ultimay

stop, their creditors mately be paid the whole of their demands, but the delay and shock to credit may, in the mean time, involve them in the same difficulty, and is always attended with the greatest injury and suffering in the districts where such stoppages occur. If this be the case where the solidity of the bank is unquestionable, what must it be when (as too often happens) they rest on no solid foundation.

In Scotland there are not more than thirty banks; and these banks have stood firm amidst all the convulsions in the money-market in England, and amidst all the distresses to which the manufacturing and agricultural interests in Scotland, as well as in England, have occasionally been subject.

Banks of this description must necessarily be conducted upon the general understood and approved principles of banking.

Individuals are, from the nature of the institutions, precluded from speculating in the manner in which persons engaged in country, and even in London banks, speculate in England.

If the concerns of the country could be carried on without any other bank than the Bank of England, there might be some reason for not interfering with their exclusive privilege; but the effect of the law at present is, to permit every description of banking, except that which is solid and se

cure.

Let the Bank of England reflect on the dangers to which it has been recently subject, and let its directors and proprietors then say, whether, for their own interests, such an improvement as is suggested in the banking system is not desirable and even necessary.

The Bank of England may perhaps propose, as they did upon a former occasion, the extension of the term of their exclusive privilege, as to the metropolis and its neighbourhood, beyond the year 1833, as the price of this conces sion.

It would be very much to be regretted that they should require any such condition.

It is clear that in point of security they would gain by the concession proposed to them, inasmuch as their own safety is now necessarily endangered by all such convulsions in the country circulation as we have lately and formerly witnessed.

"

In point of profit, would they lose any thing by it, for which they are entitled to demand compensation?

It is notorious, that at the present time their notes circulate in no part of England beyond the metropolis and its neighbourhood, except in Lancashire; and perhaps for that district some special provision might be made.

But as it is the interest, so it has been, and ever will be, the endeavour, of the country bankers to keep the Bank of England notes out of circulation in those parts of the kingdom where their own circulation prevails. In this they must always be successful, whilst public credit continues in its ordinary state, and the exchanges not unfavourable to this country. The consequences are, that in such times the Bank of England becomes in a manner the sole depository for gold; and in times of an opposite tendency, the sole resort for obtaining it; that at one period their legitimate profit is curtailed by an accumulation of treasure beyond what would be required by a due

attention to their own private safety as a banking establishment; and at another period they are exposed to demands which endanger that safety, and baffle all the ordinary calculations of foresight and prudence.

If, then, the Bank of England has no country circulation, except in the county above named, the only question for them to consider is, whether, on the ground of profit, as well as security to themselves, the existing country circulation shall or shall not be improved. With respect to the extension of the term of their exclusive privileges in the metropolis and its neighbourhood, it is obvious, from what passed before, that parliament will never agree to it.

Such privileges are out of fashion; and what expectations can the Bank, under present circumstances entertain, that theirs will be renewed? But there is no reason why the Bank of England should look at this consequence with dismay. They will remain a chartered corporation for carrying on the business of banking. In that character they will, we trust, always continue to be the sole bankers of the state, and with these advantages, so long as they conduct their affairs wisely and prudently, they always must be the great centre of banking and circulation.

Should the Bank be disposed to consent to a measure of this nature in time to enable the government to announce such a concession at the opening of parliament, it would afford great facilities to the arrangement which they may have to propose for ensuring the stability of private credit, in which the support of public credit and the maintenance of public prosperity are so materially and closely involved.

No. II. At a Court of Directors at the Bank, January 20:

This Court having taken into consideration the important paper received from the first lord of the Treasury and the chancellor of the Exchequer, have resolved,

That, however: essentially they may differ on certain views and sentiments therein laid down and expressed, it is not for the court at the present moment to offer any opinions of their own, the paper appearing to be intended as declaratory of the grounds on which his majesty's ministers have come to the determination to require the Bank to give up its exclusive privilege as to the number of partners engaged in banking, except within a certain distance from the metropolis.

It cannot, however, be considered inconsistent with this for bearance, to state the apprehensions of the court of Directors, that confidence is not so fully restored as lord Liverpool and the chancellor of the Exchequer seem to imagine.

Though the panic has subsided, credit, both public and private, remains in a very uncertain and anxious state,

That the country circulation is in many parts extremely defective, cannot be controverted; and the Bank would very reluctantly op

pose itself to any measures tending to ameliorate it, but would be glad to promote that object, either by fresh exertions on their part, should such be found practicable, or by any reasonable sacrifice.

Under the uncertainty in which the court of Directors find them selves with respect to the details of the plans of government, and the effect which they may have on the interests of the Bank, this court cannot feel themselves justified in recommending to their proprietors to give up the privilege which they now enjoy, sanctioned and confirmed as it is by the solemn acts of the legislature.

No. III.The first lord of the Treasury and the chancellor of the Exchequer have duly considered the answer of the Bank of the 20th instant.

They cannot but regret that the court of Directors should have de clined to recommend to the court of Proprietors the consideration of the paper delivered by the first lord of the Treasury and the chancellor of the Exchequer to the governor and deputy governor of the Bank on the 13th instant.

The statement contained in that paper appears to the first lord of the Treasury and chancellor of the Exchequer so full and explicit on all the points to which it relates, that they have nothing further to add, although they would have been, as they still are, ready to answer, as far as possible, any specific questions which might be put, for the purpose of "removing the uncertainty in which the court of Directors state themselves to be with respect to the details of the plan suggested in that paper."

After all, the simple question for the Bank to consider is, whether they are willing to relinquish their

exclusive privilege as to the number of partners engaged in banking at a certain distance from the metropolis?

