The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1836-09-30 00:00:00

JOINT STOCK BANKS.

Attention is beginning to be drawn in the city to the facts
disclosed in the report of the committee on joint stock banks in
a much greater degree than at first, but the general importance
of them is still far front being fully understood. One circum-
stance has very forcibly struck all those who have bestowed any
consideration on the subject, which is the very recent date of
the formation of the greater pact of them. Before the renewal
of the bank charter, in 1833, very few indeed of these establish-
ments were in existence. From an examination into those
banks which have made returns to the committee, an analysis
of which appears in the Times of this day, it appears that out of
59 banks only 22 were formed prior to 1833, the date of the
earliest of them being 1826, and even of these the activity was
less, and the sphere of operations much smaller, than it has be-
come since that time. in regard to the branches and the agen-
cies, this is still more decidedly the case, as they have almost
wholly originated since 1833, and the new banks have in pro-
portion been much more liberal in the formation of them.
l'hus, out of n banks which were formed in 183-1, out of the 59
which made returns, no less than 117 branches and 41 agencies
were created ; each bank, in point of fact, producing on an
average 15 to 16 others, for so the branches and agencies must
in propriety be termed. The banks formed in 1835 aid 1836
are not yet in a state to pronounce any fixed opinion upon, but
they are evidently in a course of extension, both as to branches
and agencies, the latter appearing, in regard to the more re-
cently formed establishments, to obtain the preference. It
must further be considered, that 30 joint stock banks have nut
made any returns to the queries in Mr. Spring Rice's circular;
and that the whole of these institutions which have been formed
in England under the act 7 Geo. IV. is 89, all of which it may
fairly be presumed have risen into business under the same cir-
cumstances as those above described. It is generally supposed
that the chief encouragement to them has been the clause in the
bank charter by which balk notes are made a legal tender, as
it was much easier for them to make a provision of that kind
for their circulation than to keep a stock of gold; but this is
obviously not the whole cause, and it is likely that the large
profits made by the banks whii'h were first in the field, by esta-
blishing a large circulation upon a very- small capital.. was the
principal source of the excitement, which, when produced, will.
naturally go on increasing till some check is given to it. Of
the general results of the returns before alluded to, it may be
further noticed, that these 59 banks report in the aggregate a
capital of £37,450,000, of which £6,000,000 has been paid up-
That some explosion should not arise out of so many manufac-
tories of paper money, placed as it now appears under no sort
of efficient legislative controul, is scarcely to be conceived as
possible, though it may happen that the ruin of them may not
produce any serious effect on the circulation. Their more im-
mediate danger seems to lie in the practice, universally follow-
ed by the weak ones among them, of endorsing and rediscount.
log the bills presented to them, the greater part of which
liabilities might, by any disastrous turn in commercial affairs,
come suddenly into play, and absorb mueh more than the
limited capital they possess. The inquiry instituted by parlia-
ment into this subject has at least done the good of showing
that an enormous evil exists, and that some remedy must be
sought for it in the next session, if it is desired to save every
other interest in the country from being sacrificed to it.—City
Article, Times, Monday.