The Sun.
London, England, 1844-05-21 00:00:00

s_ --
17419°1181* far Adak Jig717ti1777 r remlttitiees to 1 tuneqhlirreliavie,-,apdin-1840-the -nephew committed
ali'Llia and Mina,- and other places,; which he , - suicide: when the frands . were about to be disco
-
mare( -
. I must be given' up if they rigorously' pere,l aered:
~ In , the eighth case; .. a: 'batik • failed With
ste I . •
( an. -confine their ':issrteit-qtr gold, 'and 'gold I liabilities to the' amcurk of- 157,9501.—n0 dividends.
aro -
h. ne. He would now proceed to other parts ' ofl How. much did the assets amount to ? Just - 20/.-
15 explanation, which referred to joint7stock banks (Laughter, and cries of " Hear, hear.") And yet there
and private b'k an 3.- He proposed that. every hank i were-persons to he found who would stand up and s 4
this system was perfect, and required no change. Now
Which had, .On the 6th of May last, the . privilege tit might be thought that it wasimpossible to exceed this,
,of isesuin_g notes should continue to exercise'that privie :but he. would give them one case more. In the ninth ie-
, stamp-ice
lung as it IhOiight taro per. He proposed that stance, the fiat was made out on- the 12th of JulylB42 ;
f,..
ofaMp-office should make out iminediately an estie. no dividend had yet been made s but the creditors had-
in
ii!,?e. the amount which: ach bank of issue had issued: --this consolation, that 7501. had . been made by race-
ever
tli wo years last preceding the.6th of May, and that horses.e--(Great laughter.) 'New he- proposed to 'take
y banking-establishment having this privilege should- some steps to purify this system: - He did not wish t•
. .
continue in ossession of it to a limited amount till Par- Injure existing interests ; but if .safety and welfare of
lianient should otherwisedeterrnine. He proposed, also, the community . required .a change, he thought the
that every bank shOuld make a daily return •to the peesent proprietors of private. banks, would have no
Government of the amount- of its 'issues, froth which tust right to ..protest against the establishment of
daily return the
vytichn, ed
r4tur to bSe
publish tamp-officeshourd'Araw up a .weekly Joint-stock banks on a safe and sure foundation on paid-
'in the .-Gazette,or some journal •up capital. He had shown the, House that it was im-•
make should ensure equal publicity. He proposed to possible to allow the present system of. unlimited com-
- a modification of his plan., with respect to the spetiti.on to go 'on.- He- did not.- object to increased cern-
., .
instead of. the. daily circulation of such banks. Thus, petition, but to the principle of coining mere credit' into
...eau or taking the circulation of each day, he pro- money 'without depositing security.-=(llear, hear.)
Posed,' to avoid penalties, to take the average, of the Such a system' he believed was net in anywise inter
tt-hear.
its maximum
.if a bank ssued on one day 501. more - woven with the prosperity of this country. It was said
pro-
bank its miil a aiik issued on one day 501. more' woven with the prosperity of this country. It was said
I%nk sho leximum, and on another day 50/. less, that that great inconvenience would be suffered from the pro-
thba .
theu d not be subjected to penalties. He proposed posed. restriction—perhaps' there might be some, , but
laic'the follovv. should also fix. • the- day - that would be but a slight argument against any chapge.
taginwP-4ffikeoen which it would be most con- 'lt was further urged that-the people were not habituated
.werieikentrteo publish the circulation of distant banks in the to the. Bank of England; that there would be a great
by.thepdicednig. This would in all eases .be --regelated objection' to take Bank. of England notes; and that agri-
had been stance ofeach bank from the metropolis: There cultural prices would fall if aecommodation could not be
banks. isome eases in which there had, beense union of obtained from the country banks. He apprehended that
such w n these cases the. rettuktroinishMBe4stlade in these fears, were merely visionary. Now at present
be'enn away as to cause the least inconvenience. He, had the • Bank of England had a nienoptsfy of circula-
branch .b
t it3lnks.
