Sitting of 12 May 1836

MINUTES.
Bills. Read a second time:—Divisions of Counties.
Petitions presented. By several HON. MEMBERS, from the Legal Profession of various Places, for the Repeal of the Duty on Attorneys' Certificates.—By Dr. BOWRING, from the Weavers of Bacon-St., Bethnal Green, and Holmforth, for the Alteration of the Factories' Regulation Act.—By several HON. MEMBERS, from various Places, for the Repeal of the Duty on Newspapers.—By Mr. GORING and Mr. EWART, from Henfield, Liverpool, for the Repeal of the Duty on Church Building Materials.—By several MEMBERS, from various Places, for the Better Observance of the Sabbath.—By Major CURTEIS, from Rye, for the Reduction of the Duty on Fire Insurances.—By Captain ALSAGER, from Wandsworth, for the Repeal of the Duty on Spirit Licences.—By Mr. F. SHAW, from various Places, for the Repeal of the Excise Licences Duties (Ireland).—By several MEMBERS, from various Placos, for the Mitigation of the Criminal Laws.—By Mr. SCARLETT, from Suffolk and Norfolk, against the Copyhold, Manorial Boundaries, Escheats, Descents, and Heriots Bills.

DIVISIONS OF THE HOUSE.
Sir C. Burrellcomplained of the time lost by the present mode of taking the Divisions, and of the inaccuracies resulting from it. In two instances (respecting Carlow, &c.) his name had been omitted in official lists.
Mr. Humesaid, that he must deny the correctness of the first allegation; the divisions did not occupy more time now than they did formerly. As to the second charge, his name had been once or twice omitted; but these were exceptions—they proved nothing against the rule. He did not mean to say, that the system was perfect—he wished it was. It was as complete as they could make it; and if the hon. Baronet could devise a more complete system, it would become him to name it.
Mr. Wakleyobserved, that he had occasionally been engaged as teller, and had found great difficulty in the performance of that duty, from the unwillingness of many Members to mention their names when the divisions were taking. He had asked many for their names, but could not get them. While that unwillingness continued, some inaccuracies were almost unavoidable, at least till some Members were better known, or till the system were rendered more perfect. The present plan was not perfect, and, perhaps, not the best that
840
might be devised, but it was eminently useful. The great deficiency at present was, from the unwillingness of Members to state their names. The plan had so far worked well, that he hoped soon to see it extended to divisions in Committees; at all events, the existing plan could not be stopped, for Members might rest assured that the people were determined to know how they voted.
Colonel Sibthorpobserved, that with regard to the alleged unwillingness to deliver in names, he knew nothing of it;—he was not afraid to announce his name, and he thought that his name would have quite as good an effect in any division as that of the hon. Member.
The conversation dropped.

JOINT-STOCK BANKS.
Mr. Clay: In rising to bring forward the subject of which he had given notice, said, Sir, I have to bespeak the indulgence of the House. The subject which I am about to bring under its notice is one, in itself, but little attractive, and deriving no adventitious interest from any aptitude to excite the feelings of party; but it is a subject, nevertheless, of the very greatest importance, and one, I can venture to assure the House, urgently requiring an early and careful, not to say anxious consideration. The motion I am about to submit to the House is as follows:—"That a Select Committee be appointed to inquire into the operation of the Act of the 7th George 4th, c. 46, permitting the establishment of Joint-stock Banks, and whether it be expedient to make any, and what alteration in the provisions of that Act." Under that Act a system of Joint-stock banking has grown up already of great magnitude, which is daily extending its ramifications, and which promises very shortly to comprehend every portion of the kingdom, and every class of the population within the sphere of its operation. Of the vast importance of the consequences, whether good or evil, which must eventually flow from the workings of this system no man can reasonably doubt; banking forms, as we know but too well from our own experience, an important, perhaps the most important, part of the monetary system of any country, and the question of the soundness therefore of the principles on which it is conducted touches not only the welfare of the commercial and manufacturing classes, but deeply affects every relation of social life, and is consequently beyond most others deserving of the

841
earnest attention of the Legislature. My object is to induce the House to inquire whether the system of Joint-stock banking in this country has received the best legal developement of which it is susceptible. It is capable of conferring great benefit on the community, but may, if ill regulated, give birth to as great calamities. Have we taken all the means within our power to secure the one and to obviate the other? I think not. But before entering on this question, before stating what I consider the imperfections of the law by which Joint-stock banking is at present regulated, and how those imperfections may be best remedied, it may be well that I should recall to the recollection of the House the circumstances under which the existing system originated. The history of the year 1825 must be familiar to every hon. Gentleman who hears me; the mad excitement, the idle dreams of unbounded prosperity, the wild projects at the commencement of that memorable year, the wide-spread distress, the still more widely-spread alarm which attended its close, are not, I am sure, forgotten by this House, and will not be, I trust, forgotten by the public. On the assembling of Parliament in 1826, his Majesty having called its attention to the calamities which had signalized the period then recently elapsed, and to the consideration of the best means of obviating the risk of their recurrence, two measures for that purpose were submitted by the Government of that day to both Houses. The first was for a suppression, at an early period, of all notes under 5l., issued by private banking establishments, the Bank of England having already discontinued the issue of such notes. On this measure (in my opinion, a most salutary one) it is not necessary that I should at present comment; the second was intended to create a sounder system of banking. In the panic a very great number of country bankers stopped payment—fifty-nine commissions of bankruptcy were issued against country banks from October 1825., to February 1826, and many suspended their payments whose affairs did not proceed to bankruptcy. An opinion in consequence became prevalent, that one of the causes most operative in producing the crisis just then over past, was to be found in the law, which, by restricting partnerships consisting of more than six persons from issuing notes, and, indeed, as was supposed (although, as
842
subsequently appeared, erroneously), from carrying on the trade of banking altogether greatly enhanced the difficulty of forming solid establishments for that purpose. To the relaxation of that law, originally enacted in 1708, to confer on the Bank of England a monopoly of the power of issuing notes, it was necessary to obtain the consent of the Bank, as its re-enactment was part of the last as of previous bargains with that Corporation. Accordingly the First Lord of the Treasury and the Chancellor of the Exchequer, the late Lord Liverpool and Lord Goderich (then Mr. Robinson), had, on the 3d of February, written a letter to the Directors urging such consent. It is not necessary that I should trouble the House with reading either that letter, or any portion of the correspondence between the Government and the Bank Directors, consequent on the application it contained. The result of the negotiation was, that the Bank consented to wave its exclusive privileges in that particular, provided that the banking copartnerships under the new law were not to be established at a less distance than sixty-five miles from London, and that every member should be individually liable for the whole debts of the firm. In the course of the Session an Act was passed, the 7th of George 4., c. 46, embodying the conditions. As a law for the general regulation of Joint-stock banking, this Act was avowedly imperfect: the Ministers of that day stated, not that the Act was the best that, in their opinion, could be framed for the purpose, but that it was the best which the then existing bargain with the Bank of England allowed them to bring forward, and most deeply is it to be lamented, that advantage had not been taken of the renewal of the Bank Charter, in 1833, to establish a sound and enduring system of Joint-stock banking, as far as that object can be accomplished by the interference of the Legislature; that opportunity was lost. Lord Althorp did, indeed, propose conferring charters of limited liability on such Joint-stock Banks as would issue only Bank of England notes; but subsequently abandoned that intention, and the only change then made in the law relating to these establishments, was permitting them to make their notes payable in London. The laws regulating \ the trade of banking by partnerships of more than six persons in England and Wales are briefly as follows:—They must not be established at a less distance than

843
sixty-five miles from the metropolis. They may issue notes payable on demand at the place only where issued, or payable in London, and where issued. They may discount in London bills of exchange. They must, before issuing notes, enter at the Stamp-office in London the name of the copartnership, the names and residences of the partners, and the names of two or more officers of the copartnership through whom they may sue or be sued. A like return must be made every year, and also whenever a change takes place in the officers, the members, or the places where notes are to be issued. Execution on judgments and decrees obtained against the officers may be sued out against any member of the co-partnership. This responsibility attaches to persons retiring from the company for three years, as far as relates to transactions occurring whilst they were members. Under these laws, a system of Joint-stock banking has grown up already, as I have said, of vast extent, and clay by day enlarging the sphere of its action. By a return to an order of this House, of the 21st of March last, it appears that there were at that date sixty-one Joint-stock Banks established, with their branches, at 472 places, and consisting, in all, of 15,673 partners or shareholders. Of these, three were established in 1826, four in 1827, six in 1829, one in 1830, eight in 1831, seven in 1832, ten in 1833, ten in 1834, eight in 1835, and four in this year, to the 21st. ult.; and since the date of the return five have been entered at the Stamp-office—one of them having twenty-four branches and 2,052 partners. More companies I know to be in a course of formation, and there are probably others of which I have not heard. Now, Sir, I cannot but think that the circumstances I have now stated to the House—the vast and growing extent of the system of Joint-stock banking on the one hand, the absence of all legal control over the working of that system on the other, constitute a state of affairs very far from satisfactory, and, especially if looked at in combination with certain others, or, at least, without considerable anxiety. We have called into existence, we have introduced into our monetary system an element of tremendous power. We have taken no precaution to limit or control its operation. I say no precaution for the provision of the Act 7th George 4th cap. 46, which imposes unlimited liability on all the partners
844
in Joint-stock Banks, whilst it is, in my opinion, attended by inconveniences of the gravest kind peculiar to itself, has failed, and always will be found to fail, as a means of guarding against proceedings on the part of such establishments, perilous to themselves and injurious to the community. The dangers to which our present system is exposed arise mainly from these causes; by permitting an unlimited number of persons to combine for the purpose of carrying on the trade of banking, you confer on them an enormous power of creating an extensive business; by rendering all the shareholders individually responsible, you afford the most dangerous facility in obtaining credit, whilst you take not the smallest precaution that such banks shall possess capital commensurate with the engagements into which the powers and facilities you bestow, will tempt them to enter. I can conceive no state more dangerous for any commercial community than one in which a system composed of such elements should be in full activity, in which the country should be covered with Joint-stock banking companies, enabled to extend their operations through the thousand channels open to them by means of their shareholders, and feeling no necessity to limit the accommodation they afford from want of funds, the place of which, for a certain length of time, at least, their credit will supply. I can conceive no state more directly tending to produce that excitement, that overtrading, that apparent prosperity, so pleasant in its advent—so bitter in its consequences. If there be one case in which legislative interference with the intercourse of individuals could be justified equally by reasoning and experience, beyond all doubt it would be an interference to obviate the dangers which an abuse of the powers and facilities of Joint-stock Banking inevitably tends to produce. We have made no such attempt. There is in the 7th Geo. 4th, no restriction or limitation whatsoever, either on the process of forming, or subsequent proceedings of these companies. The one sole condition is, that every partner shall be liable to the whole extent of his fortune; and those who may deny that any change in the law is necessary, must be prepared to show that the one provision of unlimited liability is sufficient to secure the stability of a system on which it is quite evident that the whole banking of the country is at no distant period destined to be con-

845
ducted. Will that condition ensure an observance of the caution essential to stability? Our own experience of almost half a century is a sufficient reply. Banking in England has (with the exception of the Bank of England) been hitherto on no other footing. Need I remind the House how far from stable that footing has proved? In 1791 and 1792, one hundred country banks were swept away. There had been then no bank restriction, and there were no small notes. But was the system more secure during the bank restriction, and whilst the country bankers had the power of issuing small notes? From 1809 to 1819, no less than 174 commissions of bankruptcy were issued against country bankers; and after we had again returned to cash payments, from 1819 to 1826, including the time of the panic, ninety-nine commissions were issued. To these bankruptcies must of course be added the many cases of temporary suspensions of payment and arrangements with creditors stopping short of bankruptcy. But it may be said that, as these were not Joint-stock Banks, the illustration does not apply; but, we will examine how far the consciousness of individual responsibility will suffice to ensure the requisite caution in conducting the trade of banking, and if it be found that such consciousness has failed to secure prudent conduct in private banking establishments, the probabilities are infinitely less that it will have that effect in Joint-stock Companies. In such companies, the feeling of responsibility is less intense in proportion as the bulk of the partners take no share in the operations by which that responsibility is incurred—their very numbers and aggregate wealth generate a careless confidence, whilst the temptations to improvidence are almost incalculably increased by the facility of credit which those very circumstances produce. But I shall, perhaps, be told that the losses they may sustain is a matter with which the public has no concern. Sir, we must carefully distinguish between immediate and ultimate solvency. With ultimate solvency, it is true, that the public has no concern. Whether the assets of a bank stopping payment prove sufficient to pay one per cent, or twenty per cent, in the pound is a question almost wholly without interest to the public. The real injury to the community, produced by the working of an unsound system of banking
846
is, first, in the waste of capital consequenon the overtrading which it creates or stimulates; and, secondly, in the shock to credit—the alarm, the distrust, and lessened demand for labour, which the extensive failure of banking establishments inevitably produces. How far, then, does unlimited liability in the partners of Joint-stock Banks afford a security against the stopping payment of such establishments? Not only does it afford no such security but it inevitably tends to augment the risk of such occurrence. The credit obtained by such banks will be in proportion, not to the paid-up capital, but to the presumed extent of their ultimate solvency—their engagements in prosperous times will be in proportion to the credit so obtained; but should a period of difficulty arrive, the paid-up capital would be the only fund to which recourse could be had. To suppose that a call on the shareholders, at such a moment, would be attended to is visionary. Many among them themselves would probably have need of all their disposable funds, and none of them would be found to advance money, the return of which from their brother shareholders might reasonably be considered problematical. Of by far the greater portion of Joint-stock Banks at any time existing, the ultimate solvency could not be doubtful; but by how frightful a process would that solvency be put to the test. I have already stated, that execution on judgments obtained against the officers of Joint-stock Banks may be sued out against any of the partners. In the case of a suspension of payment by one of these establishments, the most opulent shareholders would of course be selected for attack, and respectable and wealthy persons might, if the engagements of the bank were large, be reduced at once to beggary, and left to recover their lost fortunes by suits in Chancery against their partners for their proportion of the debts of the concern. It is also by no means clear that every partner in a Joint-stock Bank is not subject to the operation of the Bankrupt-laws, with all their train of formidable consequences. But the mere misery thus created is but a small portion of the evil to be dreaded. If a period should ever arrive in which several of these establishments should become embarrassed, and legal proceedings be had against individual shareholders, it is certain that suspicion would arise generally

