This company conducted their affairs, during 130 years, viz. from the year 1696 to the year 1826, wholly in London; and they confined their operations almost exclusively to transactions with the government; and with the chartered banks of Scotland and Ireland; and to making loans to merchants by discounting bills. During that period they scarcely interfered in any manner with the general banking business of the country.

The Bank of England can receive but little of the surplus capital of the country, because it allows no interest for money deposited. The giving of interest would, on its fixed and unreversible principles, and under the management of almost any set of directors, soon cause ruin to the establishment; yet the great characteristic of the country banker is that of agent for the affluent, who employ him to invest their surplus capital judiciously amongst the industrious. The present constitution of society renders the borrowing of money from the rich, on interest, and lending it to the necessitous, so natural and urgent, that it was carried on for a long period in England, chiefly by scriveners; encumbered with all the expenses, delays, technicalities, and formalities of law. No effort of human wisdom could devise a scheme better adapted to its purpose, than that of establishing country banks, to take the spare money of the wealthy, on interest, and lend it to men of industry in the vicinity-securing, in a manner the most easy and efficacious, advantages in common to those who labor, and those who, by their savings, can rest from labor. A system which, by diffusing capital promptly and efficiently amongst the productive classes, has, with the moral qualities of the people, caused this country to rise in political importance above all other states.

After the Bank of England had been established more than half a century, those causes began first to operate on an extended scale, and in a remarkable manner; which, by increasing the productions of the mines, by extending manufactures, by giving enterprise to commerce, by improvements in agriculture, have afforded results unexampled in the history of nations.

The principles of the Bank of England render it wholly unfitted to extend any effectual aid to those important causes, which in our day have produced such astonishing effects. But then, if ever, was the time, when the directors should have resolved on establishing Branch Banks; when the extended mining and manufacturing operations of the country needed the aid of new capital, to insure a successful and triumphant issue. Not when connexions had been formed-interests grown up, and ample capital furnished, and judiciously appropriated by other banks. The necessity for such aid was obvious, and its urgency may be known, by the fact, that manufacturers, in some of the remote parts of Yorkshire and

Lancashire, were compelled to conduct all their banking transactions at Nottingham, 70 to 100 miles distant from their dwellings and factories; because there were no banks at Leeds or Sheffield, or any of the intermediate towns. These transactions were performed in the most cumbrous and expensive manner. When a Leeds merchant received a remittance of foreign bills of exchange, the only bank between his dwelling and London being situated at Nottingham; his habit was to mount his horse, carry his bills thither to be discounted, and bring home the solid metal in his saddle-bags.

The urgent and imperative wants of the people, made manifest by these circumstances, caused the great extension of the country bank system; and with it the general banking interest of London. Banks, by being the points where money is collected, and whence it is distributed to the public, bear the same relation to the money affairs of a country, as markets and roads do to the productions and commodities: they facilitate interchange, remove obstacles and delays in the transit; and, in this manner, they all tend to increase productions and to diminish their cost. If those important moral causes of the nation's wealth and prosperity, the skill, and industry, and genius of the people, could have derived no pecuniary succor but such as the Bank of England would afford, they might, in some of the most important departments of industry, have ceased to operate with the first efforts of the enterprising and laborious individuals; who, by perseverance, and the effectual aid which they derived from banks, succeeded in opening to the country vast sources of wealth and power.

The extraordinary consequences in all mining, manufacturing, and commercial operations, which have flowed from the application of capital, chiefly by the means of banks, are notorious, and may be estimated with tolerable accuracy by returns rendered by the customs, or excise, or stamp offices, or by some municipal or established authority; but no similar estimate can be made of the effect produced by the same cause on the cultivation of the land. Some criterion by which to judge of this may, however, be afforded by the fact, that a land-owner, now living, increased his rental during his own life, from one and the same estate, from two thousand pounds per annum to twenty thousand pounds per annum ; and the tenants were more prosperous, and richer, at the higher rentcharge than at the lower. The effect was not caused by the proximity of the estate to a manufacturing or greatly increasing population; but by improved husbandry, the introducing and maintaining of which depended on the country bank system.

In considering the wonderful effect produced by the stimulation which was given by the banking system of England to ingenuity and

labor, in all departments of industry, it is remarkable how little of this effect can be traced to the Bank of England, which, "in itself and by itself," gave little, if any, direct support to the expanding energies of the people, who were engaged in agriculture, mines, and manufactures. No farmer, desirous of augmenting the produce of his fields, could aid his operations in husbandry, or add a hoof to the flocks and the herds in his pastures, by borrowing money of the Bank of England. The workmen in the mines have not been paid in the money of that corporation; and in regard to manufacturers, though a few have obtained loans from the Bank of England, and used its notes in paying wages, the number is so small as to prove, by the exception, the utter insignificance of the aid which any operations in industry have received from that establishment.

Nothing has rendered this country more famous than the perfection of its means for interior communication; yet, what association for constructing bridges or canals, roads or railways, has been supported by loans from the Bank of England? It was not money from this bank which converted the pestilential and useless marshes into healthy and luxuriant meadows; or which caused the rich corn-fields to rise on the sterile wastes.

