BANK OF IRELAND.

HC Deb 25 July 1839 vol 49 cc773-834

The Chancellor of the Exchequer

, in moving that the Order of the Day for the House resolving itself into committee on the subject of the Bank of Ireland be now read, wished to ask the hon. Gentleman to withdraw the motion of which he had given notice, respecting an instruction to the committee. According to the strict rules of the House, those matters only could be moved as an instruction to the committee, which the committee itself was incompetent to perform without such instruction, but it was perfectly open to the hon. Gentleman to move in committee that of which he had given notice as an instruction. He did not wish to throw the slightest obstruction in the way of the hon. Gentleman, but he thought moving this instruction might be establishing an inconvenient precedent, and would not he in strict accordance with the regulations of the House.

Mr. Hume

would agree to the proposition of the right hon. Gentleman. All he wanted was to have an opportunity of moving his resolution, which he would quite as willingly do in committee as before.

The Speaker

thought it would be more in order to move the resolution in committee than by way of instruction.

Mr. Warburton

The great doubt was whether it was expedient to legislate on the subject this Session or not. If the House allowed the right hon. Gentleman to go into committee, it would be held, that they conceded the principle, that it was expedient to legislate during the present Session.

The Chancellor of the Exchequer

said, that such a resolution could be quite as well considered in committee.

The House resolved itself into committee on the Acts relating to the Bank of Ireland.

The Chancellor of the Exchequer

said, if the hon. Gentleman wished to bring forward his resolution in the first instance, he had no objection to such a mode of proceeding.

Mr. Hume

rose, but was interrupted by Sir R. Peel, who was of opinion, that the hon. Gentleman could not be strictly in order in bringing forward the resolution now.

The Chancellor of the Exchequer

was perfectly willing to give the hon. Gentleman a precedence.

Sir R. Peel

thought it was desirable to adhere strictly to the forms of the House. Suppose the hon. Gentleman to succeed in carrying his resolution, then he would have to bring in a bill, and carry it through the House, to carry that resolution into effect.

Mr. Hume

was only desirous, that the subject should be fully discussed—as to the manner of the discussion, he was in the hands of the House. He could only say, that the present course had been adopted after consultation with the right hon. Gentleman and the Speaker. If the statement he had to make could not bear examination after the speech of the right hon. Gentleman, it would be better that he did not make the statement at all. Therefore it was a matter of entire indifference to him whether he had precedence or not.

The Chancellor of the Exchequer

was willing to adopt either course. [The House requiring the right hon. Gentleman to proceed he continued.]

I am about to introduce to the attention of the House a subject which I hope may be discussed exclusively on its own merits, and that no other subject will be mixed up with a question which involved the best interests of the public at large as connected with the trade of banking in Ireland. The mixing up of any other subject with the question in debate will not only be irrelevant, but will be calculated to withdraw the minds of hon. Members from the proper subject which is to form the question under discussion. The subject, I venture to say, is one of the most important that has ever been submitted to the consideration of Parliament. Not only important to Ireland, as I shall afterwards more particulary show, but important also to the best interests of England and Scotland, as will not only appear from theory but from the experience of the three last years. It is evident, that any system which tends to unsettle the circulation in Ireland reacts immediately on this country, and I appeal to every man present, more especially to those connected with the Bank of England, whether in times of difficulty and pressure some of the greatest difficulties with which they had to contend, and those which caused them the greatest effort to surmount, have not been difficulties connected with the circulation of Ireland; when it is considered there is in Ireland a large circulation, not only similar in other respects to the circulation of Great Britain, but comprehending a large circulation of small notes, payable on demand, at the places of issue, I think it is obvious on general principles, and also obvious from the experience of the last years, that if the system of banking introduced into Ireland tends to disturb the public credit, and to produce a demand for gold, the mischief will not be confined to that country, but will also be felt in England. Such has, in fact, been the result of the two or three late runs or panics. I wish to press this on the attention of hon. Members, not that I conceive they will be indifferent to this question because it is an Irish question; on the contrary, I should intreat their attention on Irish grounds also, but that I shall be prepared to prove, that in the settlement of the Irish question the best interests of England are also involved. It does not necessarily follow, that it is the interest either of England or of Ireland to acquiesce in my proposal, but I do say, that, in the proper settlement of the question, the interests of both countries are involved.

I shall now proceed to lay before the House a short history of the Bank of Ireland and of the other banking establishments in that country. The history of the Bank of Ireland is in some respects peculiar. It was established about the year 1782, and at that period it was looked to by the great mass of the people of Ireland with considerable anxiety, as an establishment likely to contribute largely to the improvement of that country. I will not trouble the House with an account of the legislation which took place on the subject between the years 1782 and 1797, but it is a remarkable circumstance which I may mention, that the suspension of cash payments in Ireland was never required by the state of the Bank of Ireland, nor asked for on account of Irish interests; the Bank of Ireland at that period being on the contrary perfectly stable, perfectly competent to carry on its own transactions; but it was in consequence of the derangement of the banking system here, leading to the bank restrictions of 1797, that the suspension of cash payments was rendered necessary in Ireland at that time. The Bank of Ireland was in no degree responsible for those transactions. The evils arose from what had been done in England. There was no imputation of misconduct on the part of the Bank of Ireland, no suggestion of over-trading, nor of any thing objectionable in its operations. Undoubtedly when the suspension of cash payments had taken place there was a very great extension of banking accommodation in Ireland, not only on the part of the Bank of Ireland, but on the part of various private banks then established; and in 1804 the great failure which took place in Connaught of Lord French's bank, and several other banks, caused ruin and dismay throughout a great portion of Ireland. In 1820, as the House is aware, private banks having considerably multiplied, no less than eleven failed in a few months, and the entire circulation of the south of Ireland, as well as other parts of Ireland, was annihilated by those failures. With the exception of three or four, there was not one bank which did not fail. The failures which then took place rendered a revision of the banking laws absolutely necessary. Under the government of Lord Liverpool a new system of banking was introduced into Ireland, and the first act which passed for the establishment of joint-stock banking led to the establishment of the Provincial Bank of Ireland. With that establishment it was my good fortune to be for many years connected. That establishment was formed on account of the want of banking accomodation felt throughout the country, the Bank of Ireland not having at that time taken any steps for the establishment of branches. Merchants living in other parts of Ireland were obliged to send commercial paper for discount to their correspondents in Dublin, it being a rule of the Bank of Ireland to discount Dublin paper only. The Dublin endorsers of course required remuneration for the risk they ran, and this with postage raised the rate of accommodation so high upon those who resided in the provinces as necessarily to lead to the establishment of a rival bank to the Bank of Ireland. Under the law, as it now stands, there are three, or I should rather say four, different descriptions of banks in Ireland. The first is the Bank of Ireland, which is a bank of issue and of deposit, with a power of carrying on its transactions in Dublin and throughout all Ireland, without restriction or restraint, save that of dating its notes from the places where they are issued, and paying them on demand in specie, at the place of issue. The next class of banks are joint-stock banks, not being banks of issue but banks of deposit, which were intended by law to have full power of carrying on all banking operations, save and except the issue of notes, and the acceptance and drawing of bills of a certain amount. These banks exercise their functions within as well as beyond the metropolitan circle of fifty miles round Dublin. In the next class are the joint-stock banks of issue, consisting of more than six partners, and carrying on their operations not in Dublin, or within the metropolitan circle, but throughout the rest of Ireland. These banks have the privilege of transacting unrestrictedly all banking business beyond the limits of that circle, and they possess not exactly by law but by sufferance, the power of having a house of business in Dublin, and of having their notes paid there. The fourth class of banks I mention merely to make the statement complete. It consists of private banks having less than six partners, and who have the unrestrained power of banking, both in Dublin and without the metropolitan circle. These are few in number, there being none beyond the metropolitan circle, and not more titan three or four, if so many, within it. Of this class are the banks of Messrs. Latouche and Messrs. Ball.

I have now endeavoured to explain to the House the exact state of the law affecting these banks, but the practice under the law requires some further explanation. The main subject which will occupy the attention of the House this night is the Bank of Ireland. The Bank of Ireland has one central office in Dublin, and twenty-two agencies in the country. The Hibernian Joint-Stock Bank is a bank of deposit, and discount which does not issue notes in the metropolis. The loyal Bank of Ireland is likewise a bank which does not issue paper money in the metropolis. There are also three private banks in the metropolis. The Provincial bank is a bank of issue, with thirty-five branches. The National Bank is also a bank of issue, with thirty-six branches. The Belfast Banking company is a bank Pf issue, with twenty branches. The Ulster Bank has nine branches, and the Northern Banking Company has ten branches. These latter banks are all without the metropolitan circle of fifty miles from Dublin. The House will observe, that practically the banking business of Ireland is now carried on by the bank of Ireland in the metropolis, and in the provinces by the branches of that bank, and by the great joint-stock banks, having branches varying in number from ten to upwards of thirty. The Provincial Bank, was the first of the joint-stock banks, and for five or six years after its formation there was no other. The state of things I have described, therefore, has only been in full operation during the later years. That which now renders the interposition of Parliament necessary is the peculiar state of the law as affecting the Bank of Ireland. By the engagement which was entered into between the public and the Bank of Ireland, the existing exclusive privileges or that body, generally called their monopoly—a word which has excited considerable prejudice on the subject, but a prejudice which I trust a full and fair explanation may remove—the exclusive privileges of the Bank were to be continued to them until after the 1st day of January, 1838, when, on notice being given, and on paying the amount of debt which the public owed to them, those exclusive privileges were to cease altogether, leaving the trade in banking entirely free. The proposition which I am about to make is one to continue those exclusive privileges for a given time, and on certain specified conditions. The proposition which will be made by the hon. Member for Kilkenny is that, it is expedient that those exclusive privileges should altogether cease and determine, and that the trade of banking, both as affecting the issue of money and all other banking operations, should be left as perfectly free in Dublin as it is in Edinburgh. I believe I have stated accurately the object of the amendment about to be proposed. I admit that I am bound to show and prove the necessity of restrictions when arguing in their defence. But I think I shall be able to demonstrate that necessity, not only from the experience of this country, but on general principles applicable to this subject, and from the peculiar facts connected with banking business in Ireland.

In the first place I deny the applicability of the general principle of the freedom of trade to the question of making money. I deem it altogether erroneous that hon. Gentlemen should be carried away by the arguments of those who say, "We claim, on behalf of the public, on grounds of political economy, and on the general principles of freedom of trade, the unfettered power of issuing promissory notes used as a substitute for coin, passing from hand to hand, and payable on demand." If that principle were carried so far, it ought to be applied not only to allowing the creation of paper money to be perfectly free, but also to allowing the creation of metalic money to be equally free. To carry out fully the principle of freedom of trade on the subject of money, the principle of a national mint should be given up, and the power of coining should be left unfettered and open to be exercised by all. Indeed, if it were necessary or fitting on this occasion, I should be prepared to maintain what, perhaps, may appear paradoxical, that it might be more safe to leave the creation of coined money free, than to trust the trade in paper money, to the discretion of every individual. It is a sufficient answer, however, to any such theory, to look at the coarse of legislation which has been adopted by every country upon the face of the earth. Take our own statute boak—what have we done upon this subject? Are not our laws full of restraints upon the freedom of trade in this particular? What is the restriction of the issue of small notes? What is the restriction of the circulation of the Bank of England? Do not these provisions interfere with the freedom of trade? It is impossible to consider any one of these acts justifiable if the extravagant paradox can be maintained that the power of making paper money should be necessarily free. If, then, the question does not admit of discussion on the general principle of Free Trade let me discuss it on the principle of expediency. I am, indeed, reluctant to introduce into the consideration of this question, which merely refers to a limited period of time, the larger principles involved in the general question, but I must admit, that on my general theory, the question is wholly opposed to that of an unrestricted competition in the issue of bank notes. Without saying what course ought to be adopted in England or Ireland, where many rights and interests have grown up under the existing law which it would be unjust and unwise, if not impracticable to disturb, I will say, that if a system of banking were to be established for the first time in an entirely new country, where these rights and interests did not exist, I think the best system to adopt would be that of one central bank of issue, which should have the whole command of the currency. Of course, I do not mean to say that it would be expedient or practicable to introduce such a system in this country under existing circumstances, and I only lay down the abstract principle, in order to try whether the course proposed by me or that suggested by the hon. Member for Kilkenny comes nearer to the principles suggested by a sound theory. One argument which will, no doubt, be relied upon by the hon. Member for Kilkenny, will be the practice which prevails in Scotland of an unrestricted freedom in the issue of notes. The hon. Gentleman will excuse me if I express a doubt whether there is any analogy whatever between the state of banking in Scotland and the state of banking in Ireland. Any one at all practically conversant with the subject, must know that no two systems can be more strongly contrasted than the Scotch and Irish systems of banking. In the first place, look at the immense capital engaged in the banking trade in Scotland. I have not of course the means of knowing the precise amount except from the commonly received report, but I speak under the correction of those who have full means of information, when I say, that the funded property at the command of the Scotch banks, available under all circumstances, for the satisfaction of demands upon them, exceeds in an immense proportion; is five times, six times—perhaps ten times, as great as the whole of the capital engaged in the banking business in Ireland. Is not this, of itself, a just and legitimate ground of distinction between the systems of the two countries? I know that the hon. Member for Kilkenny will say, that this large amount of capital has been produced by the banking system of Scotland. That I altogether deny. A banking system is not the cause, but the consequence of improvement. If any one imagines that wealth can be produced in a country by manuring the land with bank notes, before large capital has arisen from other sources, he commits the greatest blunder that any one can commit, by mistaking the effect for the cause. I do not mean to undervalue the resources or capital of those engaged in banking in Ireland, but, comparing it with Scotland, it is remarkable that such is the confidence in the latter country arising from the immense wealth of the Scotch banks, or from other causes, that the proportion of gold which it is necessary to keep in Ireland, for a given amount of paper is as much greater than the amount necessary to keep in Scotland, as the capital of the Scottish banks is greater than that of the Irish banks. It has not happened within the memory of man, I believe, that there has been a continued run for gold upon the Scotch banks, the demands on which are adjusted and regulated by bills on London. But, on the other hand, there has been a series of runs on the banks in Ireland for gold, in the course of the last ten years, which has rendered it necessary for the Bank of England, upon whom the demand to supply specie ultimately fell, to supply for Ireland during that time an additional amount of gold greater than the whole amount of specie demanded for Scotland during that time. I speak under the correction of those who perhaps are better informed, but I believe the fact is so. If, therefore, it is found, that the capital possessed by the banks of Scotland exceeds in a great degree the capital of all the banks in Ireland, and if it is found, on the other hand, that the state of Ireland is such as to expose the banks there to a frequent and eager demand for gold, inconvenient both to themselves, and to this country, the circulation of which it disturbs in no common degree, it is in vain to tell me, that the case of Scotland should naturally or necessarily govern the case of Ireland. The House should judge of the case of Ireland upon its own merits without reference to the case of Scotland, which is likely to lead astray, by suggesting false analogies from a comparison between two countries which have no common measure. I repeat, that there is no common measure between the banking transactions of Ireland, and those of Scotland, because they are essentially and entirely different the one from the other (Hear!). I do not know how to interpret that cheer, for I do not believe it means assent on the part of my hon. Friend, but I will take upon myself to say, that with respect to the main fact to which I have alluded—the amount of capital, the de- mand for gold, and the tendency to panic and alarm—on these three points the state of Ireland is diametrically opposed to that of Scotland.

