SPECTATOR'S LIBRARY.

Coalman',

Banks and Bankers. By Daniel Hardcastle junior .. Whittaker and Co. POITILT.

Odes and Sonnets: with other Poems. Scotch as well as English. By the Rev. C. Lesingham Smith, M.A., Rector of Little Canfield, Essex.

Parker, London; Deight,m, Cambridge.

HARDCASTLE JUNIOR'S BANKS AND BANKERS.

THE professed object of this volume is "to explain, in a plain and familiar manner, what money, banking, and currency, properly speaking are ; and how it behoves us to deal with them at present in this country." It consists of a history of banks and banking in the Three Kingdoms, with a variety of stories about bankers, and the management of banking establishments, which have the interest of anecdotes, and are "curious if true." The volume also con- tains a transcript of ADAM SMITH'S theory of banking and currency, which this writer adopts ; a succinct sketch of the inquiries that have taken place, and the views that have been generally received upon these qucestiones vexatce, from the celebrated Report of the Bullion Committee to the last pamphlet of Mr. JONES LOYD; and the whole is wound up by a proposition for an old-new system on the expiration of the Bank Charter. Under this pro- posed restoration, gold and silver would both be legal tenders ; but DANIEL HARDCASTLE Junior rather deviates from the views of his great master, by proposing that all paper should not merely be ex- changeable on demand for the amount of metal it promised to pay, but actually represent that amount. The utility of a proper paper currency, says ADAM &urn, is that it enables a nation to employ productively that sum of gold and silver which would otherwise be profitless in the shape of reserved or circulating coin. This sum in England, judging from the amount of last year's circulation de- ducting the bulhon in the Bank, would appear to amount in round numbers to twenty or twenty-five millions, (the interest on which would be no very mighty matter); and the mixed gold and silver currency of HARDCASTLE Junior would be represented by Mint- notes, which should only be issued on lodgment of the quantity of metal for the amount of notes required.

"To accomplish these important results a few plain enactments would suffice; and I venture to name them.

"1. That her Majesty's Mint should be managed by three Commissioners, who, like the Judges of the land, should be well paid, and removable from office only by an address from the Rouse of Commons. "2. In addition to their present function of manufacturing the current coin of the realm according to the standard fixed by law, the authorities of the Mint should be empowered to issue notes payable to bearer on demand, upon a suffi- cient deposit of gold and silver of the standard value. "3. Notes of 5/. and 10/, should be payable in silver only; notes of 20/. and upwards in gold. "4. Power might be given the Commissioners at those extraordinary junc- tures which will occasionally present themselves, when the superabundance of silver might happen to be very great and the scarcity of gold extreme, to fix an agio to be paid by those who required the scarcer metal. "5. Mint. notes should be the only legal tender; all banks should meet their issues either in specie or Mint-notes."

In the mixed standard of gold and silver there is no novelty. It was the legal tender of England till near the end of the last century : its sufficiency was admitted by LOCKE, by ADAM SMITH, and Ili- ciao; and a return to it has been urged by men of less eminence. A practical objection to it, as long as a trading corporation like the Bank of England had the charge of the currency, would be, a further temptation to over-issues by the facility with which a run could be staved off by paying in sixpences or other small coin ; a scheme which the Bank of England herself has adopted before now. In such a case, this author's proposal of making notes of 51. and 10/. payable in silver, would be inoperative, as the establishment could always regulate its issues so as to have the silver notes predomi- nating; whilst under his own plan we see no reason for his rule, unless he is prepared to maintain that gold bears the same relation to silver as the demand for 20/. notes and upwards does to notes of Si. and 10/. As long as all the paper money in circulation is merely an exact representative of so much bullion in the Mint, it seems unlikely that any troublesome demand should arise for one metal in preference to another; and at all events, the power should be lodged with the officers of the Mint to pay with either; or what becomes of your double standard ? If a note of more than 10/. may be demanded in gold, why not a debt? In truth, this ela- borated proposal seems merely making silver a legal tender for ten pounds instead of one pound ; and unless notes of 51. and 10/. were only issued for a deposit of silver, and notes of higher denomi- nations for gold, it is possible for the Mint to stop payment with large amounts of bullion on hand.

