HC Deb 26 July 1839 vol 49 cc886-909

House in Committee upon the Bank of Ireland Act. The question again put, that it is expedient to continue for a limited period the privileges vested in the Bank of Ireland.

Mr. O'Connell

would confine himself to the question before the House. The Chancellor of the Exchequer stated last night, that there had been no contract between him and the Bank of Ireland. Unfortunately for him, however, persons immediately concerned had shown a document as like a contract as anything could possibly be; so like, indeed, that it would be very difficult to show that they were not identical. The effect of it had been, that bank-stock had risen three per cent. even before the right hon. Gentleman made his statement to the House. That such a document did exist, purporting to be a contract, he (Mr. O'Connell) was warranted, from the information he had received, in stating. That it was not a contract he was ready to admit, the Chancellor of the Exchequer having stated that it was not; of course what the right hon. Gentleman stated he did not dispute. But he did say, there must be some neglect somewhere in putting it in the power of these persons to give a favoured few the opportunity of thinking, and believing, and making it to be believed, that such a contract existed. The question of the resolution before the House lay in a very narrow compass, it was not a question of free trade in banking, but simply of the continuance of the monopoly of the Bank of Ireland. The Chancellor of the Exchequer argued, that if joint-stock banks were allowed to issue notes in Dublin, they would be unable to manage the concerns of their branches in the country, yet the Bank of Ireland was in this very predicament of having branches in the country, and at the same time issuing notes in Dublin, and having the exclusive circulation of the metropolitan circle. If the argument against joint-stock banks was of any value, was not it equally strong against the Bank of Ireland? He meant to take every fair step to prevent the measure passing into a law. The continuance of the monopoly could only be justified by showing services rendered to the public by the Bank. He would mention one fact as illustrative of the accommodation which it afforded to the public. Bank of England notes were constantly at a discount in Dublin. Although Bank of England notes were a legal tender in Ireland, those who received them, in return for Irish produce sold in England, had no means of realising them through the intervention of the Bank of Ireland. He could understand the principle of having but one bank for the two countries, but this system of two independent banks, in-trusted by the State with exclusive privileges, as being the only parties qualified to regulate the circulation, and yet acting without concert, and on different principles, was an utter absurdity. From the evidence before the committee, it appeared that the Bank of Ireland directors had no correspondence or communication with the Bank of England, which could have enabled them to regulate the currency, and that they were utterly ignorant of the disturbing causes which made it necessary for the Bank of England to limit its operations. He would take the sense of the House against this plan, and he would oppose, as far as he could, the species of deception which had been practised on the people of Ireland, who, until three weeks ago, had been kept in ignorance of the present plan.

