Chairman-continued.

place in Ireland beyond the distance of 50 miles from Dublin."

524. Previously to the passing of that Act, then, the Bank of Ireland had exclusive privileges in Dublin, similar to those of the Bank of England in London ?-Very similar.

525. And there were no other banks established in Dublin?-None; no joint stock bank was allowed or empowered by Act of Parliament.

526. Were other banks established in Ireland besides the National Bank?-Yes; the Provincial Bank was established before, but the object of that was confined to Ireland, and therefore they could not come to England; neither can they now without reconstituting themselves. They are simply an Irish bank.

527. Are they prevented by their own constitution from doing so?-Entirely so.

528. You do not understand then that there would be anything in the general law that would prevent their coming to London or to England if it were not for their own special constitution?-I am not aware of any such prohibition since the repeal of nearly the whole of the Act of 7 & 8 Vict. c. 113.

529. Have you paid attention to the general question of the rights of the Scotch and Irish banks to come to England?--I do not know that I am justified in saying that I have done so, but in a general way I have made some note of it. Of course the Bank of England charter is strictly limited to England, both in the words and in every sense; and, therefore, I never could quite understand what the argument is against the Scotch banks.

530. Are your firm still solicitors to the National Bank ?—Yes.

531. Then you would naturally have attended more or less to such a question as this?-Yes; I fancied I knew all the law about banking, but every now and then one has to refresh one's recollection upon any particular point. I should tell you that the Act of 7 & 8 Vict. c. 113, is almost entirely repealed; there is only one section which remains, and that section is the section under which we have the facility of suing and being sued. In fact we carry on banking in London at common law, aided by the statute of 8 & 9 Vict. c. 37, and 7 & 8 Vict. c. 113, s. 47, which is the only unrepealed section. That last Act was entirely repealed by the Companies Act, 1862, except as to section 47, which facilitates our suing and being sued, and which section is reenacted by that Act. The 7 & 8 Vict. c. 113, had been previously partially repealed by 20 & 21 Vict. c. 49, s. 12, but not so as to affect the National Bank.

Mr. Goschen.

532. You carry it on under the common law? -I consider that we do, aided by those two

statutes.

Chairman.

533. Under what restrictions do you conceive that the Irish banks are now placed by the now placed by the general law in Ireland, in England, or in Scotland? I do not know what restrictions they are under in Ireland.

534. Under what restrictions are they, except the general restrictions as to not issuing more than a certain amount of notes?-They must

Chairman-continued.

have four depôts for gold, and they must not exceed their authorised circulation of 852,000l. without having a sovereign to represent every 1ỉ. in notes beyond that sum.

535. How is the amount which they are entitled to have in circulation ascertained?-There was an Act of Parliament which enacted, I think, that no bank should increase their issue beyond the amount that they should have on a certain day; and they were obliged to make returns, and get certificates that on that certain day they had a certain amount of issue. The National Bank at that moment had about 761,757 l. of issue, and therefore they retained that; then they also united themselves with two other banks of their own connection, and thereby obtained an increase of 90,5127.; and that makes their total present right of issue 852,2697., without the legal necessity of their having gold to represent it, but beyond that they must have gold at their depôts to the extent of the surplus issue.

536. If they were now to unite with any other bank in Ireland, having an issue, would they be able to increase their issue by the amount of the issue of that bank? Yes; there is a special clause in one of the Acts which enables them to unite with other banks.

Mr. William Shaw.

537. Did you carry on banking business in Dublin before 1844?-No; but we could I think have carried on banking there much in the same. way as the London and Westminster Bank did at one time in London, through the medium of trustees. We could not ostensibly be bankers, because the Act of 6 Geo. 4 restricted us from having a house of business in Dublin as bankers. The consequence was that we could not even open as a bank there.

Chairman.

538. I understand that in the discussion that took place between yourselves and the Bank of England in 1854, your strong point was that you were established in London before 1844?-Not that we were established in London as bankers, but that we were established as a company for that purpose. The words of the Act are these: "More than six persons established on the 6th of May for the purpose of carrying on business as bankers," and I satisfied the Bank of England, as Sir Richard Bethell in his opinion expressed it, that although we were not actually banking, we were established for the purpose of banking, and had only postponed it.

