It is now several weeks ago that Mr. Henry Luard, the general manager of the London and County Joint Stock Bank, addressed a note for this department of the Herald, for the purpose of drawing attention to a dinner at Petersfield reported in the Hampshire Telegraph, professedly in honour of Messrs. Hector and Lacy the late bankers of that town, whose suspension of payments was recorded sometime ago. A prominent object of the dinner would seem however to have been the formal introduction and installation of the London and County Bank there, by which the business of the private bank was taken up and, as understood, its liabilities made good to the customers, Messrs. Hector and Lacy being possessed of fully adequate means to meet all their engagements, although not presently convertible, and therefore for the opportune ready money assistance thus afforded their successors were amply indemnified. The avowed intention of Mr. Luard, in requesting a notice of this meeting, was to counteract the effect, as he says, of a "paragraph obviously conveying to the public an insidious slur against this bank (the London and County) for having taken up the business of Messrs. Hector and Lacy the late bankers at Petersfield." And labouring under this impression he adds, "I know not whether the writer who inflicted the wound has the disposition to heal it;" concluding with the rather summary and peremptory citation, "let your City correspondent notice it," that is, the report. Perhaps it may be as well he should learn that the writers of "City articles" have a discretion of their own as well as all other writers, and are but little disposed to take the law in respect of their duty and doings, although laid down by bank directors.
To say truth however his requirement might have been complied with sooner but for two sufficient reasons; one of which was the constant accumulation and intrusion of matter of much greater public concern than even the affairs of the London and County; and secondly, as the general annual meeting of the proprietary of that bank was shortly to be held, any preliminary public discussion of its proceedings or management might have been liable to misconstruction, and perhaps even translated as "insidious." The meeting is over, and other matter is less pressing, so that an opening is thus presented for a little amicable parley in this bank business. And first, it may be well to remind Mr. Luard that individually he can have little cause of complaint against the Herald, in which his appointment as chief manager was mentioned, so soon as known, in terms of the courtesy and commendation to which he was believed to be justly entitled on his own behalf, and as an acquisition to the bank. And secondly he would seem to have read the Herald but lightly and superficially, when he can assert that an "insidious slur" upon the bank was conveyed in the paragraph referred to. That paragraph stated, simply, and without comment it is believed, for we have not time, even were it worth while, to consult the number in which it appeared, two naked facts, the one being the establishment of a branch of the bank at Petersfield, the other that it increased the number of its branches to twenty-eight or twenty-nine. Nobody can accuse Mr. Luard of being particularly tardy and obtuse in his susceptibilities, when offensive meaning can be strained with such ingenuity from a cause so far fetched. But although no opinion was then expressed one way or the other in the case, yet as he would seem to challenge the truth, there need be no hesitation in avowing the conviction that a bank may have even too many branches. The history of private and joint-stock banking is not unfruitful of examples in point, and should carry its warnings.
On perusing with attention the report of the Petersfield dinner so politely forwarded, it is not easy to discover what particular information it was intended to afford, what evidences of the solid elements of banking business it was meant to unfold,—or what sound principles of banking science it was deigned to illustrate. The dinner was one of compliments all round; the late bank and its partners toasted, and no doubt deservedly eulogised; the branch of the new bank bodily, as well as in the persons of some of its directors or managers present, was inaugurated with the usual convivial honours. The health of Sir Harry Featherstone, absent, a country gentleman deservedly esteemed, seems to have been received with most particular demonstrations of applause, and properly too, for the very substantial reason which came home to every body's stomach, that he contributed a most "handsome present of game" to the feast. Two or three speakers dwelt gratefully on the kindness and accommodation they had enjoyed at the late bank; and Mr. W. Hawes, one of the directors of the parent bank of the branch established in its place, made a brace of complimentary speeches for value received in toasts. Mr. W. Hawes may be, like his parliamentary brother, a sort of universal genius in a small way, and if he understand as much about banking as he ought to do about barilla so much the better for the concern favoured with his association; but certainly he was too good a judge to waste precious time in discourse about banking and bills, however perfect his practical science that way, in the goodly company of Sir Harry Featherstone's venison and mine host of the Dolphin's vinous cheer.
