Sir Graham Montgomery-continued. charged me 1 s., and if you charge me 1 s., I shall charge you 1 s." They were very angry at this, and they wrote me a huffy letter, and said they should refer it to the Bank of England (the Bank of England, you know, is a great authority with all of us); I said, "It is the very thing that I want you to do "; and they referred it to the Bank of England, and I have never had it charged since.

Mr. Anderson.

4983. Upon your remittance of 10,300l. to London, you said that you were informed that there were three different ways of remitting the money; all at a certain number of days' distance; are you not aware that instead of that you might have got a draft on demand for 1 s. per cent., with only a penny stamp to pay?-Here is the case. They would have given us a draft at 17 days, free of charge, and that would have cost 19 7. 16 s.

4984. But a draft of 17 days requires a stamp? -No, it was without a stamp; they pay the stamp, I suppose. Here is the Royal Bank's own letter.

4985. That letter mentions those three ways? -Yes.

4986. And it names no way in which you could get a draft on demand? I will read it to you: "We can remit you this amount by draft on London at 10 days' date, less 5l. 4 s. for stamp, or at 17 days' draft free of charge, or we can order the amount to be paid to your London agents on the 28th instant, free of charge."

Sir Graham Montgomery.

4987. Would not the cheapest plan of all have been to have sent a man down to Edinburgh, who would have brought back Exchequer Bills? -In the first place, I should say that it would be a great advantage, and that it is worth the consideration of this Committee whether it would

not be a great improvement that Bank of England notes should be a legal tender in Scotland, and that Scotch banks should be obliged to pay Bank of England notes. The only thing that they will give us is gold, and 10,000 l. in gold involves the expense of sending a man down to fetch it, and the risk of bringing it, and the whole thing. It is almost better for us to pay this 13 days than to incur that.

Mr. Anderson.

4988. I think you said that you had looked at the printed charges as to that particular charge about remitting to London ?-It is in the letter.

4989. You will see in the tables another mode of remitting to London for 1 s., and a 1 d. stamp ; so that your charge for remitting on demand would have been 5 l. 3 s. 1 d. in place of 18 l. 2s.? -The parties that were to receive this money knew that there was a charge on receiving money from Edinburgh, so that they came to us and asked us if we would ask the Royal Bank of Scotland upon what terms they could remit it to the best advantage for them. We wrote to make that inquiry, and this is the answer to the letter: "We were duly favoured with your letter of the 13th instant, and have to-day received the sum of 10,350 . on your account from Messrs. Newstead & Wilson. We can remit you that amount by draft on London at 10 days' draft, less 5 l. 4 s. for stamp, or at 17 days' draft free of charge, or

4993. Supposing that you had 10,3507. in your bank, and that you wished to place it in Scotland, what would have been the charge for doing so?If our customer had drawn a cheque for 10,350 1. and the Scotch bank sent that to us, we should pay it without any charge at all next day.

4994. You were bringing this 10,350 l. from Scotland; but supposing that you had wished to send it from England to Scotland to the credit of your customer there, what would you have charged? the cheque; we charge our customer. -We charge nothing to the person who holds

you are

4995. But supposing it is not a cheque, but that the money is in your bank, and that ordered to send it to the Royal Bank of Scotland, depends in the first place upon what amount of what would your charge be in such a case?-It money is in.

4996. Supposing all the circumstances to be the same as you have described, and that you had been in the place of the Royal Bank, what would have been your charge?—I should say that in an ordinary case we should charge nothing. If it is a customer of ours we should charge nothing, but it makes a great difference, of course, if a stranger comes in; but I do not quite understand your question.

4997. Is the Royal Bank a customer of yours? No; the party to receive the money was a customer of ours.

4998. But he was not a customer of the Royal Bank? I do not know. They say they have got it from Messrs. Newstead & Wilson; who they are I do not know.

4999. Supposing that the Royal Bank had been getting that money from you, what would the Royal Bank have paid you?—Nothing.

5000. You send down money to Scotland for nothing?—Yes.

5000.* Supposing that the Royal Bank had been getting that money from you, what would the Royal Bank have paid you?—Nothing.