Nor is this the only instance in which HARDCASTLE Junior has not been able to see some things which were necessary to be seen before confidently dogmatizing. Speaking of the principle laid down by Mr. LOYD, that a paper currency should exactly resemble the metal it professes to represent, fluctuating exactly as gold itself would fluctuate, he observes- . In the first place, it is admitted upon all sides that certain contingencies will divert and nullify the virtues ascribed to the rule. Of these the principal are, 1st, An imperative demand for gold abroad; as when Russia last invaded Turkey, and required specie to support her army, a million in specie was then taken from the Bank ; or as when in 1836 the United States of America, having determined to abolish the circulation of small notes, drew nearly three millions, which were recoined into her current money : 21, Foreign loans, which are contracted for more or less frequently, according to the exigency of events, over which, whether we are at peace or war with the power that borrows, we have no control : 31, Political agitation; as that upon the Reform question in 1832, when Lord Grey's resignation caused two millions of sovereigns to be taken from the Bank : 4th, Bad harvests, nhich compel us to pay cash for Ira- ported corn, because the laws in force for the protection of agriculture have deprived us of such commercial intercourse with all the great corn-growing countries as would induce them to take manufactures in exchange for grain."

Except an internal run for gold in consequence of political agi- tation, whose object is not to contract the currency but to exhaust the Bank, not one of these contingencies could be prevented by making the currency consist of " Mint-notes," or even of metal. A gold and silver standard would only render them less disastrous by the extent to which the change depreciated the currency. Let your currency be as solid as you please, still when food is wanted and is only procurable by bullion, the bullion must go abroad to pay for it, " that," in the words of Jacob sending to Egypt, " we may live and not die." The only remedy for this evil is to be found in a change in the Corn-laws; and though Sir ROBERT PEEL'S new modification will do something towards creating a more regular trade, which admits of readier extension in times of need, the fullest remedy will not be found till the principle of protection is abandoned. After all, it may be questioned whether a complete remedy can ever be found for famines, any more than for plague and pestilence : if it can, the direction is in improved methods of agriculture and more ready modes of transit, not in alterations of the currency however proper in themselves. Of two evils, it is better to have a pressure upon trade than national depopulation ; even bankruptcies, however dis- tressing, are preferable to parents selling their children, or thou- sands perishing by the way-side, as has occurred in India when the crops have failed; or the more than decimation of entire nations, which formerly occurred throughout Europe in years of scarcity. The export of gold will always be a great evil, but it would be a still greater were there no gold to export.

Upon the other point, a foreign demand for gold, it may be an- swered, that if foreigners must have our gold they must also pay for it : if we are deprived of our currency for a time we reap a profit on the transaction ; and that profit would rise as our currency contracted, till the cost of the accommodation might be too great for the foreigner to pay, or his incautious agents would be ruined. With regard to the loan question, the successful negotiation of a foreign loan indicates a plethora in our home capital : no man in- vests his money in strange securities when he can find a field for its employment at home. What practical difference could take place in our monetary condition by having a paper money identical with the amount of metal it professed to represent, or by a paper currency with a sufficient amount of bullion when at full, allowed to diminish by the public drain upon it till the drainage ceased, we cannot conceive : in either case, the currency would be contracted till the purpose for which the drain began was effected ; for no one, we suppose, will maintahrthe possibility of a foreign demand which should carry away all our money, or even the greater part of it. But the way in which the Bank of England has managed the circulation has compelled the British public to pay for the con- venience of foreigners. The South American loans of 1824-5 were stimulated, if not caused, by the over-issues of the Bank of Eng- land, which ended in the panic of 1825-6. A few years since, that establishment took upon itself to send out a very large amount of sovereigns to try and bolster up the American Banks, and after- wards had proportionably to contract the home circulation. Partly owing to an idea of the Directors that they are called upon to "support commerce," partly from the impossibility of their con- trolling the deposits, whose owners draw them out and add them to the currency as fast as the Bank attempts to check it by selling securities, that body on every occasion delays an efficient action upon the money-market till private or foreign speculators have

