such variations ?

On the 1st February 1830 the rate of interest was reduced on deposits remaining short of
six months to 2 per cent., and for longer than six months to 2 J per cent. The present rate
was restored on the 30th June 1831, and no variation has since been made.

19.—Date	to which the account is made up?

To 31st December 1835. No material variation aow exists. May 1830.

No, 12.—BANK OF STOCKPORT.

Question 1.--Name of the joint-stock bank, and date of commencing business ?	No. 12.

Answer.—Bank of Stockportj 4th of May 1836.	Bank of Stockport.

2.—Number	and situation of branches, and distance of each from central bank ? ——

None.

3.—Amount	of nominal capital ?

4.—Number	of shares, and nominal value of each share ?

5.—Number	of shares issued ?

Twelve thousand seven hundred and forty.

6.—Amount	of paid-up capital ?

£. 31,850.

7.—Date	of the several calls for paid-up capital, and amount of the several
instalments paid up ?

First call 2 L 10 s.9 29th March 1836. Second call 2 L 10 s., 29th June 1836.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend?

None.

10.—Variations	in rate of dividend, and date of such variations ?

None, ■■	^ ^

11.—Date	of deed of settlement and number of persons who b^ve signed such
deed?

Not drawn out.

12.—Copy	of deed of settlement; when it has been printed and published?

None.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

None.

591.	c c 4	14.—-Statementsoo

APPENDIX TO REPORT FROM THE

No. 12.

Bank of Stockport.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

None. ,

15.—Places	at which promissory notes and bank post-bills are made payable ?

16.—At	what date or sight bank post-bills are issued ?

Nne.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two-and-a-half per cent, on deposits. Three per cent, on balance of account.

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date	to which the account is made up?

None.

The bank having been opened in a temporary manner on the 4th of May last, the
deed of settlement has not been drawn out, in consequence of the motion relative to joint-
stock banking companies being before Parliament.

Thomas Robinson,
Chairman of the Directors.

No. 13.

The Liverpool
United Trades'
Bank.

No. 13.—THE LIVERPOOL UNITED TRADES' BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
Answer.—The Liverpool United Trades' Bank, registered according to the Act 7 Geo. 4,
c. 46 ; 12 May instant.

2.—Number	and situation of branches, and distance of each from central bank ?

None.

3.—Amount	of nominal capital ?

£. 400,000.

4.—Number	of shares, and nominal value of each share ?

Twenty thousand shares, of 20 I. each share.

5—Number of shares issued ?

Ten" thousand, with applications greatly exceeding the remainder; the full number of
20,000 will be issued as the directors become satisfied of the most eligible parties for dis-
tribution.

6.—Amount of paid-up capital?-7—Date of the several calls for paid-up

capital, and amount of the several instalments paid up ?

Two calls already paid, and a call now in the course of payment, making together 61. 10 s.

Eer share. Calls will immediately follow to the extent of 10 I. per share, and the directors
ave the power of calling for the further sum of 10 I. per share, making the full value of 20 L
per share, which it is intended shall be done as occasion may require.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

See No. 1.

10.—Variations	in rate of dividend, and date of such variations ?

As above.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

25 April 1836; in course of signature.

12.—Copy	of deed of settlement; when it has been printed and published ?
In course of printing; a copy shall be sent when printed.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

See No. 1.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The bank does not*

15.—Places	at which promissory notes and bank post-bills are made payable ?
None, not being a bank of issue.

16.—At	what date or sight bank post-bills are issued ?

See above, No. 15.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

The rate of interest varies according to the nature of the account.

18.—Variations	in such rate, and date of such variations?

19.—Date	to which the account is made ?

The Liverpool United Trades' Bank.	William Wilson, Manager.

28 May 1836.COMMITTEE ON JOINT-STOCK BANKS.	20;

No, ^.-GLOUCESTER COUNTY AND CITY BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business?	No. 14.

Answer.—Gloucester County and City Bank, Gloucester: 1st January 1835.	Gloucester County

. . . M	„ _ /	,, 1 o and City Bank.

2.—Number	and situation of branches, and distance of each trom central bank 1

None.

3.—Amount	of nominal capital ?

One hundred thousand pounds*

4.—Number	of shares, and nominal value of each share ?

Two hundred shares of 500 Z. each.

5.—Number	of shares issued ?

One hundred and sixteen.

6.—Amount	of paid-up capital ?

£. 19,720.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

£. 11,600, 1st January 1835, 20 per cent.

5,800, 1st August 1835, 10 per cent.

2,320, 12th December 1835, 4 per cent.

£. 19,720

A further call of 30 I. per share is to be paid 1st August 1836, and 50/. per share on or
before 1st August 1837.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—-Rate	of declared dividend ?

£.3. per share.

10.—	Variations in rate of dividend, and date of such variations?

None.

H.—Date of deed of settlement, and number of persons who have signed such
deed ?

10th of March 1835; number of persons, 23.

12.—Copy	of deed of settlement; when it has been printed and published?

Will be forwarded.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared?

The accounts are taken and examined weekly, under the immediate inspection of the
directors, and are made up under the responsibility of them, and the reports made by them.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right?

None.

15.—Places	at which promissory notes and bank post-bills are made payable?

None issued.

16.—At	what date or sight bank post-bills are issued ?

None issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of ac-
count ?

From 2 to 3 per cent, on deposits; none on balances of account.

18.—Variations	in such rate, and date of such variations ?

Variations of rate, according to the amount deposited and the time during which it is to
remain.

19.—Date	to which the account is made up ?

3Xst December 1835.

No* 15.—LEITH BANK OFFICE.

ATi	^°* *5-

Nl1- ,	Leith Bank Office.

No. 16.—PARES'S LEICESTERSHIRE BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	No ^

Answer.—Pares's Leicestershire Banking Company, carried on as a private bank since pares's Leicester-
1800, converted into a joint-stock bank 19th March 1836.	shire Banking

2.—Number and situation of branches, and distance of each from central bank ? Company.

No permanent branches; offices open on market and fair days, at Hinkley, 13 miles; -—

Loughborough, 11 miles; Melton Mowbray, 15 miles distant from the central bank at
Leicester.

591,	d d	3.—Amount

»202

APPENDIX TO REPORT FROM THE

No. 16.	3.—Amount of nominal capital ?

Paress Leicester-	£. 100,000.

shire Banking	4—Number of shares, and nominal value of each share?

ompany.	Eight thousand shares, 12 I. 10 s. each.

5.—Number	of shares issued ?

Six thousand three hundred and thirty.

6.—Amount	of paid-up capital ?

£. 15,825.

7.—Date	of the several calls for paid-up capital, and amount of the several in-
stalments paid up ?

Deposit of 20 per cent, called on commencing business on 19th March 1836.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?-10.—Variations in rate of dividend, and date

of such variations?

None yet made.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

12th March 1836. Thirty-nine persons have signed.

12.—Copy	of deed of settlement; when it has been printed and published ?

The deed is not printed, nor any copy made; it is very long; if required, a copy can be
made for the use of the Committee.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared ?

None yet made.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

None, except the 1,670 not yet issued.

15.—Places	at which promissory notes and bank post-bills are made payable ?
Promissory notes are made payable at Leicester and in London ?

16.—At	what date or sight bank post-bills are issued ?

No bank post-bills issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?-18.—-Variations in such rate, and date of such variations ?

Until 1830, 3 per cent.; then reduced to 2 per cent. In 1832 raised to 2 J per cent., and
since continued thereat,

19.—Date to which the account is made up ?

25th May 1836.

No. 17.—BIRMINGHAM BANKING COMPANY.

No. 17.	Question 1.—Name of the joint-stock bank, and date of commencing business?

Birmingham Bank- Answer.—Birmingham Banking Company; commenced business 1st day of October 1829«

ing Company.	2.—Number and situation of branches, and distance of each from central bank?

No branch.

3.-—	Amount of nominal capital?

Nominal capital 500,000 1.

4.—Number	of shares, and nominal value of each share ?

Ten thousand shares, of 50 L each.

5.—Number	of shares issued?

Ten thousand.

6.—Amount	of paid-up capital ?

£. 50,000, increased by 26,111 I. reserved out of profits.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

£. 5. per share on 10,000 shares, paid on 1st day of October 1829, or soon after.

8.—Number	of shares (if any; which may have been forfeited for non-payment of
instalments ?

No shares forfeited for non-payment of instalment; 388 shares have been forfeited by
shareholders becoming insolvent, and in debt to the company. (Clause 53 of deed of set-
tlement.)

9.—Rate	of declared dividend ?

Ten per cent, per annum.

10,—VariationsCOMMITTEE ON JOINT-STOCK BANKS.

2Q3

10.—Variations	in rate of dividend, and date of such variations?	No. 17*

No variation of rate. An excess of profit beyond the 10 per cent, divided has each year	Birmingham Bank-

been reserved, to increase the paid-up capital, and this reserve amounts to 26,111 L (See	*ng Company.

No. 6.)	———-

11.—Date	of deed of settlement, and number of persons who have signed such deed ?

Date of deed, 1st October 1829: 321 persons have signed the deed.

12.—Copy	of deed of settlement, when it has been printed and published ?

Copy of deed of settlement is sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared?

Copies of the last reports and accounts laid before the proprietors are sent herewith. The
accounts are kept with great care and accuracy. On 30th June and 31st December the
balance-sheet is made out from the ledgers by the accountants. Bad debts are revised and
valued by the board of directors. Three directors are appointed to examine the balances and
statement of accounts. These report that they have examined the statement of accounts;

find it to be correct; and that the profits are of such an amount. The accounts are then
signed by three or more of the directors; an abstract of them is reported to the shareholders,

printed and circulated.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The Birmingham Banking Company hold 388 forfeited shares, to sell again as opportunity
offers. They make no advances upon shares, and hold no share whatever on trust.

15.—Places	at which promissory notes and bank post-bills are made payable?

This Company have never issued any promissory notes but those of the Bank of England.

Bank post-bills are made payable in London.

16.—At	what date or sight bank post-bills are issued ?

Bank post-bills are chiefly at seven days' sight; some few at 21 days' date, and others at
shorter dates, according to the wants of the customers.

17.—Hate	of interest paid by the bank, whether on deposits or balances of account ?

Two per cent, on balances of account; 2 J per cent, on deposits; 3 per cent, on large

deposits, under special agreement.

18.—-Variations	in such rate, and date of such variations?

The preceding answer states the general practice of this banking company.

19.—Date	to which the account is made up ?

31st December 1835.

For the Birmingham Banking Company,

31 May 1836.	(signed) P- M. James, Manager.

No. 18.—WAKEFIELD BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
Answer.—Wakefield Banking Company; commenced business 1st November 1832.

2.—Number	and situation of branches, and distance of each from central bank?
None. Do not approve of any except under very peculiar circumstances.

3.—Amount	of nominal capital ?

£. 300,000.

4.—Number	of shares, and nominal value of each share ?

Six thousand shares, 50 Z. per share.

5.—Number	of shares issued ?

Five thousand six hundred and five shares issued.

6.—Amount	of paid-up capital ?

£. 44,840.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

1st November 1832, 2 L per share; 1st February 1833, 3I per share; 1st August 1833,
31. per share.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

1st, 2d and 3d dividend, six per cent; 4th ditto, eight per cent.

10.—Variations	in rate of dividend, and date of such variations?

Two per cent.; 25th January 1836.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

1st December 1832; signed by 220 shareholders.

591.	d d 2	12.—Copy

No. 18.
Wakefield Banking
Company.204

APPENDIX TO REPORT FROM THE

No. 18.	12.—Copy of deed of settlement; when it has been printed and published ?

Wakefield Banking Printed and published in February 1833, a copy of which is herewith forwarded.

Company.	13.—Copies of the last reports and accounts laid before the proprietors, a state-*

-—	ment of the nature of the audit and examination to which such accounts are subj ected,

and of the responsibility under which such reports are prepared ?

A copy of the last report is herewith forwarded. Every account is audited and examined
by the board of six directors, the accounts being prepared by the manager, who, besides his
own responsibility, is under bond with two sureties to the extent of 4,000 /. for the faithful
discharge of his duty; and should the proprietors not be satisfied with the accounts so
prepared and audited, they have the power of appointing three of their own number to
examine all the books and accounts of the Company.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

None held in trust as security for advances, but by the deed of settlement, article 24th and
9th, a lien is over shares belonging to persons who are or may become indebted to the bank*

15.—Places	at which promissory notes and bank post-bills are made payable?
Promissory notes are payable at Wakefield, and in London at Messrs, Glyn & Co., on

whom alone bank post-bills are drawn.

16.—At	what date or sight bank post-bills are issued?

At sight, not exceeding seven days' sight, or 21 days after date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?

From 2 to 3 per cent, on deposits; t per cent, on balances of account.

18.—Variations	in such rate, and date of such variations?

Rate varies, according as money may be more or less abundant.

19.—Date	to which the account is made up ?

The account in Paper No. 2, is made up to 31st December 1835.

The above answers include the period up to this date, 25th May 1836.

John Neill, Manager.

No. 19.—D ARLINGTON DISTRICT JOINT-STOCK BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
Answer.—Darlington District Joint-Stock Banking Company; commenced 2d J any 1832.

2.-—Number	and situation of branches, and distance of each from central bank ?
Four branches; viz. Stockton-on-Tees, 12 miles from central bank at Darlington; North-

allerton, 16 miles ; Barnard Castle, 16 miles; Stokesley, 17 miles.

3.—Amount	of nominal capital r
£. 400,000.

4.—Number	of shares, and nominal value of each share?

Four thousand shares; nominal value, 1001. per share.

5.—N	umber of shares issued ?

Three thousand six hundred and ninety-five.

6.—Amount	of paid-up capital ?

£. 55,425.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up.

First call, 5th December 1831; second, 27th February 1832; third, 31st December 1833.
Amount of each instalment, 5 L per share.

8.—	Number of shares (if any) which may have been forfeited for non-payment of
instalments.

None forfeited.

9.—Rate	of declared dividend ?-10.—Variations in rate of dividend, and date of

such variations ?

, At the end of the 1st year,	1832, no dividend.

Ditto - 2d -	1833, 11 per cent.

Ditto - 3d -	1834, 8 per cent.

Ditto - 4th -	1835, 10 per cent.

11.—Date	of deed of settlement, and number of persons who have signed such deed?
Date of deed, 2d January 1832; number of persons who have signed it, 285.

12.—Copy	of deed of settlement; when it has been printed and published ?

Printed copy of deed sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared.

.Abstracts of the two last annual reports sent herewith; made by the directors, in conformity
to clauses 45 & 69 of deed, accounts of every kind being subjected to the daily audit and
examination of the managing directors.

14.—Statement

No. 19.
Darlington District
Joint-Stock Bank-
ing Company.COMMITTEE ON JOINT-STOCK BANKS.

205

14.—Statement	whether the bank holds any and what amount of its own shares or No. 19.
stock, either in trust, as security for advances, or in its own right?	Darlington District

No shares held by the bank, either in trust or for advances, or in its own right; but it will	Joint-Stock Bank-

be seen, from the reply to Query 5, that 305 shares have not been disposed of; these might	ing Company.

have been issued long ago, but have been reserved for the purpose of being allotted to —---

parties likely to benefit the bank.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Promissory notes payable at Darlington; drafts payable in London, with Messrs. Barclay,

Bevan & Co.

16.—At	what date or sight bank post-bills are issued?

Twenty-one days after date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?

Three per cent, per annum on both; but except deposits remain three months with the

bank, no interest is allowed.

18.—Variations	in such rate, and date of such variations ?

No variation.

19.—Date	to which the account is made up ?

The accounts are respectively made up to the 31st December 1834, the 30th June 1835,

and the 31st December 1835; and this return is made on the 28th May 1836.

By order of the Board of Directors,

A. Dinsdale, Manager.

No. 20.—LI VERPOOL COMMERCIAL BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	No. 20.

Answer.—Liverpool Commercial Bank; 1st January 1833.	Liverpool Com.

2.—Number	and situation of branches, and distance of each from central bank ? mercial Bank.

None.

3.—Amount	of nominal Capital ?

£.500,000.

4.—Number	of shares, and nominal value of each share ?

Fifty thousand shares, 101. each.

5.—Number	of shares issued ?

Twenty-four thousand four hundred and forty shares issued

6.—Amount	of paid-up capital ?

£. 244,400, exclusive of the reserved surplus fund.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Each proprietor pays up the whole amount of his stock at once; the principle on which
the bank is founded being that of paid-up capital.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments?

None.

9.—Rate	of declared dividend ?

1833,	First year, no dividend.

1834,	Second year, 5 per cent.

1834 to 30th June 1835, 3 percent, for the half year.

1835,	1st July to 31st December, 3 J per cent, for the half year.

10.—Variations	in rate of dividend and date of such variations ?

As above.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

1st January 1833; 292 persons have signed the deed.

12.—Copy	of deed of settlement, when it has been printed and published ?

Copy herewith, or will be furnished immediately from a new edition; the first edition
published in March 1833, being exhausted.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

Copies of three annual reports herewith, dated first, 5th March 1834; second, llth March
1835 ; and third, 9th March 1836. The general routine of business is in the discretion of the
manager. The bill committee, for considering the private affairs of individuals, is a secret
committee, and consists of two directors and the manager, A statement of the assets and
liabilities of the bank, the amount of bills discounted, the names of accounts opened, and the
general incidents of the week, is read over to the whole board of directors weekly. The
half-yearly balance is read over and examined in the presence of the whole board, and the
ledger bears the signature of three directors then present. The report is prepared under
the responsibility of the whole board of directors by the manager, and sigued officially by the
591.	d d 3	chairman206

APPENDIX TO REPORT FROM THE

No. 20. chairman of the board of directors. All accounts are kept under the superintendence of
Liverpool Com- the manager, by a chief accountant, who, with the cashier, and all other persons employed,
mercial Bank. give large securities to the bank.

——--14.—Statement whether the bank holds any and what amount of its own shares or

stock, either in trust, as security for advances, or in its own right ?

None, except the shares yet unappropriated ; but the bank has the first and paramount
lien on all its own stock for the liabilities of every proprietor, whether solely or in partnership
with any other persons.

15.—Places	at which promissory notes and bank post-bills are made payable?

No promissory notes or bank post-bills issued; Messrs. Williams, Deacon, Labouchere & Co.,
20, Birchin-lane, London, pay all drafts or bills.

16.—At	what date or sight bank post-bills are issued ?

The bank never draws bills except at the special request of customers. Under the com-
position, @f course, bills cannot exceed seven days' sight or 21 days' date.

17.—Rate	of interest paid by^the bank, whether on deposits or balances of account ?

Deposits 2 \ per cent, or 3 per cent., subject to a commission of \ per cent, when drawn

out, the latter rate an exception. Balances of account 3 \ per cent, subject to \ per cent,
commission.

18.—Variations	in such rate, and date of such variations?

TTone since 1st January 1833. Discounts of bills over the counter are at the market rate
of money of the day, and by momentary bargain.

19.—Date	to which the account is made up ?

Three accounts are made up, one to 31st December 1834, one to 30th June 1835, and one
to 31st December 1835.

Liverpool Commercial Bank,	James MacGregor, Manager.

28 May 1836.

No. 21.—WHITEHAVEN JOINT-STOCK BANK.

No. 21.	Question 1.—Name of the joint-stock bank, and date of commencing business ?

Whitehaven Joint- Answer.—Whitehaven Joint-Stock Bank; commenced June 1st, 1829.

Stock Bank.	2.—Number and situation of branches, and distance of each from central bank?

One branch at Penrith; distance 44 miles.

3.—Amount	of nominal capital?

£. 300,000.

4.—Number	of shares, and nominal value of each share ?

Three thousand, at 1001, each.

5#—Number of shares issued ?

Two thousand eight hundred and five.

6.—Amount	of paid-up capital ?

£. 28,050.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

20th April 1829 ; paid up at one call.