In the report of proceedings at the general annual meeting of shareholders on the 3d instant, as reported most at large in the Railway Magazine, there occur various discrepancies as contrasted with statements made at the meeting in August last. The more important of these refer to the case of Mr. Dighton, the late manager, whose sudden disappearance and still unaccounted-for fate ought to operate more imperatively in preventing anything going forth that might more deeply wound the feelings and interests of a bereaved family, when he is no longer present to defend himself and support his own reputation. The attention therefore of those concerned is requested to the two differing statements put forward by themselves, one at the last and the other at the previous meeting, in reference to Mr. Dighton, which seem to require explanation. The statements are copied verbatim from the publication before referred to, where they are understood to be given with a sort of quasi official authority or order. On alluding, in August last, to the disappearance of Mr. Dighton, the chairman emphatically observed that—"With regard to Mr. Dighton I had for him a very high esteem, and immediately that his absence was known, I had not the least hesitation as to the effects of the bank being perfectly correct, but still we of course did our duty, and ascertained that everything was-perfectly correct, not on the report of hearsay, but upon that of close investigation." The Rev. Thomas James, of Woolwich, one of the auditors, thus testified to the same facts, as the results of his and their investigation, and to the extraordinary clearness with which the accounts were kept, so that a mistake would seem impossible. "I, in conjunction with my brother auditors, have superintended the last two or three half-yearly audits of accounts, and I never knew accounts kept in a more perfect, clear, and orderly manner, than they have been at this bank. We examined the accounts in detail; we went through the ledgers and other documents; we examined every voucher by which every item in the balance could be substantiated, and we found them to be perfectly correct." And afterwards, referring to Mr. Dighton, the speaker observed, "that which is stated in the report I believe myself conscientiously to be true, but though his absence is to be as deeply regretted as it is totally inexplicable, yet it has not been occasioned by anything which has affected the interests of this bank." So much for August, 1841, and here is one of the same parties who thus speaks on the authority of the same "perfect clear and orderly" accounts in February 1842. He, the chairman, in this speech acquaints the shareholders that Mr. Dighton's (the late manager) absence is still unexplained, but the directors lament to be obliged to report a dereliction of duty in his transactions with Messrs. Colls and Co., which has involved the company in a law-suit to maintain our right to securities received for money advanced by us. * * * Upon some of the bills also we hold there will be a loss, but upon a close and careful investigation your directors believe that the whole of this loss will nearly be covered by the sureties of Mr. Dighton." The Rev. Mr. James, who had before, on his own showing, scrutinised the accounts so rigidly, and testified to Mr. Dighton's integrity so strongly, was present when these strange disclosures and inculpations were made by the chairman, and he had not one word of remark or explanation of his own former assurances in the matter to offer. The continued absence, perhaps death of the unfortunate gentleman in question, which renders explanation or contradiction in his behalf difficult if not impossible, can hardly absolve the parties making these tardy incriminations from the obligation of reconciling, if reconciled they can be, the one set of statements with the other.
It may not be amiss to remind the board of management that the abuse of private and competing banks so freely indulged in in their report and speeches is both unseemly and discreditable. The "first principle," so called, of "undoubted safety" in joint-stock banking to the people, and "its profitableness to proprietors," is, so far as yet tested in practice, no more true of joint-stock than of private banks. The failure of one joint-stock bank, and joint-stock banks have failed in a score of cases within four or five years, entails more ruin, and involves a much larger proportion of individuals in distress, than any half dozen of private banks ever did or could do. The liabilities of the joint-stock are for hundreds of thousands where those of the private bank are for tens of thousands only; the whole property of every shareholder is staked in the jointstock concern, even though a proprietor of one £10 or £50 share only. This correction is made in no hostile spirit to joint-stock associations, the principle of which is sound enough when fairly carried out. Not less unseemly is the gratuitous reflection on the "other late officers" of the London and County Bank Company, who it is wantonly assumed, without the shadow of proof alleged, have aided and encouraged Mr. Sturt in his "system of attack" on the company; and who are represented besides as "acting under the countenance and sanction of private bankers," because "it is not to be imagined" that they have "either the funds or the facilities" themselves to carry on such a system of attack. All this is exceedingly paltry; what is more it will command no credit; and what is worse and more humiliating still for the company, it will provoke bad feeling and recrimination. Mr. Sturt, indeed, who seems to have a special quarrel of