LI B RAR.Y 
 
 OF THE 
 
 UN IVLR.SITY 
 
 or ILLINOIS 
 
 ■©875 
 V.33
 
 3. 
 A LETTER 
 
 TO THE RIGHT HON. 
 
 THE VISCOUNT ALTHORP, 
 
 CHANCELLOR OF THE EXCHEQUER, &c. 
 
 ON HIS 
 
 PROPOSED INTERFERENCE 
 
 WITH 
 OF 
 
 COUNTRY BANKING. 
 
 BY A COUNTRY BANKER. 
 
 LONDON : 
 JAMES RIDGWAY, PICCADILLY. 
 
 1833.
 
 TO 
 
 LORD VISCOUNT ALTHORP, M.P. 
 
 CHANCELLOR OF THE EXCHEQUER, 
 
 (Xc. ofc. <5i"c. 
 
 My Lord, 
 
 Though I would yield to no man in a heartier 
 declaration of confidence in the good intentions 
 of your Lordship, or in your wishes to act fairly 
 between the pretensions of the Bank of England, 
 as declared in the letter of the Governors of 
 that Corporation, and the best interest of the 
 nation, I must beg leave to be permitted to 
 doubt the propriety of the conclusion you have 
 arrived at, as well as the soundness of the views 
 upon which your Lordship proposes to legislate. 
 It is a fearful thing, my Lord, to take deci- 
 sive measures against popular feeling at any 
 time, but especially so when the popular feeling 
 or prejudice (call it what you will) has arrayed 
 on its side the monied aristocracy of the coun- 
 try, and the productive industry of the great 
 manufacturing towns. 
 
 B
 
 2 
 
 I know not, in the momentous change about 
 to be produced, whether your Lordship has 
 taken your secret advisers from the rich over- 
 grown Merchants of the Royal Exchange, the 
 Brokers of the Stock Market, or from the Cor- 
 porators of the Bank of England — men, alas ! 
 to whom former Chancellors of the Exchequer 
 have lent but too willing an ear ; but this I do 
 know, that your Lordship never had or ever will 
 have the concurrence of one practical man from 
 that body amounting to about a thousand indi- 
 viduals, with whom your Lordship's plans have 
 the directest and most immediate influence. 
 
 I address your Lordship, as a Tradesman in 
 the matters of whose calling there is to be a 
 great interference, and I shall endeavour as 
 shortly as possible, in a plain matter-of-fact way, 
 to convince your Lordship and Parliament that 
 the effect of the proposed interference will be so 
 extensive, that some preliminary inquiry would 
 be not only just, but necessary. 
 
 And here I must, in limine, and once for all, 
 request to be entirely absolved from the sole in- 
 fluence of interested motives, in endeavouring to 
 place the arguments bearing upon the plan, in a 
 fair point of view; so convinced are the Coun- 
 try Bankers that it is a national, quite as much 
 as a personal, question (as regards themselves), 
 that they desire nothing more, from all parties, 
 than the careful and mature consideration, which
 
 3 
 
 the gravity and importance of the subject de- 
 mands, and I must beg, too, that every Member 
 of Parliament will brino; to his recollection the 
 history of Country Bankers in his own neigh- 
 bourhood, and adduce his own experience of the 
 benefit, or otherwise, the present system has 
 conferred upon it. 
 
 Private interest we know cannot be heard 
 when an obstacle to the attainment of public 
 advantage, which can be proved will receive a 
 greater detriment by the plan than even our- 
 selves. In order that I may spare your Lord- 
 ship's time, at present so much occupied by the 
 momentous questions to which as a Cabinet 
 Minister it must be devoted, I shall take the 
 heads of the plan seriatim, and annex to them 
 in juxta-position only those objections which 
 appear to me to be most forcible and tenable. 
 
 With the arrangement between the Governor 
 of the Bank of England, as relates to the pecu- 
 niary stipulations, as a Country Banker I have 
 no right to give an opinion, it is for the coun- 
 try, by its representatives in Parliament, to de- 
 clare its willingness, or otherwise, to accept 
 the terms. 
 
 I would only remark that the whole tendency 
 of the scheme is to give permanency to the mo- 
 nopoly of the Bank, and to increase the power 
 of an irresponsible body, which is rather a sin- 
 gular object for legislation at the present day.
 
 4 
 
 No one can read the correspondence, as 
 printed in the Parliamentary Return, without 
 being struck with the great discrepancy between 
 the two ministerial proposals of the 1st of April 
 and that of the 2d of May, and there is a 
 change of tone which nothing intermediate can 
 explain. 
 
 A few words with reference to the claims of the 
 Bank for the enjoyment of its monopoly. As to 
 its claims for a renewal of the Charter, though 
 some persons appear to treat them as questions 
 of treaty, I must say, I have not the boldness so 
 to do. The fact is, the Charter and the National 
 Debt must be coeval, and there is no escaping 
 from a claim for its renewal were the country dis- 
 posed so to do. In every contract for the various 
 Loans which have been negotiated for more 
 than a century past, and under which the pre- 
 sent redeemable Annuities, or Dividends, are 
 payable (such contract being always ratified by 
 Parliament) — it has in every instance been so- 
 lemnly enacted that the Bank of England shall 
 continue a Corporation until such Annuities are 
 redeemed, or in other words, until the eight 
 hundred millions of debt shall be fully paid off 
 and discharged. 
 
 Nor is this the whole of the story. It is strange, 
 but not raore strange than true, that upon the 
 most vital subjects of finance the public appear 
 indifferent almost to a proverb ; and notwithstand-
 
 5 
 
 ing all the discussions that have taken place, both 
 oral and written, it is at this moment generally 
 believed that the present Bank Charter actually 
 expires on the \st day of August next. The fact 
 is quite the contrary. The period for its expi- 
 ration is indefinite. God knows, that period 
 may never occur. But on this most important 
 subject the public ought to be correctly in- 
 formed. Upon the last renewal, in the year 
 1800 (39, 40. Geo. III. c. 28), it was declared, 
 that the Bank shall remain a Corporation, with 
 the privilege of exclusive Banking, subject to 
 expiration only upon condition that one year's 
 notice in writing is given by the Speaker to the 
 Bank, in pursuance of a vote or resolution of 
 the House of Commons, one year after the \st of 
 August, 1833, and ai the same time the Govern- 
 ment must pay to the Bank all sums of money 
 of what nature or kind soever, then due and 
 owing on any account whatsoever, and that the 
 Charter shall not otherwise expire. 
 
 It were greatly to be desired that your Lord- 
 ship were left to your own uninfluenced, un- 
 biassed judgment ; that all parties had been 
 consulted (if any were to be consulted at all), 
 whose interests were to be affected, and Country 
 Bankers, a body whose operations are based 
 upon a capital of at least fifty millions, then 
 would not have been told, when it was too late 
 for them to complain, that they must be swept
 
 6 
 
 away because two or three Bank Directors, hav- 
 ing your Lordship's ear, said they interfered 
 with the plan upon which they chose to con- 
 duct the Bank of England. 
 
 Even suppose that this were the case, and I 
 doubt it quite as much as their bare unsupported 
 assertions, that our issues deranged the foreign 
 exchanges ; I would in common fairness make 
 this request, which I think must be considered 
 quite as much a matter of right as of favour. 
 
 Give us the datum upon which your Lordship 
 founds your opinion against us, on the justness 
 of which, you call upon Parliament to legislate, 
 that we may lay before your Lordship and Par- 
 liament that justification and satisfactory expla- 
 nation, the history of Private Banks, since the 
 year 1825, so fully affords. 
 
 I will class under Five Heads the subjects of 
 the proposed Legislation : 
 
 1. Your Lordship's declared intention of pro- 
 moting the establishment of Joint Stock Banks, 
 with peculiar advantages to be given them, in 
 order that they may be preferred to Private 
 Banks. 
 
 2. The extraordinary and novel doctrine of 
 limited responsibility to be bestowed upon 
 these favoured Banks. 
 
 3. The monopoly of the circulation of the 
 whole country by a body of irresponsible persons 
 in London.
 
 7 
 
 4. The destruction of the present system un- 
 der which the country has flourished, for the 
 substitution of a dangerous experiment. 
 
 5. The restrictions upon Country Bankers, 
 prohibiting the accommodations hitherto grant- 
 ed by them to the productive classes, which 
 must lead to most disastrous effects in a few 
 years. 
 
 Before entering upon the immediate matter of 
 grievance, I would say a few words on the pro- 
 posed alteration of the Legal Tender, because 
 from the perusal of the first of a series of Reso- 
 lutions passed at a meeting of the Committee of 
 Country Bankers at the London Hotel, New 
 Bridge Street, on the 8th of June, 1833, and 
 submitted to your Lordship, it would appear 
 that the Bankers as a body disapproved of this 
 measure. 
 
 At this Meeting there were upwards of fifty 
 Country Bankers, summoned in a few days from 
 various parts of England and Wales, after your 
 Lordship's speech in the House of Commons on 
 the 3d of May last. 
 
 Eight or nine then present are Members of 
 the House of Commons, and all were practical 
 men of business and intelligence in their various 
 districts. 
 
 After several adjournments and long patient 
 discussions, the following Resolutions were 
 passed : —
 
 8 
 
 " That this Meeting, disclaiming every sentiment of hosti- 
 tility to the Bank of England, upon its original principles, can- 
 not fail to perceive that it is the object and tendency of the 
 proposed arrangement between the Government and the Bank, 
 by making the Notes of the Bank a legal tender, and by ex- 
 pressly discouraging other Banks than those which shall issue 
 such Notes, with limited responsibility,— in the first instance 
 to discredit, and eventually to destroy, the system of Country 
 Banking, and to render the Corporation of the Bank of Eng- 
 land masters of the whole Circulation of the Country. 
 
 " That such a measure is uncalled for, and is a most inju- 
 rious restraint on that freedom of trade to which the country 
 owes its commercial ascendancy ; an ascendancy much better 
 maintained by the watchfulness of individuals than by the con- 
 trol of a Corporation. 
 
 " That if an irresponsible power of this nature be establish- 
 ed it will be a dangerous precedent, capable of being urged in 
 vindication of future encroachments to an indefinite extent, 
 tending to overturn the whole system of individual responsibi- 
 lity and free commerce. 
 
 " That the multiplication and the free and fair competition 
 of Banks of Issue, with a circulation limited to Notes of a cer- 
 tain amount, and subjected to immediate and unconditional 
 payment on demand, is a security to the Country, and salutary 
 to Public Credit. 
 
 " That the Country Banker, by his local connexion, is inti- 
 mately acquainted with the wants and necessities of his own 
 district. — His individual interest must make him ever watchful 
 in promoting productive industry in Agriculture, Mines, Ma- 
 nufactures, and Commerce. — His daily occupation and natural 
 anxiety are devoted to the improving and fostering industry in 
 every class of the community, — while his peculiar means of ob- 
 servation enable him to check a rash spirit of speculation which 
 would endanger his own stability. These objects cannot be ac- 
 complished by the agency of public bodies, or by the delegated
 
 9 
 
 servants of an opulent Corporation, who are bound by specific 
 reflations, and are subservient to strict rules. 
 
 " That should this great Corporation, conducted by Direc- 
 tors who are not personally responsible, become the entire dis- 
 pensers of the Circulation of the Country, and supplant the 
 existing Banking Establishments, — they will then be able to 
 contractor expand the Currency according to their separate and 
 particular interests and convenience, and thus be armed with a 
 power and influence dangerous to the welfare of the commu- 
 nity. The vabic and rental of land, — the value of all domestic 
 produce, — the wages of labour, — and the employment of the 
 poor, will then be made to fluctuate according to the secret 
 and uncontrolled regulations of the Directors of the Bank 
 of England. 
 
 " That one of the most effectual means of preventing the 
 crime of forgery, consists in the circulation of a description of 
 notss, which are constantly passing under the eye of the issuer ; 
 and, consequently, the universal circulation of Bank of Eng- 
 land notes will increase the temptation to the commission of 
 that crime, and the insecurity of the public. 
 
