§ On the Motion, that the House go into Committee on the Banking (Ireland) Bill,
§ Mr. Rosswas sorry to occupy the House, but he wished that farther time were allowed for consideration of this measure. All classes and all parties in the north of Ireland were satisfied that the enactment of the Bill, in its present form, would be exceedingly detrimental to the prosperity of that country. As it was now framed, the Bill was more detrimental than as it was originally proposed. There had been no opposition, at least no clamorous opposition, raised against it; because they took for granted that no material alteration would be made in the Bill. He complained of the mode in which the averages were to be struck. They were confined to the circulation of 1844; but it appeared that the circulation in the month of April, 1845, had considerably increased above April, 1844; so that the effect of this measure would be to check the rapidly increasing circulation of Ireland. Then the right hon. Baronet had assigned as a reason for adopting a different method of taking the English averages, as compared with the Irish and Scotch averages, that the latter parties had been warned of his intention to regulate their issues; while the announcement of the measure affecting the English banks came upon the English bankers like a clap of thunder. Now, what did that statement imply but a charge against the Irish and Scotch bankers, that they had combined together to force up the circulation; and he denied that they had done so, or that, from the 246 continual exchange of notes among the various bankers, it was in their power to force up the circulation. There was another point which had given great offence and caused much alarm in Ireland. It was supposed to be necessary for them, by the provisions of this Bill, not only to hold in their coffers a sovereign for every 1l. note they issued beyond the amount allowed by their average circulation, but they were required to hold, in fact, 3l. for every such 1l. note. This was caused in consequence of the number of branch banks at each of which their notes were made payable, and not, as in Scotland, at the head office only. The consequence of this was, that a supply of gold must be left at each branch as well as at the head office; and the Irish bankers wished that the gold so left in their different branches should be counted by the Government, as being part of their stock of bullion. But the Government objected to that request, that they could not send persons round to the different branches to take the amount of gold in their possession. This might be inconvenient for the Government; but it would be much more inconvenient for the banks, if the other system were carried out, and productive of serious injury to the country. To show the prosperity of Ireland at the present time, he might mention that 60,000 spindles for spinning flax had been erected in Belfast alone, within the last year, at an expense of 240,000l. This was an indication of the spirit of commercial enterprise in the north of Ireland; and if this Bill were delayed for a few years longer, he was confident, judging from past years, that the average circulation of the country would be much increased. Then there was an omission in the Bill, which he thought ought to be supplied. The notes of the Bank of England were not a legal tender in Ireland; and it would be desirable, on many accounts, that the notes of the Bank of Ireland should be made a legal tender. This would not be of any advantage to the Bank of Ireland; but it would be convenient to the other Irish banks to have a supply of these notes at a time when their stock of gold was withdrawn. He would not detain the House longer, as there were other hon. Members from Ireland anxious to speak on this question; he wished there were more of them. He wished the Gentlemen who attended in another place would come over to this House, and attend to Irish interests: but if they chose to sit 247 in Conciliation Hall, hatching the fate of empires, they could not expect that the House would bestow much attention on their interests.
§ Colonel Conollysaid, that at the present moment, no one could deny that the circulation proposed in the Bill would be sufficient for the wants of Ireland; but though he might be charged with being a prosperity monger, and indulging in Utopian visions as to the prospects of Ireland, yet he must state, that the events of last year justified the assertion that a limited circulation would be injurious to the prosperity of Ireland. It was shown by the Returns before the House, that the circulation of Ireland had increased one million within the last year: and it was further shown that this had arisen from no particular stimulus to industry, but that it had arisen from a general improvement in the industry and cultivation of the country. He found that the imports of Belfast and Derry had extended in a way that was not to be described; and this improvement was general with all the ports along the coast; and this prosperity, he trusted, would be permanent, and would call forth a still more extended circulation. He, therefore, trusted he could elicit from the Minister of the day some sort of a declaration, that along with the expanding energies of Ireland, provision should be made for an increased circulation. The imports of Dublin had increased nearly one-half during the past year, and this was legitimately derived from the general improvement of the country. He might also add that an increase had taken place in the wages of labour. He had left Kildare last month; and he found, that in consequence of the proposed railway there, the wages of the labouring classes had been raised twopence in the shilling. These, he considered, were all reasons why the circulation of Ireland should not be restricted, lest the growing prosperity of that country should be checked. He complained, that by the proposed Bill, the banks were only to obtain credit for the amount of bullion which they held at the head establishment. Then, with regard to the advantage of banks to agriculture, he might mention that for six months there was hardly a dealing with the banks by the Irish farmers, and for other six months the pressure upon the banks by them was very severe. To show the injury which would accrue to agriculture if they did not get the accommodation 248 from the banks which they now obtained, he might mention that formerly the poor tenants were constrained, by sheer necessity, to sell their wheat before Christmas at 15s. per barrel; but now, in consequence of the accommodation they obtained from the bankers, they never sold at below 25s. He would, therefore, urge upon the Minister the necessity of continuing the accommodation of the present banking system to the poorer class of tenants, and of allowing the circulation of the country to expand with the increasing prosperity of Ireland.
