Points for Mr. Chamberlain.


Interest allowed by Corporation.


I believethe late Councillor Appleby explained to you the arrangements which exist between the Finance Committee and ourselves, but perchance he did not do so, I will deal with them. As a Bank, we deposit our money with the Corporation at call, the understanding at present being that one-half of the money we pass over shall be invested in Trustee Securities giving a yield of 5%, and that such yield shall be passed on to us in the way of interest. On the remaining half the Corporation allows the Bank 4%, and of course has the use of the money. We have been talking for months about this last rate being raised, having regard to present prices and we intend to press for e further % or %. You will appreciate that we cannot have a fixed rate for all time, and it is probable that we shall some day have to accept a lower figure than 4%, but while rates are higher we contend that we ought to have more. You will further appreciate (as Lord Bradbury has done) that as a Bank we are not responsible for finding the money required. That is, by the Regulations, theCorporation's duty, and by our municipal procedure the Finance Committee would be responsible for repaying at call to the Bank whatever sum was required.


Reserve Fund.


Having regard to the fact that the Corporation guarantee the full payment of all sums to depositors, plus interest, there is not the same necessity to create a huge reserve fund as is the case with other institutions. It is, of course, necessary to have a sufficiently large fund to enable us to meet capital expenditure, such as purchase and adaptation of premises, and we have always been able to do so. When you consider that we have bought and equipped 25 Branch Banks, and bought some 12 other sites and buildings which we are now dealing with, you will realise it is no mean achievement. Buying at peak prices and carrying out alterations when prices were high has naturally been against us, and has resulted in heavy writing-down of our buildings, which in turn has prevented the building up of our Reserve Fund at a higher rate. Our practice is to have the building valued immediatelyit is finished, and write-off the excess cost over valuation, and then to take a depreciation figure of 2% each year. To give you an illustration;-  Erdington Branch: cost of land 957. 12. 2d., coat of building 7,955. 6. 10d., total 8,912, 19. -d. Valuation 6,500. Amount written off 2,412, 19. -d. Incidentally, I may add that we receive in rent for one of the flats 90 plus rates, and for the other 50 plus rates, each year, so that we are assured of a good income. I should like to see our Reserve Fund higher than whatit is at present, and the matter has been receiving the attention of our City Treasurer and myself for some time. I think satisfactory arrangements will be made on this point before long.


January 17th 1927.

Summary of
Correspondence between
Neville Chamberlain and J P Hilton:
Document enclosed with a letter to Neville Chamberlain dated January 17th 1927