The Express.
London, England, 1867-07-26 00:00:00

LONDON JOINT STOCK BANK.

A special general meeting of shareholders wag
hold yesterday at the office, 5, Prince's-street, Monoion.
house, to could'r and confirm ,resolutiona for authorising
the issue of the remaining 8,000 shares of the capital, and
also for considering reeolutions for making certain formal
alterations in the deed of settlement. Mr. J. Knowi.r.s
preside&
The Caaransw, having remarked that the object of the
meeting was fully explained to the shareholders on the
18th instant. moved that the resolution as to the issue of
the re • • 8,000 shares to the proprietors at 10/.
premium or 251. per share, pared on the 18th inst., be
confirmed.
Mr. BROOKING seconded the motion.

Mr.Hoecldeukedforanexplanation of the reasons which
influenced the directors in issuing this additional capital
at a time when money was so plentiful and cheap
Mr. Hononow thought it unadvisable to call op more
capieal under existing circumstances. The principle of
the bank, he thought, should be economy of capital and ex-
pansion of credit. He believed there W• 8 an understand-
ing, if not a distinct guarantee, that the dividend should be
kept up to 121 per cent., the guarantee fund being avail-
able to meet any deficiency. But by bringing
in this additional capital it would in effect
reduoe the lq per cent. to 10 per cent.
Theirs was not a limited liability, consequently there was
not that reason for calling up the capital so closely as
might be advisable in the case of • limited liability com-
pany, and certainly it was not a time to imam capital
when their business and their profits were falling off.
Dr. Wittman did not think it wise to wait till money
was dear for calling rip Iheeepiea. New *bee ems, wee
abundant and low, and their dividends were somewhat
reduced, was, be held, the most fitting time to offer
, these shares to the proprietors. This was the policy which
1 the London and Westminster had recently pursued.
Mr. TAYLOR recommended that if the money was wanted
they should write 200,000 L. from the reserve.
the CHAIRMAN—We AMMO do so.

Mr. TAYLOR did not see tientimesity of accumulating
so large • reserve. The reserve was as much the property
of the shareholder, as the profits, and they were equally
entitled to the benefit of it.
Mr. Famine observed that it would be as sensible to
propose that the capital should be divided among the
shareholders as the reserve fund. He thought the only
error on the part of the board in issuing the 8,000
shares was in the low premium they had fixed. Instead
of 101., he considered they ought to be issued at 151. to
201. premium. (Hear, bear.)
Mr. BURY doubted whether any guarantee fund existed
practically. It was simply so much money in book debts.
Mr. BROOKINO (director) replied generally, observing
that in 1864 the proprietors agreed with the directors that
it was desirable that the capital should be Messaged. Up
to that time they bad worked with 600,000/. of paid-upospi-
tel. The credit of the bank did not stand lower then than it
had done before, and ho was happy to my it stood now as
high as at any previous time; but the question was
whether the paid-up capital wee commensurate with the
volutions of the bank. They decided that it was not,
and resolved to create 20,000 new shares, of which 12,000
should be issued at the time, leaving the 8,1110 to be
dealt with subsequently, power being reserved to the share-
holders to confirm or dissent from the proposed terms of
issue. The board, thinking it impolitic to leave any
question affecting the capital of the bank long
unsettled, and feeling the present • fitting op-
portunity, had resolved upon issuing these 8,0410
alarm. To have attempted to issue them dur-
ing • year of crisis like the last would have been the
maddest thing possible, and would have been regarded as
an indication or weaknesa. As they bad been told befog',
the bank stood well on the celebrated Black Friday, no
bank in London being stronger on that eventful day. The
directors now felt it well that the paid-up capital should
be increased by 1,200,001/1., and they must be allowed to
be the best judges of whether such a step would *po-
dium to the general interest or not. They were as keenly
alive as the shareholders to the difference between • 20 or
23 and a 16 per cent. dividend ; hut they were
equally alive to the necessity of carrying on the affairs of
the bank prudently, and with sufficient capital, and he
appealed to the meeting whether, when they had resolved
on issuing these new shares to the proprietors it was not
better foe their interests that they should do so when
money was only worth 2 or 3 per cent. in the market than
when it was worth 10 per cent. (Hear, hear.) The Wei-
mess had not fallen off, nor were the profits reduced.
Owing to the falling off in trade with various parts of the
world, the agency business both foreign sod colonial
was somewhat diminished, which would account for
a variation in the figures ; but the home business
of the hank had materially improved. Aceording
to the deed of settlement the guarantee fund was to be
maintained by adding to it interest at the rate of 3 per
cent. per annum, as c in the balance-sheet, and
was available for meet' ns barfolses and equalising dividends.
It was not mixed up in the book debts of the bank, but
was kept as • distinct account, whether the money was
invested in government securities or used in the ordinary
business of the concern. If it were invested in Consols it
would produce 3 per cent., but by investing it in the
ordinary business the shareholders but the benefit
of the greater profit made upon it, and if
they would not allow it to remain so employed
they must expect reduced dividends. Then the reserve
was really so much working capital, which if they had not
they would require 1,600,0001. of further capital instead
of 1,200,000/. With regard to the premium it was thought
by many that the price at which the 12,000 new shares
were issued in 1864, viz., 40/. or 151. premium, was rather
too high, and did not afford • sufficient margin to share-
holders who might wish to sell. The shales then stood in
the market at 46 to 48—they had been 50—but with regard
to the fairness of the premium of 251., be might state that
200 of the shares which were not allotted and were after-
wards sold by the directors for the benefit of the company
in the open market realised 4411. 10a. But remembering
the objection, and considering that the premium was to
go to swell the reserve, the board resolved to issue the
8,000 at 251, which would make the average of the two
Moues 3:2. 10s. . . .

The motion wan carried unanimously.
Iteaolutions authorising a reduction of tie minimum
number of the board from 19 to 15, the maximum number
being 24 ; to make one confirmatory meeting sufficient for
carrying a 'pedal resolution into effect instead of two,
thus redueirg the total number of meeting" required in
each case to two instotil of three ; and for effecting some
other formal alterations in the deed of settlement were
then proposed, and, after some explanations given as to
the reasons for the change, passed.
A vote of thanks to the chairman and directors con-
cluded the businma.