847
with regard to shareholders in all such concerns. The creditors of persons thus circumstanced would feel the inclination to secure what was due to them before the property of their debtors became liable for the engagements of the bank; and a state of distrust, discredit, and alarm would occur, far more widely spread, and more disastrous, I firmly believe, than any we have yet witnessed. If a private bank fail, its immediate connexions alone are liable to suspicion: the distrust created by the stoppage of a Joint-stock will extend more widely in proportion as a greater number of persons are implicated in responsibility. The House will not think that I have overrated the importance of this consideration, when it bears in mind that nearly sixteen thousand persons, many of them commercial men of considerable eminence in the great towns of England, are partners in these companies. There are other evils attendant on the present state of the law as regards Joint-stock banks, of no inconsiderable magnitude, although trifling compared with those to which I have just adverted. Prominent among these is the facility afforded by the existing law for getting up, in a moment of excitement, bubble companies—companies, I mean, of which the projectors have no other object than to make a profit by jobbing in the shares. It is scarcely possible, indeed, to conceive a state of the law affording a more direct temptation and encouragement than the present. Under the 7th George 4th, a company for Joint-stock banking may be formed with a nominal capital, we will suppose of a million—10,000 shares of 100 l. each. It may commence business with 500 or 100 shares really taken—for to constitute the company according to the Act, it is sufficient that half-a-dozen shareholders and two officers enter their names at the Stamp-office. Upon those shares 40 s. or 20 s. each may be paid up, for the Act requires no paid-up capital, and if the projectors can provide funds to procure mahogany desks and brass door-plates, they are authorised to establish branch banks in every town in the kingdom sixty-five miles from the metropolis, for in the Act there is no limitation of the number. A fictitious dividend may be declared, for the Act prescribes no publicity; and when by this, or any other contrivance, the shares have been raised to a premium, the reserved shares may be issued; the profit thus obtained furnishing a fund from which
848
further dividends may be made, and fresh delusions practised on the public. Even the principle of responsibility of the individual shareholders is, in the existing law, by no means efficiently worked out. No publication of the names of the shareholders is prescribed, and it is quite possible, therefore, that all the parties whose names were originally the means of raising one of these companies into credit may withdraw, and the confidence of the public might thus be found to be resting on grounds altogether illusory. It is only by application at the Stamp-office that the names of the partners in any Joint-stock Bank can be ascertained—a process but little likely to be resorted to with respect to establishments at a considerable distance from London. I may add that, in point of fact, the changes of proprietors, although required by the Act to be registered at the Stamp-office, are not always registered; and indeed, if every transfer of every share in every Joint-stock Bank is to be entered at the Stamp-office, some new and extensive arrangements must be made for the purpose. Having, Sir, now stated to the House what I conceive to be the defects in the existing law, and the evils likely to flow from those defects, it may be expected that I should state to what extent existing circumstances illustrate the arguments I have used, and whether there be any symptoms indicating the near approach of those dangers and inconveniences which I have stated to be, in my apprehension, of probable occurrence. Sir, I will confess that this is ground on which I tread reluctantly, and on which if I venture at all, it will be with the utmost caution and reserve. In the first place, it will be observed that a large proportion of the Joint-stock Banks comprehended in the return on the table—the only banks yet in operation—were established before the present excitement, and are, therefore, not open to the suspicion of being got up with any other than the avowed object. In the next place, I am quite persuaded that, with regard to very many of these establishments, no want of caution can be fairly imputed to those by whom they are conducted, and where a course has been pursued open to objection, the error is rather to be attributed to our own faulty legislation, than to those by whom the mistaken principles, sanctioned by the State itself, have been practically brought into operation. Still there are fac and circumstances connected with

849
the actual working of the Joint-stock Banking system which may be stated with a due regard to the caution, which it appears to me every man, but especially every Member of either House of Parliament is

JOINT STOCK BANKS.

By return from the Stamp-office, dated 21st March, 1836

61

Omitted

1

Of the above—

—

62

In process of formation

3

Private, although included in return, having more than six partners

4

7

69

55

No returns from

9–46

Banks.

Shares.

Shares Issued.

Nominal capital.

Capital paid up.

46

821,050

529,397

£30,930,000

£5,922,505

of shares.

63 per cent.

of capital.

19 per cent.

Of the above forty-six banks, four having a nominal capital of 9,500,000 l. and paid up capital of 1,474,600 l., do not issue their own notes. The present circulation of notes by the whole of the Joint-stock Banks, including, of course, those of which I have not been able to state the capital, is 3,094,025 l. In December, 1833, it was 1,315,301 l., no great increase when the increase of their number is taken into account, and it is also recollected that the private bank circulation has fallen off 500,000 l. in the same period. But it is by no means by the amount of issue of notes alone that the effect of the operations of the Joint-stock Banks upon the monetary system of the country is to be measured. The means strictly within the power of such of these establishments as do not issue notes, of affording accommodation to their customers, consist, of course, first, of their paid-up capital; and secondly, of the money deposited in their hands. Of the amount of this latter item I have no means of forming a correct estimate, but as these establishments are comparatively of recent formation, and large deposit accounts can only be the growth of years, it is not probable that the deposits with the Joint-stock Banks can be very large, perhaps not commonly greatly exceeding the amount of the paid-up capital. In the case of such as issue notes, the amount of circulation must be added to their means of giving accommodation. But I believe I am justified in stating that the accommodation afforded in many instances by these
bound to observe in making statements which can by possibility affect the commercial credit of the country. For the following table I am indebted to the courtesy of the Directors of several banks:—
banks very considerably exceeds the combined amount of paid-up capital, deposits, and circulation. They are enabled to give this accommodation by re-discounting in the London market. Large amounts of bills are discounted by these establishments in the country at one rate of interest, and negotiated in the London market at another—the profit of the bank, of course, consisting in the difference between the discount they charge, and that which they pay on the transaction. In the case of banks not issuing paper, this is done through the Bank of England, which, up to a certain extent, will discount for such banks at three per cent. In the case of banks issuing their own paper, it is done through bill-brokers in London. Now, I believe, I am justified in saying, that this practice of re-discounting is not considered by the most skilful and prudent among private bankers as a very creditable or business-like proceeding—nor one which could be carried to any considerable extent by a private banking establishment without exposing it to suspicion and discredit; as showing conclusively that it was in want of disposable funds, and getting into engagements beyond its strength to manage. But this practice thus repudiated by private bankers is freely resorted to by some, at least, of the Joint-stock Banks. The House will at once see how strong an illustration this fact affords of the principle which I have ventured to lay down, viz., that the very facility of credit which unlimited liability affords, tends directly to

851
abuse, and, consequently, to danger. The endorsement of a bank known to contain among 500 or 600 members, many individuals of great wealth, will give currency to any Bill. "Do you not observe (said a broker to a person who expressed a doubt of the character of a bill offered to him for discount), that it has a thousand indorsers?" I by no means intend to assert that, under the sanction of these establishments, many accommodation bills have been negociated, although, perhaps, they may have been the means of introducing some paper of a questionable character into circulation. But, can no injury be done to the community, no danger be incurred even by an unlimited discounting of good bills—bills that are in payment of real mercantile transaction? I am far from thinking so; and I believe, that if, at this moment, the system of Joint-stock banking be working ill for the community, it is more through the facility it affords of a dangerous extension of bill accommodation than by any indiscretion in the issue of their own promissory notes on the part of these establishments. It is well known, that in periods of rising prices, and consequent excitement in the commercial world, persons will always be found ready to speculate in matters not within their usual trade, or to extend the operations of this legitimate business to the full extent to which they can obtain capital for the purpose. It is quite clear, therefore, that any Joint-stock Bank possessing, from the estimated liability of its many partners, an almost unbounded credit, may give a fearful stimulus to overtrading, without discounting or procuring to be re-discounted one single bill not drawn in discharge of a bona fide mercantile transaction. But is the credit of these Joint-stock Banks, when so employed, a sound and wholesome credit? Is it not, on the contrary, a credit in the highest degree hollow and dangerous, and one which would in a period of difficulty but too probably prove unsound? Suppose a change in the state of the London money market were to occur—that the rediscounts of which I have spoken could not be obtained, and that these establishments consequently must withdraw the accommodation they had hitherto afforded, is it not clear that great embarrassment would be felt by all the persons thus deprived of the support on which they had been led to rely?—an embarrassment almost of necessity shared by the Joint-stock Bank, which should have entered on a sphere of opera-
852
tions beyond the means under its direct and immediate control. To what extent the operations of the Joint-stock Banks may have contributed to create the present state of excitement in the commercial world, must, of course, be mere matter of conjecture. That they have had some considerable influence is probable from the fact that the excitement and rage for speculation is greatest in those parts of the kingdom where the operations of those establishments have been most active. London has been comparatively unmoved, but Liverpool and Manchester have witnessed a mushroom growth of schemes not exceeded by the memorable year 1825. I hold in my hand a list of seventy contemplated companies for every species of undertaking which have appeared in the Liverpool and Manchester papers within the last three months. This list was made a fortnight or three weeks since, and might, probably, now be considerably extended. It is impossible also, I think, not to suspect that the facility of credit and consequent encouragement to speculation to which I have alluded, can have been without its effect in producing the great increase of price in almost all the chief articles of consumption and raw materials of our manufactures. That increase has been enormous—not less than from twenty to fifty and even 100 per cent in many of the chief articles of produce of consumption, and materials of our manufactures. I am quite aware that there is every indication of this advance of price being sound—that it has arisen from consumption outrunning supply—and that our manufactures are working on orders rather than speculation. But I cannot forget that the excitement of 1825 commenced legitimately—that the rise of prices will infallibly check consumption, whilst it stimulates supply; and when we look at the amount of our paper currency resting at this moment on the somewhat narrow metallic basis of the bullion and specie in the vaults of the Bank of England, it is impossible not to feel the apprehension, or at least the propriety of a caution and forethought. The circulation of the Bank of England, as appears by the last average in the Gazette, is—.

Circulation of the Bank

£18,063,000

Deposits with ditto

14,751,000

32,814,100

Private and Joint Stock Banks

11,447,919

44,261,919

Probable amount of Scotch and Irish currency

10,000,000

54,261,919

Specie and Bullion at the Bank £7,801,000

853
It is right that I should say that I cannot approve of the course taken by the Bank of England in this matter. The Directors of that establishment acting, I doubt not, with the most conscientious desire to protect the interests of the community, have not taken, in my opinion, the wisest course to effect that object. With a desire to discourage the circulation of the notes of Joint-stock Banks, they afford facilities, as I have said, to such an issue of Bank of England notes. I cannot think that this mode of forcing issues is a legitimate mode of proceeding on the part of that Corporation, combining, as it evidently does combine, an increase of the currency, which may not be required, with a temptation to the Joint-stocks thus supplied with their notes, to afford indiscreet accommodation. Another practice, to which I may allude, of these companies is their making advances on their own shares—a practice clearly liable to abuse, and which might, if carried to its possible extent, deprive the public of the whole security apparently afforded by a paid-up capital. Some of the companies now in the course of formation, propose in their advertisements to make to their share-holders an advance equal to two-thirds of what they may pay on their shares. The practice, again, of reserving shares on the first formation of a company, to be issued subsequently at a premium, has been resorted to by companies highly respectable—and it was indeed hardly to be expected that any companies should hesitate to avail themselves of a profit so easy, and which the Legislature had taken no steps to discourage. It is, however, in my opinion, a source of profit inadmissible under a sound system—opening the door, as I have already said, to delusion, and leading to the concoction of schemes having no other object than jobbing and speculation in shares. I am quite persuaded, as I have before observed, that the banks included in the return now on our table were established with no such object—they may have, in some instances, availed themselves of the advantage thus presenting itself; but I am satisfied no other profit was originally contemplated than such as might be legitimately derived from the business in which they were about to embark. But it would be mere credulity to suppose, that of the banks which are now springing up in such profusion, all have been concocted without reference to profit, so much more easy to secure than those arising from real business properly conducted. I ought not to omit to mention that some of the existing Joint-stock Bank-
854
ing Companies—and among the most respectable too—have availed themselves, to an extent which I considered highly inexpedient, of the permission of the Legislature to establish branches. Some have from forty to fifty branches, the most remote from the centre being 100 or 200 miles apart. And now, Sir, having stated what I conceive to be the defects in the laws by which Joint-stock banking is regulated, and adverted to the evidence which existing circumstances afford of the evil consequences flowing from these defects, it is my duty to point out how those defects may be remedied. Assuredly, Sir, if I had believed with some persons that the inconveniences and perils which I have pointed out in our present system of Joint-stock Banking were so inherent in the very nature of that system that they could by no legislative interference be separated from it, I should not have been justified in bringing this matter under the notice of Parliament; but I entertain no such belief. I am convinced that the defects in our present system are capable of remedy; and I shall, therefore, in conclusion, state briefly! the nature of the remedy I would recommend. It consists merely in the adoption of three great principles—limited liability, paid-up capital, and perfect publicity. Of these three I have no hesitation in saying that I must rely on the first, without which, indeed, the two latter will be comparatively of little value. By permitting only Joint-stock Banks, with limited liability, I would crush at once the spurious credit at present enjoyed by these establishments from the responsibility of the individual shareholders, and reduce the credit to be obtained by a Joint-stock Bank within its legitimate bounds—viz., to the exact extent of its paid-up capital and available money resources. It is impossible, in my opinion, that this House or the public can be too deeply impressed with the importance of this principle. The collection and distribution of monied capital is the only legitimate object of banking. The money actually possessed by a bank, or held by it on deposit, is the only sure and safe basis on which its engagements and the extent of the accommodation it should afford can be calculated. All credit beyond this is spurious and unsafe. The credit of each of the shareholders of these banks is already tasked probably to its full and legitimate extent in his individual capacity. To permit it to operate again in the aggregate is a cruel permission to the individual, and most in-