 " That this Meeting, therefore, respectfully submits that 
 such an extension, and, in its effects, such a confirmation, in 
 perpetuity, of the monopoly of the Bank of England, as now 
 arranged between the Government and the Bank, is inconsis- 
 tent with sound principles of legislation and of free trade — will 
 prove injurious to public credit, and cramp and disorder the 
 industry and commerce of the country. 
 
 " That the proposition which goes to require from Country 
 Bankers an account of their issues, to be periodically com- 
 municated to the Government, has the assent of this Com- 
 mittee. 
 
 " That a Copy of these Resolutions be sent by the 
 Chairman to Earl Grey and the Chancellor of the Exche- 
 quer, and that the Chairman be pleased to request an 
 
 early interview. 
 
 "Hlnry Huehouse, Chairman."
 
 10 
 
 The remark in the first Resolution respecting 
 the Legal Tender of Bank Paper, does not imply 
 in my opinion hostility to such a Tender, in the 
 abstract, but only in context with the privileges 
 heaped upon the Bank. 
 
 The Bankers thought it were surely sufficient 
 to only legalize the issue, and thereby double 
 its amount and consequent profit, (raising it 
 from 178,875/.* to upwards of 250,000/. per an- 
 num ;) without any of the measures for increas- 
 ing it, accompanied too, as they are, by Legis- 
 lative protection, inimical to fair competition, 
 and thinking so, reminded your Lordship of 
 the new encroachment : unaccompanied with 
 these measures the Bankers would have passed 
 it by. 
 
 For myself I consider the establishment of the 
 Legal Tender of Bank Notes highly advan- 
 tageous to the country, and would forego any 
 distaste of the additional credit thus given to 
 a rival circulation for what I consider in the 
 light of national advantage. It is in fact a step 
 halfway to a Bank Restriction Act, and we shall 
 see the consequences in a rise of prices. 
 
 Silver, with a slight variation in the present 
 Mint price, should have been made a standard 
 of value conjointly with Gold; for, as Mr, Gal- 
 latin well observes, " with proper Mint regula- 
 
 * The profit on its circulation as declared by the Bank. — See 
 Evidence.
 
 11 
 
 tions, a fluctuation in the relative market price 
 of Gold and Silver would be so small, that it 
 might be neglected/' 
 
 At a Meeting of the Birmingham Bankers in 
 June last year, the following Resolutions were 
 passed relative to this subject : 
 
 " That this Meeting- consider it just and desirable that Silver 
 should be made a Legal Tender conjointly with Gold, and that 
 the Bank should make its payments in either metals, and that 
 the Bank of England Notes should also be Legal Tenders from 
 any person, except by the Bank, for sums exceeding Twenty 
 Pounds." 
 
 It must not be forgotten, that whilst the coun- 
 try is served by giving a less expensive and 
 more elastic Tender than Gold in addition to 
 Gold, the Bank will be gainer to a large amount; 
 and though I would be the last person to gain- 
 say the plan, for the reasons stated a short time 
 back, I consider the boon to one party to be an 
 additional reason for demanding the relinquish- 
 ment of their schemes of encroachment, on the 
 other. 
 
 I would therefore demand that the Bank 
 of England should immediately withdraw its 
 Branches from the countrv ; and I make this 
 demand because, every reflecting man. Members 
 of Government themselves, confess to the absur- 
 dity and wickedness of the Fife House Procla- 
 mation by which they were established. If the 
 Bank of England retain its Branches, let them
 
 12 
 
 retain the unmixed simple character of the 
 Parent Establishment. At home the Bank 
 does not interfere with the business of London 
 Bankers, does not seek to depreciate Discounts, 
 and narrow their usefulness. Let them (the 
 Branches) follow the same example. 
 
 Instead of lowering the rate of interest to the 
 public, in point of comparison, they ought to dis- 
 count higher than the Banks, and to fulfil the 
 functions of supplying the Local Bankers with 
 Gold, and act in the same way by them, as by 
 the Metropolitan Bankers. As long as the 
 Branches act in concert with the Parent Esta- 
 blishment, Bankers and the Country may be 
 benefited : for it is much more desirable for the 
 latter that the former should be elevated rather 
 than depressed, encouraged than discredited, 
 than that a comparatively small number of indi- 
 viduals should get their Bills discounted at a low 
 rate of interest. Every thousand pounds depo- 
 sited by the public in the Branches, is just so 
 much lost to the community, whilst, vice versa, 
 every thousand pounds put into the hands of the 
 Local Banker is a positive gain. The rules of 
 the first, administered by an Agent, prevent 
 advantage accruing to the public, all being 
 absorbed into the great vortex of the Parent 
 Establishment, " giving its sum of more to 
 that which hath too much," and the usage of the 
 latter being to dispense the surplus of the
 
 13 
 
 wealthy to stimulate the energies of the thrifty 
 and industrious. 
 
 It is a pleasing thing, my Lord, to hear 
 men who have risen to opulence from nothing, 
 who are now swelling; the ranks of the Aristo- 
 cracy, trace their rise from the shop and the 
 warehouse, declaring that their present station in 
 society is owing to some timely assistance, some 
 friendly aid, we have afforded at a crisis of trade ; 
 and, I must confess, the feelings that such decla- 
 rations give rise to, are worth more than it is in 
 the power of a Minister of any Monarch to bestow. 
 The enactments of a Minister may substitute for 
 this honest interchange of confidence, all the mys- 
 terious manoeuverings and corrupt contrivances 
 to get a majority at a Board of Directors ; nay, 
 it may do more, it may make Directors suitors 
 to themselves, and so kindly disposed one to 
 another, as to array them against their own cus- 
 tomers, from the impossibility of assisting them 
 and themselves too. Charity begins at home. 
 Who will not sigh to be a Joint Stock Bank 
 Director ? 
 
 I now proceed to call your Lordship's atten- 
 tion to my first objection to your plan, viz: — 
 
 The preference you propose to give in your 
 Bill to Joint Stock Banks over Private Banks, as 
 at present constituted. 
 
 Your Lordship, in common with many Mem- 
 bers of Parliament, appears to have suffered
 
 14 
 
 yourself to be led away by the prejudices ignorant 
 and interested persons in London and Scotland 
 so industriously fomented a few years back. 
 
 I find it still exists in many quarters, but 
 really, I must aver, it is almost entirely confined 
 to parties whose theories, either upon political 
 economy, and financial matters, are at variance 
 with common sense, or whose local prejudices 
 are only to be matched with the shallowness of 
 their understanding. 
 
 I grieve that your Lordship should be influ- 
 enced by such as these, and that they ever should 
 be permitted to fill places of public trust either 
 in Parliament or in the Government, where the 
 good nature or indolence of those around them 
 cares little to rebut their incessant attempt at 
 proselyteism. 
 
 I hear, such is the influence of the interested 
 parties referred to, on all sides, of the excellence 
 of what they call the " Scotch System," ergo, 
 consequent excellence of all Joint Stock Banks. 
 
 It is maintained, I know, that there is a degree 
 of safety, uniformity, and freedom, from fluctu- 
 ations, both in their circulations or advances 
 to the public, in these Joint Stocks, which the 
 private Banks do not possess; and certainly if 
 all these good qualities could be found existing 
 in them, as they exist in the imagination of 
 some of our Legislators, I would not for a 
 moment contest the point.
 
 15 
 
 I deny that the Joint Stock Banks offer any 
 more safeguards against panics, or commercial 
 revolutions, than Private Banks. At first it 
 might appear, that they did, to a superficial 
 reasoner, but further insight into the system as 
 it works, will convince to the contrary. 
 
 I do not at present speak of the limited respon- 
 sibility, that is too fearful a topic to be considered, 
 but by itself. 
 
 In their advances to the public, the Joint Stock 
 Banks cannot in their very essence become a 
 substitute for private ones, while their establish- 
 ment and the Legislative protection afforded 
 them, so cramp and injure the latter, that the 
 public are the greatest losers after all.* 
 
 * " The establishment of these Banks would moreover dimi- 
 nish the deposits of the private Bankers considerably, inas- 
 much as the proprietors of shares in such institutions would 
 naturally transfer to them deposits which are at present in the 
 custody of the private Bankers. 
 
 " Thus the latter would be deprived in a great measure of 
 their power of supplying a portion of the traders of London, 
 particularly the second class, with the accommodation now 
 afforded them, without which they could not carry on their 
 business, and which they would not be likely to obtain from a 
 public body of Directors. Such a body would not have those 
 means of inquiring into the resources of the middling classes 
 of traders, which the private Bankers possess, and which ena- 
 ble them to judge of the propriety of making the advances 
 that are solicited. 
 
 "The traders would not have the same access to a
 
 16 
 
 Where Private Banks exist, and issue paper, 
 small capitalists are created ; the personal con- 
 nexions of the Banker enable him to ascertain to 
 a nicety the character of every trader around 
 him, and he calls into action, by timely advances, 
 yearly, numbers of honest industrious men, who, 
 without his aid, would have remained among the 
 class of hired workmen. He discourages the 
 grasping Capitalist, who, to aggrandise his pro- 
 perty, would crush those less wealthy, and dis- 
 tributes his advances where most they tend to 
 national wealth. 
 
 It is nothing to say, " Look at Scotland — no 
 failure took place there, even at the Panic." 
 " No one lost by the Banks." I allow no one 
 did by the failure of the Banks, but as distrust 
 and the vital cramp which came over the Money 
 Market in England spread also there, the same 
 effects followed, though in a different way. 
 Thousands lost hy the Banks, and by the Banks 
 alone, in Scotland ; and more failures took place 
 
 Board of Directors which they have to private establish- 
 ments." 
 
 Mr. Carr Glynn. 2830. 
 
 " They are deficient in every thing requisite for the conduct 
 of Banking business, except extending responsibihty. That 
 business requires persons peculiarly attentive to all its details, 
 constantly, daily, and hourly watchful of every transaction, 
 much more so than mercantile affairs,"' 
 
 Mr. S. J. Lloyd. 3300.
 
 17 
 
 there, ten-fold, than in districts in England 
 flooded with one pound notes. 
 
 The worst is, the fact is not understood, there 
 is a federative feelino: among; all the Scotch 
 Bankers, a determination to support the system 
 by which they live, quite unknown in this coun- 
 try. I call this federation dishonest, and such 
 as few English Bankers would engage in. If a 
 Bank be in difficulties its neighbours will sup- 
 port it for a long period, while the most unre- 
 lenting harshness is used in calling in its re- 
 sources from the Traders who have relied on its 
 promises of indulgence. 
 
 Equally false is the charge against Country 
 Bankers, that " they foster speculation :" though 
 this charge has the authority of a First Lord of 
 the Treasury. They neither foster speculation 
 among their customers, nor do they embark in 
 them themselves. It is notorious that in these 
 qualities, there is a great contrast between the 
 Scotch Banks, and those in their immediate 
 neighbourhood, on the borders of the two coun- 
 tries. I wish, my Lord, you could have been 
 present at the meeting of the Bankers on Friday 
 last, and have heard the facts, stubborn and 
 uncontrovertible, narrated by Gentlemen resi- 
 dent in the Northern Counties. 
 
 I should like to know if any instance ever 
 occurred, of a private Banker, stigmatised as 
 he has been for his speculative and selfish pro-
 
 18 
 
 pensities, making the primary principles of 
 Banking subservient to enterprises at variance 
 with his consistency and stipulated engage- 
 ments ? 
 
 Has a private Banker been known to cancel 
 agreements upon which the honour and subsist- 
 ence of hundreds of industrious families de- 
 pended, void of feeling, and reckless of conse- 
 quences, plunge into a desperate investment, 
 to " set his life upon a cast "? 
 