d what he intended to do. with joint-stock tier . and issue - within. irixty-fiie. miles of : the
bwaeilrkes..o
ler
allowed
He had been asked if joint-stock banks metropolis. Now this radius included most of, the , hp-
wed to add to the'number of their branch pedant agricultural districts, either all or a portion. of
were not is answer was that they might ; but that they the folios ing agricultural districts:--Essex, bent, Suf-
sa. „
lit to increase the average maxim= of their issue felk, Norfolk,. Hampshire, Oxfordshire, Northampton-
Vne
.osecount. ,It was bajust that there should be.no shire, Buckinghamshire,. and Bedfordshire.. Now: the
husineesti
should
to this consolidation of the banks,. and that the . total amount of issue within this district, by banks, other
banks, Vd ainsiunt to the, aggregate amount of both, than theßanksof England, . wee 1,000,329/., which showed
thought theith regard to the number of branches, he that no great advantage had been taken ofprivate banks. ,
(Reese k 5
. law required amendment in this respect.— He had now laid. down the principles on-which her; its
the eaokT,trhls..l-1e theught iewculd be fur the interest of jesty's Government had determined to act. . The time
branches, esseiyes
beta that there should not be so many was now come when some check must be placed to pre-
present the 1:43.e it was a source of great
.expense. At vent . the recurrence of those evils. The proposed
on four branches,wrequired for the, payment of duty only. measures would. be adopted with a- perfect regard to this
lishtnent of .He would not object to' the estab- convenience of. the subject, and a perfect consistency with
bann.:_.
of new branches ; but he would require a -liberal s treatment •to existing interests, buts- above
Ifelb:,',", 3O/, on every new branch established.. all,• to prevent . those shocks - upon - the commerce
tbe.
so 7 been asked if he would permit substitution of and aviculture of the. country which had . hitherto
Placer ',°r the father, and allow him to take the father's proved. so ruinous, HO - trusted . that the sense
tk_ , -Certain he would. All he . wished was that and Aeling of the House would be entirely with , hitn in
-Panha should give guarantees for the continuance, of making a just compromise, and in placing this check.
their
_Privileges, but should not attempt vexatious inter- ,upon the .recurrence of--those evils which, he trusteds
ss.''atse in private transactions.-a(Hear, hear.) He had -would tend Ultimately to the establishment of sound an,
altskeiliif be would interfere if there were five- new just legislation.—(Cheers.) - . , .
Partners amongst six. ,It was like the old stocking that ' --Mr. C. :WOOD said that, as he had been chairman of
121. darned, 'of which nothing- of the old stocking re, , the Committee of Banks of Issue, he would say a few
• t'natls His answer was, that he - could, not interfere Wet* tothe•Hethie. He 'thought 'it was of the highest
withthe sale and transfer of.banki. .If he made a law on importance that ..a principle should be - laid'- down
the-5.,. 4 •
..., ... -eject-It would be evaded.: _He had been.also asked by • which the monetary, ~ system ' should; be
.7r.i, -their' he would allow those bankers who' now &cu.. - guided.---(Hear, hear.) The last time -an - attempt
..ia_tettllank of England notes to -substitute their own' had. been made, to regulate the currency was in 1819.
17Ps_ r -for the Bank of - England paper, and take the By .that. measure a return was made .to a metallic
. ..
stersge of the twnyears; He did- not propose to permit standard, ami be hoped, it, would continue.. None of the
ink Of
arrangement: 2 But then he proposed that the metals was so unchangeable as gold, . and- that alone was
tiosn't of England should grant those banks accommoda: •ft reason .with hini why he preferred a gold standard 'to
1.,..u5r the mosafavourahle terms. The Bank of Eng- any other. He believed those who were anxious : for a
:21!? tar adtransactiona with those banks of a double dm- silver standard were so with a view to deprecietion, fois
;117;%. It permitted them, in some cases, .to . open silver had fallen more in proportion than gold: At the.
-;,.. nicpunt account at a . rate of three per eerie
_present moment there was reason to believe the..sepplY
I<n
,other cases the banks have given one per 'of • geld - was increasing faster. than the supply of
'Es on the • amount of bank notes in circulation. silver, • and if that were so, those who were anxious.
