Sir John Lubbock-continued. 480. The original object of the Acts was, I think, to protect the monopoly of the Bank of England as regards banking as well as regards issue, was it not?-I suppose it was; but I cannot make out (and I have heard no explanation of it, having listened very attentively) the meaning of the enactment that no corporation, society, fellowship, or company in the nature of a bank shall be erected or established. So far as I could make out when I went into the question, banking operations at the period of the monopoly of the Bank of England consisted simply in issuing notes and the business connected with the issue of notes.

481. The general policy of the Act of 1844 was, I think, to prevent any extension of the private bank-note circulation in England?-I

Mr. Anderson-continued. from issuing notes ?-That is an argument which certainly has great force, but in my judgment it is overruled, in this way: if you read the beginning of Clause 3, it says, "And whereas the intention of this Act is, that the Governor and Company of the Bank of England should, during the period stated in this Act (subject nevertheless to such redemption as is described in this Act), continue to hold and enjoy all the exclusive privileges of banking given by the said recited Act of the 39th and 40th years of the reign of his Majesty King George the Third aforesaid, as regulated by the said recited Act of the seventh year of his late Majesty King George the Fourth, or any prior or subsequent Act or Acts of Parliament;" you must construe these most obscure Acts in some fashion or other; and if you coustrued the words " in England," as authorising the Scotch banks of issue to have branches in London, which I perfectly admit is, at first sight, arguable, then you entirely annihilate the effect of the earlier part of the section, in which it says that all those privileges have been continued, but it is perfectly arguable, as you argue it, and, in fact, that has been pressed upon me very much by a most eminent member of the Government, and I added a note upon the point to my Memorandum.

Mr. Mundella.

484. YOUR firm are Solicitors to the National

Bank, are they not?—Yes.

485. How long have you been so?-Above 40

years.

486. Have you been their solicitors from the first foundation of the bank?-Yes; in fact, I aided in the formation of the company.

487. When was the National Bank founded?. —It was promoted in 1834; its articles are dated January 1835.

488. For what purpose was it formed?-It was formed for the purpose of carrying on banking in all its branches in any part of the United Kingdom, either England, Scotland, or Ireland, or the Islands of Jersey or Guernsey, or the Isle of Man, to such extent as the laws might from time to time enable us.

489. It was mainly intended, I presume, to conduct business in Ireland? That was the original idea, but before we settled our articles the ideas expanded and took the form which I

have stated.

490. It originally commenced business in Ireland, in what year?-In 1835; in fact, immediately.

491. With a head office in Dublin, I suppose? -It must not be styled exactly a head office.

492. A branch in Dublin?-It can only at that time be considered an office for agency, because the Act of Parliament of 6 Geo. 4, c. 42, which enabled them to carry on banking in Ireland as a bank of issue at a distance of 50 miles from Dublin, contained an express restriction against their having a house of business in Dublin; therefore they had no house of business as bankers in Dublin at that time; they merely had an agency house, the same as in England. There was a similar restriction in England under the Act of seventh George the Fourth against banks established under that Act having a house of business in London or within 65 miles therefrom, but the National Bank has never carried on business under that Act.

493. But they had an agency house in London from the first, had they not?-Always..

Mr. Mundella-continued. 494. And the Board of Directors sat in London, did they not?-Always.

495. And the business was conducted from London? It was superintended from London. 496. They had 50 or 60 branches in Ireland, had they not?-Yes, and they have a large issue there.

497. At what period did they first establish a banking business in London ?-In the year 1854.

498. When they proposed to commence business in London, did the Bank of England and the Clearing-house object to their doing so?Yes, the Bank of England did.

499. On what grounds did the Bank of England object?-I suspect that the principal ground upon which they went was the Statute of 7 & 8 Vict. c. 113, which restricted the introduction of any new banks in London which had not been established for that purpose previously to a certain date, which was, I think, May 1844, and they said that we were not so established, but I ultimately satisfied them that we were, and got over that difficulty. Of course the fact of our being a bank of issue was notorious, and they. well knew that we were a bank of issue in Ireland; but we were not a bank of issue in England, and therefore they could not object to us on that score.

