CENTRAL BANK OF LONDON, LIMITED. THE thirtieth report of the directors to the Ordinary General Meeting of shareholders on the 16th January : "The directors, with the view of giving all practical information, submit, in fuller detail than heretofore, the results of the operations of the bank for the half-year ended 31st December, 1878. The annexed accounts show a gross profit, including the sum brought forward from the previous half-year, of £33,003, and deducting therefrom the charges at head office and branches, directors' remuneration for the past half-year, and interest to customers, and writing off an adequate sum from the amount expended on bank premises, there remains a balance of £15,704. 19s. 4d. The directors, therefore, recommend that a dividend be paid at the rate of £8 per cent. per annum, free of income-tax, that £5,000 be added to the reserve fund, which will thereby be raised to £25,000, and that the surplus, amounting to £6,704. 19s. 4d. (including rebate), be carried forward to profit and loss new account. Mr. William Palmer and Mr. James Shand, the directors retiring by rotation, being eligible, offer themselves for re-election. The auditors also go out of office, and offer themselves for re-appointment." General Balance-sheet, 31st December, 1878. CAPITAL AND LIABILITIES. Dr. . Capital-Authorised, £1,000,000; issued in 20,000 shares of £10 each, £200,000; amount paid up, viz.: £5 per share on 20,000 shares Amount due on current accounts, £776,686. 15s. 7d.; deposit accounts at notice, £188,102. 48. 10d. £100,000 0 0 964,789 0 5 nil £545. 68. 5d. 20,000 0 0 Rebate of interest on current bills, £3,661. 78. 9d.; profit and loss account-net profit as per statement, £12,043. 118. 7d. 15,704 19 4 £1,100,493 199 Cr. ASSETS. £232,210 10 8 Cash in hand and at Bank of England Investments at cost viz.: £64,590. 9s. 9d. consols, of which £28,000 is set aside as security for accounts of public bodies. Bills discounted .. Loans to customers Bank premises-freehold, £25,503. 7s. 2d.; leasehold, and fittings and furniture, £8,126. 78. 7d. 199,822 17 8 Dr. Profit and Loss Account for the Half-year ended 31st December, 1878. General charges at head office and branches, including directors' fees, £9,415. 198. 7d.; amount written off bank premises account for depreciation of leasehold premises, furniture, &c., £1,067. 18s. 2d. Interest paid and due on current and deposit accounts Rebate of interest on current bills, £3,661. 7. 9d.; balance being net profit to 31st December, 1878, £12,043. 11s. 7d. Cr. Balance at 30th June, 1878 Deduct amount of 29th dividend paid at the rate of 8 per cent. per annum, £4,000; amount carried to the reserve fund, £2,000 Balance of profit for the half-year ended 31st December, 1878, after providing for estimated loss by bad and doubtful debts £8,833 1 2 6,000 0 £2,833 1 2 30,169 18 10 £33,003 0 CITY BANK, LONDON. FORTY-SIXTH report to the proprietors at the ordinary general meeting, 14th January, 1879 :— "The directors present to the shareholders the annexed accounts of "liabilities and assets" and "profit and loss," for the half-year ending 31st December, 1878, showing that after providing for interest on deposit accounts and bad and doubtful debts, and retaining in hand £18,008. 198., the amount of the bank's claim on the City of Glasgow Bank, and its associated failed firms, the gross profits, including £4,761. Os. 7d. brought forward from the preceding six months, amount to £69,529. 168. Provision having been made for current expenses and rebate on bills discounted not due, the directors declare a dividend at the rate of 10 per cent, per annum, free of income-tax, payable on and after the 15th instant, and carry forward to the next account £3,712. 148." Dr. Liabilities and Assets on the 31st December, 1878. .. Capital paid up, viz., £10 per share on 60,000 shares.. £600,000 0 0 205,000 0 0 2,872,066 15 2 3,266,629 0 6 69,529 16 0 £7,013,225 11 8 Cr. Exchequer bills and East India debentures £122,366 2 4 Cash in hand, £188,263. 17. 8d.; ditto at Bank of England, £537,220. 143. 11d. Other securities, including bills discounted and loans .. Profit and Loss Account for the half-year ending 31st December, 1878. Dr. Current expenses, including salaries, rent, stationery, Directors' remuneration, proportion of building expenses, incometax, &c. Amount carried to profit and loss new account, being rebate Undivided profit transferred to profit and loss new account £28,389 9 4 7,427 12 8 30,000 0 0 3,712 14 0 Cr. Balance brought down, viz. :-Undivided profit brought forward from last half-year, £4,761. Os. 7d.; since added, after providing for bad and doubtful debts, £82,777. 148. 5d.— £87,538. 15s.; less total amount of claim on the City of Glasgow Bank and its associated failed firms, £18,008. 