I have stated, that the banking business in Ireland has been, of late years, mainly conducted through the agency of the joint-stock banks, and of the Bank of Ireland. I wish to draw the attention of the House to certain facts connected with the question. I do not call upon them to vote for my resolution solely upon any arguments which I can adduce. I am about tender to them the evidence on which my case rests. The House will recollect, that a committee was appointed upon the subject of joint-stock banks, which sat for two successive years. The affairs of the Irish Bank were made matter of investigation by that committee. In the year 1837 the examination began. In the year 1838 it was resumed, and there was no proposition made for the production of any witnesses before that committee, which was negatived by the committee, nor were there any impediments thrown in the way of the investigation by the Bank of Ireland. The case was gone through and was attentively considered by that committee, and on the evidence collected by them, and now lying on the table, I rely as the justification of my motion. There were parties examined before the committee connected with the Bank of Ireland. The Governor of the Bank of Ireland was himself examined. Parties connected with the provincial bank were examined. Mr. Needham, the manager of the Royal Bank was examined. Mr. Mahony, formerly a Member of this House, a gentleman of very great professional experience, and who has given a great deal of attention to this branch of the law, was also examined. So was Mr. Pim, a gentleman connected with a private banking establishment, and one of the most intelligent and practical men of business whom it has ever been my lot to meet. Two Gentlemen, Mr. Callaghan and Mr. Dunne, were called over to speak generally of the inconveniences complained of, arising from the monopoly of the Bank of Ireland. They were examined at very great length. No other witnesses were offered to be brought forward. Consequently no other witnesses were produced, and the evidence was closed. No proposition or suggestion was made for taking further evidence; and, therefore, I feel myself entitled to say that, as far as the judgment of the House, and the Committee go, the evidence is complete, and we are now authorized to come to a decision upon it.

In order to make that evidence intelligible, I must take the liberty of adverting to some circumstances which occurred in the year 1836; otherwise, the nature of the complaint brought against the Bank of Ireland, and my argument in defence of a temporary continuance of its exclusive privileges will not be quite intelligible. Gentlemen will recollect, that at the close of the year 1836, a severe pressure was felt on the banking interests in both countries. The first manifestation of difficulty took place in Ireland, even before there was any serious pressure on the Bank of England. In dealing with this subject I must admit, because I wish to state the case with perfect fairness, that I do not think the conduct of the Bank of Ireland, at that period, was based upon prudent banking principles. They made one very great and serious mistake on that occasion. When the Bank of England raised the rate of discount, on every principle, that ought to have influenced the conduct of the Bank of Ireland, it would have been prudent on its part to raise the rate of interest on discounts of the same time. The Bank of Ireland did not do so, however, for a considerable time. So far as that step is concerned, I am not disposed to defend the course which the Bank of Ireland then took. I think it the duty of the Bank of Ireland, and every other bank dealing with the issue of paper, to keep a most vigilant eye upon the whole transactions of the Bank of England, the quarterly returns of their assets and liabilities, the state of the specie in their coffers, and the state of the foreign exchanges, and to regulate all their proceedings with reference to the transactions and returns of the Bank of England. The directors of the Bank of Ireland did not govern themselves according to those principles. It is very material for me to state the truth upon this point, because I mean to make use of it afterwards for the purpose of repelling some of the accusations made against the Bank. The main objection raised in Ireland on the part of those who wish to put an end to the exclusive privileges of the Bank was, not that it had pushed its issues too far, or that it had given accommodation in excess, but the attack was of an exactly contrary descrip- tion. Those persons said, that the whole operations of commerce in Ireland were restricted by reason of the supposed monopoly, and that Dublin and the metropolitan circle suffered, not from an excess but from a deficiency of accommodation. Now, the only case in which I think there has been reason to complain of the conduct of the Bank of Ireland is one in which they gave, not too little accommodation, but too much. In fact the only real danger to the public from banking operations is from banks being tempted, in quest of inordinate profits, to extend their circulation too far, and thus to give an undue excitement to prices and an undue impulse to speculation. The public may rely upon this, that every bank will carry its business and will extend its issues as far as it can do so with safety, because it has a direct interest in putting out as much of its paper as it can circulate without danger. The public need not be afraid of a bank refusing accommodation, but it ought to be afraid of a bank going too far in that direction for the purpose of sending out its notes. However, the whole complaint, and the burthen of every argument against the Bank of Ireland, is founded on the presumption that the the directors will not discount in Dublin and the metropolitan circle as much sound and legitimate paper as they would be warranted in doing; but, on the contrary, that they have a disposition to starve and stint the circulation within that district. My charge against the Bank of Ireland, as I before stated, is, on the contrary, that during a period of pressure, it continued its discounts, when, from the proceedings of the Bank of England it ought to have contracted them. Upon this point the Bank of Ireland—or at least those persons connected with it who were examined before the committee—admitted that they were wrong. To return, however, to the narration of what happened in the year 1836. In that year the Agricultural and Commercial Bank, with which establishment the evidence taken before the Committee has made the House and the public familiar, ventured upon a very large issue of notes, embarking in the wildest speculations, taking the most improper means of extending its issues, doing the worst description of business, and creating an unnatural banking competition wholly unjustifiable from their resources, or upon the general principles of banking. This bank sustained a reverse, and was compelled to stop payment. Several of the other banks felt the pressure so severely that they were obliged to have recourse to the Bank of Ireland for assistance. All the banks in Ireland were obliged likewise to draw largely on their resources in this country. The National Bank remitted 200,000l. in gold from this country, and the other banks remitted 700,000l. in gold. All this necessarily disturbed the London money market, and aggravated the inconvenience which was there felt. It appears from the evidence that the conduct of the Bank of Ireland, on that occasion, towards other banks was entitled to every praise. It appears from the evidence that towards the assistance of the Belfast Banking Company it advanced 103,000l.; to the Ulster Banking Company 60,000l.; to the Hibernian 21,000l.; to the Agricultural Bank 19,600l., and to the National Bank 42,600l., making a total of 246,000l. These sums were advanced by the Bank of Ireland to assist their own competitors in trade. I rely upon these facts for two reasons—first, I wish to show to the House that the working of this supposed monopoly at that period was not prejudicial to the other banking interests, but that through the assistance of the Bank of Ireland the other banks obtained those resources which enabled them to meet the pressure upon them. I mean further to show from these facts that the same resources can be made available hereafter only by a continuance of the present exclusive privileges of the Bank of Ireland, and that if the House were to put an end to those privileges they would run the hazard of those great evils which have formerly been averted or mitigated through the instrumentality of the Bank of Ireland. Yet one of the witnesses before the committee, Mr. Dwyer, stated, and Mr. Callaghan asserted, that he thought the conduct of the Bank of Ireland on that occasion extremely liberal. They went further, and said that it was intended by the bank to break all their competitors in trade. Can the House imagine it possible that they were complained of for not doing that which there was distinct evidence to prove that they had done? Mr. Dwyer complained of their conduct in limiting accommodation. The bank with which he was connected, having received 21,000l. to meet their engagements, and the agent of the same bank in Galway having received on his own security the sum of 12,000l. more—nay, it was stated in the evidence that the Bank of Ireland offered the Agricultural Bank further accommodation if they could give bills on London. The Agricultural Bank frankly and honestly admitted that they could not give bills which they were sure would be accepted in London; but they tendered as perfect security for the advances which they required, their own promissory notes returned from circulation, and requested to receive gold, or notes convertible into gold, in exchange for this discredited paper. The Bank of Ireland most properly refused to make advances on such security, and a Gentleman comes before a Committee of this House, and declares that the Bank of Ireland acted towards its rivals with the intention of crashing them, or of cramping their operations. In contradiction to this, however, another witness—Mr. Mahony—not only unconnected with the Bank of Ireland, but connected with one of its rivals in trade, stated that, according to his information, there were but three banks that did not get assistance from the Bank of Ireland, and that the conduct of the Bank of Ireland was very liberal at that crisis. I have already shown, that its advances exceeded the sum of 240,000l., either in gold, or paper exchangeable for gold, I will now call the attention of the House to the terms of the complaint of Mr. Callaghan, who says, in answer to question 1,170— I think the Bank of Ireland at any time, at its greatest issue, did not give the accommodation to the public which it had a right to expect. In answer to question 1,190, the same Gentleman says, I think its capital ought to be for the accommodation of the public, when it could be safely given, instead of being tied up in the public funds. Mr. Dunne said in answer to question 1,290, The Bank of Ireland has not extended accommodation to the public in the way it ought and might have done. To question 1,297, Whenever a crisis came, as in the late panic, they acted with great illiberality. And to question 1,422, I do charge the Bank of Ireland with an intention of putting down all the other banks. So far from this being the case, as I have shewn on the evidence of Gentlemen connected with other banks, it is undeniably true, that all the banks, except three received assistance from the Bank of Ireland. At a time when the Bank of Ireland might have apprehended danger to itself, it parted with nearly 250,000l. to aid its rivals in trade. The charge has been repeated in a publication which has come from something like authority, complaining of the Bank of Ireland, and calling on the public to negative the proposition for an extension of the Bank charter. Will the House have the kindness to hear the charges brought against the Bank of Ireland in this pamphlet, which has been published on the renewal of its charter. It says— In the midst of general impoverishment, public debility, and national convulsion, we find the Bank of Ireland consolidated, strengthened, and exalted. Often as discontent and insubordination have agitated and vexed the island, the Bank has always stood hale and pursy. The rebellion of 1798—the insurrection of 1803—the panics of 1810, 1820, 1825, 1836—the famines, too numerous to be recounted, and too horrid to be described, have encountered it, have swept by it, and left it stronger in resources, grosser in wealth, and more formidable in power than they found it. Crisis after crisis, convulsion upon convulsion, came on the devoted country; but the Bank has never been moved—never swerved in the slightest degree from its selfish centre. It has evidently had but one rule of action—to make money, and run no risks. All argument on this subject is superseded by the one strong fact, that the sum total of its bad debts since the day of its creation amounts only to 338,500l. [Mr. O'Connell: That is an anonymous authority.] I give it as such. I have a right to deal with it as an argument. Some of the witnesses against the Bank made more absurd statements. But what is the argument addressed to the public against the Bank of Ireland but this, that during all times of peril and danger it has been enabled to answer its engagements. Through crisis after crisis, famine after famine, and panic after panic, its notes have preserved their value. The argument against the bank is this—that it has steadily attended to its trade of making money, dealing as a banker should do. I say, that if a bank were to go on upon any other principles than those of dealing with their transactions as merchants, doing a safe business, and stopping when that business was not safe, so as to maintain their credit, and to keep their resources available they would not discharge their duty as bankers. This is the first time I have ever heard it charged against a commercial establishment that, in the course of fifty-three years, the fact of their not having made bad debts was a proof of their transactions being mismanaged. This is an argument so absurd in itself, that noticing it is sufficient. And here let me deal with the evidence of Mr. Ignatius Callaghan and Mr. Dunne, Gentlemen of whom I do not desire to speak with the slightest possible disrespect; but I am dealing with their opinions and evidence—and evidence of a more extraordinary character has never been given. Will the House believe it possible, that one of the complaints made by these Gentlemen was that the Bank of Ireland reserved a large proportion of their capital in the public funds as available assets to meet their engagements?—I must say, that a most curious series of answers was given by one of those Gentlemen, who showed that, however, respectable he was, and no doubt he was highly so, he knew as little about the principles of banking as about finding the longitude. Mr. Callaghan referred to the amount of the capital of the Bank of Ireland, and the amount that was invested in public securities, and he stated that the difference of two millions ought to be issued in increased discounts beyond the whole present circulation, thinking it better than that the capital of the bank should not be reserved in the public funds and in Exchequer bills, available to meet their engagements. Here were his own words:— What is the proportion?—I would certainly keep a portion; for example, we will say, the Bank of Ireland has with the Government three millions; I think if I had a bank such as you suppose, having that proportion with the Government, I would devote the whole of my accommodation, as far as safety would warrant, to the public, instead of putting the money into the funds; the whole beyond that. Was there ever a proposition such as this ventured upon by any man who was ever tendered as a witness on the subject of banking—namely, that the whole fund locked up with Government remaining untouched, all beyond that should be employed in discounts, for the accommodation of the inhabitants of Dublin, with- out a farthing being available as a security when a time of pressure came? What would be the consequence? Why, that in time of pressure the Bank of Ireland, as their resources would not be convertible, would not only be unable to meet their own engagements, but would also be unable to meet the wants of other banks, whom they might feel it their duty to assist. As this is the evidence to be relied on against me, I must ask the House, what can they think of the authority of any Gentleman who, when examined upon this subject, with reference to the rate of discount at which the Bank of Ireland was doing business in 1836, stated that he was not aware that the Bank of England discounted at a higher rate at that time. This Gentleman, who is to be relied upon as an authority in banking, stated that he was not aware of the fact, that the Bank of England had raised the rate of discount. I think this a most extraordinary instance of total and complete ignorance exhibited by a person who had taken upon himself to inform others. I will quote the evidence. My question refers to the period at which the Bank of Ireland was discounting at a lower rate than the Bank of England; do you consider that prudent or the reverse? I was not aware of one point you make, which is, that they were under the Bank of England in their discounts at the time. I am now going to allude to another part of the evidence. With the same view, this Gentleman was asked about the account of the Bank, and whether it was necessary in balancing accounts to strike off bad debts and protested bills. He answered, that protested bills, to a very considerable extent, were quite as good as other bills; that it was true that merchants might suffer some degree of dishonour, if their bills were not paid; but he stated absolutely, in answer to question 1,244, that it was a very common thing with gentlemen of the first fortune to let their bills be protested; and therefore he assumed, in order to make his case good, that really there was no necessity for writing off protested bills; but he who himself objected to the public funds, and to deposits in the public funds told them that protested bills were extremely good things to have. [Mr. Hume read the question and answer.] I will undoubtedly, if it is desired. You seem, in the previous part of your evidence, to have placed little reliance on the fact of bills being protested, that many of your protested bills were as valuable as those which were not so; is that so?—What I meant to convey was, that in making out an account (we will suppose protested bills 5,000l. or 6,000l.), we never had so much protested bills in hand that we did not know, as certainly as we know the solvency of a bank note, that a great number of them were good. It is a common thing with many gentlemen of the first fortune to let bills be protested. I think I am entitled to say, that such testimony as this is not entitled to any very great weight. In the next question he certainly stated, that a mercantile person's bill being protested would be fatal to his character, but the whole of the former question applied to protested bills.

