The Press.
London, England, 1856-09-13 00:00:00

BANK OF FRANCE.

THE Moniteur of yesterday published the Debtor
and Creditor Account of the Bank of France, made
up to Thursday, tho 11th inst. Mr. William Avens,
of No. 13, Tokenhouse-yard, Lothbary, in his
circular published last evening says :

It is less favorable in some respects than that for the
preceding month, inasmuch as it shows a falling off in the
Bullion, notwithstanding there is a considerable increase
in the payments, which we in this country consider to be
irregular, with the view of maintaining it at a maximum
amount. But on the other hand, the Bank has not only
contracted its own liabilities, but, from the progressive
diminution in its advances, it appears to be farther de-
veloping the policy of discouraging Bourse operations and
commercial speculation. These are favorable features in
the return which compensate for those that are less
agreeable to contemplate : and judging from the amount
of Private Deposits withdrawn during the month, we
should say that the cash, rather than the credit, system is
extending in the internal commerce of the country. Com-
pared with the previous return, the following will show the
changes made in the position of the establishment during
the month, expressed in English currency at an exchange
of twenty-five francs to the pound sterling:—
Decrease in Circulation

Increase in Public Deposits
Decrease in Private Deposits.. 1,808,182
Decrease in Bullion 409,300
Decrease in Commercial Discounts 912,302
Increase in Advances on Bullion
Deorease in Advances on Public
Securities
Decrease in Advances on Railway
Securities

400,297

Increase in Premiums on Purchase
of Gold and Silver
Decrease in Aggregate Liabilities 1,784,759
Circulation
Stock of Bullion (September 14)

The amount paid for premiums on gold and silver pur-
chases was 59,83521. in the present month, against
45,M91. in August. The following table shows the
several advances made by the Bank in the two months
just closed :

Commercial Discounts
Advances in Bullion .. ..
„ Public Securities ..
„ Railway Shoes ..

Harr. AOOOlll%
. £17,5650513 £18,477,811
162,915 14 / ,431
8,611.858 4,072,155
2,218,160 2,288,245

Deduct ..

£23,64446 £.24,979,846
.. .. 23,548,446

I )ecrease in September X1,4'21;200

ROYAL BRITISH BANK.
TO THE EDITOR OF " THE PRESS."

Sir,—Every one must deplore with you the shock given
to public confidence in the system of joint•stock banking,
especially on the Scottish principle, from the fate of the
Royal British Bank, and the conduct of the manager and
directors.

It is little consolation to the public to be told that the
system has not had fair play ; that this bank has been
raised up without apparently the smallest intelligence
placed in the most untried and unintelligent hands ; and
as to some of the latter, at least, it appears that worse
might be said.

For a bank bearing such • name, and in such a place,
the capital, paid or subscribed, seems to have been ridicu-
lously small. As to the charter, deemed of such conse-
quence in general, the grantees seem as much at sea as
the general public, for both seem to pat faith in what
should limit their faith; the selection of the manager
seems to have been without the smallest judgment; his
power and emoluments ridiculous ; and the management
and control of the directors equally ridiculous. All ths
world should know that it is not the business of banks to
lend on filed securities, or speculative or long-winded
transactions. These should form the business of retired
capitalists—or in very sure circumstances of great banks
of issue, having large sums of rest requiring to be at
interest ; insurance, or other companies, whose guarantees
mast be dormant ; in short, of any parties conceivable but
active bunks. Their profits arise from the continual re-
volution and lending of their capital and its interest, and
the commissions, Itc. dec., thence accruing : this also is the
source of their utility, and I may add of their safety. Their

money should always be at hand for safe and proper rise ;
their debtors always hard in hand. No debtors of banks
should have opportunities of laughing at them for months
while mis-spending their money. Long-dated transac-
tions are, I say again, for money-lenders commonly so
called, not banks ; and these money-lenders should by law
be allowed to make their own terms, for long locking up
of capital as well as for risks ; though Lord Althorp, with
the stolidity peculiar to himself, and the ignorance of
actual business peculiar to his tribe, would have reversed
this, and did reverse it; and so enables the usurer to grind
down the estates of struggling and well-meaning, though
often miscalculated tradesmen, by striking for heavy in-
terest, commission, &c. d- c., once in every two, or three,
or perhaps every one month; while the hands of the
capitalist, who upon a fair representation and remunera-
tion would have given time, are comparatively tied.

But my object is not at present to teach the principles
of banking, but merely to say that in this instance, in
the instance of the Northern Bank of England in Man-
chester, and in that of the Liverpool bank in particular,
all the principles of banking have been outraged, and so
obviously, that the astonishment should be that the facts
are not considered and treated as crimes rather than as
error of judgment ; for no directors can consider them-
selves legally entitled to take their seats merely to help
themselves, or to conceal the effects of their management,
or mismanagement, by keeping double sets of books ; and
yet this has been the conduct in several of the gross
failures of the last few years.

