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ment? I also wish to make a remark with regard to the debentures.
1 was very glad to hear what the chairman afterwards said as regards not
congratulating the meeting about the issue of debentures. They are the

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42 Land Mortgage Bank of India.

life and sonl of the company. The oompauy waa originally formed with
a moderate capital^ and the debentures were to be the life and aonl of it,
and if we draw in our debentures from time to time that feature will be
done away with. If we borrow money at 6 per cent., and if we get 10 per
cent., it follows, that if year by year the company decreases that amotmt,
it must of necessity decrease its profits. With regard to the dividend I
am not insensible to that, for I hold 700 shares, but it is a matter I think
that ought to be left to the wisdom of the directors. I shall be quite
satisfied if they pay no dividend. I think what they ought to look at is
not to give 1 per cent. — ^what does it matter, £20 or £30? — ^but place a
large amount to the reserve fund, and then you will see the shares rise in
value. I also wish to make one other suggestion. I see there are five
directors, and I think there has been no change in the board for some time.
I think one or two shareholders might in the coarse of six or twelve
months be added to the board.

A Shareholder — ^I hope, certainly, you will give us two per cent, next

The Chairman — ^I hope so, too, sir. I would mention here, sir, as to
your enquiry as to the reduction of our books, we have sold some small
properties included in our estimate of loss in 1868, for a gross sum of
£20,410, and that the result of the sale of these properties, they were 16
in all, was a realisation of the estimate we put upon them in 1868, with
£726. As to the employment of our capital pending inveiftment upon the
only security in which we are authorised to invest, if you will remember,
sir, we are limited to two species of investments, one is in India, and the
other upon land and building — real property. The other power given ua
is by the 69th article, that the board shall have power to make t^porary
investments of the company's funds in the United Kin^om, and in India,
on Grovemment securities, and to authorise the drawmg, endorsing, and
accepting and so on of bills of exchange. You will see that we
are debarred from entering on any other species of businees
than that authorised by the articles. We do our best, botii
in India and at home, to make our available funds profitable
while they are awaiting investment, by lending them upon the
deposit of Government securities, which is the only mode in which we
are authorised to deal with them ; and our bankers allow us a &ir rate of
interest upon the amounts from time to time at our credit. You see, sir,
we are precluded by our implied contract with our debenture-holders from
entering on any other species of business. It has often occurred to us
whether there are not other securities in which we might invest onr
funds, failing our placing them upon a security originally contemplated
by our scheme ? and we are met by an entire want of authority, and then
our difficulty would be this, in attempting to alter the constitution of the
bank by altering the security upon which we have authority to place our
funds. Exception would be taken to it by the debenture-holaers, and
they would say this species of security we do not consider is safe. It is a
matter which has occupied very much of our thought, from time to time,
to see if there are any means of getting over the difficulty, and we have
certainly been unable to do so. We do our best ; we urge upon our local
managers the importance of making all our funds profitable to the fullest
extent ; wo have authorised them to promote their investment as much
as possible. I have suggested and authorised the advancing of our funds
at a small amount below the Bank rate, in order to compete with those
banks whose legitimate business is to make advances of this desoription.
We find applications for loans on Government securities go to the Preu-

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Land Mortgage Bank of India. 48

denoy Banks, or Exobange Banks, and don't oome to us. We have kept
that point constantly before our mana^ra, and exhorted them to do their
best, bnt inasmuch as we cannot alter our articles of association, I do not
see there is any help for this. We must hope that we shall soon get the
whole of our available funds invested.

Mr. Addison— I quite see you cannot alter your artideB, bnt I referred
to the very small profit you have made.

A Shareholder - -SuTeh^ we could alter the articles without the deben-
ture-holders' consent. In what form is the memorandum drawn ?

The Chairman read frcmi the articles of association.

The Shareholder — The form of the debenture I mean. Surely the
debenture-holders take the debentures subject to the rules and regulations
for the time being.