The as.
st allieproposed to:put an end to the three per cent._ for a depreciation -ought to be cautious how': they_
01r—um, and to substitute the one one per cent. for the changed the standard from gold to silver, . :The ounce--
" Per cent., and the Bank of England were quite of gold was:at present valued at 3/%175. 100., and the:
ses. pereto. enter into engagements with the, banks . pound in gold contained. 123 grains and a fraction, and
.... Lungits paper for, this purpose. He- thought it right by. that he hoped they would abide. The Hon. Gentles-
_
'"' make this public declaration on this subject. He did man referred to some•evidence which had been given.
pot think there was any. other point of importance which before-the Bank Committee,' of which- he was chairman:-
r?_ eeired explanation; and here- he might terminate his. and. said that the system of free trade in banking hatl'
nas,n rvations, and permit the-Houie to resume the dis- beets fbllowed by the most' disastrous consequences in:
~,,,ss.s.lOtil , but that he had been told his chain of argil- America. In 1830 there were 329 banks in the United.
•;.,,721. on the former occasion was incomplete-that, there , States, with e capital of
.145,000,000 dollars, - and air.
wi'llel2o necessary . connexion between his premises, issue 'of 61,000,000 dollars. In 1837 it had in- -
thu.n, Some readily admitted, and his . conclusion--e creased .., to, .677, : being more „ than , doeble T.
..,o,_ be did not show • a necessity for interfering with the capital was 378,000,000 dollars, and the circulation:
bmaq-nketreulation of country banks and of -joint-stock:' ..had more than trebled, being 186,000,000. But in the •
issue s, or of . :establishing a , central .
,bank • of May of ;that year cash payments had been -suspended:
eruct' i . and giving increased control to the i Bank through the. Union. All the
,evils against which they.
in .thnkhtild. •He was not conscious' that , any link were anxious to proVide had desolated that country from
' telt e chain was --wanting,- ' because he had at- one.extremity to the other. But if they looked to what
40tepsted to show that competition among the issuers of had taken plaCe in this country in. 1839 it would show
isot .was a bad principle, that the same ' arguments did they were not quite so far off frOm suck.a state of things
• etheaPPlY to that branch of commerce which applied to 'themselves, and it was only by adopting
.the unusual
ism:- He had shown- that unlimited.Competitionin the course of applying for foreign creditaea. course not very
If thsel„f.notes .was bad, from 'the example of America: henourable to the character of the- ountry-s-that thes_
for w-fs,'"uld let bins go.to the colonies he could. bring were able to avert those evils which took place in America.
d ),--. greater Proof that the principlebad one; This-was owing to the unlimited - circulation of paper ;
fro ''' would now trY to bring it to their conviction, and it was worthy of remark that, previous to this time,
•ea rx,ie the experience furnished 'both by: England and the circulatien was greater 'than at any former period.
042, that if they were wise they .would , take lie did. not mean to deny that-the-circulation of ,paper
tbe-,:tt7. against -unlimited, competition -in issue; was a great benefit, but, in order to render it safe, proper
hatiV"llltl increase .the control of the superintending securities should be taken. Those , precautions, were ;
siciss!, and. thus prevnt those terrrible alternations 'and Such as subject give paper as much as
,pessible the value
- yelue'lt,,ufdea in that medium which was to- regulate the of gold, byng it to the same regulations: There
oush; r every thing, and from which. they had so'griev- should be as much paper as was just necessary, and no ,
iieri,',..auffered. Now-, fie would take the five great - more, and previous deposits of, bullion equal to the
• a„,,,---, when -this principle of convertibility had been in
.einoent
-of. paper required sleuld, be. mad.e. , Tha-
danger; and he would attempt to show them;that that would ensure convertibility ; but something more than
tsneger nod arisen from the unwillingness , or.
.hicompes. 'convertibility was-required. That would -provide means
_.„)!..Qf count bankers—he excluded joint-stock banks of circulation, but it .. was inadequate to check paper be-
asst,i's
scontrect their issue.- There were, in Met, five great, ing put into circulation. , There were other checks, no
her r's--. 1825, 1832, 1g35, 1836, and 1839. Itt "Novena- -donbt, such • as. the fear of consequences ;' but, there,
of ,82A, the Bank was possessed of bullion to theamouet were not the same checks as existed in a metallic circu-
to '3,;.60,000/. In November, 1925; it was reduced lation, for bullion had to be taken to the Mint, end if
etteb3,ol2,ooo/ Now, it was quite cleai
.that there they applied the same Check to paper,.. they. took all the
en-s-,,t •to have . been a, great reduction - in- the- security that could be 'required. The most proper courst,
b,lb„—nt Of circulation.: He knew some persona thought they could adopt was in his opinion, to require deposits.