The country banking interest has grown up, principally, during the last seventy years, in afd of the energies of the country; an interest which has, for a long time, been like cause and effect, intimately connected with all the operations in industry, and is now inseparably blended with the means of national wealth. It may be said, generally speaking, that no farmer enters on a farm, without knowing previously whether, in case of a deficiency in his own means, the neighboring banker will, directly or indirectly, enable him to purchase stock; nor will be enter on extensive improvements, without knowing whether he will be supported by the same pecuniary aid, till the beneficial returns which must result from those improvements come to set him free. While the miner and the manufacturer resort to country bankers for the means of paying wages, as well as for assistance to keep their workmen employed and accumulate stock, during temporary but constantly recurring periods of slackened demand. It is impossible to estimate accurately the magnitude of this interest. No man acquainted with the subject will deny, that in the personal property of bankers amenable for their engagements; in the deposits committed to their charge and in their paper circulation, an interest is combined of a magnitude six times the extent of that which is comprised in the paper circulation, the deposits, and the capital stock of the Bank of

1 See letter and communication from Lord Liverpool and Mr. Robinson, to the Governor and Deputy-governor of the Bank, January 13th, 1826.

England. That, while the former derives its importance from being connected with the active classes in the community, the latter is known almost solely from its connexion with the government. And though it be an interest which cannot be accurately estimated, some criterion by which to judge of its importance may be afforded by the facts, that one banking company lent, at one time, to the farmers and traders of one county and the borders adjoining, a million sterling; and that one co-partnership in the City of London, which derives its means and its importance entirely from the country banking interest, has, in some periods, discounted a much greater amount in a single year, than the Bank of England has discounted during the same year.

The operations of industry having become dependent, to a vast extent, on the functions of the country banker, all rents and all incomes derived from fixed property (other than government security) must be greatly affected by the prosperity or adversity of the banking interest.

Is this an interest for the subversion of which the power and resources of the Bank of England must be applied? When all the processes of industry have become almost identified with the coun try bank system, and are continued by its means, is it wise so to risk the disturbance of capital, and the breaking up of establishments which afford employment to the laborers? When men of property and character have devoted their time and talents to establishing a business, requiring the most particular and anxious attention, on principles which will afford security to the lender of money, and benefit to the borrower, is it just to endeavor to deprive them of the fruits of experience, by the unfair competition of Branch Banks from the Bank of England? Can this design be accomplished, without imminent danger to the prosperity of the community, to the resources of the state?

and

The Bank of England is unfitted, by its constitution and the principles of its action, to perform the general banking business of the country. If the principles were unobjectionable, that vigilant, minute, never-relaxing attention which is indispensable in the banking business, rarely can be met with in delegated functionaries, whether directors or managers; a circumstance which must render Branch Barks, at places remote from the Bank of England, eminently hazardous. The essence of the banking business is, that those who practise it can render constant attention to individual circumstances. The directors of the Bank of England will lend only for a stated period, and in a particular manner; and they require repayment, on a fixed day, of the whole sum. Other bankers will lend for a longer or a shorter period, on one kind of security or another, to be regulated by circumstances; and they

will take back the sum lent at once, or at various times, in whole or in part, according to the convenience of the borrower.

That the principle of the Bank of England is monopoly, to the heart's core of its system, is manifest; and this master vice will taint all its proceedings, and produce every where the same consequences in society. By discounting large sums, it affords facilities to the powerful to enter on speculations, and conduct enormous establishments. By refusing to discount small bills, it debars the struggling man, of little means, of its advantages. It refuses all accommodation to those who can perfect their operations only by long-continued persevering efforts; therefore, all processes in agriculture, and most of those in mining and manufacturing concerns, must proceed without its influence, or be abandoned for the want of it. Its principal transactions with the public being by means of discounting bills, it affords encouragement to middle men, who deal only by wholesale: men who, by means of discounting at the Bank of England, can at any time cause a glut, or produce an artificial scarcity; and who can thus throw the concerns of those who are engaged in producing, or those who purchase for the consumers, into ruinous confusion. No man of good credit, prudence, and industry, can borrow money of the Bank of England, but by means of a bill of that particular kind which their rules prescribe; but any such man can borrow money of a country banker, so, long as he retains the qualities of prudence and industry. The directors take no cognisance of personal conduct; accordingly, any specious man, who has once established his credit with them, and opened a discount account at the Bank of England, or any of its branches, may raise money so long as he can create bills fashioned according to their particular regulations. But any man who desires to continue, from time to time, to borrow money of a country banker, must retain his character of prudence and intelligence, which first guaranteed the loan. Hence one system offers a premium for raising money by dexterous expedients and accommodation, and leads to gambling habits of speculation in commerce: the other gives encouragement to skill, and labor, and perseverance in all departments of industry, and not alone in those where bills greatly prevail. The leading principle of the Bank of England acts so as to deny all assistance to the man who is engaged in producing things of value by continued labor, and to afford all encouragement to sharp and cunning men of the market, who deal and deal, and cause the same commodity to pass through a dozen hands, without changing in any respect its form or texture, or adding to its intrinsic value; consequently, all operations in agriculture, all mining processes, and all operations in manufactures, wherein labor is a great constituent of price, are excluded from its influence.