§ Order for Third Reading read.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he rose, in conformity with his notice, to move that the Order for the Third Reading be discharged, and that the Bill be re-committed for a certain limited purpose. It had been his intention, in accordance with an established practice, after the re-committal of the Bill and the adoption of his Amendment, to proceed 801 at once with the third reading. But having understood from the right hon. Gentleman the Speaker that, inasmuch as there was a notice given of an intention to move the rejection of the Bill upon the third reading, it would be more regular and becoming to postpone the third reading to a future day; be should acquiesce in that suggestion, and would therefore postpone his Motion for the third reading until next week. He now moved the re-committal of the Bill for the purpose of asking the House in Committee to insert certain words in the preamble. There were other notices of Motion given by hon. Members, one of which, by the hon. Member for Leicester, he should not object to. The notice of the hon. Member for Leicester (Mr. Heygate) was one affecting the eighth clause. He (the Chancellor of the Exchequer) thought, as some hon. Members might object to it, that it would be more convenient to combine the two notices together. He should therefore now move—That the Order for Third Reading be read and discharged, and the Bill re-committed for the purpose of inserting in the Preamble, after the word "mentioned," the following words; 'And to fix by Law a time whereat the present statutory right of issue on the part of Hankers obtaining such exemption shall determine, in order that either their issues may become subject to the enactments of the Bank Act of 1814 hereinafter mentioned in respect to lapsed issues of Bank Notes, or that Parliament may make further provision concerning them as it shall think fit upon grounds of public policy,' and for the purpose of making Amendments in Clause 8.
§ Motion made, and Question proposed, "That the Order for Third Reading be read and discharged."—(The Chancellor of the Exchequer.)
said, he advocated the recommittal of the Bill, for the purpose of substituting the word "may" for "shall" in the eighth clause, in conformity with an agreement arrived at between the Chancellor of the Exchequer and the Association of Bankers on the 11th inst. As that course might seem at first sight inconsistent with the part which he had taken in Committee on the Bill, when he expressed opinions hostile to the whole scope and policy of the measure, he begged the indulgence of the House while he endeavoured to explain the reasons inducing him to propose an Amendment having for its object the carrying out of the compromise to which he had just referred, and which, bad he considered himself perfectly free to act, he should certainly not have submitted 802 to the House. It was doubtless within the knowledge of most hon. Members that the introduction of the Bill was regarded with suspicion and dislike by many classes throughout the country, and certainly met with little favour from the community of bankers. The Association of Bankers, originally formed for the purpose of watching the proceedings of a Committee appointed in 1857 to inquire into the operation of the Bank Act of 1844, took measures for the protection of its own and the public interests, and the result was that after various negotiations between the Chancellor of the Exchequer and a Committee appointed to conduct those negotiations, several alterations were agreed to by the former, and at a full meeting of members of the association on the 19th of April, it was resolved that all future opposition to the measure should be withdrawn. Unfortunately, the compromise thus effected was not adhered to in every particular, for this eighth clause, upon the wording of which a great deal turned and which was a principal question in the discussions, was not only not submitted to the Committee of the House in the terms agreed upon between the two contending parties, but the clause underwent still further alteration in the House in a sense more than ever inimical to the banking interest. A second series of discussions and renewed opposition to the Bill was the natural consequence of this departure from the agreement; and not to weary the House with details fresh negotiations took place between the Committee appointed by the Country Bankers' Association and the right hon. Gentleman the Chancellor of the Exchequer, and the result was that new proposals less friendly to the country issue than the former were submitted for the consideration of the bankers. Before dealing with them, the Committee of Hankers very properly issued an urgent summons to every member of the Association on the 9th of May, explaining fully the nature of these proposals and earnestly inviting their attendance on the 11th "for the purpose of considering and deciding upon their adoption or otherwise." In spite, however, of that urgent summons the meeting on the 12th was but thinly attended, and it was then and there resolved (though by a small majority only, fifteen voting one way and thirteen another) to "authorize the Committee to accept these last proposals with such modifications (if any) as they could effect." Whereupon 803 and under such express authority, the Committee after suggesting modifications without success, did actually conclude the negotiation by accepting unconditionally the Chancellor of the Exchequer's terms, and left nothing unsettled except the manner in which the arrangement should be carried out on the third reading of the Bill. Under these circumstances, as was probably known to the House, various banking firms, some of whom voted in the minority referred to, but most of whom did not attend the last meeting, resolved to take separate action for themselves, and oppose the further progress of the Bill. But when he remembered that the Association now comprised every bank of issue in England among its subscribing members, and having regard to the urgent summons they each and all received, and the full notice of the terms they were then invited either to accept or to refuse, he could not resist the conclusion that there was but one course open to the members of the Association—namely, to carry out in their integrity the terms of the last agreement. It was urged, he knew, that the right hon. Gentleman not having rigidly adhered to his former agreement in reference to the eighth clause, it was competent for the bankers to do what they liked on this occasion; but he was not aware that a departure from the terms of one contract justified a breach of faith in return with respect to another contract. Indeed it appeared to him that by the acceptance of the last proposals of the right hon. Gentleman his conduct in reference to the former was condoned, so that nothing now remained for them but to fulfil the terms of an honourable engagement.
§ MR. HADFIELD
said, there was considerable opposition to the Bill in Sheffield and the neighbourhood, and although they did not approve of the understanding that was come to between the Committee of the Bankers' Association and the right hon. Gentleman the Chancellor of the Exchequer, yet they would have abided by it. They objected on principle, and believing it to be a matter that required further consideration they wished to have the Bill referred to a Select Committee of that House, where they could be heard. It was a most important subject involving no less than six millions of capital, and he should propose that in referring the Bill to a Select Committee that the Committee should not sit until after the Whitsuntide holidays. It was contended by the bankers of Sheffield and the neighbourhood that 804 their interests and those of the public had not been considered to the extent it ought to have been from the hasty manner in which the Bill had been brought forward. Many country people, tradesmen and others, from their personal knowledge of provincial bankers, considered it safer to deal with the country bank notes than with those issued by the Bank of England. With regard to the Amendment that was introduced into the Bill, he believed it was carried against the will of the right hon. Gentleman the Chancellor of the Exchequer, and it was generally disapproved of by the country bankers. He moved the re-consideration of the Bill in a Select Committee, and that it be postponed until after the holidays.
