able year the necessity was seen of encouraging the formation of joint-stock banks throughout the country, and an act was passed accordingly. But the main rights and privileges of the Bank of England were left untouched, till an opportunity for considering them was afforded on the renewal of the Bank Charter. Was it expedient to continue all the monopolies which that institution enjoyed? Should the charter be renewed and the Bank still be highly favoured by the Legislature? For centuries the Bank of England was the only banking company allowed to exist in England. As we have seen by the Bank Charter Act of 1708, it was enacted that, during the continuance of the corporation of the Bank of England, it should not be lawful for any body politic or corporate, other than the Bank of England, or for any person whatever united in partnership, exceeding the number of six persons, in England, to borrow, owe, or take up any sum of money on their bill or note, payable on demand, or on any less time than six months from the borrowing thereof. Time after time the charter, with all its privileges and monopolies, was renewed with remarkable ease. But lately the action of the Bank on the circulating medium had been freely canvassed. Not a few were ready to criticise the conduct of the Bank in times of great national exigencies, and it was felt that more than a formal enquiry was requisite. In the session of 1832, therefore, a secret committee was appointed to enquire, not only into the expediency of renewing the charter, but into the system on which banks of issue in England and Wales were conducted. Three points were specially examined into by the committee: first, whether the paper circulation of the metropolis should be confined to the issue of one bank, or whether a competition of different banks of issue, each consisting of an unlimited number of partners, should be permitted; secondly, if it should be deemed expedient that the paper circulation of the metropolis should be confined, as at present, to the issue of one bank, how far the whole of the exclusive privileges possessed by the Bank of England were necessary to effect this object; and, thirdly, what checks could be provided to secure for the public a proper management of banks of issue, and especially whether it would be expedient and safe to compel them periodically to publish their accounts.

7 Geo. IV. c. 46. In 1836 a committee of the House of Commons was appointed to enquire into the operation of this act, and it reported that the act was defective in not imposing any preliminary obligation to the formation of such banks, or any restriction upon the amount of the nominal capital, or on the number and amount of shares, or on the amount to be paid up, or on the publication of liabilities and assets, or on the traffic in shares.

The charter of the Bank of England was renewed in 1781 till twelve months' notice after August 1, 1812, when the Bank advanced 3,000,000l. for the public service for three years at 3 per cent.; and also in 1800, till twelve months after August 1, 1833, when the Bank advanced to Government 3,000,000l. for six years without interest.

The committee had no time to complete their enquiry that session, and only submitted the valuable evidence they had received, without any formal report. Yet many matters of moment date from that enquiry: such as the publication of the accounts of the Bank, the publication of the amount of bullion held by the Bank, and the partial adoption of the principle of currency by which the Bank of England, as well as the country banks' circulation, should be regulated by the state of foreign exchanges. These and many other points were brought out with great fulness in the evidence before the committee, and, upon the presentation of the report, Lord Althorpe proposed that the Bank of England should continue to have the monopoly of the circulation; that no bank, with power to issue notes, with more than six partners, should be allowed to be established within sixty-five miles of London; that the charter should be renewed for twenty-one years, terminable at the end of ten years; that weekly accounts of bullion and securities, and of paper in circulation and deposits, should be presented; that Bank of England notes should be legal tender except at the Bank; that the usury laws should be so far modified as to exempt from their operation bills of exchange not having more than three months to run; that a fourth of the debt due to the Bank should be paid; that in future the Bank should deduct 120,000%. a year from its charge on account of the management of the public debt; that bankers should be allowed to pay a composition duty in lieu of the stamp duty; and that facilities should be given for the establishment of joint-stock banks at a certain distance from London. These proposals of the Government had been accepted by the Bank, but the House of Commons strongly demurred to the principle of making Bank of England notes legal tender.

Why were Bank of England notes thus exceptionally treated? Was it not introducing a species of inconvertible paper money? The reasons alleged for the proposal were, that in 1825 the danger of exhaustion did not so much occur from the demand for gold to meet the notes as from the necessity of enabling country bankers to pay their deposits. That in most of the country districts the amount of notes issued by the bankers bore but a small proportion to the amount of their deposits and engagements, for which they were obliged to provide in times of pressure; yet that it was to meet these that they applied to the Bank for bullion. It was, therefore, to guard against such a danger that it was thought desirable to make Bank of England notes legal tender. The measure was not intended for the benefit of the country bankers; its object was to keep in circulation as much paper as possible, and to prevent any unusual demand for gold upon the Bank of England. And upon such pleas, though very weak in themselves, after much discussion, the clause to that effect passed, as well as the main proposition, for the renewal of the Bank Charter."

3 & 4 Wm, IV, c. 98 By this statute bills of exchange not having more

Yet the bill was not allowed to pass without the insertion of one more clause, which, whatever was the design of its framer, exercised considerable influence on the future monetary institutions of the country. When the bill was passing its last stages through the House, a clause was introduced, to the effect that any company or partnership might carry on the business of banking in London, or within sixty miles thereof, provided such body did not borrow, or take up in England any sum of money either on bills payable on demand, or at any less time than six months from the borrowing thereof. By introducing this clause, the governors of the Bank of England believed that they would effectively prevent the establishment of any bank in London, and that they might thus enjoy for many years an undisputed monopoly; but they were wholly deceived. This clause proved soon after to be the open door by which joint-stock banks were permitted in the metropolis, and, on the strength of that very act, in 1834, the London and Westminster Bank commenced business.