§ Sir R. PeelSir, I wish I could impress upon the Representatives of Ireland some portion of the strong conviction I feel in my own mind that I am proposing a measure most intimately connected with the growing prosperity of Ireland. There is no country on the face of the earth which will derive a greater advantage from a sound system of banking and a stable system of government. There is no country on the face of the earth which has suffered more evils from a bad and imperfect system of banking than Ireland. I have had personal experience of this at the time of my official connexion with that country; and I say there were then cases of extreme distress in the south and west of Ireland, arising from the simultaneous failure of almost all the banks in that portion of Ireland—cases of the most heartrending distress to individuals, as well as of injury to the general interests of the country. I will refer the House to an extract with regard to the failure of banks from the Report of the Committee of Irish exchanges, which sat in 1804. At that period there were fifty registered banks, but they all failed; and their failure, I know personally, led to the most fearful distress. I never saw such wide-spread distress as was caused by the failure of those banks in Ireland. There were then only private banks, but recently joint-stock banks have been erected. Well, but what is the first advantage which I propose to give to the bankers of Ireland by this Bill? We propose to apply to Ireland that principle of the convertibility of paper into gold, without which no banking system can be securely carried on; and we make this quite certain, if the bankers of Ireland conduct their affairs with ordinary prudence they will incur no risk whatever. What occurred in 1837? There was then a bank existing called the "Agricultural Bank" in Ireland. It was a joint-stock 249 bank. It issued its notes and kept promising to pay in gold. A pressure came, and every branch of that bank failed. But was the pressure confined to the "Agricultural Bank" itself? An hon. Member opposite has referred to the necessity of Irish banks keeping gold. But how did the necessity of keeping gold arise? From the rash speculation of imprudent bankers, whose failure necessarily created a pressure upon every bank in the country. The Provincial Bank of Ireland, which is conducted upon very excellent principles, suffered materially from the failure of the Agricultural Bank. See how the Agricultural Bank told upon the Provincial Bank. The agent of the Provincial Bank, in his examination before the Committee, was asked whether or no, in consequence of the pressure on the Agricultural Bank, it became necessary, on the part of other banks, to increase their supplies of gold? He said—
Undoubtedly. The Provincial Bank was previously ready for a run, for it was feared that the general circulation of the country would be discredited. The Provincial Bank had a great quantity of gold; it was always very considerable. The amount of gold in the Irish Banks at the time payment of their notes was demanded exceeded their issues.Talk of relief from the necessity of having great quantities of gold! Why, the necessity arises from the want of stability in the banking system. The agent was asked—Do you speak of your own knowledge?—Yes. Can you inform us if the greater part of the gold came from England?—All from England. Did it come from London and other places?—Principally from London, but also from Liverpool, and I believe from Bristol, but I am not sure. That is to say, the gold in the Bank of England and in the branch banks is made to supply the Banks of Ireland.In answer to other questions, the agent stated, that—Contemporaneously with this large demand, gold was demanded at all the banks, including the Bank of Ireland, and that the increased supply of gold was very considerable, indeed, not falling short, he believed, of 2,000,000l."Two millions of gold to be suddenly called for! That was the state of things in Ireland at that time in consequence of the improvidence of the banks of Ireland. All this amount of gold was stated by the agent to be necessary simply for the protection of the credit of the banks of Ireland. 250 Well, I am going to relieve the banks of Ireland from the constant necessity of guarding against these pressures, and from the never ending alarm and anxiey which must attend the business of a banker, when conducted upon such principles. The hon. Member opposite (Mr. Turner), has told you this evening that "though it is true that the Bill of last year has caused the English bankers some loss, yet the increased security which it affords against pressure and speculation has tenfold compensated them for the loss." This is the evidence of a country banker, a Member of this House, and so do not undervalue the advantages of this Bill, because you think it will introduce some restrictions on the circulation. We now have the Bills for Scotland and Ireland before us; and it has been asked, "Why have you not dealt the same with Scotland and Ireland as last year you did with England?" But how stands the case? Last year there was no notice at all to the English bankers. The twelve months previous to my statement in this House were determined upon as the average of the amount of issue. We might have adopted the same course with regard to Ireland and Scotland. It would have been perfectly just; but we did no such thing. I did not deal with Ireland and Scotland in that way; but taking the average of a year instead of twelve weeks, what has been the result? Ireland gets a false estimate. By taking the average of thirteen lunar months instead of twelve weeks, we give to Ireland the amount of about 1,000,000l. increased issue. This is one advantage we give to Ireland; but you are allowed to retain your issue of notes under 5l. The English bankers have no such privilege; and this relieves the Irish bankers from the necessity of employing specie for small sums. But I have also abolished the exclusive privilege of the Bank of Ireland. This is an advantage we have not given to Scotland; but in Ireland we give to all other bankers the privilege of competing with the Bank of Ireland, within those limits heretofore excepted. You well know the inconvenience of the Irish