Star.
London, England, 1826-05-27 00:00:00

SCOTCH BANKS.

On the mntinn, that the Report of the Committee Scotch and,
Irish Banking, inlaid on the table,
Mr. TIERNEY adverted to the recommendation of
his Majesty's Speech to put the Currency upon a better
footing, and recapitulated the various proceedings which
had been adopted in pursuance of that recommendation.
They proceeded with great vigour at first, with a vigour
even beyond the law. They soon, however, began to
relax. The Bank of England was to have the power of
issuing one and two-pound notes till the latter part of
the year, and he had no doubt that they would exercise
it as extensively as possible. They legislated for England,
and indeed outrun in action the speed of legislation, all
without inquiry. They went on very well in the progress
of the Bill till they came to Scotland : of Ireland he
would not speak, as nothing had been determined. But
with respect to Scotland the case was very different. He
believed that since the tebellion of 1745, there was never
such a combustion in Scotland. Nothing could equal the
firmness of Scotch Members in support of the Bill at
first, but their firmness in opposition to it afterwards--
when it touched themselves. He wished he had eloquence
to describe the commotion that was created in Scotland,
for it was a übjectof eloquence. As it was, lie would only
refer for a description of it to the writings of the Great
Unknown. In one of his poems there was a part under
the title of the Gathering, in which every man through.
out the country was brought, on a signal given, to his
post in half an hour. Such was precisely the case in
the present instance. The warmest language had been
employed, and even menaces had not been spared.—
(Some Hon. Member h.re made an observation, and
there aro e a low I cry of Hear, hear.)—lt was, he knew,
far from the disposition of his Hon. Friend to interrupt
any body, and particularly in anger, but he would tell
him what he meant by menace. Something had been
. said about the Scottish claymore; this certainly sounded
rather alarming to the ear of an Englishman, who
very seldom saw such a thing except at the play.—
The situation of Scotland %,11S now very different
from what it bad been ; great wealth had poured
into Vie country from India and elsewhere. The sys-
tem of cash credit, • n a hich so much stress had been
laid in the Committee, was not peculiar to Scotland. The
Right Hon. Gentleman enlarged much on the injustice
• and partiality of ntaki.ig a distineti.in between England
and Scotland. The report would produce a new dis-
cussion of the whole Lurttncy question, which he had
flattered iiintst-lt was at an end. It was a manifesto in
.lavt-u: of paper aga.nst gold, and as circumstances

•
war* likely tq operate in its fareur it lir turn the
current- of-popularityain favour of paper. e expressed
his terror of a systeatia: inconvertible paper ,currency.
He had rejected all new-fashioned theories, and ttoi-
furmly adhered to gold, or paper convertible into gold
at the pleasure of the holder. The Right Honourable
Gentleman contended, that the sanction given by the
Report to the Scotch system would- 1- ad to a dan-
gerous attachment to its principles, and then to place
the currency of the country upeti a metallic basis
would be utterly impossible. Under such circum-
stances, how should we be able to meet France with
her sound metallic currency, in case of any rupture
with that country ? He complained that Lord Liverpool
had not obtained sufficient information upon this sub-
ject before he brought forward his measures, and then
have stood 'to them. Give him a Government who
would first mature their measures, and be satisfied of
their propriety, and then abide by their fate; he should
then know what it was he was called upon to support,
and be able to satisfy his own mind of its claim thereto
He pet fectly concurred with Lnrd Liverpool in the de-
sign of establishing Banking Companies; but now the
Bill for effecting it had passed, it was found tittetly im-
possible that any Joint Stock Banking C in?any could
be formed under it. The Bill was row a month old;
and those who brought it in had been holding meetings
to discover by what means it could be evaded. He
under itood that such a discovery had at last been made,
'and that the Banks were to be established under an evasion
of the Act He had been induced to make these ob-
servations with a 'new of justifying himself for giving
his support to the early measures of the Government on
this important subject. nom their declarations, and
the principles which they professed, he never expected to
see such a Report as this receive their sanction. He
could offer no motion, as the Report was not before the
House. a My only object," said the Right Honourable
Gentleman, 61 was to set myself right with the country
—li6eravi animam means—and having done so, I shall
detain the House no longer." Lord Liverpool was a
man for whom he entertained great personal reipeet' and he only
wished that he possessed better nerves, and not so much raihneis.
