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DEVOTED CHIEFLY TO FINANCE AND CURRENCY, AND TO BANKING AND COMMERCIAL STATISTICS.
" It is the interest of every country that the standard of its money, once settled, should be inviolably and immutably kept to perpetuity. For whenever that is altered, upon whatever pretence soever, the public will lose by it.
* Men in their bargains contract, not for denominations or sounds, but for the intrinsie value."- Locke on Money.
WEDNESDAY, JULY 4, 1838.
TO THE RIGHT HONOURABLE HENRY LORD BROUGHAM AND
VAUX, LORD HIGH CHANCELLOR OF GREAT BRITAIN, THIS
OF UNFEIGNED GRATITUDE
THE TRADE OF BANKING IN thing connected with the concerns of the ENGLAND:
is disclosed without reserve. Embracing the substance of the evidence taken
Decided differences of opinion prevailed before the secret committee of the house of amongst several of the witnesses who apcommons, digested and arranged under ap- peared before the committee, with respect io propriate heads. Together with a summary
the fluctuations which from time to time bave of the law applicable to the Bank of Eng- taken place in the currency. I found it neland, to private banks of issue, and joint cessary, therefore, to attempt to clear away stock banking companies. To which is the obscurities by which that subject has added an appendix. By MICHAEL J. been heretofore surrounded ; and I hope, that, Quinn, Esq. of Lincoln's Inn, Barrister at with the assistance of the practical knowledge Law. London, Butterworth, 7 Fleet street; relating to it which abounds in the minutes of Murray, Albemarle street ; Ridgway, Pic- evidence, I have succeeded in simplifying a cadilly and Richardson, Royal Exchange. topic which theorists had previously made 1833.
almost unintelligible. In order to prepare the reader for this discussion, I have touched on the nature of the foreign exchanges-a
theme also hitherto fruitful of perplexity to work is, WITH HIS PERMISSION, AND WITH SENTIMENTS all persons who have not an immediate inte.
For SEVERAL TOKENS OF | rest in their variations, and a practical acKINDNESS, MOST
quaintance with the causes that elevate or depress them in the course of trade. If the
reader go with me through these explana. PREFACE.
tions, I trust that he will then be enabled to I have endeavoured in the following pages judge how far the management of the bank is to present, in the first place, a general view chargeable with producing contractions or of the origin, privileges, and functions of enlargements of the circulation to the prejuthe Bank of England, of the mode in which dice of the community, and whether any its business is conducted, and of the charac. system of banking can be devised by which ter which it has acquired amongst those such alternations can for the future be prepersons in London, who, from their own ex. vented. perience, are peculiarly competent to bear The lessons afforded to the country by the testimony to the true nature of its operations. catastrophe of 1825 are next alluded io, as I have then proceeded to treat of its branch well as the extent to which the bank has pro. banks recently established in different parts fited by those serious and providential admoof the country, collecting from the evidence nitions. The whole of the objections which laid before the committee of the house of have been made to its system of management, commons such information as might enable and the answer given to those objections on the public to judge of the value of those the part of the bank, are then exhibited, in institutions. Considering the bank and its order that the reader may decide for himself branches, then, in one point of view, I have between conflicting opinions, arguments, and traced out its actual condition as to capital, statements of fact, on which side the truth is liabilities, and annual profits, from the ac- probably to be found. counts which were rendered to the committee. As the enquiry now pending in parliament As no similar returns were ever before com- extends to private and joint-stock banks, the municated by the bank, the real state of that evidence with respect to those establishments corporation can now be examined, for the is condensed in successive chapters; and they first time, upon the faith of documents of an will, perhaps, be found, in connection with authentic description, and in which every those which precede them, to disclose a more
complete view of the banking trade in this Names and designations of the witnesses who appeared country than it was possible for any one writer
before the committee. to collect, without access to the valuable evi. Attwood, Thomas, Esq. banker at Birminghain. dence lately published by order of the house Beckett, William, Esq. banker at Leeds. of commons.
Burgess, Henry, Esq. sccretary to the committee of The improvements proposed by several
Burt, James, Esq. one of the directors of the Jointwitnesses with respect to the banking sys stock Bank at Manchester. tem are next drawn out from the mass of Dyer, Joseph Chesborough, Esq. one of the directors questions and answers, and I have presumed of the same establishment. to conclude the first part of this work with Easthope, John, Esq. slock-broker in the city of Lon.
don. such observations as occurred to me upon a Forster, Charles Smith, Esq. banker at Walsall. careful and impartial consideration of the Glyn, George Carr, Esq. banker in London. whole subject.*
Grote, George, Esq. banker in London. References having been made, in many Harman, Jeremiah, Esq. director of the Bank of Eng.
Gurney, Samuel, Esq. bill-broker in London. passages of the evidence, to the present state
land for many years previous to 1827. of the law upon several points connected with Loyd, Samuel Jones, Esq. banker in London and in banking, I deemed it convenient to add, in a Manchester. second part, a summary of all the more im- Norman, George Warde, Esq. director of the Bank of portant statutes which relate either to the England.
Palmer, John Horsley, Esq. governor of the Bank of Bank of England, to private banks of issue, or
England. Joint-stock Banking Companies.
Richards, John Baker, Esq. deputy-governor of the In the appendix will be found an account Bank of England from April 1824, to April 1826, of the principal foreign banks, and of those of and governor from April 1826, lo April 1828. Ireland and Scotland; and also a series of Rothschild, N. M. Esq.
