Appx. No. 17.

J. H. Houston,
Esq.

(12 April.)

Sometimes you find your notes returned upon you much quicker than at other times? Yes.

To what do you attribute that circumstance?—There are a variety of causes; alarms will take place occasionally in every country where bank paper circulates; the slightest thing will create an alarm, and the country people come in and send their notes forward in great numbers for a week or ten days probably.

When they send them in do they ask for bank of Ireland notes, or gold?—They never get gold; they might get gold if they choose to send the notes up to Dublin, where they are payable.

The common people do not send them to Dublin, do they? -No, but they go to the shopkeepers and request they will exchange them either for bank of Ireland notes or other notes that they conceive more valuable; such alarms have taken place frequently, and our agents at those times are supplied with the bank of 1reland paper in large quantities; and to any one that comes to them with notes they give bank of Ireland paper for them, and then the alarm has always gone off in a day or two.

Has the amount of the circulation of the Belfast Bank increased of late?—This year it has diminished very much since the assimilation of the currency, and since the discussion on the question in Parliament; but I do not attribute it altogether to that, but a great deal to the state of the country, the mercantile difficulties that have existed.

There has probably been an increase in the amount of the circulation since the establishment of the Provincial Bank ?-The Provincial Bank has been so short a time established that that could not make much difference, but the Northern Banking Company have extended themselves very much, and I suppose they have more in circulation than we have, although it is probable we had more than any other bank for many years.

At what towns has the Northern Bank branches?—I believe they have agents in nearly the same towns that we have.

Have any banks in the north of Ireland been discontinued since the establishment of the Northern Bank and the Provincial Bank, except the Belfast Bank that was merged in the Northern Bank?-No; but prior to that time, about the year 1816, the Newry Bank. In my recollection there never were more at any one period than five banks to the north of Dublin, and three of those were in Belfast, one in Newry and one in Lurgan; the Lurgan Bank wound up their affairs and discontinued business, the Newry Bank failed, and the Belfast banks remain still, only with the change of the Northern Bank into the Northern Banking Company.

When those banks existed, how was the circulation of Donegal and Tyrone supplied?-A good deal with bank of Ireland notes, and the Belfast banks, also those of Messrs. Ball and Co.

How many banks are there now in existence to the north of Dublin?-There are five in Belfast, I believe; there are three banks in Belfast, and a branch of the bank of Ireland, and a branch of the Provincial Bank.

Are those the only banks in the province of Ulster ?—Yes.

All your notes are made payable in Dublin only?—Yes.

In point of fact, are you in the practice of exchanging your notes for bank of Ireland notes or sovereigns for any person who brings those notes to you?- For individuals; if country people come in and say that their landlord wishes a bank of Ireland note, we give it to them; but if a person brings in a large bundle, we say, they are payable in Dublin, and we do not of course keep a second capital to pay them here.

Then in point of fact at those periods when the circulation is considerably contracted by some alarm, you would decline paying any mass of notes that might be presented at Belfast?-We would, because we must keep a capital where the notes are paid; the business would not be worth following if we were obliged to keep a capital in two places.

Why should not you keep a capital in Belfast ?--Then we should not make them payable in Dublin; and if they were not made payable in Dublin, they would not circulate over so wide a country.

Is there any system of exchange of notes between your bank and other banks ?— Yes, every second morning we send to the other banks what notes we have of theirs; and if that exceeds what they have of ours, they give us a draught upon their agent in Dublin, at sight, for the balance, and vice versa we do the same. What would be the effect upon your banking establishment of a law that should

prevent

prevent you from issuing any notes under 5.?We would probably discontinue the bank immediately.

Would a law, which prevented you from issuing any notes under 37. have the same effect?-It would not reduce the business so much; our business has been profitable in consequence of the circulation.

You issue no notes at present to the amount of 37.?-We do not; if we were not permitted to issue any below 37. the circulation would be very limited indeed compared with what it is, for the small notes go in payment of yarn and butter and linen cloth, and large notes would not answer for the purpose of general circulation in the country. It requires a very great circulation to pay the expenses of our establishment, the expenses are about 10,000l. a year; and therefore it would require about 200,000l. to circulate in order to pay the expenses of it, so that if we were limited to notes of 31. we could not carry on the business in the same way in which we do now,

Do you ever lend money upon mortgage?-Never, we look upon that as quite foreign to the business of a banker.