bankers in not having branches in Dublin or its neighbourhood. That is the seat of Government—the seat of a large portion of the commerce of the country—and the exclusive privilege of the Bank of Ireland, within the metropolis and its vicinity, we have altogether abolished. Each banker may now have an 251 agency in Dublin—may draw Bills upon Dublin—and have, in fact, all the privileges formerly enjoyed by the Bank of Ireland. These are the advantages we give to Ireland; but there is another which I have not mentioned. In Scotland it has never been the custom to keep much gold. The bankers have kept securities in their possession, and have always trusted to the sale of those securities. So, practically, there has been little or no gold in Scotland. That has not been the case with Ireland. Each bank has kept a very fair quantity of gold. The Bank of Ireland keeps an amount of not less than 1,000,000l., upon an average; and the Provincial Bank somewhere about the sum of 400,000l. or half a million. The National Bank, too, and the Belfast banks, have always kept a supply far exceeding the usual amount kept by the banks of Scotland. Now, I don't require them for the future, if their circulation does not exceed the given amount, to keep any stock of gold. Permission is given there to issue in excess of their present amount at the head office. That is a great privilege in Ireland, which Scotland does not possess, in consequence of her keeping gold. The amount at the head office is now about 800,000l. The extended commerce of Ireland requires an extended issue; and we ask you to apply some part of your banking assets to ensure a continued security. So far from thinking that this measure will cause any embarrassment in Ireland, I think it will most materially promote the permanent prosperity of that country. I believe that the changes we have made in the system of banking will be beneficial to all parts of the kingdom; but I think, that in all other places, it will fall short of what it will prove to be in Ireland. The hon. Gentleman opposite says that "I resist everything — that I will not yield a single point." Now, to show that I have no such feeling, there is a concession that I am prepared to make in favour of Ireland. By the Bill, as it at present stands, different periods are taken in order to obtain an average of the circulation in Ireland and in Scotland. Now, I am willing, in order to remove any possible feeling or objection upon this point, to take the same periods for both countries. This, I am quite aware, will increase the amount of permitted circulation; but I do hope that the Representatives of Ireland will view this measure as a whole, instead of 252 criticising its minute details—that it will meet with their general concurrence, and that they will partake of my conviction, that it will be for the advantage of Ireland—that it will afford the means of additional prosperity to the commerce and agriculture of that country—and that, at the same time, both the bankers and their customers will be relieved from the anxiety and the suspense which, for so many years, have hung over the banking transactions of Ireland.
§ Mr. E. B. Rochesaid, that the right hon. Baronet, in trying to make out a case for this Bill, had alluded to those times of banking depression which had caused so much distress in Ireland; but it was scarcely necessary to remark that things had materially altered since that period. The right hon. Baronet had then alluded to the failure of many banks which had occurred subsequently. Undoubtedly that was so; but many of those banks had recovered themselves. His objection to the Bill was, that the right hon. Baronet had failed to make out a case for interference with the banks of Ireland. The right hon. Baronet had admitted that those banks were respectable; they had not issued an excessive amount of paper; nor had they carried on their banking transactions with imprudence. Then why interfere with them at all? The effect of the Bill would be to restrict the circulation of the country. Now, the commerce of Ireland was increasing by an extended system of railways; and was this the time to restrict the circulating medium? The Bill would do great injustice to the two Banks—the Royal Bank of Dublin, and the Hibernian Bank. They had always maintained a trustworthy position; and yet they could not become banks of issue. He was not, however, prepared to offer any objections to the Bill going into Committee. As the Bill passed, he should offer his opposition to several of its clauses; but he had been unwilling to let the Bill go into Committee, without stating that no case had been made out for any interference with the banking system of Ireland.
§ Mr. Redingtonsaid, that the speech of the right hon. Gentleman seemed to evince a disposition to play off Ireland against Scotland, and to satisfy the members for the one country by assuring them that they were treated quite as well, if not better, than the other. Why had not the right hon. Gentleman adopted the same system with regard to Ireland as had 253 last year been adopted in taking the averages with regard to England? The right hon. Gentleman said, that he would make a concession, by fixing the same time for Ireland and Scotland; but the fact was, that in his original statement, the right hon. Baronet said that the time was to be the same for both; and so the boon of which the right hon. Gentleman boasted was nothing but a correction of a clerical error in the Bill. He had many objections to this measure; and he did not see why they should further limit the now restricted circulation of the country.
Sir R. Fergusonsaid that since the beginning of December last the wants of Ireland had called for an issue of notes to the amount of 700,000l.; but the measure before the House proposed to limit the circulation to 6,300,000l. As to the proposition respecting fractional notes, the impossibility of procuring a sufficiency of silver at fairs should be considered. These fractional notes had been found to be a great convenience, and the abolition of them would be attended with great injury and hardship. On the whole, he did not consider that this Bill would prove to be that great bonus to Ireland which the right hon. Baronet appeared to think.
