The Sun.
London, England, 1866-07-19 00:00:00

Of eration of the Bank Act.

DEPUTATION TO THE CHANCELLOR OF
THE EXCHEQUER.
A deputation, consisting of the Lord Provost of
Glasgow, and the following membersof the Glasgow
Chamber of Commerce, Mr. Stephen Mason, Mr.
Henry Dunlop, Mr. W. Kidston, Mr. Geo. Craw-
ford, and Mr. Jas. S. Fleming, waited upon the
Chancellor of the Exchequer yesterday,,at his offi-
cial residence in Downing-street, for the purpose of
supporting the prayer of a memorial previously pre-
sented that an inquiry by Royal Commission should
take place into the working of the Bank Act.
The following gentlemen accompanied the depu-
tation :—Mr. Dalglish, M.P., Mr. Graham, M.P.,
Mr. Akroyd, M.P., Mr. Bazley, M.P., Mr. Beecroft,
Mr. Robertson, Mr. Smollett, M.P., Mr. Crum-
Ewing, M.P., Mr. Merry, M.P., Mr. Fildes, M.P.,
Mr. Lamont, M.P., and Mr. Kinnaird, M.P.
Mr. DALGLISH having introduced the deputation,
The LORD PROVOST of GLASGOW, addressing the
Chancellor of the Exchequer, said that they did not
intend to press any particular view upon his atten-
tion as to the working of the Bank Act. The mer-
cantile community which they represented simply
desired to urge upon the Government the desirable.
ness of speedy inquiry into the subject.
Mr. HENRY DUNLOP said the Chamber of Com-
merce of Glasgow were unanimous upon the point
that an investigation, such as that asked for, was
needed. They were of opinion with Adam Smith
that banking should be free, and that a banker
should be allowed to conduct his business on the
same principles that a merchant conducted his. A
mistaken opinion prevailed, that if banking was per-
fectly free the nation would be inundated with bank
notes. Nothing could be more absurd than that
opinion. A banker should make provision for the
notes he issued in like manner as a merchant did.
If he issued £lOO,OOO to-day,he should be prepared
to meet them to-morrow. The issue would be re-
gulated by the demand of the public and the trade
of the country. Bankers in Scotland conducted their
business upon a large capital, and therefore upon a
ground of safety to themselves and the public. It
was not the same in England. What was wanted
was strong bankers. The law at present made them
weak. Where Scotch bankers had two millions of
paid-up capital, English bankers should have ten
millions—but instead of that they had perhaps only
£500,000 paid-up capital, and they divided very
large profits, while bankers who conducted their
business on a sound principle—a principle of per-
fect safety—did not go beyond a small dividend.
Legislation, instead of doing good, had done a great
deal of harm by establishing a vast monopoly. The
consequence was, that when the crisis came the
English banks had no capital to meet it. In order
to maintain a system of monopoly they had a sys-
tem of weak banks. Let the banks be free. Let
them mind their own affairs, and a result would be
brought about which legislation could not accom-
plish. The Scotch bankers and mercantile commu,
nity were anxious that there should be an inquiry
into the present system, and that they should be
fairly represented. They looked upon it as a ques-
tion in which the mercantile as well as the banking
interest was involved, and that each interest should
be represented.
Mr. BAILEY, M.P., expressed his belief that if
an independent commission of inquiry took evidence
in every part of the country—in Manchester,
Glasgow, Liverpool, Leeds, and elsewhere, as well
as in London—an accumulation of facts would
be secured by her Majesty's Government upon
which a beneficial change might be effected in the
banking legislation of the country. He need only
refer to the state in which banking was at the pre-
sent time. They all knew that there had been a
rapid absorption of floating capital which had been
placed in fixed positions, and which might be said
to be almost irremovable. He had heard criticisms
upon his (the Chancellor of the Exchequer's) re-
marks upon the subject in Buckinghamshire, but
upon the whole he concurred in them. They had
been, he believed, spreading out their borders too
far and too wide. The subject was a large and dif-
ficult one, and he would not say more in reference
to it, than that an act which required to be sus-
pended continuously could not be regarded as sound
or satisfactory. (Hear, hear.)
Mr. AKROYD, M.P., said that the institution of
the inquiry which was now sought would give great
satisfaction to the commercial interest of the coun-
try. For the last two months the Bank rate had
been 10 per cent, while in France the rate had been
4 per cent.—a difference of 150 per cent. as between
the two countries. Now the rate of money mate-
rially affected the cost of production, and conse-
quently the ability of the English manufacturer to
meet the foreign competitor in neutral markets.] In
this country, too, labour was at a higher rate than
across the Channel, and to this was added the fact
that money was 150 per cent. dearer. The Bank of
England relied with great confidence upon the
likelihood of the high rate of discount bringing a
flow of gold into this country, but that expectation
had been altogether disappointed. Only last week
a sum of £200,000 went over to France. How could
they account for the fact of that sum going from a
country in which money was
pleor per cent.
rt.Tthoerae
wcoasuntervy aidi
entwlyhicshomiet wcaausse4at work other than
the rate of discount. Ine fact, there
adoptedtherewas
by
strong feeling that the
the Bank of England to strfiendgtheeenin euthei:bpaonsiktiieg
position
had a contrary effect, and confidence
system has been shaken at home and
r sahbrreowadd.ly
Thegentlemen from Glasgow had v
sug-
gested that the inquiry should be an open one. If
the commissioners sat in London only, they might
imbibe London banking notions, and he therefore
thought with them that evidence should be taken in
Glasgow, Birmingham, Manchester, Liverpool,
Leeds, and elsewhere. The Imperial Government
had found it necessary, notwithstanding the favour-
able position in which France stood, to institute an
inquiry and issue a number of questions upon the
several banking systems. That commission had not
yet reported ; but if an inquiry were necessary in a
cmoultrymoinre which
necessary
the
wasra it in one rate was 4pe in which theercent.,how
rate was 10 per cent. ?
Tahbeooinvbestitghaetimonercnaonw
sought would be considered -
tile community, and would show a
dnispyosition on the
part of the Government to inquire into the disad-
vantage under which commerce laboured.
QUER—Is it your
The CHANCELLOR of the EXCHE

