The Sun.
London, England, 1851-02-10 00:00:00

:U ;int

LONDON, MONDAY, FEBRUARY 10, 185

We were among the first to hail with satisfaction
the introduction of the Scottish system of banking
nto England, by the establishment of the Royal Bri-
ish Bank in the metropolis. By some the project
was regarded as a bold experiment, which might, in-
deed, succeed, but the results whereof were, to say
the least, very problematical. We, however, enter-
tained no such doubts. Convinced of the soundness
of the principles on which it was based, well aware
of the characters of the men who came forward as
directors and managers of the new undertaking, and
knowing that the important and onerous duties con-
fided to their charge would be performed with
ability, fidelity, and seal, we unhesitatingly
predicted a long and prosperous career for the
new bank. We knew that the system had
flourished during a long course of years in the sister
kingdom—that it had at various times been subjected
to the most stringent tests—had passed through the
most severe ordeals, and that on every occasion it had
passed triumphantly through:its many trials. It bad
been weighed in the balance, and not found wanting.
It had proved alike profitable to the shareholders and
beneficial to the community in general. The former
had received handsome dividends on the amount of
their investments, while many an energetic young
man, who had no capital but his well-known probity
and industry, owed his welfare and prosperity in lile
to the judicious accommodation afforded
by the various banks ; the real value of a
"good name, " pure, and without reproach,
was thus exemplified. It might prove the foundation
of future fortune, and was therefore a treasure highly
prized and not willingly relinquished. It is well
known that many of the most wealthy.capatilists, who
stood shoulder to shoulder and supported the Scottish
banks against every pressure, were persons who
had previously received assistance from these estab-
lishments, and who thus simultaneously testified their
gratitude for former favours, and their unwavering
confidence in the solvency and stability of those
who had been their early benefactors. The simple fact,
that during the last century and a half, the community
in general had not lost more than twenty-six thou-
sands of pounds, by all the banks that failed north of the
Tweed, while during the first half of the present century
more than twenty-six millions had been lost by such
failure south of the border, afforded the most power-
ful argument in favour of the system that produced
such auspicious results ; and if " the fundamental
principles of trade and banking, as a branch of it,
are and must be the same everywhere, that men in all
countries are essentially alike, and that there are no con-
trarieties or even substantial dissimilarities between the

essentials which should regulate trade and influence the
people in the southern, as compared with the northern
part of the island," we might reasonably conclude
with the directors that the " principles and mode of
giving effect to them practically, which have proved
bound and beneficial in one portion of the kingdom,
could hardly, if fairly tried, fail of success:in the other."
Well, the system has been tried under a southern
meridian. It has been brought into practical opera-
tion for something more than a year, and the favour-
able anticipations in which we indulged have
been completely fulfilled. Our sanguine vaticinations
have been more than verified. The report presented by
the Court of Directors to the proprietors, at the general
meeting held on Friday, at the hank premises, Strand
branch, showed an amount of progress more than
could reasonably have been expected, and, indeed,
almost unprecedented. Any person embarking in
businers calculates, as a matter of course, on some
degree of loss the first year ; he is well contented if
his profits are equivalent to his expenses during the
second year ; and it is not until the third
year that be ventures to look for an in-
come from his exertions. Now the Royal British
Bank appears to have passed this probationary
period per ealtum, and to have already attained a
position which many men are well satisfied to achieve
after years of arduous and unremitting labour.
A dividend after the rate of 4/. per cent. per annum,
free of income-tax, has been declared for the half-year
ending the 31st of December. But this dividend,

although extremely handsome from an establishment
but a single year in existence, shows but a small
portion of what has actually been done. The actual
profits have been, not 4 but 14 per cent. during that
period, for there has been gained not only the 2,0001.
appropriated to dividends, but 2,0001. applied as
the first contribution to a reserved fund, or
rest, and 3,0971. 1.55. 7d. still unappropriated.
This is, indeed, astonishing good fortune, and might
be doubted but for the distinct and positive proof ad-
duced by the directors. There is no concealment.
The state of affairs is set forth with the utmost can-
dour. There is no concealment, for there is nothing
to be dreaded from publicity, which is courted to the
fullest extent. The directors not only show us the
flourishing state of their accounts, but they explain
the principles on which they have acted, and assign
the most convincing and satisfactory reasons for
every step they have taken. There may be what in
this latitude will be considered as novelties, but which'
both in theory and practice will bear the strictest
examination, the most searching investigation, and
scrutiny.

The report itself is a masterpiece in its way ; it
evinces a thorough acquaintance with banking prin-

cipies, and shows where a discreet and prudent ex-
tension of the practice heretofore carried on in this

country may be beneficial to bankers and customers,
whose interests are really one and indivisible, and
who will find their best account in mutually
supporting each other. It clears away the mists that
have formerly prevailed on the subject and removes
ancient prejudices. It explains the misapprehensions
that have existed on the subject of " capital," and
shows the wide distinction between the same word ap-
plied to banking and to commerce. In commerce,
"capital is necessary to enable the merchant and
trader to purchase the commodity in which he deals."
in banking, " the commodity dealt in is that whereof
apiconsists, and it is not purchused, but received
in trust,
tist, and for safe custody and for hire,
or not, according to the terms (;n which the bank
transacts its business, but always to be lent out by