Mr. Goschen-continued. ment of any bank in any part of England with more than six partners.

61. Then at that point the Scotch could not have come to London?-The Scotch could have come to the provinces, but not to London, because no joint stock bank could under that Act have come within 65 miles of London. Then the Act of 1833 followed, and by Section 3 of that Act it was enacted: "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 months from the borrowing thereof, during the continuance of the privileges granted by this Act to the said Governor and Company of the Bank of England." It is perhaps proper to explain, with reference to this Act, that the Government of 1826 considered that the exclusive, privileges of the Bank of England applied to every description of banking, and it was on that idea that the Government asked the Bank of England to waive their privileges in part by consenting to the establishment of joint stock banks outside of the 65 mile circle, which the bank rather reluctantly did; and then there followed the establishment of several joint stock banks under the authority of the Act of 1826. The Bank Charter expired in 1833, and a new negotiation ensued between the Government of the day and the Bank of England, which resulted in the discovery by the Government that the interpretation put by the Bank of England upon its exclusive privileges was a great deal broader than the opinion of the law officers of the Crown confirmed. That led to a great deal of discussion and correspondence between the Government and the Governors of the Bank, resulting in the Act of 1833, which was really intended to declare what the law then was and had always been. Under its provisions any body politic or corporate, or society, or company, or partnership, might come to London, provided they did not issue any bank-notes within England.

62. You explained to the Committee just now, that you did not contend that the Scotch could come to London before this Declaratory Act was passed?-Certainly not, under the Act of 1826.

63. Then your point is this: that by the Declaratory Act, which was to clear up doubts, you

Mr. Goschen-continued. gained a privilege which you had not got, and which it was never contended that you had got before the Declaratory Act was passed?-If the privilege exists at all, it existe, no doubt, under this Act of 1833, so far as statute is concerned.

64. But this Act of 1833 is, as you have explained to the Committee, rather a declaratory than an enacting Act, is it not?-It is a Declaratory Act, because the Government were being pressed by the Bank of England to give an interpretation to the privileges of the Bank which the Government were advised was not a sound interpretation, and that was the reason of the Act.

65. Your contention is that under the Act of 1826, and previously to this Declaratory Act, it was clear that, as far as Scotland was concerned, the Scotch banks could not come to London to issue notes ?---To London they could not; but to the provinces they could, under the Act of 1826.

66. But when the Declaratory Act, which was only to remove doubts and to explain the law, was passed, the Scotch gained a privilege which it had never even been contended that they had got before?-That was so; but I must rather object to its being put as a privilege to the Scotch banks; it was a privilege to the whole world. Before the Act of 1833, no bank could have come to London, French, German, or any other; it was, till then, believed to be impossible to establish a bank in London with more than six partners.

67. Still, the Scotch banks are admitted, as I understand you, by the insertion of the words "in England"?-I do not think that the insertion of the words "in England" makes much difference in the clause. Though it were read without the words "in England," the result would practically be the same; because what the Act did was to declare that, for the future, it should be open to all banks, English or foreign, Scotch or Irish, to establish themselves in London with more than six partners.

68. But this clause practically excludes the English Banks of Issue, does it not?-No; the Act which excludes the English Banks of Issue is the Act of 1826.

69. Then that restriction was not removed by the Act of 1833?-It was not, and it still exists.

70. What I want to understand from you is this: whether the Act of 1833, which was a Declaratory Act, removed, as far as the Scotch banks were concerned, the prohibition to come to London, but did not remove it as regards the Banks of Issue in England?-That was so.

71. And that was the effect of an Act intended, as you say, to clear up doubts, but not to make a change in policy?-I beg your pardon; if I have led the Committee to suppose that that was my view, I must have expressed myself inaccurately. I did not mean to say so. On the contrary, the extension to London of the right which had previously been extended to the provinces was a matter of express stipulation between the Government and the Bank of England; it was a further inroad upon the privileges of the Bank of England. The Government applied to the Bank, and proposed that the Bank should waive what was understood to be a privilege; the Bank of England were very unwilling to do so, and that led to the Government consulting the law officers of the day, and they were told that what the

enje tlest to, lience the saweng which was not intender menur

a difenster, out to confer & Joe The ork at the two gream" ea f his on ơn see that hey are seth tentaminum. wir macting: "And whereas be utentura * hat de Goremor and ComLanA ve barve A Ingland shou.d, luring “le jemet bija Aet Cubject, neverthetée, i «Ich roster when se je deverbed in this Act, continue awud and ejer ail the exclusive privlezen nť yantoja git be the said recited Act of he 1... uth and fortieth years of the reign of his Woesty King George the Third afrol, a te ringtel ng the recited. Act of the sementa pear ate Majesty King George the F