The Chairman— Quite so, but it would not be competent to us, having
taken the money on a scheme which pointed to a spe<nfic class of security^
to alter our articles of association, and lend our moneys on securitieA of a
totally different character, and which might be less satisfactory in the
opinion of the debenture-holders.

The Shareholder — That is your present power. They take them sub-
ject to the power being altered. It is a question on which the solicitor
could give information.

Mr. Addison — ^I appeal to the meeting. I think we can leave this
matter to the directors. I do not think myself it would be judicious to
alter the articles of association. We borrow mxmej on the basis that we
are a Land Mort^page Bank of India. I should like to know something
about the produce of the investments of the past year's interest.

The Chairman — ^May I ask whether you refer to the interest realised
upon short Loans 9

Mr. Addison — What I said was this. According to the last report you
had £6,000 odd. Ton proposed to take £2,000 ; that makes £8,100,
and, talung the cadi in hand, it reduces your profit for the past year to

The Chairman — To go into that point one would have to compare the
credit entries in the last balance-sheet with the credit entries in our
estimate for the present year.

A Director — ^I might say that the policy of the directors has been a safe
one, and if the board had wished to have had made an increase, sundry
loans on sea and other properties paid off might not have been paid off ;
but the board, not approving of the loans, preferred receiving the money,
although they lost the interest ; and that I believe will account for the
difference. There was one large loan on a coal property; the people
offered to renew it, but we preferred to have the money, and that money
has been earning very little interest, instead of 10 per cent, or 12 per
cent. ; but in the long run we prefer to get the money in, and invest it
in a better class of security.

The Chairman— It is hardly a fair comparison to take the gross of last
year's accounts and compare it with this, and for this reason, our last
year's profit and loss account contained an amotmt of interest received in
Bombay of 2,6942. The amoimt this year is £2,160. The amount realised
from Madras last year was nearly £2000. This year, after payment off of
loans which have increased the amount available for investment, it is
1,2002. The amount realised from Calcutta is much about the same, and
that tends to reduce the amount of the interest reaUsed in Calcutta iq>on
our ordiaary loans, but your calculations take a similar amount to have
been received from India, but inasmuch as the amount realised in India

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44 National Bank of India.

from our general operations has been less than last year, your calculation
is hardly a fair one. We hare realised daring the present year between
£3,000{ and £4,000 for short loans on deposit of Grovemment securities.

Mr. Addison — ^What I said was this ; taking your net profits, not your
gross projdts, they have been very small, and I take it you hare a larger
amount in hand than last year.

The Chairman — Much larger.

Mr. Addison — I am afraid I have taken up the patience of the meeting,
and I will only express a hope that the directors will use every effort, not
only in Bengal, but in Bombay, so that when we next meet they will be
able to tell us they have worked very hard, and have been able to place
all our money out.

The Chairman — ^I hope so, too.

A Shareholder^! understood the gentleman who seconded the report
to say that he did not agree with some of the remarks of the chairman.

Mr. Harrison — Oh, no ! Ton quite misunderstood me.

Major-Greneral Sir Gkorge Balfour — ^I would like to take this oppor-
tunity of saying that the board have worked most harmoniously together,
and I would also like to say that we are deeply indebted to the chairman
for the labour he has bestowed upon the affisiirs of the company. That I
cannot too highly convey to you, and I may say that I am the only gen-
tleman who is an original member of the board. Your first operations
were indebted to the exertions of Mr. Boyson.

The motion for the adoption of the report was then put to the meeting,
and was carried unanimously.

The Chairman— That, gentlemen, is the business of the meeting. I
can only hope, next time we meet, whether in March or April, we shall
be able to put before you a more satisfactory state of your afiairs.

Mr. Addison — Gentlemen, I beg to propose a vote of thanks to Mr.
Boyson, for his able and courteous conduct in the chair. I am sure that
we are all very much obliged to him for the ample information he has
given us.

The motion was then carried unanimously.

The Chairman— I am much obliged to you, gentlemen, for the honour
you have done me. I can only say I did what I believe to be my duty in
having taken upon -me my present position. I shall continue to do so.

The proceedings then terminated.


