The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1840-11-24 00:00:00

BANKING

TO THE EDITOR OF THE LIVERPOOL STANDARD.
MR. EDITOR,—I purpose, by your permission, to send
you, from time to time, letters containing a few plain
thoughts on Banking. lam aware that they will be at va-
riance with most of the writers on the subject—men of no
ordinary talent, and amongst whom I feel myself to be
" Infelix peer atque impar congressus Achille."
The only pretensions I have to advance are those of experi-
ence, gained during many years in private and joint-stock
banks.

Banking is a profession or business brought into existence
by the wants of trade. It is of recent origin, not only be-
cause trade and commerce have till within the last two cen-
turies been limited, but civilisation has not sufficiently ad-
vanced to render the profession of banking safe to the public
or the banker.
The first bankers were the Jews and goldsmiths. Even at
the present day, the London bankers call their waste books
" Goldsmiths'. Book received " and " Goldsmiths' Book
paid." The first public bank was formed at Venice. This
was followed by the Bank of Amsterdam, and some years
afterwards by the Banks of England and Scotland, projected
by a Mr. Paterson, a Scotchman.

Before the formation of the Bank of England, the banking
houses of Messrs. Child and Messrs. Snow were in exist-
ence. Both Mr. Child and Mr. Snow were goldsmiths. The
former establishment was a very formidable rival to the
Bank of England, which is said to have been in danger of
suspending payment in consequence of the heavy demands
made by Messrs. Child (who also issued notes) for payment
of its notes. The expedient of paying in boxes of silver,
containing £l,OOO each, was resorted to by the Bank of
England ; and thus, by gaining time in the counting and re-
counting the silver, the bank was enabled to meet its en-
gagements. Many years afterwards, the banks of Messrs.
Hoare, Gosling, Ilatikey, Grote, and others, were opened.
Banking appears to have extended very slowly to the pro-
vincial towns. Nottingham, Hull, Derby, and Bristol were
amongst the first places where they were opened; and it was
not till the end of the last century that they were generally
formed in the larger country towns. The prosperous state
of agriculture, and the frequent highway robberies, at that
time, in addition to the inconvenience of carrying gold and
silver, aided their success.

In December 1825, and January 1826, about eighty bank-
ing houses stopped payment ; and though some resumed
business, and many paid their creditors in full, the panic
was so alarming throughout the country, that the govern-
ment, at the head of which was Lord Liverpool, determined
to take measures to obviate a similar disaster. Two methods
were suggested—the formation of joint-stock banking com-
panies, and the opening of branches of the Bank of England
in the provincial towns. The existing law which prohibited
the number of partners in a bank exceeding six, was an ob-
stacle to the former plan ; and any alteration in the law re-
quired the sanction of the Bank of England. The other
mode was objected to on the ground that the Bank would,
by extending itself into the country, obtain too large a share
of power ; and that only the larger towns would, if a benefit,
derive any advantage from the Bank of England, as in them
only the branches would be opened.
It must be confessed that the Bank of England liberally
consented to the repeal of the law which prohibited joint
stock banks in England. Both plans were adopted ; joint
stock banking was legalized in England, and the bank gra-
dually opened establishments in ten or twelve of the largest
towns.

The privilege of forming joint stock banks in England was
very tardily acted upon. No body-of respectable men step-
ped forward to second the views of the government; and it
is to be regretted that those joint stock banks which have
been formed, have originated more generally with individuals
prompted by self-interest, than with persons actuated by a
sense of public advantage. The Gloucestershire Banking
Company, the National Provincial Bank of England, the
Manchester and Liverpool District Bank, and the Bank of
Birmingham, were amongst the first joint stock banks in
England. Till the year 1830 very few were formed, and it
was not till the speculations of 1835 spawned them into ex-
istence, that joint stock banks were generally in operation.
About this time they were in universal favour with the pub-
lic, and, perhaps without exception, their shares were at a
premium. Many private bankers, alarmed for their own
business, took refuge in the conversion of their establish-
ments into joint stock banks. The first check to the career
of joint stock banking was the failure of the Norwich and
Norfolk Joint Stock Banking Company. This bank, with a
small, though sufficient capital, paid dividends of Bs. 6d. after
all its paid up capital was lost ! The stoppage of the North-
ern and Central Bank of England was " a heavy blow and
great discouragement" to the system, and the failure of the
Agricultural, the Southern, and the Provident Banks, in
Ireland, together with the failure of the Birmingham Bo-
rough Bank, the Bank of Birmingham, the Phtenix Bank,
the Central Bank of Liverpool, London Trades' Bank,
Southern District Bank, Imperial Bank of England, Lea-
mington Bank, Commercial Bank of England, cam aliis—
and the losses of the Manchester and Liverpool District—
the Hull and the Yorkshire District Banking Companies,
whereby the shareholders have so severely suffered, and the
transactions of the directors and managers which have been
brought to light, have caused a re-action with the public
against joint stock banks, and in favour of private banks.
Banks are divided into two classes—those of deposit and
issue, and those of deposit only. Country banks generally
are of the former class ; and all the London banks, and those
of Lancashire, belong to the latter description. There is no
obstacle to the private bankers in London, and the Ovate
and joint-stock banks of Lancashire, issuing notes. The at-
tempt has not been made in London ; and in Lancashire,
banks of issue are so greatly discouraged, that they are una-
ble to maintain a circulation, and are scarcely allowed to be
respectable.-1 remain, sir, your most obedient servant„

0.
[We shall be glad to receive the promised contributions of
our correspondent, if he will permit us to make such altera-
tions in his future letters as we have taken the liberty to
make in the above.—E. L. STAND.]

THE PILOTS,

TO THE EDITOR OF THE LIVERPOOL JOURNAL

Six,—ln your last paper there was a letter, signed " Egre-
mont," the writer of which knows more about Sabbath
breaking than the duty of pilots. He is perhaps not aware
that pilots cannot " scour the seas" beyond the limits pre-
scribed by their act of parliament. He asks, " Where were
they last Monday night, when upwards of twenty Souls were
left to perish through the want of pilots ?" Now this is a
question which may lead the public to believe they were off
duty. and that the Scotland was lost through the want of
pilots, when it was not the case. The pilot boats were all at
their stations last Monday night, and if the Scotland had
been kept to windward until she got a pilot on board, she
would ere this have been safely moored in one of the docks.
I do not hesitate to say that a great portion of the vessels
lost in coining to Liverpool are lost through the selfishness
of their commanders, in endeavouring to evade paying pilot-
age; thus endangering the lives of their crews, and risking
the loss of their vessels, for The paltry sum of a few pounds
I am your's, &c..
Nov. 21st, 1840

A PILOT,

SOCIETY FOR THE PROPAGATION OF THE GOSPE.L.—
During the summer and autumn, public meetings on behalf
of this society have been held in various parts of England and
Leland; and to show how entirely have been sanctioned by
the herds of our church, it is satisfactory to state, that they
have been presided over by the following prelates ill their
respective dioceses :—The archbishops of Canterbury, York,
Armagh, and Dublin; the bishops of London, Durham.
Winchester, Worcester, Exeter, Salisbury, Gloucester and
Bristol, Hereford, Lincoln, Norwich, Ripon and Derry. The
number of district associations was, in 1838, 200; in 1839,
310 ; and in 1810, 400. Income of the society from voluntary
subscriptions during the last four years :-1836, £9,407 ;
1837, £10,752; 1838, £16,082; 1839, £23,443. The re-
ceipts up to the 31st October of the present year were
£35,300.

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