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it was 52,000l.; this includes both banks. The reduction from 120,000l. in 1828, to 90,000l. in 1829, was on account of the withdrawal of the small notes. The deposits have varied much, and the mining account is very low at present. The contraction arose from the action of the public on the bank, and not in that of the bank itself. The exchanges have no more to do with the Merthyr circulation than last year's now has. The public prints have stated that when the Bank of England increased its issue the currency left the country; but that never influenced the Merthyr bank. A regular contraction of the Bank of England does produce an effect on the Merthyr bank.

2. Parties they deal with; small Note Circulation, &c. (p. 1609.) The bills described as not negotiable would become so, if indorsed by the Merthyr firm, but not else. They would be readily taken in the London market. The promisers are generally drovers, for that part of South Wales is a feeding country, and these persons come for accommodation to attend fairs, &c.; they generally bring a responsible person with them, and are accommodated with 10007. or 20001. for two or three months; the bank is always acquainted with the credit of some of these parties. The 1. notes increased the facility of their accommodation! their withdrawal has thrown difficulties in the way, for it is not worth while for the bank to draw from the funds or other securities money to lend at five per cent.! but the notes were at hand, therefore the accommodation is diminished four-fifths, especially to drovers, for they have only their personal responsibility to offer. The bank has less confidence in the parties, and its funds are less. Had no day been named for the termination of the 17. circulation it might have been better, but the people supposed themselves bound to pay with money by the 8th of February. The bank in the neighbourhood failed in 1826, which increased the business of the Merthyr bank; their circulation, when they failed, was 70,0007.

3. Branch Bank of Swansea. Was Manager thereof, &c. (p. 1627.) The branch bank of Swansea was established in 1826; there were few Bank of England notes in the district before that, and the increase now accounts in some measure for the diminished circulation of the country bank. The witness was a country banker from 1796 to October 1826; he then became manager of the Bank of England branch bank at Swansea, and in April 1832 returned to Brecon and Merthyr country bank, on account of the death of the last partner.

4. Fluctuations greatest with Agricultural Bank at Brecon; the issues of 1825, &c. (p. 1633.)

The fluctuations described rather apply to the agricultural bank at Brecon than to the manufacturing bank at Merthyr, but that, too, has been diminished in its circulation. The bankruptcies of 1825 were probably owing to the over issue of the country banks, which

might, perhaps, be owing to their following the demand. The Brecon bank in 1825 increased its circulation by taking country notes payable in London. It appeared likely to end ill, but the notes of - were brought, and the Brecon bank lost nothing. There appeared a wild system of credit going which boded mischief. If a better rule for circulation that demand could be pointed out, the banker would readily adopt it. The Brecon bank gave chiefly its own small notes in exchange for the 10., 20l., and 307. notes of the bank; the reason of the change being required was, that the Brecon notes were to be issued in Glamorgan, Pembroke, and Cardiganshire, where the firm was known and trusted. The power of issuing paper mainly depends on the power to issue 11. notes.

5. Loss by Panic in 1825; the Country Banks can increase the Currency, &c. (p. 1655.)

The run upon the bank in 1825 caused a loss to the firm of 10,000l., from the necessity they were under of selling public securities at a low price, which was more than the profit made by exchanging the notes of the midland banks before. The parties who brought these notes were not customers, but strangers, and generally men or -men. No regard is paid to the issues of the Bank of England. If good bills are brought they are discounted. Six or seven hundred banks, acting on this principle, might so increase the currency as to produce an unfavourable exchange, in spite of the Bank of England. It would be a great improvement if bankers were taught to regard the course of the exchanges. The establishment of the branch bank at Swansea has relieved the country bank from the necessity of retaining much gold. It is forty miles from Brecon, but nearer to Merthyr, where the chief demand for gold is.

6. Distress amongst the Agriculturalists; want of Money in

Wales, &c. (p. 1673.)

