The Sun.
London, England, 1852-10-15 00:00:00

SUN,

LON DON,

on her entire registered tonnage, from which if in ballast
only they are exempt, at a time when the exportation
of the staple articles of commerce is forbidden, impedes
that of minor articles, and the real% of the two last
ens.c:ments is, that ships kayo this port with ballast of
a descriptio❑ iejerions to their construction and safety,
while fine timber has been seen floating down to the sea
unheeded. Let us now turn our attention to the nature
and effects of the prize seizure.
"As the Government on shore consider it nenessary
for the public service to seize all timber for their use,
whether the same be owned by friends or foes, and the
prospect of recompense, for it is certainly distant and
improbable, it has given rise to great inconvenience
and dissatisfaction.
" The commodore has likewise taken the step of ap-
propriating the cutch, cotton, and grain brought here by
the native boats, whose owners were under the impres-
sion they would be protected, and allowed to dispose of
their property for their own advantage. Under the
same order the rice is being exported, and it is under-
stood that the petty proceeds will be applied for prize
money. These two acts are universally pronounced to
be in violation of the proclamation with regard to the
trade of this place, which was a short time since pro-
mulgated, and cases of great hardship have in conse-
quence occurred to people who have been our partisans
on the rivers. We regret the unavoidable conclusion to
which these circumstances lead, viz., to want of confi-
dence, the alienation of the natives from our cause, de-
cline in trade and in the consumption of British im-
portations, the impoverishment of all classes, and the
condemnation hereafter of measures productive of results
so disastrous and so difficult to retrieve."
I enclose you the report of a meeting of the
shareholders of the Bombay Bank, summoned to
consider and sanction some very important altera-
tions in their constitution. Before the bank was
allowed to commence business in 1840 the whole
capital of half a million and upwards (Rs. 5'2,25,000)
required to he paid up; nearly the whole of this
was invested in Government Securities, the restric-
tions of the charter depriving them of more profitable
business. Tire bank has occasionally held 400,0001.
of Government Stock, at present they hold above
320,000 i. Government now urge them to reduce the
amount of this to 260,0001., or half their capital; but
the bank is at a loss in this case how to dispose of the
funds thrown into their hands. Their average rate of
profits, in excess of Government interest, has been
about 3 per cent. ; their average circulation of notes
about 250,0001. ; their maximum 650,0004, though
the charter authorises them to issue two crores. The
bank, under these circumstances, desires to have the
privilege of issue curtailed to a million, and to be
permitted to issue another in the shape of bills of ex-
change payable in any quarter of the world. Should
this be declined, the directors recommend that the
capital be reduced by one-half—shares of 1001. being
henceforth worth 501.—the difference to be paid back
to the shareholders. These propositions are all most
important, and deserving of the most minute and ma-
ture consideration.

