sons to put the question to him. It was at this stage to explain to the House that on that assurance, in which he placed the Bill which I ask the House to read implicit faith, that he concurred with his a second time is not identical in any rehon. Colleague in the propriety of with- spect with the measure introduced by my drawing the Bill. After the many un- hon. Friend the Member for Clare last successful attempts to legislate locally upon Session, although if it passes into law it the question, he was much gratified to will effect much of the good which my find that Her Majesty's Government in- hon. Friend proposed to effect by his Bill. tended to deal with it. He was convinced As all measures proposing to deal with or that no measure could be carried through affect the currency laws in any portion of the House and meet the approval of the the United Kingdom are naturally and country, unless introduced on the respon- properly regarded with a very jealous eye, sibility of the Government. He had some it is right that I should at the outset personal experience on this subject, for in inform the House that this Bill is in per1863 he had, in conjunction with his late fect harmony with the principles which Colleague, introduced a measure which it are the basis of our present currency laws. was intended to confine to Liverpool. It In fact, I only seek for a modification of was then urged against the Bill that it at the technical portions of the existing tempted to deal locally with what was in laws, or if I may be allowed to use the reality a national question, and it was figure, I only seek to adjust and simthrown out by 16 votes. Tempted by plify the machinery. But, Sir, it may be the smallness of the majority, the Bill asked if the scope of this Bill be so simwas subsequently re-introduced, but so ple, why should the House deal with it decided was the expression of opinion in as a separate and distinct piece of legislathe House that it was withdrawn, with- tion? and why should we not allow mere out taking a division upon it. The right technical obstructions which have existed hon. Gentleman the Home Secretary was so long to continue somewhat longer, until the proper authority to bring in a Bill the amendment is carried out as a portion upon this subject, and so strong was the of a general adjustment? Sir, I anticifeeling of the country in reference to the pate these objections at once by saying question that the right hon. Gentleman that the subject is important, and pressed would, he believed, find no difficulty in for early rectification, and the Bill I ask passing his measure. the House to pass will not complicate, but, if passed, will materially simplify the existing law. As I have said that the sub Motion agreed to. Order for Second Reading read, and ject is urgent, it is right that I should discharged: Bill withdrawn. PROMISSORY NOTES (IRELAND) BILL. (Mr. M'Kenna, Mr. Brady.) Order for Second Reading read. Mr. M'KENNA, in moving the second reading of this Bill, said, it was intended to amend the Act 9 Geo. IV. c. 81, and to authorize banks of issue in Ireland to make their notes payable only at the places in Ireland at which the account of gold and silver coin held by such bankers is taken by the Commissioners of Stamps and Taxes, whenever such notes are in excess of the average amount of circulation during the year preceding May 1, 1845, and are issuable only against gold or silver coin of an equal amount deposited at such places. In doing so he said-I deem it right exemplify and prove the grievance I seek to redress. Another reason, however, which strongly presses on my mind the absolute necessity of altering and amending the law is the fact that it is habitually violated. The Bank of Ireland have offices open on special days in the week at Arklow, Bagnalstown, Cahir, Castlebar, and Monastereven, and at each of these places, on at least one day in the week, this law is openly violated. The penalties which the Bank of Ireland incur by doing business at these places, and issuing their notes there, none of them being payable at any of these places, is of an amount I am afraid to compute. Now I want to alter the law, and submit 9 Geo. IV. to a Committee of this House, which can very easily provide to relax the law so as to legalize the transactions of the Bank of Ireland at these places. If this be not done, then I say let the law be enforced; but, at any rate, let not this House sanction the principle that a law is to remain on every pound his circulation extends beyond the average of the year ending 1st May, 1845. Now, all who understand the habits of the Irish trading classes, high and low, are aware that save and except in times of panic they all use notes in preference to gold; but the banker in Ireland who has surplus capital to employ knows very well that the cost of maintaining a note circulation in excess of his average of 1845 renders it more profitable to him to employ his money elsewhere than in Ireland; hence it is that there are at least 200 towns in Ireland wholly without banking facilities, a privation which in Scotland could not occur to towns and districts of like capabilities. The present Bill is very simple, and confined to one object. It is to enable a the statute books to be a public obstacle to | on the notes which he is obliged to equibusiness to all who are prepared to obey the poise pound for pound with gold or silver law, and an open scandal, because it is coin at depôts. This is not all, however, habitually violated with impunity. I be- nor is it the grievance which this Bill lieve if the law respecting bank notes were proposes