The Sun.
London, England, 1841-02-08 00:00:00

JOINT STOCK BANKS•

We observe in the Atlas, of Saturday, an address,
recently delivered at a meeting of the Wilts and DorSet
Bank, by Mr. Gilbert, the Manager of the London and
Westminster Bank, in which he states the present posi-
tion and the prospects of the Joint-stock Banks. He
considers that these banks must soon occupy the at-
tention of the Legislature ; first, with reference to an
amendment of the general law of partnership ; and se-
condly with reference to restrictions upon the circu-
lation of notes. Hs is of opinion, from the merits of
the question, and from the present state of political
parties, that a sole bank of issue will not he established.
He advises the Joint-stock Banks to make no public
demonstration by petition to ?arliament, or otherwise,
until they are attacked, but to leave their cause i❑ the
bands of the Committee they hare appointed to watch
over their interests. That Committee, he states, will
renew their communication with the Government, upon
the amendment of the law of partnership ; and they
are provided with witnesses to show the practical evils
that would result from one bank of issue. In the
mNsntime he advises the banks to union and co-opera-
tion, and to take every means of increasing their Par-
liamentary strength. The following- is the address to
which we allude :

James William Gilbert, Esq., always thought it a fa-
vourable circumstance in the progress of a bank, when
the annual report of its proceedings furnished but scanty
materials for making a speech. But while the individual
circumstances of this bank call for no particular observa-
tion, the class of banks to which it belongs arc at the pre-
sent moment the subject of peculiar interest. There were
two points connected with these banks that would probably
soon occupy the attention of the Legislature. The first
was, the general amendment of the law of partnership, so
far as regards banking companies; and the second was,
the establishment of a sole bank of issue throughout the
country. Year after year, for several years past, the
Committee of Deputies appointed by the Joint-Stock
Banks had memorialized her Majesty's Government with
the view of obtaining :1 general amendment of the law,
but hitherto without success. All they had been able to
oktain was an Act now and then to remedy some specific
defect, after some atrocious case of dishonesty had oc-
curred, and nut only so, but these Acts were always in the
first instance passed for only a limited time—usually about
two years. At first it was discovered that if a clergyman were
a shareholder in a Joint-stock Bank, it waa placed beyond
the pale of the law ; it could neither sue its debtors nor be
sued by its creditors. Then it was found that a Joint-stock
Bank could not sue its own shareholders for a debt, and after-
wards that a shareholder might rob the bank with impu-
nity, as the bank could not prosecute a shareholder crimi-
nally. The Act which remedied the- last two defects ex-
pires next year. But there are many other defects in the
law that required to be redressed. The legal proceedings
that were taking place term after term with regard to the
Imperial Bank of England and the Agricultural and Com-
mercial Bank of Ireland, furnish abundant evidence of the
present defective state of the law. Besides, these Joint-
stock Banks that are located in London and within 65
miles thereof, are subject to peculiar disabilities. No
Joint-stock Bank in London can, as such, sue any of its
debtors. The number of its partners is a. practical ob-
stacle. Hence, when a person opens an account he signs
a contract, giving to certain persons therein named the
power of suing him for any monies be may hereafter owe to
the bank. There is another defect in the law—Joint-stock
Banks in London, and within sixty-five miles, cannot ac-
cept bills drawn at less than six months after date. This,
too, is deetned a privilege of the Bank of England. What
is granted to other parties as a matter of right, is viewed,
with regard to Joint-stock Banks, as a matter of privilege.
The power to sue their debtors, or to accept bills fur less
than six months, is, with regard to banking partnerships
consisting of not more than six persons, not a privilege
but a right—but with regard to Joint-stock Banks, these
arc not rights but privileges. The next topic that would en-
gage the attention of Parliament would be the establishment
of one bank of issue. He had often been asked whether
ho thought that one bank of issue would be established;
he had always answered " No I" for he thought the scheme
was so visionary in theory, and would be so injurious in
operation, that no body of practical statesmen would ever
be found to bring forward such a measure. The Bank of
England, judging from her anxiety to form agreements
with other banks, would like to have all the circulation of
the country, and some distinguished political ecenomists
were in favour of such a measure. The political econo-
mists contend that the amount of the circulation ought to
fluctuate according to the importation and exportation of
bullion ; and that this could only be effected by the esta-
blishment of one bank of issue. These principles had nut
been acknowledged by the Bank of England, nor has she
ever conducted either her London or her country circu-
lation upon these principles. Thus the sole principle on I
Hell it can rest is disputed, and its practical effects were I
also disputed. He was no politician, and he thought that
no banker ought to be a politician. He considered that
politics, like banking, was a science in itself, and he
was willing to leave it in the hands of those who
made it their study ; and he had a strong int-
pression that the government of a state very much re-
sembled the government of a bank in thin respect—that it
was much easier to write a pamphlet, a review, or a leading
article upon the subject, than actually to exercise the
functions at government. There is, however, one snb-
ject which almost every Man understands better than
