The Sun.
London, England, 1839-07-26 00:00:00

/dIVENING ROM' I I.

. .
i burden of every argument against the Bank of Ireland
was founded on the presumption that the Bank of Ireland
would not discount in Dublin and the metropolitan circle
good paper, but was rather disposed to starve and stint
the circulation within the ct'srele. He had shown that that
was contrary to all the Ilrinciples on which the Bank should
be carried on, and b,e could show also that it was cerorsr,
to the facts of the ease. He had there, in the admis-
sion of '.he Bank of Ireland itself, as %%el.
as upons the evidence of persons haying their
views directed to the subject, that that was a
ni;stake, and that the persons making that statement
overe wrong. But following up what happened in 1830, A
bank called the Agricultural and Commercial Bank, withi
iee
the evidence respecting which the public was very fa
liar, that bank carried on business in a moat improper way,
by injudiciously extending its influence, doing the very
*cost description of business, and creating an unnatural
banking competition—that bank was the first to. sustain a
reverse and compelled to suspend its payments. Other
banks felt the pressure so severely that they were obliged
to have recourse to the Bank of Ireland for assistance, and
all the banks in Ireland which did not apply to the Bank
of Ireland were obliged to draw largely upon the resources
10 England. In addition to the ordinary million, the
specie balance in the Bank of Ireland, it was compelled to
call for an amount of specie from England of not less than
400,0004 The Provincial Bank of Ireland had at that time
remitted to it 700,0001. The National Bank had remitted
to it 2,200,0004 All that was calculated to unsettle and
disarrange the London market, and greatly aggravated the
inconvenience felt in Ireland. It appeared upon the evi.
deuce that the conduct of the Bank of Ireland on this occa-
'ion towards the other banks was entitled to every praise.
It appeared on the evidence that to the Belfast Bank
103,0004 were advanced ; to the Ulster Banking Company,
60.0004; to the Hibernian, 21,000/. ; to the Agricultural,
.19,6004 ; to the National Bank, 42 6001. ' • making a total
of 246,000/. given by the Bank of Ireland to assist its own
contemporaries on trade. Now, he (the Chancellor of the
Exchequer) relied upon this, for two reasons. First, he
Wished to show to the House that the working of this mo
n°Poly at that period was not prejudicial to the other bank
jug interests, but that, through the assistance of the Bank
cif Ireland, they obtained resources which enabled them to
tineet the pressure which was on them ; and he meant to
use it also. to show, that if these resources were to be made
available hereafter, under any similar circumstances, it was
an" lay the continuance of the present exclusive privilege,
!:4 if this was put an end to, they run the haz ad of all the
Pis which were then averted. He knew this was contra
mitted, and let him tell the House on what principles. One
of the witnesses (Mr. Dwver) stated, and another witness
repeated it, that be thought the conduct of the Bank of
Ireland was extremely illiberal, and that it intended to
break all its competitors in trade. Now, would the House
imagine that Mr. Dwyer, who complained of this conduct,
that his bank bad received 21,0001. from them to meet his en-
!fagernents, and that his agent at Galway had been allowed to
111
draw the sum of 12,0004 on his own security. He stated
that the Bank of Ireland would have given more accommo-
ion, if they could have given them bills on London. The
Agricultural Bank had the honesty to say they had no se-
,e'hur,itY that their bills would be accepted, but they tendered
their own promissory notes which had been returned from
circulation, and requested an advance of gold or paper on
On
that security ; and because the Bark of Ireland refused,
security of that description, a gentleman came be-
fore I
a the Committee, and said the Bank of Ireland
u
seected towerds these banks with a view to crush them.
n the contrary, another witness admitted, and a witness
not my 'unconnected kith the Bank of Ireland, but with
their
therecerivals—that, according to the best of his inforniation,
were but three Banks at that period that did not
a assistance from the Bank of Ireland, and
that the conduct of the Bank of Ireland was extremely
liberal
already shown that this assistance did amount to 240 000/.
lkil gold, or in paper exchangeable for
gold. But he now
'egged the attention of the House particularly to the charge
which was made against the Batik. Mr. Callaghan stated
that
he thought the B iek had not given that aceommoda-
Lon to the public which they had a right to expect, and
that the capital of the Bank should be applied for the be-
'fit of the public, instead of being tied up in the funds.
M. Dunn said the Bulk had not extended accommodation
whto the public, in the way which it might have done—that
enever a crisis came, as in the late panic, the Beek had
witthed with great illiberality, and he cling: d the Bsnk
an intention of putting down all other Banks. He
(the Chancellor of the Exchequer) had shown that so far
from this being the case, all th,,? Banks except th h
!lureceived assistance from the Bank of Irebsnd—thatree atad a
te when the Bank itself m;.eht have apprehended danger.
