The Sun.
London, England, 1860-11-15 00:00:00

BANKRUPTCY L 4 W AMENDMENT.

A meeting of the Manchester Chamber of Com-
merce was held yesterday morning to confer with
Mr. Samuel Morley, of London, and other gentle-
men, on the prospects of amendment in the laws
relating to bankruptcy and insolvency.
Mr. E. POTTER, the President of the Chamber,
took the chair. This meeting, he said, had been
brought about by the expression of a wish on the
part of Mr. Morley for a conference of gentlemen
connected with the mercantile interests of Man-
chester on this question. It had been before the
Chamber no less than 15 times since the amalga-
mation of the two commercial associations of Man-
chester three years ago ; they had also sent four
deputations to London on the subject, had sub-
scribed to the Law Amendment Society, and done
all they could to promote the object, without any
pressure from the outside public. It was highly
important that the delay in getting an improve-
ment of the law should be put an end to, and he was
glad to learn from Mr. Morley that there was a
prospect of something being done at last, if the
mercantile community would avail themselves of
the talents and experience of Sir R. Bethell in
carrying out the wished-for measure of reform.
(Hear.)
Mr. MORLEY said his motive in seeking this in-
terview (along with his friend Mr. John Crossley,
of Halifax) was a conviction that unless the mer-
cantile interests took some special steps to be
represented as creditors in the House-of Commons,
they had no chance of getting a valuable measure
of amendment He put the matter in that brief
and distinct form as the substance of what he
desired respectfully, but very earnestly, to press
upon this meeting. The principle on which some
few friends ineLondon were seelsipg to act in con-
nection with the matter was this—that the pro-
perty of an insolvent trader, the instant he was
discovered to be insolvent, belonged, not to himself,
but to others—his creditors; and that there ought
not to be a moment lost, nor any unnecessary expense
or officialism imposed upon the creditors in getting
possession of what belonged to them. He had been
present. he believed, at every debate on the subject
in the House of Commons during the last session,
and was bound to express an opinion that such
views did not find utterance there. It was not that
gentlemen did not understand what was wanted,
but the talk was almost entirely in the hands of the
lawyers, and there was not the stand-up fight posi-
tion assumed which, he held, must be maintained
by those interested in reform, if they. were to ob-
tain any satisfactory measure. He was present and
heard Mr. Crossley, the member for the West Rid-
ing, say that members were speaking on the sub-
ject as though they held special retainers for parti-
cular interests. Then was the messenger interest,
the broker interest, the registrar interest, and the

official assignee—an exceedingly powerful interest,
judging by the matter in which those gentlemen,
he was prepared to say, imposed upon members of
Parliament; but while all these were represented,
there did not seem to be that kind of utterance in

the reuse of Commons which he believed the At-
torney-General deserved, as well as their own inte-
rest, on the part of commercial communities. It
was with him a question of decided feeling, pecu-
niarily, for the house with which he was connected
had submitted every week to extortion and robbery
at the hands of insolvents, rather than take estates
into the Court of bankruptcy. They were afraid of
the court and shunned it, for he should not be ex-
aggerating if he said the treatment experienced
there by creditors was really contemptuous. (Hear.)
The whole thing was put into the hands of offi-
cialism and red-tape ; and it was s the result, for
his own part, of inextinguishable entiv (as well
as personal interest) to what was mere ofiieNism,
that he resolved some time ago to make use of a few'
opportunities to bring to bear that more united ac-
tion sin behalf of an amendment which should en-

sure success. Mr. Morley then cited some details of
experience of the present system, and, among the
rest, the fact that out of 29,589 estates settled within
a certain circle of action between the years 1850 and
1853, only 3,300 were settled in court, so great was
the distrust of it on the part of creditors. His own
experience of creditors was directly contrary to the
impression that they were a grasping and oppressive
class towards debtors,and he was prepared strongly to
urge that, while all the insolvent's property belonged
to the creditors, he was entitled to every protection
against vindictive pursuers. In reference to some
dissatisfaction which had been expressed with regard
to the conduct of the Attorney-General in dealing
with the bill of last session, and with representations
offered to him on the subject, Mr. Morley declared
emphatically his opinion—although he was not
there as in the slightest degree connected with
that distinguished man, or vindicate him in any way
—that there was not a man in England better able
or disposed to carry out the interests of the commer-
cial community in this matter than was Sir R.
Bethell. (Hear) He used the words advisedly when
he said the Attorney-General was desirous " to do
their bidding" on the question, provided their infor-
mation were conveyed to him in sufficient time, and
in such a form as would enable him to give effect
to their wishes. He (Mr. Morley) held in his hand
a letter, which he was at liberty to read, though it
was not addressed to himself, from Sir R. Bethell,
as follows :