The Chancellor of the Exchequer

said, I confess that but for two circumstances I should be perfectly satisfied to let this debate pass without a word. But, in justice to my self, it is absolutely necessary that I should immediately follow the hon. and learned Gentleman. The hon. and learned Gentleman has a very convenient mode of dealing with personal charges. This is the second time—for the hon. and learned Gentleman made the same charge last night—at the same time, that he insinuates personal charges, he states his own readiness not to believe them to be true. But an impression may, notwithstanding this disclosure, be conveyed to the public by what has fallen from the hon. and learned Gentleman and that impression is one inconsistent alike with my private honour and my public duty. Therefore I am called upon, in the most distinct and unequivocal manner, and with the most direct contradiction which one individual can apply to another, to contradict in every part and in the strongest terms, the suggestion of the hon. and learned Gentleman. The suggestion of the hon. and learned Gentleman amounts to no thing short of this—that I, in my official capacity, whilst I stated to this House, that I had entered into no engagement with the Bank of Ireland, had actually done that which, as he says, was tantamount to entering into a contract, in the shape of a written paper, and that I had communicated to those whom he designates as a favoured few, information which they were enabled to turn to their own private profit. It is perfectly true, as the hon. Gentleman says, that because this is inconsistent with my statement last night, therefore he is bound in charity to disbelieve it. But if he disbelieved it, he had no right to allude to it at all. If he did believe it, it was not by a mitigated assertion like that which he has now made that he should have brought it forward, but in a distinct and unequivocal shape, in which I could have grappled with it. The character of a public man is public property in this country, and any individual base enough to turn his official knowledge to the pecuniary benefit of any person or of any party would be not only unworthy of holding office under the Crown, or of possessing a seat in this House, but would be unworthy of the respect or consideration of any private acquaintance. Therefore, I call on the hon. and learned Gentleman to bring forward evidence for that which he now suggests. I will not allow this to remain as a mere suggestion or insinuation, because elsewhere, and possibly here, it may be said that the disclaimer s of the hon. and learned Gentleman is a merely parliamentary and equivocal compliment. It has a tendency to cast a foul and false calumny on my personal character, and I dare the hon. and learned Gentleman to bring his charge distinctly forward. The imputation that an individual who fills the office which I hold is capable of using his financial knowledge to make communications for the purpose of affecting the value of the public securities, is an imputation from which I should have supposed that the character of public men, for the last fifty years, would have been in the judgment of any one but of the hon. and learned Gentleman, a sufficient protection. He (the Chancellor of the Exchequer) would state the whole of the transactions which had occurred, and he would mention the witness whom the House might, if they thought fit, examine. He had stated last night, that, so far from following the ordinary course on similar occasions, which was to make a contract with the Bank of Ireland, he had specially abstained from entering into any such course. Consequently, the bill which he said he should introduce, in place of reciting, as was the custom in similar bills, that the portion referring to a contract was done with the consent of the Bank of Ireland, was to contain a blank to be filled up when it went into Committee. He would tell the House exactly what he had done with the Bank of Ireland. When the notice was originally given of bringing forward the question, he asked his hon. Friend, the Member for Kilkenny, to postpone his notice until he requested the directors of the Bank of Ireland to come over here. These gentlemen came over, and he had various interviews with them, as well as with the deputations from Drogheda and the Provincial Bank—in short he had received every gentleman who applied to him for information on the subject. When he had prepared his plan, he communicated it to all the parties whose interests might be affected by it. To the deputation from Drogheda, on which the hon. and learned Gentleman attended, he gave a complete description of the plan now introduced. The hon. Gentleman who represented that town, and the hon. Gentleman sitting next to him, would be able to say, whether he had not frankly and unreservedly stated to them the details and principles of his plan. He made the same statement to the governor of the Bank of Ireland, and to the deputation from the Provincial Bank. He accompanied his statement to the gentlemen connected with the Bank of Ireland by telling them that he would not enter into a contract of any sort or kind with them, and that they were not even at liberty to bring it before the court of directors or court of proprietors, until the opinion of the House of Commons had been pronounced on the subject, and the decision of Parliament taken. This was the simple transaction as it happened. The Bank of Ireland had the same access to him which other gentlemen connected with other establishments had: could he justly or fairly have excluded from them the communications which he made to every other class interested in the subject. He would mention the gentlemen with whom on the part of the Bank of Ireland he held communication. They were:—Mr. Wilson, the present governor, than whom a more honourable and respectable gentleman did not exist; Mr. Arthur Guinness, well known to Members of the House, and and to the whole mercantile community of Dublin; and Mr. Carr. He invited the House to summon these gentlemen to its bar, and ascertain from them whether any single word had passed which could justify the suggestion which the hon. and learned Gentleman had insinuated against him. He begged pardon for the defence of himself. He did not believe, in addressing an assembly of gentlemen, having the feelings of gentlemen, that it could possibly be supposed that any one in this position could act in the way that had been suggested. But, if he had not given an immediate and public confutation and denial to the statement, it would have been repeated and dwelt upon as an accusation which had not been, and therefore which could not be denied. The hon. and learned gentleman referred to the panic of 1836, and said, that it had been occasioned by the conduct of the Bank. He had not hesitated to admit, that the conduct of the Bank, in continuing a low rate of discount, when the rate had been raised by the Bank of England, was entirely without defence. But if, instead of being controlled by the Bank of Ireland, the circulation had been then at the mercy of joint-stock banks, conducted on the principles of the Agricultural Bank, or under the auspices of Mr. Mooney, and such per- sons calling themselves bankers, the result would have been ruin and confusion throughout the two countries. But the hon. Gentleman had said, on a former occasion, and had again repeated, that the Bank of Ireland had been guilty of great misconduct, in being altogether regardless of the state of the discount of the Bank of England; and, in proof that they were so, it had been stated that they were ignorant on the subject. Now, if they would look to the evidence of Mr. Wilson, they would find that the Bank of Ireland was not altogether regardless of the state of the discounts of the Bank of England, nor ignorant of their operation; neither was it ignorant or regardless of the rates of foreign exchanges; what Mr. Wilson had stated, in reply to questions put by the right hon. Baronet, the Member for Tamworth, a Member of the Committee, was, not that they were ignorant of the liabilities and assets of the Bank of England or the state of the Exchange, but that they were not aware of the state of the American securities at that time, nor of the manner in which those securities had been affected, or had been instrumental in producing the state of commercial distress. He believed the Bank of Ireland regulated their affairs by considering, first, the rate of discount in the London market; second, the state of the foreign exchanges; and thirdly, the amount of specie and securities in possession of the Bank of England as compared with their deposits and circulation. These were the exponents to which they ought to direct their attention. He did not know if it was the duty of the Bank of England to acquaint the Bank of Ireland with the state of their general transactions: but it was clearly the duty of the Bank of Ireland to attend to these exponents which the Legislature had provided as guides to them in conducting their banking operations. He did not justify the conduct of the Bank of Ireland on that occasion, and it was not for the sake of the Bank of Ireland that he asked the House to adopt this measure. He only asked support for that establishment, in so far as it was of importance to the public interest. He did not come forward to propose this bill for the advantage of the Bank of Ireland. He knew but little of any individuals connected with that establishment; he had been connected with establishments which were its rivals in trade, and therefore could not be supposed to have any great fondness for the Bank of Ireland, or interest in, supporting it; he proposed this resolution because he thought it was for the benefit of the country. Those who maintained with the hon. Member for Kilkenny, that a free trade in banking would be a public benefit, those who desired to see every individual entrusted with the power of embarking in business as bankers, would very properly object to it; but gentlemen who did not go to that length, although they might differ in opinion as to the extent to which the principle of legislative interference might be carried, should support him because their differences