A Short Inquiry Into the Profitable Nature of Our Investments (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1881 Excerpt: ... has been since, mainly for the reason that such new banks were floated and brought an amount of discredit upon similar joint stock enterprise. The passage of the Limited Liability Act of 1862 gave a vast impetus to the introduction of financial and monetary undertakings, and competition became so severe that risks were incurred which, since the lessons of 1866, have been carefully avoided. Some few new banks have appeared since 1878, but they have been mainly conversions of previously existing businesses; while amalgamations have tended rather to diminish than to enlarge the number of our home banks. Indeed, such entirely new home banks as have been started during the past twelve years have met with small success. The reasons for this apparent restriction of competitors in so lucrative a business are not far to seek. "An old-established bank has a prestige which amounts to a 'privileged opportunity;' though no exclusive right is given to it by law, a peculiar power is given to it by public opinion. The business of an old-established bank has the full advantage of being a simple business, and in part the advantage of being a monopoly business All the banks which pay above 20 per cent., save one, are 25 years old; all those which pay between 15 and 20 are so too. A new bank could not make these profits; in attempting to do so it would simply ruin itself." So wrote the author of "Lombard Street" in 1873, and the reasoning is as perfect now as it was then. VIII. SCOTCH AND IRISH BANKING COMPANIES. It has been very difficult to deal justly with Scotch Bank Stocks of late years, treating them in the light of investments. Are the losses incurred by the most disastrous banking failure ever known to be written off from the profits earned by the ...