The real question the House will have to decide, and that which, after all, is is the main and practical question, is, whether it is or is not expedient to preserve the exclusive issue of bank paper, payable on demand, in the hands of the Bank of Ireland, in Dublin, and the metropolitan circle? I shall refer again to the evidence, not evidence connected with the Bank of Ireland, but evidence connected with its opponents. One of the points pressed upon in Committee was as to what would have been the effect of an unlimited competition in the issue of paper in Dublin and the metropolitan circle during the period of distress in 1836. Mr. Pim, being examined, said, that if all the great banking establishments had had houses of issue in the metropolis in 1836, the embarrassment would have been considerably increased, greatly increased. [Mr. O'Connell read the question.] The question is as follows: What do you think would have been the state of commercial affairs in Dublin at that period, if all the various banking establishments, the Provincial, National, Agricultural, and Northern Banks had had houses of issue in the metropolis?—I think their embarrassments would have been considerably increased, greatly increased. This was the answer; and it was exactly as I had before stated it. If hon. Gentlemen will refer to question 4,112, they will find the evidence of Mr. Mahony, who was formerly an opponent of the Bank of Ireland. The following question was put to that gentleman: Having described the state of the law with respect to keeping houses of business in Dublin, on the part of joint-stock banks, what do you think would have been the effect in the commercial crisis which occurred in the month of November last, had the existing joint-stock banks generally had houses of business established in Dublin, not only for banking business but for the actual issue of paper?—It would, certainly, under the system they were then carrying on, have increased their power of being mischievous, if they had those establishments in Dublin as elsewhere; they would then of course have partaken in the issue of the Bank of Ireland, as far as their connection and influence could have extended; and having, as in the case of the Agricultural Bank, mismanaged their issues, of course they would have had a greater power of mismanagement if they had had those establishments in Dublin. The next person to whose evidence I shall refer, is Mr. Pim again. In answer to question 500, he stated, that if everything was kept within the proper limits, the panics would not arise. I will read the whole. Your opinion, then, is founded on a state of facts, which you would conceive might very probably be shown to be misconduct, but with prudent conduct, and proper banking principles, the issue in Dublin would be no more dangerous than the issue in the country, kept within its proper limits?—Why, I do not see that the Bank of Ireland sustained any difficulty, from having any issue in Dublin as well as in the country. If every thing of the kind be kept within the proper limits, the panics will not arise; but the great difficulty, in cases of this kind is, how to assign those limits, and that if you afford to parties having a very extensive branch bank establishment over every part of the country, the facility of an unrestricted issue of notes in Dublin, and subject them to the competition which must arise in Dublin from all parties being allowed so to issue notes, I greatly fear the consequence would be, in a time of pressure, to increase the difficulties of the parties in Dublin. Again, question 500, which was put by the right hon. Bart., the Member for Pembroke, is as follows:— Bringing within the metropolitan limits, now exclusively assigned to the Bank of Ireland, such as exist without those limits, what do you think would be the effect; would it be salutary or injurious?—I think that if there was no other restraint than exists in other parts of Ireland, and that we have no check to the increase of the numbers by the better mananagement of banks, I should greatly prefer seeing the monopoly of the Bank of Ireland continued in Dublin, than throwing open the issue of notes to all parties without restriction. You would be afraid to trust to the restraint arising from the competition of rival establishments, and the rapid returns of the issue of notes?—Yes, I would. Such is the evidence of a banker of Dublin, not only unconnected with the Bank of Ireland, but directly connected with a a rival and antagonist in trade; his evidence, therefore, is quite unexceptionable in respect of interest. There is one word which I wish the hon. Member for Kilkenny would bear in mind in discussing this question—a word of wisdom contained in Mr. Pim's answer to the question 515, where he stated that it was not so much of free trade in banking that he was afraid as of free trade in making money. I am not more afraid than Mr. Pim of a free trade in banking, and my proposition will give great freedom in banking; but I am afraid of a free trade in making money. The question 521 and the answer of the same gentleman are as follow:— Is it not almost certain that there would be that tendency among banks issuing in competition simultaneously at periods of commercial prosperity and consequent excitement on a rise of prices?—I think the temptation to an over-issue would be greatly increased by their all having establishments in Dublin. I think I am entitled, after this, in contrasting the evidence of Mr. Pim, with that of Mr. Callaghan and Mr. Dunne, to state, that it would be dangerous to grant an unrestricted competition in issuing notes within Dublin and the metropolitan circle.

There was one other witness, Mr. Needham, who was connected with the Royal Bank of Ireland, a rival in trade of the Bank of Ireland, which, though not a bank of issue, received deposits and transacted all the other business of banking. Question 1,674, and Mr. Needham's reply is as follows:— Supposing that in the month of October 1836, all the joint-stock banks of Ireland had possessed and exercised the privilege of issuing notes in Dublin and the metropolitan district, do you consider that the pressure upon the metropolis would have been other or greater than it was when that crisis occurred? My conception is that it would have been greater. That was the answer. Again to question 1,677, the reply was as follow:— Do you consider that the exclusive privilege of issue which is now enjoyed by the Bank of Ireland, gives to that Bank any injurious monopoly within Dublin and the metropolitan district?—I do not conceive that it does. Mr. Needham further stated, in answer to question 1,684, that the Royal Bank would not consider it desirable to avail themselves of the privilege of issuing notes if it were conceded to them. This, be it recollected, is the testimony of an opponent of the Bank of Ireland. I shall now refer to the evidence of Mr. Marshall, the very intelligent and able secretary of the Provincial Bank of Ireland. He was asked question 4,486, If the joint-stock banks of Ireland had been authorised by law to issue notes in Dublin as well as in the provinces, do you think the commercial pressure would have been greater or less than it was?—Had they carried on all manner of banking business in Dublin and issued their own notes, I should have been disposed to say the pressure on some of these banks might have been greater. How, then, stands the case as to evidence? The public had gone through a trial of a time of pressure under the existing law, and we have found by the evidence of Messrs. Pim, Needham, and Marshall, that the pressure during that time of difficulty would have been infinitely greater had the issue of notes in Dublin been unrestricted. Consequently, if we were now to make the trade in banking free within the metropolitan circle, at any other time of pressure that might recur, we ahould find that pressure greatly augmented, if we are to believe the evidence of these practical men, men who are not strangers or theorists, but who, on the contrary, are conversant with all the details of banking, and especially with banking in Ireland. But the case does not rest here. Some may say that a time of pressure is a contingent evil; some may be sanguine enough to hope, "that no panics will arise and no difficulties will hereafter exist; or, at all events, that the inhabitants of Dublin and the metropolitan circle ought not to suffer inconvenience, because there may arise a future panic or a disturbance of the monetary system. Now, what is this inconvenience? Is it a want of accommodation? How stands the case? It is in evidence, and I need not refer to the evidence, because it is quite notorious, that in Dublin and the metropolitan circle, the rate of money accommodation is lower and cheaper than it is in the provinces, with the competition of all these different banks—if, then, the rate of money, the value of money, be lower in Dublin and the metropolitan circle, how can it be contended that any kind of restriction is imposed on the commercial classes there? But to go further. The private banks in Dublin have now full power of issuing notes. Some of those private banks are in high credit. There is no bank in higher credit than that of Latouche and Co., and the bank of Ball and Co. is also in high credit. Do they issue paper? Those banks, both of them, formerly did; that of Ball and Co, to a considerable extent, and that of Latouche and Co. also; but of these one has wholly discontinued, and the other has contracted its issues of paper. Why have they done this? If the monopoly of the Bank of Ireland made the issue of paper profitable to the issuer, then private banks, being in the possession of great resources, being unrestrained by any law, and in full possession of the privilege, so far from giving up that part of their business, would, under the supposition that it was profitable, have continued and extended it. In place of having done so, they have, as I stated already, given up that branch of business.

It was stated by the governor of the Bank of Ireland, that there was a lower rate of discount charged in Dublin than in the provinces. The argument is, that this monopoly is unwise, because it is said, the people have to pay more in Dublin for their Banking accommodation. But is this the case in point of fact? There are two parts of Ireland, the one the district beyond the metropolitan circle, where there exists a competition of issuing banks; the other Dublin, and the metropolitan circle, where what is termed the Bank of Ireland monopoly prevails. If the people suffered from this monopoly, the price of the value of money would be greater where the monopoly existed, than where there was a free competition. But the very reverse is the case, for in the metropolitan circle the value of money is lower than in the provinces. This appears from the evidence of Mr. Wilson; and it was also admitted by Messrs. Callaghan and Dunne, that money is cheaper in Dublin than in other parts of Ireland. In answer to question 1420 they admitted, that the exclusive privilege of the Bank of Ireland had no effect in raising the rate of discount to the people of Dublin; and again, in answer to Question 1476, those Gentlemen stated, that the accommodation afforded by the other banks in Dublin was far beyond what the Bank of Ireland afforded. Why, if the other banks gave greater accommo- dation, the Bank of Ireland can not be held to possess any banking monopoly. The two things are inconsistent. The low rate of discount in 1836 in Dublin and the metropolitan circle, when it was kept much below what prudence or interest, as I think, would justify, shows that it was not from any deficiency of money accommodation that the public had sustained any loss.

I will next point out the great danger, the imminent danger, that would arise from granting in the metropolitan district unlimited competition. I will take upon myself to say, with some practical knowledge on this subject, having been for nearly ten years of my life conversant with the first joint stock bank established in Ireland, that no greater peril or danger can be introduced into the money concerns of any country, than that which would be introduced into Ireland, if we were to abrogate the privilege of the Bank of Ireland, and allow an unlimited issue of notes within the metropolitan district. I will state my reasons for so saying. The banks of Ireland are somewhat peculiar. They carry on their business through the medium of many branches, extending from Cork to Londonderry, from Galway to Belfast; in fact, these branches are established in all directions except within the the metropolitan circle. I take upon myself to assert, that in order to preserve in safety so very large a system of branch banking, it is absolutely necessary, with a view to their own safety, that there should be within the city of Dublin a central agency acting on the part of those banks, whose duty would be exclusively the regulation of those branches—the supplying of gold when it was wanted—the transfer of specie from those branches where there was a surplus to those where there was a deficiency, the examination of bills of exchange, and the negociation of public and private securities; in fact, the regulation of the different branches, having the attention of the agent confined exclusively to this important duty. The mode of performing this is at present as follows:—These great banks have a house of business or of agency in Dublin, to which the directors remit from London and from the branches available securities for collection or negociation. The agent in Dublin receives regular reports from the branches; and if there should appear any deficiency at one of the branches, he is bound to be pre- pared to assist it, and to supply adequate means, having available securities in his possession, and having to operate at a a central point of rest and repose. But if, together with the demand from the branches, the agent were also to be subject to a demand on account of a large issue of paper within the metropolitan district, it would be utterly impossible and impracticable, as I conceive, that his transactions could be carried on with any safety whatever. It would be utterly impossible for them at once to make provision for their whole metropolitan circulation, and also to make provision for the supply of the branches in cases of deficiency. I therefore venture to say, that it would be perfectly inconsistent with the safety of the existing system of banking in Ireland, to allow this unlimited power; and if I may tender myself as an evidence on this occasion, I would say, that if the bank with which I was connected for several years had enjoyed a power by law of issuing, paper within the metropolitan district, the very instant they were so reckless and daring as to exercise such a power, that very instant I should have felt it to be a matter of prudence to retire. As to the banks themselves, I believe it would injure their credit in Ireland if they were allowed to be responsible for a metropolitan circulation. I find this admitted by Mr. Pim, in his answer to question 377, where he states that the difficulties of managing banks are prodigiously increased by the number of branches they had established, and this not in a mere numerical ratio to the number of those branches, but in much higher proportion; and that with respect to the Provincial Bank, if they had not a house of agency in Dublin to look after their affairs, in a way that would be inconsistent with a bank of issue. He did not believe that they would be able to meet their engagements unassisted, in the same satisfactory manner that they had done.