opinion that by legislation you can procure the same
rate of interest in London and in Paris ?
Mr. ACKROYD—Assuming that the difference arose
from restrictions which could be removed by legisla-
tion, a great disparity which now exists could at all
events be avoided. A bill was now looked upon with
suspicion, and the currency of the country was re-
duced very much to bank notes, of which the issue
was left to one bank. Bankers invested in Consols,
which became their capital.
The CHANCELLOR of the EXCHEQUER—IS it your
opinion that Consols are capital?
Mr. ACKROYD—Yes, convertible generally, only
inconvertible at a time like the present.
The CHANCELLOR of the EXCHEQUER—I look
upon them as an annuity.
Mr. ACKROYD—Bankers can sell them, and thus
convert them into capital.
The CHANCELLOR of the EXCHEQUER—They get
for them the market price of the annuities, what-
ever that may be, and that, of course, depends upon
circumstances.
Mr. DALGLISII, M.P., said he did not exactly re-
present all the views entertained by the deputation.
The Bank Act had failed three times, and should
therefore be regarded as an unsatisfactory measure.
Upon that ground, and that ground alone, he sup-
ported the appeal for an inquiry. He did not think
that any bill that could be framed would have the
effect which some gentlemen expected would result
from legislation on this subject. No man could be
compelled to sell gold he possessed when gold was
required, at a lower price than the highest he could
get for it.
Mr. GRAHAM, M.P., said that representing Glas-
gow he had accompanied the deputation, without,
however, wishing to commit himself to their opinion,
in which he did not altogether concur. At the same
time he agreed with them as to the desirability of
the inquiry for which they asked. In almost every
part of the country there was a feeling amongst the
mercantile community that whatever was the true
principle on this subject—either the present under
the Bank Act, or free trade in banking—there
was something in the machinery not working
smoothly and effectively. (Hear, hear.) There
was a wide-spread opinion that the present system
favoured the monied interest rather than the mer-
cantile. On that ground he thought it desirable,
for the satisfaction of the mercantile mind of the
country, that there should be an inquiry. An in-
quiry which would be held not only in London—
which to some extent represented capital—but in
Glasgow, Manchester, Liverpooly and Birmingham,
would give general satisfaction to the country—
even to those who upheld, as to some extent he did,
the Bank ACt.
Mr. Crum-Ewing, M.P., Mr. Kinnaird, M.P.,
and Mr. Kidston also supported the application for
a royal commission to inquire into the operation of
the act.
The CHANCELLOR of the EXCHEQUER—Gentle-
men,—I have listened with very great attention and
interest to your remarks. It is always a great satis-
faction to me to meet gentlemen of such experience
in matters relating to commerce and banking, and
I shall be always happy to receive you. It appears
to me, as doubtless it does to you also, that there
could not have been this great desire to investigate the