 There is a country, my Lord, where this iron 
 rule, more tyrannic than the usurped power of 
 any despot, may lay men prostrate, and should 
 any sufferer dare to murmur, complaint would 
 make his burthen more intolerable. There is a 
 Banking System in that country, where circum- 
 stances such as these frequently occur. The 
 Director, in lofty state — say in the Metropolis, 
 or at its great commercial emporium, has deter- 
 mined that a coup de finance shall be made ; 
 and the price of Consols being favourable to the 
 undertaking, in Consols shall half a million of 
 money be thrown. The Treasury is empty, says 
 the Cashier. Slave, talk not of the Treasury, 
 exclaims the Director, in the fertile Carse of 
 Gowrie are hundreds of " bold yeomanry, their 
 €0untry's pride," who rejoice in my assurances 
 of support, and bask in my smile ; I have mul- 
 tiplied their cattle, and manured their fields. 
 In Paisley, the active and pallid weaver, toils
 
 19 
 
 through the day, and brings his large family his 
 earnings wrought from the capital I have lent 
 him, and his little all is embarked in his hopes 
 he may still retain the indulgence. I have told 
 the Glasgow Merchant he may freight his ves- 
 sels, and spread the products of India over our 
 country, for upon me may he depend. I have 
 called into action thousands, and has not every 
 one bound himself unto me for ever, '^ making 
 assurance doubly sure." 
 
 Mighty Governor, says the Cashier, I know 
 all this, and " for this wast thou ordained." For 
 this was thy Charter bestow^ed : for this did the 
 dome of our temple arise : for this were all men 
 denounced as seditious, who doubted that a slip 
 of paper, touched with thy finger, was of less 
 value than pure gold. For this, among the vul- 
 gar, is the necromancy of thy counsels wor- 
 shipped. 
 
 Silence, presumptuous fool, furiously retorts 
 the papyferous Autocrat. Thou sayest truly my 
 power, minion, let my vassals feel it ; write, sir, 
 write to my Governors of provinces ; tell them 
 to reduce the accustomed supply one half; and 
 if the vassals faint and stagger with amazement, 
 implore for mercy, prate of starvation, and weep 
 for their infants, let my servants tell them, 
 mercy I know not, neither pity ; my will is un- 
 changeable, and the dregs of the cup of bitter- 
 ness shall they drink still deeper. Prosperity,
 
 20 
 
 comfort, and the joy of honest industry, may 
 fade from the land ; their names may be written 
 in the Gazette, the catalogue of the wretched, I 
 heed it not. Consols are at 75 — and on their 
 progress will I put my fate. 
 
 As a man of business I first addressed you, 
 and I may be censured for wandering into style 
 like this ; I cannot, however, give an overcharged 
 picture, for, as I before said, I advance nothing 
 which facts do not bear entirely out. 
 
 I know instances of Travellers from Birming- 
 ham and Sheffield manufacturers, being actually 
 refused Gold, even for trifling sums, at the 
 Branches of some of the Chartered Banks in 
 Scotland, and when it has been stated that Gold 
 would not be asked, but from the parties being 
 about to proceed home, and required it for tra- 
 velling purposes, a few sovereigns have been 
 most reluctantly given. It is a question with 
 me, whether any Bank keeps more than from 
 50 to 100 sovereigns ; while in the English 
 Banks they would consider it discreditable to 
 refuse any amount, however large, in Gold. I 
 know many Banks, keeping from five to twenty 
 thousand sovereigns and Bank of England notes 
 constantly by them, besides large sums in cash 
 in London, available by return of post. The 
 Bankers in England maintain the credit of their 
 customers; — the Bankers in Scotland maintain 
 their own, and they will unite and ruin a whole
 
 21 
 
 district to keep up their own unspotted charac- 
 ters. The price of their honour is far too dear, 
 and it is only wonderful that a sagacious people 
 like the Scotch will pay it. Existing solely 
 upon an imaginary basis, paper, for it is non- 
 sense to say you may have Gold or Silver, there 
 not being Legal Tender sufficient in the whole 
 kingdom to take up the circulation of the smallest 
 Bank in it ; accommodation is granted in pro- 
 portion to the facility in tlie power of the bor- 
 rower from the Bank of pushing out its paper. 
 Thus each play into the others hands ; and this 
 is all very well, so long as there is a calm, but 
 come a storm, and how does it work ? 
 
 * " But even Mr. Macculloch, with the strong- 
 est prejudices against the Country-Bank system 
 of England, bears his testimony, in a work re- 
 cently published, in favour of that view which 
 we have endeavoured to explain." 
 
 "A Banking System," he says, "fitted only 
 for a period of prosperity, and unable to sustain 
 itself, and to assist the country, in times of dis- 
 tress and difficulty, is as ill calculated for the 
 great purposes it should serve, as the paper 
 cannons of the Chinese for being used in war. 
 
 " The example of the Scotch Bankers may 
 here be referred to. They are most liberal of 
 
 » "The Bank Question." Marchant, 1832. A very able 
 exposition, by a most competent judge.
 
 22 
 
 their advances so long as they consider they ran 
 no risk in making them ; but the moment that 
 alarm and discredit begin to make their appear- 
 ance, they demand payment of every advance 
 that is not made on the very best security , they 
 cease in a great measure to discount ; and pro- 
 vide for their own security by ruining thousands 
 of their customers. Had the Bank of England 
 acted, in 1792, 1815, and 1816, and in 1825 
 and 1826, as the Scotch Banks act when they 
 apprehend a return of their notes, all classes 
 would have been involved in bankruptcy, and 
 we should have been fortunate had we escaped 
 a revolution ! 
 
 " Similar results are said to be exhibited in 
 the State of Massachusetts, the Banking System 
 of which has received some encomiums in this 
 country. We learn, from the best authority, 
 that in Massachusetts the oscillations in the 
 quantity of paper afloat are very sudden and 
 violent, and have been productive of most inju- 
 rious consequences." 
 
 So much did this esprit de corps act among the 
 Scotch Banks, when there was a prospect of Go- 
 vernment dealing with them as with us, that in 
 defiance of common honesty and decency, they 
 kept up two Banks utterly insolvent, I mean 
 the Falkirk and Stirling Banks, in 1826, waiting 
 the decision of Government; knowing that should 
 they fail just then, the clamour they had raised
 
 23 
 
 to intimidate the Minister would lose some of 
 its effects. These Banks stopped directly after- 
 wards, (Government being actually bullied into 
 their demands,) and more ruin resulted thereby 
 in the neighbourhood, than from all the English 
 failures. 
 
 Under the sanction of the Legislature, these 
 favoured Banks pushed into the counties of 
 Cumberland, Northumberland, and Durham, 
 upwards of 140,000/. of their notes in districts 
 about 100 miles from the Banks of issue ! And 
 yet, my Lord, I am met with assurance of the 
 respectability and stability of Scotch Banks, and 
 comparisons made with ours. 
 
 The crazy state of Scotch shopkeepers — their 
 known dependance on a Bank system, whose 
 principle is to sacrifice industry, happiness, and 
 property at every feeling of weakness, is so well 
 known to our manufacturers, that 7i per cent, 
 is added to the invoices of all goods sent to be 
 sold in that country. 
 
 I wish, my Lord, I might be permitted to 
 bring half a dozen plain straightforward trades- 
 men from Birmingham, Leeds, or Manchester, 
 into Downing Street, (or if your Lordship would 
 grant a Committee of inquiry, as vouchsafed to 
 the Scotch Banks, before Parliament), they 
 would be found worth a hundred political eco- 
 nomists, and would inform your Lordship of 
 many secrets worth knowing.
 
 24 
 
 The experience of the Commercial history of 
 the country has proved, that its prosperity has 
 been coeval to the abundance and stability of its 
 circulating medium ; that the means of support- 
 ing and encouraging a healthy state of currency, 
 and thereby giving to land the produce of in- 
 dustry its just and fall value, have been fully 
 demonstrated to be the Country Bankers. 
 
 The Country Bankers, by their individual 
 knowledge of local circumstances, their intimate 
 acquaintance w^ith the credit and stability of all 
 classes of traders, possess opportunities of fur- 
 nishing assistance to the industrious, or w^ith- 
 holding it from the rashly speculative, which no 
 delegated body of Joint Stock Company Direc- 
 tors, or Branch Bank of England Managers can 
 ever by any means hope to have. This has 
 been proved in every town where private Banks 
 and Joint Stocks, with a Branch of the Bank of 
 England have existed together. The Country 
 Bankers do not assume this egotistically, as they 
 naturally ought to be supposed to do, from a 
 partiality to their own mode of doing business. 
 In fact, when some Country Bankers have had 
 under their consideration, whether it might not 
 be advisable to increase the number of partners, 
 and resolve themselves into a Joint Stock Com- 
 pany, under the regulations of the late Act of 
 Parliament, they have, upon mature considera- 
 tion and consultation with their customers, found
 
 25 
 
 that a considerable majority were in favour of 
 the private Bank system, and would, if a Joint 
 Stock were so formed, remove their accounts to 
 a private Bank. 
 
 I trust, if Government see fit to encourage 
 Joint Stock Banks, it will foUaw the example of 
 the United States, which certainly does encou- 
 rage Banks of this kind, to the confessed ruin of 
 the country. There every State Legislature 
 which grants a charter, enacts that 8 per cent. 
 per annum be paid on its gross profits, as duty, 
 and this may be levied in addition to the 
 stamp duty on notes. 
 
 On a broad principle I think Corporations 
 productive of mischief, especially Commercial 
 Corporations. Their management is always de- 
 fective, and they never succeed except where 
 laws or circumstances give them a monopoly. 
 They obtain a power which it is difficult at all 
 times to set aside, and are characterised by a 
 want of moral feeling and responsibility, greatly 
 destructive to the public. 
 
 A celebrated writer has said, that " Corpora- 
 tions have neither bodies to be kicked, nor souls 
 to be damned," and to none does this remark 
 apply more than to Banking Corporations. 
 
 The privileges to be conferred on Banking 
 Corporations are just so many robbed from the 
 people. 
 
 If your Lordship only turned your atten-
 
 26 
 
 tion to the Banking System of the United States, 
 I am convinced you would be the last man to 
 encourage the Joint Stock system here, especially 
 that with limited responsibility, to which I shall 
 advert. 
 
 Upon this doctine, to which your Lordship 
 has lately become a convert, I must earnestly 
 request your attention to a few remarks, because 
 I feel fully convinced, the awful responsibility 
 your Lordship has undertaken has never fully 
 presented itself to your mind. 
 
 In the United States the system has been fully 
 tried, and from conversations I have had with 
 gentlemen of that country, fully competent to 
 decide upon its merits, I feel assured that a 
 more dreadful visitation could not await this 
 country than the adoption of them here. 
 
 Mr. N. Biddle, the President, in his address 
 to the Stockholders of the United States' Bank, 
 in 1828, stated, that of five hundred and 
 forty-four Banks in the United States, one hun- 
 dred and forty-four had been openly declared 
 bankrupt, and about fifty more had suspended 
 payment. 
 
 These were all Joint Stock Banks of issue, with 
 Charters, and incorporated by the Legislatures of 
 the various States. Having once obtained credit 
 with the Members of the Legislature, by means 
 best known to themselves. Charters for Banks 
 were easily procuj'ed, though it is to be hoped,
 
 27 
 
 should ever the mania spread here as there, our 
 Legislators will be less easily induced to grant 
 them. 
 
 Many persons in that country are greatly 
 opposed to the system, but they are borne down 
 by interested parties. An American writer says, 
 " In the Bank Controversy there is, on one side 
 the strong feeling of private interest, supported 
 by party discipline ; and on the other side, the 
 comparatively weak feeling of patriotism, with- 
 out any aid from party organization. The 
 friends of the Banking System act in concert ; 
 its opponents act singly, if they act at all. 
 Against any kind of action there are various 
 discouragements. If a proposition is made to 
 establish a new Bank, it seems hardly worth 
 while to oppose it, for one Bank, more or less, 
 can have no great effect. The question imme- 
 diately occurs on such occasions, why should 
 not these men be permitted to share the profits 
 of Banking? Every new Bank does, indeed, in- 
 crease the difficulty of reform ; but the prospect 
 of reform seems so remote as to be with many 
 thought hardly worthy of attention. 
 