539. Were established, where ?--In England. This is the English Act to which I am referring.

540. Then supposing that you had not been established in England you would have been excluded by that Act?-No doubt, because this Act forbade the establishment of any new bank, if it was a joint stock bank, after the 6th May to carry on business except by letters patent, and therefore we could not have opened a bank in London if we had been established after that date. The first section says: "That it shall not be lawful for any company of more than six persons to carry on the trade or business of bankers in England after the passing of this Act, under any agreement, or covenant of co-partnership, made or entered into on or after the 6th day of May last

Mr. Tatham.

Chairman-continued.

passed, unless by virtue of letters patent to be 3 May 1875. granted by Her Majesty." Our articles of partnership were, of course, of a much earlier date, and therefore we did not come within that section.

541. Then is it to be understood that that was not with reference to your establishing yourselves in London particularly, but with reference to your carrying on business as bankers at all?— Yes, but it was in London solely that we were contemplating carrying on business. We could not have carried on banking as the law then stood, irrespective of that statute, in London, and at the same time have carried on banking at a distance of 65 miles from London as a bank under the 7 Geo. c. 46.

542. When we speak of the Act of 1844, we are in the habit, in Committees like this, of thinking of Sir Robert Peel's great Bank Charter Act. The Act to which you are referring, however, is not the Bank Charter Act, but is an Act for regulating Joint Stock Banks in England?— Yes; there are two Acts of 1844.

543. If you had not been already established before the 6th of May 1844, could you have established yourselves in London by virtue of the provisions of this Act?-No.

544. What do you mean by "prohibted any future Bank"?-The first section prohibits it.

545. The first section, as I read it, prohibits any company of more than six persons from carrying on the trade or business of bankers in England after the passing of the Act, unless by virtue of letters patent, to be granted by Her Majesty according to the provisions of the Act. Therefore, if they complied with the provisions of this Act, there was nothing to prevent their establishing themselves, was there? I think there follow the words of qualification as to the date of their articles.

546. They were not to establish themselves under any agreement made or entered into after the 6th of May last passed, unless by virtue of letters patent to be granted under the Act?— Yes; therefore no new bank could have been established after that Act, except by letters patent.

547. But by letters patent it could have been? -No doubt.

548. Then supposing that you had not been established before the 6th of May 1844, would there have been anything in the general law, as you understand it, to have prevented your getting yourselves established in London by letters patent, in conformity with the provisions of this Act?Of course we had no occasion to consider it, but I apprehend not; we could easily have passed such resolutions as were necessary for the purpose of authorising the directors to obtain such letters patent, if a doubt had existed as to the date and provisions of our articles being sufficient evidence that we were so established.

549. But would there not have been an objection raised by the Bank of England, and could you have surmounted that objection?-I think it is very likely that the Bank of England would have raised an objection.

550. Was the upshot of the controversy between yourselves and the Bank of England this: that if you had not happened to have been established before the 6th of May 1844, you would have been precluded from establishing yourselves under this Act?--The opposition would, if they

Chairman-continued.

had so contended, have gone to a greater length, but whether they would have succeeded, is another question.

551. You do not express an opinion upon that? -Your question perhaps assumes that they had not been established until after the passing of this Act.

552. Or had not been established till after 1844? If they had been established before May 1844 of course they would not have been precluded, but if they had been established afterwards then no doubt they must have come under this Act exclusively, and they would have been under the restriction. They might in the latter supposed case go for a charter; it would apply no more to the National Bank than to any other body of people. The Bank of England could not have opposed the establishing of a bank by charter, I expect, for this Act implies that such grants should be made.

553. I suppose that the Bank of England would object to any bank of issue coming and establishing itself in London if it had the legal power to object?-This Act is not confined to banks of issue; this Act is with reference to all joint stock banks thereafter to be established in England.

554. But do you not recognise a distinction between a bank of issue and a bank not of issue?-Yes; but they were already forbidden from coming to London; no bank of issue in England could have come to London under the Act of 7 Geo. 4; they could not carry on banking and issue except beyond 65 miles from London, and no new bank of issue can now, since 1844, be established.

