The Sun.
London, England, 1832-09-21 00:00:00

LAND CHARTER.

Examination of GEo: CARR GLYNN, Esq.

You are a banker in London ?—I am.

Will you state whether, in your opinion, the ex-
clusive privileges of the Bank of England are inju-
rious or advantageous to the bankers in London ?
In my opinion, decidedly advantageous.
Will you state upon what ground you consider
them advantageous ?—I consider that the existence
of more than one bank of issue would expose the
commercial world to very great fluctuations, and the
hankers in particular to very great inconvenience in
their details of business.

In what manner would it expose you to great in-
convenience in your details of business?—Suppos-
ing there were three or four banks of issue in exist-
ence at the same time, carrying on business in Lon-
don, it would be necessary for the private banker to
retain in reserve notes belonging to each of those
several banks ; it is quite clear that if any one pre-
senting a check comes to the counter and de-
mands payment in any note that he chooses, we
must find that note for him, or gold ; therefore
it follows as a matter of course that we must keep
by us probably three or four times the amount that
we do at present, or a very large amount in gold.
Is that the only inconvenience you foresee in the
details of your business ?—I conceive it would pro-
duce such great inconvenience to the private bank-
ing business altogether, and that it would diminish
their deposits so much, that the private bankers
would be deprived in a great measure of their power
of supplying a portion of the trade in London,
which, in fact, at present entirely depends upon
them for the necessary accommodation ; I allude
particularly to the second rate class of traders, who
frequently have recourse to the private bankers for
that assistance which no public body could afford
them ; a public body would not have those means of
inquiring into their resources, and they would not
have that access to them which private bankers
have, and which enables us to judge as to the pro.
priety of trusting them or not.
How would it operate to prevent you from giving
the accommodation you now give traders ?—By
lessening our deposits ; the private bankers in fact
trust only to their deposits for the accommodation
they are enabled to give, and the existence of diffe-
rent Joint Stock Banks would of course inte►fere
so materially with our deposits as to prevent our
giving, that accommodation to which I before alluded.
Then the mode in which the Joint Stock Banks
would diminish your deposits would be by a portion
of them being withdrawn from you and placed in
their hands ?—Clearly.

Might not the deposits be now withdrawn, and
placed in the hands of the Bank of England ?—Cer-
tainly ; but the evil would be of course very much
augmented if the number of bodies of that descrip-
tion was increased.

On what ground is it that persons prefer placing
their deposits in the hands of the Bank of England,
ra.her than in the hands of the private bankers ?
I suppose it must be upon the ground of fancied
better security.
Do you suppose that the circumstance of there
being two or three banks of the same description as
the Bank of England would induce more people to
think that the security of the private bankers was
not amply sufficient ?—No ; but the subscribers to
those banks would, as a matter of course, withdraw
their deposits and their business from the private
banks.

Do you think that the effect of large Joint Stock
Companies in London would be such as to prevent
the private bankers continuing to conduct their bu-
siness in the present mode ?—Decidedly, with very
many of them.
Do you not think that every banker in London,
without exception, would be affected by it ?
Every private banker would decidedly be affected.
You have stated that the private bankers are able
to give an accommodation to the public which a
large Company could not give; would not that cir-
cumstance enable the private bankers to continue
their business ?—They might continue their busi-
ness in a degree ; but certainly, as regards that par-
ticular branch of business (and a very important one
it is in London), they would be deprived of the
power of doing that which they do now.
Have you considered in what way the establish-
ment of competition among banks of issue in Lon-
don would affect the value of property and the
amount of the circulating medium ?—I have not
considered it as affecting the value of property ;
but, as affecting the circulating medium, I think it
would expose it to very great fluctuations, sometimes
by increase, and then by sudden reduction.
Would not those fluctuations affect the value of
property ?—Certainly.
On what grounds do you think that that compe-
tition would produce great fluctuations in the amount
of the c rculating medium ?—The natural inclination
of all Banking Companies who are seeking profit
for their proprietors must be to extend their issues.
Is it not the interest of a Banking Company, in
extending its issues, to take into its consideration
ottThhuheegiehrdy ta
issueso:
ouggedrho
tofto d
thoe
it.n notes coming back upon them,
and producing, by re-action, a considerable loss ?
Do you not think that their feeling of what they
improperlyoul would be a?_chAeckyeurpyodnotulbletifrulexehteenek,
extending
a,ptunr
caAeCartsftireaal
j atth
anyre isover-issue
onesue
mustbank , therecom come
b‘o
avcku would be
upon
eoil,d,ntt,gyoaatnrhsedly° one
only which
upon. 1 should be very sorry, in
that bank; but if there was more than one bank,
would not there be a scramble upon the part of the
various banks, and would they not issue their paper
under an expectation that the return of paper gene-
'ally, if there was an over issue, might come upon
their competitors and not upon themselves ?—Cer-
tainly, they would expect that it would come back
more upon their competitors than upon themselves.
Supposing there were two, three, or four, or per-
haps more, large banking establishments in London,
are you not apprehensive that the scramble for pro-
fit between them would prevent that due regulation
of their general issues which is essential for the
safety of the circulation ?—I am decidedly appre-
hensive of that.