to deal with. By the Act of altered according to the principle of this 9 Geo. IV. c. 81, which I seek to amend, Bill, the Irish community would enjoy the Irish banker is compelled to make his the benefit of banking facilities for one or notes payable at the place where issued. two days in the week in about 150 towns So it comes to pass, by the action of three now wholly without such accommodation. Acts of Parliament, that the Irish banker I will not weary the House with a list who exceeds the amount of his certified of the towns; but in the letter A of the circulation has not only to lodge an equipost towns alone you will find such towns valent amount of specie at depôts, but has as Abbeyfeale, Adare, Ahascragh, Ardra- to pay a composition duty of 7s. per cent han, Arklow, Ashford, Askeaton, Athboy, per annum on notes actually represented Athenry, and Aughrim, in every one of by gold or silver coin; and not only this, which an office might be profitably open but as he is limited to four depôts, and if for only one or two days in the week. as he must make his notes payable at the I will not needlessly occupy time by going places where issued, whether depôts or through forms of argument to establish not, he is in practice and by law comprinciples which the House already re-pelled to keep more than 25s. in coin for cognises. I will save time by saying that I assume it is the desire of the House to afford to Irish industry and enterprize, as also to Irish capital, all the facilities for development and exercise in Ireland which the law can properly concede. I will not trespass upon the indulgence of the House, arguing that the House should so desire, but I assume that the desire exists, and on it I base my hopes that the facts I propose to adduce will be deemed sufficient to induce the House to sanction the present Bill. The fact which I will prove is, that under the present laws affecting the issue of bank notes in Ireland it is more profitable for the majority of Irish issuing bankers to engage their surplus capital out of Ireland than within it. For instance, it is the fact that for five of the six issuing banks in Ireland under the pre-banker, whenever he issues notes against sent laws it would be more profitable for coin at depôts, to issue his notes payable them to employ their money in English or only at such depôts. It does not propose foreign securities at a rate of 5 per cent to make his notes a legal tender, or to per annum, than to advance to Irish tra- oblige people to take them, if they do ders on equally good security at 6 per cent. not like to do so, in payment of any I will explain how this is the case. By claim on the banker. The question is the 8 & 9 Vict. c. 37 (Sir Robert Peel's not one chiefly in the interests of Irish Irish Banking Act, which I do not pro- bankers, and particularly it is not so in pose in the least degree to disturb) the connection with the bank interests with amount of notes which an issuing banker which I am myself identified. It is a in Ireland can maintain in circulation (ex- measure in the interests of Irish trade and cept notes issued against specie at depôts) manufacture. Wherever a well-managed is limited to the average amount of his bank is established an impetus is given to circulation for the year preceding May 1, industry such as no other agency can sup1845. The banker, however, by another ply. I am desirous that mere technical Act of Parliament, being subject to the difficulties should be removed, and in the payment of a circulation duty equal to 7s. present instance I only seek to remove a per cent per annum on the total of his restriction which is in no sense protective notes in circulation, actually pays a duty of the public, but which is injurious and anomalous. An hon. Member with whom | in employing £100,000 at 5 per cent in England or abroad, over employing it as he best can on equally good security at 6 per cent in Ireland. I lately conversed on the subject of this Motion suggested that I should reduce to a formula the proposition with which I startled him- namely, that the security being equal, it was more profitable to an Irish issuing banker, having say £100,000, for example, available for investment, to advance the same at 5 per cent per annum in England, rather than to retain and employ the same money in his ordinary way of business in advances to Irish traders. That proposition I establish in this way -£100,000 advanced in England at 5 per cent per annum produces in one year £5,000. The Irish issuing banker, who, being in excess of his certified circulation, and who is consequently issuing his notes against gold at depôts, electing to employ £100,000 in Ireland, finds by experience that this money must be advanced at various places, and in the form of bank notes. Save, however, for purpose of convenience to his customers, it is in effect the same to the banker as if his advances were made at once in coin; for Sir Robert Peel's Act, which I do not seek to affect in any way whatever, renders it imperative on him to counterpoise pound for pound the whole amount of his excess circulation by the deposit of coin at one, two, three, or four depôts. In this condition of affairs the 9 Geo. IV. c. 81, which this Bill proposes to amend, operates most prejudicially, for that Act makes it imperative on the banker to make his notes payable wherever they are issued, and as this issue will rarely be at his depôts, he is in practice compelled to distribute some £20,000 coin to meet these notes where they are made payable. This will leave him only £80,000 to deposit at depôts, and hence he is only able to utilize at interest about four-fifths of the sum he has elected to retain for employment in Ireland. The return of interest on £80,000 at 6 per cent per annum will be only £4,800, against £5,000 earned by employment of the whole sum at 5 per cent in English or foreign securities. But this is not the sole deduction to which the Irish issuing banker has to submit. He has to pay 78. per cent composition duty on the circulation of £80,000 in notes, although these notes are represented by an equivalent amount of coin at depôts. The deduction under this head from Irish profits is £280, so that an Irish issuing banker, under the circumstances I have shown, has practically a premium of £480 VOL. CLXXXVI. [THIRD SERIES.] Motion made, and Question proposed, "That the Bill be now read a second time."