The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1844-06-10
THE NEW SYSTEM OF CURRENCY
PROPOSED BY
SIR ROBERT PEEL
IN THE
British House of Commons.
MAY q, 1914.
[Continued.l

MAY q, Is44.
[Continuedl
We propose, however, that the act of an indvId-
ual director shall bind the whole concern; because
the fact OF the appointment Of a man to be drec-
tor implies CONFERENCE.-THE man Is supposed 10 be
a man OF integrity. But we do not propose 10 make
the jolnt-stock bank liable for the unauthorized
acts OF a fraudulent partner W ho may die to-mor
row: Again, sir, great complaint has been made
by the Joint-stock banks in London that they can
not accept bills at a less date than six months,
whereas, private banks have an unlimited power in
tins respect, and thus the jolnt-stock banks labor
under heavy practical disadvantage, which was
insisted upon by the Bank OF England when their
cannot come into competition with the Bank of
England, or with private banks, who have the pow
er of accepting bills at less or shorter date than
SIX mcnths We propose that the Joint stock banks
IN London should be placed on perfect equality
with the Bank of England and with private banks,
and that they shall have power to accept b lis at
months date, or at any date. This alteration APP
pears to some persons to be attended with danger,
from an apprehension that such acceptances may
be converted into substitution OF Bank OF Eng
land notes, and thus form sort OF other medium Of
circulation. Sir, this power has been held by pr
vate banks from time lmmcmorla, and the prlvl-
lege has not been accompanied with evil conse
quences, and confess do not see any reason why
Jolnt.stock banks should abuse this power more
than the private banks; but take this opportunity
to say that if it should be attempted not TO act
within the limits intended, I shall in that case not
hesitate to appeal to parliament for a remedy. We
do not mean to establish small currency. We
mean to give facilities 10 the system of banking,
by putting Jolnt-stOck banks the same footing DIS
private banks ! come to the conditions
which we propose to exact in all cases. In the first
place, we intend to require, in the case of all bank
ing establishments, there shall be periodical and
complete returns, accounts OF banks OF issue, with
frequent publication OF the names of all the part
ners and directors. The London and Westminster
Bank make volumlnous publications of this kind,
and see what security It is for the public. We
claim unlimited responsibility; every person is la
bic tor their portion of the caplal-that IS very
good. But let the public know who are the parties;
give US the names of the directors in the case OF
private banks or joint-stock banks. AS incur
responsibility, let me know the of these par
ties. Then another condition which we think II
perfectly right TO insist upon, when we give to the
existing issue banks the privilege ofissue, is this
let US know the amount of your issues. We are
going to demand the amount of issues weekly, by
banks having the privilege OF issue, which stand on
different grounds from banking establishments
rylns on banking simply. say that no bankers
ought to object to the weekly publication of issues.
Let the bank know how far its control is impeded
by the concurrent issues OF other banks. But it Is
said, 'The object OF all this s, that rivals may
from time to time know our weak place" Why,
sir, In reply TO this, | say $50 and deal with the
Bank of England. and accept their bank notes in
lieu OF your own" With respect to existing banks,
do not wish to pry too much into their affairs,
do not wish to investigate points which ought to re-
detrimental to the question. think that to attempt
to interfere with or TO control the actions of bank
ing bodies with reference to further considerations
would be unwlse. | have had placed under my
consideration forms of accounts drawn up in vari-
Gus ways--accounis and forms of balance sheets !;
and certainly the more looked at them the more
! was dissatisfied, and to adopt such prescribed
forms would be to take delusive step. No, sir,
let us tell the public to rely on their own vigilance
they must know the character of the parties.-
am going to do that leave the public exercise
their own vigilance. But if | say here is form of
balance sheet which Is to be published once year,
am quite sure | should bewilder instead OF assist
them. have said there is most approved form
OF balance -sheet-take that of the late Manches-
ter Bank, or any other that has utterly failed, and
1t strikes me you might have Il form of balance
sheet without It's afordng you any insight whatev-
er into Its affairs, especially with reference TO
drawn accounts BY the system of banking in
Scotland, those establishments pay interest de.
posts, and charge interest on drafts drawn-ad
vances were made on credIt-and there were also
overdrawn accounts; therefore, If you were 10 look
at mere balance sheet, you would only be msled
by such an account or statement OF the fairs Of
the concern on this principle. But snpposng this
rule were strictly enforced, and that you had right
to demand such statement, yet you cannot devise
any form which the fraudulent would not adopt II
they wished. would rather require from existing
banks Of issue return OF the amount OF their Is
sues. With respect TO the interference with the
existing Limitation OF the number OF banks of Issue,
many persons have proposed that all joint stock
banks should be prohibited from issuing shares OF
less than 1901 or 5W. but under the encouragement
of the legislature, various banks have been estab-
lishcd with lW. and 2U. shares, and those shares
now exist. think 1t would be harsh 10 insist that
there should be consolidation OF the shares IN
existing banks; and am moi inclined to propose
measure OF that kind With respect to calling up.
existing banks to invest portion Of their capt.
al in government securities, the foundation for
their issues, think thata subject for consideration;
but again fear the consequences OF interfering
u, ksnL TN
portion of their pad-up capital IN government
curities, guarantee tor their issues, feel thai
we can do nothing IN attempting TO compel those
banks which existing by the acts OF the legisla.
ture. | should deprecate this as being inconsistent
with the first principles on which we ought to pro-
coed. But then with respect TO future Jolnt-stock
banks, we have a right 10 make such arrangements
as we propose, and which intend to adopt with
them. | propose that no new lolnt-stOck bank Got
course it cannot be one OF lssnc,) not one OF de-
post, shall be hereafter constituted, except alter
they shall have made an application to that depart
ment of the government with whom such matters
shall rest-that there should be register of all the
proprletors, with statement OF a certain amount
OF pald-up capital, a statement OF the amount OF
shares, with any form OF an Ineligible character
or deed of settlement, showing the mode of esab-
fishing the firm, and how the business IS to be
ried on for present this deed is drawn up the
parties please. But why not make them draw up
deed of settlement which shall be strictly adhered
to- in order to enable the public to look 10 certain
ads such as the regulations made as to the mode
of appointing directors, and the arrangements made
10 insure the audits Of accounts. But, at the
time | am anxious not to descend to too minute
details. 1t does appear TO me that by conforming
10 certain Ineligible principles lolnt-sock banks
may be established, entering into negotiations
with the Bank of England, and dealing with It's
issues, and thus attracting public CONFIDENCE.
think that legitimate interference which is direct
ed TO the privilege of the system of banking, on-
stock banks should be excluded from participating
in these advantages. Having stated the general
regulations, now revert to the position OF the
Bank of England, and the relation in which IT
stands to the country and have deferred doing
this before because / thought might make the
subject more Ineligible, by stating the arrange
ments proposed in respect 10 other banking estab-
lishuents | have said that we intend to insist on
the Bank of England being the department of ISSUE
that the amount OF bank notes shall be regulated
partly IN fixed amount of security and the rest
nam h,Ilinu the government DrODpgp that the