grur or subsequent Act or Acts of Partia ut no other or further exclusive privilege sanking, And whereas doubts have arisen as e the cnetruction of the said Acts and as to he extent of such exclusive privilege, and it is expedient that all such doubts should be removed, ne it herefore declared and enacted." Does not the language of that section look as if this narticular section, at ail events, under which the Setch claim that they can come to London, wis a section to remove doubts, and to remove dights onte? - No doubt it does; but it was the result, as I have already explained, of a negotiation be tween the Government and the Bank, the necofiation having for its object the extension of the prege of the formation of joint stock banks. No joint stock banks then existed in London or could exist: the Government wished that joint stock banks should exist in London, and accordingly the power given by this Act was given for the very purpose of limiting the priviJeges of the Bank of England.

73. But would not that apply to the other lana limiting the privileges of the Bank of England, and not to this one, the preamble of which states that it was to remove doubts which were existing?--I cannot put that interpretation

upon it.

74. Does the whole Scotch case rest upon this elque? The whole Scotch case, as regards London rests, I think, upon that clause, except in the case of the Royal Bank of Scotland, which has a perial Act.

Mr. Mundella.

75. That is to say, upon Clause 3 of the Act of 1233- Upon Clause 3 of the Act of 1833.

Sir John Lubbock.

76. You have put in a very interesting table in your Report, showing the amount of the average circulation, during a certain period, of the Scotch banks; will you be able, and have you any objection, to furnish the Committee with the average deposit during the same period, so that the table may be complete?-Certainly. All the Scotch banks publish their accounts annually; so that it will be a very simple matter to furnish the Committee with any table of that kind. I should also say that the Scotch banks, in the view of being represented before this Commuttee, have been collecting statistics on various ponts, which are not complete, but which Mr. Davidson, of the Bank of Scotland, will hereafter Iny before the Committee.

77. The Scotch banks do publish their accounts,

on their one and notes Mule on jemand? Carany, a stand: ut I mink the words following show, in ne aterran fhe Act, What is it re v 1. It mes on to 7. Per at any less time than six nets im he to wing thereof luring the finance f me pavileges granted his Act to the ai Comemor and Company of the Bana f England. Nw.it eculd be ao intertierence with * the privileges granted by the Act to the sui Governor and Company of the Bank of England." that banks established in Sectiand armatei notes there, and took up money on these actes.

20. So as a matter of fact. If there are Scotch notes in England sue by the Ser ten banks, they owe money or those notes, do they not?-But the Sect banks do not issue blus or notes in Engiand, and there re they do not borrow, → owe, or take up money in England, and consequently they do not in any degree interfere with the privileges of the Bank of England.

81. Then your centention is, that because such netes are not issued in England, they are not owed?-They are owed wherever they go: but we do not borrow, owe, or take up money in England, and never di; we owe the money to the holders, who might be in France as readily as in England.

82. This clause also expressly recites, does it not, that the privileges granted to the Bank of England by the Act of 1926 are to continue, and that this clause is merely explanatory of those privileges?—Yes.

83. Can you state whether, in the negotiations which took place at the time, the question of the Scotch banks was ever discussed?—I am not aware. I do not suppose that the Scotch banks at that time ever thought of going to England; but I think it not improbable that that may have been in the contemplation both of the Government and of the Bank of England at the time, for in the correspondence which took place in 1826, allusion is made, over and over again, to the Scotch banking system as the system which it was the wish of the Government of the day to introduce into England. In short, it was the avowed object of the Government to introduce into England a system of banking which they commended as the system then in force in Scotland.

84. That is to say, so far as regards the existence of joint stock banks; but the Government, I think, certainly did not think of introducing the Scotch system as regards bank notes?-I think that between 1826 and 1828 the Scotch banks might legally have circulated their own notes of any amount in England

outside

Sir John Lubbock-continued. outside the 65 mile circle, because, if you refer to the Act of 1828, 9 Geo. 4, cap. 65, entitled, "An Act to restrain the Negotiation in England of Promissory Notes and Bills under a limited Sum issued in Scotland or Ireland," you will see that it prohibits, for the first time, the issue in England of Scotch or Irish notes under 57., which necessarily implies a right on the part of the Scotch and Irish banks, if they chose, to circulate 57. notes and upwards in England. Of course that was terminated by the Act of

1844.

