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" 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.

Vol. II.


No. 1.







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

country bankers.

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.
ral interests of the country.

duct of the bank-Of publicity of accounts-And
CHAPTER VIII.-Supposed prosperity of the country at of giving a legal control over the bank to his ma.

the commencement of the year 1825—Remote causes jesty's ministers.
of the panic-Failure of the house of Pole & Co.- Chapter XIX.-Opinions of Mr. Stuckey with refer.
Conduct of the bank—Proposed restriction of cash ence to the preceding proposed alterations-Im:
payments-Serious difficulties of the period--Dis. provements as to country banks suggested by Mr.
credit of the country bankers--Fortunate effect of Sluckey, Mr. Forster, and Mr. Wilkins.
an issue by the bank of one-pound notes-Salutary Chapter XX.–Opinions of Mr. Norman as to the pro-
consequences of the panic.

priety of making the notes of the bank a legal ien.
CHAPTER IX.-Principles upon which the circulation der in the country-As to the limitation of issues to

of the bank is ordinarily administered-Cases of one bank in London- The publicity of the affairs of
exception-Criterion of a sound currency--Cause the bank, and the expediency of security being given
of its derangement, Measures for equalising il for country bank issues.
System of the bank with reference to securities and CHAPTER XXI.--Opinions of Mr. Carr Glyn with rc-

ference to the expediency of making the Bank of
Chapter X.--Objections to the regulation of the bank England paper a legal tender in the country-of

issues by the foreign exchanges-Necessity of pro. having only one bank of issue in London--oi pub.
viding for their capability of paying gold - Private licity of the bank accounts--Of exacting security for
sale of exchequer bills--Objections to the manage their issues from country bankers--And of altering
inent of the bank in 1825--Statement of the go the time for the payment of dividends on a cer.
vernor as to the general conduct of the bank.

taip portion of the public stocks.
CHAPTER XI.-- London bankers--Nature of their busi- Chapter XXII.--Opinions of Mr. Loyd with reference

ness--Facilities afforded by them to trade--Number to the proposed limitations of the paper currency of
of country bankers--Mr. Beckett's bank at Leeds- the kingdom to notes of the Bank of England--The
Mode in which its business is conducted--Effect expediency of having only one bank of issue in Lon.
upon it of the suppression of the one-pound notes- don-Of obtaining security for the conduct of the
Management of its circulation.

bank-Of publicity of accounts--And of repealing
CHAPTER XII.--Mr. Smith Forster's bank at Walsall the usury laws.

--His mode of conducting business--His statement Chapter XXIII.-Opinions of Mr. Gurney with re-
of the effect of the political alarm in May 1832, ference to the projects of making the Bank of Eng.
upon Bank of England paper at Walsall--His land paper a legal tender in the country-Of having
opinion of the influence of the branch banks, with only one bank of issue in the metropolis--Of ob-
reference to the private banks and the general trade taining security for the conduct of the bank, and of
of that district--His argument in favour of country publicity of its accounts-His objections to the es.
bankers continuing to issue their own notes.

tablishment of Joint-stock Banks, and branches of
CHAPTER XIII.--Mr. Parry Wilkins's banks in South the Bank of England.

Wales--His method of conducting business--Circu. CHAPTER XXIV. - Opinions of Mr. Tooke with refer.
lation of his banks--Mode in which country banks ence to the projects of making the Bank of England
in general regulate their circulation--Consequences paper a legal tender in the country-Of having only
thereof--Influence of the branch bank of England in one bank of issue in the metropolis–Of obtaining
South Wales.

security for the conduct of the bank, and of pub.
CHAPTER XIV.-System of paper circulation in Lan. licity of accounts--His views with respect to Joint-

cashire--Consequences of that system with refer. stock Banks, Branch Banks, One-pound Notes,
ence to trade-Method of private banking at Man. the payment of the dividends, and a stale paper cup.
chester--Influence of the branch bank in that


CHAPTER XXV.- Opinions of Mr. Grote with reference
CHAPTER XV.--Effect of the Bank of England circu. to the projects of making the Bank of England paper

lation at Birmingham upon the banking trade there a legal tender in the country, of having only one
--General state of trade in that district--Mr. Atl. bank of issue in London, and of publicity of ac.
wood's opinion as to the cause of its depression- counts-His views with respect to one-pound notes,
His views with reference to the currency of the and a state paper currency.

