The Press. — London, England, 1855-06-30 00:00:00

NEW PRINCIPLE IN BANKING. UNITY JOINT-STOCK MUTUAL BANKING ASSOCIATION. Established for the purpose of introducing the principle of mutuality into banking operations, whereby the customers of the bank become entitled to bonus, by way of interest, estimated after the rate of fifty per cent. on the net profits. Capital, Half a Million Sterling. Divided into 5,000 shares of 1001. each. Deposit, 501. per share. This amount will be payable by two instalments, namely 101. on allotment, and 401. at the Limo of incorporation. shareholders have the option of paying up the whole 801. on the Shares al lotted lo them, iu one instead of two payments. It is not ex pected that any further call will be made. The business of the bank will not be commenced until the whole of the capital has been subscribed and one half thereof paid up. By a clause in the deed of settlement, shareholders are entitled to interest at the rate of five per cent, per annum on all share capital pall up, previously to the declaration of bonus, as well as to fifty per cent. of the net profits. With the exception of the amount needed to defray the neces sary preliminary expenses, the paid•up capital will be invested in Government securities until the bank is incorporated. TO BE amp BY ROYAL CIIAIITEE. The Central Offices of the Bank will be at the Unity Buildings, No. 10, Cannou•street, City. During the necessary alterations, business will be carried on at the TEMPORARY OFFICES. Chief-40, Pall-mall, London. City Branch-98, Cannon-street, London-bridge. COURT OT DIRECTORS. William Joseph Bruce, Esq., Duke-street, Westminster, and 4.). Hyde-park-place, Cumberland-gate. G. L. P. Eyre, Esq. (Messrs. Trinder and Eyre), 1, John-street, Bedford-row. Thomas Carlyle Hayward, Esq. (Messrs. Hayward and Sons), 93, Minories, and 8, Highbury-park North. Robert Garland, Esq., Thames Chambers, York-buildings, Adelphi, and Belfiore Lodge, Highbury. Thomas H. Baylis, Esq., 38, Cannon-street, City, and 4, Notting ham-terrace, York-gate, Regent's-park. Dr. Lloyd, 4, Suffolk-place, Pall-Mall. Edward Gould Bradley, Esq., Heathland Lodge, Hampstead. Major Hetry Stones, LL.B., 33, Nottingham-place, Regent's park. Robert James Snap., Esq., 2, Stone-buildings, Lincoln's lun. M‘jor Martin Mulkern, JO:afield-house, Regent's-park. ••• This number to be increased. When the court of directors is completed, the governor and deputy-governor will be ap pointed. BANKERS. The London and IVesunineter Bank. Chief Officee—Lothbury. And at the following Branches, at either of which deposits on shares will be received and receipts given, viz.:— Westminster Branch, 1, St. James's-square. Bloomsbury Branch, 214, High Holborn. Southwark Branch, 8, Wellington-street, Borough. Eastern Branch, 87, High-street, Whitechapel. St. Marylebone Branch, 4, Stratford-place, Oaford-street. SOLICITOR—Thomas Tayloe, Esq., 27a, Bucklerabury, Loudon. GENERAL MANAGER—James Knight, Esq., F.S.S. SECRETARY--Henry Lake, Esq. Among the various improvements Introduced during the pre sent century, in connection with the commercial institutions of this country, there is not one in itself so entirely satisfactory— not one which has been attended with more solid and complete success, or that has conferral greater benefits on the community —than that of joint•stock bulking. It has opened up metns for profitably employing capital—provided the public with insti tutions replete with known security, arising from paid-up and st.hicribed capital by numbers of individuals—and given to banking operations a tone and an importance previously unknown. The joint-stock banking system has grown out of a combination of circumstances, arising, amongst other causes, from the pro sperity of the country, and the inereaA of population. It has now become a positive necessity to the commercial world, and it provides such advantages as command the cordial approval and iupport of the public. The late Sir Robert Peel, in a speech delivered twenty years ago in the House of Commons, alluding to the joint-stock princ iplo generally, and in particular to the joint-stock banks, said : " f look upon theprinciple of joint-stock companies as one of "the great discoveries of modern thaw.. I regard them, when "made responsible to public opinion, as the ground ou which all " successful enterprise must be founded. I say further, that if " there can be one description of business to which the principle "of the joint-stock company can be wore applicable than " another, it is, under due restrictions, the business of banking." The opinion of Sir Robert Peel, delivered in 1835, has not only been fully confirmed by the success which has attended joint-stock companies generally, but more especially by the success which has since then been obtained by all joint-stock banks that have been well established and prudently managed. That there has existed. dui ing the past twenty years, room for additional banks, no doubt can be entertained. For, while the iii London Joint-Stock Banks have created and transacted a large business. while they have extended and popularised to a great degree the principles of banking—and thus afforded valuable facilities to the commercial community, by directing capital to most profitable uses—there is no known instance of any well regulated and responsible private bank which has not increased its busines also during the same period. Bearing in mind the daily extension of the commercial operations of this country, and the continuous increase of the population, this is not to be wondered at. The population cannot increase without rapidly extending