85. Up to the Act of 1826, I think you admit that the Scotch banks could not have come to England?-No bank with more than six partners could have come to England, as the law was then understood.

86. The Act of 1826 is expressly called, "An Act for the better regulating Co-partnerships of certain Bankers in England," is it not? That is the title of it.

87. Do you contend that an Act with such a title as that is to be read as an Act which relieves the Scotch banks from their disabilities under a previous Act of Parliament?-I do not think that the title of an Act has much to do with its enacting parts; for example, the Bank of England was established under an Act imposing, according to its title, duties upon beer.

88. Does not the first clause of the Act of 1826 go on to say that the banks which are authorised to be established under this Act should have the whole of their banking establishments, and carry on their business as bankers, at any place or places in England exceeding the 65 miles from London ?-That is so.

89. I need hardly ask you whether the Scotch banks have the whole of their banking establishments in England; are they not, therefore, precluded under that clause from coming within the operation of the Act?-The Act of 1826 neither precluded the Scotch banks from coming to London nor permitted them to come.

90. I thought you rested your case very much upon the Act of 1826?-Not at all. The Scotch banks did not avail themselves of the privileges of the Act of 1826 in any shape or form.

91. Then you admit that the Scotch banks could not have come to London until the year 1833? Not to London. They could have come to the provinces beyond the 65 mile radius in 1826, under the Act of 1826, but they did not do so.

92. Do I rightly understand you to contend that under the Act of 1826 the Scotch banks might have come to England, provided that they did not come to London ?-That is what I submit to the Committee.

93. But the Act expressly provides that joint stock banks may be founded, provided they "have the whole of their banking establishments and carry on their business as bankers at any place or places in England exceeding the distance of 65 miles from London"; surely, that implies that a joint stock bank may be founded under this Act, but that they must neither be out of England nor must they be within the 65 miles of London? -The Act says, "shall have the whole of their banking establishments and carry on their business as bankers at any place or places in England." I think that means that they shall have the whole of their banking establishments in England at a distance of more than 65 miles

Sir John Lubbock-continued. from the metropolis. I do not think it has any other meaning.

94. But the Scotch banks have not all their places of business in England?-Under this Act, if they had availed themselves of the privilege they must have had all their English establishments at a distance of 65 miles from London; they could not have come within the 65 miles radius.

95. Then you mean to say, that when the Act says, "the whole of their banking establishments," it merely means "their English banking establishments"?-I think so.

96. Surely it is obvious that where it says "the whole of their banking establishments," it does include all their banking establishments; to say that the offices which are in England must be in England would be tautology, would it not?-They must be beyond 65 miles from London.

97. It does not say that they must be beyond. 65 miles from London; it says that they must be in England beyond 65 miles from London ?-The clause is in these words: "Provided that such body politic or corporate, or persons united in covenants or partnerships, exceeding the number of six persons in each co-partnership, shall have the whole of their banking establishments and carry on their business as bankers at any place or places in England exceeding the distance of 65 miles from London." I read that as meaning that the whole of their English establishments. shall be at a greater distance than 65 miles from London. But very little really turns upon the Act of 1826, because that is not the Act under which any Scotch, Irish, or foreign bank has come to London; the Act under which they have come is the Act of 1833. That Act, I think, is really the Act which for the first time permitted the establishment of joint stock banks in London. It is immaterial whether they were Scotch, Irish, or foreign; and upon the provisions of the Act of 1833 would I alone rest the right of any foreign bank to come to any part of England. I think the Act of 1826 is merely valuable as illustrating the progress of legislation. In my opinion, the Scotch banks between 1826 and 1828 might, if they had thought proper, have come to any part of England outside of the 65 miles circle and have circulated their notes, even the smaller notes. In the year 1828 there was an express prohibition of the issue in England of Scotch or Irish notes under 51. Therefore they might have gone on between 1828 and 1833 circulating 51. notes and upwards, and carrying on banking business. Then in 1833 they might have come to London; but if they came to London they were put in precisely the same position as the English provincial banks of issue are in now; that is to say, they must have given up the privilege of circulating notes within England.

98. Then your contention is that the words " in England" in this clause are really misplaced, and that when the clause speaks of banks carrying "on their business at any place or places in England," what is really meant is banks carrying "on their business in England at any place or places," because this clause actually states that the whole of the banking establishments (without any limitation at all) are to be in England, and at a distance not exceeding 65 miles from London ?-I quite see the point that is made of that, and I confess that my attention had not

Mr. Goschen-continued.

