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further payment on shares, &c. &c. The forms in which these and the like documents may be drawn up are as easily procurable as forms of wills, indentures, and bonds; but vary at the discretion of directors, secretaries, managers, and solicitors. When any persons propose to form a joint-stock bank in any district, they procure the statistical returns of the district; such as the tables of the population-the exports and imports -the duties paid the returns of the sales in the various markets and every other information respecting the trade and wealth of the district. If these prove satisfactory, they take notice of the banks already established there, and observe whether they are joint-stock banks, or private banks-whether strong or weak-and whether likely to oppose or to join any new establishment. If the existing banks be joint-stock banks, the projectors procure from the stamp-office a list of the shareholders, in order to observe the strength of their proprietary, and whether they reside chiefly in the district.

Having satisfied themselves that a new bank would be successful, the first document drawn up is a prospectus. This document usually sets forth the great advantage of joint-stock banking to both the public and the shareholders, and then points out the facilities of the district in which the bank is proposed to be established.

Previous to issuing the prospectus, some leading persons in the district are requested to become members of a provisional committee for the formation of the bank, and they obtain the assistance of an influential solicitor, to whose office the applications for shares are usually addressed. The committee then appoint a secretary, or sometimes the office of secretary is filled by the solicitor.

Attached to the prospectus is the form of an application for shares.

As the applications come in, they are entered in a book prepared for the purpose. In the first column is entered the date of the application; then follow the name, profession, and residence of the applicant; then the number of shares applied for, and in a farther column the number of shares granted. After the committee have determined what number of shares to allot to each applicant, letters are addressed to the respective parties.

After the sums to be paid up have been received, a general

meeting of the shareholders is called, when the provisional committee make a report of their proceedings. Resolutions are then passed-1. That the report be received and printed;2. That certain shareholders then named be appointed directors; -3. That the thanks of the meeting be given to the provisional committee. The bank is now formed, and the government is assumed by the directors. They appoint the manager and other officers; they prepare the deed of settlement; and they adopt the measures necessary for the commencement of business.

THE PRACTICE OF BANKING.

PART II-OF BANKING INSTITUTIONS.

SECTION I.

THE BANK OF ENGLAND.

THE history, constitution, and administration of the Bank of England up to the year 1828 have been traced in an early chapter of the present edition, and, later on, are continued to several years after the passing of the all-important Bank Charter Act of 1844 (7 & 8 Vict. c. 32), the principal provisions of which are as follows:

"That from and after the 31st of August, 1844, the issue of promissory notes of the Governor and Company of the Bank of England, payable on demand, shall be kept wholly distinct from the general banking business of the said governor and company; and the business of such issue shall be thenceforth conducted and carried on by the said governor and company in a separate department, to be called "the issue department of the Bank of England;" and it shall be lawful for the court of directors to appoint a committee or committees of directors for the conduct and management of such issue department.

"II. That upon the same day there shall be transferred, appropriated, and set apart by the said governor and company to the issue department securities to the value of fourteen million pounds, whereof the debt due by the public to the said governor and company shall be a part; and at the same time so much of the gold coin and gold and silver bullion as shall not be required by the banking department; and thereupon there shall be delivered out of the issue department into the banking department such an amount of notes as, together with the notes then in circulation, shall be equal to the aggregate amount of the securities, coin, and bullion so transferred to the issue department; and it shall not be lawful for the governor and company to increase the amount of securities for the time being in the issue department, save as hereinafter is mentioned, but it * Section III.-History and Principles of Banking. Pages 226 to 227.

shall be lawful for them to diminish the amount of such securities, and again to increase the same to any sum not exceeding in the whole the sum of fourteen million pounds, and so from time to time as they shall see occasion; and from and after such transfer and appropriation to the issue department it shall not be lawful for the governor and company to issue bank notes, either into the banking department, or to any persons or person whatsoever, save in exchange for other Bank of England notes, or for gold coin or for gold or silver bullion received or purchased for the issue department under the provisions of this Act, or in exchange for securities acquired and taken in the issue department under its provisions: Provided always, that it shall be lawful for them in their banking department to issue all such notes as they shall at any time receive from the issue department.

"III. That it shall not be lawful for the bank to retain in the issue department at any one time an amount of silver bullion exceeding onefourth part of the gold coin and bullion at such time held in the issue department.