3._Number of shares (if any) which may have been forfeited for non-payment of

instalments ?

None.

9.—Rate	of declared dividend ?

Three dividends at 10 per cent., and two at 8 per cent.

10.—Variations	in rate of dividend, and date of such variations ?

1831: August 1,10 per cent.; viz. 7 J per cent, amongst the shareholders, and 2 \ per
cent, to surplus fund.

1832: August 1, 10 per cent. ------ ditto ----- ditto.

1833: August 1, 8 per cent.; viz. 6 per cent, amongst the shareholders, and 2 per cent,
to surplus fund.

1834: August 1, 8 per cent. ------ ditto ----- ditto.

1835: August 1, 10 per cent. ------ ditto ----- ditto.

11—Date	of deed of settlement, and number of persons who have signed such
deed ?

April 15th, 1829 ; number signed 238.

12—Copy	of deed of settlement; when it has been printed and published ?

Copy of deed of settlement sent herewith.

13.—Copies of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,
and of the responsibility under which such reports are prepared ?

See copy of report of directors sent herewith, and approved of at the annual meeting of

the shareholders.	_ i f

14.—StatementCOMMITTEE ON JOINT-STOCK BANKS.	207

14.—Statement	whether the bank holds any, and what amount of its own shares No. 21.

or stock, either in trust, as security for advances, or in its own right ?	Whitehaven Joint-

Sixty shares in its own right.	Stock Bank.

15.—Places	at which promissory notes and bank post-bills are made payable 1
Whitehaven.

16.—At	what date or sight bank post-bills are issued?

None issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of ac-
count ?

Two-and-a-half per cent, on deposits and balances of accounts.

18.—Variations	in such rate, and date of such variations ?

No variations since the establishment of the bank.

19.	Date to which the account is made up ?

30th April 1836.

No. 22.—NORTH AND SOUTH WALES BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	22,

Answer.—North and South Wales Bank • 16th May 1836. Head office, Liverpool.

2.—Number	and situation of branches, and distance of each from central bank ?	_

Dolgelly, in the county of Merioneth; Pwllheli, in the county of Carnarvon ; both

distant from the head office in Liverpool between 70 and 80 miles.

3.—Amount	of nominal capital ?

£. 600,000.

4.—Number	of shares, and nominal value of each share ?

Sixty thousand, of 101, each, to be all called up.

5.—Number	of shares issued?

Upwards of 20,000, and others in course of allotment.

6.—Amount	of paid-up capital ?

Nearly 20,0001. on first call. About 5,0001, on second call.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

First call of 11, due 19th March 1836. Second call of 11. 10 s. due 1st June 1836.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

10.—Variations	in rate of dividend, and date of such variations?

11.—-Date	of deed of settlement, and number of persons who have signed such
deed?

To be signed on 1st June 1836.

12.—Copy	of deed of settlement; when it has been printed and published ?

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable?

London and places of issue.

16.—At	what date or sight bank post-bills are issued ?

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Not yet arranged.

18.—Variations	in such rate, and date of such variations ?

19.—Date	to which the account is made up ?

21st May 1836.

Thomas A, Corlett, General Manager.

No. 23.—UNION BANK OF MANCHESTER.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	n0# 22.

Answer.—Union Bank of Manchester; 23d May 1836.	Union Bank of

2.—Number and situation of branches, and distance of each from central bank?	Manchester.

None.	-

591;	d d 4	3.—Amount208

APPENDIX TO REPORT FROM THE

, . No. 23.	3,—Amount of nominal capital?

Union Bank of	£.600,000.

Manchester.

:	4.—Number of shares, and nominal value of each share ?

£. 24,000 shares, of 25 Z. each.

5.—Number	of shares issued ?

Nineteen thousand six hundred and thirty.

6.—Amount	of paid-up capital?

£.49,075.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

May 2d to 7th, first call, of 21. 105. per share.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments?

Twenty.

9.—Rate	of declared dividend ?

None has been yet declared.

10.—Variations	in rate of dividend, and date of such variations?

See answer to the preceding question.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

The deed is before counsel, and will not be ready for a few weeks.

12.—Copy	of deed of settlement; when it has been printed and published ?
See answer to the preceding question.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

See answer to the question No. 1.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

Four thousand three hundred and seventy shares are retained by the directors, to be
granted to such parties as engage to open accounts with the bank.

15.—Places	at which promissory notes and bank post-bills are made payable ?
It is not the intention of the Company to issue promissory notes, nor have the directors

yet issued any post-bills.

16.—At	what date or sight bank post-bills are issued ?

See answer to the preceding question.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?

See answer to question No. 1.

18.—Variations	in such rate, and date of such variations?

See answer to the preceding question.

19.—Date	to which the account is made up ?

28th May 1836.

No, 24.—YORK UNION BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?

i 2*« i Answer.—York Union Banking Company; 1st May 1833.

York Union Bank-	. . JT J	J

ing Company.	2.—Number and situation of branches, and distance of each from central bank ?

„_L Four branches; viz. Driffield, 28 miles; Burlington, 30 miles; Thirsk, 22 miles; Malton,

18 miles from York.

3.—Amount	of nominal capital ?

£. 700,000.

4.—Number	of shares, and nominal value of each share ?

Seven thousand, at 1001. each*

5.—Number	of shares issued ?

Five thousand seven hundred and forty-five.

6.—Amount	of paid-up capital ?

£. 57,450.

7.—Date	of the several calls for paid-up capital, and amount of the several in
stalments paid up ?

10 5. per share March 1833; 4 Z. 10 5. ditto May 1833; 5 I. ditto January 1834.

8.—Number	of shares (if any) which may have been forfeited for non-payment of

instalments ?	■ 1 ■ ■ -	'• ."v ■'■■■':	'

None.	L	v " *■

9.~*-RateCOMMITTEE ON JOINT-STOCK BANKS.

0.—Rate of declared dividend ?	No. 24.

Eight per cent.	York Union Bank-

10.—Variations	in rate of dividend, and date of such variations?	rag Company.
Seven per cent, for 1834; eight per cent; for 1835. •'

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

1st May 1833 ; 260.

12.—Copy	of deed of settlement; when it has been printed and published?

Copy of deed sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared?

Report, stating the balance of profit and loss, being the amount of profit, deducting the
current expenses and bad debts therefrom, which account is audited by the board of directors,

and examined and signed by the two managing directors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, or as security for advances, or in its own right?

No shares held by the bank in trust, but occasionally advances are made to the proprietors
for short periods, on security of their shares; 1,255 reserved shares on hand, to be issued to
persons who may wish to do business with the bank.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Promissory notes at York, Driffield, Burlington, Thirsk and Malton, and at Williams,

Deacon & Co., London ; bank post-bills payable at Williams 8c Co., London.

16.—At	what date or sight bank post-bills are issued ?

At sight, and seven days after sight.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two-and-a-half per cent, on running deposits; two per cent, on accounts current.

18.—Variations	in such rate, and date of such variations?

Three per cent, on deposits to remain certain for 12 months, but if such deposits be with-
drawn within that time, then 2 per cent, only is given.

19.—Date	to which the account is made up ?

31st December 1835.

York Union Banking Company,

B. T. Wilkinson, Manager*

No. 25.—WOLVERHAMPTON AND STAFFORDSHIRE JOINT-STOCK

BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	^

Answer.—Wolverhampton and Staffordshire Joint-Stock Banking Company; 2d January Wolverhampton

1032*	jind St-ftflordslii

2.—Number	and situation of branches, and distance of each from central bank ? Joint-Stock R»nV
No branches. ing Company.

3.—Amount	of nominal capital?	11.....- -■

£. 500,000.

4.—Number	of shares, and nominal value of each share?	N
Ten thousand shares, 50 L each.

5.—Number	of shares issued ?

All issued.

6.—Amount	of paid-up capital ?

£.50,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

£. 5. at one call, on the 2d January 1832; 50,000 I.

Number of shares (if any) which may have been forfeited for non-payment of
instalments?	• ■

None.

9.—-Rate	of declared dividend ?

The first yearly dividend for 1832, 5 per cent.; yearly dividends for 1833. 1834. 1835.

each 6 per cent.

10.—Variations	in rate of dividend, and date of such variations?

Five per cent, for the year ending 31st December 1832; 6 per cent, per annum for the
years 1833, 1834, 1835.

11 .—Date of deed of settlement and number of persons who have signed such
deed ?

9th December 1831; signed by 287 persons.

12.—Copy of deed of settlement; when it has been printed and published %

Copy of deed of settlement sent herewith.
W1'	ee	13.—Copies210

APPENDIX TO REPORT FROM THE

No. 25.

Wolverhampton
and Staffordshire
Joint-Stock Bank-
ing Company*

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

Copy of the last report sent herewith. These reports are prepared and examine^ by tbk
board of directors, and are submitted by them to the proprietors at the general annual
meeting, held on the first Monday in February; and by clause 31 of the deed of settlement
the accounts may be examined by two auditors appointed by the general meeting.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The banking company holds no shares in its own right, but by clause 66 in the deed of
settlement, the shares of each proprietor are liable for any amount they may owe the Com-
pany in their current accounts.

15*—Places at which promissory notes and bank post-bills are made payable?

Re-issuable notes at Wolverhampton and at Messrs. Williams, Deacon & Co., London;
post-bills at Williams, Deacon & Co. only.

16.—At What date or sight bank post-bills are issued ?

At all dates allowed by law; viz., not exceeding seven days' sight or 21 days'date,
under the Stamp Composition Act, and at not exceeding two months' date or 60 days' sight
on stamps.

„17.-*-Rate of interest paid by the bank, whether on deposits or balances of ac-
count?

Not exceeding 3 per cent.

18.—Variations	in such rate, and date of such variations ?

No variation.

19.—Date	to which the account is made up ?

26th May 1836.

No. 26.
Liverpool Union
Bank.

No. 26.—LIVERPOOL UNION BANK.

Question 1.—Name of the joint stock-bank, and date of commencing business?
Answer.—The Liverpool Union Bank ; business commenced in May 1835.

2.—Number	and situation of branches, and distance of each from central bank?
Has no branches.

3.—Amount	of nominal capital?

£. 600,000, with power to increase to 1,000,000 Z. (See deed of settlement, clause 2.)

4.—Number	of shares, and nominal value of each share ?

Thirty thousand shares, of 20 Z. each.

5.—Number	of shares issued ?

Seventeen thousand one hundred and seventy-five.

6.—Amount	of paid-up capital?

£.171,750.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

1st May 1835, called up - - £. 5 per share.

1st July 1835 - - - . - 5 -

Together

£.10 per share.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

No dividend made.

10.—Variations	in rate of dividend, and date of such variations ?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

1st May 1835; number of individuals by whom signed, 235.

12.—Copy	of deed of settlement; when it has been printed and published ?

Herewith transmitted.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected,
and of the responsibility under which such reports are prepared.

Sent herewith. The reports and accounts laid before the proprietors are carefully col-
lated from the books of the company, by the manager, sub-manager and accountants, then
audited by two of the directors, and afterwards submitted to the revision of the whole board.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

None. According to the deed of settlement (clause 58), the bank has a lien on the shares

ofCOMMITTEE ON JOINT-STOCK BANKS.

of the proprietors who may be indebted to the company; but if the question is framed with No, 26.
& view to ascertain the amount advanced by the bank to their customers, being shareholders Liverpool Union
on security of stock hypothecated as above, the answer will then be, to 46 individuals, holding Bank.
4,950 shares, 38,6201.; being an average of about 81, per share of 10 L paid.	/ 11 ■ •—'

15.—Places	at which promissory notes and bank post-bills are made payable ?

None.

16.—At	what date or sight bank post-bills are issued ?

Do not issue bank post-bills.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?
Three-and-a-half per cent, per annum allowed on balance of current accounts; 2 J per

cent, on deposits.

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date to which the account is made up ?

31st December 1835.

James Baird, Sub-Manager.

No. 27.—CHELTENHAM AND GLOUCESTERSHIRE BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	No. 27.

Answer.—Cheltenham and Gloucestershire Bank. .	Cheltenham and

2.—Number	and situation of branches, and distance of each from central bank? Gloucestershire
No branch has been established.	'

3.—Amount	of noniinal capital ?

£.500,000.

4.—Number	of shares, and nominal value of each share?

Ten thousand, of 501, each.

5.—Number	of shares issued?

Three thousand; and daily increasing.

6.—Amount	of paid-up capital?

£. 15,000; and daily increasing.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid 4ip ?

Only one call has been made.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

10.—Variations	in rate of dividend, and date of such variations?

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

9th May 1836; 116 persons.

12.—-Copy	of deed of settlement, when it has been printed and published ?

The deed has not yet been printed.

No. 28.—THE HALIFAX JOINT-STOCK BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	No, 28.

Answer.—The Halifax Joint-Stock Banking Company; 25 November 1829.	Halifax Joint-Stock

2.—Number	and situation of branches, and distance of each from central bank ? Banking Company.
Has not any branch, disapproving of the system of branches.	--——

3.—Amount	of nominal capital ?

£. 500,000.

4.—Number	of shares, and nominal value of each share?

Five thousand shares of 1001, each	. ~

5.—Number	of shares issued ?

Three thousand nine hundred and twenty-five shares, issued at 31st December 1835.

6.—Amount	of paid-up capital ?

£.39,225.

7.—Date	of the several calls for paid-up capita^ and amount of the several instal-
ments paid up ?

£.5 per share, 12 Nov, 1829, is 19,625 L; 5/. per share, 16 January 1834, is 19,600/.

8.—Number	pf shares (if any) which may have been forfeited for non-payment of
instalments? r J

Nil.,

591 *	e e 2	9.— RateAPPENDIX TO REPORT FROM THE

No. 28.	9.-—Rate of declared dividend ?--10.—Variations in rate of dividend, and date

Halifax Joint-S tock	Gf such variations ?

Banking Company. Dividend payable 14 February 1831, 6?. per cent.

1832,	121. 10s. per cent.

1833,	161, per cent.

1834,	161. percent.

1835,	12/. 10s. percent.

1836,	12 Z. 10s. per cent.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

25th November 1829; signed by 186 individuals.

12.—Copy	of deed of settlement; when it has been printed and published ?

Printed copy sent herewith; published in March 1831.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared?

Copy of last annual report sent herewith. Accounts are made up under the superintend-
ence and direction of the manager, and subsequently examined and audited by a committee
of shareholders, chosen for the purpose.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

The unappropriated shares, in number 1,075, are held by the bank in trust for the general
benefit of the shareholders at large.

15.—Places	at which promissory notes and bank post-bills are made payable?
At Halifax, and in London at Messrs. Jones, Loyd &Co.

16.—At	what date or sight bank post-bills are issued?

At seven days' sight.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?--18.—Variations in such rate, and date of such variations ?

Three per cent, per annum is the rate which has been uniformly paid on permanent
deposits. On fluctuating balances the rate varies according to the nature of the account,
from 3 to 4 per cent.

19.—Date to which the account is made up ?

31st December 1835.

Halifax, 28 May 1836.	John Caw, Manager.

16

23	—

22	—

28	—

27	—

No. 29.
Huddersfield
Banking Company*

No. 29.—HUDDERSFIELD BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?
Answer.—Huddersfield Banking Company; commenced business 1st June 1827.

2.—Number	and situation of branches, and distance of each from central bank?
No branch banks. This company has two agencies; one at Holmfirth, about five miles

from Huddersfield, and the other at Brighouse, about four miles from Huddersfield: these
are for the convenience of parties resident there, who keep their accounts at Huddersfield.
No accounts are kept at these agencies, but everything is sent to Huddersfield. Holmfirth
agency commenced 2d October 1834; Brighouse agency, 2d March 1836.

3.—Amount	of nominal capital ?

£. 700,000.

4.—Number	of shares, and nominal value of each share ?

Seven thousand shares, of 1001, each.

5.—Number	of shares issued ?

Six thousand five hundred.

6.—Amount	of paid-up capital ?

£. 65,000, or 10 /. paid up on each share.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Paid on each share, 1st June 1827 -
Ditto - - 8th August 1827
Ditto - - 29th January 1828

Paid up on each share -

£.

~ £.

Repaid back to shareholders,
On 27th August 1834
24th - 1835

- per share £. 3
-	7

£.

10
5
5

20

10 -

10 -

LeavingCOMMITTEE ON JOINT-STOCK BANKS.

Leaving 10 Z. paid tip on each share. This bank consisted originally of 5,000 shares of 100/. No. 29.
each; 20Z. on all the 5,000 shares was paid up of the dates above stated, making 100,000/. Huddersfield
paid-up capital: 2,000 new shares were created by supplementary deed, dated 27th August Banking Company.
1833; 1,500 of these have been allotted, making in all 6,500 shares issued.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

About 20, forfeited in June 1827; but no particular account kept of them. No instal-
ments were paid up on these shares.

9.—Rate	of declared dividend ?

No dividend made for the first year, but the profit carried to form a surplus fund. Divi
dends paid the shareholders:

August 1829, six per cent, per annum on £. 100,000 - £. 6,000 - -

1830,	five - - - - 100,000 - 5,000 - -

1831,	six	-	- 100,000 - 6,000 - -

1832,	six - -	100,000 - 6,000 - -

1833,	19 - -	100,000 - *19,000 - -

1834,	six	-	- 123,660 - 7,419 12 -
- 1835, 81 - 106,386 - 9,308 15 6

# This dividend included 13,000/., amount of the reserved surplus fund, which was ordered
to be divided among the old shareholders previous to the admission of new shareholders, by
the supplementary deed, 27th August 1833.

10.—Variations	in rate of dividend, and date of such variations ?

The above list of dividends explains this.

11.—Date	of deed of settlement, and number of persons who have signed such deed?

June 1, 1827, date of deed of settlement; signed by 360 shareholders. August 27, 1833,

date of supplementary deed, signed by 376 shareholders.

12.—-Copy	of deed of settlement; when it has been printed and published?

Deed of settlement printed in 1827 ; supplementary deed of settlement printed in 1833.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

Copies of report,-29th July 1835, herewith sent. A balance account is made up half-
yearly by the accountant and manager, in which every individual account is particularly
specified, and the directors appoint one or two of their number to compare this balance
account with the bank ledgers, &c. The reports to the shareholders are grounded on this
balance account, and under the responsibility of the directors are the reports made to the
shareholders; but it is only considered necessary by the directors of this bank to state in
their reports the amount of the profits for the year, after deductions of bad debts, &c., the
amount of the proposed dividend, and the amount of the reserved surplus fund.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

The bank holds 180 of its own shares, which it purchased at several sales. The bank
holds no shares in trust. If a shareholder of the bank be one of its customers in the way of
business, the law and the deed of settlement gives the bank a lien on any shares he may
hold in the bank ; but no shareholder in this bank has any right to claim any advance from it
upon his shares, and the directors treat him in every respect in the same manner as they treat
any other customer of the bank, who may offer them security for any credit he may want in
the course of his business.

15.—Places	at which promissory notes or bank post-bills are made payable ?

Promissory notes are payable in Huddersfield, and at Messrs. Smith, Payne & Smiths,

London. Post-bills are drawn at seven days after date on Messrs. Smith, Payne & Smiths,

London.

16.—At	what date or sight bank post-bills are issued?

At seven days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account ?

Three per cent, interest paid on deposits ; on current accounts the rule is to charge and

allow four per cent., charging one-fourth per cent, commission on debit side of account.

18.—Variations	in such rate, and date of such variations ?

Have fluctuated from 2 \ to 3 per cent.

19.—Date	to which the account is made up ?

31st December 1835.

No. 30 —SADDLEWORTH BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ? gaddl^rth^B'
Answer.—Saddleworth Banking Company; converted from a private bank (established in j ComDanv '
1806) March 1,1833.	P J*

2.—Number and situation of branches, and distance of each from central bank ?

Two branches (previously occupied by the private bank of Buckleys & Co.), one at Ashton-
under-Lyne, distant seven miles, the other at Oldham, distant four miles from the head
office at Dobcross.