Smith, John Benjarnin, Esq. one of the directors of the useful tables compiled, at my request, by Mr. Joint-stock Bank at Manchester. Heppel, one of the most accurate accountants Sluckey, Vincent, Esq. banker in the counties of Soin the city of London. I wish I were at merset and Gloucester. liberty to mention the names of two other Tooke, Thomas, Esq. London merchant.
Trotter, Sir Coutts, Bart. London banker. gentlemen, of great commercial experience Ward, William, Esq. director of the Bank of England. and high character, who have done me the Wilkins, John Parry, Esq. banker in Wales. favour to revise this volume in its progress through the press. If upon the subject of which it treats it have any pretension to au
CONTENTS OF PART I. thority, I owe it entirely to their suggestions, and to the kind vigilance with which they
CHAPTER 1.-Origin, privileges, and functions of the
Bank of England—Its power with respect to private have preserved me from falling into material
M. J. Q. CHAPTER II.-Supreme management of the bank by 10, Gray's Inn Place, Jan. 28, 1833. the court of directors—Connection betweenthe bank
and government-Practical management- The pro
prietors-Opinions of the London bankers and others Names of the members of the committee appointed, on
as to the general management of the bank. the 22d of March, 1832, lo enquire into the expe. Chapter 111.—Origin of branch banks-Their sup. diency of renewing the charter of the Bank of Eng.
posed advantages—Places where established-Gene. land, and into the system on which bunks of issue in
ral principles of management-Facilities afforded England and Wales are conducted.
by them to country bankers, to trade, and to the Lord Viscount ALTHORP, Chairman.
crown for transmission of revenue-Expenses of the
branches, and their losses by bad debts. Sir Robert Peel, Bart. Mr. Irving, Lord John Russell, Mr. Warburton,
CHAPTER IV.–Capital of the Bank of England-Divi.
dends-Its liabilities and assels-Annual expenses Mr. Goulburn,
Mr. George Philips, Sir James Graliam, Bart. Mr. James Morrison,
and net profits. Mr. Herries, Lord Viscount Morpeth,
Chapter V.--The par of Exchange-Par between Mr. Poulett Thomson, Mr. Heywood,
England and France-Signs of unfavourable and Mr. Courtenay, Lord Viscount Ebrington,
favourable exchanges-Effects upon the exchanges Colonel Maberley, Mr. Lawley,
of foreign loans of the general slate of trade, and of Sir Ilenry Parnell, Bart. Sir John Wrottesley, Bart.
the operations of individuals, single or combined. Mr. Vernon Smith, Lord Cavendish,
CHAPTER VI.-Nature and amount of English curren. Mr. John Sinith, Mr. Alderman Wood,
cy-Its advantages-Fluctuations to which every Mr. Robarts, Mr. Strutt,
species of currency is liable-Effect upon it of Sir Mathew Ridley, Bart. Mr. Bonham Carter,
foreign exchanges— Peculiar fuctuations to which Mr. Attwood, Mr. E. J. Stanley,
the currency of England is exposed. Sir John Newport, Bart. Mr. Alderman Thompson. Chapter VII.- Issues of the bank during the restric. Mr. Baring,
lion of cash payments—Consequences of those issues
--Interference of the bank with the currency pre. * Chapter XXIX.
viously to the restriction- Influence of enlarged and
contracted circulation of bank paper upon the gene. cial individuals-of obtaining security for the con.
duct of the bank-Of publicity of accounts-And
the commencement of the year 1825—Remote causes jesty's ministers.
priety of making the notes of the bank a legal ien.
of the bank is ordinarily administered-Cases of one bank in London- The publicity of the affairs of
ference to the expediency of making the Bank of
issues by the foreign exchanges-Necessity of pro. having only one bank of issue in London--oi pub.
taip portion of the public stocks.
ness--Facilities afforded by them to trade--Number to the proposed limitations of the paper currency of
bank-Of publicity of accounts--And of repealing
--His mode of conducting business--His statement Chapter XXIII.-Opinions of Mr. Gurney with re-
tablishment of Joint-stock Banks, and branches of
Wales--His method of conducting business--Circu. CHAPTER XXIV. - Opinions of Mr. Tooke with refer.
security for the conduct of the bank, and of pub.
cashire--Consequences of that system with refer. stock Banks, Branch Banks, One-pound Notes,
CHAPTER XXV.- Opinions of Mr. Grote with reference
lation at Birmingham upon the banking trade there a legal tender in the country, of having only one
CHAPTER XXVI. - Opinions of Messrs. Dyer, Burt, and
Mr. Burgess's opinion as to their utility-His answer the Bank of England, and the project of making its
stock Banking Companies.
country-Mr. Stuckey's Joint-stock bank and its ference to the projects of making the Bank of Eng-
of Mr. Horsley Palmer with reference to the pro. reference to the existence of one bank of issue in
CHAPTER III.-Suppression of promissory notes under troller shall immediately thereupon, (unless he shall be
satisfied that there is a good and legal defence against
the issue and re-issue of promissory notes duly person or association will be redeemed out of the trust
lawful for the comptroller to apply the said trust funds
lation by the maker or makers of such protested noles,
pursuant to the provisions of this act, as will in his
$ 4. In case the maker or makers of any of such cir. $ 9. The comptroller may, in his discretion, reas-