 " Other difficulties arise from the system 
 having received the sanction of the Federal Go- 
 vernment, as well as that of the State Govern- 
 ments. If any one of the States was disposed to 
 establish a system of sound currency and sound 
 credit, it would find the work impracticable so
 
 28 
 long as a Paper Money Bank, incorporated by 
 the United States Government, continues in ex- 
 istence. If a proposition is made to suffer the 
 Charter of the United States Bank to expire, we 
 are startled with the horrors of a multitude of 
 State Banks issuing paper without limits, and 
 failing to redeem their notes with specie."* 
 
 The same writer, who had good opportunities 
 of knowing from experience the effect of Joint 
 Stock Banks, says. " The heavy expenses of 
 these institutions in the payment of Presidents, 
 Cashiers, and Clerks, and the heavy losses that 
 are necessarily sustained when corporate interest 
 superintends the business of lending, are the 
 reasons that the Stockholders get much less 
 than the people pay. Such being the fact, the 
 anxiety to establish new Banks mig-ht create 
 surprise, if we did not know that the object of 
 the projectors of such institutions is not to lend 
 money, but to make money. People who have 
 money can lend it without the intervention of 
 Boards of Directors. They can lend it more 
 securely, and watch over it more easily. But a 
 new Bank will afford to some favoured gentle- 
 man a snug birth as President for life, and to 
 another an equally snug birth as Cashier. Poor 
 cousins can be conveniently provided for, by 
 
 * See Gouge on " Paper Money and Banking in the United 
 States." Philadelphia, Ustick, 1833.
 
 29 
 
 giving" them clerkships. To some, tlie new- 
 Bank will afford facilities for borrowing, to 
 others it will afford facilities for lending, at 2 or 
 3 per cent, a month. To those who are to be 
 Directors, it will impart additional consequence 
 in society, and give great advantages over their 
 neighbours in business. Others hope to make 
 fortunes by speculations in script. To further 
 all these objects nothing is necessary but a 
 Charter from the Legislature, and the means of 
 paj'ing the first instalment. By the convenient 
 contrivance of Stock Notes the Stock of the 
 Bank can be completed. The circulations and 
 deposits will prove a certain source of revenue. 
 
 " When a Charter is granted the speculators 
 evince great anxiety to possess the stock, and 
 thereby create an idea that it is something very 
 valuable. 
 
 " In New York it is usual to subscribe a 
 much greater amount than the nominal capital, 
 and then clamour for a pro rata division. In 
 the case of the Broome County Bank, the 
 capital of which was fixed at 100,000 dollars, 
 the subscriptions amounted to eight millions. 
 
 " In Pennsylvania, where subscriptions are not 
 received beyond the amount of nominal capital, 
 draymen and other able bodied persons are 
 hired by the speculators to get the script for 
 them. They struggle at the windows with so 
 much violence as to give and receive severe
 
 30 
 
 personal injury. The most disgraceful riots 
 that occur in Pennsylvania are those which are 
 produced by the opening of the books of sub- 
 scription for a new Bank. These doings have 
 their effect on simple minded people ; and from 
 the prospect of large profits they prefer Bank 
 Stock to land and houses. The founders of the 
 Bank kindly spare them some of the script at an 
 advance of 5 or 10 per cent., retaining only 
 enough to keep the control of the institution in 
 their own hands. 
 
 *' Even those who are not simple-minded do 
 no not hesitate to buy the script at an advance, 
 for they hope to sell it at an additional advance. 
 They know that the price of Bank Stock in the 
 market is regulated principally by the rate of 
 dividends, and that few make inquiry into the 
 solidity of these institutions, or have, indeed, 
 the means of ascertaining whether, on the wind- 
 ing up of affairs, they can pay fifty cents on a 
 dollar. 
 
 " From the peculiar nature of their operations 
 Banks may sustain their credit, and continue to 
 make high dividends even when nearly all their 
 capital is gone. 
 
 " In one instance in Philadelphia, a sum equal 
 to the whole capital of a Bank, was actually 
 taken from it by some of its clerks and their 
 coadjutors out of doors, without the Directors 
 knowing any thing about it.
 
 31 
 
 ** The Bank continued its operations as before, 
 supported by its deposits and its circulation. 
 Its Stock sold as high in the Market as ever. 
 When the defalcation was discovered, the credit 
 of the Bank received a shock. But the Directors 
 called in one or two additional instalments, and 
 the Bank recovered its credit. Its Stock is now 
 much above par. 
 
 "On common gambling principles, specula- 
 tions in Bank Stock are, perhaps, as eligible as 
 speculations in any thing else. But it may be 
 made a question, if executors, gniardians, and 
 trustees, act with sound judgment, when they, 
 merely for the sake of facility of management, 
 invest the property entrusted to their care in 
 Stocks of this description. The ability of a 
 Bank to pay any thing to the purchasers of its 
 shares, depends on the ability of the original 
 subscribers to pay their Stock Notes and accom- 
 modation Notes, and on the ability of borrowers 
 to pay their promissory Notes. 
 
 " The ability depends on various contingen- 
 cies, all which ought to be duly considered by 
 those who contemplate making permanent in- 
 vestments of the funds in their hands. 
 
 " In making temporary investments, there is 
 less risk. ' The House is crasy,' says the 
 weary traveller to himself, ' and must fall, but 
 not to-night. I may therefore venture to sleep 
 in it.' When it has no profits, the Bank may
 
 32 
 
 make Dividends on its capital, and the fact be 
 concealed from all but the Directors. Some- 
 times the funds of a Bank are employed in 
 purchasing its Stock, and then, if the price 
 offered be sufficiently high, those who have the 
 management contrive to sell their own shares. 
 
 " In 1826, 4883 shares of the Franklin Bank 
 of New York, were bought up with the funds of 
 the Bank at an advance of 62,850 dollars. 
 When an investigation was made of the affairs 
 of the Bank in 1828, it was found there was not 
 enough left to pay the remaining Stockholders 
 50 cents, in a dollar. 
 
 "When a Bank gets into difficulties, it some- 
 times sustains itself for a period, and affords its 
 agents a considerable chance of profit, by allow- 
 ing them to have its Notes at a discount, on 
 condition of their putting these in circulation in 
 distant places. 
 
 " On an investigation of the affairs of the 
 State Bank at Trenton in 1825, it was proved 
 that one of its agents had sold Bills of the Bank 
 to the amount of 18,500 dollars, at an average 
 discount of 37 J per cent. 
 
 " The very day before the Bank stopped pay- 
 ment, its notes were quoted in the Philadelphia 
 Price Current at only l^ per cent, discount. 
 
 " Every now and then the speculators find it 
 convenient to break a Bank. This enables them 
 to purchase up at a discount, and therewith pay
 
 33 
 
 what tliey owe to the Bank. ''There are in- 
 stances," says Mr. Gallatin, " in which the 
 Stockholders, by paying for their shares in their 
 own notes, and afterwards redeeming their 
 notes with the Stock in their name, suffered no 
 loss ; and this fell exclusively on the holders of 
 Bank Notes and depositors." 
 
 It is said that the London Bankers concur in 
 the plan, and see with some degree of satisfaction 
 the abridgment of the power now possessed by 
 their brethren in the country. 
 
 It is probable they may, industry, quickened 
 by the judicious management of Country Bank- 
 ers, has accumulated capital to an extent only to 
 be found a few years back in the Metropolis ; 
 that capital in the shape of deposits in the hands 
 of the Bankers, comes into the London Money 
 Market a powerful competitor for that of the 
 London Banker. Many Bankers in the country 
 employ large sums constantly in discounting the 
 Bills of first-rate merchants in London, at a low 
 rate of interest, from 2 and 3^ per cent. 
 
 The Bill Brokers are the medium of these 
 investments, and your Lordship would be as- 
 tonished at the amount of capital annually 
 employed in this way, by those parties who are 
 supposed to be, so far from having spare cash 
 for such purposes, to be so embarrassed as not 
 to be trusted with the redemption of the trifling 
 
 D
 
 34 
 
 amount of- notes they issue for commercial con- 
 venience ! Sir H.Parnell, Mr. M'Culloch, Mr. 
 Joplin, and the gentlemen who sit in the Bank 
 Parlour, think they are not to be trusted ; your 
 Lordship is told they are not to be trusted ; and 
 if your Lordship tells Parliament they are not 
 to be trusted, I am resolved it shall not be for 
 want of your Lordship's knowing better. 
 
 As an inducement for Parliament to encourage 
 Joint Stock Banks, and to individuals to sub- 
 scribe to them, Mr. Joplin, in his work on 
 "The Advantages of a National Bank," draws 
 the attention of his readers to the high prices of 
 their shares, upon which he reasons (just as a 
 Stock-jobber reasons in the Alley) that they 
 must be capital things. He may, by this flimsy 
 argument, if it may be dignified with that 
 name, allure the thoughtless and weak, but to 
 address sober men of business in such a strain 
 is the height of folly. They would take as a 
 warning what he imagines must act as entice- 
 ment. 
 
 For myself I consider no Banker ought to 
 make a dividend out of his profits for the first 
 five or six years at the least, for it requires tha^ 
 time to take an average of bad debts, &c. &c. 
 Yet the Joint Stock Banks, now established in 
 two years by jobbing, have run up the shares to 
 the following unnatural premiums.
 
 35 
 
 The Lancaster Bank sold at 100 per cent. Premium. 
 
 The Hiiddersfield 
 
 do. 
 
 70 . 
 
 do. 
 
 The Bradford 
 
 do. . 
 
 130 . 
 
 do. 
 
 The Norwich 
 
 do. 
 
 50 . 
 
 do. 
 
 The Manchester 
 
 do. 
 
 30 . 
 
 do. 
 
 The Workington 
 
 do. 
 
 50 . 
 
 do. 
 
 The Halifax 
 
 do. 
 
 60 . 
 
 do. 
 
 The Gloucester 
 
 do. 
 
 90 . 
 
 do. 
 
 The Bank of Birmino^ham 
 
 100 . 
 
 do. 
 
 It is notorious in America that in defiance of 
 the Legislation, Charters continue to be granted 
 to the most despicable concerns ; and how can it 
 be otherwise? 
 
 ^ " So the Northern Bank of Pennsylvania was 
 set a going by means of a certificate for 35,000 
 dollars, said to be deposited in one of the New York 
 Banks; and so, the Sutton Bank of Massachusetts 
 was put in operation by means of 50,000 dollars 
 in specie, borrowed for one day from the city 
 Bank of Boston. 
 
 " Several of the kind of doings described in 
 this chapter, are regarded with horror by Banks 
 which have reputation to sustain. But in a 
 view of the whole system, it is necessary to take 
 them into consideration. The aggregate of loss 
 sustained by simple-minded people, through 
 such doings, is enormous. 
 
 " Another way of making money through 
 the medium of incorporated paper money Banks, 
 is by dealing in Government Stocks. Voltaire 
 
 * Gouge, page 77.
 
 36 
 gives us some insiglit into this, in one of his 
 letters from Ferney, in Switzerland. * Here I 
 am,' he says, ' living in a way suited to my habits, 
 and caring but little for to-morrow, for I have 
 a friend a director in the Bank of France, who 
 writes to me, whenever money is to be made in 
 public funds. Sometimes he writes to me, de- 
 siring me to sell, because the Bank is going to 
 withdraw its notes ; at other times he bids me to 
 buy, for we are going to issue a quantity of 
 notes ; and so, through the kindness of my 
 friend, I always make money, though living two 
 hundred miles from Paris.' 
 
 " When a bill was under consideration in the 
 year 1828, to renew the Charter of the New 
 York State Bank, General Root, then Speaker 
 of the Senate of that Commonwealth, made a 
 speech, from which the following is an extract : 
 
 " ' This bank was chartered in 1803. Who 
 were the original applicants, and what were the 
 representations made to the country members, it 
 is not necessary to state, at all events, it was to 
 be a State Bank, and a democratic one. I was 
 urged to be a subscriber to the Bank ; it was 
 said the shares w^ere to be scattered over the 
 state, and the members of the Legislature were 
 to have shares. It was one of the most open, 
 palpable, bare-faced acts of bribery that can be 
 imagined. I was induced to subscribe, but I 
 lost all the shares, they said they had lost the 
 subscription paper, or some such thing. So I
 
 37 
 
 told them I would not take any. Afterwards a 
 gentleman who came from Albany to Delaware 
 (i. e. Delaware County, N. Y.) brought me a 
 script for eight shares, I told him I would not 
 have any ; so he kept them to himself, I 
 suppose.' 
 