500. Did they consult counsel upon it?Yes.

501. Did you consult counsel upon the question?-Yes,

502. What counsel did you consult?-Sir Richard Bethell (who was afterwards Lord Westbury), Mr. Wordsworth, and Mr. Welch as a pleader.

503. They were all men eminent in their day on commercial law, were they not?--Yes.

504. Have you the original case put to them and their answers?-Yes, it was dated May 1853. The first question which was put was this: "Whether the National Bank of Ireland under the provisions of their present deed of settlement and as at present constituted, are legally at liberty to establish a bank or banks in

Mr. Tatham.

Mr. Mundella-continued.

London, and within 65 miles therefrom, and to avail themselves of the provisions of the 26 sec. 3 May 1875 of the 7th & 8th Vict. c. 32, and of the 47th sec. of the 7th & 8th Vict. c. 113, or either of those Acts, so long as they do not register under the 7th George 4, c. 46, and so long as they do not infringe the Bank of England charter as modified by those Acts, and whether the establishment of such bank or banks will in any way legally prejudice or affect their position and present operations as bankers in Ireland under the 6th George 4, c. 42." The replies of Sir Richard Bethell and Mr. Charles Wordsworth to the first question were as follows: "We have referred to the company's deed of settlement, and are of opinion that it is within their powers to carry on the proposed banking business in London, and within 65 miles of it, and that their so doing will not affect their position as bankers in Ireland under the 6th George 4, c. 42. 42. We have considered the 7th & 8th Vict. c. 113, which enacts that banking companies formed by covenant of copartnership on or after the 6th May 1844, shall be constituted by letters patent, and we are of opinion that the National Bank of Ireland is unaffected by the proviso contained in the first section of that statute. With respect to section 47 of that Act, which bestows certain privileges in the mode of suing and being sued on banking companies established' on the 6th May 1844, for the purpose of carrying on the business of bankers within 65 miles of London, we have entertained a doubt whether the National Bank of Ireland was sufficiently within the statute. It appears to us, however, that the company was fully formed on the day above mentioned. We think that the company at that time had two objects in view, the one to become bankers in England, the other in Ireland, and that although it has suspended carrying into effect the former, and has only hitherto actually carried out the latter object, the company may nevertheless be considered as having been established on the 6th of May 1844, within the meaning of the 47th section. With respect to the 7th & 8th Vict. cap. 32, sec. 26, which removes the prohibition then existing against banking companies drawing and accepting bills, we are of opinion that there is nothing to prevent the National Bank of Ireland from availing themselves of that branch of banking.business. Then the second question is as follows: "Whether they could establish such banks as proposed in the first question, and at the same time, or at any time afterwards, on such banks being discontinued, carry on business as bankers beyond 65 miles from London on registering under the Act of 7th Geo. 4, cap. 46." The answer is, "We think it will not be competent to the National Bank of Ireland to establish banks beyond 65 miles of London, at the same time that they carry on business in London and elsewhere within that distance." The third question is this: "Whether in the event of the establishment of such banks as proposed in the first question, the return to be made by the National Bank of Ireland to the Stamp Office in in England, England, would be regulated solely by the 47th sec. of the Act 7 & 8 Vict. cap. 113, or would a return be required under the 21st sec. of 7 & 8 Vict. c. 32." The answer is, "We think the return should be made under the 47th section of the 7th & 8th Vict. cap. 43."

Mr. Mundella--continued.