5001. You send down money to Scotland for nothing?-Yes. I should have added without charge to the receiver. If we allow no interest, we make no charge at all. If we allow interest, we make a charge of 2 s. 6 d. per cent. on such a case

5001.* (To Mr. Fleming.) Can you explain the circumstance to which Mr. Leslie Melville has referred? I shall be very glad indeed to have the opportunity of explaining the matter. I had not a distinct recollection of the particular case to which Mr. Leslie Melville has referred until he read the letter from the Royal Bank, but now I have a very distinct recollection of it. This money was paid in at Edinburgh to be held at the disposal of certain parties in England, and the Royal Bank was asked specially to send a draft on London at a short date to cover the charges. Of course there were four ways of dealing with it. There was first the way of giving a draft on demand drawn upon the Bank of England or upon one of our London correspondents, for which the charge is 1 s. per cent.; that would have involved a deduction from the amount so paid to the Royal Bank in Edinburgh of 5 l. 3 s. in order to make it available in London; but the object of Mr. Leslie Melville's firm in putting the question to the Royal Bank was to elicit in what way the exact amount could be produced in London. There were three ways of doing that, and those three ways are explained in the letter, all of them being in exact conformity with the scale of charges upon which all the Scotch banks act. I should also be very glad to make an explanation somewhat supplementing an answer of my own on a previous occasion with regard to the charges made to the Scotch banks by English banks. It bears upon the question which is now before the Committee. The question, I think, was put to me on a previous occasion whether it was usual for English provincial bankers to make a charge to Scotch bankers for making available in London the amounts of English cheques remitted to them. I stated then that I believed that there was not a day passed that we had not a charge of that description made to us by English bankers. Since then I have taken some trouble to verify that statement, and the result is this. I took the month of May 1874, before any question

had arisen between the Scotch bankers and English bankers, and I found that in the course of that month the Royal Bank remitted cheques to 65 English provincial bankers. In the case of 32 out of the 65 instances, no charge was made, and in the case of 33 out of the 65 a charge was made. That charge ranged from 6 s. per cent. to 1 s. 3 d. per cent. As the result I should say that the private bankers of England, as a rule, made no charge, with only very few exceptions. The joint stock provincial banks in England did make the charges, with one or two exceptions; the result, on the whole, was that the charge by the provincial bankers ranged from 6 s. per cent. to 1 s. 3 d. per cent.

Mr. Orr Ewing.

5002. Supposing that you had been getting the money from Mr. Leslie Melville, and that he had sent it to you, what charge would he have made?—That I cannot tell; I can only say that so far as the Scotch banks are concerned, if money is paid to them in London they make no charge,

5003. Is it not the fact that in all these cases in which you say that the English provincial joint stock banks made you a charge you had the opportunity, if you had chosen, of sending down those cheques, as all English country banks do, through the country clearing house, and that in that case, so far as you know, no charge would be made? I think I explained, on a previous occasion, that if a cheque was sent through the country clearing house no charge would be made, because it became money available at five days in London. I think one of the honourable Members of the Committee, or one of the witnesses, stated that the money was available on the second day, but that is not so; it works out in this way: we cash say, a cheque on Lincolnshire, in Edinburgh upon the first of the month; we send it to London; it reaches London on the second; but generally too late for the country clearing of that day; it passes through the country clearing house on the third, and it is made available to us in London two days after that; so that a cheque cashed in Edinburgh on the first day of the month is not available to us in London until the fifth of the month, and we have not advice in Edinburgh of its payment till the sixth of the month; so that it is practically not available for our purposes before that time.

5004. In other words, owing to your distance from London, you, from the very nature of the case, lose four days?-No, that is not so. We do not feel ourselves legally justified in allowing five days to elapse before that cheque is presented. We hold that we are bound as a matter of due negociation to send the cheque direct to the banker whom it is drawn, or to our correupon spondents in the town upon which it is drawn. 5005. Is it not the fact that English provincial banks, both private and joint stock, have established a machinery by which your cheques from Scotland on England can be paid free of charge, and that because you take views which, without any disrespect, I may call peculiar, as compared with what the English banks do, and do not avail yourselves of this machinery, but require to have the money paid in another form from what the English banks do, you subject yourselves willingly to this charge?-The Scotch banks decidedly encourage their customers to say to them, "We shall exonerate you from all legal responsibility arising from this mode of negociation "; and if the customer is content to allow us to send it through the country clearing house we are glad to do it.