591.	e e 3	3.—Amount£14	APPENDIX TO REPORT FROM THE

No. 3o.	3.—Amount of nominal capital ?

Saddleworth Bank- £.300,000.

ing Company.	4#—Number of shares, and nominal value of each share ?

Six thousand, of 50 /. each.

5.—Number	of shares issued ?

Five thousand nine hundred and thirty.

6.—Amount	of paid-up capital ?

£. 29,650. By the conditions upon which the banking company was established, the
proprietors of the private bank of Buckleys & Co, were to be allowed time to withdraw and
invest their capital before any further calls should be made upon the shareholders of the
banking company.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Only one call of 5 I. per share, payable May 1st, 1833, and all paid.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

For half year ending 30th June 1835, five per cent., being after the rate of 10 per cent,
per annum.

10.—Variations	in rate of dividend, and date of such variations ?

First dividend made, 7 \ per cent, per annum ; in 1835, the rate altered to 10 per cent,
per annum.

11*—Date of deed of settlement, and number of persons who have signed such
deed ?

Deed dated 9th September 1833 ; executed by 124 proprietors.

12.—Copy	of deed of settlement; when it has been printed and published ?

Sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

The reports merely consist of a statement of facts corresponding with the balance-sheet
produced at the annual meeting for the inspection of the shareholders. The books and
accounts are kept upon the Scotch plan, made up and examined by the directors monthly, as
well as half yearly, who are responsible to the shareholders for their correctness.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

No shareholder has any claim for an advance in consequence of being a partner in the
concern ; but the bank has a lien, in case of need, upon the shares of every proprietor, in
conformity with the deed of settlement, s. 11. The bank holds 30 of its own shares.

15.	Places at which promissory notes and bank post-bills are made payable?

The notes of the bank are [paid at all its establishments, and at Messrs. Glyn & Co.,

bankers, London.

16.	—At what date or sight bank post-bills are issued ?

No bank post-bills are issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?

On deposits 2 | per cent, or 3 per cent, subject to a commission of J per cent, on with-
drawal. On current accounts, 4 per cent.

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date	to which the account is made up ?

31st December 1835.

No. 31.—LINCOLN AND LINDSEY BANKING COMPANY.

£lm	Question. 1.—Name of the joint-stock bank, and date of commencing business?

Lincoln and	Answer.—The Lincoln and Lindsey Banking Company ; commenced business 14th

Lindsey Banking August 1833.

Company.	2.—Number and situation of branches, and distance of each from central bank?

'■	Branches: at Louth, 27 miles; at Gainsboro', 21 miles. Agencies: at Brigg, 24 miles;

Horncastle, 21 miles ; Market Rasen, 16 miles ; Alford, 40 miles. We also give attendance on
market and fair days, at Caistor, 26 miles; Spilsby, 36 miles; and Sleaford, 17 miles. The
above places are all situate in the north division of this county, with the exception of
Sleaford, which is situate in the south division.

3.—Amount	of nominal capital?

£. 250,000.

4.—Number	of shares, and nominal value of each share?

One thousand two hundred and fifty shares, of 2001, each.

5.—NumberCOMMITTEE ON JOINT-STOCK BANKS.	215

5.—Number	of shares issued ?

One thousand shares.	Lincoln and

6.—Amount	of paid-up capital ?	Lindsey Banking
£. 20,000. Company.

7.—Date	of the several calls for paid-up capital, and amount of the several in-
stalments paid up ?

First instalment of 10 /. per share paid up 15th June 1833, second instalment of 10 L per
share paid up 17th September 1833.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

Six per cent.

10.—Variations	in rate of dividend, and date of such variations ?

None.

11.—-Date	of deed of settlement, and number of persons who have signed Such
deed?

12th August 1833 ; 248 persons signed the deed.

12.—Copy	of deed of settlement; when it has been printed and published ?

Copy sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared ?

Copy of report and general balance sent herewith; the accounts are examined and
audited weekly by the board of directors, and the report is also prepared under the re-
sponsibility of the board of directors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The shares of the customers of the bank are held liable for any advances which may at
any time be made on their account, (see clause 15, deed of settlement.)

15.—Places	at which promissory notes and bank post-bills are made payable ?
Lincoln; and Prescott, Grote & Co., London.

Louth; and - - ditto - - ditto.

Gainsboro'; and - ditto - - ditto.

16.—At	what date or sight bank post-bills are issued?

No bank post-bills are issued, but drafts are drawn at any date not exceeding two months.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two per cent., both on deposits and balances of account.

18.—Variations	in such rate, and date of such variations?

None,

19.—Date	to which the account is made up?

31st December 1835.

No. 32.—STOURBRIDGE AND KIDDERMINSTER BANK.

Question 1.—Name of the joint-stock bank* and date of commencing business? -	32-

Answer.—Stourbridge and Kidderminster Bank; commenced business at Stourbridge	1 • 6 a

10 April 1834, and at Kidderminster 30 June 1834.	Bank^"11118^

2.—Number	and situation of branches, and distance of each from central bank ?	,
Two branches and four agencies: 1. A branch at Kidderminster, seven miles from Stour-
bridge ; 2. A branch at Stratford-on-Avon, 30 miles from Stourbridge, founded upon the

business of the old bank at that place, which had been established about 22 years. Four
agencies, all connected with the bank at Stratford: 1. Henley-in-Arden, eight miles from
Stratford; 2. Shipston-on-Stour, 10 miles from Stratford, six from Moreton, and 11 from
Chipping-Norton; 3. Moreton-in-Marsh, 16 miles from Stratford, six from Shipston, and
eight from Chipping-Norton; 4. Chipping-Norton, 21 miles from Stratford, 11 from Shipston,

and eight from Moreton. Attendance is given for about two hours every Tuesday: 1. At
Bromsgrove, 10 miles from Stourbridge, 20 from Stratford; 2. .Redditch, 15 miles from
Stourbridge, 15 from Stratford; 3. Alcester, 22 miles from Stourbridge, eight from Stratford;

places all in the direct line between Stourbridge and Stratford; but we have no establish-
ment or paid agent at any of them.

3.—Amount	of nominal capital ?

£.250,000.

4.—Number	of shares, and nominal value of each share?

Ten thousand shares, of 25 /. each.

5.—Number	of shares issued ?

Nine thousand.

6.—Amount	of paid-up capital ?

£. 45,0001.

591.	e e 4	7.—Date216

APPENDIX TO REPORT FROM THE

No. 33.	7.—Date of the several calls for paid-up capital, and amount of the several instal-

Stourbridge and	ments paid up ?

Kidderminster	One instalment of 5/. called when the shares were issued.

*	8.—Number of shares (if any) which may have been forfeited for non-payment of

'	instalments?

None forfeited.

9.—Rate	of declared dividend ?

Six per cent, per annum.

10.—Variations	in rate of dividend, and date of such variations ?

No variations, only one dividend having been declared.

11.—Date	of deed of settlement, and number of persons who have signed such deed?
25 March 18:34; enrolled in the High Court of Chancery, 11 February 1835, and signed

by 267 persons.

12.—Copy	of deed of settlement; when it has been printed and published ?

Copy sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors; a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared.

Copy of report sent herewith. The accounts are made up on the responsibility of the
accountant and manager, and are examined and audited by the directors, at a special meet-
ing for this purpose. Proprietors, at a general meeting, are fully authorized by the 84th
clause of the deed of settlement to appoint two persons, being proprietors of 50 shares each,
to examine and report on the affairs of the company, with power to call for all books, writings
and documents of the company; and, in addition to the manager, accountant, clerks, &c.,
to employ, at the expense of the company, such clerks and assistants as may be necessary
to aid them in making their audit and report.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

The bank does not hold any of its own shares in trust, as security for advances, or in its
own right; but the directors have, by the 91st clause of the deed of settlement, a general
lien on the shares of each proprietor who may be indebted to the company, with power
of forfeiture.

15.—Places	at which promissory notes and bank post-bills are made payable ?
Promissory notes are payable at Stourbridge, Kidderminster, and Stratford-on-Avon; also

n London, at Messrs. Smith, Payne & Smiths. Post-bills are payable only in London.

16.—At	what date or sight bank post-bills are issued ?

At any date not exceeding 21 days, or seven days' sight, at the option of the customer.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?
The rate of interest on deposits and balances of account varies from 2 to 3 per cent.,

depending upon the amount, the time it will remain in our hands, &c.

18.—Variations	in such rate, and date of such variations ?

No variation.

19.—Date	to which the account is made up?

Saturday evening, 21 May 1836.

No. 33.	No. 33.—GLOUCESTERSHIRE BANKING COMPANY.

Banking* Company.	Question 1.—Name of the joint-stock bank, and date of commencing business?

w,	Answer.—Gloucestershire Banking Company; 2d July 1831.

2.—Number	and situation of branches, and distance of each from central bank?
Four, viz: Tewkesbury, 10 miles; Cheltenham, eight miles; Stroud, eight miles; Eves-
ham, 25 miles.

3.—Amount	of nominal capital ?

Five hundred thousand pounds.

4.—Number	of shares, and nominal value of each share?

Ten thousand of 50 Z. each.

5.—Number	of shares issued?

Ten thousand (being the whole).

6.—Amount	of paid-up capital ?

£. 100,000; of which 75,000 /. is already received, and the final payment of 25,0001, will
be made next month (as stated below, No. 7.)

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

July 2, 1831, 5/. per share; January 20,1836, 2 L 105.; July 20, 1836, 21. 10s.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

0.—RateCOMMITTEE ON JOINT-STOCK BANKS.

217

9.—Rate	of declared dividend?

Six per cent, for the year ending 1st July 1832; 10 per cent, for the years ending 1833, Gloucestershire
1834 and 1835.	Banking Company.

10.—Variations	in rate of dividend, and date of such variations ?	_

An increase for the year ending 1st July 1833, of 4 per cent., and following years (as

above) ; no other variation.

11.—Date	of deed of settlement, and number of persons who have signed such deed t
July 2,1831; signed by all the original subscribers, in number amounting to upwards of 300.

12.—Copy	of deed of settlement, when it has been printed and published?

At the opening of the bank, 1st July 1831.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
i ment of the nature of audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

Copies of reports and accounts inclosed. The accounts are prepared by the manager, and
examined and audited by three of the directors, specially appointed by the board, who go
through the whole of the accounts, and see that they are correctly taken from the books,

and who, with the manager, are responsible for the reports.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable?

Jones, Loyd & Co., and Williams, Deacon & Co., bankers, London; bank post-bills in

London only; and promissory notes in London, and at the towns where the same are respec-
tively issued.

16.—At	what date or sight bank post-bills are issued ?

At seven days' sight and under; at 21 days' date and under.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account ?

Two-and-a-half per cent, on deposits, and no interest allowed on running accounts, except-
ing by special agreement.

18.—Variations	in such rate, and date of such variations ?

Very little, if any variation.

19.—Date	to which the accounts are made up ?

December 31, 1835.

Wm. Russell Skey, Manager.

No. 34.—EAST OF ENGLAND BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business?	„

Answer.-—East of England Bank ; commenced business 29th February 1836.	gast 0f England

2.—Number	and situation of branches, and distance of each from central bank ? Bank.

Great Yarmouth, 21 miles, with three sub-agencies; Ipswich, 43 miles, with three sub- ---

agencies; Swaffham, 27 miles; Bury St. Edmunds, 42 miles; and six agencies connected
with central office.

3.—Amount	of nominal capital ?

£. 1,000,000 sterling, with power to increase the same.

4.—Number	of shares, and nominal value of each share?

Fifty thousand shares, of 20 I. each.

5.—Number	of shares issued?

Fifteen thousand eight hundred and seventy-eight.

6.—Amount	of paid-up capital ?

£. 75,752. 105.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

First call of 2 Z. 10s. per share, due 22d January; amount paid up, 38,290 Z. Second ditto,

2Z. 10s., 21 March; 37,462Z. 10s. Third ditto, 2Z. 10s., 10th September.

N. JR. It is calculated, at the present rate of progression, that within the current year the
shares allotted will amount to 20,000, and the paid-up capital to 200,000 Z.; but both can be
augmented, as the business may require.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

Nil.
Nil.
Nil.

9.—Rate	of declared dividend?

10.—Variations	in rate of dividend, and date of such variations?

11.--Date	of deed of settlement, and number of persons who have signed such deed?
12th of May 1836; has just been put under signature, and has received 79 names ; the

present number of proprietors 692; and they are required to sign by the 1st of August next.

12.—Copy	of deed of settlement, when it has been printed and published?
Tbe deed is now in the press, and a copy will be forwarded in a few days.

^ 591.	f f	13.—Copies218

APPENDIX TO REPORT FROM THE

24.	—Copies of the last reports and accounts laid before the proprietors, a state-

East of England	merit of the nature of the audit and examination to which such accounts are subjected,

Bank.	and of the responsibility under which such reports are prepared ?

______Reports and accounts are to be prepared under the responsibility of the general board of

directors, and submitted annually to general meeting of proprietors, to be held in Norwich
on the first Wednesday in June, and which meetings are empowered to appoint auditors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

Company has a lien upon all its shares, but does not make advances, except for useful
business.

15.—Places	at which promissory notes and bank post-bills are made payable ?
Promissory notes are made payable at Norwich, Ipswich, Great Yarmouth, and Bury St.

Edmunds, and all of them at the London agents; post-bills not used.

16.—At	what date or sight bank post-bills are issued?

Nil,

17.—Rate	of interest paid by the bank, whether on deposits or balances of account ?
£.2. per cent, per annum on deposits and balances of account.

18.—Variations	on such rate, and date of such variations ?

Nil.

19.—Date	to which the account is made up ?

21st of May 1830.

W. Cargill, General Manager.

East of England Bank, Norwich.

No. 35.—YORKSHIRE DISTRICT BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business?
35; . Answer.—Yorkshire District Bank; 1st August 1834.

Yorkshire District	2.—Number and situation of branches, and distance of each from central bank?,

Bank.	Head office at Leeds, and 18 branches, as follows: York, 24 miles from Leeds; Bradford

--- 10 ditto ; Hull, 54 ditto; Pontefract, 13 ditto; Sheffield, 33 ditto; Knaresborough, 18 ditto;

Halifax, 18 ditto; Ripon, 27 ditto; Doncaster, 28 ditto; Huddersfield, 16 ditto; Selby,
20 ditto; Beverley, 52 ditto; Thirsk, 37 ditto; Dewsbury, eight ditto; Malton, 43 ditto;
Barnsley, 19 ditto; Pocklington, 36 ditto; Richmond, 52 ditto. The average being 28 miles,
and all of them within the county of York,

3.---Amount	of nominal capital ?

£. 1,000,000.

4.—Number	of shares, and nominal value of each share ?

Fifty thousand, at 20 I. each, with power under certain provisions to increase the number
to 100,000.

5.-—Number	of shares issued?

Thirty-one thousand two hundred and eleven.

0.—Amount of paid-up capital ?

£.311,110.

7.—Date of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

£, s. d.

1834: Aug. 1. 22.105.- - - 78,027 10 -
Sept. 16. 2 7.10*.- - - 78,027 10 -
1835: Feb. 18. 5/. -	155,055 - -

£.311,110 - -

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

Five per cent.

10.—Variations	in rate of dividend, and date of such variations?

Only one dividend, as above, has yet been declared.

11.—Date	of deed of settlement, and number of persons who have signed such deed?
1st August 1834; 665.

12.—Copy	of deed of settlement, when it has been printed and published?

Copy sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors ; a state-
ment of the nature of the audit and examination to which such accounts are subjected,
and of the responsibility under which such reports are prepared ?

Copies sent. Auditors are appointed in terms of the 71st clause of the deed of settlement,
which is as follows ; "71. That at every general meeting of th£ proprietors of the said bank,

toCOMMITTEE ON JOINT-STOCK BANKS.

219

to be held on the first Friday in February in each year, they shall appoint three of the pro- No.

prietors (none of them being a general or local director of the said bank, and each of them Yorkshire District
being a proprietor of 50 shares therein at the fewest) as auditors, to examine the accounts Bank.

of the general board of directors of the said copartnership, to be produced to the general ---

meetings of the proprietors, directed to be held on every first Friday in August, and to sign
such accounts, if found correct, and not to report thereon to the general meetings unless the
accounts be found incorrect; which auditors are hereby empowered to require the pro-
duction of all books, vouchers, writings and documents concerning the same accounts,

and to call in the aid of the general and other managers, accountants, clerks and officers
of the said copartnership; and every of such auditors shall, previous to entering upon the
investigation of the matters committed to their care, subscribe a declaration, engaging to
observe secrecy in respect to the state of the accounts of individuals with the bank."

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust as security for advances, or in its own right ?

The bank holds no shares as special security; but they have a lien on the shares of all the
proprietors who may transact business with them, in terms of the 9th clause of the deed of set-
tlement, which is as follows: " That the said copartnership bank shall have a lien upon, and
shall be entitled to retain and appropriate the whole value of the shares and interest of any
proprietor therein for the time being, for or in or towards the payment and liquidation of any
debt or liability, debts or liabilities, due from or entered into by such proprietor, to or with
the said copartnership bank, whether such debt or liability, debts or liabilities, be several,

and due and liable from or by such proprietor solely, or joint and due, and liable from or by
him or her, along and together with any partner or partners in trade, of any such proprietor
for the time being, or together and along with any other person or persons, as surety or gua-
rantee, sureties or guarantees, or otherwise howsoever; and that each and every of the pro-
prietors of the said copartnership bank doth hereby authorize and empower the general
board of directors thereof for the time being to retain his and her own particular shares and
interests and profits therein, in security for the debts and engagements of the copartnership, as
well as for his and her respective several or joint debts and liabilities thereto, as hereinbefore
mentioned, and when necessary for any or either of the said purposes, to sell and dispose of
such shares, interests and profits as hereinafter directed as to shares forfeited to or purchased
by them; and in general security for the performance and observance of each and every
proprietor's part of the conditions and stipulations of this copartnership, the said shares,

interests and profits are hereby assigned and conveyed to, and declared to be vested in the
said general board of directors accordingly." There are 18,789 shares still unappropriated,

which could be given off at once, but are reserved to secure eligible and useful copartners.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Notes are payable at Leeds, and all the branches, as enumerated at No. 2, and at the office

of Messrs. Williams, Deacon & Co., bankers, London. There are no post-bills.

16.—At	what date or sight bank post-bills are issued ?

None.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account ?

The rates allowed are the same as those given by the bankers at our various esta-
blishments, but the average rate of deposits may be stated at 2 | per cent.; ditto, current
accounts, 3 per cent.

18.—Variations	in such rate, and date of such variations 7

None.

19.—Date	to which the account is made up ?

21st May 1836, the date of the circular of the Chancellor of the Exchequer.

By order of the General Board of Directors,

Yorkshire District Bank,	James Scarth, General Manager.

Leeds, 8 June 1836.

No. 36.—NORTH WILTS BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?

Answer.—North Wilts Banking Company ; 9th November 1835.	'

° r J 9	North Wilts Bank-

2.—Number	and situation of branches, and distance of each from central bank? ing Company.
Eleven; distance from central bank respectively, 28, 24, 21, 17, 16, 8, 7, 7, 5, 5, 5.	---

3.—Amount	of nominal capital ?

£.250,000.

4.—Number	of shares, and nominal value of each share ?

Ten thousand, at 25/.

5.—Number	of shares issued ?

Seven thousand three hundred and eighty-five.

591.	f f2	6,—Amount220	APPENDIX TO REPORT FROM THE

g6.	6.—Amount of paid-up capital ?

North Wilts Bank- £• 36,925.

mg Company.	7 _Date of the several calls for paid-up capital, and amount of the several instal-

————	ments paid up ?

November 1835 ; one calling of 5/.; all paid up.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

None.

10.—Variations	in rate of dividend, and date of such variations?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

31st October 1835 ; 157.

