Political Pamphlets

by Unknown

Since the period of the Ayr Bank, now near half a century, I recollect very few instances of Banking Companies issuing notes which have become insolvent. One, about thirty years since, was the Merchant Bank of Stirling, which never was in high credit, having been known almost at the time of its commencement by the odious nickname of Black in the West. Another was within these ten years, the East Lothian Banking Company, whose affairs had been very ill conducted by a villainous manager. In both cases, the notes were paid up in full. In the latter case, they were taken up by one of the most respectable houses in Edinburgh; so that all current engagements were paid without the least check to the circulation of their notes, or inconvenience to poor or rich, who happened to have them in possession. The Union Bank of Falkirk also became insolvent within these fifteen years, but paid up its engagements without much loss to the creditors. Other cases there may have occurred, not coming within my recollection; but I think none which made any great sensation, or could at all affect the general confidence of the country in the stability of the system. None of these bankruptcies excited much attention, or, as we have seen, caused any considerable loss.

In the present unhappy commercial distress, I have always heard and understood that the Scottish Banks have done all in their power to alleviate the evils which came thickening on the country; and far from acting illiberally, that they have come forward to support the tottering credit of the commercial world with a frankness which augured the most perfect confidence in their own resources. We have heard of only one provincial Bank being even for a moment in the predicament of suspicion; and of that copartnery the funds and credit were so well understood, that their correspondents in Edinburgh, as in the case of the East Lothian Bank formerly mentioned, at once guaranteed the payment of their notes, and saved the public even from momentary agitation, and individuals from the possibility of distress. I ask what must be the stability of a system of credit of which such an universal earthquake could not displace or shake even the slightest individual portion?

Thus stands the case in Scotland; and it is clear any restrictive enactment affecting the Banking system, or their mode of issuing notes, must be adopted in consequence of evils, operating elsewhere perhaps, but certainly unknown in this country.

In England, unfortunately, things have been very different, and the insolvency of many provincial Banking Companies, of the most established reputation for stability, has greatly distressed the country, and alarmed London itself, from the necessary reaction of their misfortunes upon their correspondents in the capital.

I do not think, sir, that the advocate of Scotland is called upon to go further, in order to plead an exemption from any experiment which England may think proper to try to cure her own malady, than to say such malady does not exist in her jurisdiction. It is surely enough to plead, 'We are well, our pulse and complexion prove it—let those who are sick take physic.' But the opinion of the English Ministers is widely different; for, granting our premisses, they deny our conclusion.

The peculiar humour of a friend, whom I lost some years ago, is the only one I recollect, which jumps precisely with the reasoning of the Chancellor of the Exchequer. My friend was an old Scottish laird, a bachelor and a humorist—wealthy, convivial, and hospitable, and of course having always plenty of company about him. He had a regular custom of swallowing every night in the world one of Dr. Anderson's pills, for which reasons may be readily imagined. But it is not so easy to account for his insisting on every one of his guests taking the same medicine, and whether it was by way of patronising the medicine, which is in some sense a national receipt, or whether the mischievous old wag amused himself with anticipating the scenes of delicate embarrassment, which the dispensation sometimes produced in the course of the night, I really cannot even guess. What is equally strange, he pressed the request with a sort of eloquence which succeeded with every guest. No man escaped, though there were few who did not make resistance. His powers of persuasion would have been invaluable to a minister of state. 'What! not one Leetle Anderson, to oblige your friend, your host, your entertainer! He had taken one himself—he would take another, if you pleased—surely what was good for his complaint must of course be beneficial to yours?' It was in vain you pleaded your being perfectly well,—your detesting the medicine,—your being certain it would not agree with you—none of the apologies were received as valid. You might be warm, pathetic or sulky, fretful or patient, grave or serious in testifying your repugnance, but you were equally a doomed man; escape was impossible. Your host was in his turn eloquent,—authoritative,—facetious, —argumentative,—precatory,—pathetic, above all, pertinacious. No guest was known to escape the Leetle Anderson. The last time I experienced the laird's hospitality there were present at the evening meal the following catalogue of guests:—a Bond-street dandy, of the most brilliant water, drawn thither by the temptation of grouse-shooting—a writer from the neighbouring borough (the lairds doer, I believe),—two country lairds, men of reserved and stiff habits—three sheep-farmers, as stiff-necked and stubborn as their own haltered rams—and I, Malachi Malagrowther, not facile or obvious to persuasion. There was also the Esculapius of the vicinity—one who gave, but elsewhere was never known to take medicine. All succumbed—each took, after various degrees of resistance according to his peculiar fashion, his own Leetle Anderson. The doer took a brace. On the event I am silent. None had reason to congratulate himself on his complaisance. The laird has slept with his ancestors for some years, remembered sometimes with a smile on account of his humorous eccentricities, always with a sigh when his surviving friends and neighbours reflect on his kindliness and genuine beneficence. I have only to add that I hope he has not bequeathed to the Chancellor of the Exchequer, otherwise so highly gifted, his invincible powers of persuading folks to take medicine, which their constitutions do not require.

Have I argued my case too high in supposing that the present intended legislative enactment is as inapplicable to Scotland as a pair of elaborate knee-buckles would be to the dress of a kilted Highlander? I think not.

I understand Lord Liverpool and the Chancellor of the Exchequer distinctly to have admitted the fact, that no distress whatever had originated in Scotland from the present issuing of small notes of the bankers established there, whether provincial in the strict sense, or sent abroad by branches of the larger establishments settled in the metropolis. No proof can be desired better than the admission of the adversary.

Nevertheless, we have been positively informed by the newspapers that Ministers see no reason why any law adopted on this subject should not be imperative over all his Majesty's dominions, including Scotland, for uniformity's sake. In my opinion they might as well make a law that the Scotsman, for uniformity's sake, should not eat oatmeal, because it is found to give Englishmen the heartburn. If an ordinance prohibiting the oatcake, can be accompanied with a regulation capable of being enforced, that in future, for uniformity's sake, our moors and uplands shall henceforth bear the purest wheat, I for one have no objection to the regulation. But till Ben Nevis be level with Norfolkshire, though the natural wants of the two nations may be the same, the extent of these wants, natural or commercial, and the mode of supplying them, must be widely different, let the rule of uniformity be as absolute as it will. The nation which cannot raise wheat, must be allowed to eat oat-bread; the nation which is too poor to retain a circulating medium of the precious metals, must be permitted to supply its place with paper credit; otherwise, they must go without food, and without currency.

If I were called on, Mr. Journalist, I think I could give some reasons why the system of banking which has been found well adapted for Scotland is not proper for England, and why there is no reason for inflicting upon us the intended remedy; in other words, why this political balsam of Fierabras which is to relieve Don Quixote, may have a great chance to poison Sancho. With this view, I will mention briefly some strong points of distinction affecting the comparative credit of the banks in England and in Scotland; and they seem to furnish, to one inexperienced in political economies (upon the transcendental doctrines of which so much stress is now laid), very satisfactory reasons for the difference which is not denied to exist betwixt the effects of the same general system in different countries.