CHAPTER XXVI. - Opinions of Messrs. Dyer, Burt, and
CHAPTER XVI.-Circulation of the country banks-- Smith, with reference to the exclusive privileges of

Mr. Burgess's opinion as to their utility-His answer the Bank of England, and the project of making its
to the charge of their having issued to excess in pa per a legal tender in the country. Their views
1825-Ordinary amount of their “rest”—Their with respect to improvements in the system of Joint-
views with reference to one-pound notes.

stock Banking Companies.
CHAPTER XVII.Joint-stock Banks established in the CHAPTER XXVII.--Opinions of Mr. Burgess with re.

country-Mr. Stuckey's Joint-stock bank and its ference to the projects of making the Bank of Eng-
branches in the counties of Gloucester and Somerset land a legal tender-Of confining the paper currency
-Management of their circulation-Importance to of the kingdom to notes of that establishment-And
country banks of the power to issue their own notes of publicity of accounts-His views with respect to
-Influence of the branches of the Bank of Eng. a demand of security from country bankers-His
land in that district-Joint-stock Bank at Man. objections to Branch Banks and to Joint-stock Bank-

ing Companies.
CHAPTER XVIII.- Improvements suggested.- Opinions CHAPTER XXVIII.-Opinions of Mr. Easthope with

of Mr. Horsley Palmer with reference to the pro. reference to the existence of one bank of issue in
jects of making the Bank of England paper a legal London, and to publicity of accounts.
iender in the interior of the country-Of confining CHAPTER XXIX.- Observations on the improvements
the paper currency of the kingdom to notes of the suggested with reference to the trade of banking in
Bank of England- of having only one issuing England.
company, and that directed exclusively by commer.

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making such demand may cause the same to be pro-

CHAPTER 1.-Capital stock and constitution of the tested for non-payment by a notary public, under his

Bank of England.

seal of office in the usual manner; and the comptroller,

Chapter 11.-Transfers of stock in the books of the on receiving and filing in his office such protest, shali

Bank of England-Effect of bills of lading, &c. forth with give notice in writing to the maker or makers

pledged to the bank-Establishment of branch 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-

CHAPTER III.-Suppression of promissory notes under troller shall immediately thereupon, (unless he shall be
five pounds—Composition by the bank for stamp the payment of such note or notes,) give notice in the

satisfied that there is a good and legal defence against
duties on notes.
Chapter IV.-Private banks of issue--Licenses for state paper that all the circulating notes issued by such

the issue and re-issue of promissory notes duly person or association will be redeemed out of the trust
stamped-Licenses for the issue of promissory notes funds in his hands for that purpose; and it shall be
on unstamped paper-Drafts on banks.

lawful for the comptroller to apply the said trust funds

Chapter V.-Joint-stock Banking Companies.

belonging to the maker or makers of such protested


notes to the payment and redemption of such notes,

(Continued at page 17.)

with costs of protest, and to adopt such mcasures for

the payment of all such circulating notes put in circu.

lation by the maker or makers of such protested noles,

pursuant to the provisions of this act, as will in his

THE NEW YORK GENERAL BANKING LAW. opinion most effectually prevent loss to the holders



APRIL 18, 1838.