I have thus endeavoured to show, that the principles of free trade did not apply to banking; I have also endeavoured to prove from experience, that in times of panic the difficulties would be much increased by allowing a competition of issuing banks in Dublin and the metropolitan circle, and I have endeavoured also to prove, from the best evidence in my power, that even in ordinary times this competition of issue would be inconsistent with the present principles of banking in Ireland; and I have done this by the testimony of witnesses, whom I prefer; because unconnected with the Bank of Ireland, and who, indeed, many of them, are connected with establishments which are its direct rivals in trade. I call upon the House, therefore, to continue for a time, and under the provisions which I shall explain to the House, the monopoly of issue, or rather the privilege of the Bank of Ireland, as it at present exists. The Bank of Ireland paper, has never been, in the memory of man, since its issue, subject to a moment of discredit. [Mr. Hume: It had suspended cash payments.] The hon. Member for Kilkenny says, that they suspended cash payments. It is true, they did so when they were compelled by law and by the British minister, but they were not required to do so for their own protection. From the time of the restoration of cash payments it has been proved upon the evidence of all the witnesses who have been examined, that never has there been a single instance in which the paper of the Bank of Ireland was subject to discredit; and the best proof of this is, that in 1836, when the pressure was most severe on all the other banks, when all, except three, had to apply for assistance to the Bank of Ireland, and when they had, at the same time, to import a million and a half of specie from this country, the Bank of Ireland was only required to pay 20,000l. in exchange for its own paper, and that at a period when it had advanced 200,000l. in aid of the other banks. This is a strong proof that the Bank of Ireland has never been subjected to any discredit whatever.

I shall now proceed to explain the nature of the agreement which I propose to make between the Government and the bank; and, in bringing it before the House, I beg to say, that I have not felt myself at liberty to contract any engagement with the Bank of Ireland, but have left the subject perfectly free till I had submitted it to the consideration of Parliament, thinking that it would be more respectful to the House, and more just, not to enter into any binding negociations, as had formerly been generally done, nor to conclude any agreement upon the subject, till the House had the whole matter brought before them. Therefore, in the bill which I hope to be enabled to introduce, in place of reciting an agreement already made with the Bank of Ireland, I shall leave a blank for the insertion of it, as the matter can only be brought under the consideration of the directors of the Bank of Ireland after the House has decided upon the subject. In the first instance, the time for which the agreement is proposed to be made is important. I propose an agreement, by which the charter of the Bank of Ireland shall be renewed for the same period as that to which the Bank of England charter was renewed; namely, an agreement absolute till the year 1844, and liable to be continued for an additional term of ten years; I think it of very great importance that the affairs of the two banks should be considered and disposed of at the same time. The great question of a central Bank of issue must be seriously discussed. I will not now express an opinion, not being called upon to express my opinion incidentally on the whole banking question, an opinion which would raise the question of one sole central bank of issue, regulated by sound and defined laws, and restrained within positive limits, as to its action upon the circulation and the exchanges, but the House will feel this to be one of the most important questions that can possibly be considered in Parliament; I will not, as I said before, express any opinion upon this question, but supposing that the House should be called upon in the year 1844 to affirm an opinion on this subject, it would be unwise and inexpedient to tie up the hands of Parliament, with respect to the Bank of Ireland, and thus prevent them from applying cotemporaneously to Ireland whatever principles were adopted in England for the improvement of the banking system. I, therefore, propose, upon grounds which I hope will be clear and satisfactory to the House and the public, to make the period of the renewal of the charter to the Bank of Ireland the same as that of the Bank of England. Next, as to the limits within which I proposed to continue the exclusive right of issue, secured by the Bank of Ireland charter. Upon this subject I am fully aware that I have the misfortune of differing from many of my countrymen. Between myself and the Bank of Ireland individually there exist no peculiar interest. I can feel no interest whatever in that corporation, except so far as it is connected with the public service. I am aware that the proposition I am about to make will be objected to by very many of those Gentlemen who are in the habit of supporting the present Government. I am aware, that it will be unpopular to a certain extent, but unpopular, I believe, because it is mistaken and misunderstood. But making this proposition with a knowledge of the opposition of my friends, it is at least a pledge that I make it with sincerity; and I may appeal to those hon. Gentlemen who may differ from me, whether a different course would not be more agreeable to my own wishes, if whether it would not have been much more convenient if I could have acceded to the strongly expressed wishes of many Gentlemen; but believing, as I do, that it is not the interest of the Government only, nor the interest of the banks merely, but the interests of the whole commercial community which are involved in this question, I am prepared to hazard any opposition, or misinterpretation, or the loss of that support with which I am threatened, in the pursuit of an object which I believe a right one, and having performed my duty, I will leave the matter to the decision of the House. I am therefore not prepared to propose any alteration in the circle within which the monopoly of issue now exists. I will tell the House why I will not do so. I will assume that the monopoly of an exclusive issue within the metropolis is absolutely necessary for the security of the circulation of Ireland. If that be conceded, there must be a circle drawn somewhere without Dublin, as the limit of this exclusive Where is that circle to be? I will ask, whether any alteration of the circle would give satisfaction, if it involved the exclusion of the town of Drogheda from the metropolitan circle? Now let me explain what the effect of that exclusion would be. I am not now arguing with those who contend for a free trade in banking; they would be opposed to any restriction; I am addressing myself to those who think that there ought to be an exclusive issue of notes in Dublin, and who yet doubt whether that exclusive issue could not be preserved while giving a free trade of making money to Drogheda. Drogheda is distant between twenty-five and thirty miles from Dublin, and if the House allows a joint-stock bank of issue to be established there, how can they hope to preserve the exclusive issue for Dublin in the hands of the Bank of Ireland. If there were a bank of issue at Drogheda, with railway and other rapid conveyances, nothing on earth could prevent any non- issuing bank, or merchant, or trader in Dublin from at once going to that bank and obtaining 50,000l., or any other sum, in promissory notes, returning to Dublin, issuing them there, and thus breaking down the monopoly of the issue in Dublin. It is utterly impossible to preserve an exclusive circulation within the metropolitan circle if Parliament allows the power of making money to exist within twenty-five or thirty miles of Dublin. I cannot, therefore, yield on that point.

I shall now proceed to state the pecuniary terms of the arrangement which I propose to carry into effect. On a former occasion when we discussed this subject, my hon. Friend, the Member for Kilkenny, reproached me with the amount of money which the Bank of Ireland received from the public. What, then, do they receive? There is a capital sum of 1,015,000l., for which the public pay five per cent.; there is also a capital of 1,615,000l., for which the public pay four cent.; in other words, for the use of a capital of 2,630,000l. the public pay an annual sum of 115,000l. If the two sums were equally balanced, the rate of charge would be somewhat less than 4½ per cent. [Mr. O'Connell: 4l. 7s. 6d.] Nothing can be more obvious than that this charge; is excessive. I propose in the bill I ask leave to introduce, in lieu of that rate of 4l. 7s. 6d., to reduce the charge of this debt to 3½ per cent., which will effect a considerable saving to the public, to the extent of about 23,000l. per annum. Perhaps, it might be said, the sum they receive is still too much. [Mr. Hume: hear.] Is it? Will hon. Gentlemen secure me, if I go into the market to-morrow, that I shall be able to pay off nearly 3,000,000l., considering the present value of money, upon such advantageous terms? Let hon. Gentlemen compare my operations under the most favourable circumstances—let them look, for instance, at the price I paid for the West-India loan, and they must agree with me that the present arrangement will be most advantageous for the public. But I have a right also to take into the account the services which the Bank of Ireland render. The Bank of Ireland execute the whole expense of our funded operations in Ireland without charge to the public. The Bank of England, on the last renewal of the charter, made a reduction of 120,000l. in its annual charge, but we still pay a con- siderable sum for the management of our affairs to that corporation. The whole of of the Government business in Ireland, however, is transacted by the Bank of Ireland without any charge whatever; although, in addition to the operations conducted by the Bank of England, the Bank of Ireland also remits the revenue from the provinces to Dublin, from Dublin to London.

Mr. O'Connell

inquired what amount of expense was occasioned to the Bank of Ireland by the management of the public debt?

The Chancellor of the Exchequer

The Bank of Ireland employ an establishment of forty-two persons, at salaries in one department of 17,000l. per annum, and in another at 7,000l.; so that the expense amounts to between 20,000l. and 30,000l., independent of the charge paid for remittances. [Mr. O'Connell: What is the state of the balances?] In former times, the balances of public money in the Bank were very considerable. In 1814 and 1815, when at the maximum, they amounted to upwards of 2,100,000l., but of late years, since the establishment of the new system of exchequer, in which the object of Government was to prevent any accumulation of balances, and to bring all public money to account with as great rapidity as possible, the balances have been reduced more than one-half. In 1814 they amounted, as I have stated, to 2,100,000l.; in 1815, to 2,066,000l.; 1837, to 933,000l.; and in 1838, to 977,000l. There is another transaction which I must bring under the consideration of the house. Hon Members are aware, that a short time since a sum of 900,000l. was raised by Exchequer-bills for the payment of Irish tithes. They were advanced as a loan, and the terms of the Act of Parliament prescribed repayment. I and the other Members of the Government contended at the time that it was but just the loan should be repaid; but the House, of its own generosity, notwithstanding the resistance of the Government, thought proper to remit the whole. But those Exchequer-bills remain outstanding. By the conditions of the Act, the Bank of Ireland is authorized to make advances on them; the Bank of Ireland now holds the Exchequer-bills; they have not entered into the market. I, therefore, propose, as part of the arrangement, to take a power to fund the amount of Exchequer-bills, by creating stock to the amount of their value transferring it to the Bank of Ireland, the effect of this would be to cancel that amount of the unfunded debt without any expense or payment of premium on the Exchequer-bills. This would obviously be an advantageous arrangement for the public.

I have now stated the nature of the transaction between the Bank of Ireland and the Government; but a question as to the pecuniary arrangement still remains. Under an old Act of Parliament, an annual sum of 2,000l. was charged on the Bank of Ireland towards the payment of certain offices of the Court of Chancery; but as these offices have since been abolished, I propose to relieve the Bank henceforward from that payment. It may be interesting to the House to know, in passing, that, the Bank of Ireland, to its great merit, has taken such pains in the improvement of its notes as a medium of circulation, that forgery is scarcely known; within four years, notwithstanding the very large circulation of the Bank of Ireland, losses by the forgery of its notes have not exceeded 754l.

Having stared the arrangement I propose to make with the Bank of Ireland, I come now in conclusion to what is by far the most gratifying part of the duty assigned to me. The plan I propose would be accompanied by measures tending greatly to the relief of the general bank mg interest of Ireland. Great as were the casualties of 1836, and great as was the proved misconduct of the agricultural and commercial Bank of Ireland, the pressure on the banks at that period has afforded the best possible evidence of the solidity of the principle of joint-stock banks, when well-managed. No system has ever been brought to a more severe trial than the system of joint-stock banks in Ireland in 1836; and the experience of that period has undeniably proved, that if conducted prudentially, and managed by men of business, the system is capable of the most useful application. Having felt myself compelled to retain for the Bank of Ireland, within the metropolitan circle, certain privileges, the extension of which I feel would be inconsistent and irreconcileable with the public interests, it has been my duty to consider whether certain other benefits could not be cotemporaneously given to joint-stock banks in Ireland. The non-issuing banks in Ireland are now sub- ject to great disadvantages. They have not a power of appointing, like other joint-stock banks, a person through whom to sue and be sued; they have not the power of registering their shareholders, and are driven to appoint trustees for the conduct of their business. I propose that they shall have all those privileges. They will stand in Dublin perfectly free to receive deposits, to take accounts, and conduct business, only they will not be allowed to issue promissory notes payable on demand. Next, as to the joint-stock banks of issue. At present, under a species of connivance or sufferance, they may have houses of business in Dublin; I propose that Parliament shall now grant to them the right to establish houses in Dublin for the regulation of their affairs, and the conduct of their business. I propose to give them further, the power of drawing and accepting bills, and engaging in that respect in the business of remittance and exchange; but in order to preserve exclusive issue in the metropolis, I must place some limit upon that power. With the view, therefore, whilst giving the full means of issuing bills of exchange for the purpose of remittance, of doing so in a manner which could not interfere with the circulation, the limit I propose is 10l. in value, and ten days to run. I intend to impose on the bank of Ireland the obligation of making a return of its liabilities and assets in the manner prescribed to the Bank of England. I think it would be very creditable to the other great banks of circulation in Ireland to make similar returns, but at the present moment, not being prepared to go into the general law for the regulation of joint-stock banks, I do not think it would be fair to impose that on the joint-stock banks of Ireland, without at the same time imposing it on the joint-stock banks of England. But as we are preserving for a certain time the exclusive privilege of issue to the bank of Ireland, the House has a right to require from that establishment some in. formation with respect to its transactions. Let it not be said that the results of these measures will be to keep up the monopoly of banking business. With the exception of the restriction of issue within the metropolitan district, banking in Ireland will be entirely free. Of all countries, Ireland is the last to be trifled with as to banking accommodation. No country has suffered so severely or to such an extent from bad systems of banking, and the poorer classes, the small farmers invariably, are the chief sufferers. If Parliament does anything to excite speculation, or encourage over-issue, the most fatal consequences must be the result. I have seen, under the old system, notes in Ireland issued of so low a value as 1s. 6d., 3d., and even 1½d.; I have seen checks unaccepted, and yet in circulation through the country; I have seen notes payable so many days after date without a date; and notes payable at sight without acceptance. This led, of course, to the absolute ruin of the poorer classes. If any one refers to the evidence upon this subject—especially in connexion with the Provident Bank, established by Mr. Mooney, the Southern Bank, and the whole proceedings of the Agricultural and Commercial Bank of Ireland—he will find the dangerous state of things I describe is not confined to the former system. Do not let it be said that security of ultimale payment is every thing; it is not a universal panacea; mismanagement must be guarded against. Though banks may ultimately pay 20s. in the pound, its customers may be ruined by delay of payment. Nothing will tend more to the revival of the old system than allowing within the metropolitan circle an unlimited competition of paper money. I know that it is popular to say, "Give us freedom of trade—we want no monopoly—all we demand is competition." That, in my opinion, is not a sound way of treating the question; that will not, in my opinion, lead to a sound system of banking. When I show what has been the effect of competition in banking in Ireland—when I show that in the metropolitan district there has been no practical disadvantage felt in consequence of the present system—when I show that competition will affect the circulation of a bank which hitherto has never been discredited—and when I likewise show, that unlimited competition has formerly led to speculation and over-trading, I think that I have shown sufficient to prove, that the adoption of such an unrestricted mode of banking would hazard the security of all commercial transactions in Ireland. I have already stated what my first resolution is. I will now state the substance of my second. I propose, under provision similar to those contained in the Savings-banks Act, to give stock to the Bank of Ireland for the Exchequer-bills it holds at the average price of the quarterly purchases for the last quarter. I conceive, that without any derangement of the money-market I can give to the Bank of Ireland for the 900,000l. of Exchequer-bills which it now holds, a proportional quantity of stock, calculating it at the average price of stocks for the last quarter. I believe that I have now made all the observations which I deem necessary on the subject, and I shall, therefore, conclude by moving my first resolution:— That it is expedient to continue for a limited period to the Governors and Company of the Bank of Ireland certain of the privileges now vested by law in that corporation, subject to such conditions as may be provided by any act to be passed for the purpose in the present Session of Parliament. I will also read my second resolution, which is:— That the Governor and Company of the Bank of Ireland shall be entitled for all Exchequer-bills (being bills issued in pursuance of two acts for the relief of the owners of tithes, and for abolishing compositions for tithes in Ireland, and not exceeding in the whole 900,000l.) which shall be delivered up by them to be cancelled, to receive for the same, and for the interest due thereon, such an amount of 3l. per cent. Consolidated or Reduced Annuities, as the said Exchequer-bills and interest would have purchased if the same had been applied in the purchase of such annuities, estimated at the quarterly average price at which the said Annuities might have been purchased in the quarter in which the said Exchequer-bills shall be delivered up to be cancelled.