• gotten their accommodation at an easier rate than they ought to do. If the drain is limited, all is well ; the Directors plume themselves that their currency is "something better" than gold : but if not, there comes a rapid application of "the screw," and with it ruin to many, loss and inconvenience to all. The only re- medy for this evil is Mr. JONES LOYD'S suggestion—to separate the management of the currency from the business of a bank of deposit, as well as to prescribe a ratio of bullion to circulation and compel the managers to observe it. At present we pronounce no judgment on the double standard proposal; but we believe it must be distinctly understood, that what is called the "relief" to be afforded to the money-market by it, can only be in proportion to the depreciation of the currency. We have touched upon the two most important points in the book; and from the opinion we have passed upon them it may be gathered that we do not hold Mr. DANIEL HARDCASTLE Junior to be an infallible guide in matters of currency. In fact, his mind is not fitted to expound recondite truths. He is what is called a "strong" writer; always up to his theme, and sometimes a good bit above it ; capable of making a plain, fluent, and true-looking case, to those who think every thing in an obscure subject becomes true when they can understand it ; but too incautious in his views, and perhaps with too much of brag and bluster in his nature, to be trusted to pronounce upon abstruse principles, or even to enounce them. The best parts of his book are the history of banking. His powers of statement enable him to make a clear and readable nar- rative of a somewhat dry subject ; and the ignorance, mismanage- ment, and fraud which the practice of banking has so frequently displayed, almost justify any censure however " strong."

The most amusing parts of Banks and Bankers are those which relate to the accounts of particular banks, given in the shape of a history of their founders or partners. These, however, are the parts which throw most question upon the sobriety and caution of the author. These anecdotes seem to have been picked up by a

man who has the run of the City ; and though some of them may be true, others are evidently made-up if not invented : many of the generic sketches smack strongly of an article-monger, and some of the panegyric reads very like a puff. See the picture of Glyn's Bank, (page 38 et seq.); to one of which firm the book is also dedicated.

BANKING GENEALOGY.

Apropos of Sir J. Child, I have to remark that he founded the firm which still retains his name at Temple Bar, and which, with the house of Willis, Percival, and Co. is considered to be about the oldest in London. Child's house is understood to possess documents which prove their existence as a bank as early as 1663; since which they have never moved out of the same premises. The books of Messrs. Hoare in Fleet Street, are said to go back to 1680; and those of Messrs. Snow, in the Strand, to 1685. Stone, Martins, and Stone, of Lombard Street, claim to represent the house of Sir T. Gresham ; but this, I presume, must be more a matter of tradition than of documentary evidence ; and is principally noticeable as suggesting views of ancient descent upon the part of our commercial interests which will bear a comparison with the genea- logy of many noble houses.

THE LONDON RANKER OF THE OLD SCHOOL

Bore little resemblance to his modern successor : he was a man of serious manners, plain apparel, the steadiest conduct, and a rigid observer of formali- ties. As you looked in his face you could read in intelligible characters that the ruling maxim of his life, the one to which he turned all his thoughts, and by which he shaped all his actions, was, that he who would be trusted with the money of other men, should look as if he deserved the trust, and be an osten- sible pattern to society of probity, exactness, frugality, and decorum. He lived, if not the whole of the year, at least the greater part of the year, at his banking-house; was punctual to the hours of business, and always to be found at his desk. The fashionable society at the West end of the town, and the amusements of high life, he never dreamed of enjoying ; and would have deemed it nothing short of insanity to imagine that such an act was within the com- pass of human daring as that of a banker's lounging for an evening in Fop's Alley at the Opera, or turning out for the Derby with four grays to his chariot, and a goodly hamper swung behind, and well stuffed with pengord-pies, spring chickens, and iced champagne.