§ MR. SPEAKER
said, the hon. Gentleman could not then make the Motion. The question before the House was that the order for the third reading should be discharged.
§ COLONEL EDWARDS
said, he wished to second the Motion of the hon. Gentleman the Member for Sheffield.
§ MR. HADFIELD
said, he did not oppose the re-committal of the Bill. He would make his Motion at a subsequent period of the proceedings.
§ MR. NEATE
said, he would like to hear a more satisfactory explanation of the principle of the Bill than had yet been given by the Chancellor of the Exchequer. Was it framed on the principle that the Government had a right to stop the issue of these private notes unless the banks paid for the privilege, or did it assume that the banks had a perpetual right of issue, and that the right hon. Gentleman wished to induce them to give up the right by securing its exercise for a limited term, and by offering them other advantages? It was clear to him that these banks had an undeniable right to continue their issue, and that they had a right to compensation if the privilege were taken from them. The late Sir Robert Peel was stated to have assured a deputation of bankers in 1844 that the privilege of issue would be continued to them. The definition of a bank note was a note payable to the bearer on demand, and the 9th of Queen Anne gave everybody the right to issue them. Then came the Bank Charter Act. The Chancellor of the Exchequer of the day having ascertained the injurious effects which arose from an unlimited right of issue, restricted 805 the privilege; but now it was proposed to go much further, and to deprive individuals who had invested large capital in their business of the right which they had hitherto enjoyed, of issuing notes to a limited amount. He should like to hear from his right hon. Friend whether he meant to say that the Government were justified in depriving those hanks of that right without giving them any compensation, for if so he was prepared to join issue with him, and would endeavour to defeat the Bill.
§ COLONEL EDWARDS
said, it was not his intention then to enter into the merits of the Bill, because he should have ample time for doing it on the third reading. He wished, however, to set himself right in one matter. In the recent discussion which took place on this Bill he considered it his duty to oppose it, and he stated at that time that it was the universal opinion of the country bankers that the Bill was inimical to their interests, and ought not to pass the House of Commons. He was then told that a majority of the bankers had decided in favour of the Bill, and to a certain extent that might be true. There was a meeting of bankers in London, as had been referred to by his hon. Friend the Member for Leicester (Mr. Heygate), and on a division there was a majority of two in favour of proceeding with the Bill, but the promoters consisted of persons deeply interested in the Bill, and Members of the National Bank of Issue, and they were supported, in a great measure, by persons interested in the Bank of England, who no doubt were favourable to the Bill, because they would be glad to see six millions of floating capital absorbed at once. That would not satisfy the country, and he ventured to assert that if the Bill passed it would entail most serious consequences upon its trade, more especially in small towns and their neighbourhoods where district banks circulated their own notes, and where country hank notes were taken with as much confidence as Bank of England paper. Another important meeting of the Bankers' Association had been held that day. All the most important firms in the Kingdom were represented, and he regretted to find that the Chancellor of the Exchequer declined to receive a deputation that afternoon, and that he avoided meeting them to discuss the subject. He trusted, however, that in a short time the right hon. Gentleman would find an opportunity of doing so, because the opinion of 806 so large and influential a body of men ought to be listened to upon a question which so materially affected their interests. He would read to the House the Resolution that had been agreed to at the meeting held that day—That the Committee, accompanied by any Members of the House of Commons who will attend with Mr. Beckett Denison, Mr. Bayley, Mr. John Jobson Smith, be requested to solicit an interview with the Chancellor of the Exchequer and to inform him that at a meeting of bankers held this morning, more numerous than any previous one, it was resolved by a large majority that in deference to the very general feeling entertained by the country bankers, he be respectfully requested to withdraw the Bank Issues Bill. Failing this, that this meeting is of opinion that the Amendment of Mr. Salomons should be supported.And if no other Member would support the hon. Member for Greenwich (Mr. Alderman Salomons) on that occasion he would, for a more dangerous Bill for the banking interest had never been concocted by the Treasury Bench. It was a confiscation of property, for the issue of private banks was, and always had been, a chief source of profit; and now without compensation it was proposed to deprive this great interest of that privilege. He hoped that the Chancellor of the Exchequer would, before the third reading of the Bill, reconsider the matter, and do an act of justice to the country by withdrawing the Bill.
§ MR. CLAY
said, he thought the discussion at present was not precisely to the purpose. The Chancellor of the Exchequer was willing to put off proceeding any further with the measure for a week. His hon. Friend (Mr. Hadfield) was of opinion, and in that opinion lie shared, that as a week would bring them within a day or two of the usual holidays, it would be better to defer the Motion for the third reading until after Whitsuntide.
§ MR. GREAVES
said, he was Chairman of the Bankers' Association, which was first formed in 1857 8—when a Select Committee of that House was appointed to inquire into the general question—for the purpose of defending the issue of both public and private hanks. It was at that time proposed to have two gentlemen appointed on the Committee—one to represent private banks and the other public banks, not for the purpose of influencing the decision of the Committee, but, understanding banking operations, to elicit from the witnesses that information which it was desirable the Committee should obtain. That application was refused by the then 807 Chancellor of the Exchequer, and the Bankers' Association confined, their operations to putting before the Select Committee such witnesses as could give most desirable information. No action, however, had been taken upon the Report of the Select Committee, but the Association had continued in existence. He had ceased to be a banker, and had only attended one meeting recently, and he had done that merely for the purpose of transferring to other hands the funds which he had held as trustee. As soon as the present Bill was laid upon the table he went to the gentleman who conducted the proceedings in 1857–8, and urged him to write to all the banks of issue, whether subscribers or not to the Association, naming a certain day and place for them to meet in London to consider what was best to be done for the general interest of bankers with respect to this Bill. Several meetings had in consequence been held, and he understood the Chancellor of the Exchequer had given the Association a great deal of his time and attention with regard to what clauses should be introduced into the Bill, and he believed the result was embodied in the present Bill. He did not consider the Bill so inimical to the interest of bankers as many supposed. He believed that the country bankers were bound in honour, as in interest, to accept the Bill as it stood. It gave them a lease for fifteen years of their privileges; and they were not bound to come within its operations, in which case, according to the assurance of the Chancellor of the Exchequer, their interests would not be affected. But before the fifteen years was up the whole subject of the circulation and currency must be inquired into. It was desirable—nay, absolutely necessary—that there should be a Committee, because the present currency laws had broken down, and might break down again. He supported the proposition of the Chancellor of the Exchequer.
