The Sun.
London, England, 1851-01-17 00:00:00

BANK.

"My Lord and Genthinea,—We, the undersigned in-
habitants of the parish of S. Pancras, being sensible of
the want of banking accorniuodation in this neighbour-
hood, and having coutidered. the propoal to establish a
bank at the We!,.t-,,rid, on the Scotch principle, request
you to depute some quo.lified persons to attend a nick tmg
of the inhabitants of this parish, to be held shortly, tu!ly
to explain the nature sod advantages of the propot;ea
b..nk."

Mr. WARREN was celled :a the uhair, on taking which
he said that Mr. Archibald Kintrea was in al teboat:c:: at-
the rneeing ou behult' of the directors or the bank, fi
was prefaled to explain i s objet.A and to answer ,:ny
questions which might 13.,_• u.:lted by aoy of the gentlemen

Mr. ARCHIBALD NINTREA. said, in eta mpting an t a-
planatien of tee Scotch banking s) stem, and of the de-
sit ableness of having it introduced into England, he
must beg the patience and forbearance of the meeting
for two reasons; first, bee:into of his inexperience
in addressing large a.serriblies, and, second'),
because he had only had a few minutes'
time to cast together a few imperfect ideas on
the subject. Born and educated in Scotland, he mieht,
however, pretend to some acquaintance with it, and his
subsequent experience in London, us a merchant and
manufacturer, entitled him to speak with some confidence
as to the imperfections of the system in operation in the
metropolis. He appeared there to affirm, ewphaticelly,
that to the banking institutions in Scotland must they
attribute the prosperous condition of his •native country,
and the intelligence and energy which so proverbially
characterised his countrymen. A century and a halt
ago the system took its rise at a period when the ener-
gies of that country, so long depressed by vexatious re-
ligious and political troubles, were beginning to be di-
rected to objects which would advance the comfort and
prosperity of the people. Previous to that time Scot-
land was but little removed from a condition of semi-
barbarism, and the circumstances of the mass of the
people were wretched in the extreme. The inventive
genius, however, of William Patterson, a Scotchman, and
author of the too celebrated Darien expedition, aided
by an English gentleman, John Holland, opened up a
new era. They established the Bank of Scotland in
1695, and from that time a new hope was infused int)
the people; the means were given to them of turning
their industry to a usetul and profitable account, and the
result had been that the country had been enriched, the
arts and sciences had been cultivated, and the share-
holders of the various banks had enjoyed large profits
with the most perfect safety. That the intelligence of
the people of Scotland was the result of ,her banking in-
stitutions might easily be proved by a reference to the
condition of Ireland. There the people were literally
without money, the circulation being less than 11. per
head per annum. They were positively in a condition of
primitive and uncivilized barter, without the means of
exchanging wealth, if created, and consequently without
the necessary stimulus and reward to exertion and per-
severance. He held a strong opinion that the miserable
and degraded condition of Ireland was in a great degree
to be attributed to the want of a sufficient circulating
medium, because Scotland was in a similar condition pre-
' vious to the noble and patriotic exertions of Patterson,
and but for her banking institutions wculd, he confi-
dently believed, even now be quite as impoverished as
Ireland. At the revolution of 1688 Scotland was much in
the:condition of a newly-discovered country; the land, na-
turally poor, was left unimproved; produce of any kind was
limited, and the people were indolent and slothful in
their habits. Nothing could be done without money;
not that he meant gold coin, which was wealth itself,
bat money as it ought to be—the representative of
wealth. lc was necessary that the labourer should be
supported while tilling the soil, and implements were
required; but there was no money. The banking system
volunteered to rouse and direct the dormant energy.
There was abundance of natural wealth, and the batiks
found a symbol which represented the real wealth, and
thus furnished the means of enabling the agriculturist
and the manufacturer to procure implements and ma-
chinery, and to maintain their labourers in the produc-
tion of food and manufactures. The borrowers of that
representative money were speedily enabled to repay the
loan with interest; wealth rapidly increased on all sides,
with equal advantage to the borrowers and the lenders,
anti thus the system had continued to the present time,
increasing yearly in its magnitude, and in an equal ratio
increasing the prosperity of the country, until they now
find Scotland, the land of the Celts, to be but little in-
ferior in all respects to England itself; which had had
all the benefits of a naturally rich soil, of a flue
climate, and was, besides, the inheritor of cen-
turies of Saxon enterprise and greatness. The Scotch
banking system might briefly be explained as follows:
Deposits were received from the poorest, for which a re-
spectable interest was paid. Thus all classes were em-
braced in the system, and the interest which was paid for
the deposits was found to be a strong incentive to saving
and frugal habits, producing a great moral effect, and
placing within the reach of all tee certain means of ob-
taining, sooner or later, the position of having what was
called a stake in the country. The chief feature, how-
ever, was the cash• credit system, an arrangement by
which a specified sue-r, was placed to the credit of an in-
dividual, upon which he m:ght draw as his business re-
