BANKERS AND BANKING.
TOPICS OF THE DAY.
SOME weeks ago, we enjoyed a laugh at the coxcombry of those newspapers that undertake-the guidance of people in the conduct of their own private business. There is mischief, however, as well as ludicrous absurdity, in this practice : a well-informed mercantile correspondent —whose letter, on several matters connected with the business of banking, we insert—seems impressed with a con- viction, that the officious intermeddling of one of these self-ap- pointed guardians accelerated the denouement of REmnvoroN's affairs ; and although it neither produced the .house's insolvency nor the dishonesty of STEPHENSON, the loud braying of such an organ every morning Might have aided in producing a panic, if the times had favoured it.
" The failure of Messrs. Remington and Co. has given rise to much talk on the general system of Banking in London, for the improvement of which many suggestions have been olfered. But most of these have pro- ceeded, like the plans of political reformers, upon the theory of possible perfection ; which, I fear, is as difficult of attainment in banking as in government. After a little while, we shall probably forget our fright, and return to our old habits of confidence in established firms ; and if we would only be circumspect in our confidence, and judge of the stability of our bankers rather by the regularity and prudence of their general habits, than by the display of wealth in their personal expenses and the style of living of their families, we should seldom be deceived. " It is easy to be wise after the fact, but it strikes me that Mr. Rowland Stephenson was a great deal too much before the public in a variety of ways, and too much engaged in foreign pursuits, for the banking business to go on well—to say nothing of his expensive and speculative habits. But we shall not pursue this further; our present business being with an- other question, namely, the propriety of the press singling out particu- lar bankers, in a season of alarm, as a subject of animadversion. There can he no doubt that the affairs of Remington and Cu. have been in an equivocal state for some time past. There is sufficient reason for supposing the like of the concerns of Sir Peter Pole and Co. before the failure of that firm in 1825. But there is equal reason for believing that the obser- vations of particular newspapers accelerated, if they did not actually cause, the fall of both houses. The newspaper which first pointed the public attention to Remington and Co., takes great credit to itself for having warned its readers in time to save their money ; and perhaps it did so, (although, by the way, it told them one morning afterwards, that the house was quite safe,) but is it not possible, that if attention had not been specially directed to this banking-house, it might have weathered the storm, and the other partners might have gained time to get rid of Ste- phenson, and strengthen their hands by the accession of other partners ? " The great benefit of banking, to the country at large, we take to be the means which it affords for the more equal and general distribution of capital. But how is this benefit to be attained if bankers are to have the finger of suspicion publicly pointed at them at any moment ? A banker, it is true, does not carry on business merely to serve the public. Neither do his customers deal with him purely to oblige him. The whole affair is one of mutual accommodation ; to which, however, there must he an end, if the business do not afford the banker the means of paying his es- tablishment and maintaining himself out of the profits. Those profits can only be derived from lending his customers money : but what banker can venture to lend money to others, which he may be called upon by a sudden run to want for himself?
" I have hitherto supposed that the newspaper has good and sufficient grounds for warning the public against particular bankers : but may it not happen, that the news-writer may act upon false, or incorrect, or malicious information? or may he not have some private ends of his own to promote, while his anonymous character tempts him with the hope of impunity ? It is the especial misfortune of the banker, that whether the surmise be true or false, well or ill founded, he equally suffers : a ruts follows inevitably, which every person acquainted with business knows well can only be provided against, even by the most wealthy, by a cer- tain sacrifice of property and feeling. "But our cotemporary says, that in the case of Remington and Co., the event has proved the accuracy of his information ; and he boasts more- over of having saved the money of some of his readers by sounding the alarm so early. Be it so : but has he not occasioned loss to others by the selfsame act? Although such warning to the public may by possibility render bankers in general more cautious, (their own most obvious inte- rest is their best caution,) they never can be beneficial in individual cases. If a run be excited against any particular house, many of its customers will of course withdraw and save their money, but many will not hear of the denunciation, and some will think it right to disregard it. Cobbett would say of these last, that they deserved whatever should befal them. But if a concern he insolvent, it is obvious that somebody must suffer, since all cannot be paid ; and to excite a run upon it, is in effect only to occasion unjust preferences.
" It has been asked why more reserve should be observed towards bankers than towards merchants ? A moment's reflection must show that the cases are widely different: the merchant contracts engagements to be fulfilled at fixed periods, for which he provides accordingly, but the banker must pay on demand at any moment. We should however de- precate the particular interference of the press alike in both cases."
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