§ MR. HUBBARD
agreed as to the desirability of the Government indicating a distinct principle of policy when they propounded a measure of this kind. He differed, however, entirely from the principles laid down by the hon. Member for Oxford. If it were contended that bankers had undoubted and perpetual rights of issue, this must be established upon natural rights of freedom of commerce or upon rights conferred by legislation. In his view, on neither point could private issuers establish their right. As to the question of the natural freedom of com- 808 merce, it must be recollected that the right contended for was not to make bills of exchange or promises to pay at a future day. Their existed no restraint on that practice. But when they came to bank notes, which meant promissory notes payable on demand, and professing to be at all times the exact equivalent of the coin which they represented, they had to deal with a very different article. It was not a bill of exchange; it was paper money. It would not do to say that because Acts of Queen Anne gave permission to issue certain commercial documents that those Acts conferred perpetual rights. As we advanced in the science of Government we had had to regulate, in the public interest, all such rights. No one ever doubted that the coinage of money was the indefeasible right of the reigning power of the State. It was true that this right had been subjected to many irregularities; but the rule had been maintained. At the early part of the present century there was a great lack of the smaller circulating media of the country, silver and copper. And what was the result? Many individuals issued silver tokens; and in 1813, when a statute was propounded in that House to regulate the issue of silver money there was great agitation in the town of Reading, and a resident received the unanimous thanks of the inhabitants for having created a large amount of silver tokens, which to them were as useful as the notes of private issuers were to their customers. Their remonstrance, however, did not successfully arrest the movement of the Ministers, who passed an Act prohibiting the circulation of silver tokens. Subsequently to this Sheffield, Birmingham, and other towns issued copper tokens, which, of course, were very profitable to the issuers; but in 1818 the Government passed another Act prohibiting entirely the private issue of copper coin. Then what was the difference in principle between paper money and copper and silver money? The only difference, that when copper money was issued the value of the metal was half at least of the value at which the coin circulated, while of paper money the intrinsic value was nothing, so that the very strongest security should be required for the professed value at which the note circulated. If it was a function of the State to give value to coins by stamping them with their authority, much more was it their function to make the issue of paper money a part of their business and make the money safer to the country. When the makers of 809 paper money talked about their indefeasible right, did they consider that they had been sharing with the Chancellor of the Exchequer the power of drawing revenue from the pockets of the people? The hon. Member for Oxford said that whenever the State interfered with private enterprize it gave compensation. Well, he had not the least objection to this; and he dared to say that the Chancellor of the Exchequer would have no objection to give compensation to the full value of the paper and the printing presses, which were the only capital engaged in the enterprize. It might be said that the privilege of issue in country places was advantageous to the neighbourhood, by supplying money for agricultural and manufacturing purposes. But did these country bankers supply their customers with money at an interest even a fraction lower than its market value? They did not; and therefore they made not the slightest concession to their customers in return for their monoply. The lapsing of country issues would not cause any deficiency in the circulating medium for the additional Bank of England issue would immediately flow into any district where capital was called for. The existing banks would not cease their banking business because they lost their power of issue; but, if they did, other banks, such as the London and County Bank, would extend their operations and supply capital even in the remotest towns. With regard to the legislation on the subject, up to the year 1821 there was no such thing recognized in this country as the true principle of currency. Nay, up to 1844, legislation had not touched the question of issues, either by the Bank of England or by country banks. The Act of 1844, aiming at the entire absorption, sooner or later, of the whole of the issues of the country into one uniform administration, paved the way for that step by enabling country issuers to compound with the Bank of England for certain annual percentages, hoping that a large portion of them would come under that clause; but the very clause which empowered the Bank of England to give these annual compensations directed that they should cease in twelve years. The measure did not at that period take effect, because it would have been unjust to terminate the interest of the compounding banks, while those who had not compounded were still at liberty to carry on their issues. Then came the Annual Continuance Bill; and thus there was reserved to the Legislature the right of interference 810 at any future time. Sir Robert Peel's Act of 1844 limited, and by limiting affirmed the right of dealing with all private issues. If the country issuers had the indefeasible right to issue bank notes the Government could have no more interfered with that right by limiting its exercise than they could have interfered with the making of bills of exchange. He looked upon that measure as an unequivocal declaration on the part of the Government of the right to interfere with the issue of paper money. He denied entirely the argument of the hon. Member for Oxford, and he affirmed that the Crown, in the interest of the people and for their security, as well as with a regard to the National revenue, had a right to interfere with, limit, restrain, and terminate the whole of the bank issues of the country.
§ MR. ALDERMAN SALOMONS
said, that as the Amendment still more obscured the Bill, he had hoped that the re-committal would have been agreed to, for the purpose of taking the discussion of the principle on the third reading. When that Motion was made, he intended to move, as an Amendment, that the third reading be deferred for six months.
§ Question put, and agreed to.
§ Order for Third Reading read and discharged.
§ THE CHANCELLOR OF THE EXCHEQUER moved that the Bill be re-committed with regard to the preamble and the eighth clause.
§ Motion made, and Question proposed, "That the Bill be re-committed in respect of Clause 8 and the Preamble."—(Mr. Chancellor of the Exchequer.)
§ MR. HADFIELD moved, as an Amendment, that the words, "in respect of the preamble and the eighth clause," be omitted from the Motion.
§ Amendment proposed, to leave out the words, "in respect of Clause 8 and the Preamble."—(Mr. Hadfield.)
§ THE CHANCELLOR OF THE EXCHEQUER
said, that the recommittal of the Bill was proposed for the purpose of enabling him to fulfil the engagement to a body of appointed representatives of country bankers, but he had thought it right to include other Amendments of which notice had been given. He must oppose 811 the Amendment of the hon. Member for Sheffield, of which notice had not been given, who, objecting to the Bill altogether, moved an Amendment merely dilatory in its effect.
§ Question, "That the words proposed to be left out stand part of the Question," put, and agreed to.
§ Main Question put, and agreed to.
§ Ordered, That the Bill be recommitted in respect of Clause 8 and the Preamble.