There never came so many strange drovers to Brecon as in 1825. The present condition of the graziers, drovers, and farmers, is far from prosperous. One man came lately to raise money; he had no security, and had raised hundreds of thousands on his own personal responsibility, with the house of Walters, Jones, and Loyd. These men are remarkably punctual in their payments: they borrow 7000. or 8000l. at a time, and they hardly ever deceive the lender. The bank that lent so largely without security failed, and increased the distress of 1831. The wool trade is low at present; wages are 8s. per week to farm labourers, and 10s to day labourers. There have been riots in the district for increased wages, but the present prices are not insufficient to maintain the labourer. There were disturbances in the spring on the Monmouth border of Montgomeryshire; the men consented to work at reduced wages, but a set of fellows, called Black Cattle, would not let them. There has been distress among the farmers, because the graziers could not readily

raise money to purchase their cattle, but fairs are improving, and cattle rising. The country bankers take each other's notes, and exchange weekly or monthly, paying the balances in London. Up to a late period the Brecon notes were payable in London; an impolitic change confined them to a local circulation, which is very limited. Wales would absorb twice as much of the circulating medium as it now does if it could get it.

7. State of the Iron Trade in Wales, &c. (p. 1712.)

The iron trade of Merthyr suffers by competition with Staffordshire; but if the price were raised, there is as much iron there as would supply the world. The issue of paper would create speculation, and that would create iron; but permanent good would not be done except by increasing the demand; for there might be in Staffordshire at the same time an issue of paper and increased production, and then would come stagnation and greater distress. A manufacturer of iron bringing good security would scarcely be accommodated at the bank just now; at least he would not be allowed to over-draw his account. There is an immense stock of iron at Merthyr. There appears to be no difficulty in paying the work people in coin from 10s. to 12s. a week, while the agricultural labourer has only 8s. The late rioters were not in actual distress; they wanted to regulate the price of wages. Combination is often most prevalent when wages are highest. When wages were high, the men had ducks and green peas, and luxuries the masters could not afford; besides, there is more iron made than the market will consume.

8. Principles on which Issues are made, &c. (p. 1756.)

No circumstance is regarded in the paper presented except its credit; if inconvertible, however, a higher commission is charged for it. The bill of a known drover would be discounted without regard to any thing but his credit. There was a rise in price up to 1825, and a fall afterwards, which makes a prosperous or unprosperous state of trade. The decrease of issue lately is not from the want of demand on the bank, but from a refusal to discount largely. The branch bank is a great convenience to the country banks in the supply of gold and bank notes. No sum is refused on a bill payable in London. Checks are not paid in Bank of England notes except they are required. Before 1796 the bank kept one-fifth as a bullion reserve; it now fluctuates between one-tenth and one-fifth, the branch being at hand. Any sum can be had at twelve hours' notice. The 1. notes passed and returned more rapidly than 51.

notes.

9. Branch Banks of the Bank of England; the Effects of them, &c. (p. 1762.)

Present price of iron would prevent speculation; but an issue of notes might encourage it, by raising the price. There is more iron on hand now than in 1825. The farmers consumed more then;

they were very lavish in the good times; but if high prices arose from an over-issue of paper the prosperity must have been fallacious. At Bristol, at Swansea, and indeed wherever there is a branch bank of England established, the bankers find it not worth their while to issue their own notes, for the Bauk of England notes must have the preference in times of difficulty, and by degrees the whole circulation must be Bank of England notes. The branch banks interfere little with the main business of the country bankers, and where local notes do circulate, they have better credit, on account of the vicinity of the branch bank. The withdrawal of 14. notes has limited the means of accommodation held by country bankers, and if they cease to issue any notes of their own, they will have still less power of accommodation; but the banks which issue Bank of England notes only, receive favours from the Bank of England almost equivalent to the loss of their circulation. The Bank does business for them at a lower rate of interest. It makes them more cautious in the persons they lend to; but it does not much limit their useful accommodation. If country banks were wholly excluded there would be a class of industry which the Bank of England could never reach with relief, on account of its prescriptive forms. But if the Bank of England allows a certain quantity of notes to a country bank to remain out (on deposit) for an unlimited period, then the accommodation it would give would be much the same as before.