An extraordinary meeting of this company was held on the 10th December,
at the Cannon-street Hotel, Mr. B. O. Campbell in the chair, for the
purpose of confirming certain alterations in the articles of association,
as adopted at a meeting held on the 19th November last.

Mr. It. 0. Sawers (the chief manager) read the notice convening the

The Chairman said the meeting was a purely formal one required by
the Companies Act, 1862, which rendered it necessary that any resolution
altering the articles of association should be confirmed. He then moved
the confirmation of the resolution adopted at the meeting held on the
19th November last

Mr. Wingrove seconded the motion, and it was carried unanimously.

A vote of thanks to the chairman terminated the proceedings.

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The tenth ordinary general meetiDg of this hank was held on the 16th
Decemher, 1872^ at the Cannon Street Hotel ; Mr. G. W. Drahhle, in the

The Secretary haying read the notice convening the meeting, the report
of the directors was taken as read. It was as follows : —

In presenting the tenth yearly statement of accounts, the directors
congratulate the shareholders upon the good results obtained, and have
the pleasure to recommend a dividend of six per cent, for the half-year
ended 30th September last, making, with the interim dividend paid in
June, a distribution of 11 per cent, for the year. The sum of £10,000
haA been added to the reserve fimd, thereby raising it to £165,000, and
leaving a balance of £8,887. 12«. to be carried forward to the profit and
loss account of the current year. The large increase of immigration, the
rise in the value of aU property, the rapid extension of railway and tele-
graphic communication, the important public works now decided upon,
and the greatly increased value of the exports, all testify to the material
'progresB of the River Plate provinces. The board took advantage of the
visit of the chairman to the River Plate to request him to make a per-
sonal inspection of the various branches, and are pleased in being able to
state tbat his report confirms their views of the soundness of the bank's
business. The directors recognise with pleasure the valuable services of
the managers and staff of the respective establishments. The directors
retiring from ofiice in rotation on this occasion are Messrs. John Hack-
block, George Alexander Hancock Holt, and Henry Archer Wyatt Smith,
who, being eligible, offer themselves for re-election. Dividend warrants,
free of income tax, will be issued, payable on the 23rd December, 1872.



Capital called up to date £600,000

Kcserve fund 155,000

Bills payable at head-office and branches 562,611 14 5

Notes in drculation at branches... 350,471 17 10

Deposits and amounts due on current accounts, &c 4,214,445 18 7

Profit and loss account for balance from last year,
£5,034. 17«. 11^.; and net profit for year ending SOth

September, 1872, £105,123. 5j. 5<;. 110,158 3 4

£5,992,687 14 2



Cash on hand at branches, at bankers, and on deposit ... ... £2,209,742 14 1 1

Local bills discoonted, bills receivable, cnirent accounts, and

other securities 8,699,458 14 3

Premises in Calle Piedad, Buenos Ayres ... £21,400 4 5
Calle del Cerrito, Montevideo 21,033 5 8

Bank fomitare account £12.281 5

Less amount written off for depreciation 1,228 10 1

42,438 10 1

11,052 14 II

Interim dividend declared in June, 1872, being 5 percent, for the
six months ending 81st March, 1872 30,000

£5,993,687 14 2

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46 London and River Plate Bank.

Ftofit and Lobs Account of the London Office and Branchei, 80M September, 1872.

1872. Sept. 30. Charge, indnding rent and taxes, salaries,
directors* remnneration, income-tax, and
all other expenses at London Office and

branches for 12 months £45,621 8 11

Expense of Mr. Drabble's visit to tb» Biyer

Plate 1,250

Amount written ojBf Bank fnmitnre account

for depredation 1,228 10 1

Leavingbalanoeasaboye£ll,052 14 11

Balance, tIz., amount brought
forward from last account... £5,034 17 11

And net profit for year ending
30th September, 1872 ... 105,128 5 5

110,158 3 4

£158,257 17 4


1871. Oct 1. Balance from last account £5,034 17 11

1872. Sept. 30. Gross profit for year, after making proyi-

sion for bad and doubtful debts ... 153,222 19 5

£158,257 17 4



Interim dividend, paid in June, 1872, being 5 per cent, for six
months ending 31st March, 1872 £30,800