That this unexpected event should disconcert the Bank of England we might well imagine. It was a bold attempt. For the first time since its formation the Bank had to realise the fact of having a competitor in the field, and, whether from fear of the possible results, or out of spite at such an intrusion, the Bank decided to offer all the opposition in its power to the same, and the occasion soon presented itself. The London and Westminster Bank requiring legal sanction to sue and be sued in the name of its officers, Mr. Clay introduced a bill on the subject in the House of Commons; but the Bank determined to oppose it in all its stages. The Chancellor of the Exchequer, espousing the cause of the Bank of England, opposed the bill, on the plea that it was a breach of the undertaking with the Bank on the renewal of its charter, yet the bill was read a second time by a majority of 141 to 25, and the third time by a majority of 137 to 16. Yet the Bank never relaxed its efforts to defeat it, and when the bill was presented to the Lords it was rejected by a large majority. The London and Westminster Bank, however, was not to be foiled by such manœuvres. Undismayed by the powerful opposition, it advanced towards completion, and only avoided the difficulty of the mode of suing or being sued by putting forward its trustees instead of its officers. The Bank of England refused to keep a drawing account for the London and Westminster Bank, and soon after, in 1838, the Bank of England commenced legal proceedings to prevent the London and Westminster Bank accepting bills drawn at six months' date. For two years the suit was carried on, and it ended by the Master of the Rolls granting an injunction to

than three months to run were exempt from the operation of the usury laws; and three years after, by the 7 Wm. IV. and 1 Vict., the act was extended to bills of twelve months and under.

P

restrain the London and Westminster Bank from accepting bills at less than six months' date. Even this, however, did not disconcert the London and Westminster Bank. Persistent in its efforts to the last, it caused its country agents to draw upon the bank in London without needing acceptance, in the same manner as the Bank of Ireland draws upon the Bank of England. And thus, by one expedient after another, the London and Westminster Bank succeeded in neutralising the opposition, and the Bank of England became at last tired of its absurd and ill-conceived jealousy. A peculiar feature of the new joint-stock bank was the establishment of branches in different parts of the metropolis. On the same day when the head office of the London and Westminster Bank was opened in Throgmorton Street, a branch was established in Waterloo Place. In 1836 a branch was opened in Holborn and another in Whitechapel; Southwark came next, then Oxford Street; and so by degrees the London and Westminster Bank, under the able direction of its first manager, Mr. James W. Gilbart, a man distinguished for his talent, judgment, and liberality, became a bank second to none in the metropolis, and proved a formidable rival to the national institution, the Bank of England. Nor did it remain long alone. Soon after other banking institutions were established in the metropolis. The London Joint-Stock Bank came immediately after, in 1836; the Union Bank of London followed in 1839; after that the London and County Bank, originally the Surrey, Kent, and Sussex Bank, in 1839; and the Commercial Bank in 1840. Not only in the metropolis, but throughout the country, a great stimulus was given to the establishment of joint-stock banks.

CHAPTER VIII.

CORN LAWS.

The Corn Laws.-The Corn Law of 1801.-The New Corn Law of 1804.-The Corn Law of 1816.-Injurious Effects of the Corn Laws.-The Sliding Scale of 1828.-Mr. Villiers's Motion.-Formation of the Anti-Corn Law League. Mr. Villiers's Motion Renewed.-Object of the Anti-Corn Law League.

THE corn laws had long been a bone of contention in England. Maintained for the interest of a class who clung to them as their anchor of safety, they had always been attacked as an obstacle to the well-being of the middle and lower classes. In the opinion of their advocates protection was necessary in order to keep certain poor lands in cultivation, and to encourage the cultivation of as much land as possible in order to provide for the wants of the country. Let the cultivation of such lands cease, they said, and we shall be dependent on foreigners for a large portion of the people's food. Such dependence, moreover, may be fraught with immense danger, inasmuch as, in the event of war, the supplies may be stopped or our ports may be blockaded, and the result may be famine, disease, or civil war. According to the defenders of protection it was the advantage gained by the corn laws that enabled landed proprietors and their tenants to encourage manufactures and trade. Abolish the corn laws and half the country shopkeepers will be ruined, mills and factories will be stopped, large numbers of the working classes will be thrown out of work, disturbances will ensue, capital will be withdrawn, and no one dare venture to say what may be the fatal consequences.

In 1801 the price of wheat reached the high limit of 1558. a quarter, and we may well imagine what sufferings that price entailed among the people, at a time especially when trade and manufacture were so much paralysed by the Continental war. Happily, for two or three years afterwards, a succession of good harvests changed the condition of things, and in March 1804 the price of wheat fell to 498. 6d. per imperial quarter. But what was anxiously desired by the people was regarded a great disaster by the agricultural interest. They complained that with the high cost of production, in consequence of high wages, high rate of interest, and the heavy cost of implements of husbandry, they could not afford to sell at such prices. Meetings were