555. How did the National Bank acquire the privilege of coming to London ?-In one sense, under the common law. The question of the extent of their privilege depends upon their freedom from restrictions on the part of the Bank of England. They might establish themselves as discount bankers, or keeping current accounts, provided they did not have a bank 65 miles from London, under the Act of 7 Geo. 4, and there was nothing to prevent any joint stock bank establishing itself in London as a bank of discount and deposit, &c., which did not avail itself of the Act of 7 Geo. 4, and such joint stock banks were enabled under subsequent Acts to accept bills and to sue and be sued.

556. Setting aside, for the present, all this question about issue, and about coming to London, I understand that before the 6th of May 1844, a joint stock bank might have been established in Ireland, let us say, at Wexford or Waterford?—Yes.

557. And that after the 6th of May 1844, it would also have been legal to establish a joint stock bank at Wexford, or at Waterford?-I apprehend so.

558. But by a different process ?-Under the Act of 6 Geo. 4.

559. Before the Act of 1844, you could have established a bank under one process, and after the passing of that Act you must have established it under a different process, was not that so?—I do not know that. This Act does not apply to Ireland.

560. Is there any Act which regulates the establishment of joint stock banks in Ireland?The Act of 7 & 8 Vict. c. 113, was extended to

Ireland

Chairman-continued.

Ireland and also to Scotland by 9 & 10 Vict. c. 75, the date of 18th July 1846 being substituted for 6th May 1844; but this last Act was partially repealed by 20 & 21 Vict. c 49, which is also almost entirely repealed by "The Companies Act, 1862."

561. Supposing that any body of persons wished to establish a new bank in Ireland tomorrow, how would they do it ?—I do not think that they would take the trouble to go under the Act of 6 Geo. 4, because there would be no advantage in it, inasmuch as they could not be a bank of issue; but of course even now, if it pleased them, they could establish a bank under the Act of 6 Geo. 4, and thereby gain the right of suing and being sued by a public officer. Under that Act they could carry on banking all over Ireland, excepting within 50 miles of Dublin. Then the subsequent Acts would enable them to carry on banking in Dublin, and therefore, in that way, they could be a bank in Ireland under that Act, if they thought fit. There is nothing to prevent them. But the Joint Stock Companies Act now applies to Ireland as well as to England; and therefore I have no doubt that anybody wishing to establish a bank in Ireland at the present time, would establish it under the authority of that Act. They would not take the trouble, I expect, to go under the Act of 6 Geo. 4; but they would go under the Companies Act, either as a limited or as an unlimited bank, as in their direction they thought fit. Since the passing of the Companies Act, 1862, no joint stock bank can be established for carrying on any branch of banking business in any part of the United Kingdom unless it is registered under that Act, or is formed in pursuance of some other Act of Parliament or under letters patent.

562. All the banks in Ireland, which are banks of issue, must have been established before 1844, must they not?-No doubt,

563. Then all of them are, in respect to their power to come to London, on the same footing with the National Bank?-Yes, since the repeal of nearly the whole of the Act of 7 & 8 Vict. c. 113, except that, as I say, their constitutions. will not allow it, they would in law be able to do

so.

Sir John Lubbock.

564. The honourable Member for Sheffield asked you whether the Bank of England and the Clearing-house objected to your coming to London, and you said that the Bank of England did; I think no objection at all was actually made on the part of the Clearing-house, was there?-I should think not. The objection on the part of the Clearing-house, so far as I recollect, was a sort of jealousy against joint stock banks generally; they would not have any business with the joint stock banks at all at one time, and the consequence was that there was a great difficulty in getting a joint stock bank admitted to the Clearing-house. I remember well that 40 years ago, when the London and Westminster and other banks were established, they would not admit them to the Clearing-house.

565. I am not talking of the time when you commenced business, but of 1854, when you proposed to come to London; was there any opposition then on the part of the Clearing-house?—

Sir John Lubbock-continued.

Mr. Tutham.

I do not think that there was any opposition at that moment; I think the principle had been 3 May 1875. admitted at that time.

