OF THE UNITED STATES. 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 intrinsic value."-Locke on Money. THE TRADE OF BANKING IN No. 1. the fluctuations which from time to time have thing connected with the concerns of the company 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 appeared before the committee, with respect to propriate heads. Together with a summary of the law applicable to the Bank of England, to private banks of issue, and joint stock banking companies. To which is added an appendix. By MICHAEL J. QUINN, Esq. of Lincoln's Inn, Barrister at Law. London, Butterworth, 7 Fleet street; Murray, Albemarle street; Ridgway, Piccadilly and Richardson, Royal Exchange. 1833. TO THE RIGHT HONOURABLE HENRY LORD BROUGHAM AND VAUX, LORD HIGH CHANCELLOR OF GREAT BRITAIN, THIS KINDNESS, MOST RESPECTFULLY DEDICATED BY THE PREFACE. taken place in the currency. I found it necessary, therefore, to attempt to clear away the obscurities by which that subject has been heretofore surrounded; and I hope, that, with the assistance of the practical knowledge relating to it which abounds in the minutes of evidence, I have succeeded in simplifying a topic which theorists had previously made 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 all persons who have not an immediate interest in their variations, and a practical acquaintance with the causes that elevate or depress them in the course of trade. If the reader go with me through these explanations, 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. weil as the extent to which the bank has profited by those serious and providential admonitions. The whole of the objections which have been made to its system of management, and the answer given to those objections on the part of the bank, are then exhibited, in order that the reader may decide for himself between conflicting opinions, arguments, and statements of fact, on which side the truth is probably to be found. 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 to, as I have then proceeded to treat of its branch banks recently established in different parts of the country, collecting from the evidence laid before the committee of the house of commons such information as might enable the public to judge of the value of those institutions. Considering the bank and its branches, then, in one point of view, I have traced out its actual condition as to capital, liabilities, and annual profits, from the accounts which were rendered to the committee. As no similar returns were ever before communicated by the bank, the real state of that corporation can now be examined, for the first time, upon the faith of documents of an authentic description, and in which every As the enquiry now pending in parliament extends to private and joint-stock banks, the evidence with respect to those establishments is condensed in successive chapters; and they will, perhaps, be found, in connection with those which precede them, to disclose a more before the committee. 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 to collect, without access to the valuable evidence lately published by order of the house "of commons. The improvements proposed by several witnesses with respect to the banking system are next drawn out from the mass of questions and answers, and I have presumed to conclude the first part of this work with such observations as occurred to me upon a careful and impartial consideration of the whole subject.* References having been made, in many passages of the evidence, to the present state of the law upon several points connected with banking, I deemed it convenient to add, in a second part, a summary of all the more important statutes which relate either to the Bank of England, to private banks of issue, or Joint-stock Banking Companies. In the appendix will be found an account of the principal foreign banks, and of those of Ireland and Scotland; and also a series of useful tables compiled, at my request, by Mr. HEPPEL, one of the most accurate accountants in the city of London. I wish I were at liberty to mention the names of two other gentlemen, of great commercial experience and high character, who have done me the favour to revise this volume in its progress through the press. If upon the subject of which it treats it have any pretension to authority, I owe it entirely to their suggestions, and to the kind vigilance with which they have preserved me from falling into material M. J. Q. 10, Gray's Inn Place, Jan. 28, 1833. errors. Attwood, Thomas, Esq. banker at Birmingham. Burt, James, Esq. one of the directors of the Joint- don. Easthope, John, Esq. stock-broker in the city of Lon- Manchester. CHAPTER II.-Supreme management of the bank by the court of directors-Connection betweenthe bank and government-Practical management-The proprietors-Opinions of the London bankers and others as to the general management of the bank. CHAPTER III.