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

been so common in Ireland, anl to which t here c u'd be l bank." arr. Gassatt, who was connected with the
no greater incitement than allowing the unlimited opera- Northern Central Bank, in reference to the same point,
tion of making paper money.—( Cries of " Hear, hear.") says—" The notes would soon find their way back to the
That Was what he called anon them to limit ; he called bank, instead of being circulated among the community :"
upon them to step is as the guardians of the traders of and Mr. Samuel Gurney ohserved—" Jlv belief is that
Ireland, and to do that which would be most conducive over issues could be • ffocted by any cfrart of
to a sound system of banking. When he showed the the country banks." So he (Mr. H.) said, except by
House what had arisen in consequence of competition such great monopolies as the Banks of England or Ire-
in banking in Ireland, and when he showed them that its land. And again—" Might not an over-issue of notes of
effect would be to displace notes that had never yet been " the Bank of England be very easily effected by the pur.
questioned, and that it would shake banks which the public' chase of public securities ? Answer—lt is easy, certainly ;
had hitherto had great c ,nfidence in—when he showed and the result would be an excess for a time, a reduction
that it was calculated to promote over trading, he thought of interest, and an increase of prices, until the excess was
the House would hesitate before it adopted any plan that restrained." That was what the Banks of England and
would have such an effect. He believed that he had now I•eland had done, and speculation ant over-trading went
concluded the observations that it was necessary for him on, until the only test of an excess compelled the Bank to
to make. He was conscious that he had made them most give in. That was the course which the Right Honourable
imperfectly—( Hear)—and though he was aware that the Gentleman set up against the whole people of Ireland.
resolutions he had proposed were unpopular, still he had He thought he ought to be allowi.d to mention a cir-
felt it to be his duty to bring them forward. Thank- cumatanco connected with the question of monopoly.
ing the House for the indulgence they had granted to him, It was the correspondence which took place between Lord.
he would conclude by moving his resolutions, which were Liverpool and the Bank of England in 1826, when the
to the elf-ct that it was expedient to continue for a limited monopoly was found to be se stringent and injurious, that
period to the Governor and Company of the Bank of Ire• it was thought necessary to relax it. He believed he was
land certain privileges which they now possessed, subject correct in saying that up to 1824 the Bank of Ireland was
to such conditions as might be provided in any Act to be the sole bank of issue. For forty years it had the entire
passed in the present Session. And also that the Go. monopoly in Ireland, and did not extend its branches into
vernor and Company of the Bank of Ireland should be en- other parts of the country. When the bank pressed for
titled, for all Exchequer Bilis, not exceeding 900,000/ , a continuance of its monopoly, Lord Liverpool said—
to interest at the rate of three per cent., until those Ex- " With respect to the continuance of your privileges, it is
chequer Bills were cancelled, obvious that after the discussions that have taken place,
Mr. HUM E was anxious to address himself to the sub- Parliament will never agree to it. Such privileges are out
ject generally which had been brought before the House of fashion ; and what expectation, under the circum-
by the Right Hon. Gentleman. He must confess he had not stances, can the Bank entertain that theirs should be
heard anything from him that had at all affected his judg- renewed ?'' It was a great loss that Lord Liverpool
ment as: to the propriety ofeagreeing to elle first resolution. did not live to carry out his plans, for he thought that
He considered the present subject as one not only of great renewal had been a great national misfortune. He merely
importance to the people of Ireland, but to the people of mentioned that correspondence to show what the intentions
England.—( Hear, hear.) And what he complained of of Lord Liverpool and the Government were—to show
was, that a subject of such inegraitude, and involving such that they considered it a monopole, and that they had no
extensive interests, after an inquiry for three years, was intention of renevving it. I: was clear that they had com-
brought forward at so late a period of the Session. He mitted a serious evil in reneeing the monopoly of the
thought it was the paramount duty of the Government to Bank of England, and he hoped they would not commit a
have taken steps loeg before this to have brought the second one by renewing that of the Brink of Ireland. The
matter before the House.—( Hear, hear.) When the Right Hon. Gentleman had then referred to the question
Government had so important a duty to perform, and of the expediency, but he had not brought forward a single
when it was admitted that it was essentially necessary fact to prove the expediency of renewing that charter.
