Mr. Anderson.

4073. You said that that the number of Scotch notes had increased in Carlisle since the Clydesdale Bank had opened in that city; I think you said that you would be willing to put in some returns to show the increase; are you prepared with those returns ?-I think I showed to the Committee on Thursday that our own bank, the Cumberland Union Bank, had sent Scotch notes down to Scotland at the rate of 27,600 l. per annum for the four years previous to the Clydesdale Bank coming into Cumberland.

4074. Can you state separately the quantity of 17. notes in that amount?-I cannot; for the year 1874 we sent down 31,215 7.

4075. Can you include also the quantity that you paid away?-No.

4076. Then it is an imperfect return as showing the actual circulation of Scotch notes ?-It is what comes through our hands, what we send down to Scotland; and for the five months of this year, so far as it has gone, it is at the rate of 48,500 7. per annum.

Sir John Lubbock.

4077. Do you pay away many Scotch notes?It does occasionally happen that a Scotchman comes in and says, "I am going down, and I can take any quantity of Scotch notes that you like," and we give them away to him.

Mr. Anderson.

4078. Previously to the Clydesdale Bank coming to Cumberland, did you cash Scotch notes in the same way that you do now?-We make no difference whatever; we take them from our customers.

4079. And you took them then?—Yes, but we do not take them from strangers across the

counter.

4080. Do you make any charge for them? They go to the credit of our customers'

account.

Mr. Anderson-continued.

4081. Free from any kind of charge direct or indirect?-It depends altogether upon the character of the account.

4082. Then you do sometimes make a charge? -We do.

4083. Is that to debtor balances or to creditor balances?-To debtor balances. The commission, whatever it may be, charged on such an account covers everything.

4084. But if it is a credit balance, what then? -There is a small charge or per-centage, or deduction of a certain number of days' interest until the notes are in cash.

4085. Is that a system of charging that you have in Cumberland generally?—No.

4086. But it is done in certain cases?—It is done in certain cases until they are in cash.

4087. How many days would you deduct?There would be 10 days deducted probably; but there is no regular system, and it altogether depends upon the character of the account.

4088. I think you said that to non-customers your charge was 3 s. 6 d. per cent. ?—Yes.

4089. Then to non-customers it is 3 s. 6 d. per cent., and to customers it is 10 days' interest?Yes.

4090. Does that apply not only to your Carlisle office, but to all your other branches?It applies to all the branches.

4091. Is there any difference of charge made at branches in towns where the Clydesdale Bank do not compete with you?-None whatever.

4092. The competition of the Clydesdale Bank does not affect your charge upon notes?--No. 4093. Can you also say how many English notes go into Scotland ?-No.

4094. How do you get back your English notes when they do go to Scotland?-Sometimes they are sent to us direct by our own correspondents; others again are received by us from the two other joint stock banks in Carlisle who receive them from their correspondents, and bring

them

Mr. Anderson-continued. them to us in the ordinary course of exchange; so that we do not know whether they have come from Scotland or from any part of England.

4095. Does this increasing issue or circulation of Scotch notes in England show that the public find them a great convenience?-I do not think it does.

4096. Do you not think that their coming in an increasing quantity shows that the public find them a convenience ?-No; they are in a measure forced upon them.

4097. How?-As I explained to the Committee on Thursday, commercial travellers, and cattle dealers, and men in various lines of business, when they are in Scotland collecting moneys, of course get the moneys of the country, Scotch bank notes; to change those Scotch bank notes into English money in Scotland would cost them considerably more than to pass them to the credit of their account in England, and so they come into England almost perforce.

4098. But the tradesmen and shopkeepers show no reluctance to take them, do they ?-No; such is the competition in trade that they will take anything that any bank in Carlisle will take. They know there is a Scotch bank in Carlisle will

take them.

4099. Do they take 1 7. notes quite as freely as they would take sovereigns?—I cannot answer that question.

4100. Have you ever heard of any difficulty about it?-No.

4101. You said, did you not, that your only objection to 17. notes was that they were dangerous in times of panic?-Yes, that is the great objection; but there are other objections as well, such as the fact that they are more liable to forgery.

4102. Do you mean that they are more likely to be forged than sovereigns?-No, they would be more liable to forgery in England than in Scotland, from the fact of its covering such a much larger surface, and from the population being of a very different class.