; the,rt •
ed with upwards of 200,000/. in aid of I,s rivals in
trade. However the charge was repeated in a publi-
cation which came, it sr:neared to him, from some autho-
, TitYl complaining of tle Bank of Ireland, and calling Upon
Tito' public to negative any proposition for a renewal of the
Charter. Let the House hear the following passage in
that pamphlet--" Li the midst of general impoverish.
tent, public d,bility and national convulsion, we find
the Beek of Ireland consolidated, strenetherted,
,
exalted. Often had discontent and insubordination
, agitated and vexed the island ; the Bank had always
i stood hale and perfect. The 'rebellion of 1798,
the insurrcetion of 1803, the panics of 1810, IPO, 1825,
!1536, famines too numerous to be recounted, too horrible
to be described—had been encountered by it, had swept by,
and had left it stronger in its resources and in its wealth,
'more formidable in its power; crisis after crisis, convulsion
:after convulsion, had fallen on the devoted country ; but
the Bank had never been moved, never swerved in the
alightest degree from its selfish splendour. It as i-
deafly had but one rule of action—to make money handv
to
t 2141 no risk. All argument upsn the subject had been
au,pe.rseded by the one stroll! fact, that from the period
I i),,‘ 14 formation, its bad debts had amounted only to
048.000/." (we believe.) Me, O'CONNELL—Who wrote the pamphlet?
The CHANCELLOR of the EXCHEQUER could
not say, but it was the evidence of their own witnesses.—
(" No, eo," from Mr. Hume.) He certainly had a right to
stroke use of this evidence which had been brought forward
against the Bank of Ireland. Now, what were these
charges—that the Bark of Ireland had always met its
engagements—that its notes had always maintained their
'eredit—that their security was good—that famine after
famine, and panic after panic had followed, and yet the
Bank of Ireland had stood firm ; and what was the charge
against them—that they had attended to making money,
and discharged the duties of bankers as bankers should.
The Bank had run no undue risks—they had done their
business safely, and when they could not do it safely, they
had abstained from doing it at all. They bad done their
duty as bankers. This was the first time he had ever
heard such matters as these brought as charges against
any banking establishment. Could any thing, in fact, be
More absurd. But it might be said that these were merely
the statements of an anonymous pamphlet. He would,
therefore, turn to the evident' of Mr. Ignatius Callaghan
and Mr. Dunn, two gentlemen of whom he did not wish to
aaY any thing disrespectful ; but he must say evidence of
a. nacre extraordinary character had never been given.
brought against the Bark of Ireland was that they
reserved a large proport on of their capital in the
Pllblie funds, by way of s curity, to meet their en-
frgagemeats? The answer given by one of these
itlemen, when questioned on the subject, showed
a_at however respectable he might he, lie knew as little of
the principles of banking as of the discovery of the longi-
rna• After stating the amount of the capital of the Bank
_ Ire!and, and she portion locked up with the Government,
Le' goes on to &tete that they must he bad bankers, because
tutY inyest in Exchequer bills and in the public funds, in
°tales
shat meet their engagerneets. He is asked to specify
,0 - ise,
proportion of capital, in his opinion, they should keep
to their engagements. After stating the amount of
eabisPiota! kept locked' up by the Government, he states it as
slat; Pinion ?hat the rest should be employed in accommo-
emndl,g the public as far as possible; and thus he would
ee'Y,lhe whole in discounts, and not retain one fraction to
wo ;• tila pressure when the pressure should come, What
t, uLd nave been the position of the Bank of Ireland had
sai_cY acted thus, when the pressure came ? Would they
tear
been üble to maintain their position; and not only
ip.v.,_ , but to assist ether establishments? Another an-
de er of this gentleman, to which he wished to
' aw the attention of the House, was this :—He was asked
tri Ahe Was aware that in 1836 the Bank of Eeg-
,,,n," Was discounting at a higher rate than the Beek
;latcelaild. He stated he was not aware of the fact. This
is a the most extraordinary instance of total and complete
!pesenorance t er exhibited en the part of a person taking
t himself to inform others. He called the attention
of the House to this, because it was the opinion
the Comm:ttee that the Bank was giving too
inch accommodation, and keeping down the rate of dis
e(a1) t ; and yet this is the gentleman who takes upon
.141 self to tell the House what the strte of banking is. In
ere
twee to another question 'ne says the Bank have no right
`c write off as bad debts the protested bills, because he
cinsidered protested bills to be as good as ether bills, for
se,_at many gentl,nien of fortune let their hills be protested.
