The Express.
London, England, 1857-12-14 00:00:00

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LONDON, MONDAY, DECEMBER 14.

Aiwa a monetary crisis, investigation of
its immediate features seems highly desirable,
and we remark with great satisfaction that the
inquiry of the Parliamentary Committee is
to be extended so as to embrace the points

arising out of the action of establishments which
hold immense amounts of money " at call" and on
deposit. The benefits of this system in ordinary
times are undeniable ; for, through its operation,
money is collected from a multitude of sources, and
brought into active employment. But the system
has also its evils end its abuses. The joint-stock
banks, whose deposits may be withdrawn with such
short notice, or almost without notice at all, have
fallen into an evil habit of grasping at immense
dividends. Even in this very respect, a mischievous
I rivalry has been witnessed amongst the London
establishments, each endeavouring to show the
largest per centage of profits. Dividends at the
enormous rate of 16, 18, and 20 per cent per annum
have been attained, and complacently pocketed by
the respective proprietaries, who, in many cases,
have betrayed great impatience of the argument,
adduced in favour of adding a larger proportion of
the profits to the reserved fonds. And thus it hap-
pened that these institutions, holding many millions
of deposits, with a very slender basis in the shape
of paid-up capital, employed these deposits up to a
perilously small margin. It seems tolerably clear
that these banks ought to have kept, and ought
henceforward to keep, larger supplies of money im-
mediately available. They ought also, one and all,
to add ocesiderably to their " reserved funds." To
do so would of course involve a diminution of the
enormous dividends to which the proprietors have
become accustomed, but they must consent to the
deprivation. We have not been slow to acknow-
ledge the benefits bestowed upon trade through the
agency of these joint-stock banks, and we fully
admit the ability with which the managers
have escaped the quicksenda of the recent
perilous navigation. There can be little doubt,
too, that the funds now held by them are ample, for
they have had good time to make provision, and
have during several weeks studiously abstained from
embarking largely in fresh transactions. But this

very het ;how; the evils of the system the more
strongly' in quiet times the joint-stock banks are
free lenders, and keep a comparatively small name;
in times of pressure that pressure is increased
through their desire to strengthen themselves, which
leads them seriously to curtail accommodation to
many persons who have been led to rely upon its cm.
finance. The fact that only a few weeks ago gene-
ral apprehension was felt for the position of the joint.
stook banks is sufficient of itself to render this sub.
jest one of the most important to which the atten-
tion of a Parliamentary Committee can be directed.