In what manner would six or seven banks issuing
in London differ from six or seven banks issuing in
Birmingham ?—We must always consider London
as the great centre to which all the money transac-
tions of the empire point, and likewise the place
upon which all the foreign exchanges operate, and
where the first fluctuations of expansion or contrac-
tion must always take place.
Do you conceive that, either in London or else-
where, it is possible to keep out for any time a quan-
tity of paper greater than the transactions of the
country requir::?—For a certain time it may be
done ; ultimately it will re-act, and right itself.
It being in the power of rival banks, such as the
Joint Stock Companies that have been mentioned,
to exchange their notes, as they probably would do
every day, iwould not any increase of their paper
come upon them immediately for payment in gold ?
—The mere balance between the two banks would
come in that way, but that would scarcely operate
to reduce the general circulation to a proper level.
Are you not aware, from your connection with
country banks, that that is the invariable effect in
large towns where there are several banks, that an
over issue on the part of one of those banks imme-
diately produces calls for payment from the other
hank who possesses its notes'?-1 testis for exchange
in London of a portion of the circulation that may

be out, but it does not follow that it draws from the
neighbourhood in which the circulation has taken
place all that is necessary to bring the circulation to
a proper level.
Does the banker pay the amount of his exchange
in London without having his own notes returned
into his coffers 2—Perhaps that is a question which
I am not fully capable of answering ; I believe that
the exchange between the bankers is paid in London.
Is not the ground of that exchange the payment
of the notes into the banker's hands ?—I do not
know whether it is solely confined to that.

You object to the competition between Joint Stock
Companies to be established in London arid the pri-
vate bankers ; are you aware that Joint Stock Banks
have been established in the country ?—Yes, but I
do not think them calculated for London and its trade.

Did they not come into competition with the pri-
vate banks already established there ?—ln some
places.
Does it not naturally follow that the persons who
are partners in those banking establishments will be
induced to deposit their money in the banks from
which they derive profit, instead of depositing in
other banks from which they derive none ?
Clearly.
Then the same competition is now going on in
the country towns which you deprecate in London ?
—Yes.
Upon what groUnds do you suppose that, if there
were four or five Joint Stock Banks in London, you
would be called upon to issue a note of any one par-
ticular firm with whom you did not choose to bank
yourself ?—lt would be in the power of any holder
of a draft upon us to present it at the counter, and
demand from us payment as he chose.
Could he demand payment of you otherwise than
in gold ?--To m,kke a legal demand, I suppose he
could not ; but perhaps I ought to explain that the
banker's business is of such a nature that they can-
not refuse to those that come with demands upon
them, any facility required; and this would be one
of those which competition would force upon us.
Supposing you continued your account with the
Bank of England, should you have any difficulty in
telling your customer that you kept no other notes
except those of the Bank of England, or gold, and
that he must take his option ?—I think it is an an-
swer which would not be received by any person fa-
vouring another banking company very willingly ; and
if we were to keep cash by us to make the psyments
in gold of every check for which other notes than
those of the Bank of England might be demanded,
it would be extremely inconvenient.