§ Bill considered in Committee.
§ MR. COBBOLD
said, that the right hon. the Chancellor of the Exchequer sent to the committee of country bankers on the 17th of April a proposed Amendment in the following words for their acceptance:—The Lords Commissioners of Her Majesty's Treasury may on, and at any time after, the 1st of January, 1870, by notice in the London Gazette, declare that, unless Parliament otherwise determine, at the expiration of one year from the date of the notice, all issues of banks in respect of which a percentage may be payable under this Act shall cease, and thereupon such issues shall cease accordingly.On the 19th of April there was a very large meeting of the country bankers, and he believed that there was only one banker who voted against the acceptance of the proposed Amendment, and thereupon the bankers agreed to withdraw their opposition to the Bill. The right hon. Gentleman, however, in giving notice of his Amendment did not entirely follow the words which were submitted to the committee of bankers. During the discussion of the clause in Committee a most important alteration was made. He admitted that he and many other Members interested in the question were in the House at the time; but the right hon. Gentleman having made a long speech before going into Committee, the alteration was afterwards made in a very hurried manner; at all events in a manner so hurried that he and many Gentlemen who sat beside him did not understand its nature until they saw the Bill in print a few days subsequently. The public were also led, through the usual channels by which they learned what passed in that House, to misconceive the true character of the alteration. In the Report of the discussion given by The Times it was stated that—Mr. Hankey proposed that the word 'if' should be omitted from the clause;and it was afterwards added that— 812Mr. Hankey withdrew his Amendment, and the Amendment of the Chancellor of the Exchequer, with some verbal amendments, was inserted.It was quite true that the alteration consisted of a very little word; but a distinguished Master at Eton used to say that if they took care of the litle words the great ones would take care of themselves. In that case the small word "if" bad been omitted, and words declaring absolutely that on or before a certain day notice requiring the termination of these issues should he given were introduced. The clause then stood "on or before a certain day notice shall be given." When it came to the knowledge of the bankers that that important alteration, as they deemed it, bad been made, they remonstrated strongly against it; and he had, therefore, taken the liberty of putting on the paper the notice which stood in his name, and which sought to restore the clause to the shape in which it had been proposed by the Chancellor of the Exchequer himself, had been accepted by the bankers, and on the faith of which the bankers had been induced to withdraw their opposition. The hon. Member concluded by moving his Amendment.
In page 3, Clause 8, to leave out to 'eighty,' in line 8, and insert"—
("Issue of Banks accepting conditions of Act to continue till 1st January 1880.)
8. "The Lords Commissioners of Her Majesty's Treasury may on and at any time after the first day of January, one thousand eight hundred and seventy-nine, by notice in the London Gazette, declare that unless Parliament otherwise determine at the expiration of one year from the date of the notice all issues of Banks in respect of which a percentage may be payable under this Act shall cease, and thereupon such issues shall cease accordingly; but.
§ MR. AYRTON
said, he had heard with great regret the attempt of the hon. Gentleman to disturb the arrangement which had been come to after so much discussion and deliberation. The ground of the present opposition of the hon. Gentleman was, that he did not understand what passed on the occasion to which he had alluded. He could not admit that the alteration of which the hon. Member (Mr. Cobbold) now wished to get rid was adopted in a hurried or unintelligible manner. He had himself pointed out, in no inaudible voice, to the Chancellor of the Exchequer the evil tendencies of the Bill as it was originally submitted to the Committee, and the necessity of making some alteration, and the full spirit and character of the 813 Amendment. Another hon. Member (Mr. Hankey) then suggested the mode in which it could be carried out, and it was agreed that the condition should be left out. The Chancellor of the Exchequer then made some alterations in the clause, and read it audibly to the Committee. Everybody must have known that by omitting the word "if" the conditional character of the clause was taken away, and the verbal Amendments suggested by the Chancellor of the Exchequer merely gave a more grammatical form to the proposal of the hon. Member for Peterborough (Mr. Hankey). All this was done in the presence of the Gentlemen who took so much interest in the Bill, not on account of the public interest, but of their own interest. When the Chancellor of the Exchequer accepted the Amendment, in order to get rid of the ostensible opposition, and a still more latent opposition, and when no one rose to protest, and claim the benefit of any previous arrangement, they were bound in honour and in conscience to accept what had been done. The hon. Member, however, claimed the right to revert to the original words of the clause, because of an alleged prior understanding. When besieged by the private bankers and their friends in that House the Chancellor of the Exchequer might have made some suggestions in the hope of making the measure more palatable to them; but those suggestions were surely subject to the condition that the House would accept and ratify them. The right hon. Gentleman knew the extent of the opposition which his Bill had to encounter in that House on the ground of the public interests, and perceived the precarious position in which it stood when they were last in Committee. But the measure having since then been advanced a stage, and the bankers having thus gained the advantage thereby secured to them, without raising their objections at the proper time, it was not competent for them to turn round now and claim to be relieved of the condition on which alone the Committee allowed the measure to proceed. But there was something more grave in the consideration of this question. The pertinacity with which the monopolists desired to introduce this alteration into the Bill showed the object they had in view, and the latent intentions which they entertained in endeavouring to induce the House to acquiesce in their proposition. The country had been greatly tantalized in the matter. First one period and then another 814 had been named for the termination of that monopoly. It was quite clear that what they were now doing they would be certain to do when January, 1880, should arrive. They had now fifteen years within their reach, and proposed to postpone the period indefinitely. The hon. Member for Oxford (Mr. Neate) had given some insight into the course they were now pursuing, lie had put forth the claims of the bankers, not as a banker, but as a lawyer, and said that the effect of legislation had been to give the bankers an indefeasible right in perpetuity to the issue of notes. Now, what was the real character of this legislation? Parliament, in suppressing the issue of £1 notes, made the issue a State matter. The principle of right was asserted. The banker had no individual right. All the community had a right. But in 1844, all the world being at liberty so to do, Parliament decided that no one should do it. The right to issue £5 notes was destroyed in 1844. The power to issue was reserved as a compensation to certain people, but the right was emphatically destroyed, and the words of the statute showed that the power was only to continue as long as Parliament might think fit. Time was allowed them for twelve years, and then they were to have no further claim. Parliament did not abrogate its rights. It only gave to these private bankers, but not of right, the power of going on with their business, in order that when the time came, in twelve years, they should have no possible claim, moral or otherwise, for compensation at the hands of the State. That was the legitimate conclusion of all that had been said and done. The whole discussion that took place left that impression on the mind of every one that read it. But now, hon. Gentlemen got up and claimed a right in fee simple. And what was the value of that right? The value of the paper monopoly to the country was not less than £500,000 a year, and it was monstrous to suppose that a sum equivalent to £17,000,000 was to be given to them in perpetuity. When such monstrous claims were made by private bankers it behoved the Committee to be careful not to admit any continuing right or claim; and so strongly did he feel this that he hoped the Chancellor of the Exchequer would alter the wording of the clause by omitting the words "statutory right," and inserting "statutory power of issue," as it was not a statutory right but only a statutory power. He trusted the 815 right hon. Gentleman would not agree to the entangling language of the hon. Gentleman opposite. If he did, it would be the duty of the House at the next stage of the Bill to give it every opposition.