TOPICS OF THE D.Y.

THE .BANK OF ENGIAND.

Nerroar of sthopkeepers'as-we are, it is rare for any question con- nected with financial management to become what may really be called a popular one-yet something of the kind is-the case at-the present moment. The convulsions in the corn market, the pres- sure for money, the suspension of railway-works, and all-the other stirring subjects of-City intelligence, wide as they-seem just now, have still their limited -range andtchatever may be the excite- ment connected with each of Aem, it-will*after all-be found-that hundreds of thousands of 'intelligent people continue wholly un- disturbed, and, except as a matter of curiosity, uninterested by

the turmoil. All at once, however, a City question has been

startedavhieh, asitheareanion-the national reputation, has touched the sensibilities of most men. The Batik of .Eriglandmanage- ment (whether justly or itnjustly-rensains to be seen) is a subject of discredit 'to us-all aver the world. Of course this is not a state of-affairs to be patiently. borne ; and -discussion is urged upon us either to establish a defence or to compass a reform. The charge against -the Bank of England is that for many years the gentlemen selected as Governors and Directors have

shown a want not merely of stability, but of many other recog- nized commercial virtues, sufficient to demonstrate that they by

no represent the great body of English merchants ; of Whomrin foreign countries, and indeed at home, they are from

their. position naturally assumed to present the highest models. It.has been alleged, and unfortunately the recollection of many will substantiate the fact, that in a period of about eighteen years, (daring which, as a new Governor is elected every two years, the ordinary number of Governors would be nine,) no fewer than six or seven persons who have filled the chair have become insolvent; thatin.a -majority of these cases the insolvency was of long stand- ing, andmust have been suspected by, if it was not absolutely known to the Court, at the time when the parties were recom- mended to the post ; and lastly, that it has been made matter of congratulation by the Bank, that while it has upheld these per- sonsm.a position which would lead all the rest of the world to give them credit, the Bank has exercised sufficient shrewdness net .to awn a similar risk itself.

Now we fear that all these things are past denial. The ques- tion therefore must simply be, supposing them admitted, is there arty:harm in them? Is the proportion of seven out of nine no more than the average of failures amongst our leading mercantile houses.? is the system of electing Governors by rotation so ad- vantageous as to render it desirable, that in order to avoid a de-

parture from it, even an insolvent one should be appointed? And islit .aE error on the part of foreigners and ourselves, of the con-

seanenees of which we have no right to complain, if we attach weight to the station of Bank Director, and give a degree of credit on that account which otherwise we should withhold ? If none.of these propositions can be maintained, then the public (at leastmo long as the Government permits the Bank to act as its agent, and thus to possess a national character) are certainly en- titled to clamour for reform.

-But that this reform will be achieved by any other means than a well-maintained agitation in Parliament, we greatly doubt.

The remedies recommended have been, first, an abolition of the

practice now pursued by the Court, of filling up all vacancies in the Direction by nominees of their own--a remnant of the days of Gatton and Old Sarum ; and second, the appointment of a per- manent Governor. It is alleged that, under the present method of filling up vacancies, a sort of hereditary system is adopted. The sons of Directors inherit the office along with their fathers' fortunes ; and as these young gentlemen are usually brought up with the money-spending rather than with the money-making habit, it may easily be inferred that the vigour and business talents of the founders of their houses are mostly wanting in them ; while in cases where the hereditary plan is not pursued, the junior partner of some leading firm is usually selected, not on account of his talent, but because of the interest of his house, and too often, we have heard it said, because he happens to be the part- ner whose services can best be spared. Hence there is nothing like vigour and originality of view. They enter the Direction almost as boys to be trained ; and they are drilled into all the narrow and pompous notions which have become established in the minds of the older members, and which this system of selec- tion is sure to foster. Of the moral tone which is cultivated by a long connexion with the Bank-parlour, we have a disagreeable indication, in the fact that the various parties who have failed after having been for years in the lowest depths of insolvency, were deficient even in that conventional sentiment towards their colleagues which should have led them at the last to decline re- election.