4103. Would they be more liable to forgery than 57. notes ?-I think so, because the 17. notes would not circulate in the hands of those who are so able to detect forgeries as those among whom the 5 l. notes circulate. The 1. notes, circulate in the hands of poor people who would not know the difference between a genuine and a forged note.

4104. Are you aware that there is no such difficulty in Scotland?-There have been frequent forgeries.

4105. But do you think there is greater risk of forgery in England than there is in Scotland?-I do.

4106. Do you think there is a greater risk of forgery of a 17. note than there is of base metal in a sovereign, or of light weight in a sovereign? -I think so; but I only give that as my own opinion.

4107. Do you remember the money crisis of 1866-I do.

4108. Of 1857?-I do.

4109. And of 1847?-I do.

4110. Do you consider that those were panics? -I believe so, in more or less degree.

4111. Did you hear that there was any rush for the payment of 1 l. notes in Scotland on those occasions?-I believe there was a rush for the

Mr. Anderson-continued. deposits at the banks and for gold for the notes, inasmuch as it is on record that the Scotch banks brought down a large quantity of gold on that occasion in 1857.

you

4112. The deposits might be for 5 l. notes, or 20. notes, or for 100 l. notes. I am specially asking about 17. notes at present, and I ask whether you are aware that there was any rush for the payment of 1 l. notes in Scotland during those panics?-There is no information upon that subject distinguishing the rush for 17. notes from the rush for 5 . notes.

4113. You mean that you have no information ?—I have none.

4114. Did you ever hear of any such in Ireland?-No.

4115. Would you be surprised to be told that there was none whatever in Scotland, and that even the Western Bank notes, when the Western Bank failed, were only discredited for two days? -I know that that is said.

4116. Do you know any other place where there has been a rush for the payment of 1 1. notes or of small notes in times of panic ?-Not of late years; but it is on record that there have been frequent runs upon the Scotch banks before they became so consolidated.

4117. That is to say, when they were weak institutions, private banks mostly?-I do not think that the old Scotch banks were ever weak institutions.

4118. Are you aware that the banks upon which the run was were private banks which were weak institutions?-It is the joint stock banks that I refer to that there was a run upon.

4119. When was that?-It is beyond my recollection, but I have read it in reports. 4120. Can you name the bank ?—No.

Sir Graham Montgomery.

4121. Before 1826, I suppose you mean?— Before 1833.

Mr. Anderson.

4122. Do you remember the panic of 1825 ?— I do not.

4123. You have heard of it, I suppose?-I have heard of it.

4124. Did you hear that an issue of 1 l. notes then saved the Bank of England from suspending payment?-It is said so, but I am not aware that it is the fact.

4125. You are not disposed to modify your opinion that 17. notes would be dangerous in time of panic ?—No.

4126. But, at the same time, you cannot say that that opinion is based upon any experience whatever?-In the year 1857, when the panic extended itself to Glasgow, one of the Scotch banks there had a savings bank attached to it, which was open, I understand, on Saturday evenings only, and I believe that the run for the deposits on that savings bank intensified the panic in Glasgow very much, and led to the closing of the doors of that bank.

4127. When they ran for the deposits did they get paid for them in notes or in gold?-They got paid for them in notes, and it led to the closing of the banks whose notes were paid.

4128. But they got paid for the notes?-In the long run they did. 4

4129. Therefore the run was for notes and not for gold?-They could not get gold at the

Mr. Anderson-continued.

savings bank, but they got the notes, and they took the notes to the bank whose name appeared on the face of them, and the rush closed the doors of that bank.

4130. What bank was that?-The City of Glasgow Bank. That was in 1857.

4131. Then you distinctly stated that the rush for payment of notes of that bank got from the savings bank, led to that bank closing its doors?-I believe so.

4132. Did it lead to any loss to the public from its notes?-I believe not.

4133. Do you know how long that bank remained with closed doors?—I am not prepared to state how many days or weeks it was, but it was a few weeks, I think.

4134. Did the bank then re-open? Yes, it re-opened then.

4135. They paid everybody in full, did they not?—Yes.

4136. Are you aware whether, during the tinie that it was closed, its notes remained current among the community ?—I cannot speak to that.

4137. You are not aware that there was any run upon them?-There was a run upon them which compelled them to close their doors.

4138. But we are speaking only of 1 7. notes just now, and you say that the run for 1 7. notes got from the savings bank led to the closing of the City of Glasgow Bank?-Yes.

