The Express.
London, England, 1856-07-30 00:00:00

LONDON, WEDNESDAY, JULY 30.

TIIE monetary movements of the last few years
abound in points of interest to commercial men
generally, and to those whose special business it ie
to des) with floating or surplus capital more partica•
lerly. Their history tarnishes no with valuable data
for estimating the peculiar effects produced by the
improvements in locomotion, the rapid extension of
trade sod consequent re-distribution of capital, and,
above all, by the gold discoveries which for the last
six years have introduced elements into commercial
and Boanci.l calculations so new se to baffle the
experience of the most astute.

On the present occasion we propose merely to
review the progress of Joint Stock Banking in the
Metropolis, the features of which are sufficiently
remarkable to merit the attention of all connected
with trade and finance, and the development of
which has of late made so much progress. The
Loudon and Westminster, the first of the Joint
Stock Banks, was founded in 1834, and was followed
by the London Joint Stock and the London and
Comity, in 1837, the Union in 1839, the C)mmercial
in 1840, the Royal British in 1849. the City Bank and
the Bank of London in 1855, and the Unity in 1866.1
Besides these, various other Joint Stock Banks exist,
bet as their operatioos aro principally connected
with the sister kingdom or the colonies, we omit
them as having a less immediate bearing on
the points we propose to illustrate. The
principle once established, it will be seen
from the following table, showing the amount
of capital, the profits foe the year, and the
deposits on the 31st December in the respective
years, that the progress of the system hes been tepid
and continuous.

Paid up capital. Profits. Drposits.
1814 .. 2 063,925 ~ 127.049 .. 7.984,306
1849 2,354180 181.368 .. 11 626 046
1854 .. 2,772,795 .. 444,636 .. 26,338,586

On the 31st December, 1855, the paid up capital
had increased to 3,587,8051., and the deposits to
31,390,8021.; but the returns of Jane 1t358 exhibit a
still more extraordinary increase. Excluding the
London and County sod the Royal British, which
have not yet held their meetings, the paid up capital
was 3,930,0001, the profit for the half year 317,7341.,
and the amount of deposits 32,343,7701. This latter
amount would probably be raised to nearly
38,000,0001. were the deposits of the banks who have
not yet published their reports included.
We have no means of knowing, eves approxL
irately, how far this steady increase in the amount of
deposits has affected those in the hands of private
bankers, though doubtless they mast have suffered to
a considerable extent; but there can be little doubt
that the establishment of Joint Stook Banks has
largely added to the number of persons keeping bank-
log accounts. The important results of this enormous
aggregation of small capitals, the bulk of which
would have otherwise remained nearly unproductive.
will at once be evident. It is not the mere existence
of capital, but its circulation in a reproduo-
ties form, that adds to the general wealth
of a nation, and this function of distribution is per-
formed by banks in the most effectual manner-
The managers of basks are necessarily more compe-
tent judges of the value of any given security than
individual', especially small capitalists, can be; and
banks are consequently, from their lugs trans.o.
done, a sort of insurance offices for capital, spreading
the inevitable risks over a vast surface, sod thereby
reduoiog the ratio of risk to the capital employed to
its minimum proportion,. The great addition to
the public wealth, and the benefits commerce
derives from the restoration of millions of idle
capital to reproductive circulation, by the dis-
count of bills and similar advances, is not the
only benefit obtained by the extension of the banking
system. The depositors themselves, who would other-
wise receive no return for their surplus capital
whilst unemployed, or who would obtain a return
only at considerable rick, share largely in the profits
obtained by the hanky, in addition to the economy
of time and money involved in the receipt and pay-
ment of their bills and drafts. The Union Bank of
London alone, in the year ending June 30, 1838,
distributed as interest among its depositors no
less a sum than 198,5941., while the profit
divisible among its shareholders was 121,1121.
It has now, apparently, become a settled principle to
grant interest on deposit and current amounts, arid
the chief difference in the practice of the Joint Stock
Books is, ea to the point where the interest com•
mance, on current amounts. The usual rate is 2 per
Gent. on balances which have not been below 5001.,
and 1 per cent. on those not below 2001.; but the
Unity Bank allows 2 per cent. on accounts of 3001.
and upwards, and 1 per cent. on all below that
&menet. The Royal British Bask was founded
with a view to introduce the Scotch system into
London, but probably, for the reasons we recently
urged against that system, it makes but slow pro-
gress compared with those founded on the ordinary
principles. The Unity Bank has innovated still far-
ther, by proposing to give the depositors, in addition
to the 1 or 2 per cent. on their monthly balances
one-half of the net profit., after deducting 6 per
cent. on the paid op capital and the amount to be
carried to the reserve fund. Although this plan
offers considerable advantages to the depositors, it
will require very large profits to remunerate the
sberebolders, and these profits the p►omoters hope to
secure by sharing them with thaw who assist in their
creation to a greater extent than is done by other
establishments. Some yeses must necessarily elapse
before the soundness of this principle, or
rather the inducement it holds out to embark capital
in forming a bank, can be tested ; and unpromising
as it may now appear to most of as, it should not be
forgotten that the opposition to the system of Joint
Stock Banking se proposed by the London and West-
minster was very general, not only among bankers
but among many who were seconeected with banks,
except as depositors. That the general principles on
which the Joint Stock Banks of London are con-
ducted are sound, experience has proved beyond a
doubt; that the public has not been blind to
the advantages they offer is shown by the progress
made by the older banks doting the past year, notwith-
standing the establishment of two new ones holding
out no unusual or dangerous attractions to customers.
Bat it is important, looking at the vast numbers sow
interested in the position of those institution', that no
precautions against abase should be omitted, aid
that the audit of their accounts should not be a mere
verification of balances, bat a careful inspection of
their securities also; while the moot complete pub-
licity should be given to their balance-sheets, for
which it is extremely desirable that some form should

be devised, which all Joint Stock Banks without

etcosption—the Bank of Ragland
compelled to adopt.

Win Court.

,_
OSBORNE, JULY 29.

Colonel the Hon. C. B. Phipps, Colonel F. Seymour,
and the Rey. G. Prothero, had the honour of dining with
her Mniesty yesterday.
I_ _ - - - . .

The Prinoese sad the Prisons Louise of Prorate, at-
tended by Counters Hooke, Canute* °drilla, Madame de
So robarg, Count Boos, and Baron Ernest Stoekmar, left
°Atone this morning fel the Continent. Her Majesty and
the Prism Consort sectompenied the PI hie...OM to South.
emron in the royal yacht Fairy. Colonel Francis Seymour,
Groom in Waiting to the Prism, will attend their Royal
Highnesses to Dover.

A Cabinet Council was held yesterday afternoon at
the Foreign-office, Downing-street. It was attended
by Viscount Palmerston, the Lord Chancellor, the
Marquis of Lansdowne, Earl of Harrowby, Sir George
Grey, Earl of Clarendon, Mr. Secretary Laboachere,
Lord Penman., the Chancellor of the Exchequer. Sir
Charles Wood, the Right Hon. R. Vernon Smith, Lord
Stanley of Aiderley, and the Right Hon. M. T.
Baines. The council sat two hours and a half.