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he was very anxious to narrow, as far as in his power, the ground of the present discussion, and to avoid including many controverted matters it might possibly be their duty to enter on and deal with somewhat largely on a future stage of the Bill. He entirely agreed that very wide issues indeed, and questions of far greater importance than the comparatively limited provisions of this measure, were involved in many of the transactions which had taken place respecting it. But, feeling the importance of these issues, he was very anxious not to anticipate the discussion of them, and thus lead to difficulty or dispute. While he had beard with great satisfaction the speech of his hon. Friends the Members for Warwick (Mr. Greaves) and the Tower Hamlets (Mr. Ayrton), and others, some things bad been said which it was necessary he should notice. He was bound to repudiate in the strongest terms the declaration of the hon. Member for Leicester (Mr. Heygate)—that he did not conform to the spirit of his arrangement with the private bankers. A more groundless charge had never been made, and if an alteration was made in the form of the Bill, that alteration was much more due to the hon. Gentleman himself than to him. He would now deal with the Motion of the hon. Gentleman (Mr. Cobbold), and he must give a very different account of what took place in Committee from the extraordinary narrative of the hon. Member. If ever there was a Committee in which, though the Gentlemen present were comparatively few in number, all were interested in the subject-matter of discussion, paying attention to every word that was uttered, and to all appearance perfectly masters of the whole question, it was that Committee. It was therefore astounding to hear the hon. Gentleman, himself a country banker, and appearing there as the representative of a portion of that most intelligent body of men, declaring that the whole affair was so confused that he did not know what was going on. He was reminded by some who took part in the discussion that he had himself been careful to read every word of the Amendment be fore putting it into the hands of the Chairman. It was of no great length; the words 816 were as clear as they could be, and afterwards it was again read by the Chairman in the clearest manner possible. Now he must say a few words with regard to the history of the substance of this measure. But first of all he must on the part of that House enter a protest which, at some period or another, it might be necessary more largely to explain, with respect to the tone which from circumstances they were obliged to adopt with reference to the country bankers. It might really be supposed that Parliament was a body whose business it was mainly to guide legislation in respect to private issues by considerations of the interest and views of that body of gentlemen. Now, that was an assumption to which he must altogether object. He asserted most unreservedly the supreme authority of Parliament to deal with this question of issue, not as a private right, according to the astonishing doctrine which had been suggested, but simply on principles of public policy and justice tempered, as these were ill the action of Parliament, by regard to the fair and equitable claims of individuals. When this Bill was introduced he found himself at once placed in communication with a body known as the Committee of the Association of Country Bankers; and he found on the part of that body, in the first instance, a very great apprehension with regard partly to the direct and partly to the indirect effects of the measure. He found also, he was bound to say, not only the greatest intelligence and the highest honour, but likewise, as he thought, a spirit of prudence and moderation by which alone in a country like this such questions could be adjusted. There was on their part a great anxiety to avoid the evils which they were inclined to anticipate from the indirect effects of the enactments of this Bill. They said they feared the Bill might be considered as involving a new legislative declaration that private issues were to be extinguished, and that they would be extinguished at the time to which the Bill pointed. He stated with respect to private issues what he believed and what Government believed to be the evident sense and intention of the Act of 1844. He would not repeat it now; it had been several times referred to in the debate; hut he also stated this—that they did not seek to obtain any new legislative declaration on the subject by the present Act, but left the principle of private issues precisely as it stood under that Act. Then he was asked whether it was intended at the close 817 of the term proposed by the Bill that the issues affected by the Bill should necessarily lapse and come under the operation of the Act of 1844. He replied that what appeared to the Government wiser was that they should cease to exist on their present footing—that he did not seek to obtain a declaration from Parliament in 1865 as to whether it would or would not in 1879 allow these issues to pass over to the Bank of England or recognize the continuance of them in the hands of local agents; but what the Government did seek was to put an end, as far as these notes were concerned, to what might be termed a Parliamentary monopoly, under which a privilege was secured to particular parties by a certain statute, for he agreed with the hon. Member for the Tower Hamlets (Mr. Ayrton) that it was a statutory power rather than a right, under which paper money passed from hand to hand through the country for the benefit almost exclusively of private individuals, and without that security to the note holders which under any just and sound system ought to exist. There was a perfect understanding between the Committee and himself as to the aim and contemplation of the Bill. It was then requested that he would introduce into the Bill a notice to be given to the parties in order that preparation for the change of the law might be made. It was represented that that notice would be of the greatest convenience to the parties, because if that were not given they would not be aware what the question was in the view of the Government, whereas if it were they could make their own preparations. Words were introduced into the Bill providing for such a notice, and these words were in a conditional form—that if notice should be given then such and such results should follow; and it was perfectly understood that the words were never intended to countenance private issues on their present footing. He would now come to what took place on going into Committee. What took place in the Committee was this. On the eighth clause he stated to the House that the conditional words were not intended to continue private issues on their present footing. Those conditional words were adopted exclusively on the ground that it was not usual to lay down in statutes by authority of Parliament any direct enactment fettering the future discretion of Gvernment. On that occasion Member after Member rose from behind 818 these Benches, from below the gangway, and from the opposite side of the House every one of them agreeing upon the very form of the Amendment then introduced. Among hon. Members opposite