In the business of your house, if you were to pay
in gold, could you conclude the transactions of your
house within the twenty-four hours ?—I doubt it
very much; on Saturdays I am confident we could not.
Would it not, in point of fact, be utterly and to-
tally impossible to carry on the commercial affairs
of the city of London if payment in gold were re.-
quired ?—lf I may offer an opinion, I should cer-
tainly say it would be so.
Your house is connected extensively with ceuntry
banks ?—We are.

You are aware that most of the country banks,
and the banks in Scotland, allow interest upon depo-
sits ?—They do.
How comes it that in the city of London, where
there is so much greater facility for the em-
ployment of money than there is in the country, the
system of banks allowing interest upon deposits has
never taken place ?—lt has been tried, and I be-
lieve I may add, that the houses that adopted it
have invariably failed.
When, and by whom, has it been tried ?—Main-
waring's house, I recollect; I think they failed in
the year 181 2, or earlier.

Can you state to the Committee any reason why
a practice that is so common in the country, and
which is consistent with so much solidity in the
country banking establishments, should not be prac-
ticable in the city of London ?—I ought to observe
that there is a commission charged upon the other
side of the account, in the country, when interest is
allowed, which is never done in London.
Are there not many of the country banks that al-
low interest, that do not charge commission upon
the checks ?—I think, only upon deposits for a long
period ; I believe that on a common current account
in the country it is very seldom the practice to al-
low interest, except the money is deposited with
them for a stipulated period, and that a long one.
Generally speaking, does not the interest allowed
exceed considerably the charge of commission upon
the check ?—I am not aware that it does.

Can you state to the Committee generally any
reason why that practice, which is so prevalent in
the country, should not have been successful in
London 2—l can give no other reason than that it
has been tried, and has failed.
Are you aware that the Scotch banks allow inte-
rest upon deposits upon this condition only, that 21
days' notice shall be given of their being drawn out ?
I am not aware that it is the general practice, but
I know that in some of the large banks they do.
In what shape does the London banker hold his
current funds; does he hold it in the shape of Batik
of England paper, or in the shape of deposits with
the Bank of England ?—He holds it in both ways ;
he holds a portion necessarily always at home, in
Bank of England paper, and a small portion in gold;
but it is our custom, and I believe it is so likewise
now with nearly every banking-house, to keep also
a large deposit in the Banx of England.
Has not the modern practice of banking rather
tended to decrease the amount held in Bank of
England notes, and to increase the amount held in
deposits in the Bank ?—I am not quite prepared to
answer that question; as far as regards our own ex-
perience, I should say decidedly we do not hold less
at home in consequence of having an account at the
Bank of England.
Will you state what proportion you hold of your
money in notes, and what proportion in deposits at
the Bank ?—lt will of course be evident that this
must depend upon the nature of the deposits we
have in our hands; some are fixed, at least for a
time ; others are those which are going at the end
of two or three days; but I should say, as a gene-
ral rule, from a fifth to a sixth of the whole amount
of deposits was about the proportion held at home,
exclusive of the sum on our account at the Bank of
England.

Can you state what proportion of the amount
which you hold in reserve you keep in deposits at
the Bank of England, and what proportion you hold
in Bank of England notes ?—There is no fixed pro-
portion; our first object has been always to have a
certain proportion in the house, and if we find we
have not about the proportion that we think there
ought to be, we draw upon our account ut the Bank
of England.
Do you think that more than one-half of what you
hold in reserve is deposited at the Bank ?—Perhaps
not so much; but that varies very much.
Do not the balances in your hands amount occa-
sionally to very large sums, and are they not with-
drawn without any notice to you ; and is it not there-
fore your duty to be prepared to answer all those
demands ?—Certainly.
And you can never tell what your balance three
days hence will be, it depending entirely upon the
state of your deposits ?—Clearly it depends upon a
fluctuating daily deposit.
Do you not in fact consider what you have at the
Bank as so many Bank notes in your drawer ?—Yes.
Is your intercourse with the Bank almost daily ?
Hourly, I may say.
Do you Mid any facilities a(forded in your trans-
actions with the Bank ?—Every facility.
Do you believe it to be the general practice of the

London bankers to keep a great proportion of their.
unemployed moneys at the Bank of England?—l
believe it is nearly a general practice.
You have expressed in general terms your appro.
val of the present system under which the Bank i
conducted, so far as it is connected with the private
bankers ; have you found the Bank operate as a rival
establishment to private bankers ?—I think latterly
there has been more disposition than there was some
years ago to put itself forward as a rival establish-
ment to private bankers.
In what respect ?—They certainly have afforded
greater facilities to private customers; I mean so far
as opening accounts goes, which they did not do
before.