5006. In that case you are subject to no charge by the English_banks?-We are subject to no charge by the English banks in that case.

Sir John Lubbock-continued.

post between Scotland and England, cheques cashed at our branches are rarely passed through the clearing house on the day they are received in London; hence we do not receive credit for them till the fifth day. If cheques are received in London by the first post they would be cleared the same day, and we would get credit for them on the fourth day.

5009. On the other hand, if you sent it direct, you would receive it upon the third ?-If we sent it direct we should send it from Edinburgh on the first; it would reach its destination on the second; the banker upon whom it was drawn would instruct payment by the same post, no doubt; and we should receive the money on the third, I think.

5010. Therefore there is not a difference of .five days, as I understood you to say just now, but only two days?—I did not mean a difference of five days. In the one case you get it in due course, and in the other you have to wait.

5011. And none of the cheques to which you have alluded, and upon which you have charged a commission, were sent through the country clearing?-No; I have explained that we do not feel ourselves at liberty to negotiate cheques through the country clearing house unless we have the authority of the person by whom they are presented. If we have that authority we invariably send them through the country clearing house. The cheques which I referred to are cheques drawn by English provincial banks.

5012. You have stated that you do not do so because you do not feel justified in not presenting a cheque for four days after you receive it; are you not aware that a banker sending a cheque by post is presentation, and that therefore when it is sent by post from London to a country bank that is a legal presentation of the cheque? I take it, that if a Scotch bank or any bank sends a cheque to a provincial bank in England for the purpose of negotiation, he constitutes the English banker his agent for the purpose of negociation, and that at present that would be practically a fulfilment of the legal requirements of the case.

5013. And therefore the legal presentation of the cheque presented through the country clearing house takes place on the day after you

have received it?-No.

5014. He sends it up to London on the first of the month to his London agent, his London agent sends it on the second, by post, and that sending it by post is a legal presentation; and therefore that legal presentation takes place on the day after he receives the cheque, does it not?I take it that in that case the negociation through the country clearing house would take place on the receipt by the banker on whom the cheque was drawn.

5015. You are not aware that the sending of a cheque in that way is legal presentation?-I

am not.

Mr. Mulholland.

5016. I think you said that the three plans which you suggested for making this remittance were three plans by which the whole amount could be paid in London ?-Yes.

5017. Was one of them to give a 10-days' order at a charge of 1 s. per cent.?-No. (Mr. Melville.) "We can remit you this amount by draft on London at 10 days, less 5 l. 4 s. for stamps."

Mr. Mulholland-continued. (Mr. Fleming.) There were three ways of remitting the money free of any charge so as to produce the amount that had been paid in to Edinburgh.

5018. Then you mean that that 5 l. 4 s. should be paid to you?-No, that 5 l. 4 s. was stamp duty payable to the Government.

5019. But who was to pay it?" We can remit you this amount by draft on London at 10 days, less 5 l. 4 s." There plainly would have been a deduction, and therefore that would have been a very inadvisable mode of remitting the money.

5020. Would not the same, 1s. per cent., have been deducted for an order on demand?-No, this is an order of 10 days.

5021. Ought you not to have given them the advantage of an order on demand?-The question was put, as I have already stated, in this way: in what way can you, a Scotch banker, make this money available free of any charge to our constituents.

5022. Was there not a charge of 5 l. 4 s. for stamps?-Apparently so; Mr. Melville chose that mode of remittance in preference to another which would have produced the money on the same day free of stamp or charges. Why he did so I cannot explain. (Mr. Melville.) I wish Mr. Fleming would tell me how to ask the question next time; I asked, "How are the parties to receive in London free of charge 10,350 l., that is in your hands?" and we have done the best we could. Should I have had the whole amount in London if I had gone his way to work. If the cheque had been upon me it would have been paid the next day in London without any charge at all.

