Appendix, No. 11.

PAPER handed in by Mr. Du Bedat, 7 June 1875.—(In answer to Question 3090.)

Appendix, No. 11. CIRCULAR of 21st April 1870.-CHARGES to be made by BANK of IRELAND and BRANCHES, by Order of Board, on and after 1st May, on the following:

Appendix, No. 12.

PAPER handed in by Mr. Du Bedat, 7 June 1875.-(In answer to Question 3349.)

Bank of IRELAND POST BILLS outstanding at the following Periods:

Appendix, No. 12.

RETURN of the AVERAGE ISSUES of BANKS in Ireland, as published, in each November from 1846 to 1874.

Bank of Ireland

3,738,428

4,431,000 3,274,350 2,907,925 2,678,075 2,740,600 2,512,525 2,843,000 3,054,625 3,246,650 3,391,025 3,559,200 3,509,250 3,367,650 3,586,400 3,295,000

Appendix, No. 13.

PAPER handed in by Mr. G. Readman, 10 June 1875 (in answer to Question 3624.) Appendix, No. 13.

CASE for the CLYDESDALE BANKING COMPANY.

FOR THE OPINION OF COUNSEL.

THE Clydesdale Banking Company was established and commenced business in 1888; and by contract of copartnery, executed by the partners in that year, they formed themselves into a joint stock banking company for "carrying on the business of banking in all its branches and departments in Glasgow "and such other towns, cities, and places in Scotland" as the ordinary directors might think fit, and that under the rules and articles, stipulations and conditions therein specified, a copy of the contract is herewith submitted.

The fifth Article of the Contract (page 11) provides that the trade and business of the company should consist of banking in all its branches, and then specifies in detail the contemplated operations of the bank, such as issuing notes, receiving deposits, making advances on cash credits, investments, &c.

The 23rd Article (page 30) confers power on the ordinary directors "to establish branches or agencies of the company in such towns, cities, or places in Scotland, or elsewhere, as they may deem advantageous to the interests of the company with such managers or agents, clerks and other servants, and either with or without local boards of management, and under such regulations, restrictions, and conditions as the said ordinary directors may determine upon."

The directors have had under consideration the expediency of establishing a branch or agency with a local board of management in London, provided this can be accomplished without bringing them within the operation of the English Joint Stock Bank Act (7 & 8 Vict. c. 113 (5th September 1844), and the Extension Act to Scotland (9 & 10 Vict. c. 75; 26th August 1846), but before taking any steps in the matter they are desirous of being advised by counsel, whether there are any legal impediments to their doing so, either under the common or statute law of England, or under their contract of copartnery.

The memorialists assume that under the common law of the kingdom it is competent for any party to carry on the business of banking in any part of the kingdom, and that consequently any restrictions which may exist must be imposed by statute. They therefore propose shortly to advert to the statutes which appear to them to bear on the subject; but counsel will please to understand that while it is a principal and leading object of these statutes to provide for the issuing of notes, and for the regulation thereof, it is not in the contemplation of the memorialists to issue their notes in England, but merely to carry on ordinary banking business, such as transacting business and exchanges in London connected with the head office and branches in Scotland, receiving deposits, negotiating letters of credit, discounting hills, &c., lending money on securities, &c.

The statute 39 & 40 Geo. 3, c. 28 (28th March 1800), recites the previous statutes applicable to the exclusive privileges of banking conferred on the Bank of England, and contains a declaratory clause (Section 15) that no company with more than six partners in England shall borrow, owe, or take up any money on their bills, or notes payable on demand, or at any less time than six months during the continuance of the Bank of England's privilege of exclusive banking which could not be withdrawn prior to 1st August 1833.

The statute 7 Geo. 4, c. 46 (26th May 1826), repeals the Bank of England's privilege of exclusive banking in England in all places exceeding sixty-five miles from London, and authorises companies, though consisting of more than six persons, to carry on business as bankers in England beyond sixty-five miles from London on the conditions therein specified, the most important of which are that such company shall not have a place of business in London, or within sixty-five miles of it, and that their bills and notes payable on demand shall not be payable at any place within that distance.

The statute of 3 & 4 Will. 4, c. 98 (29th August 1833), passed on the expiry of the Bank of England's exclusive privilege, was directed to confer upon the Bank of England "certain privileges for a limited period under certain conditions." These exclusive privileges were to terminate on one year's notice being given after the expiration of 10 years from 1st August 1834, on the conditions therein specified being complied with. The second section of that statute enacts that no company having more than six partners shall make or issue in London, or within 65 miles thereof, any bill, promissory note, or engagement payable on demand, but providing that nothing contained in that Act, or in the Act of Geo. 4, should prevent any company carrying on banking business at a greater distance than 65 miles from London, and not having any establishment as bankers in London, or within 65 miles thereof," except as hereinafter mentioned," to issue their bills or notes payable on demand, or otherwise, at the place at which they should be issued, being more than 65 miles from London, and also in London, and to have an agent in London or other place at which the bills should be payable," for the purpose of payment only, such bills