Do the issues bear any fixed proportion to the amount of deposits?—Not to the amount of deposits, it is only limited by our own discretion, and what we conceive we can meet at any time; we must always take care to be prepared to meet any run that might take place, and there have been some very sharp runs upon us at different times, in consequence of the failure of other banks.

You have eight agents established in different parts of the country?—Yes.

Is there any maximum of issue which each of those agents cannot exceed ?— They are regulated every week; we send them what money we think proper every week, and if we find at any time that money is likely to be scarce we tell them they must limit their discounts; they must do so much less.

Do you make a remittance in notes each week to the agents ?--Yes, we send them exactly the amount we wish them to discount.

Does the agent who discounts a bill receive the payment of that bill when it becomes due?-Sometimes; but in general we wish them to be made payable in Belfast, Dublin or London; some few bills are made payable in Derry and Armagh, but we do not wish it.

In the course of transacting business have the agents lost considerable sums in consequence of discounting bad bills?-They have lost occasionally.

In what class of life are your agents?-We look out for persons in a respectable situation in business, that can give good security for what they do; for we generally have security.

May the agent be in business for himself?-Yes.

What is the regulation with respect to his own bills?-They must come before us in the same way as others; he cannot discount for himself without our express permission.

He has the power of discounting for other persons without your express permission, has he not?-Not his own bills, nor such as we disapprove of.

Supposing he sends his bills to another agent, can that other agent discount his bills?-Not one of our agents, but an agent of another bank might; that would be a cross fire that would never answer.

What is the security given by the agent ?-According to the extent of the business he does.

Does not that depend on the future ?-We do not know when we establish an agent the amount of business he will do, but we know the probable amount.

Have you had many applications for those agencies; is it a thing sought after?We have had a great number.

Is any salary paid?-None whatever.

If there is a loss upon the account of the agent does that fall upon the bank?— It does; but, except in one or two instances, we have not lost much by any one of our agents.

You say the charges of the bank amount to 10,000l. a year; what do you include in those charges ?-Stamps and the note paper, the commission of the agents in Dublin, in London, in Manchester and in Liverpool, &c. and wherever we have agents all through the country, and house rent, and manager's salary, clerks, and a great variety of charges of that kind.

You do not include in that the interest of the capital of the bank, but only the interest of your own money?-We do not include in that any but our own money. When the first Belfast bank existed in 1784, at what rate did they discount bills?

Appx. No. 17.

J. H. Houston,
Esq.

(12 April.)

Appx. No. 17.

J. H. Houston,
Esq.

(12 April.)

-At six per cent for Belfast bills; Dublin bills came to from eight to nine per cent. What commission did they charge?-As well as I recollect they charged a quarter per cent upon a bill at sixty-one days upon Dublin, or three-eights, I am not sure which.

For what purpose have you an agent at London, Liverpool, &c.?-For getting bills accepted at Liverpool and London, and wherever we have bills drawn on; we are obliged to take such English bills, as approved of, that are offered to us.

Are you in the habit of giving bills for the remittances of landlords rents in Belfast? We do; we take bills at a per centage, whatever the price of the market is, and we generally charge about a quarter more.

Do all the agents issue notes of all denominations?-They do all those small

notes.

You send some of each denomination to all the agents employed?—Yes.

Can you state what the weekly amount of discounts in Belfast at present is, not of your own bank alone, but of the whole ?-I could not at all state that accurately; I could state what we have done ourselves, taking in the whole of the agents, and every thing else, I dare say we have discounted from 40,000l. to 50,000 l. in the course of a week.

Have you any means of knowing what the amount of weekly discount by the different banks at Belfast may now amount to ?-I have not.

Are your issues regulated in any degree by the issues of the Bank of Ireland?Not always; we always hold between 80,000l. and 100,000l. of 3 per cents to bring into the market at any time; and if we asked for 20,000l. or more upon a deposit of stock we could get it for a short time.

How do you supply your agents in Dublin with bank of Ireland notes to pay your notes with?-By bills on Dublin and England; the former of which they collect when due, and the latter they pass upon Change; and we also remit them bank of Ireland notes when they come into our hands.

Do not the other banks at Belfast, and the branch of the Provincial Bank, issue notes above two guineas?-The Northern Banking Company issue some at four pounds and five pounds I believe.

