The Express.
London, England, 1847-09-14 00:00:00

OPERATION OF THE BANK CHARTER.

Sir,—The Circotor for Bankers drew attention on
Friday to a remarkable circumstance. The largest and
most frequent failures are stated to occur in districts chiefly
dependent on the Bank of England for discounts, and in
which little or no circulation of private, er joint stock bank
notes, takes place. Large houses in London, it is said,
which have accounts with the bank, readily get any amount
of bills discounted. Large houses in the provincial cities
obtain the same assistance through the agency of their bill-
brokers in London. Assuming the fact to be as stated, it
affords no argument, one way or the ether, on the policy of a
restriction of note issues. Both the Bank of England and the
provincial bankers are smarting under the same unjust en-
croachment on the legitimate sphere of their activity. The
nature of the notes employed by rash speculators would
afford no additional security to their customers and to the
public. But the locality in which merchants seek to make
their credit available is clearly a point of primary import-
ance to all parties. If a merchant obtains credit where he
is known, we may assume that he is worthy of the trust re-
posed in him. If he be compelled to seek it at a distance,
the circumstance, under freedom of banking exertion, would
of itself tell against him.
Now the law of banking for which this great commercial
country is, under heaven, indebted to tl:e wisdom of Sir R.
Peel, exactly reverses the above simple and intelligible pro-
position. Inducements and excuses are held out to comae!,
chl men to evade the test of their neighbour's opinions as
to the solidity of their credit. They are driven to the Bank
of England when they might be independent of its aid.
They are screened from scrutiny by going there if they
dread inquiry. The great minister, in his worship of the
power of money, overlooked the principle of banking, which
makes a banker dread to trot incautious merchants. In
Sir Robert Peel's opinion, the nation was awe. whatever the
trader ventured, provided he had a safe banker. Experience
now shows him what all bankers know before, that the best
banker can be placed in jeopardy by trusting ill-advised
customers.

In other words, the public is far less interested in the
amount of notes issued anywhere than in the use that is
made of them when they are issued. A bill that would
regulate speculation (were such a measure practicable)
would be of far more value than any act ever devised for the
regulation of the currency.
No stronger case could be made out against the present
system of doing violence to the banker's right to private
judgment in matters of trade, than the circumstances which
the banker's circular, on good authority, states as attending
I the lamentable failures which occurred last week.
The demand for notes for local purposes, such as the pay-
ment of wages and the settling of small accounts, is sure to
absorb, in • manufacturing locality, any moderate sum to
which private bickers may be restricted. For these pur-
-1 posies the bankers may issue too, on more advantageous
I terms than the general merchant can afford to pay. Were
our law of currency what it ought to be, the country
banker would, in extending his issues, exercise hie judg-
ment en the business doing by his cus•omers. He would
ultimately, resort to the Bank of England, both for
relief and to dispose of his Nth. But in this man-
ner the Bank of England would discount on the se-
curity of • banker who know what the merchant was
doing, and not on that of • merchant, of whose dealings the
Bank of England can know little or nothing. Instead of
this simple and natural mode of doing business, the Bank
has been induced to submit to restrictions devised by Messrs.
Peel, Torrens, and M'Culloch, by the supposed bribe of a
limitation of private issues. The bankers of the metropolis
are not allowed to issue notes at all; country bankers are
tied down to amounts that lulled • previous epoch of our
growing trade. To make the most of the supposed mono-
poly, the Bank was recommended to establish branch banks
to the larger country towns in such a manner as to become
a direct rival of those between whom and the Bank a
natural dependence existed to mutual advantage. We
have the results of this lamentable intermeddting with
trade in two distinct shapes in the recent failures. They
arc partly to be ascribed to the facility with which • discount
account with the Bank of England enables reckless specula-
tors to screen their proceedings from scrutiny. Similar
secrecy would be difficult to preserve when the parties had to
resort to private banks. It would be out of the question
where joint stock banks with a numerous proprietary held
the control is the first instance. But the present lamentable
condition of mercantile credit I. also in part to be ascribed to
the want of confidence which was almost immediately per-
ceptible on the pasting of the Bank Charter Act, and which
has its source insthe impossibility of calculating the operation
of that act by the simple and usual principles of trade. An
act which, at the mmo time, draws from our industry a por-
tion of the life-blood by which it was nourished, and gives to
the remainder • forced and unnatural circulation, provides
for such alternations of feverish excitement and death-like
paralysis, that all must tremble to be connected with the
dimmed commercial system which is abandoned to such doc-
tors and to such a nostrum. R.

THE NATIONAL LAND COMPANY.
We see no practical good to be gained by prolong-
ing the controversy on Mr. O'Connor's experiment at this
stage of its progress. We therefore, as becomes a polite
landlord in his own house, give our guest, Mr. Frost, the
last word, and therewith close the discussion. When the
time comes for renewing the argument it shall not be our
fault if it is not carried on, as it hu been now, with that
mutual respect which earnest seekers after truth owe to each
other even when they differ most widely.
Sir,—Notwithstanding your avowed intention of avoiding
any further controversy on the subject of the National Land
Company, I cannot refrain from again addressing you on
those portions of my letter of last week which you appear to
have so strangely misunderstood. I have no wish to com-
plain of being called a chartist,• though the word only par-
tially expresses my pnociples, which are considerably in ad-
vance of the six points of the charter ; but I am surprised
that you should decline to accept my prophecy that you
will, " ere long, be found among the most prominent of the
talented advocates of those pnnciplea which alone can re-
deem suffering humanity from the social evils which hang
as a dead weight at the wheels of progression." lam sur-
prised I say at this, when I find you advocating, in the
second column of your reply, the very principles to which I
alluded. It will be a source of congratulation to the work.
ing classes, that they have such a talented advocate of the