§ Mr. Sharman Crawfordconceived that the ultimate object which the Government had in view was to assimilate the condition of Ireland to England, with regard to the bank-note system. He should certainly wish to see an assimilation effected between the two countries in respect to all measures that were good; but he was one of those who thought the restriction to the gold circulation in England was not a benefit to England. It was no wonder, then, that he was not willing to assent to the same principle as regarded Ireland. They should recollect that England had arisen to the highest pitch of prosperity in her commerce, and that Ireland had been in the greatest poverty, and was only progressing now in a very small degree towards prosperity. What then was fit for England was unfit for Ireland. He fully assented to all that had been said in regard to the admirable conduct of the banking companies of Belfast; any measure that would limit the circulation of notes in Ireland would have a most injurious effect upon the trade of the north of Ireland. He thought that there ought to be a free trade in banking as well as in other matters, only taking the precaution 254 of putting those establishments under a wholesome control so as to ensure the safety of the public.
§ Mr. Wyseadmitted that much which had fallen from the right hon. Baronet was founded upon sound views of the interests not only of Ireland, but of the kingdom generally. At the same time he thought in the measure before the House that there were provisions which carried out too far the principle which was sought to be established by the right hon. Baronet. In his anxiety to restrict over-issue the right hon. Baronet had not provided the power of expansion which was required in Ireland, whose interests were in course of development, and a new enactment might very soon be found necessary to meet the growing exigencies which would necessarily follow the development of her labour and capital. The right hon. Baronet had not provided for increasing the number of banks as well as the increase of issues in each bank. No one would contend, but that Ireland might not rise to the same condition as Scotland. He thought that the present measure would have the effect of giving a monopoly to the existing banks in Ireland without any reference whatever to new ones that might be established.
§ Sir William Somervillesaid, he had a case of great and unmerited hardship to bring before the Committee on the part of two of the best and most meritorious establishments existing in Ireland, namely, the Hibernian and the Royal Banks, In consequence of the refusal of the Bank of Ireland to afford sufficient banking accommodation, a number of banks having less than six partners were established, and the subsequent failure of many of these establishments was well known. In consequence of the depression of trade which ensued, and the continued monopoly of the Bank of Ireland, the Hibernian Bank was established in 1824. The hon. Baronet read the evidence of the late Mr. Ignatus Callaghan, one of the directors of the Hibernian Bank, given before the Committee of the House of Commons in 1838, to show that at the time the company obtained their Act of Parliament, in June, 1824, Mr. Huskisson and Lord Ripon, then Mr. Robinson, distinctly pledged themselves that the Bank of Ireland charter should not be renewed; and that, were it not for that pledge, and the expectation that at the termination of the 255 charter they would be enabled to become a bank of issue, the company would never have been formed. After that evidence he thought it was clear that the Hibernian Bank had been established on the express understanding that the Bank of Ireland charter would not be continued; and that it was to be afterwards placed upon the same fooling with that establishment as regarded the issue of notes. The hon. Baronet read an extract from the Report of the Directors of the Hibernian Bank to the proprietors of the bank for 1833, in order to show that they had not lost sight of the expectation of becoming at some time a bank of issue. The Hibernian Bank had a paid-up capital of 250,000l. It had been conducted from the very commencement on the best principles, and it had conferred infinite service on the trading interests of Dublin. No complaint had ever been brought against its management or mismanagement. It was besides, an older bank than any other joint-stock bank in Ireland. It was followed by the Provincial Bank, in 1825, having thirty-six branches; the Northern Banking Company, having eleven branches; the Belfast Bank, with seventeen branches; the National Bank of Ireland, with thirty-seven branches, and the Ulster Banking Company, with thirteen branches. In 1825, the Bank of Ireland established twenty-three branches; but of these only six were placed within the prescribed circle of sixty-four miles, around Dublin, while there were no less than 131 branch banks outside the circle. It would have been easy for the Hibernian Bank to go outside the limit of the sixty-four miles, and thus become a bank of issue; but they were anxious to preserve their utility for the advantage of the mercantile community of Dublin, and if they had not done so, the trading interests of that city would have suffered to an extent which no man could see. In the year 1838 the Royal Bank was established, and though it had not equal claims on the ground of antiquity with the Hibernian Bank, it was equally entitled to the attention of the House. No complaint had ever been made against it, and, as well as the Hibernian Bank, it had been carried on with every due regard to ultimate fair and safe business. He would wish to know why these banks which, owing to the vicious legislation of Parliament, were obliged to confine their utility within sixty-four miles of Dublin, 256 should not now share in the advantages that were about being extended to other banks? He was told in reply that the Bill of last year passed to regulate the issue of banks in England prohibited all banks which in 1844 had not the privilege of issue from becoming banks of issue hereafter. The clause which enforced that prohibition was by no means generally known; but even were it otherwise, it did not in the slightest degree affect the banks whose cause he advocated. If the same principles were adopted in both countries, they would prevent any fresh issue of paper, but they should at the same time preserve the monopoly of the Bank of Ireland, in which case it was clear that the Hibernian