of his court, he was not aware that this was the case? The Bank credited individuals, but it was because those individuals were possessed of property. Discount was a more convenient mode than advances on goods; but objections which applied to the latter practice before the warehousing system was adopted, did not apply now. Since the bonding and warehousing system was brought to its present perfection, and merchandise was placed under the king's lock, the inconvenience of advances on deposits were, in a great degree, removed, and issues on goods might now stand on nearly the same footing as issues on the discount of bills. The money advanced, it might be presumed, would be but a portion of the value of the merchandise deposited, and thus the return of the loan made upon the goods could always be commanded. The noble marquis doubted whether an advance for two or three months would be of any use. In answer to this objection, he could say, that he had conversed with persons from different parts of the country, all of whom agreed that advances for the short period he had mentioned would be of the greatest advantage; because they considered that there was no want of money in the country, and that the cause of the distress was the money being locked up in consequence of that panic, the effects of which would, he trusted, soon cease to be felt.

The Earl of Lauderdale thought that the merchants of the country were entitled to look to the government for relief, though the noble earl opposite wished to throw all the responsibility of any thing which might be done in that way on the Bank. The noble earl had argued, that the distress of 1793 differed from the present, because it arose out of political events; but he could not admit the existence of that difference, for the present evils were also the consequence of political measures. He agreed with the noble earl in believing, that the wealth of the country was not impaired. Indeed he was of opinion, that if all the transactions of the late period of speculation were wound up and balanced, it would be found that the country was not a loser to the extent of 100,000l.; but the property had changed hands. The evil proceeded chiefly from ths noble earl's speeches and measures. He had taught the country to believe that it was rotten to the foundation, and that the great cause of the mis

chief was the one and two pound notes When Mr. Pitt declared war in 1793, he was not a more active agent in bringing on commercial distress than the noble earl had been. He could not conceive how any person could expect to restore confidence by the means to which the noble earl now resorted. Measures more fatal could not be adopted than those which he had ventured on. Two or three months advances would afford no essential relief to the merchants, The only way to give relief was that open and manly way which was adopted in 1793, in 1811, and 1814. That was a way much better calculated to restore confidence than the course which the noble earl had chosen to adopt. He would therefore say, let them tread the path which had been trodden before, and confidence would be restored. It seemed, however, that now-a-days old and tried measures were not palatable; some novelty must be served up; some experiment must be made; any thing, rather than travel in the beaten path of experience. He protested his belief, that the noble earl had brought the country into such a state, that the open and direct course of affording relief by Exchequer-bills was the only expedient likely to restore confidence.

The report of the Bank Charter Amendment-bill was then brought up. Upon its being read, the earl of Liverpool moved the introduction of his clause respecting the discretionary power to be vested in the branch-banks.

The Marquis of Lansdown moved, that a proviso be added to the clause, compelling the Bank of England to pay its notes in coin in any part of the country in which they had been issued through the medium of its branch-banks. He moved this in consequence of the strong opinion he entertained that both with respect to branch-banks of the Bank of England, and the provincial banks throughout the country, it was most expedient that their paper should not only be convertible into coin, but so convertible with the least delay possible, which would not be the case if the holders of them could not obtain payment of them in the place in which they had been issued. Another ground upon which he had been induced to propose this proviso was, what had taken place in Ireland. After that arrangement had been made, in pursuance of which the Bank of Ireland had established branch banks in different parts of the country, a number of their notes were presented at one of those branch houses for payment in coin; but the demand was refused, on the ground that they were only payable in Dublin. The party making the demand immediately resorted to legal proceedings, for the purpose of compelling the Bank to pay in coin where the notes had been issued; but after the suit had gone on for some time, the Bank put an end to the proceedings, after consulting their counsel, who very properly represented to them that, their notes being in the nature of a general contract, they ought to be paid wherever they had agents. Since then, however, the Bank of Ireland had made an alteration in their notes, by the introduction of the words "in Dublin;" in consequence of which, a party who took those notes in the country-no matter how remote the place was now compelled to repair to Dublin, before he could obtain payment of them in coin. He had also been informed that some of the country banks in this country had so altered their notes as to make them payable in London, and no where else. Upon these grounds, therefore, he moved, that a proviso be introduced compelling the Bank, in the event of their resorting to the establishment of branch-banks, to pay their notes in gold in those parts of the country in which they shall have been issued. He could not conceive any inconvenience likely to accrue to the Bank from this measure. They might, perhaps, be put to some inconvenience from being compelled to pay all their notes, if so required, at any of the places where they had appointed agencies; but they could experience none, or at least none which they ought not to endure, from being obliged to pay them in each particular place in which they had been issued.