that the system of banking should be put on a proper He had also referred to the excess of amount of capital
footing, he considered they were greatly to blame fur al. in the Scotch banks, but it appeared by the returns
lowing such a subject to remain so long in doubt and un that in the twelve great barks of Scotland, paid-up capi-
certainty. With respect to the Joint-stock Banks, he tal was only 8.300,000/., while the deposits in these banks
thought they had great ground of complaint against the amounted to 17.000,000/. These banks were not, there-
Government for the dilatory manner in which they had fore, rich in capital, but they were rich in the confidence
proceeded. He never recollected such inattention of the public. Many of them had only paid up 10 or 12
on the part of a Government, as had been shown per cent., but their deposits were so large that they
by the present, to Joint-stock Banks—fur it was had a great command el money. All that had arisen from
not until after three letters had been written that their experience and their prudence in the management of
the Committee on the subject obtained an inter- these concerns, and the checks which one bank had against
view with Lord Melbourne. With respect to the the other, by settling twice a week, so that if any bank
Bank of Ireland he ( Mr. II ) would be enabled to show issued an excess it would be returned upon it again.
that the Chancellor of the Exchequer had sustained* great He therefore protested against the doctrine that they were
loss by allowing the question with respect to it to have to judge of what would take place in Dublin, if the mo-
been delayed so long. The Right Hon. Gentleman had in yoly of the Bank was removed by any thing that had
stated there were four different systems of banking in Ire- taken place before. He considered the Bank of Ireland
land. One was the same as in London, where there was had led to all these ups and downs which the Chancellor
one law which extended sixty miles, in which district the of the Exceequer had referred to. There ought to be a
B ark of England had an exclusive issue, but there was free trade system adopted as in Scotland ; there they had
another beyond that distance by which Joint-stuck Banks nothing to do with the Exchanges, and if Ireland was
might issue, but then riot being under the necessity of placed in the same situation, he was perfectly satisfied the
paying in suede but in Bank of England notes, led to same results would take place. Why should any man in
many of the great evils that had taken. place. In Scotland Dublin, who wanted to send money to the provinces, be
the case was different, there was a free system, but prevented from doing so by a bill or a cheque? Ireland
there was no depreciation of the standard, that free had been dealt very harahly- with in this respect. It was
system bad led to additional confidence on the part of said Ireland wanted capital, and yet the whole banking
the people, but he was prepared to show, notwithstand- system adopted in Ireland had been to exclude capital.
inter the statements of the Right Hon. Gentleman, that He understood that no Bank could be conducted better
that confidence was not the effect of capital, but the than the Northern Bark was—the shares were high, as
adoption of that system which he was anxious to confer were also those of the Provincial Bank; and when
Orion Ireland, Through the whole speech of the Right they saw the profits were considerable that that arose
Hon. Gentleman he had not stated any reason why that from good mrnagement, and that the people in the pro-
system, which had been adopt-d so beneficially in Scot- vinces had confidence in them, he did not see why the
land should not be equally so in Ireland. It was true same system should not be adopted within that magical
that the medium of this value of property in the three circle round Dublin which the Chancellor of the Excise-
countries was different, but to that the liaght Honour- quer had created. The Right Hon. the Chancellor of the
able Gentleman had not directed his alteration. He (Mr. Exchequer, then said he would show the expediency of
H. )considered the distress and the misery of the country te; continuing that reonopoly. He (Mr. flume) had listened
have been cause-I entirely by the unsound monetary system attentively to the melancholy detail of the Chancellor of
that a' present existed. The Bank of England had been the Exchequer, of what had taken place on a former occa-
the disturbing cause in this country, and he should be able sion, but every one of the Right Hon. Gentleman's facts
to show that the Bank of Ireland had acted in a similar appeared to be totally inapplicable to his reasoning. As
manner in that country, and therefore it was that he was to what had taken place in 1836, he submitted those cir. desirous of seeing its faults removed. What a different cumstances had been owing to the badness of the system.
picture France presented. In that country, where the cur- They did not exist in Scotland, and they only existed in
rency was substantially metallic, there had been no com- England and Ireland, because the Bank of England and
plaints, nor any desire of change; it was therefore impos- the Bank of Ireland had a monopoly, which prevented that
,able not to come to the conclusion, where so many corn- precaution which would be taken if the circulation was
plaints existed, that the system was faulty ; and it tested by that test which was unerring. The Right Hon.