The first lord of the Treasury and the chancellor of the Exchequer are satisfied that the profits of the Bank would in no degree be affected by their consenting to such a proposal.

Convinced of this, and that its adoption by the Bank is as important to their own security as to that of the public, it does not appear that the Bank can be equitably entitled to claim any compensation for the surrender of this privilege of their charter.

Against any proposition for such compensation the first lord of the Treasury and chancellor of the Exchequer formally protest; but if the Bank should be of opinion that this concession should be accompanied with other conditions, and that it ought not to be made without them, it is for the Bank to bring forward such conditions.

Fife-house, Jan. 23.

No. IV. At a Court of Directors at the Bank, January 26;

The governor laid before the court the following minute of the committee of Treasury, viz.—

Committee of Treasury, Jan. 25. The Committee of Treasury having taken into consideration the paper received from the first lord of the Treasury and the chancellor of the Exchequer, dated January 23, 1826, and finding that his majesty's ministers persevere in their desire to propose to restrict immediately the exclusive privilege of the Bank, as to the number of partners engaged in banking, to a certain distance from the metropolis, and also continue to be of opinion, that parliament

would not consent to renew the privilege at the expiration of the period of their present charter; finding, also, that the proposal by the Bank, of establishing branch banks, is deemed by his majesty's ministers inadequate to the wants of the country, are of opinion, that it would be desirable for this corporation to propose, as a basis, the act of the 6th Geo. 4th c. 42, which states the conditions on which the Bank of Ireland relinquished its exclusive privilege; this corporation waving the question of a prolongation of time, although the committee cannot agree in the opinion of the first lord of the Treasury and the chancellor of the Exchequer, that they are not making a considerable sacrifice, adverting especially to the Bank of Ireland remaining in possession of that privilege five years longer than the Bank of England.

The act above alluded to contains the following clauses, sections 4 and 18. [See the annexed paper, marked A.]

(A)"Provided always, and be it further enacted, that nothing in this act contained shall extend, or be construed to extend, to enable or authorize any such society or copartnership, either by any member or members thereof, or by their agent, or any other person on behalf of such society or copartnership, to pay, issue, or re-issue, at Dublin, or within 50 miles thereof, any bill or note of such society or copartnership, which shall be payable to bearer on demand, or any Bank post-bill, nor to draw upon any partner or agent who may be resident in Dublin, or within fifty miles thereof, any bill of exchange which shall be payable on demand, or which shall be for less amount than 50l, nor to bor

row, owe, or take up, in England, or in Dublin, or within fifty miles thereof, any sum or sums of money, or any promissory note, or bill of any such society or copartnership, payable on demand, or at any less time than six months from the borrowing thereof, or to make or issue any bill or bills of exchange, or promissory note or notes of such society or copartnership, contrary to the provisions of the said recited acts of the 21st and 22nd years of king George the 3rd, or of the 1st and 2nd of his present majesty, save as provided by this act in that behalf.

"And be it further enacted, that execution upon any judgment in any action obtained against any public officer, for the time being, of any such society or copartnership, whether as plaintiff or defendant, may be issued against any member or members, for the time being, of such society or co-partnership, and that in case any such execution against any member or members, for the time being, of such society or co-partnership, shall be ineffectual for obtaining payment and satisfaction of the amount of such judgment, it shall be lawful for the party or par◄ ties so having obtained judgment against such public officer for the time being, to issue execution against any person or persons who was or were a member or members of such society or co-partnership, at the time when the contract or contracts, or engagement or engagements, on which such judgment may have been obtained, was or were entered into. Provided always, that no such execution as last mentioned shall be issued without leave first granted on motion in open court, by the court in which such judgment shall have

been obtained, and which motion shall be made on notice to the person or persons sought to be charged; nor after the expiration of three years next after any such person or persons shall have ceased to be a member or members of such society or co-partnership.”

the

Resolved, That the foregoing recommendation of the committee of Treasury be agreed to; and that governor and deputy governor be requested to lay it before the first lord of the Treasury and the chancellor of the Exchequer.

No. V. The first lord of the Treasury and the chancellor of the Exchequer have taken into consideration the paper delivered to them by the governor and deputy governor of the Bank, on the 27th instant.

They think it right to lose no time in expressing their concurrence in the proposition which has been sanctioned by the court of Directors, as to the exclusive privilege of the Bank of England, and are willing to agree that the

two clauses inserted in the Irish act last year, and referred to in the paper communicated by the governor and deputy governor on the 27th instant, shall be inserted in the bill, which will be necessary to give effect to the new arrangement.

The first lord of the Treasury and the chancellor of the Exchequer cannot conclude without adverting to that part of the paper of the Bank which respects branches of the Bank of England. In their paper of the 13th of January, the first lord of the Treasury and the chancellor of the Exchequer have stated the reasons why they are of opinion that, under all the present circumstances, the establishment of branches of the Bank of England would not of itself be sufficient to meet all the exigencies of the country; but they are so far from wishing to discourage the establishment of such branches, that they are decidedly of opinion, that the formation of them, under proper regulations, would be highly advantageous both to the Bank and to the community.

Fife-house, Jan. 28th.

No. VI.-At a general Court of Bank of England, Friday, Fe the Governor and Company of the bruary 3rd:

Resolved, That this Court do consent to the terms proposed to the Bank, in the papers now read, and do request the court of Directors to carry the arrangement into effect.

As it appears to your committee to be advisable to consider the state of circulation in Scotland, separately from that in Ireland, they will, in the first instance, report the result of the inquiries which they have made with reference to the case of Scotland.

The first notice of banking in Scotland, which occurs in the Statute-book, is an act of king William the 3rd, passed in the year 1695, under which the bank of Scotland was established. By this act an exclusive privilege of banking was conferred upon that bank;