12.—Copy	of deed of settlement, when it has been printed and published?

Sent.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

One hundred and fifty held on security; 75 in own right.

15.—Places	at which promissory notes and bank post-bills are made payable?
Melksham, Devizes and London.

16.—At	what date or sight bank post-bills are issued?

Seven days' sight to 21 days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

£.2. 10^. on deposit; nothing on account current.

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date	to which the account is made up ?

31st May 1836.

Of 240 shareholders, 227 are resident in Wilts, most of them known to be persons of good
property, and many of them of large fortunes.

The directors all reside in Wilts, and act gratuitously.

No. 37.—LEEDS AND WEST RIDING BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
No. 37.	Answer.—Leeds and West Riding Banking Company: commenced business 27th Oc-

Leeds and West tober 1835.

Riding Banking	XT ,	.	.

Company.	2-—dumber and situation of branches, and distance of each from central bank ?

_^ Three branches ; viz. Harrogate, 15 miles from head office : Heckmondwike, 10 ditto :

Pudsey, 7 ditto.

3.—Amount	of nominal capital ?

£.400,000.

4.—Number	of shares, and nominal value of each share?

Twenty thousand shares, of 201, each.

5.—Number	of shares issued ?

Nine thousand.

6.—Amount	of paid-up capital i
£.45,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

One call 21 days from the time of allotment, the period of allotting shares still being

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ? r J

None.

9.	Rate of declared dividend ?

None, not having been in existence one year.

10.—VariationsCOMMITTEE ON JOINT-STOCK BANKS.

221

10.—Variations	in rate of dividend, and date of such variations ?

None, not having been in existence one year.	Leeds and West

11.—Date	of deed of settlement, and number of persons who have signed such Riding Banking
deed ? Company.

Deed dated 27th January 1836; signed by 147 persons. The deed has not yet been sent	■

round for signature, it is therefore fair to surmise that it would have been more numerously
signed, as there is no objection to it, there not being a clause in it which has given rise to
discussion or objection.

12.—Copy	of deed of settlement, when it has been printed and published ?

Is in the printer's hand, and nearly finished.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

The balance-sheet will be laid before the proprietors, called together by public notice ;

the report is prepared by the directors, or a committee from the directors, along with the
manager of the Company.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

The bank holds none of its shares, either in its own right or for advances, yet, at the same
time, the deed gives a lien on them to the bank in case it is required.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Promissory notes payable at Leeds or London.

16.—At	what date or sight bank post-bills are issued ?

Bank post-bills are not issued by this Company.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Three per cent, paid on deposits where the money is undisturbed for a period of not less
than three months, but on balances of current accounts 2 per cent,, as such balances
fluctuate rapidly.

18.—Variations	in such rate, and date of such variations?

Non«.

19.—Date	to which the account is made up ?

30th June and 31st December.

No. 38.—THE HAMPSHIRE BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	n 8

Answer.—The Hampshire Banking Company; 1st May 1834.	Hampshire

2.—Number	and situation of branches, and distance of each from central bank ? Banking Company,
One branch at Fareham, distant from the central bank at Southampton 12 miles; another

at Romsey, distant seven miles, with an office at Stockbridge, distant 17 miles, which is
open only on Thursdays, the day of holding Stockbridge market.

3.—Amount	of norninal capital ?

£.300,000.

4.—Number	of shares, and nominal value of each share ?

Six thousand shares, of 50/. each.

5.—Number	of shares issued ?

Four thousand eight hundred and thirty-four.

6.—Amount	of paid-up capital ?

£.24,170.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up?

On 1st May 1834 a call of 51, per share was made.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

£.7. 10 s. percent.

10.—Variations	in rate of dividend, and date of such variations?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

2d July 1834; signed by 143 shareholders.

12.—Copy of deed of settlement, wl
ent herewith.

591-	f f 3	13,—Copies

12.—Copy of deed of settlement, when it has been printed and published ?
Sent herewith.222

APPENDIX TO REPORT FROM THE

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared?

Copies of the last report, and a statement of accounts laid before the proprietors, are sent
herewith ; the same were prepared by the manager and two confidential directors, then sub-
mitted to the audit and examination of a general board of directors, upon whose joint respon-
sibility they were afterwards laid before the shareholders at the annual meeting, agreeably
to the 48th clause of the deed of settlement.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills £>re made payable?

At Southampton, and at Messrs. Jones, Loyd & Co., London.

16.—At	what date or sight bank post-bills are issued.

The Hampshire Banking Company usually draw on Jones, Loyd & Co. at 21 days after
date, and sometimes at shorter periods, and even at sight, according to circumstances.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two-and-a-half per cent, is paid on deposits at interest for periods of not less than three
months, but no interest is allowed on running accounts.

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date	to which the account is made up ?

* 30th June 1835.

No. 39.—DEVON AND CORNWALL BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?
No. 39. Answer.—The original name was "The Plymouth and Devonport Banking Company/"
Hfu Corn- commence(j[ business January 1, 1832 ; the name was changed to the Devon and Cornwall
wa BankingCom- gankjng Company, October 18, 1833, in consequence of its having extended its branches
_ beyond the limits originally contemplated.

2.—Number	and situation of branches, and distance of each from central bank ?

Plymouth head office and central bank, from which Devonport is two miles; Totness, 22 ;

Dartmouth, 28 ; Liskeard, 18 ; St. Austell, 36 ; Kingsbridge, 18 ; Ashburton, 25 ; Newton,
30; Bromin, 30.

3.—Amount	of nominal capital ?

£. 300,000.

4.—Number	of shares, and nominal value of each share ?

Three thousand shares, of 100 L each.

5.—Number	of shares issued ?

Two thousand and nineteen shares. See Note on next page.

6.—Amount	of paid-up capital ?

£. 40,380. See Note on next page.

7.—Date	of the several calls for paid-up capital, and amount of the several
instalments paid up ?

Deposit 2 I. on subscribing; first instalment 10/., before December 31, 1831; second
instalment 8/., before June 30, 1832. No calls have since been made, sufficient capital
having been received for transacting the business of the bank. See Note on next page.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend?-10.—Variations in rate of dividend, and date

of such variations ?

A dividend of 5 per cent, on the paid-up capital was paid at the close of the first year,
of 6 I per cent, at the close of the second and third years, and of 7 J per cent, at the close
of the fourth and last years. There was appropriated to the guarantee fund at the rate of
about 4 per cent, on the paid-up capital at the close of the first and second years
respectively, of about 6 per cent, at the close of the third year, and of 7 per cent, at the
close of the fourth year, after making allowance for bad debts.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

The date of the deed of settlement is November 23d, 1832; it is signed by 135 persons,
being all the proprietors except 10. During the year 1835 only one transfer of shares took
place, and that of only five shares, although there were many applications for shares.

12.—Copy	of deed of settlement, when it has been printed and published ?

A copy of the deed of settlement accompanies this return.

13.— Copies

No. 38,
The Hampshire
Banking Company.COMMITTEE ON JOINT-STOCK BANKS.

223

13—Copies of the last reports and accounts laid before the proprietors, a state- n0< ^g.

ment of the nature of the audit and examination to which such accounts are Devon and Corn-
subjected, and of the responsibility under which such reports are prepared?	wall Banking Com-

A copy of the last report laid before the proprietors accompanies this return. The audit pany.

and examination of the accounts is entrusted to two directors, and the reports are prepared	-

under the responsibility of the whole board. The deed of settlement, s. 31, p. 24,

provides, " That in case of dissatisfaction with the statement of the affairs of the company,

every annual meeting may appoint two shareholders qualified as directors, as auditors to
examine and report on the state of the accounts and affairs of the company; but this right
has not been exercised, the proprietors having passed a unanimous resolution expressive of
their entire satisfaction and confidence in the management of the bank.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The bank does not hold any of its own shares or stock in trust as security for advances,

except as it is provided in the deed of settlement, sec. 58. That the shares are held as
a lien against ail debts due from the shareholders to the bank on a current account; but no
proprietor can claim to borrow on his shares, nor has money ever been lent on shares, except
on account, and this in very few cases. The bank does not hold any shares in its own
right, excepting such as have not been issued, and are consequently not reckoned as
capital.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Plymouth, Devonport, Kingsbridge, St. Austell, Totness; and are payable at the places

from whence they are issued respectively.

16.—At	what date or sight bank post-bills are issued ?

No bank post-bills are issued, but bills of exchange are drawn on London at any date
which may be required, in conformity with the provisions of the Composition Act, and
sometimes on stamps.

17.—Rate	of Interest paid by the bank, whether on deposits or balances of
account?-18.—Variations in such rate, and date of such variations?

Three per cent, interest is paid on deposits, which rate has not varied since the establish-
ment of the bank.

19.—Date to which the account is made up ?

This account is made up to December 31, 1835.

Note.—Since the close of the last year the directors, in accordance with the intention
expressed in their report, and in consequence of the extension of their branches, have issued
827 of the reserved shares, making to April 18, 1836, the total number of shares issued
2,846, the paid-up capital of which will be 56,920/. The premium received on those
shares is not applied to the credit of profit and loss, but is appropriated to the augmentation
of the guarantee fund, which is consequently an addition to the capital of the bank.

For the Directors of the Devon and Cornwall Banking Company,

David Derry.

Plymouth, 30 May 1836.

Exeter, Collumpton and Tavistock have been added as branches to the bank.

No. 40.—BARNSLEY BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business ?

Answer.—Barnsley Banking Company; commenced 13th February 1832.	Barnsley* Banking

%—Number and situation of branches, and distance of each from central bank ? Company.

None.	-——-.

3.—Amount	of nominal capital ?

£.300,000.

4.—Number	of shares, and nominal value of each share?

Three thousand, at 100 I. each.

5.—Number	of shares issued ?

Two thousand five hundred and fifteen.

6.—Amount	of paid-up capital ?

£.25,150.

7.—Date	of the several calls for paid-up capital, and amount of the several instal
ments paid up ?

11th January 1832, 5 L ; 13th February 1832, 5 I.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

591. f f 4	9.—Rate224	APPENDIX TO REPORT FROM THE

9.—Rate of declared dividend?-10.—Variations in rate of dividend, and date

of such variations ?

Seven-and-a-half per cent, from 13th February 1832 to 31st December 1833; 6 per cent,
from 31st December 1833 to 31st December 1834; 6 J per cent, from 31st December 1834
to 31st December 1835.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

1st May 1832; signed by 129 shareholders.

12.™Copy	of deed of settlement, when it has been printed and published ?

Sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared ?

Copies of the last report and accounts accompany this return; the audit and examination
of the accounts are subjected to a board of seven directors, who are responsible for their
accuracy, after which a report and balance-sheet are prepared and presented to the body of
proprietors at their general annual meeting. Please refer to clause N o. 49, page 34, of the
printed copy of the deed accompanying this.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

Five hundred shares were reserved by the directors to be disposed of as stated in clause
No. 3, p. 3, of which 15 have been since disposed of to customers of the bank; the bank
holds no other shares in its own right, or in trust, or as security for advances, except by the
general lien clause, No. 33, p. 22.

15.—Places	at which promissory notes and bank post-bills are made payable?

Do not draw bank post-bills; the promissory notes are payable at Barnsley only.

16.—At	what date or sight bank post-bills are issued ?

Not any are issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two per cent, on deposits from two to six months; 2 £ per cent, on deposits if six months
or upwards ; 3 per cent, on accounts where commission is charged; 2 per cent, on accounts
where no commission is charged.

18.—Variations	in such rate, and date of such variations ?

Interest on deposits of six months and upwards was allowed at 3 per cent, up to 31st
March 1833, when it was reduced to 2 |.

19.—Date	to which the account is made up ?

31st December 1835.

No. 40.
Barnsley Banking
Company.

No. 41.—NORTHERN AND CENTRAL BANK OF ENGLAND.

Question 1.—Name of the joint-stock bank, and date of commencing business ?
, '41*	Answer.—Northern and Central Bank of England; commenced business at the head-

tral^ Bank ofEng-^ 0&ce in Manchester 17th March 1834'

land.

--2.—Number and situation of branches, and distance of each from central bank ?

Branches have been established as follows : viz.

		Distance			
Town.	County.	from Head		Town.	County.
		Bank.			
Bangor Birmingham	Carnarvon	103	miles.	Macclesfield -	Chester -
	Warwick	83	-	Nantwich	Ditto
Bolton	Lancaster	12	-	Michwich	Ditto
Bradford -	York	35	—	Nottingham	Nottingham
Chester	Chester -	3*	-	Preston -	Lancaster
Clitheroe -	Lancaster	28	—	Shrewsbury	Shropshire
Colne	Ditto	23	—	St. Helen's	Lancaster
Denbigh -	Denbigh -	61	-	Sheffield -	York
Halifax	York	27	—	Tarn worth	Stafford -
Keighley -	Ditto	40	—	Whitchurch	Shropshire
Knutsford	Chester -	15	-	Worcester	Worcester
Leeds	York -	45	-	Wrexham	Denbigh -
Liverpool -	Lancaster	30	—		

Sub-"

Branches,COMMITTEE ON JOINT-STOCK BANKS.
Sub-Brakches.

225

Sub-Branch.	Branch.	Distance from Principal Branch.	Sub-Branch.	Branch.	Distance from Principal Branch.
Carnarvon Holywell - Ruthin  Cleckheaton A Wakefield (&- > continued) - J Ormskirk - Congleton -	Bangor - Chester - Denbigh -  Leeds  Liverpool Macclesfield	7 miles. 20 -  7	~  (9 ~ \io -  6 -  8	-	Grantham Bakewell Wem - A Wellington - J Evesham A Leominster - J Mold - -1 Oswestry -J	Nottingham Sheffield -  Shrewsbury  Worcester  Wrexham	24 miles. 16 -  J10 ~  lu - fi5 - 120 - f 8 - \io -

jV. B.—Reference is here made to the accompanying Plan.

No. 41.
Northern and
Central Bank of
England.

jV. B.—Reference is here made to the accompanying Plan.

3.—Amount	of nominal capital ?

None.

4.—Number	of shares, and nominal value of each share ?

One hundred thousand shares, of 101, each.

5.—Number	of shares issued ?

Seventy-one thousand one hundred and eighty-six.

6.—Amount	of paid-up capital ?

£.711,860.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

20 January 1834, a call of - - - - £.2 10 s. per share.

3 March - —	2 10 —

22 October - —	- -- -210 —

25 March 1835 — - -- -2 10 —

Vide Plan.

Total

- £.10 -

Being the whole amount subscribed for.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

£. 7. per cent.

10.	— Variations in rate of dividend, and date of such variations ?

Only two dividends have as yet been declared; the first, being for the period from the
commencement of business to 31st December 1834, was at the rate of 5 percent, per annum;
the second, being for the year 1835, was, as above-mentioned, at the rate of 7 per cent, per
annum.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

The deed of settlement is dated 1st July 1834, and the number of persons who have signed
the same is 1,265, who, by the existing law, are liable for the engagements of the Company
to the utmost extent of their means; but it must be observed that, by clause No. 26 of the
deed, should 25 per cent, of the capital at any time be lost, the Company will then stand
ipso facto dissolved, the responsibility of the shareholders being thereby limited to that
extent only.

12.—Copy	of the deed of settlement, when it has been printed and published ?

A printed copy of the deed of settlement is sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared?

A copy of the last report laid before the proprietors is sent herewith. By clause No. 7 of
the deed of settlement, the proprietors, at a general meeting, are empowered to appoint two
of themselves as auditors to examine and report on the state of the accounts and affairs of
the Company; but as the power so conferred by the deed of settlement was not expected to
be exercised, the directors, on the occasion of the general meeting of proprietors in April
last, previously submitted the report, books and accounts to six influential proprietors, who
satisfied themselves of the correctness of the statements contained therein.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, on security for advances, or in its own right ?

The bank has a lien upon the shares of all proprietors in respect of cash advances, bills or
obligations, and hdlds no shares in its own right.

g g	15.—Places226

APPENDIX TO REPORT FROM THE

^	15.—Places at which promissory notes and bank post-bills are made payable ?

Northern and	Promissory notes are issued at all the branches (see list in answer to Question No. 2.).

Central Bank of	They are made payable at the place where dated, and also in London. Bank post-bills are

England.	drawn on London bankers, and are only payable in London.

————	16.—At what date or sight bank post-bills are issued ?

Bank post-bills are usually drawn at 7, 10, 14 or 21 days' date, and at seven days' sight.

17.—Rate of interest paid by the bank, whether on deposits or balances of
accounts ?

Various rates, from 2 \ to 3 \ per cent., according to special agreement. If no agreement
is entered into the rate allowed is 2 \ per cent.

IB.—Variations in such rate, and date of such variations.

The rates above-mentioned are those which have been allowed by this bank since its com-
mencement.

19.—Date to which the account is made up ?
31st December 1835.

Manchester, 11 June 1836.

James R. Lyle,

Chief Accountant.

No. 42.
Commercial Bank
of England.

No. 42.—COMMERCIAL BANK OF ENGLAND.

Question 1.—- Name of the joint-stock bank, and date of commencing business?
Answer.—Commercial Bank of England; commenced business 12th August 1834.

2.—Number	and situation of branches, and distance of each from central bank ?
Number of branches 18 : Ashbourn 43, Birmingham 78, Blackburn 24, Burnley 25,

Burslem 34, Chester 40, Ellesmere 70, Hanley 36, Leek 30, Liverpool 32, Ludlow 100,
Newport 60, Preston 30, Rochdale 11, Skipton 43, Shrewsbury 70, Uttoxeter 50, Whit-
church 60 miles.

3.—Amount	of nominal capital ?

£. 260,005 paid-up capital,

4.—Number	of shares, and nominal value of each share?

One hundred thousand shares, of 5Z. each.

5.—Number	of shares issued ?

Fifty-two thousand and one shares, appropriated and paid.

6.—Amount	of paid-up capital ?

£. 260,005.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Shares, when granted, have been immediately paid, the principle of the bank being a
paid-up capital.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

£. 8. per cent., or 61 per cent, per annum.

10.—Variations	in rate of dividend, and date of such variations?

Only one dividend declared, the bank having then been in existence only 17 months.

11.—Date	of deed of settlement, and number of persons who have signed such deed ?
26th of May 1834. Number of shareholders, 637. No shares can be transferred, unless

the deed be first signed. Number actually signed, 433 persons.

12—Copy of deed of settlement; when it has been printed and published?

Copy sent herewith; printed for distribution.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

Report laid before the general meeting, under the responsibility of the general board of
directors, agreeably with the deed of settlement; copy sent herewith.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

Six hundred and eighty-two shares, held by the trustees of the bank in their own right,
being shares bought, which shares came into their hands by death or otherwise.

Note.—The deed of settlement gives a lien upon all shares, consequently the bank
have the security of the shares against all customers' over-drafts, when any.

15.—Places	at which promissory notes and bank post-bills are made payable ?
Promissory notes are payable where issued, in London, and by courtesy wherever the bank

is situated.

16.—AtCOMMITTEE ON JOINT-STOCK BANKS.

227

16.—At	what date or sight bank post-bills are issued ?	No, 42.
Not exceeding 21 d. dor 7 d. s. Commercial Bank

17.—Rate	of interest paid by the bank, whether on deposits or balances of account? England.

From 2 \ to 3 | per cent.	>

18.—Variations	in such rate, and date of such variations ?

Impossible to be given, being so very fluctuating.

19.—Date	to which the account is made up?

The 10th June 1836.

F. Grugeon, Managing Director.

No. 43.—BANK OF LIVERPOOL.

Question 1.—Name of the joint-stock bank, and date of commencing business ? « ,
Answer.—Bank of Liverpool; 13th May 1831.	Bank of Liverpool.

2.—Number	and situation of branches, and distance of each from central bank?

No branches.

3.—Amount	of nominal capital ?

£.3,000,000.

4.—Number	of shares, and nominal value of each share?

Thirty thousand shares, of 100 L each.