w act rid of suck a system that he was anxious to Gentleman had found fault with the evidence of Mr.
bring the subject forward. He Had always been an Callaghan, in statieg what the Bank of Ireland ought to do.
advocate for free trade in banking, and being so he was If he ( Mr. Hume) had been examined before that Committee,
the more anxious to maintain a metallic standard, because he would have stated in still stronger language the devia-
he believed the country would be far better off if it existed tion the Bank of Ireland had made (as the Bank of Eng.
than it was at present, particularly the working classes. land had) from the rules of banking. The mey they
It was to remove the anomalies that existed in the Bank had to deal with, 7,000,000/., depended on
the issue of
of Ireland, the Charter of that establishment acing now paper and deposits, and Mr. Callaghan had stated what
nearly out, that he thought it was necessary to adopt some was perfectly correct, that a banker who had assets or secu-
course of putting an end to the four systems of banking in rities for circulation ought not to lock up his money in
Ireland, and placing them upon a clear and plain footing. Government securities. It was proved that Government
The Right Hon. Gentleman in proposing to continue the securities were the worst securities—they were not avail-
present system had stated that he would prove its neces- able securities, and it was proved by Air. Gurney and others
sity. He (Mr. H.) expected that in making that assertion that in 1835 commercial bills were better resources than
the Right Hon. Gentleman would have given the House Government securities. The Bank of Ireland at this
some reasons to induce it to believe in its necessity, but moment had public securities to the amount of 3,500,0001
he (Mr. H.) had not heard not heard a single argument —private securities to the amount of 3,500,000/. and
from the Right Hon. Gentlemen in that respect. The 887,000/, in bullion, ready to answer calls. The Right
Right Hon. Gentleman had proceeded upon a principle Hon. Gentleman had stated that he had an objection to a
which he was anxious to meet. He had said that there free trade in paper, but that he did not object to a free
could not be any over-issues that would be injurious, trade in coin. He (Mr. Hume) contended that as long as
because if there was an over issue in times of embarrass- the paper could be convertible into gold.on demand it ought
ment, they would be remedied in times of plenty. to be held as equivalent. Paper had certainly only a local
Ho could not agree with him in that argument. value, but that local value was equal to gold. The note was
In looking over the proceedings of the Bank of Ireland, equal to gold for every local purpose and every national
he found they had not been so steady as they ought to purpose ' • and unless the Right Hon. Gentleman could get
have been, and from the Report it appeared that the rid of that proposition, the whole of his argument fell to
amount of deposits and securities had very much varied. the ground. If they removed the monopoly altogether,
In 1805, it was four millions, and during the great issues then they might remove the evil; and why should this
fn 1825 it was nine millions, and they never brought the plague spot be continued in Ireland? for it was a plague
amount below 6,600,000/,, which they were in 1836. spot, as it interfered with capital, and prevented fair ex-
What was it which the Right Hon. Gentleman said en- change, and thus injured the whole community. If Joint-
titled the Bank of Leland to the confidence of the üblie? stock Banks could be trusted to issue money in England
Because they were able to pay their notes in bullion, and and Ireland beyond the limit of sixty miles of the metro-
stand a crisis. He (Mr. H.) would however assert, that polis, it remained to be proved why they should not share
the crises in Ireland were occasioned by the limited and the power of doing so within it, He hoped the Right
injudicious conduct of the Bank of Ireland ; and as to Hon. Gentleman would not succeed in carrying his reso-
vatßhe:teintenitnrke,adioetftidiciEntsodniitgnillilgdeaimriid.:tal:lN.ie.hooysnwta,temolefntl.:_bullion and assets of the lotion, but that the House would, on the contrary, declare
if the Right Hon. Gentleman road Ireland was entitled to the same justice as Scotland. He
the evidence of Mr. Wilson he would learn that they never would now make one or two observations on the plan.