Mr. Hussey- Vivian.

5023. (To Mr. Fleming.) Are your charges so far circulated that Mr. Melville ought to have known that he could have received this money for 1 s. per cent. ?-If Mr. Melville had asked his solicitor in Edinburgh, or if Mr. Melville's constituents had asked his solicitor in Edinburgh to remit this money, he would probably have known the best way of remitting it.

5024. Then probably the solicitor would have made a considerable charge; but is it so commonly notorious among bankers who have dealings with Scotch bankers that this payment of 1 s. per cent., is a mode of obtaining remittances that any banker well-instructed in his business ought to have known that it could be done in that way? The truth is that I do not believe that out of the millions of drafts which the Royal Bank have issued during the last 12 months, there was a similar question put, or a similar draft granted. It is quite an exceptional thing in Scotland to remit by drafts at a date, the drafts are invariably asked for and given on demand, and the uniform charge is 1 s. per cent. on demand. The exceptional circumstances here seem to be, that to satisfy some legal requirement they wished to have the exact amount made forthcoming in London, and that could only be done by giving a draft at a date.

5025. Then you admit that you make a charge against the English bank of 1 s. per cent., which the English banker does not make against you? -I do not admit that by any means; on the contrary, I have told the Committee that in the experience of the Royal Bank for one month the charges range from 6 s. to 1 s. 3 d. per cent.

5026. (To Mr. Fleming.) You might have sent all those cheques through the country clearing house, and you would then have received the money free of any charge, less the loss of one or as you consider, two days' interest, would you not?-In the one case where it is sent direct we have the money on the second day from its transmission.

5027. You said the third day before, did you not? No, we send it direct; we have it the second day; it is put to our credit in London on the second day after transmission. In the other case we had it on the fifth day.

5028. Therefore you would have lost three days, but you would have had it free ?Yes.

Mr. Backhouse.

5029. (To Mr. Melville.) Do you wish to say anything with regard to the Act of 1844?-I was here at the time of the passing of the Act of 1844, and I rather differed from other bankers on two or three points; and as I differed from them, I did not know very well what to do; but the late Lord Yarborough (then Lord Worsley) was an intimate friend of mine, and I said to him, "I think the other bankers are wrong; they give it up as a bad job, but I don't think it is a bad job; I believe I have right on my own side," he said, "If you will draw your own petition and will give it to me, I will support it, for I think you are quite right in the view you take." Here, on a very yellow piece of paper, is my petition at that time, and in it I asked for three things. One thing that I asked for was this; that instead of having only a week in which to make up our returns, the averages should be made once a month, because it was impossible from the different branches to get in the returns, so as to do it in a satisfactory way; that they agreed to,

Mr. Backhouse-continued. and I carried it by this very petition. Another point that I asked for was this: I said that the way in which they took the averages was unfair; they proposed that it should be (and you will find that in Sir Robert Peel's speech) the last two years; I said, "The last two years are the very lowest that we have ever known, therefore, it is not giving it a fair chance if you take it for the last two years; take it for three years, or for five years, or for seven years, or for the last three months, or in any way you like, except taking it on those very lowest years," that they agreed to, and they gave it me for those three months; those two things I carried myself. I wish to support this excellent Act of Sir Robert Peel's, except this one little slip about the Scotch banks; otherwise it seems to me to be perfect; I said in my petition: "That your petitioner begs humbly to represent that the proposed plan of taking an average from past years, as constituting the maximum of future circulation is anomalous in principle, and unjust to those districts in which from fairs, and other causes, the demand for money at different seasons of the year is subject to great variation." That was not granted, but I have got a good circulation, and I am satisfied, and I work within my circulation. But if there is any idea of making any alteration in Sir Robert Peel's Act, what I would suggest is this: that if you gave 10 per cent. it would be equivalent to my proposal, and it would save many of us a good deal of trouble. The last four weeks, for instance, were very high; in the last four weeks we had our sheep fair, and we had the payment of servants' wages in May, so that we were carried over our amount, and we were above our 100,000l. Then I had to put on the screw; I had to send Bank of England notes to all my branches, and to have them at home; and not a note of ours was allowed to be issued; and so I brought it down to 98,000l. instead of 100,000 7.; that is what we are compelled to do now and then; at the same time I make no great point of that.