Mr. Secretary PEEL said, that as Chairman of the
Committee upon whose report the Right Honourable
Gentleman had animadverted, he rose to vindicate the
concldsions to which the Committee had come, arid to
reply to the charges preferred against his colleague,
Lord Liverpool, and the rest of the Government. And
first, in respect to the conclusions of the report, it did
appear to him to be a most singular proceeding on the
part of the Right Hon. Gentleman to make them the
subject of such remarks when the report was not before
the House, and it was impossible that any judgment
could be formed of its merits. He requested the House
to suspend that judgment until they had an oppor-
tunity of reading the report, and said that he had never
sat in a Committee more determined to do its duty ac-
cording to the evidence laid before it. The Right Hon.
.Gentleman had said that the adoption of the Report
was departure from the principles and the declarations
of the Crovernments, asserted in the early part of the
S ion. This he denied.' And he would ask the Right
Hod. Gentleman when any declaration bad been made
by the Government which said that the measure
to come into operation in this country, io the year
1829, should- he mended to 'Scotland? This in- ,
consistency and contempt of principle so loudly com-
plained of by the Right Honourable Gentleman,
would be neither mere nor less than a return to the
systeto which existed up to the year 1797. From the i
year 1777, the issuing of notes below the sum of 51. ,
was prohibited by law ; and for a century before that
there had been practically no small notes in circulation
in this country. But during the whole of that period, ,
concurrently with our own metallic circulation, Scotland ,
had small notes and nothing else. Up to this Session
of Parliament, no one had ever proposed that the sys- ,
tem of banking in Scotland should be done away. In
1810 a Committee was appointed, at the instance of
Mr. Horner, to inquire into the expediency of a resump-
tion of cash payments. That Committee sat for many
months, examined evidence, and made an able Report,
the conclusion of whichwas,that in two yens there should I
be a resumption of Cash Payments. But the Report
never suggested that the same measure should be ex-
tended to Scotland. The Committee of 1819 in the same
manner made a Report, in which they recommended
the same measure, but without extending it to Scotland.
This Committee took evidence of the existence of the
'Scotch small notes, but did not think it necessary for
their principle to interfere. Here, then, were the facts
of the practice of a century, and of two Committees 1
sitting upon the subject of the Currency, and not deem- I
ing it necessary to interfere. Then let him ask the Right '
Hon. Gentleman upon what public declaration of the
Government it appeared that they had, at any time,
made up their minds to such an interference. He would
repeat that his impression was in favour of extending
our own system ap Scotland, but as there had been
no inquiry upon the subject in reference to Scot-
land, his feeling was, that they should not proceed until
they had enqtaire'd. The Right Hon. Secretary then
contended that the letter of Lord Liverpool did not bear
the construction put upon it by the Right Hon. Gentle-
man. To him it appeared to prove a directly contrary
opinion, and that his Lordship had never made any such
declaration as that attributed to him in the Right Hon.
Gentleman's speech. He had said that Lord Livet-
pool ought to have made up his mind and supported the
measure without enquiry. But this had not always
'been the conduct of the Right Hon: Gentleman: When
in 1818, Lord Liverpool, through the then Chancellor
'of the Exchequer, Mr. Vansittatt, came down to the
House with a proposition for requiring additional secu-
rity from country bankers, the Right Hon; Gentleman
turned round and said that Mr. Pitt himself in the
zenith of his power would not have dared to bring in
such a B 11 wit! out previous inquiry: But now, when
Lord Liverpool, following the advice of the Right Hon.
Gentleman, had proceeded by inquiry, then he turned
round and said, a Bring down your measures and lay
them upon the table, that I may know what it is I am
called upon to support." The Committee h 'd been
fairly constituted, and other Members he had readily
added to it, upon the recommendation of those who
complained that the interest of the bankers of Scotland
would not be properly represented. The feeliqg of
• Scotland was universally in favour of the existing sys-
' tem ; but that he confessed he should have disregarded,
if upon examination he had found that the general
interests of the country called for a change. But what
were the facts? First, the system had existed in the
best times of the English currency, without inconve-
nience. Then, he was asked by the people of Scotland,
Why will yrar disturb us, and make us adopt your
system, when o e have not felt from our own the
inconveniences of which . you have complained ?".a.
