The Sun.
London, England, 1836-05-13 00:00:00

StN, -LON DON, Pni DAY, iNiA_Y ig,

Mr. A. Baring said—" If persons had been allowed to
combine, on condition of depositing their capital, and of
limiting their responsibility to that capital, plenty of in-
dividuals would have been found ready to engage in such
nssociations. Landed gentlemen would put down their
6,000/., 10,000/, or 20,0001., as might be convenient, and
banks would then be formed all over the country on the
best ptineiples ; solid establishments would be created, with
which prudent men with families would be very willing to
tonnett themselves." In the same debate Mr. Huskisson-
gatd " lie allowed it would be a great improvement if, under
a proper system, charter banks were established, with only
a limited liability. It would, no doubt, induce many per-
sbni! dr great credit and fortune to invest their money in
shares in such banks. But the Bank objected to the ex-
tension of this limited liability." I have only further to
state why I determined in bringing under the consideration
of the House the propriety of an alteration of the existing
law, to move for the appointment of a Select Committee,
rather than for leave to bring in a Bill for that purpose. I
was, Sir, first induced by the belief that by a Select Com-
mittee important evidence might be collected, and placed on
record, illustrating the defects in our present system. I
was yet more strongly induced, I can assure the House, by
an unaffected anxiety to have the assistance of a Committee,
in devising a measure on a subject of such vast importance,.
and with respect to which, although it has long occupied my
laborious consideration, I could not but be conscious I
might have failed to advert to many important considera-
tions. The opinion that some alteration of the laws are
necessary is, if I may judge from the communications I
have received, all but universal ; but opinion, both without
and perhaps within these walls, is much divided as to what
may be the most expedient alteration. The labours of a
Committee may usefully guide us in a path yet new to us
in legislation.

The CHANCELLOR of the EXCHEQUER said
• that it was his intention to express his concurrence in the
motion of his Hon. Friend for the appointment of a Corn-
mittee.--(Cheers.) Neither the public nor himself had
any right to complain of the manner in which his Hon.
Friend had brought forward his motion. His Hon. Friend
' had said or done nothing to excite alarm ; and if he (the
Chancellor of the Exchequer) thought that the effect of
the motion would be to throw any discredit upon commer-
cial transactions or speculations throughout the country he
should not have concurred in it. He thought there was
enough pointed out by his Hon. Friend to induce an ac-
quiescence in the motion, and at the same time to avoid
creating public distrust. His Hon. Friend had pointed out
many inconveniences, risks, and responsibilities that were
well deservinc, of a strict inquiry. With respect to the
danger which his Hon. Friend seemed to apprehend from
joint-stock companies, he confessed that he did not join in
those fears. All parties should be at liberty, in a great com- •
mercial country like this, to exercise their own reason in the
laying out and partition of their own property. The ques-
tion on the present occasion was, what effect the joint-stock
system of banking was likely to have on the public in-
terests, and not how it might operate against or for indivi-
dual benefit. This he thought was a just ground for Parlia-
ment to institute an inquiry into. Within a few years Par-
liament had passed new laws respecting banking, which
were now in operation in many parts of the country, and
he would say that with respect to those laws or any other
laws of an experimental kind, as those were, it was a fair
subject of inquiry, what had been the result of the experi-
ment, had the laws been beneficial in their operation, did
they require amendments, and if they did, what that amend-
ment should be ? These were proper subjects of inquiry,
and if such an inquiry was the object of his Hon. Friend,
he, for one, did not hesitate to concur in it. This inquiry
would perhaps be looked upon as the more necessary on ac-
count of the large investments that were seen to be made
daily in joint-stock companies ; but he would caution the
House even in this view against the vice, or rather the er-
ror, into which popular assemblies were apt to fall, of
making frequent changes in these laws, thereby depriving
them, from year to year, of that stability which was neces-
sary to their fair operation. In 1826 he perfectly recol-
lected the cry was that all the distress and misery which
was then produced was attributed to the want of joint-
stock companies—(Hear, hear)—and that the system of
private banking that then prevailed was responsible for
all the evils of the day, and that joint-stock compa-
nies alone was the only safe system. He hoped they
would not now be betrayed into the opposite extreme.
His own opinion of joint-stock companies was, that
they were one of the greatest improvements that had been
introduced in modern years. He looked upon them as the
element of all successful enterprise—(Hear, hear)—and,
above all others, as applied to banking. A case of abuse in
this system, or in any other, however perfect, might occur ;
but that would be no argument against the principle itself.
The reason for his agreeing to the present Itotiob was, that
Joint Stock Companies wore extending not only to the
Banking s, stem, but to many other objects for which he
considered them as totally inapplicable ; and the House
had a right to see that in these cases, and even as regarded
Banks, there was not springing up under colour of a whole-
some system of Banking a set of mere bubble Companies
where there was no real capital. It was a fit consideration,
therefore, whether or no the present state of the law was
good ? He was quite sure it would be a delusion if it were
for a moment supposed that agreeing with this motion
could in the least degree affect credit. His Hon. Friend
(lid not mean that it should have that effect in,proposing it,
an4l he (the Chancellor of the Exchequer) had no such mean-
ing in agreeing to it. If the House should agree to go into the
Committee he thought the most prudent course would be not
to express an opinion upon any particular Company more
than another. He had turned his attention a good deal to the
subject ; but if the motion was not resisted, he thought a
debate on it at present had better be avoided, as it would
be opening the whole question, might do mischief, and
could tend to no good. On this ground he should not go
into the principles laid down by his Hon. Friend, from many
of whose doctrines he widely differed, and while he ac-
quiesced in some he must be understood as not agreeing
to all. His object was to remedy as far as was possible
the inconveniences which his Hon. Friend had pointed out,
without at all touching the principle. He should now
say one word as to the course which the Government in-
tended to pursue on this occasion. He would take the li-
berty of saying that such an inquiry as this should not be
left in the hands of any private individual.—(Hear, hear.)
It should be in the hands of the responsible Government
of the country. There was much information to be ac-
quired, which should not be rashly called for or divulged--
which should only be confidentially communicated, and the
results alone be made known to the public. In 189.6, the
Right Hon. Baronet the Member for Tamworth obtained a
committee which was to inquire into the private transac-
tions of private banks, and therefore it was necessary that it
should be in the hands of the Government. To this propo-
sition he believed his Hon. Friend would not object.
In conclusion he should only saY that he hoped and be-
lieved that those who were interested in the inquiry as
bankers would see that, so far from the inquiry being de-
signed or calculated to excite their jealousy or suspicion, it
would be the best means of affording the opportunity of
proving the solvency of the system, and the prudence,
honour, and discretion, with which it was conducted.

