The Sun.
London, England, 1836-07-15 00:00:00

JOINT STOCK BANKS.

Owing to the- slow progress made by the committee
on Joint-stock Banks, and the little that transpires of
the proceedings, an impression prevails in the City
very generally that nothing material will be done in
the present session. Great difference of opinion exists
as to the restraints to which these establishments ought
to be subjected, but all, except those who have a direct
interest in them, agree that they ought to be very strict
and severe, if it is meant to afford any protection to the
public from the consequences of their deviation from
the right path. One condition strongly insisted upon is,
that the capital should not be merely a nominal one, but
that the whole should be paid up within a fixed period.
This is a practice• growing into use already in the
better class of banks of the United States. Some notices
are now circulating here of the formation of new banks
,in the southern states, which require the whole capital
to be paid up within 18 months. Another is to fix a
maximum proportion to the capital, in the case of banks
of issue, for the circulation of notes. The American
banks are not to be held up in general as models for
imitation ; but in this respect, also, some judicious
regidatiops are beginning to be adopted. If to
these were added a prohibition against the issue
of notes of less value than .5/., or perhaps 10/., it seems
to be admitted, as regards the fiscal part of their arrange-
ments, that joint-stock banks could do no great harm.
There are still, however, other objections to be met with
—for example, on the score of influence, which may be in
some instances misapplied, and do as much harm to a
community, though in another way, as by the mal-admi-
histration of pecuniary concerns. The National Bank of
Ireland, in the manner in which it is conducted by O'Con-
nell and his agents, is a striking proof of this, of which
public notice has already been taken ; and we have heard
it affirmed that-institutions of the same kind are to he met
whsh in England, though the misdirection is not so much
of a political as of a religious or sectarian kind. It is cer-
tain that a Board of Directors having so much capital to
be disposed of at pleasure, in whatever part of the country
they may be placed, do possess an enormous power, which
is capable, like all other power, of being abused or per-
v'ertefl. There is oi:e point which we have not heard ad.
veiled to, in which these establishments required to be
curbed, and that is in the great extension of branches, to
sshich there is at present no limit. These branches may all
grow up to be as important as the principal bank, and thus
40 or 50 banks may spring out of one charter, which is
obviously absurd, as well as dangerous. Soma limitation
of distance, and also of the number of branches that may
be formed, seems indispensable to all sound legislation on
the subject. Other opportunities will, however, present
themselves from time to time for further discussion of this

important subject.
Some of the managers of the large joint-stock banks in
the country have been examined before the Committee,
and they are said to have objected, on behalf of those whom
they represent, to make the disclosures with respect to
circulation and deposits, and other matters, which will be
required of them, unless private persons engaged in banking
ore subjected to a similar inquisition. This is a manifest
evasion of the question, for tLe Government can possess no
power in this respect over the actions of private individuals.
It is only when a charter of incorporation is applied for,
that they are in a situation to make conditions ; and they
:in--, enabled also to enforce them by introducing a clause of
forfeiture into the charter in the event of non-compliance.
ing Paper,