The Sun.
London, England, 1834-05-09 00:00:00

Sir WILLIAM downy again congratulated the meeting
on the unanimity -with which the report was adopted. As
the business of the yearly general meeting was now over,
and as they were about to resolve themselves into a special
meeting of the proprietors, he begged to propose a vote of
thanks to their chairman for his able and impartial conduct
that day.
The motion having been unanimously carried,
The gentlemen present then resolved themselves into a
Special Meeting of the Proprietors, to take into considera-
tion a proposition for the establishment of banks with local
shareholders, deriving their profits or incurring their losses
(as the case may be) solely from, or at, and by means of,
those banks, &c.
Sir WILLIAM COSWAY moved that the Hon. D. G.
Halliburton, M.P. be Chairman of the Special Meeting.
Mr. JAMES, M.P., seconded the motion, which was
carried unanimously.
After the Secretary had read the Report of the Direc-
tors to the Special Meeting,
. _ _

Colonel LitTx HAY rose and said, that having on a
former occasion, as one of the directors of this establish-
ment, had to propose a resolution connected with the prin-
ciple of local shareholders, it was now his duty to move a
resolution to the same effect. As the meeting were aware
that a very considerable difference of opinion existed among
the directors on the subject, it would be necessary for him,
for his own satisfaction, and for the information of the gen-
tlemen present, to make a few observations, and he could
promise that his observations would be but few. It was
satisfactory to him, as he knew it would be to the meet-
ing, that his observations would be of a conciliatory kind.
The gentlemen who opposed the resolution which he pro-
posed, did so in an honourable spirit, and with much good
temper. But, while he thus gave them every credit for
good feeling in their opposition, he, and others who viewed
the subject in the same light as himself, thought the local
bank principle.was a measure of vital importance to the com-
pany. (Loud cheers.) He much regretted, on the one hand,
the publications which had been put forth relative to the dif-
ference of opinion that existed among the directors on this
subject ; though he was glad, on the other, they had been so,
as those publications communicated general information on
the subject. The gentlemen whom he ( Colonel Leith
Hay) had the honour to address, were so well qualified to
decide on the point, that it would be improper in him to
take up much of their time. He could only state, that an
humble individual like himself might not be supposed to
know much of the business part of the institution ; but he
might be permitted to say, that the active interest which
he had taken in it from the first, led him to move a reso-
lution which, in his opinion, was essential to the intrests
of so great an establishment; for great it certainly ought
to be, and would be, if the principle in question was
adopted. If properly managed, the Provincial Bank of
England would become one of the first and best establish-
ments of the kind in the country. (Loud cheers.) He
would only further say, that he should be sorry if he had
done anything injurious to the interests of the establish-
rnent ; but he conceived that what he had done was for
its good, and he could never deviate from what appearedto
him to be his duty, while he had the honour to fill the
situation he now held. (Loud cheers.) The secretary
would read the resolution.

