Star.
London, England, 1826-06-02 00:00:00

PARLIAMENTARY PAPER.

REPORT FROM THE SELECT COMMITTEE 01 THE HOUSE
OF COMMONS ON PROMISSORY NoTES IN SCOTLAND
AND IRELAND.

Laneladarifonn Me STAR ?yederday.]
Your Committee trust that they have not improperly
outstepped,the limits of their duty, in sulmitting to the
House this brief review of the laws by which the busi-
ness of Banking in Scotland is regulated, and of the
mode in which it is at present conducted; k is a subject
not adverted to in the Reports of previous Committees,
and it appeared therefore to your Committee, that it
might be conveiient to prefix a general account of the
Banking Establishments and Currency of Scotland to
their observations on that important question, which
was the more immediate object of the reference made
to your Committee.

They consider that question in substance to be. whe-
ther Scotland shall be permitted to retain the privilege
which she has hitherto had, of maintaining a paper cir-
culation for sums between twenty shillings and five
pounds; or whether she shall be required at some pe-
riod, to be now ascertained by law, to provide, in the
same manner in which England has been called upon
to provide, a metallic.currency ?
Although the promissory notes issued in Scotland are
convertible into gold at the will of the holder, yet it
appears to your Committee to be proved by experience
that the permission to issue notes of an amount sof&
ciectly low to perform the office of coin will practically
exclude that coin from circulation, notwithstanding that
such notes may be payable at the will of the holder:
and it must be assumed, that under the operation of the
law now applicable to the two countries respectively,
England will, after the year 1829, have a metallic
culatioa fur the payment of all sums below five pounds,
and Scotland a circulation of paper alone, for all pay.
intents of not less than 20s.

Whether this state of things can be allowed to exist,
'eoffsisfentiy,with equal lattice to the inhabitants of the
fr •
pcitnontrins-,whether the stability of the present sys-
•••
,rfeeeF paper cxrrency in Scotland can be ensured, if
coin•be not in circulation as its basis—whether that sys-
tem-cin co-exist with a metallic currency in England,
without deranging the currency of this country, are
,the important considerations which must be maturely
welhed b.lote a final decision can be satisfactorily
pronounced.

The presumption, on gen-ral principles, appears to
,your Committee to be in favour of an extension to other
parts of the United Kingdom of the rule which it has
been determined to apply to England. Provision would
thus be made for equally apportioning among all parts
of the Empire that charge which is inseparable in the
first instance from the substitution of a metallic in the
room of a paper currency. The wider the field over
which a metallic circulation is spread, the greater will
be the security against its disturbance from the opera.
tio.; of internal or external cause:, and the lighter on
any particular part will be the pressure incidental to a
sudden contraction of currency. The business of bank-
ing, and probably of all other commercial transactions
connected with it, would be conducted on a more equal
footing, in respect to profit, under a system of currency
common to all parts of the Empire, than under one
which should confine to particular portions of it the
,privilege of issuing a certain description of paper. In
proportion as the offence of coining shall be found to
be more difficult of execution, and to be less frequently
committed than the offence of forgery, in that degree,
upon moral considerations, will a metallic circulation
be preferable to one of paper ?
These appear to your Committee to be the principal
reason in favour of extending to Scotland a system of
currency which the Lsgislature has resolved to re-es-
tablish in England ; reasons which, seem decisive in
favour of such an extension, unless they can be coun-
tervailed by the proof of some peculiar circumstances
in the condition of Scotland; justifying a special excep-
tion in her behalf, and by a strong presumption that
such an exception can he admitted without prejudice to
the interests of other parts of the empire.
The main object of the witnesses from Scotland, who
were examined before your Committee, has been to
prove the claim of Scotland to this exception. Their
opinion, with very slight shades of difference, is deci-
' dedly adverse to any change in the laws which have so
long regulated the issue of promissory notes in that
country. estimating, however, the weight due to
their opinions as authority, it ought to be borne in
mind that a great pat tof the witnesses from Scotland
were Gentlemen immediately connected with some of
the Winks in that country, subject therefore to the pre.
pos essions which naturally spring from a long con•
nexion with existing establishments, and from a warm
interest in the continuance of their prosperity.
It is nut improbable that, had the time permitted it,
your Committee would have extended still further their
inquiries; and they deem it on that account the more
incumbent upon them to state the general nature of the
testimony upon which they have cothe to their present
conclusions.