Mr. Hume

would not address himself to the latter resolution, unless the Committee agreed to the first: for if the Committee agreed to the first, which he thought that it ought not to do, a better occasion than the present would be offered him hereafter for discussing the second. He should address himself to the subject generally which the right hon. Gentleman had brought before the Committee; and he should commence by stating that he had not heard any, the slightest reason why he should agree to this first resolution. He agreed, however, with the right hon. Gentleman—that the subject was of great importance, not only to the people of Ireland, but also to the people of England; and he complained that being, as it undoubtedly was, a subject of great importance, it had, after an inquiry protracted over the long space of three years, been brought on at the very last period of the Session. He complained of it, because having trusted in the representation that it would be brought in soon after the meeting of Parliament, he had been deluded into suffering the subject to be postponed till now, when it was almost too late to deal effectually with it. With respect to the Irish joint-stock banks, he thought that they had good ground for complaining that her Majesty's Ministers had proceeded in this very dilatory manner. He held in his hand a copy of the correspondence which had taken place between Lord Melbourne and a committee of joint-stock banks on this subject. That committee had waited upon Lord Melbourne in November, 1838, for the purpose of ascertaining from him what measures he intended to take with respect to the Bank of Ireland. That committee reported, that from Lord Melbourne no answer whatever could then be obtained. In January, 1839, the same committee addressed a letter to her Majesty's Government, pressing it to do something upon the subject, and to inform them what that something was to be. To that letter no answer was returned. On the 30th of April, 1839, the same Committee addressed another letter with the same request to her Majesty's Government, but to the letter also no answer was returned. On the 17th of June the same committee addressed to the same parties a similar letter; and that letter led to an interview between Lord Melbourne and the parties, in which the leading features of the present plan were communicated to them. Besides the inconvenience occasioned to the parties most interested in this matter by this delay, he could show that it had placed the country in the position of being obliged now to fund this loan of 900,000l., which had been referred to at a great disadvantage. This would be self-evident when he stated that in January stock was at 101½, whereas it was now at 92, leaving a clear loss of the difference between these two prices, multiplied by the amount required to be funded. The right hon. Gentleman had not stated one word to show why the system which had operated so beneficially in Scotland should not be introduced into Ireland. No less than six different modes of regulating the circulating medium existed in the United Kingdom; and the distress and difficulty arising from our monetary system were caused by the monopolies which were given to particular parties, and which enabled them to disturb the circulation of the country. Instead of being the regulator of the cur- rency, the Bank of England produced by its own operations the principal evils attendant upon our monetary system. The Bank of Ireland was likewise a cause of the disturbed state of the currency, and therefore he wished to see it removed. Not a year passed since 1797, during which a committee had not sat, on some question raised with regard to our system of banking. In France, however, the National Convention had fixed the standard in 1791, by making the currency metallic, without prohibiting paper in aid, provided it was truly represented by bullion; the subject had from that period never once been discussed in the Chamber of Deputies, or canvassed in a single pamphlet. It was impossible to contrast the uniform and steady state of the currency in that kingdom with our fluctuations, and the losses entailed by them, and not come to the conclusion that the system on which we acted was a faulty one. When he declared himself anxious for free trade in banking, he wished to guard himself against possible misrepresentation. No man was more anxious for a metallic standard than he was. No man more dreaded depreciation of the currency, and no one had exerted himself more in that House and out of it to maintain the public credit by securing a gold currency. He contended (and he never hesitated to declare his opinion when he thought the expression of it called for) that this country would be better off if it had none but a metallic currency. By such a change the working classes and the mass of the people would be saved from the sufferings inflicted upon them by the fluctuations in the currency. He was willing, however, so far to modify that opinion as to support the principle of a paper in aid of a gold currency without depreciation. The right hon. Gentleman proposed to continue the present monopoly of the Bank of Ireland. In making that proposition, the right hon. Gentleman had proposed to prove the successful working of that system, and to show that there could be no security to the country against an over-issue of paper in the Dublin district, if the issue were not confined to one bank, and that bank the Bank of Ireland. He had expected that the right hon. Gentleman would have favoured the Committee with some reasons to prove the necessity of his present proposition, but he had expected them in vain. He had expected that the right hon. Gentleman would have shown some reason for his opinion that a bank, which he allowed to issue notes ad libitum at Belfast, and which he asserted could issue them at Belfast without danger, could not be allowed to issue them in the same manner at Dublin. He had not heard from the right hon. Gentleman a single argument to show that the power of issue would be exercised by it more injuriously within than without the metropolitan circle. When he looked to what had been the conduct of the Bank of Ireland, he found that it had not been so steady as it ought to have been. What was the advantage supposed to be derived from that bank in comparison with joint-stock banks? Why, that it would provide against a commercial crisis. But he contended that a commercial crisis bad been caused by the conduct of the Bank of Ireland. When the right hon. Gentleman vented his indignation against Mr. Callaghan, because he did not know that the Bank of England had raised its interest, what would he say when he told him that the Bank of Ireland did not know that the Bank of England had raised its interest? With securities amounting to 6,883,000l., liable to be called for, having issued 1,500,000l. in notes, and 2,800,000l. deposits, they had only 887,000l. of bullion to meet demands. Was a proportion of one to eight a right proportion. The Bank of England said one to three. Yet for three years they went on reducing their bullion, till, in a year of pressure, it amounted to only 887,000l. So much for their being prepared with gold to sustain credit. When the difficulty arose, what did the Bank of England do? It sent 700,000 sovereigns. What did the other bank do? It did not refuse to take Bank of England notes, but it refused to take bills of the best class; and if the right hon. Gentleman looked at the amount of discounts, he would find that the accommodation given to the public was not what it ought to be. They discounted more bills in 1808 than in 1836. He rested the whole question on this—could there be an over-issue of paper? Could it be, in a free state of banking, as in Scotland, that one bank could issue more money than the circumstances of the country required? A banker at Aberdeen undoubtedly might issue 50,000l. of notes, which might go to Edinburgh; but in a few days they would return, if there was no want of them. The quantity of paper which could be maintained at any time depended on the state of commerce, being at one time greater, and at another less; but if the notes were not exchangeable into bullion, no banker, in a free state of banking, could keep out a greater quantity than the circumstances of the country required. The error of the Bank of England was, that they did not attend to the effects of over-issue till they saw the exchanges brought against this country, and the bullion going abroad. There was no such thing as this in Scotland; if there were an over-issue there, in a few days the notes were returned to them, and they would have to pay them in bullion at a great loss. So it should be in England and Ireland, and it was because he wanted to see it so that he desired the monopoly to be reduced. The difference between the free banking system of Scotland and the monopolies in England and Ireland was the same as between freemen and slaves. If the latter countries were as free as Scotland in this respect, no over-issue would take place. With regard to over-issue, he would read to the right hon. Gentleman the answers of one or two witnesses before the committees. Mr. Horsley Palmer, in his evidence, in 1832, being asked what he meant by "over-issue," said it arose from excess of prices. It is clear," he said, "that bankers only legitimately issued as a demand arose in the prices of a country; but prices may be above the relative value of the country, and in that case an over-issue may exist. Mr. Gibbons, who was connected with the Birmingham and other banks, was asked, Suppose there was an issue to excess, what would be the consequence? He answered, It would be returned to the bank. The right hon. Gentleman said, there would be an over-issue in Ireland; he (Mr. Hume) said, then the notes would return to the Bank. Mr. S. Gurney said, that over-issue could not be effected by any acts of a country bank; and his (Mr. Hume's) opinion was, that the power to produce such an effect was generated by the monopoly given to the banks of England and Ireland. There was another circumstance which he must remark. It was well known, that in 1826, a correspondence took place between Lord Liverpool and the Bank of England, when it was thought necessary that the monopoly of the Bank of England should be relaxed—a measure of which the right hon. Gentleman himself had been a strong advocate, though now he refused to reduce the monopoly of the Bank of Ireland, What did Lord Liverpool say? When the Bank proposed a continuance of this monopoly, he answered— With regard to the extension of the term of your exclusive privileges, I must observe that Parliament will never agree to it; such privileges are out of fashion, and how could the Bank expect that their exclusive privileges would be renewed? He considered it a great misfortune to the country that Lord Liverpool did not live to carry out this doctrine. But did not the same observation apply to the Bank of Ireland? Were not such privileges still out of fashion? Lord Liverpool had said, that there was no reason why the Bank of England should look at the admission of free banking with dismay; and he said the same with respect to the Bank of Ireland. He thought it had been a serious evil that the Government should have renewed the monopoly of the Bank of England; but if they had committed one evil, let them not commit another, by renewing the monopoly of the Bank of Ireland. But the right hon. Gentleman talked of expediency. He left it to the House to judge whether he had adduced a single instance to prove the expediency of continuing the monopoly. His reasoning was founded on erroneous principles; it afforded no argument whatever in favour of its continuance. The right hon. Gentleman had spoken of the capital of Scotland; but he was mistaken as to its amount. The capital paid up of the twelve great banks of Scotland amounted to 8,300,000l. and no more, and the deposits in the banks amounted to 17,000,000l.; so that the banks of Scotland were rich, not in amount of capital, but of credit, for the capital of the Bank of Ireland was between 7,000,000l. and 8,000,000l. The confidence reposed in the banks of Scotland arose from the prudence of their conduct; and if they exceeded in their issues the fair demand, their paper would be thrown in upon them. Let it be the same in Ireland, and the right hon. Gentleman would not say that the riches of Scotland had created the banks, but that the banks had tended to create riches in Scotland. In all the panics he considered the Banks of England and Ireland to have been the disturbing parties; they had themselves led to all the ups and downs which had been witnessed in both countries. But give to Ireland the benefit of a free trade in banking the same as Scotland enjoyed, let Ireland have nothing to do with exchanges, but be placed on the same footing as Scotland, and he was satisfied the same beneficial results would take place. Why should any man in Dublin, desiring to send money to England, be prevented sending it by a check or bill on London, and yet this was an advantage of which the people of Ireland were deprived by the monopoly which it was now sought to continue. The whole system had been to exclude capital from Ireland, and to impede and harass her commercial transactions. The towns of Drogheda, Newry, and Dundalk, had not the advantages enjoyed by the people of Scotland, and he was at a loss to know why the good management of the northern banks, by which those establishments had gained the confidence of the public, and raised the prices of their shares, should not be extended to the towns in the vicinity of Dublin. He had listened with attention to the melancholy details of the occurrences which had taken place in 1836, but he held that this case was not applicable. The right hon. Gentleman had found fault with the evidence of Mr. Callaghan in reference to his statement as to what the Bank of Ireland ought to have done; but if he had been examined before the Committee, he should have stated in much stronger language the deviations from all the rules of banking of which the Bank of Ireland had been guilty. Mr. Callaghan had correctly stated, that the banker who held assets for circulation, and held deposits, ought not to lay up his money in Government securities; they had been shown by the evidence of 1832 to be the worst and most unavailable securities. When the right hon. Gentleman laughed at the recommendation of the Bank vesting their money in commercial bills, because some of them might possibly be dishonoured, he did so in ignorance of the effect of the evidence of 1832 upon that point; because by that evidence it was proved, that in the year 1825 commercial bills were a better resource than Government securities. The Bank of Ireland had three millions and a half of capital vested in public securities, and three millions and a half in private securities, and had only 887,000l. in bullion to meet their issues and deposits. Let a crisis come, and it would be impossible for the Bank to meet it. But all irregularities would cease the moment the trade in banking was made free. The right hon. Gentleman had said, that though he would admit of free trade in banking, yet he must protest against free trade in coining. He denied that the issuing of paper was coining. The Government issued gold; the Bank issued paper; and as long as that paper was convertible into gold, it was, and must be, held equivalent to gold. It was true that the paper might displace a portion of the gold; but that would not alter the value of the note. The note would be of equal value with gold for every national and local purpose. But, then they came to the exchanges. These were held to be the only test of the depreciation of the value of paper. If the Bank of England in August last had paid attention to the exchanges when they began to turn against this country, much of the evil now felt would have been prevented. The coining of paper (as it was called) could not be in excess. It would come back to the banks if the amount exceeded the demands of the country. On this ground it was, that he was surprised that the right hon. Gentleman should give a power to persons living beyond fifty miles of Dublin to issue paper, and yet refuse it to those who resided within that distance. Why should they continue this plague spot upon the commercial spirit of Ireland? If joint-stock banks could be trusted to issue notes both in England and in Ireland, beyond the limits of fifty miles, it required to be shown why they should not be trusted to do so within that distance. He hoped the House would not adopt the resolutions proposed by the right hon. Gentleman; but on the contrary would declare that Ireland was entitled to the same measure of justice as was enjoyed by the people of Scotland. He would only say one word with respect to the plan proposed by the right hon. Gentleman. He did not think the right hon. Gentleman had acted wisely in the course he had pursued. In January, 1838, the three-and-a-half per cents were above par. He might have funded the three millions. The Bank of Ireland ought not to have any of its capital in the Government securities. The Government ought to pay the Bank, in order that it might use its capital for commercial purposes. The Bank obtained nothing equal to what it could do in the way of discount, if it possessed the whole of its capital. The bullion committee of 1819 stated, that the Bank of Ireland could not conduct its affairs properly until the whole of the money Government owed to it was repaid. A portion was subsequently paid, but the whole ought to have been paid. By the Government having paid 3½ per cent, on the debt since the termination of the charter, the country had lost 30,000l.; for the Government might have obtained the money at three per cent. He trusted to see this question taken up early next Session; but as a matter of principle—not having heard one single argument that he conceived to be sound, for continuing this monopoly to the Bank of Ireland, except it was that the charter of the Bank of England would expire in 1844—he begged to move, as an amendment to the resolutions of the right hon. Gentleman—"That the exclusive privileges enjoyed by the Bank of Ireland shall cease so soon as the notice required by law can be given."