4139. Are you aware that all the time during which that bank remained closed, its 17. notes were freely taken by the community?—I cannot speak as to that.

4140. You said, I think, that every additional 17. note issued was a profit to the bank issuing it? Yes.

4141. Is that the case when the authorised issue is already far more than exceeded, and when every additional note can only be issued with a sovereign at its back?-No doubt it is.

4142. Is not the cost of keeping that sovereign greater than the profit they get from issuing the note?-That may be, but they would keep the sovereign nevertheless, even although they did not issue the note.

4143. Do you mean that whatever was the amount of their issue, they would never extend the quantity of their gold?-As prudent bankers they would keep that gold whether they had the

over-issue or not.

4144. But if they increased their issue, would they increase their gold?-I believe that they would, as prudent bankers.

4145. Then if they would increase their gold as they increased their issue, where would be the profit upon the issue?-Because as the issue increases, the general business of the bank is increased. The gold is there against the liabilities of the bank, its deposits. As the circulation increases, the deposits increase, and it compels them, as prudent bankers, to hold a greater quantity of gold.

4146. Still you say that as their issue increases they must hold more gold?-They must.

4147. If the Cumberland banks got the same power of unlimited issue, and of issuing 17. notes against gold as the Scotch banks possess, would you consider that a great advantage to them?— Very great.

4148. You would wish to see that change carried into effect, would you?-As bankers we

Mr. Anderson-continued. should be very glad to get it; at the same time I should be very sorry to see it carried through.

4149. Would that be a benefit only to thebanker, or would it be a benefit to the public as well?-It would be a benefit to the banker at certain times, but it would be very disastrous to general public; I believe that it would lay the foundation for such a panic as England has never yet seen if there were an unlimited issue of 1. notes in England.

4150. Would it enable the bankers to do the banking business for the public at a lower charge? -It would, certainly.

4151. Then to that extent it would be a benefit to the public, would it not?—Yes.

4152. Did you not say that you already did your business as low as the Clydesdale Bank do? -We do it lower, I think.

4153. Then you would do it lower still, I suppose, if you had this extra advantage?—I think that there is very little doubt of it.

4154. Then that would be a still greater advantage to the public than the Clydesdale Bank have given them by going to Cumberland, would it not? Yes.

4155. Is there an association of bankers in Cumberland ?-No.

4156. Has there never been such an association?-Yes, there was at one time an association of Cumberland and Westmoreland bankers together.

4157. Was that an association as a defence against the Scotch banks?-The Scotch banks were not heard of in Cumberland when that association was in existence.

4158. Was it formed in 1864 or 1865?-Somewhere thereabouts.

4159. How long did it last?-A couple of years, I think.

4160. Was it not in existence in 1874?-Certainly not.

4161. What were its objects when it was in existence, did it fix rates of interest and rates of discount?-It fixed rates of interest, but it left the rates of discount very free.

4162. Have you any scale of the rates of interest at different periods?—I have not.

4163. Are you aware that we got that from the Scotch banks?-Yes; but there is but one bank in Scotland as regards rates.

4164. Is there no kind of agreement among the Cumberland banks ?-There is a general understanding, the same as there may be among the London or Manchester bankers, but there is no agreement.

4165. Are the rates of interest on the general understanding based upon any fixed principle; for instance, do they bear some proportion to the bank rate?-They bear some proportion to the Bank of England rate. We watch the operations. of the London joint stock banks who invariably advertise, and we also watch the advertisements by the Scotch banks and we act accordingly; each one for himself.

4166. When the bank rate was 10 per cent. what rate of interest on deposits did you allow? -We followed the London bankers on that occasion, by not giving more than 5 per cent; I speak from memory.

4167. What do you allow when the bank rate is 8 per cent. ?-I could not say.

4168. What do you allow when it is 7 per

cent.

4174. But before the Clydesdale Bank went to Cumberland, you did not feel any necessity absolutely to follow them?-No.

4175. Whereas now you do feel a necessity absolutely to follow them?-Yes.

4176. And you do so?-We watch what they are doing and act accordingly.

4177. And you charge the same as they do? -I believe we charge less just now. Their allowance on deposits is 2 per cent., so is ours, and their interest on current account is 1 per cent., but ours is 2 per cent.