Bank would enjoy privileges which it will not possess under the increased competition to which it will hereafter be subjected. The Hibernian Bank had grounds for expecting that this course would be adopted, because in 1838 the right hon. Baronet, and he believed the Chancellor of the Exchequer also, voted, for the renewal of the Bank of Ireland Charter for twenty years, and would have succeeded were it not for the opposition of some Irish Members, of whom he (Sir W. Somerville) was one. A great deal had been said about the Scottish system; but the cases were not at all analogous, as there never had been any circle of restriction established in that country. He wished to know what success the right hon. Baronet would meet with, if he had brought forward a measure for this country, supposing an exclusive circle had existed of sixty-four miles round London, which would enact that all the provisional bankers might issue notes within that circle, but that none of the London bankers should be allowed that privilege? He would venture to say that the right hon. Baronet would not attempt carrying such a measure in opposition to the London bankers. He could of his own knowledge bear testimony to the injurious effects of the monopoly of the Bank of Ireland. He had already presented two petitions from the corporation and inhabitants of Drogheda, another from Navan, and a petition a few evenings ago, signed by no less than 15,000 of the merchants and traders of Dublin, all praying that the Hibernian and Royal Banks might be placed on the same footing with the other joint-stock banks of Ireland. The evil legislation of that House prevented these banks becoming 257 banks of issue heretofore; and now the right hon. Baronet proposed to take from them the share which they hitherto possessed in the monopoly of the sixty-four miles from Dublin, without allowing them in return any part of the privileges which he intended to confer on the other joint-stock banks. He was quite certain that the right hon. Baronet did not wish to do injustice; and he would be, therefore, most gratified if the right hon. Gentleman would take the case of these banks into his consideration, and declare his willingness to deal with them as he should deem just. He would be satisfied if any reasonable compromise were offered. The shares of these banks had already fallen 15 per cent. The right hon. Baronet might say I that the privilege of issuing paper money was no advantage. He differed altogether from that opinion; and, at all events, it was only just to place one bank upon the same footing in that respect with the others. The hon. Baronet concluded by expressing a hope that he would have the support of the Scotch and English Members in favour of his Amendment, and that the right hon. Baronet (Sir Robert Peel) would consent to take the case of these banks into his own hands. The hon. Baronet concluded by moving, in Clause 1, line 5, after the word "thereof," that the following words be inserted:—
And also so much of the said recited Act of 7th and 8th of Her Majesty as prohibits, after the passing of that Act, any other person than a Banker, who on the sixth day of May, one thousand eight hundred and forty-four, was lawfully issuing his own Bank notes, should make or issue Bank notes in any part of the United Kingdom, as far as same may be held to include in its enactment said Hibernian Joint-Stock Company and said Royal Bank.
§ The Chancellor of the Exchequerthought that to those who had attended to the previous part of the discussion the speech of the hon. Baronet must have afforded considerable satisfaction, as it showed that, under circumstances more unfavourable than could ever again occur, these two banks had carried on a profitable banking business.
§ Sir William Somervillesaid, his argument was, that the exclusive system was more favourable for these two banks than the proposed measure, unless they were permitted to share in the privilege of issue.
§ The Chancellor of the Exchequersaid, 258 the object of the Amendment proposed by the hon. Baronet was to repeal the enactment made in the last Session of Parliament, which applied equally to all parts of the United Kingdom, and which prohibited, from the day on which it passed, the establishment of any new bank of issue in the United Kingdom. To the restrictions imposed by that Act the banks of England and the banks of Scotland had submitted; and, though there were in the latter country two banks on the point of being established, when the Act of last year was introduced, Parliament had not thought them entitled to any indulgence on that account. The hon. Gentleman opposite asked them to make an exception of two banks in Ireland; and he had alluded to a promise said to have been given to the Directors of the Hibernian Bank by the Earl of Ripon and Mr. Huskisson, that at the expiration of the charter of the Bank of Ireland a free trade in banking would be established in that country, and that the charter would not be renewed. It was not the first time that such a statement had been made. In 1839, when Lord Monteagle brought forward a measure for renewing the charter of the Bank of Ireland, it was stated that a pledge had been given by the Earl of Ripon that the charter would not be renewed, and that at its expiration the privileges of the Hibernian Bank would be extended. Lord Monteagle then stated that he had applied to the Earl of Ripon to know whether he had any recollection of a transaction of the description alluded to, and he read to the House the answer which he had received. It was scarcely to be believed that any public man would say, thirteen years before the expiry of a charter, that he would guarantee the abolition of the charter at the end of that period. The answer given by the Earl of Ripon, in 1839, to Lord Monteagle, regarding the conversation which, took place fifteen years before was, that he had no distinct recollection of what passed on the occasion referred to; but that there could not be a doubt that he did not—because he could not—give any pledge as to what was or was not to take place at the end of fourteen years; that he had no doubt that he had expressed his regret that he could not do more for the banks of Ireland than to give them the power of suing and being sued; and that he perhaps might have said that he was willing to give them the advantages conferred on the banks of England by the Act of 1826. He 259 came now to the consideration whether there were circumstances to justify the