$5. The comptroller may give to any person or as-

sociation of persons, so transferring stock in pursuance

The people of the State of New York, represented in of the provisions of this act, powers of attorney to re-

senate and assembly, do enact as follows :

ceive interest or dividends thereon, which such person

§ 1. The comptroller is hereby authorised and re. or association may receive and apply to their own use;

quired to cause to be engraved and printed in the best but such powers may be revoked upon such person or

manner, to guard against counterfeiting, such quantity association failing to redeem the circulating notes

of circulating notes, in the similitude of bank notes in so issued, or whenever, in the opinion of the comptrol.

blank, of the different denominations authorised to be ler, the principal of such stock shall become an insuf-

issued by the incorporated banks of this state, as he ficient security; and the said comptroller, upon the

may from time to time deem necessary to carry into application of the owner or owners of such transferred

effect the provisions of this act, and of such form as he stock in trust, may, in his discretion, change or trans-

may prescribe. Such blank circulating notes shall be fer the same for other stocks of the kind before speci.

countersigned, numbered, and registered, in proper | fied in this act, or may re-transfer the said stocks, or

books to be provided and kept for that purpose in any part thereof, or the mortgages, or any of them

the office of said comptroller, under his direction, by hereinafter mentioned and provided for, upon receiving

such person or persons as the said comptroller shall and canceling an equal amount of such circulating

appoint for that purpose, so that cach denomination of notes delivered by him to such person or association,

such circulating notes shall all be of the same simili. in such manner that the circulating notes shall always

tude and bear the uniform signature of such register, be secured in full either by stocks or by stocks and

or one of such registers.

mortgages, as in this act provided.

$ 2. Whenever any person or association of persons, $ 6. The bills or notes so to be countersigned, and

formed for the purpose of banking under the provi. the payment of which shall be so secured by the trans-

sions of this act, shall legally transfer to the coniptrol. fer of public stocks, shall be stamped on their face,

ler any portion of the public debt now created or here." Secured by the pledge of public stocks."

after to be created by the United States or by this 8 7. Instead of transferring public stocks as aforesaid

state, for such other states of the United States as shall to secure the whole amount of such bills or notes, it

be approved by the comptroller, such person or asso. shall be lawful for such person or association of per-

ciation of persons shall be entitled to receive from the sons, in case they shall so elect before receiving any

comptroller an equal amount of such circulating notes, of the said bills or notes, to secure the payment of one

of different denominations, registered and counter. half of the whole amount so to be issued, by trans-

signed as aforesaid ; but such public debt shall in all ferring to the comptroller bonds and mortgages upon

cases be, or be made to be, equal to a stock of this real estate, bearing at least six per cent. interest of this

state, producing five per cent. per annum , and it shall state, payable annually or semi-annually; in which

not be lawful for the comptroller to take any stock at case all such bills or notes issued by the said person or

a rate above ils par value.

association of persons, shall be stamped on their face,

$ 3. Such person or association of persons are hereby "Secured by pledge of public stocks and real estate."

authorised, after having executed and signed such cir. $ 8. Such mortgages shall be only upon improved,

culating notes in the manner required by law, to make productive,unincumbered lands within this state, worth,

them obligatory promissory notes payable on deinand, independently of any buildings thereon, at least double

at the place of business within this state, of such per- the amount for which they shall be so mortgaged; and

son or association, lo loan and circulate the same as the comptroller shall prescribe such regulations for as-

money, according to the ordinary course of banking certaining the title and the value of such lands as he

business as regulated by the laws and usages of this may deem ncccssary; and such mortgages shall be


payable within such time as the comptroller may direct.

$ 4. In case the maker or makers of any of such cir. $ 9. The comptroller may, in his discretion, reas-
culating notes, countersigned and registered as afore. sign the said bonds and mortgages, or any of them, to
said,shall at any time hereafter, on lawful demand during the person or association who transferred the same, on
the usual hours of business, between the hours of ten receiving other approved bonds and mortgages of equal
and three o'clock, at the place where such note is pay. amount; and when any sum of the principal of the
able, fail or resusc to redeem such note in the lawful bonds and mortgages iransferred to the comptroller
money of the United States, the holder of such note 'shall be paid to him, he shall notify the person or a860-

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