HC Deb 30 July 1846 vol 88 cc216-23
The CHANCELLOR OF THE EXCHEQUER

moved, that the House go into Committee on this Bill, and observed, that the measure had been introduced to the House by the late Government, at an early period of the Session; and a perfect understanding had been felt, that, though late, the Bill would be carried through Parliament. It had been stated by the right hon. Baronet at the head of the late Government, that he intended to assimilate the system of banking in the two countries. The Bill before the House had resulted from this determination; and the present Government, considering the measure called for, and calculated to effect much benefit, had promoted its enactment into a law.

House in Committee.

On Clause 1,

MR. HUME

objected to the Bill, and when originally brought forward had stated his objections, upon the ground that the measure was not called for, and in its operation would create a monopoly. The hon. Member for Shrewsbury (Mr. Disraeli) had spoken a few evenings since upon the principle of action and reaction; but really the Government made strange havoc of their free-trade legislation; for occasionally they followed that principle, and then they retraced their steps. He wished the hon. Member for Shrewsbury had been present to mark the mode by which sometimes the Government supported free trade and then abandoned it. Free trade could be adjudged right in some things, and why not in all? He objected to the Bill, and should also oppose it, upon the fact of the utter absurdity of the want of principle characterizing such legislation.

MR. GOULBURN

stated, that the late Government, having found the necessity of legislating upon the principle of banking, had proceeded to do so, and the last Bill on the subject was that then before the House. No complaint could be made that either the House or the banking interest were taken by surprise with respect to the measure, because the existence of the Bill was well known; the bankers themselves had been apprised of the intentions of the Government respecting it; and even the Scotch Members themselves had inquired when the measure would be brought forward. He had had deputation upon deputation from Scotland upon the subject of this Bill; and Scottish Members could not now plead surprise in regard to it, or a want of notice. The right hon. Gentleman then recited the principal provisions of the Bill, and contended that they could not possibly have any injurious effect on the operations of banking in Scotland.

MR. NEWDEGATE

said, that he could not admit to the right hon. Gentleman the late Chancellor of the Exchequer (Mr. Goulburn), that the public or the House had had ample notice of the intention to proceed with the measure. He must remind the House that the second reading of the measure had taken place at half-past eleven at night long since, when the attention of the country and the House was absorbed by the consideration of the great free-trade measures proposed by the late Government: no fair opportunity was then afforded for the practical discussion of the principle involved in it. He (Mr. Newdegate) knew that a great number of Members, previously to that second reading, had gone away, believing that the Bill would not be proceeded with. This alone was a sufficient reason to justify the present Chancellor of the Exchequer in abstaining from going on with the measure, when there were not six Scotch Members in the House. The system of banking in Scotland was secure, and comprehensive, and worked so well in every respect, that a measure of this kind was wholly unnecessary and uncalled for. There had been no insecurity in banking in that country; on the contrary, the Scotch system was so good that it was equally extraordinary and unfortunate that the system of banking in England was not more nearly assimilated to it. He objected to the Bill altogether, because the intention of it was to undermine the Scotch banking system; to cripple and limit the security upon which it was based, and so confine the accommodation it afforded as by degrees to bring it into discredit. That clause which enacted that no body of persons who could not subscribe—or who might not choose to subscribe—so large a sum as 100,000l. could form themselves into a public company for banking purposes, was quite uncalled for and mischievous. There was nothing whatever in Scotch banking that rendered such restriction necessary or proper. It was most extraordinary to hear the late Chancellor of the Exchequer quoting the disasters which occurred in England in 1825–6 under the system of 1819, and then arguing for the alteration of the Scotch system to that of England, when the instances he had himself adduced told so greatly in favour of the Scotch system, which had weakened the storm in 1825, and against the English, which had wrecked the hopes and property of so many thousands. And what was the remedy adopted in England in 1826? Why, to increase the number of partners and the capital of local banks; and this Bill was to do exactly the reverse for Scotland. But there was an under current in all this, a determination to limit the means of accommodation which the people of Scotland had so long enjoyed; to lay the same iron hand upon the legitimate use of their resources, which pressed so heavily upon the productive classes of England. How was it that agriculture had advanced so rapidly in Scotland, but by the means of the accommodation afforded to her farmers by her banking system: the advocates of the English system knew, that it was so, and were jealous of the comparison. This Bill tended to monopoly, and was therefore favoured by the chartered banks of Scotland, who would gain by it; and was supported by a free-trade Government, because it gave them the power of limiting the banking establishments. Was ever anything more inconsistent, more glaringly unjust, than that immediately upon having determined to expose our productive classes to the competition of the world, you should be creating a monopoly in banking, and limiting the resources upon which the industrious classes could obtain accommodation? Could not the Government be content with the fall of prices competition would produce, without superadding the depression consequent upon limited issue and scarcity of money? He much regretted that the present Chancellor of the Exchequer had adopted this measure. It was not the right hon. Gentleman's own Bill; and, perhaps, he might be permitted to remind the present Government that if they intended to form a sort of joint-stock company with the late Ministry, it was time they looked to the amount of their liabilities. With the permission of the House he would read an extract from a very able letter, written as a warning to the Scotch Members and nation on this subject, published in 1845:— I know that your spirit and the spirit of all the northern clans would be up in arms instantly if Sir Robert were to attempt, by force, to carry his new order of things beyond the Tweed. But I must confess that I am a little fearful lest by tickling the vanity of the Scots, and baiting his hook with the promise of some temporary advantage—perhaps leaving their small notes nominally untouched until that good faith upon which they are based has been secretly undermined, and then (according to the system pursued in England) taking advantage of some partial discredit thus created as a pretext for enforcing his dogma. That the advance of credit for forming the circulating medium of the country is a privilege and an advantage to which none are entitled; or it may be that some of the principal Scotch banks may be dealt with in the same manner as the Bank of England has been treated, first relieved from all control over the currency, as being a power quite unfit for them to exercise—then deprived of their independent character—then made the tools of an arbitrary and ambitious Prime Minister, who, having thus got them under his own control, may then insist upon the whole credit circulation of Scotland baing brought nominally under the control of those favoured banks, but really under his own; I am, I repeat, fearful lest he should thus accomplish, by cunning and stratagem, that interference with your circulation which he could not accomplish by force. That warning, verified by the introduction of this measure, was indeed worthy the attention of Scotchmen. He would conclude by expressing his satisfaction that the hon. Member for Montrose, and other Scottish representatives, had showed by their conduct on this question that the warning he had quoted had not been disregarded.