They. would not, he hoped, view the inquiry with suspicion,
distrust, or alarm, but would readily furnish all the informa-
tion that ought fairly to be required at their bands. He
was of opinion that the same discretion should be used in
the present inquiry as in that which had taken place with
the Bank charter, and he would, therefore, suggest that
the committee be a select and secret committee of fifteen.

t would of course be open to all the Merraers of the

House, but it would not be expedient to have it entirely
open. It must be altogether needless to divulge mat-
ters that were entirely of a private nature. Suppose one
prticular bank was charged with imprudence iu the ma-
nagement of its affairs, would it not be extremely

unfair to let such a charge go abroad without hearing
:vhat the bank in question had to say in extenuation or de-
ram ? O❑ these grounds he should propose that the

committee be a secret one. He should name the committee
to-morrow, and such other arrangements as would insure
the production of all necessary evidence for the develope
ment of truth and facts. The inquiry ought to be a practi-
cal one,. with a view to the amendment of the law, and
with that object alone he should proceed.—(Cheers.)
Mr. O'CONNELI said that if the motion rested solely
on the arguments of the Hon. Member who h id brought it
fbrivard, he should have felt it his duty to divi.le the House
against it. He had never heard fewer principles laid down
to govern a committee upon any important subject than in
the speech of the Hon. Gentleman. He was ready, how-
ever, to agree with the proposition of the Chancellor of the
Exchequer, who had fairly and intelligibly laid down the
only (*rounds upon which such a committee ought to be
granted. He differed from the Chancellor of the Ex-
chequer only on one point, and that was as to the committee
being a secret one. The Hon. Member who introduced
the motion bad referred to the number of banks that had
failed before and at the period of 1826, but the Hon. Gen-
tleman forgot to tell the House that these were not joint-
stock banks, but private banks ; and the Hon. Member had
not said a word about Scotland. In that country only one
bank had failed, for the very reason that the system was on
the joint-stock principle, and even that one afterwards paid
2es. in the pound. But, besides, it should be considered
that those failures took place at the period of a panic,
when persons were changing their notes for gold, not with
a view to circulating it, but- to hoard it, because they were
afraid of the private banks in which it was deposited.
But in joint-stock banking companies the depositors
would injure themselves by withdrawing their money, be-
cause it was their interest to let it remain. He could
not help noticing what the Honourable Member had
said as to limiting the responsibility of parties in
joint-stock companies. Nothing could be more absurd than
to permit a man to embark in a risk'of 104, rather than his

whole property. It would be a fit qtieStion for the
Committee to Inquire whether it should be 26i. or 301.
that ought to be paid up, and 701. or 801. to be called
for. With respect to the Committee being a secret one,
he thought it ought to be public. The public had a
right to know everything in which they were interested.
They were entitled to know the assets and effects of
those in whose hands they entrusted their property.
The only necessary additioh to the law that he could
see was, to provide for the public a better security. If they
combined increased circulation witn increased security they
would be doing a great public benefit. Ike confessed be

