538 JOINT-STOCK BANKING SYSTEM. 



from the banking system generally, we need not expatiate ; for in 

 the present complicated state of English trade and commerce, busi- 

 ness could not be conducted without such adventitious aid. Without 

 the private banks in the provinces the agricultural and manufacturing 

 population could not be maintained ; and we are bound to say, what- 

 ever the abuses may be, that very beneficial consequences have 

 resulted from the establishment of banks founded on extended credit 

 and security. That a regular banking system, one which shall not 

 only circulate legal money, but vouchers also for convertible capital, 

 such as bankers' bills, and bills of exchange, is highly useful, nay 

 indispensable, in the present state of things, cannot be doubted by 

 any man out of Bedlam, We now proceed more particularly to en- 

 quire into the alleged abuses of the Joint-stock banking system. 



It appears that under the Act 7 Geo. IV. c. 46, no less than 

 98 joint-stock banks have been formed between June 16th, 1826* 

 and September 17th of the present year, each bank on an average 

 consisting of 270 partners, with an average capital of about 600, OOO/. 

 each. Of these banks 50 only had been formed at the close of 1834, 

 seven years from the passing of the act ; the remaining 46 are the 

 offspring of the speculative mania of the last and the current year ; 

 and 37 out of the number date their existence only from 1836. So 

 unusual an excitement in favour of joint-stock banking companies, 

 was beyond all doubt likely to produce a re-action, and to give to 

 their opponents the opportunity of questioning the advantages deriv- 

 able from them, and of magnifying the evils to be apprehended 

 from their abuse. Accordingly, on the 12th of May last, Mr. Clay, 

 M.P. for the Tower Hamlets, made a motion in the House of Com- 

 mons, in a speech since published by himself, for the appointment of 

 a Committee to enquire into the operation of the existing laws con- 

 cerning joint- stock banks, and the expediency of altering the pro- 

 visions of that Act. This speech, and the discussion to which it led, 

 have given rise to several interesting pamphlets, expressing conflict- 

 ing opinions on this important point. Without adhering to the opi- 

 nion of any party, we proceed to state very briefly our own views on 

 the matter, modified by mature reflexion on the various doctrines 

 already propounded. 



Mr. Clay in his motion before the house insisted on three points as 

 necessary to ensure the respectability and solvency of the Joint-Stock 