505. Those being the opinions of Sir Richard Bethell and Mr. Wordsworth, the replies of Mr. Welch are of the same tenor, I believe?-Yes; in answer to the first question Mr. Welch says, "I think that the National Bank of Ireland under the provisions of their deed of settlement, and as at present constituted, may legally establish a bank or banks in London, and within 65 miles therefrom, and avail themselves of the provisions of the 26th section of the Statute 7 & 8 Vict. c. 32, and of the 47th section of the Statute 7 & 8 Vict. c. 113, subject to the restrictions imposed by those Acts; and I think that the establishment of such bank or banks will not in any way prejudice or affect the position or operations of the company as bankers in Ireland, under the Statute 6 Geo. 4, c. 32. The 26th section of 7 & 8 Vict. c. 32, applies generally to every company or copartnership carrying on the business of bankers within the distance of 65 miles from London at any time after the passing of the Act; and I think that the object of the 47th section of the 7 & 8 Vict. c. 113, was to extend the provisions of the Statute 7 Geo. 4, c. 46, with respect to the powers of suing and being sued by a public officer to all banking copartnerships not included within the restriction or prohibition contained in the 1st section of the Act. I think that the National Bank of Ireland is not included within that restriction or prohibition, for if the National Bank of Ireland should carry on the trade or business of bankers in England, whether within or beyond 65 miles from London, they would not carry on such trade or business under any agreement or covenant of copartnership made or entered into after the 6th May 1844, but under an agreement or covenant of copartnership made and entered into before that day." The answer to the second question is this: "I

think that a registration under the 47th section of the Statute 7 & 8 Vict. c. 113, is by the effect of that statute virtually a registration under the 7th Geo. 4, c. 46, and that there is no difference in the form or effect of the registration, whether it be under the one statute or the other; I think that if the bank were to carry on business in London, or within 65 miles from London, and then discontinue such business, they would still be at liberty to carry on business beyond 65 miles from London, making such new return to the Stamp Office as the change of circumstances would require." The answer to the third question is as follows: "I think that in the event referred to returns must be made by the National Bank of Ireland to the Stamp Office in England under both the Acts of Parliament mentioned, the returns although almost identical in form being made with different objects. The Return required by the 7 & 8 Vict. c. 32, has no reference to the power of suing and being sued by a public officer, and does not contain any mention of public officers."

506. Did you communicate that opinion to the Messrs. Freshfield, the solicitors to the Bank of England? Yes.

507. Did they also take counsel's opinion upon the question?-They did.

508. What was the result?-They took the opinion of the late Lord Chief Justice Bovill (then Mr. Bovill), and they sent me a copy of a case which they laid before him, and a copy of his opinion. The case was as follows: "The National Bank of Ireland has proposed to open a drawing ac

count

6

Mr. Mundella-continued.

count with the Bank of England. There is no objection on the part of the Bank of England. Indeed an account has been for some years kept at the Bank of England in the names of four gentlemen, which is understood to be for the National Bank, but it is now desired to open the account in the name of the National Bank, and the Bank of England must be satisfied who will have power to draw on such account. The National Bank of Ireland was constituted by a deed of settlement, dated 6th January 1835, a copy of which accompanies this statement. The National Bank of Ireland has its seat in London, but was instituted for the purpose of banking in Ireland, and has numerous branch banks there, and is generally in a flourishing condition. The directors now propose to open an office, and carry on business in London as an English Bank, and it is with this view that the account in question will be opened. The doubt that occurred to us and which we expressed was that though the company clearly takes powers to establish branch banks, and agencies in cities, towns, and places in Great Britain as well as Ireland, it seemed to have been contemplated that the head office in London was to be the centre of a system of management and not an acting banking establishment, and the deed consequently contains no provisions prescribing the mode of carrying on business of such an establishment in London. In consequence of these doubts the solicitor of the National Bank has pointed out the provisions of the deed of settlement relied on in the following letter: The clauses to which I would partieularly call your attention are the 4th, 5th, 57th, and 125th. The three first of those clauses clearly anticipate that the company will always have a head office in London where the court of directors shall sit, and that they will also, at all times, have a drawing account with some other London bankers, and the same clauses give the directors power from time to time, at their discretion, to remove such bankers and to appoint others in their stead, and thus no special clause expressly authorising such an account would be inserted in the deed, but the extent of the balance from time to time to be left to the company's credit on such drawing account, would be the funds or part of the funds which agreeably to the 77th clause the directors may consider a proper provision for the immediate and current claims upon and expenses of the society. The mode of operating on that account, such as the drawing of cheques, &c., is left to the exercise of the general powers of management and control vested in the court of directors by the 125th clause, which provides that the court of directors shall at all times have the entire management of and control over the affairs and concerns of the society, and that they shall in all cases, not expressly provided for by that deed, act in such manner as shall appear to them best calculated to promote the welfare of the society, and that for their better guidance in such management and superintendence, they may make whatever rules and bye-laws they may think proper, provided they be not repugnant to the fundamental principles and constitution of the society. Thus with reference to the proposed drawing account with the Bank of England a resolution of the court of directors would sanction the opening and continuance of that account, and either another or the same resolu

Mr. Tatham.