566. As regards the Act of September 1844, I think I understood you to say, that in order to claim the right to come to England under that Act, it was not only necessary that the bank should have been established before a particular date mentioned in the Act, but that it should have been established for the purpose of banking in England; and that you based your claim upon the ground that by your original constitution you were intended to bank in England?-We could not otherwise have come to London and have had the advantages of that Act, which practically are absolutely essential to the business. For instance. Clause 47 enables you to sue and be sued in the name of a public officer; and practically, without that we could not carry on business, though theoretically we might.

567. Practically, you think that you could not have come but for that Act?-No, because we have no power to sue and be sued but under that Act.

568. I think that by 8 & 9 Will. 3, c. 20, s. 28, it was enacted that during the continuance of the Corporation of the Governor and Company of the Bank of England no other bank or any other corporation, society, fellowship, company, or constitution in the nature of a bank should be erected or established, permitted, suffered, countenanced, or allowed by Act of Parliament within this kingdom? That is the Act of 1697. There was a previous Act of incorporation, 5 Wm. & Mary, c. 20, s. 20, which was the year 1694; that was modified or extended afterwards by an Act of Geo. 3, I think.

569. Will you have the kindness to tell me when it was modified?—I think you will find that it was modified or extended in the reign of Queen Anne, and again by an Act of 39 & 40 Geo. 3. The Act of 3 & 4 Will. 4, c. 98, "An Act for giving to the Corporation of the Governor and Company of the Bank of England certain privileges for a limited period," recites 39 & 40 Geo. 3, c. 28, and that in fact renewed the charter: "And whereas it was by the said recited Act declared and enacted that the said Governor and Company should be and continue a Corporation with such powers," and so on; and it then recites 7 Geo 4, c. 46.

570. Then you consider that the prohibition to establish a bank in England which was enacted by the Act of Will. 3, was put an end to by the Act of 1833?-It was put an end to by the Act of 7 Geo. 4. I believe you could always have carried on banking in London, notwithstanding the Bank of England Charter, by any number of persons not exceeding six, and you could have issued notes of course in any part of England either in London or elsewhere. It was not the custom to do it in London, but there was nothing in the law to prevent six persons uniting in being bankers in London and being a bank of issue.

571. Supposing that they were more than six in number, they were prohibited by the Act of Will. 3, were they not?-The Act of 5 Will. & Mary, c. 20, s. 20, and the Act of 8 & 9 Will. 3, c. 20, s. 28, incorporated the Bank of England, but contained no prohibition. The Act of 6 Anne, c. 22, s. 9, is the first Act which forbade a society or partnership of more than six in number being

Mr. Tatham.

Sir John Lubbock-continued.

a bank of issue. This was practically such a pro3 May 1875. hibition, because more than six could not accept bills; but they could always have been a bank of issue, provided that their partnership did not exceed six persons in number.

572. Under what Act do you consider that the prohibition has been removed?-Under 7 Geo. 4, c. 46, the Act of 1826; but that Act only went to a distance beyond 65 miles from London.

573. Therefore under that Act no joint stock bank could come within 65 miles of London ?— Not for the convenience of banking; they could not accept bills at less than six months' date, and they could not sue and be sued in the name of a public officer.

574. Then, in fact, you base the right, as regards London, not upon the Act of 1826 but upon the Act of 1833?-Our particular bank does not go under the Act of 7 Geo. 4, because that contained an express prohibition against having a house in London. How far that would operate in the present state of the law I am not prepared to argue; but I am quite clear that at that moment we could not have had a house in London, because the Act of 7 Geo. 4 expressly forbade any banking establishment under it having a house of business in London. The later Act did not prevent us from carrying on banking at common law; and the 7 & 8 Vict. c. 32, and 7 & 8 Vict. c. 113, give us power to accept bills, and to sue and be sued; and therefore, at this moment, we do not bank under the Act of 7 Geo. 4. Although our articles contemplated that we should do so, we never have done so; it was not convenient.

575. I am putting questions, not with reference specially to your own bank, but with reference to the general law; and I ask, under what Act you consider that the restrictions imposed upon banking by the Act of Will. 3 were relaxed? I now understand you to say that you consider that they were relaxed by the Act of 1833? No, the Act of 7 Geo. 4 relaxed the statutes of Anne.