Do you not conceive that if a Joint Stock Bank-
ing Company, or if another chartered bank, was to
be established, that Bank might adopt the princi-
ple of the private bankers, which would materially
affect the profits and interests of private bankers ?
In some degree they might ; but I think it is quite
impossible that they could ever carry on business in
the same way as the private bankers do now; yo❑
never can get that done by a secretary, or a board
of directors, which you can have done by six indi-
viduals in partnership.
Do not you apprehend that if a Joint Stock
Banking Company was established, those who were
concerned in framing that Company would endea-
vour to bring into connection with it the leading
commercial men in the City and the leading capital-
ists ?—Probably they would.
Would that materially affect your profits ?—lt
certainly would ; it would take from our deposits
very largely.
Would such a state of things disable you from
affording that accommodation which you have been
in the habit of affording, and which has been a great
ad vantage to the second and third class of traders ?
—Decidedly.
Can you give the Committee any idea of what pro-
portion the advances a private banker makes to his
customer bears to the gross amount of his deposits?
—Our object is to employ as much money as we
can amongst our customers.
Is it not generally a small proportion that you
employ in that way, as compared with the gross
amount of deposits ?—No, a much larger proportion
is employed in bills of exchange and notes than in
public securities.
Can you state what proportion they bear to the
total amount of depodists ?—These advances to cus-
tomers fluctuate so much at different times that it is
impossible to say; they are a small proportion com-
pared with the total amount, but they are large in
themselves ; and supposing we were deprived of the
deposits we now have, it would not be prudent to
continue the same amount of advances on promissory
notes that we do now.

You are speaking of loans to your customers for
short periods ?—Yes,
Can you state generally what you conceive to be
the proportion of his general liabilities which the
London banker thinks it safe to hold in cash ?—I
should think it varies from a fifth to a sixth ; of
course it must fluctuate according to the nature of
the deposits.
Do not you consider that a private London banker,
who is a banker for commercial houses in the City,
is very differently situated from a banker at the West
end of the town, who has the accounts of country
gentlemen and individuals out of trade ?—I should
conceive it is a totally different sort of business; and
I should say our reserved deposit was necessarily a
much larger one than the deposit of the West end
of the town banker.

You cannot rely upon the use of money depo-
sited with you to the same extent that the bankers
at the West end of the town may ?—Certainly not.
It has been suggested that merchants and bankers
are very much under the influence of the Bank of
England, and it has been suggested that they would
not be the best evidence upon any question relative
to the Bank ; do you feel the slightest dependence
upon the Bank of England ?—Not the slightest ;
nor do we feel ourselves under the least obligation
to it in any way.
You respect them as a national establishment, but
otherwise do you care a farthing about them ?
Speaking for the London bankers generally, we ra-
ther consider ourselves the very best customer, ex-
cept Government, which the Bank of England has.
Do"you believe there would be any difficulty in
finding men sufficiently independent of the Bank of
England, who, if they really entertain unfavourable
opinions of the Bank of England, would be willing
to come forward and express those sentiments ?
Decidedly not.
Are you aware that a considerable reduction in
notes of the Bank of England took place in the year
1831 ?—Yes.

Do you think that during that period there was a
general reduction in the balance of country banks in
their funds kept in London ?—As far as our ex-
perience goes, I should say there was decidedly ; in
the early part of 1831 the cash deposits of country
bankers in our hands were high, but towards the close
of the year they became very small, comparatively.
Do not you think that that arose from the reduction
of their circulation 7—That was one great cause.