19s. Mr. John Jones, the chairman, after declaring a dividend at the rate of 10 per cent. per annum, said he should encroach a little more than usual on their time, owing to the exceptional circumstances of the day. The amount due by the bank on current and deposit accounts, letters of credit, &c., was £2,872,066, showing a reduction as compared with the previous statement, arising from the withdrawal of deposits. They were in the habit of receiving extensive deposits from various provincial banks when it suited the convenience of those institutions, and it had happened that they had required those deposits to strengthen their own position. Their acceptances against cash in hand, banker's bills, approved securities, &c., amounted to £3,266,629, being larger by £36,927 than at the 30th of June last. This item, however, was in no way whatever connected with the general arrangements of the bank, the amount varying according to the requirements of banks and undoubtedly wealthy houses who at times required such accommodation. It had been materially larger than it was at present-recently it was £676,000 in excess of the present amount. At no time had they ever felt the slightest inconvenience or drain on the bank in connection with their acceptances. They were not a novelty, for from the early constitution of the bank they had taken up by selection certain bankers; and in one or two instances commercial firms of undoubted respectability. They had not changed those names, but had continued their business year after year-in some instances for so long a period as 20 years -without the slightest inconvenience. Their engagements in support of their acceptances were sound, profitable, and in every way substantial. He stated this openly, with the full concurrence of the board. It was not to be imagined that in a great commercial community business was to be carried on without acceptances, and the amount now before the shareholders, large as it might appear, did not equal the engagements under acceptances of many of our merchants. As to the question of unlimited or limited liability, although unlimited liability was in no way injurious to the shareholders in this bank, yet there was a decided feeling, in which the board participated, to review matters carefully, with the hope that, as times became quieter and calmness succeeded to the present excitement, steps might be taken to, in some prudent degree, limit the liability of shareholders where at present it was unlimited. He assured them this was a matter which had the most careful consideration of the board. It was commonly supposed, and personally he strongly believed it, that it was more than probable that there would be Parliamentary interference with the existing state of things. Whatever step was taken would be carefully watched and considered, and if it took such a shape that they could submit to the shareholders a proper and judicious proposal, it would be their duty to call a meeting and take their opinion on the subject. COLONIAL BANK. REPORT of the directors to the proprietors assembled at the eighty-second halfyearly general meeting, the 2nd day of January, 1879, T. D. Hill, Esq., in the chair. As required by the charter, the directors submit to the proprietors the usual statement of the debts and assets of the corporation on the 30th June, 1878, including the net profit made during the half-year ending at that period, as follows: Cr. Specie Due to the bank in the colonies, on bills discounted and purchased (including those past due), &c. Due to the bank in the colonies, on current accounts Bank premises and furniture, in London and the colonies £431,516 5 0 3,088,157 8 9 600,000 0 0 90,000 0 0 1,114 8 11 37,777 0 10 £4,248,565 3 6 2,417,940 3 7 8,082 10 9 £4,248,565 3 6 The Directors now recommend that out of the net profit, amounting, after providing for all bad and doubtful debtsand for income-tax, to £37,777. Os. 10d. added to the amount brought forward £1,114. 8s. 11d., together £38,891.9s. 9d., an ordinary dividend be made of six per cent, upon the paid-up capital for the half-year ending 30th June last, which will require £36,000, and that the balance of £2,891. 9s. 9d. be carried forward to next half-year, leaving the reserve fund at £90,000. The directors regret the continued depression in the sugar market, referred to in their last report, whilst the severe drought in British Guiana has added to the difficulties of all connected with that colony. In addition, heavy mercantile failures have occurred, by which the bank has sustained losses; but it is satisfactory to the directors, under these unfavourable circumstances, to be able to recommend the payment of the ordinary dividend of six per cent. for the half-year, having amply provided, as they believe, for all bad and doubtful debts. The directors may add that the general accounts from the branches are satisfactory. The following resolutions were carried:-1. That the report of the directors, which has been read to the meeting, be received, printed and distributed amongst the proprietors. 