855
jurious to the public. To encourage the intervention in the monetary system of the country of a circulating credit grounded upon the supposed aggregate fortunes of the shareholders is to attempt to coin into money the lands, the houses, the factories, the fixed capital of the country. It is to fall again into the famous error of Law's Mississippi scheme; and whatever form the credit thus created may assume—whether of bill circulation, cash credits, or issue of notes—most certain it is, if there be truth in reasoning or experience, that the credit so created is altogether hollow and illusory, and must sooner or later issue in deep distress to the individuals concerned, and great calamities to the community. By the permission to establish banks of limited liability also, we should acquire the most important of all securities for the good conduct of such establishments, viz., a certainty that the most respectable persons in the community would become partners in them. Once remove the well-founded alarm which the being engaged in indefinite responsibility inspires, and you would have spring up in every part of the kingdom banking companies, comprehending in their proprietary all the wealth and intelligence of the district, conducted on sound principles; because the shareholders would be well contented with moderate profits, the very key-stone of sound banking when to be obtained with security. I would grant such charters, however, only on the two conditions—first, of the whole capital of the bank being paid up; and, secondly, of entire publicity. From these provisions many important advantages would flow—they would effectually put an end to any getting-up of these companies as mere bubbles for the purposes of speculation. There could be no holding back of shares subsequently to be issued at a premium—no fictitious profits to be created out of those very premiums, and as a real outlay would be required, no banks set on foot by persons without substance. The publicity that I would require, moreover, would be real, searching, and effective—making clear to the apprehension of all men the circumstances of the bank both as to its assets and liabilities. Such publicity, so far from being injurious, would be in a high degree beneficial to sound and well-conducted banking establishments, and we should permit no other. On this head the House will permit me to read an extract from a letter from the manager of one of the existing Joint-stock Companies. "On first establishing this concern, the Directors
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came to their vocation with all the bias respecting the absolute necessity of secresy, which prevails in private banks—a gradual change has, however, arisen in the minds of the Directors, as they have watched the progress of the Joint-stock banking system. Seeing the great additional security which it would afford for good management, the necessity under which it would lay weak banks to call up more capital, and the confidence which the public would derive from an actual knowledge of the state of their affairs, we should now feel little objection to giving the greatest publicity to the state of our issues, liabilities, and assets, provided such publication were generally required." Into the detail of the regulations by which I would propose to work out these great principles I do not now enter—they will be proper matter for consideration in the Committee which I shall propose to the House to appoint. I am well aware that many schemes have been proposed for rendering Joint-stock banking safe which do not involve an admission of the three great principles I have stated as essential; but valid objections may in my opinion be raised against all those schemes, and it is still less necessary, therefore, that I should occupy the time of the House in discussing them. The application of these principles involves, in my opinion, all within the power of legislation to effect towards the establishment of a sound system of banking; but I also think that those principles, if judiciously applied, will be effectual fort he accomplishment of that object, and I have yet to hear one valid argument against the so applying them. To the adoption of these principles all experience points. The Bank of England presents an example of stability which has never been doubted; but it has had limited liability and large paid-up capital. Can any one doubt but that, if publicity had been enforced on it, great errors would have been avoided, and great calamities spared to the country? Scotland, I know, may be quoted as furnishing an exception to the rule I would establish; but I believe it might be shown, by a reference to the history of Scotch banking, that exception is more in appearance than reality, and that peculiar circumstances in Scotland have caused the banks of that country to fail in one important particular, viz., paid-up capital, within the rules I would lay down. It should not be forgotten that the three Scotch banks, which preceded by many years the establishment of the others, and gave the tone to public opinion on the

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subject of banking—viz., the Bank of Scotland, the Royal Bank of Scotland, and the British Linen Company were chartered banks of limited liability, and large paid-up capital. In the United States of America the same conclusion has been come to by a people, than whom none exists more intelligent, more sagacious, more practically wise, or more capable of drawing useful lessons from experience. In the United States the trade of banking has never with, I believe, but one instance of exception, been carried on by individuals, or firms of a small number of partners; it has always been in the hands either of Joint-stock or Incorporated Companies. The people of that country have, therefore, extensive, and, in but too many instances, calamitous, experience, of the working of a system yet in its infancy with us. The result of that experience is the adoption almost universally of the principles I have laid down—viz., limited liability, paid-up capital, and perfect publicity. In 1833, the President determined to withdraw the Government balances from the Bank of the United States, and deposit them in banks in the several States. For this purpose twenty-three banks in different parts of the Union were selected. Of course, the banks selected were among the first in point of character and solidity. The charters of all were laid before Congress. I have looked carefully through those charters, and can assure the House, that with some slight and doubtful modifications in one or two, as to the liability of shareholders, they embody those principles. Several of the leading States of the Union—Pennsylvania, New York, and Massachusetts, have enacted general laws for the regulation of banking. Those laws are pervaded by the same principles. Many other and stringent regulations are laid down for the government of banks, which an experience of the calamities flowing from malversation in such establishments has led the people of the United States to adopt; but in no laws that I have seen are the principles of limited liability, paid-up capital, and publicity, in the main departed from. The House will, I am sure, feeling how important is the lesson we may derive from the experience of our trans-Atlantic brethren, pardon me for referring especially to one general Act passed in America on this subject. The House is, no doubt, aware that all legislation in the United States, except on certain specified subjects, falls within the province of the State Legislatures. It is also, I
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doubt not, aware that the district of Columbia, in which Washington is situated is under the direct control of Congress; any laws, consequently, for the Government of that district, may be considered as emanating from the collective opinion of the whole Union. In 1817, a law was passed by Congress for the regulation of banking in Columbia. What were the provisions of that law? At that time there were in that district Joint-stock Banks; the Act constituted them all Corporations, on compliance with certain conditions, the most important of which were, that their whole capital should be paid up before the 1st of January, 1819, and that they should every year lay a complete statement of their affairs before the Secretary of the Treasury; it further prohibited, by heavy penalties, all other parties from carrying on the trade of banking. To the example of America I may add the authority of some of those statesmen among ourselves most worthy to be listened to on such subjects in favour of liability. In a discussion in the House of Lords on the Bank Charter Amendment Bill, on the 17th of February, 1826, Lord Liverpool said, "The measure he had to propose was but a half measure; and why was it so? because they had the chartered rights of the Bank of England to contend with. This was an obstacle to their going further at present; they ought to go further whenever they could. The Bank had consented to allow the restriction as to the number of partners in country banks to be removed, and so far one difficulty was removed.*" In a discussion on the same Bill, in the Commons, on the 10th of February of that year, Mr. A. Baring said, "If persons had been allowed to combine, on condition of depositing their capital and of their limiting their responsibility to that capital, plenty of individuals would have been found ready to engage in such associations. Landed gentlemen would put down their 5,000 l., 10,000 l., or 20,000 l. as might be convenient, and banks would then be formed all over the country on the best principles; solid establishments would be created, with which prudent men, with families, would be very willing to connect themselves.†" In the same debate, Mr. Huskisson said, "he allowed it would be a great improvement, if, under a proper system charter banks were established, with only a limited liability. It would, no doubt,
* Hansard, New Series, Vol. xiv. p. 461.
† Ibid. p. 209.

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induce many persons of great credit and fortune to invest their money in shares of such banks. But the Bank objected to the extension of this limited liability."* I have only further to state why I determined in bringing under the consideration of the House the propriety of an alteration of the existing law, to move for the appointment of a Select Committee, rather than for leave to bring in a Bill for that purpose. I was, Sir, first induced by the belief, that by a Select Committee important evidence might be collected, and placed on record, illustrating the defects in our present system. I was yet more strongly induced, I can assure the House, by an unaffected anxiety to have the assistance of a Committee, in devising a measure on a subject of such vast importance, and with respect to which, although it has long occupied my laborious consideration, I could not but be conscious I might have failed to advert to many important considerations. The opinion that some alteration of the law is necessary is, if I may judge from the communications I have received, all but universal; but opinion, both without and perhaps within these walls, is much divided as to what may be the most expedient alteration. The labours of a Committee may usefully guide us in a path yet new to us in legislation. I have now, Sir, only to thank the House for its indulgence. I regret that I should at such length have trespassed on its attention—and yet those who are conversant with the subject will be aware how much, for the sake of brevity, I have omitted. I have, however, I hope, stated enough to induce the House to concur in a motion I now put into your hands. The hon. Member concluded by moving, "That a Select Committee be appointed to inquire into the operation of the Act of the 7th George 4th, cap. 46, permitting the establishment of Joint-stock Banks, and whether it be expedient to make any, and what, alterations in the provisions of that Act."
The Chancellor of the Exchequerdid not rise for the purpose of following his hon. Friend through the whole of the argument into which he had entered on the present occasion, because, as he intended to express his concurrence in the appointment of the Committee, he should simply slate the grounds on which that concurrence was founded, in order to prevent any possible misconstruction of the views taken either by the Government collectively, or
* Hansard, New Series, vol. xiv p. 243.
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by himself individually, of the character, nature, and tendency of the present motion. He did not complain, nor did he think the public could have any right to complain, of the course adopted by his hon. Friend. Neither the arguments contained in his hon. Friend's speech, nor the motion with which it concluded, ought to excite alarm in the mind of any person whatever. If, indeed, he thought that his acquiescence in the motion could be considered as in any degree calculated to affect the commercial credit of the country, he should have felt that there was a necessity for making out a much stronger case of exceeding danger than any he had yet heard stated, before he incurred so fearful a responsibility. At the same time, it was impossible to approach the consideration of any question which touched upon the currency of the country, and upon the general banking system, without being aware that they were in a greater or a less degree approximating to those great principles upon which all commercial credit depended. But he thought there were sufficient grounds to induce the House to acquiesce in the present motion, without suggesting causes of distrust or apprehension in the minds even of the most timid. His hon. Friend, it was true, in the course of his speech had pointed out many inconveniences, risks, and responsibilities, to which the proprietors of Joint-stock Banks were exposed. He believed it had been often said, that if a skilful anatomist were to point out all the risks to which the human frame was liable, no one would rise up with cheerfulness, or go to bed with resignation, so in matters of great speculation, if the parties about to engage in them were clearly to foresee all the chances of calamity to which they were exposed, it might prove a great hindrance to the free employment of capital. His hon. Friend would excuse him, he hoped, if he stated, that it was not on account of the difficulties which individuals might experience from the operation of Joint-stock Banks that he was disposed to concur in the motion. All parties had a right to exercise their own judgment in the application of their own property, and must take the consequence of success or failure. It was not on individual but on public grounds that he was prepared to enter upon the inquiry, and he therefore would not mingle, with this the main consideration, any notice of those awful consequences to individuals on which his hon. Friend had in

