The Express.
London, England, 1858-01-29 00:00:00

TO OUR READEEB.

♦ DOUBLE NUMBER of the EXPRESS will
be pilisil on the FIRST SATURDAY in the
Padiansulary Session, and eootinned on such weeks
se the With of the Parliamentary Debates shall
=ex desirable.

Tiz accumulation of an adequate guarantee or
starved fund is a measure of precaution so impera-
tively required from the London Joint Stock Bank',
that the public, who looked with mach interest to
the meetings just held, feel some di appointment at
the extreme reluctance of the several board, to move
in this salutary direction. The pleas pat forward
by the directors in justification of their halting
policy are almost amusingly varied. Probably the
most singular is that urged at the meeting of the
London and Westminster Bank proprietors last
week by Mr. Alderman Ba.Lomous, who, in very
briefly glancing at the fact that the sum added to
the reserved fund I. only 3,8881., remarked, in the
same breath—" The question of the manner in
" which Joint Stork Beaks are to be managed will
0 shortly some under the consideration of the Homes
"of Commons, and we shall wait with patience for
0 any change which may be suggested." A strange
reason this for refraining from making a needful
addition to the reserved fund ! One would think
that the London and Westminster Bank, whose re-
served fund, considered in relation to the amount of
their deposit', is relatively smaller than that of any
other of the old London banks, would have been
glad, at such a juncture, to obviate criticises upon one
of their vulnerable points. The real reason for
starving the guarantee fund is that the anxious state
of commercial affairs has prevented the Bank from
earning so large an amount of profits during the last
half-year. For the first six months of 1837
the dividend and bonus declared were at the rate
of 18 per oent per annum ; for the last six months
ef that year they are at the rate of only 14 per cent.
per annum. Obviously, therefore, as the Directors
thought, they had little or no money to spare for
the " Rest" High rates of dividend must be kept
up, whatever may betide.
The proceedings of the Union Bank of London
are open to the same objection. For the first
Mx months of last year the profits were so
large that the Directors were enabled to make
a distribution at the rate of no lees than 22f
per cent per annum, making 20 per cent, for the
whole year ending the 30th June, 1837, and to add
the respectable sons of 13,0001. to the reserved fund.
They at the same time announced that the dividend
and bonus would in (stare be limited to 20 per cent.
per annum as a maximum, and that the entire sur-
plus of profits beyond that rate of distribution would
be added to the reserved fund. Bat for the last six
months of 1837 the profits will allow of a division at
the rate of only 15 per cent. per annum, and, in
consequence, no addition, not even in the shape of
interest, is made to the reserved fend.
The Commercial Bank have declared a dividend at
the rate of 6 per cent. per annum, against 8 per
cent. per annum for the previous six months. The
sass added to the guarantee fund is trifling; but as
the total held by this bank is larger, in proportion to
the extent of their business, than that set apart
by any similar institution in London, the
reasonable requirements of the public are fatly
satisfied. Mr. Mot lIVICTILI4 the chairman, pro-
raised at the recent meeting that, as the business of
the establishment increases, the reserved fund shall
be increased also. With great justice, too, he en-
veloped a belief that " the public will hereafter, in
"judging of a bank, look not so much to the extent
" of business done as to the manner in which that
" business is carried os, and to the amount of the re-
" served fund which is set apart for the protection
°of its customers, as well as its shareholders." The
public have their duty to do in this matter; let
them watch narrowly the conduct of the banks,
and extend their custom to those which ex-
hibit the strongest desire to act upon legitimate ,
banking principles. This will be one of the most
effectual modes for maintaining a high banking
standard in London, the example of which, be it
remembered, will go far toward' shaming banking
irregularities throughout the kingdom.
Having recently drawn attention to the censur.
ably obscure way in which the managers of the
London Joint Stock Bank draw up their balance-
sheet, lumping together " cash, loans, bills die-
" counted, and other securities," in one vast item of
ten millions and upwards, we must do this bank the
isstioe to remark that, although in the point com-
plained of no evidence of amendment is visible, it is
distinguished as the only nietropiilitan bank that has
made any important addition to the guarantee fund for
Use last six months 0(1887. The amount thus appro-
priated is 16,0(61., and the directors are able at the
same time to maks a distributive et the rate of no
lens than 22 per oent. per enirent, or equal to that
fee the previous six months. It may be reasonably
doubted, however, whether this course would hays
been pursued had the profits been smaller. Of all
the metropolitan bank proprietaries, that of the
Leaden Joint Stock Bank seems the most difficult