Bank thought they were entitled to was not what they were really entitled to. Hence the passing of this Act, which was not intended merely to clear up a difficulty, but to confer a new right. 72. If you look at the two preambles of this clause, you will see that they are both declaratory, and not enacting: "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 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." Does not the language of that section look as if this particular section, at all events, under which the Scotch claim that they can come to London, was a section to remove doubts, and to remove doubts only?-No doubt it does; but it was the result, as I have already explained, of a negotiation between the Government and the Bank, the negotiation having for its object the extension of the privilege of the formation of joint stock banks. No joint stock banks then existed in London or could exist; the Government wished that joint stock banks should exist in London, and accordingly the power given by this Act was given for the very purpose of limiting the privileges of the Bank of England.

73. But would not that apply to the other clauses limiting the privileges of the Bank of England, and not to this one, the preamble of which states that it was to remove doubts which were existing ?--I cannot put that interpretation upon it.

74. Does the whole Scotch case rest upon this clause?-The whole Scotch case, as regards London, rests, I think, upon that clause, except in the case of the Royal Bank of Scotland, which has a special Act.

Mr. Mundella.

75. That is to say, upon Clause 3 of the Act of 1833 ?-Upon Clause 3 of the Act of 1833.

Sir John Lubbock.

Sir John Lubbock-continued.

but not all at the same dates, do they?-No; but we can tell year by year what the amount is at the dates of their respective balances.

78. Referring to Clause 3 of the Act of 1833, which we have just been discussing, I think I understood you to say that the words "in England," in your opinion, made no difference in the clause?--I did not mean to say that. As I read the clause, I do not know that it would make any very material difference; but I read the clause with the words "in England" in it, and take any advantage which results from their being there.

79. The words before that are, "do not borrow, owe, or take up, in England, any sum or sums of money on their bills or notes payable on demand"; do not the Scotch banks owe the money on their bills and notes payable on demand?— Certainly, in Scotland; but I think the words following show, in the interpretation of the Act, what its scope was. It goes on to say, "or at any less time than six months from the borrowing thereof, during the continuance of the privileges granted by this Act, to the said Governor and Company of the Bank of England." Now, it could be no interference with "the privileges granted by this Act to the said Governor and Company of the Bank of England," that banks established in Scotland circulated notes there, and took up money upon those notes.

80. Still, as a matter of fact, if there are Scotch notes in England issued by the Scotch banks, they owe money for those notes, do they not?-But the Scotch banks do not issue bills or notes in England, and therefore they do not "borrow, owe, or take up" money in England, and consequently they do not in any degree interfere with the privileges of the Bank of England.

81. Then your contention is, that because such notes are not issued in England, they are not owed?-They are owed wherever they go; but we do not "borrow, owe, or take up" money in England, and never did; we owe the money to the holders, who might be in France as readily as in England.

82. This clause also expressly recites, does it not, that the privileges granted to the Bank of England by the Act of 1826 are to continue, and that this clause is merely explanatory of those privileges? Yes.

83. Can you state whether, in the negotiations which took place at the time, the question of the Scotch banks was ever discussed?-I am not aware. I do not suppose that the Scotch banks at that time ever thought of going to England; but I think it not improbable that that may have been in the contemplation both of the Government and of the Bank of England at the time, for in the correspondence which took place in 1826, allusion is made, over and over again, to the Scotch banking system as the system which it was the wish of the Government of the day to introduce into England. In short, it was the avowed object of the Government to introduce into England a system of banking which they commended as the system then in force in Scotland.

84. That is to say, so far as regards the existence of joint stock banks; but the Government, I think, certainly did not think of introducing the Scotch system as regards bank notes? I think that between 1826 and 1828 the Scotch banks might legally have circulated their own notes of any amount in England outside

Sir John Lubbock-continued. outside the 65 mile circle, because, if you refer to the Act of 1828, 9 Geo. 4, cap. 65, entitled, "An Act to restrain the Negotiation in England of Promissory Notes and Bills under a limited Sum issued in Scotland or Ireland," you will see that it prohibits, for the first time, the issue in England of Scotch or Irish notes under 51., which necessarily implies a right on the part of the Scotch and Irish banks, if they chose, to circulate 51. notes and upwards in England. Of course that was terminated by the Act of

1844.

