In 1804 there were fifty registered banks in Ireland, and nearly the whole of them failed at different times. The people suffered, but what did it matter, provided the Bank of Ireland maintained safely its own monopoly? It was not till 1824, when the Irish, having aroused themselves from their lethargy, and the merchants of Belfast having represented the evil of the system in the strongest possible manner, that a measure was introduced which authorised the establishment of banking companies at a distance of fifty miles from Dublin. And so the matter stood till the passing of the Bank Acts in 1845. The Irish banking system has much in common with the Scotch. There is a daily exchange of notes in Dublin, whilst in Edinburgh it takes place twice a week. There is nearly the same system of cash credits in Ireland as in Scotland, but, unlike the directors of English or Scotch banks, the directors of the Belfast banks are appointed permanently at a high salary, it may be 1,500l. a year, more or less, according to their standing, and they are precluded from entering into other business.

By the Bank Charter Act of 1845, especially affecting Scotland and Ireland, the power to issue notes in those countries was confined to those banks which were in the habit of issuing notes in the year preceding May 1, 1845. And the issue of each bank in Scotland and Ireland was fixed at the average amount of notes in circulation during the year ending at the same date, provided, however, that such banks might issue any amount of notes in excess of the legal issue, on condition of their holding gold in their coffers to cover the excess. Here are two very objectionable features. First, it was inexpedient to prohibit the establishment of any new banks of issue, and thereby to confer a decided monopoly on the existing banks. Had the principle of permitting but one bank of issue for the whole of the United Kingdom, or of admitting no other than a state issue, been acted upon, or were the same still in contemplation, there might be some justification for the maintenance of the present restriction. But with no prospect whatever of adopting either alternative, the limitation of the right of issue to the few banks which happened to be in existence on a certain day thirty years ago can scarcely be defended on any principle. Second, the obligation to keep gold within the coffers of the respective banks, to cover any excess above the authorised issue, is another decided grievance. It so happens, that some time in the course of the year, in consequence of certain regular payments falling due, the circulation in Scotland and Ireland is necessarily enlarged for a time beyond the ordinary amount. And what follows? Under the necessity of providing bullion, clerks are sent to London to fetch it from the Bank of England. The heavy cases are never opened, there being no extra demand for gold in Scotland or Ireland, but there they lie till the notes return, when the bullion is sent back to England untouched. What

U

folly does it seem to take away the gold from England, where it is absolutely wanted, often at the very season when the withdrawal of even a small amount is seriously felt, and is likely to produce a rise in the rate of discount, to send it to Scotland or Ireland, where it is not required, and thus incur a wasteful expenditure of time and money! Nor is such a system at all justified by the need of providing for the convertibility of the notes in Scotland or Ireland, for, apart from the security resulting from a careful administration, the regular exchange of notes, which takes place amongst Scotch bankers twice a week, and in Dublin every day, when all the notes issued must be taken back by the respective issuers, and, if any balance be due by any one bank, it must be paid by Exchequer bills or by a letter of credit in London, is quite a security against any excessive issue. Besides this, the very general practice in Scotland at least of keeping a banking account makes all the notes in circulation very speedily find their way into the banks, and it is not in the power of any bank to keep any part of the issue out for any time. Doubtless, the obligations imposed on Scotch and Irish banks not to issue beyond a limited amount, except upon bullion, is a security against over issue. But no over issue can long remain in circulation, and if it be intended thereby to prevent the necessity of realising the securities kept in London, experience has shown that in this respect it has had quite the opposite effect. Bad as is the case, however, with respect to the Scotch and Irish banks, it is still worse certainly as regards the English joint-stock banks, for, while the restriction with respect to Scotch and Irish banks was against any increase of their issue on credit, the English banks were precluded from extending their circulation under any circumstances, not even with sufficient amount of gold on hand to cover the excess. Can we wonder that when recently the Royal Bank of Scotland sought for power to establish a branch in London, which its charter did not appear to contemplate, the English country joint-stock banks petitioned the Chancellor of the Exchequer against the unfair treatment they received.3

The Bank Acts of 1844 and 1845 professed to establish certain

A committee of the House of Commons was appointed in 1875 to consider and report upon the restrictions imposed and privileges conferred by the law on Bankers authorised to make and issue notes in England, Scotland, and Ireland, respectively. But they had no time to prepare a report that session, and agreed to report the minutes of evidence to the House. Those who gave evidence were representatives of the Bank of Scotland, the Royal Bank of Scotland, the Union Bank of Scotland, the Clydesdale Bank, the Manchester and Liverpool District Bank, the National Provincial Bank of England, the Provincial Bank of Ireland, the Hibernian Bank, the Northern Bank of Ireland, the Bank of Ireland, the Association of English County Bankers, the London and Westminster Bank, Sir James Fitzjames Stephen, Q.C., Sir Henry Thring, Mr. Robert H. J. Palgrave, Mr. Kirkman D. Hodgson, M.P., the Deputy-Governor of the Bank of England, Mr. Bagehot, and others.

