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the laws by which the business of with equal justice to the inhabibanking in Scotland is regulated, tants of the
two countries-wheand of the mode in which it is at ther the stability of the present present conducted ; it is a subject system of paper currency in Scotnot adverted to in the reports of land can be ensured, if coin be not previous committees, and it ap- in circulation as its basis-whether
peared therefore to your committee, that system can co-exist with a , that it might be convenient to pre- metallic currency in England,
fix a general account of the bank without deranging the currency of ling establishments and currency of this country, are the important
Scotland to their observations on considerations which must be ma" that important question, which was turely weighed before a final de
the more immediate object of the cision can be satisfactorily pro1. reference made to your committee. nounced. ..' They consider that question in The presumption, on general substance to be, whether Scotland principles, appears to your com
shall be permitted to retain the mittee to be in favour of an exten• privilege which she has hitherto sion to other parts of the United
had, of maintaining a paper circula- Kingdom of the rule which it has :l/tion for sums between twenty been determined to apply to Eng
shillings and five pounds; or land. Provision would thus be
whether she shall be required at made for equally apportioning 14 some period, to be now ascertained among all parts of the empire that
by law, to provide, in the same charge which is inseparable in the oli manner in which England has first instance from the substitution 1. been called upon to provide, a of a metallic in the room of a paper smetallic currency?
The wider the field tassen Although the promissory notesis- over which a metallic circulation } 'sued in Scotland are convertible into is spread, the greater will be the w gold at the will of the holder, yet security against its disturbance it it appears to your committee to be
from the operation of internal or proved by experience, that the per- external causes, and the lighter on olla mission to issue notes of an amount any particular part will be the ' sufficiently low to perform the pressure incidental to a sudden 110 office of coin will practically ex- contraction of currency.
The slu un clude that coin from circulation, business of banking, and probably
notwithstanding that such notes of all other commercial transactions kit may be payable at the will of the connected with it, would be con
holder : and it must be assumed, ducted on a more equal footing, in went that under the operation of the law respect to profit, under a system of !, *** now applicable to the two coun- currency common to all parts of 1. tries respectively, England, will, the empire, than under one which .
after the year 1829, have a metal- should confine to particular porlic circulation for the payment of tions of it the privilege of issuing all sums below five pounds, and a certain description of paper. In Scotland a circulation of paper proportion as the offence of coining alone, for all payments of not less shall be found to be more difficult than twenty shillings.
of execution, and to be less freWhether this state of things can quently committed than the offence be allowed to exist, consistently, of forgery, in that degree, upon
moral considerations, will a metallic The witnesses examined by your circulation be preferable to one of committee, with reference to the paper.
state of the circulation in ScotThese appear to your committee land, were seven gentlemen standto be the principal reasons in ing in various relations to some of favour of extending to Scotland the banks in Scotland :a system of currency which the Mr. Kirkman Finlay, a merlegislature has resolved to re-esta- chant at Glasgow; Mr. Gibson blish in England, reasons which Craig, a writer to the signet in seem decisive in favour of such an Edinburgh ; Mr. Hadden, a maextension, unless they can be coun- nufacturer in Aberdeen; Lieut.. tervailed by the proof of some col. Campbell, factor to the duke peculiar circumstances in the con- of Argyle; Mr. Gladstone, à memdition of Scotland, justifying á ber of the house; Mr. Moss, a special exception in her behalf, banker of Liverpool; and Mr. and by a strong presumption that Birkbeck, a banker in the Westsuch an exception can be admitted Riding of Yorkshire; were exawithout prejudice to the interests mined as to the manner of conof other parts of the empire. ducting the business of banking
The main object of the witnesses and commercial transactions confrom Scotland, who were examined nected with it, in Lancashire. Mr. before your committee, has been Gladstone was also enabled to give to prove the claim of Scotland to evidence upon some points relating this exception. Their opinion, with to the circulation and commerce of very slight shades of difference, is Scotland. decidedly adverse to any change in Three of the directors of the the laws which have so long re. Bank of England gave their evigulated the issue of promissory dence, chiefly as to the bearing notes in that country. In estimate. which a paper circulation in Scoting, however, the weight due to land might have upon the interests their opinions as authority, it ought of the Bank of England, after the to be borne in mind that a great re-establishment of a metallic curpart of the witnesses from Scotland rency in this country, were gentlemen immediately con- The grounds relied upon by the nected with some of the banks in witnesses from Scotland to prove that country, subject, therefore, to that it is neither necessary nor the prepossessions which naturally expedient to alter the laws which spring from a long connexion with permit the issue of small notes in existing establishments, and from that country, appear to be the fola warm interest in the continuance lowing of their prosperity.
