The Sun.
London, England, 1833-06-05 00:00:00

BANK CHARTER.

A question much agitated among capitalists at this mo-
ment is that of determining, under the altered circumstances
of the case, what the real value is of Bank Stock, and thf.
inquiry is of some utility in a general point of view, be-
cause by the result we get at something near the tact of
the rate at which the holders estimate the advantages of
the bargain about to be concluded with the Government.
The first step to the solution of the problem is to ascer-
tain the value of Bank Stock, supposing the profits of the
establishment to remain exactly what they are, and, at the
same time, the diminution of the capital to be made, toge-
ther with the reduction of 120,000/. from the charge of
transacting the Government business. The difference
between the value so settled and the market price of the
day will, of course, represent the anticipated profits of the
new Charter.

The present capital of the Rink is 14.686,800/, on
which 8 per cent. for several years has been divided among
the proprietors, and as 3 per cent, is paid on this capital
by the Government, the trading profit of the Bank, as dis-
tinguished from the interest of capital, has been 5 per
cent., or 733,4341. From this the Government now take
120,0001., leaving the total profit, if to continue at the
same rate, 613,4341.

The capital being reduced by 25 per cent or
3,500,000/., this profit would become divisible on a
capital of (in round numbers) 11,100,000/., and would be
at the rate of 5- per cent., making the dividends, with the
per tentage received from Government, and supposing the
whole profit to be apportioned, 81- per cent, on the re-
duced capital.

The Government la aye reserved the power of determi
ning the Charter at the end of 11 years, and, if acted on,
the capital of the Bank would then be at par, to
which is to be added the amount of reserved profit in
baud, which in F. bruary, 1832, was 2,637,7601., and
the estimated value of the buildings 1,000,0001., making
together about 33 per cent. on the capital of 11,000,0001.,
and the present value of the stock consequently only 133
per cent. Whatever is given beyond that price is for the
11 years' lease or goodwill of the business.
The market price of Bank Stock is rather unsteady, but
take it at 201, and deducting the 25 per cent. of capital to
be paid off, it leaves 179/. as the value of 751. in the new
stock, or at the rate of 238 for the 1001. stock. There-
fore, 1051 , the difference between 238 and 133, is the
sum given now on each 100/. Bank Stock for possession
during 11 years of the new privileges. To warrant this,
the Bank should accumulate, during the 11 years, a fur-
ther reserved fund or profit to the amount of 15,000,0001.
Our moneyed men are too sagacious not to form a tolerably
good calculation of the value of securities of any descrip-
tion, and the fair inference is, that they do not-, on this
occasion, greatly err in supporting the current quotation
of Bank Stock. As a commentary on the bargain made
with the Directors, it is worth all the arguments in the
world. What has partly assisted to blind the public to the
true bearings of it laas solely been the circumstance of the
reduction of the capital, which is no advantage whatever
to the Government. Ilad that clause been omitted in the
proposals made by the Chancellor of the Exchequer, the
Stock would have risen at once more than 30 per cent.,
and thus have exposed at once, so as to preclude all possi-
bility of mistake, the improvidence of the bargain proposed
to be made.—Times.