5.—Number	of shares issued ?

Twenty-five thousand eight hundred and ten shares issued.

6.—Amount	of paid-up capital ?

£. 258,100 capital paid up.

7.—Date	of the several calls for paid-up capital, and amount of the several in-
stalments paid up ?

Five pounds per share on the opening of the bank; 5 L per share on the 29th August 1831.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.	.

9.—Rate	of declared dividend ?

At the rate of 8% per annum for the half year ending 31st December 1835.

10.—Variations	in rate of dividend, and date of such variations ?

First year to 30 June 1832, no dividend.

the rate of 6% per annum.

— - 6% —

- - 6% -
— - 6% —

— - 6% —

—	- 7% —

—	- 8 % —

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

Deed of settlement dated 25th August 1831; signed by 580 proprietors.

12.—Copy	of deed of settlement, when it has been printed arid published ?

Copy of the deed sent herewith.

Note. The capital stated in the deed is 2,500,000 7.; by a supplementary deed,

dated 10th April 1835, the capital was increased to 3,000,000 I.; and by a second sup-
plementary deed, under date of 18th April 1836, was further increased to 5,000,000 L

13.	Copies of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared?

Copy of the last report to the proprietors, dated 2d September 1835, sent herewith
This, and other previous reports, are the only statements of the affairs of the bank submitted
to the proprietors; they are drawn up by the manager from the accountant's balance-
sheet, which has undergone his examination, and being approved by the managing directors,

are laid before the board for their sanction, and signed by the chairman.

14.	Statement whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

By the 9th article of the deed of settlement " The bank has the first and paramount
lien on all the shares and stock of any proprietor who inay be indebted to the bank,

whether 6n his own account or jointly, or in partnership with any other person, such lien
being wholly discharged upon the transfer of such share or stock/' And by the 24th
article it is provided, " That no proprietor in this company shall be entitled to demand or
591#	g g 2	insist

Half —	31 Dec. -
Half —	30 June 1833
Half —	31 Dec. -
Half —	30 June 1834
Half —	31 Dec. -
Half —	30 June 1835
Half —	31 Dec. -228

APPENDIX TO REPORT FROM THE

No. 43, insist upon a cash credit to any amount whatever; but the same may be given, or wholly
Bank of Liverpool, withheld, at the discretion of the directors."

-	15.—Places at which promissoiy notes and bank post-bills are made payable ?

The Bank of Liverpool issues no promissory notes or bank post-bills.

16.—At	what date or sight bank post-bills are issued ?

See answer to the last question.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

The bank allows 2 J°/0 interest on deposits, and keeps the current accounts of its cus-
tomers at 31% interest, give and take, charging a commission of on the debit side.

18.—Variations	in such rate, and date of such variations?

The rate of interest on deposits has not varied since the bank commenced business; nor,
generally speaking, on accounts current. In some instances, where accounts have been
dormant for a time, with a Dr balance, interest has been charged from 4% up to 5*/o> ac-
cording to circumstances.

19.—Date	to which the account is made up ?

To the 31st December 1835.

Note.—Bank of Liverpool, May 28, 1836 :

The capital of the Bank of Liverpool this day is (say) paid up £. 358,320	-	-

The reserved fund........ 158,875	12	3

Add, unappropriated profits to the 31st December 1835 - 9,522	10	—

Total - - £. 526,718	2	3

No. 44.—THE STAMFORD AND SPALDING JOINT-STOCK BANKING

COMPANY.

ho,	Question 1.—Name of the joint-stock bank, and date of commencing business ?

The Stamford and Answer.—The Stamford and Spalding Joint-Stock Banking Company; commenced 2d
Spalding Joint- January 1832.

Comp^y0^1115	Note.—It has very lately been determined by the shareholders to insert the word

" Bostonthe style in future to be, " The Stamford, Spalding and Boston Banking
Company "

2.—Number	and situation of branches, and distance of each from central bank?
The bank consists of three main stations, at Stamford, Spalding and Boston; with three

branches, at Oundle, Bourn and Peterborough. From Stamford to Spalding is 20 miles,
and from Spalding to Boston 16 miles. Bourn is about equidistant from Stamford and
Spalding, viz. 10 miles; Peterborough the same, about 14 miles; Oundle is about equidistant
from Stamford and Peterborough, about 13 miles.

3.—Amount	of nominal capital ?

£. 150,000.

4.—Number	of snares, and nominal value of each share ?

Three hundred shares, of 500 Z. each.

Note.—The shares have very recently been reduced to 100 L each.

5.—Number	of shares issued ?

Two hundred and twenty; now 1,100, in consequence of the above alteration.

6.—Amount	of paid-up capital ?

£. 44,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up.

In 1832, the first call of 10 per cent., and new shares during the year, produced	£.9,500

In 1833, the second call and new shares produced -----	10,100

In 1834, new shares produced ---- --- -	1,600

In 1835, the third call and new shares produced -----	11,650

In 1836, the fourth call and new shares has produced -	11,150

£. 44,000

Another call is in contemplation on 1st January.

8.—Number of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—RateCOMMITTEE ON JOINT-STOCK BANKS.

229

9.—Rate	of declared dividend ?

Seven-and-a-half per cent, in every year except the first, in which all the profits were
placed to a reserved fund.

10.-—Variations	in rate of dividend, and date of such variations ?

None.

11.—Date	of deed of settlement, and number of persons who have signed such deed ?

2d January 1832; 106.

12.—Copy	of deed of settlement; when it has been printed and published?

Sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,
and of the responsibility under which such reports are prepared ?

Copies of the report and balance-sheet exhibited at the last annual meeting are sent here^
with. The reports and balance-sheets are made up under the authority and superintendence
of the whole board of directors. The shareholders at a general meeting may, if they think

fit, appoint three auditors to inspect the books of the company, and report thereon.-See

Deed of Settlement, s. 37.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The bank holds in its own right two of its shares taken of a customer who became insolvent,
under power of sec. 19 of the deed of settlement, which will be granted out to the first appli-
cant for shares, instead of creating fresh shares. The bank has, by the deed of settlement,
a lien to the amount of the value of shares held on all overdrawn accounts of shareholders.
The amount of advances on this security, of course, varies from time to time; it fluctuates
generally between 8,000 h and 10,000/.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Stamford, Spalding, Boston, Oundle, Bourn and Peterborough.

16.—At	what date or sight bank post-bills are issued ?

The bank does not issue any.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?

Two-and-a-half per cent, on balances, and three per cent, on deposits, withdrawable at two

months' notice.

18.—Variations	in such rate, and date of such variations?

None.

19.—Date	to which the account is made up ?

June 1836.

No. 45.—LEAMINGTON BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business ?	No. 45.

Answer.—Leamington Bank; May 12, 1835.	Leamington Bank.

2.—Number	and situation of branches, and distance of each from central bank ?	■" ■—
No branch.

3.—Amount	of nominal capital ?

£. 200,000.

4.—Number	of shares, and nominal value of each share ?

Ten thousand, 20 L each.

5.—Number	of shares issued ?

Five thousand one hundred and eighty.

6.—Amount	of paid-up capital?

£. 25,710.

7.—Date	of the several calls for paid-up capital,

ments paid up?

£. 5 per share, at the commencement.

8.—Number	of shares (if any) which may have
instalments ?

None.

9.—Rate	of declared dividend ?

No dividend declared.

10.—Variations	in rate of dividend, and date of such variations?

None.

11.—Date	of deed of settlement, and number of persons who have signed such deed ?

May 11, 1835; 146.

12.—Copy	of deed of settlement, when it has been printed and published ?

One sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors; a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared.

No report made until the annual meeting in August. See clauses 86 and 87 in deed of
settlement.

591.	g g 3	14.—Statement

No. 44.
The Stamford and
Spalding Joint-
Stock Banking
Company.

and amount of the several instal
been forfeited for non-payment of230	APPENDIX TO REPORT FROM THE

No. 45. 14.—Statement whether the bank holds any and what amount of its own shares o
Leamington Bank.	stock, either in trust, as security for advances, or in its own right?

—--— None.

15.—Places	at which promissory notes and bank post-bills are made payable ?
London and Westminster Bank.

16.—At	what date or sight bank post-bills are issued?

From sight to 21 days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account.

From 2 to 3 per cent.

18.—Variations	in such rate, and date of such variations?

In proportion to the length of time deposited.

19.—Date	to which the account is made up?

December 31, 1835.

No. 46.—LEICESTERSHIRE BANKING COMPANY.

No. 46.	Question 1.—Name of the joint-stock bank, and date of commencing business?

Leicestershire	Answer.—The Leicestershire Banking Company; 1st September 1829.

Banking Company.	^—Number and situation of branches, and distance of each from central bank?

Four branches; Hinckley, 13 miles from Leicester; Market Harborough, 15 miles ditto;
Ashby-de-la-Zouch, 17 miles ditto; Melton Mowbray, 15 miles ditto; all in Leicestershire.

3.—Amount	of nominal capital?

£. 500,000.

4.—Number	of shares, and nominal value of each share?

Five thousand shares, 1001, each.

5.—Number	of shares issued ?

Three thousand one hundred and ninety-one.

6.—Amount	of paid-up capital?

f. 47,865 on the 14th June 1836.

7	._Date of the several calls for paid-up capital, and amount of the several instal-
ments paid up?

First call, 6th August 1829, 51, per share; second ditto, 1st January 1830, 51 ditto;
third ditto, 15th January 1835, 5 I. ditto.

8—Number of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend?

£. 7. 10 s. per cent.

10.—Variations	in rate of dividend, and date of such variations?

January 1831, 4 per cent; ditto 1832, 4 \ ditto; ditto 1833, 41 ditto; ditto 1834, 5ditto;
ditto 1835, 6 ditto; ditto 1836, 7 £ ditto.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

Dated 6th August 1829 ; signed by 130.

12	._Copy of deed of settlement, when it has been printed and published ?

Deed of settlement printed prior to the bank commencing business, and a copy delivered
to every shareholder on his or her signing the deed.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

Copies of the last report and accounts laid before the proprietors sent herewith. The half-
yearly accounts are audited, examined and signed by at least three of the directors, in
accordance with the 20th article of the company s deed of settlement, and the reports are
prepared by the manager to the company, and submitted to a full board of directors for their
approval.

14	._Statement whether the bank holds any and what amount of its own shares or

stock, either in trust, as security for advances, or in its own right?	^

No advance made on account of stock held by a proprietor, nor held in its own nght, but
the company have a lien on the shares by the 55th article of the deed.

15.—Places	at which promissory notes and bank post-bills are made payable?

Notes at Leicester, Ashby-de-la-Zouch, and Messrs. Barclay & Co., bankers, London ;

bank post-bills at Messrs. Barclay & Co. only.

16.—At	what date or sight bank post-bills are issued ?

Not exceeding 21 days' date, or seven days' sight.

17.—RateCOMMITTEE ON JOINT-STOCK BANKS.	231

17.—Rate	of interest paid by the bank, whether on deposits or balances of No. 46.
account ? Leicestershire

Two-and-a-half per cent, on deposit accounts; 3 per cent, on current accounts, subject to BankingfcCompany.
a commission on the debits.	-

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date	to which the account is made up ?

30th of June and 31st of December.

No. 47.—NOTTINGHAM AND NOTTINGHAMSHIRE BANKING COMPANY.

Question 1.—name of the joint-stock bank, and date of commencing business?	No. 47.

Answer.—Nottingham and Nottinghamshire Banking Company; 19 April 1834.	Nottingham and

tvt	•	t	p	^	Nottinghamshire

2.—Number	and situation or branches, and distance of each from central bank?	Banking Company.

Central bank, Nottingham, Notts; first branch, Mansfield, Notts, 14 miles; second branch, _

Worksop, ditto, 26 miles; third branch, Retford, ditto, 30 miles; fourth branch, Newark,

ditto, 20 miles; fifth branch, Loughborough, Leicestershire, 15 miles.

3.—Amount	of nominal capital?

£. 500,000.

4.—Number	of shares, and nominal value of each share ?

Ten thousand, value 50 I.

5.—Number	of shares issued ?

Six thousand two hundred and sixty-one, 30th June 1835.

6.—Amount	of paid-up capital ?

£.62,610, 30th June 1835.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up.

First call 11, on allotting shares, 1834; second call 41.> 19th April 1834; third call 5 /.,

1st November 1834.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend?

Six per cent.

10.—Variations	in rate of dividend, and date of such variations?

Only one declared.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

8th April 1834; number of shareholders who have signed 285.

12.—Copy	of deed of settlement, when it has been printed and published ?

Copy produced, printed at Nottingham by C. N. Wright, 1834; page 27, clause 39, declara-
tion of secrecy.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such accounts are prepared ?

Copy of report produced; the audit and examination are made and the report prepared
under the responsibility of the board of directors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

Shareholders have accounts with the bank, and the amounts of their shares are held as
security for their balances respectively.

15.—Places	at which promissory notes and bank post-bills are made payable?

Promissory notes are payable in Nottingham and London, and bank post-bills and drafts

are payable in London.

16.—At	what date or sight bank post-bills are issued ?

Bank post-bills are issued at seven days' date or seven days' sight, and drafts on demand,

or at any date to 21 days. No bill at a longer date has yet been drawn by this bank.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Three per cent.

18.—Variations	in such rate, and date of such variations?

Paid 2 J per cent, to 31st December 1834, and 3 per cent, since 1st January *1835.

19.—Date	to which the account is made up ?

With reference to balance, 30th June 1835, being the only balance yet made.

591-	g g 4232

APPENDIX TO REPORT FROM THE

No. 48.—SHEFFIELD BANKING COMPANY.

]\t0# ^g#	Question 1.—Name of the joint-stock bank, and date of commencing business?

Sheffield Banking	Answer.—The Sheffield Banking Company; commenced business 1st-July 1831.

Company,	2.—Number and situation of branches, and distance of each from central bank ?

" 111 1 '.......'	One branch only, at Rotherham, six miles from Sheffield.

3.—Amount	of nominal capital ?

£. 300,000.

4.—Number	of shares, and nominal value of each share ?

One thousand five hundred shares, of 200 I. each.

5.—Number	of shares issued ?

One thousand three hundred and eighty-one, up to 31st December 1835.

6.—Amount	of paid-up capital ?

£. 75,955, up to 31st December 1835.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

First call, 30th March 1831, 20 L per share; second call, 30th May 1831, 201, per share;
third call, 1st September 1834, 5 7. per share; fourth call, 12th November 1834, 101. per
share; all which calls are paid up, amounting to 75,955 Z., as above.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend?

No dividend declared for the first twelve months from commencement of establishment.

10.—Variations	in rate of dividend, and date of such variations?

25th January 1833, dividend of 41, per cent, upon paid-up capital, being for the half-year
ending 31st December 1832, at the rate of 8 per cent, per annum, declared; 31st January
1834, dividend of 10 per cent, on paid-up capital, being for year ending 31st December 1833,
declared; 30th January 1835, dividend of 10 per cent, on paid-up capital, being for year end-
ing 31st December 1834, declared; 29th January 1836, dividend of 8 per cent, on paid-up
capital, for year ending 31st December 1835, declared.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

Original deed, dated 16th January 1832, signed by 200 persons. Supplementary deed, dated

1st September 1834, signed by 195 persons.

12.—Copy	of deed of settlement, when it has been printed and published?

Printed copies of original and supplementary deed of settlement are sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors; a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

Printed copies of the last and all preceding reports laid before the proprietors are sent
herewith. No accounts further than are contained in the reports ever have been laid before
or required by the proprietors, who have an opportunity, at the general meetings, of making
the fullest inquiries, and who have been quite satisfied with information verbally afforded.
Clause 52 of the original deed of settlement states the nature of the report to be made to the
proprietors; and clause 54, the inspection to which the affairs of the company are subject, but
which latter has never been acted upon.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

Holds no shares in its own right, and has a lien on all for advances.

15.—Places	at which promissory notes and bank post-bills are made payable?
Promissory notes made payable at Sheffield and Rotherham. No bank post-bills have been

hitherto drawn by this company.

16.	At what date or sight bank post-bills are issued ?

Answered above.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
accounts ?

On deposits: 2 per cent, if remaining three months; 2 J per cent, if remaining six months;
3 per cent, if remaining twelve months. On balances of accounts with customers, 2 \ per cent.
On balances of accounts with other banks, 3 per cent.	*

18.	Variations in such rate, and date of such variations?

The above rates have been uniformly allowed since the opening of the bank.

19.—Date	to which the account is made up?

31st December 1835.

James Drabble, Manager.COMMITTEE ON JOINT STOCK BANKS.

233

No. 49.—CHESTERFIELD AND NORTH DERBYSHIRE BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?	No, 49.

Answer.—Chesterfield and North Derbyshire Banking Company; 1st January 1834. Chesterfield and

J	.	North Derbyshire

2.—Number	and situation of branches, and distance of each from central bank ? Banking Company.
None. 1 niij.

3.—Amount	of nominal capital ?

£. 250,000.

4.—Number	of shares, and nominal value of each share ?

Two thousand five hundred; 100 L

5.—Number	of shares issued?

Two thousand three hundred and twenty.

6.—Amount	of paid-up capital ?

£123,200.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up?

First call, 14th November 1833; second call, 6th January 1834; all paid; amount 23,2001.

8.—Number	of shares (if any) which may have been, forfeited for non-payment of
instalments?

None.

9.—Rate	of declared dividend ?

Six per cent.

10.—Variations	in rate of dividend, and date of such variations?

No variation.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

1st May 1834; 98.

12.—Copy	of deed of settlement, when it has been printed and published ?

Sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors; a state-
ment of the nature of the audit and examination to which such accounts are sub-
jected, and of the responsibility under which such reports are prepared ?

Sent herewith. The accounts are submitted to the board of directors, who are prepared
with a general statement thereof for the general annual meeting of the shareholders; the
manager responsible for its accuracy.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

One hundred and eighty unappropriated shares are yet in the hands of the bank, which has
also a lien on 890 shares, for advances made to shareholders.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Smith, Payne & Smith.

16.—At	what date or sight bank post-bills are issued ?

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?

Two-and-a-half per cent, on deposits, and the same on balances of account.

18.—Variations	in such rate, and date of such variations ?

On deposits in the bank for a less period than eight months, 2 per cent, only allowed.

19.—Date	to which the account is made up ?

The account, No. 2, made up to 31st December 1835; No. 1, to this period.

No. 50.—WALSALL AND SOUTH STAFFORDSHIRE BANK-

Question 1.—Name of the joint-stock bank, and date of commencing business	v.

Answer.—Bank of Walsall and South Staffordshire; 1st August 1835.	Walsall and South

2.—Number	and situation of branches, and distance of each from central bank ? Staffordshire Bank,
One branch, eight miles distant.

3.—Amount	of nominal capital ?

£.200,000.

4.—Number	of shares, and nominal value of each share ?

Eight thousand shares, 25 L each.

5.—Number	of shares issued ?

Five thousand.

"591.-	h h	Amount234	APPENDIX TO REPORT FROM THE

r No. 50.	6.—Amount of paid-up capital ?

Walsall and South £ 25,000.

Staffordshire Bank,

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up?

One call; 1st August 1835.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

None, till annual meeting in August 1836.

10.—Variations	in rate of dividend, and date of such variations ?

Nil.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

Dated 29th July 1835; signed by 109 individuals.

12.—Copy	of deed of settlement, when it has been printed and published ?
In January 1836.

13.—Copies	of the last reports and accounts laid before the proprietors, and a state-
ment of the nature of the audit and examination to which such accounts are subjected,
and of the responsibility under which such reports are prepared ?

Nil, till August 1836, when accounts, and a report prepared under the responsibility of the
directors, will be submitted to an annual general meeting, summoned 14 days previously,
by public advertisement and private circular, conformably with a clause in the deed of
settlement.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable ?
Walsall and London.

16.—At	what date or sight bank post-bills are issued ?

Twenty-one days' date, and seven days' sight.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?