MR. HENLEY

opposed the Motion. The Bill would have the effect of enhancing the value of money, and cheapening the price of commodities; such being the result of a similar measure in England. He had also to complain of being taken by surprise with respect to this Bill. It had been brought in last February, but a delay had been permitted to take place till the latter end of July; and the Scotch Members were very generally under the impression that it would not be brought on at all this Session.

The CHANCELLOR OF THE EXCHEQUER

denied that hon. Members had any right to complain of having been taken by surprise in the case of this Bill. The Bill was originally brought in last year, but withdrawn on the express understanding that it was to be introduced again this Session. It was entered on the books for a very early day after the opening of the Session, but was postponed till a later period, solely that there might be as ample an opportunity as possible for discussion on the subject. Immediately after the accession to office of the present Ministers, he notified to the House that this measure was one of those with which the Government were resolved to proceed; and he named a remote day for bringing it forward. He was induced, however, to depart from the day that he had fixed, and to postpone the measure for a week longer, in order to receive a deputation from the bankers of Scotland on the subject; and surely, after all this, it was not open for hon. Members to complain that due notice had not been given of the intentions of the Government. He considered the principle of the measure a sound and just one, and was willing to undertake the responsibility of adopting it.

SIR R. FERGUSON

thought the Bill altogether uncalled for.

MR. FORBES

protested strenuously against the Bill, and hoped that the Chancellor of the Exchequer would give him time to get up a county meeting against it. He would undertake to procure numerous petitions from every parish in Stirlingshire. The present system of banking in Scotland was found to work admirably; and the measure which was now under consideration was not at all required. It would be injurious to the country to which he had the honour to belong.