5030. When that Act was passed, you undertook it as a permanent settlement ?—Yes, and we have always acted upon it, and believed it so; and the country believed it so, and they are perfectly satisfied; I hear questions raised about this and that, but we have never had a question about our notes since 1825.

5031. You are the Deputy Chairman of the Issuers' Committee of the Association of English Country Bankers, are you not ?—I am.

5032. You are also the chairman of the North and South Wales Bank, are you not ?-I am. 5033. That is a bank of issue, is it not?It is.

5034. What is the amount of your authorised issue? The amount of our authorised issue, by the Act of 1844, was 63,951 l.

5035. Where is your head oflice ?-Our head office is in Liverpool.

5036. How many branches and sub-branches have you?—In all, 41.

5037. Where are they, chiefly? They are chiefly in the northern part of the Principality, and we have a few in the counties bordering upon that part of the country, chiefly in Shropshire and Cheshire.

your

5038. Do you issue your own notes at all offices? We do not; we only issue at 21 of the branches.

5039. Do you issue in Liverpool? We do not; the only issuing bank that there ever has been in Liverpool is the branch of the Bank of England. 5040. Do you think that the fact of the branch of the Bank of England being established there has anything to do with your not issuing in Liverpool?-I think that it has.

5041. Why should it prevent your issuing there?-All the other joint stock banks in Liverpool, when they were established, although they had the choice of issue, preferred making arrangements with the Bank of England. Of course, one bank conld hardly contend with its issues against seven or eight banks all issuing Bank of England notes, and therefore we never attempted to compete with our notes in Liverpool against those of the Bank of England.

5042. Do you pay your notes in gold at all your branches?-At all our branches, wherever issued; we pay them at 43 points in all. We issue them at 21 points, but they are all payable at our head office, our London agents, and our own 41 branches.

5043. Therefore, if they were issued at any one of those 21 branches, they would be paid at any one of the other 40?-They would.

'Mr. Backhouse.

5044. Why do you limit the issue of notes to 21 out of the 41 offices?-Our issues being limited to the amount that I have just stated, about 64,000 l., we are obliged to limit the points of issue so as to keep within the limits prescribed by the Act of 1844.

5045. What is the penalty of over issue ?-For every 5 l. issued in excess of our authorised limit, we forfeit 5 l., it is pound for pound.

5046. Then is the result this: that practically you cannot avail yourselves of the full limits of your issue? That is so.

5047. Have you any returns showing this ?—I have a return showing the average circulation of our notes for the last 10 years. I will not trouble the Committee with the averages year by year, but the average for the 10 years is, in exact figures, 58,0821., and our authorised issue being 63,951 l., it follows that we have been, during the last 10 years, within the authorised issue by 5,869 l., or 6,000 7 in round numbers.

5048. What is the greatest excess, and the greatest drop?-I have a return here showing the greatest excess beyond the limits in our circulation, and the lowest point which it has touched in any one of the 10 years in the return from which I have just quoted.

5049. What dates are the 10 years?-The dates of the 10 years are from 1865 to 1874, up to the end of last year. The highest point that our circulation has ever reached during that period was 69,550 /., which it reached on the 19th of April 1866; that was 5,600 7. in excess of our authorised issue

5050. What was the lowest point?—The lowest point was 43,385 l.; that occurred on the 1st September 1870, and that was 20,566 7. below our authorised limit.

5051. Was there any special cause, in September 1870, to account for that?-None, except this: that I see by our returns that we had gone above the limit in the last week of the return by 5,000 l. or 6,000 /., as I have already stated; and, in order to bring the issues within the average limit for the month we had to reduce them to that extent.

5052. Have you any other return as regards your circulation, which you wish to submit to