The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1868-09-30
The Bank of EngIand-Its Condition
and Management


The Rank of EngIand-Its Condition
and Management
The balf yearly court OF the Governor and
proprietoIs in the Bauk of England was held
September H. The Governor said that the
accounts, and he had TO report that the net
profit for the gear ending August 80 amounted
to G5S4, 1863 Ss 3d., making the amount OF rest
Id. After providing for dividend of four per
cent for the half year, the rest would amount TO
29, ,O2s, 476 IFS. Id. The Court OF Governors;
therefore, proposed that half years dividend
be made of four per cent, being at the rate OF
eight per cent. per aunum, and that the dividend
be pay able on the 10th of October next.
The Governor, in replying to various questions
put by Mr.. Jones and other proprietors, said
that the capital of the bank upon which divi-
dend had to be paid was f14, ,553 600. ALI the
rest of the property belonging to the bank were
the profits arising out OF the banks operations,
and it was commonly called rest" The rest
was the undivided profits, which the court OF
p1oprietors long since decided should never be
allowed to fail below f3,0O000 000 Tue building
in which they were assembled occupied rather
over three acres of ground, aud its value was
not included in the capital, but the branch
establishments were. With regard to the rate
OF discount being different on long and short
loans gentlemen of experience must know that
O discount was short transaction for short
time, and loan might extend over series of
years, and the rate must be different. In 1866
the discount was 10 per cent, but the consols
were only q; railway debentures, IN some
cases, were at S. There were deposits of per-
manent character, which the board knew how
to deal with, and there were also short deposits,
which they might be called upon to pay aud
must be prepared to pay at any moment. As to
the bank not having deposits, he believed the
deposits had never been so large as-not, per-
haps, at that moment OF speakiug-but over an
average of the last six months, (Cheers.) No
doubt the country would be benefited by money
being lent to farmers, but it was not the pro-
vince of this bank to lend it 10 them. 1t could
only safely be done by the local bankers, and
even to them it was a question fraueht
with grave difficulty. With regard to the
rate of discount, the explanation @ was vas
years ago, that was period ante to the crisis
of 1866. there was very great extension OF
credit, but those sudden and excessive exten-
sions of credit were not always wise. The first
effect of it was thls-that those who embarked
in business were suddenly called upon to pay
their debts, and to do that they had to withdraw
money from the legitimate operations they were
engaged iD, and that produced a crisis. WHAT
took place in 1866 had been miscalled panic
1t was a crisis arising from, and following natu-
rally upon too wide an extension OF credlt, ana
this crisis out of its convulsons produced panic
Upon the 18th OF May it was banking panic,
when people were seized with unreasonlng tear
for the safety of their money, and rushed to
to replace it in the same bank, find
ing they did not know what to do
with 1t when they had 1t in their posses
sion. Then came rail way panic, whsn people
ought that rail way debentures of All kinds were
not worth buying. THIS was succeeded by a
commercial panic, when the trade came almost
to a standstill; sOut through all thi CORPORATION
had steered one steady course. With regard to
the rate of DISCOUNT it of course depended very
much upon the supply and demand. It there
was large sum OF money to lend and lew
borro wers the money must go at lower rate
than ii the number of borro wers were greater
Whether the bank had too much money to lend
or too few borrowers the result was the same
Some said that the bank might invest upor
some other securieties, but they forgot that the
bauk had TO pay on demand, AMI 1t would bt
u.e'ess TO tell man asking for his money tha
it had been invested in a safe and snug security
The report was approved and the divIden(
GeciaIe7.