10. Had proposed the Establishment of a Joint-Stock Bank; its Advantages, Disadvantages, &c. (p. 1804.)

I have proposed to establish a joint-stock bank at Brecon, for Monmouth, Hereford, and South Wales, the capital to be 600.0007. half paid down, and business to be done with the Bank of England notes only. Deposits would be taken from the branch banks, and placed in this chartered bank, because it would give interest to two and a half per cent. and be as safe as the branch; on those deposits money could be advanced to tradesmen on promissory notes, at five per cent., and the trade bills of the neighbourhood freely discounted to a large amount; two and a half per cent. being expressly reserved to meet any loss by this free trade, and the Irish bills drawn at six months would then be discounted, while the Bank of England only allows three months. The capitalists of the country would readily embrace this plan, it would engulph all the private banks, and the present bankers would have the option of becoming agents for the different branches of this new chartered bank. There would be a dividend of ten per cent. to the parties, after all expenses. The Bank of England would advance to such a company any sum, and the public would have a paid up capital of 300,000 as a security. The Bank of England would also discount any thing indorsed by such a company; the face of the bill would never be looked at. This bank would doubtless increase speculation; it would, however, take off from the country banks all the investments they now hold. ⚫ A chartered bank, issuing its own paper, might do business cheaper,

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but it would not be so safe. The country would have immense confidence in such a bank. Had such banks been established in 1825, issuing their own paper, the distress might have been increased; but if they had issued only the paper of the Bank of England, they would have checked speculation altogether, and prevented the disaster. This is part of the system of the Scotch banks, but they have the evils of their own notes, and 17. notes; it would be well for the country if all banking centered in the Bank of England. In case of a panic, not one sovereign should be paid in gold, let the alarmist have his remedy at law. The bankers in the neighbourhood approve the plan, and would become agents; but with unlimited responsibility it would be impossible to get partners.

JOSEPH C. DYER, ESQ.

Director of the Bank of Manchester: a Joint-Stock Company. 1. Description of the Joint-Stock Bank of Manchester, and the Nature of is Transactions. (p. 4118.)

The bank of Manchester, being the first joint-stock bank established there, and conducted on a similar plan to the system of the private banks, was established in the end of 1828, under the provisions of the 7th George IV. A deed of settlement was executed, bearing date in December 1828. The company consisted of six hundred proprietors; its subscribed capital is 2,000,000/.; its paid-up capital is nearly 300,000. It came into operation in March, 1829. The partners are liable to the full extent of their property: it does not issue cash notes, but paper, payable at various distances of time. It issues drafts at thirty, sixty, and ninety days, and bank post bills at seven, for various accounts, but chiefly 50%, and 1001. At first they issued bills under 50l.; but it was thought to be contrary to statute, and to the injury of the bank, and the inconvenience of its customers; the practice was discontinued. These bank post bills are payable in London, at the house of Glyn and Company. They thought it hard that the strong bank could not issue the sort of paper that the weaker banks were permitted to issue. The character of the business of the bank is as follows:-Of 2,029,000l. paid into the bank, 1,001,000l. consisted of Bank of England notes and cash, of which about one-ninth was specie; 90,000l. consisted of promiscuous bills, or the re-issue of such bills of exchange, are placed to the credit of certain customers to other customers; upon which item it is necessary to remark, that if bills of exchange ought to have a stamp, it seems objectionable to allow the re-issue to fill the office of circulation without stamps. 753,000l., consisting of drafts and acceptances, and 185,000 bank post bills, which would have been much larger but for the cause before stated. All the drafts are made payable in London. The bills created by the Manchester bank are seldom sent up to London for acceptance, the security of the company being considered unquestionable: they generally go up, bonâ fide, to be paid, or for payment.

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