The Earl of Lauderdale said, he had great doubts as to the effect of this clause in the way in which it stood now; for it would impose upon the Bank the necessity of issuing notes of different forms, so as to show at what particular branch-banks they were payable respectively. Then, if a person presented a note for payment at a particular place, which had issued at another place, he would be told that it could not be paid there; and the consequence of this might be to excite alarm in that part of the country. The question, however, was one of great difficulty;

for he certainly would not take upon himself to say that all the Bank of England notes ought to be payable at the Bank of England alone, because that would oblige the Bank always to keep a great store of cash by them to guard against the possibility of a run, and consequently it would put them to great inconvenience. To show how necessary it would be for the Bank in that case to be always prepared to meet a run, his lordship stated, that he had been informed that a man had been lately going about the country, and displaying the greatest industry in collecting country bank notes, and presenting them at the respective banks (for what purpose God only knew), in Exchange for Bank of England paper. At last, however, a stop had been put to his career, by refusing to give him Bank of England notes, and paying him only in gold.

The Earl of Liverpool agreed that this proviso was one of some difficulty; butstill he thought it was founded on good principles. It would, he admitted, compel the Bank to adopt notes of different forms; but, so far from that being an objection, he thought it would be an advantage; for if, as had been said, the Bank of England notes were more liable to be forged than local notes, this measure, by confining the payment of the notes issued by the branch-banks to the particular places where they had been so issued, and thus rendering their circulation local, would operate as a check to that crime, and thus effect a benefit to the public. It would also throw an impediment in the way of any persons who, actuated by malice or any other feeling, might be anxious, like the man to whom the noble earl had alluded, to produce a run upon the Bank of England here, or upon any particular branch in the country. He therefore thought that the Bank ought to adopt particular forms of notes. Besides, it would be invidious towards the country banks, to compel them to pay their notes in specie, if the branch banks of the Bank of England were not equally obliged to do so. The measure would, moreover, afford an amazing check to over-issues of paper. Upon the whole, therefore, he approved of the proposition of the noble marquis.

The Marquis of Lansdown contended, that the absence of a compulsory provision for payment by the Bank of England of its notes in coin where they had been towards the country banks, but would put it in the power of the branch-banks to extinguish them altogether if they chose; seeing that they might collect all the notes in circulation of any bank they pleased and pour them in upon it at once, while the other would have no power to retaliate upon the branch-bank. The clause, with the proviso, was then agreed to.

HOUSE OF COMMONS.

Monday, February 27.

DEBTOR AND CREDITOR ARRANGEMENT BILL.] Sir C. Cole presented a petition from the creditors of the Swansea bank of Gibbon and Eaton, in favour of the bill before the House for promoting a better arrangement between Debtor and Creditor. The petition went to point out the serious inconvenience which occurred, as the law now stood, in vesting the property of merchants, bankers, and others engaged in trade, who might be involved in difficulties. It often happened, that when the majority of the creditors were disposed to invest the property in the hands of trustees for the benefit of the whole, one obstinate creditor, by holding out, and taking out a commission of bankruptcy, involved the property in legal proceedings to such an extent, that that property, which would, under a different system, pay a large dividend, was wholly absorbed in law expenses, and thus lost to the creditors. The petitioners, therefore, prayed, that the bill which allowed the majority of the creditors to enter into arrangements for the security of the property, might be binding on all; and that after such arrangement had been entered into, no creditor should be allowed to sue out a commission of bankruptcy. They gave an instance of the evil of which they complained, in the case of the Swansea Bank.

Mr. Bright said, that great evils had arisen from the difficulty complained of, which ended, in many instances, in a total loss of the property to all the creditors. The object of the bill which he had introduced, was to cause the agreement of the majority of the creditors to be binding on the others. Since the bill was introduced, he had received several communications, which showed the immense losses which bad accrued from the want of such a measure. These losses fell with great

ders. He would bring on his bill to-morrow, and so convinced was he of its necessity, that he would not abandon it, until he had ascertained the opinion of the House to be against it.

Mr. Alderman Wood bore testimony to the general utility of the bill.

Mr. Lockhart thought that, to render the measure productive of the intended good, it should be carried much further. The mere prevention of an investment of the property of a trader from being considered an act of bankruptcy would not be sufficient; for it often happened that acts of bankruptcy were committed before such investment was made. Now, it would be necessary that the bill should extend to prevent those previous acts of bankruptcy from affecting the trust deed for the benefit of the creditors. The bill which had already passed, making the issuing of commissions of bankrupt null and void, unless such commissions were issued within six months, was not carried far enough; and unless some improvement on this point were made in the present bill, it would be inoperative.