4178. Do you allow the same rate on deposits at all your branches ?--The same.

4179. Is that so at Hexham, for instance, where the Clydesdale Bank have no branch ?I believe it follows the Newcastle banks, but I do not know what it is. A discretion is left with our agents there.

4180. Then your deposit allowance is not the same at all your branches?-I talked of Cumberland before, but Hexham is in Northumberland.

4181. In other words, Hexham has no branch of the Clydesdale Bank, has it?-The Hexham branch follows the Newcastle rate entirely.

4182. Is there a branch of the Clydesdale Bank at Hexham ?—I am not aware. I do not think so.

4183. And therefore you do not feel any necessity to follow the rate of the Clydesdale Bank? If there were a branch of the Clydesdale Bank there, their rate would be lower than we are allowing now, so that it tells the opposite

way.

4184. So that you compete at Hexham not with the Clydesdale Bank, but with the Newcastle banks?--Yes, but there is very little competition; we work harmoniously together.

4185. Is the rate of allowance of interest on current account balances uniform to all your customers?-No, it depends altogether upon the character of the account.

4186. In what way? Does it depend upon the extent of the account?-It depends upon the extent of the balance that is kept, upon the number of transactions upon it, whether those transactions are across the counter, or are tranfers of money to London, Liverpool, Manchester, or

Mr. Anderson-continued. elsewhere. Very many of those things have to be taken into account in fixing the rate of interest to be allowed.

4187. Then is every account a definite bargain with the individual customer?—Yes.

4188. Is it the same at all your branches?-It is the same.

4189. Then you cannot draw any comparison as regards current accounts between your bank and the Scotch banks, because they have an uniform rate?-Their uniform rate is 1 per cent. just now on current accounts calculated on the daily balance. Our rate is 2 per cent. allowed on the daily balance also. That as a general rule.

4190. Is that allowed yearly or half yearly?— We make it up half yearly, and credit the interest half yearly and bring forward the balance.

4191. On your debtor accounts you debit the interest half yearly ?-Just so.

4192. Have you any special deposits on which an increased rate of interest is allowed if left for a term of years?-We have a few if they remain three or five years. We take nothing for less than three years, but it is very trifling, it does not amount to much.

4193. Did I understand you to say that your present rate on deposit receipts was 24 per cent.? -That is the present rate.

4194. With regard to commissions, you were asked some questions about a 5,000 7. cheque, supposing you sent it to Glasgow, and you said that you got it paid in Glasgow without any charge from the Scotch bank because you had an arrangement with them; was that so?-That was

So.

4195. Do you make any charge to your customers for that cheque ? We do.

4196. Then you have a clear profit upon that cheque yourselves?--That does not follow, because what the Scotch bank does for us we do for the Scotch bank; we collect all that they have in Cumberland free of charge in the same

way.

4197. But still you have no charge made to you for this particular 5,000 7. cheque, and you do make a charge to your customer; what is it? -3 s. 6 d. per cent.

4198. Whatever the amount?-I think as Mr. Goschen said, a 5,000 l. cheque would not come very often; it was a mere fancy figure.

4199. Supposing it to be a 1,000 7. cheque, I do not care about the amount ?-But you must understand what I have already stated, that upon an account where a commission is charged there would be nothing additional.

4200. On a debtor balance ?-On a debtor balance.

4201. But on an account with a customer having a credit balance, what should you charge? -We should either charge them the 3 s. 6 d. per cent. or deduct the interest.

4202. Ten days' interest upon 5,000 l., you are aware, is about 6 l. 10 s. ?-Yes.

4203. Then 61. 10 s. would be the charge upon a 5,000 l. cheque ?—Yes; but, as I have already stated, there would be no such thing, because the transaction would be entirely exceptional, and would be treated exceptionally.

4204. The charge on a 1,000 7. cheque would be about 30 s., would it not?-Yes, it is the same as the Scotch banks would charge for a cheque between Glasgow and Carlisle.

Mr. Anderson-continued.

4205. Are you aware that the Scotch banks charge 15 s. 1 d. as the maximum charge on any amount?-I am not.

cus

4206. What would you charge your tomers for granting a letter of credit on Glasgow; would it be the same rate of 3 s. 6 d. per cent.? -On a debtor account there would be nothing where commission is charged, but with a credit account I am not quite sure, but I think it is oneeighth per cent. ; you will understand from what I have said that the commissions in our mode of doing business are charged in a lump sum at the end of the half year; in the Scotch banks they charge them from day to day just as they occur. 4207. They charge no commission, do they?They would charge a commission upon a cheque from Scotland to Carlisle.