.I,.ne evidence of' a gentleman giving such testimony as
13,),.0,awt 5 not entitled to any very great weight. Well,
main . the real question they had to decide (for it was the
orwand practical queqion after all), was whether it wss
as not expedient to preserve the exclusive issue of
Batik paper, payable on demand, in the hands
of the Bank of Ireland in Dublin and the
metropolitan Circle
would now refer to
et idence connected' With tihee Bank of Ireland and eel.
ids
connected connected with theicopponeets. One of the points
ttnilocta
et pressedtrect u f Ilona,
inbivi
ttehdee,,Crnotreohi!tee Was, what would be
tleitron of issue in Dublin arid
the, metropolitan districts ?
(question• Pyrn was examined on
tilat subject, ;ad be was asked
s,,tef 490) '' What do
You think would have been the
ill Dublin in 1836, if all the various
I.a°nnk'mercial affairs
Ments, provincial, nations!, agricultural, analneg eistablih-
,, I
think their
had
Lad use of issue ?" The answar was, barreesments would have been considerala em-
reatly increased." Mr. Mahoney had increased,gee„Ysiiae,,i
'seece. Mr. Pym, in answer to question 600, had similar
nity" Ido not say the Bank of Ireland would suffer any diffi-
from having the Issue in Dubin. If everything be
IrePt within the proper limits the panics will not arise, but
the, great difficulty in cases of this kind is how to assign
t'"'Se titbits, and if sou have great establishments over every
Part of the country, aiid subject them to the competition
that mist arise in Dublin from all parties being so allowed
teells3" notes, the consequence would be, in times of
press
for, to increase the difficulties of the parties in Dublin."
I
answer to question 500, put by the Hon. Member
Dreferamseurth, the leafless stated that be should greatly
tinued seeing
the
n'unopoly of the Bank of' Ireland con.
note in Dublin, rather than throwing open the issue of
of
a 8 to all Paris of the country. That was the evidence
"trnan who was a backer in Dublin, unconnected
,thaenldlank of Ireland, and directly connected. with the
visa!
otir:za:. antalsonists of the Bank of Ireland in respect
_
Then
forkte re was one sword which he wished the
4 vlemb r. !alike '
so siee,ti.,n,
51_.
.r.ny to bear in mind. In answer
a the witness said he was not so much.
tnaftrhalidn;fnflroee trade in banking as he was of free trade in
ncY• He (the Chancellor of the Exchequer)
Ras not of free trade in bateking stay mole than the
would , 'and the plan which he was about to propose
give gre
421 it Was stated fret
d'-'m to lahrg Ti an,,wer to qu . silos.,
'd that the ternptatien to over issue would be

greatly increased by their all haring establishments ii,
Dublin. As far the evidence of Mr. Pym merit, he war
distin •tly of opinion that it would be dangerous to have
unrestricted competition in Dublin. But there was the
evidence of Mr. Needham, who was connected with the
Royal Bank of Ireland, which, although not an issuin
bank, was a bank receiving profits and doing all other
business. In question 1,674, Mr. Needham was asked
whether, supposing in October all the Joint. stock Banks
had exercised the privilege of issuing notes in Dublin, the
pressure on the metropolis would have been greater than
when it occurred, and he replied that his conception was
that it would have been much greater, and in answer sir
qnestion 1,684 he said, the Royal Bsnk would not consider it
desirable to avail themselves of the privilege of issue, even
if they had it. There was the teatimonv of another witness
to which he wished to advert, that of Mr. Marshall, the
Secretary to the Provincial Bank of Ireland. In question
4,466, he was asked if the Joint-stock Batiks of Ireland had
been authorised by law; to issue notes in Dublin, would the
commercial pressure have been greater or less that, it was ?
His answer was, that the pressure on some of the banks
would have been grea'er. Then how stood the case.
They had had the trial in the time of pressure, under the
existing state of the law, and it appeared in evidence that
the pressure at that time would have been infinitely greater
than it was, and that if they were now to open th
trade in banking within the metropolitan circle, the
pressure would be augmented if they were to believe
the evidence of those practical men who were conversant
with banking in all its details. Perhaps Gentlemen would.
say that no panic would arise—that no difficulties could
hereafter exist but an inconvenience would be felt
when there was any disturbance in the monetary system.
What was that inconvenience? Want of accommodation.