toe Right lion. Gentleman He thought the Right Hon. Gentlemen had not acted
against Mr. Callaghan for not wisely ; he ought to have come forward in January, 1838,
knowing that, he should recollect that the president of his when the 31- per cents, were above par. lie might have
ownse bank
idid int know that the Bank of England had funded three millions, and paid the Bank its capital, which
not kw
raid its nterest...se( Mr, Cecon„li_o No, but he did the Bank might have made use of for commercial pur-
nor any
i thing ago, C
American connection.) poses. The Bank did not give any thing like the assistance
Mr. W ilson, n his evidence stated —" It is not usual for to the country which it ought to do. The Bullion Corn-
the Bank of England to communicate with us, unless we mittee of 1839 had stated the Bank of England could not
particularly require it." He had shown them that in resume its payments, or cmduct its affairs properly, till the
1836, when the pressure took place, the Bank of Ireland money owed by the Government was repaid ; and one quer.
had three millions and a halt of notes in circulation. ter was then paid hack ; and he submitted that capital of
Their deposits were 2.800,000/, and they had only the Irish Bank ought not to be retained, but should be
587,0001 in bullion to meet the demand. W3S that the paid back. Well regard to the question of profits, he
proportion in which they were advised to keep the bullion considered the country had been ill treated in having been
in the Bank? It was found that from 1833, they began made to pay an extrt one per cent.--(Hear, been.,
to reduce the bullion—in that year it was 900,0001 , hear.) When the Charter of the Bank of Ireland
in the following year it was 778.000/., and in the expired they might have obtained money at three
year of the pressure it was 887,000/. So much per cent., but they have paid 30,000/. more than they need
for their being prepared with gold to sustain their credit, have done. As to the reduction that appeared to him to
He would now tell the House what the Bank of Ireland be really trifling; the people of Irelana bad been too long
had done when the difficulties arose. They sent to Eng kept under the thraldom of the monopoly, and he did hope
land for 400.0001, and what did the other Banks? They the House would give them the same facilities in regard to
sent for 900,000/ Did not the other banks, therefore, commercial transactions which the people of Scotland had,
equally maintain their credit with the Bank of I. eland, and would abolish the exclusive privileges of the Bank of
while they afforded much greater facilities to the commer- Ireland. He should therefore move as an amendment, on
(dal public. Could the Right Hon. Gent. forget that th, ahich he should certainly take the sense of the House—
Bank of Ireland had even refused to take Bank of Eng. " That it is the opinion of this Committee that the exclu-
land notes? they refused to take Bills of the best class, sive privileges enjoyed by the Bask of Ireland shall cease
and it would appear further, if the evidence was referred as soon as the notice required by law can be given."
to, that the amount of discounts and accommodation had The question having been put,
been Increased. It appeared that in 1808 more bills Mr. CLAY rose and said, he did not think the
were discounted by tie bank, and greater accommo- Honourable Member for Kilkenny had made out sufficient
dation given titan in 1836. On the contrary, grounds either with reference to the peculiar circumstances
eo complaints were made with regard to the of Ireland, or with reference to the general principles
ether banks that parties did not receive the aiFist. which aught to regulate our momentary system, to induce
ance they required. He came now to the 'question. Could he House to agree to his amendment. Wids regard to
there be an over issue of paper—coUld there be in a free the peculiar condition of Ireland, as bearing on this ques-
trade in banking, like that existing in Scotland, any one Lion, he did not think it necessary to trouble the Corn-
bank issuing more paper titan the circumstances of the coup- anittee with more than one or two observations, first, because
try required ? The Right Hon. Gent, said a person might ea: Right lion. Friend the Ctiancelloa of the Exchequer hart
go to Drogheda and draw out 50.0e0/ in notes and circa• gone into that at great length ; and, secondly, because in
late them in Dublin, so he (Mr. En ire) might say that truth it was now reduced to a question, purely of princi.
he could draw out 50,000/. in Aberdeen and circulate plc, for this reason, that by the plan proposed by
them in Edinburgh, but in a few days they would be nis Right Honourable Friend the exclusive privilege
returned to the Bank at Aberdcem if the cis cumstances of the proposed to be granted to the Bank of Ireland,
country did not require them. There was no role by would determine in 1844, at the same time that
which it could he said what quantity of notes might be the exclusive privilege enjoyed by the Bank of Eng-
required—the state of commerce might require a larger or land would determine, if the Legislature should so decide.
a smaller quantity, but if these notes were exchangeable The question therefore was as between what the 1-1,41.