The. witnesses examined by your Committee, with re-
ference to the state of the circulation in Scothind, were
seven Gentlemen standing in various relations to some
of the Banks in Scotland :

Mr. Kirkman Finlay, a merchant at Glasgow.
Mr. Gibson Craig, a writer io the signet In Edinburgh.

•~.it~

Mr. Hadden, a manufacturer in Aberdeen. vasmossol.
Lieut. Colonel Campbell, factor to.the Duke of Argyle.
Mr. Gladstone, a Member of the House,
Mr. Moss, a banker of Liverpool; and
Mr. Birkbeck, a banker in the West Riding of Yorkshire,
were examine f as to the manner of conducting the
business of banking and commercial transactions con-
nected with it, in Lancashire. Mr. Gladstone was also
enabled to give evidence upon some points relating to
the circulation and commerce of Scotland.
Three of the Directors of the Bank of England gave
their evidence, chiefly as to the bearing which a paper
circulation in Scotland might have upon the interests of
the Bank of England, after the re establishment of a
metallic currency iu this country.
The grounds relied upon by the witnesses from Scot-
land to prove that it is neither necessary nor expedient
to alter the laws which permit the issue of small notes
in that country, appear to be Ole following :
That these laws, so far as they relate to notes be-
tween the sum of 20s. and 51. payable on demand, have
remained unaltered since the first institution of balking
in Scotland.

Tuat, coincident with the present system of currency,
if not immediately owing to its effects, there has been n .
great and progressive increase in the manufacture,, the
agriculture, the commerce, the population, and the ge-
neral wealth, of the country.
That during the civil commotions of the last century,
in the rebellions of 1715 and 1745, the confidence in
paper securities in Scotland was not shaken ; and that
the Scotch Banks maintained their stability, and were
not called upon for any extraordinary issue of gold in
exchange for their notes, during the shocks to which
mercantile credit was exposed in this country in the
years 1793, 1797, and more recently in 1825. That it
cannot be assumed, therefore, that a circulation of
specie is necessary in Scotland for the purpose of guard-
ing against the effect of sudden pan'e.
That while Scotland had a Paper Currency for the
discharge of all sums above 20s. England had at least,
for twenty years previously to the Bank Restriction, a
,currency consisting of the precious metals, to the ex-
clusion by law of notes below five pounds. That these
different systems co-existed, and that no proof can be
adduced that the Paper Circulation of Scotladd dis-
placed or interfered, in any material degree, with the
metallic currency of England. •
That from the da.e of the first .establishment of a
Bank in Scotland to the present time, the instances of
the actual failure of a Scotch Bank have been extremely
rare, and that there hive been only two instances in
which the creditors did not ultimately receive the whol*
amount of the principal and interest of their debt.
Listly, that the indkement of the Scotch Banks to
continue their Branch Banks in Many remote parts of
the country in which they now eiitt, would be destroy-
ed ; and that the whole system of deposits and cash
credits would be most materially affected, if the Banks
were compelled to forego the profit now derived from
the issue of notes below five pounds.
For the opinions in detail of the witnesses from Scot-
land, on these and other points "connected with, the
small note circulation in that country, your Committee
must refer to the evidence annexed to this Report. So
far as the interests of the Bank of England are con-
cerned, it will be seen that the Directors of that Bank,
who were examined before your Committee, urge no
objection to the continuance of the present system
in Scotland, provided that the paper circulation of
Scotland can be effectually restrained within the limits
of that country.
Upon a review of the evidence tendered to your
Committee, and forming their judgment upon that
evidence, your Committee cannot advise that a Law
should now be passed, prohibiting, from a period to be
therein determined, the future issue in Scotland of notes
below five pounds.
There are, in the opinion of your Committee, suffi-
cient grounds in the espeiience of the past, for per-
mitting another trial to be made of the compatibility
of a Paper Circulation in Scotland with a circulation
of specie in this country.
Lnoking at the amount of notes current in Scotland
below the value of five pounds, and comparing it with
the total amount of the paper currency of that country,
it is very difficult to foresee the consequences of a law
which should prohibit the future issue of notes consti-
tuting so large a proportion of the whole circulation.
Your Committee are-certainly not convinced that it
would affect the cad) credits to the extent apprehended
by some of the witnesses; but they are unwilling, with-
out stronger proof of necessity, to incur the risk of de-
ranging, from any cause whatever, a system admirably
calculated, in their opinion, to economize the use of
capital, to excite and cherish a spirit of useful enter-
prize, and even to promote the moral habits of the
people. by the direct inducements which it holds out to
the maintenance of a character for industry, integrity,
and prudence.