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the early part of his speech so much relied. He thought that the subject furnished a proper ground for a Parliamentary inquiry. He would put it upon this fair principle:—within a few years Parliament had adopted a new plan, and had passed a new law with respect to Joint-stock Banks. That new law had been brought into operation in many parts of the kingdom; and latterly its operation had been greatly extended. It was a law deeply affecting the interests of the whole community. It was, to a certain extent, an experimental law. It was right and proper then that Parliament should inquire what had been the result of that experiment. It was right that Parliament should inquire whether the law answered the ends for which it was originally framed. It was fit that Parliament should inquire whether it required any and what amendment. If such were the objects of the inquiry for which his hon. Friend moved, he for one was ready to admit that a case did exist upon which it was expedient that a Committee should be appointed. Undoubtedly, since the Act which had given occasion to the present motion passed, there had been a great and enlarged establishment of Joint-stock Banks. But let him take the liberty of earnestly cautioning the House against—he would not say the vice—but the error, to which popular assemblies were, perhaps, peculiarly prone. He meant a want of stability in their opinions from year to year, and the habit of rapidly rushing from one extreme to another. Let the House, for instance, look at those very debates in the year 1826 to which his hon. Friend had referred. What then was the cry? At that period what was the principle advocated in Parliament? The general declaration was this: that all the difficulty, all the distress under which the country was then labouring, was entirely to be attributed to the want of Joint-stock Banks. They were told that the private Banks of the country were not sufficiently stable—must always be subject to the influence of a sudden panic; but that the establishment of Joint-stock Banks would afford a remedy for all the difficulties into which the broken credit of private Banks had plunged the country. But whilst he assented to the motion of his hon. Friend, and whilst he differed, perhaps, from those who anticipated in the Joint-stock Banks a perfect panacea for all the evils by which public credit could be assailed, he would not have
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the House suppose that he was disposed to go into the opposite extreme, and to say, that whereas in 1826 he took the Joint-stock Banks as a remedy, in 1836 he was disposed to attack them as the disease. He looked upon the principle of Joint-stock Companies as one of the great discoveries of modern times. He regarded them, when made responsible to public opinion, as the ground on which all successful enterprise must be founded. He said, further, that if there was any one description of business to which the principle of a Joint-stock Company could be more applicable than another, it was, under due restrictions, the business of banking. He was aware, when he made that statement, that he was not combating the arguments of his hon. Friend (Mr. Clay); but he undoubtedly was combating an argument which he knew in a greater or less degree occupied the minds of many persons within the walls of that House, as well as out of doors. It might be shown that in certain instances abuses had taken place in the formation of Joint-stock Companies. But those abuses, if proved, would furnish no argument against the principle itself. The ground upon which he was ready to acquiesce in the motion of his hon. Friend was, the great extension of these banking establishments at the present moment. The House was aware that a general spirit of speculation was abroad—that Joint-stock Companies were formed for all kinds of purposes—some for purposes to which such co-operations were by no means applicable—and the House would feel that this rage for speculation would hardly fail to extend itself to the banking business as well as to others. Within the last few years, indeed, the increase of Joint-stock Banks and branches of the Bank of England had been very considerable. In proportion, then, as they allowed the application of the Joint-stock principle to sound and -legitimate objects, they were bound to see that under the colour of Joint-stock Companies the country was not imposed upon by a number of bubble companies, representing no real property, and incapable of affording the smallest security. If the law, as it now stood, opened the way to such an abuse, it was time that they should seriously consider whether it might not require some amendment. With respect to the Joint-stock Banks at present established, his hon. Friend, he was sure, must know, from the return he hold in his hand, that any apprehension that his

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speech could properly excite as to their perfect solvency, would be an utter and complete delusion. There was nothing in the present motion calculated to effect in the smallest degree the credit of any one of these companies. His hon. Friend had suggested various remedies for the evils he pointed out; he had spoken of the beneficial effect of limited liability, of paying up capital to the fullest extent, and of entire publicity of accounts. But he thought the House would see that if they were about to enter into this Committee for the purpose of inquiry, it would be the most prudent, the most cautious, and by far the wisest and most convenient course, to abstain altogether from expressing even the slightest opinion with respect to any one of the points suggested by his hon. Friend. He was not, any more than his hon. Friend, without his opinion, affirmative or negative, on all these points; he should be unworthy the duties he was called upon to discharge if he had not directed his attention to the subject; but if the House were disposed to agree to the appointment of the Committee, it must at once strike every gentleman present that any debate upon the subject at the present moment would be utterly fruitless—utterly useless to any good end—whilst by possibility it might lead to disastrous consequences; because it was impossible to go into any one of these points of detail without opening the whole question, and thus anticipate the labours of the Committee. It was on that account, and that only, that he declined altogether from entering into any discussion of any one of the details to which his hon. Friend referred. Upon principle, however, he must say, that he differed most essentially from many of the doctrines laid down by his hon. Friend, and his acquiescence in the motion must not be assumed to be an acquiescence in the reasons on which it was grounded. He must add, that he would not, at that moment, enter into any discussion on the important questions involved in the motion, as that could not be done without causing the evils he wished to avoid. With respect to the course which the Government felt it their duty to pursue upon that occasion., he begged to say one word before he sat down. His hon. Friend would not take it as intending to offer any disrespect towards him, if he took the liberty of stating, that he did not conceive this inquiry to be one that ought to be left in the hands of any private or individual Member
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of the House. It was an inquiry which, to be undertaken at all, ought to be placed in the hands of a responsible Government. There was much of information upon this subject, which no doubt it would be greatly for the interest of the public to obtain; but which, with that care and that observance which was due to private property and private interests, ought not to be rashly called for or lightly divulged to the public. In matters of private business there was much, which if made known at all, ought only—except upon very strong occasions indeed—to be made confidently known. Such was the course taken upon the appointment of the Committee in 1826. The right hon. Baronet, the Member for Tamworth, when he moved for the Committee of 1826, obtained for the use of that Committee, from the various banking establishments in the kingdom, all the information that was necessary to be communicated to it; but the private transactions of private bankers were not unnecessarily divulged nor made known. Therefore he thought it essential, without meaning the slightest disrespect to his hon. Friend, that the appointment of a Committee like that now moved for, and the responsibility of directing its proceedings, ought to be left in the hands of the Government. To that proposition he believed his hon. Friend would make no objection, and if that were the case he (the Chancellor of the Exchequer) should raise no opposition to the appointment of the Committee. But at the same time, he could not conclude without stating his hope that the Joint-stock Banks themselves would feel as he (the Chancellor of the Exchequer) did, that an inquiry of this kind conducted in an amicable spirit, and instituted not for the purpose of injuring these establishments, but of improving the law under which they were called into existence, could be productive only of beneficial results to all parties, and that they would, therefore, regard it without jealousy or suspicion, feeling (as they ought to do) that the best proof they could give to the world of the soundness of the system under which their affairs were conducted, the best proof they could give of their perfect solvency, of their prudence, their honour, and of their discretion, would be, not to view the inquiry with distrust or alarm, but, on the contrary, to come forward cheerfully and readily to furnish all the information that

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could be fairly required at their hands. With the view of bringing before the House, in this spirit, the result of the inquiry, he should think it necessary that the same discretion should be used in this instance as was used with respect to the inquiry into the Bank charter—he meant that the Committee should be a Committee of secrecy. Whilst the House had the full benefit of the results of the inquiry, it would not, he thought, be expedient that the inquiry, during its progress, should be open and public. He was led to this conclusion, not from any distrust of the result of the inquiry, still less from any distrust of the soundness or solvency of the establishments to which it related, nor from any apprehension as to the present state of public credit, but because he thought when the Legislature instituted inquiries into the transactions of individuals carrying on business according to the law of the land, they were bound to take care, whilst they sought the information they desired, that matters which might seriously affect the interests of those individuals should not lightly or needlessly be divulged. He wished to press that point particularly upon the House, because he really conceived it to be of very great importance. If the inquiry were perfectly open, it was impossible to say what injury might not be effected. Suppose on any one day of the inquiry that evidence were tendered to show that one of these Joint-stock Banks was improperly conducted, that its affairs were in a bad state, that it was insolvent—what could be so unjust as to allow a day's examination proving the case against the bank to go out to the world, unless it were accompanied with what the bank could say, on the other hand, to remove the erroneous impression that would otherwise be created. Upon this ground, then, he repeated, it was essential that the Committee should be one of secrecy. He thought he had stated enough to justify the Government in its acquiescence in this motion. He hoped, too, that his statement had been made in such a manner, as neither in or out of the House to give rise to the slightest apprehension at the course proposed to be taken. He could not agree with his hon. Friend, that the present rise of prices was wholly to be attributed to unsound and illegitimate causes; but, at the same time, he was perfectly prepared to admit, that when a
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general rise in the price of all commodities took place, it became the duty of all engaged in the management of money concerns to inquire whether that general rise of price took place entirely from natural and legitimate causes, or whether, with much that was natural and legitimate, there might not be mixed up causes of a totally different character. For his part, he believed that he had reason to be thankful for the present posture of affairs. He had stated as much the other night, and nothing he had since heard had induced him to alter his opinion. Indeed, he might add, that taking into consideration the future consequences of present events, it was possible that he had not told the whole truth. In a time of prosperity like the present, inquiries of this description might be entered upon with the greatest safety. If it were a time of apprehension and of alarm—if there were reason to doubt the solvency of the great bulk of these banking establishments, then he should conceive the appointment of a Committee of this kind to be most objectionable. But, believing they were now in a condition to conduct the inquiry with advantage, he was disposed to concur in it. If it had the effect of discouraging the establishment of any new banks till the law were improved, or of making those which were already established to increase their prudence and caution, it would be advantageous. It was just and right that Parliament should inquire, in order to legislate with caution on this important question. As his hon. Friend consented to place the matter in the hands of the responsible Government, he would, perhaps, to-morrow name such a Committee as would embrace all interests concerned, and develope all the facts material to be known before it. He would not have it a one-sided inquiry, to support any particular theory; but to ascertain the operation of the present law, and whether it required some amendment, and if so, what that amendment should be. He trusted that such an inquiry could have none but the happiest effects.
Mr. O'Connellsaid, that if the motion had rested solely upon the speech of the hon. Gentleman who brought it forward, he certainly, for one, should have felt it his duty to have divided the House before he gave his consent to it. He did not think it had ever happened to him to hear purer principles laid down, as governing

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a great commercial question, or rather he should say, so many principles laid down diametrically opposite to the end in view, as he had heard that evening from the hon. Member for the Tower Hamlets. But of the course taken by the right hon. Gentleman, the Chancellor of the Exchequer, he was disposed to approve. The right hon. Gentleman had not pledged himself to any particular opinion. If he differed from the right hon. Gentleman at all, it was only upon this point—that the Committee should be a Committee of secrecy. But the right hon. Gentleman had stated one reason in favour of the secrecy, which appeared to be all-powerful with the House, and which he supposed would induce it to coincide with him; but the hon. Gentleman opposite, in the course of his long speech, had. stated nothing to make out his case—had positively adduced no evidence whatever—had put forth not the shadow of an argument, to show that the inquiry for which he moved was necessary. It was true that he talked a great deal of the failure of the banks in 1795, and again in 1826; but it so happened that not one of those banks were Joint-stock Banks, and consequently their stability or instability, at any particular periods, had no reference whatever to the subject which the hon. Gentleman professed to be discussing. All the banks that stopped payment in 1795 and 1826 were private banks, and the cause of their failure was sufficiently obvious. But whilst the hon. Gentleman spoke at so much length on the failure of the English banks, he was perfectly cautious not to say anything about the banks in Scotland. In the year 1826, when the English banks were falling to the ground, in every direction, only one Scotch bank stopped payment, and that only for a short time, afterwards paying 20 s. in the pound, in discharge of all claims upon it. How did this happen? The systems of banking in the two countries were totally different. In the one country, in a moment of emergency, there was a general break-down of the banks; in the other, with the single exception he had mentioned, the banks remained firm, and upheld their credit. How was it that this circumstance had escaped the observation of the hon. Gentleman? Then, again, nothing could be more absurd than the argument put forward by the hon. Gentleman, with respect to limited responsibility. It was as much as to say, that a man who risked 10 l. in
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a speculation was better security than one who risked his whole property. How such a proposition could enter into the head of so intelligent a Gentleman as the hon. Member for the Tower Hamlets was to him perfectly astonishing. The point of paid-up capital he certainly thought a very fit subject for discussion; but for the reasons stated by the Chancellor of the Exchequer, he should abstain from entering upon it at that moment. There was one point upon which he thought the Committee would stand clear from any species of difficulty, and that was, as to the propriety of giving complete publicity to the accounts of these banking establishments. The public had a right to know every thing. No man should engage in a business of that description, unless he was prepared at all times to make known the amount of his assets and of his liabilities. He thought publicity perfectly necessary—it would give additional stability to those banks who were enabled to give good security, whilst, on the other hand, it would prevent the public from being deceived and defrauded by those who could give no security. He believed, that shortly there would not be a single private bank in the country. The system of banking was such as left little doubt in his mind that the whole of it would very soon be done by Joint-stock Banks. Whether in that House they could rightly be called currency doctors or not, no man could deny, that as the circulating medium had increased they had had periods of prosperity. From 1826 to 1835, the circulating medium had been exceedingly limited. Gold did not afford a sufficiently abundant or sufficiently rapid medium of circulation in a country like England. Where there were such extensive commercial and manufacturing transactions, it was necessary to have cheap instruments wherewith to work exchanges; and wherever cheap instruments could be employed without danger to the public, they ought to be resorted to. The prosperity of a great mercantile country was always found to be in proportion to the quantity of its circulating medium. It, therefore, by the establishment of Joint-stock Banks, the circulating medium of this country could be increased with safety to the public, the prosperity of ail classes of the community would be infinitely increased. If such a result should follow the appointment of this Committee, it would afford him great sa-

