In all banks the junior clerks have lower salaries than the senior clerks. In Scotland, a clerk usually serves an apprenticeship of three years, during which he receives but a small salary. This plan has been introduced into some of our country banks. In London it does not exist. In the private banks, a junior clerk usually commences with £60 a-year, and a portion of the Christmas money. In the joint-stock banks, where no Christmas money is allowed, the commencing salary is usually £80. But the rules of advance are various, and, indeed, must be so, depending as they do upon the prosperity of the banks, and other contingent circumstances. One bank may assign a certain fixed annual increase to each clerk, whether he advance. in rank or not. In this case, his salary will be regulated entirely by the number of his years of service. Another bank may have a fixed salary for each post, and a clerk has no increase of salary except when he takes a step in rank. Another bank may adopt a scale of salaries combining the principles of the other two. For instance, every post in the bank may have a fixed minimum salary. But each clerk holding a post for a certain period (say for five years) has an annual advance for that period. Then he stops, and receives no further advance until he is promoted to the next post, where again he becomes entitled to the annual advances belonging to that post. We give no opinion as to the respective merit of these plans. But there is one principle we would enforce-that the salaries of the clerks should be regulated by the prosperity of the met and overcome I am very sensible, and for this, as well as for the uniform zeal and integrity with which the general duties of the office are discharged, I beg that the clerks will accept my grateful acknowledgment, and that you and they will believe me to be the faithful friend of you all.

(Signed)

"S. J. LOYD.

bank. If the bank is prosperous, the clerks ought to share in its prosperity; and if the bank is unfortunate, the clerks must consent to share in its ill fortune. But, under any circumstances, a scale of salaries is desirable. It prevents caprice on the part of the bank, and jealousy on the part of the clerks. The amount of salary in each case should be fixed by rule, and not by favour.

With reference to this subject we quote from Mr. Taylor's work, entitled "The Statesman"-a work which he states to have been the result of twelve years' official experience :

"It is often said, that in order to get efficient service good pay must be offered. But this is not true, as applied to first appointments of young men. On the contrary, it

will often happen that the largeness of the temptation, by bringing into activity the most powerful interests through which abuses of patronage are engendered, will lead to the appointment of a worse man than would have been obtained by a smaller offer. On the other hand, though men of promise are to be had cheap, whilst they are young and their value is little known to themselves or others, they cannot, when this is no longer their condition, be kept for a small consideration, or at least kept contented. But a reasonable degree of contentment is of essential importance where the understanding is the workman. There is no position so strong as that of a man who stands upon his head; and if he be not induced to the activity of just thinking and clear reasoning, he will hardly be coerced to it. Upon the whole, therefore, I would say, that what is most conducive to good appointments in the first instance, and thenceforward to deriving benefit from them, is to offer small remuneration to the beginner, with successive expectancies proportioned to the merits which he shall manifest, and of such increasing amount as shall

be calculated to keep easy, through the progressive wants of single and married life, the mind of a prudent man. Upon such a system, if unfit men belonging to influential families shall make good an entrance into the service, they will be more easily got rid of; since, finding that they have got but little in hand, and have but little more to look to, they will hardly be desirous to continue in a career in which they must expect to see their competitors shoot ahead of them."

V. Their Sureties.—In all banks the clerks give sureties for their integrity-usually two, of £500 each; and in some banks these amounts are increased on accession to higher offices. Of late years societies have been formed, both in England and Scotland, for the purpose of giving, on the part of clerks and others, the amount of security required.

The Lords of the Treasury, indeed, all Government Departments which require securities, and most of the great banking companies and private banks, accept the guarantee of these societies in preference to private suretyship.

In the year 1841 the Bank of England took measures for discontinuing the system of requiring sureties from the clerks. Every clerk subscribed annually two shillings per cent. upon the amount of his surety-bond. When he had subscribed in the course of five years (or immediately if he chose), ten shillings per cent., the liability of his sureties ceased. Every new clerk subscribes, when admitted, ten shillings per cent. on the amount of the bond he would otherwise give. These contributions are invested in the Three per Cent. Reduced, or Consols. This fund is fixed at £6,000 stock. When at this amount, the interest is given to the "Clerks' Widows' Fund," a fund

established by the clerks, with the assistance and support of the bank. When the claims have reduced the guarantee fund below £6,000 the interest goes to this fund until it has increased to this amount. If the claims reduce the fund so low as £4,700 then the clerks are required to make a further contribution until the fund is again raised to £6,000. But this contribution is never more than two shillings per cent. per annum on the amount of their respective bonds. Nor can any claim be brought against the fund greater than the amount of the bond that would have been required from the defaulter. The clerks still give their personal bonds, which are for the full amount of their deficiencies. This is an admirable plan for a large establishment. In adopting it the directors have shown a sound discretion, as it makes all the clerks interested in watching over one another. At the same time, they have manifested that kindness and goodwill which have, we believe, at all times distinguished the directors of the Bank of England in their conduct towards their clerks.

1

Mr. Thomson Hankey, when governor, delivered to the Banking Institute the following account of the working of this system :—

"With regard to the guarantee system, it appeared to him that the principle adopted in the Bank of England in 1841, by his predecessor, was capable of extension, with great benefit to the clerks, to many of the other banking

'This Institute was established in 1851 on the initiative of the editor of the "Bankers' Magazine." It flourished for a few years, and then gradually expired. It is to be hoped that the present "Institute of Bankers," founded in London last year, under the presidency of Sir John Lubbock, will continue to receive the strong support with which it has hitherto been carried on, and continue the very useful work it has already accomplished. In Scotland a similar institute, absorbing the old Bankers' Literary Society, was established in 1875.

institutions of the country. The principle of that plan was, that a compulsory payment of £1 a-year for five years, or £5 in one sum, was required from each clerk, on entering the establishment. These payments accumulated until they amounted to a sum of £6,000, the interest of which was then to be applied to another purpose, for the benefit of the clerk; but in the meanwhile the fund was applicable to all losses at the bank, which, under ordinary circumstances, would fall upon the private sureties. Every clerk, on entering the establishment, was bound to give security to the amount of £1,000. Well, he believed the lowest premium the guarantee societies would take was 10s. per cent., or £5 for the £1,000, and this £5 premium had to be renewed every year. Now, the amount of this £5 premium from each of the 700 clerks of the Bank of England would be £3,500 a-year. Well, since the guarantee fund to which he had alluded had been established in 1841, the total defalcations in the Bank of England had only amounted to about £1,500. Now, if the 700 clerks had paid the £5 a-year each to the guarantee societies for the whole of that period, it would have raised nearly as much as £40,000, the whole of which would have gone into the pockets of the guarantee societies, with the exception of the £1,500 which would have been necessary to make good the defalcations. Now, if £40,000 had been paid in premiums, and £1,500 had been the loss, it would require very little argument from him to show that the guarantee societies would have been very great gainers, at the expense of the clerks."

VI. The System of Promotion.

It need hardly be observed that some posts in a bank are more important than others, and it is always desirable that the most clever men should occupy the most im