MR. J. STUART

objected to the consideration of a measure like that before the House when there was so thin an attendance of hon. Members. He contended that the Bill came, if not by surprise, at least under circumstances which prevented them, as a legislative body, from considering it. The Chancellor of the Exchequer had said that the Bill had been introduced last year, but that it had not been proceeded with, because there had not been time to consider its provisions adequately. He asked whether that objection did not still exist, and whether the House or the country had had sufficient time to deliberate upon it. His principal objection was, that the attention of the House and the country had been lulled asleep; and, without using expressions offensive either to the present Government, or to the Members of the late Government who took an interest in the Bill, he was sorry to be compelled to say that he had heard out of doors, and with some reason too, that at the close of the Session it was the practice to smuggle Bills through Parliament, as they were now about to do this. The Bill had been ordered to be printed so far back as the 24th of April; and nevertheless it was a remarkable fact that its provisions were not taken into consideration until the 30th of July. Almost every Scotch Member in the House had declared himself an antagonist to the Bill. The hon. Members for Stirling and Montrose had protested against it on the ground that the Bill, although purporting to extend only over a page and a half, really contained fifty clauses of another Act of Parliament, not recited but included in the Bill now applicable to joint-stock banks in England. He would ask whether hon. Members who were about to vote, could stand up and declare that they had read and understood those fifty clauses, and that they applied to Scotland? ["Divide!"] Hon. Members might call "Divide;" but he begged to inform them that the business of legislation ought not to be carried on in a manner so rapid and inconsiderate; and if it were done so in this case, he charged hon. Gentlemen, but more particularly English Members, who were not so well acquainted with the probable tendency of the Bill, with neglect of duty if they permitted themselves to be parties to it. The principle of the Bill was of a most startling and extraordinary nature, and was directed to prevent the formation in Scotland of any joint-stock bank, except under certain restrictions; and those restrictions were of such a nature, that although the Bill had been in operation in England for two years, only one joint-stock bank had been established under it. The Bill, he declared, if passed, would sanction monopoly; and though the right hon. Baronet, lately Her Majesty's principal adviser, had observed that he would retire from the administration of public affairs "hated by every monopolist," the party who then acted with him were about to inflict upon Scotland a measure the direct tendency of which was to foster and encourage that very system which their leader had so significantly denounced.

SIR GEORGE CLERK

said, it was stated that the House had been taken by surprise with reference to this measure; and that it was another instance of the evil which the legal profession complained of from hasty legislation. Now, what was the history of what was called hasty legislation? A Bill was brought in in 1844, for the regulation of banks in England; and it was stated at the time that it was the intention in the then ensuing Session to introduce a measure carrying the same principles into the system of banking in other parts of the United Kingdom. Accordingly, in 1845, a Bill was introduced for improving the system of banking both in Ireland and Scotland. This identical Bill was introduced at the end of the Session, in the month of July; but on representations being made on the part of the inhabitants of Scotland that they had not sufficient time to consider it, it was postponed until the next Session. The Bill was again introduced in the beginning of the present Session, on the 21st of February. It excited great attention in Scotland, and deputations attended on the then First Lord of the Treasury, consisting not only of bankers, but of noblemen and landholders, and a large proportion of the representatives of Scotland. If the people of Scotland thought the Bill would be prejudicial to them, the Table would be covered with petitions against it; and he (Sir George Clerk) conceived it would be only a waste of time to add a single word on this clause of this Bill.

The Committee divided on the Question, that the Clause stand part of the Bill:—Ayes 53; Noes 13: Majority 40.

List of the AYES.
Baine, W. Buller, C.
Barkly, H. Clerk, rt. hon. Sir G.
Barnard, E. G. Craig, W. G.
Berkeley, hon. Capt. Crawford, W. S.
Broadley, H. Divett, E.
Brotherton, J. Dundas, Adm,
Browne, hon. W. Estcourt, T. G. B.
Fleetwood, Sir P. H. Parker, J.
Flower, Sir J. Ricardo, J. L.
Gibson, T. M. Rich, H.
Goulburn, rt. hon. H. Rutherfurd, A.
Graham, rt. hon. Sir J. Sheil, rt. hon. R. L.
Grey, rt. hon. Sir G. Smith, J. A.
Hatton, Capt. V. Somerset, Lord G.
Hawes, B. Somerville, Sir W. M.
Hobhouse, rt. hn. Sir J. Stanton, W. H.
Howard, hon. C. W. G. Vesey, hon. T.
James, W. Warburton, H.
Jervis, J. Ward, H. G.
Labouchere, rt. hn. H. Wawn, J. T.
Listowel, Earl of White, S.
M'Carthy, A. Williams, W.
Maitland, T. Wood, rt. hon. C.
Marshall, W. Wyse, T.
Maule, rt. hon. F. Young, J.
Mitcalfe, H. TELLERS.
Moffatt, G. Hill, Lord M.
O'Conor Don Tufnell, H.
List of the NOES.
Borthwick, P. Martin, J.
Bouverie, hon. E. P. Morris, D.
Duncan, G. Newdegate, C. N.
Ewart, W. Spooner, R.
Ferguson, Sir R. A. Wodchouse, E.
Forster, M. TELLERS.
Henley, J. W. Forbes, W.
Hume, J. Stuart, J.

Bill went through Committee.

House resumed. Bill to be reported.

House adjourned at a quarter past Eleven o'clock.