Mr. Bright was afraid of the difficulties which would be opposed to the suggestion of the hon. member. At the same time, he would be disposed to adopt any practicable course to make the measure effectual.

Ordered to lie on the table.

PROMISSORY NOTES BILL.] On the order of the day for going into a committee on this bill,

Mr. Hume said, whatever difference of opinion might exist in the minds of hon. members as to the causes of the present distress, they were all agreed, at least, in a sincere desire to alleviate it as much as was in their power, and to prevent a recurrence of similar disasters. He was sorry to be obliged to differ from the introducers of the present bill as to the causes of the evil, and he could not but consider the present measure wholly uncalled for, and extremely mischievous in itself. He begged to remind hon. members, that if they supported this measure for England, they could not consistently oppose the extension of it both to Scotland and Ireland; for it was but right that the same system of currency should prevail through every part of the united kingdom. The supporters of this bill must also be guilty of a decided retracta

crease of 2,000,000l. in the paper circulation of Ireland, and still that country had not met with similar disasters in its banking establishments as had befallen England. Scotland had also escaped; indeed it was scarcely possible that any loss could arise from the chartered banks there. America also afforded an instance of the good effects of adopting the system of banking which he had proposed. In the province of New York there were thirty-five chartered banks, and no private bankers whatever. It was invariably required, that all the capital should be paid up, before they were allowed to issue a single note. They were also required to furnish an annual account of their issues, and indeed of all their transactions, to the government; and if there appeared the least suspicion as to the solvency of any of them, a commission was immediately appointed to examine into, and report on the matter. Such were the good effects of this system, that since the year 1816, only one failure had taken place amongst these chartered banks, and that had arisen from its being connected with a private bank in another province. In Massachusetts and New Hampshire there were both chartered and private banks. With the chartered banks the non-payment on demand ipso facto amounted to a forfeiture of their charters; and it certainly was worthy of remark, that whilst almost all the private banks had been obliged to suspend their payments on account of the great depression which took place during the war, every one of the chartered banks continued to pay in specie all the time; and whilst other paper circulation was depressed from 15 to 25 per cent, the paper issues of the chartered banks were not depressed a farthing. The hon. member concluded by moving, "That it be an instruction to the committee on the Bill, to provide for requiring from Banks and Banking establishments, deposits (to be lodged in the Exchequer or other proper office), equal in amount to the amount of Promissory Notes payable on demand, issued by them respectively."

The Chancellor of the Exchequer said, he should be inclined, on principle, to object to the introduction of any amendments to the effect of those proposed by the hon. member into the present bill; for this bill was of a mere temporary nature, and it would be a very inconvevient, not to say a very clumsy, mode of proceeding, to introduce into it measures VOL. XIV.

of a permanent nature, and of such very great moment in themselves, as those suggested by the hon. member. The House had already come to a decision, that these small notes, which the hon. member considered so innocent, and indeed so useful, had a most pernicious tendency; and, indeed, the present bill was founded on the principle, that it was desirable to effect their gradual extinction, whereas the provisions which the hon. member wished to have introduced into the bill proceeded quite on different grounds, and professed to prevent a recurrence of the late disasters, by quite a different mode from the one pursued by the present bill. He thought that after the House had given its almost unanimous assent to the principle on which the present bill was founded, it ought not, at this late stage of the business, to abandon it; which it must necessarily do if it should adopt the suggestions of the hon. member. Now, he owned that of all the powers which could be vested in the Treasury, this appeared to be one of the most objectionable. He did not wish to pry into the private concerns of every country banker. The power of doing so would be as intolerable as it would be inquisitorial. Though he might not be inclined to avail himself of it, he would not attempt to conceal from the House his opinion, that it would be dangerous to intrust government with the knowledge of the amount of property which every man had vested in a country bank. It was a power that the Treasury might use with partiality and injustice, and he should therefore be averse to see it vested in those who had the direction of it. It appeared to him that the hon. member had completely forgotten that there were two species of creditors to every country bank; namely, those who held their notes, and those who had deposited money with them. Now, the security which the hon. member wished to exact from the country banks would be much better for the first description of creditors than it would be for the latter. Indeed, the hon. member's plan would prevent the country banks from being any longer banks of deposits, and would thus destroy one of the chief advantages arising from the present banking system. This was a decided objection to the proposition which the hon. member had just laid before the House. The hon. member might think it easy to establish country banks on the plan which he had 3 L