it is understood by a Prime Minister—that one subject
is his own profession ; and they, as practical bankers who
understood perfectly their own profession, and daily wit-
nessed the effects of banking operations in the respective
localities in which they were placed, did not think that
they were guilty of any disrespect towards the rulers of
the land, or of any overweening conceit of themselves,
in believing that their own judgment as to the effects that
would he produced by one bank of issue, was more
likely to be correct than that of any statesman or phi-
losni,her who has nut had equal means of information. If
such a measure were carried at all, it must he carried by the
Government or by the Opposition, or by both united. With
regard to the Government, we must recollect that it is com-
posed of practical statesmen who would look to the practical
effects of the establishment of one bank of issue, and would
not introduce it merely for the purpose of testing the truth of
philosophical theory. The subject would involve questions
of finance, of taxation, of national prosperity, of political
newer, and of party influence. The Chancellor of the
Exchequer would naturally inquire whence he was to bor.
row money upon his deficiency bills? Whether he was to
depend upon the esprice of the Stock Exchange, or whe-
ther he should increase the taxation of the country, in order
to render himself independent of all such assistance ? lie
might also ask, whether to ahoy and cripple the banking
interest throughout the country was the best means of ob-
taining any future loan, or of being supported in his finan-
cial operations? Might not the Government, too, have some
doubts whether the establishment of a monopoly of the cur-
rency was a measure exactly consistent with their principle as
Liberals, and with the doctrines of free trade, which on other
occasions they had so strongly advocated ? There might be
some difficulty in deciding what kind of bank of issue should
be trusted, for the advocates ot one Bank were divided into
three parties ; one party wished the Bank of England to be
the one Bank, another wished for a Government Bank, and
a third wished it to be entrusted to Parliamentary Commie.
sioners independent of the Government. I3ut, suppose
all these difficulties overcome, and the measure finally
arranged. could it certainly be carried through Parlia-
ment? If introduced as a Government measure, might it
not be opposed by the Conservatives; and could the Mi-
nistry rely upon the support even of their own adherents?
All these considerations would, he apprehended, be
maturely weighed by the Government before they would
commit themselves to this measure, and he thought they
would never bring it forward, unless they could insure the
co-operation of the Cmiservatives. But were the Conser-
vatives as a party likely to introduce or to support this
measure ? The principles of all bankers, with respect to
those principles that form the foundation of civil society, are
essentially Conservative. From motives of self-interest,
bankersinustbe friendly to the security of pt ivete proper ty,the
legitimate influence of wealth, the impartial administration
of justice and inviolability of the national faith, and the
supremacy of the law. Bankers must be opposed to all
popular commotion, to all appeals to physical force, fur in
those seasons they would be the chief sufferers. Again,
it is universally asserted that the main strength of the
Conservative party lies among the agriculturists. Now
nearly all the notes of the private and Joint-stock Banks
circulate in the agricultural districts. If these notes were
abolished, the bankers must call in the loans they had
granted to the farmers and others, and hence great dis-
tress. Now, is it likely that the Conservative party would
consent to a measure that should spread distress through-
out those districts in which lies their chief support, and
thus alienate the minds of their own adherents ? The Dc-
mocratical party in America arc opposed to all banking in-
stitutions, upon the ground that they lead to the for ;nation
of a moneyed aristocracy. Upon the same round the Con.
servatives ought to support them. Fur in times of popular..
tumult the aristocracy of money will join the aristocracy of
rank in resistance to the movement party. From all these
considerations he was led to believe that the Conservative.,
would not introduce a measure for the establishmenbtioefroenae
bank of issue. But notwithstanding all .tthlies
cpersob.a
e, the
soning, it must be admitted to be a.
P°*'sl that'introduc the
leaders of both parties might Whatjln is to be done
establishment of one bank of issue.
then ? This certainly alters the case in one very im-
portant respect. If the Liberal party ntroduced the ques_
tion, the Conservatives might oppose them ; if the
pondCo-
servatives introduced the question, theyp'
by the Liberals ; and should. the two
posed, the banking interest is a.mply povsertut to give the
parties concur in the
preponderance to that party which might espouse their
cause. But should the leaders of bath
measure, it would be no longer a patty question. Now the
allegiance of a Member of Parliament to his party is confined
to party questions. Upon the supposition that the establish-
ment of one bank were not a party,question, the leaders of
the two parties could not command the votes of their respec-
tive adherents. B :sides, as we are dealing in supposition:, we
must not only suppose that the leaders of both parties shall
endeavour to establish one bank of issue, from a sincere
conviction that such e measure would be conducive to the
good of the country. We must also suppose that the
banking interest, from an equally sincere conviction that
such a measure would be injurious to the country, would
be equally vigorous in opposing it. We will suppose that
in every place in which there is a bank or a branch bank,
a public meeting shall be held to pass resolutions, and pre-
pare petitions to Parliament, on behalf of the local circu-
lation ; that a de.autation from the bankers shall wait upon