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

M. Stewart) held that to be an excellent doctrine, and could
recommend it to the perusal of all interested in the monetary
affairs of the United Kingdom.
Sir R. PEEL hoped the Hon. Gentleman would allow the
Bill to go into Committee, in which its details w old be dis-
cussed. In bringing it forward, the Governmeat had fairly
dealt with Scotland, and he regretted that the Hon. Gentleman
had endeavoured to raise a trejudice against 11 o Bill, and
alarm at it, by stating that it was to be the forerunner of a
single bank of issue in that country. He (Sir R. Peel) had
never been in favour of establishing a single bank of issue in
Scotland, as he knew the difficulties in the way of such an es-
tablishment. The interviews which he had had with persons
interested in Scotch banking, had made him fully
aware that there would be a most vigorous opposition
to a measure intended to effect such a change in
their monetary system.--( Cries of " Hear, hear.") He wished
to remove any apprehension on the part of the people of Scot-
land, by stating that the Government did not contemplate
establishing a single bank of issue ; neither did they intend to
bring forward any other measure than the one they had pro-
posed. It was clearly a case in which the whole country was
concerned, and there was a case of res integree. As regarded
the money to be advanced to the public, he thought that there
ought to be some ground for the principles on which the bank-
ing system should be conducted in Scotland. He was aware
that there was a great prejudice in Scotland in favour of tha
system of paper issues and security credit ; but yet, even there,
there was a doubt of this system ; and in England, where it
had been tested, much doubt was not only entertained respect-
ing the principles of banking, but also as to the mode on which
it ought to be conducted. He was not aware of the feeling
which was said to be entertained in Scotland in favour of those
accommodations that the public enjoyed, and he was rather in-
clined to think that the feeling of the public was against it
than otherwise. A distrust must naturally exist in the minds
of all who had property at stake, and unless they saw that
there was perfect security for the money which they depo-
sited, they would of course be very chary of the amount which
they contributed to what the Hon. Gentleman was pleased to
consider the general benefit. There was not in his (Sir R.
Peel's) opinion anything to justify the assurance of the sound-
ness of the banks, simply because the paid-up capital of the
banks was all deposited for their trading. He indeed did not
think that any paid-up capital could give that security which
the public had a right to demand. Unless the director or the
governor of the bank had a power of converting their assets
into cash, there was no probability of the several banks being
able to meet their engagements. This was a principle well
recognised in commerce, and a feeling had accordingly been
engendered in the commercial world against it. The Man-
chester Chamber of Commerce had indeed so decidedly
expressed itself, that there was no doubt of the
course which would be pursued in all the places where
commercial transactions were of any importance. This was
high authority, and entitled to the greatest credits and he
thought that if a doubt had been entertained at all upon the
subject the safest plan would be to allow the claims of those
who, while they were unable to help themselves, required and
were entitled to the greatest consideration. This perhaps
could only be obtained by the same system which was pur-
sued in England, but yet he felt that there had not been
sufficient care taken to render the system even in England so
perfect as it might be. The banks in England were net bound
to a certain amount of issue except so far as the amount of
their capital might restrict them ; but he thought that in
accordance with the principles which had always regulated the
people of Scotland they should have some other and further
security. It warn not sufficient that the people should have
the assurance of the solvency of their banks, but that they
should also derive from them consistently with their security
all the assurance which they derived from that quiet enjoyment
of their property to which, from the Constaution, they were
entitled. He therefore thought that the system which had
been proposed was not only wise in itself, but judicious from
the way in which it provided for the public benefit ; and he
trusted, in consideration of these reasons, that the Hon. Gen-
tleman would withdraw his opposition.
Mr. HUME said that, in the restriction of the issues for
Scotland he differed from the Right Hon. Baronet, toto
That Scotland had flourished under the present system no one
could pretend to doubt, and he thought the people of Scotland
would be quite satisfied if they were left alone. They had been
able to provide for the general benefit hitherto, and the feeling
was decidedly, throughout the country, in favour of the system
on which they felt that their prosperity had been grounded. If
they were to adopt this system and continue it, they would save
the country at least from 200,000/. to 300,000/. a year, and at
the same time satisfy the feelings of the people of Scotland from
one end to the other.