Amount carried to profit and loss new account, being rebate of
interest on bills not due 30th September, 1872 24,219 14 8

Amount to be written ofi" the Buenos Ayres and Montevideo
bank buildings account 2} per cent, £42,433. lOs. Id. ... 1,060 16 8

Amount to be carried to reserve fund 10,000

Amount proposed to be distributed as dividend of 6 per cent.,
making in all 11 per cent for the year ending 30th Sep-
tember, 1872

Balance to be carried to profit and loss new account

Balance of profit and loss account, as above

The Chairman said it was then hia duty, as*chairman, to moye the adop-
tion of the report. He thought that under ordinary circumstances he would
have to give very few expLmatory remarks thereupon, for he had no doubt
all the shareholders would consider it a satisfactory statement of the interest
confided to the directors and that as such it would meet with their full
approval. Still, as they would have seen by that report, since he had the
honour of last presidine at their general meeting, it had been his privilege
to yisit their different oranches. In connection with other busineas, it
was his duty to visit those countries, and the board thought that a per-
sonal inspection could not be but advantageous, and the report he would be

8,887 12

£110,158 3


£110,158 8


£110,158 8


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London and River Plate Bank 47

able to bring home would not only be aatisfactory to them, bnt to the
shareholders. It would be impoesible to enter into all points of detail
that came under his notice. He might mention that he was in the Ri^er
Plate four months, and attended at the branches day by day. He visited
each city, and could not but see a great deal of what was going on, and if
he gaye all the details it would only weary them. As regards Buenos
Ayres he found that everything was going on very well, and the new
manageTB had been installed in their duties. At their last meeting they
called their attention to a change in managers, and stated that the directors
were in hopes they were fulfilSng their duties very satisfactorily. It was
therefore very satis&tctory to him to see that the statement made by the
board at that time was trtie, and he could confirm the same in Ids report to
the board. The city of Buenos Ayres, as they knew, was the seat oi their
principal branch, and as such it was important that he should be well
acquainted witii everything that passed there,' and it wa« also impor-
tant that he should come to some conclusion as to what he thought
of the city and the general state of trade in those countries. He had
lived there some twenty years, and had been absent five years, and
therefore on his return it was a great pleasure to him to see that the
city had greatly increased, and that much greater attention was sdven
than ever he recollected to have been the case during his residence
there, both by the Qovemment and the community, to public works and
to whatever was calculated to develop the trade of the country. When
he mentioned that the exports from Buenos Ayres in 1866 only amounted
to £5,000,000 odd, and in the present year it was calculated that thev
would exceed the sum of £10,000,000 — ^the exports alone — he thought it
showed pretty plainly the important position the city was taking as a
commercial centre. In connection with the branch itself, it appeared to
him that the staff generally were fulfilling their duties very well. Several
cases were brought before him, in which some of the staff wanted an in-
crease of salary, but he had to tell them that the board here had to meet
the shareholders once a year, and that it was their duty to keep down the
working expenses as much as possible. He must say, however, that
Buenos Ayres was perhaps as expansive a city to live in as could be found
anywhere, and that the young men who went there were disappointed
that they could not lay by as large a sum as they had expected. From
Buenos Ayres he went to the city of Bosario. He had also been at
Bosario before, but not for a period of 12 years, and nothing had ever
struck him so much as the advance which the city had made in that interval.
At their last meetings he had had to call attention to the dulness of trade
there, but what he saw convinced him that they were at last getting to
the top of the hill, that some losses which the directors had made
provision for three years before were being recouped, and that the
branch was doing a good and safe business. He next visited the city
of Cordova, their least important branch; and though he was well
pleased with that city, which had a population of about 30,000, and
was a centre of trade, yet he thought, when the railway from Bosario
to Cordova was made, it might not remain a centre of trade. From
Cordova he went to Montevideo, where they had their second important
branch. The progress of that city surprised him. Their branch there
was seoond to none. It had the reputation of being a most important
and first-rate bank, which was not more than it deserved, because they
would recollect that three or four years ago, when the (rovemment
decreed the suspension of the currency there, their branch did not
take advantage of tiie decree, but, at a great sacrifice, it converted its

