(we cannot charge our memories which), with remainder in tail to his wife, of L.500 or L.600 a-year, should, by a lamentable bereavement, the luckless shareholders lose the benefit of his services. The conjugal foresight of the dowry legacy is equally meritorious with the thrifty provision of Sterne's parson for his son, and substituting petticoat for breeches, is a faithful copy of the original. What other makeweight to incline the beam of such short allowance still more in his favour the paper functionary may have had cast into the scale in the shape of shares to be unpaid upon, or reserved for him at par to be disposed of when at a premium, or a per centage upon issues, is yet among the secrets of the prison-house, that is, the board-room of direction; in any case the fixed salary is equivalent to the full pay of a veteran admiral of forty years standing, and the lady dower little short of the half-pay or pay off active duty of a vice-admiral. The special allotment was not earned, be it remembered, by long service and grey hairs, or awarded on the plea of special fitness and great experience, or bestowed in compensation for sacrifices made, social position abdicated, or brighter prospects abandoned. The former condition of this provident director and fortunate projector was obscure; in circumstances he was poverty-stricken, if not abject.

The money mania of these times differs in no essential feature from that of 1825, but the absence of foreign schemes and el Dorado enterprises to the shores of the Atlantic and Pacific, the sores of which were still too recent and unhealed for further experimenting. The plague spot changed places only from the exhausted south the virus has been transplanted to the more plethoric and susceptible north, where its baleful ravages found grosser food for contact and propagation. Manchester, the second money capital of the three kingdoms, has been beyond all most deeply impregnated with the joint-stock malaria. It is thought that one half the joint-stock bank, railway, and mining shares, publicly created during the last three years, have been absorbed, and are most of them still held in that town and its densely populated neighbourhood alone. Certain it is, moreover, that a large proportion of joint-stock follies for the whole empire

The repu

have therein originated. tation, justified or not to the extent, is neither safe nor honourable for the greatest, as it should be the most intelligent, manufacturing community in the world. It is a subject of wonder to see a race of men, proverbial no less for sagacity than ingenuity and plodding industry, become the dupes of artifices long stale and worn threadbare on the Exchange and the Stock House of the Metropolis. Some twelve months ago only, sojourners could not fail to be struck with the parade of railway carriages through the town, richly painted in bright blue, relieved in burnished gold, with letters importing LoNDON and GREENWICH, No.. As Manchester, too, has its Vauxhall and Piccadilly, there seemed no reason why it should not dignify some villages on the outskirts with the names of London and Greenwich; but the stranger learned to his surprise, that it was not so-the machines were absolutely intended for the veritable Amphitryons two hundred miles off. The mystification was soon cleared away; London and Greenwich shares were discussed on all sides as familiarly as the new crop of cotton in the United States, the last prices of bowed Georgias at Liverpool, the prospects of the spring trade, and the bettings at Tattersall's for the Spring Meeting at Newmarket. Letters were read from London directors or officials, with flaming accounts of arches completed, and the Tooley Street terminus in rapid progress;- Wetenhall quoted for London and Greenwich at 10 premium, all buyers and no sellers, with hints significant that shares might possibly pause at 20, but must eventually advance to 40,-the whole wound up with a pathetic lament, that such was the rush for the new Gravesend, no more than ten actions could be secured for the writer's most particular friend and correspondent, after every possible exertion of favour and influence; so that London and Greenwich carriages in blue and gold were not built and made a raree show of in Manchester streets without an objectpremiums were to be kept up, and a market made for London speculators to realize, which could only be accom plished by tempting Manchester holders with the prospect of a more exorbitant bonus hereafter, and Manchester capitalists to despatch their orders for purchase whilst the tide was at "the