, He had the greatest reriect for the Hagfish country

Pbankers as a class, and thought they ha] done much
eyes to the fact, that individuals had abused the pre-
sent system in a degree for which the affairs of
Scotland afforded no parallel. This was proved by the
returns, which showed that since the year 1816 there
h id been only one failure of a Scotch Wok, while in the
same period in England there had been 158. The Re•
port provided that the introduction of Scotch paper
money into this country should be prevented by-the
passing a law which rendered it penal. If this law
should Gil in its effect, then the question of assimilating
the systems would.be necessarily reconsidered. It ap-
peared upon their evidence that if the one pound paper
circulation was prohibited, the Scotch Banks would be
obliged to give up their Branch Banks in the High-
lands, to the great inconvenience of the population.—
There was one important peculiarity in the ca e •.1 Seer-
land to ,which he could flat shut his eyes—he meant the
amount of circulation. In 1819, the circulation of
England was about forty millions of Bank of England
and Country Bank Paper ; of this 23 or 24 millions
consisted of small notes. During the debates of the
present Session, the amount of small paper had been
calculated at about six or seven millions. Whin be
compared this with the amount of small pi?er circtila-
tion in Scotland, he saw that alaw to prohibit it alto-
gether might produce consequences ti e extent of
*hich could not be foreseen. The total amount of
the Scotch circulation was about 3,300,0901. and dr that
upwards of 2,000,0001. was in paper money below the
•alue of 51. He must say, that whatever might haV€ beet!
his Impteision at tut, When he heard these facts he was afiald to
destroy to large II portion of the circulation of that country,
further trial had been made of iti compatibility with our own iy;..
tem. The conClusion; therefore, to which be came was this : —he was
not enamoured of the Scotch system, but under such circumstances
he thought it prOdent to give it another trial. The respect
which he entertained for the opinion of the Right Honourable
Gentleman opposite (Mr. Tierney) made him sorry that the report
met his disapproval; but either as Chairman of the Committee, or
as a Minister. he could assert; that to no act df duty which k•
had been called upon to perform, did he look back with greater
satisfaction.

Mr. ABERCROMBY said, that he went into the
Committee with the opinion that one system for Eng-
land, and another for Scotland, was an absurdity. rite
objection he had now to make to this Report was, that
every one of its positions went to confirm that opinion,
except its conclusion. No one had ever ventured to
assert, either before the Committee or in that House,
that the cash credits in Scotland would be destroyed by'
the destruction of the one pound notes. He thought
the measure recommended by the Report was most
unfair and Unjust, as giving an undue advantage to the.
Scotch banker Which those of England did not possess,
and still more unfair and unjust to the principles which
the Government had professed. The Right Hon:
Gentlenian had said that only one bank had failed in
Scotland, and that no calamities had fallen upon that
country under the present system. Buethe Right for.
Gentleman forgot to state the difference in the law
which gave the Scotch banks so much greater security.
This very circumstance required that there should
be a power of controul exercised over the issues of
those banks, because by ao over issue they had the
power of inflicting greater . hardships upon the poor
man, by increasing the price of the necessary articles of
life, thaw if by a sudden failure he lost his one pond
note altogether. The law to prevent tfie inttoductitiri '
of the Scotch notes into England would be the most
odious and detestable law ever made. They took an
imaginary border, which, so help him GOD, lie had
often passed without knowing it ; and if a note legally •
issued on the one side were carried on the other without
any immoral intention, the party was to be expo;4.l to
the penalty of the law. Unless the Committee had come
to a more decided opinion, they ought not to have made
such a report. An argument was put into the hands
of practical men, when they said that their principles
were unanswerable, but yet unsuited to the circumstances of the
country. The real question was, whether Minshers should retrace
their steps with regard to England, or whether they should put the
currency of Scotland and of this country en the same footing.
Mr. J. P. GRANT denied that there existed any analogy be-
tween the banking systems of Ragland and Scotland ; for a metallic
currency was the original one of the former, and not of the latter.
Besides the notes of the latter were payable in ten days in London,
and there only occurred two failures, and a loss of 36,0001. to the
country, within the last few years. Those who deposited their-
money in the Scotch banks bad had four per cent. interest for it.
while the bankers had been ooe-half per cent. gainers. All the
political economists, from Adam Smith downwards, approved of the
system of banking in Scotland; a system se far from being changed,
ought if possible to be extended to England.