2. That an ordinary dividend of six pounds per cent. be made for the half-year ending 30th June, 1878, on the paid-up capital of the corporation, and that the same be payable on and after the 8th instant, free of income-tax. 3. That the following gentlemen, who have now gone out by rotation, be re-elected directors of this corporation:- Jacob Quixano Henriques, Esq., Charles Marryat, VOL. XXXIX. 9 Esq., Edward Miller, Esq., and Vice-Admiral Wish; and that Joseph Henry Marryat, Esq., the auditor, who has now gone out by rotation, be re-elected an auditor of this corporation. 4. That Charles Andrew Prescott, Esq., be elected a director of this corporation in place of William Munro Ross, Esq., resigned. Also that Henry Pryor Powell, Esq., be elected an auditor of this corporation in the place of Charles Andrew Prescott, Esq., resigned. 5. That the thanks of the meeting be given to the chairman and directors for the able manner in which they have conducted the affairs of the bank. COMMERCIAL BANK OF SCOTLAND. REPORT of the ordinary court of directors of the Commercial Bank of Scotland to the annual general court of proprietors, 17th December, 1878. The proprietors of the Commercial Bank of Scotland, no doubt, anticipate that, after the recent bank disasters, the annual report of their directors should be fuller and more explicit than usual; and the board willingly comply with this reasonable expectation. Although the past history of the City of Glasgow Bank did not inspire such confidence in its management or stability as was generally placed in the other principal banks in Scotland, and the large amount of its acceptances had not escaped observation, no one could have imagined that its published statements had been falsified, or that a few individuals, inside and outside of the bank, would for years, and systematically, have combined in illegitimate transactions of enormous amount, by which ruin was brought upon the bank and its shareholders. The result of these transactions, and of this false management, came by surprise upon the other banks in the end of September last, and the shareholders of the Commercial Bank will no doubt unite with the directors in deploring the loss and misery caused by such an unprecedented calamity. The directors of the Commercial Bank can confidently assert that its management has been free from those faults, subversive of all banking principles, which characterised the management of the City of Glasgow Bank. In the first place, the great majority of its directors for many years have not been engaged in trade, and those of them who have been in business have not required bank accommodation. Secondly, the acceptances of the bank and of its London correspondents have always been for moderate amounts, and granted solely for the purposes of legitimate business. Thirdly, the Commercial Bank never had any foreign or colonial investments of any description; and, fourthly, it has always been the practice of the directors to write off every year all ascertained bad debts, and to make ample provision for estimated and contingent losses. It may interest the shareholders to know that, with one exception (that of a very large public company), no single account of any one customer or firm, except on rare occasions, involves the employment of £100,000 of the bank's money, while the company alluded to have no special loan from the bank, and their account is kept within reasonable limits. The directors advert with deep regret to the recent very lamentable stoppage of the Caledonian Bank, an event caused solely by that bank having unfortunately become shareholders of the City of Glasgow Bank. The directors of the Commercial Bank had no hesitation in acting in conjunction with other banks in taking up the notes of the two banks which have stopped, so preventing the discredit of the note circulation of the country, and they have also united with the other banks in mitigating the inconvenience and loss which would have arisen from the deposits of the public being locked up in these two banks. The directors rely upon the shareholders approving what they have done, in conjunction with the other banks, with reference to the liabilities of the lapsed banks. The directors may mention that the Commercial Bank is not a shareholder in any company involving liability for calls. The board have now to submit to the proprietors an abstract of the balance-sheet, as at 31st October last, also the following view of the profits of the past year and of the undivided profits of the bank. It was stated in last annual report that, after paying the dividend and extra dividend or bonus in January, 1878, there would remain |