Maberly Phillips.

A history of banks, bankers, & banking in Northumberland, Durham, and North Yorkshire, illustrating the commercial development of the north of England, from 1755 to 1894, with numerous portraits, facsimiles of notes, signatures, documents, &c online

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Online LibraryMaberly PhillipsA history of banks, bankers, & banking in Northumberland, Durham, and North Yorkshire, illustrating the commercial development of the north of England, from 1755 to 1894, with numerous portraits, facsimiles of notes, signatures, documents, &c → online text (page 14 of 57)
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he soon became intimately associated with the leading financiers of the day. He
again returned to the north, and advocated the formation of a bank. Subsequently,

" A meeting was held in the City of Durham at which the late Lord Barrington presided, with a view
to promote such an undertaking. The country gentlemen were greatly in its favour, but it was found
that, without a degree of encouragement from the Government, which Ministers were not willing to
afford, such a bank could not be formed, for the parties willing to form a company required a charter
to limit their liability to the amount of the capital subscribed, and the Government declined promising
them a charter on such principles."

In 1823, Mr. Joplin was in\ated by Mr. Attwood, of Whitehaven, to assist
in forming the Provincial Bank of Ireland, which was successfully accomplished.

♦' This was, strictly speaking, the first Joint Stock Bank formed, but it was not the first registered; the
directors applied for, and obtained a Public Banking Act for Ireland, upon which a respectable private
bank in Belfast converted itself into a public company, and was the first to legally avail itself of the
privilege obtained."

In the notorious panic of 1825, Mr. Joplin took a view of the situation
directly opposed to the press, the Ministry, and the Directors of the Bank of
England. They all by their writings and actions advocated a restriction of the
currency as a cure for the disease. Joplin declared that an increase of currency
almost to any amount, was the only course to be adopted to stay the panic.
Suddenly the Ministry and the Directors veered round to his opinion. This he
shows in his writings, but he bitterly complains that no acknowledgment was ever
made of the adoption of his suggestions.

The following shows the increase of the circulation : —

1825, November 19 .. .. .. 17,594,301



December 3

17

24

1826, February 22



17,477,294
23,942,827
25,709,425
24,399,080



. [^

Mr. Joplin became Secretary to the Provincial Bank of Ireland, but he soon
relinquished the appointment, returned to England, and promoted the establishment
of Joint Stock Banks in many parts of the country. At Whitehaven and
Workington he was successful. Again he tried to form a bank in Northumberland,
but with the old result ;

" The influence of the private banks preventing commercial men from coming forward, and though the
country gentlemen were very desirous of the formation of a bank, they would not move without a
charter to limit their liability, which could not be obtained."

His exertions were then directed to Huddersfield, Bradford, and Norwich. At
each of these towns banks were formed — but little pecuniary reward seems to have
personally attended his labours. He endeavoured to establish himself as broker
to the banks thus formed, but this he could not carry out. He next attempted the
formation of a large London Company. Of this event the biographer of George
Fife Angas says : —

"Prom the early age of eighteen, when he established in his father's factory (Caleb Angas, Coach
Builder) a Savings' Bank and Provident Fund for working men, George Angas had shown strong
proclivities towards banking and kindred institutions. In 1828 his cousin, Mr. Thomas Joplin, who
had made banks and banking a speciality and had written various pamphlets on the subject, submitted
to him a scheme for associating a number of provincial banks together, with a certain amount of
local government, but under the general management of a central establishment in London, such
institution to be called ' The National Provincial Bank of England.' Singular as it may appear,
the probable expense of making the experiment was estimated at the modest sum of £300, which
Mr. Angas was asked to advance, and in the event of success ensuing, he was to become a Director.
At first he did not respond, but on a renewal of the application in the following year, he promised to
find the amount required for necessary expenses, to take a certain number of shares, and to become a
Director. The time, however, was not then ripe, owing to the disturbed state of the country, and the
political changes consequent upon the passing of the Keform Bill. It was not, therefore, until

April, 1833, that the scheme was revived It was not to be expected that a large

undertaking like this could be started without difficulty, and thoughout this year we find constant
notes in the diary, referring to frequent, protracted, and somewhat stormy meetings, and had it not
been for the sake of his cousin, Mr. Joplin, he would have retired from the direction."