" London, Oct. 22.
" Dear Sir,—l am very sorry that I shall not be in town
after to-day until the Ist of November. I am very much
disgusted by the absurd accusations brought against me of
having abandoned the Bankruptcy Bill through ill-humour.
certainly was treated by the members for places most
clamorous for the bill in a manner to provoke ill-humour,
after the labour and sacrifices I had made ; but the bill-was
given up after the most deliberate consideration with Lord
Palmerston, and in consequence of the leading law lords
.having stated that they certainly would not proceed with it
if it came up to them after July, and no human exertion,
even with the concessions I made so injuriously, could have
got the bill through the Commons before the sth or 6th of
August. The defeat of the bill is due to the division on Sir
H. Willoughby's motion, when the members for Coventry,
Nottingham, Birmingham, and many other large towns
voted against me in perfect ignorance of tho matter.
That
lost me nearly three weeks, and was the real cause, joined
to the faint support I received, of the loss of the bill. I
do not think yol; will And a division list iA which half of

the members pledged to support the bill were present. Yours
faithfully, " RICHARD BETHELL."
After reiterating the opinion that the mercantile
interests would be misled if they endeavoured to
take the conduct of the matter out of the hands of
Sir R. Bethell, Mr. Morley referred to some other
branches of the evil to be removed, expressing him-
self in favour of a wholesome control being vested
in the majority of creditors, when they represented
three• fourths. of the debt, over any blindly self
interested minority, and of the principle that official
assignees should be dependent as to some portion of
their remuneration on the satisfaction they gave
the public. He believed that as on this question of
Bankruptcy Reform Lord Palmerston was really in
earnest—which was a good deal to say for Lord
Palmerston—(much laughter)—those interested in
the reform were now likely to succeed, if they only
showed themselves united and determined; and with
that view he urged a vigorous cooperation on the
part of Manchester and all the important towns
around it. (Hear, hear.)
After some remarks from Mr. I. CROSSLEY, of
Halifax, and Mr. J. A. Tur.NER, M.P.
Mr. M. Ross moved the following resolutions
which was seconded by Mr. J. CHEETTIAM

" That this Chamber has heard with great satisfaction
that her Majesty's Government are pledged to introduce, at
the commencement of the next session of Parliament, a bill
to amend the laws affecting bankruptcy and insolvency, and
trusts that they will spare no efforts to secure the enactment
of a simple practical measure for that purpose ; mad further
trusts that another session may not be permitted to pass
away without the settlement of a question so important to
the interests of this community."

The resolution was unanimously agreed to. The
meeting was afterwards addressed briefly by Mr.
Bazley, M.P., Mr. Taylor, Mr. Gillibrand, Mr. W.
Entwisle, and others, and a committee was appointed
to watch the progress of any bill that may be intro-
duced in -the ensuing session, and to take such mea-
sures as they may deem fit with regard to it.

T cOMPARATIVE MERITS OF FBI-

VATE AND JOINT-STOCK BANKS.

(From the Money Market Review.)