Pes,"ss enterite, into a, useless conflict by attempting to of bullion previous to the' increase of the paper circulation,
s't,—?..n,strate that ; but pamphlets, - based on the oppo- Tip to 1833, all that the Bank of England required was.
pleViliciple, were issued every clay., There was one to have good commercial securities ; but, in :Is33,;ft new
ri,:tsbed that very dayes" A Metallic Currency e Bar- rule was adopted; which wink a nearer approach to) sound
e - to. the Progress of Civilisation, and the Primary principle, and it was, in point of fact, that which the
Se-usle of Restrictions, en International Intercourse, with Right HOn. Baronet adopted. - Beginning from the year
n .°lstions for placing the Currency. of Britain 'on a 1832, during the eight years in_ which thet. rule was in
1::: :Isis." That basis was a .paper currency, which, operation, the difference between the highest and lowest.
le,. said to be adequate to the growing' denianda of the amount of security was 10,804,0001., and that between--
iss ',
'ere was the old doctrine that. the State' might the highest and lowest amount of bullion was 8,178,004,
tree whatever it pleased. But he assumed, that the and the difference between the highest and I::kweat
.
ata,,-,i majority of that House were in favour of one amount of circulation was 3,334,000/. That which
pagard, and that standard a metallic • one. If that ought to vary; varied to the amount of three millions.; .
.44 neepl were right, there ought in 1825 .to hale been a- and that which ought not to vary, . varied to , the
14,4 tiiin in . the -'amount of circulation' ; but, in- amount of 10,800,000/. • The: rule, 'which was suited to
. had I?_f, diminishing, the notes of the country' banks ordinary circumstances, was fotind to be broken through
In itozaareased from four , millions to eight.
,when a pressure came. He was convinced of the • in-
-9,849 000 the bullion in the Bank of England :undiluted to justice of the attacks which had been made. against the
4,00'",,20/., in 1837 it" . had diminished more than Bank directors. . Whatever they did, it was from a con-
tlee "'"0/. Did.the circulation of the country banks viction that it was the best for the-public, uninfluenced
is ease during the latter period.? : No,.it increased—in by any consideration of private interest. Still less did
laeostne cireulation' of the country banks was about he . blame the issuers of country banks. They acted
14.4 'Mot, in 183 Z it had increased to 11,310,0001. upon no rule. They did not profess to regulate their
a eri:lig-a..st) 1836, .when the country :Was on the verge of -issue by any particular yule. , Mr. Hobhouse, in his
111,1344 In monetary affairs, the circulation of the coun- evidence, stated of the country bankers that they never
WI at nih was more than -10;000,0001.--(Hear, hear.) pretended. to. excreta!: any power over the circulation.
of r,„ ''''‘e "anted to show' was that during these periods. The .consequence was, . that while_ the - aggregate
ityleistt,Lenibtirrasiment, the ;coUntry, banks, so far from circulation increased largely only from . March,
ing h;'4lming in the embarrassment, were daily increas- 1838, to -September in the same year, the
th, 26 circulation, and_ thus aggravating
,the evil. On country issues increased largely from the former period
- gland ~..th of June, 1838, the bullion in .the Bank of Eng- up to June 1839: They were at a minimum, when
-Mal s"sas 9,722,0001., in June,-1829,. it was reduced to bullion was at a 'maximum, and they were at a maximum
instesa"."4/e whilst the circulation' f the . country banks when bullion decreased six per cent. He
believed that
taere7„, of decreasing had increased from 11,740,000/. the principles laid down by the Right Hon. Gentleman
?ale s'sasli 12,000,000/. when the Bank of England had were sound as far they went, and the question really
'or i -''."0,000/. in its coffers. Making every allowance was by what means they could introduce principles still
(aealProvidence on the part of the Bank 'of • Englund sounder. lie believed. that the power of the public over
valet . e did not wish for a moment to,defend that bank a papr circulation would be just what it was over a
that the was liable to the 'charge), it was. quite-clear metallic circulation. But he was bound to say the Right
giffau e country banks were, even in times of monetary Hon. Gentleman was • entitled to the credit of having
eiceuisittlicolreg.ulated by. prices, and. that their increased
_brought forward an eminently practical plan. There
„salts-es; Only -,added fuel ao•the fire. The. country were other considerations. connected with the matter,
s._'"cir a"'" 110 doubtrendered great. service, but he asked but taking the plan as far as it went, he was
ara;Pc_ates to remember that when such disasters bound •to say it was eminently practical.—(Hear.)