might be taken into consideration when they got into committee. The hon. Gentleman had adverted to the state of the law respecting Bank of England notes being a legal tender in Ireland; and after mentioning the fact, that Bank of England notes are sometimes at a discount in Ireland, had contended that this must be owing to some delinquency on the part of the Bank of Ireland. The fact was, the Bank of Ireland had nothing whatever to do with such depreciation of value, and consequently could not be considered responsible. Bank of England notes were only known in Dublin like any other chargeable security. If the supply exceeded the demand, they were cheap, and at a discount; and if they were few in number, and less than the demand, then they fetched a higher price, and were at a premium, and the Bank of England note, like every other commercial security, would vary in value according to the state of the market. But the Bank of Ireland had been accused of having acted unjustly by refusing these notes: he wished to explain the state of the law on this subject. When Lord Spencer introduced the Bank Charter Act, he introduced a clause making Bank notes a legal tender in any place except by the Bank themselves. It was not the intention of Lord Spencer that this clause should affect Ireland or Scotland. He had said, as the reason for making these notes a legal tender, that inasmuch as they might always be taken to the Bank of England, and specie there obtained for them, they might therefore safely and fairly be made a legal tender in other parts of England. But this argument was not applicable to Ireland. A person receiving a note at Dundalk, could not step across the way to the Bank of England to get gold in exchange—he would be obliged to cross the Channel. The same argument would apply to Scotland, and it had never been the intention of Lord Spencer that this law should be applied to those countries, and, for some time, such was considered to be the state of the law. But, in 1835 or 1836, a question arose as to whether these notes were a legal tender in Ireland. The opinions of the hon. and learned Gentleman, Mr. O'Connell, and of the Attorney and Solicitor Generl, were in favour of their being a legal tender. Other high legal authorities differed from them; but, as the Law Officers of the Crown had given their opinion, the Government determined to abide by it, and gave orders to receive those notes in the collection of the revenue. This legal tender clause was applicable to England where there was only a five-pound note in circulation, but was totally inapplicable to Ireland when there existed a circulation of small notes. It would in Ireland become very probably productive of forced issues—a matter above all others to be avoided. In the bill which he was about to introduce, it was his intention to put an end to this question of a legal tender, so far as Ireland was concerned. Another of the grievances complained of by the hon. and learned Gentleman was the precipitancy with which he hurried on his measure. Upon this point he would beg to call the attention of the House to a document which he held in his hand, taken from a Drogheda paper, and giving an account of what had lately taken place in that town. It named several hon. Gentlemen on both sides of the House in a manner which would interest their curiosity, if it was not altogether gratifying to their self-complacency. A deputation come over from Drogheda, and was introduced to him by his hon. Friend who represented that town, and who had spoken so ably last night. He had explained to them his plan. They came to oppose granting any charter to the Bank of Ireland. When they had heard his plan, they returned to Drogheda and called a meeting, at which the mayor took the chair, to give a report of their proceedings. If the deputation felt that they had reason to complain of the lateness of the period of the session at which he brought forward his measure, would they not have been the loudest to complain? They did no such thing. Did they complain of his plan? The House should hear. The mayor, on taking the chair, said— Gentlemen, as one of the deputation sent to London, to communicate with the Chancellor of the Exchequer on the Bank of Ireland monopoly, Dr. Atkinson, and I think it our duty to lay a statement of the proceedings before you. On arriving, we at once proceeded to business, and our first visit was paid to Sir William Somerville, who seemed to have a good feeling towards us. Through his influence, the following Tuesday was appointed by the Chancellor of the Exchequer as the day on which we could have an interview with him, and accordingly we went, accompanied by Sir William Somerville, Mr. O'Connell, Mr. Hume, and Mr. Redington, and laid our views before him. We found his tone very different from what we had expected; he yielded completely, and, in fact, gave us more than we had reason to hope for. Dr. Atkinson will now give you every information relative to our interview with the Chancellor of the Exchequer. Dr. Atkinson: Gentlemen, the mayor has informed you of our preliminary proceedings, and I will now detail to you as satisfactorily as I can, our interview with the Chancellor and its results. We endeavoured to do as much as possible by remonstrance and solicitation, and if not successful by these means, we were determined on resorting to open hostilities. Our first thing was to solicit an interview with the Chancellor of the Exchequer, which we obtained through Mr. O'Connell, and, accompanied by him, Mr. Ashton Yates, and several other gentlemen, we waited on him. At this time he had made up his mind that there should be no change in the existing regulation—that things should remain as they now are, viz., that no bank within fifty miles of Dublin, having more than six partners, could issue notes, or sue and be sued Before we left the room we got him to agree to the establishment of joint-stock banks in any part of Ireland, having all the privileges which the bank of Ireland now enjoys, with this exception, that they would not be allowed to issue their own notes; and he even added that if he were a partner in a joint-stock bank, he would rather carry on its business with Bank of Ireland notes than the contrary. The plan he suggested is, to get paper from the Bank of Ireland at three per cent. having got so much from Mr. Spring Rice, we were determined to go to hostilities, for the purpose of getting more, and accordingly waited on several Members of Parliament; and here I may remark that nothing can exceed the degree of ignorance on Irish affairs manifested by even the most acute and intelligent of the English members. We canvassed, and got a considerable section of the liberal members to support Mr. Hume's motion on Monday next, and our next object was to secure the support of the Conservatives, as if we got them there could be no doubt whatever of our success. Mr. Ellis waited on Sir Robert Peel, who expressed great regret at being obliged to leave town, but appointed to-morrow for an interview. We have, however, got for the fifty mile district every privilege except that of the issue, and as the Bank of Ireland might at any time seriously inconvenience the public by contracting its issue, we must get rid of that also, which we are certain of doing with the assistance of the Conservative members. When Sir Robert Peel was asked if he would support the extension of joint-stock banks in Ireland? the hon. Baronet's reply was:—'I am rather favourable to the renewal of the bank charter, but I think so important a town as Drogheda should not be shut out from the privilege of joint-stock banks.' I will conclude by observing that the Chancellor of the Exchequer made these concessions, because he heard it whispered that we were mustering a powerful opposition to him, and supposed that we would therefore abandon it. We did not do so; in fact our leader, Mr. Hume, who is opposed to every species of compromise, would not let us, even if we were so inclined. He told the deputation what his plan was, and undoubtedly he believed that his explanation removed any previous wrong impression that existed. He certainly had made no concession; but they considered it a concession, when they were informed that his plan would make a variation in the laws regulating joint-stock banks, which would effect considerable improvement. The deputation took this explanation to be a concession, and so they told the people of Drogheda. He told the deputation that he thought a great improvement might be made in the system of joint-stock banks, if they were to cease to issue paper money of their own, and if they became the circulators of Bank of Ireland paper, by which the whole system of banking in Ireland would be placed on a much safer foundation than it now stood upon. This would be approximating to one central and united issue of paper money; and the question hereafter to be discussed would be whether the nearer they approximated to this principle of central issue, the safer and sounder would be the banking establishments of the country? In the whole of the proceedings of the meeting there was not a complaint with respect to the time at which this measure was to be introduced; there was no complaint of their being uninformed as to its details; there were no objections made to the plan as far as it went; on the contrary they claimed the measure as their own, and as Mr. Canning, on a certain occasion, said "this is my thunder;" the deputation said, "this is our banking bill." As to the complaint of the hon. Member for Kilkenny, with regard to the lateness of the session at which this modified and temporary measure was passed, that complaint, he must say, came with a very bad grace from that hon. Member, who himself, in a letter dated the 14th of July, declared that on the 23rd he was to bring forward a motion which had for its object the entire bouleversement of the banking system in Ireland. He thanked the House for the indulgence they had shown in listening to this explanation, and he would only add that the convenience of those Gentlemen who opposed the measure should be consulted, with respect to the period at which the further progress of the measure should be fixed to take place.