It varies from 2 per cent, to 3 per cent., according to circumstances.

18.—Variations	in such rate, and date of such variations ?

None,

19.—Date	to which the account is made up ?

21st May 1836.

Thomas F. Wood, Manager.

No. 51.—LEAMINGTON PRIORS and WARWICKSHIRE BANKING COMPANY.

No. 51.	Question 1.—Name of the joint-stock bank, and date of commencing business ?

Leamington Priors Answer.—Leamington Priors and Warwickshire Banking Company: established 1st Sep-
and Warwickshire tember 1835.

Banking Company#	tvt i	. . . _	-it

2.—JN	umber and situation of branches, and distance of each from central bank ?

Four; viz. Warwick, two and a half; Banbury, 20; Southam, seven; and Kenilworth, five
miles from Leamington.

3.—Amount	of nominal capital ?

£. 200,000.

4.—Number	of shares, and nominal value of each share ?

Ten thousand shares, of 20 L each.

5.—Number	of shares issued ?

Three thousand six hundred and seventy.

6.—Amount	of paid-up capital ?

£. 22,020.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

The first and only call of 61, per share, made on the establishment ©f the Company,

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ? ,

Fifteen.

9.—Rate	of declared dividend ?

None at present.

10.—Variations	in rate of dividend, and date of such variations?

11.—DateCOMMITTEE ON JOINT STOCK BANKS.	235

11.—Date	of deed of settlement, and number of persons who have signed such No. 51.

deed ?	Lea&iingfcon Priors

Dated on the establishment of the company, and signed by 110 persons.	.	and'Warwickshire

12.—Copy	of deed of settlement, when it has been printed and published ?	Banking Company.
Not yet printed.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

No account at present laid before the proprietors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

Only 3,670 shares allotted at this date.

15.—Places	at which promissory notes and bank post-bills are made payable?

London, Leamington, Banbury and Warwick.

16.—At	what date or sight bank post-bills are issued?

At the several dates allowed by Act of Parliament.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account?

Two-and-a-half per cent, on the principal, laying a specific time; no interest allowed on

a running account.

18.—Variations	in such rate, and date of such variations?

None.

19.—Date	to which the account is made up?

31st March 1836.

No. 52.—BRADFORD COMMERCIAL JOINT-STOCK BANK.

Question 1.—Name of the joint-stock bank, and date of commencing business?	No. 52.

Answer.—Bradford Commercial Joint-Stock Bank; commenced business 4th March 1833. Bradford Commer-

2.—Number	and situation of branches, and distance of each from central bank ?	^toc^

tt	i	i	DallK#

Has no branches.

3.—Amount	of nominal capital ?

£.500,000.

4.—Number	of shares, and nominal value of each share?

Five thousand shares, of 100 L each.

5.—Number	of shares issued ?

Two thousand nine hundred and forty.

6.—Amount	of paid-up capital ?

£. 44,100.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

1st February 1833, call 51, per share; 1st August 1833, call 5 I. per share; 30th Sep-
tember 1834, call 5 L per share.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments?

None.

9.—Rate	of declared dividend ?

Average about 9 J per cent.

10.—Variations	in rate of dividend, and date of such variations ?

v February 1834, paid 7 J per cent.; February 1835, paid 7 per cent.; February 1836, paid
7 per cent.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

Dated 20th February 1833; 163 have signed the deed of settlement.

12.—Copy	of deed of settlement, when it has been printed and published?

Sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors; a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

Sent herewith; accounts audited by the directors, and prepared under their responsibility.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes are made payable?

Bradford, Yorkshire.

16.—'At	what date or sight bank post-bills are issued ?

None issued^

£91.	hhJ	17.—Rate236	APPENDIX TO .REPORT FROM THE

No. 52.	17.—Rate of interest paid by the bank, whether on deposits or balances of

Bradford Com-	account?

mercial Joint Stock Three per cent, on deposits; 2 J per cent, on balances of account.

' * : "	18.—Yariations in such rate, and date of such variations ?

None.

19.—Date to which the account is made up ?

31st December 1835.

No. 53.—NATIONAL PROVINCIAL BANK OF ENGLAND.

No. f?,

National Provin-	Question 1.—Name of the joint-stock bank, and date of commencing business ?

cial Bank of Eng- Answer.—National Provincial Bank of England; first branch opened 1st January 1834.
land.	2.—Number and situation of branches, and distance of each from central bank ?

Thirty branches established, and 23 sub-agencies to ditto. See accompanying list, marked
No. 1.

3.—Amount	of nominal capital ?

Original nominal capital, 1,000,000 Z.; now about to be increased by 200,000Z.

4.—Number	of shares, and nominal value of each share ?

Ten thousand, 100 Z. shares; 10,000, 20Z. shares.

5.—Number	of shares issued ?

All the 100 Z. shares issued, and 20 Z. shares in the course of being issued.

6.—Amount	of paid-up capital?

Paid-up 250,000 Z.; and called up on the 20 Z. shares, 100,000 Z.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

On the 100 Z. shares, deposit of 5Z.; second call, 20th December 1833, of 10Z.; third
instalment, 2d October 1834, of 5Z.; and fourth instalment, 12th December 1834, of 5 Z.;
making 25 Z. per share; all paid up.

8.—Number	of shares (if any) which may have been forfeited for non-payment
of instalments ?

No shares under forfeiture.

9.—Rate	of declared dividend ?

Five per cent, per annum.

10.—Variations	in rate of dividend, and date of such variations?

None.

H.—Date of deed of settlement, and number of persons who have signed such
deed?

The deed of settlement, dated 23d September 1833; and number of proprietors, 508.

12—Copy of deed of settlement, when it has been printed and published ?

Deed not printed; summary sent herewith, marked No. 2.

13.—Copies	of the last reports and accounts laid before the proprietors; a statement
of the nature of the audit and examination to which such accounts are subjected, and of
the responsibility under which such reports are prepared ?

See papers apart, marked No. 3 and 4.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right?

The bank does not hold any of its own shares.

15.—Places	at which promissory notes and bank post-bills are made payable?
Promissory notes payable at the places where issued, and at the London bankers on which

the branches respectively draw.

16.—At	what date or sight bank post bills are issued ?

Do not issue bank post-bills.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account?

Rate of interest on deposits is from 2 § to 3 per cent., provided the money remains for three
months. We do not in every instance allow interest on the balances of current accounts; but
where we do so, the rate is generally from 2 to 2j.

18.—Variations	in such rate, and date of such variations ?

See No. 17.

19.—Date	to which the account is made up ?

28th May.

No. 54.—DERBYCOMMITTEE ON JOINT-STOCK BANKS.

237

No. 54.—DERBY AND DERBYSHIRE BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?
Answer.—The Derby and Derbyshire Banking Company; 30th January 1834.

2.—Number	and situation of branches, and distance of each from central bank ?
One branch at Belper, seven miles distant; and another at Ashbourn (weekly), 13 miles

distant.

3.—Amount	of nominal capital?

£.250,000.

4.—Number	of shares, and nominal value of each share ?

Five thousand, of 50 Z. each*

5.—Number	of shares issued ?

Four thousand.

6.—Amount	of paid-up capital ?

£.20,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

Only one instalment of 10 per cent, called up.

8.—Number	of shares (if any) which may have been forfeited for non-payment
of instalments ?

None.

9.—Rate	of declared dividend ?

Six per cent.

10.—Variations	in rate of dividend, and date of such variations ?

None; only one dividend paid.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

30th November 1833, and signed by 204 persons.

12.—Copy	of deed of settlement, when it has been printed and published ?

Printed copy sent.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

Copy sent; and reference is made to the 54th and 55th clauses of the deed of settlement
for the answer to the latter part of this question.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

Reference is made to the 9th clause of the deed of settlement, in reply to this question, as
to the lien which the bank has on the shares of proprietors.

15.—Places	at which promissory notes and bank post-bills are made payable ?

Derby and London.

16.—At	what date or sight bank post-bills are issued ?

None issued.

17.—Rate	of interest paid by the bank, whether on deposits of balances of
account ?

Two per cent, up till the 1st June 1835; since that period 2 \ per cent, has been allowed
on deposits.

18.—Variations	in such rate, and date of such variations?

19.—Date	to which the account is made up ?

31st December 1835.

No. 54.
Derby and Derby-
shire Banking
Company.

No. 55.—WARWICK AND LEAMINGTON BANKING COMPANY.

Question 1.—Name of the joint stock-bank, and date of commencing business ? w 55-
Answer.—Warwick and Leamington Banking Company; commenced business on the
1st September 1834, on the foundation of Messrs. Tomes & Russell.	Company

2.—Number	and situation of branches, and distance of each from central bank ? __

Warwick; Leamington, two; Stratford-on-Avon, eight; Southam, ten; and Henley-in-

Arden — miles from Warwick.

3.—Amount	of nominal capital ?

£.250,000.

4.—Number	of shares, and nominal value of each share ?

Ten thousand shares, of 251, each.

5.—Number	of shares issued ?

Six thousand two hundred and sixty.

6.—Amount	of paid-up capital?

£.31,310 ; 10?. of this amount being the deposit of 11, per share on 10 shares forfeited.
591.	h h 3	7.—Date238

APPENDIX TO REPORT FROM THE

N0>	7.—Date of the several calls for paid-up capital, and amount of the several instal-

Warwick and Lea-	ments paid up ?

mington Banking Only the original call of 5 Z. per share on the opening of the bank.

Company.	8.—Number of shares (if any) which may have been forfeited for non-payment

--of instalments ?

Ten.

9.—Rate	of declared dividend ?

Six per cent.

10.—Variations	in rate of dividend, and date of such variations?

One dividend only has been declared.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

1st September 1834; signed by 135 subscribers.

12.—Copy	of deed of settlement, when it has been printed and published?

Copy sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

The accounts were subjected to the examination of an experienced accountant; but subse-
quently an auditor has been attached to the company, and under his superintendence, and
the responsibility of the board of directors, the accounts and reports are now prepared.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The bank holds in its own right 45 shares, purchased of distant proprietors for distribution
to local customers.

15.—Places	at which promissory notes and bank post-bills are made payable?
The promissory notes and bank post-bills are all drawn payable in London; the promissory

notes are of course payable at all the branches of the establishment.

16.—At	what date or sight bank post-bills are issued?

At or under seven days' sight, or 21 one days' date, to suit the convenience of customers.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Sometimes less, but never exceeding 2 \ per cent, per annum.

18.—Variations	in such rate, and date of such variations?

There has been no variation in the rate of interest above stated.

19.—Date	to which the account is made up ?

31st December 1835.

No. 56.
North of England
Joint Stock Bank-
ing Company.

No. 56.—NORTH OF ENGLAND JOINT-STOCK BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?
Answer.—The North of England Joint-Stock Banking Company; commenced business
1st December 1832, at Newcastle-upon-Tyne.

2.—Number	and situation of branches, and distance of each from central bank?
Four; viz. Sunderland, 12 miles from the parent bank at Newcastle; North Shields,

seven ditto; Berwick, 60 ditto; Morpeth, 14 ditto.

3.—Amount	of nominal capital?

£. 2,000,000.

4.—Number	of shares, and nominal value of each share?

Twenty thousand shares, of 100 Z. each.

5.—Number	of shares issued ?

Sixteen thousand.

6.—Amount	of paid-up capital ?

£.240,000.

7.—Date	of the several calls for paid-up capital, and amount of	the several instal-
ments paid up ?

Three calls; viz. 1st December 1832	£.80,000

30th June 1833 -------	- 80,000

8th January 1834	80,000

£.240,000

8.—Number	of shares (if any) which may have been forfeited for non-payment
of instalments ?

None.

9.—Rate	of declared dividend ?

Three per cent., and 3 Z. 65. per cent.

10.—VariationsCOMMITTEE ON JOINT-STOCK BANKS.

239

10.—Variations	in rate of dividend, and date of such variations ?	^o. ^

Three per cent, for the half-year ending 31st December 1833, and 31. 6 s. percent, for the North of England

year ending 31st December 1835, are the only dividends that have been paid.	Joint-Stock Bank-

11.—Date	of deed of settlement, and number of persons who have signed such Company,
deed ? --

Deed dated 14th November 1832; it has been signed by 629 persons.

12.—Copy	of deed of settlement, when it has been printed and published ?

A copy of the deed of settlement sent herewith.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

Copies of the last report and account laid before the general meeting of proprietors in
February last are sent herewith; the accounts are made up from the books half-yearly by the
officers in the bank, under the superintendence of the board of directors.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The bank holds no shares of its own; there are 4,000 original shares, which were never
allotted; vide Questions 4 and 5. The deed of settlement gives the bank a lien upon all
shares for debts due from the shareholders; see deed of settlement, article 15.

15.—Places	at which promissory notes and bank post-bills are made payable ?

The bank does not issue post-bills; its notes are payable at Newcastle only, but when pre-
sented at the branches they are paid.

16.—At	what date or sight bank post-bills are issued ?

None.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

The general rate of interest on deposits is 3 per cent.; occasionally special bargains are
negotiated at other rates. See No. 2.

18.—Variations	in such rate, and date of such variations ?

The bank allowed 2^ percent, from its commencement on deposits to 1st September 1835;

from that time to the present period, 31st December 1835, at 3 per cent.

19.—Date	to which the account is made up ?

31st December 1835.

No. 57.—BANK OF WESTMORLAND.

Question 1.—Name of the joint-stock bank, and date of commencing business? « ,
Answer.—Bank of Westmorland; established 1st July 1833.	0 es mor~

2.—Number	and situation of branches, and distance of each from central bank ?	__

One branch at Ulverston, Lancashire, distance from Kendal 21 miles.

3.—Amount	of nominal capital ?

£. 250,000.

4.—Number	of shares, and nominal value of each share?

Two thousand five hundred shares of 100 I. each.

5.—Number	of shares issued?

Two thousand and ninety-five.

6.—Amount	of paid-up capital ?

£. 20,950.

7*—Date of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

£. 3 per share on the 1st May 1833	5?655

£. 3 per share on the 1st July 1833 -------	5,655

£. 4 per share on the 1st October 1834 -------	9,640

£. 20,950

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

Not any.

9.—Rate	of declared dividend ?

Twelve shillings per share declared in July 1835; the profits of the first year, ending July
1834, were placed to the credit of the " Guarantee Fund."

10.—Variations	in rate of dividend, and date of such variations?

Not any.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

Deed dated 25th April 1834 ; signed by 164 proprietors.

12.—Copy	of deed of settlement, when it has been printed and published ?
See printed copy of deed of constitution sent herewith.

591.	h h 4	13.—Copies240

APPENDIX TO REPORT FROM TfiE

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

Extract from last report:—" The clear profits of the business from 1st July 1834 to 30th
June 1835, after deducting all expenses, amount to 1,548 Z. 7 s. 5 tZ., out of which 1,239 I.
was divided, and the remainder placed to the credit of the e Guarantee Fund.'" The annual
report of the affairs of the company prepared by the manager, and submitted to the directors
for their inspection and approval, agreeably to the provisions of the deed of constitution,
clauses 26 & 27.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

Four hundred and five shares unappropriated.

15.—Places	at which promissory notes and bank post-bills are made payable?
Promissory notes payable at Kendal only.

16.—At	what date or sight bank post-bills are issued ?

This company do not issue bank post-bills.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

Two and 2 J per cent.; rate increased 1st July 1836 to 2 § and 3 per cent.

18.—Variations	in such rate, and date of such variations?

See question No. 17.

19.—Date	to which the account is made up?

To 31st December 1835.

Robert H. Lamb, Manager.

No. 58.—MANCHESTER AND LIVERPOOL DISTRICT BANKING COMPANY.
No. 58.

Manchester and	Question 1.—Name of the joint-stock bank, and date of commencing business ?

Liverpool District Answer.—'The Manchester and Liverpool District Banking Company; commenced business
Banking Company, on the 1st December 1829.

"	2.—Number and situations of branches, and distance of each from the central

bank ?

Liverpool, 31 miles; Stockport, 6 \ ; Oldham, 6 h; Hanley, 34; Nantwich, 38; Warring-
ton, 18; Ashton-under-Lyne, 6 ; Bury, 9; Blackburn, 24; Stafford, 52; Wigan, 19; Preston,
31; Stalybridge, 7 ; Rochdale, 11.

Sub-branches: Leek, 10 miles from Hanley Bridge; Burslem, 2 ditto; Lane End, 4 ditto;
Cheadle, 10 ditto; Market Drayton, 13 miles from Nantwich Bridge; Hyde, 2 miles from
Ashton Bridge; Glossop, 10 ditto; Rugeley, 8 miles from Stafford Bridge.

3.—Amount	of nominal capital ?

£.5,000,000 sterling.

4.—Number	of shares, and nominal value of each share ?

Fifty thousand shares, of 100 Z. each.

5.—Number	of shares issued ?

All the 50,000.

6.—Amount	of paid-up capital ?

£.749,600.

7.—Date	of the several calls for paid up capital, and amount of the several instalments
paid up ?

First call of lZ., on the grant of shares; second call of 47. per share, 1st October 1829;
third call of 5 Z. per share, 1st June 1830; fourth call of 5 Z. per share, 14th February 1835.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of dividend declared ?

Last dividend at 7 J per cent.

10.—Variations	in rate of dividend, and date of such variations ?

First dividend, March 1831, at 5 per cent.; second ditto, March 1832, at 5 per cent.; third
ditto, March 1833, at 6 per cent.; fourth ditto, March 1834, at 7 J per cent.; fifth ditto, March
1835, at 7 J per cent.; sixth ditto, March 1836, at 7 J per cent.

11.—Date	of deed of settlement, and number of persons who have signed such deed ?
1st June 1830; signed by 834 individuals.

12.—Copy	of deed of settlement, when it has been printed and published ?

Annexed hereto.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and of
the responsibility under which such reports are prepared ?

Accounts and reports annexed hereto; the former are audited by gentlemen appointed under
the 37th clause of the deed of settlement, and the report prepared by order and under the
responsibility of the directors.

14.—Statement

No. 57.
Rank of Westmor-
land.COMMITTEE ON JOINT-STOCK BANKS,	241

14.—Statement	whether the bank holds any and what amount of its own shares or	^8#
stock, either in trust, as security for advances, or in its own right ? Manchester and

One thousand and thirty-seven shares in its own right: all shares are security to the bank for Liverpool District
advances made to shareholders under the 30th clause of the deed of settlement.	Banking Company.

15.—Places	at which promissory notes and bank post-bills are made payable?

Manchester, Stockport, Oldham, Hanley, Nantwich, Ashton, Warrington, Bury, Blackburn,

Stafford, Preston, Rochdale.

16.—At	what date or sight are bank post-bills issued ?

No bank post-bills are issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account ?

From 2 per cent, to 3 per cent.

18.—Variations	in such rate, and date of such variations?

About one-half per cent.; variation as the money-market changed.

19.—Date	to which the account is made up ?

31st December 1835.

No. 59.—WILTS AND DORSET BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?

Answer.—Wilts and Dorset Banking Company; commenced business 14th December ..... No. 59.

1835	b	Wilts and Dorset

2.—Number	and situation of branches, and distance of each from central bank? Banking Company.
Twenty-one branches: Blandford, 22 miles from central bank; Bradford, 28; Bridport,

54; Chippenham, 32; Christchurch, 27; Devizes, 22; Dorchester, 40; Fordingbridge, 12;

Frome, 27; Lymington, 28; Malmesbury, 42; Marlborough, 34; Melksham, 30; Poole,

28; Sherborne, 40; Swinden, 40; Trowbridge, 26; Warminster, 21; Wimborne, 22; Woot-
ten Bassett, 40; Yeovil, 46.

3.—Amount	of nominal capital ?

Capital 300,000 L

4.—Number	of shares, and nominal value of each share?

Twenty thousand shares, of 15 Z. each.

5.—Number	of shares issued?

Nine thousand six hundred and ninety-three.

6.—Amount	of paid-up capital ?