commerce, and adding to the wealth of the nation. This, necessarily, gives an impetus to every commercial enter prise. The banking system, therefore, like all others, must pro gress, and In order still further to facilitate commercial trans actions, and to meet the increasing requirements of the oommunity, new organisations must be brought about for its further development. THE PRESS. It is, moreover, proved to demonstration, that Joint- Banking, under proper supervision, affords a most legit and unusually profitable field for the investment of capital. The five totals in the foregoing table show that— I. The entire amount of subscribed aiming in the whole of the existing joint • stock banks in London, amounts to 12,1304,2001. H. HI. The amount thereof paid up is 2,767,0351. The amount of deposits, or customers' balances, is 25,505,6971. The total number of shareholders is 4,028. The number of shares issued, 180,094. These live facts exhibit the material points in connection with the whole of the existing London joint-stock banks, so far as their responsibility, business, and extent of connection are concerned. With respect to the profitable working of these Institutions, it will be observed that the highest rate of dividend payable amounts to the large sum of 20j per cent. per annum, while that of the lowest is 6 per cent. Viewed, therefore, in any respect, each institution has proved to be a most desirable investment to the persons holding shares. The small number of shareholders in all these banks together —namely, 4,028—wi11, no doubt, excite surprise; and the more so, when it is known that very many of these are resident out of London. This clearly indicates that there is but a very small proportion of the public who are enabled to participate as shareholders in the bonuses resulting from the joint•stock banking system. The comparison of 4,028 persons constituting the shareholders in the six London joint stock banks with the number of their customers, is very small indeed ; and yet these are the only persons who enjoy the privileges and tie bonuses resulting from the large transactions of the whole body. It is, therefore, evident that there not only exists ample room for properly-established and well-regulated joint-stock banks, conducted on sound banking principles, but that by their estab lishment the public will be materially benefited. It now becomes worthy of consideration, what course can be adopted in the con struction and practical management of banks, which will recurs the more effectual identification of interests between the share• holders of a bank and its customers. As at present constituted, the shareholders alone participate in the bonuses declared by the banks. Of late years the requirements of the public have led to the establishment of various joint-stock institutions based on another principle, namely, that of mutuality. This has resulted entirely from an experience which has proved its necessity, and has led to a most desirable and successful " Unity " of purpose and interests. lu no one instance has this principle failed in securing the very best results. Nor is it likely to do so; for it confer upon the greatest number of persous the largest amount of benefit. The present joint-stock banks, as compared with the private banks, are an exemplification of this fact.. The former have, unquestionably, given greater benefits to the public than the latter; but it will remain for other institutions to do so in a more comprehensive and effectual manner. It is for the accom plishment of this object that the SATURDAY, UNITY JOINT•STOCK MUTUAL BANKING ASSOCIATION is established. This association is promoted under singularly advantageous circumstances, Although entirely distinct from them In point of capital and liabilities, it commences its career with the assistance of two powerful and popular institutions, viz., the Unity Fire and Unity General Assurance Associations, whose united constituencies number several thousands of shareholders. So that., apart from the support that will neces sarily arise from the public appreciation of the new features now propounded, there is every reason to regard the present project as one comniencMg muter peculiarly favourable auspices. The plan proposed is that of extending the " mutual principle" to the business of banking, by paying the customers of the bank interest estimated accordiu.t to profits, and by these means in ducing them to interest themselve 4 iu promoting and extending its operations. CAPITAL OF THE BANK. The capital will amount to half a million sterling, with power to increase. This sum will be divided into 5,000 shares of 1001. each, on which a deposit of 101. will be required on allotment, and 401. on incorporation. This will yield a paid•up working capital of 250,0001. MANAGEMENT. The management of the bank will be conducted by a governor, deputy-governor, and a court of directors, representing the Erofessional, mercantile, and trading interests of the country. ach of the directors must be the holder of twenty shares, and have paid up 1,0001. of the capital stock as a director's qualification. The Central Bank will be at the Unity Buildings, No. 10, Cannon-street, in the City of London, and branches will be opened in such parts, and at such times, as may be deemed desirable. ALLOTMENT OF THE SHARES. It will be the aim and desire of the court of directors to be very cautious in the allotment of the shares. Their object is to obtain a numerous and respectable proprietary, without dis tinction of class or place. For the accomplishment of this object they will require a responsible reference