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mu * .»» Ii-EAPEB. [Ho, AOli, Dbobmbbr2f...
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JOINT-STOCK BANKS. The merchants, banker...
Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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Christmas Politics. The Season Of Christ...
reflect upon the chill and dismal Christmas of the thousands from whom commercial gam , " Wing has withdrawn for a time the means of life . "What is the merry day to , them ? They hear the tintinabulations of Christmas , and they look wan , and their little ones have
scant food , and their clothing has been exchanged for bread , and , if they have heard of Christian brotherhood , they wish that the rich man would think that he has brethren outside the door . And often the , rich man does think , and is munificent ; but this is a season of extraordinary claims . " With no kill-joy motive , we point to the umiivrnbered orphans and widows who have lost the hope of their lives on Indian battle-fields , and to the hard-handed workmen at home to whom
a commercial crisis means destitution . The wind , we say , has - been tempered to the shorn lamb . . The physical cruelties of winter have not hitherto been felt by the suffering poor ; but there is work enough for benevolence to perform ^ even under the sneer of that immaculate science which says to the famished labourer , " Young man , i f nature has ' provided no knife and fork for you at her table , it ' s time you died ! " Wisdom cries " Patience" to the poor , and whispers " Charity " totheiich . 7
This Christmas we pay the penalties of indifference and improvidence . Our prosperity in India seduced us into neglect , and while the empire , widened the treachery of a hundred thousand soldiers prepared itself for action under our very eyes . We , or our heaven-bornv rulers , were too proud to take precautions , and we have had to struggle for existence . Our prosperity at home lured us into commercial excesses , and our social law is that the classes least responsible shall endure the
heaviest punishment . JBut , if we moralize , let us nioralize justly . Administrators and speculators are the scapegoats of our day , but turn them into the desert , and will righteousness remain alone in the land ? Sect , faction , selfishness , arrogance , apathy , will still inhabit their palaces and their cottages , and speak from printingpresses , platforms , pulpits , and divide the nation against itself . It is not only that armies are destroying one another in India , or that ruin has broken up the basis of "
trade , that a pestilence has decimated Lisbon , or that an earthquake has shaken Naples ; the earth breeds a million of petty wronggj and , in addition to war , famine , plague , or a crisis that scatters fortunes like a storm , the malignant parasites climb and cling ; not evea * time extirpates them . The divine holiday has never yet been celebrated—the one Christinas day of universal release from passion , animosity , and egotism . Trad © ceases , churches are opened , labour rests , the people revel ; but war and the causes of war , rancour and the motives of
rancour , evil and the principle of evil , continue at work without a cessation or a sabbath . But wandering among these moralists— -. the circle of cynicism—we reach the hope and prophecy of our commemoration , r * -tbat life is more powerful than death , and tlr at , toiling , and enduring , by the sweat of the brow , and through the blood of battles , mankind is in pursuit of a blessing of which the foretaste can only be enjoyed by those "who worship with the heart , and on that altar- light a flame of charity to hallow Christmas and the other three hundred and sixty-four days of the 3 ear .
Mu * .»» Ii-Eapeb. [Ho, Aoli, Dbobmbbr2f...
mu * . »» Ii-EAPEB . [ Ho , AOli , Dbobmbbr 2 ft im
Joint-Stock Banks. The Merchants, Banker...
JOINT-STOCK BANKS . The merchants , bankers , and traders of London will not readily forget the deep gloom that hung over the City the second week of K ovexaber . Each day had its special disasters :
tha great City annuaLfestiv ^ . inaugurati n-g a new Mayordom . was-eloude . d by the news of the stoppage of Den ^ istou !* and Co ., of London , Liverpool , and Glasgow , and by the failure of the Western Bank of Scotland ; the next day witnessed the fall of
SahdeesoN , SANDEMANandCo . ; the next , the City of Glasgow Bank , accompanied by a run on other of the Glasgow banks , as well as by discredit in Ireland ; the followi ng morning was one of anxiety and distrust , men ' s minds on the rack , and a general feeling pervading the commercial community that some great change , was impending -. that things could not go on much longer as they were : that the fever had reached its height : that the crisis had come : and that a few hours must witness a pretty general ' crumbling to atoms' or the dawn of returning confidence . Happily , a favourable
change took place , and City men returned home to dinner with better appetites than might have been anticipated , and with minds greatly relieved . The means of relief wa » the Treasury letter which arrived in the afternoon of the 12 th , authorizing the Bank of England to create additional notes upon the deposit of securities . This satisfied all commercial houses who held real and bona J ide paper that there would be no insuperable objection to their obtaining accommodation if necessary , and so an intolerable burden of anxiety and suspense was . taken off the public mind .