"IV. That all persons shall be entitled to demand from the issue department bank notes in exchange for gold bullion, at the rate of three pounds seventeen shillings and ninepence per ounce of standard gold.

"V. That if any banker who on the 6th of May, 1844, was issuing his own bank notes shall cease such issue, it shall be lawful for Her Majesty in Council to authorize the governor and company to increase the amount of securities in the issue department to an amount not exceeding two-thirds the amount of bank notes which the banker so ceasing to issue may have been authorized to issue; and every such Order in Council shall be published in the next succeeding 'London Gazette.'

"VI. That an account of the amount of notes issued by the issue department, and of gold coin and of gold and silver bullion respectively, and of securities in the issue department, and also an account of the capital stock, and the deposits, and of the money and securities belonging to the said governor and company in the banking department, on some day in every week to be fixed by the commissioners of stamps and taxes, shall be transmitted weekly to the said commissioners, and shall be published by them in the 'London Gazette.'

"VII. That from the same date the bank shall be released from payment of any stamp duty upon their notes.

"VIII. That from the same date the payment of the annual sum of 120,0007. made by the bank under the provisions of the Act passed in the fourth year of the reign of his late Majesty King William the Fourth, out of the sums payable to them for the charges of management of the public unredeemed debt, shall cease, and in lieu thereof, in consideration of the privileges of exclusive banking, and the exemption from stamp duties, given to them by this Act, they shall, during the continuance of such privileges and such exemption, allow to the public the annual sum of 180,0007. "IX. That all profits derived by the bank from the increase of their issues beyond the 14,000,000l. prescribed by the Act shall go to the public.

"X. That from and after the passing of this Act no person other than a

banker who on the 6th of May, 1844, was lawfully issuing his own notes shall issue notes in any part of the United Kingdom.

"XI. That after the passing of this Act it shall not be lawful for any banker to draw, accept, make, or issue, in England or Wales, any bill of exchange or promissory note or engagement for the payment of money payable to bearer on demand, or to borrow, owe, or take up, in England or Wales, any sums or sum of money on the bills or notes of such banker payable to bearer on demand, save and except that it shall be lawful for any banker who was on the 6th of May, 1844, carrying on the business of a banker in England or Wales, and was then lawfully issuing, in England or Wales, his own bank notes, under the authority of a licence to that effect, to continue to issue such notes under the conditions hereinafter mentioned; and the right of any company or partnership to continue to issue such notes shall not be prejudiced by any change which may take place in the personal composition of such company or partnership: Provided always, that it shall not be lawful for any company or partnership now consisting of only six or less than six persons to issue notes after the number of partners therein shall exceed six.

“XII. That if any banker in any part of the United Kingdom who after the passing of this Act shall be entitled to issue notes shall become bankrupt, or shall discontinue the issue of notes, it shall not be lawful for him to resume such issues.

"XIII. That every banker claiming under this Act to continue to issue notes in England or Wales shall, within one month after the passing of this Act, give notice in writing to the commissioners of stamps and taxes of such claim, and of the place and name and firm at and under which such banker has issued such notes during the twelve weeks next preceding the 27th of April, 1844; and thereupon the commissioners shall ascertain the average amount of those twelve weeks' issues; and it shall be lawful for every such banker to continue to issue his own notes: Provided, nevertheless, that such banker shall not have in circulation upon the average of a period of four weeks, to be ascertained as hereinafter mentioned, a greater amount of notes than the amount so certified.

"XIV. That if it shall be made to appear to the commissioners of stamps and taxes that any two or more banks have become united within the twelve weeks, it shall be lawful for the commissioners to certify the average amount of the notes of the two or more banks so united as the amount which the united bank shall thereafter be authorized to issue, subject to the regulations of this Act.

"XV. That the said commissioners shall, at the time of certifying, publish a duplicate of their certificate in the 'London Gazette,' and the gazette shall be conclusive evidence in all courts whatsoever of the amount of notes which the banker named in such certificate or duplicate is by law authorized to issue.

"XVI. That it shall be lawful in case banks become united, for the commissioners to certify the amount of bank notes which each bank was authorized to issue, and the amount stated shall be the limit of the amount of notes which such united bank may have in circulation: Provided always, that it shall not be lawful for any such united bank to

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