£.42,672. 10 5.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

27th November 1835, 2Z. 10s., 21,780Z.; 26th January 1836, 2Z. IQs., 20,880Z.; 1st
September 1836, 2Z. 10s., 12Z. 10s.

8.—Number	of shares (if any) which may have been forfeited for non-payment
of instalments ?

Two hundred and fifty-five shares.

9.—Rate	of declared dividend ?

None.

10.—Variations	in rate of dividend, and date of such variations ?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

* 14th December 1835 ; deed at present in the country being signed.

12.—Copy	of deed of settlement, when it has been printed and published ?

In the printer's hands.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are subjected,

and of the responsibility under which such reports are prepared ?

None.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable ?

At the places of issue, being all the branches, and at the London and Westminster Bank.

16.—At	what date or sight bank post-bills are issued ?

Seven days' sight, or 11 to 21 days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account.

On deposits, 2J per cent; on balances of account, 2 per cent.

18.—Variations	in such rate, and date of such variations ?

None.

19.—Date	to which the account is made up ?

4th June 1836.

591.	I I242

APPENDIX TO REPORT FROM THE

No. 60.- LANCASTER BANKING COMPANY.

Question 1.—Name of the joint-stock bank, and date of commencing business?
Answer.—Lancaster Banking Company; 23d October 1826.

2.—Number	and situation of branches, and distance of each from central bank ?
Two branches; one at Preston and the other at Ulverston, each about 22 miles from Lan-
caster.

3.—Amount	of nominal capital?

£.300,000.

4.—Number	of shares, and nominal value of each share ?

Three thousand shares, of 100 Z. each.

5.—Amount	of shares issued ?

Two thousand four hundred and thirty.

6.—Amount	of paid-up capital ?

£.48,600.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up?

Four calls, of 5 L per share each, have beQ.n made. The first was directed to be paid on
the day of commencing business; the second was made payable by the deed of settlement on
the 1st of February 1827; the third was dated 27th January 1833, and made payable on the
1st of May following; and the fourth was dated 28th January 1834, and made payable on the
1st of May following: thus 207. have been paid up on each share.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

The last dividend declared, being for the year 1835, was 10Z. per cent, upon the paid-up
capital.

10.—Variations	in rate of dividend, and date of such variations?

£.5 per cent, upon the paid-up capital was declared for the several years 1827, 1828, 1829,
1830, 1831, 1832 and 1833; for 1834 a dividend of 7\l. per cent was declared; and for
1835, as before stated, 101 per cent, was declared.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

20th of September 1826; 78 persons have signed the original deed, and 43 a supplementary
deed, dated 14th August 1833.

12.—Copy	of deed of settlement, when it has been printed and published ?

A printed copy is transmitted herewith.

13.—Copies	of the last reports and accounts laid before the proprietors; a statement
of the nature of the audit and examination to which such accounts are subjected, and of
the responsibility under which such reports are prepared ?

A copy of the last report is annexed hereto; the books are balanced and the accounts au-
dited in strict conformity with the provisions in the deed of settlement relating to those points.
See clause 39.

14.—Whether	the bank holds any and what amount of its own shares or stock,
either in trust, as security for advances, or in its own right ?

By reference to Answer 4, it will be seen that the number of shares is 3,000 ; and as only
2,430 have been issued, it follows that 570 are still in reserve.! The number originally distri-
buted was 2,230, and 200 more were given off in 1834 to the customers of the bank; but it is
not intended to issue the remainder, if it can be avoided. Independently of the 570 unappro-
priated, the bank does not hold any of its own shares, either in trust as security for advances or
in its own right, only as it has by its deed of settlement {see clause 44) a lien on the shares for
any debts owing by the proprietors; and as several of the proprietors occasionally stand in-
debted to the Company, it is obvious that the shares are liable to be taken by the directors and
s0>ld to liquidate the claims of the bank.

15.—Places	at which promissory notes and bank post-bills are made pavable ?

The bank does not issue post-bills ; its promissory notes are made payable at the different

places where issued, namely, Lancaster, Ulverston and Preston; those above 10L are also
payable in London.

16.—At	what date or sight bank post-bills are issued ?

As before stated, none are issued.

17.—Rate	of interest paid by the bank, whether on deposits or balances of account ?

Three per cent, is allowed on deposits, and 3 J per cent, on balances of accounts

current, subject tg a charge of one-fourth per cent, commission on payments made by the
bank. " Until further notice, interest will be allowed at the rate of 3 J per cent, per annum,
charging the usual bank commission, or at the rate of 3 per cent, per annum, with commis-
sion on London payments only; either mode at the option of the Lancaster Banking Com
pany. l?st January 1836."

18.—Variations

No* 6o.
Lancaster Banking
Company.COMMITTEE ON JOINT-STOCK BANKS.

243

18.—Variations	in such rate, and date of such variations ?	N0 qq
The Company commenced in October 1826 with allowing 2| per cent.net on deposits, and Lancaster Banking

4 per cent, (less J per cent, commission on returns) on balances of accounts current, On the Company.

1st July 1830, these rates were altered to 2 per cent, on the former and 3 per cent, on the __—

latter. On the 1st July 1831, they were again altered to 2 J per cent on the former and 3 \

per cent, on the latter; and on the 1st January last the rate of deposits was advanced to
3 per cent., that on current accounts remaining as before, at 3 i per cent.

19.—Date	to which the account is made up ?

The present time.

No. 61.—BANK OF MANCHESTER.

Question 1.—Name of the joint-stock bank, and date of commencing business?
Answer.—Bank of Manchester; March 25, 1829.

2.—Number	and situation of branches, and distance of each from central bank?
Three branches: Stockport, seven miles from Manchester; Bolton, 12 ditto; Newtown,

90 ditto.

3.—Amount	of nominal capital ?

£. 2,000,000.

4.—Number	of shares, and nominal value of each share?

Twenty thousand shares of 1001, each.

5.—Number	of shares issued?

Twenty thousand.

6.—Amount	of paid-up capital ?

£.500,000.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

December 1st, 1828, 5Z. per share; April 22d, 1829, ditto; September 29th, 1830, ditto;
March 25th, 1834, ditto; January 21st, 1835, ditto.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

Seven per cent, per annum.

10.—Variations	in rate of dividend, and date of such variations?

First year, the profits were not divided, but set apart to form a reserved fund; second year,
6 per cent; third year, ditto; fourth year, ditto; fifth year, ditto; sixth year, 7 per cent.

11.—Date	of deed of settlement, and number of persons who have signed such
deed?

Date of deed, March 25th, 1829; present number of proprietors 544.

12.—Copy	of deed of settlement, when it has been printed and published ?

A printed copy of the deed of settlement is sent herewith, containing the name and place
of abode of each proprietor who signed the same on the establishment of the bank.

13 .—Copies of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

Printed copies of each report made by the directors to the annual general meeting of pro-
prietors are sent herewith. The accounts of the bank are audited by three directors, ap-
pointed for that purpose by the board of directors, who attest the same by their respective
signatures. Upon the presentation of the yearly accounts to the board of directors by the
auditors, the board draws up the report to be presented at the annual general meeting of pro-
prietors, a copy of which is afterwards sent to each proprietor.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

TKe bank held of its own stock, on the 30th June 1835, 4,7101. It now holds none.

15.—Places	at which promissory notes and bank post-bills are made payable?
The promissory notes of the bank are payable in Manchester and London.

16.—At	what date or sight bank post-bills are issued?

At seven days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of ac-
count?

The rate of interest paid by the bank on deposits is 2 J per cent, per annum; on accounts
current the bank charges interest at the rate of 3 to 4 per cent, per annum, according to cir-
cumstances.

18.—Variations	in such rate, and date of such variations?

The deviations from the above are few, and not confined to any particular periods.

19.—Date	to which the account is made up?

The accounts of the bank are made up to the 30th jf June in each year, and the reports
sent herewith are to the 30th June last year, being the last annual balance of the bank's
affairs.

591.	i i 2

No. 6i.
Bank of Man-
chester.244

APPENDIX TO REPORT FROM THE

No. 62.—BANK OF BIRMINGHAM.

No	Question 1.—Name of the joint-stock bank, and date of commencing business?

BankofBir-	Answer.—Bank of Birmingham; August 1832.

mingham. 2.—Number and situation of branches, and distance of each from central bank?
--No branches.

3.—Amount	of nominal capital?

£. 500,000.

4.-—Number	of shares, and nominal value of each share ?

Ten thousand, 50 Z. each.

5.—Number	of shares issued ?

Seven thousand six hundred and forty-two.

6.—Amount	of paid-up capital?

£. 73,785.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

The second and last call was made in August 1833, but was made optional.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None; though a few individuals have not paid the second call, it being an optional one.

9.—Rate	of declared dividend?

Ten per cent.

10.—Variations	in rate of dividend, and date of such variations ?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

August 1832; 290.

12.—Copy	of deed of settlement, when it has been printed and published ?

Sent.

13.—Copies	of the last reports and accounts laid before the proprietors, a statement
of the nature of the audit and examination to which such accounts are subjected, and
of the responsibility under which such reports are prepared ?

Copy of the last report sent, and also of the last balance then made out. The reports are
made under the responsibility of the directors, who examine the state of the different accounts
kept with the bank monthly.

14.—Statement	whether the bank holds any and what amount of its own shares or
stock, either in trust, as security for advances, or in its own right ?

The shares unallotted are retained by the bank for the purpose of allotment to persons
bringing accounts, or they may be disposed of in any other way the directors may consider to
be conducive to the interests of the concern. By the deed of settlement, the bank has a lien
on all shares of proprietors for advances made to concerns in which they are engaged.

15.—Places	at which promissory notes and bank post-bills are made payable ?
The 5 Z. and 10 Z. notes (forming much the greatest proportion of the circulation,) express

on them to be payable either in Birmingham, or in London, at Sir R. C. Glyn & Co. The
notes of larger amount express to be payable in London only, but are, in fact, always paid at
Birmingham when presented. No notes higher than 100 Z. are issued.

16.—At	what date or sight bank post-bills are issued?

Bank post-bills at seven days' sight and 21 days' date.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

The general rate of interest on deposits is 3 per cent.; 2 § per cent, is given on some, and
in a few instances, under particular circumstances as to time, &c., 3 J per cent, is given. It
is not customary to allow interest on accounts current, though in a very few cases, more
resembling deposit accounts, it has been done.

18.—Variations	in such rate, and date of such variations?

No regular or stated variation.

19.—Date	to which the account is made up ?

The account is made up to December 31st, 1835.COMMITTEE ON JOINT STOCK BANKS.

245

No. 63.—THE ROYAL BANK OF LIVERPOOL.

Question 1.—name of the joint-stock bank, and date of commencing business?
Answer.—The Royal Bank of Liverpool; 2d May 1836.

2.—Number	and situation of branches, and distance of each from central bank?

None.

3.—Amount	of nominal capital ?

£. 2,000,000.

4.—Number	of shares, and nominal value of each share ?

Two thousand shares, of 1,000 L each.

5.—Number	of shares issued ?

Eight hundred and seventyrsix.

6.—Amount	of paid-up capital9
£. 91,980.

7.—Date	of the several calls for paid-up capital, and amount of the several instal-
ments paid up ?

£. 5. paid on the allotment of each share; a call of 100/. per share was made payable on
the 2d May, all of which is paid; and a further call of 145/. per share is made payable on
the 15th August next, making 250 Z. per share paid up.

8.—Number	of shares (if any) which may have been forfeited for non-payment of
instalments ?

None.

9.—Rate	of declared dividend ?

None.

10.—Variations	in rate of dividend, and date of such variations ?

None.

11.—Date	of deed of settlement, and number of persons who have signed such
deed ?

The deed of settlement will be ready for signature on the 13th June next.

12.—Copy	of deed of settlement, when it has been printed and published?

Will be sent.

13.—Copies	of the last reports and accounts laid before the proprietors, a state-
ment of the nature of the audit and examination to which such accounts are
subjected, and of the responsibility under which such reports are prepared ?

None.

14.—Statement	whether the bank holds any and what amount of its own shares
or stock, either in trust, as security for advances, or in its own right ?

None.

15.—Places	at which promissory notes and bank post-bills are made payable?

None.

16.—At	what date or sight bank post-bills are issued ?

None.

17.—Rate	of interest paid by the bank, whether on deposits or balances of
account ?

An interest of 2 \ per cent, is allowed on deposits; current accounts are settled at an
interest of 3 or 3 \ per cent., with a charge of a quarter per cent, commission.

18.—Variations	in such rate, and date of such variations?

None.

19.—Date	to which the account is made up ?

21fit May 1836.

No. 63.
The Royal Bank
of Liverpool,

591.

i i 3246

APPENDIX TO REPORT FROM THE

— No. 64.—

No 64	ACCOUNT of all Places where United or Joint-stock Bankb have been established under

Places where	the Act 7 Geo. 4, c. 46, together with the Number cf Partners therein, and the Dates when such

Banks have been Banks respectively were established.

established.

PLACES.

Ashton-under-Lyne -

Birmingham -
Liverpool -

Manchester, Stockport, Bolton and

Newtown.

Carmarthen -
Stockport -

Walsall and Cannock -

Kendal and Ulverston
Barnsley -
Birmingham -

Bolton -
Bradford -

Ditto	- - - -

Bristol -

Bury ------

Cheltenham -

Chesterfield -

Manchester,Preston, Burnley, Skip-
ton, Birmingham, Chester, Leek,
Burslem, Liverpool, Blackburn,
A shbourn,Rochdale,Shrewsbury,
Ellesmere, Uttoxeter, Whit-
church, Hanley, Newport and
Ludlow.

Coventry -
Ditto - -

Workington, Cockermouth, Mary-
port, Wigton, Carlisle, and Pen-
rith.

Darlington, Stockton, Sto&esley,
Barnard Castle, Northallerton,
Bedale, Egglestone, Durham,
Masham, Yarm, Thirsk, Hartle-
pool,Gisborough, Bishop's Auck-
land, Brough and Stagshaw.

Derby, Ashbourn and Belper

Plymouth, Devonport, Kingsbridge,
Totness, Bodmin, Ashburton, St.
Austell, Liskeard, Dartmouth,
Newton Abbot, Exeter and Col-
lumpton.

Dudley and Westbromwich -

Norwich, Great Yarmouth, Ipswich,
Swaffham, Lynn, East Dereham,
Foulsham, Fakenham, Harleston,
Eye, Saxmundham, Bungay,
Watton,Lowestoft, Beccles, Diss,
Bury St. Edmunds, North Wal-
sham and Framlingham.

NAME OF THE BANK.

Number
of

Partners.

-	- Ash ton, Staleybridge, Hyde,
and Glossop Bank.

Bank of Birmingham
Bank of Liverpool -

Bank of Manchester -

Bank of South Wales
Bank of Stockport -

-	- Bank of Walsall and South
Staffordshire.

Bank of Westmorland
Barnsley Banking Company
Birmingham Banking Company -

-	- Bolton Joint-stock Banking
Company.

Bradford Banking Company

-	- Bradford Commercial Joint-
stock Banking Company.

Bristol Old Bank -

Bury Banking Company

-	- Cheltenham and Gloucestershire
Bank.

-	- Chesterfield and North Derby-
shire Banking Company.
Commercial Bank of England

-	- Coventry and Warwickshire
Banking Company.

Coventry Union Banking Co mpany

-	- Cumberland Union Banking
Company.

-	- Darlington District Joint-stock
Banking Company.

- - Derby and Derbyshire Bank-
ing Company.

~ - Devon and Cornwall Banking
Company.

- - Dudley and Westbromwich
Banking Company.

East of England Bank.

328

227
441

552

7

39°
112

154
118

311

166

173
160

8

104
99
98
444

261

158

52

247

204
146

190
534

DATE
when
Established.

18	June 1836.

2	Aug. 1832.
23 April 1831.

19	Mar. 1829.

26	Feb. 1835.

3	May 1836.

10 Aug. 1835.

8 June 1833.
25 Jan. 1832.
30 Sept. 1829.

30 May 1836.

7 July 1827.

27	Feb. 1833.

16 June 1826.
14 June 1836.

19 May -
21 Dec. 1831.
1 July 1834.

13 Dec. 1835.

12	May 1836.

13	Mar. 1829.

22 Dec. 1831.

28 Dec. 1833.
31 Dec. 1831.

30 Dec. 1833.
27 Feb. 1836,COMMITTEE ON JOINT-STOCK BANKS.

247

PLACES.

Gloucester -

Gloucester, Stroud, Newnham, Eve-
sham, Tewkesbury, Cheltenham,
Newent, Campden, Alcester,
Pershore, Redditch, Blockley,
Moreton, Cirencester and Winch-
comb.

Halifax and Huddersfield

Halifax -
Ditto -

Southampton, Fareham, Rumsey

and Stockb ridge.

Holywell and Mold -
Huddersfield, Holmfirth and Brig-
house.

Hull, Barton, Beverley, Brigg,
Gainsborough, Goole, Grimsby,
Lincoln, Louth, South Cave,
Caistor, Market Rasen, Retford,
Howden, Snaith and Market
Weigh ton.

Knaresborough, Ripon, Wetherby,
Easingwold, Hemsley, Thirsk,
Boroughbridge, Masham, Pate-
ley Bridge, Otley and Harrogate.
Lancaster, U1 vers tone and Preston
Leamington Priors -
Leamington Priors, Southam, War-
wick, Kenilworth and Banbury.
Leeds -
Ditto -
Leeds, Harrogate, Pudsey, Heck-

mondwicke and Bradford.
Leicester, Ashby - de - la - Zouch,
Hinckley, Market Harborough
and Melton Mowbray.

Carlisle -

Lichfield, Rugeley and Tamworth

Lincoln, Gainsborough, Louth,
Horncastle, Brigg, Market Rasen,
Caistor, Sleaford, Alford, Spils-
by, Epworth, Grimsby, Partney
and Retford.

Liverpool -
Ditto -

Ditto.....

Ditto - -
Manchester, Liverpool, Oldham,
Warrington, Ashton-under-Lyne,
Bury, Blackburn, Wigan, Pres-
ton, Staleybridge, Rochdale,
Hyde,Stockport, Nantwich, Han-
ley, Stafford, Burslem, Leek,
Lane-End, Cheadle, Rugeley,
Market Drayton and Glossop.
Manchester -
Huddersfield, Dewsbury, Wakefield,

and Bradford.

Aberystwith, Birmingham, Brecon,
Llandovery, Hay, Bath, Shepton
Mallet, Boston, Castle Cary,
Somerton,Bideford,Southmolten,
Torrington, Bury St. Edmunds,
Cheltenham, Cardiff, Bridge-End,
Dursley, Gloucester, Hereford,
Honiton, Stowmarket, Ipswich,
Woodbridge, Lichfield, Rugby,
Tiverton, Walsall, Wisbeach,
Whittlesea, Chatteris, Long
Sutton, Worcester, Ledbury,
Wotton-under-Edge, Yarmouth,
Bristol, Norwich, Leicester and
Dolgelly.

591.

NAME OF THE BANK.

Gloucester County and City Bank
Gloucestershire Banking Company

- - Halifax and Huddersfield
Union Banking Company.

Halifax Commercial Banking Com.
Halifax Joint-stock Banking Comp
Hampshire Banking Company

Holywell Bank, North Wales
Huddersfield Banking Company -

Hull Banking Company

- - Knaresborough
Banking Company.

and Clare

Lancaster Banking Company
Leamington Bank -

-	- Leamington Priors and War-
wickshire Banking Company.
Leeds Banking Company -
Leeds Commercial Banking Comp.

-	- Leeds and West Riding Bank-
ing Company.

Leicestershire Banking Company

Leith Banking Company

-	- Litchfield, Rugeley and Tam-
worth Banking Company.

-	- Lincoln and Lindsay Banking
Company.

Liverpool Borough Bank -

-	- Liverpool Commercial Banking
Company.