Mr. Mundella-continued. tion would direct as a bye-law that the cheques drawn against that account shall be signed by 3 May 1875. any three of a certain larger number of the directors, and be countersigned by the secretary or accountant; the direction as to the signature by three directors, being in analogy or onformity with the provisions in the deed, which require that all investments shall be made in the names of at least three trustees. The 68th clause, to which your report also alludes, is confined, as you observe, to an authority to the directors to make regulations and rules with reference to the signatures of notes, bills, and receipts; and the lending of money at the branch banks and agencies,' and the London or head office is not comprehended in those terms. The signing of notes and bills would not, of course, in the present state of the law, be legally, applicable to the London office, but the exclusion of the London office from, or rather its non-inclusion in, any express provision of that nature, so far as the same would be applicable to that office, affords an additional and à fortiori argument that the directors themselves, being in attendance at that office, need not there the power of delegation vested in them by the clause to which I have first alluded, but that they can personally, under the general powers and authorities vested in them by the deed, have the entire management of and control over the affairs and concerns of the society, including the power to sign cheques, &c.' We by no means underrate the importance of these observations. The 125th clause has no doubt been prepared by a careful draftsman, desirous by a general provision to give the fullest powers to the directors in all cases contemplated or not contemplated, and the disposition of the courts has been rather to extend in favour of banks the authority by implication which has been denied in case of other joint stock companies. The decision on the powers of the managers of joint stock companies, however, is so conflicting that the Bank of England, not desiring to raise difficulties, still wish for advice whether the powers of the deed enable the directors of the National Bark to open such an account in the name of the National Bank, and to draw cheques upon it in that name. As it is not the practice of the Bank of England to allow accounts to be overdrawn, it is not probable that the Bank of England would become creditors of the National Bank by reason of over-payments. Still even this might happen, and the Bank of England would probably become holders of bills payable to the National Bank, and endorsed by the directors or by persons authorised by them, and the question would be if the Bank of England would be safe in paying monies or cheques drawn by the directors, or by persons appointed by the directors; whether they would have a claim on the shareholders in the Bank if the account were overdrawn, and whether they would be entitled to hold against the National Bank, and if need be to claim against the shareholders in the National Bank upon bills endorsed by the persons appointed by the directors." Then the opinion is, "From the provisions of the deed of settlement of the National Bank of Ireland, it certainly appears probable that they did not originally contemplate having a bank in London, nor is there any recital of the Bank Act of 1833, which authorises the formation of joint stock banks in the metropolis; but at the same time

Mr. Mundella-continued.

I think the terms of the deed are sufficient to authorise the National Bank to open a banking establishment in London. If they did not carry on any banking business in England prior to the 6th of May 1844, there might be some question under the 7 & 8 Vict. c. 113, whether they can now do so without a charter or Act of Parliament; but upon the whole, and even in the event last suggested, I am of opinion that they may legally carry on a banking business in London, and open and keep a banking account in their own name with the Bank of England. I am also of opinion that they may, subject to the restriction of the Act of 1833 (3 & 4 Will. 3, c. 98), borrow and take up money, and issue securities; see clauses 2 and 125, notwithstanding the 29th clause which seems to provide for the raising of money only by new shares. The mode in which cheques are to be drawn and securities signed, should, I think, be regulated by resolutions of the board of directors, and under secs. 62 and 125, if not under sec. 68, I think the directors possess the requisite powers for this purpose. I think that such resolutions, and the acts done under them, would be binding upon the shareholders of the National Bank, and that the Bank of England would be safe in paying cheques, advancing money, and taking securities in accordance with the resolution of the board of directors of the Bank of Ireland."