into bullion, no bank could keep out a larger q. antity than Member for Kilkenny called a free trade in banking (a
the circumstances of the trade and commerce required ; free trade, as he explained it, in the issue of notes) and
and it was only by having a large monopolising establish. the best system of control which it was possible for the
ment, like the Bask of England or of Ireland, that such a wisdom of Parliament to devise. The question was be-
state of things could exist. He coukl state a variety of tween those two systems. As regarded the present condi-
instances, as regarded Scotland, in which a bank having don of Ireland, he would only make two observations; the
issued more notes than was necessary, in the course of a first was, that there was no evidence before the Committee
very few weeks the whole was returned, as they were for which he had originally moved, and on which he wee a
obliged to pay the balance in bullion, much to their incon. constant attendant, to show there was any want of fair
venience. So it would be in England and Ireland ; and banking accommodation in Dublin to persons worthy to
it was because the system was fairly tried in Ireland that receive it. Again, with regard to any pernicious influence
he was anxious the present monopoly should be done occasioned by the monopoly of the Bank of Ireland within
away with. The Right Hon. Gentleman said that they the circle of fifty miles, the town of Drogheda had
were not to judge Ireland by the case of Scotland. Cer- been alluded to. It had been said that Drogheda
slayercompare the state of freemen and was excluded from the benefit of free trade in banking en-
Mr. O'Connell.) In Scotland the joyed by other tows. Had the town of Drogheda suffered
t ra l not( Hoed c , , tflri,e;my
banking system was perfectly free, whilein Ireland it wascom- by that deprivation? He held in his hand a report of a
pletely cramped and interfered with, and the issues for alarge meeting held in Drogheda on the Thursday of last week.
portion of the country were a monopoly in the hands of One of the speakers said that in Drogheda a national en-
one establishment, He contended that under a free sys- terprise had shown itself, and they had proof of what it
tern in •Ireland over issues would not take place, and he could do; several flax and cotton mills had been built,
would refer to the evidence of Mr. Horsley Palmer, on sonic by private enterprise and others by subscriptions.
that subject. In question 370 he was asked—" nave you But the question was, what Was the best monetary sys_
any idea that bankers can maintain a larger circulation in tem, and the Hon. Member for Kilkenny had made it so,
their districts than the wants of the country require? because he had stated in terms singularly forcible and clear
Ansaver_No. Explain what you mean by over issues? that in a system of free trade in banking there could be no
Answer—Over issue means an excess of prices, having over issue of paper. He had further said that if notes be
reference to the prices of other countries. A banker can exchangeable at the will of the owner for bullion, there
only issue legitimately upon a demand, and that demand could never be an excess, and his Honourable Friend
arises upon the prices of the country, and tliese prices may bad upon that referred to the evidence of Mr.
be above their relative value as compared with foreign Gurney, and mentioned the case of Scotland.—( Hear.)
countries, and in such a case an over issue may exist. The instance adduced by Mr. Gurney showed the advan-
Question_By what test do you measure that an cage of the present system. The reason why there could
over issue has taken place ? Answer—By the not be any great excess in Joint-stock Banks for a length
foreign exchanges being against
( Hear, hear, of time was, that their notes must he liquidated on the
theiou Bs
hear.) Hr.contendedll.) that would not occur, if currency of the Bank of England. There might be over
earnekturones e (M_E„wghlaantdherareiaotritthbey ptohawter
was,o
of giving fella. issues of the Bank of England, but it was only foreign ex-
giving the changes which Would cheek that issue.—( Hear, hear.)
average every three months, which he maintained was not But his lion. Friend had referred to Scotland, and it was
a fair test. suppose, for instance, he took the average of the only instance which could be given in defence of a
the month of May at six millions, the month of June at system of free trade in paper. This had always been felt
four millions, and the month of July none, the average of Itobe a gteat anomaly, not reduceable to any rules. The
the three months would he 3.300,000/., which would be f success of the Scotch hauling system might be adduced
a most fallacious one. me, Gibbons, in question 1,264, is as a proof of the excellence of any one system. There
awsokueldd—b;
tsheupepoonsseethe issues were carried. to excess, what were banks with four or five partners, there were banks
consequence ?—They would return upon the i with many partners, there were banks with limited lia-