4•44 e, rd.' " must be now fresh in the mind of every It was impossible- that a drain should happen when the
thre entice:tan who listened to hire, and occurred too bullion was so. low, although the knowledge that it was
Tankgli . f .
s the want • sympathy between the country so might tend to . incre'a'se the draie. On the whole,
`',sear and the Bank, of England, it-. must be taking'all the circumstances of the case into -coasidera-
' ",.. I sr.,'" caution was requisite, that they had Lion, he felt bound' to say that althOugh at first he felt
tt." . kti'..,1410 not against the , use but the abuse some doubts upon the subject, he was not all prepared •
.
. ,''' %hi '"crY -banks - and that ;legislation. •on to quarrel with the amount of security. It was exceed-
itee.seattZett in some shape .or other, was i.Mperativvly ingly. desirable that persOns should be aware what was
4tles 'Y, in order to put .a stop to improvident circe7._ -the first 4ppaient drain in the returns of the circulation,
„,t4sry o'is-,., (Hear, hear.) When he looked back to the his- least any alarm should be excited in the public mind,
•i'''Y su Private banks for the last thirty years, he was He believed there.were about twenty-one millions of notes
‘B4a -rPrised that
„lIT would
take . it tins resery .
Q - first 'returns
_fort-he issuing department would-show an
~-'''Prisat, real to the House, from a return, the number apparent increase of.bank notes to the amount of nine
'ery sh,— nanks which had become' bankrupt - Within a *millions. That. amount would rather
,startle the public
tnllte. 41 time. In ,s. . les fss, . ,
.1840. there were twenty-feni batik.-
.unless they. yere apprised. that the increase Would*
ate ban, Private banks—twenty-four bankruptciesof pm- more in appearance than` in reality. ' What each, depara-,
listsits
-.42f In cite year !In 1841 there were tvi,entpsix; ; ment•did with these notes would, of course, appear in
°l' the Ati""tidin.lB43;eleyen.; And as an illustration the returns ;.he was only anxious. hat the public should
..
'tis - sYst
' . etitlass. ern, he would infOrm thern..tbat out of the be apprised that there would be an . increase, of,
•'-itten ti out c'.
tr.' banks,•ieventee a paid -nd dividends—seven nine millions in the Bank circulation.--(Hear.) 1
i,, t twenty-four
d -..tensit, - hanks paid no dividend% ! What He now came to the_ exceptional power of increasing
that
b Y of-individual suffering -mast have been pro- the issue upon 'depositing security, and he was willing
. . seat tb_ Y these failures..---(Hear, hear.) It was said that this should take place in the cases
.stated by the
taut
~•hapeopie
might have refused to take 'their notes, Right Han. Gentleman. The House was willing that, so •
ghat ehtoiWtta the poor farmer or retail , dealer- to, ,de ? long ai'theßightllon. Gentleman was Prime Minister
as??._, option: se had he Y . This. descriptibn of 'persona had of this 'country, ' This- peaver should remain with him 1
ett7tit'e to let the occasion
hear._) lt.
