The Sun.
London, England, 1845-06-06 00:00:00

below the minimum. But under this 13111 they would have
the power of extending their circulation to the extent of
500,0001. upon 3,000,000/. This was a much greater pro-
portion of increase than was to be allowed to the English
bankers, which was 3,000,000/. to 50,000,000/. This appeared
to him to be an unfair proportion, and he did not see why the
Scoteh bankers should be relieved from the necessity of
holding gold, when that necessity was imposed on the English
bankers. A better arrangement of the Scotch banking sys-
tem would do away with• the great objection to the 11. note
system. The better order of Scotch bankers hold about one-
fifth of their circulation in coin, and it would be no hardship to
others to impose the same necessity on them. The measure
would operate very unfairly in favour of the Scotch bankers,
as compared with the English system. The Scotch bankers
were allowed to have one-fifth more circulation in notes than
they had coin in their coffers, while the English bankers were
compelled to pay all above their allowed circulation in notes of
the Bank of England, whch, of course, they must borrow from
the Bank.
The Hon. Mr. BOUVERIE did not wish to say much upon
this subject, but his opinion was that he did not think the
present state of banking in Scotland warranted the interference
of the Legislature at all. The losses, and failures, and bank.
ruptcies that had attended the interference hitherto of the Le-
giclature with the banking system in England had been un-
known in Scotland ; but now the Legislature, having taken up
ti e question, and were about to make lees regulating the
Scotch banking system, he had no doubt but that a very short
time only would elapse before the same evils would be the con-
sequence of this interference. They had all seen that evils of
the same nature had resulted in America from legislative inter-
ference, though not to the same extent as in England. On
these grounds he contended that the present system of banking
in Scotland should not be interfered with, at least by such le-
gislative interference as that of which he had been speaking,
for it certainly would not be attended with beneficial results.
Mr. MUNTZ did not intend"to say much upon the subject.
He would merely observe that the only thing he had to com-
plain of was, that the Right Hon. Baronet in preferring this
measure had not gone far enough. He could not see why if
one-pound notes were good far Ireland and Scotland, they
should not also be good for England ; and, on the other hand,
if they were bad for England, why should their circulation be
permitted in Scotland?
Mr. BARING thought that last year's Bill decided the
principle upon which they should proceed. They limited the
banks of issue in Scotland and in Ireland last year, and the
Government would not have granted the monopolies which
they had conferred, without reserving to themselves the right
of regulating the one-pound note system afterwards. He pro-
fessed himself a disciple of the old school, and would read to
them an extract from Adam bmith, in which it would be found
that his opinion was not very favourable to the advocates of the
small-note issues. The Hon. Gentleman then read the ex-
tract; and went on to say that anybody who looked to the com-
mercial prosperity of this country, which had increased so
much for the last fifty years, and asserted that that
prosperity was traceable to the banking system which existed
here, he would be laughed at. Now, ho held that the same
system of reasoning applied to Scotland. It was not, he con •
sidered, a fair inference that the commercial prosperity of
Scotland entirely proceeded from the banking system, which
was established there. It was rather attributable, he con-
sidered, to the prudence and commercial habits of the people.
There never, too, was a greater mistake than to draw in-
ferences from the fluctuations in bullion. For in the year
1837, a time of great commercial depression, when the bul-
lion in the Bank of England was reduced to five or six mil-
lions, was the diminution in the circulation of the Bank of
Scotland proportionally reduced ? Quite the contrary. So
far from being reduced, he found there was an actual increase
of 165,000/. And again in August, lin, while the bullion
was decreased 2,440,000/. in the Bank of England, there was
an increase (but a small one, however) in the circulation of the
Bank of Scotland. He was very much afraid that they did not
follow out in practice the principles which they had laid down.
He would not, however, detain the House b 3 repeating the ar-
guments of the Hen. Member for Halifax, and under all the
circumstances he would give the Bill his support.