flood which leads on to fortune." In vain did that cautious but most ably conducted journal, the Manchester Courier, in the true Conservative sense oppose itself, courageously and alone, to the frenzy, ever fitful but still spreading. Notwithstanding a series of sketches, graphic and powerful, wherein the gatherings and machinations of well-known bands of plotters were portrayed to the life, the dreaded shafts of ridicule itself failed, proved pointless against the raging epidemic, as would the resistless laughter inspiring grimace of Liston upon the distempered fancies of a dweller in St Luke's. The disastrous results of joint-stock banking extravagance will hereafter prove a manual of useful reference when all accomplished, of which we are far from thinking that the worst has been witnessed. The "enquiries (of the Parliamentary Committee) have not been yet brought to a close," as we are told in the first line of their report. The crop promises to be most plenteous of results lamentable, and will be of facts discreditable, should future investigation embrace Ireland as well as England, and be directed in the mode we have indicated to probe the evil to the roots. Incomplete as the labour performed and the experience gleaned still is, it cannot be without its uses briefly to advert to some portion of the matter officially in evidence, or sufficiently public and notorious. The Norfolk and Norwich Bank, now defunct, may be cited as a sample of gross improvidence in the management, and of a ruinous business carried on in the face of a first loss exceeding in amount the whole paid up capital:-the play of the gambler, who throws the more blindly as his stakes disappear. This bank was established in the year 1827, with seven branches; the nominal stock L.200,000, the paid up and bona fide capital, from first to last, L.23,000 only. In less than a year, one bad debt alone was made, exceeding L.30,000; and yet a dividend was formally declared and paid at the rate of 5 per cent, at the expiration of twelve months from the opening. Supposing the profit on the general business to have been L.6000, and this deducted from the bad debt, the bank was still deficient in real assets by L.7000; to which add the dividend declared, and paid out of the monies

The

of depositors, and it was actually insolvent by L.8150 beyond the capital stock entirely annihilated, which then, at Midsummer 1828, was, according to Mr Gilbert, one of the directors, paid up to the extent of L.17,000 only. We know that the directors individually were highly responsible and respectable persons, and their co-proprietors probably not less so; but we know also, that, in the case of a break-up and a litigious disposition, the remedy of creditors against a joint-stock company, under a trust-deed, by suits transfer able into Chancery, is neither prompt, inexpensive, nor beyond the reach of accident and chicane. A cautious board of business-like men had at this time two straightforward courses before them on which to take the sense of their fellow-shareholders :—either to wind up the concern, and apportion the pro rata damage incurred, or to call up a larger quota on the whole of their nominally subscribed stock. They took neither one nor the other, but preferred to trade on with this millstone around their necks, in the delusive expectation of gradually recruiting their finances from out a fund reserved of gains to come. contingency of other risks seems not to have been taken account of; they came to maturity, however, in due course, and in thundering sums, such as a deficit in the best part of L.20,000 of the Franklingham agent, L.6500 by one Tuck, with other minor sums of thousands. All these brought the establishment to a stand-still at last, and so the directors made the best of a bad bargain, by selling the goodwill of the old to a new and better fitted out joint-stock company for the liberal bonus of L.20,000. The Norfolk and Norwich Bank, be it observed, was all the while, apart these special calamities, realizing an annual balance of profit of L.5000, L.6000, or L.7000, and dividing 5, 6, or 74 per cent per annum on its shares. It is fair to record, that otherwise the general management appears to have been commendably correct and economical. No costly settlements were lavished upon secretaries or directors, or weeping relicts quartered upon the funds. The total sum of salaries to the whole clerkly or executive department amounted to no more than L.1488, 16s., or 75 per cent more only than the one secretary alone

pockets, and not equal to the princely income the one director alone absorbs in the Oriental affair to which we have formerly alluded. The whole charges of superintendence by the directors as a body are stated at L.370 only, being L.130 per annum less than the contingent remainder saddled in the guise of widow's weeds upon their more magnificent contemporary. The shares, 1000 only of L.200 each, were too few in number to afford the means of jobbing, and of those less than three-fourths were taken up. The resident director states, in his examination before the committee, that "the directors of the Norfolk and Norwich Bank have never derived any advantage to themselves by the transfer of shares; they never have derived a farthing on their private account, nor had one sixpence by the purchase or sale of shares." How many of their fellow-directors in other bank schemes could venture conscientiously to say as much? However misled and misjudging they may have been, let us not fail in a tribute of homage to honourable men, so justly their due. When the bank finally closed for business, and the extent of

defalcation was yet unascertained, but presumed to be considerable, they voluntarily undertook, and have pledged their well-known responsibility, to pay off the shareholders in full. They, therefore, and they alone, will be the sufferers by the crude and ill-digested speculation. In answer to the query by Sir Thomas Freemantle, "Whatever loss falls upon the company will be borne by the directors?" Mr Bignold, one of them, replies, "The directors have guaranteed it."