with each application. The shares will be allotted lu small numbers, and a preference will be given to those allotments which are most likely to pro duce business to the bank, and extend its connection. ADVANTAGES TO SHAREHOLDERS. The Deed of Settlement gives to the Share holders, out of the profits, as a remunera tion for the capital advanced, and the re sponsibility and security for the transac tions of the bank (after paying interest at the rate of Al. per ct. on the paid-up capital) (A per cent. ADVANTAGES TO CUSTOMERS. It is in this important particular that the Unity Joint-Stock Mutual Banking Association differs from all other existing banking institutions. It is the first to propound and offer for public support a principle so equitable and so calculated to fa vourably advance the intetests of all parties. No good reason can be assigned why a bank should not acknowledge and reward the services of those who contribute to its profit and success, as assurance companies recognise those who assure their lives or property. It is well known that of late 'ears assurers have been permitted to participate largely in the bonuses of those institu tions, with the most successful results. With a view, therefore, to applying this well-known and highly appreciated principle to the business of banking, after having made due provision for reserve fund, to be regulated by the shareholders, under the advice of the directors, and paid N. per cent interest per annum on the paid-up capital, The Deed of Settlement gives to the Customers, as interest on their cash balances, in addition to the ordinary amount paid on deposit and current accounts, • sum equal to the interest paid to the shareholders, that is The deed, however, does not render it compulsory on the cus tomers to acbept such additional interest, but provides that any customermay, on opening his account, elect whether lie will or will not accept the same. This plan, it will be observed, creates strong interest with the customers in the bank, who thus become much concerned iu ex tendiog its business. It will be the means of opening up new business in quarters where banking has nut hitherto been adopted ; it will have a strong tendency to consolidate and preaerve the attained connections of the bank; and it will thus advance its own interests, and be productive of practical benefits to the public generally. Great difficulty exists in estimating the effects likely to be produced by the establishment of this new and most desirable feature in banking. It is one that must become highly popular with every commercial interest, and with every class of the public, because its simplicity and advantages are at once to be seen and appreciated. To those great commercial bodies which are compelled to have large cash balances constantly at their bankers, It will prove to be a serious consideration and a most important source of profit. The railway, dock, gas, water, steam navigation, insurance, and other companies, professional men, merchants, brokers, gentle• men of fortune, and traders of all kinds, will duly estimate the difference in the system now proposed from that heretofore ex isting. In tine, as joint-stock banks became a public necessity, as is now proved, so will the principle o f mu t ua lity, w h er eby these admirable institutions may be rendered still more service able to the public, and in no way less safe, demand the best con sideration of the community at large. BUSINESS TO BE UNDERTAKEN. All the usual business of banking will be undertaken ; and arrangements will be made for extending the transactions of the bank iu every desirable quarter. Current accounts will he made up half-yearly—namely, to the 90th of June and the 91st of Decembee—and interest will be allowed at the rate of 21. per cent., provided the balance shall not at any time have been below MK If not below 1001., 11. per cent. Under this amount no interest will be allowed. DEeosir ACCOUNTIC-With respect to these, the rate of interest allowed on money placed at seven days' notice will be H. per cent. under the rate of discount on first•class bills adopted by the Bank of England, regulated thereby. The bank will give receipts fur the sums so deposited, or, for the convenience of depositors leaving England, promissory notes, or bills, including interest as well as principal, at not less than six months' date. The bank will undertake the agency of Country and Foreign Banks, whether Joint-Stock or Private, and will afford every accommodation to travellers and others, with respect to Circular Notes and Letters of Credit. It will receive all kinds of Income for its customers, including Annuities, Dividends, Military. Naval, and Civil Officers' Pay. It will undertake the Sale and Transfer of Stock In the Public Funds, hc., and will be respon sible for the safe custody of Title Deeds and other Securities be longing to its customers, to which they will at all Coles have convenience of access. Applieations for Prospectuses, and Forms of Application for Shares to be made to the Solicitor of the Association, Thomas Tayloe, Esq., 27a, Bucklersbury, London ; to the Secretary, at the Temporary Offices, 40, Pall-mall, London; or at 38, Cannon street, London-bridge. HENRY LAKE, Secretary. ti 5 0 ti ' 4 • . a s u 0. .. .0 ~. y E 6, 0 04 0. 4) ..; d a) V., 0 a al 6+ ' '' 4., •• .. .-4 ..) r. 4) 4. , -...raci za st. >, /72=e© a a I : lg 9 ....., O .„,....=.O O toi. 1 ____°© ..0 0 Q . 4 w ..... -'0 • 05 g. W 0 -... !Eil 1 c d =r-.., 0.,a,4 *claim= ~.ao4 g i ..... BO . 1 W 2 . 'z' 44- u 1 "ci.gggS -a.= o ,e le °: 1 to .. 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