Captain GORDON thoughts properly regulated paper currency
the best for England as well as Scotland, where it Was found td
confer general benefit, and afforded universal satisfaction.
Sir RIDLEY, on the part of the Country Bankers, chal.
lenged inquiry, and he saw a o reason why they should shrink
from it. He considered them to have been must unfairly treated ;
and the letter which the Right Honourable 6en:'e•nan rippu,ite.
and the Noble Lord at the Head of the Treasury; sent to the
Bank Directors, (though, he was sure, they did not so design ir),
produced more mischief in the country than all the failures which
had previously occurred. Nothing could be commended is the
system of Scotland, which was not equally applicable to any well-
conducted banking house in the country. Ile agreed with an Ron.
Gentleman who had spoken, that a paper currency convertible
into gold was the best and safest circulation which could be em-
ployed. Ile felt a degree of jealousy at the idea that Scotland must
go on at the expense of F.nglami ; and he conceived it would be
better if they wete to proceed together and 60 the same principle.
He would take occasion to move; in the course of the night, that
the Howie tizeuld, at an tidy period of the next Session, direct its
attention td the state of the Currency in England and Scotland, iu
order Mks as imitation in both countries. The Right Han. Gentle.:
man who had gained so much credit by ameliorating the Criminal
Cede, would not be able by any possible 'ocotillo to prevent tee
circulation of Scotch notes in Prrygland. Previoas to the year 1797
no leas than sixty or seventy Ihousand pounds of those notes were
disseminated through England, and much more bad been current
since by the exertions of Scotch Bankers' Agents. Bankers might
indeed be prevented front re-issuing; but no penal law; however
excessive, could reach those, who, travelling into the north of Eng-
land. brought &oteh paper in their pockets: It wail very unfair to
involve English bankers in the odium of rejecting those notes, when
presented by their customers ; and any of the Hon. MNnbets for
Scotland, parsing through Newcastle, would think hint very unac-
commodating, indeed; if be refused to supply them with the circu-
lating medium of London, in exchange for their Scotch paper--(•A
laugh).—lf he had the honour of a seat next Session, he would take
care to record on the Journals of the House the illiberality with
which the Country Bankers had been treated.
Mr. H. GURNEY said be was not a palter/fist of the Scotch
system. He thought, though cash accounts had a tendency to cause
over-issues, the exchanges with London corrected it. He drought an
Inquiry should be instituted into the system of the currency. Tuts,
were at. present purchasing gold at so high a ewe that it cost Bog-
!ante/se-half more than its nominal value. The distress and stag-
nation of commerce which occurred in the year )819 Weser V.
duced by excessive circulation and over-speculation, from wisidt
they had not yet reentered. He thought that some means should
be dodged to mitigate the distress of the country, either by intro-
ducing silver into the standard coin of the country, or a privileged
paper currency similar so that of the Bank of England.
Mr. ROBERTSON said, a currency ea a metallic basis was the
only security for the country.
Mr. 'l'. WILSON said he Was averse to any restrictions being
placed on England, while Scotland was exempted, convinced that
such a line of conduct would be injurious.
Mr. Alderman II EY G ATE said much injustice might have
been avoided by an earlier inquiry. If security had been requirol
from the country beakers, it would have placed the busking systeat
here on as good a footing as that of Scotland: Tim Report oft
Committee he considered a sound and wise Report, fir it held :5.1
a gold currency was not absolutely necessary.

'yr. ELLICE thought it 'Wally abard that there should be a
different currency for Eagland, Ireland, and &attend, as that there
should be a different corn field for each. For the assimilation of the
currency, the Charcellor of the Exchequer bad giSeti him a pledge
before he (Mr. Ellice) voted on a former occasion. The Right
Hon. Gentleman then said, that it might be a question of time, but
it war impossible that a different cut reney could continue for both
countries. Now he thought that a middle course might be taken,
and that a check Might be devised for restraining over-issues. The
best cheek for the purpose was to impose a condition on Bankers to
issue paper only in proportion to the amount of the cash deposited
in their banks. This was agreeable to the plan pursued in Massa.
chussetts where the best possible system of banking prevailed. The
first condition of that system was, that when payment was refused
for a note, the Bank Charter fell. In our present circumstances
we were obliged to call suddenly on all foreign nations for the
amount of eight or ten millions due to us, and so we rendered the
rest of the world the poorer, and consequently unable to deal with
us for our manufactures. He now asked the Chancellor of the
Exchequer to make amends to his friend Malachi Malagrowther for
{the hard words be had made use of against him, as this might be
the last opportunity he would have of doing so.