Mr. O' Connell

did not shrink from a single word which he had said, nor had what had fallen from the right bon. Gentleman made any difference in his opinion. He did not believe that any one, but the right hon. Gentleman himself, would suppose that, when he talked of a favoured few, he alluded to persons who were favoured by the right hon. Gentleman. There were two parties to the arrangement, and each might have favourites. The words "favoured few" seemed to be taken for what he would not call declamation, but something that resembled it. But what he had stated he would repeat, namely, that the arrangement had been conducted in so loose a manner, and that although no contract had been entered into, such documents passed as enabled persons to avail themselves of the belief of a contract to the extent of causing a rise of three per cent. in bank-stock. To that statement he adhered, but he did not for a moment attempt to insinuate, that the right hon. Gentleman had entered into a financial arrangement in order to enhance the profits of individuals. As to the Drogheda document which the right hon. Gentleman had read, he wished him joy of it. If the report were true, and there was nothing to vouch for its accuracy, this deputation was composed of the silliest men whom the community could produce. But what business had the right hon. Gentleman to bargain with the deputations? To be sure the right hon. Gentleman guarded himself by saying, that he did not pledge himself to any thing that might pass in conversation, and then he went on to ask "Suppose the limits of the Bank of Ireland monopoly or privilege were confined to a circle of twenty miles, would there be any objection with this condition, to the renewal of the Bank Charter?" The deputation at once assented to this proposition, as it would enable the towns of Drogheda, Dundalk, Newry, and other towns, to be placed on the same advantageous footing as Belfast. The deputation and he himself went away with the conviction that this was the opinion of the right hon. Gentleman, and that the only reason why he did not pledge himself to it was, that there must first be a resolution of the Cabinet. He (Mr. O'Connell) stated publicly, in letter, that this was his conviction. He, therefore, was deceived; the people of Ireland were deceived; and he would repeat again, that until within these three weeks, he had remained under that deception.

Mr. Redington

also had attended the deputation, and the impression conveyed to his mind was exactly the same as that conveyed to the mind of the hon. and learned Member for Dublin.

Sir W. Somerville

said, that he also had attended the deputation, and he left the presence of the right hon. Gentleman under the conviction that the Towns of Drogheda, Dundalk, and Newry were to be relieved from the operation of the bank monopoly. He trusted that the right hon. Gentleman would reconsider this subject before he took a contrary course.

Mr. Hume

utterly denied that his object was to overturn the whole system of banking in Ireland, and that the right hon. Gentleman's understanding of his letter was altogether incorrect. He had been waited upon by some gentlemen from Ireland, and, he said to them that if it were proposed that the Royal Bank of Scotland should have an exclusive privilege of issuing paper money within fifty miles round Edinburgh, did they think the people of Scotland would submit to it? And why should the people of Ireland submit to like injustice? He added that, if the Members for Ireland were as active as they ought to be, and if the people of Ireland were as zealous as the people of Scotland, it would be utterly impossible for any Chancellor of the Exchequer to succeed in carrying a measure of so much injustice.

