SUMMARY OF WEEKLY RETURNS OF BANKS OF ISSUE FOR FOUR WEEKS ENDING JULY 1st, 1882. Average Weekly Circulation of these banks for the month ending as above:- .. .. £1,638,934 1,682,472 On comparing these amounts with the Returns for the previous month, they And, ascompared with the corresponding month of last year:- Total Increase as compared with the corresponding period of last year £31,065 The following is the comparative state of the circulation as regards the Fized issues: The Private Banks are below their fixed issues £1,909,232 708,666 Total below their fixed issues .. £2,617,898 SUMMARY OF IRISH AND SCOTCH RETURNS TO JULY 1st, 1882. The Returns of Circulation of the Irish and Scotch Banks for the four weeks ending as above, when added together, give the following as the Average Weekly Circulation of these banks during the past month, viz. :— Average Circulation of the Irish Banks Average Circulation of the Scotch Banks Together.. On comparing these amounts with the Returns for the previous month, they And as compared with the corresponding month of last year- £795,191 Increase in the Circulation of Scotch Banks 88,798 Total Increase as compared with the corresponding period of last year £883,989 The Fixed Issues of the Irish and Scotch Banks a the present time, are:- Together 16 £6,354,494 2,676,350 £9,030,844 £551,561 3,099,258 The Actual Circulation compared with the above gives the following results:-- Total Above fixed issues £3,650,819 Average amounts of Gold and Silver coin held by these banks during the past month : Being a Decrease of £57,939 on the part of the Irish Banks, and a Decrease of £357,278 on the part of the Scotch Banks as compared with the Return of the previous month. CIRCULATION OF THE UNITED KINGDOM TO JULY 1st, 1882. Average Weekly Circulation for the month ending as above, as compared with the previous month: As compared with the corresponding period of last year, the returns show a decrease in the Bank of England circulation of £789,442, a decrease in Private Banks of £11,516, and an increase in Joint-Stock Banks of £42,601; in Scotland an increase of £88,798; and in Ireland an increase of £795,191. Thus showing that the month ending July 1st, as compared with the corresponding period last year, presents a decrease of £758,377 in England, and an increase of £125,612 in the United Kingdom. The Returns of the Bank of England for the month ending June 29th give an average amount of Bullion, in both departments, of £23,867,011. On a comparison of this with the Return for the previous month, there appears to be an increase of £824,618, and a decrease of £2,806,717 as compared with the corresponding period last year. The average amount of Coin held by the Banks of Issue in Scotland and Ireland during the month ending July 1st was £6,920,020, being a decrease of £415,217 as compared with the Return of the previous month, and an increase of £446,090 as compared with the corresponding period of last year. THE BANKERS' MAGAZINE AND Journal of the Money Market. SEPTEMBER, 1882. BANKING CAPITAL AND LIMITED LIABILITY. THE adoption of limited liability by the joint-stock banks of England and Wales has now advanced so far, that we may fairly at the present time proceed to take stock of the alterations which have hence resulted in the amount of the capitals and reserve funds of the banks. So recently as four, or even three years ago, the majority of English joint-stock banks were unlimited in their constitutions, and it seemed but little likely that any immediate alteration would be made in this respect. Many of the older men connected with joint-stock banking were strong in their objections to any change of plan. They thought limitation of liability undesirable, they believed it to be uncalled for, they resisted a change which they considered alike unfair to the creditors of the banks and lowering to their own prestige. But the general body of those concerned were of a different opinion. The shareholders were almost unanimous in approving the change, and in desiring to place a limit to the risk to which their estates were exposed by being proprietors of bank shares. Gradually the feeling, we might call it the prejudice, against the alteration in constitution, and the addition of the word "Limited" to the description of a bank, was overcome. It VOL. XLII. 51 became more generally understood that there was nothing un suitable in a bank being limited. Precedent, always a potent factor with Englishmen, was quoted in favour of the form of association, in the most respectable example that could be brought forward. The Bank of England itself is limited by charter. Could any other English bank do wrong in following that example? When limitation of liability was proposed, those in charge of the interests of the banks felt one thing very strongly-that the change could never be suitably made unless the banks offered those who did business with them-those, in fact, who trusted them with their money-solid and adequate security. If the old arrangement-the liability to the last shilling and the last acre-were to be given up, something very substantial should be proposed in its place. The result was that in almost every instance the alteration in the liability of banks was accompanied by heavy additions to the capitals, and also, as a natural result, to the reserve funds as well. The high standing the banks had already obtained enabled them to offer their new shares at a considerable premium, which formed a substantial addition to the reserve. The shareholders are in most instances liable for four times as much, and in some cases for a larger multiple of the paid-up capital. This ought to make the depositors abundantly secure. Sufficient capital to meet any sudden demand is essential to the efficient working of a bank, although real safety in business does not consist so much in the possession of large amounts to work with as in careful management. The capital of a bank ought always to bear a very solid proportion to its deposits. The statement which follows at the close of this article contains a list of the joint-stock banks of England and Wales as their capitals and reserve funds stood in 1877, and as they stand now in 1882. The former date was selected as being a sufficient length of time before the failure of the City of Glasgow Bank and of the West of England and South |