THE LATE FAILURES AND THE LONDON BANKS.

Kumara Times, Issue 807, 2 May 1879, Page 4

THE LATE FAILURES AND THE LONDON BANKS.

[daily telegraph.]

_ It is an open secret that the London, like the Scotch banks, hare gone through a very trying period during the last three months, and the fact that all have faced the ordeal so successfully, speaks volumes for the substantial soundness of our banking system, and for the excellence of its management. The Scotch banks, when the storm came after the City of Glasgow collapse, stood with true instinct shouldei to shoulder, and not even the heavy though unavoidable rail in the market value of their shares, accompanying a large number of most mischevious rumors, in the slightest degree shook their stability. It was soon found that the failed bank was a disastrously eccentric exception to all the real characteristics of Scotch banking, and could in no way be considered representative. The London banks also suffered from the diffusion of a large amount of absolutely baseless and foolish distrust, to which there can be no harm in alluding now that it is over. During the three months that elapsed from the city of Glasgow failure to the end of the year a certain number of nervous depositors—a class which, with the best intentions, does an amazing amount of mischief—drew out large sums from all, the banks, necessitating, on the part of these institutions, very constant measures of precaution. Perhaps it was fortunate that the time for the halfyearly meetings was so near, for it turned out that the distrust was mainly begotten of exaggeration. Most of the great joint-stock banks have now declared their dividends and published their balance-sheets ,* and what is the resnlt 1 In all cases the profits have been equal to those earned in the corresponding previous half-year, or have exceeded them, and in none have the losses been excessive. Every bank has reduced its liabilities by paying off some of its depositors, and is stronger in the posses* aion of cash to pay off any others who may be foolish enough to apply ; while, finally, in no instance has the slightest attempt at mystery been made in the presentation of the accounts. These remarks are suggested by the proceedings at the London and Westminster Bank yesterday. This great institution is the oldest, as it is the most powerful of the joint-stock establishments that give a distinct character to metropolitan banking, and it has always commanded an unusual share of public confidence. But its very eminence increased its responsibilities, which represented twentysix millions of good English money ; and the speech of Sir John Rose, the Chairman at yesterday's meeting, showed how these were enhanced by the contagion of distrust a month jr two since. The losses were greatly exagerated by popular report} the withdrawals were also absurdly magnified; and the difficulties of realising securities were increased by the very cause which led to a partial drain from the banks. In the last three months of the year the London and Westminster Beems to have parted with fully five millions of deposits ; but so ample were its resources, and so judiciously were these managed that not the slightest difficulty was experienced in meeting all claims, and simultaneously doing a most profitable business, while refusiug no legitimate accommodation to its clients. These are results to be proud of, and it is not at all wonderful that the meeting passed a hearty vote of thanks to Sir John and his colleagues, and that the bank shares afterwards rose rapidly in value. This story, however, would be incomplete without the finishing touch. Since the year opened, said the Chairman, more than two million of new deposits had been received, so entirely was confidence restored. The moral of all which is, that acknowledged nuisance—the nervous depositor.