Was there considerable inconvenience felt in Lon-
don during that period of the year 1831 ?—I do not
remember any particular inconvenience at that period.
What should you consider to be the present state
of the commerce and trade of London, is it flourish-
ing 2—There is a great deal of depression among the
second class of traders in London, great complaints
of stagnation amongst shopkeepers.
Does that extend to the merchants in London
generally 7—There is a deficiency of profit among
the higher class of merchants.

Would you combine that with distress among the
weaker merchants 2-1 think that has very much
subsided within the last six months.

Does the state of depression you have mentioned
apply to shopkeepers generally P—Yes, arising from
a want of returns and business.

Has that depression at all subsided ?—No, I
think not.
You have had occasion to look into the affairs of
some bankrupts in the course of your business; in
looking through those affairs, did it riot generally
appear to you that the bankrupt ought to have failed
siEne six or seven years before, and that he had been
supported by a fictitious system of credit, and had
been going on upon nothing for a long time ?—Thai
has occurred very often.
Do you feel any inconvenience occasionally in
your business from considerable fluctuations bet weep
a scarcity and a plenty of money in London ?—Yes,
but not to the degree we did some years ago; 1
should attribute that very much to the course which
has been taken by the Bank lately, for the purpose of
keeping the quantity of notes out as nearly equal as
they can during the year; of course it is subject to
fluctuations from the exchanges, but at the end of
the quarter, which is the period when the bankers
used to feel the greatest pressure upon their depo-
sits, the evil is now remedied by a regulation of the
Bank, allowing any person to take money on secu-
rities for from ten days to six weeks, to be paid
when the dividends come out.

With that exception, do you find the fluctuations
as extensive as heretofore ?—I do not think that
they are.

Are they still materially inconvenient to the
bankers in London ?—I think very much less than
they were some years ago.
At times do you find a difficulty in employing
your money P—We are obliged to employ it at a
very low rate of interest occasionally.
Do you find occasionally a sudden demand in the

Is it in your experience a subject of common com-
p:aiot, that great variations in the scarcity or plenty
of money in the London market are experienced?'
—The variations alluded to are sometimes felt in one
class of merchanis and traders in London, and not in
others; lam not aware of there having been any
great general pressure in the money market of
London for some time past, although we have had
complaints in different portions of it.
The question refers to complaints among ti e
money dealers of a great plenty of money at one
period, immediately followed by a scarcity ; are not
complaints common among the large dealers in
money in London, upon that subject ?—I do not re-
member any at this moment, there may have been
complaints of it, but it is not a complaint that we
should have made ourselves.
Has the rate of discount varied much within the
last 12 months ?—Not very materially ; it had fluc-
tuated occasionally, but it has soon got back to a
particular position again, and that is three to three
and a half per cenf.
Has it not fluctuated from two to four per cent ?
—ln some cases it may have been two and a half
per cent., but the average has been three to three
and a half, and it has fairly kept at that rate, but
the extremes have been from two and a half to four.

Does not it very often happen, that a bill, for ex-
ample, which has a long period to run before it be-
comes due, is discounted at a higher rate than a
very short bill ?—The average rate of discount may
be three per cent. or three and a half, but a bill of
12 or 18 months may be done at five.
There are several of your customers concerned in
foreign trade ?—Yes.
Did you ever hear any of them say what the fluc-
tuations in the interest of money were at Hamburg
and Amsterdam ?—I cannot quote the figures, but
much greater than the fluctuations that were alluded
to just now.
Have you ever heard that the interest of money
at Hamburg frequently goes up to six, seven, or
eight per cent. and falls down again to two or three
very suddenly ?—Yes, it has been recently as high
as that.

Do not you. consider that, upon the whole, the
rate of interest has kept as steady in London as is --
consistent with the nature of commercial transats-
tions any where ?—Yes, extraordinarily steady.
Are you connected with many country banks who
issue notes payable in London 7—Yes.
Can you state the fluctuations that have taken
place doting the last 18 months, from a general view
of the amount of notes you have paid ?—No, I am
not prepared to answer that question, I could speak
more as to the deposits of the country bankers.
Generally speaking, have you paid more notes
within the last four months than you did in the cor-
responding period of 1831 ?—I am not prepared to
anst.ver the question.
Have you formed any general idea, from the pay-
ment of notes, whether the amount of issues of the
country bankers, in the present year 1832, has been
less than in the year 1831 7—l should think not less
than the latter part of 1831, but I have not com-
pared them.
Then no great decrease of issue of country
bankers has been brought to your notice in const-
quence of paying a smaller sum ?—No.
Is it not the custom in your establishment rarely to
refuse to discount a good bill for any respectable
customer who applies to you, notwithstanding those
fluctuations 7—l recollect no instance of our having
refused a tolerably good bill during any fluctuations,
from a respectable customer.
Therefore those fluctuations operate little or no-
thing upon your general accommodation 7 Very
little indeed.