Appendix, No. 13. not being for less than 5 l." Then follows a declaratory section (Section 3) which proceeds on the preamble that the intention of the Act was that the Bank of England should continue to enjoy the exclusive privileges of banking given by the recited Acts of Geo. 3 & Geo. 4, or any prior or subsequent Acts; that doubts had arisen as to the construction of these Acts, and as to the extent of such exclusive privilege, and that, it was expedient that such doubts should be removed; therefore it was declared and enacted,

7 & 8 Vict. c. 322.

that any com

pany, although consisting of more than six persons, might carry on the trade or business of banking in London, or within 65 miles thereof, provided that such company do not borrow, owe, or take up in England any sum or sums of money, or their bills or notes payable on demand, or at any less time than six months from the borrowing thereof, during the continuance of the privileges granted by the said Act to the Bank of England."

The Statute 7 & 8 Vict. c. 32 (19th July 1844), was passed for regulating the issue of bank notes, and for continuing to the Bank of England the privileges of exclusive banking, with the alterations, and upon the conditions therein contained. After providing for the separation of the issue of notes department from the general banking business of the company, the Act provides (Section 10), that no person other than a banker who, on 6th May 1844, was lawfully issuing his own bank notes, should issue bank notes in any part of the United Kingdom. The 11th section provides, that after the passing of the Act it should not be lawful for any banker to draw, accept, make, or issue in England or Wales, any bill of exchange or promissory note, or engagement for the payment of money, payable to bearer on demand, or to borrow, owe, or take up in England or Wales, any sums or sum of money on the bills or notes of such banker, payable to bearer on demand, save and except that it shall be lawful for any banker who, on 6th May 1844, was carrying on the business of a banker in England or Wales, and was then lawfully issuing there his own bank notes, under the authority of a license to that effect, to continue to issue such notes to the extent, and under the conditions therein mentioned. The Act then contains special provisions regarding the issue of banks whose right to issue was reserved.

The 21st section requires every banker in England and Wales, who was then carrying on or should thereafter carry on business as such, to make a return to the Commissioners of Stamps and Taxes in London, on or within 15 days after the first day of January in each year, of the name, residence, and occupation of the partners of the company, firm, manager, &c.

The 26th section enacts that, after the passing of the Act, it should be lawful for any company, though exceeding six in number, carrying on the business of banking in London, or within 65 miles thereof, to draw, accept, or endorse bills of exchange, not being payable to bearer on demand, notwithstanding of anything to the contrary in the said Act of 3 & 4 Will 4, c. 92, or in any other Act.

The Acts before recited relate to the exclusive privileges of the Bank of England. Those now to be adverted to apply to the regulation of Joint Stock Banks in the United Kingdom.

The first and leading statute is that of 7 & 8 Vict. c. 113 (5th September 1844), intituled "An Act to regulate Joint Stock Banks in England," the first section of which enacts "that it should 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 copartnership made or entered into on or after the sixth day of May last passed, unless by virtue of letters patent to be granted by Her Majesty, according to the provision of this Act: but nothing herein contained shall be construed to restrain any such company established before the said sixth day of May for the purpose of carrying on the said trade or business of bankers in England from continuing to carry on the same trade and business as legally as they might have done before the passing of this Act, until Letters Patent should have been granted to them severally on their application, as thereinafter provided, to be made subject to the provisions of this Act."

It will be perceived that the date of 6th May 1844, referred to in the last Act renewing the Bank of England's privileges, is the date after which, in terms of the Joint-Stock Bank 7 & 8 Vict. c. 113. Act, no company shall be allowed to carry on the business of bankers under any agreement made after that date, unless under Letters Patent granted in terms of the Act.

7 & 8 Vict. c. 113.

The prohibitory clause of the Statute of 1844 is quite specific, that no company shall carry on business as bankers in England after the passing of the Act unless (1) their contract of copartnership was dated before 6th May 1844, or (2) under Letters Patent issued by virtue of the Act. But the question arises whether this prohibition had the effect of preventing a Scotch bank, established before 6th May 1844, under a contract which expressly contemplated the establishment of branches elsewhere in the United Kingdom, establishing a branch or agency in London or elsewhere in England.

The saving clause which immediately follows the prohibition does not appear to be very logically framed, inasmuch as it provides that nothing contained in the Act should be construed to restrain any company established before 6th May 1844, for the purpose of carrying on the business of bankers in England "from continuing to carry on the same trade and business, as legally as they might have done before the passing of this Act," until Letters Patent should have been granted to them as therein provided, if they chose to apply for such Letters Patent. The expression" continuing" would appear to imply that the Act intended to reserve to banking companies such banking business only as they both possessed the right to carry on, and were actually carrying on at 6th May 1844, whereas the expression "as legally as they might have done" seems to imply that it intended to reserve to them an such business as at and prior to 6th May 1844, which they had the right to carry on, whether they were actually carrying it on at that date or not. This want of consistency in

the