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tisfaction. He was glad to learn from the Chancellor of the Exchequer that the Committee was not to be composed exclusively of gentlemen who took any one particular view upon the subject of banking or of the currency. He trusted that they would ponder well before they suggested any alterations that might involve an extensive change in the medium of circulation—for he had seen more families ruined, more persons reduced from happiness and comfort to a state of misery and starvation, more social mischief produced in Ireland, than almost ever occurred in France at any period of the revolution, and all from a sudden change in the medium of circulation. The very reports which showed that the English labourers were better off after the change of the currency than they were before, at the same time proved that the Irish peasantry were reduced by it to an infinitely worse condition. Whatever the effect of the change in England might be, in Ireland it worked nothing but mischief. But from the establishment of the Provincial Bank in that country up to the present moment, there had been an improvement. The present year was the best that the Irish agriculturists had known for a long time past. He was glad to find that there was a disposition to come to the consideration of this question without heat or rancour. He was the bet e pleased with it, because on former occasions he had observed a sort of bigotry in the House on the subject of the currency. He entirely agreed with the Chancellor of the Exchequer as to the inexpediency and impropriety of entering into any discussion on the subject at the present moment, and he hoped that he had said no more than was consistent with that view.
Mr. Gisbornedid not intend to enter into any discussion of the general question. He did not intend to object to the appointment of the Committee, although he confessed he could not look at the proposition of the hon. Member for the Tower Hamlets without some feeling of suspicion. This feeling, however, had been greatly alleviated by the speech of the right hon. Gentleman, the Chancellor of the Exchequer. The main object he had in rising was to say, that having himself given notice of a motion having reference to this subject, as the Committee for which the hon. Member for the Tower Hamlets moved was not to be appointed that day,
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he (Mr. Gisborne) would consent to put off the motion of which he had given notice until that Committee was appointed, upon the understanding that his right hon. Friend, the Chancellor of the Exchequer, would then allow him to bring it forward.
Mr. Richardsagreed with the hon. Member for the Tower Hamlets that this was a subject of the greatest magnitude, and he should have been much better pleased if the Government had come down to the House with some well-digested plan, in order to cure any evils that might be incident to Joint-stock Banks, instead of sanctioning this motion for a Committee, and he could not help suspecting that there was some understanding between the right hon. Gentleman and the hon. Member for the Tower Hamlets, as to the latter bringing forward this proposition, He regarded it substantially as a motion on the part of the Government. But he could not refrain from observing that Joint-stock Banks, in 1826, were instituted almost upon the sole recommendation of the Government of that day. In reference to the motion before the House, the hon. Gentleman had stated many grounds for granting his motion, but he had not given the House one single proof of any evil that had arisen from Joint-stock Banks. There had not been a single failure for the ten years during which they had existed. That fact of itself ought to make the House approach the subject with considerable caution. The hon. Gentleman seemed to have some dreadful apprehension haunting his mind, as to the possibility of evil. He had said, that such a state of things might arise as to make the operations of these banks dangerous. He was quite aware that a bad harvest might cause the exchanges to turn against this country, create a general alarm on the public mind, and occasion an effect upon the currency which might lead to great individual and general distress. But was that an objection to Joint-stock Banks? Unquestionably not. True it was, that there was danger attending these banks; but there was also danger arising from the use of the steam-engine; but surely that was no argument why steam-engines should not be used. He much approved of the language of caution used by the Chancellor of the Exchequer. Nothing could be more guarded, more prudent, or more statesmanlike. Still he thought the Government ought to have proposed

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a measure, on their own responsibility, and not to have sheltered themselves behind a Committee. There might be individual; cases of misconduct on the part of these banks; but that sort of thing would correct itself. What would be thought of a motion for a Committee to inquire concerning the best mode in which merchants might generally carry on their operations? The merchants would laugh at it, and say it was a busy, meddling, impertinent interference. Now he would take the liberty of warning the right hon. Gentle- man how he dealt with this subject. A mighty power had arisen, which was beneficial to the public, and which had set in motion a vast quantity of industry. A flattering statement was made by the right hon. Gentleman the other night of the state of the revenue. He could tell the right hon. Gentleman, that, in a great measure, he might thank the Joint-stock Banks for his being able to make that statement. He for one protested against the appointment of a packed Committee, with a view to obtain the sanction of this House to a preconceived set of measures, which Gentlemen might possibly contemplate. He could not conceal the suspicion he entertained, that the Bank of England—and that suspicion was by no means diminished on viewing the very near connexion that exists between the right hon. Gentleman and the hon. Member for the city of London at this very moment, the Chancellor of the Exchequer was in close conversation with Mr. Pattison, the governor of the Bank, and one of the Members for the metropolis. He did entertain a distrust lest a feeling of jealousy on the part of the Directors of the Bank of England, who, from the increased business of the Joint-stock Banks, had found their own business decline, might not have influenced the right hon. Gentleman in acceding to the motion of the hon. Member for the Tower Hamlets. He for one, believed that that hon. Member had been (to use a common expression) set on by the Government; and he viewed the appointment of this Committee with the greatest possible jealousy, believing, as he did, that it would consist of men high, no doubt, in station, but, generally speaking, not men of practical experience in commercial affairs.
Mr. Pattisonassured the House, that the conversation which had just passed between him and the Chancellor of the Exchequer,
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had not any reference whatever to the subject now under consideration. He was asking the right hon. Gentleman a question which deeply interested a portion of his constituents as to what was the intention with respect to allowing a drawback of duty on paper.
Mr. Humesaid, the speech of the hon. Member for Knaresborough, showed how difficult it was for any Minister to steer his course satisfactorily. It appeared to him his Majesty's Government had acted rightly in taking upon themselves the appointment of the Committee rather than leave it to an individual who might possibly have selected persons entertaining erroneous opinions on the subject of the currency, which might have led to most disasterous results. The Chancellor of the Exchequer would now be responsible as to the individuals composing the Committee. He did not think the hon. Member for Knaresborough had spoken in the manner he ought to have done, when he said, that this was an understanding between the Chancellor of the Exchequer and the hon. Member for the Tower Hamlets; as if the Chancellor of the Exchequer required the aid of any individual to bring forward such a motion. He, at the same time, wished to hold himself free from the opinions expressed by his hon. Friend, the Member for the Tower Hamlets. He did not believe that the Joint-stock banks had produced any surplus of paper money what-ever. He was prepared to show that the increased production of this country in manufactures alone, was upwards of 10,000,000 l., while the increase of paper circulation was only 1,000,000 l.; and this was effected by the present system of banking, which allowed discounts to such an extent as enabled the country, with the same quantity of circulation, to transact a great deal more business than under the old system. What he wished to see changed, or at all events inquired into, as to the present system of the currency was, the working of the clause which was inserted by Lord Althorp in the Bank Charter, which enabled country banks to pay their notes in Bank of England paper instead of gold. His wish was, that bank notes should be convertible into gold on demand. That was the best security against evil arising from over issues; and was the only check that could be applied to it. He thought he could show that it was impossible to issue too much paper money, if it were thus made convertible

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into gold on demand. Indeed he believed that great delusion existed in the country with regard to the effect of prices on the currency. His opinion was, that the quantity of money depended on the rise of prices; and that the rise of prices did not depend on the quantity of money. He held the prevailing doctrine to be extremely erroneous on this point. The currency doctors he knew differed from him; but there never had been a fair opportunity of demonstrating the truth of his positions. Whether the result of the labours of this Committee would do so he could not tell. Before he sat down, he begged to propose, as an addition to the motion now before the House, that the Committee should be instructed to inquire into the effect of the clause introduced into the Charter of the Bank of England, by which country bankers were held to have satisfied their engagements by paying them in Bank of England paper.
The Chancellor of the Exchequerthought, by adopting the proposition of his hon. Friend, they would be embarrassing the proposed inquiry with a subject which did not naturally belong to it. He was willing to inquire into the operation of Joint-stock banks. That was an important subject, and was quite enough to occupy the Select Committee. He could assure the hon. Member for Knaresborough, that he had not the slightest notion that the hon. Member for the Tower Hamlets intended to make this motion until he saw it on the order book.
Mr. Cayleyagreed in opinion with those who thought the hon. Member for the Tower Hamlets had failed in showing any cause for this Committee. But looking at the subject in the point of view in which the Chancellor of the Exchequer had put it, he was not opposed to the motion. If the subject would bear the light, then the present state of things ought to stand; if it would not bear the light then it ought not to stand. But he protested against the notion that Joint-stock banks were at the bottom of our present position. In his opinion this Committee was brought forward with a view of tampering with the currency. He was frequently accused of a wish to tamper with the currency; no one, however, was more averse to tampering with the currency than he was; because that undermined all the engagements of society. What he desired was, to have such a well-regulated standard as would not require the frequent tampering with the currency,
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which the existing standard had required. Since the preparations for, and the establishment of, [the standard in 1810 they had always been tampering with the currency. They tampered in 1815, again in 1816–1817; again in 1819; again in 1822; again in 1826; again in 1 829, when one pound notes were withdrawn. Again in 1833, when the legal-tender clause was introduced into the Bank Charter Act, and now the Joint-stock banks were to be regulated, or lather put under, the screw, so that they could not issue so much paper as before. All these changes; ail these tamperings—had taken place with the view of propping up the unsuitable and iniquitous standard of 1819-Talk of the Joint-stock banks—talk of the signs of the times—what were they? Why simply, that more paper had lately been issued—prices were rising, in consequence—this rise in prices according to the gold standard price of 1819, must drive the gold abroad, then the paper would be reduced, and then prices must fall, and adversity be restored. The fact was, as he had often stated, that good prices were often requisite, under our heavy engagements to prosperity, and good prices were incompatible with our standard of value, with Mr. Peel's Bill of 1819. There would soon be again a struggle with the standards as there was in 1825. The symptoms might vary, but the disease would be the same; already the gold was beginning to leave the country. He agreed in much that had fallen from the hon. and learned Member for Dublin, but he totally disagreed with that part which related to the conduct of private banks in 1825. All the blame of that panic was visited on the country banks and one pound notes. They were made the victims of the ignorance of the Government, and its co-operation with the Bank of England. In 1822 the Government had stimulated a larger issue of paper, with the avowed object of restoring prosperity; the prices of 1824 and 1825, were attributable to this paper issue; but gold remaining low in price, by the Act of 1819, while all other things rose, was drained from the Bank, and the Bank drew in its circulation, and caused the fall in price, and then gold could not be had in sufficient quantity, and rapidly enough. And this it was which caused the panic, and the country banks to stop payment; though they ultimately, at least sixty out of seventy, paid twenty shillings in the pound. A victim, however, was wanting for the errors of Government and

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the Bank of England, and a victim was found in the country banks and the one-pound notes, and the Joint-stock banks were patronised in their place. He was much mistaken, if the present motion was not preparatory to making the Joint-stock banks the victims of the crisis, which every reflecting man was expecting. But that crisis, which would be hastened by a deficient harvest and the importation of Foreign corn, or by a Foreign loan, would be attributable not to the Joint-stock banks, which have, as yet, fully answered the intention of their creation, but to the Act of 1819, which made a rise of prices and general prosperity impracticable with the preservation of the standard. The House must choose between the standard and prosperity, but it could not have both. On this account he had always advocated an alteration of the standard. He wished to ascertain what rate of prices would give general prosperity, and then to strike the standard at that point, which would preserve those prices, without the gold leaving the country. His hon. Friend, the Member for Whitehaven, stated truly the other night, that there was one part of the present prosperity in manufactures which had a solid foundation, and one only, namely, "that which rests on the industry, the energies, the enterprise of the people of this country," which laws, the most blighting to industry, had proved insufficient to tame and subdue. The rest of the prosperity was based on an increased issue of paper, and that increased issue was unsafe and incompatible with the present standard of value, which, from the confiscation of property it had caused, and from its cramping effects on industry, had seared the best affections of the parent towards his child—had turned into a curse the bountiful gifts of Providence—and had made the late peace a tenfold greater calamity than the savagest horrors of the war which had preceded it.
Mr. Forsterbore his testimony to the extensive information; accurate statement, and spirit of candour which pervaded the speech of the hon. Member for the Tower Hamlets. He thought, the Chancellor of the Exchequer having acceded to the appointment of this Committee, that it could not fail to do good. The best corrective of the evils, whether belonging to private or public banking, Was a strict adherence to the laws now regulating our currency, namely, the maintenance of the standard, and the principle of convertibility with regard, to all issues, and the prohibition of
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bank notes under 5l. By an adherence to these principles they would do more to redress any evils of the banking system than by any other course that could be pursued. He must say, understanding the obloquy that had been cast upon the Bill of 1819, that the right hon. Baronet the Member for Tam worth, had he no other claims to public gratitude, had by that measure alone raised his fame upon a certain and sure pedestal. He was persuaded that many benefits which the country now enjoyed, such as diminished pauperism, fewer cases of insolvency, and a more stable system of commerce, were to be attributed to that measure. He could not refrain from observing, that should any money crisis arrive—and it was always possible in a great commercial nation like this to happen—he foresaw that the Minister of the Crown would be subject to a pressure, arising from the present state of the banking in this country, to which no Minister had ever hitherto been subjected. It would not be confined to the arrangement between the Government and the Bank of England; but the Minister would be assailed by Joint stock banks from all parts of the country, backed by the most powerful part of the constituency of the towns in which those banks were established. Such a pressure would require great firmness on the part of the Minister to resist what he (Mr. Forster) anticipated would be their request. But he trusted the Finance Minister of this country would always have that firmness. It was reported of Mr. Huskisson, when the Bank of England asked him for advice at a moment when they were in a predicament for want of gold, that he advised them to put a notice on their doors to this effect—"Closed, waiting a supply of gold." That was just such an answer as a Minister of England ought to have given. Had Mr. Pitt given that answer in 1797, most of those evils which had arisen from the paper system, and the non-convertibility of paper into gold, would have been prevented. But Mr. Pitt was exposed to the influence of circumstances too powerful for him to control or to resist. The present Minister had no such circumstances to contend with; and he trusted that whenever he should be assailed his answer would be-—"You gentlemen paper makers, if you have brought yourselves into a scrape by the undue issuing of paper money, you must trust to your own resources to extricate you from it; for I cannot give you relief." He felt so strongly on this subject that he should like to see a resolution of this House declar-