principles of currency and banking, but they only stereotyped what was in operation thirty years ago. They aimed at establishing one only bank of issue-they ended with recognising and perpetuating the rights of certain banks. They designed to place the issue of notes upon a metallic basis -they ended in leaving the largest amount based upon simplest confidence. Whilst professing to treat all bankers alike, they introduced differences in the contingencies arising from the cessation of any bank for which it is difficult to find a reason or an object. In Scotland, if two banks join, the united bank is allowed to issue the circulation of both. In England, if two banks join, the circulation of one is forfeited, and the united bank is only allowed the circulation of one. Beyond this, the law allows the circulation of one pound notes in Scotland and Ireland, and prohibits it in England. And then there are differences in the constitution and administration of banking companies in the three countries. In Scotland there is not now a single private bank. In England and Ireland the joint-stock and private banks are in open competition. In Scotland all the jointstock banks are banks of issue. In England and Ireland there are many joint-stock banks without such right of issue. land all the joint-stock banks have branches all over the country. Not so those in England and Ireland, except, indeed, the London joint-stock banks. In England the Bank of England and several other banks allow no interest. In Scotland every bank allows it. In England Bank of England notes are legal tender. In Scotland and Ireland their respective Bank of Scotland and Bank of Ireland has no such privilege. It has, indeed, been proposed to constitute Bank of England notes legal tender in Scotland and Ireland as well, but it is very doubtful whether the Scotch and Irish would be agreeable to such a change, or if it would fulfil the purposes required in facilitating the operations of trade, or that it would help in maintaining a safe metallic circulation.

In Scot

CHAPTER IV.

REPEAL OF THE CORN AND NAVIGATION LAWS.

The Anti-Corn Law League.-Sir Robert Peel's Policy.-A New Cabinet.The Recall, and the Abolition of the Corn Laws.-State of Ireland, and the Potato Crop.-The Potato Disease.-Price of Wheat.-Emigration.— Repeal of the Navigation Law.

THE Anti-Corn Law agitation was one of those movements which, being founded on right principles, and in harmony with the interest of the masses, was sure to gather fresh strength by any event affecting the supply of food. It was popular to attempt to reverse a policy which aimed almost exclusively to benefit one class of society. It was well known that the League wanted to outset an economic fallacy, and that they wished to relieve the people from a great burden. And as time elapsed and the soundness of the principles propounded by the League at their public meetings was more and more appreciated, their triumph became certain, and her Majesty's Government itself began to see that it was no longer possible to treat the agitation either by a silent passiveness or by expressed contempt. The economic theorists had the mass of the people with them. Their gatherings were becoming more and more enthusiastic. And even amidst Conservative landowners there were not a few enlightened and liberal minds who had already, silently at least, espoused the new ideas. No change certainly could be expected to be made so long as bread was cheap and labour abundant. But when a deficient harvest and a blight in the potato crop crippled the resources of the people and raised grain to famine prices, the voice of the League acquired greater power and influence. Hitherto they had received hundreds of pounds. Now, thousands were sent in to support the agitation. A quarter of a million was readily contributed. Nor were the contributors Lancashire mill-owners exclusively. Among them were merchants and bankers, men of heart and men of mind, the poor labourer and the peer of the realm. The fervid oratory of Bright, the demonstrative and argumentative reasoning of Cobden, the more popular appeals of Fox, Rawlins, and other platform speakers, filled the newspaper press, and were eagerly read. And when Parliament dissolved in August 1845, even Sir Robert Peel showed some slight symptoms of a conviction that the

days of the corn laws were numbered. Every day, in truth, brought home to his mind a stronger need for action, and as the ravages of the potato disease progressed, he saw that all further resistance would be absolutely dangerous.

A cabinet council was held on October 31 of that year to consult as to what was to be done, and at an adjourned meeting on November 5 Sir Robert Peel intimated his intention to issue an order in council remitting the duty on grain in bond to one shilling, and opening the ports for the admission of all species of grain at a smaller rate of duty until a day to be named in the order; to call Parliament together on the 27th inst., in order to ask for an indemnity, and a sanction of the order by law; and to submit to Parliament immediately after the recess a modification of the existing law, including the admission at a nominal duty of Indian corn and of British colonial corn. A serious difference of opinion, however, was found to exist in the cabinet on the question brought before them, the only ministers supporting such measures being the Earl of Aberdeen, Sir James Graham, and Mr. Sidney Herbert. Nor was it easy to induce the other members to listen to reason. And though at a subsequent meeting, held on November 28, Sir Robert Peel so far secured a majority in his favour, it was evident that the cabinet was too divided to justify him in bringing forward his measures, and he decided upon resigning office.

His resolution to that effect having been communicated to the Queen, her Majesty summoned Lord John Russell to form a cabinet, and, to smooth his path, Sir Robert Peel, with characteristic frankness, sent a memorandum to her Majesty embodying a promise to give him his support. But Lord John Russell failed in his efforts, and the Queen had no alternative but to recall Sir Robert Peel, and give him full power to carry out his measures. It was under such circumstances that Parliament was called for January 22, 1846, and on January 27 the Government plan was propounded before a crowded House. It was not an immediate repeal of the corn laws that Sir Robert Peel recommended. He proposed a temporary protection for three years, till February 1, 1849, imposing a scale during that time ranging from 48. when the price of wheat should be 50s. per quarter and upward, and 108. when the price should be under 488. per quarter, providing, however, that after that period all grain should be admitted at the uniform duty of 18. per quarter. The measure, as might have been expected, was received in a very different manner by the political parties in both Houses of Parliament. There was treason in the Conservative camp, it was said, and keen and bitter was the opposition offered to the chief of the party. For twelve nights speaker after speaker indulged in personal recriminations. They recalled to Sir Robert Peel's memory the speeches he had made in