who advocated that view he might mention the hon. Member for Buckingham (Mr. Hubbard) and the hon. Member for Stamford (Sir Stafford Northcote). The hon. Member for Leicester (Mr. Heygate), himself a country banker, remained silent in his place, and by that very silence consented to the suggested alteration. It would have been totally impossible for him to have resisted the authority of the Whole House of Commons, especially as those who might reasonably be supposed to be most interested remained perfectly silent while this pressure was brought to bear upon him. If he had divided the House, he would not say that he would have gone into the lobby alone, but he would certainly have been accompanied by a minority, and that a reluctant one; and therefore he had deferred to the wishes of the House, in respect to what really amounted to little more than a verbal alteration. In one sense the words might be an improvement, but in another they were not, because it was not usual with the Legislature to put mandatory instructions into a Bill of that kind. He found, however, that in the minds of many with whom he communicated there existed apprehensions, and honestly entertained, as to the effect of the change which had been thus unanimously adopted in the presence and knowledge of Gentlemen themselves connected with country banking, and those apprehensions he felt it his duty to remove. It was stated to him that the alteration conveyed the impression of an absolute declaration on the part of Parliament that at the end of the specified term of years the power of issue should be extinguished so far as those banks were concerned. The words, therefore, which he had now to propose for insertion in the preamble were as follows:—And to fix by law a time whereat the present statutory right of issue on the part of bankers obtaining such exemption shall determine, in order that either their issues may become subject to the enactments of the Bank Act of 1844, hereinafter mentioned, in respect to lapsed issues of bank notes, or that Parliament may make further provision concerning them as it shall think fit upon grounds of public policy.In his opinion it was no part of their duty at that time to enter into any consideration as to what might be right as between those two questions, either as to 819 the mode of placing them in the hands of a central issuer, or giving the right to the public as opposed to monopoly. He had been complimented by an hon. Member in the course of this debate upon the patience which he had exhibited in connection with this question. He might safely say that he grudged no sacrifice of time if such a sacrifice could by any means tend to advance Parliament towards the attainment of a sound system, which they certainly at present did not possess. He had, therefore, trusting to the patience and the indulgence of the House, made it his duty to make or accept any suggestions which might be received without detriment to that object. He must say that the proposal of the hon. Member for Ipswich (Mr. Cobbold) appeared to him to be made for the express purpose of introducing vagueness and uncertainty into the provisions of the Bill. It was partly the fault of the hon. Member himself that the clause had been altered—for if those Gentlemen who now regretted that alteration had only on the former occasion risen in their places, and said that they preferred the original words, he should have stood by them. He might, however, Bay that if these discussions had led to the disclosure of a latent impression that those conditional words would be the means of utterly nullifying the intentions of the Bill, he could not help feeling that it was exceedingly satisfactory that that impression had been brought to light.
said, he did not rise to support the proposition of the hon. Member for Ipswich (Mr. Cobbold) because he felt bound in honour to abide by the decision which had been come to on the matter. His recollection of what took place in the Committee differed from that of the right hon. Gentleman, and he must say that the statement of the right hon. Gentleman was a most extraordinary representation of very simple facts. Now, what was the history of the clause which had been amended so many times? He would venture to remind the right hon. Gentleman that he had agreed to a certain form of words upon the 10th of April, but that the country bankers and the public found, upon the printing of the clause, that the form so agreed upon had not been adhered to.
said, he had a printed tasement to the effect that such on agree- 820 ment was arrived at. Upon May 1 the House went into Committee upon this Bill, and for his silence upon that occasion he wished to give some explanation. He was at that time ignorant of his position as a country banker in reference to this Bill. He had taken no part in the discussions of the country bankers when they proposed a modification to which the Chancellor of the Exchequer assented, but he disliked the Bill from the first, and felt himself to be free to oppose it. The feeling of the country was not, as the hon. Member for the Tower Hamlets (Mr. Ayrton) seemed to think, hostile to the bank issues, and in that House, beyond the hon. Gentlemen who were called "the Members for the Bank of England" (Mr. Goschen, Mr. Thompson Hankey, Mr. K. Hodgson, &c), who sat behind the Chancellor of the Exchequer, the hon. Member for Buckingham (Mr. Hubbard), and a few currency doctors, he did not believe that this measure for extinguishing those issues had any supporters. The first result of the agreement between the bankers generally and the right hon. Gentleman was the issue of a circular announcing the withdrawal of all further opposition. He, believing himself to be free to act as he pleased, came down to the House and made some observations on the scope of the measure before going into Committee, but when the Bill had got into Committee he did not care what was done with it, as he regarded the proposed legislation uncalled for and of no advantage to the public. He did not feel himself called upon to keep the Chancellor of the Exchequer to his engagement. The right hon. Gentleman upon that occasion ought to have told the Committee that his was an important Amendment, part of a solemn arrangement, upon the faith of which opposition to the Bill had been withdrawn. That, however, was not done, and the Bill passed into Committee. He admitted that he had been culpable in one respect, that he had not previously exactly ascertained the extent to which he was bound by the Bankers' Association; but feeling now that, although not present, nor taking part in the arrangement, he was bound by it, he should not seek to repudiate it. He would remark, however, that the modification proposed in this clause must be an important alteration, whatever might be the exact meaning to be put upon the words, or the opponents of the country issues would not be so eager for the clause in its altered form, and in 821 any case the Association of Bankers were entitled to the letter of their bond upon the faith of which they withdrew their opposition. With respect to what had fallen from the hon. Member for Oxford (Mr. Neate) he must say that he had never claimed for the country issuers an indefeasible right to issue notes. All he had ever said was that he believed it was a privilege which had endured for a long time, which had not been abused, which was appreciated by the public, and which it was not necessary to destroy. The question was one surrounded by difficulties, and before the system was disturbed the whole subject should be fully and maturely considered, and not dealt with in the present fragmentary manner. He repudiated the doctrine that this privilege gave the issuers the power to tax the public, and was strongly of opinion that the Bill was an unnecessary unsettlement of a state of things which was beneficial to and approved by the public.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he wished to say a word or two to vindicate himself from a charge of having broken faith.
said, he assured the right hon. Gentleman he did not intend to impute to him any breach of faith. What he had stated was that somehow or other, accidentally or otherwise, the clause was not printed in the shape it was agreed on between the committee of bankers and the right hon. Gentleman.