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ing that any one who should advise his Majesty to issue an order of council depriving any of his subjects of their right to recover their debts in the lawful money of the realm, was deserving of impeachment.
Mr. Hundleycould not allow this discussion to close without entering his solemn protest against this Committee as unnecessary, uncalled for, and calculated to check that return to a state of prosperity which the agricultural interest was now making. In 1825 Joint-stock banks were admitted on all hands to be the panacea for the evils of the country, they then received the sanction of Parliament in that belief, and he now asked whether any injury had arisen from them; or whether any proceedings had occurred which at all called for this interference, and from which he anticipated great and grievous consequences?
Mr. Peasethought the Committee recommended itself. It ought to be the wish of the Joint-stock banks themselves to institute this inquiry; for a prejudice had sprung up respecting them which was perfectly unfounded. A court of inquiry, constituted of impartial Members of that House, would do good by giving encouragement and a proper development of the sound principle on which Joint-stock banks were established, and of retarding everything that could throw a doubt on the responsibility and respectability of those banks.
Mr. Haweshoped the suggestion of the hon. Member for Middlesex would be adopted. If there was any evil at all arising from an increase and fluctuation of the circulating medium, it was to the clause in the Bank charter alone that it was to be attributed. With reference to the state of the country he would mention one fact. He believed that there never was a time when the amount of bad debts in trade was so small; or when there was so little artificial paper in circulation as now.
Mr. Poulett Thomsonsaid, his hon. Friend misapprehended the object of this Committee if he supposed it was to inquire into the fluctuating amount of the circulating medium in the country. The object of the Committee was, as it had been stated by his right hon. Friend, to inquire into the principles on which Joint-stock banks were conducted, with a view to ascertain whether it were advisable to introduce any amendment in the Act upon which those banks were established, or to interfere in any way, so far as the legislature was concerned, as well for the purpose
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of removing any prejudice which might exist against these banks, as to prevent any bad consequences arising from improper speculation on their part. But that had nothing to do with the other part of the subject. When his hon. Friend recollected the grounds upon which the clause in the Bank charter was inserted, he would clearly perceive that it could not form a proper subject of inquiry before the proposed Committee. That privilege was accorded to the Bank of England simply on the ground that it was advisable to enable bankers in the country to pay their liabilities in the paper of the Bank of England, in order to do—what? In order to avoid that drain upon the Bank of England which in a moment of temporary crisis might withdraw a great deal of gold from its coffers, as was found to be the case in the year 1825–6; which gold went out of the country, and, of course, greatly diminished the resources of the Bank of England, and impaired the security to the public for the payment of the notes of that establishment. Therefore he should say, supposing it was advisable to make an inquiry at any time as to the effect of that clause, they had no grounds now for such inquiry, because the circumstances under which the advantages or disadvantages of that privilege could be tested had not arisen. But he should object to the introduction of the question now, as being entirely inconsistent with, the object of the formation of this Committee.
Mr. Warburtonsaid, that a question had been raised as to whether or not the establishment of Joint-stock Banks had raised the prices, and it had also been insinuated that the change of the currency had had an effect on the prices. On that account he considered the amendment should be adopted. It was not to be an inquiry whether or not Joint-stock Banks had sufficient means to meet their responsibilities, it was to inquire into the increase of the currency; and that could not be done without inquiry into the effect from the increase of the currency from other causes. With regard to the inquiry being secret, as they could not be considered private accounts that were to be gone into, but the effects of a system on the money of the country, he thought that a Select Committee would be sufficient.
Mr. Forbesopposed the amendment. He did not approve of the original motion, but he considered the amendment far more objectionable.
Mr. Matthias Attwoodobjected to the appointment of the Committee, on the

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grounds brought forward by the hon. Member for the Tower Hamlets, in support of it. He had experienced some difficulty in ascertaining the intentions of hon. Gentlemen who supported the motion. He could not learn what evils they were desirous to remedy, nor what benefit the country was to expect from the proposed measure. The right hon. Gentleman, the Chancellor of the Exchequer, said that the whole system of Joint-stock Banks was a great experiment—that the experiment had now been tried for ten years; and that we now ought to inquire into the manner in which that experiment had worked, in order to discover whether the system was acting beneficially for the country, or whether there were dangers in its mode of operation to be guarded against,—and whether, lastly, there were any means which could be adopted to bring its advantages more prominently into action. But those grounds led to an inquiry of a far more extensive nature than that proposed by the right hon. Gentleman—an inquiry into the whole of the financial and monied system of the country. Joint-stock Banks were introduced as an invention to guard the country against dangers of precisely that description which almost every Gentleman who had spoken, now apprehended from the very action of these Joint- stock Banks. These Banks were the creation of the Legislature. They were an invention to guard against a panic, and any dreadful convulsion which it was apprehended might otherwise occasionally take place in our monetary system. If any such apprehension now exist, was not that a strong ground for inquiring into the whole question of our monetary system, and not merely into the nature of Joint-stock Banks? The hon. and learned Member for Dublin had spoken of the effect of this great experiment upon the interests of Ireland, and of the prosperity consequent on the establishment of Joint-stock Banks in that country. The hon. and learned Gentleman appeared, while thus describing the state of Ireland, entirely to lose sight of the landed interest in that country. Had it not been proved that the distress of the agricultural interest had been entirely the result of the great experiment—whether the country could rest with security, not merely with 20,000,000 l. of circulation,—not merely with 55,000,000 l., being the entire amount of circulation in Great Britain and Ireland, but with 800,000,000 l. of debt—founded on 8,000,000 l. of gold and silver, coined and uncoined in the Bank of England? He was willing to believe that there was con-
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siderable prosperity in many branches of our trade; but it had been shown that one-third of all the commercial transactions of the country rest upon Joint-stock endorsements. Now, the great national establishment—the Bank of England—had rejected much of the paper of those Banks. On what ground? Because it believed the paper to be insecure. If so, must not much of the prosperity connected with such paper be insecure also?—must not commercial transactions, so supported, rest upon a foundation which could not be permanent? The hon. Member for the Tower Hamlets said that the prosperity was real, and not artificial, because our manufactured goods were sold off,—no stock was left on hand,—and the orders were abundant. It was this very circumstance which distinguished the transactions of the year 1825. That was, word for word, the description given in the reported evidence of the state of our manufactures immediately preceding the panic of 1825 and 1826. The hon. Member for Walsall had praised the Act of 1819, which was recommended on the ground that it would give a firm security to the monetary system and commercial operations of the country. But had that been the result? Instead of giving permanency to the monetary system, soon after that Bill had passed, the Minister of that day found it necessary to give additional powers to the Bank of England in respect to its issues. The hon. Member for the Tower Hamlets had proposed three amendments in the present system of management of Joint-stock Banks. First, limited liability; second, the capital to be paid up; and third, publicity. Now, as to limited liability. That was a matter resting entirely with the Bank of England; for the Bank of England had bought the power of establishing this limited liability, and without its consent no Joint-stock Bank upon such a principle could exist in England. With respect to paid-up capital, had these Banks been originally confined to a paid-up capital, it would have been a prudent measure; but now that they were in their heyday, if they were made to pay up their capital they would be exposed to very great danger, that would not only seriously affect the new ones, but would weaken the stability of the old. It must be obvious that the House could not adopt this part of the hon. Member's plan, without involving the country in great and serious danger, and hastening the catastrophe which was so much apprehended. Then, as to publicity. Publicity was the great instrument recommended by the Bullion Committee, and was

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brought into action in 1832. The establishment of publicity was to lay the foundation of the commercial credit of the Bank of England. He took it for granted that every Gentleman who was accustomed to trade, was convinced that that instrument had failed altogether, and had been found to be inapplicable to banking affairs. There were in banking affairs periods of commercial convulsions, against which no bank could guard; and during which the credit of the bank did not rest alone on the amount of bullion in its coffers, but upon its character for prudence and discretion. It was as much for its moral qualities that confidence was reposed in any bank, at such a time, as for the amount of its bullion. Upon the whole, he saw no benefit to be derived from this Committee, nor had he heard sufficient grounds for its appointment. At the same time he saw no serious objection to it, if its inquiries were conducted with caution.
Mr. Clay, in reply, begged it to be distinctly understood, that so far from being hostile to Joint-stock Banks, he was a decided friend to them, thinking them capable of conferring the greatest benefits on the country. He could not agree to the proposition of the hon. Member for Middlesex.
The motion for the appointment of the Committee was agreed to.
Mr. Humethen moved, "That it be an Instruction to the Committee that they do inquire into the operation of the privileges conferred on Country and Joint-stock Banks to pay their Promissory Notes in Bank of England Notes, instead of paying them in gold."
The House divided: Ayes 12, Noes 98: Majority 86.

List of the AYES.

Aglionby, H. A.

Warburton, H.

Crawford, W. S.

Wason, R.

Ewart, W.

Williams, W.

Marsland, H.

Williams, W. A.

Morrison, J.

Potter, R.

TELLERS.

Thompson, Colonel

Mr. Hume

Villiers, C. P.

Mr. Hawes

List of the NOES.

Adam, Sir C.

Bewes, T.

Alston, R.

Blamire, W.

Astley, Sir J.

Bonham, R. F.

Bailey, J.

Bowring, Dr.

Baldwin, Dr.

Brotherton, J.

Balfour, T.

Buckingham, J. S.

Barnard, E. G.

Buller, E.

Barry, G. S.

Chapman, A.

Beauclerk, Major

Chichester, A.

Benett, J.

Childers, J. W.

Bernal, R.

Clay, W.

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Collier, J.

Musgrave, Sir R.

Crawford, W.

North, F.

Crawley, S.

Packe, C. W.

Crompton, S.

Parker, J.

Curteis, H. B.

Parrott, J.

Curteis, E. B.

Parry, Sir L. P. J.

Ebrington, Lord Vis.

Pattison, J.

Estcourt, T.

Pease, J.

Fazakerley, J. N.

Philips, M.

Felden, W.

Plumptre, J. P.

Finch, G.

Price, Sir R.

Forbes, W.

Pryme, G.

Foster, C. S.

Rae, rt. hon. Sir W.

Fremantle, Sir T.

Rice, right hon. T. S.

French, F.

Richards, J.

Gillon, W. D.

Rushbrooke, Colonel

Gisbourne, T.

Russell, Lord J.

Goulburn, rt. hon. H.

Scott, Sir E. D.

Goulburn, Mr. Serg.

Scourfield, W. H.

Green, T.

Seale, Colonel

Grote, G.

Strickland, Sir G.

Handley, H.

Stuart, V.

Hardy, J.

Tennent, J. E.

Hastie, A.

Thomson, rt. hn. C. P.

Hector, C. J.

Thompson, Mr. Ald.

Hindley, C.

Turner, W.

Hobhouse, rt. hn. Sir J.

Vernon, G. H.

Horsman, E.

Wemyss, Captain

Howard, hon. E.

Weyland, Major

Howard, P. H.

White, S.

Howick, Lord Vis.

Wilbraham, G.

Inglis, Sir R. H.

Wilson, H.

Johnston, A.

Wrightson, W. B.

Jones, W.

Wynn, rt. hon. C. W.

Knight, H. G.

Yorke, E. T.

Lushington, C.

Young, G. F.

Maher, J.

Marsland, T.

TELLERS.

Martin, J.

E. J. Stanley

Murray, rt. hon. J. A.

Mr. M. O'Ferrall

COMMUTATION OF TITHES (ENGLAND.)
Lord John Russell Lord John Russell moved the Order of the Day for going into Committee on the Commutation of Tithes (England)Bill.
Mr. Edward Bullerproposed several amendments in Clause 34.
Lord John Russellopposed the amendments, as tending to disturb the agreement entered into, which was this, that where the average amount of tithe received for the last seven years was from 60 l. to 75 l. inclusive, all such cases should remain undisturbed by this Bill; where it was from 80 l. to 90 l. it should be reduced to 75 l.; and where it was under 60 l. it might be raised, if it should appear to the Commissioners that it was fit to do so. He did not understand upon what principle the hon. Member proposed his amendment. It was not the principle of this Bill which took the gross, and not the net amount.
Mr. Edward Bullerproposed a reduction of 10 l.. per cent., where the full value of the tithe had been received for the last seven years. His proposition amounted to

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this:—If the tithe-pavers were not satisfied with the average of the last seven years, they would be at liberty to demand a new-valuation of the gross tithe. If upon the average it was found to amount to any sum from 90 l. to 100 l., then from such amount a deduction of 10 l. per cent. should be made. Where the amount was between 75 l. and 80 l. he would make no reduction, and if it was under 75 l. he would raise it to 75 l. The effect of his proposal would be, to allow all proprietors of tithes throughout the country to retain the advantages they at present possessed, at the same time that it would allow of the raising to the 75 l. percent. such tithes as were now, from the expenses of collection, below that rate. If the noble Lord proposed to take off 25 per cent. from the gross amount in certain cases, why might not 10 l. per cent. be deducted from the net amount in the others?
Lord John Russellthought, now that he understood the proposition of the hon. Gentleman, that it was not founded on the same principle of justice as his own. He could not see the ground for acceding to a proposition which might practically have the effect of giving a tithe-owner in one case 80 per cent. and another tithe-owner in another 35 per cent. only, thus leaving a difference of 45 per cent. He thought that a proposition which established one equalised rate to apply to all cases was a more just one, and one which must have a more beneficial effect than a plan liable in operation to such inequalities.
Mr. Benettsaid, there was no question that the gross demand of the tithe-owner was for 100 per cent; the difference lay in the expenses of collection. That was the argument for commutation, because by commutation all that expense of collection, now lost to both parties, were saved.
Sir Robert Inglissaid, that, although his objections to the system of commutation were as strong as ever, he would have an opportunity, on another occasion, of addressing himself to the general principle of the measure. The question now in dispute was the amount to be given to the tithe-owner under the proposed commutation. It had been said, that the principle proposed to be acted upon would have the effect of raising the value of some tithes, and of depressing that of others. Now, he could not see why a principle which should have the effect of depressing should be admitted at all. He thought, that where, on an average of the seven preceding years, the tithe-owner had received the whole of his right, that right ought to be
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preserved to him under the measure of commutation.
Mr. Blamiresaid, he must object both to the proposition of the noble Lord, and that of the hon. Member for Staffordshire, inasmuch as he did not think either the one of the other would place all parties concerned in that position in which they ought to stand in reference to each other. He was perfectly satisfied that no rule could be laid down which would entirely meet all cases. He would with great submission beg to state to the House and to the noble Lord how he thought the difficulty might be remedied. He was aware, that the subject was a very difficult one to deal with, especially the compulsory part of the arrangement. The House ought to bear in mind, that if it were not possible to do what they wished and what was desirable, it was their duty to steer clear of doing a positive injustice to anybody. He begged to say, that he thought it would be an infinitely better plan in every case to ascertain the expense of the collection of tithe in that particular place, and fix the deduction according to that standard, and at no more. He had always considered, that tithes were but a contingent, and not a positive property; for the landowner had it always in his power to fence with the tithe-owner, and make an advantageous bargain with him, unless the tithe-owner's demands were according to his estimation of the matter, reasonable and moderate. Cases were constantly occurring where the tithes of the tithe-owner were evaded by the land-owner, and where he was fenced with by the landowner, and obliged to put up with a bargain very advantageous to the latter. In his part of the country the mode was this; for he could say for himself, as well as for those he had the honour of representing, that while they did not wish to give the clergyman one farthing less than he ought in justice to receive, they were not desirous of paying him more. In his particular part of the country, then, the state of the case was this: the lands were greatly subdivided, and there was a great variety of tenure and admixture of tithe able and tithe-free lands. The consequence was, that before a man agreed to take a farm, he endeavoured to ascertain from the tithe-owner what was the amount of his demand for the tithe able land proposed to be rented, and then tried to make the best bargain he could with him. If the bargain were altogether dissatisfactory to the farmer, the probabilities were, that he either did not take the farm at all, or if he did take it, that