Mr. ROSS thought he should best consult the feel** of the
House in adopting the example set him by the Hon. Member
for Halifax, in not mixing up the Irish and the English part
of the question. He begged, however, to assure the House,
that he would bring the whole system of Irish banking before
them on a future occasion.
Mr. OSWALD thought that the people of Scotland would
be quite satisfied to be left alone altogether.—(A laugh.) He
had very carefully examined the nature and bearings of the
measure, and they had no great fault to find with it in the
main. Any objection he had to make would be brought for-
ward when the question went into Committee.
The House then went into Committee on the Bill,
On the first clause being read,
Mr. BANNERMAN moved as an amendment that the
words "said period of one year preceding the first day of May
1845," be omitted, and to substitute the following words—
" period of four weeks immediately preceding the 7th day of
December 1844."
Sir ROBERT PEEL said, that it was totally out of his
power to agree to the proposition. He believed that the
arrangement that had been proposed would lead to conciliation.
—( Hear, hear.) He believed that without disparaging the
issue of the banks of Scotland, the bank would be enabled to
provide for it without any increase of the amount of bullion.
Mr. H UME thought not one point of benefit had been pre •
sented by any Hon. Member that could be derived from the
measure. He thought the present measure was a breach of
faith, and they were about to restrict circulation. The very
first words of the preamble of the Bill were at variance with
the provisions which the Right Hon. Baronet had obtained
leave to introduce, and as the whole people of Scotland were
unanimously against the measure, he concurred with his Hon.
Friend the Member for Kilmarnock, in conjuring the :Go-
vernment to consult the interests of that country, although,
perhaps, by a majority, wholly ignorant of the measure and its
effects, it might be carried in opposition to their wishes.
Sir R. PEEL declared that a more unfounded charge bad
never been made than that of accusing him of having broken a
pledge solemnly given to the House, of having brought forward
a Bill at variance with that which he had obtained leave to
introduce.--( Hear, hear.) He would show that, like many
other of the Hon. Member's assertions, this charge was falla-
cious and unfounded.—(A laugh.) The preamble of the Bill,
as originally propounded, recited the identical provisions of the
prevent measure. He proposed to ascertain the averages by
the issue of the month. The variations in banking in
Scotland at certain periods of the year were unquestionable and
remarkable. In the months of May and October, the circulation
was materially affected, and if the average should be taken during
those equivocal periods, the deductions would be fallacious, and,
if acted upon, dangerous. The periods, he contended, should
be thirteen lunar months from the date of the passing of the
Bill. The average issue of the Scotch banks was
3,041,3991., while 3,061,000/. was the average of the last,
and anticipated average of the next year. Such had been the
computations as originally propounded, and he would therefore
ask the House how, when the same were now repeated, he
could be charged with breaking his pledge or introducing a Bill
at variance with his previous enunciation& ?—( Hear, hear. )
Mr. HUbIE would not retort the charge of inconsistency or
error, although it was singular bow often the Right Hon.
Baronet had followed his (Mr. Hume's) advice, after pre-
viously and obstinately opposing it; and how often he had
changed his course and adopted the principles of those he charged
with ignorance and fallacy.—(Loud laughter.) He could
prove, from the preamble of the Bill, that restrictions were
anticipated by it—restrictions wholly at variance with the
pledge previously given.
The CHANCELLOR of the EXCHEQUER contended
that such was not the provision of the Bill. The bankers in
Scotland would not be entitled to issue more than 3,061,0001.,
unless they bad a reserve of gold warranting an increase. Such
a reserve they frequently had, and the operations of the Bill
merely enjoined a registration of the excess.
Mr. DENISON contended, from a statement of a Com-
mittee of Bankers, that so far from an increase of 30,000/., it
would exceed 100,000/., making the average circulation of
Scotland 4,000,000/. instead of 3,000,0001.
Mr. OSWALD thought the sum of 3,063,000/., as provided
by the Bill, too limited for the present wants of the country.
