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Appx. No. 17.

Mr.

James Marshall.

(12 April.)

board, in a case in which a difference of opinion arises, the matter must be submitted to the board in London.

The manager has a veto upon every act of the board ?-Yes; if he sees that it is in his opinion inconsistent with the good of the bank to do any one act, he has it in his power to prevent it.

Has the local board power to represent the misconduct of a manager?Certainly.

Have they power to suspend him at their own pleasure?—No.

They only have power to make a representation to the board in London?Yes.

How are the local directors selected?-They have been selected by the board in London, according to the best information they could obtain as to the gentlemen that were most likely to be useful in any particular district; there have been two deputations sent for that purpose to Ireland.

Is there any limit upon their number?-The highest number we have is five, and the lowest is three.

Is five the greatest number which by the regulations there can be?-There is no particular regulation upon the subject.

But five is the highest number of local directors that there is ?-Yes.
Do the local directors receive any thing for their attendance?—They do.

In what way is the payment made to them?-There is a certain sum allotted to the board, according to its magnitude and the degree of attendance supposed to be required, which is divided among the local directors.

Is there a fixed salary allotted to each?-They divide the sum allowed according

to their actual attendance.

What constitutes attendance ?-Either every day, as is the case in some of the branches, or certain days of the week; they must attend at the hour when the bills are ordered to be given in for discount on each day.

Is there any limitation on the amount of the sum which can be divided among the local directors ?-That is fixed by the board at London; they allow a certain sum to each particular branch, to be divided amongst them.

What is the regulation made with respect to the sum to be divided among the local directors? There is no particular regulation; the board at London judge according to the magnitude of the place, and the relative importance of the branch, whether it shall be more or less.

Must the local directors have shares in the bank?-They must each hold ten shares as a qualification.

Does not the profit of the bank depend upon the amount of bank-note circulation that you keep up?-That is one most important item in the profit.

In point of fact, in those towns in which there is a branch bank established, do the local directors receive facilities of discount from the branch which they superintend? Their bills are not rejected because they are local directors, certainly.

Practically, do the local directors in all cases offer their bills to the bank for discount?-Where they are engaged in trade the bank expects they will do their business with the bank.

Do you apprehend that the payment of a salary was necessary to induce them to become directors?-It is found in most societies of that kind, to insure punctuality of attendance.

Is that the practice in private establishments -The bank of England pay their directors, the East India Company pay their directors, and the insurance companies all pay their directors; but of course the bank can have no wish to withhold from the Committee information of what the directors receive. All I would wish to state is, that it is not considered to be of that amount as to be an object to the gentlemen who usually act in that capacity. It has been the object of the bank to select gentlemen as independent in their circumstances as possible.

Are the local directors generally merchants or men engaged in business in the town in which the bank is situated?--We have them in almost every branch.

Has any failure taken place amongst the local directors of the different branches? -None that I know of.

Have any failures taken place among the connections of those individuals who form the local board of direction, among their correspondents in different places?--Not particularly that I know of. The allusion may probably be to the failure of the banking house of Sir John Perring and Company, of which firm Mr. Shaw,

of

of the house of Jordaine and Shaw (who were the correspondents of some of the Appx. No, 17. houses connected with our establishment in Ireland) was a partner; but the house of Jordaine and Shaw are solvent, and, so far as I know, no person whatever James Marshall. connected with our bank has lost any thing by the failure of Perring and Co.

What is the check upon the issues, as the local directors, having shares in the bank, have a manifest interest in increasing as far as possible the issues made by the bank?-They have an interest in promoting the true interests of the bank.

Have they not an interest in increasing the issues of bank-note paper?—An increase in the amount of issues merely, is no criterion of the interest of the bank being promoted.

Are not issues upon discount, upon which five per cent is received, a criterion of the profits of the bank, provided the parties to whom they are issued be solvent? -If those issues remain out, if the notes do not come back immediately upon the bank; it is not the mere paying of notes over the counter that produces profit to

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Do you find that the obligation to pay in gold is a check upon the issues?—It certainly is.

Is gold frequently demanded?-Of late, in the south of Ireland: at Cork, owing to the failure of Messrs. Leslie and the stoppage of Mr. Pike's bank, by his death a panic was created amongst the people, which caused a very considerable run upon our bank.