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48 London and River Plate Bank.

notes, and bad always held aloof from any issne of notes that was not
based on a gold conyertible basis. (Hear, hear.) The relations between
the Government and the branch were most intimate ; and when he was
there the Finance Minister and their manager consulted him on seyeral
occasions ; and it had always been their endeavour, especially since the
present Government came into office, to assist them as far as they oould
m all measures which they considered would put the Government finances
on a sound basis, and put the currency into the state in which it ought to
be. The Gt)V6mment had always had in view the redemption of the cur-
rency, and last year a loan was brought out for that purpose. At one time
he was afraid they should not be able to carry it out, but by the last mail
he learned that at a meeting of the Government, at which their manager
assisted, it was considered that the Government were in a position to carry
their project through, and the advices received that morning stated that
in two days the first steps would be taken towards that object. He woald
now make a few observations on the report itself. If they compared it
with that of the previous year they would find that there was on the
credit side a very large increase of the cash balance. The cash in hand
was £2,209,742, as against £783,000 in the previous year, but upwardn of
a million of that was the deposit wliidi they held as the security for the
currency. He made this explanation lest they might think that they
were holding an unnecessary balance in hand. They would also see a new
item, £1,060. 16$. 8d., being 2^ per cent, written off the Buenos Ayres and
Montevideo Bank buildings account. All buildings and property of
that kind had risen in value, but still they thought it wise to write off
2^ per cent, for depreciation. The note circulation did not call for special
observation^ except that, as soon as the Montevideo currency was retired
by the Government, the circulation of the notes of the bank there would
increase. At Bosario and Cordova the circulation had increased. The
expenses showed an increase. As he told them at the beginning in refe-
rence to Buenos Ayres —and the same remark applied to the other branches
— the expenses of living were very great there, and he could not hold out
any expectation of a reduction of the expenses. The net profits, if they
made allowance for the rebate, were £18,448 in excess of those of the
previous year. From this they gave the shareholders one per cent. addi«
tional ; they added £10,000 to the reserve fund, and they carried a
larger balance forward than they did last year. Ihe board hoped that
that appropriation would be considered a satisfactory one. He did not know
that there was any other point that he need allude to, but he should be
most happy to answer any questions the shareholders might put. With
regard to their future, however, he would make one remark. Last year
the board stated that they would endeavour to keep the bank in a satis-
factory condition, and he could only say the same now. With the increase
of trade, the large exports and imports, and the increase of emigration,
he felt himself great confidence in the future of those countries. He did
not think they should be too sanguine, but the directors would do all they
could to protect the shareholders' interests. In conclusion, he moved
that the report as now presented be received and adopted.

Mr. G. A. Holt seconded the motion. The directors had gladly taken
advantage of Mr. Brabble's visit to the Biver Plate, and he considered
the result of that gentleman's inspection of the branches most satisfactory.

Mr. Gibson asked if the Cordova branch now returned a profit to the

The Chairman replied that it had made fair profit.

The motion for the adoption of the report was then put, and carried

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Commercial Bank of Scotland. 49

A dividend at the rate of 6 per cent, per annnm for the half-year was

The retiring directorg, Messrs. John Hackblock, G. A. H. Holt, and H. A.
W. Smith were unanimously re-elected, as also were the retiring auditors,
Messrs. J. Vanner and W. W. Deloitte.

The Chairman then moved that a vote of thanks be given to the con-
sulting director, managers, and staff of the respective establishments, for
the zeal and ability with which they have conducted the affairs of the
bank. He made special mention of Mr. Smithers, their manager here,
and stated that the whole of their officers had peciormed their duties in

Online LibraryJohn Tilden PrinceThe Bankers' magazine → online text (page 7 of 150)