The Treasury letter was expressed in no ambiguous terms ; indeed , for a Government manifesto , it was remarkably explicit . The cause of the interference of the Executive was stated to be ' the recent failure of certain joint-stock banks in England and Scotland , as well as of certain large mercantile firms , chiefly connected with the American trade . ' Parliament met three weeks later , when Hbb Majesty , with that clear and distinct utterance on which reporters love to dwell , announced from the throne that the failure
of c certain joint-stock banks and commercial firms' —had compelled her to assemble both Houses of Parliament at that unwonted period of theyear ; aud the very same expression about the joint-stock banks and American houses was inserted in the Act of Parliament which is now enrolled in the annals of the nation , and from which future historians Mill derive their materials for the narrative of the disasters of 1857 .
On three several public occasions , thenin the letter from the Treasury , in the speech from the Throne , and in the Act of Parliament—it is formally recorded that the immediate cause of the deliberate violation of the law of the land , and the consequent assembling of the Legislature , was the discredit and distrust occasioned by these failures . The public had taken the alarm ; various rumours , partly founded on truth and partly exaggerations and distortions of the truth , were
current m the clubs and other places of , public resort ; and in consequence the joint-stock banks , which had in some quarters been previously over-praised , were now by the very same parties brought under suspicion ; large transfers of their deposits were made into Government Stock and other investments ; and their establishments generally -were subjected to an ordeal of a trying character , through which the greater part of them have safely passed .
It is pretty generally understood that tho management of those banks will form cmo of the subjects of inquiry before the new Committee , whoa probably some clearer notions will bo gained of the nature of their operations , and the influence they have had with reference to tho late commercial crisis . The experience they have acquired during tho lafco trying ovents will not bo lost on thorn ,
and -they will no doubt reeoBsid ^ man v of < fo > practices wfcieh liad grown up iQ connexC with their modern mode of banking anrt take such steps generally as they maf < W aider desirable to avoid for the future undue risks—security being , as all coafess , the first great object in every well-conducted banking establishment . 6 The great element of weakness in . tU modern system of joint-stock banking an , pears to be the allowance of a high rate of interest on money deposited with them , ft cases where large sums of money are ieffc a long and specified period , it is quite
-intelligible that a bank could with tolerable safety allow a comparatively good rate of interestbut that competition should be carried so far as to induce establishmenta to accept any sum * of money that may be deposited by their ^ customers and by the public in general , allowing 7 , 8 , and even higher rates , of interes t on amounts . payable on demand or at a veri / : slwrt notice , has long been a matter of
surprise , and has at lengih drawn from the Chancellor or the Exchequer the opinion ( and all who know Sir Corniewall Lewis look upon him as a particularly cautious and guarded man ) that it is a system ' eminently liable to abuse , and containing within it elements of danger , and that to this system many of the evils of the recent crisis rnav be attributed . '
It requires indeed no great penetration ; , nor anything beyond an ordinary acquaintance with money matters , to be able to traced generally the workings of the system . Large sums of money are taken in-which bear inte- ' rest from the day of their receipt ; as a matter of course they must be employed immediately . These sums , be it remembered , are repayable either on demand or at a very short notice , say three or seven days . At the moment we
write the rate of interest allowed is 8 per cent . Prom the newspapers we learn that loans on the Stock Exchange for short terms on the security of Consols and Exchequer bills can be effected a . t 5 per cent , only , while good bills are discounted at 8 to 8 ^ per cent . It is therefore obviously impossible to lend this money ( which , be it always remembered , is liable to be demanded at a very short notice , if not at call ) for any short time on Grovernment securities without
loss ; although possibly if it be locked up for a month as much as 9 per cent , may be had . The only other mode of employing the money on improved banking principles is to lend it on mercantile securities , or to discount first-rate bills of exchange having compara * tively a short time to run ; hut whether the to cent is
margin of - ^ f per , per annum sufficient to cover all risks—especially in such times as these—to pay the expenses of a large establishment , and to yield a profit , is a question which probably : none but the directors of these banks can answer with any certainty . It is generally understood that the managers of several of these establishments are themselves iu doubt -whether thoy
havo not pushed beyond its legitimate limits ' a system in the main wholesome and beneficial , and tending to collect together and turn to good account the scattered resources of the country . ' It is well known that this system has been established for many years in Scotland , but tho rate has been from 3 to 3 i per cent ., and at this moment does not thero
exceed 4 per cent . ; and the bankn hold enormous s \ i \\\ b 2 yormancnth / at this comparatively low rate . It is quite intelligiblehow tho system answers under such circumstances , especially as these banks issue thoir own notes , a privilege denied to joint-stock bauks in luondon and within sixty-iivc miles of tho metropolis . In accordance with the practice prevailing
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Citation
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Leader (1850-1860), Dec. 26, 1857, page 10, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/cld_26121857/page/10/
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