509. After receiving that opinion the Bank of England withdrew all objection to the National Bank commencing business in London, did they not? They did.

510. And the National Bank was admitted to London, and to the Clearing House?—Yes.

511. They were originally called the "National Bank of Ireland," and they dropped the words "of Ireland," and called themselves "The National Bank," when they came to London, did they not?-Yes, under a special power in their articles; and it was also admitted by counsel that the change of name could not affect their right of issue or cause any other inconvenience. For prudence sake we took the opinion of counsel upon that, but there was no doubt about it.

Mr. William Shaw.

512. The changing of the name was entirely a question of policy, was it not?-The name was not considered quite consistent for a bank carrying on business in England.

513. You changed the name to make it more acceptable to English people?—Yes.

Mr. Mundella.

514. Have you also a copy of the original deed of settlement of the National Bank of Ireland? -Yes (producing the same).

Chairman.

515. I am not sure that I clearly understand what were the original head-quarters of the National Bank of Ireland?-The head office was always in London.

516. Then what is the meaning of saying that you had no bank in London? -Because we did not carry on business as bankers. We had only a head office where the directors met to superintend and control the general affairs of the bank in Ireland, or elsewhere, wherever it might carry on business. Previously to the Act of 7 & 8 Vict. c. 32, the Bank of England charter ren

Chairman-continued.

dered impracticable our carrying on business in London, even although we had not registered as a bank of issue under the 7 Geo. 4, c. 46, for we could not draw, accept, or indorse bills payable at less than six months after date. We could have been a bank of deposit and discount, but no then existing Act gave us the facility of suing and being sued in the name of a public officer in relation to such business in London, and it was not worth carrying on business to that limited extent. The latter difficulty was removed in favour of then existing banks by the Act of 7 & 8 Vict. c. 113.

517. I think you stated that you were restricted from opening in Dublin; where was your chief place of business?—At first they were restricted in Dublin from issuing, but now there is an Act enabling them to do so. The Act of 6 Geo. 4, only enabled them to carry on banking 50 miles from Dublin, on condition of their not having a house of business in Dublin; but a subsequent Act enabled all bankers to issue even in Dublin, and they do issue in Dublin now. I do not know what the privileges of the Bank of Ireland are, but they must be very limited now, I think.

518. Where were you registered?-We were registered only in Dublin at that time. There was an Act for Ireland of the 6 Geo. 4, for establishing joint-stock banks in Ireland, similar to the Act of 7 Geo. 4, which applied to England, for carrying on banks here. Each of those Acts had a direction that there should be a registration at the Stamp Office in the particular country of the names of all the shareholders and the public officers, &c.; but inasmuch as we did not carry on banking in England, we were only registered at that time in Ireland.

519. Then you did not carry on banking in England at all?-Not at all.

520. Nor in Dublin?-No. 521. Where did you carry on banking?-In all parts of Ireland, except within 50 miles of Dublin.

Mr. William Shaw.

522. Fifty Irish miles?—Very likely.

Chairman.

523. When was the subsequent Act passed of which you spoke which enabled you to carry on business in Dublin?-It was 8 & 9 Vict. c. 37, s. 1: "So much of the recited Act of Parliament of the 21st and 22nd years of the reign of His Majesty King George the Third as prohibits any body politic or corporate erected or to be erected, other than the Governor of the Bank of Ireland, or for any other persons whatsoever united or to be united in covenants or partnership exceeding the number of six persons, to borrow, owe, or take up any sum or sums of money on their bills or notes payable at demand, or at any less time than six months from the borrowing thereof, shall be and the same is hereby repealed; and that from and after the said 6th day of December 1845 it shall and may be lawful for any persons exceeding six in number united or to be united in societies or partnerships, or for any bodies politic or corporate to transact or carry on the business of bankers in Ireland at Dublin, and at every place within 50 miles thereof, as freely as persons exceeding six in number, united as aforesaid, may lawfully carry on the same business at any

place