his own with the direction, and appears to be an awkward customer to deal with, has announced a forthcoming reply already, so that fresh work of this sort will be carved out for another meeting. That gentleman lately addressed a letter announcing the line he should adopt to this department, which from a desire to promote conciliatory feelings, which intemperate language could not assist, was not inserted. In respect of the unworthy insinuation against "other late officers" of the bank who are represented as wanting "funds and facilities" and therefore of having recourse to private banks to assist in venting their spleen, it is stated on their behalf first, that they have taken no part in any publication or proceeding reflecting on the bank; and secondly, that, if such had been their mind, they are as responsible in funds and facilities,"that is property, of their own, independent of assistance from any quarter, for any necessary purpose as those by whom assailed. It is impossible, as believed, to mistake two at least of the parties aimed at; one of them now honourably filling a high and responsible situation in a first-rate joint-stock bank establishment—a situation certainly of much greater trust and eminence than before in the London and County. The other well known, and as respected as known, in the City, as the active partner in a mercantile house some time since dissolved and retired from business, second only to Barings for wealth and extensive reputation, and which during its existence dealt in more millions annually than the London and County do in hundreds of thousands, and possessed more hundreds of thousands capital than it has scores of thousands. There is certainly no director of the bank, respectable and well-doing as he may be, who is entitled to cast this slur upon the "funds and facililities" of such "late officers" which was imprudently hazarded. It is surely unwise and undignified in the managers of a public establishment to force their private bickerings on public notice. The statement of account exhibits the capital of the London and County Bank paid up from 1838 to 1841 both inclusive. The capital in the first-cited year is stated at £34,915. As the printed trust deed recites that on the establishment of the bank in 1836 upwards of 8,000 shares were subscribed or paid upon, which, at £5 per share, the first instalment, should constitute a commencing capital of between £40,000 and £50,000, it would seem that the capital had declined to that date, 1838, absorbed perhaps by preliminary expenses or bad debts, a point, however, unexplained. But to render the accounts complete it should be stated what was the original capital begun with.
Again, the " preliminary expenses," expenses of establishing branches, of leases, bank fixtures, current expenses, and interest on current and deposit accounts, are stated at the large amount for the year of 34,848/. The particular item here which most requires elucidation is that of "preliminary expenses." These might unavoidably be large even for a bank starting with modest paid-up means, business and pretensions. But large or small the special item, as in the case of other joint-stock bank accounts rendered, should be separately specified. There certainly is no blame to be imputed for charging the amount proportionally over several years, as so much deduction from profits, because such is the custom, although it would be more simple and clear to deduct it at once from capital in the outset, less such part as may represent substantial value, such as the purchase of a lease or freehold of a banking house, which would appear of course to the credit of assets. The difference between the capital paid up at starting and that of 1838, if difference there be, may, for anything which appears, have been sunk in preliminary expenses, or partly in bad debts, which are incidents not to be avoided in any enterprise; but in rendering an account compiled from accounts so "clear and perfect" as the reverend auditor found those of this bank, and in speeches professing to be formal statements of banking progress from the commencement, such incidents should have been made apparent, and if omitted, the reverend auditor, if really as acute an accountant as he appears to be a ready speaker, and as conversant with figures as he is fluent of words (not exactly representing ideas by the way), should have been keen enough to notice the fact and apply the remedy, in the due discharge of his duty as auditor. The proper explanations will no doubt be forthcoming on these various points for the information of all concerned and at a distance, and therefore no more need be said on the subject. It is in the interest of joint-stock banks themselves that all their operations and accounts should be clear, intelligible, and beyond the reach of cavil in every respect; that nothing should be left in doubt or unexplained, however conscious all concerned in the management of their own unsullied integrity and of the real correctness of all their proceedings. It may be fully conceded that more respectable men generally cannot be found than the directors of public companies, but it is rarely, scarcely ever, they can give much time to the superintendence of any other concern, when themselves engaged in business of their own, and therefore having to depend on others they are liable to take for granted instead of examining for themselves, and may be imposed upon without laying themselves open to the slightest discreditable imputation. Having thus availed ourselves of Mr. Luard's invitation to cast a glance over the affairs of the London and County Bank we now take our leave of them.