exception of these two banks from the restrictions which had been applied to the other banks of the United Kingdom by the Act of last Session. The hon. Gentleman seemed to think that they were entitled to exemption. The hon. Gentleman did not seem to be aware that there were not only joint-stock banks, but private banks, who had abandoned the issuing of notes from their being within the circle of the monopoly of the Bank of Ireland, and which had as fair a claim to be regarded by the House of Commons as the two joint-stock banks referred to by the hon. Gentleman. The hon. Gentleman said that these banks had suffered greatly from the price of their shares having become depreciated. But the same thing happened to the Bank of England, when the Bill of last Session was introduced. Bank of England stock, which had been 207l., fell, when that Bill was introduced, to 203l. 10s. If they looked to banks in Dublin, they would find that while that discussion was going on, shares had become depreciated. Shares of the Hibernian Bank had fallen from 33l. 10s. to 31l., and the Royal Bank from 14l. 2s. 6d. to 13l. 5s. The hon. Gentleman would perceive, therefore, that the fall in the price of these shares was not of a nature to produce any alarm, and that the same thing would happen when the present measure came into operation as had happened to the Bank of England after the measure of last year, the shares would rise to their former amount. He did not think the competition of other banks within the prescribed circle would at all injure the two banks alluded to by the hon. Gentleman. The notes of the Provincial Bank and of the National Bank would henceforth become current within that circle; and the two banks in question might make an arrangement by which they might be relieved from the necessity of acceding to the terms which the Bank of Ireland might propose as the price of circulating Bank of Ireland notes. He thought, therefore, that that advantage would more than compensate them for any loss which they might suffer from the competition. If he were to accede to the Motion of the hon. Gentleman, he felt he should be giving the banks in Scotland and England just ground of complaint; and he could not, therefore, hold out any hope of acquiescence on the part of the Government in the proposal made by the hon. Gentleman.
§ Mr. Redingtondid not think that the right hon. Gentleman could point out, either in London or in Scotland, any bank which had been put in the same position by the Act of last Session, as that in which the present measure would place the two banks referred to by his hon. Friend the Member for Drogheda. He hoped, therefore, the House would not be led astray by the notion, that they were about to do for Ireland the same thing which had been done for England and Scotland. The belief in Ireland was, that the right hon. Baronet opposite had curtailed the paper circulation of Ireland to an amount below what it ought to be, and he trusted the Government would reconsider the subject.
The O'Conor Donthought that the Hibernian Bank ought not to be put in a worse position than that in which it had hitherto been, especially as it had conducted its business in a satisfactory manner. The right hon. Baronet opposite (Sir R. Peel) had formerly expressed a desire to meet the wishes of the people of Ireland with regard to another part of that subject. He could assure the right hon. Baronet that if he wished to give satisfaction to the people of that country, he would reconsider his decision with a view to altering it on this point.
§ Sir R. Peelsaid, that his only object was to do that which would be permanently beneficial to the country. The Bill which was passed last year was to prevent the establishment of any new banks of issue. It was not merely a Bill for regulating bank charters, but it was also a Bill for taking precaution against excessive issues, and was applicable to any part of the United Kingdom. That was distinctly expressed at the time, and might be in the memory of many Gentlemen who were present during the discussion, which took place on the occasion. It had been decidedly announced, as the intention of the Government, that that Bill was intended to be generally applicable to the United Kingdom, and that the principle involved in it was, that no new banks of issue should be established. There were two banks in Dublin which never exercised the privilege of issue; and last year they passed an Act to the effect that no bank which had not then the privilege should, subsequently, be allowed to issue. He was not surprised, that not having had hitherto the privilege of issue, they should have conducted their business so satisfactorily as had been mentioned; 261 and he doubted not but they would still continue to do so as well as they had hitherto done. It was quite impossible for him to agree to the proposition for giving these two banks the privilege which they had not previously exercised; and he should, therefore, oppose the Motion of the hon. Baronet opposite.
§ Mr. Haweswas disposed to support the Motion of the hon. Baronet behind him (Sir W. Somerville), on the principle of the general benefit that might accrue to Ireland, from extending to that country a sound system of joint-stock banking. It was said, that if they went to Scotland they would find a sound system there in operation, which was essentially beneficial to the public. As to the reply of the right hon. Baronet at the head of the Government with respect to the Banking Bill of last year, he (Mr. Hawes) should observe that he did not consider himself bound by that measure, some portions of which he had opposed at the time, and some modifications of which he confessed he should like to see introduced. Several of the great commercial towns of Ireland, such as Cork, Limerick, Belfast, and Waterford, had applied for accommodation to the Bank of England, in consequence of the existing monopoly of the Bank of Ireland, and that having been refused to them, he considered, if it was supposed to be of service to Ireland to have this power of issue sought for granted, that it ought to be conceded. There was no reason to suppose that this power would increase the present circulation—it might rather tend to diminish it. In conclusion, he had only to say, that however the present system might be viewed, he thought it was only good policy to extend to Ireland the benefit of a sound system of joint-stock banking, and on that ground he was disposed to support the Motion before the House.
