The Dorset County Express and Agricultural Gazette.
Dorchester, Dorset, England, 1876-01-04 00:00:00

WILTS AND DORSET. BANK.

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We observe that an announcement has been made that
the directors of the Wilts and Dorset Banking Contp,py
will recommend at their next anneal meeting to be held
in February, 1876, an Increase of the capital of the hank
to nOO,OOO, by the issue of 5,000 new shares Thee.
shares are of £lO paid. and are to he issued at PO per
share, and the premium added to the reserve fund. It
speaks well for this thriving company that it is enabled
to put forth new capital at so large • premium, without
fear of depreciating the value of its existing capital, rb,
market price of its shares of £lO paid stand at 424 to af
or a premium of MO per cent. It is undenuoal that tlui
operation will enable the directors to increase the reserve
fund to £2iio,l)oo, and they have no doubt acted wisely in
making this large addition to their rest or reserve fund,
and, in so doinge they offer an excellent example ts. sot-6
of our other banking institutions. There was a time eine
the proportion of 45 per cent, or even 41 per rent of
reserve fund to capital was deemed ample to meet every
merger cy that could arise, but with the growing comae
tition in banking as in every other kind of bunnen
throughout the country, the borrowing wants of our
community are not only met with a much greater amount
of liberality, but • larger proportion of a banker's funds is
employed ill the discount of promissory notes of long
Currency in advances by way of open credits ar.d oyes.,
drawn 'accounts, in Icans upon the deposit vf dials al
other securities, and generally in making Licences whi
partake of si more permanent character, than prevailed i
the earlier history of joint-stock banking; now with out
extended knowledge of banking (if the proportion of such
advances be kept within due limits), we know that this
may be made both with advantage to a bank and to its
customers. But with this feature of banking. stimulated
by coiupetition on the one hand and the dearth of outlets
for the employment of capital on the other, banking risks
have increased from the very nature of these operstiona
Hence the importance to • bank of augmenting from time
to time, as circumstances favour, the reserve fund; of
maintaining • larger proportion of English Government
ansl other securities of an equally convertible character,
and of enlarging permanently reserves of rash on band
and at call. For how small a proportion of the advances
we have described could. in a season of ungepected csm.•
usercial pressure, be prcloptly reloaded by th, horroweral
Looking, then, atahe matter from this poiht of view, we
think hank directors art wisely and in the best intereste
of their shareholders in building up steadily and surely
substantial reserve feed. Let at he in the proportion
50 per cent., or even 100 per cent., of its paid-up capi
(as in the yam) If SOlne Northern hanks), the grtater thi
better. Such a fund judiciously invested in Coneols :Er
the most negotiable of British securities, readily Coto
vertible in seasons of commercial crises and panics, cannot
fail to lend stability, strength, and security to any banking
institution. Failures, frauds, deficient harvests, depression
of trade, and the various other sources of loss for which
the vigilant eye of a banker should ever be on the watch,
find him prepared for the worst that can happen. To
know that a bank is thus prepared adds to the comfort and
peace of mind of its directorate; it diminishes the
anxiety of it/ manacemett : it lends the same encbsid-
ment to its skareholders ; it girusi
market quotation of his shares, and en Inumw. the value
his property. It strengthens the confidence of the bankt
depositors and the outside public in seasons when eacb.
deuce it invaluable; it benefits both shareholder and
customer. We congletulate the direeturs s,f the Witt
and Dorset Bank ou this proposed 64410 of new capital,
and on being enabled to increase their reserve fund toe
quarter of a million sterling, and, should they Out it
practicable, at no distant future, to repeat the operation,
we hope they will be able to make capital and reserve
fund equal to each other. —The Bullioniat.