had himself atendency to the currency, although he was
glad that this question was not to be confined either to
paper or gold. He had seen the ruin which the change
to gold currency had brought upon his own country.—
(Hear.) That change had produced more social mis-
chief than the French revolution. Ia England there was
the consolation that although it did great mischief it be-
nefitted the agricultural labourers ; but in Ireland it
made the agricultural labourers worse, if possible, than they
were before. He should, however, consider this question
unmixed with the currency subject, and he was glad that it
was to he inquired into on the principles laid down by the
Chancellor of the Exchequer.
Mr. GISBORNE approved of the tone of the Right
Hon. Gentleman's speech, and was glad to find that there
was no design to direct others how they ought to conduct
their own affairs. He had a motion on this subject, which
he should now defer until the appointment of the Commit-
tee, provided the Chancellor of the Exchequer had no ob-
jection that lie should then introduce it.
The CHANCELLOR of the EXCHEQUER was
understood to say that he did not give any pledge on the

subject. -
Mr. RICHARDS could not help believing that an un-
derstanding existed between the Government and the Hon.
Member for the Tower Hamlets on this subject. The Hon.
Member defended the joint-stock banks, and begged to ask

whether, since 1826, there had been any failure in these

banks? Not one. He should view the appointment of this
Committee with a jealous eye. He had observed the con-
versation carried on between the Governor of the Bank of
England and the Right Hon. Gentleman opposite, and he
should like to know if any understanding existed with the
Bank of England on this subject ?
Mr. PATTESON begged to assure the Hon. Member
that he had not said a word about joint-stock banks, but
had merely asked the Right Hon. Gentleman when it
would be convenient for him to receive a deputation of his
constituents ?

Mr. HUME approved of the conduct of the Chan-
cellor of the Exchequer in taking twenty-four hours for the
appointment of so important a Committee. He thought,
however, the inquiries of the Committee ought to extend
to the clause introduced by Lord Althorp into the charter
of the Bank of England respecting joint-stock banks, to

meet the demands upon them in paPei of the Bank of Eng-
land, instead of gold. As to the risk incurred in joint-stock
companies, he thought that one of the best guarantees
against excess of speculation which the public could possibly
have ; nor did he think it possible to have too much paper
in circulation, provided it was convertible into gold on
demand.

The CHANCELLOR of the EXCHEQUER ob-
jected to the proposition of the Hon. Member for Middle-
sex, as foreign to the present enquiry ; and, with respect to
the charges thrown out against the Government, he begged
to assure the Hon. Member opposite that he was not in
the least aware of the present motion till he read it in the
paper, and though he intended to have brought forward
something to the same effect, he did not think it decorous
or consistent with the usages of Parliament to take it out
of the hands of the Hon. Member for the Tower Hamlets.
Mr. RICHARDS begged to express his conviction that
he had been in error in this respect.
Mr. CAYLEY thought the Hon. Member for lie Tower
Hamlets had failed in showing any cause for this Committee,
though on the footing on which the Chancellor of the Ex-
chequet put it he should not object to it.
After a few words from Mr. GUEST, which were in-
audible,

Mr. HANDLEY defended the joint-stock banks, and
maintained that this interference would be highly dan-
gerous.

Mr. PEASE thought that respectable joint-stock banks
would have nothing to fear from the inquiry.
Mr. HAWES supported the view of the Hon. Member
for Middlesex.

Mr. HUME moved his amendment formally.
Mr. P. THOMSON objected to the amendment, which
would lead the Committee into inquiries altogether foreign
to the immediate subject. The inquiries of the Committee
were to be wholly devoted to the formation and operation
of joint-stock banks, their advantages and evils, and the
mode of increasing the former and providing against the
latter ; whereas the amendment would lead them into a
general discussion as to the circulation of the country.
Mr. WARBURTON supported the amendment, but
objected to a Secret Committee.
Mr. M. ATT WOOD said that a great experiment was
in progress, and it was not the success of that experiment
that they now proposed to investigate. It was clear that
if the paper of these banks secured prosperity, the depen-
dence on it was also secure. The reasons stated by the
Hon. Member for the Tower Hamlets as grounds for ap-
pointing this committee did not appear sufficient. It might
have been prudent originally to limit the amount of capital,
but if all were now called upon to pay up the full amount
subscribed, it might be _productive of serious difficulties and
dangers. Though he saw no good that could arise from
the committee, neither did he see any evil, if it was con-
ducted with proper caution. He would not, therefore, op-
pose the motion.
Mr. CLAY would oppose the amendment of the Hon.
Member for Middlesex. He never intended to insinuate
the least doubt as to the solvency of these banks, and
no man was more friendly to them under proper regu-

_
lotions.
The House then divided—

For the original motion
For Mr. amendment l2
Majority for the Committee ...... —B6
On the suggestion of Lord John Russell—Mr. Gillon,
Dr. Bowring, and Mr. Sergeant Goulburn, postponed
their motions to a future day, for the purpose of enabling
lie House to go into committee on the English Tithe Bill.