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he grew tithe crops, as much as he could on the land which was tithe free, and upon that part of the farm which was tithe-able, he took care to grow only untitheable crops. Thus, if the demand of the tithe-owner were excessive, the result might be, that he would get little or nothing. It was also the practice of making a bargain for the tithe before the farmer ventured upon renting such farms as would require a large outlay of capital, and the use of much adventitious manure, and tithe was evaded by turning lands down to grass, or, of occasionally planting lands that had paid tithe. Various other schemes were had recourse to, and in some extreme cases the proprietor for a time, totally abandoned all interest in the property. What he said, might not meet the views of many Gentlemen, but he felt so strongly that tithe was a contingent property and not a positive one, that he thought they had a right to demand from the tithe-owner some consideration—he was not prepared to say how much—for the been which would be conferred upon him by changing the nature of his property into a positive, and not, as now, into a contingent property. In reference to the lay impropriator, he thought there would be no great difficulty in calling upon him to give some moderate consideration for the advantage which he would derive from the change. His was a marketable estate, and would be greatly benefitted by the change, though this observation did not apply to the great body of the owners of tithe, the clergy. He thought it would be a great improvement in their case, if the onus or responsibility of the collection of their tithe rested with the parish. It was a plan adopted in many parishes, and a very beneficial one, to collect the tithes for the clergyman and pay them over to him, and for this service the House would fairly be entitled to call upon him for a certain deduction. He was not prepared to point out what that amount should be, but it was a very fair principle, that some consideration should be allowed by the clergyman to the parties who effected for him an improved mode of collecting his revenue and improved security. He thought it would be better, instead of having recourse to either the plan proposed by the noble Lord or the Member for Staffordshire, at once to give a large discretionary power to the Commissioners in the compulsory part of the arrangement. In the plan of the noble Lord there was an appeal from the decision of the valuer; but he could not regard that appeal as
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being of the slightest value, for it was merely an appeal from the valuer to the Commissioners; in fact, an appeal to the individual valuer himself. It was not very reasonable to expect, that after a Commissioner had given a decided opinion as to the value of certain tithes, that he would be willing to depart from his statement. He did conceive, that not in one out of 100 cases would there be obtained by any such appeal the slightest alteration in the original award. In many of the local Bills for the commutation of tithe, which had passed, and indeed in some of the Bills which had been laid upon the Table of the House, among others in that of the right hon. Member for Tamworth, it had been proposed, that there should be an appeal to the Quarter Sessions of the county; but he could not but look upon this as a very objectionable proposition. He should conceive, that an infinitely better and wiser plan would be, to constitute local boards for the express purpose of hearing and determining upon all these matters. He should therefore propose, that those boards should be thus constituted: that the Commissioners should appoint as assistant commissioners two barristers of a certain standing, and two practical men from among farmers and surveyors, who should not have any direct interest in the settlement of the question; that this court should go from place to place where the matters in question were to be settled, and have power to hear evidence in proof of the facts; and that, having done so, they should make their report to the Commissioners, who should have power to enforce their determinations, subject to certain prescribed limits as to the extent of the reduction or increase. If this were not thought a sufficient check, it might be further provided, that in the schedule they should be compelled to assign their reasons for any deviation they might make from the regular plan. He was aware, that perhaps some objection might be made to his proposition on the supposed score of expense; but his opinion was, that the establishment of local boards, such as he had suggested, would not be productive of much expense. At all events, he thought it would be a more satisfactory plan to the country generally than the one proposed. He might observe here, that a most erroneous notion had gone abroad as to the nature of this Bill. In a great many parts of the country the people said they were satisfied with the Bill as it stood, because they thought that by it one-fourth of the clear value of

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tithe was to be taken from the tithe-owners and given to them—a most lamentable misconception. He should be very glad, if possible, to avoid compulsion, but he feared, that in the present state of the case it might be found difficult, if possible, to avoid it. He thought it would be better, that no commutation should take place at all, than that the Bill should pass as it stood; but at the same time he fully saw the necessity that some Bill should be passed on the subject, or else he feared the country would be placed in a state of the greatest excitement, productive of the most mischievous results. He therefore hoped the noble Lord would take into consideration the suggestion he had ventured to throw out.
Mr. Edward Bullerwithdrew his Amendment.
Mr. Charles Bullerremarked, that a great portion of the House seemed to object to the clause, and yet the opposition to it did not appear to be seriously maintained. The hon. Member was proceeding to move an Amendment, which he explained, when.
Lord John Russellsuggested, that this was not the proper time for entering on the question involved in it.
Mr. Goulburnwished to ask the noble Lord opposite, upon what grounds the limits of seventy-five and sixty per cent had been assumed. He quite understood the difficulties with which the noble Lord had had to contend; but the more he heard on the subject, the more was he convinced, that a system of compulsory commutation must be in individual cases attended with great injustice. The noble Lord had, in effect, admitted this, because, having adopted the compulsory principle, he now found it necessary to introduce a clause, in order to correct some part of the evils to which a compulsory system must inevitably lead. The noble Lord made a proposition which appeared to him scarcely reconcileable with justice upon the information he had received; though perhaps the noble Lord was in possession of facts which would enable him to prove the fitness and expediency of the limits the noble Lord had assigned. It was consistent with his knowledge, that there was frequently great inequality in the cost of collecting tithes, even in the same parish. The collection of the small tithes was often much more difficult than that of the large tithes, and although it might be right, that in the case of the small tithes an individual should receive only sixty per cent, in confederation of the difficulty with which they
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were collected, yet seventy-five per cent might be too little in the case of large tithes, which were collected with much facility. He knew instances where the collection of the large tithes was effected at an expense of seven, eight, ten, and thirteen per cent of deduction from the value of the sum, and therefore he thought it would be desirable that the noble Lord should state to the House the basis upon which he had been induced to adopt the maximum and minimum proposed.
Sir John Wrottesley, after having made inquiries in several parts of the country, and particularly in his own county, was bound to say, that the maximum and minimum proposed, though in some few cases they might impose hardship, were on the whole considering the difficulties and facilities of levying tithes in different places, suitable to the circumstances. Fixing limits in the way proposed would save time and trouble and prevent much litigation; he therefore, thought that this part of the Bill was highly desirable.
Lord John Russellsaid, that when the right hon. Gentleman asked him to explain on what principle he had appointed the limits to the deduction, he supposed the right hon. Gentleman did not mean to ask why he made it seventy-five rather than seventy-six or seventy-seven, and sixty, rather than sixty-one, but why he had taken those limits as a fair average between the lowest and highest amount of tithes collected. It appeared to him fair, as he had repeatedly stated, in making any general commutation of tithes, to look not to particular cases, but as nearly as possible to the general average of the country, so as to include the greatest number of cases. With respect to the Amendment which had been proposed by the hon. Member for Staffordshire he would admit that there might be cases where the tithe might be collected at 10 per cent., but such cases were very rare, and therefore, not to be taken into account in a question of legislation. There were also cases where the expenses amount to 50 per cent., but these being almost equally rare he had not allowed them to interfere with the adjustment of the measure. It might be asked, why not make some one and fixed sum the standard; and, indeed, a most intelligent and respectable gentleman. Mr. Jacob, when examined before the agricultural committee, selected seventy-five per cent., as the general average all over the country, but that exact limit would not give a sufficient representation of the real value of

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tithe, because the charge of collection and many other circumstances differed widely in different parts of the country. There were cases in which tithe was collected at a cost of not more than ten per cent, and this was true, not only of large, but in some cases of small tithes. All the accounts he had received tended to show that on further inquiry into these cases, if the first amount of the produce were taken into account, the deduction would not fall short of twenty or twenty-five per cent. He thought, also, that in any general commutation, a considerable deduction should be made from the gross sum of 100 l. (taking that sum) on the value of the tithe. Nobody had ever advocated a commutation without maintaining that there should be a large deduction; and in estimating this, not only the expense of collection, but many other circumstances, should be taken into account. The higher limit having been fixed at seventy-five per cent., all contained between that standard and sixty he presumed to be compounded for by the different parties interested, who would consider all the circumstances of the case, the cost of collection, and the agreement entered into, which he held it to be advisable not to disturb. With regard to the other limit of sixty per cent, although there might be cases where the expense of collecting would lower the net amount below that sum, he did not think them of sufficient force to induce him to admit of so total a disparity, as respected the tithe-owner and the tithe-payer. Besides, it was but fair where, through the lenity of the tithe-owner the sum collected had fallen too short of the real value of the past tithe—to provide, in such instances, that leniency should not operate as future punishment. His doubt upon this point was not whether the sum should be 50 l. or 60 l., but rather whether he should fix it as low as 60 l. However, on consideration, the best he could give the subject, he found that by adhering to 60 l. he should provide a fairer average and a nearer equalization. He thought the mode he had adopted would tend to obviate the evil consequences which too frequently resulted from composition in Ireland, where the differences were so great that neighbouring parishes, when they came to compare the different amounts paid, might feel great dissatisfaction. He had, therefore, chosen those limits between which there was only a difference of fifteen per cent, as being likely to afford more general satisfaction, or at least to occasion less complaint than if the difference were doubled, by fixing the minimum at 50 l. and the maximum at 80 l.
Mr. William Miles Mr. William Miles moved an amendment of which he said that the object was to give power to the Commissioners or Assistant-Commissioners, when the average sum paid, or agreed to be paid, should be more than 50 l., and less than 75 l., for every 100 l. of such average gross value of the tithes taken in kind, to award such fair and equitable sum for the permanent commutation thereof as upon inquiry they should deem expedient, due regard being paid to the peculiar nature of the tithe in individual parishes. He, therefore, moved as an amendment that the word "fifty" be substituted in the clause for "sixty." If that were carried he should move, that all the words in line fifteen after the word "limit," be omitted, and that there be inserted in their stead a proviso accomplishing the object for which he proposed his first amendment.
Mr. Charles Bullersaid, it was inconsistent in the hon. Member for East Somerset to tolerate this clause, after arguing against its principle. He was altogether opposed to the clause, because he looked upon it not as a modification of the 33rd clause, but, as wholly subversive of it. To take an average of the gross produce with certain deductions would be to perpetrate a gross injustice on the tithe-payer and the landowner. The noble Lord's fundamental error was, in not regarding the power of evasion as well as the right of tithe; for throughout the country the right of tithe had been modified, owing to the peculiar method of collection; and from that modification the power of evasion had been derived. The right of evasion was to be as much respected as the right of tithe itself, and was as old as the right of tithe. If it were found out that tithe could be collected with certain exceptions occurring in five or six years, he would not hesitate to do away with those exceptions, and to enforce the collection to the whole amount of the tithe; but when they considered the length of time that the rights of evasion had existed, indeed that, from time immemorial the right of tithe had been modified, and that that modification had been solemnly recognized by the Legislature and by the courts of law—it would be unjust to suspend it. It would be doing injustice to the tithe-owner to take from him more than was to be given up to him; but it would be equally unjust to make the tithe-payer pay more than he ought. The attention of the House had not been sufficiently directed to the expenses of collection, and the variety of the