At the same time that your Committee recommend
that the system of currency which has for so long a
period prevai'ed in Scotland, should not, under exist-
, ing circumstances, be disturbed, they feel it to be their
duty to add, that they have formed their judgment
upon a reference to the past, and upon the review of a
state of things which may be hereafter materially varied,
by the increasing wealth and commerce of Scotland,
by the rapid extension of her commercial intercourse
with England, and by the new circumstances that may
affect that intercoure after the re-establishment of a
metallic currency in this country.
Apart from these general considerations, bearing
upon the conclusion at which they have arrived, these
are two circumstances to which your Committee must
more particularly advert.
It is evident that if the small notes issued in Scotland
should be current beyond the border, they would have
the effect, in proportion as their circulation should ex-
tend itself, of displacing the specie, and even in some
degree the local cum ncy of England. Such an in-
te, ference with the system established in England
would be a m.nifest and gross injustice to the bankers
of this part of the empire. If it should take place, and
if it should be found impossible to frame 'a law con-
sistent with sound and just principles of legislation,
effectually restricting the circulation of Scotch Notes
N ithin the limits of Scotland, there will be, in the
opinion or your Committee, no alternative, but the ex-

1

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tension to ScWond of the principle which the Legisla-
ture has deter toed to apply to this country. •
The other circumotanolti to which your Committee
matt tit refer, as bear'ng materially upon their present
decision, will rise ihibe event of aconsiderable increase
in the crime of fiager'y. . •
Your Committee called for Retails of the number of
prosecutions and convictions for for get y, and the offence
of passinsz forged notes during The last 2(1 years in Scot-
laod. which Returns will be found in the Appendix.
There appear to have been, doting that period, no
prosecutions for the ctinte of forgery; to have been 86
prosecutions for the offence of issuing forged promis-
sory notes, fifty-two.convictions ; and eight instances in
which the capital sentence of the Jaw has been carried
into effect.
It ought not to escape observation, that out of the
total number of prosecutions for issuing forged notes in
the last twelty years, thirty-eight have been instituted,
in the years 1823, 1824, and 1825 ; a fact which seems
to warrant the apprehension that the crime of forgery
is upon the increase in Scotland. It ought, however,
to be observed/that the Return does not specify whe•
ther the forged notes, for the issue of which prosecutions
have taken place, were in all instances notes of the
Bank of Scotland. It is possible, therefore, that some
of the prosecutions may have been eirtcted against for-
get its committed on the Bank of England, or on Banks
other than the Banks of Scotland.
Your Committee will here close their observations
with respect to the circulation of Scotland. They are
. well aware of the great advantage that would result
from being enabled, in a matter of this nature, to ex-
press a clear and decisive opinion, unembarrassed by
any qualification or reserve; but they consider it to be
their duty, in a complicated question that involves
many important considerations, and upon which the
decision must be subject to future contingencies, to pre-
sent the whole of those considerations fairly to the
House, and to qualify their I resent conclusions by a
reference to possible circumstances, by the occurrence
of which they might be materially affected.
IRELAND.
With respect to the circulation of Ireland, the inquiries of your
Committee have been less extensive than those which they have
instituted with respect to Scotland.
The first law in Ireland which restrained the negotiation of Pro-
missory Notes, was an Act passed in the Irish Parliament in the
year 1799.
The preamble recites, that various Notes, Bills of
Exchange, and Drafts for Money, have been for some
time past circulated in lieu of cash, to the great preju-
dice of trade and public credit; and that many of such
notes are made payable under certain terms with which
the poorer classes of manufacturers and others cannot
comply, unless by submitting to great extortion and
abuse. It adds, that the issue of such notes has very
much tended to increase the pernicious crime of forgery:
and the Act proceeds to apply to notes between the