85. Up to the Act of 1826, I think you admit that the Scotch banks could not have come to England?-No bank with more than six partners could have come to England, as the law was then understood.

86. The Act of 1826 is expressly called, "An Act for the better regulating Co-partnerships of certain Bankers in England," is it not?-That is the title of it.

87. Do you contend that an Act with such a title as that is to be read as an Act which relieves the Scotch banks from their disabilities under a previous Act of Parliament?-I do not think that the title of an Act has much to do with its enacting parts; for example, the Bank of England was established under an Act imposing, according to its title, duties upon beer.

88. Does not the first clause of the Act of 1826 go on to say that the banks which are authorised to be established under this Act should have the whole of their banking establishments, and carry on their business as bankers, at any place or places in England exceeding the 65 miles from London?-That is so.

89. I need hardly ask you whether the Scotch banks have the whole of their banking establishments in England; are they not, therefore, precluded under that clause from coming within the operation of the Act?-The Act of 1826 neither precluded the Scotch banks from coming to London nor permitted them to come.

90. I thought you rested your case very much upon the Act of 1826?-Not at all. The Scotch banks did not avail themselves of the privileges of the Act of 1826 in any shape or form.

91. Then you admit that the Scotch banks could not have come to London until the year 1833? Not to London. They could have come to the provinces beyond the 65 mile radius in 1826, under the Act of 1826, but they did not do so.

92. Do I rightly understand you to contend that under the Act of 1826 the Scotch banks

might have come to England, provided that they did not come to London ?-That is what I submit to the Committee.

93. But the Act expressly provides that joint stock banks may be founded, provided they "have the whole of their banking establishments and carry on their business as bankers at any place or places in England exceeding the distance of 65 miles from London"; surely, that implies that a joint stock bank may be founded under this Act, but that they must neither be out of England nor must they be within the 65 miles of London? -The Act eays, " shall have the whole of their banking establishments and carry on their business as bankers at any place or places in England." I think that means that they shall have the whole of their banking establishments in England at a distance of more than 65 miles

Sir John Lubbock-continued. from the metropolis. I do not think it has any other meaning.

94. But the Scotch banks have not all their places of business in England?-Under this Act, if they had availed themselves of the privilege they must have had all their English establishments at a distance of 65 miles from London; they could not have come within the 65 miles radius.

95. Then you mean to say, that when the Act says, "the whole of their banking establishments," it merely means "their English banking establishments"?-I think so.

96. Surely it is obvious that where it says "the whole of their banking establishments," it does include all their banking establishments; to say that the offices which are in England must be in England would be tautology, would it not?-They must be beyond 65 miles from London.

97. It does not say that they must be beyond 65 miles from London; it says that they must be in England beyond 65 miles from London?-The clause is in these words: "Provided that such body politic or corporate, or persons united in covenants or partnerships, exceeding the number of six persons in each co-partnership, shall have the whole of their banking establishments and carry on their business as bankers at any place or places in England exceeding the distance of 65 miles from London." I read that as meaning that the whole of their English establishments shall be at a greater distance than 65 miles from London. But very little really turns upon the Act of 1826, because that is not the Act under which any Scotch, Irish, or foreign bank has come to London; the Act under which they have come is the Act of 1833. That Act, I think, is really the Act which for the first time permitted the establishment of joint stock banks in London. It is immaterial whether they were Scotch, Irish, or foreign; and upon the provisions of the Act of 1833 would I alone rest the right of any foreign bank to come to any part of England. I think the Act of 1826 is merely valuable as illustrating the progress of legislation. In my opinion, the Scotch banks between 1826 and 1828 might, if they had thought proper, have come to any part of England outside of the 65 miles circle and have circulated their notes, even the smaller notes. In the year 1828 there was an express prohibition of the issue in England of Scotch or Irish notes under 5l. Therefore they might have gone on between 1828 and 1833 circulating 51. notes and upwards, and carrying on banking business. Then in 1833 they might have come to London; but if they came to London they were put in precisely the same position as the English provincial banks of issue are in now; that is to say, they must have given up the privilege of circulating notes within England.

98. Then your contention is that the words "in England" in this clause are really misplaced, and that when the clause speaks of banks carrying "on their business at any place or places in England," what is really meant is banks carrying "on their business in England at any place or places," because this clause actually states that the whole of the banking establishments (without any limitation at all) are to be in England, and at a distance not exceeding 65 miles from London?-I quite see the point that is made of that, and I confess that my attention had not