Now how stood the case? It was in evidence within the
Dublin and Metropolitan district the rate of money, the
banking accommodation, was lower and cheaper than in
the provinces with all the competition of these different
banks. But it did not merely rest there. Private banks
had now a full power to issue. 'They were in high fame,
and there was not one in higher fame than that of La-
touche and Co. The Bank of Ball and Co., was also in higt
tared t. Did they issue paper ? They both formerly did,
and that of Ball and Co. to a considerable extent. But
the batik of Latouche and Co. had discontinued the
issuing of paper. Why? If the monopoly of the Bank
of Ireland made the issue of paper in that circle profitable
to the issuer, these private banks being unrestricted by
law, and having the privilege, o far from having given
up that portion of busineaa, would have continued and ex
tended it ; but they had given up that trade. It was stated
by the Governor of the Lank of Ireland that there was a
lower rate of discount charged in Dublin than in the pro-
vinces. The argument was, that the monopoly is injurious
to the public, and that the public paid more for their ac-
commodation. If the public were sufferers, the pr ice would
be found greater where there was monopoly than where
there was competition, but he had shown the contrary to he
the case. In answer to question 1,420, it was admitted than
the exclusive privileges of the 13ank of Ireland, had no
effect in limiting the rates of discount on the people of
Dublin, and the answer to question 1,676 stated that the
accommodation of other banks w,s greater than that of the
Bank of Ireland. If so, it was clear the Bank of Ireland
could enjoy no monopoly ; it showed that the pubic were
not now sustaining any loss by reason of the exclusive pri-
vilegea of the Batik of Ireland. But he should take the
liberty of showing to the House the great and imminent
danger that would arise if an unlimited competition were
allowed. Having been for ten years practically conversant
with the management of the first of these Joint-stock Banks,
he was convinced there could not be a greater peril in-
troduced into the money concerns of the country than the
abrogation of the privileges of the Bank of Ireland, and
the allowance of an unlimited circulation in the issue of
notes. The Bank of Ireland was somewhat peculiar. I
was carried on through the medium of Joint-stock Banks,
having a great many branches. He took on himself to say
with s me confidence, that in order to preserve in safety so
large a district of branch banking it was absolutely neces-
sary, with a view to the safety of these branch banks them-
selves, that there should be within the central station of
Dublin an agent on the part of these banks, whose duty
should be limited to the rersulatian of these banks. trans
'erring gold from the bank where there was an excess to
that where it was wanted, negociating securities, etc. These
great
branches in Dublin had a house of business, and in-
spectors, who passed from branch to branch, receiving re-
gular reports from the branches, and supplying money-
where there was a deficiency. But if. instead of having
that central point of rest from whence they could inspees
and govern these banks, they were subject to a demand ter
a large issue within the metropolitan district, it was im-
possible to conceive that their tra-sa.ctions would be car-
ried on with any safety. It would be utterly impossible
for them to make provision at once for the whole of
their metropolitan circulation, and also to make provision,
for the supply of such of their branches as might be dis.
disturbed. Therefore he thought it would be perfectly
inconsistent with the existing system of banking in Ireland
if they were to allow this indiscriminate and uncontrolled
issue. If the Bank with which for several years
he had been connected, had had the power of issuing paper
in the metropolitan district, the very instant that such a
reckless—such a daring—and such a prejudiei4i course was
resorted to, he should have felt no safety for that branch,
which now enjoyed perfect credit in Ireland. Mr. Pym, in
answer to question 370, said the difficulties of managing
banks were increased by the number of batiks, and the
difficulties were not in a mere numerical ratio, but in a
much higher proportion, and that now the branch will
which he was connected, if they had not had an agency
in Dublin to look after their affairs, he did not believe
they would have.been able to meet their engagements un-
assisted in the satisfactory manner they did. He had en-
deavoured to show first, that the principles of free
trade did not apply in this case.—( Hear, hear.)
He had endeavoured to shrew that in times of panic
the difficulty would be very much increased if there
was a competition of issue in Dublin and the metropolitan
district—he had endeavoured to show, on the best evi-
dence, that it would be inconsistent with the present system
of banking in Ireland, and the witnesses to whom be had
referred were unconnected with the Bank of Ireland, and
many of them opposed to it. He called upon the House,
therefore, to continue, for a time to be limited, and under
provisions which he should explain to the Honse, the
monopoly or privilege of issue to the Bank of Ireland.
The Bank of Ireland paper had never been the subject of
discredit.

Mr. HOME—They suspended cash payments.