-(Mr. McKenna.) COLONEL FRENCH said, he believed that it was not desirable to assimilate the Irish system of banking to the Scotch, and that the effect of the measure would be to diminish public confidence in the Irish banks. This was a serious and important question, and ought not to be brought forward by a private Member in a thin House. He moved, as an Amendment, that the Bill be read a second time that day six months. Amendment proposed, to leave out the word "now," and at the end of the Question to add the words " months."—(Colonel French.) upon this day six MR. POLLARD-URQUHART said, the Bill did not propose to extend the present excess of issue over gold; it was simply intended to promote the convenience of the public, by affording increased banking facilities, and it certainly did not contravene the principle of the Acts of 1844 and 1845, otherwise he (Mr. Pollard-Urquhart) would not give it his support. He believed the effect of the Bill would be to afford largely - increased facilities to farmers, tradesmen, and others in the outlying towns of Ireland for making deposits which they could not make in the Post Office savings banks, and which there were at present no other banks to receive. He trusted that the House would give a favourable reception to the Bill. MR. GOSCHEN said, if he thought the Bill would tend to increase the prosperity of trade and commerce in Ireland, he should be glad to give it his support, and he believed the Irish Members would admit that there was every disposition in the House, under the exceptional circumstances in which Ireland was at present placed, not to be bound too strictly by the rules of political economy, but to go as far as possible in introducing any changes that might be beneficial to the people of that country. But he doubted whether the hon. Member had made out his case in that respect. The hon. Member who had just spoken had stated that increased banking facilities would be a great advantage to Ireland; but the hon. Member for 30 MR. M'KENNA said, he did not quite say that. He did not wish to express any opinion in contravention to the policy of Sir Robert Peel's Act; but he had no objection, if the House thought fit, to see the number of issuing banks multiplied. Youghal had said he did not wish to | It seemed to him that to do what was increase the number of issuing banks in proposed would not be in accordance with Ireland. the principle upon which Parliament had hitherto acted in carrying out the policy of Sir Robert Peel, which was not to encourage private issues, but to discourage them. Nor could he help thinking that the proposal of the hon. Member was to reverse the tendency of the legislation of the House with regard to currency generally. He trusted that the House would negative the second reading, because he felt confident that it was not for the convenience of the general public in Ireland, and because it ran counter to the general legislation which that House had followed with regard to currency. If they desired to develop still further the system of private issues, they should be quite consistent in voting for the Bill; but if, on the contrary, they thought the whole system was not on a satisfactory footing, then they ought not to do that which he could not help calling an improvement of the monopoly now enjoyed by a certain number of banks in Ireland. SIR JOHN GRAY felt some difficulty in dissenting from the opinions expressed by so high an authority on monetary affairs as the right hon. Gentleman who last addressed the House. With all due deference to the right hon. Gentleman, he (Sir John Gray) ventured to express the opinion that this was not a Bill, as was incorrectly represented, to increase the banking monopoly of the existing banks of issue, but had as its object the removal of obstacles that prevented their being able to extend proper banking accommodation to the inhabitants of the smaller towns in Ireland and the districts around them. It was in fact not a bank MR. GOSCHEN understood the hon. Member to support the principle of Sir Robert Peel's Act limiting the number of issuing banks. There were six issuing, which at present had a monopoly in Ireland, and the proposal now was that that monopoly should be improved and made more valuable to the country. But the question was, was the House and the country generally satisfied with the present state of the private issues? If there were any idea that the private issues were not on a satisfactory footing, would it be wise on the part of the House to improve the position of the private bankers in Ireland, and make it more difficult to deal with them if at any time it should seem right to the House to adopt one general system of circulation for the United Kingdom? The present question might be considered from three points of view. There was first the question