Having so largely entered into the case of the Norfolk and Norwich Bank, which is but too rose-coloured a type of many others not yet in extremis, we shall content ourselves with a more brief reference to such defects in the constitution of a few other banks as most readily strike the eye, and are remediable without legislative interposition. Our meaning more especially points to the enormous discrepancy too often exhibited between the apparent and the real capitals, and of the glaring inadequacy of the latter, as contrasted with the sphere of operations. The following abridged extracts will explain our meaning :

15

Paid up,

Shares (all issued),

8,842

33,358

6

Rate of last dividend,

12 per cent.

Surplus fund,

12,930

Real capital, therefore,

87,930

L.100,000

Paid up,

26,000

Coventry Union Bank, nominal capital,

L.200,000

Paid up,

28,050

Paid up,

209,882

17

tant 110 miles),

is clear, that for depositors, whose protection is the first object for consideration, the sheet-anchor of safety is loosened from its fastenings so long as directors of the deposit-banks are not restrained from parting with the capital stock in exchange for their own unnegotiable and inconvertible scrip or shares.

Such as we have described has been the origin of the joint-stock banking mania, and such also the system. The system is there, however, to answer for itself, such as it has exposed itself before the Committee, such as the skeleton of it is imprinted upon those pages; no thinking man will say that such a banking currency is sound, or under such a system can ever be other than unsound. The legislature is bound to take measures for the enforcement of a more wholesome discipline. Nominal capitals are a deception alike for the shareholder and the depositor. Fixed and duly proportioned funds should be rigorously exacted, and the payment in full enforced. In most instances the non-payment now does not arise from the reluctance of the proprietors, but from the unwillingness of directors, who in their greediness for premiums have gorged themselves with scrip, further calls upon which are perhaps beyond their means or their inclination to satisfy. Late events may possibly bring the whole question of the currency once again under discussion, with a view to revision. But however that may be, it will probably be considered judicious to impose a larger share of personal responsibility on joint-stock directors, on the one hand, and on the other to require the investment in fixed and tangible securities, of values to correspond with, and cover the amount of issues, and so bar them from undue expansion. Without venturing into so wide a field as an inquisition into the state of the national currency, which would be beside the special purpose of this article, as well as beyond our disposable space, we may suggest whether it might not be worth while to examine how far it would be politic to constitute the Bank of England the sole bank of issue for the empire. It is evident that a revolution in banking has been rapidly consummating of late years, and is in its tendencies inevitable. The advantages of the joint-stock principle, under wise and strict regulations

To

for imposing liability, prompt and be yond evasion, are incontestable; but under the most favourable circumstances it may be doubted whether joint stock or private banks, even the most irreproachably managed, and with a superior quality of personal guarantee, may, without danger, be intrusted with the royal powers of coinage. With such an extension of privilege, the Bank, however, ought perhaps to be inter dicted from competition in the general discount market, and bound, at given and lower than the ruling rates, to deal with bankers alone for coin or notes against bills and securities. the mercantile class, even of the highest standing, and such only in the main transact with the Bank, it can make little or no difference whether their supplies be derived from the parent or the subordinate banks; in fact, the great mass of money operations, whether in town or country, are, and have long been, conducted through the agency of the latter. Bank paper, to amounts and upon securities to be agreed upon, might be furnished according to demand to private and jointstock banking concerns at a moderate agio of interest, say 24 or 2 per cent per annum, subject to periodical modifications on previous notice, according to the variations of rates of interest and the state of the exchanges. The extension of its note circulation, from the average of eighteen to that of thirty millions or more, would indemnify the Bank for the deprivation of its discount business; and bankers who can afford to allow interest on deposits in the ratio of 24 per cent per annum, would be no losers by bank supplies on the same footing. The uncertain duration, and the arbitrary withdrawal at inconvenient seasons of the former, would perhaps balance the disadvantage of obtaining the latter only upon value received, or security perfected. But in order to render the position of the Bank more stable, and that it should, with a currency so much expanded, be less at the mercy of sudden panics, the standard ought no longer to be capriciously and despotically confined to gold alone. This is almost the only country where gold is the measure, or sole measure of value, and hence the difficulty which is found to exist in replenishing the drain of bullion upon emergencies, as limited to one precious commodity alone. In most