Has there been a demand for gold, in exchange for your bank-note paper, at any other place than Cork?-Nothing in that way at all; we are always paying out and receiving in gold at every place.

You have issued gold partly in discounting bills, probably?-No: people come with our notes and ask payment in gold, and they get it; they do that currently at every place, and in some places to a considerable extent.

For what purpose do they ask for gold?-Some for the purpose of taking it over to this country; there is at present an emigration going on to America, which has occasioned a considerable demand for gold; and other people ask for it for the purpose of hoarding it.

Are notes issued at Cork payable in gold at Clonmel?—No, only at the place

of issue.

So that you always know the amount for which you are liable at each place?— Yes.

Do you issue any notes in this country?-No where, but at the places I have mentioned.

None at Dublin?—No, we have not the power to issue in Dublin; the notes may pass from hand to hand there, but we can neither have an office of our own to issue them, nor employ any agent to do so in Dublin.

Has the company made application to individuals, in any particular place where they established a branch bank, to become directors, who have declined becoming directors?-Yes: in every case we obtained lists of the persons who were considered to be most eligible, and it was the object of the deputations who went over to see those gentlemen, and to inquire whether they were disposed to be directors. Are there many applications to be directors?-There have been a good many. But many who have been applied to, have refused to become directors? Not many.

Does the circumstance of a person being a local director, give any superior facility to him for obtaining the discount of bills?-I am not aware that it does. Can you state what amount of gold is paid into the bank, in proportion to that which the bank pay in exchange for their notes?-Very small.

Supposing a deposit was made with you in bank of Ireland notes, would you refuse to receive that deposit?—No, we constantly receive them.

Supposing on the next day an application were made to you to discount a bill, should you issue those bank of Ireland notes in the discount of that bill?-No; we issue our own.

What do you do with the bank of Ireland notes ?-We exchange them, or get payment for them by sending them to Dublin; we exchange them in Cork and in Clonmel, and in Belfast and Londonderry, wherever the bank of Ireland has a branch a regular exchange takes place; their agents and our managers send alternately to each other's office to make the exchanges.

.. Does that take place on some particular day of the week?-Every day in the week; they exchange notes daily, and settle the balances by an order upon Dublin;

Mr.

(12 April.)

Appx. No. 17.

if we have 5,000l. against the bank of Ireland that is paid to our agent in Dublin; if they have a balance against us, they get payment in the same way from our agent James Marshall. in Dublin.

Mr

(12 April.)

Has the bank of Ireland local directors for its branch banks?—No, they have two agents generally; they have two persons united in the agency.

Do they pay in gold at their branches?-No.

Do you know that the branches of the Bank of Ireland have been applied to for payment in gold and that they have refused?—Yes.

Have there been any proceedings taken in consequence of that?-At one time there was a protest taken of their notes of which payment in gold had been refused. Do you attribute the alteration in the form of the bank of Ireland notes lately made to that transaction?-I do.

Supposing you were allowed to charge seven per cent interest instead of six, do you think you would have any difficulty in carrying on your transactions, although you were prohibited from issuing notes under five pounds ?--We have in no instance charged more than five.

Suppose the usury laws were done away with, and there was no fixed rate of interest by law, do you apprehend you would have any difficulty in discounting bills?-I believe the bank could make a profit, but I think they would not have the same power of accommodating the country.

Would not your power continue to be the same as long as your capital was the same?-No.

Supposing you were allowed to issue notes as low as three pounds, but none under three pounds, do you apprehend that you would find any material difficulty in conducting the transactions of the Provincial Bank Company ?-I think there would; I think the difficulties attending the constant transport of specie backwards and forwards, and the cost of it, would be so great as very much to cramp the business.

Do you practically find any such difficulty in transporting specie to all the different branches you have established?—That is done in a large sum only for once; but there would be a constant business of it.

Why would that be necessary?—It would travel from one place to another; the issues at one branch for instance we should have to replace very speedily.

A gold circulation having been once supplied to the country, where would be the necessity for this constant transfer from one bank to another?-I conceive that necessity would still be very great, and that the expense of it would be such as to prevent the bank giving the accommodation to the country which it now does.