Mr. CRI PPS thought the English Bankers had as good a right
to a Committee of Enquiry as the Scotch Bankers before any alte-
'ration took place in the Currency, and expressed a hope that Branch
Banks would be established before the next Session of Parliament.
Mr. MAXWELL, was of opinion it would be impossible to pay
the Taxes imposed upon this Country, if an exclusive metallic cir-
culation was established.—(The Honourable Gentleman sat down
amid loud cries of" Question.")
Mr. II USKISS.)N then moved—e, That the Report be brought
up and primed," which passed in the affirmative. After which,
Sir M . W. II I I)LEY moved the following Resolution That
the I louse think it advisable to pledge itself to institute an inquiry
next Session into how far the interests of England and Scotland
may be affected by different systems of eminency, and to ascertain
if any and what means could be taken to alsinaUate the currency
of both countries."'
The motion, hiving been put to the vote by the &saw, was ne-
gatived without a division.
'ARION CORN IMPORTATION BILL.
Mr. HIM MON brought up the Lords' amendments to this Bill.

To a question by a Member,
The SI'EAK ER stated, that all the clauses of the Bill, as passed
by the House, were returned front the Lords unchanged, with the
exception of the clause relative to the arrangements, as to the mode
of introducing the foreign corn into the home market, which clause
Wall unintelligible before their Lordships had nude it intelligible,
and am additional clause was wanted before, which their Lordships
attrched to the Bill.
The Amendments were then read a first and second time.
ARMY HALF-PAY.
Mr. HUME said he was sorry at this late hour of the night to
detain the House, but-be considered it very important that this
subject should be submitted to their consideration. He thought
the system of admitting Half-pay Officers to sell their commissions
extremely objectionable, as the expense entailed upon the public,
was by that means made perpetual. The Hon. Gentleman then
alluded to a Return which stated the number of ptesnotions which
had taken place since the year 1817 to the present time, and con-
cluded by moving " That an humble Address be presented to his
Majesty, praying that he may be graciously pleased to employ in his
Army, as vacancies should occur, such persons as now are on half-
pay who are qualified to serve his Majesty, as well as with intent to
remove the nation from the burthen at present imrsed oa them, as
to reward those who have served in the late war.
Lord PALMERSTON disclaimed all idea of following the Hon.
Member through the various subjects to which he had alluded, but
he would maintain that he was entirely mistaken in his calculations
as to the increase of the half-pay. He would take two of the periods
adverted to by the Hen. Member. 1822 and 1826, and within this
period the Officers upon half-pay had decreased by 676; and there
was a 'saving of nearly 40,0001. upon the establishaterq; the ex-
penses of the year 1822, being 756,0001. whilst that of 1826 was
715,0001. It had also seemed to have escaped the Hou. Member's
recollection, that the authority of the Crown was limited. It could
not augment the Half-pay List beyond a certain proportion. He
hoped it was not meant to be insinuated that commissions were
.given to unworthy objects. He thought .h highly desirable that
persons connected with the aristocracy, if they had the means,
should be induced to purchase. This would tend to prevent any
abuse of a standing army, as k connected it with the great interests
of the country. Besides, no general Officer was allowed to pur-
chase over the held of his senior unless that senior declared his in-
ability or unwillingness to purchase. By the present system justice
was done to all parties; for it would be no more just to promote all
the Half-pay List than to confine it to those in active service. The
proposal of the Hon. Member would have the effect of disgusting
every Officer on full pay, and would bring back into active life
many who, front their age and infirmities, were utterly unfit for it.
They would have Ensigns of forty and fifty, with twelve children.
The House might judge what appearance an army would Lave with
Their wives and children following the camp. He should oppose
the lion. Gentleman's motion.
Mr. HUM' replied—The question Was then put and negatived.
The House then adjourned, at a gamma Parr 0112, to Wednes-
day next.

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