A PROPRIETOR suggested, that as the question as to
whether or not the company could, in terms of its copart-
nery, act on the local bank principle, had been submitted
to Mr. Brodie, it would be better, before the resolution
was read, or any opinion expressed upon it, that the meet-
ing should have the case read to it which was submitted
by Mr. Brodie, together with his answer.
The Secretary accordingly read the case and the answer.
Mr. AIURRAY read the resolution alluded to, which was
as follows :—" Resolved, That with a view to the esta-
blishment of banks, with local shareholders deriving their
profits or entering their losses, as the case may be, from
such separate banks, a deed of copartnership be entered
into- on behalf of this society, by any three of the direc-
tors, to be specially appointed for that purpose by the
Court of Directors, with subscribers for shares in any par-
ticular local bank, and that it be provided in the deed of
copartnership that the local shareholders shall content
themselves with such portion of the profits arising from
their local banks as shall be agreed upon, and shall relin-
quish the other portion of such profits to the metropolitan
bank ; and that the shareholders of such local bank shall
be guaranteed against any loss which such local bank may
sustain beyond its own paid-up capital, and that such gua-
rantee be given by the metropolitan bank, and by every
ogler local bank that* may from time to time be asso-
ciated therewith to the extent of the actual paid up capital
in the shares in the metropolitan bank, and other local banks ;
and that, on the other hand, the metropolitan bank, and
all the other local banks that may from time to time be
associated therewith, shall be guaranteed against any
loss which such metropolitan, and other local banks,
or any of them, may sustain beyond the amount of their
respective paid up capitals, and that such guarantee
be given by the shareholders in such local bank to the ex-
tent of the actual paid up capital in that bank, and that
the Court of Directors of the metropolitan bank shall fix
for the amount of the instalments to be from time to time
paid up on the shares in such local banks to form the cash
capital of that bank, and that any call for an instalment of
the shares on such bank may be made either by the Court
of Directors of the metropolitan bank in the same way as
they are authorized in the deed of settlement to make calls
on their own shareholders, or by such person or persons as
the Court of Directors may adopt for that purpose. Fur-
ther resolved, that in addition to the calls necessary to carry
into effect the steestions contained in the resolutions,
there shall be inserted in every such deed of copartnership,
such further calls and provisions as the Court of Directors,
under the advice of their counsel, shall think proper."
Sir W. COSWAY rose to second the resolution. He said
that the opinion which had been read to the meeting was
merely a lawer's opinion upon what was necessary to be
done to enable the company to carry the plan of local
shareholders into execution. The subject had been so
extensively canvassed, both in print and in conversation,
that he had no doubt the proprietors' who had come
from different parts of the country, had already formed
an opinion upon the matter. From the first proceed-
ings, in 1830 he had taken an active part in the form-
ation of a bank on the principles on which the present
was proposed to be established—viz . , the local shareholders'
system. It might be said that they had no precedent ; that
was true. This plan was the extension of the Scotch system
of banking to the wants, to the feelings, and, if he might
so say, to the prejudices of England. What might be very
sound in Scotland, he alluded to the cash credits, was
not, it must be admitted, very practicable in England.
When the Scotch banks were established, one pound notes
were in being, but that was no longer the case in Eng-
land. The present plan was, therefore, adapted to the
present state of English society. It was proposed to carry
the principles of the Scotch system into England, on the
foundation that life insurances were established. It was
sufficient to know that there was no sort of establishment
in the country, the profits of which were so secure as those
of life insurance companies. It was well known that their
profits were calculated on the average of lives, and he be-
lieved that same principle would be carried into this sys-
tem of country banks, which was then propounded to the
meeting. He had been asked what was this local share-
holders system, and how the local shareholders were to
meet capital required for the country ? If the local share-
holders subscribed one hundred thousand pounds, the com-
pany would put down the same amount to meet their sub-
scription. The company being subscribers would give so
much security, that the utmost confidence would be placed
in the banks. In Birmingham, Worcester, and other great
manufacturing towns, it was possible there might be a
great excitement at some particular moment. There might
be a tendency on the part of the Bank to over-trade. The
London directors would then step in, and give notice to draw
the cord a little tighter, knowing the general state of the coun-
try, and how far it would be advisable to go. Sir William
next alluded to the difference of opinion between the direc-
tors of the company, on the subject of the proposed plan.
Those who differed from him thought that the Irish sys-
tem, as it was technically called, was preferable, because
they had had the advantage of practice. That system
had, however, been tried when Ireland was free, when the
other banks had failed, and when there was no competition.
But in England the case at present was very different ;
they would have numerous banks to contend with, and
therefore it was necessary to have recourse to local Di-
rectors, whose aaice and information, as well as local in-
fluence, would be of the utmost service. The Irish Pro-
vincial Bank had only 22 branch banks. (More.) Well,
they might be 30, and that number was quite sufficient if
they were to be effectively managed. But the grand prin-
ciple of the local shareholders' system would be, that they
could all establish 200 branch banks, because they would
have local directors to manage them. When the question
whether the proposed plan should be adopted was de
tided, he trusted that the result would not be, that those
directors
.i who were opposed to the plan, and whose great
ilbi ;ties he could not too highly praise, would not deem it
tlat necessary,the as they had intimated, to retire. He hoped
proprietorstheir
services.o ul d still The havepres continuedentw
as
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which had unhappily been too frequent. He must not
omit to mention that the opinion of the learned counsel
(Mr. Brodie) did by no means
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called upon the meeting to do was, to give the directors
power to carry out the rmciple of local shareholders where
they deemed it advisable.
A PAQPRIETOA—Are we to have any voice in the
choice of directorg?
Sir W. COSWAY-The intention is this. Suppose the
locala,
thed s h a rsehha
ro ledhe
or
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eSrYsstetonl teol ebcet eastaßbloisahreddoint
DBiirremeitnQgrsh::.;
can have only a' negative on an individual. A veto must
necessarily be vested in us.
A Paovairina—liqw is the London Board to know
the state of the country business, and the manlier in 1 hick
it is being carried on ?
Sjr W. Coswav—That will be done by inspeotiop
poriocliq4k 9n the spot, and yye shall also have a weekly
report.