Do the Provincial Bank issue none above that amount ?—I never saw one of the Provincial bank-notes; they were only established about two or three weeks ago. If the bank of Ireland was to limit its discounts considerably, and make a considerable contraction of its paper, would not that circumstance have an effect upon the conduct of the country banks in issuing their paper?-Immediately; we have got Dublin paper discounted at the bank of Ireland occasionally. Our bank is a private bank, but we have sometimes got paper discounted at the bank of Ireland. Therefore, if the bank of Ireland is acting upon a liberal principle in discounting bills and issuing paper, will not that be an inducement to other banks to deal largely also? It will.

Then in point of fact the issues of the country banks are in some degree regulated by the issues of the bank of Ireland?—I think they are.

Have you ever known any Scotch notes find their way into the north of Ireland about Belfast?-Some few of them come over occasionally by travellers.

Not to any great extent ?-No.

Do you ever remember any instance of a forgery of those Scotch notes?-Very often.

If thecirculation of the notes under five pounds were prohibited, would you continue to have agents for your bank in different towns?-I do not think we should continue the business at all; it would be quite on a different footing; we should have to charge a commission to merchants, upon the discount of the bills, to remunerate us for the expense of the establishment, and to make some profit.

Have the commercial transactions of the province of Ulster very materially increased, and to what extent, within the last twenty or twenty-five years? I think they are. Immediately before I left home I was engaged in public business, but I wrote to a friend in Belfast from Downpatrick to request he would get me an account of the principal exports of Irish produce and manufactures for the last twenty years, and he could only procure it in the years 1809 and 1810, that was just after the banks came into operation, and I think it would be highly satisfactory to the Committee to know what it has been since. In 1809 the exports of Irish produce and manufactures from Belfast amounted to 2,367,271. Ss. 3d., and in 1810 they amounted to 2,904,520. 19s., making an increase in 1810 of 537,249l. 8s. 3d.

Was

Was that the real value of the produce?-Yes; I have here an enumeration of Appx. No, 17. all the articles.

Have they since that time increased considerably?—I have not been able to ascertain that.

Is it your opinion that they have increased or diminished?-Greatly increased. What are the particular inconveniences that you conceive the north of Ireland would suffer by prohibiting the issue of notes under five pounds?-I think agricultural produce would fall, and the rent of land would fall very considerably in

consequence.

What inconvenience would it occasion to the purchasers of different kinds of produce in the different markets?-There would be less capital I should think, and less capability of paying for the produce.

Mr. Thomas Joplin, called in; and Examined.

WERE you ever connected with any of the Scotch banks?—I never was.
Or with any bank in Great Britain?—Not any.

What caused you to turn your attention to the state of the Scotch banking esta-
blishments? The failure of the banks in the north of England, where I was
resident, and some acquaintance with Scotland, led me to inquire into the difference
of the two systems, and from that to publish a pamphlet upon the subject.
Were you resident in Scotland?—I resided in Newcastle.

You were unconnected with any banking establishment?—Yes.
What was your occupation at Newcastle ?-A merchant.

Had you extensive dealings with the Scotch banks?-Not very extensive dealings. I had connections and dealings in Scotland, but not particularly extensive dealings with the Scotch banks.

Did you hold a situation in connexion with the Provincial Bank of Ireland ?--I assisted in forming that establishment, and held the situation of secretary, which, since the proposed alteration in the charter of the bank of England, I have resigned.

Is there any difference between the mode of doing business adopted by the Provincial Bank, and the mode adopted by the Scotch banks?-It is the intention of the Provincial Bank to follow the principles of business adopted by the Scotch banks, but they have not yet had an opportunity of carrying them into complete effect.

Do you mean without making any variation whatever?-The principle upon which the Scotch banks do business differently from the English banks is in the mode of lending money upon cash accounts, a principle which it is the intention of the Provincial Bank to carry into effect, as soon as the circumstances of the times will admit of its being done with advantage.

Have you been in Ireland?—Yes; but not in the provincial parts of Ireland; not further than Dublin.

Were you in Ireland on business connected with the Provincial Bank ?—Yes. Had they opened cash credits at the time you were connected with them?-To a limited extent.

Did they conduct the business of cash credits precisely in the way that the Scotch banks conduct it?—Yes.

At what towns had they opened cash credits at that time?—At Cork and other branches, but they had not carried it very extensively into effect.