 " In the year 1816, Mr. Hopkinson, of 
 Philadelphia, had the boldness to declare in 
 Congress, that he considered the litter of Banks 
 lately created in Pennsylvania, as the offspring of 
 private legislation, and legislative fraud. 
 
 " A few years since, a senator from Philadel- 
 phia County, was heard to lament, that a num- 
 ber of shares had been reserved for him in a 
 certain corporation, the bill for establishing 
 which he had assisted in passing through the 
 legislature. The speculation turning out un- 
 fortunate, he had lost, instead of gaining, by his 
 services, as a stock-jobbing lawgiver. 
 
 " There was great struggling for the script of 
 the Spring Garden Bank. But we know a 
 member of the legislature who merely intimated 
 his wish to have a certain number of shares in 
 that institution, and his wish was gratified. 
 
 " A distinguished statesman has lately inti- 
 mated ' that there was no law against the Banks 
 subsidizing the public press.' With equal truth 
 it may be said, that there is no law to prevent 
 members of the legislature from partaking of 
 the advantages of the corporations they them-
 
 38 
 
 selves establish. Still it is proper that such facts 
 should be known. 
 
 " Another great inducement with members of 
 the legislature to vote for new Banks, is, that 
 they may have the means of rewarding the town- 
 ship and ward politicians, the ' delegates,' and 
 ' conferees,' to whom they are indebted for their 
 nominations. In selecting ' Commissioners,' 
 they have the means of paying a debt of grati- 
 tude to some men, and of laying others under 
 personal obligations, which they hope will not 
 be forgotten. To get a majority to vote for a 
 new Bank, is, in some instances, no difficult un- 
 dertaking. In Pennsylvania, there is a mode of 
 running bills through both houses, known tech- 
 nically as ' log-rolling.' The figure of speech 
 is borrowed from the practice of the original 
 settlers, who, after cutting down the trees on 
 their tracts of land, used to assemble together to 
 roll the logs into heaps. What could not be 
 done by one man, the united strength of many 
 made easy. In like manner, the members of 
 the legislature who are interested in local, per- 
 sonal, or corporation bills, unite their strength, 
 and roll them all through both Houses. In this 
 way it may chance that 50 or 100 bills are 
 passed in the course of a session, each of which, 
 if suffered to rest on its own merit, would have 
 been rejected. 
 
 " I\lany members of the legislature are averse
 
 39 
 
 to this practice ; but some of them are reluc* 
 tantly brought into it, by the refusal of the ' log- 
 rolling' members to vote for good public bills, 
 unless their own private bills are passed at the 
 same time. 
 
 " The same system is known in other States, 
 by other names, and it will readily be believed, 
 that where it prevails, special privileges will be 
 conferred on companies under any and every 
 pretext. Such is the effect it has on American 
 Legislation, that a stranger, on inspecting the 
 list of acts annuall}^ passed, might suppose our 
 state governments had been established for the 
 special benefit of stock-jobbers and speculators. 
 In 1826 the Governor of Massachusetts declared 
 that, within the preceding five years, charters 
 had been granted to corporations within that 
 commonwealth, with authority to hold thirty 
 millions of property. This was exclusive of 
 charters to banking, insurance, canal, and rail- 
 road companies. The Governor of Delaware 
 stated, in his official message in 1815, that there 
 were then eighty corporations in that small 
 State. 
 
 " No doubt many legislators think that, in 
 voting for New Banks, they are promoting the 
 welfare of their constituents. But the preva- 
 lence of false views of the money corporation 
 system, in legislative bodies, is to be attributed 
 mainly to the exertions of those members who
 
 40 
 
 have a personal or political interest in establish- 
 ing and supporting such institutions. 
 
 " If a Bank only preserves a tolerable credit, 
 the renewal of its Charter follows as a matter of 
 course; at least we have rnet with no instance 
 on record, of refusal to renew the Charter of a 
 State Bank which had not committed some open 
 act of bankruptcy. How far a Bank may be 
 entitled to the credit it enjoys is seldom inquired 
 into. Too many interests are then concerned. 
 Those who have bought Stock at second-hand, 
 know not if the Bank were compelled to wind 
 up, if its assets would cover its debts. Some of 
 the borrowers from the Bank feel alarmed, for 
 if called upon to pay what they owe, their in- 
 solvency may be made apparent, and the means 
 of living in splendour be taken away from them. 
 A clerkship of 600 dollars per annum, makes a 
 man a firm friend of the banking system ; and 
 he who has had an accommodation note dis- 
 counted, of the amount of only 500 dollars, feels 
 unpleasant if you hint at the possibility of a 
 Charter not being renewed. Such is the weak- 
 ness of human nature, that if a man owns only 
 a hundred dollars' worth of Stock, it makes him 
 less an enemy to money corporations than he 
 otherwise might be. 
 
 " In the larger towns, and even in the small 
 towns, which are centres of wealthy districts, 
 the business of dealing in exchanges, and of
 
 41 
 
 acting as an agent between lenders and bor- 
 rowers would become a distinct profession. 
 
 " In each city the number of Bankers would 
 be in proportion to the amount of business to be 
 done, and their capital in proportion to the trade 
 of the city. A merchant of Philadelphia who 
 wished a note discounted would, instead of hav- 
 ing his choice among a dozen Corporations, have 
 his choice among perhaps twice that number of 
 Private Bankers. Instead of being obliged to 
 approach the supercilious Director of some over- 
 grown monied institution, he would deal with a 
 private trader, to whom it would be of as much 
 importance to lend, as it would be to himself 
 to borrow. The extent of business these Private 
 Bankers would do, would depend in a degree 
 on the disposition they shewed to accommodate 
 their customers. 
 
 " The competition amongst them would be so 
 lively, that, after the manner of the Bankers of 
 Europe, they would allow a credit on deposits. 
 Being responsible in the whole amount of their 
 private fortunes, they would seldom extend their 
 loans so far as to cherish the wild spirit of spe- 
 culation.* Their whole fortunes would be in the 
 business, and their whole faculties exerted for its 
 
 * It would appear almost as if the American writer had an 
 insight into the Ministerial plan, and penned this as a timely 
 warnino:.
 
 42 
 
 proper management, and it is in this way only 
 that any business can be well conducted. 
 
 " If there should be a necessity for placing 
 any restrictions on these Private Bankers, it 
 would be simply that of restraining them from 
 issuing Notes, Bills, or Checks, which would 
 circulate in the same way as the present Bank- 
 Notes.* Some intelligent men who have turned 
 their attention to the subject, think that even this 
 would not be necessary. They are of opinion, 
 that the competition among Private Bankers 
 would be so brisk, that they would effectually 
 check one another. 
 
 " In opposition to this it may be urged, that 
 much has been lost by the breaking of Private 
 Bankers in England ; though it must be admit- 
 ted, this is not a case exactly in point, since the 
 Private Bankers in England are influenced in 
 their operations, though not regulated, by the 
 great Corporate Institution of that kingdom." 
 
 A Committee of the New York Legislature, 
 1818, says, " No aristocracy so entirely enslaves 
 a people as that of money ; and in the opinion 
 of your Committee no system was better devised 
 to enslave a community than the present mode 
 of conducting Banking Establishments." 
 
 The Private Banker can scarcely mismanage 
 his affairs for any length of time ; his whole pro- 
 
 * That is, making them irredeemable in specie, — which the 
 Banks combine {Scotice) to banish.
 
 43 
 perty is at stake, and it is too much his interest 
 to attend to his business to allow others to 
 mismanage it. 
 
 At the great panic, when at a time Gold was 
 leaving the country, the exchanges were against 
 us, the price of every species of property had 
 fallen, and the marketable value of either at a 
 ruinous depreciation; when Country Bankers who 
 had been encouraged by the Government to issue 
 freely their Notes, and make advances to Traders, 
 on the declaration of the faith of the Chancellor 
 of the Exchequer that prosperity would be per- 
 petual, who was it that most stood in need of 
 Government protection and the forbearance of 
 the people? — Country Bankers. Upon whom 
 did the ocean in dark accumulated waves roll ? 
 Who were called upon to produce sovereigns at 
 that "dread hour," when ruin stalked over the 
 land, in exchange for all the circulating me- 
 dium of the country at a moments notice? 
 — The Country Bankers. Upon whom was the 
 odium of bad measures and dishonest men 
 laid, when the plotters fled from the crash, 
 the work of their guilty hands ? — The Country 
 Bankers. 
 
 Sir H. Parnell, in his treatise on "Currency," 
 " The Bank," and other matters, in a strain of 
 dogmatical insolence, which so often characte- 
 rises financial amateurs, propounds this speci- 
 men of " wisdom infinite." " What has been 
 the cause of the failure of Country Banks in
 
 England ? The facility with which every cohlbler 
 and cheesemonger has been able to open a 
 Bank." Profound logician. 
 
 Were every cheesemonger required to pro- 
 vide, at a moment's notice, the whole amount of 
 his debts in cheese, or a cobbler his in shoes, it 
 is probable he would beg his customers just to 
 wait a few hours, for the arrival of the waggon 
 from London with the requisite supply, when 
 they might all be suited to their tastes and 
 shapes. 
 
 The only difference between the case of the 
 cheesemonger and cobbler and the Banker is 
 this — that Government favoured them by not 
 affixing the penalty of ruin, when they could 
 not undertake impossibilities. 
 
 Just as unreasonable was it to expect Country 
 Bankers to find gold at a moment's notice for 
 their Notes. The " Legal Tender" creation 
 will prevent all panics in the country, and work 
 more miracles than I believe your Lordship 
 supposes. 
 
 There were then 7 or 800 of them, and it is 
 only to be regretted they did not all close their 
 doors as one individual did at Gloucester, and 
 send the frightened applicants, who would con- 
 sume their vitals, into Downing Street for expla- 
 nation, until the storm was over. But no, they 
 boldly fronted the " hurly burly," and though 
 some drained themselves to the last guinea, 
 they heroically stood their ground as long as
 
 45 
 
 they could. Instead of three-fourths giving way 
 or suspending payment, which might naturally 
 be expected, about 65 did so, and the public 
 loss was only two shillings and sixpence in the 
 pound, after their estates had been sacrificed by 
 forced sales. 
 
 Is this, my Lord, to be put into comparison 
 with the millions which the Bankers have lost 
 and are daily losing, from the community, 
 .by failure and bankruptcies. The Country 
 Bankers are the props of national credit, the 
 supports of the manufacturing community, and 
 a healthy state of trade, with them over-issue 
 is almost impossible, for should they improvi- 
 dently discount paper which may turn out bad, 
 the evil is soon corrected from the numerous 
 channels through which it returns to them. The 
 great failures which took place in 1825 and 
 1826 were in those places where the Country 
 Bankers' circulation did not exist; this has been 
 proved over and over again. I know your 
 Lordship is too candid a man not to admit it, 
 as well as the injustice of the calumny contained 
 in the State Paper of January 13, 1826, bearing 
 the signature of Lord Liverpool. The country 
 at last has done justice to the Country Bankers, 
 by treating that paper with the ridicule it de- 
 serves, but it remains for Parliament to acquit 
 itself of the acquiescence it too readily gave to 
 the positions of the deceased Minister.* 
 
 * View of the Banking Question. 46.
 
 46 
 
 The Country Bankers now only ask, my Lord, 
 for inquiry into their mode of doing business, 
 and for an opportunity of laying before the 
 country facts which may convince it that any 
 change, especially such an one, as proposed by 
 your Lordship, will inevitably lead to much 
 mischief. 
 
 I am truly happy to bear testimony to the 
 willingness with which, upon explanation of its 
 fruitlessness, your Lordship gave up one part of 
 your original plan, I mean, the exposure of 
 the assets of Private Bankers. Such an expo- 
 sure would have led to no possible good, and 
 defeated its own end. The partners of one 
 Bank might have had property worth a million, 
 and the partners of another not more than fifty 
 thousand pounds, yet in the aggregate the 
 amounts of all would have been large, and 
 the security to the country at the same time, 
 not in the least degree enhanced by its mag- 
 nitude. 
 