Sir W. CLAY said that the system of Scotch curreney could
not exist if Scotland were an independent nation. But his ob-
jection to the measure of the Right Hon. Baronet was, that it
attempted too much, for the impression in Scotland now was
such, that it would be exceedingly dangerous to interfere with
the small note circulation. —( Hear, hear.)
Mr. HAWES said that they must recollect that when the
Bill was read the former time it was agreed to waive all discus-
sion until the next reading He was disposed to ask now what
were the grounds on which they intended to introduce this
measure to Scotland ? Had the success of the English Bill been
such that they wished to extend its advantages to Scotland
also ?—( Hear, hear.) The Right Hon. Baronet, in introducing
the Bill, said they had every reason to be satisfied with the
policy and justness of that measure. He (Mr. Hawes) did not
see that the Bill of last year had proved that the expectations
of the Right Hon. Baronet had been well founded. He would
a'k again, if the policy of last year was such that the Right
Hon. Baronet was justified in extending it to Scotland ? And
here he could not help saying that the Scottish bankers had
evinced a right and a proper spirit, and he only wished
that the English bankers had evinced a like spirit
when the measure relating to English banking was first intro-
duced by the Right Hon. Baronet. It had been said by the
Right Hon. Baronet that the banks had the power of issuing
an almost unlimited number of notes. But what had been the
ease last year ? And here he would remind the Bight Hon.
Baronet that in that year there had been no lack of railway and
other speculations. The Bank of England could have issued
30,000,C00/., and yet there were notes to the amount of
6,000,0001. in the Bank lying unissued. Now, surely, if the
Bank could have forced their notes into circulation, there
never was a better opportunity—never a greater inducement,
than to have done so at that time. And why did they not ?
Because they were liable at any time to be called on to give
bullion for their paper, and that was found, and would be ever
found, a sufficient check upon any undue circulation.—( Hear.)
He was surprised to hear the Hon. Member for the Tower
Hamlets, who was connected with a system of banking in this
Country that was little removed from, if not equally as bad as
the American system, complain of the Scotch plan. But upon
what grounds did the Hon. Gentleman complain ? The re-
turns showed nothing to justify such an opinion, or to justify
either reproach or complaint. For a long course of years he
found that the banking system had been in Scotland highly sa-
tisfactory to the people, and the circulation had been ample,
steady, and uniform. This clearly proved that the Scotch
banking system had been conducted with great ability, great
honesty, and great success.—( Hear, hear.) Ho was therefore
surprised to hear any one review the system in a tone or manner
otherwise than favourably. The fluctuation of the Bank of
England was infinitely greater than that of Scotland.
LIEUTENANT COLLINS. In the years 1839 and 1840, when distress was very pre-
Mr. ESCOTT asked whether the dismissal of Lieutenant valent, the circulation of the Bank of England fluctuated
Collins had met with the approbation of the Government, and 5,000,00a1., while the fluctuations of the Bank of Scotland
whether they had inquired into the matter, and whether it did not amount to more than 2,000,0001. or in fact not much
was net competent for the Board of Control to interfere ? less than the average issue.—( Hear, hear.) Then, with
jiord JOCELYN said that the Board of Control had ap- regard to the failures in English and Scotch banks, ho found
pro of the sentence of the East India Company with re- that the number greatly preponderated on the side of England;
gaffd to the dismissal of Lieutenant Hollis, and they had no and where an English bank only paid ss. in the pound, he
power to interfere in the matter. found that the Scotch banks paid from 9s. 3d. to 15s.