Mr. Clay

did not think his hon. Friend had laid sufficient grounds to induce the House to agree to his amendment. With regard to the peculiar condition of Ireland as bearing on this question, he did not think it necessary to trouble the Committee with more than one or two observations: first, because the Chancellor of the Exchequer had gone into the question at great length; and, secondly, because this question had now become entirely a question of principle. The privileges enjoyed by the Bank of Ireland would cease in 1844, the same as those possessed by the Bank of England; it would then depend upon the Parliament to determine what system should be permanently established. The question now before the House was as between what his hon. Friend called the system of free trade in banking—that was to say, in issuing of notes—and the best system of control which it was possible the wisdom of Parliament could devise. As regarded the present condition of Ireland in relation to this question, he would only make two observations; first, that there was no evidence given before the Committee, for which he himself moved, and which he constantly attended, to show that there was any want of fair banking accommodation in Dublin to persons worthy to receive it, or that a man might not get a good bill discounted; and it would not be a good system under which a man could get a bad bill discounted. Again, with regard to the pernicious influence said to be occasioned by the monopoly of the Bank of Ireland within the circle of fifty miles, the town of Drogheda had been expressly alluded to. It had been said, that it was especially hard to that town, that it should be excluded from the benefits of the free trade in banking which was enjoyed by other towns that were out of the circle of fifty miles. Had that town suffered by this deprivation? In Tuesday's paper there was a report of a meeting held in Dublin last Thursday, for the purpose of passing resolutions adverse to the plan of his right hon. Friend, and what was said with regard to the town of Drogheda? Let us," said one of the speakers, "look at the town of Drogheda. There the genuine effect of national enterprise manifests itself. To that town one may look with pleasure to what an intelligent and industrious population can effect. Several flax and cotton mills have been built there within the last seven years, some by joint-stock companies, others by individuals, and they are all doing well, and are full of work. Then, with a species of logic peculiar to Irishmen, the speaker went on to argue why the present was a very bad system, and why some other should not be tried. But this statement was, at all events, evidence that Drogheda was not decaying. His hon. Fried had, in terms forcible and clear, stated the principle which he thought should regulate the monetary system of this country. He had said, in so many words, that in the system of free trade on banking there could be no over issue of paper; and he had further said, that the notes were exchangeable, at the will of the holder, into bullion. He had, for the maintenance of these propositions, relied on the evidence of two witnesses. First, he quoted the evidence of Mr. Gurney; and secondly, he referred to the case of Scotland. What did Mr. Gurney say? He said, there might be and over issue by the Bank of England, but no over issue by the joint-stock banks. But had the reason been stated by his hon. Friend, why there could not now be, for any length of time, a great over issue? It was curious enough, because the very instance adduced by Mr. Gurney showed the advantage of the present system. The reason why there could not now be a very great excess in the issues by private of joint-stock banks was, because their notes must always be liquidated in the currency—that was to say, the notes of the Bank of England. If they issued notes in excess, they would be called upon to pay them in a sound currency. There might, however, for a time, because it was the foreign exchanges only that could check their over issues. Next, his hon. Friend referred to Scotland, and beyond all doubt, he had referred to the only instance which could be given in defence of the system of free-trade in banking. It had always been felt by all writers and reasoners upon this subject, that the system of banking in Scotland was a great anomaly, not reducible to any known rules. There were banks in Scotland with four or five partners; others with a great many; some with a limited, others with an unlimited liability. Therefore the success of Scotch banking might be used with as much justice as an argument in favour of any other system of banking, as it could be in favour of the principle advocated by his hon. Friend. The facts with regard to Scotland were, that nearly a hundred years ago, three chartered banks were established. They were very sound and solvent banks, but were conducted without any precise rules. When other banks were established, they were obliged to conform to the course pursued by these chartered banks, and the result was, that a species of strict police was formed among all the banks of Scotland. The circumstance that was wonderful in this was, that such a system should have grown up to its present state. It had, however, grown up, and was an exception to all rule, and was by no means a safe instance to rely upon. Still he was somewhat sceptical as to all the advantages that had been attributed to it. His hon. Friend was not correct in saying, that there was no instance of failure of any bank in Scotland except the bank in Ayrshire; because, since the failure of that bank, there had been five or six other failures, though the system generally had certainly been successful. Still that system was very stringent and severe upon the community. Though the banks did not themselves break, yet they occasionally caused considerable breakings among their clients; because they occasionally put on the screw somewhat unrelentingly in order to save themselves. But this Scotch system of banking was the solitary instance that could be adduced in defence of the system advocated by his hon. Friend. All other experience was against it. There was no system of free trade in banking that the world afforded an evidence of that did not go directly in the very teeth of that system. The reason was apparent. Where there were many banks issuing in competition one with the other, there would be a natural tendency to over issue, from a disposition to give more accommodation in times of prosperity in order to gain business. Where there was nothing to check that tendency—where there was not one great regulator of issues of the currency—it was absolutely certain that there would be an over issue. The check which his hon. Friend relied upon was no check at all; for, where all the banks issued simultaneously, the relations between the demand and the amount of the issues, by a return of the notes, could not be preserved. His hon. Friend had said, that there was no instance but that of Scotland where free trade in banking existed. It was remarkable that he should have overlooked that country where the system of free trade in banking had existed for the longest period—he meant the United States of America. The system not only existed there in its most prominent form, but it had been recently tried under those very circumstances of excellence upon which his hon. Friend relied; for he relied upon the joint-stock principle. That was the only principle adopted in America. There were no private banks there what ever. The system there observed was incomparably better than that pursued in this country, and, with some slight alterations, was well worth adoption, as far as mere banking was concerned. The same system extended over the whole of the Union; and he would say, that without meaning any disparagement to the banks in England, the banks of America were superior in every respect. They were better ordered, they had better regulations, they comprehended more of the wealth, the intelligence, and the respectability of the country, in proportion to the whole population, than the banks in England. Yet they afforded an instance, which this country would be insane not to profit by, of the truth of this proposition—that to no banks, private or joint-stock—to no association could the whole and sole control of the issue of paper money be safely entrusted. The history of the free trade system in banking in America was too pregnant with a moral to allow of its being passed over in silence. The misfortunes of the American banks, immediately after the war terminated in 1814, must be familiarly known to every one. In 1814 all the banks in America except at Massachusetts, stopped payment. There ex- isted for many months the most wretched state of uncertainty, variation, and doubt as to the value of the paper currency. Bank paper in one place was at ten per cent discount, in another twenty per cent., and in another thirty per cent discount, and so on. In 1816 the pressure of these evils led to the establishment of the United States Bank, having a charter granted to it for twenty years, with a capital of twenty-five millions of dollars; and, without being absolutely a government establishment, it was so far so, that it became the central bank of America and the United State Government became a shareholder to the extent of one-fifth of its capital; that was was to say, the Government took shares to the amount of seven millions out of the thirty-five millions of dollars. It was allowed by all the best authorities on American finances that that bank was mainly instrumental in restoring a sound currency in America. He alluded particularly to one who was well known as the most able American financier, and whose work on the subject of its finances was regarded as of the highest authority; he meant Mr. Gallatin. That gentleman attributed the sound currency of America to the influence of that bank. But be that as it might, he would now come to facts. In 1820 (four years after the United States Bank was established) there were 308 banks in the United States. In 1830, the increase was twelve only; there being then 320 banks, having a circulation of sixty-one millions of dollars. Very shortly after the year 1830 began that quarrel between the President of the United States—then General Jackson—and since followed up by Mr. Van Buren, of which the world at large must be cognizant. The President having quarrelled with the bank, the quarrel soon assumed a political aspect, parties in America espousing one side or the other. The result was, that Government refused to renew the charter of the United States Bank, and demanded to be repaid their portion of the capital. They took away the Government deposits and distributed them among a number of the State's banks, which hence got the name of the Debt Banks. The central guide for banking in America was therefore at an end. Their charter expired in 1836. It was clear that between 1830 and 1834 the charter would not be renewed. What was the number of banks in 1834? The banks had in 1834 in- creased to 506, having a circulation of 94,000,000 of dollars—an increase of fifty per cent. in four years. In 1836 the banks increased to 567, with a circulation of 140,000,000. In 1837, namely, in one single year, the number of banks had increased to 677, with a circulation of 187,000,000 of dollars. Here, then, was free trade in banking in its best form, and under which form his hon. Friend had said it was impossible there should be an over-issue or an excess of paper money. But his hon. Friend not only relied on the joint-stock system, but on the power which the holders of bank paper had of changing their notes into specie. His hon. Friend considered every man bound by law to receive specie in exchange for paper, and that that right would operate as a check upon excessive issues. But in America, where the system of banking was perfectly free, there was this peculiar feature in the system, that the issuers of notes were entitled to decline paying their notes on demand, by paying 24 per cent. interest to the holders during the period that they refused so to pay their notes of specie. Instead, then, of allowing their notes to be payable on demand in gold, the American Government had, on the contrary, taken care to fence the change of their notes into specie with various safeguards and penalties. There had been a most extensive over-issue of paper money in that country, the inevitable result of such a system. In the memorable period from 1834 to 1837, there had been an increase in the paper currency of no less than 95 per cent.; the consequences are well known; every bank in the United States stopped payment. Such was the happy state of things resulting from that system of paper currency. That was in the period from January 1834, to January 1837. Let the House next consider what was the state of the currency and monetary interest in England in that period, subject to the wretched system of the Bank of England. In January 1834, the current paper of the Bank of England was 17,469,000l.; private and joint-stock banks 10,152,104l.—total issue of notes 27,621,104l. In January, 1837, the issue of the Bank of England was 17,998,000l.; private and joint-stock banks, 12,011,697l.—total issue of notes in 1837, 30,009,697l., which gave an increase of 12 per cent. on the issue of 1834. Therefore while in that country, under the system advocated by his hon. Friend, the paper currency had increased 95 per cent., and during that period the whole of their banks had stopped payment, the increase was only 12 per cent., and the same ruinous disturbances of commercial interests and checks to public credit bad not been felt. He did not say that that system was the best which could possibly be devised, or that the Bank of England conducted their business always in that way which he thought most conducive to the public interests; but he said that with all their faults the monetary system under which we lived was upon the whole the safest and best calculated for the support of public credit. Let him next consider what had been stated by the highest authority in America on the subject. On the 4th of September, 1837, being four or five weeks after the universal stoppage of payments to which he had already alluded, an extraordinary meeting of Congress was called, at which the President delivered a message, from which he would read the following extract:— The history of trade in the United States for the last three or four years affords the most convincing evidence that our present condition is chiefly to be attributed to over action in all the departments of business—an over-action deriving, perhaps, its first impulse from antecedent causes, but stimulated to its destructive consequences by excessive issues of bank paper, and by other facilities for the acquisition and enlargement of credit. …. In view of these facts it would seem impossible for sincere inquirers after truth to resist the conviction that the causes of the revulsion in both countries have been substantially the same. Two nations, the most commercial in the world, enjoying but recently the highest degree of apparent prosperity, are suddenly without any great national calamity, arrested in their career, and plunged into embarrassment and distress. In both countries we have witnessed the same redundancy of paper money, and other facilities of credit—the same spirit of speculation—the same partial successes—the same difficulties and reverses, and at length nearly the same overwhelming catastrophe. Such, then, was the opinion of the highest executive authority in the United States, distinctly attributing their condition to excessive issues of paper money. What were the sentiments of the principal men of business? A meeting of business men, from the different States, in Philadelphia, took place on the 15th of November of the same year, who gave the following account of their condition:— Possessing a wide and fertile country, a climate adapted to the production of everything which contributes to the health or happiness of man, with an enterprising and intelligent population, with the friendship of all nations, the bounties of the earth and the smiles of heaven, it would seem that we must be prosperous and happy above all people; but when we inquire into the actual condition of the people, we discover that actual distress and gloomy forebodings have spread dismay and ruin over prospects recently so brilliant. Bankruptcy has overtaken thousands of our most worthy and enterprising men of business; our banks are unable to meet their engagements; instead of a sound and healthful currency we have a paper circulation, based upon promises which are not performed, or, what is still worse, a species of paper currency containing no promise to pay till after a lapse of time which will wear them to rags. The merchants are unable to pay the manufacturers; the manufacturers are unable to go on with their work; the labourers are unable to pay for bread; and the spindle and the loom and the tool of the artisan are still, and thousands who twelve months ago enjoyed a comfortable subsistence from the rewards of honest industry are now trembling on the brink of despair. He held that certain ruin would be the inevitable result of the system of free trade in banking. If there were no limitation on the issue of paper money, one of two things must eventually occur.—If it be not redeemable in specie, it would depreciate very greatly in value. That had been illustrated in England during the Bank Restriction Act, and in Russia, and generally in despotic states. In countries, again, where it was exchangeable into specie, the system must inevitably end in one universal stoppage of payment; for it was quite impossible for hankers, under such a system, to keep a sufficient amount of bullion in their coffers to enable them to meet all the demands which could come against them. If a considerable run was to take place upon such banks, as had been the case in America, it was beyond all doubt that similar results would unavoidably take place. His hon. Friend had spoken in terms of eulogy of the system of banking in France, and boasted that since 1791 they had no occasion to alter it; but his hon. Friend must be aware that the system in France was very different from this country or America. It presented a considerable contrast to the system which had been adopted in either. In France there was scarcely such a thing as a private bank at all. There were about eighty-five millions of specie in France. That was the amount of specie current, according to the most accurate calculation. The bank notes in circulation were under twelve millions, so that they had a paper currency in France of twelve millions to eighty-five millions of specie. He derived his information from the Count de Argout, the director-governor of the Bank of France. No wonder, then, that France had experienced comparatively hardly any disturbance in her monetary system, even while her soil had been occupied by foreign armies. His hon. Friend had made some other remarks well worthy of notice. He said, why not repay the Bank their capital, so as to enable them to give more accommodation, and allow a larger extent of discounts. His hon. Friend, in his opinion, had misunderstood the true nature of the trade of banking. It did not consist in lending money, but in the proper collection and re-distribution of money. The true principles of the trade of banking were to enable the banker to lend other people's money, and not his own. He, therefore, thought his hon. Friend had misapprehended the nature of the real principles of banking. He trusted that his hon. Friend would excuse him for saying that his notions of this subject proceeded on false principles altogether. Banking had really no natural connection with the issue of notes. His right hon. Friend the Chancellor of the Exchequer, however, was about to remove some very inconvenient restrictions to which the trade of banking in Ireland was subjected. In that he did well, and he should certainly support the motion of his right hon. Friend. He should do so, because he thought it would not be wise to allow a competition in the trade of money without the restraining check of one firm, superintending, central head, and also because his right hon. Friend had, wisely in his opinion, made the privileges which were to be given determinable at the same period as the privileges of the Bank of England, and placed under the disposal and in the power of Parliament the control of the circumstances attending the renewal, and also placed the whole in future upon a safe and permanent footing. He did hope by that time that the public mind would take a surer and more wise direction, and that they should cease to hear of the idea of promoting public prosperity by the mere issue of a set of bits of paper. It was the capital of the people alone that could be relied on for that purpose, and not such fictitious and unstable means, which although perhaps they might seem to be a means of strength at first must be the] means of weakness afterwards. He would say humbly for himself that he had no personal connection with any bank. He was no shareholder or partner in any concern of the kind; but he did not hesitate to say, that all the agitation which he had observed on this question had originated with bankers and persons connected with them. No one appeared for the public. It was the bankers alone who agitated the question and fought the battle with the bank. He thought the the interests of the public were distinct from both, and he had accordingly stated what he considered to be the course best calculated to support the permanent interests of the country.