• We used the term without any disrespectful meaning, in the usual
vague, and, it must be confessed, not very appropriate way. Properly
speaking it ought to be restricted to that intelligent and respectable
dam of the oMversal suffragists represented by Mr. Lovett among
the artisans, and Mr. ?rano, Place among the middlaelsaste—the
real originators and supporters of the charter. Mr. Foveae O'Connor
and his more immediate followers took It up as they would have done
any other document that had the recommendation of going far."
We question if half-a4ozen of tlilseeetiol of nt called chartists ever
read the charter. Our coirivondent again belongs we presume to a
third deny, to whom this designation la also ineorrectlurgel. lie
appears to adhere to soon of the notated shades at ac

co-operative principle sa yourself, and I feel proud of you so
a fellow-labourer in the same vineyard. I reminded you
that " the co operative principle will do mom than buy
land and build cottages; it is destined to build workshops and
factories, in which machinery shall work for man instead
of against him ; " and as you have suggested a co-opera-
tive factory ma an improvement on the National Land
Company, you will be pleased to learn, if you are not already
aware of the fact, that manufactures and mechanical pursuits
enter into the plans of the Co-operative League, founded by
William Hewitt, which proposes to unite those branches of
industry with the cultivation of the land. But I apprehend
that the question is net so much whether the land plan of
Feargus O'Connor is the best system that can be devised for
the amelioration of the condition of the working classes, as
whether they are prepared to adopt social economics, involv-
ing a greater departure from the present societary system.
It is only a comparative few, the elite of the working classes,
who are prepared fur those advanced stages of human asso•
ciation to which the National Land Company will form a
step. If lam right in supposing yuu to advocate the eaten-
aion of the co-operative principle to the cultivation of the
land as well as its purchase, I am decidedly of the opinion
which I understand you to express ; but I question whether
the allotteea generally will agree to adopt it. I suggested to
the allottees at O'Connorville the advantage of co-operating
in the purchase of coals, grocery, &c., and I have been gra-
tified ray seeing the suggestion carried into effect, which shows
that the working claws are beginning to appreciate the arl•
vantage of extending the principle by which they obtained
their allotments. _

I will now proceed to the more immediate object of this
letter—those points upon which it appears that I was so un-
fortunate
so to fail in making myself comprehensible.
Readily admitting that " the shareholders of the land com-
pany will obtain no more land than they can pay for, and
that the purchase-money of an allotment sufficient to main-
tain a family would, in any other form, render the owner
comparatively independent," and that " a cottage and lour
acres of land can scarcely be worth, on an average, less than
1.101.," I wish you distinctly to understand that very few
members of the National Land Company possess a sum at all
approximating to that you have named. You have, however,
considerably under-rated the value of a four-acre allotment,
as none but good land is purchased, and the cottages are
built with excellent materials. How can a hand-loom
weaver of Leeds, or an agricultural labourer of Dorsetshire,
invest even 1,10/. in the purchase of a house or a government
annuity ? Neither of there can he possibly do ; the only in-
vestment which is open to him so the National Lan4 Com-
pany; he takes out two shares, pays for them by instalments
of perhaps threepence per week, until he has subscribed the
full amount of his shares, 21. 125., when he receives his cer-
tificate, and at the end of a longer or shorter period, as it
may happen, he receives two acres of good land, a three-
roomed cottage, and an advance of 151. to commence opera-
tines with. These advantages he obtains for 21. 125.,
which he has paid in small instalments, which, in
many instances, would otherwise have been dissipated
at the public-home; and the delusion under which you
labour, that a member of the company must necessarily be
the owner of a sum equivalent to the value of his allotment
is most unaccountable. The allotments are conveyed as
freehold property to the allottees, who undertake to pay the
compiny 5 per cent. as interest upon the capital expended.
This interest is redeemable by the allottees placing their
savings in the redemption department of the National Land
and Labour Bank, Cur which they will receive 4 per cent.
interest; and the money thus invested is appropriated to the
redemption of the interest payable by the allottee.
In the third paragraph of your reply you represent me as
stating that " the whole capital of the society is not sunk In
land, but that a portion of it forms the capital of a bank."
Now, sir, if you will take the trouble to read my letter, you
will look in vain for such a statement. You speak of the
land being " the sole security to the depositors." Why, sir,
no other bank gives any tangible security at all. \Vhat
other bank gives land and houses as the security for the de-
posits ? I cannot understand what you mean by the bank
advancing loans at 5 per cent. ; no such loans are mentioned
in my letter, nor in the rules of the society. You have been
fighting a shadow, sir. By referring to my letter, you
will find that my explanations on this subject are
strictly in accordance with the third rule of the
society, which stands thus: " That a bank of
deposit shall be established, through the medium of
which the money expended in the purchase of lead, and in
the erection of buildings, &c., shell be reproduced, the
property of the company being made security for all cash
deposited in such bank. That the depositors shall receive
31 per cent. upon their deposits, and that the interest or
rent-charge payable to the company by tke allottees be
available for that purpose. The money thus advanced upon
the company's property to be invested in the purchase of
other lands, erection of houses, &c., upon which, in like'
manner, money shall be risen; such operations to be con-
tinued until the objects of the company arc accomplished."
I have quoted the rule in full, as it serves the double purpose
of setting you right on the banking question, and showing
the manner in which the original capital of the company
will bo made reproductive, until it finally returns to the
members when all are in possession of their allotments.
Croydon, Sept. 9. T. Feeler.