BUSINESS 01? THE HOUSE. He was therefore justified in inferring from this
Ili answer to a question from Mr. GIBSON, that the Scotch banking system was a good one. In Ireland
Sir Rs PEEL replied that permission had been given for they were going to limit thee number of banks because an alarm
the Bill for the regulation of Lunatic Asylums to be brought prevailed in that country which was not founded in fact, and,
forwsard to-night. indeed, for which there was no cause whatever.—( Hear. )
Lord JOHN RUSSELL wished to ask the Secretary of How could they settle at the present moment what number of
State whether the third reading of the Irish Education Bill banks will be necessary for the future wants of Ireland ? The
would be proceeded with on Monday next? population of that country was gradually increasing, and it
Sir J. GRAHAM said it could not be entertained on Mon- was to be hoped its wealth and industry proportionably in-
day next, as the House was going into a Committee of Supply, creased with it. Why, then, should they bo called upon to
but on Friday it was most probable the Bill would be read. restrict banks in Ireland, while there was every prospect that,
Sir V. BLAKE said he would withdraw the motion of which in a few more years, the exigeecies of the country
he hail given notice on Monday night. would render an augmentation of the number of
Lord WORSLEY inquired when the second reading of banks absolutely necessary ? He stood upon these
the Commons Inclosure Bill would take place? facts in opposing the measure so far as it related to Ireland;
Lord LINCOLN replied that he would fix the second read- and he told the House, if they passed this Bill, they would be
ing to be proceeded with on Thursday week. establishing one of the oldest and worst systems of banking
Lord CLEMENTS wished to know whether the inquiry monopoly. Upon these general grounds he stood opposed to
of the Coasmissioners appointed to investioisate the state of the Bill of the Right Hon. Baronet. In England they had a
populous towns was intended to extend to Ireland. paltry and imperfect system, and they were d&nisr their best to
Sir R. PEEL stated that the report of the Commissioners introduce their system into Scotland and Ireland,b instead of
would enable the Government to take such salutary measures copying Scotland.
as e ould be applicable to the condition of all populous towns Mr. BAILLIE said Scotland did not wish to enjoy any privi-
both in England and Ireland. lege whatever at the expense of England, but the question
COUNTY RATES BILL. before them rested upon totally different grounds. What was
Sjr J. Y. BULLER postponed the second reading of this the difference in the history of the banking system of the two
Wednesday next. countries? The people of England found, from fatal expo-
SMOKE PROHIBITION BILL. rience in 1825, that their system of banking was unsound
Mr. MACKINNON postponed his motion for going into and unsafe, and injurious, not only to this country, but to the
Committee on this Bill until Wednesday next. sister kingdom. In 1825, the numerous failures that took
SCOTCH BANKING. place in c-cry part of the country clearly proved to the world,
On the order of the day being read for the House going that the country bankers of England managed their issues in a
into Committee on this Bill, most reckless manner, spreading periodical ruin and disaster
Mr. P. M. STEWART said he thought he should lie from one end of the country to the other. Those accumulating
guilty of a dereliction of duty if he did not express his decided evils clearly proved that some great alteration in the banking
disapprobation of the Bill which had been introduced by her system was necessary, and in 1826 the Government of
Majesty's Government with respect to the banking establish- the day, acceding to the general wish of the
ments of Scotland. He regretted that the Right Hon. Ba- people, abolished the circulation of one pound notes
ronet, in endeavouring to better the condition of banking es- in England. That was a clear statement of the facts so far as
tablishments of this country, should have touched those of they related to England. Now, what was the case respecting
Scotland, which were acknowledged to bo the most perfect that Scotland ? Why a system was then established, which was
existed ; and this then being the case, and being supported by considered to be one of the very best in the kingdom. It had
the opinions of those most competent to judge, he thought it passed through all the storms and changes of the last century—
was the deity of every one connected with Scotland to exi ress threugh panics and internal rebellion and foreign war. Yes,
their disapprobetion of the Bill before the House. The Scot- it had passed through all these changes without ever having
tish system of banking hail been held up by many eminent raised the least suspicion or doubt in the putlie mind of Scot-
writers—Hume among the number—,as a model for the adop- land, and always met its demands, arid maintained its
tion of other countries. After the 1/. and 21. notes had been superiority over all other systems. Although he objected to
abehshed in England a motion for an inquiry into the Scottish many of the minor details of the Bill he would give it his sup-
banking system was made, and was resisted by all the most port. He hoped that some modification would be made in the
distinguished Scotch authorities in both Houses of Parliament Committee, but upon the whole:he believed that the Bill would
at that period. Since then the system had not retrograded, be both acceptable and beneficial to the Scottish people.
but, on the contrary, had been greatly improved. The reports Mr. C. WOOD had not intended to mak• any observations
of the Committees of Commons and Lords, subsequently ap- on the Bill before it went into Committee ; but, as the Hon.