Liverpool Tradesmen's Bank
Liverpool United Trades' Bank -

-	- Manchester and Liverpool
District Bank.

Manchester and Salford Bank

-	- Mirfield and Huddersfield
Banking Company.

-	- National Provincial Bank of
England.

Number

of

Partners.

I I 4

23
265

404

172
378
141

7

335
247

160

127
157
135

451
220
161

101

9

98
230

3^9
263

542

319

i>054

255
263

487

DATE

when
Established.

15 June 1836.
29 Dec. 1832.

27 Dec. 1833.

No. 64.

Places where
Banks have been
established.

31 Dec. 1834.
28 June 1831.

29 June 1836.

21 June -
11 Nov. 1829.

29	April 1834.

11 Nov. —
7 June 1827,

30	Nov. 1833.

14 Sept. 1831.

9 Oct. 1826.
8 May 1835.

27	Aug. *•

22 Nov. 1832.
21 June 1836.

28	Nov. 1835.

28 Aug. 1829.

23 Nov. 1827,
21 Nov. 1835.

10 Aug. 1833.

28	June 1836.

29	Dec. 1832.

22 Mar. 1836.
12 May —
26 Nov. 1829.

(continued.)248

APPENDIX TO REPORT FROM THE

No. 64.
Places where
Banks have been
established.

PLACES.

-	- Newcastle-upon-Tyne Joint-
stock Banking Company.

-	- Norfolk and Norwich Joint-
stock Banking Company.

North and South Wales Bank

Newcastle-upon-Tyne

Norwich, SwafFham, Foulsham,

East Dereham, Fakenham, Lynn,

Harleston, Bungay and Watton.

Liverpool, Dolgelly, Bangor, Ma-
chynlleth, Aberystwith, Holy-
well, Wrexham, Pwllheli, Bala,

Denbigh, Oswestry, Llanidloes,

Ruthin, Llanroost, Fastiniog,

Mold,Newtown, St. Asaph, Ches-
ter, Carnarvon, Llangefni, Con-
way, Welchpool and Amlwch.

Newcastle-upon-Tyne, Sunderland,

North Shields, Berwick-upon-
Tweed, Morpeth, Hexham, South
Shields, Durham and Bishop's
Auckland.

Northampton, Daventry, Welling-
borough, Kettering, Thrapstone,

Peterborough, Oundle, Hyham
Ferrars, Stamford, Spalding and
Market Harborough.

Northampton, Daventry and Wel-
lingborough.

Manchester, Bolton, Colne, Clithe-
roe, Liverpool, Ormskirk, St.

Helen's, Preston, Bangor, Car-
narvon, Bakewell, Chester, Bir-
mingham, Bristol, Congleton, Knutsford, Macclesfield,
Northwich, Nantwich, Halifax, Cleckheaton, Keightley,
Leeds, Sheffield, Wakefield, Denbigh, Wrexham, Eve-
sham, Worcester, Holywell, Mold, Leominster, Notting-
ham, Oswestry, Wem, Shrewsbury, Whitchurch, Wel-
lington, Tamworth and Grantham.

NAME OF THE BANK.

- - North of England Joint-stock
Banking Company.

- - Northamptonshire Banking
Company.

Northamptonshire Union Bank »

- - Northern and Central Bank of
England.

Newcastle-upon-Tyne -

Melksham, Devizes,Bradford,Trow-
bridge, Westbury, Calne, Chip-
penham, Warminster and Cor-
sham.

Nottingham, Newark, Mansfield
and Loughborough.

Leicester, Hinckley,Loughborough
and Melton Mowbray.

Liverpool.....

Saddleworth, Ashton and Oldham

Sheffield and Rotherham

Sheffield - - -

Sheffield and Rotherham

Shiffnal, Wellington, Newport and
Coalbrook Dale.

Manchester -

Stamford, Spalding, Boston, Oun-
dle, Bourn, Market Deeping,
Spilsby,Burgh, Wainfleet, Swines-
head, Peterborough, Holbeach,
Oakham and Uppingham.

Stourbridge, Kidderminster, Strat-
ford-upon-Avon, Henley-in-Ar-
den, Bromsgrove, Redditch,
Shipston-on-Stour, Chipping
Norton, Alcester and Moreton-
in-Marsh.

Bristol, Axbridge, Bridgewater,
Taunton, Wellington, Crewkerne,
Chard Jlminster,Langport,Wells,
Glastonbury, Shepton Mallet,
Bruton, Wincanton, Selwood,
Frome, Castle Cary, Yeovil,
Barnwell, Weston - super - Mare,
Williton, Martock, Somerton,
South Petherton and Ilchester.

- - Northumberland and Durham
District Banking Company.

North Wilts Banking Company -

-	- Nottingham and Nottingham-
shire Banking Company.

-	- Pares's Leicestershire Banking
Company, or the Leicestershire
Union Banking Company.

Royal Bank of Liverpool -
Saddleworth Banking Company -
Sheffield Banking Company

-	- Sheffield and Hallamshire Bank-
ing Company.

-	- Sheffield and Rotherham Joint-
stock Banking Company.
Shropshire Banking Company

South Lancashire Bank

-	- Stamford and Spalding Joint-
stock Banking Company.

- - Stourbridge and Kidderminster
Banking Company.

Stuck ey's Banking Company

Number
of

Partners.

136

125

526

571

296

464
1,204

464

152

272

15

215

114

225

738
234

277
778

85

223

35

DATE

when
Established.

27 June 1836.
31 Mar. 1827.

30 April 1836.

28 Nov. 18312.

13 May 1836.

23 May -
12 Mar. 1834.

23	May 1836,
6 Nov. 1835.

12 April 1834.
15 Mar. 1836.

30 April -
29 June 1833.

24	June 1831.
20 May 1836.

25	June -

27	May -

25 May -

28	Dec. 1831.

9 April 1834.

9 Oct. 1826.COMMITTEE ON JOINT-STOCK BANKS.

249

PLACES.

Liverpool - - - -

Manchester -

Wakefield.....

Warwick, Leamington, Stratford-
on-Avon, Southam, Henley-in-
Arden and Shipston-on-Stour.

Bristol, Bath, Barnstaple, Exeter,
Swansea, Taunton, Bridgewater,
Cardiff, Newport, Wells, Glas-
tonbury, Bideford,Merthyr Tyd-
vil, Stowey, Dulverton, Williton,
Axbridge, Somerton, Llanelly
and Sidmouth.

Whitehaven and Penrith

NAME OF THE BANK.

Union Bank of Liverpool -

Union Bank of Manchester

Wakefield Banking Company

- - Warwick and Leamington
Banking Company.

- - West of England and South
Wales District Bank.

-	- Whitehaven Joint-stock Bank-
ing Company.

-	- Wilts and Dorset Banking
Company.

Salisbury, Warminster, Devizes,

Bradford,W estbury, Trowbridge,

Melksham, Calne, Chippenham,

Marlborough, Swindon, Malmes-
bury, Woottoji Bassett, Crickladp> Frome, Yeovil, Win-
canton, Chard, Crewkerne, Taunton, Glastonbury,
Wells, Shepton Mallet, Bruton, Bridgewater, Dorches-
ter, filandford, Wimborne, Wareham, Poole, Bridport,
Lyme Regis, Shaftesbury, Sherborne, Weyhill, High-
worth, Ludgershall, Mere, Weymouth, Sturminster,
Beaminster, Melborne Port, Fordingbridge, Christ-
church, Lymington and Ringwood.

Wolverhampton -

York, Malton, Selby, Howden,
Scarborough, Boroughbridge and
Goole.

York, Driffield, Bury, Thirsk, Mal-
ton, Helmsley, Kirby Moorsidge,
Pickering, Pocklington, Market
Weigh ton and Tadcaster.

Leeds, York, Hull, Sheffield, Hali-
fax, Doncaster, Selby, Thirsk,
Malton, Pocklington, Bradford,
Pontefract, Ripon, Knaresbo-
rough, Huddersfield, Beverley,
Darlington,Richmond and Dews-
bury.

-	- Wolverhampton and Stafford-
shire Banking Company.

-	- York City and County Bank-
ing Company.

York Union Banking Company

Yorkshire District Bank

Number
of

Partners.

323
598
192
122

469

236

485

238
267

277
680

DATE
when
Established.

2 May 1835.
6 May 1836.
25 Oct. 1832.
10 Sept. 1834.

23 Dec. -

25 May 1829.
11 Jan. 1836.

No. 64.
Places where
Banks have been
established.

28 Dec. 1831.
2 Mar. 1830.

23 April 1833
30 July 1834.

Stamp Office, Somerset Place,!	™ 7 7 ~ 7 77 — . •, .

1 July 1836	j	lees dale Cockett, Distributer.

501

K K— No. 65.—

RETURNS made by Joint-Stock Banks in each Year since their Establishment, in pursuance of 55 Geo. 3, c. 184, and 1 Geo. 4, c. 46.

at
o

NAME OF THE BANK.

1.
2.

3.

4.

5.

6.

7.

8.

9.
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

35.

36.

37.
88.

39.

40.

41.

Bristol Old Bank -
Bradford Banking Company
Huddersfield Banking Company -
Lancaster Banking Company
Norfolk and Norwich Joint-Stock Banking Company
Stuckey's Banking Company	•>

Leith Banking Company -
Bank of Manchester -
Cumberland Union Banking Company -
Leicestershire Banking Company
Whitehaven Joint-Stock Banking Company
Birmingham Banking Company -
Halifax Joint-Stock Banking Company
Manchester and Liverpool District Bank
York City and County Banking Company
Bank of Liverpool -
Gloucestershire Banking Company *

Sheffield Banking Company
Bank of Birmingham -
Barnsley Banking Company
Darlington District Joint-Stock Banking Company
Devon and Cornwall Banking Company
Knaresborough and Claro Banking Company
Stamford and Spalding Joint-Stock Banking Company
Wolverhampton and Staffordshire Banking Company
Bank of Westmorland -
Bradford Commercial Joint-Stock Banking Company
Leeds Banking Company -
Lincoln and Lindsey Banking Company
Liverpool Commercial Banking Company
Mirfield and Huddersfield Banking Company
North of England Joint Stock Banking Company -
Saddleworth Banking Company -
.Wakefield Banking Company
York Union Banking Company -
Chesterfield and North Derbyshire Banking Company
Commercial Bank of England -
Derby and Derbyshire Banking Company
Dudley and West Bromwich Banking Company -
Hampshire Banking Company -
Hull Banking Company.....

Whefi first
Established.

16 June
7 July

7	June
9 Oct.

31 Mar.

9	Oct.
23 Nov.
19 Mar.

13	Mar.
28 Aug.

25	May

30	Sept.
11 Nov.

26	Nov.
2 Mar.

23	April
28 June

24	June
2 Aug.

25	Jan.
22 Dec.

31	Dec.

14	Sept.
28 Dec.

28	Dec.

8	June

27	Feb.

22	Nov.

10	Aug.

29	Dec.
29 Dec.

28	Nov.

29	June
25 Oct.

23	April
21 Dec.

1 July

28	Dec.

30	Dec.

29	April

30	Nov.

1826
1827
1827
1826
1827
1826
1827
1829
1829
1829
1829
1829
1829

1829

1830

1831
1831

1831

1832

1832
1831
1831
1831
1831

1831

1833
1833

1832

1833
1832
1832

1832

1833

1832

1833
1833
3834
1833

1833

1834
1833

Number of Returns delivered into the Stamp-Office under Schedules A. & B. in each Year, commencing on the 11th day of October, and ending

on the 10th day of October following^.

t-*																							Total No. of	
S	Year		1826		1827		1828		1829		1830		1831		1832		1833		1834		1835		each Bank since Esta-	
% .	ending		to		to		to		to		to		to		to		to		to		to			
m  ■M  53 £  <V fi	1826.		1827.		1828.		1829.		1^30.		1831.		1832.		1833.		1834.		1835.		1836.		blishment.	
0) S M Co  P-l P-t	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.	A.	B.
8	1		1		2		2		2		2		2		1		2		2		1	1	18	1
173		_	1	-	2	1	2	1	2	1	2	2	2	2	2	2	1	2	1	2	2	1	17	14
335		-	2	-	3	-	2	_	2	1	2	-	2	*	2	-	2	1	2	1	2	1	21	4
127	—		2	1	2	1	2	-	4	1	2	1	2	1	2	1	2	1	2	1	2	-	22	8
125	_		1	2	1	1	2	—	2	_	2	-	2	-	2	-	2	-	2	-	2	—	18	3
35			1	-	3	1	2	2	2	_	1	1	2	-	2	1	2	1	1	3	2	5	18	14
16			_	—	2	2	2	_	2		2	1	2	-	2	1	2	2	2	1	2	1	18	8
552		—	—	_		-	1	-	-	1	1	-	2	-	2	-	2	1	2	-	2	-	12	2
52					-	—	2	1	2	—	1	-	2	1	2	-	2	-	2	-	2	-	15	2
101		—	—	-	-	-	1	-	3	-	3	-	2	-	2	-	2	-	2	-	2	-	17	-
236			_		—	-	1	_	2	_	3	-	2	-	2	- ■	2	-	2	-	2	-	16	-
311		—			—	-	-	—	2	-	3	«,	2	1	2	-	2	1	2	-	2	-	15	2
178									2	1	2	1	2	1	2	-	2	2	2	1	3	1	15	7
1,054	_,			-	-	-	-	_	2	_	2	-	2	-	2	-	2	1	2	-	2	-	14	1
267									1	1	1	1	2	1	2	-	2	-	2	-	2	-	12	3
441		-	—			-	-	' —	-		1		1	-	2	-	2	-	2	-	2	-	10	-
265		_		—	_	-	-	' —	-		1	-	2	-	2	-	5		2	-	2	-	14	-
225	_			-	-	-	-	-	-		1	-	1	-	2	-	3	-	2	1	%	-	11	1
227		—	_	_		-	_ -	-	-		-	-	1	-	1	-	2	-	1	-	1		6	-
118	__	_	_	-	_	-		-	-		~	-	1	-	2	-	2	-	2	1	2	-	9	1
247													1	1	2		2	-	2 (	«-	2	-	9	1
146													2	2	2	1	2	3	2	3	2	3	10	12
274													1	2	1	1	1	1	2	-	2	-	7	4
85													2	1	2	1	2	-	1	1	2	-	9	3
238	«.	-			; -		—	-	-	-	-	-	2		2	-	2	-	2	-	2		10	-
154	_		_		..		—	-	-	_	-		-	-	1	-	2	-	2	-	2	-	7	-
160															1	-	2	1	2	1	2	1	7	3
451															2	-	2	-	2	-	2	1	8	1
230															1	-	2	1	1	1	2	-	6	2
263															3	1	1	1	2	2	2	1	8	5
263															1	1	2	1	2	2	3	3	8	7
571	_	—	_	_			—	-	-	—	-	-	-	-	3	-	2	-	2	-	2	-	9	—
114															2	■ -	2	1	2	2	2	2	8	5
192															2	1	2	2	2	2	2	2	8	7
277															1	-	2	2	2	1	2	2	7	5
98	_	_		_	_		—	_		_	_		_			-	1	-	2		2	1	5	1
444																	1	-	1	1	1	1	3	2
204																	2	1	3	<-	2	—	7	1
190		_	_	_		_	_	_	-		-	-	-		-	- !	2	-	2	-	2	- .	6	-
141																	2	-	2	1	2	1	6	2
247	-	-		-	-	-	-	-	-	-	-	—	—			—	2	3	2	2	2	5	6	10

Whefi first
Established.

>

"d

b
H—!

X

3

PS
>"0
£

Tj

fO
O

S

ttlOr
CO

42.
43s

44.

45.

46.

47.

48.

49.

50.

51.

52.

53.

54.

55.

56.

57.

58.

59.

60.
61.
62.

63.

64.

65.

66.

67.

68.

69.

70.

71.

72.

73.

74.

75.

76.

77.

78.

79.

80.
81.
82.

63.

84.

85.

86.

87.

88.
89.

National Provincial Bank of England -
Northern and Central Bank of England
Nottingham and Nottinghamshire Banking Company
Stourbridge and Kidderminster Banking Company
Warwick and Leamington Banking Company
Yorkshire District Bank -
Bank of South Wales -
Bank of Walsall and South Staffordshire
Gloucester County and City Bank
Holywell Bank, North Wales
Leamington Bank -
Leamington Priors and Warwickshire Banking Company
Union Bank of Liverpool -
West of England and South Wales District Bank
Ashton, Stalybridge, Hyde and Glossop Bank
Bank of Stockport	- - - -

Birmingham Town and District Banking Company
Bolton Joint-Stock Banking Company -
Bury Banking Company -
Cheltenham and Gloucestershire Bank -
Coventry and Warwickshire Banking Company
Coventry Union Banking Company
East of England Bank -
Halifax and Huddersfield Union Banking Company
Leeds Commercial Banking Company -
Leeds and West Riding Banking Company
Lichfield, Rugeley and Tamworth Banking Company
Liverpool Borough Bank -
Liverpool Tradesmen's Bank
Liverpool United Trades' Bank • «.

Manchester and Salford Bank
Moore & Robinson's Nottinghamshire Banking Company
Newcastle-upon-Tyne Joint-Stock Banking Company
Newcastle, Shields and Sunderland Joint-Stock Banking
Company.

Newcastle Commercial Banking Company -

North and South Wales Bank -

Northamptonshire Banking Company •

Northamptonshire Union Bank -

Northumberland and Durham District Banking Company

North Wilts Banking Company -

Pares's Leicestershire Banking Company, or Leicestershire

Union Banking Company.

Royal Bank of Liverpool -
Sheffield and Hallamshire Banking Company
Sheffield and Rotherham Joint Stock Banking Company
Shropshire Banking Company -
South Lancashire Bank -
Union Bank of Manchester -
Wilts and Dorset Banking Company -

27 Dec. 1833
12 Mar. 1834

12	April 1834
9 April 1834

10 Sept. 1834

30	J iily

26	Feb.

10	Aug.

31	Dec.

11	Nov.
8 May

27	Aug.

2	May
23 Dec.

18	June

3	May

4	July
30 May

14	June

19	May

13	Dec.

12	May

27	Feb.
29 June 1836
21 June 1836

28	Nov.

21	Nov. 1835
28 June 1836

22	Mar.
12 May

15	June
12 July
27 June
11 July

1834

1835
1835
1834

1834

1835
1835

1835

1834

1836
1836
1836
1836
1836
1836

1835

1836
1836

1836
1836
1836
1836
1836
1836

16 July 1836
30 April 1836
13 May
23 May
23 May
6 Nov. 1835
15 Mar. 1836

1836
1836
1836

30 April	1836

20 May	1836

25 June	1836

27 May	1836

25 May	1836

6 May	1836

11 Jan.	1836

Stamp-Office, Somerset-place,"
19 July 1836.

4 2

Total Number since Establishment - -

Teesdale Cockell,

Distributer.

546

181

Q
O

1-3

H
M
K

C

H

i

m
H
O
O
W

w

>

«

in

c;«j&ket

of ike Dis trict / ^un of f./tr.

and cmwrriiAih mAmiKoFmwmA&mw

Established IZ^Jan3!

I < e eoLs

^MifoxdL

=o CIecK.Kea.to n

(1 ac-rnar von

N<>Uim)fhaJrn





J>*# &l&y'he-l> vUcr* ip 1&c]C&yf.

JamtjjbLuJze GJHaju ard/Jti Softs,iHri^r^

OTdjeied?i>y theHouse of Commo:*is.to J>e £rxnted 20mAugU£i 1856.This book is a preservation facsimile produced for
the University of Illinois, Urbana-Champaign.
It is made in compliance with copyright law
and produced on acid-free archival

60# book weight paper
which meets the requirements of
ANSI/NISO Z39.48-1992 (permanence of paper).

Preservation facsimile printing and binding
by

Northern Micrographics
Brookhaven Bindery
La Crosse, Wisconsin
2014