quired, paying interest upon the sums drawn out; and
inis credit was granted to him on the condition of his
finding the satisfactory security of two or more friends, as
might be agreed upon between him and the bank. Ile
was also expected to make repayments as he was able,
end in all respects he used the sum placed to his credit as
his own legitimate capital. A small capitalist trader, or
a young man, whose previous well-known good habits
might have acquired him friends or relations willing to
lend their names towards procuring him the means of
starting in life, had by this cash-credit system placed at
his command a ready money capital by which he might
enter into markets as advantageously and as successfully
as the wealthiest capitalist, and be gets rid of the ruin-
ous necessity of resorting to usurious money-lenders,
whose assistance was never obtainable excepting on terms
which rendered success iu business utterly impossible.
In these two principles consisted, in point of tact, the
essence of the Scotch system of banking. It would, of
course, be expected that he should show wherein that
system so essentially differed from the English system.
This he should now do, desiring that it might be clearly
understood that he did not wish it to be inferred that
the English had not appreciated banking institutions, or
that they were ignorant of the value of banks as an
engine for calling forth the energies of a people and de-
veloping the stamina and resources of a country; but he
did mean to say that on comparing the two systems, the
Scotch and the English, he thought he was entitled to
say, speaking from a practical experience of both, that
that in Scotland was infinitely superior to what they had
in England as respected the smaller class of tradesmen
and working people. He knew perfectly well thiit a
capitalist with 10,0001. could go to Lombard-street, or
Princes street, in which all the banking accommodation
of the metropolis was centred, and procure assistance on
good mercantile bills to at least twice the amount of his
capital, but he (Mr. Kintrea) had no desire still farther
to increase the already overgrown resources of the rich
eliwt aheld'xtioetsy was tcr quite a different class of
see strengthened and assisted those
wring either by heal or hand, formed
cptwhaehopeopi:laebiiusantbh.e and sinew of this mighty empire.
He wished to see something done to improve
the falling condition of all those who were included
under the denomination cf the industrious classes; not
that he would seek to de that at the expense of the
capitalist, but that lie should simply wish to see intro-
duced into this metropolis e system which should afford
assistance as readily and as economically to the man
who had only 5001. in business, a shopkre per for instance,
or a little manufacturer, as could the 10,0001. capitalist
from his Lombard-street banker. He did object to the
English system, inasmuch as it offered no inducement to
people of limited income to accumulate their small
savings, and that it refused to have any transactions
with a tradesman unless he could afford to keep a con-
stant balance of some 2001. at his credit in the bank,
upon which in most cases he neither received interest
nor accommodation, or, if interest at all, at a rate so in-
significant as to be inappreciable. How different was
thea Scotch
over asch a system,
apet ere u
osmit: and upon which a fair interest was
paid, where as smell a sum as 11. was re-
ceivedr
a person accumulating those small
se of years might reasonably expect
the after countenance and support of the bank should he
svi
savings
r a
nt
d where
withdraw his savings for the purpose of entering into
business. Besides the advantages held out by the Scotch
system to the general public, the inducement to hold
shares in a Scotch hank was, in his (Mr. Kintrea's)
humble
is h opinion,system One's capital was not so locked up bymuch greater than it was under the
E
the purchase of Scotch bank shares as it was by the
purchase of English bank shares, because the cash credit
system enabled a bank safely to accommodate its own
r at any rate toied on upon ar
'somethingßesidshareholders
thlike
ep
inro
profits
sem
uapo preferenceuouan tot allbusiness
shares
others;c held by them.
Capital was prin-
e
large amount of deposits, especially deposits for long
periods,
as was generally the case with small sums,
which the Scotch system attracted to itself, must be
cmi
puacihi
y contributed
g r eater
Accordingly they found that in Scotland the balls
yr e
tthh,
ee t
sriai
adrinhgold ers themselves.
paid from 7 to 10 per cent. per annum on the
paid-up capital of their shareholders, besides
periodical bonuses to a large anaemia and all this t“o
than where
was done with the most perfect safety, as was proved by
the fact tha', during the last century and a half, em-
bracing a period notorious for its numerous civil and
religious commotions, a sum not exceeding 40,000/. was
all that had been lost to the community by Scotch bank-
ing tailures, and these failures, too, it was to be re-
membered, were confuted solely to private bankers esho
had not the respoesOiility of accounting to a large pre-
prietory, and who, doubtless, used the credit of the bank
in the furtherance of their own private transactions.
lie could conceive no more secure investment for capital
than that afforded by it, joint-stocl on the Scotch
principle. No doubt mall English bank failures were
fresh in the winds of those present, but few of them
Were to be found among joint: stock companies, and
where such joint stock companies could be pointed out end
referred to, it would to found that the utmost recklessness
and extravagance had characterized the conduct of the
managing body. That was the case in Liverpool in
1817, where ;he howler of a joint-3tock oompany ad-

