The Sun.
London, England, 1832-09-10 00:00:00

How do those separate interests tend to a contraction
of the issues ?—The separate interests controlled by the
particular fears of each body, may lead to contraction.
Then you mean to say that it is not merely increasing
the number of banks, and frequently balancing, that tends
to check over-issue, hut that there are other circumstan-
ces attending many banks, which lead you to think that
such wou'd be the effect ?—I would rather not answer
that question,
Although increasing die number of banks and balanc-
ing the notes will not in themselves prevent an over-issue, is
not the necessary consequence of such increased number,
and such balancing, to produce such evidence by the
return of notes of a redundant currency, if redundant, as
will stop those banks from increasing their issues ?—I
wish, as I said before, to state to the Committee that its
what I have heard and read about the Scotch banking
system and its adaption to London, there are some diffi-
culties that I do not see my way clearly out of, and I
think they will have information from other individuals
who are snore competent than I am.
Do you think, that if there were several banks ti.e re-
sult would be their acting in perfect union with each
othei?—l think their interest would be to set in union
with each other to a certain extent.

Do you mean that they would so far unite as to act
upon certain regulations contributing to their own secu-
rity ?—lt would be manifest that they would. I judge it
from the present state of things. The bankers in London
now have a certain confidence in each other, attended with
all those civilities and freedom of communication which I
should imagine naturally leads to their interest and pro-
tection.

Would not there be separate interests amongst such
banker•, as amongst other traders P—Certainly.
Would not those separate interests lead to rivalry, and
in that way give a greater security to the public against
over issues, than the public now has from one bank ?—I
am inclined, if not with full confidence, to think that such
would be the result.

What security has the public, under the present system
of the Bank monopoly, against over-issues, and againstan y
other abuse that can flow from an over-issue of paper, x -
cept the discretion of 24 individuals who happen to be di-
rectors ?—None at all.

Do you think that is a safe principle to trust the whole
currency and property of the country upon ?—A most
unsafe one.

Then, in point of fact, while you have one bank you
have nothing to trust to but the discretion of the directors ;
Ind if there were several you would have competition ?
If I was asked which I considered the safest, whether the
ten banks as it is proposed to manage them, or the one
bank upon the present system of the Bank of England, I
should certainly say the ten banks.
. . .

Take the case of one bank in a district, which should
ever-issue to the extent of one-fourth or one- fifth of its
previously existing issues, and then suppose that was split
into five or six different banks, established in that same
district, which ehould over-issue to the extent of one-
fourth or one fifth of the previously existing issue, would
not the over-issue in either case, if it were in the same
proportion, be speedily returned ?—Yes.
Putting rivalry aside, would not the rate at which
those notes were returned be the sante in both cases ?—I
am not quite sure how that would act.
You have stated it as your opinion that it would be
great check upon the over-issue of notes by the Bank of
England if they were to publish their accounts; in your
opinion would it act as the same check if all banks of
issue were required to publish their accounts, or do you
limit your opinion to the Bank of England only?—I think'
.t would manifestly act as a check upon over-issue in all
cases.

