THE 



MONTHLY MAGAZINE, 



OF 



POLITICS, LITERATURE, AND THE BELLES LETTRES. 



VOL. XVI.] OCTOBER, 1833. [No. 94. 



JOINT STOCK BANKING.* 



THE disastrous consequences which attended the failure of so 

 many private Banks in 1825 and 1826, must be fresh in the minds of 

 our readers. To use the words of the present First Lord of the Admi- 

 ralty " one eighth of the country Banks were ruined. Terror pre- 

 vailed, credit was at an end ;" and so frightened was the Old Lady of 

 Threadneedle Street, that she t( actually refused to discount, in the 

 ordinary course of trade, the acceptances of some of the bankers of 

 the best established credit in the city"; of course the industrious 

 classes in all parts of England suffered great misery and distress 

 during these periods of panic, and the frequency of their occurrence, 

 and the extent of the mischief they created, is proof positive, that the 

 English system of Banking has hitherto been unsound. It appears 

 for instance by a parliamentary paper lately published, that commis- 

 sions of bankruptcy have been issued during the last fifty years, 

 against no less than 407 Banks ; which is not perhaps a Jlfth part 

 of the total failures : Many of these being wound up under trus- 

 tees, or otherwise privately compromised ! Even in London it will 

 be found that one-third of the total number of private Bankers haye 

 failed within the last thirty years j whilst, in Scotland under a 

 different system, only two or three, or about one twentieth, and 

 these of. the most insignificant of her thirty or forty Joint Stock Banks 

 have suspended their payments. 



Is it at all surprising, therefore, that these frequent disasters, 

 which give such serious checks to the industry and prosperity of the 

 country, should gradually have led to the conclusion that there was 

 " something rotten in the state of Denmark," something radically 

 wrong in the English system of Banking ? And that the monopoly 

 in favour of the Bank of England, practically restricting all other 

 Banking Establishments to six partners, could no longer be main- 

 tained with safety to the trade and industry of the country ? 



The late Lord Liverpool was many years ago so strongly impressed 

 with the necessity of bringing about a more secure system of Bank- 



* The Safety and Advantage of Joint Stock Banking. By an Accountant. Second 

 Edition. 1833. 



Considerations on Joint Stock Banking , chiefly with reference to the Situation and 

 Liabilities of Shareholders. 



M. M. No. 94. 3 A 