Mr. O'Connell

said, the question raised by the Chancellor of the Exchequer was, whether a particular bank in Ireland should possess the unlimited privilege of issuing their own notes; so that the excellent speech they had just heard from the hon. Member for the Tower Hamlets was really against the cause which he supported. When he recollected to have heard the hon. Member argue on a former occasion that the liabilities of joint-stock banks should be limited to their subscribed capital, so that the smaller the security you have to look to the greater your safety, he did not feel surprised at the course he had adopted on this discussion. The question they had to look to was, whether they would allow all other banks to be excluded from trading within a limit of fifty miles, and whether they would allow ten counties in Ireland to be thus handed over the exclusive discretion of one particular bank. He did not think the Chancellor of the Exchequer had treated Ireland well, nor did he believe that he would have attempted to use her as he had done if he had not been aware of the strength of English prejudices, and trusted to that source for support. The right hon. Gentleman had first of all raised suspicions in the breasts of English Members, by observing that it would he requisite to find gold for Ireland, and that that gold must be sent from England to Ireland. He admitted that such would be the case. But how, would the continuance of the monopoly of the Bank of Ireland prevent it? The Bank of Ireland, on the very last occasion was obliged to apply to England for aid to the amount of 400,000l., which was an additional drain on this country. The question was, whether they would allow a monopoly to be created in Ireland. He said created, because it had in fact expired, and it would not come again into operation unless they thought fit to renew it. The right hon. Gentleman said, to be sure that it was not a monopoly, but merely a renewal of privileges. They had a free trade in banking in England, out of the limits of the Bank of England, and a free trade in Ireland out of the limit of fifty miles. What, then, was the magic in the extent of fifty miles? Let them take the case of the town of Newry, and think of its absurdity. Why the magic limit cut off one-third of that town, so that if you cross the bridge of Newry, you are in the region of free trade in banking; and if you do not, you are under the monopoly of the Bank of Ireland. What could be more absurd than to make the bridge of Newry the limit for the region of free trade in banking? Nine-tenths of the Irish Members had left town, and it was most unjust to postpone this discussion to so late a period of the Session, and to bring it forward too at a time when the price of money had greatly increased, so that the Bank of Ireland would be able to drive a much better bargain than otherwise. He could not understand how it was, that the right hon. Gentleman had fallen in love with the Bank of Ireland, but such had been his fate, and the first fruits of his affection were presented to them in this measure for renewing the privileges to the object of his passion. The Bank of Ireland had 23,000l. a-year more for the money they had lent the public, than it could have been obtained for at the market price. One portion had been obtained at five per cent. and another portion at four per cent. The Bank of Ireland had thus received 4l. 7s. 6d. per cent. for the money which could have been got at three or three-and-a-half per cent.; and yet, at this late period of the Session, this measure was brought forward. It was said by the right hon. Gentleman, that they could not compare the banking in Scotland with Ireland. But the right hon. Gentleman had not told them why. No doubt the Scotch banks had a large capital in the funds— as much as 9,000,000l., he believed—the result of more than a century of continuous enterprise and public saving. Let them look, on the other hand, at the large paid-up capital in Ireland, and they would find that the surplus saving of a century was not a larger sum in proportion to the different circumstances of the two countries. But supposing he was wrong in coming to that result, Scotland, before she had enjoyed that 100 years of successful trading, was in the same situation that Ireland is in now. Scotland has become a prosperous, great, agricultural country. Ireland, with a superior soil and climate, was one of the poorest agricultural countries. Scotland had a perfect free trade in banking. There were misfortune and poverty in the one—prosperity and riches in the other; and were not those grounds for arguing in favour of a free trade in banking in Ireland. In so far as the system had been tried in Ireland, the Chancellor of the Exchequer admitted that it had answered well, that the joint-stock banks had acted most properly. Could the Chancellor of the Exchequer say, that when the Scotch banks were first established, they were in a situation to meet any run which might be made upon them? So far from that being the case, they made their notes payable on demand, or at six months' date, at the option of the banker. That was not the case now, because by their success they had established themselves in such credit, that they were in no risk of any run, and were independent of such precautions. The case of Scotland was one neither to be trampled on nor sneered down. Of all countries in the world, Ireland was the country in which the establishment of joint-stock banks was most necessary. The treasure of the country was not allowed to settle there. It was sent away as fast as it was raised. The only way to stop that drain, and to fix the floating capital in the country, was to establish joint-stock banks. The Bank of Ireland had done nothing to entitle it to the advantages proposed to be given to it. He was not arguing for any breach of public faith. The monopoly was at an end. Would they, then, re-create it? There was a distinct pledge given, that it would not be renewed. ["Hear" from the Chancellor of the Exchequer.] The Chancellor of the Exchequer cried "hear!"—did not the right hon. Gentleman consider himself bound by the pledges of his predecessors. He said, that if they renewed this monopoly, they would break two distinct pledges which had been given to the people of Ireland. The one was direct, given by former ministers—the other indirect, by the right hon. Gentleman, by which he had held out inducements to lead them to believe that the monopoly would not be renewed by the present ministers. He alluded, in the first instance to the case of the Hibernian Bank. Two or three people, principally engaged in farming, came over to this country, and had an interview with Mr. Huskisson and Mr. Robinson, now Earl of Ripon, to whom they stated, that they intended to establish a bank in the city of Dublin, and wished to know the views of the Government as regarded the Bank of Ireland charter. Those ministers stated, that they regretted that they could not give any privilege beyond that of suing and being sued;— That the Bank of Ireland Charter, the report stated, interfered with our getting it; but they gave a distinct pledge that the Bank of Ireland Charter would not be renewed, a distinct promise to our deputation; and, had we not got that distinct promise, we would not have gone on when the difficulties were explained to us in the formation of our bank; we would have thought it useless: but we did it in the hope of better times, on the opening of the trade, even at the distant period at which we have now arrived. Thus these parties had received as direct a pledge as words could give, that the Bank of Ireland Charter would not be renewed; and the result was, that 250,000l. was subscribed for the establishment of that bank alone. So much, as regarded the pledges of former ministers. Then, as regarded the present. When he, along with a deputation, waited on the right hon. Gentleman last year, the right hon. Gentleman said he would not pledge himself; that he wished time to consider—that he would not be bound—but he asked hypothetically, if the limits of the monopoly of the Bank of Ireland were confined to ten or fifteen miles, whether they would be satisfied. The answer was, that they would. He was aware, that some persons present said, they must first consult upon the subject. That was true, but afterwards the whole depatation said they would be satisfied. On their return to Ireland, the deputation accordingly said openly, that the Chancellor of the Exchequer had agreed to put all the large towns out of the monopoly of the Bank Charter. And yet, after all that had passed,—after the expectations, not to call them by a stronger name, which the right hon. Gentleman had given, he now, at this late period of the Session, and in spite of those pledges, had determined otherwise. The right hon. Gentleman had observed, there were no petitions upon the subject. The reason was, that in consequence of what had passed between the right hon. Gentleman and the deputation, no idea was entertained until within the last fortnight that those odious privileges were intended to be renewed. In the year 1828, when the deputation he had referred to went back to Dublin, a meeting took place, with the Lord Mayor in the chair. At that meeting the resolutions were moved by the first-rate merchants in that city. An attempt was made the other day to get up another meeting; but the leading mercantile people had not courage to attend it. They were afraid to expose themselves to the anger of the Bank of Ireland, to whom they found their future interests were to be abandoned. The right hon. Gentleman quoted, in support of his views, the evidence of Mr. Callaghan and Mr. Pim, whom he treated as witnesses adverse to the Bank, although Mr. Pim had been produced before the Committee by the right hon. Gentleman himself. Indeed, the right hon. Gentleman's question on the Committee bespoke a foregone conclusion, and an intention to make out a case by leading questions. He relied on Mr. Pim's evidence to show, that the Bank of Ireland was necessary to the other Irish banks. He would read one of Mr. Pim's answers on this point. Mr. Pim was asked whether it was from England mainly that the Irish banks, in the stoppage of 1836, obtained the increased supplies which were necessary. Mr. Pim's answer was—"I should say from England solely." Yes, from England solely the money must come, notwithstanding the resources of the Bank of Ireland. The Chancellor of the Exchequer boasted of the assistance given by the Bank of Ireland to the other banks during the panic of 1836. Who brought on that panic? The evidence was conclusive that it was created by the Bank of Ireland. It was demonstrated by the fact, that the interest charged by the Bank of England was 4½ per cent., when the Bank of Ireland was charging only 3½ per cent. Could there be a more certain method of having its gold drawn away? The merchants of Liverpool found, that by sending their bills to friends in Dublin, they would save 1 per cent., and they got their bills discounted at the Bank of Ireland, instead of the Bank of England, and so drew away the gold from Ireland. This was not all. Mr. Callaghan gave another instance of the conduct of the Bank of Ireland. The Hibernian Bank was the correspondent of a Belfast banking company, a bank of great property and credit, and having a great number of branches in Ulster. The Hibernian bank paid their notes and drafts, and did their business as agents. It had a parcel of excellent bills, with not more than thirty days to run, and the Hibernian Bank sent in these bills to the Bank of Ireland, in the usual course of trade, at a time when the Bank of Ireland was discounting sixty-one day bills. The Bank did not throw them out at once, but kept them twenty-four hours, though their minutes counted for thousands of pounds, and then they refused to discount them. Was not that calculated to increase the panic? Did it not in fact create the stoppage of the Belfast bank, and if that bank had not had abundance of assets, would it not have been ruined? Yet the directors of the Bank of Ireland who had acted thus were the only magicians who could regulate the monetary system of Ireland, and preserve it from panics and convulsion. Many and many a time had the thought of the fatal Union between the two countries come painfully upon him, but never more oppressively than this night, when he looked round and saw the thin House by which this question, so vital to Ireland, was to be decided. The Chancellor of the Exchequer talked of the Bank of Ireland always meeting its engagements. How did they meet them?—by paying promises with other promises—by handing out ten small promissory notes for one large one, a mode of meeting demands which, no doubt, they would be ready to continue to the end of the chapter. The Chancellor of the Exchequer might as well refer to the foolish vengeance taken by some of the rebels, when, to spite the Bank, they lit their pipes with bank notes, and boast that the property of the bank was not lessened by such injuries. Look to the conduct of the Bank of Ireland with respect to branches! The law at one time gave the Bank the monopoly of issuing notes in every part of Ireland. From the year 1820 to 1825, when there was no other banking company, why did they not establish branches? What said the Chancellor of the Exchequer? He said, with some triumph, that the Provincial Bank had been the first to form branches. The Bank of Ireland was awakened when it found its monopoly endangered, and wherever the Provincial Bank was successful, there the Bank of Ireland planted a branch. They consulted their pecuniary interests (for which he did not condemn them), but hazarded nothing to meet the wants of the public. There was another point worthy of consideration. Compare the towns in which the joint-stock principle was in action with Dublin, which was subject to a banking monopoly—compare them with respect to their contributions to the post-office revenue at different periods, and observe at what a different rate they seemed to improve. He found, from the appendix to the report of the railway commissioners, that Waterford, where banking was free, contributed 4,726l. to the post-office revenue in 1830, and 5,500l. in 1836, showing an increase of 17 per cent. in six years. In Clonmel the increase was 19 per cent. In Belfast 25 per cent. In Cork 26 per cent., and in Limerick 27 per cent. In these towns banking was free. Look at the towns within the circle of the monopoly. In Newry there was a decrease of 3½ per cent. In Carlow the increase was only 3½ per cent. In Dundalk 13 per cent., and in Drogheda, the most flourishing town within the monopoly, 15 per cent. But the most remarkable case of all was that of Dublin, where there was a decrease of 25 per cent. Notwithstanding that it might be said to have a monopoly of the legal and banking postage, the postage of Dublin diminished in six years from 95,000l. to 70,000l. Such was the effect of the bank monopoly upon Dublin, crushing its resources, depressing its trade, and rendering it a melancholy spectacle of decay. To show the accommodation afforded by the bank, it would be enough to state, that while the amount of money available for discounts was 7,432,400l., the actual amount of their discount was only 2,500,000l. And how was this distributed? The discounts at their branches, in the trading part of the county, where there were other banks ready to give assistance, amounted to 1,450,000l., while in Dublin, where it was peculiarly necessary for them to be liberal, as there was no other bank to apply to, their discounts were only 1,198,000l. Let them relieve Ireland and above all Dublin, from the depressing influence of the present monopoly. In conclusion, the hon. and learned Member moved that the chairman do report progress.