principle upon which our banking system should be

r conducted were it not for the present state of the
monetary market. I confess I think it was very
wise in you to limit your representation generally
to the advisability of investigation, because discus-
sions of an interlocutory character upon the ques-
tion of currency are interminable—(a laugh)—are
deficient in precision, and are not satisfactory. If
I allude to the question without dwelling upon it,
it is only because I do not wish you to think me
wanting in courtesy to any member of the deputa-
tion. What I think we are suffering from is not so
much a want of currency as a want of capital.
I do not think there is any banking arrange-
ments that could relieve us from the embar-
rassments we are now daily experiencing: Pos-
sibly some mitigation might have been found in a
Bank Act framed differently from the present. I
do not give any opinion upon that. It is not neces-
sary that I should now do so, but the mitigation would
I fear, have been of no gcteat amount. The evils
that we must all acknowledge to exist—the embar-
rassments that most of us feel—arise from deeper
causes than mere banking arrangements. With re.

gard to an investigation into the principles of bank

ing and the action of the Bank Act, without giving
-an opinion at the present moment as to whether it
is expedient we should have such an inves Ligation,
I would just observe that there would be no inability,
whether it be by Royal Commission or by Parlia-
mentary committee, to obtain the opinions of local
authorities and gentlemen connected with the great
emporiums of banking and commerce in this country.
Because, although no doubt a travelling commis-
sion might investigate the question at Glasgow,
Liverpool, and Manchester, still at the same time,
when there have been investigations on kindred sub-
jects by commitees of the House of Commons, we
have been favoured with the presence of the highest
authorities from those great centres of industry. I
remember myself that at the investigation which
took place in the year 1854, and which lasted three
months, we had gentlemen from Liverpool and
Glasgow called by the representatives of both
opinions—both schools of banking and currency.
We had the advantage of their information and
views, and I do not see myself that we should obtain
by a Royal Commission moving about more authen-

Ac or more valuable information than we should ob-
tain under the circumstances to which I have re-

ferred. Irrespective of that, you know the means
of locomotion are now more easy than they were
twelve years ago, although they were then tolerably
easy. Ido not conceive that any very great benefit
would be obtained by a roving commission, should
we decide upon the expediency of an inquiry. There
is no doubt that a Royal Commission would be able
at once to enter upon the investigation, and that a
committee of either House of Parliament would not.
(Hear, hear.) That is a fact that should not be lost
sight of by us. Practically it is an important con-
sideration. I do not think that by moving about the
country we should obtain any additional advantage.
With respect to the general subject, Mr. Baxley is
aware that it is in a day or two to be brought under
the notice of the House of Commons.

Mr. KINNAIRD—On Friday next, by Mr. Watkin.
The CHANCELLOR of the EXCHEQUER—We shall
then be able to enter into the large question involved
in the question. I shall say no more at present than
that I shall give the whole matter my earnest consi-
deration, and bring it before my colleagues, and I
shall be happy if our decision is one that will be at-
tended with public advantage. I need scarcely say
that it is a subject of great difficulty, as it is one
also of great importance. I never was myself a be-
liever in the doctrine of over issues. That question
has been very well settled by a Scotchman, Mr. Ful-
lerton, who was a very considerable authority on
the subject, and whose work is an admirable one.

With regard to the main point, as to the banking
system and the effect of the law upon the present
state of affairs, I do not wish my opinion, small as
the value of that opinion may be, to be regarded as
an authority for this proposition," that a change in
our banking sy stem couldrelieve the embarrassments
we are experiencing at the present moment. I be-
lieve that the causes of those embarrassments are
deeper and more extensive than is generally sup-
posed, and that, as 1 before observed, it is want of
capital and not want of currency we are suffering
from. At the same time, I must admit that nothing
is more legitimate than the wish expressed that the
present system should be inquired into. I give no
opinion upon the general question. If I did I should
go into a large discussion which would weary you
and lead to no practical result. It will be discussed
in Parliament. There we shall be able to give our
opinion ; and I hope, and have no doubt, that the
house will decide according to the merits of the
question to be considered.
The deputation thenrretitrhee te
retired, having
ittwhanhkewdhtihche
right hon. gentlemanfo
they had been received.

The report of the directors of the Bank of Egypt
for the past six months ended June 30 states that,
including a balance of £4,950 brought forward, the
net profits amount to £21,871, which enables them
to continue the usual dividend at the rate of 10 per
cent. per annum, and to carry forward £9,371.