The failure of a metropolitan bank is, happily,
at the present day, an event of no ordinary occur-
rence. The position occupied by the Bank of
Messrs. Davies and Co., of Shoreditch, was not
very high, the majority of its depositors and cus-
tomers being small traders located in the immediate
neighbourhood. In fact, it may almost be regarded
as purely a Tradesman's Bank. The consequences,
therefore, to such a class, of the failure of their
bank, are very serious and lamentable. It is to be
traced to the fact that the partners lent a large
portion of the monies of their customers on se-
curity, which, on an emergency, could not be made
available. This is the old system over again. In
the present instance it appears that large sums
have been advanced to speculative builders who
have failed. This is not banking at all. A banker
is simply a trustee to his customers, and in that
capacity cannot be too choice in the nature of the
securities he takes isi exchange for the money
which he has borrowed from them ; for the act of
depositing money at a banker's is looked upon by
the law a.s a lending on the part of the depositor,
and a borrowing on the part of the banker.
The judicious and timely interference of the Lon-
don and County Bank will, in all probability, save
many tradesmen, customers of Messrs. Davies and
Co., from being seriously embarrassed; or even
ruined. It is a revival of a proceeding which,
when the failure of banks was of more frequent
occurrence than at present, was adopted by solvent
establishments in order to procure the business of
such of the customors of an insolvent bank as were
kndwn to be responsible. In some cases their en-
' gagements were met by the interposing bankers
without any previous communication.
The failure of Messrs. Davies and Co. naturally
leads the public to inquire into the advantages, on
the score of profit and security, which the custo-
mers of a Joint-Stock Bank enjoy over those of a
private bank. The way to do this effectually is to
compare one with the other. In the first place, the
depositor in a private bank simply enjoys the con-
venience which the bank affords him in transacting
his monetary affairs. He does not participate in any
profit his banker makes by the use of his money ;
neither has he any means of forming an opinion
'as to the extent or nature of the busi-
ness carried on by his banker, even if
the latter speculates with his customer's
money. Further, a depositor in a private
bank has the security only of a private firm, com-
posed, as we shall presently show, of three or four
individuals, and sometimes less, whose capital and
liabilities he has no means of knowing. In fact,
there are many cases where a private banking
firm continues the use of the name of an old firm
long after the parties have been dead, and their
capital withdrawn from the bank. For example,
in the firm of Herries, Farquhar, and Co., there is
no partner of the name of Herries ; in that of
Ransom and Co., no person of the name of Ran-
som ; in that of Jones, Loyd, and Co., there is no
partner of the name of Jones. Many people sup-
pose that Lord Overstone is still a partner in this
bank; this is an error; lie withdrew from it when
he ceased to be Samuel Jones Loyd. In the firm
of Smith, Payne, and Co., there is no partner of
the name of Payne, nor has there been for the last
forty years, neither is Lord Carrington a member
of this firm, as some suppose. The retirement of
a partner from an English bank, when he is ele-
vated to the peerage, seems to be a matter of course,
it being apparently considered infra dig for an
English peer to carry on business as a banker,
whereas in Scotland most of the banks have dukes,
marquises, earls, and other notabilities at their
head.
In the firm of Spooner and Co. there is no part-
ner of the name of Spooner ; in that of Stevenson
and Salt no person of the name of Stevenson ; in
that of Hugh and John Johnston and Co. no part-
ner of the name of Johnston ; and in that of Puget,
Bainbridge, and Co. there is no partner of the
the name of Puget. The composition of the firm of
Coutts and Co. is somewhat obscure, the style of
the house being Edward Majoribanks, Sir Edward
Antrobus, Bart., and William Coulthurst, bankers,
individually and as trustees for the parties
beneficially interested in the will of the late
Duchess of St. Albans, who was the widow of
Mr. Coutts, and who subsequently married the
Duke of St. Albans. In tha firm of Child and
Co. the Countess of Jersey, formerly Sarah Sophia
Child, appears to be the only partner of the name
of Child. There are several bankers who add " and
Company" to the title of their firm, but who, not-
withstanding, have no partners. When the head of
a private banking establishment dies, leaving a
family, it is no uncommon thing for his capital to
be withdrawn from the bank in order to pay the
various legatees under his will, yet the' bank con-
tinues without any change in the name of the firm,
whilst the public, who are slow and reluctant
learners, still look with the same degree of confi-
dence upon the solvency of the establishment. An
instance of this has lately been furnished by the
failure of the Bilston Bank; for on the death of one

of the partners, which took place in 1855, the money
he had in the bank was all withdrawn to pay lega-
cies ; the bank struggled on with an exhausted
exchequer, and in July last it was brought to a
stand-still. In these remarks we disclaim all in-
tention of underrating the importance of the old
e 7:1 tabli s h e d private banks, particularly in the me-
tropoL.'s, many of which comprise men of great
wealth anal influence. Our object is simply to show
one of the poink,`.s where the system of joint-stock
banking compares advanta
jeously with that of
private banking.
By the 7th and Bth Viet., cap. 32, it iFits
obligatory on all banks then existing, or w2'ich mayin future be formed, whether private or joint-stocK)
rendered
to furnish, in the month of January in each year, 0
statement of the names and addresses of all the
partners. The return for this year, which appeared
in the Gazette of the 23d of February last, shows
that there are 47 private banks in the metropolis,
and eight joint-stock banks exclusive of the Bank
of England and the colonial banks ; that the total
number of partners in the private banks is 184; and
that there are two banks with more than six partners,
and seven with six partners, the remainder varying
from five down to one. The total number of part-
ners in the eight joint-stock banks is no less than 1
5,830—viz., three banks with upwards of 1,000
partners, one with upwards of 800, and the remain-
ing four banks averaging 330 partners each. It
must be borne in mind that every shareholder in
these banks, let his position in society
may, is individually liable, in his own b e what it
personal
estate, for all the debts and liabilities of the bank in
which he becomes a shareholder, even should he
only possess one share. Consequently, y, the deposi-
tors and customers of a Joint-Stock Bank have the
of security of a known and numerous body
proprie-
tors, whose united paid-up capital is £3,899,000;
and such is the high estimation in which these
banks are held by the public, that their united de-
posits amount to the enormous sum of £41,698,000
whilst their shares are eagerly Three
public
f the number have
hl
obtained such a hold on favour that their
shares stand at upwards of 100 per cent. premium.
The profits of a j • s
oint- tock Bank are diffused
among the parties whose '
capital has produced those
profits, so that if a shareholder becomes a customer
to the bank, and
requires banking accommodation,
part of the consideration he for it returns a
pays t
him in the shape• •
of dividends. Should he become
a depositor the amount is doubly ruitful ; for he
receives from the bank interest on the sum depo•
sited, and, secondly,
he share:, in the profit which
the bank makes by
These are simply's, few of the reflections which

-

will occur to any thinking man who turns his
attention to, an investigation of the comparative
advantages and defects of the two systems of bank-
ing. The subject is a very important and interest-
ing one, and we shall return to it.