You desire a proper audit of the affairs of banks ; and
most properly ; but you do not suggest how, fur it would
be difficult to any one uninitiated.

In the case of savings•banks in particular, I have long
urged, and I think earned, the principle of inspectors, re•
sponsible to the Government and depositors, and indepen-
dent of the directors.

Such an officer would be equally useful in railroads.
Had such a one existed and known and done his duty,
the Hudsons of the day could never have cooked their ac•
counts, and the failure of the Cuffey-street Bank could not
have happened. The inspector, if honest and capable,
would have insisted on signing the balance-sheet and
report of the railways, perhaps on reading and comment-
ing upon it ; and certainly the partners should have in-
sisted on having him present and answering all questions
upon his oath and honour.

Such an officer seems to be indispensable in public
banks ; but both in banks and railroads he must be one of
the staff. He cannot be brought in at special periods—
the transactions would overwhelm him; he must be ever
present ; but, to be certainly efficient, he must be indepen-
dent of the directors. He must be the sworn servant of
the companies, and a very judicious man.

The directors would thus act under a gag? Not at all ;
but under a guide and guarantee. Most public companies
in Scotland have such inspectors, who minutely examine
all transactions, and draw up and read the reports ; and
instead of being odious to either managers or directors,
very few of either would consent to act without them.
And no wonder ; for their signatures form the releases of
directors and managers and the guarantees of the
securities of all officers finding security.
Such officers exist in Scottish banks, but not so promi-
nently as in other companies ; but there has not been an
instance of their being tampered with. And in Scottish
Banks there are no juntas of " acting directors." AU the
directors act there; and are so tenacious of character, and
so alive to responsibility, that were any ride in the con-
tract to be departed from but once, even at the instigation
of eleven•twelfths of the directors, the twelfth would in all
probability throw down his pen ; and he would need no
long protests nor procedure whatever ; the contract would
act like iron ; and if, as is the universal rule in Scotland,
and seems to have been adopted in the instance of the
Royal British Bank, one fourth of the capital of the bank
had been lost, and not replaced, the bank would be dis-
solved by contract, and that dissolution would be acknow-
ledged and yielded to by some one director; and that
would be a signal for the inevitable yielding of the whole.
How have any failures arisen then in Scotch banks? I
could explain that also without impeaching the system or
even implicating the directors as bodies; though in some
instances they had all so deeply dipped into the funds, and
became so nearly the companies, that their efforts to re-
trieve the banks were like the efforts of private individuals
to retrieve themselves.

As a general position, public banking, conducted with
intelligence and integrity, ought never to disappoint the
public.

In the present instance, had the directors met their con-
stituents, as they ought to have done, and fairly represented
the state of matters, even though the directions of the con•
tract or charter bad been neglected, there ought to have
been no failure, though the bank might in due time have
been dissolved.

First. Those who have overstepped the limits of the
charter are personally liable in the consequences. That is
one ground of retrieval.

Next. The partners ought instantly to have replaced the
deficient capital, or such as were capable should have done
so, pro ruin, on the faith, as they were entitled to calculate,
of general indemnity.
All this might have been done without any public expo-
sure. This would most probably have quieted the waters,
and in the meantime the business might have bern
handed over to another bank.

This last should have been easy if the business has not
been wholly misconducted, for an accession of customers
is an aoccssion t) a bank as to other establishments money
being forthcoming so far as required, very little would have
been required; distrust would have ceased, end very pro-

perly, unless the charter has been so ill•considered as to
have left no adequate responsibility, and, if that shall prove
the case, it will be a lesson in the matter of charters.

It is not for the public to interfere with the creditors of
this bank. If they will take their money gradually, very
well. But it would be for the honour of the system that
some bank or public body, having money dormant or at
inferior interest, should step forward and pay at least the
minor creditors without the delay of an liotu•.—l am, sir,
your ve►y obedient servant,
Edinburgh, 9th Sept., 184,

D. B.

BANK OF ENGLAND.
An Account, pursuant to the Act 7th awl Rth Victoria, cap. 32
for the week ending on Saturday, the Gth day of Sept., 1836.

IR,tJI PTPARTMENT.

..... . _______....
Notes issued .... 4126;001,765 Government Debt /11,015,100
Other Securities .. 3,459,000
Gold Coin & Bullion 11,526.765
Silver Bullion .... --

526,001,765 i .
BANKING DEPARTMENT.
Proprletors'CapitalSl4,3s9,ooo Government Seen.
Rest
Public Deposita* 6,087,061 Dead WeightAn.l 42.114.079
Other Deposits
Seven Day di other Notes 6,021,600
Bills

A26,G01,765

£34,914,691 1 £54,914,t•91
• Including Exchequer, Commissioners of National Debt,
Savings' Banks, and Dividend Accounts.