vancecl the large sum of 400.000/. to one individual,
without, it appeared, the kno,ledge or consent of
those who ,abould have been consulted on the subject, and
when the individual who had received so large an
amount of that company's capital became brnkrupt,
in the general wreck of mercantile houses in that
memorable year, the bank was or course compelled
to suspend payments. lie (Ur. Kintree) 'night also
refer to the extraordinary case of Ilarnmersley's
bank, although a private bank, where the prin-
cipal proprietor advanced the capital of the firm
to a plausible adventurer in the soap trade,
who, without pretensions to either knowledge of his
business, or genius in management, recklessly squan-
dered the money in erecting extravagant works, and
even in fitting out armed vessels for the safe conduct of
tallow from St. Petershurgh, end by this notable scheme
80.0001. was lost to Dammersley's bank. Ile ought to
mention that one great safeguard of the Scotch banks
was this—that a provision was generally made in the
Ceed of copartnery, that when a specified portion of the
ei,pitak say one-fourth or one-third, was let, the share
ho:ders should he c died together to consider the:r posi-
tion. o,le Scotch bank already exiso-51 in Lorair•n, and,
if the reports of its success v. hieh had reached him wane
correct, no farther proof could he r«ptired in 'eon °bora-
lion of his assertion, that the Scotch bay kir g system.
was superior to that now in op,r,-,ti 3n in England, and
that the tradesmen in Loudon were willing and anxiou.,
to lend their support and enema—gement to bank:,
mainly designed fur their accommodation. In proot of
what tradesmen of nr &rate capital could accomplish,
he might mention the cAse e f the Commercial Bank of
Scotland. That bank was established principally f,y shop-
koep- and was popularlycalled I he"Shopkeop k."
Its more aristocratic competitors loud!) progno, lean d
dial failure, but the Shopkeepers' Bank not Dilly to Is
up a high position, but it greatly distanced all the others
in the number of its branches, and its shares had sold at 250
percent. premium. Up to the present time the suburb,
of London had not had all the advantages and facilities
to which they were entitled ; the retail trade of the me-
tropolis was rapidly extending to the suburbs, and, in
the absence of banking facilities, a class of men were
rapidly springing up who discounted, in a private
manner, upon large security, and at a most usurious rate
of interest. Loan Societies, too, of which the 1,83 said the
better, were greatly on the increase, and it was high
time that the suburban tradesmen should have the same
attention as the City capatilist. It was, accordingly,
proposed, forthwith, to establish a chartered bank, to be
called the " London and Suburban Bank," which
should consist of four chief suburban branches, with
smaller receiving houses, and that this bank, so much
needed, should be on the Scotch principle, which he had
already described. A most respectable and influential
board of directors had been obtained, and a large number
of shareS had already been applied fur ; and, in a short
time, it was expected, the bank would be in operation.
That it would effect a great and lasting benefit could
not be doubted, and those whom it was designed to be-
nefit ought, even on a selfish principle, to lend it their
countenance and support.—(Applause.)
Mr. HALL TERRELL, solicitor, of Basingball-street,
said the only serious objection he had heard started
against parties having shares in joint-stock banks was
the supposed liability they incurred. In reply to that,
he would call on the meeting to look at the numerous
joint-stock banks in the country, having large capitals,
and therefore a large number of subscribers. The pro.
posed London and Suburban Bank would not be formed
on the same basis as those joint-stock bunks now in ex-
istence. In the existing joint-stock banks, in the event
of any deficiency of the funds, every subscriber was
liable to be sued, not in proportion to the amount or
number of his shares, but to the extent of his whole pro-
perty. The proposed bank would not be attended by
anything like that same amount of liability; in fact it
would be formed on a different basis. Through
the intervention of' Sir Robert Peel an Act of
Parliament was passed to regulate joint-stock banks in
England. The object of that Act was twofold—to af-
ford additional security to the creditors of any joint-
stock bank, and at the same time to lessen the liability
of the parties who were shareholders in it. No joint-
stock bank could be formed since 1844 without complying
with the requisitions of Sir Robert Peel's Act. In order
to make the bank stable it was required by that Act
that it should consist of a certain number of shareholders,
with a paid-up capital of 50,000/., and each joint-stock
bank in the country was required monthly to advertise
the amount of its assets and liabilities. By the law as
it now stood applicable to joint-stock banks, no
shareholder was liable to be sued individually,
ally'
in the firstinstance, as formerly, but the coroporaron
itself must now be sued; and the shareholder could only
be sued in the improbable case of a deficiency in the ge-
neral funds, and then he had his remedy against his
co-shareholders, who could be compelled to contribute.
It therefore appeared to him (Mr. Terrell) that the
amount of liability incurred by any shareholder was
very trifling indeed; so much so, that when a gentlemen
asked him one day to state the amount of his liabilities
arising out of a joint-stock bank, in the event of his tak-
ing shares in it, he (Mr. Terrell) told him he might
take as many shares as he thought proper, and for one
shilling he (Mr. Terrell) would guarantee him against
any loss.—(Hear, hear.)

Mr. LENVIS moved a resolution alleging that there is
at present no adequate banking accommodation in the
parish of Sr. Pancras, and that from the existing banks
the great bulk of the shopkeepers and professional men
receive no advantage.
This resolution was seconded by Mr. FRYER, and
unanimously passed, as were also several others, express-
ing confidence in the proposed back, and for tLe adop-
tion of measures to establish it.

In answer to a question a; to locality of the bank,
The CUAIRMAN said it was not yet fixed upon, but it
would be in the locality where they were likely to re-
ceive the greatest support.