Sir R. Peel

said it was quite true that in 1819 he proposed as a very desirable course that the current paper circulation should be converted into money; but he did not see that this at all implicated the principle of free trade in banking. He did not think either that a free trade in commercial matters necessarily included a free trade in banking. On the contrary, in 1819, when he proposed that the notes in circulation should be converted into gold, he did not propose to destroy the monopoly of the Bank of England; nor again, more recently, when the charter of the Bank of England was under consideration, did he oppose its renewal. He regretted that a measure of this importance should have been brought on at so late a period of the Session, nor could he see any sufficient excuse for its being brought forward at this time. It was quite true that under peculiar circumstances the state of the country might require a measure of coercion, or a grant for an additional levy of men, to be brought suddenly forward at a late period of the Session, but upon a subject of this kind, which had been three years under enquiry, he could not see why any projected measure should have been held bark so long. He must say, also, that when so many Members were absent from town, and so much business remained unfinished upon their votes, it was peculiarly inconvenient to undertake a measure of this kind. There were twenty-eight orders of the day on the votes for to-night; some of these must be got through, others might be postponed, but then they only accumulated the labour and inconvenience for future evenings. He really thought that some mode must absolutely be adopted of getting though the business of the House in better time, either by adopting the practice of committees in the French Chambers or otherwise; but, unless something was attempted, and that speedily, to remedy the existing evil, he did apprehend that this House would lose its character in the country. In consequence of this dilatory mode of proceeding—the House, preferring party discussions to the transaction of the real business of the country, would, from time to time, resign a great part of its authority to the discretion of the Privy Council; and thus not only forfeit its claim upon the respect and regard of the people, but destroy some of the most valuable constitutional rights of the country. With respect to the question now under consideration, he confessed that although he came to the same conclusion practically as the Chancellor of the Exchequer, he had not been convinced by any of the right hon. Gentleman's arguments. The right hon. Gentleman referred to the difference displayed between Scotland and Ireland in banking transaction and said, that those of Scotland were at least tenfold that of Ireland and that there was greater security in the paper circulation of the former than the latter. In reply to this, it might well be asked, "Then why not adopt the Scotch system?" If there be greater capital employed and greater security in Scotland, without a monopoly, than in Ireland with one, certainly that was not a reason for containing the monopoly in Ireland. At the same time he thought it was of great importance that the question should be considered upon a wider basis, and that not only the effect of monopoly, but of the general principles of banking, should be taken into account. He did not say that it necessarily followed that because the free system answered in Scotland it should succeed equally well in Ireland. A great deal depended in matters of this kind upon the habits of the people. He did not think the principle of the Scotch banks could be advantageously applied to Ireland, and the reason was, that the Scotch banks, it was well known, leaned a great deal upon the Bank of England for a supply of gold in cases of emergency. This was not a mere Irish question, but affected the monetary concerns of the whole empire, and therefore he was not prepared to throw the banking of Ireland entirely open without a sufficient opportunity of considering this great question in all its bearings; not only as it affected Ireland, but England also, and more particularly the important question as to having one bank of issue. He had listened with great attention to the observations concerning the deputations from the parties interested in this question; and he had been very much surprised at the accounts which had been published of what took place at those interviews. He gave the gentlemen who composed the deputations which waited on him, every opportunity of freely expressing their views, and he made some observations of his own in reply; but he must say that it would be a very great restraint upon the freedom of private communication between public men and other parties under circumstances of this kind, if a statement of what might thus have been let fall were immediately to find its way into the leading article of a newspaper. He did not care one farthing about the circumstance for himself; but at the same time there were many things which might pass in a private conversation should only be published with the consent of both parties; and it must be obvious that the slightest difference in the terms made use of might very materially alter the sense of what was intended to be conveyed. With respect to the present proposition, he hoped that the subject might be postponed till the next Session. It was a question which must be settled within a very short period, unless they wished to get into inextricable confusion; and unless it was taken up deliberately and calmly, with the good will of the Bank of England, and at a period when there was no immediate apprehension or emergency, no necessity for immediate adjustment, so that they could consider and decide in 1842 what ought to be done in 1844—he knew very well what would take place—namely, that the charter of the Bank of Ireland would be again renewed for three or four years, and the great question involved in it left still as far as ever from a satisfactory settlement.

Mr. Warburton

thought it would be much better to let this question stand over till next session, and that then a committee should be appointed to inquire into the whole subject of currency and banking.

Sir J. Norreys

would give the Chancellor of the Exchequer's proposition every opposition in his power, because he thought it quite wrong that a measure so deeply affecting all who possessed any property in Ireland should be brought on so late in the Session.