When a person deposited 1,000l., and had an account current with the bank, did the Provincial Bank allow interest upon the balance?-Yes.

What was the amount of interest they allowed?-Two per cent.

Supposing there had been a prohibition by law to issue notes under five pounds in Ireland, do you think the Provincial Bank would have been established ?— I think there are very few towns in which the Provincial Bank could have establishments, if they were not permitted to circulate notes under the value of 5 l. The commercial business of Ireland is so small, and its banking operations so few, that they would not pay for the establishment of banks independently of the circulation.

Have you formed any opinion as to what would be the effect of a law upon the mercantile interest of Ireland generally, which should prevent the circulation of promissory notes under 57., do you think there would be any difficulty in procuring a sufficient amount of specie for the circulation of the country?-The banks that

J. H. Houston,
Esq.

(12 April.)

Appx. No. 17.

Mr.

circulate the large notes would have to supply the proportion of gold currency required; I do not suppose it would make any difference in the total amount of the Thomas Joplin. Currency, if the banks could procure a sufficient quantity of gold from England. Would it not diminish the profits of the bank pro tanto?-Yes; and it would prevent the establishment of banks in many parts of the country, where the establishment of them would be productive of great benefit.

(12 April.)

Supposing the usury laws were repealed, what would be the effect that would be produced? I should not think that there is a sufficient extent of commercial operations in the provincial towns of Ireland, with the exception of four or five, to support the establishment of a bank without a circulation, under any system of charges that could be adopted.

How do you account for it, that both the Provincial Bank and the bank of Ireland, and other banking establishments, have been enabled to establish branch banks at different towns in Ireland, where they exist concurrently?-Where three or four banks can profitably found establishments now, one perhaps might exist if the small-note circulation were withdrawn; but it does not appear to me, from the amount of business done in the provincial parts of Ireland, that without a smallnote circulation banking could be carried on extensively. About two-thirds of the amount of the circulation in the provincial parts of Ireland, or at least in the south of Ireland, consist of notes under the value of 5.

Have you formed any calculation as to the total amount of small-note circulation requisite for Ireland?—I have formed no other estimate than that contained in the documents called for by the House of Commons, and it appears from that to be about two millions.

That contains only the amount of notes stamped: is that any criterion of the amount in circulation?-The Return from the bank of Ireland I believe gives the amount in circulation, which appears to be about 1,600,000l. I never attempted to form any very correct calculation of the other small notes of the other banks, but I suppose, added to those of the bank of Ireland, the total amount may be 2,000,000l.

Are there now in circulation small notes to the amount of 400,000l. of all the other banking establishments besides the bank of Ireland?—I should think there must be that amount at least.

Supposing there was once established in Ireland a gold currency of sovereigns to the amount of two millions, do you apprehend there would be any difficulty in carrying on the mercantile transactions of that country?—I should imagine there would be no difficulty in carrying on the present mercantile transactions of that country; the injury sustained would consist in the premium being withdrawn, which the circulation at present gives to the establishment of banks in the different parts of the country where they would be of great advantage to it.

Supposing the banks were allowed to cover the new expenses they would incur by an additional rate of interest, would not there be the same inducement to establish banks that there is at present, and would not the charge fall upon the country generally, and not upon the banks themselves?-That might be the case in England and Scotland; but I do not think in Ireland there is business sufficient under any charge to pay for the establishment of banks in most parts of the country, without the profits to be derived from the circulation.

Do not you think a person would rather pay seven per cent interest than relinquish the advantage of getting his bills discounted, or of getting a cash credit?-Certainly; the cash credits are generally granted to people of small capitals, who I think could pay a small additional interest, rather than forego the advantages they afford.

Then if they would consent to pay that additional interest, surely there would then be no inducement to the bank to abstain from discounting?-I should say that in a neighbourhood where perhaps there is a circulation of 20 or 30,000l. the interest derived from which would pay for the establishment of a branch, there might not be, in the present state of Ireland, a sufficient number of agriculturists, manufacturers and merchants, who could take advantage of banking accommodation to pay one fourth the expenses of an establishment by means of such charges; yet the encouragement and support which a bank would afford them, might enable them to extend their operations with great advantage to the country, as well as be an inducement to others to settle in the neighbourhood.

It might perhaps be necessary to discontinue the banking establishment at Clonmel for instance; but why should not the parties who live in the neighbourhood of

Clonmel