Mr. Alderman Thompson

knew no instance of a detrimental exercise of the exclusive privileges of the Bank of Ireland within the circle of its operation. The hon. Member for Kilkenny had avowed his adherence to the principle of free trade in banking, and asked if several joint-stock banks issued too many notes, would they not return upon them? No doubt they would, but the misfortune was that when they did return, the joint-stock banks, as in the case of the Northern and Central Bank, were sometimes not able to pay them. His hon. Friend dwelt much on the Scotch system of banking as perfectly sound and safe. He thought, on the contrary, that there never was a more unsound principle than that of the Scotch Banks. If an individual could get another possessed of property to join him in a bond, a Scotch Bank would lend him capital to establish manufactures, or carry on trade. He was convinced that banking carried on to any extent upon such securities must be highly unsafe. He should give the motion his ready and cheerful support.

Sir William Somerville

rose, in the name of his constituents, to protest against the town of Drogheda being included within the circle of the Bank of Ireland monopoly. It had been stated that Drogheda had prospered under this monopoly. It was true that the town of Drogheda had prospered, but it was in spite of the monopoly, and was altogether attributable to the improvement of steam navigation. He felt bound to resist the motion of the Chancellor of the Exchequer.

Mr. Hutton

said, he disapproved as much as his hon. and learned colleague (Mr. O'Connell) did, of the present system of banking, as practised by the Bank of Ireland, and he thought that the people of Ireland had great reason to complain of the want of liberality that had been exhibited by that establishment. If they meant to deprive the Bank of Ireland of the power of issuing notes, and thus return to a sounder basis of action, he would gladly concur in the motion; but to give an unlimited power of issuing notes to every bank within a short distance of Dublin would lead to abuse. It appeared to him, also, that to go on creating a new set of vested interests would render it more difficult to deal with the mater properly at a future period.

Mr. Warburton

did not agree with his hon. Friend, the Member for Kilkenny respecting free-trade in banking, and believed it to be possible that there could be an over issue with such a trade. The hon. and learned Member for Dublin had very properly stated that there could be no over issue, provided people when they were called upon actually paid in specie. Why that was the question at issue. If they allowed a free-trade, would there by any guarantee for paying in specie? The more freedom they gave to banks of issue, the more danger was there of departing from metallic currency. He was also opposed to the motion of the Chancellor of the Exchequer. The right hon. Gentleman admitted that the renewal of the Charter to the Bank of Ireland was founded upon false principles, and that, in renewing this charter, he was breaking through those sound principles. Why, then, renew this charter at all? Why not, at least, separate those two functions of a bank of issue and one conducting the ordinary routine of business. If they were anxious to place banking upon better principles they had now an opportunity of trying the experiment upon a small scale. He thought that the hon. and learned Member for Dublin was perfectly correct in objecting to a measure of this importance being proceeded with at so late a period of the Session; and for that reason he would support the amendment.

Mr. W. S. O'Brien

could assure the Government, that the course they had taken on this subject had excited great surprise and dissatisfaction throughout Ireland. The question they had to deal with was, whether it were just to create in favour of one company advantages which they were not prepared to give to others. Justice and reason alike repudiated such a principle. He hoped the hon. Member for Kilkenny would press his amendment to a division.

Mr. Redington

contended, that no case had been made out for a renewal of the charter of the Bank. He thought, that the limited district of its monopoly was disproportionately large, as an area of fifty miles round Dublin was much greater in proportion for Ireland than sixty-five miles round London was for England.

The Chancellor of the Exchequer

would trespass upon the attention of the House only a very short time in replying. Never was the House called upon to give a more important vote; but at the same time he would remind them, that this resolution was one on which a bill was to be afterwards founded, which they would have ample opportunity of discussing in detail in its various stages. If they were to vote against the resolution, they would be deprived of the opportunity of considering the details of this very important subject. He could not help remarking, also, that those who were opposed to the existence of the monopoly of the Bank of Ireland would defeat their own object by voting, that the Chairman now report progress, because by refusing to consider this subject, they would leave the bank of Ireland as at present. He could not help observing, that the hon. Member for Bridport, who disapproved of the principles of free trade in banking, should support the hon. Member for Kilkenny, whose object was to destroy the monopoly of the Bank of Ireland, and establish a free trade in banking all over the country. The hon. Member for Kilkenny was for a free trade in banking; and his views went to this extent—that every man should have the right to make use of his capital in banking purposes as he thought proper, and issue notes to any extent, without any control beyond that of public opinion. Now he would ask, how were such views as these to be reconciled with the opinions of the hon. Member for Bridport? For his part, he, having had some personal experience in banking concerns, gave it as his decided opinion, that a great system of branch banks in Ireland could not be carried on with safety either to the shareholders or the public, if they had the power of issuing their own paper in Dublin. If such a scheme were to be attempted by the joint-stock banks, the sooner the shareholders withdrew their capital from them the better, both for themselves and the public. With respect to any charge of breach of faith on the part of the Government in this matter, as alleged by Mr. Callaghan, he denied that any promises of the kind had been made by him; and he had, moreover, applied to Lord Ripon, in reference to what had taken place at the interview with his Lordship to which Mr. Callaghan's evidence referred, and his Lordship had replied to him by letter in the following terms:— That he had no very distinct recollection of what had passed on the occasion referred to, but that there could be no doubt that he (Lord Ripon) had not, because he could not, have given any pledge as to what was not to take place till fourteen years afterwards; and further, that he recollected stating, that he did not think anything further could be given to the joint-stock banks of Ireland beyond the power of suing and being sued. This was the statement of Lord Ripon, and the promise then held out by his Lordship. This promise he was now about to fulfil. In conclusion he begged to say, that the arrangement which he now proposed for the Bank of Ireland was only for a period of four years, and that at the expiration of that period they would be able again to come to the consideration of the question, and effect such modifications in the system as the state of the currency in the empire generally might seem to require.

The House divided on the question, that the Chairman leave the chair:—Ayes 35; Noes 115: Majority 80.

The Committee again divided on the original question:—Ayes 112; Noes 36: Majority 76.

List of the AYES.
Acland, Sir T. D.	Cowper, hon. W. F.
Acland, T. D.	Craig, W. G.
Adam, Admiral	Crompton, Sir S.
Ainsworth, P.	Dalmeny, Lord
Alsager, Captain	Darby, G.
Anson, hon. Colonel	De Horsey, S. H.
Archdall, M.	Dick, Q.
Ashley, Lord	Donkin, Sir R. S.
Bannerman, A.	Douglas, Sir C. E.
Baring, F. T.	Egerton, W. T.
Barnard, E. G.	Elliot, hon. J. E.
Berkeley, hon. H.	Farnham, E. B.
Blackstone, W. S.	Ferguson, Sir R. A.
Blair, J.	Fitzroy, Lord C.
Blake, W. J.	Fremantle, Sir T.
Briscoe, J. I.	Gordon, R.
Broadley, H.	Graham, rt. hn. Sir J.
Brocklehurst, J.	Grey, right hn. Sir G.
Brodie, W. B.	Grimsditch, T.
Brownrigg, S.	Hill, Lord A. M. C.
Bruges, W. H. L.	Hobhouse, rt. hn. Sir J.
Buller, C.	Hodges, T. L.
Buller, Sir J. Y.	Holmes, W.
Burrell, Sir C.	Hope, hon. C.
Campbell, Sir J.	Hoskins, K.
Chichester, J. P. B.	Howard, F. J.
Cochrane, Sir T. J.	Howick, Viscount
Cole, Viscount	Hutton, R.

Inglis, Sir R. H.	Rolfe, Sir R. M.
Irton, S.	Rose, rt. hon. Sir G.
Irving, J.	Round, J.
Kemble, H.	Russell, Lord J.
Kinnaird, hon. A. F.	Rutherfurd, rt. hon. A.
Labouchere, rt. hn. H.	Seale, Sir J. H.
Lowther, J. H.	Seymour, Lord
Lushington, rt. hn. S.	Sheppard, T.
Maule, hon. F.	Smith, J. A.
Moreton, hon. A. H.	Smith, R. V.
Morpeth, Viscount	Somerset, Lord G.
Morris, D.	Stanley, hon. E. J.
O'Ferral, R. M.	Stanley, hon. W. O.
Pakington, J. S.	Stewart, J.
Palmer, C. F.	Strutt, E.
Palmerston, Viscount	Surrey, Earl of
Parker, J.	Teignmouth, Lord
Parnell, rt. hn. Sir H.	Thomson, rt. hn. C. P.
Pattison, J.	Thompson, Alderman
Pechell, Captain	Troubridge, Sir E. T.
Pendarves, E. W. W.	Verney, Sir H.
Perceval, Colonel	Warburton, H.
Pigot, D. R.	Williams, W.
Pigot, R.	Wood, C.
Plumptre, J. P.	Wood, G. W.
Price, Sir R.	Worsley, Lord
Reid, Sir J. R.
Rice, right hon. T. S.	TELLERS.
Rich, H.	Stuart, R.
Richards, R.	Clay, W.

List of the NOES.
Attwood, T.	O'Connell, J.
Barry, G. S.	O'Connell, M. J.
Bridgeman, H.	Philips, M.
Brotherton, J.	Redington, T. N.
Bryan, G.	Salwey, Colonel
Cayley, E. S.	Scholefield, J.
Clements, Viscount	Sheil, R. L.
Duncombe, T.	Somerville, Sir W. M.
Easthope, J.	Stock, Dr.
Ellis, J.	Turner, W.
Evans, G.	Vigors, N. A.
Fielden, J.	Villiers, hon. C. P.
Finch, F.	Wakley, T.
Hall, Sir B.	Wallace, R.
Hindley, C.	Wyse, T.
Howard, Sir R.	Yates, J. A.
Jervis, S.
Langdale, hon. C.	TELLERS.
Muskett, G. A.	Hume, J.
O'Connell, D.	O'Brien, W. S.

Mr. O'Connell

protested against having a measure so important in its nature decided by such a House as was present during the greater part of the discussion. At one time there were only thirty-five Members present. He put it to the right hon. Gentleman, whether he could hope to have the bill read a second time before the 20th of August, a period when there was no chance of a House, the grouse shooting having commenced, and the partridge approaching. He must again move, that the Chairman report progress.

The Chancellor of the Exchequer

should certainly consider it a direliction of duty if he gave way to the Opposition. It was perfectly notorious in Ireland, that he meant to propose the prolongation of this charter for four years.

Mr. O'Connell

must positively assert, that the people of Ireland had no more notice than three weeks. A more mischievous measure than the present had not been introduced in any Session.

The Committee again divided:—Ayes 33; Noes 102: Majority 69.

Another division on a similar motion to postpone the proceedings took place with a similar result, and a similar motion having again been proposed, the Chancellor of the Exchequer yielded, and the House resumed. We give the lists, as the principal one of the second division only. The minority which opposed the progress of the measure was nearly the same throughout.