§ THE CHANCELLOR OF THE EXCHEQUER
said, the hon. Gentleman might not have meant it, but in a former speech he made the charge. The hon. Gentleman seemed to think that he (the Chancellor of the Exchequer) ought to have told the Committee that this was an important Amendment and alteration proposed in consequence of a solemn compact, and that if it were not agreed to he must withdraw the Bill. But his own distinct opinion when the Bill was in Committee was, that there was no difference substantially between the form of words urged by the majority of hon. Members and that agreed on with the Bankers' Association, and for that reason he had not felt it right to insist upon the latter.
said, the House had some reason for not being quite satisfied with the way in which this question had been dealt with, for the Bill in a great degree had been worked outside the House. They were placed in this position, that a 822 certain kind of engagement had been come to of which the House knew nothing. The House, of course, had a perfect right to deal with that agreement as it pleased, and it was for the Government to abide or not by the agreement as it thought fit. It was clear from the alterations now proposed that the Chancellor of the Exchequer had some such feeling.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he proposed the alteration to satisfy apprehensions honestly entertained by many respectable gentlemen.
said, he presumed that the Bill was re-committed in order to make some alteration in the construction of the Bill. It appeared to be purely a struggle between the bankers on the one side and the hon. Member for the Tower Hamlets (Mr. Ayrton) on the other to try whether they could get some curious sort of word in or out of the Bill which might in some way or other fetter the action of Parliament fourteen or fifteen years hence. It would be much better to let the Chancellor of the Exchequer cook the Bill that night as he chose, and then let it be printed, that the country might see what it was like. The "sons of Zeruiah" were quite strong enough to take care of themselves. The House, of course, had nothing to do with the negotiations which had taken place, and was perfectly free to do what it thought best for the country; and it might be a matter for grave consideration whether it would not be the best thing to kick the concern out altogether.
§ MR. ROEBUCK
said, he thought that the right hon. Gentleman (the Chancellor of the Exchequer) had taken the House rather by surprise. It was not within the memory of man that a great interest like the banking interest should be dealt with so suddenly without some sort of previous inquiry. He would appeal to the right hon. Gentleman the Chancellor of the Exchequer whether so large an interest as the bankers issuing private notes should be dealt with without inquiry by that House. He knew the great power of the right hon. Gentleman, but he did not think the people of England would be perfectly satisfied with his power or his intelligence without full evidence and information being given about this matter. He was told that the sudden restriction of the issues of the private banks at the end of fifteen years would act as a restriction on the mercantile and manufacturing interests of the country. In the town which he represented there 823 were three banking establishments, and at the end of fifteen years there would be an end of them. [The CHANCELLOR of the EXCHEQUER made a gesture of dissent.] The right hon. Gentleman might shake his head, but he had seen a great many heads shaken on the Treasury Bench. For instance, Sir Robert Peel shook his head when he told him that the increased tax which he was imposing would last his lifetime. At the end of fifteen years the issue of these banks would be at an end. [The CHANCELLOR of the EXCHEQUER: Certainly; but you said the banking establishments.] The issues, of course, was what he meant. These banks did their business among people whom they knew, and on a different system from that of the Bank of England, which the right hon. Gentleman wished to introduce. He knew the centralizing propensities of the right hon. Gentleman, and his wish to get rid of the private banks. The measure would give power to the central Government, of which the right hon. Gentleman hoped to be a Member for a long time hereafter, and he hoped he might be. Such a great change as this ought not to be made without inquiry, on the mere authority of the right hon. Gentleman. The great majority of the banks were against the Bill. The right hon. Gentleman had had communications with the Bankers' Committee, the remnant of the Committee appointed in 1844 consisting of four bankers, but that Committee was repudiated by the bankers, and that very day the bankers of the North had held a meeting, at which they had come to a unanimous resolution to oppose the right hon. Gentleman's Bill. The right hon. Gentleman had no authority to pass such a Bill, and he hoped it would not be passed without inquiry.
§ MR. GOSCHEN
said, the hon. and learned Gentleman seemed to have overlooked altogether the fact that this was a permissive Bill. If the bankers of the North thought it was not for their interest they might reject it, and leave the bankers of the South to reap all the advantages of it. If the right hon. Gentleman had introduced a compulsory general measure then there might have been some force in the hon. and learned Gentleman's arguments that it ought to be preceded by a most careful inquiry. It was said that this Bill was intended to abolish private issues altogether, but there was a great deal of confusion between putting an end altogether to private issues and putting an end to them on 824 the footing on which they were at present. Many Members on both sides of the House believed that the footing on which the private issues stood was unsound and might be very much improved, and there was no reproach in wishing to improve what was unsound. He did not wish to pledge himself to the opinion that private issues ought to be altogether abolished; that would be a fair subject for future consideration; but he saw no reason why they should not in the meantime endeavour to remedy an acknowledged evil. Many people seemed to labour under the impression that by that Bill some special advantage was to be secured to the Bank of England. But he believed that was an entire misapprehension. The Bank of England would derive no benefit, either present or prospective, from the operation of the measure. It should be remembered that there existed this difference between the Bank of England and private issuers, that the Bank issued on the security of deposits; that it paid a portion of its profits to the State, and that it published a weekly statement of its accounts. He would ask the representatives of the bankers whether they would submit to the same conditions; and if they did, then he would be prepared to say that their business was conducted upon a sound footing. At present, however, they enjoyed a monopoly, and that monopoly, he thought, ought to be abolished in order that the entire system should be recast. What object was to be achieved by substituting the word "may" for "shall" he could not see. Foreigners never could understand the distinction between our "shall" and "will," and now the House was to be told that "may" and "shall" was practically the same.
§ MR. CLAY
said, he thought the Bill had got into that unfortunate state which the right hon. Gentleman the Member for Oxfordshire (Mr. Henley) was in the habit of calling a "brangle." He was opposed to interfering with the complicated machinery of the banking of this country unless he heard of a proved grievance, and in this case he had heard of none. The Chancellor of the Exchequer had spoken of the negotiations between himself and a committee which he said he had every reason to believe represented every country bank in England. It appeared, however, that the majority of the bankers, as soon as they heard of the agreement come to between the committee and the 825 right hon. Gentleman, said that in coming to that agreement the committee had acted ultra vires, as it had not been authorized to make any terms, but simply to see the right hon. Gentleman with the view of inducing him to withdraw the Bill. However, that was now beside the question, for the agreement entered into with the committee had not been kept. If he were to offer any advice to the hon. Gentlemen who were taking an active part in opposing this Bill, he would tell them not to be introducing a new difficulty by moving an alteration of "shall" into "may" but to move the rejection of the Bill on the third reading.