The raceme would Wert the banks in the agrieultural
dis-
icicle, but the great banks in Edinburgh and Glasgow would
not be influenced by it.. The real s( fferers would be the
country banks in the rural districts, if the Right Hon, Baronet
did not concede something to the feelings of the people of
Scotland, by a relaxation of the restriction he proposed.
Mr. ROCHE did not see that the present measure was
called for, as to the former banking system in Scotland that
country was indk bted for all the good she had achieved, up to
that moment, in trade, commerce, and general improvement.
Sir G. CLERK defended the restriction of the Bill relative
to the issues, and if the principle of a certain amount of gold in
proportion to issues was to be maintained, he could riot see
how the amount of specie could he reduced.
Mr. FOX 51AULE corroborated the statement of Mr.
Oswald, as to the influence of the Bill on the agricultural
banks, and cited several banks in Scotland that would be inju-
riously affected by it. They should pause ere they changed a
system which had produced such great advantages during the
last 120 years.
Mr. P. M. STEWART wished that the principle of avo-
ragecirculation was extended to Scotland, for he felt confident
se theot eh minimum that it would answer quite as well there as in England. The
banks
sm oughtreturns
to
allowed be circulation t
o nm e
amend
returns Scotland, m made
ed
werethe
those returns; and the fair adjustment of this point would be
to allow the Scotch banks to amend their returns, and ob-
tain the fair average, which would be four millions sterling.
It was a motion of great moment, and the practical effect of
the measure would be, in many instances, the limiting the
metropolitan banks to a very low circulation. They must call
in the small banks, which would seriously injure the popula-
tion of the rural district. Was it worth while that they
should risk such an important interest by refusing that which
was only a fair working out of the principle of the Bill ?
An How. MEMBER, whose name we could not learn, ob-
served, that in considering these twelve months, from which
the average was taken in eight cases out of ten, a maximum
average had been given to the circulation of England. And
therefore he would say that, whether from accident, or any
other cause, the English banks, instead of being placed in
a worse situation than the Scot eb, were placed in a much bet-
ter position. Ho hoped the right Hon. Baronet would allow
the Scotch Banks to amend their returns.
Sir R. PEEL said the English bankers had asked to have
that period given them which would furnish a maximum re-
turn, but it was refused to them, and he hoped the House would
not ROW decide upon subjecting the people of England to dis-
advantages to which the people of Scotland were not subject.
The truth was the measure was more favourable to Scotland
than the English measure was to England.—(Hear, hear.)
There was this difference between them, that whatever amount
of gold the bankers held in this country, they were not
allowed to increase the Issue. He hoped that the
Irish Members would not, on this occasion, join with
the Scotch—(Loud laughter)—but consider the case of
Scotland as separate from England. The Scotch bankers
were riot entitled to greater advantages than the bankers of
this country. He relied upon the general sense of the House
for maintaining a proposal which was net unjust, but
which, if erroneous or unjust, was certainly unjust in favour
of Scotland.

Sir R. FERGUSON said, that daring the last year there
had been increased prosperity in Ireland, and he would im-
plore the House not to allow such a Bill to pass as would put
restrictions on their currency.
Mr. M UNTZ agreed with the Right lion. Gentleman at
the head of the Government that the present measure was
decidedly favourable for the currency of Scotland, but he would
have wished it to have been extended on a more liberal plan.
The House then divided, when there appeared
For the amendment
Against it
Majority against the amendment —2s
The clause was then agreed to.
On clause 2 being proposed, a desultory discussion took place,
in which the Honourable Sir. Bouverie, Ilir. Redingtan, and
Mr. Charles Wood, took part.
The clause having been put,
Mr. DENNIS'IOUN said that it was understood by
tankers generally, that the Government would not press this
clause, and ho should therefore beg leave to move a verbal
amendment.

Strangers were then ordered to withdraw, and the House
divided, when there appeared—
For the amendinemt 3l
Against it
Mori aai
The clause wasa then aggreednst to.it
Clauses 3,4, 5,6, and 7, were passed without any dis-
cussion.

On clause 8 being put by the Chairman,
Air. F. MAULE said he had an amendment to move upon