The Sun.
London, England, 1847-03-29 00:00:00

SCOTCH EXCHANGE BANKS.

The following circular, which has lately been in course
of transmission by one of the scotch Exchange Banks
continue receive
to solicitors and others in the different towns in the
north, will account for much of the support which the
share markets (in that part of the kingdom at least)
to
are paid. It will be seen that not only are deposits , and for the means by which calls
in-
vited at 5 per cent. interest, but that a commission (the
amount of which is not stated, and which it may be in-
ferred is a matter of conscience and arrangement) is
allowed
in to such professional gentlemen as may be suc-
cessfulpersuading their clients to place their money
at the disposal of the institution. Under. these circum-
stances, management and
profit, it would appear that the rate charged to the cus-
tomers of the bank can scarcely in any case be less than
7or 8 per cent.--a fact which, taken in conjunction
with the implied circumstance that the securities
advanced upon are of the " best description, would
indicate a degree of pressure in the north beyond
anything we have hidierto been aware of, As a
large proportion of these advances are made, it is
to be presumed, upon shares of incomplete lines,
which at the best pay no more than 4 or 5 per cent.
to the holders, it becomes an impor:ant question how
long these parties will think it advisable to, pay
the extra rate charged by the bank, rather than to ,
hat
the bank contemplate no speedy raiseamelioration is
money by selling some part of what they posst.ss,.
5 eyi.
denced by the fact that the commission to the p.roies-
sional gentlemen is allowed only upon their negcanating
deposits " likely to remain for some years, or at all
events for not less than twelve months." It would also
be interesting to learn the precise quality of the securi-
ties received by the institution, and also the margin pro-
vided for depreciation, although It is fair to remark that
this is a point which the bank is in some measure en-
titled to keep toitself, since the t, mptation held out in the
shape of guarantee to depositors is not so much the soli-
dity of the pledges upon which its advances are made as
" the capital of the company, and the number and wealth
of its partners."

" Commercial Exchange Company,
66, St. Vincent-street, Glasgow, March 9.
" Dear Sir, —I beg leave to inform you that the direc-
tors f this company have come to a resolution to ad-
vance the rate of interest allowed on deposits to five
This will he intimated by circular to each
depositor, n
but I beg leave to trouble you with this special an-
nouncement.
." The demand for money in our market still continues
so ample on the best securities, thatalthough no advance
is contemplated on the fixed rate at which all loans
granted by the company are charged, the directors are
thus willing to allow to the depositors the full advantage
of the present rise in the value of money.
" In thus advancing the rate of interest paid by the
company without any corresponding advance in the rate
charged, there is an evident present loss of profit to the
shareholders. But I hope and believe that this liberal
policy will so increase the number of the company's
customers and the amount of their transactions, that ulti-
mately the shareholders will be greater gainers than if
the directors had pursued an opposite policy.
gu:llh :a as can be invested
means in your power to make it yknownou will
amongtake everyyo
u
fri:e‘nldsshaanlld, therefore,clients tha
tb,efoorblsi
for any considerable length of time, they may obtain an
interest of 5 per cent. per annum, while their security is
beyond all question, mot only from the capital of the
company, but from the number and wealth of its partners.
" I am, Sir, your most obedient servant,
" G. KINNEAR, Manager.
" I big leave to add that a commission is allowed to
professional gentlemen who negotiate deposits with the
company, if the money is likely to remain for some
years, or at all events for not less than twelve months,
and it will give me much pleasure to treat with you on
this footing."