Mr. Villiers

rose to vindicate his vote for the motion of the hon. Member for Kilkenny last evening, and to express his intention to support him if he divided again to night; he was induced to do so from the misrepresentation of the object of that motion which he had heard that night. Hon. Members who opposed the hon. Member for Kilkenny said, that nothing could be more objectionable than the present exclusive privileges of the Bank of Ireland. And what was the motion of the hon. Member for Kilkenny? Why, that these objectionable privileges should not continue. He thought they were objectionable; they had not been justified by any person who had spoken; nothing had been adduced in their favour, and he asked in vain for a reason to justify their continuance. But he supported the Member for Kilkenny, because he voted for what he intended, and not what others imputed to him. He had heard with surprise the attempt that had been made to confuse the specific objects which the hon. Member's motion contemplated, with all that the House may find it difficult to understand, and to which it was opposed. Language and phrases had been used purposely, as it seemed, to mislead the judgment on the subject. Oh, it is said, if you vote for the hon. Member for Kilkenny you are voting for free trade in banking, and a pretty thing that is; that is allowing any man, at any place, under any circumstances, to deal in money as he likes. That was the Chancellor of the Exchequer's definition of free trade in banking. He had been astonished to hear his hon. Friend the Member for Bridport talk in the same strain, when he thought he could not have helped seeing that, however clear his own ideas were, he was profiting by the delusion which his auditory were under on the subject. Now he was for free trade in banking; and yet he was not for that wild, vague sort of thing, which had been described to frighten and delude people. What was the first thing the friends of free trade in banking contended for? Why, that no private company in the same trade should be clothed with exclusive privileges. That was the first test whether there was free trade or not—aye, no company so privileged as to operate to the prejudice of private traders and subjected to no control over its private interests, so as to secure its operation for public good. When such a company as that existed, there was no free trade in banking; and it was when such exclusive rights to particular traders were withdrawn that free trade began. But he contended that there was nothing inconsistent with freedom in all engaged in the same trade being equally subject to some restrictions. No system was entirely without some restriction; and it depended upon the nature of the restriction whether the trade could be considered to be free. The law might wisely take security against fraud, where the public could not protect itself; and the question here was how far the public ought to be protected or watched by the law. Now this involved the question of the principle on which banks might be rendered safe by law. Now, what was it that the hon. Member for Kilkenny contended for? Why a right to issue paper convertible into gold on demand, and that such paper should not be made legal tender. But was this a new fancy? Why, this is the very principle which is recommended by all the thinking men, all the writers of note, all the statesmen whose names we quote with respect in this House, who had considered the subject. It involves the whole question of the paper currency, and a safeguard against its abuse, and it is that safe and economic system recommended by the bullion report, and known to have been the opinions of Mr. Horner, Mr. Huskisson, Mr. Mill, and Mr. Ricardo. They sought out the causes of depreciation of paper in their day; and they found it in the non-convertibility of paper into bullion, and they declared their opinion that the convertibility on demand is the safe and efficient check against over-issue, and against depreciation; but it seemed there were new lights now-a-days, who have sprung up and told them that this was no security, and that there will be over-issue and depreciation whether notes are convertible or or not, and they were referred by the hon. Member for the Tower Hamlets to America, to prove it. He said, in answer, that such a system as he had described had not been fully tried either in America or in this country. He said not in America, by the hon. Members own showing; for he had told them, that if a banker did not pay his notes on demand he was not, as in this country, made a bankrupt and ruined; but that he might pay interest upon the note he refused, he said twenty-four per cent.; but that was a very different thing from committing an act of bankruptcy, as in this country, and might operate very differently upon the prudence and caution of an issuer of notes. Again, he told him that in many respects these notes had been made legal tender in America. The Government received them in payment of taxes. And again, let him say that the chances of panics were far less there than in this country, which may have given to bankers, but only as it did to all others engaged in trade in that country, a peculiar hardihood in their mode of doing business. Again, he said that nobody had a right to refer to what had occurred here as against freedom in banking, when they have had a large privileged banking company constantly acting upon the trade, and, by their power, and by their capricious, irregular dealing with the currency, disturbing all the calculations which the unprivileged might have recently made; for he would ask any body in common candour to say whether the crises in com- merce, whether of panics or of distresses, which have periodically occurred in this country, have not been upon the most striking occasions more traced to the irregular proceedings of the Bank of England than to the imprudence of private banking companies? Where, then, is the experience to which any man could refer against that properly-secured and free system, which he contended, on the authority of much greater men than himself, ought to be adopted. There was none, and the objection rested on speculation, and not on experiment. It was said, that there had been an over-issue of paper money, notwithstanding its convertibility, but if it is granted that this may have occurred at particular times, and in particular cases, that did not affect the argument; for it has not happened for any lengthened period, because that check had been sufficient to prevent it; and he would venture to state to the House how the check operated. It was this—that if paper was forced into circulation beyond the wants of the community, that paper became depreciated; and being depreciated, it becomes the object of some persons to avail themselves of the right which on the face of that paper is given to the holder, namely, to demand gold in exchange for it; and does anybody suppose that this would not occur in a country like this, where it is the business of man, from morning to night, to see how he can turn a penny to account, to buy up depreciated paper and demand gold for it; and would not the issuers of the notes soon know that this would be the case, and would not that make them careful? Why, it was done during the war, and there was literally a trade in buying up depreciated local notes, in order to get gold for them. But then it would be said, what is the proof of the currency being depreciated? Why, if he looked to the rule laid down by the monopolists themselves, or if he consulted his own reason, he should say that the exchanges are at once an indication of that; for they would mark what would be the inevitable consequences of depreciation, namely, gold leaving the country. He said that was notice to any banking establishment in the country to be on their guard; and by all but a privileged body, which depends on something else but its own prudence to guide it, it would be so. But did any body, he would ask, stand up for such monopolies in banking as they had had in England and Ireland? No, all denounced them: then what is the excuse for continuing them. Why, some hon. Members say, "Oh don't do anything this year; let us go fairly into the subject next Session;" and then they would all come to some conclusion, and agree upon some uniform safe principle on which the banking of the empire should be rested, which would be permanent and applicable to every part of the country! But he wished to know what chance any one believed there was, that they would be more disposed or more competent next Session to discuss or to decide this subject than they were at present, or why more in 1843, as some proposed, than in 1840. Why is it that they were discussing the subject at this period of the year, and everybody shrinking from it? Why, because it was a distasteful subject to the House—because Members were uninformed about it—because it appeared difficult to understand, and because the mass of the constituencies would not be critical upon the conduct of a Member on such an occasion. Why, then—why was this to be different two years? Why, he asked, was the charter of the Bank of England renewed when it was? Was there any doubt about its mischief or its impolicy at the time? Look at the discussions four and five years before it was renewed—can anybody doubt that the subject was not fully understood then by some men—and was not the renewal then deprecated even more strongly than now?—and yet was not the state of the House and the mind of its Members such that amidst the pressure of other business they suffered it to be renewed. And so surely will it be renewed again in 1844, as the bank of Ireland charter was about to be renewed again now for four years avowedly, and as he firmly believed for ten years after that. Nothing would prevent it but extreme vigilance on the part of some Members of this House on the part of the public. But, under these circumstances, let them not omit to avail themselves of this God-send of the natural expiration of one of these mischeivous monopolies, to show that it was not really their intention to perpetuate so great an evil upon the country. Nothing could recommend its continuance but its resting upon some settled recognised principle of policy, or the experience of some practical benefits which the country had derived from it, and he asked any man to say honestly, if he believed that the Irish Bank was based on any principle that could be defended, and if not, whether, in spite of all the evidence which they had collected, and the declared sentiments of the representatives of that country, they could believe, that it had been of any practical advantage? Under these circumstances he did beg of the House to consider, how far they were justified, without any urgent necessity for it, or without the pretence of any immediate evil being alleged, in continuing a system exercising so pernicious an influence upon the most important interests of the people of Ireland.