With regard to the question of the Governorship, the liability to repeated failures would of course be averted by a reform in the election of Directors. Past experience would seem to show that the plan of electing legacy-made instead of self-made men, usually proves fatal at about the time of life at which the Direc- tors approach the chair. With a weak ostentation, they continue to maintain or to exceed the style of their fathers ; and at about the age of fifty they find that their business is worn out, and that they are living upon credit—that is to say, upon their fathers' name and their place in .the almanack amongst the Bank Direc-

tors. But it is questioned whether the present plan oi' a con- stant succession of Governors would not be objectionakile ex en if the Direction were generally composed of men of s 3ity and 1- power. In an establishment like the Bank of England t be an immense amount of routine knowledge require* layi tIntL kt • Governor; and to have a fresh learner every two years, must be to prevent all progress, since just when the ease and confidence is attained that would leave the mind free to suggest and carry out

reforms, the period will approach when these must be left to be completed or discarded by a successor. It is moreover univer- sally admitted, that no person engaged in business of his own can safely give to the office of Governor of the Bank the time and undisturbed thought which it imperatively demands ; and the appointment of a well-paid permanent Governor is therefore the point contended for.

We have already said, however, that these reforms, or such other as might be deemed more suitable, are not likely to be car- ried out except by the interference of the Legislature. That the evils which have been detailed really have an existence, is not denied; that these evils must be reformed, is a fact also that most persons cognizant of the general progress of affairs at the present day will admit ; and that the requisite changes would come most appropriately from the Bank Court itself, will appear no less ob- vious. But the question has already been mooted, and the signs are not satisfactory. At the general meeting of Proprietors last week, the feeling that pervaded the assembly was unequivocally in favour of reform : but the movement was met by a Bourbon- like resistance, which showed clearly enough that nothing would be successful but a pressure from without. No justification was attempted ; but the moment discussion was sought, the trick (for that word is applicable) was resorted to, of merging the question in a vote of want of confidence in the Directors, so as to give the Proprietors no alternative but that of dropping the contest or of throwing everything into confusion. Mr. Morris, the new Go- vernor, really believed, that in the execution of their duties the Directors only did that which they thought was most beneficial for the commercial interests of the community ": but what had this to do with the facts of the case ? No one spoke of the mo- tives of the Directors : it was the ascertained public results of their measures that was under discussion ; and the attempt to evade the question, by making it an offensively personal one, should not for an instant have been permitted. Again, the Go- vernor observed, " that the Directors were only elected for one year, and therefore it was always in the power of the Pro- prietors to elect such persons as they thought fit " : it being well understood that the recommendation of the Court is always given, and that under the present circumstances any attempt to set aside that recommendation would at once, in the same way as the question then before the Court, be converted into a personal one, in which the Proprietors would be urged "to support the Direction." Finally, Mr. Morris, after observing that ' it never would be his wish to take advantage of the Court," and that " he hoped he should so conduct himself in his present position as to entitle himself at the termination of his term of office to their ap- probation "—and a series of other phrases, showing a total in- ability in conceive that the Proprietors were thinking of any- thing n the world except himself—conceived that he had settled the whole affair by one bold stroke ; the only one, it must be ob- served, in which there was any attempt to meet the subject that had been presented. "If the honourable Proprietor," it was re- marked to the party by whom the incessant and disgraceful fail- ures of Governors had been brought forward, " could point out any way to prevent private merchants from sometimes failing, he might then accomplish his object." With a disposition to meet a grave public question in this way it must be hopeless to contend. It is true that, at the interces- sion of Mr. Jones Loyd, the confusion of the meeting, over which the Governor himself seemed to have no power, was stayed ; and that the Governors and Directors permitted Mr. Loyd to give a sort of pledge on their behalf, that on that day six months they will be prepared to propose some plans calculated to produce practical results. But enough had previously passed to show the total want of power on the part of the Court to comprehend their real position ; and we should therefore be sorry to see the ques- tion neglected on account of any reliance upon their cooperation.