 The return now required from the Bankers 
 through the composition of 75. in the pound on 
 their Notes, will be attended with considerable 
 loss and inconvenience to many : and if I might 
 suggest to your Lordship, the return could just 
 as well be accomplished by leaving the Bankers 
 to have their Notes stamped as usual. In some 
 districts the proposed composition will be ex- 
 pensive, and to all very troublesome. 
 
 The amount of the circulation of each might
 
 47 
 
 just as well be ascertained at present, as by a 
 composition, as every Banker can make up 
 every Saturday the amount of his Notes in cir- 
 culation, and give the weekly average at the 
 end of six months as easily as if he compounded 
 — and this is all that is required. 
 
 The tenacity which Country Banks have at 
 times shewed, when Country Bank Paper has 
 been assailed by Government, has resulted not 
 so much from the profit they derive from its con- 
 tinuance, but because they do not see why a 
 thing that originally was forced upon them by 
 Government, and has subsequently received its 
 repeated approbation, should suddenly be held 
 up for reprobation, and parties connected with 
 it have blame attached to them too. When an 
 increase of duty was proposed on one portion of 
 the circulation now extinct, the calculations and 
 memorials of the Country Bankers so clearly 
 shewed, that as a branch of their trade it was so 
 much less a matter of profit than public conve- 
 nience, that the Chancellor of the Exchequer 
 in 1815 consented to a reduction in his scale of 
 Stamp Duties. 
 
 As the results of the present working of the 
 Country Bank Circulation is the principal 
 ground of complaint against it by the Bank, 
 nothing is more necessary in order to fix on firm 
 and indisputable data, than that the average 
 amount of this circulation should be pretty cor- 
 rectly ascertained ; and if your Lordship would
 
 - 48 
 
 grant the Country Bankers time to make such a 
 return before you commence legislation, Par- 
 liament and the Country will be better able to 
 judge of the credit to be given to the assump- 
 tions of the accusing parties. 
 
 This return would be much better made by 
 the Banker in his own way than by the com- 
 pulsory composition. Error is as likely to be 
 avoided in one way as the other. 
 
 The Joint Stock system can be proved to offer 
 no security to the Depositor or the Shareholder, 
 nor can the restrictions recommended by Go- 
 vernment accomplish it. Why these restrictions, 
 I mean the privilege to issue paper being only 
 given to those bodies who are paying up the larger 
 deposit of 50 per cent, on the nominal capital, — 
 will fail to give security, is simply in this way. 
 
 A Bank obtains a Charter, to avail itself of 
 the limited responsibility, with a nominal Capi- 
 tal of 500.000Z. large enough to ensure appa- 
 rently all the security desired. 
 
 Of course the Bank cannot issue Notes. To 
 protect the public against the possibility of loss, 
 your Lordship will not allow it to do so. This is 
 one of the conditions of the Charter. The Bank 
 is to issue Bank of England Notes. But the 
 Bank of England will not give its Notes away. 
 No, nor will it lend them but on good security. 
 To put security into the hands of the Bank, the 
 Chartered Company diminishes its resources by 
 the sums required for the purposes of issue, con-
 
 49 
 
 sequently the public are no gainers, though the 
 Joint Stock issue no notes of its own. The Joint 
 Stocks are the gainers ; for instead of paying up 
 250,000/. had it issued Notes, 125,000/. is now- 
 only required. I think I have pointed out by 
 the example of America,* that as large an 
 
 * Number of Banks in operation at different periods, and num- 
 ber of Banks that failed or discontinued business, from 
 \st January, 1811, to \st January, 1830 
 
 */■ ' 
 
 
 
 
 
 
 Broken 
 
 
 1811 
 
 1815 
 
 1816 
 
 1820 
 
 1830 
 
 Banks. 
 
 Massachusetts 
 
 15 
 
 21 
 
 26 
 
 28 
 
 66 
 
 6 
 
 Maine 
 
 6 
 
 8 
 
 14 
 
 15 
 
 18 
 
 8 
 
 New Hampshire 
 
 8 
 
 10 
 
 10 
 
 10 
 
 18 
 
 2 
 
 Vermont 
 
 — 
 
 — 
 
 — 
 
 1 
 
 10 
 
 — 
 
 Rhode Island 
 
 13 
 
 14 
 
 16 
 
 30 
 
 47 
 
 I 
 
 Connecticut 
 
 5 
 
 10 
 
 10 
 
 8 
 
 13 
 
 2 
 
 New York 
 
 8 
 
 26 
 
 27 
 
 33 
 
 37 
 
 10 
 
 New Jersey 
 
 3 
 
 11 
 
 11 
 
 14 
 
 18 
 
 7 
 
 Pennsylvania 
 
 4 
 
 42 
 
 43 
 
 36 
 
 33 
 
 16 
 
 Delaware 
 
 — 
 
 5 
 
 5 
 
 6 
 
 6 
 
 1 
 
 Maryland 
 
 6 
 
 17 
 
 20 
 
 14 
 
 13 
 
 9 
 
 Dist.of Columbia 4 
 
 10 
 
 10 
 
 13 
 
 9 
 
 4 
 
 Virginia 
 
 1 
 
 4 
 
 12 
 
 4 
 
 4 
 
 10 
 
 North Carolina 
 
 3 
 
 3 
 
 3 
 
 3 
 
 3 
 
 2 
 
 South Carolina 
 
 4 
 
 5 
 
 5 
 
 5 
 
 5 
 
 2 
 
 Georgia 
 
 1 
 
 2 
 
 3 
 
 4 
 
 9 
 
 1 
 
 Louisiana 
 
 1 
 
 3 
 
 3 
 
 4 
 
 4 
 
 2 
 
 Alabama 
 
 — 
 
 — 
 
 — 
 
 3 
 
 2 
 
 3 
 
 Mississippi 
 
 — 
 
 1 
 
 1 
 
 1 
 
 1 
 
 — 
 
 Tennessee 
 
 1 
 
 2 
 
 4 
 
 8 
 
 1 
 
 9t 
 
 Kentucky 
 
 I 
 
 2 
 
 2 
 
 42 
 
 — 
 
 43 
 
 Ohio 
 
 1 
 
 12 
 
 21 
 
 20 
 
 11 
 
 20 
 
 Indiana 
 
 — 
 
 — 
 
 — 
 
 2 
 
 — 
 
 2 
 
 Illinois 
 
 — 
 
 — 
 
 — 
 
 2 
 
 — 
 
 2 
 
 Missouri 
 
 — 
 
 — 
 
 — 
 
 I 
 
 — 
 
 2 
 
 Michigan 
 
 
 
 — 
 
 — 
 
 — 
 
 1 
 
 1 
 
 Florida 
 
 88 
 
 — 
 
 — 
 
 — 
 
 1 
 330 
 
 — 
 
 
 208 
 
 246 
 
 307 
 
 165 
 
 
 t 
 
 Includin( 
 
 ! five branches. 
 
 
 
 
 
 
 E 
 
 

 
 50 
 
 amount as this may be easily frittered away in 
 a few years by irresponsible persons, the Share- 
 holders receiving large dividends, from false 
 statements, which they are too pleased with to 
 doubt, the direction selling out and securing large 
 profits, and the inevitable fate of the Bank. 
 
 There is a facility at times when accommoda- 
 tion to different branches of industry call for it, 
 in affording it by the issue of our own paper, 
 not that a security less valid would be taken, 
 when our Notes were paid, but that there is an 
 absence of all consideration of borrowing from a 
 third party, in affording the accommodation. 
 
 In your speech on proposing the Resolutions, 
 your Lordship says, I wish to encourage the cir- 
 culation of Bank of England Notes to the with- 
 drawal of Country Notes. 
 
 It is the avowed determination, your Lord- 
 ship, as a Minister of the Crown, has shewn to put 
 down Country Notes, that I complain of. Coun- 
 try Bankers would not have complained if Go- 
 vernment had only encouraged fair competition ; 
 but I must confess it does appear to me to be 
 most unfair and oppressive that a declaration 
 should be made, that in legislating for two par- 
 ties, one is to be openly favoured with immuni- 
 ties denied to the other. 
 
 The Bank regulate their " Rest" by their cir- 
 culation, and retain a third of it in gold. The 
 circulation of a Country Banker bearing so
 
 51 
 
 small a proportion to his deposits, sums liable 
 to be called for on demand, together with the 
 discharo'e of his eno-ao-ements with his custom- 
 ers, in discounting their Bills, advances in cur- 
 rent account, &c. he retains, I should say, from 
 what I know of Country Bank practice, nearly 
 two-thirds, and in manufacturing districts, fre- 
 quently a sum equal to the whole of it. 
 
 I do not believe there can be such a thing as 
 over-issue in the country. In London, from 
 the control the Bank has over the money mar- 
 ket, and the necessarily large amount of its 
 fluctuating investments, this may be the case ; 
 but with us, our Notes so soon return in upon 
 us, that to effect what is technically called, over- 
 issue is impossible. Where there are five or six 
 Banks in a tow^n, and they exchange every 
 morning, as is mostly the case, any imprudent 
 liberality in discounting doubtful paper, by 
 which a temporary increase of the Banker's 
 issue takes place, is very soon corrected by the 
 return of the Notes through numerous channels, 
 and what soon convinces the Banker of his error, 
 the Bills returned to him in a dishonoured state. 
 The effect of forcing us to become borrowers 
 from the Bank of their Notes, for the purpose of 
 issue, wdll of course be a diminution of accom- 
 modation to the public. Bills will be refused 
 discount, loans will be denied. Let the Bank 
 lend its Notes but at 2 per cent. I throw back
 
 52 
 the proposed loan with disdain. When a man 
 knows he is a borrower, he will of course act 
 in a very different way towards his debtors than 
 he would do, unshackled with debt. The high 
 moral feeling which characterises the operations 
 of Country Banks will be destroyed, — the coun- 
 try will lose its accustomed accommodation ; and 
 for what equivalent is so much evil to be perpe- 
 trated ? Can the Legislature, with the certain 
 effects of the measure exposed to them, attempt 
 such a thing ? I can scarcely deem it possible. 
 Mine are no frivolous objections, no chimeras of 
 my own. Hundreds of practical men from the 
 country will tell just the same, and join in the 
 remonstrance against the meditated mischief. 
 
 " Before the establishment of Banks in the 
 interior, (^say a Committee of the Senate of Penn- 
 sylvania,) the farmer who possessed credit and 
 character, experienced little difficulty in bor- 
 rowing on his simple bond, for one or more 
 years, any sum which it was thought could be 
 prudently loaned to him. Embarrassments and 
 failures, in those days, were scarcely known 
 among our husbandmen, and society, moved 
 on by a regular, sure, and happy march. In 
 our cities, on the contrary, where loans have 
 been chiefly made by incorporated Banks, we 
 have seen a continued succession of bankrupt- 
 cies, and had it not been for the practice so 
 universally prevalent amongst merchants of se-
 
 53 
 
 curing the Banks for the sake ofindorsers, Banking 
 long since would have been abandoned as an 
 unprofitable trade. 
 
 I shall now enter upon the third point. 
 
 The monopoly of the circulation of the whole 
 country, by a body of irresponsible persons in 
 London. 
 
 In adverting to this portion of your plan, I 
 must beg to disclaim any hostility to the Bank of 
 England, when that Corporation keeps within 
 the limits its charter originally intended it 
 should. I fully agree with your Lordship that 
 nothing can be more dangerous than a National 
 Bank connected with the Legislature, and an 
 issuing an irredeemable National Currency. I 
 have read all the arguments of Mr. Joplin, and 
 other writers on the subject, and see nothing 
 but mischief and ruin in embracing of it. I 
 should wish the Bank Charter renewed upon the 
 best terms for the country, but object to an 
 enlargement of its privileges, especially when 
 power, more than profit is to be bestowed, and 
 that power subversive of the commercial balance 
 whereon it may be exercised. In the year 1827, 
 the late Governor of the Bank, Mr. J. H. 
 Palmer, circulated, among the Country Bankers, 
 proposals entirely in the spirit of the Bank 
 Director's letter to your Lordship, of 11th April 
 last. 
 