.I,vas impossible for the --(Hear,.heer)s--but before he hid got out of doors,
-tie. Right Hon. Gentleman's propoSal,
had Y against the ca'st" Pass without,
.o.ving
_some -se!. after listening to
ankt made as been., recurrence of these: evils. A return he. as told that this was considered in the Bank parlour
We 1 nPtcY C ' '
of the number of bankruptcies from the an exceedingly convenient mode of increasing the issue
a d read 'lnn from Ari 1,1839" to 1844, . and he whenever' he Bank might desire. He thought that was
ord,,,.testhe House extracts- from this return;lP : a malt aeriotts objection to the proposal,' and' the objecs
le • t° sho '
the fi w the nature and cause of tbeSebankruptcies. tion was stronger when the power was in- the hands' of
‘)/!r's r" instance th
esnt Peculation , e: cause of bankruptcy
.Wes , the Government than when it was in the hands of the
, min
town
inn Spanish bonds. . A bank in a : flank. Let them only imagine a weak Government pro.
tg on e which everything 'appeared to' be: teeding to exercise the power,- and he. felt sure they
rice. - well, and in which the titmost confi- I would cOnoltide that must be most dangerous ; in factot
enga. ed 7" reposed, was s.it the same , time to
• iht take away the - Very essence of- the' present
. .plan,
11°
1 cuss
1 a most hazardous speculation in Sanish which was itself.. a.. check to issue. However, he
it -' and When
, could „sit
.the sudden crash came u- on the bank thelight , the alteration . proposed by the. ..on.
. 'Right 'TT
rOttAter 48Yane. dividend. - In the second inSianee the Gentintllen tended ',materially to remove this objection, ,
fhe-necessity oarCh an
aaPtee ss sptrit-merchant,.and the cause of his bank- ,He confessed he d. 41. no.t e(:'
tilt pa, alle_ged to have been paying his father's arrangement. It was'quite clear that so lone• substi,
caesreeitwaB h 13 kb' - Id '
„.,..." third no dividend irethis case either. In : tuition was made out of the reserVe t 0 on wou gam .
1-..ll,e,_ioned b Inahe fourth in
' and dividend, was bad speculationstoos and there was , the whole profit of the transaction, but if it was obliged
instance the bankruptcy lira§ . to obtain notes by depositing a larger amount of security
Wereaitrupts isl' 1,(.'" on railway speculations. These the.- withle profit would 'go •to the Government. • The
' into not ti:,4lits.PilE.'4 the medium of exchange—they Bank had no inducement to come to. the-Government
apee,mon_,
and
in capital—d in their own
they were conveitieg Ciedit to obtain that power so long as they had
es Cadets:a!: ~_a_d then entering into; great -railway hands a 'sufficient supply of notes to enable them to make
"tied to eo .'"
, the twat case the bankrupt; bad sue t.h, v batitution; He quite agreed with the Right :Hon,
estate, a nsinisrable propert he hd '
tai-asor and overdrawn ass •y. . a mortgageds. Gentietaass as to t..p , P
WhOie-oWn interests
sorbing rnotes to the Auntiprivate moonlit*, issued pro- communicating will.; tOsp. parties .
. the whole of 14,0001., and, after 4.17, ' were:more iinnlediatelY-concepled, 9,1-
E.l he thought ' , a
..17z . able to niakeprefit of the bank, failed, without. stable. to the _Right, Hon. tats 141 44471
'tour hea" the bank, any retire to his creditors. In. he colialguit4" tiAtt'aitov".bad shown .every 01.V9sitig's .t°
it islLlY, had been • though apparmtly going ;In- fa-: amend. the law as fax as own-4,mv4 wag fennirecl. "Hp
arue insolvent for Many yeaea • La length: • thou ht it "exceedingly 444-14111141 sh.mo
renninbankrupt from hay' lost . v .g was 'desirous
13,erite-
(.40se, I' and 66,000/. I- t
ing large smile-CR itale,i - know what.was the amount, of the notes' in s . ft.
the unclothe seventh ca a commercial house in Giese tits. ef England. ; There . was an, lestneese money
100 and th _ e the bank was conducted by power ,in .Vise . 144.-. .ctit. o-if:hatcsalgi.Perit,; if it
,0004, e nephew, a
in 1838-the uncle di
, and the nephew dissipated had . in_ reserve nine millions a „ TAPIWY .in notes,
e died leaving a largo fo There might be immense mug 9032,nney w. 144, 4 VacT II

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