576. That is the Act of 1826 ?-Yes, that was the one certainly. I should say that the Act of 1826 enabled them, but 7 & 8 Vict. c. 32, expressly authorises any society or partnership exceeding six persons carrying on business as bankers in London, or within 65 miles, to draw, accept, or endorse bills of exchange, not being payable to bearer on demand.

577. But you do not contend, do you, that the Act of 1826 gave a joint stock bank power to come to London?-No, it expressly prohibited the doing of the two things at once.

578. Therefore the Act of 1826 did not allow you to come to London ?-Yes, it would, because we were not carrying on the business of banking beyond the 65 miles.

579. Then you say that the Act of 1826 did allow you to come to London ?-It did not allow us to come to London, but it did not prohibit so long as we did not avail ourselves of that Act.

580. Then it was the Act of 1833 which allowed you to come to London ?-7 & 8 Vict. c. 32, facilitated our doing so.

581. But that Act only applied to your own bank; you do not base a general claim upon that Act, do you?--Yes. I should say that any bank would be in the same position. After all, the only restriction in the Bank Charter of

any

Sir John Lubbock-continued. importance upon bankers was that of their not being able to draw, accept, or endorse bills of exchange. The inability to sue and be sued cannot be considered a restriction under the Bank Charter; it was a common law difficulty which attaches to all incorporated societies.

582. Then, do I understand you to say that,

in your opinion, a bank of issue could not have come to London until 7 & 8 Vict. c. 32 was passed?-If they were existing elsewhere, such, for instance, as the Provincial Bank of England, which was a bank of issue, they could not come to London, because they were acting under the Act of 7 Geo. 4, which expressly prohibited their coming to London. When they did come to London, they had to relinquish their issue.

583. I understand you to say that it is not the Act of 1826, because that expressly prohibits a bank of issue from coming to London; under what Act is it that you consider yourselves justified in coming to London as bankers?—The Act of 1826 prohibited banks availing themselves of the Act of 7 Geo. 4; but you might be a banker and not avail yourself of the Act of 7 Geo. 4. A joint stock bank could not practically come to London, because they would not have power to sue and be sued, except under that Act.

584. But the Act of 7 Geo. 4 clearly did not allow a joint stock bank of issue to come within 65 miles of London ?-It did not.

585. By what subsequent Act was a joint stock bank of issue allowed to come within the 65 miles? It could not come to London unless it abandoned being a bank of issue, and then it would come directly under the Acts that we are now upon.

586. But the National Bank is a bank of issue, and has come to London, and I am asking you under what Act of Parliament you claim the right to come?-We are not a bank of issue in England, within the limits of the Bank of England Charter.

587. Under what Act do you, or any of the Scotch banks, claim the right to come to England?-Under the Act of 7 & 8 Vict., or rather under the common law, aided by that statute, we claim; but I am not prepared to reply on behalf of the Scotch banks on what ground they base

their claim.

588. Then do I understand you that you consider that, until the Act of 7 & 8 Vict. was passed, you could not have come to London ?— We could not with any good purpose, because we could not have accepted bills, and until 7 & 8 Vict. c. 113 was passed, we could not have had the power of suing and being sued.

589. But the Act of 7 & 8 Vict. never repealed in any way the Act of Will. 3?-The Acts of Will. 3 incorporated but gave no other exclusive privilege to the Bank of England, but the Act of 7 & 8 Vict. repealed partially the Bank Charter of the reign of Queen Anne. The Act of 7 & 8 Vict. c. 32, s. 26, has a most important bearing upon the Bank of England Charter, as enabling joint stock banks in London to accept or endorse bills of exchange other than payable to bearer on demand. That was a repeal of the Bank Charter pro tanto.

Mr. Anderson-continued.

some conflict between the two opinions that you received? There was a temporary conflict in this way: Sir Richard Bethell, when the case was first put to him, was about to give a very positive opinion to the contrary, and I then begged that he would postpone his opinions until he had heard my arguments; and when I had given him my arguments he flattered me by telling me that I had completely converted him, and about four months afterwards he was completely altered in his view, and he then gave the opinion which he has written.

