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The Pamphlet Collection of Sir Robert Stout: Volume 37

Evils of Government Banks

Evils of Government Banks.

By what authority does Government say that one man shall trade in money, and another not? To think of superseding the practice of country banking by substituting branch banks from the Bank of England in their stead, besides being an iniqnitously innovating infringement upon the already legal rights of country bankers generally, is what every rational individual throughout the whole country ought instantly to lift his voice against: being likely moreover to create a most dangerous and unconstitutional engine of arbitrary power, so page 67 enormously great and liable to abuse in the bands of a weak or wicked ministry as might easily destroy the nation's best liberties, together with the personal properties and independence of every private individual.

(Crutwell.)

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 banks at places remote from the Bank of England eminently hazardous. 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 shorter period, upon 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.

The Bank of England by discounting large sums affords facilities to the powerful to enter upon speculations. By refusing to discount small sums it debars the struggling men of little means of its advantages. It refuses all accommodation to those who can perfect their operations only by long-continued persevering efforts.

The proceedings of the Bank of England tend to destroy all the results of experience and judgment in regard to the employment of labor—to cause capital to be drawn from industry in the country to be employed upon industry in great towns and foreign states—to wrest it from those occupations wherein the returns are remote, the employment of labor regular and long continued, and fortunes are slowly made and rarely lost, to be employed in speculative undertakings. They disturb the institutions of industry, and introduce disorder into the vocations of all below the first class, whose pursuits depend on the temporary or permanent application of other capital than their own.

(Burgess.)