§ MR. PAULL
said, he wished to correct a mistake into which the hon. and learned Member for Sheffield (Mr. Roebuck) had fallen with regard to the Bankers' Committee which had negotiated with the Chancellor of the Exchequer. The remnant of the Committee of 1844, to which he had referred, had resigned, a new Committee had been formed, and he believed that that Committee which had been in communication with the Chancellor of the Exchequer had in no way exceeded the powers with which they had been invested. The history of that Committee was as follows:—At the general meeting of the country bankers a Committee was appointed, consisting of six gentlemen who represented the private banking interest, and of six others who represented the joint-stock interest, and he did not think it would be possible to constitute a Committee with more formality and regularity. The meeting consisted of between seventy and eighty country bankers, and the Committee was empowered to communicate with the Chancellor of the Exchequer in order to obtain certain Amendments in the preamble of the Bill, and the substitution of the word "may" for the word "shall." So desirous was the Committee to discharge its duty and arrogate no power to itself that notice was sent to the country bankers, which gave them time to appear in person or to state by letter whether, in their opinion, the proposed Amendments ought or ought not to be adopted. The Resolution was formally carried, though by a small majority no doubt; but it had the authority of the Association, and it was as binding as if all the members of the Association had been present. Therefore, the Committee, having been appointed to discharge certain duties, entered into an engagement with 826 the Chancellor of the Exchequer, and the majority having passed that Resolution, they ought to abide by the engagement with the right hon. Gentleman. The hon. Members for Warwick and Leicester (Mr. Greaves and Mr. Heygate) had stated that they felt bound to abide by that engagement. He thought that if any attempt were made to defeat the Bill on the third reading every hon. Member ought to know what had taken place on the occasion to which so much reference had been made.
§ MR. ALDERMAN SALOMONS
said, he wished to ask whether he should be in order in calling the attention of the Chancellor of the Exchequer to Clause 5, which assumed that as the law now stood there could be but six partners in a bank of issue. In point of fact, by an alteration in the law two or three years ago, the number of partners permitted in a bank of issue or not of issue was increased to ten.
said, that as the Bill had been re-committed on Clause 8 and the preamble only, the hon. Member could not refer to any other clause.
§ MAJOR WATERHOUSE
said, that as one of the members of the Committee of Bankers he had entered his protest against the Resolution referred to, and therefore he felt himself at liberty, notwithstanding what had been said by the hon. Gentleman (Mr. Paull), to adopt any course he might see fit in reference to the question now before the House. He totally dissented from the statement made by the Chancellor of the Exchequer as to what occurred the other night when the alteration was made in Clause 8. He had not been present the other evening during the discussion; but he was informed that the Chancellor of the Exchequer had at once assented to the alteration suggested by the hon. Member for the Tower Hamlets (Mr. Ayrton) without referring the matter to any other party. Hon. Members on the Opposition side of the House had kept silence because they thought themselves safe in the hands of the right hon. Gentleman, and therefore it scarcely became him to reproach them with not having stood up in their own defence. The Bill had become greatly involved and inextricably confused, and the country bankers must now oppose it most strenuously. When it came on again for discussion next week he hoped that the country bankers would meet it with one unanimous burst of opposition. At the present moment, however, no purpose would be served by 827 the Amendment of the hon. Member for Ipswich (Mr. Cobbold) being pressed, which should be withdrawn.
§ MR. COBBOLD
said, he would assent to the suggestion which had been made that he should withdraw his Amendment, but in doing so he would state that because he was present and silent on a former occasion it did not make him an assenting party to the proceedings; and he would also state that he was justified in having given notice of this Amendment. He would take the opportunity of correcting a misunderstanding which appeared to prevail as to the grounds upon which a large proportion of the country bankers opposed the Bill. In no instance had any advocate of their claims put forward those claims as a right, but simply as a matter of public policy. When the Bill again came on he should move the insertion of the words, "Shall be determined."
§ Amendment, by leave, withdrawn.
§ MR. HEYGATE moved to amend the clause by substituting the word "may" for "shall" in line 2, and that the Bill be re-committed for the purpose.
§ Amendment agreed to.
§ Clause, as amended, ordered to stand part of the Bill.
THE CHANCELLOR OF THE EXCHEQUER moved to insert after the word "mentioned," the words—
And to fix by law a time whereat the present statutory right of issue on the part of bankers obtaining such exemption shall determine, in order that either their issues may become subject to the enactments of the Bank Act of 1864 hereinafter mentioned in respect to lapse issues of bank notes, or that Parliament may make further provision concerning them as it shall think fit upon grounds of public policy.
§ MR. COBBOLD
said, he wished to suggest that instead of "shall determine" the words should be "shall be determined."
§ THE CHANCELLOR OF THE EXCHEQUER
said, he must decline to accede to the suggestion, because the adoption of that form of words would imply that the rights were not terminable at the present moment.
§ THE CHANCELLOR OF THE EXCHEQUER
said, that according to that argu- 828 ment you might insert words in the preamble which were merely nonsensical. [Mr. ROEBUCK: You may.] With great submission he had understood—[Mr. ROEBUCK: You are wrong,] He had not the prevision or second sight of the hon. and learned Gentleman, who declared that he was wrong before he had heard what he was about to say, but he had always understood that though the words of the preamble are not efficient to alter existing laws the preamble sometimes was consulted in order to arrive at the true construction and intention of a statute.
§ MR. ROEBUCK
said, that he spoke as a lawyer, and lawyers always held that the preamble had nothing whatever to do with the enactment.
MR. J. J. POWELL
said, that if the words of a clause were clear and unambiguous it was not necessary to consult the preamble, but if there was any difficulty as to the interpretation of a clause, lawyers invariably resorted to the preamble in order to ascertain its true construction.
§ Amendment agreed to.
§ Preamble agreed to.
§ House resumed.
§ Bill reported; as amended, considered; to be read 3° on Thursday next.