591. It was the opinion of Sir Richard Bethell, was it not, that you were entitled to come to London, but that you were not entitled to establish yourselves anywhere in England beyond the 65 miles?-We could not do the two things together; we could do either the one or the other, but not both.

592 The other opinion was the opinion of Mr. Welch, was it not?-Yes.

593. Did he not give you an opinion that you might establish yourselves anywhere 65 miles beyond London? So we could; but not at the same time that we banked in London, because at that time the Act of 7 Geo. 4 would have prohibited it.

• Mr. Mulholland.

594. You said that unless your bank had originally purposed coming to London you could not have come under 7 & 8 Vict. c. 113, which you said had afterwards been repealed?-7 & 8 Vict. c. 113, is all repealed excepting one section.

595. So that there is nothing in that Act now to prevent any Irish bank coming to London, even if it had been its original purpose not to come to London ?--I apprehend not, but of course it cannot facilitate their doing so, as it does us under the unrepealed section.

596. Your attention, I do not think, has been called to the Act of 1833, in which there is a special clause permitting joint stock banks, which do not issue in England, to come to London?3 & 4 Will. 4, c. 98, s. 3, is as follows: "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 thirty-ninth and fortieth 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, but no other or further exclusive privilege of banking: And whereas doubts have arisen as to the construction of the said Acts, and as to the extent of such exclusive privilege, and it is expedient that all such doubts should be removed: Be it therefore declared and enacted, that any body politic or corporate, or society, or company, or partnership, although consisting of more than six persons, may carry on the trade or business of banking in London, or within sixty-five miles. thereof, provided that such body politic or corporate, or society, or company, or partnership do not borrow, owe, or take up in England any sum or sums of money on their bills or notes payable on demand, or at any less time than six

Mr. Tatham.

Mr. Mulholland-continued. months from the borrowing thereof, during the continuance of the privileges granted by this Act to the said Governor and Company of the 3 May 1875. Bank of England." But the Act of 1844 enables them to do that, and that proviso is, in fact, abrogated by 7 & 8 Vict. c. 32, s. 26, by which it is enacted: "That from and after the passing of this Act it shall be lawful for any society or company, or any persons in partnership, though exceeding six in number, carrying on the business of banking in London, or within sixty-five miles thereof, to draw, accept, or endorse bills of exchange, not being payable to bearer on de

mand."

597. But that proviso is a proviso against issuing notes in England generally; it is to permit any joint stock banks, which do not issue notes in any part of England, to come to London ? -Anybody could do that before this Act was passed, but the last Act facilitated their business there.

Chairman.

598. I think your attention has not recently been specially directed to this question, and to the examination of these different Acts, which are rather complicated ?-If I understood the question, I think I could answer it.

Mr. Mundella.

599. But you were called here merely to speak to specific facts?-Yes.

Mr. Mulholland.

600. However, you have come to the conclusion that any Irish bank might establish a house in London if there was nothing in its original charter to prevent it? That is my impression, certainly, in the present state of the law.

Sir Graham Montgomery.

601. When did you enter the London clearing house?-I forget whether we did it before we opened as a bank in London. We had a good deal of business in Ireland, and we always cleared through Barnetts'.

602. At the time you entered the London clearing house, was there any disinclination on the part of the London banks to admit you?—I do not think that there was. When they found that the Bank of England did not oppose us as a bank, I do not think they opposed us at the clearing house.

603. If there had been any doubt as to your power of having a branch in London and retaining your note circulation in Ireland, the Bank of England and the London bankers would have hesitated to admit you to the clearing house,. would they not?-I confess that I should have been very much surprised if they had, because I do not understand what they could possibly have to do with the question, any more than if we were a bank of issue in Spain.

604. Your impression is that the Scotch banks, unless they have anything special in their constitution to prevent them from having branches in London, are probably in the same condition as your bank, with reference to this question?-I am ignorant of any argument to the contrary; in fact, I have not studied it; but I am not prepared to say that they are not perfectly at liberty to do so.

605. You know of no Act of Parliament which would prevent their doing so?---I do not.