Do you think it expedient that all banks of issue shout I
publish their accounts?—Yes, I do decidedly ; but not so
important as in relation to the Bank of England. I see
no good reason why the Government of the country should
not thoroughly understand the currency, and why the pub-
a! should not have positive information as to the amount
if the currency in the country. But I think it is much
more important in relation to the Bank of England to pub-
lie!, its issues, and to have them always under the view of
the public, because the credit of the country is based mainly
upon their issues.
Is it not an evil to the country to have an over-issue,
whether that over-issue is by the Bank of England or by
country bankers ?—Yes, but I think that the over-issues of
the county bankers are grounded upon the over-issues of the
Bank of England.
Upon what grounds do you form that opinion?—Upon
observation and experience; when I was a country hanker,
we were always (as I conceive country bankers necessarily
must) led in some degree to govern our issues lay the
ficilities of obtaining money in London ; if we under•
stood that in London there was great difficulty in ob-
taining discounts, and great apprehension in conse-
quence, we immediately dealt out our e.ecommodation with
a more sparing hand ; and if money was exceedingly
abundant in London, we were more free in discount-
ing bills, because we could calculate, in case of need,
upon their being reconverted. If we heard from our
hankers in town that considerable difficulty was likely to
cake place, and that it would require increased caution in
making advances, it naturally operated so ; if there was
no difficulty apprehended, we then could discount, and
let safe customers overdraw with more freedom. I be-
lieve it is the practice of country bankers to let their cus-
tomers overdraw to an extent (in comparison with the ex-
tent of the business) much beyond what is the practice in
town, and that I conceive to be always more or less
checked by the state of money in town.
Did you regulate your issue a by the state of the foreign
exchanges, or only by the state of the money market in
London?—Country bankers, I conceive, generally have
inure reference to the state of the money market in Lou-
don than they have to the state of the foreign exchanges.
You have stated, that you consider that the issues of the
Bank were unnecessarily large previous to the y-ar 1825,
to what particular years do you limit that opinion ?—I
oave not got the documents before me sufficient to answer
that question, but generally I conceive that the issues of
the Bank were large, and I think my answer wits con-
nected with its having led to the panic of 1825.
Do you consider that in the beginning of the year 1822
the issues of the Bank were unnecessarily large ?--I have
not the documents before me, and theretore 1 cannot an-
swer the question.
Do you recollect what were the prices at that time ?
I have not them immediately upon my recollection.
If from the 3d of January, 1822, to the 3d of January,
1824, it should appear that the issues of the Bank of Eng-
tend had only increased 1,600,000!., and that their bul-
lion had increased 2,100,0001., would you consider those
circumstances as indicative of an over- issue of paper on
the part of the Bank of England?—Those circumstances,
that is, the circumstance of the bullion having increaed in
the proportion mentioned, ani the circumstance of the
wank-notes having increased in the proportion mentioned,
would not be the single and alone causes by which I should
be entitled to say that there was an over-issue.
Would not those circumstances be a proof that there had
not, in that interval at least, been an over-issue of paper
on the part of the Bank of England, namely, the bullion
having increased 500,000/. beyond the increased issue of
paper ?-1 am not prepared at this moment to say that
those circumstances would be decisive of no over-issue, it
nay be attended by other circumstances that 1 have not
immediately in my view.
You have stated that the Bank of England acted inju-
diciously in lending 1,000,000/. of money to the city of
London, for the repair of London-bridge; are you aware
when that loan first commenced, and when it ended ?—I
can be only aware of that which the public are aware of.
Are you aware that that loan was to commence in 1828,
and it only ceased the other day ; and that the conditions
of that loan were, that a large sinking fund should be
established, to redeem a considerable portion of it an.
nually ?—I forget all the circumstances; I know at the
time that it was negotiated there was a question about
whether the Equitable Insurance Office or whether other
individuals should lend it, and the Bank of England lent
it, to the surprise of a great many people.
You have stated it as your opinion, that it would be
advantageous if more j tint-stock banks of issue were esta-
blished in London, and the number of 10 has been men-
tioned ; what do you think would be the effect of such
establishments upon the private balking establishments
in London 2—lt must be very obvious that if
another system of banking, more safe to the public,
be engaged in, and that they obtain business, there
would be a diminished business for the private bankers.
Would not you calculate that upon those ten establish-
ments there would be included the leading capitalists of
London, and that consequently those leading capitalists
must withdraw their accounts from their private bankers?
—Unquestionably if it was engaged in by the leading ca-
pitalists, the presumption is that they would support it.
And if it were not engaged in by the leading- capitalists
it would not be productive of those advawages which your
calculate would result from it ? —I do not ttliok,e,litit Iva
oecses ay consequence, if by the leading capitalists are
meant some dozen individuals, or saint hundred indivi-