§ Mr. Bellewconsidered the Hibernian Bank was especially entitled to consideration, inasmuch as for many years it had counteracted and resisted the stringent and imperious monopoly of the Bank of Ireland, at a period when that establishment was indisposed to afford accommodation to any persons except those of a particular line of political opinions.
§ Mr. E. B. Rochesupported the Motion; and wished to know on what grounds it was that Ministers refused those banks the privilege of being banks of issue at a time when they were doing away with that monopoly which the Bank of Ireland long 262 possessed for sixty miles round Dublin, and when the people of Ireland expected to have the benefit of the abolition of those restrictions? He did not then mean to express any opinion as to whether it was or was not advisable to have only one bank of issue; that question was not raised in the present discussion; but he did think they ought not to shut out two solvent, and, as had been fully acknowledged, well-managed banks, from that competition which they ought to be allowed as banks of issue. Now that commercial enterprise was opening up in Ireland, and making fresh demands for facilities of monetary transactions, they ought not to create monopoly, but allow a free trade in banking as well as anything else.
§ Mr. P. M. Stewartsupported the claims of the Royal and Hibernian Banks to the enjoyment of the advantages conferred by this Bill.
§ Mr. Muntzsupported the Resolutions proposed for the extension of the advantages of this Bill to Ireland. One great argument in favour of the Resolutions was, that Ireland was a poor country, and had on this account a claim to particular consideration, in respect to the special matter under discussion.
§ Mr. Wysesupported the Amendment. He thought that those Banks had the fullest claim to the enjoyment of those privileges. If those banks had had timely notice that the Bank of Ireland was disposed to surrender its peculiar privileges, there was no doubt that they would have come forward and established their claim. He felt bound to support the Motion for the extension of those privileges to those banks, convinced that it was just.
§ Mr. C. Woodthought that, in some respects, the measure of the right hon. Baronet with regard to Ireland was in some of its enactments more liberal than the measure extended to Scotland. He did not think that any case had been made out for the extension of those privileges to those banks. It might be true that to confine the issues to existing banks was to give them a monopoly. No doubt it was. But the right hon. Baronet was anxious in these measures to preserve existing interests, and therefore he allowed existing banks to issue up to the amount they issued now. He did not think there was any fair ground for the complaint that parties had been taken by surprise, and that being so, he could not agree to this motion.
§ Mr. Sharman Crawfordwould appeal to the good feeling of Government on this question. They had recently been acting upon a very conciliatory policy towards Ireland; but this measure had a very un-conciliatory tendency. It would excite a very unpleasant feeling in that country, if the Government carried this measure in opposition to the united remonstrances of the Irish Members—particularly as no advantage had been proved as likely to result from the change. He hoped, therefore, that, in some way or other, those banks would be allowed to issue notes.
§ Sir W. Somervillereplied. The analogy between Scotland and Ireland did not hold, for in Scotland they had no monopoly to deal with; but that was not the case in Ireland. As the monopoly was now to be abolished, he contended that these banks whose case he had brought forward ought to share in the advantages. He agreed with those hon. Gentlemen who stated, that Ireland was now beginning a career of prosperity. He believed that a career of prosperity was now opening upon them, of which no man could foretell the extent; and he trusted the right hon. Baronet would not, by this measure, interfere to check it.
§ The Committee divided on the Question, that the words be inserted:—Ayes 43; Noes 103: Majority 60.
§ On Clause 8 being proposed,
Mr. M. J. O' Connellsuggested that the average of the circulation should be taken, not, as proposed by the Bill, for twelve months previous to the 27th of April last, but, as in the English Bill, for twelve weeks preceding that period.
§ Mr. Redingtoncomplained that the Irish bankers had not been put upon the same footing as the English bankers.
§ Sir R. Peelsaid, no advantage had been taken of the Irish bankers, to whom twelve months had been given, which had not been given to the English bankers.
§ Mr. Redingtonasked why the right hon. Baronet did not give a reason for making a distinction between the two countries?
§ Mr. E. B. Rochesaid, his hon. Friend (Mr. Redington) was wrong in looking for a reason from the right hon. Baronet, who was not under any necessity for giving a reason, backed as he was by a majority who would support him. The Irish Members and the interests of Ireland were in fact treated with contempt, and he advised his hon. Friends to take no more trouble with the Bill.
§ Sir R. Peelsaid, he could not conceive how any Government could be supposed to have any motive in imposing a restriction upon the currency of Ireland, unless with a view of securing the welfare of the country. He had had long experience of the effects of an uncontrolled circulation in Ireland. He remembered the years 1819, 1820, and 1825, and the disasters which overtook numberless individuals, who in vain struggled against the misfortunes in which they were involved. So far from treating the Members from Ireland, or the interests of Ireland, with contempt or neglect, he had the strongest impression they were consulting the interests of Ireland, by putting some check to the undue increase of the paper circulation of the country.
§ Clause agreed to.
§ On Clause 9 being read,
Mr. M. J. O'Connellproposed to leave out the words, "At the Head Office in Dublin." By the law as it at present stood, which they did not want to change, every bank was obliged to pay its notes at its branches as well as at the head office in Dublin. The effect of the clause in the Bill would be to embarrass commercial enterprise, by unnecessarily restricting the circulation, for the banks would be obliged to keep bullion to meet their notes, not only at their branches in the country, but at their head offices in Dublin.