You would lose the profit you now gain upon the issue of one and two-pound notes, or any note below three pounds, would there be any difference whatever beyond the loss of profit upon the issue of notes below three pounds?—There would be the trouble and inconvenience of these frequent transmissions, and the expense attending them, with an actual diminution of the profit which now attends the circulation of small notes.

Have you not considerable dealings in which silver is necessary?—There is plenty of silver in some places; we find it increasing considerably beyond the desirable amount.

Do you keep silver for the purpose of paying demands upon you below 40 s. in silver?-We conceive we are entitled by law to pay every small note in silver, but whenever gold is asked we give it.

What difficulty can there be in transporting such a sum as twenty thousand pounds in gold but the expense of the chaise which takes it?—If it were only one transport of twenty thousand pounds, which was not to take place for six or nine months again, that would not be any great evil; but I apprehend it would be something very different, and that, in fact, to the people it would be a very great evil, by obliging them to carry money from great distances, as they do come from great distances to the markets, and it would be very unsafe and troublesome and inconvenient to them in every way if they had to carry sums of gold the distance of twenty, thirty and forty miles.

You are speaking now of the people who traffic at the markets?—Yes.

But you say that the general average of the dealings does not amount to more than two or three pounds; if they amounted to five pounds they would be allowed to employ five-pound notes; where could be the inconvenience to a man who has to travel thirty or forty miles to carry two or three sovereigns? They can do it, but

it is not so safe, because in such a country as Ireland they do not like to let their money be seen.

Appx. No. 17.

Mr.

Is not he equally liable to robbery if he has notes ?-The notes are cut into halves, James Marshall. and sent by different conveyances, which is a very general practice.

In the case of a man coming to market to buy a pig or a barrel of flour, is it usual to cut the note in half?-No; but when I speak of persons attending markets, it is where buyers attend markets who have to carry large sums with them in order to make their purchases in those markets, which are of course all made in ready money; that buyer must be provided with three, four or five hundred pounds in order to make his purchases.

Is he so provided at present?—He is, speaking of Ireland generally; but in the north the bankers have been in the habit of sending agents to the linen markets with notes to supply the buyers, in exchange for bills, which they pass according to the amount of their purchases on their employers in Belfast, Dublin or elsewhere.

What portion of the sum of five hundred pounds so brought by the dealer to the market consists of notes above five pounds?-Scarcely any, I believe.

Why might not a large proportion of it consist of notes above five pounds?Because he must buy from this one and that one, who has only one, two and three pounds worth to sell; he could not effect his object without small notes.

Supposing, for instance, a linen buyer offers to purchase a web from a weaver, the price of which should be thirty shillings, and the people of the country generally knew that the small notes under three pounds were to be out of circulation, do you think the weaver would not be disposed to give change in specie for a threepound note ?--No.

Do you apprehend that any man who had 17. 10s. in specie, and had an article to sell in the market worth 17. 10s. would refuse to sell it for one of your threepound notes because he had to give 17. 10 s. in exchange?-Many of them have a great disposition to hoard the gold, and they do not like to part with it after they have got it.

Will they hoard their gold in preference to selling their manufacture?—A man cannot keep both his linen and his gold, and if it can only be sold upon those terms, he must do so.

Excepting in Cork, where there has been a sudden panic from the failure of the bank in Cork, is there that disposition to hoard gold in Ireland, that you find any difficulty in maintaining an adequate supply of gold at the different branches? I think there seems to be a disposition to hoard gold in other places; I think there is a demand for it, which is not accounted for in any other way.

Do you consider that it will be a permanent part of the Irish character to hoard the gold? The country has been so frequently disturbed, that when any thing apprehended, of course gold is a thing that they consider will stand them best.

Supposing you should happen to have issued more notes than were required fo the circulation of any district, what effect would that have upon your supply of gold? -If we issue more than should be issued they instantly come back to us; we are obliged to pay them.

Then may not the demand for gold in the cases you mention have arisen from there having been an over issue of your notes?-It does not follow, because the country people may want to hoard it.

Do you apprehend that you can by any possibility make an over issue of notes? -As long as we are obliged to pay them in gold, and have to exchange them as we do, I think that checks it.