Pointed to inquire into the subject, were to the effect, that no Member for Lambeth had stated some objections to the prin-
good could come from any interference with the monetary af. ciple of the measure, which required an answer, be would
fairs of Scotland- The Hight Honourable Baronet (Sir James therefore address himself to them now. His Hon. Friend had
Graham) in 1825 and 1826, in speaking of the currency of said that the experience of the past year was not enough to
Scotland, said that if they had not interfered with the currency enable them to judge of the entire success of the Bill of last
of 1793, the disasters which occurred during those years might session. He agreed with him to some extent; they could not
have been in a great measure aver, ed. He could not then yet form a complete opinion of the effect of the measure one
conceive, wh-n the banking system of that country was Placjd way or the other. During the past year the monetary state of
ton a proper footin why the Government desired to interfere the country had been unprecedented, and must return to its
with it, and he spoke the feelings of the people of Scotland ordinary state before the Bill could be fairly tried. It was
alien he said that they consideredconsidered the measure a wanton inter- alleged sast year, by the opponents of the Bill, that it would
vonce with their currency Scotland respectfully, the Bill,
but firmly, check the business of the country, check enterprise,' and en-
deprecated any change, unless better groasndsewerey'set out than' tail ruin on some, and pressure; at least upo all. What
any which had yet been given. At one meeting the only sup- did they hear now ? The opponents of the Bill told them
porter of the change was a retired oldsmith, who must have that speculation had been rife, that the measure had
ad a natgral affection for the metalgthat made him—( Laugh- placed no impediment in the way of it—in short,
ter).--and he moved a vote of unqualified confidence in the that not one of the evils they had predicted bad fol-
Right Hotaiiiiret. At another meeting, however, some- lowed the operation of the Bill. His Honourable Friend
thing more e a retired goofldsmith took part against the Bill avowed himself one of the old school of political econo-
-it was a retired Speaker the Right Hen. Gentleman that House, the predecessor of mists, and of Adam Smith, from whom, however, he differed ;
words of an old poet-- now in the chair ;in fact, in the the principle laid down by them" political economists was, that
" From Maidenkirk to John o'Groat, the legal convertibility of a bank note was sufficient to main-
We all prefer the one pound note." lain its value. Ho was surprised, after the experience they
Hew was the system applicable to Scotland, and what was to be one
shouldd had of
nowofthis maintain this doctrine.
country,andstillmore
In A
of America,
cthatvey
the part of the Government, that their
ultimate anyr
the result of the experiment? He could foresee otenealintotention on security that the law could furnish was taken—they had limited
suppression of all local banks of issue, and the establishmentvrasthe liability and paid-up capital—every legal security was taken to
one national bank of issue. In 1840, a year of
much depression of
insure the convertibility of the paper. Yet all at once the
in regard to monetary affairs, the circulation of the banks of hanks in America stopped payment one after another. Legal
Sevtland was much higher than in 1838. Three banks in convertibility was not so good a security as practical converti-
Glasgow, the Clydesdale, the City of Glasgow and Edinburgh, biflity. As to the supposed intention of the Right Hon. Baronet
" and he Glasgow Bank, had lately paid up a canital of 3,000,000 n of meeting one general bank of issue, he had expressly gene cut
whereas the Bill would restrict their circulation to 300,000/. of
his
way
Right o
.atpmlryoenatehstuehr!seardindcoipolee
to disclaim it, and this Bill itself, unless he misun-
I in
to Scotland.
consult
They had branches in many of the towns of Scotland, and the tendedrs oodwit, contained everything to show that it was not in-
trade of that country was in such a state that those banks
existing stitnhgouinghtetretshtes
would require the whole of that capital. They must recollect in franaine hisa
English Ell had fully sownerediittisi purpose of making the flue-
1,11; the provident banks were of more imssirtance to the poor
with
the question
of the metallic cur-
. 7 as to insure their co-operation. His
tuations of paper corres
1711% to the rich man, as when the larger banks limited their
of the solvency
circulation f-r provident purposes, the smaller banks established rency. lie would not touch
of Scotch banks. He bore every uestion
in Scotland for similar purposes commenced their issue. lie
admitted that the definition of the circulation of Scotland set nary success with which the system had testimony
to the extraordi_been carried out; •
but h h
iie teouget the Scotch attributed that success to one o
forth in the Bill was perfectly correct. The Bill, as he hador
said, was uncalled for, and aimed at an ad libitum influence two things only—to their small notes and cash credits, when
over the banking sy stem of Scotland.—( Hear.) The it should rather be attributed to the sound management of
Hon. Gentleman then re!erred to a passage in a pamphlet their banking in general. He thought this Bill took every
written by Sir James Graham, advocating not only a free security against abuse. The chief Scottish bankers gave evi-
trade in corn, but in money, and opposing the interference of deime to the effect that the Scottish circulation was diminish-
-1844 the circulation was 2,500,000/., or 90,000/, the Government with the eiteulating medium, He (Mr. P. lug. In

Lord GRANVILLE SOMERSET made a few remarks,
which did not reach the gallery.