 That gentleman saw long ago the great ad-
 
 54 
 
 vantages to be gained by the Bank obtaining 
 the entire circulation of the country ; and 
 though the Country Bankers protested against 
 the scheme, and the manner it was received in 
 Parliament was conclusive at the time of its 
 unpopularity, it is again brought forward, and 
 appears, mirahile dictu, to be brought anew to 
 light under the sanction of your Lordship. 
 In that paper Mr. Palmer says :■ — 
 " The difficulties and hazard of our present 
 system, could be obviated by confining the issue 
 of paper to one body of undoubted solidity ;" 
 and believing that such a measure, if practica- 
 ble, could not be so satisfactorily carried into 
 effect as by the Bank of England, under proper 
 and efficient parliamentary regulation, it is pro- 
 posed that the paper of that Corporation should 
 be that alone permitted to circulate. Even in 
 this paper Mr. Palmer submits that the immense 
 advantages and power thus craved for the Bank 
 should be under parliamentary regulations. He 
 well knows that having obtained the issues of 
 the kingdom, he must absorb the deposits too. 
 
 The savings now placed in a Country Bank- 
 er's hands, and which by his prudence and 
 knowledge of local wants are lent in small sums 
 to the industrious, are to be absorbed at the 
 Branches of the Bank of England, and made 
 the auxiliaries of speculations in London and 
 the Continent. Amidst the difficulties which
 
 55 
 
 beset a Country Banker, there is one part of his 
 business which affords him sincere pleasure, and 
 that is the power to assist the rising mechanic 
 or factor in his time of need, to enter into his 
 affairs confidentially, and afford him advice and 
 the benefit of his experience. The establish- 
 ment of Branch Banks have much diminished 
 this power, and the proposed measures of your 
 Lordship will achieve the entire overthrow of it. 
 
 I am inclined sometimes to think that your 
 Lordship is ignorant that there is a public debt 
 upon which all classes are paying a high interest 
 to annuitants, amounting to a considerable bur- 
 then upon every man's labour ; that the people 
 are not entirely free from taxation, poor rates, 
 county rates, local and parochial rates of all 
 imaginable denominations, that they are by no 
 means free to spend their earnings as they will ; 
 in fact, that we are not altogether in that pletho- 
 ric condition, that bleeding and reduction would 
 be recommended rather than avoided. I know 
 the goodness of your heart, and cannot believe 
 that the cloud under which we are creeping is 
 unknown to you. Let me seriously then ask 
 you to pause ere you darken the gloom by fresh 
 impositions upon us — new restraints upon in- 
 dustry. Again, I say, this is a national ques- 
 tion, as a national question it must be tried. 
 
 The foundation of the arguments used by the 
 Bank of England to your Lordship, in their
 
 56 
 endeavour to persuade you to give them the 
 entire currency of the country is this : — That 
 as long as Country Bankers supply the wants 
 of the country by their paper, the Bank cannot 
 carry on its operations in London as connected 
 with the foreign exchanges,* and cannot, as it 
 says, rectify them at the proper times; "that the 
 collision between the issues of the Bank, and 
 other establishments issuing paper money, is 
 one of the evils of the present system." 
 
 This is the great argument made use of by 
 the Bank, and adopted by the Government. 
 
 That the Bank may rectify the exchanges in 
 London, the transactions of a thousand ramifica- 
 tions of internal trade are to be disarranged, 
 and that when the Bank sees gold, from it bear- 
 ing a premium in Paris or Hamburgh, leaving 
 London, its discounts to merchants there are to 
 be disallowed ; we in the country are to be the 
 sport of these transactions ; the state of com- 
 mercial relations to be unhinged, to gratify the 
 theory of the political economists on their fa- 
 vourite subject, the exchanges. The Bank com- 
 plain of Country Bankers not following its ex- 
 ample at the moment the word is given " Con- 
 tract." The Country Bank issues contumaciously 
 pursue the steady tenor of their way, irrigating 
 the manufacturing districts from their grateful 
 
 * Bank Correspondence, 11th April, 1833.
 
 57 
 
 springs, uninfluenced, alas ! much to the indig- 
 nation of the financiers of the metropolis, by 
 what they dictate to be the sole legitimate causes 
 of paper fluctuation, whose supremacy we poor 
 sinful people in the country dare to doubt. 
 
 Upon a review of the causes of fluctuation, it 
 will be found that in this country they operate 
 to retain the balance of exchange in our favour, 
 consequently the chances are less here than 
 elsewhere against an exportation of gold. 
 ■ It is easy to prove this. 
 
 France has solely a Silver standard. Gold is 
 a legal tender, but a creditor must pay an agio 
 or premium for it, consequently the Bank of 
 France is not under the necessity of retaining a 
 tenth of the quantity of Gold in that country 
 that the Bank of England would feel it its duty 
 to do. Gold necessarily must exist in larger 
 quantities here than abroad, for throughout 
 Europe the Silver standard is maintained. 
 
 This fact, I would observe, alone, independent 
 of the many advantages to be derived from a 
 Silver standard, might induce Government to 
 declare it to be so, altering its rate. 
 
 The foreign merchants, especially those in 
 the West India Trade, who are drawn upon 
 pretty quickly, generally on receipt of bill of 
 lading, and cannot part with the consignments 
 in London or Liverpool to a profit, often send 
 them to European markets. They draw in their
 
 58 
 
 turn, and, as by reciprocal shipments the fo- 
 reigner's acceptance is provided for, and Gold 
 will be most profitably, if transactions like these 
 occur often, sent to this country. I do not think 
 the present over bright prospects of the West 
 India merchants need alarm your Lordship lest 
 they engross all the consignments made. A 
 large capitalist may retain a warehouse full of 
 goods, an impoverished one must send them to a 
 market directly, or stop payment. This is 
 another chance in favour of Gold coming into 
 the country, and lessens the grounds of appre- 
 hension so feelingly expressed by the Bank. 
 
 Mr. Rothschild, in his evidence, doubts that 
 foreign loans occasion any drain of Gold from 
 this country, and thinks that the dividends re- 
 mitted every six months counterbalance the 
 effect, if any be produced. Mr. Rothschild is a 
 great authority, I know, but I question whether 
 his present calculation is altogether correct. 
 He should have added " z/"" dividends be re- 
 mitted. His opinion, however, may soothe 
 another of the fears of the Bank. 
 
 I would refer the Directors again to that 
 gentleman's evidence, wherein he plainly shews, 
 from the details of his business, that "all the 
 Gold and Silver of the world have a tendency 
 to come here," " that Bills drawn abroad are 
 not equal to those drawn at home," and that 
 " the Bills drawn upon the Royal Exchange
 
 59 
 must bring Gold from all parts of the world." 
 Consequently, if the Bank but manage its 
 aft'airs prudently, and not suffer a continued 
 drain of Gold to go forward without counteract- 
 ing it, as it may easily do, these drains would be 
 so partial, and so momentary, (Gold having a 
 natural tendency to accumulate here,) that no 
 complaint would be heard against Country 
 Bankers, or any one else again. It is, however, 
 a good thing to have a scape-goat on whom to 
 lay the blame, attached to one's self, and Coun- 
 try Bankers have, therefore, been denounced as 
 the offenders, whom I scruple not to say, were 
 the Earl of Rippon, (anxious again to be in 
 troubled waters,) Mr. Canning, Lord Liverpool, 
 and the whole of the Cabinet of the year 1824 
 and 1825. 
 
 I allow, that in the aggregate our Notes, as, 
 inter alia, a part of a medium of currency, and 
 when in a state of currency, part of the floating 
 capital of the country, must be concomitant, but 
 not per se, in influencing the Exchanges of the 
 country. 
 
 They have a legitimate influence, and form 
 the most unobjectionable portion of the influence. 
 In their issue they increase relatively to the 
 wants of the country, prices, &c., and their 
 growth or diminution is governed by the coun- 
 try's demands. 
 
 Every Country Bank Note may be cross ques-
 
 60 
 
 tioned and examined (to speak metaphorically) as 
 to whence he cometh and whither he goeth. He 
 has a little domestic account to give of himself, 
 highly satisfactory to the minds of all, but those 
 stony-hearted fellows who, Buonaparte said, 
 would grind nations to powder. No man (save 
 the people in Threadneedle-street) wishes him 
 harm, or grudges him room in the world. He 
 is rather dity, keeps company with brawny 
 miners and smoky artisans, but they are 
 honest, and love him, and he is none the worse 
 for his smutty skin. The pale-faced youth from 
 Threadneedle Street has not an idea in common 
 with his country rival. Cockney in his birth. 
 Cockney in his habits, and Cockney in his soul, 
 he is altogether out of his element when he 
 passes out of Middlesex, the sphere of his use- 
 fulness. It is true, his parent, the alma mater 
 of his race, has procured a pretty extensive 
 manor, wherein he may sport 65 miles round 
 his cradle ; but even there, he is looked upon 
 as a foreigner and an intruder, and were he not 
 an hypocrite, he would confess that to stop at 
 home, and " keep within his original limits," 
 would make him not only richer, but happier. 
 He is a bit of a Bully, and cares not who he 
 ruins, so that he elbow his way among his 
 weaker neighbours. 
 
 Can the Bank deny that any fluctuation in 
 the Exchanges, productive of a demand for
 
 61 
 
 Gold, would affect the country much less through 
 the medium of Country Bank paper, than 
 through an uniform circulation, controlled avow- 
 edly w ith reference to the Exchanges ? The 
 Bank feels the effect first, we feel it soon after ; 
 and as we have a good broad back, the missile 
 glances off almost spent upon the productive 
 classes. We are willing to bear the brunt of 
 Bank contractions, and our customers' exac- 
 tions. Why is the Bank, then, so chivalrous as 
 to desire to enter into conflict with every part of 
 the Empire, at one and the same moment ? 
 Their desire for universal circulation is as mad 
 as Buonaparte's desire for universal dominion. 
 The Tories prevented the last, let not the Whigs 
 be behindhand in arresting the first. 
 
 We are decried as ignorant shopkeepers, and 
 not fit to be trusted with supplying the wants 
 of our neighbours, though those neighbours 
 have been perfectly satisfied with us for a hun- 
 dred years. 
 
 Do not be led by theories, my Lord. Let one 
 of these country shopkeepers, as a Bank Director 
 lately called us, give you his opinion as to the 
 effect of the exchange clashing with the efforts 
 of the Bank, by an obstinacy which the Bank 
 would almost make us believe, were rendered 
 supernatural. 
 
 The price of goods in this country, and the 
 value of labour, the demand for them abroad.
 
 62 
 
 compared with the value of importations, must 
 always regulate the scale at which remittances 
 are to be made. Without going into the ques- 
 tion any further it must be obvious to every one, 
 that where fluctuation in the premium upon the 
 medium of exchange, whether in Gold or in 
 Bills, exists, the amount of the fluctuations 
 would be naturally most immediately felt at the 
 emporium or outlet of commodities of export, 
 and in time the effect of the variation gradually 
 pervades the whole country, and aff*ects prices ; 
 and if Government meddle at all in these 
 matters (which at any time I think unwise) it 
 should surely be to protect those who can least 
 afford, and have least interest in these fluc- 
 tuations as to profit or loss, from the effects of 
 them. 
 
 As a part of the whole currency, Country 
 Bank circulation is undoubtedly affected, but it 
 is affected so remotely, and so gradually, that 
 scarcely one Country Bank in ten will allow of 
 them producing any visible alteration at all. 
 
 This very indifference in the Country to the 
 Exchanges is called by Bank Directors and by 
 Government gross ignorance. 
 
 " Where ignorance is bliss, 'tis folly to be wise." 
 