Has there been any want of discount upon good
bills, for the last four years in London ?—I am not
aware that there has.

What is the rate of discount to your customers?
—Private bankers are regulated by the rate of the
Bank of England, that is four per cent.
When a period of great plenty of money exists
in London, and discount can be obtained in the
market at 2 per cent., are not less discounts offered
to you ?—Yes.

And when money becomes scarce, your customers
apply to you for more discounts?--Yes.
And your habit has always been to discount for
a fixed rate the bills brought to you 9—Yes, with
occasional exceptions.
When money is plentiful, if a man you know
Drell, although not a customer, brings you desirable
paper, do you not frequently discount that paper at
rather a low rate ?—Generally at the market rate.
In your intercourse with the country bankers, is
it the general practice for the London bankers to
Allow them interest, upon their deposits ?—Nov it
.s scarcely ever the custom to allow interest upon
the money of the country bankers in the hands of the
town agent ; during the time of the war it was done
to a large extent, but not now.
In what manner do you employ for the country
banker the funds he deposits with you 7—Generally
they seek their own employment for it; and it is,
almost invariably employed either in Government se-
curities, or through a bill broker.
Does the country banker effect that employment
of his funds through you ?—No, he does it directly
with the bill broker.

Then he gives that bill-breker a credit with his
London banker for any surplus funds he may have ?
—Yes.

Does it not sometimes occur that a respectable
trader, one of your customers, wants to overdraw
his account 200/. or 300/. ?—Yes, frequently.
Do not you give him that sort of accommodation
merely upon the opinion you have of his good cha-
racter 2—Yes.

Do you imagine that such an advance would be
very common with any large company ?—I should
conceive not.

Is it the custom of the Bank of England ?—Never.

Does it not almost happen daily-that a customer
of property and respectability, without the least no-
tice, comes to you, and says, put .5,000/. or 10,000/.
to my account ?—Yes.
And you must always be prepared to meet that
demand 7—Yes.

Could arrangements of that sort be easily effected
with a large public establishment ?—Certainly not,
I should conceive, nor with the secresy they fre-
quently require.

Would the Bank of England do any thing of the
kind ?—I should consider not.

Supposing a large joint stock company to be
established in London upon the same principles as
the Bulk of EnglatO, would it, in your opinion, have
any effect on the Oarket price of gold, in as far as it
might increase the demand for that article ?—lt
would in some degree.
Would not five joint stock banks require a greater
deposit of gold than one joint stock bank, the liabi-
lity of the five and the one being equal ?—Decidedly.
You recollect the events of the year 1825 ?--I do.
Do you recollect the price of stock for money
early in the month of December, and the price at
the next account, which was about a three weeks'
account ?—I do not recollect the figures, but I re-
collect a fact that occurred—namely, that funded
property, for one day, was not saleable for batik-notes.
Do not you remember that Consols were 754 for
money, and about 80i for the account, which ac-
count day was within twenty-five days of the day
mentioned; is it not true that those bankers who
were compelled to raise money by selling stock
for money, and buying the same stock for the ac-
count, borrowed money at the rate of 72 per cent ?
—I believe that to be the fact. _ _ _

What was your opinion of the conduct of the Bank
Directors during the panic of 1825 think
that the commercial public were exceedingly in-
debted to them at that time; I think they rendered
every assistance in their power during the time that
panic was prevailing.
What period do you allude to ?-1 mean just at
the period of the panic.

But previous -to that time ?—They were not
called upon to render that m,istauee
In the year 1825, do you think that greater f3e'lkl