Mr. LA BOUC HERE said the Noble Lord was evidently
alarmed at the facilities which he (Mr. Labouchere) proposed
with regard to railway legislation. There was a material
tlitr:rence between the proposition of the Right Hon.
Gentleman (Sir George Clerk) and that which he (Mr.
Labouchere) had venturtd to rropote. He thought if a well
suggested measure were brought forward by her Majesty's Go-
vernment next session, that it would be likely to lead to the
dcsitl7d results, and would obviate frequent discussions like
that before the House.

Mr. W. PATTEN thought that whatever course they took
it would be most desirable that something should be brought in
during the present session.—( Hear, hear.) He considered
that the aiffieulties which had occurred mainly arose from the
neglect of the House with respect torailway business.—( Hear,
hear.) Upwards of six weeks of the present session had been
occupied in laying down rules for the management of the Com-
mittees, and a great deal of time was consumed before they
clearly perceived the course which they ought to pursue. A.
hundred new raiiway Bills were to be brought in next session,
and unless a measure similar to that recommended were intro-
duced, they would be in a worse position next session than
during the present.
Sir R. PEEL said he acquiesced in the propriety of the sug-
gestion made by the Right Hon. Gentleman opposite He
th-dight it would be highly desirable to appoint a Committee to
consider and'frarne rules with regard to the future proceedings
of the Hou-e in the matter of railways. He did not any this
with a view of relieving her Majesty's Government from anys
responsibility, but he thought with the Right Hon. Gentleman
that it would be exceedingly desirable that a Committee should
be appointed for the purpose referred to in the resolutions.
Mr. S. WORTLEY agreed with the Right Hon. Gentle-
man that some rules w 'To absolutely necessary for the purpose
of expediting the railway business of the country.
Mr. W. COLLETT thought it was rather hard that the
promoters of railway projectishould be:required, first, to undergo
the ordeal of the Board of trade, and afterwards that of the
Parliamentary Committees. He thought that this system
should be amended.

Lord WORSLEY hoped that a more effectual course would
be taken on the subject, as great inconvenience had resulted to
the public from the present state of things. There were a
great many railway Bills which, although connected with some
of the most important towns in the north of England, and
although there was little or no opposition to them, could not
yet be paned through Parliament.
The motion was withdrawn, and the amendment carried.
GUILDFORD JUNCTION RAILWAY BILL.
This Bill was read a third time and passed.
SYRIA.

Dr. BOWRING gave notice that he would, to-morrow,
ask a question from the Right Hon. Baronet relative to the
destruction of property in Syria.
In answer to a question from Mr. LABOUCHERE, rela-
tive to the manufac, ore of spirits in the Channel islands,
The CHANCELLOR•of the EXCHEQUER replied that a
practice had lately existed at the Custom-house of permitting
plain spirits, made from British produce, to be introduced into
this conntry upon payment of the excise duty only, and with-
out being subject to the other Custom-house regulations. Now
the importers of these plain spirits had laboured under the im-
pression that British brandy, manufactured from British pro-
duce, was paced upon a similar footing, and accordingly large
quantities of that article had keen imported from Jersey, upon
payment only of the excise duties. Government had allowed
the spirits to pass into the hands of the retail dealer, without
imposing any additional duty on it, but notice had been given
to the parties that this privilege could not be extended to any
future importations. These parties had applied to the Court of
Queen's Bench for a mandamus to compel the Custom-house
to pass the brandy, upon payment only of the excise duties,
and the Court bad refused the application. It was, therefore,
a settled point of law, that Jersey had no more right to intro-
duce British brandy, free of customs duties, than either Ireland
or Scotland.