-Origin of branch banks-Their supposed advantages-Places where established-General principles of management-Facilities afforded by them to country bankers, to trade, and to the crown for transmission of revenue-Expenses of the branches, and their losses by bad debts. CHAPTER IV.-Capital of the Bank of England-Dividends-Its liabilities and assets-Annual expenses and net profits. CHAPTER V. The par of Exchange-Par between England and France-Signs of unfavourable and favourable exchanges-Effects upon the exchanges of foreign loans of the general state of trade, and of the operations of individuals, single or combined. CHAPTER VI.-Nature and amount of English currency-Its advantages-Fluctuations to which every species of currency is liable-Effect upon it of foreign exchanges-Peculiar fluctuations to which the currency of England is exposed. CHAPTER VII.-Issues of the bank during the restriction of cash payments-Consequences of those issues --Interference of the bank with the currency previously to the restriction-Influence of enlarged and Contracted circulation of bank paper upon the gene- CHAPTER IX.-Principles upon which the circulation CHAPTER X.--Objections to the regulation of the bank CHAPTER XIV.-System of paper circulation in Lan- district. CHAPTER XV.--Effect of the Bank of England circu- CHAPTER XVI.-Circulation of the country banks-- CHAPTER XVIII.-Improvements suggested-Opinions cial individuals-Of obtaining security for the con- CHAPTER XIX.-Opinions of Mr. Stuckey with refer- CHAPTER XX.-Opinions of Mr. Norman as to the pro- CHAPTER XXI.--Opinions of Mr. Carr Glyn with rc- CHAPTER XXII.--Opinions of Mr. Loyd with reference CHAPTER XXIII.-Opinions of Mr. Gurney with re- CHAPTER XXIV.-Opinions of Mr. Tooke with refer- CHAPTER XXV.-Opinions of Mr. Grote with reference CHAPTER XXVI.-Opinions of Messrs. Dyer, Burt, and CHAPTER XXVII.-Opinions of Mr. Burgess with re- CHAPTER XXVIII.-Opinions of Mr. Easthope with CHAPTER XXIX.-Observations on the improvements making such demand may cause the same to be pro- tested for non-payment by a notary public, under his seal of office in the usual manner; and the comptroller, on receiving and filing in his office such protest, shall forthwith give notice in writing to the maker or makers of such note to pay the same; and if he or they shall omit to do so for ten days after such notice, the comp- troller shall immediately thereupon, (unless he shall be the payment of such note or notes,) give notice in the AN ACT TO AUTHORISE THE BUSINESS OF BANKING, PASSED The people of the State of New York, represented in §1. The comptroller is hereby authorised and re- quired to cause to be engraved and printed in the best manner, to guard against counterfeiting, such quantity of circulating notes, in the similitude of bank notes in blank, of the different denominations authorised to be issued by the incorporated banks of this state, as he may from time to time deem necessary to carry into effect the provisions of this act, and of such form as he may prescribe. Such blank circulating notes shall be countersigned, numbered, and registered, in proper books to be provided and kept for that purpose in the office of said comptroller, under his direction, by such person or persons as the said comptroller shall appoint for that purpose, so that cach denomination of such circulating notes shall all be of the same simili- § 5. The comptroller may give to any person or as- sociation of persons, so transferring stock in pursuance of the provisions of this act, powers of attorney to re- ceive interest or dividends thereon, which such person or association may receive and apply to their own use; but such powers may be revoked upon such person or association failing to redeem the circulating notes so issued, or whenever, in the opinion of the comptrol- ler, the principal of such stock shall become an insuf ficient security; and the said comptroller, upon the application of the owner or owners of such transferred stock in trust, may, in his discretion, change or trans- fer the same for other stocks of the kind before speci- fied in this act, or may re-transfer the said stocks, or any part thereof, or the mortgages, or any of them hereinafter mentioned and provided for, upon receiving and canceling an equal amount of such circulating notes delivered by him to such person or association, in such manner that the circulating notes shall always ler any portion of the public debt now created or here- §3. Such person or association of persons are hereby authorised, after having executed and signed such cir- culating notes in the manner required by law, to make them obligatory promissory notes payable on deinand, at the place of business within this state, of such per- son or association, to loan and circulate the same as money, according to the ordinary course of banking business as regulated by the laws and usages of this §4. In case the maker or makers of any of such cir- culating notes, countersigned and registered as afore- §8. Such mortgages shall be only upon improved, 9. The comptroller may, in his discretion, reas- |