Mr. Ellis

said, he was anxious to seek a brief indulgence from the House, seeing that he had been precluded last night from making any observations on the grave question under consideration, owing to the Chancellor of the Exchequer having anticipated him in rising, with the view of replying to the entire debate which then took place. His constituents were much interested in the question. The right hon. Gentleman had read an account of a meeting lately hell in Drogheda; in consequence, however, of the copious remarks that had been subsequenly made by hon. Members, the manner in which they had been able upon personal and well established information to dissect the statement and expose its incorrectness, he could not congratulate the right hon. Gentleman upon any advantage which he had gained by relying upon newspaper authority. The question which they had to debate was, whether or not they should renew the exclusive privileges, with certain modifications, of the Bank of Ireland. The Chancellor of the Exchequer, in the opening portion of the speech which he delivered last night, remarked, that throughout the whole Session a question of more vital importance as affecting the interests of England, no less than those of Ireland, had not been introduced. He could not then forget, that they were discussing the propriety of renewing the charter on the 26th of July, and he rejoiced to hear the right hon. Baronet condemn her Majesty's Ministers for having delayed for so unreasonable a time the introduction of that measure. The bill having vegetated in the mind of the Chancellor of the Exchequer for nearly four years, and allowed to be of such absorbing interest, he wondered that it was not made one of the topics in her Majesty's Speech at the opening of the Session, except indeed that it would have afforded another more public proof, that the more important the Government considered any measures the more tardy were they in bringing them to maturity. He could not fathom the principle upon which the monopoly in favour of the Bank of Ireland was first created, much less why it should be continued. At any rate, the reasons were stronger against its continuance than against its creation, for when the money transactions of the country were limited, and supplies of corn and bank notes were chiefly looked to be drawn from the capital, some shadow of a reason might have been advanced for conferring exclusive privileges upon the Bank of Ireland. But the great strides effected in commerce, the vast and immeasurable extent of business, the increased and increasing enlightenment of the age, rendered the system of exclusive monopoly far too narrow-minded a policy to be adequate to the cumulative wealth and new wants which had arisen in the empire. If there were any argument at all for such a monopoly, it might be brought forward with equal or stronger force in favour of Liverpool, whose industry, commerce, and wealth might challenge a comparison with those of Dublin. The Bank of Ireland did not regulate the exchanges—that was done by the Bank of England, which had difficult and different functions to perform, they had a large national debt, an enormous unfunded debt, and these were some reasons, therefore, why they should possess a control over the circulation of the paper money of the country. Whilst monopoly in any shape was to exist, let it be confined to the Bank of England, which could regulate the currency much better single-handed, than in connexion with the Bank of Ireland, for it was in evidence that the latter had at one time, by its imprudent conduct greatly distressed the former by not simultaneously raising its rate of discount. The right hon. Gentleman had expressed an opinion in favour of an uniform and central issue. He (Mr. Ellis) concurred in that opinion; but the Chancellor of the Exchequer was departing from that principle in seeking to revive the exclusive privileges of the Bank of Ireland. The right hon. Gentleman felt the pinching part of the question was to be found in the satisfactory manner in which the principle of joint-stock banking was carried on in Scotland. Let them reflect upon the evidence which was given in proof of the wholesome workings of that principle in the correspondence which took place in 1826 between the Treasury and the Bank of England relative to an alteration in their exclusive privileges. Referring to the great distress which had been felt in the money market throughout the country, the Lords of the Treasury observed, We have a further proof of what has been advanced in the experience of Scotland, which has escaped all the convulsions which have occurred in the money-market of England for the last thirty-five years, though Scotland during the whole of that time has had a circulation of 1l. notes; and the small pecuniary transactions of that part of the United Kingdom have been carried on exclusively by the means of such notes. The failures which have occurred in England, unaccompanied as they have been by the same occurrences in Scotland, tend to prove, that there must have been an unsolid and delusive system of banking in one part of Great Britain, and a solid and substantial one in the other. What was to prevent the introduction of the Scotch system into Ireland? What would be viewed as an impediment to it, instead of any effort being made even gradually to approach it? The revival of the charter of the Bank of Ireland. By a glance at the whole of their proceedings, it would be seen, that selfish and not public interest was the moving principle of the Bank of Ireland. That establishment, it was plain from Parliamentary returns, made by legitimate banking only, 116,207l. per annum, and 253,013l. by other means, derived from the monopoly. Was it just or rational that such a system should be continued? The right hon. Gentleman had last night quoted from a pamphlet, but in a most unfair, garbled, and un-statesmanlike manner, supposing, no doubt, that the debate will then have concluded, and that no one would have an opportunity of detecting him. After reading and carving out of a paragraph extracts favourable to the Bank, he had entirely omitted the remaining portion which told quite the other way, and in which the Bank was described as "indifferent alike to the public prosperity or distress, equally insensible to pity or generosity, and as the vampire of the national weal." Was that fair dealing towards the House on the part of the Chancellor of the Exchequer? To show tin working of the bank system, he would take the case of Newry. According to the report of the Irish railway commissioners, its population exceeded 13,000, and its export and import trade was of the value of 1,135,547l. Till 1826 it had no accommodation from the Bank of Ireland. Its commerce had been steadily increasing, but of late years the Bank of Ireland had gradually decreased its accommodation. In 1832, the total average discounts of the Bank of Ireland were 293,800l., on which they charged 14,020l. interest, while in 1836 the discounts amounted to only 162,600l., with 7,890l. interest. Newry was only an instance of the way in which other good trading towns in the north of Ireland were treated, and actually driven to remote places for banking accommodation. It was a mistake to say, that to refuse to renew the charter was to sanction an un-checked system of joint-stock banking. Over and over again the Chancellor of the Exchequer had been told, that parties were willing to enter into any reasonable security he might propose for placing the joint-stock banks on a sound footing. Another great mistake was to suppose, that because the Bank of Ireland, as an association of individuals, had done an excellent banking business, it was not open to observation and censure when viewed as a national establishment. It had been endowed with vast immunities for the public good, but the public had suffered by the monopoly, whilst the, Bank had fostered its own private interests. By the last official returns, it appeared, that there was a million and a half of public money in that establishment for which no interest was paid, and, at the same time, the Chancellor of the Exchequer had borrowed two millions and a half at 4½ per cent., so that the country pays 115,000l. annually for money over which it ought to have a complete control. In conclusion, he thought, that by every means in their power, they ought to encourage the introduction of capital into I Ireland; but they would not treat that country fairly, if they consented to renew the privileges of the Bank of Ireland. One thing was clear, that the greater the number of banks they established, the more limited became the district of each, and the less the shock to public credit when failures took place. The Irish were accused of being improvident. Let them induce the middle classes to deposit their, money in banks, instead of devising means of expending it so soon as they have gained any, and frugal habits would be formed, while morals would be improved. By throwing the monetary transactions of the country into sound and legitimate channels, they would develop the resources and promote the prosperity of Ireland.