value of five pounds and twenty shillings similar re-
strictions to those which had been applied to such notes
issued in England, by the Act which passed in the year
1777. It permits, however, during the suspension of
Cash Payments by the Bank of Ireland, the issue of
Bank Post Bills, Bills of Exchange, ind Drafts, under
certain regulations, for any sums not less than three
guineas. This Act did not extend tothe Bank of Ireland.
In 1305 this, and some other Acts,which had passed
in the interim, relating to the issue f 6111211 notes, were
re-ealed, and notes under 12 which hail beam pre.
0 -11' • 1
ittiOnsiy pertinitesi tinder certain regulations by the Act
oi 1799, were declared void.
There is at present no law In force imposing any limitation 'to
period for which notes for a sum not less than twenty shillings
ybe issued in Ireland.
A tolerably correct estimate of the amount of pro-
missoi y notes above and below five pout;ds, circulating
in Ireland, may be formed from the subjoined Returns,
made by the Bank of Ireland, and by other Banks, at
pit:atilt established in that country.
BANK OF IRELAND NOTES.
1. An account of the average amount of the Batik of Ireland Notes
of five pounds, and upwards. (Including Bank Post Bills), for the
years 1820, 1821, 1822, 1823, 1824, and 1825.
Irish Currency.
Notes an Post Bills of XS and upwards . £3,646,660 I'. 6
2.• An account of the average amount of the Bank of Ireland .Jotes,
under the value of five poutids, (Including Bank Post Bilis), for
the years IE2O, 1821, 1822,1823, 1824, and 162 Trish Currency.
' Notes and Post Bills under the value of £5 £1,643,828 0 5
An Accousrr of the Amount of Brokers Notes circulating in Ire-
land, exclusive of those of the Bank of Ireland, strewing the
Highest and Lowest Amount in the Years 1815, 1821, 18°3,
1824, and 1825; and also of the Amount in Circulation at the
latest period in 1626 to which the Account can be made up ;
distirguishing the Amount of Notes under £5 front those of £5
and upwards.
• 1815.---.lligliest Amount-E5 and upwards, 44,652 ; under
£5, 298,530; total, 343,182. Lowest Amount-E5 and up-
wards, 53,182 ; under £5, 196,433; total, 231,615.
1821.-Highest Amount-E5 and upwards, 58,749; under
£5, 874,763; total, 955,512. Lowest Amount--E5 and up-
wards, 45,494; under £5, 582,196; total, 627,690.
1823 -Highest Amount-CS and upwards, 56,396 ; under
£5, 1,023,201 ; total, 1,079,597. Lowest Amount-.C.5 and up-
wards, 44,910; under £5, 688,410; total, 735.3`20.
1824.--.llighest Amount-ES and upwards, 75,274 ; under
£5, 1,110.170; total, 1,185,417. Lowest Amount-45 and up-
wards, 57,035 ; under .C 5,711,084; total, 775,119.
1825.-Highest Amount-E5 and upwards, 106,605; under
BES, 1,359.054; total, 1,465,659. Lowest Amount-E5 and up-
wards, 65,987; under £5, 854,126; total, 920,113.
MC-Amount at present in circulation-ES and upwards,
74,658 ; under £5, 663,960 ; total, 758,6111.
The amounts stated in this Account are made up from all the
Returns that have been yet received from Bankers in Ireland, nine
in number, of whirl. six only issue Notes.
The amount of each description of Notes in circulation, by four
of th,:ce Banks, iS calculated according to the proportions which are
stated by each Bask to be usually in circulation; two Banks only
giving the exact amount of each description of Notes.
it will appear front the evidence, that a practice prevails in Ire-
land of is‘uing notes for the payment of sums between one and two
tuts for three guineas, and other fractional sums.
• no
,r Committee see no public advantage arising out of this prie-
cr
, and they are of opinion that it ought to be discontinued, as it
tends to to:ispense with the nece.sity of silver coin, and practically
}o culotte it from circulation.
Your Committee hesitate, in the present imperfect state of their
.4; information, to pronounce a decisive opinion upon the general
measures which it may be fitting to adopt with respect to the Paper
Currency of Ireland.
Although they are inclined t. think 'that it would not be advis-
able. to take any immediate step for the purpose of presenting the
issuing of small notes in Ireland, their impression undoubtedly is,
that a Metallic Currency ought, ultimately, be the basis of the cir-
culation in that country.
It will, probably, be deemed advisable to fix a definitive, though
not an early period, at which the circulation in Ireland of all notes.
below five pounds shall cease; and it is deserving of consideration,
whether measures night not be adopted in the interim for the pur-
pose of insuring such a final result by gradual, though cautiousi
advances towards it. ,