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amounts collected in different parts of the country. In Wiltshire and Hampshire, the effect of this Bill would be to deprive the tithe-owner of about one-sixth or one-fourth of the value of the tithe. In the western parts of England, however, the reduction of twenty per cent. would be nothing like a sufficient reduction. The experiment of levying tithe in kind had been tried in various cases, and instances were not rare, in which the clergyman had not merely lost fifty or sixty per cent., but had actually been out of pocket by the time he had got in his tithe. He wanted to show the House how this system of modification had operated, and that it had been respected by courts of law and the Legislature. A case in point was tried in the Court of King's Bench before Lord Tenterden. It was an action against the tithe-owner for not carrying away his tithes of early potatoes grown for the London market. The potatoes were put out in baskets which held about three-quarters of a bushel each, and it was proved that the produce was spoiled by exposure to wind, rain, and sun, if not taken away in half an hour. Lord Tenterden held, that although the practice might put the tithe-owner to great inconvenience and expense, yet for the sake of the crops, the evil must be submitted to, and the- tithe-owner must be in attendance to take away the tithe, though it might cost ten times the value of the tithes to collect them under such circumstances, and the produce might be spoiled in getting it into his possession; and not only that, but if he would not go to the trouble and expense of removing the tithes, he would be liable to an action for it. Here, then, was a reduction, not of sixty per cent., but of the whole tithe. Look at the tithes of hay, eggs, milk, apples, &c.; suppose them to be levied in kind in a parish full of small farmers, and fancy a cart going about to collect every tenth haycock, every tenth egg, every tenth day's milking, and every tenth apple, why the collector would not be able merely to go over some parishes in less than two days. This was the case of the parish which he represented, as he could testify from canvassing it. He had the authority of a practical collector of tithes in Wiltshire, for saying that there, on the other hand, the expense of collection was. about ten per cent.; this Bill would make it twenty-five per cent; so that the operation of this commutation, would deprive the tithe-owner of about one-sixth of his income. It is not difficult to put ground under a different culture for the sake of
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evasion, and arable was often converted into pasture land, not merely to spite the parson, but because the difference of the tithe really made, very often, the difference between the profit derived from the two different kinds of produce. But this power existed to a different degree in different parts of the country. In Wiltshire, nature seemed to have so fixed to each portion of land its peculiar mode of cultivation in tillage or in pasture, that this power of conversion hardly existed at all; in Devonshire and Cornwall, the conversion was perfectly easy in almost all cases, and was often effected merely to save the tithe. This power of conversion made an immense difference in the value of tithes. Yet for all these ancient and established remedies against the exaction of the extreme tithe, no allowance was made by this Bill. The farmers in the West of England had expected that a liberal Ministry would lessen the intolerable burden of tithes. The effect of this Bill would be, to raise the tithe throughout the West of England. He would give the House an instance of the practical operation of this Bill, in a parish adjoining that of Liskeard. The tithe collected in that parish had, for some years, amounted to 3s. 3d. in the pound. On the induction of a new clergyman, the farmers demanded an abatement of 3d., the effect of which was, that the parson said he would collect his own tithes; and the consequence was, that the leading farmer having a large barn near the church, fitted it up for public service; for the farmers, as is usual in such cases, all determined that they would not go to church; and they stuck to their determination. The proprietor of the barn engaged a Dissenting minister in the neighbourhood to come over every Sunday to preach and to read the service of the Church of England. They told him he was not to give them any of his Methodistical stuff, and was never to preach longer than ten minutes, and was to be paid for his services by four or five tumblers of brandy and water. The clergyman's service in the church was attended by the clerk and the sexton; and sometimes by an old woman from the workhouse. The effect in a pecuniary point of view was this, the clergyman got rather less of his great tithe than he would have got under the composition offered to him; and he soon gave up trying to collect his small tithes at all. He was beaten, and obliged to accept the farmers' terms. The operation of the Bill would raise tithe in this parish from 3s. to 3s. 7d., and settle this dispute about

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3d., by making the farmers pay 7d. The average of tithe in the east of Cornwall varied from 2s. 6d. to 3s. 6d. per pound; but the general average was about 3s., or 3s. 3d.; so that the noble Lord's Bill would generally raise tithe in that county from ten to as much as thirty per cent.; and this was intended as a measure of relief! He knew the difficulty of meeting extreme cases, but when the House was likely to doom men to the destruction of their property, and consign their families to destitution, by overlooking these cases, it was right to attend to them. He was convinced of the necessity of a compulsory commutation; he was convinced that a Bill for that purpose was demanded by the country; but a compulsory commutation ought to be a fair and just one. This Bill, however, was unjust, and it would be better not to pass it until a just system of commutation was adopted.
Viscount Ebringtonwould support the amendment. The county he represented was divided into small farms, and contained a greater proportion of landlords than many other counties. He was quite sure that the effect of this clause, as proposed by his noble Friend, would seriously raise the value of tithe in that county. He had always been disposed to give to the tithe-owners their due, and was always ready to raise his voice against making those who had to pay, pay more than they ought; he should never subscribe to any plan of commutation that should give more to the tithe-owners than they at present enjoyed, or more than under the present mode of collection they could expect to receive. It might be argued, perhaps, by the hon. Member for the University for Oxford, that it would be hard on the tithe-owners to make them suffer for the leniency they had exercised; but their forbearance was not always voluntary. He must say, that he had known instances of experiments in collecting tithes in kind, in which so far from 50 per cent of the gross value being received by the tithe-owners, they had not realized so much as 20 per cent., and those cases were not confined to his own county. For proof of it he might refer to the evidence already quoted. Mr. James was asked—"You think, then, that the clergy have not got more than half their tithes?" His answer was—"No doubt, for the last seven years, they did not average one-half of their tithes." Under these circumstances, feeling in common, with his noble Friend, anxious to establish compulsory commuta-
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tion, and to disturb, as little as possible, the existing scale of payments, he could not vote for the clause, the effect of which would be to increase the greater part of the existing commutations, and make the tithe-payer pay more than at present.
Viscount Howickwould abstain from replying to the remarks which had been made by hon. Members against this Bill, not because they were unanswerable, but because he thought this was not a favourable opportunity to go into the subject. It appeared to him, as far as there was any real ground for opposition to this measure, the clause to be introduced by his noble Friend, and which he had caused to be printed, and had announced his intention of moving, would obviate it. All those inconveniences on which hon. Members, who had preceded him had dwelt, had been anticipated by his noble Friend, who rested his proposition upon the fact, that the expenses of collection, in a great number of instances, amounted to 50 per cent on the gross produce. His noble Friend behind him (Lord Ebrington) had said, that he was willing to give the clergyman that to which he was entitled, but without burthening the land with a permanent charge beyond that which the clergyman now received. That was a principle which the whole House was prepared to admit, and he was sure if his noble Friend looked into the clause as it was printed, he would see that wherever there was a case in which, owing to the particular nature of the tithe, the expenses of collection were heavier than the amount provided for originally, there was a power given to make such modification as the justice of the case required. Whenever the expenses of collection exceeded 40 l., and in other special cases, the assistant Commissioners would have the power of making that large reduction of the gross amount which might be due. He thought, then, that all just ground of complaint would be removed by the plan of modification so proposed. But if he was not mistaken, the hon. Member for Somersetshire moved this amendment on rather different grounds; he stated, if he understood him right, that it was not enough that his noble Friend had proposed a mode for providing for cases in which there might be ground for believing that the amount of expense of collection would go beyond 40 per cent.; but the main argument of the hon. Member, as he understood it was, that the assistant Commissioners ought to have a discretionary power in all

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cases of fixing a permanent rent-charge when the amount should be between 60 and 75 per cent. The hon. Member did not complain of the minimum which was proposed by his noble Friend., but because the plan of modification in the Bill was identical with that of the hon. Member; his object was, that in those cases in which the amount of composition might fall between 75 and 60 per cent on the gross value, the Commissioner ought to be empowered to vary the rent-charge as compared with the produce. If the question were reduced to that issue, he confessed that he thought the Bill stood considerably better as his noble Friend proposed it. He thought whenever it was possible to adhere to those compositions to which the parties had mutually agreed it was extremely desirable to do so, and that only to depart from them in cases where the amount exceeded that which ought to be permanently paid. With regard to what fell from the hon. Member for Liskeard, he thought the hon. Member had not stated one case that could occur in which such modification ought to take place. His noble Friend, the Member for Devonshire, said existing commutations ought not to be disturbed, and, therefore, he claimed the vote of the hon. Member against the amendment of the hon. Member for Somersetshire, for he had distinctly admitted that his object was not to alter the minimum as proposed by his noble Friend, but to give the Commissioners a discretionary power of varying the amount of composition even in those cases which fell between 75 and 60 per cent. He really did not think that adequate grounds had been shewn for adopting the amendment of the hon. Gentleman, and the House, in his opinion, would be acting more wisely in rejecting it. The hon. Member for Liskeard said, that clergymen in many instances had only realised a much smaller sum than 50 per cent upon the gross value, he was aware of that; but the truth was, the legislature had not to consider so much that which the clergyman had actually realized as the average amount which the land-owner was compelled to pay. He did not think it was at all just toward the tithe-owner, who was giving up much, to expect that he should be guided by what the land-owners said on the subject. He was aware how impossible it was in a numerous assembly like that, to discuss the minute points of such a question; but he could not forbear before he sat down, from
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reminding the House how exceedingly necessary it was, in a case of this sort, not to deal with extreme severity towards the tithe-owners; for, as the Bill now stood, they were making a very considerable sacrifice; and if by acting with severity, the Bill should fail after the subject had been agitated, the consequences would be of the most serious description to the land-owners of the country. They must remember, that not many nights ago, the hon. Member for Kent shewed how necessary some measure was, for he actually gave notice, in case this Bill did not pass, that he would move for leave to bring in a Bill to restrain the tithe-owners for one year from enforcing the collection of tithes. An hon. Member conceiving it necessary to give notice of this kind, was a circumstance which he thought this House ought not to forget. It seemed to him now, that the question had been agitated to render it necessary to pass this measure into a law.
Mr. Childerssaid, the noble Lord who had just sat down, had stated a principle of a different nature from any he had heard. The noble Lord said, that they were not to take what was now paid as the basis of a rent-charge, but that they were to take into consideration the sum lost, or which might be lost, on the part of the tithe-payer or tithe-owner, and to divide it between them. Now, that was a principle which he thought had been repudiated throughout the whole of this Bill. The noble Lord did not allude at all to another and a very important point, which was contained in the observations of the noble Lord, the Member for Devonshire, and which that noble Lord stated upon the testimony of Mr. James—namely, that not only when the tithe was taken as a dividend, but in composition, the clergyman had not received one-half what he was entitled to. That witness stated, that he had no doubt on his mind that the majority of compositions entered into during the last seven years did not average one-half the value of the tithe. He then went on to say, that on certain arable land the tithe is 13 s. 6d., but that it is compounded for 6s. or 7s., and that on an average, it was less than one-half. Supposing that to be the case, it was quite clear that the clergy did not receive more than 400 l. or 500 l. out of every 1,000 l. Then if the House did what the noble Lord said, divide the sum lost on the gross value between the tithe-payer and receiver, it would leave the tithe-payer in a worse condition than at present

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and instead of his paying 400 l. oblige him to pay 600 l. That was the state of the case as he viewed it, and to that he should always be opposed.
Viscount Howickwished to explain. The hon. Member had supposed him to say, that what was now paid ought not to be taken as the basis of the future rent-charge; but, on the contrary, that we should divide between the parties what was lost or gained by the composition. That was not his statement. What he distinctly stated was this, that in all cases in which it was possible to be done, they should take the existing arrangement between the parties as the future rent-charge; but that in those particular cases in which the parties had not been able to come to an arrangement by themselves,—in those cases of dispute referred to by the hon. Members, in which the clergymen had claimed more than the tithe-payer had chosen to pay; and in those cases where the clergyman had been driven, under the circumstances, to raise the tithe in kind—in all these cases, he said, we were not to take for our basis either the small receipt of the clergyman, on the one hand, or the severe loss, perhaps of one hundred per cent., to the landlord on the other. But that in those cases only they should consider what ought to be divided between the two parties, thereby affording a gain to both, by producing an arrangement between them.
Colonel Thompsoncould not assent to the principle which, with the exception of a few words from the Secretary-at-War, if he had rightly understood them, had been assumed through the whole of this debate—that the tithe-owner was to have nothing but the barest amount of his net receipts, and that all the advantages of the proposed legislative improvement were to go to the land-owners. Suppose the tithe-owners were to set up the plea, that the landowners ought to have nothing but their present receipts—that they ought to have none of the profit arising from removing the pressure of the present law on the cultivation of land—and that all the advantages of the commutation of tithes were to go to the tithe-owners. Would there be the smallest chance of such an arrangement being agreed to; and was not the proposed arrangement equally unjust? The truth was, that a great saving to both parties ought to arise out of the commutation of tithes; to the land-owners, that of being able to improve their culti-
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vation without being checked by an increase of tithe; and to the tithe-owners, that of escaping the expense and uncertainty of the present mode of collection. But neither the land-owner nor the tithe-owner had a right to say he would take both these savings to himself;—there should be a division. It might not be easy to say with precision what this division should be; but one thing it was easy to see, which was, that the tithe-owner had a right to be very liberally treated, and that there was no foundation for the present principle of screwing him down to his lowest net receipts. He claimed the attention of the Members for the Universities to this, and hoped they would support him.
Mr. Humehad no hesitation in voting for the word fifty instead of sixty. It seemed again to have been forgotten in the discussion, that tithe-property was only contingent property, and some deduction might reasonably be made in amount for rendering it secure and certain.
Mr. Bennettsaid, that the amendment would give the Commissioners greater powers than would be given them by the clause of the noble Lords. In some cases they would be enabled to raise the composition from 61 l. to 75 l. To that he would never consent; and, therefore, he would oppose the amendment.
Mr. Parrottwas also opposed to giving the Commissioners so much discretionary power.
Mr. Blamirewould give the Commissioners all the discretionary power proposed. To place limits was, in fact, only erecting a screen, behind which they might concert injustice or partiality. It would be better to place no limits on their discretion, but make them responsible for its exercise.
The Committee divided on the original clause—Ayes 95; Noes 71—Majority 24.
The House resumed.
The Committee to sit again.