DENISON'S DECISION.

The present Mr. Denison gave a striking proof of the extent of his resources and the spirit and decision of his character, when the Bank of Manchester, in 1835, proposed to become a bank of issue. That proceeding was highly dis- tasteful to the Bank of England; which had previously enjoyed the exclusive circulation of Lancashire. Accordingly, the Manchester Bank was soon made to feel the displeasure of the Bank Parlour. Its drafts and acceptances became a subject of comment ; its London bankers disagreed with the Directors, and closed their account ; its London bill-brokers sent them notice that there would be difficulties to encounter in getting cash for their bills in future. A series of adverse circumstances arose an rapid succession to embarrass and dis- tress the Company ; they were full of anxiety, and reduced to extremities, when they had the good fortune to obtain an introduction to Mr. Denison. That gentleman, upon a brief statement of their case, and after satisfactory explanations as to their solvency, saw that a great principle was involved ; that a cause in every respect national, and which the Government and Parliament had anxiously promoted, stood in jeopardy ; and he brought the negotiation quickly to a favourable issue, by stating that he should be prepared with 600,000/. the next day to meet the demands of their agency, which, if neces- sary, he would increase to a million in the course of the week.

A MOT OF THE ELDER LOYD.

Mr. Lewis Loyd, according to his own account to the Lords' Committee in 1819, began business in 1792, at Manchester; where having spent a year, he re- moved to London ; and has since remained with a partnership in the Manchester firm. According to report, he was originally an Unitarian clergyman, but soon tired of that vocation ; finding it, as he is sometimes said to confess after dinner, much more profitable and agreeable to spend his time in turning over bank-notes than in turning up the whites of his eyes. This antithesis reminds me that the figure is one to which Mr. Loyd is partial. When Frys and Chap- man, the Quaker bankers, failed, a member of the Society took his account to Jones Loyd. " We think you right, friend," said the senior partner; "it is wiser to place thy money with a rich sinner than a poor saint."

THE MANAGER OF THE UNION BANK.

About the best thing a joint-stock bank can have is a good manager, and perhaps the most valuable talent he can possess is the faculty of judging, when abill is offered to bins for discount, whether it is legitimate or not ; that is to say, whether it represents a bonafide transaction between the parties to it. A friend of mine, a bill-broker in the City, tells me, that of all the men he has met in the course of business, the General Manager of the Union Bank pos- sesses this talent in the most extraordinary perfection. The moment a Lon- don bill is shown him, he can tell whether a transaction to its amount can have properly passed between the parties; and will give off hand the most mi- nute and extraordinarily correct information regarding the means and credit of the drawer, accepter, and endorsers.

DISASTROUS EFFECTS OF BANE FAILURES IN IRELAND: AN IRISH STORY.

Severe as the distress of all classes was at this juncture, it gave rise to some ludicrous incidents. While it lasted, a gentleman in Cork wanted a leg of lamb, and offered a five-pound note for it, which was refused. In Limerick, a country gentleman with 1,500/. a year had sent invitations out for a din- ner-party the week the banks broke, and considered himself most fortunate on finding among his notes one Bank of Ireland note for ten pounds. No one doubted the goodness of the note, but no one could give change for it Ten pounds, in gold or silver, were not in the county ; and as for credit, there was none to be had. In this extremity, with money—which was not money—and without credit, having tried butcher, baker, and confectioner, in vain the gen- tleman gave up the idea of his dinner-party in despair, and wrote to vain, friends to keep the engagement standing until he could procure cash or credit for a

ten-pound note.