. The inhabitants of Barbadoes appear very sensitive
as to insurrections. A sentinel oo duty was approached
by two blacks during the night, and offered money for
his gunpowder, which he refused, and was wounded.
1 his has excited great alarm in the island. A reward
of 1001. is offered for the daring wretches.

CAMBRIDGE UNIVERSITYDLECTION.—Tfie
ATTORNEY-GENERAL'S COMMITTEE Meet daily
at the Spring Garden Hotel, Spring gardens.
.PUBLIC MEETING TO-MOIIROW. •
Lord JOHN RUSSELL, M.P. in the Chair.
THE object of the Select Committee appointed by
the House of Commons to inquire into, and Report on the
Case of Mr. BUCKINGHAM, having been entirely .siefeated by
the Prorogation of Parliament, before their labours could be brought
to a clove, a PUBLIC 11EETING will be held TO-MORROW,
at the Thatched House Tavern, St. James's, at Two o'Clock, fur
the purpose of considering whether any further measures can be
taken to avert the impending calamities which threaten to over-
whelm Mr. Bacatirrmost, by the severe and disproportionate. pu-
nishment to which he has been subjected, without trial, and with-
out necessity, by the Government of India.
'On this occasion, the attendance of all Englishmen who feel an
interest in preventing a fellow-conntryman from being crushed and
ruined by an arbitrary destruction of property, altogether unpre-
cedented in English History, is earnestly solicited.

THE EVENING STAR.

LONDON.

FRIDAY, JUNE 2,1826.
STOCK EXCHANGE, TWF.LVE O'CLOCK.

Consols opened this morning at 815, and soon after the /tart
began to purchase, when the Market went up to 801 for the Ac-
count, with a good deal of business doing ; but within this half
hour, a re-action has taken place, owing to the Jobbers realizing,
having turned on the Market several small lots of Consols, which
caused them to decline to 805 I for the Account, at which price
they remain up to the present time.
In the Foreign Market little is doing up to the present hour.
Current Prices: Old Spanish 75 8, Mexican 62 Colombian
new 401 415, Peruvian 29 30, Russian 81 5, Brazilian Bonds 56
87, Greek Bonds 1415, New Scrip 1 prem. Exchequer Bills 8 10.
ONE O'CLOCK.
Consols are, to the present time, wq In the earlier part of
the morning several heavy sales Were made.

PRICE OP-STOCKS AT TWO O'CLOCK.
Bank Stock 201% 202►
S per Cent. Red. 79% 78% 791/8
S per Cent. Cons. Shut.
3.4 per Cent. 86%
3} per Cent. Red: 853/8
4 per Cent. Shut.
4 per Cent. Scrip n 11/2 1
4 per Cent. 1826. 941/4
Long Ann. 19 18%
India Bonds. 5 7

£l,OOO Excheq. Bills 8 9 prem.
I:500 ditto 8 9 prem.
£lOO and £2OO ditto 8 9 rem.
Cons. for Acct. 8034 Vf Vs 16

DISSOLUTION OF PARLIAMENT.

Parliament is dissolved, and we subjoin copies of the.
Proclamations which were signed by his MAJUTT
yesterday, and will be issued this evening for that
purpose. The first is for the election of Members of
the House of Commons, and the second for the elec-
tion of Sixteen Representative Peers for Scotland, which
is to take place at the Palace of Holyrood, on the 13th
of next month: Both the W.rito arc returnable. on -art
25th of July.
)

BY THE KING.
A PROCLAMATION,

TOR DISSOLVING THE PRESENT PARLIAMENT, AND D*