SPECIAL MEETING OF THE PROPRIETORS
OF THE BANK OF BOMBAY.
A special general meeting of the proprietors of the
Bank of Bombay was held on the 2el inst., pursuant to
notice, at eleven o'clock in the forenoon, at the bank
premises, in Rampart-row.
The following gentlemen were present on the occa-
sion:—J. R. Hadow, &q., vice-president of the board,
in the chair; Major Swanson, Manockjee Linjee, Esq.,
A. Rimington, Esq., and J. Hunter, Esq., directors; J.
Warden, Esq., Bunaanjee Framjoe Caeca, Esq., Colonel
Waddington, Dossabhoy Framjee, Esq., Captain Cruick-
shank, W. Acland, Esq., A. S. Le Messurier, E,q., Dr.
Maclennan, Captain Crawford, and Meier Davidson;
comprising almost all the European shareholders resi-
dent in Bombay.
Mr. STUART, secretary to the Bank, read the notice
calling the meeting, as also the section of the charter
under which it was convened; and then proceeded to
read the following report:—
eleven
tvldt
ene
on den
calling
i o'clock
rpkeaedcigani
yea t
eigtl
rheeaenlf eom2rr aedelnedotmei
forenoon.
Report of the Directors of the Bank of Bombay, sub-
otifnsgeopftetmheheprr, proprietors
of the proprietors so
soon after the usual annual meeting, when the siatements
of the affairs of the bank made up to 30th June last were
eubtoitted, the directors are most anxious to place be-
fore them the following summaries of the operations of
the bank from its commencement is 1840, with the
view that the opinions of the shareholders may be taken
as to the advisability of an application to Government
for a modification of the present Oh arter, Act 111. of 1840.
2. As the whole of the capital of Rupees 52,25,000
was required to be paid up before the Bank was allowed
tth ohneeesfinrsi neent
therefore
repseecreauoul
investedrifiroiittwtai
sebees dl
s,eemploymente wt
bfae ohedreluti
whale
theaisdnimedreo
rut
realised,the
considerable
descriptioncoihtLih er Govern-
ment portionory ,ev
erand
nongodfei
to commence business in 1640, the directors were unable
e
athave: ndbe rt
although transacted
nnt
chs eae
m(tamounth4o,oo,ooh
0), tbyh
ethe
presentbank has
amounthe n
f s fortynelakhs r
lnearly
t thirty-two
tryu.ptewe
os
lakhs (32,00,000), and the Goveenment urge upon the
directors the necessity of reducing this amount to at
least twenty-six lakhs (26,00,000), or one-ha/if the amount
of the capital.
3. The directors still experience great difficulty in
finding profitable employment for the large amount of
funds placed at their disposal, and' they are of opinion
that some of the restrictions imposed upon the bank
under the present charter may with great advantage be
modified, so as to render the bank more useful to the
public, and profitable to the shareholders, without in the
least affecting its present stability.
4. The average rate of profit realised on banking
operations since 1840 (exclusive of all profit on invest-
ments in Government Securities) is little more than
three per cent. per annum on the whole paid-up capital.
5. Under the present charter the bank is allowed to
issue bank-notes payable on demand to the extent of
two crores of rupees (2,00,00,000) and the directors
uow propose to the proprietors that this credit should
be divided into two equal parts, one for the issue of
notes payable on demand, and the other for the issue of
bills of exchange payable either in India or elsewhere,
and for this purpose they submit that an application
should be made to Government for a modification of the
present charter, particularly with reference to the 32d
section, and that the prohibition limiting the bank to
buying and selling bills of exchange payable in India
only should be rescinded, and that the bank be allowed
to deal in bills of exchange payable in England or else-
where.
6. If the Government will grant this request the bank
will agree to give up the privilege of issuing notes to the
extent of two crores, and limit its issue of notes payable
on demand to one crore, and in order to insure to the
public the most perfect security for the payment of the
notes, the bank will further agree that the whole amount
of capital raised by the issue of notes will be employed
in granting advances on deposit of Government Secu-
rities, discounting Government bills, or invested in Go-
vernment Securities, and at all times the bank will hold
a reserve in cash equal to one-fourth of the total amount
of notes in circulation, as provided for under section 26
of the present charter.
7. The largest amount of notes the bank ever had in
circulation was 63i lakhs in December, 1843, but the
average circulation,
as shown in the annexed statement,
is only 35 lakhs, and it is believed, from the result of the
last twelve years' experience, that an authorised circula-
tion of one crore of rupees will be amply sufficient to
supply all the wants of the community, but if not, the
bank may be allowed to issue notes in excess of one
crore on deposit of cash equal to the excess of issue, on
the same principle as regulates the issue of notes by the
banks in England in excess of their authorised circu-
lation.
8. With reference to the bank being allowed to buy
and sell bills of exchange payable beyond the limits of
India, the directors propose that never more than one-
half of the present paid-up capital will be employed in
these operations, and that the total liabilities on such
bills of exchange will not at any time exceed one crore
rupees, being equal to the other half of the credit allowed
the bank under the present charter, and that no bill will
have a longer term to run than six months after sight.
9. The directors understand that her Majesty's Go-
vernment has granted Royal Charters for the incorpora-
tion of banks of issue in the colonies on similar princi-
ples, and hitherto no inconvenience has been experienced
in allowing these banks to issue notes payable on de-
mand in cash at the place of issue, and bills of exchange
payable in England.
10. Another modification the directors propose is that
th© bank may be allowed to advance money on the se-
curity of the shares of any of the chartered banks of
India, and on the shares of any of tho Indian railway
companies upon which the interest is guaranteed by the
Government; and also on the security of bills of lading
and shipping documents of goods in transit and con-
signed to Bombay, and that the clauses in the 27th and
28th sections of the charter prohibiting this description
of business be rescinded.
11. Under the present charter two general meetings
of the proprietors are held in each year, one on the first
Monday in August (under section 36), for the purpose
of receiving from the directors a statement of the affairs
of the bank made up to the 30th Juno, and the other on
the second Monday in December, under section 13, for
the purpose of electing two directors. It is now pro-
' posed that only one meeting be held in each year on the
second Thursday in February, and that the accounts be
submitted made up to 31st December, and the two di.
rectors be elected at the same meeting.
12. In the event of the directors not being able to ob-
tain any modification of the charter with reference to
issuing bills of exchange payable beyond the limits of
India, they are most reluctantly compelled to propose
that one-halt of the present paid-up capital should be
returned to the proprietors, and that the shares be re-
duced from Its. 1,000 to Rs. 500 each.
13. The authorised circulation of notes to the extent
of two crores of rupees, allowed under the present char-
ter, will
as s
also require to be reduced to one crore, an
the
shown in
of
inatheanßnoettehdays;tahtnetmiefnntott, to b
e the bank amply
my
sufficient for
may be allowed to
the issue notes in excess of one crore on
conditions stated in the 7th paragraph as above.
14. The average rate of dividend paid by the bank
one-half, the ratep would be
but had the capital been only
wi be 9 9-11 per cent., as per an-
nexf'd statement, sboyear, and the rate ofnthe net
profit realized in each
dividend paid, also the rate per
cent. of that profit on a capitalt of one-half the present
amount, after deducting fn
and 5 per cent. on that portefroest at the rate of 4 per cent.
be returned to the proprietors! of
the capital proposed to
15. In the original prospectus of h
in 1836. it was estimated that a adt.-c o bank, published
i
p
lakhs of rupees would be amply su fnc!)
ncapital of thirty
bank commenced with this capital, it weoutcdhve and had the
much higher rate of dividend than it has done,a but in