Mr. O'Connell

The right hon. Member for Tamworth made an observation which he thought deserved an answer; and that was, that the questions of banking, as they affected the entire empire, ought to be examined at once. That might be very well done by taking up the subject early next Session, and reserving the present bill for that time. He should hope there would be sufficient attention given to the Irish question if it were mixed up with the English. If it were not, he despaired of its being properly canvassed. The conduct of the right hon. Gentleman the Chancellor of the Exchequer throughout these proceedings, was certainly calculated to confirm the view of those who thought his character more marked by ingenuity than candour. He pressed upon the House the propriety of postponing the question till next Session, and he would, therefore, move, that "the Chairman do now leave the Chair."

The Committee divided:—Ayes 24; Noes 80: Majority 56.

The Committee again divided on the original question:—Ayes 79;Noes 24. Majority 55.

List of the AYES.
Acland, T. D. Euston, Earl of
Adam, Admiral Ferguson, Sir R. A.
Baker, E. Gaskell, J. M.
Bannerman, A. Greenaway, C.
Barnard, E. G. Grey, rt. hon. Sir G.
Blair, J. Grimsditch, T.
Blake, W. J. Guest, Sir J.
Bramston, T. W. *Hawes, B.
Broadley, H. Hawkins, J. H.
Brocklehurst, J. Hinde, J. H.
Brotherton, J. Hodges, T. L.
Bruges, W. H. L. Hodgson, R.
Buller, Sir J. Y. Hope, hon. C.
Burroughes, H. N. Hoskins, K.
Campbell, Sir J. Howick, Viscount
Clay, W. Kemble, H.
Cooper, E. J. Law, hon. C. E.
Craig, W. G. Liddell, hon. H. T.
Crompton, Sir S. Lushington, rt. hn. S.
Darby, G. Macaulay, T. B.
Denison, W. J. Mackinnon, W. A.
Donkin, Sir R. S. Marshall, W.
Douglas, Sir C. E. Maule, hon. F.
Egerton, W. T. Morpeth, Viscount
Eliot, J. E. Morris, D.
Murray, A. Stanley, hon. E. J.
Palmer, C. F. Steuart, R.
Parker, J. Strutt, E.
Parnell, rt. hn. Sir H. Surrey, Earl of
*Pechell, Captain Teignmouth, Lord
Peel, rt. hon. Sir R. Troubridge, Sir E. T.
Perceval, Colonel Vere, Sir C. B.
Pigot, D. R. Walker, R.
Plumptre, J. P. Wood, C.
Rice, rt. hon. T. S. Wood, Colonel
Richards, R. Wood, G. W.
Rutherford, rt. hn. A. Wood, Colonel T.
Sanderson, R. Worsley, Lord
Sanford, E. A. TELLERS.
Seale, Sir J. H. Dalmeny, Lord
Smith, J. A. Seymour, Lord
List of the NOES.
Aglionby, H. A. Somerville, Sir W. M.
Bridgeman, H. Turner, W.
Browne, R. D. Vigors, N. A.
Ellis, J. Villiers, hon. C. P.
Ewart, W. Wakley, T.
Hector, C. J. Wallace, R.
Hindley, C. Warburton, H.
Langdale, hon. C. Williams, W.
Muskett, G. A. Wyse, T.
Norreys, Sir D. J. Yates, J. A.
O'Connell, J.
O'Connell, M. J. TELLERS.
Redington, T. N. O'Connell, D.
Scholefield, J. Hume, J.

* Absent on the first division. Absent on the second division, Berkeley, hon. H.; Reid, Sir J. R.; Smith, R. V.

Resolutions agreed to.

The House resumed. The Report to be received.

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