The CHANCELLOR of the EXCHEQUER—Tbe
Hon. Member for Kilkenny said that the Bank of Ireland
had suspended cash payments, but they were compelled
o do so by the British Minister, not requiring it for their
own protection. But passing this by, from the time of the
restriction of cash payments there never had been an in-
stance known in which the paper of the Book of Ireland
had been subject to discredit, and as a proof of that, in
1836 when the pressure was most severe on the other
banks, and when they had to obtain a million and a hdf of
specie from this country, the Batik-of Ireland ens only re-
qtered to pay 20;0001. in exchange for their own paper,
and that at a time when they supplied 200 0001, is sove-
reigns to other banks. He would now proceed to state to
the House the nature of the alteration which he proposed
to make in the government of the Bank, and he had not
felt at liberty to make any engagement with the
Bank of Ireland, but he left the subject entirely free
till he had submitted it to Parliament, and therefore
in the Bill which he should introduce in place of reciting
an agreement already made with the Bank of Ireland,
he should leave a blank fur the insertion of that matter,
and it could only be brought under the consideration of the
Directors after the House feel decided ,in the proposition.
In the first instance the time of the agreement which he
proposed, was of some importance. He proposed to make
the agreement with the Bai.k of Ireland terminate at the
same period as that of the Bank of England. and
strictly dependent on the same conditions. When-
ever the whole banking question seas open for
consideration, he should be ready to geve his atten
tion to the question of a Central Bank of Issue, restricted
within the bruits of the law as to its action upon the cir-
' eulation of the exchanges On this qiiestion, which was
one of the most important that could be considered, he
was not now expressing an opinion, but supposing that
the House should b, called oil in 1644 to affirm any
opinion on that subject,. it would be unwise to tie up the
hands of Pesti- .ne-. with respect to the Bank of Ireland,
and not apply the pritntiple adopted in England, with
regard to the monetary system to Ireland. He therefore
proposed to make the period of the contract with the Bank
of Ireland precisely the same. Then as to the limits within
which he proposed to continue the Bank of Ireland privilege,
Upon this subject he was aware he should have the 'mis-
fortune of (tiff:ring from many of his friends, as well as of
his political opponents. He made his proposition with
this knowledge of the facts, which was a proof that he
made it in sincerity, and that it would have been more
agreeable if hr, could have acceded to the strongly ex pressed
wishes of limiting the Institution. But believing{ that not
the interests of the Government only, but the inte-
rests of the whele commercial community--the in.
terssts of every existing bank, were completely in-
volved in this question—at the hazard of any opposi.
don, at the hazard of any misapprehension, at the
hazard of any loss, of support with which he might be
threatened, he would make that proposition which be be-
lieved to be the right one, and abide all the chauces. He
therefore was not prepared to propose any alteration in the
circle within which the monopoly of issue now existed,
and he would tell the House why he would not do so. He
assumed that the exclusive issue in the metropolis was ab-
solu'ely necessary for the well- being Of the circulation of
Dublin. If he was to keep that up he must have a circle
about the metropolis. He knew no alteration would give
satistaction unless it involved the addition of the town of
Drogheda. Now let him explain the effect of that. He
was not arguing with those eho contended for free trade
in banking—he could not convince them—but to those
who thought that there should be an exclusive issue of notes
in Dublin, and yet thought that if it could be accom-
plished there should be a free trade in making money at a
place, such as Du:Lida fur instance--he would say this.
Drogheda was twenty-five or twenty-six miles from Dish-
lila To allow a great Joint-stock Batik al Drogheda
and yet to presume contereporeneously an exclusive eireu-
tation in Dublin, was impossible. He would say nothing
about railroads, and the coesequent shortening of the dis-
tance between time two places, he felt that he had no right
to resort to contingencies—he took things as they were_
and he would say that, in the state of things he had men-
tiened, there was nothing to-prevent a merchant or trader
in Dublin going to the Provincial Bank or National Bank
at Drogheda, obtaining on security 50,0001. promissory
notes, of that bank, returning to Dublin, and issuing these
notes, and thereby breakieg in upon the monopoly. There..
pf::eirt (";urnhalkibneg miionnplemssible to preserve the exclusive
circulation in the metropolis, if there was an unlimited
distant from at a ml ice less than thirty miles
.ID)e
cu
Dublin._
nta w:y" att (so" r Hear,md iffss. eeocuftst'sreeh rtO.
arrangement,
aas
Hn'neemnoewnt,prwoiclitesehdehdo
proposedthis
t o
scary
t'ufloornm. e
Friendo ecas
ion,
Member for Kilkenny had the
reproached him with the
amount of the money which the Bank of Ire-
land received from the public. Hear.) What they
did receive from the public was as follows:—Oe a capital
cf 1 0150001. the public paid five per cent. On a capital
of 1.615,0001, the public paid four cent. On a :urn or,