 Never was this line better adapted to the sub- 
 ject. This ignorance forms our great bulwark 
 against those fluctuations caused by a few spe-
 
 63 
 dilators in any market in Mark Lane, Mincing 
 Lane, the Royal Exchange, or the Council of 
 the Bank itself, which the Country possesses 
 through the Country Bank circulation, which 
 bulwark your Lordship proposes to destroy. 
 That the Bank wishes to get rid of this bulwark 
 
 1 am well aware. Former Governments and 
 jealous Parliaments have turned a deaf ear to 
 their entreaties, and I trust the sagacity of the 
 present one will prevent it committing itself by 
 further concession. 
 
 Every Banker does, or ought, to keep a large 
 available reserve in London, beside sums in- 
 vested in Exchequer Bills and India Bonds. 
 Prudent Banks do not invest in Stock at all, but 
 prefer low interest and the integrity of their in- 
 vestment to a higher one fluctuating in value ; and 
 a scarcity of money, or otherwise, in London, 
 arising from the operations of the Bank, is felt by 
 him then in the readiness or difficulty of finding 
 advantageous investments. 
 
 At times the Banker in Leeds, Sheffield, or 
 Birmingham employs a portion of his surplus 
 capital in discounting Bills for Foreign Mer- 
 chants, through the medium of brokers, at from 
 
 2 to 4 per cent., and the facilities for obtaining 
 these Bills, with the amount of his means to seek 
 them, are, of course, influenced by the opera- 
 tions of the Bank, consequent on the Exchanges. 
 A Banker, therefore, unless he be much
 
 64 
 
 cramped in his available resources, and if he be 
 so, he will in the course of things be less in- 
 fluenced by the rate of the money market, will 
 make no alteration in accommodations to re- 
 spectable customers in his own town, nor be less 
 inclined to pursue his general rule than before. 
 
 This, I find, is not known, but to those who, 
 like myself, are practical tradesmen. It is ima- 
 gined that our issues counteract the effects desired 
 by the Bank, and so interfere with their plans, 
 or, in their own language, " to derange com- 
 mercial affairs." 
 
 Whether the East India or West India Mer- 
 chants, who formed the Committee for conduct- 
 ing the Bank of England concerns, are better 
 judges than ourselves of our own local busi- 
 nesses — the effect of local issues, I leave to the 
 country to decide. Whatever infallibility they 
 may be supposed to possess in Threadneedle 
 Street, I trust neither in Downing Street, nor 
 elsewhere, will it be acknowledged. 
 
 The more I reflect upon the proposed mono- 
 poly of circulation to be given to the Bank, the 
 more I am struck with the monstrosity of the 
 usurpation. 
 
 It is the most audacious attempt to obtain 
 monetary rule, any body could make, and that 
 in the attempt they may fail, is the wish of every 
 intelligent person I have spoken to, either in 
 London or in the country.
 
 65 
 
 What will be the effects of this imiform cur- 
 rency, which is to be bought wholesale by the 
 Bankers, and retailed by them to the country ? 
 
 Bankers who now issue from thirty to one 
 hundred thousand, must pay a price for these 
 monopoly notes to the Bank, or issue sovereigns. 
 This is the alternative. Now making the Bank 
 Note legal tender, will drive away nineteen- 
 twentieths of the sovereigns from the country, 
 consequently it will be compulsory on the 
 Bankers to issue notes, which they must buy. 
 
 I explained before the convenience the issue 
 of paper was to a Banker, even when his stock 
 of gold was large, and the advantage to the 
 public, this inducement to accommodate on tlie 
 part of the Banker was. Now let us see how 
 the proposed uniformity scheme will act. 
 
 A Banker who has to buy 30,000 or 100,000, 
 on however cheap terms, will not, I can assure 
 your Lordship, be half so inclined as formerly 
 to act liberally to his customers ; he will reduce 
 his discounts, call in his bonds, and at any fresh 
 loan he may make, consider not only the merits 
 of the borrower, but the humiliating condition 
 of himself, as being a borrower too, a vassal of 
 the Leviathan monopoly of the Reformed Go- 
 vernment. 
 
 This mortifying consideration, which every 
 man possessed of delicacy must appreciate, will 
 rankle in the minds of the high-spirited men of
 
 66 
 
 large landed property, who are now Bankers in 
 every part of England. In many parts there 
 are men worth from 500,000/. to 1,000,000/. 
 Think you, my Lord, these gentlemen will con- 
 tinue Bankers, and suffer themselves to be put 
 among the debtors, in the pledge book at the 
 Bank of England. 
 
 The moment your Bill passes, they will cease 
 to be Bankers. Their names, now towers of 
 strength to the Banks of England, will be found 
 no more as the supporters of that part of the 
 local system of commerce. And what is the 
 paltry equivalent — a few respectable private 
 Bankers condescending to remain, others not so 
 respectable obliged to keep their concerns on, 
 and a swarm of joint stocks composed of specu- 
 lators, premium hunters, and jobbers, of every 
 description. " Look on this picture and on 
 %at." The Bank say, and your Lordship con- 
 descends to repeat after the Bank, that it is 
 necessary that it should have the power of con- 
 tracting and expanding the issues of the whole 
 country, when the state of the foreign exchanges 
 requires. That a want of this, however, at pre- 
 sent, is attended with great embarrassment to the 
 Bank. I have endeavoured to demonstrate how 
 peacefully, happily for the country, the present 
 system works. God knows the productive classes 
 do not want new modes for depreciating prices, 
 there are too many in operation against them at
 
 67 
 
 present ; but let us see how this uniform mono- 
 poly will work, supposing it passed, by tlie 
 Bank. 
 
 Country Bankers are in number about 1,000, 
 each having a character to sustain in his district 
 as an honourable tradesman, and each interested 
 to know thoroughly the operations of his neigh- 
 bour. 
 
 The Bank Directors are 26 in number, weal- 
 thy merchants, resident in the metropolis, having 
 very few ideas in common with " the country 
 shopkeepers," and holding themselves aristocra- 
 tically aloof from even traders of the middle 
 ranks in London. Fourteen, a majority of these 
 parties, take it into their heads, that the Bank 
 issue is far too large, carry a vote that it be 
 reduced, say from 40 or 50 millions (which it 
 would soon be at in a year after the " Legal 
 Tender," and " Uniformist" Acts were passed,) 
 to 30 or 35 millions. 
 
 To effect this, their Agents at the Branches 
 would have orders to lessen their issues one- 
 third, or in other words, their accommodation. 
 
 A Country Banker, whom the Government 
 had obliged to change his notes, the representa- 
 tive of his capital, for those of the Bank of Eng- 
 land, and to pay for them too ; is told the next 
 day he must only have two-thirds of the amount 
 of currency he had stipulated for, and upon 
 which agreement, he had made his arrangements
 
 68 
 
 with his customers. The Country Banker must 
 inevitably take this course, there is none other 
 open for him; but to send to every one of the Mer- 
 chants, Manufacturers, and Shopkeepers, who are 
 accustomed to receive temporary accommoda- 
 tion at periods of the year when the staples in 
 which they deal, or which they work up, are to be 
 purchased, with cash, in the Colonial, Copper, 
 Iron, Yorkshire, Lancashire, or Irish Markets, 
 and tell them, one and all, the sums they have 
 reckoned upon receiving must be cut down one- 
 half, for the Banker fearing another curtailment 
 from the Bank, must protect himself by lessen- 
 ing the amount of Bank advances. 
 
 The parties so disappointed cannot take up 
 their Bills and Notes, which are dishonoured — 
 Bankruptcies are the consequence, and the dis- 
 may spreading, unhinges, as I said before, the 
 whole social system. 
 
 The effect of these unsteady bargains for 
 accommodation will produce universal distrust, 
 and at a time when every inducement ought to 
 be given to Bankers to promote confidence, and 
 restore trade, a new project comes out to make 
 it impossible even to do so. 
 
 Thus, instead of the slow and natural progress 
 external relations have upon the internal trade 
 of the country, fourteen men, isolated and igno- 
 rant, are to throw every thing into confusion 
 by a power hitherto unknown, and which I trust
 
 69 
 your Lordship, on further inquiry, will no longer 
 think of granting. 
 
 Every external relation of the country, foreign 
 loans, large speculations in foreign produce, 
 continental wars, all causing a drain of Gold 
 from this country, will effect every branch of 
 industry like an electric shock. " But, "say the 
 Bank Directors, " the Exchanges shall be rec- 
 tified;" but whilst they are rectifying the Ex- 
 change, hundreds are ruined, from causes from 
 which they are now exempt. 
 
 Such transitions, productive as they inevitably 
 would be of distrust and impediments to com- 
 mercial affairs, would create distress, and add 
 greatly to the embarrassments of the country ; 
 and while I recognise the justice of your Lord- 
 ship's remarks on the great importance of dis- 
 connecting the Circulating Medium from the 
 control of the Government, I must admit, I 
 perceive, a departure from that principle, in 
 bringing into the closest contact the influence 
 of your measures " through the medium of an 
 uniform Bank of England circulation ;" that cir- 
 culation being contracted and expanded from 
 the causes mentioned. 
 
 Such are the dangers of giving to this coun- 
 try, which contains so many peculiar local inte- 
 rests, an uniform Bank circulation. 
 
 The Bank, as an inducement to Country 
 Bankers to lay aside their opj)Osition, and to
 
 70 
 
 entice them into acquiescence with their plan, 
 liave offered to let them have the Notes at 2^ 
 per cent. 
 
 In the first place, we don't want to borrow 
 money even at 1 per cent., therefore why com- 
 pel us ? 
 
 In the next, as a farther inducement, a lease 
 is talked of for a certain number of years, of 
 which we are to have the amount stipulated, and 
 a fixed rate of interest which is not to be raised. 
 
 Can any thing be more absurd and contradic- 
 tory ? 
 
 The plea for legislating at all on this subject, 
 is the necessity for varying the amount of circu- 
 lation, according to circumstances ; the power of 
 saying to any Bank, whether Private or Joint 
 Stock, " So much shall you issue and no more, 
 until we give you leave !" and here, on the 
 threshold of the affair, they admit the opposite 
 principle to lull asleep our hostility. If your 
 Lordship, after this display of its weakness in 
 argument, will allow the Bank more privileges, 
 the country, I feel assured, will ere long pass a 
 harsh judgment on your decision. 
 
 Bind us not, my Lord, to the feet of the Bank 
 until we know the charge against us. 
 
 Let us not by this Bill stand convicted in the 
 face of the country before inquiry be made. 
 
 We challenge inquiry. In the name of the 
 Country Bankers of England I humbly solicit it.
 
 71 
 
 Tread not down to the dust men entitled to con- 
 sideration — offer not to us the mortifying alter- 
 native of being the commission agents of an 
 overgrown monopoly, or quitting the occupation 
 we have been brought up to without inquiry. 
 
 At the General Meeting of Country Bankers, 
 held on Friday last, there were from 150 to 200 
 Country Bankers, a Meeting representing as 
 much wealth as any that ever took place in this 
 great city. 
 
 Among that number were fifteen Members of 
 Parliament, large Landholders, and others pos- 
 sessing great stakes in the Iron, Cotton, Silk, 
 Wool, and other trades. 
 
 Our next Meeting will present a sad falling 
 off. Most of us will have withdrawn from the 
 Banks we are connected with, trusting, though 
 we leave a position where we hoped to prove 
 useful to society, that your Lordship may not 
 have calculated too sanguinely on the benefits 
 the country will derive from our retirement. 
 
 I have now, my Lord, laid before you my 
 objections to your plan, and I trust you will be 
 induced to reconsider it. Nothing would give 
 me, and many other Bankers, more pain than 
 to act hostilely to Government, but we must, in 
 duty to ourselves, be at issue with it on this 
 point ; not only, as I have before stated, from 
 an opinion that we are hardly dealt with our-
 
 72 
 selves, but from a firm conviction, which is not 
 to be shaken by the eloquent sophistry of the 
 Political Economists, nor the selfish prejudices of 
 London monopolists. 
 
 Hoping that my appeal will not be in vain, 
 
 I have the honour to remain, 
 
 Your Lordship's 
 
 Obedient, humble servant, 
 
 A COUNTRY BANKER. 
 
 H. SKEEN, rniNTER, 29, MAIDEN LANE, COVENT GARDES.