respecting the issuing banks; secondly, the question of how the measure would affect the public; and next, the question of how it would bear upon the currency generally. He confessed he was unable to understand the hon. Gentleman's argument that unless further privileges of issue were conceded Irish bankers would invest their money in England rather than in Ireland. How did the hon. Gentleman propose that the bankers should invest the money? Was it in the funds? The funds were in Ire-ing question in that sense, but a commerland as well as in England. Was it in bills? There were bills in Ireland as well as in England. Was it in mortgages? There were mortgages in Ireland as well as in England. As to the issuing of notes, the law in Ireland was more assimilated to the law of England than it was to the law of Scotland. As to the interests of the Irish public, they had more security for the convertibility of the notes under the existing law than they would under that which the hon. Member proposed to substitute for it, because the fact that the notes were payable in the various branches of a bank obliged the banker to keep more gold than he would be obliged to do if they were payable only at certain depôts. cial question-it was not an effort to prop up or to extend the credit or resources of banks, but to extend credit and the ordinary banking facilities to districts now denied these advantages because of the operations of a special Act. He regretted that the right hon. Gentleman thought it right to enforce his peculiar views by stating that the Bill before the House was an attempt to disturb the Acts which regulate the present currency and to alter the present basis-the metallic basis which regulates the commercial currency of these kingdoms. The arrangements as to branch banks which prevail in Scotland are not at variance with the metallic basis, and all that is aimed at by the Bill of the Member for Youghal is to assimilate the 1 for the other four or five days, and if laws which regulate branch banks in Ire- notes were by statute made payable in land to those which regulate them in the place of issue or of re-issue the bank Scotland, and the operation of which has must of necessity be open each day of the done so much for the development of the six and maintain the staff at a loss. Now, trade, the commerce, the manufactures, what was the result of the two systems? In and the agriculture of Scotland. The Scotland, with a population of 3,000,000, hon. Member for Westmeath, who is con- there were more than 550 branch banks. versant with the system in both countries, In Ireland, with nearly 6,000,000 populahas given the House his experience of tion, there were 191 branch banks. Scotthe benefits which extended banking faci- land with great banking facilities grew rich, lities conferred on the people of Scotland. prosperous, contented-Ireland was the There every town and every village has opposite of all this. Another great fallacy its branch bank, and every trader and was dwelt on by a right hon. Member, almost every farmer has his cheque book. and prevailed largely outside this House. The right hon. Gentleman the Member for It was said that the £15,000,000 of money Roscommon (Colonel French) said the ob- belonging to the farming classes and small ject was to obviate the necessity for hav-traders deposited in the Irish banks was ing a pound in gold deposited in the bank cellars for every note of surplus circulation issued, and that this, if effected, would diminish the security given to the public for the conversion of the note. [Colonel FRENCH: Hear, hear!] This was altogether a mistake on the part of his right hon. Friend. If the Member for Youghal was clear on any one point it was on this-that the metallic basis of the circulation, the security in deposited gold, would still be pound for pound for the amount of the issue. For every surplus pound issued by the banks of issue as promissory notes, they are compelled by statute to have a pound in gold or silver in the bank till at one of their central depôts. That pound in specie, be it gold or be it silver, is the security to the public who accept the notes so issued. Does the right hon. Gentleman want more than a pound in specie for every pound note issued? ["No, no!"] Well, then, that pound security-that pound in gold -must, under this Bill, be still deposited in the bank till; but the law as it now stands requires that if a branch bank issue a note for one pound, that promissory note must be made payable at the place of issue, and not, as in Scotland, at one of the four depôts, thus in effect requiring that the Irish banks of issue should have one pound in gold in the central or provincial depôt and another at the branch bank from which it was issued to meet the demand for conversion should it arise. The Irish banks of issue did not fear such demand; but they know that many small towns which required banking accommodation on one or two market days in each week would not bear the expense of having a bank staff maintained inactive and dormant. This was a great The GENERAL DUNNE said, the Bill would produce much the same effect as the measure proposed last year by the hon. and learned Member for Clare. The present proposal was regarded in Ireland with suspicion, and he should like to have a more satisfactory explanation of its provisions than had yet been given. He did not think that it would give the people facilities for getting their money. He knew perfectly well that the people of Ireland would much rather go to an establishment within reach of their own homes than to a central depôt to exchange their notes. |