4208. Supposing a customer of yours sends a cheque out of your county and it comes back for payment, would you charge a commission on it? -No, nothing extra.

4209. You get it cleared through the Clearing House? Yes, and there would be no extra charge for that.

4210. Do you discount at the bank rate in discounting bills to your local customers? varies.

It

4211. There is no rule about it?-There is no rule about it; it depends altogether upon the character of the bills.

4212. Do you mean the currency of the bills or the supposed solvency of the bills?-The general character of the bills.

4213. I can quite understand that you make a higher charge for three or four months than for two more six four

Mr. Anderson-continued.

4221. Do you discount that at the bank rate? -Yes, in the manner that I have been stating. 4222. What do you say about local paper?Local paper is generally discounted at a fixed rate, but not always.

4223. That is to say, such a rate for four months and such a rate for six months?—Yes, our local bills are generally three months. 4224. Do you employ all your capital and deposits in your own locality except what reserves you consider is necessary to keep in London, or do you discount elsewhere through England; do you discount, for instance, for any other English banks? We have done so, and we occasionally do so still.

4225. Do you do so on more favourable terms to them?-Certainly; they can command more favourable terms.

4226. Is it because you cannot employ all your money in your own locality that you re discount to other English banks?-Not because we cannot, but because we do not think it desirable to employ the whole of our resources in our district; it would be possibly locking up too much of our money; if we discount for the brokers of Lombard-street and other bankers who require cash, those bills are paid at maturity to a certainty, and we can command the money at any time.

4227. Whereas your local loans you are not sure about?-It would be imprudent to lend out too much in that way.

4228. Do you suffer heavily from bad debts?— We have not done so hitherto.

4229. Can you give anything like a per-centage such

upon two bills of the same currency?-Certainly, if the one was a first-class bill and the other was not of that character, it would not be entitled to the same rate of discount.

4214. Who fixes the class of the bill?-The manager of the bank reads the bill and sees what it is, and he fixes the rate.

4215. Then in reality you charge a del credere rate; it is a rate to cover the risk?-It is the same as the Bank of England does itself; the Bank of England does not discount all its bills at the minimum rate; it charges a different rate for different classes of bills.

4216. You are aware that the Scotch banks adhere entirely to a uniform rate?-I understand

so.

4217. It must be much easier for the customers of a Scotch bank to know exactly what they will be charged on all occasions, than for a customer of yours? Yes, but I understood one of the Scotch gentlemen to say that the rates which he named were the minimum rates.

4218. Did he not also say that he made no difference of charge in reference to the solvency of the party; but that he would not take a bill at ail unless he thought it was solvent?-He added afterwards that he would take bankers' acceptances at a lower rate.

4219. I think the distinction was as to London paper, and not as to local bills?-I understood that your questions had reference to London

a long period ?-I cannot; I think that was given only for the Royal Bank, and not for the others.

4230. I think we had a statement from you as to the capital and the reserves of the Cumberland banks; can you also state what the profits have been?-I cannot state what were the profits of each bank; I could have supplied it very readily, because they are all published and it is all public property, but it escaped me, or else I should have brought that as well; I can tell you

our own.

4231. Can you tell me the profits of the other two Carlisle banks?—I could not tell you that off-hand, and I can only tell our own from the last report.

4232. The capital, I think you said, of the Cumberland Union Bank was 225,000 l., and the reserve 83,000 l. ?—Yes.

4233. What was the profit?-The net profit, taking it as the Scotch banks did, after deducting 4 per cent. upon the capital, and upon the reserve, was 33,500 l.

4234. That was the net profit upon the balance sheet after deducting 4 per cent. upon capital, and 4 per cent. upon reserve?-Yes, after deducting 4 per cent. upon 300,000 7., in fact. 4235. What per-centage is that?-£. 14 18 s. 5d. 4236. Nearly 15 per cent. ?-Yes. 4237. In what year was it that the Clydesdale Bank came?—It was the beginning of 1874.

4238. Can you state in a similar way what your profit was the year before the Clydesdale Bank came? I cannot, but it has made no difference whatever as yet; it has had no time to make any.

4239. Do you make as much profit now as you did