The Sun.
London, England, 1844-12-06 00:00:00

EDINBURGH TOWN COUNCIL.
SCOTCH BANKING SYSTEM.

At the meeting of the Council on Tuesday, the
Lord Provost (Mr. Adam Black) brought forward
the notice on the Scotch banking system, of which he
had given notice. He said, "If it were necessary to
apologise for troubling the Council with the motion
which I have now to submit for your consideration, I
have only to remind you of the proceedings in Par-
liament last May, %hen the renewal of the Bank
Charter was under discussion. On that occasion Sir
Robert Peel, while he proposed and carried important
changes and regulations affecting the system of bank-
ing and currency, at the same time declared that he re-
served for future legislation the system of banking in
Scotland and Ireland, and that he purposely abstained
from saying anything about the issue of small notes at
that time, as it might raise a storm which he might not
be able to allay. The regulations which he then pro-
posed were generally allowed to be founded on just
principles, and I concur in the general opinion that
their tendency will be to keep the currency .in a
healthy state, and to prevent those sudden fluctua-
tions from excessive issues in times of prosperity, to
excessive contractions in times of panic, which have
from time to time bees so disastrous to the country.
It will be well to notice here that one of the regula-
tions proposed by Sir Robert Peel is to prevent the
establishment of any new bank of issue, and that if any
of the existing banks shall cease to issue paper, it shall
not be in its power to resume such issues, and that none
of the existing banks of issue shall at any future time
keep in circulation a greater amount of paper than the
average of the last twelve weeks. Thus we have a se-
curity, that however great the temptation, it will not be
in the power of the banks to increase the amount of
paper money in circulation to an injurious extent,
htlt, cm ilia oontrarv, whatever change is made, it
must be in the direction of diminution, as every bank
of issue which gives up, or which ceases to circulate
notes, will so far contract the circulation of the
country. Some have said that Sir Robert Peel will
not propose to interfere with the circulation of small
notes in Scotland ; others that he ought, and that he
will. Any one who carefully considers the principles
which he has adopted, and which he has enunciated,
may see that they lead to the suppression of all small
notes ; but it does not follow that he will press the
adoption of his measures, if we can prove from ex•
perience that the Scottish system of banking has been
beneficial to the country, and that his views are in
direct opposition to the wishes and views of the people
of Scotland, generally and decidedly expressed. It is,
therefore, the more necessary that the sentiments of
the people of Scotland should be made known as
early as possible, to prevent the adoption of mea-
sures prejudicial to the interests of the country.
He then adverted to the objections raised against the
Scotch banking system, the issue particularly of
small notes, and the alleged injury which Scotland
caused to England by being exempted from the same
monetary regulations, and, after answering these ob-
jections, thus concluded :

"If you are satisfied that the charges against our
notes, especially our small notes, are not well-
founded, but that, on the contrary, from the discreet
and judicious manner in which they have been issued
by the Scotch banks, they have tended greatly to pro-
mote the prosperity of the country, and that their sup-
pression would be attended with disastrous conse-
quences to the trade, manufactures, and agriculture
of Scotland, and would occasion great distress
among all classes of the community, you will adopt
the resolutions I have now to propose. In throw-
ing my thoughts together, I was under the impres-
sion, from reading Sir Robert Peel's speech, that the
restriction of the issues of paper money to the average
of the previous two years,
i was applicable to the Scotch
as well as the English banks ; but on looking at the
Act since I entered the Council, I perceive that this
regulation applies only to the English banks. I am,
however, of opinion that it is but fair and right that
the Scotch banks should be placed on the same footing
as to the restriction of the amount of their issues as
the English. This would give a perfect security
against any excessive issue of, paper money in Scot-
land as well as in England. Some have brought for-
ward and supported resolutions that the system of
Scotch banking should not be interfered with in any
particular whatever. I consider this as taking too
high ground, for it can hardly be maintained, that
however excellent the Scotch system of banking is,
that it is absolute perfection ; all I propose is, to
object to any interference with the essential principles
of Scotch banking. His Lordship moved the adoption
of the following resolutions :
"That the prosperity of Scotland has been greatly
promoted by the well-regulated system of banking
which has existed in it for nearly 150 years.
" That the public confidence in the stability of the
Scottish banks is fully justified by the ample security
afforded by their ability to answer all the demands
that can be made upon them, inasmuch as to meet
their paper currency in circulation, amounting to less
than three millions, they have a paid-up capital of
about twelve millions, with nearly a million of Ex-
chequer .bills, and gold or Bank of England paper,
and the responsibility of numerous and wealthy indi-
vidual partners.
" That the present system is intimately incorpo-
rated with the trade of the country, has grown with
its growth and strengthened with its strength, and is
so accommodated to the habits and feelings of the
Scottish people, that any interference with its essen-
tial principles, if it did not immediately and directly
disturb and embarrass the trading and manufacturing
and agricultural interests, would at least spread such
general distrust and alarm as would be widely disas-
trous to the community.
" That while the Scottish system of banking has
been of great advantage to Scotland, it has, at the
same time, been beneficial to the empire generally, by
supplying to a certain extent a safe, economical, and
well-regulated currency, by furnishing a capital to
the Scottish tradesmen and agriculturists, by means
of which they have been enabled to encourage the
trade and manufactures of England.
" That the great objection which has been brought
against the circulation of paper money, that of occa-
sioning disastrous fluctuations in the mercantile world
by excessive issues in times of prosperity, and sudden
contractions in times of depression, cannot be brought
against the Scottish banks, the issues of which having
been prudently accommodated to the wants of the
public.
" That on these grounds, if it should be deemed
necessary, petitions should he sent to both Houses of
Parliament, and that it be left to the Provost's Com-
mittee to decide on the propriety of petitioning, and
t of the time at which this should be donq,"