May not this demand for gold have been the operation of this natural check that you suppose to exist? We use the utmost precaution in issuing our notes; we do. not issue them except in the first place upon proper security; and in the next place, as far as it is in our power to judge that the issues are wanted for the real transactions of the country, and will be fairly used.

Do you apprehend there could be any over issue of notes provided you were satisfied that the parties who applied for the notes were perfectly solvent, and that they meant to apply them in what you call projects really useful to the country?— As long as we are obliged to pay our notes, if there has been more issued than is wanted for the circulation of the place, it instantly comes back in a demand either for a bill upon London or Dublin, or somewhere else.

And there has been that demand?-It is the natural operation of the thing. You say there have been instances in which you have found the demand an inconvenient one?-I did not intend to say that, except in the instance of the run

(12 April.)

Appx. No. 17.

Mr. James Marshall.

(12 April.)

upon Cork, which we did not consider a convenient thing; in some other instances there is a considerable demand going on, some coming back and some going out.

If there was a demand for gold, arising not from any real panic, but merely from a disposition to hoard the gold, should not you consider that an inconvenient demand for gold?—We consider that we must keep up a supply to a certain extent of our issues, the practice points out what that is; we lay our account with the demand always existing; we do not suppose that when the notes go out they are to stay out always.

You say there is a great disposition on the part of the Irish people to hoard gold; has that led to any inconvenient demand for gold upon you for the purpose of hoarding it?-It is a constant sort of demand; I do not say that it is an actual inconvenience, because we must provide always a considerable sum at each branch.

How do you know that the demand arises from a disposition to hoard gold?We know generally from information in the country, in the neighbourhood of Cork, that that disposition has been excited in that quarter of late, in consequence of the panic that took place at Cork, and because it neither appears in general circulation, nor comes back to the bank, but in very small quantities.

Did that panic extend to Belfast?-No.

Did that panic extend to Londonderry?—No.

Did it extend to Wexford ?—No, we had just begun there then.

Did it extend to Sligo ?-No, the panic has not extended any where but at Cork. Was there immediately after the panic existing at Cork, an extra demand for gold at the different places that have been mentioned ?—I think not, as connected with the panic at Cork; there has been a considerable demand at some places but without any symptom of panic: as it is made by those who hold only two or three notes, and as so little of the gold appears in circulation, we conclude it must be demanded for the purpose of hoarding.

Is gold paid into your bank?--Occasionally.

How do you account for the payment of gold into the bank, if there is a disposition to hoard gold? However a man may wish to hoard, he must part with some of it sometimes.

Is the amount paid in very small in proportion to the amount issued?—Very small indeed in proportion to the amount issued.

Supposing there were no notes below three pounds in circulation, do not you apprehend that the gold which is now circulated would make its appearance in order to conduct the ordinary transactions of the country?-To a certain degree; if there were no notes in circulation under three pounds, the void must be supplied by something else.

Do you find any disposition to hoard silver?-We do not perceive it, for we find silver growing in quantity; in some places it has gone away, but generally speaking it is the reverse.

You do not find any disposition to hoard silver ?—Judging from that, I should say we do not.

If you are allowed to issue notes below one pound, five-shillings notes for instance, do not you think there would be a tendency in the silver to disappear?—I do not see how that should cause it.

In those parts of the country where twenty-five shilling notes are issued, has the tendency of the silver to disappear been more visible than in other parts of the country?—No, we do not find any want of it; it is only at one place where there has been any demand for silver, and we have not issued twenty-five shilling notes

there.

Where is that?—At Clonmel; and I cannot say by what it has been occasioned. Had Clonmel received what was thought an adequate supply of silver?—Yes; when we found it increased greatly at other places, we found it decreased there.

Was not Clonmel a town where both the bank of Ireland and the Provincial Bank established a branch ?--It was well known we were going to establish a branch there for a long time; the bank of Ireland established a branch there.

There being no branch existing at Clonmel, both the bank of Ireland and the
Provincial Bank concurrently established a branch ?-They were before us.

Within what period were the two branches established?—Several months I think.
There are now two branches there?-There are.

Two years ago there was no bank at all there?-No; the bank of Ryall which had been established there had ceased.

Do

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