§ Mr. Hawessaid, that if any parties had a right to complain of the Bill, it was the English, not the Irish Members. There was a fairness and liberality towards Ireland in this Bill, which he had looked in vain for in the English measure. But, at the same time, he thought that the wish of the Irish Members might be acceded to on this point.
§ The Chancellor of the Exchequerregretted that he could not accede to the wishes of hon. Gentlemen opposite. The Bill provided sufficient margin for the expansion of the currency. He did not share in the apprehension of the hon. Member for Kerry, that the increased commerce and improved railway communication of Ireland would be injured by the restricted circulation of this Bill.
§ Mr. M. O'Ferrallwas sorry that the right hon. Gentleman would not concede to the wishes of his hon. Friends. All that was required was to gain security for the 265 country, and that security would be insured by having gold anywhere—whether at the head office, or at any of its branches.
Mr. S. Wortleythought there was so much reason in the objections against the plan of the Government on this point, that they ought to concede it. He quite concurred in the observation of the hon. Member who had spoken last.
§ Mr. Rossassured the Government, that whatever other concessions were made, they would be quite useless, unless they conceded the present point. The people of Ireland would not be satisfied without it.
§ Mr Redingtonsaid, that the plan of the Government demanded from the Irish banker 21. in gold for every 11. in paper.
§ Mr. Trelawnyassented to the general banking principles of the right hon. Baronet, which were founded upon the doctrines of free trade; but, upon the present point, he agreed with the Irish Members; and, on the last division, had voted with the minority. Many English Members had done the same; and so it was not fair to charge them with indifference to Irish interests.
§ Mr. Wysesaid, that he had anxiously waited for some reason from the Government for the course they were adopting, but no reason had been given. All the objection the Government could offer to the Amendment was a small inconvenience; whilst to their plan were opposed the general banking interests of Ireland.
§ Sir R. Peelsaid, that hon. Gentlemen seemed very much alarmed at the consequences which would follow from restriction. They thought that an increased currency was essential to the prosperity of a country, and they referred to Scotland. He would read the opinions of Scotchmen themselves. [The right hon. Baronet read a statement published by the Directors of the Glasgow Chamber of Commerce in 1841, which showed that the circulation of Scotland had diminished in late years, while the transactions of the country increased.] It was on the proper distribution of capital by banks, that the prosperity of a country depended, and not on the amount of its paper currency. It was far better that there should be a sound paper currency, than that there should be a short and delusive prosperity accompanied by a speedy reaction. He much preferred the system adopted in Ireland of making the notes payable on demand at the branch banks, to the system adopted in Scotland, of making them payable only at the head 266 bank. But some of the Irish banks had so many as forty or fifty branches; and, without meaning in the least to depreciate the Irish banks, he thought it right that there should be some security. He would undertake to consider whether or not, without endangering the security which it was right to require, they could adopt some such a plan as would make bank notes payable at every branch to the holders of its notes, and yet, at the same time, not hold out any inducement to the head bank to collect its gold for the purpose of increasing its issues. If he could reconcile the two things, he would do so but he should not be considered as giving any pledge.
§ Amendment withdrawn.
§ Clause agreed to.
§ On Clause 15, prohibiting the issue of notes for fractional parts of a pound, being proposed,
§ Sir W. Somervillehoped the right hon. Baronet would not prohibit the circulation of 25s. and 30s. notes, which were of the greatest convenience.
§ Sir R. Peelsaid, he believed the effect of prohibiting the issuing of such notes would be to increase the silver circulation; and he had so strong an impression of the advantage of this, that he could not agree to the suggestion of the hon. Member.
§ Mr. Redingtonsaid, that the right hon. Baronet had not proposed the clause in the first instance. He could not then have considered it of so much importance; and it looked very like inconsistency to propose it now.
§ Sir R. Peelsaid, it was impossible, in proposing a measure like the present, to foresee every case that might arise. It might look like inconsistency; but the question, after all, was, whether what was proposed in the clause would be for the advantage of Ireland; and he really believed it was.
§ Mr. M. O'Ferrallsaid, that the people, in making bargains at fairs, found great convenience in the 30s. notes. He, therefore, hoped, that if the right hon. Baronet was determined in abolishing all other fractional notes, he would not interfere with the 30s. notes.
§ Mr. C. Woodsupported the clause. He thought it would be most beneficial to the country to bring silver into circulation; and he hoped the right hon. Baronet would not consent to the alteration.
§ Mr. Rosssaw no objection to this clause; but by another clause the bankers of Ireland 267 were required to keep a greater amount of silver than the country contained.
Sir R. Fergusonhoped the right hon. Baronet would reconsider this subject. The prohibition of these fractional notes would cause the greatest inconvenience to small traders in Ireland.
§ Clause agreed to.
§ Remaining clauses and the schedules agreed to, with verbal Amendments.
§ The House resumed.
§ Bill to be reported.