The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-26

protected alike. /, is too bad that those who may
happen TO be claimants on banks should enjoy the
exercise Of government provision on their behalf,
while the claimants on other establishments are
obliged to trust to their own vigilance, although
their time is equally valuable. The next argument
was, that limited liability encourages speculation
but as the same speaker had just before shown
that II encourages extraordinary caution by stating
that he himself would not trust limited liability
bank, there is no occasion to deal with that, espe
ciay as what he doubtless meant to convey was
that he would not trust such bank except upon
grounds that would satisfy any prudent man. No
doubt he trusts the Bank Of England, which is a
limited liability bank but he does on the faith OF
its capital and management. He next pointed out
how well the paternal system works, even In the
worst cases by mentioning that the creditors Of the
Royal British Bank will after all get les. in the
pound. They have not got il YETI and he omitted
to remark moreover that while he attributes the
coyery of that sum to the wholesome effect OF the
shareholders being liable TO their last farthing they
would never, but for the law of unlimited liability
have trusted the bank, or been in a position to
trouble the shareholders at all The next speaker
believed that but for the existing law mat
ters would have been far worse than they
at present, but did not explain the grounds Of
this beliei-whether for instance If there had been
no unlimited liability in the case OF the Western
Bank of Scotland, they would have been trusted
with twelve millions OF deposits instead OF six, or
would have had still greater facilities" from the
London discount houses. This member also sought
TO draw some distinction TO the effect that other
traders employed their own capital, but bankers
WIN lne Cdlllli Oh OlHPf ana az no
one asked him whose capital il il man trades with
when he gets bale Of silk or a cargo Of tea upon
credit, the remark seemed TO answer very well. In
fact, the gentleman who rose after him-an
governor If the Bank of England-was so struck
with this observation that he hastened 10
express his entire concurrence with it, The
House was then informed that it is the credit
of "A bank that constitutes its sole and true CAPT
tall" a fact which is, at all events. undeniable
in some cases; since the Western of Scotland and
Liverpool Borough Bank, having lost the whole of
their .paidup subscriptions some time back, had
latterly, thanks to the discount houses, traded on
nothing else. eff Parliament it was observed,
Limits the liabilities of bank it will also limit
its credit and this seemed TO be considered very
grave contingency, although there are some people,
perhaps, who think it might not in the instances just
mentioned have proved a very disastrous one But
the truth is, Parliament are not asked either to limit
to extend the liability of joint stock banks. They
simply asked not TO NEEDLE at all in the matter.
II might, moreover, have been inquired whether
the credit Of the Bank of England is limited by it's
enjoyment Of limited liability; but that did not
seem to occur TO any one This speaker then
offered his testimony TO controvert the statement
that unlimited liability prevents prudent persons
from having anything to do with joint stock banks,
and Immediately, like one of the previous speakers,
clenohed his statement by avowing that except I'M
der the most cautious circumstances, he should not
like TO be shareholder in such concerns He was
not, however, welded to the absolute enforcement
Of unlimited liability. All that he insisted upon
that there should he government meddling Of some
knd-say to the extent of enacting that the liability
should be t8ce the amount Of the subscription. Any
thing rather than cut the whole matter short by re-
cognzing that the mercantile and financial classes do
not require the government 10 teach them how TO
conduct their own affairs. Finally i was urged by
this member as subject for astonishment that any
one should say the system had hitherto failed IN
giving the protection il prefesed. He could recol-
lect only two instances in which broken jointstock
banks had not paid in full II il bad TO trust 10
recollection on statistical points, and u u believed
the list might be enlarged, especially by some
Illustrations from Newcastle. But it appeared
10 be forgotten that in all these cases OF
stoppage IT IL the delay that causes ruin. No
doubt the depositors in the Western Bank 70 The
extent Of six millions will he told, "Oh you will
have nothing to complain Of. You will get every
thing in the course OF a couple OF years" But in
times like the present this il not quite comfort
ing the honorable member seemed 10 imagine
and moreover IL will perhaps also be dsigreeable 10
these depositors TO feel that although they get
everything II will be by plungng hundreds of IA
miles children widows and aged men, into inextri-
cable and lifelong penury The last speaker whom
1t IL necessary TO notice compimened his predeces-
sor on the nature Of his views, and Immediately
spoke against the most important OF them by assert
ing that the chief object with regard to banks was
rather to check their credit than increase IL. Sup
posing II would check IL or increase IT, however each
proposition served In turn argument 20 uphold
the existing system and 20 prevent the recognition OF
the great principle Of freedom of trade that would
solve every difficulty. Whetherthe public will think
that the pleas just cited and they comprise the
whole that were brought forward-are sufficient 10
justify the maintenance of an anomaly which still
keeps the theory Of protection in vital play, and IL
opposed to the entire spirit Of English independence
and self reliance Is the point that remains 10 be
solved -dH the riars uttered BY the majority last
night, IKE many Of those by chich they hare Just been
preceded on hs currency, ,rouid hare seemed consist
ent The French Legsidtre Chamber under ths presi.
dency of Count de Woyny; but appears like an H.
tusion 10 beiepe that they were heard in assembly
rhich more than Ten years back affirmed, p,h
orertcheiuing roice he pidr conceptions that rere
then inaugurdfed.
The report Of the Independent committee ap-
pointed TO investigate the position Of the City OF
Glasgow Bank states that, although their labors
were conducted with great rapidity, the examna-
tion was as strict possible under the circum-
stances, and that confidence s entertained IL will
prove substantially correct In many cases they
think they may have made an under valuation. The
deductions consist Of f90s5 for probable loss from
debtors accounts tof which about $50 900 IL in con
nection with firms recently faled) and ell l $50
from the general securities including railway stocks
debentures, &C., the chief part Of which should
properly. have been written of at former periods.
The total capital, which was originally f975 900,
but which appears to have been reduced
to f7451l0 m consequence OF shares for f229ys90
having fallen into the hands Of the bank IT, after
allowing for accruing profits &C. reduced only by
f77,5I6, the amount remaining, according TO the
valuations OF the committee, being E667593. This
abstract although very favorable under the circum
stances, indicates many points Of bad banking-a
large lookup in railway shares and the practice ap
parently, Of making advances their own shares;
but II seems to free the directors from everything
IN good ground 10 hope that the lesson they have
ceved has produced s effect, the prospect OF their
resumption may be looked forward TO with satisfac
ton.
LONDON MONEY MARKET.
From the London Tines (City Article) Dec. l01
The English funds opened this morning at an improve.
Of eighth, but subsequent further advance q.
quarter per cent was not maintained The market how
ever, closed with steady appearance Consols for tho
opening were rst quoted ai 70 I ex dividend and After
having touched sl1 they LEFT OF at el The statement
of the Chancellor % the Exchequer ,t evening that The
bank reserve had recovered 70 G $40 on Monday
the expectation that has since continuously increased
stimulated The tendency 10 confidence by creating