That these laws, so far as they It is not improbable that, had relate to notes between the sum of the time permitted it, your com- 20s. and 5l. payable on demand, mittee would have extended still have remained unaltered since the further their inquiries; and they first institution of banking in Scotdeem it on that account the more land. incumbent upon them to state the That, coincident with the pregeneral nature of the testimony sent system of currency, if not imupon which they have come to mediately owing to its effects, their present conclusions, there has been grent and prom gressive increase in the manufac- exist, would be destroyed; and tures, the agriculture, the com- that the whole system of deposits merce, the population, and the ge- and cash credits would be most neral wealth of the country: materially affected, if the banks
That during the civil commo- were compelled to forego the profit tions of the last century, in the now derived from the issue of notes rebellions of 1715 and 1745, the below five pounds. confidence in paper securities in For the opinions in detail of the Scotland was not shaken; and that witnesses from Scotland, on these the Scotch banks maintained their and other points connected with stability, and were not called upon the small-note circulation in that for any extraordinary issue of gold country, your committee must in exchange for their notes, during refer to the evidence annexed to the shocks to which mercantile this report. So far as the intercredit was exposed in this country ests of the Bank of England are in the years 1793, 1797, and more concerned, it will be seen that the recently in 1825. That it cannot directors of that bank, who were be assumed, therefore, that a cir- examined before your committee, culation of specie is necessary in urge no objection to the continuScotland for the purpose of guard- ance of the present system in Scoting against the effects of sudden land, provided that the paper cirpanic.
culation of Scotland, can be effect.. That while Scotland had a paper ually restrained within the limits currency for the discharge of all of that country. sums above 20s., England had at Upon a review of the evidence least, for twenty years previously tendered to your committee, and, to the Bank restriction, a currency forming their judgment upon that consisting of the precious metals, evidence, your committee cannot to the exclusion by law of notes advise that a law should now be below five pounds. That these passed, prohibiting, from a period
, different systems co-existed, and to be therein determined, the futhat no proof can be adduced that ture issue in Scotland of notes bem, the paper circulation of Scotland low five pounds.
rd bui displaced or interfered, in any ma- There are, in the opinion of :. terial degree, with the metallic your committee, sufficient grounds 11 currency of England.
in the experience of the past, for That from the date of the first permitting another trial to be made establishment of a bank in Scot- of the compatibility of a paper cirad, land to the present time, the in- culation in Scotland with a circu
the actual failure of a lation of specie in this country. singolo Scotch bank have been extremely Looking at the amount of notes », rare, and that there have been only current in Scotland below the two instances in which the cre- value of five pounds, and comparditors did not ultimately receiveing it with the total amount of the the whole amount of the principal paper currency of that country, it and interest of their debt.
is very difficult to foresee the conLastly, that the inducement to sequences of a law which should the Scotch banks to continue their prohibit the future issue of notes branch banks in many remote parts constituting so large a proportion of the country in which they now of the whole circulation.
Your committee are certainly interference with the system estanot convinced that it would affectblished for England, would be a the cash credits to the extent ap- manifest and gross injustice to the prehended by some of the witness- bankers of this part of the empire. es; but they are unwilling, with-" If it should take place, and if it out stronger proof of necessity, to should be found impossible to incur the risk of deranging, from' frame a law consistent with sound
nyomuy any cause whatever, a system ad- and just principles of legislation, mirably calculated, in their opi- effectually restricting the circulanion, to economize the use of ca- tion of Scotch notes within the pital, 'to excite and cherish a spirit limits of Scotland, there will
there will be, et of useful enterprize, and even to in the opinion of your committee, or promote the moral habits of the no alternative, but the extension is people, by the direct inducements to Scotland of the principle which which it holds out to the mainte- the legislature has determined to nance of a character for industry, apply to this country. integrity, and prudence.
