Page:Hints About Investments (1926).pdf/233

 Their second advantage is that most of their business is done within a square mile of their offices, and that they have none of the difficulty involved by scores of branches but are in close and constant personal touch with their most important connections.

Although it would be interesting to know how much of the Union Discount's investments consists of British Government and how much of other securities and of what kind these latter may be, it will be noted that owing to the high standing of those responsible for meeting the bills which make up the greater part of the company's assets, the question of doubtful assets hardly arises in the balance-sheet of a discount house. Acting as they do as intermediaries for the banks, it is an essential of their business to be above reproach in its conduct, and to add continually to the strength of their position by an active reserve fund policy and by caution in the question of rebating—that is estimating the present value of—their bills of exchange.

From the Profit and Loss Account of the Union Discount it appears that it made a gross profit for the year 1924, after making provision for contingencies, of £753,000. Deducting expenses, £76,000, and rebate £423,000, we find a net profit of £254,000. The company