The other circumstance to which At the same time that your your committee meant to refer, committee recommend that the bearing materially upon their system of currency which has for sent decision, will so long a period prevailed in Scot- event of a considerable increase
in land, should not, under existing the crime of forgery. circumstances, be disturbed, they Your committee called for refeel it to be their duty to add, turns of the number of prosecurus that they have formed their judg- tions and convictions for forgeryzal ment upon à reference to the past, and the offence of passing forged of and upon the review of a state of notes during the last twenty years oo things which may be hereafter in Scotland, which returns will be materially varied by the increasing found in the Appendix.
vit,vrolu wealth and commerce of Scotland, There appear to have been, by the rapid extension of her com- ing that period, no prosecutions, mercial intercourse with England, for the crime of forgery, to have de and by the new circumstances that been eighty-six prosecutions for
ais may affect that intercourse after the offence of issuing forged pro-141 the re-establishment of a metallic 'missory notes, fifty-two convicciso curreney in this country. "? tions; and eight instances in which Apart from these general consis the capital
sentence of the law has derations, bearing upon the conclu- been carried into effect. sion at which they have arrived, It ought not to escape observanosa
hosting 940 ot bus there are two circumstatices to tion, that out of the total number, se which your committee must
t more of prosecutions for particularly advert.
in the last twenty years, It is evident, that, if the small thirty-eight have been instituted its
and current beyond the border, they 1825; a fact which seems to wara,118 would have the effect, in propor- rant the apprehension that the
" tion as their circulation should ex crime of forgery is upon the in, tend itself, of displacing the specie, crease in Scotland. It ought,cid
, and even in some degree the local" however, to be observed, that the to currency of England. Such an "return does not specify whether
have been, durzus
the forged notes, for the issue of able under certain terms with which prosecutions have taken which the poorer classes of manuplace, were in all instances notes facturers and others cannot comof the Bank of Scotland. It is ply, unless by submitting to great possible, therefore, that some of extortion and abuse. It adds, that the prosecutions may have been the issue of such notes has very directed against forgeries commit« much tended to increase the perted on the Bank of England, or nicious crime of forgery: and the on banks other than the banks of act proceeds to apply to notes beScotland.
tween the value of five pounds and Your committee will here close twenty shillings, similar restrictheir observations with respect to tions to those which had been apthe circulation of Scotland. They plied to such notes issued in Engare well aware of the great advan- land, by the act which passed in tage that would result from being the year 1777. It permits, howenabled, in a matter of this na- ever, during the suspension of cash ture, to express a clear and deci- payments by the Bank of Ireland, sive opinion, unembarrassed by any the issue of bank post bills, bills qualification or reserve ; but they of exchange, and drafts, under consider it to be their duty, in a certain regulations, for any sums complicated question that involves not less than three guineas. This many important.considerations, and act did not extend to the Bank of upon which the decision must be Ireland. subject to future contingencies, to In 1805, this and some other present the whole of those consi- acts, which had passed in the inderations fairly to the House, and terim, relating to the issue of to qualify their present conclu- small notes, were repealed, and sions by a reference to possible notes under 20s. which had been circumstances, by the occurrence previously permitted under certain of which they might be materially regulations by the act of 1799, affected.
were declared void. IRELAND.
There is at present, no law in
force imposing any limitation to With respect to the circulation the period, for which notes for a of Ireland, the inquiries of your sum not less than twenty shillings committee have been less extensive may be issued in Ireland. than those which they have insti- A tolerably correct estimate of tuted with respect to Scotland. the amount of promissory notes
The first law in Ireland which above and below five pounds, cirrestrained the negociation of pro- culating in Ireland, may be formed missory notes, was an act passed from the subjoined returns made in the Irish parliament in the year by the Bank of Ireland, and by 1799.
other banks at present established The preamble recites, that va- in that country. rious notes, bills of exchange, and drafts for money, have been for
Bank of Ireland Notes. some time past circulated in lieu 1. An Account of the average : of cash, to the great prejudice of amount of the Bank of Ireland
trade and public credit; and that notes of five pounds, and upmany of such notes are made
pays wards (including bank post