At last all difficulties were overcome, and on August 4th, 1833, Mr. Angas
makes in his diary the following very important entry : —

" Last night, after some difiiculty and discussion, I succeeded in getting Mr. Joplin's name placed in
the Deed of Settlement for the new National Bank as one of the Directors, and as the originator of
the Bank."

The biographer adds : —

" This was perfectly true, but it was an unusual instance of disinterestedness, as the scheme would
probably never have been accomplished but for the persistent labours of Mr. Angas, and for his supply
of the sinews of war."



[io7]

The position thus gained upon the board of the new bank was not retained
long. Mr. Joplin was a man of distinct individuality. When the question of the
establishment of branches came to be considered, his plan not being acceptable
to the majority of the directors, and other differences arising, he withdrew from
the undertaking upon being recouped the expenses he had incurred.

During 1836, the policy of the joint stock banks was questioned by the
Government. Mr. Joplin defended the banks in a series of very able articles
published in the Economist.^

His next proposition was a gigantic plan for converting all the private banks
into one huge Joint Stock Company, but the difficulties proved insurmountable.
Over these various schemes Mr. Joplin expended considerable sums of money and
greatly impaired his health.

"He always indeed anticipated that the Joint Stock Banks would acknowledge him as the founder of
the system and treat him accordingly. But when they became popular, his efforts were unknown to
the majority of persons connected with them. The small beginnings in these cases are the most
difficult, and the preliminary steps do not present themselves to notice after they have attained the
purpose for which they were commenced. They appear to be small and insignificant, and unworthy
of the mighty results to which they have given rise, though these comparatively mean exertions may
have laid the foundation of the whole superstructure."

During this time, Mr. Joplin was a most voluminous writer upon all questions
of political economy. A list of his works will be found in the account of him
given in the "Dictionary of National Biography." In spite of such a busy life,
he found time to forward many philanthropic and benevolent institutions, indeed
his later years were entirely devoted to such objects. About 1843 he went for a
visit to Grafenberg for the water treatment under Preissnitz the founder of the
system, and derived much benefit. In 1846 his health again necessitated a visit
to the continent. On April 12th, 1847, his sudden death is announced : —

" Died at Bomischdorf, Silesia, Mr. Thomas Joplin, the founder of Joint Stock Banking, and author
of numerous works on the currency. Mr. Joplin was a native of Newcastle, and was for some years in
one of the banks of that town." (I have not met with any confirmation of this last statement.)

Mr. Joplin left a widow but no family. A cousin of his is now residing at
Chelsea, and to him we are indebted for the portrait given.

One of the numerous suggestions that were made to prevent the forgery of
bank notes, was the repetition of a well-known face round the margin. A specimen
of this character is given in the Gilbart Prize Essay by Granville Sharp, and may

♦Joplin was the founder of the Economist Newspaper, and for some time forwarded each Member of
Parliament a copy of the paper.



[ io8 ]

be familiar to many ; but it is not generally known that the portrait selected was
that of Thomas Joplin.



In 1832, the Charter of the Bank of England came before the House of
Commons. On May 22nd, Lord Althorp moved for a Committee of Secrecy to
report upon the expediency of renewing the bank privileges. This step
immediately brought the country bankers together for united action. They held
a meeting at Henderson's Hotel, Bridge Street, Blackfriars, when representatives
were present from eighteen firms. The meeting was adjourned to May 30th,
when twenty-nine bankers assembled from all parts of England, Mr. James
Backhouse of Darlington representing this district. Mr. Henry Burgess was
appointed Secretary. Various resolutions were passed, of which the following
was the most important : — ■

" That a Petition be presented to the House of Commons, setting forth the injustice which Country
Bankers have sustained by the erroneous assumptions of the Government on former occasions, and
praying that they may be examined before the Committee on the Bank Charter."

The Committee appointed by the Government were : — Lord Althorp, Sir R.
Peel, Lord J. Russell, Mr. Goulburn, Sir J. Graham, Mr. Herries, Mr. P. Thompson,
Colonel Maberly, Sir H. Parnell, Mr. Vernon Smith, Mr. John Smith, Mr. Roberts,
Sir M. W. Ridley, Mr. Attwood, Sir John Newport, Mr. A. Baring, Mr. Irving, Mr.
Warburton, Sir G, Phillips, Lord Morpeth, Mr. Morrison, Mr. Heywood, Lord



[109]

Ebrington, Sir J. Wrottesley, Mr. Cavendish, Mr. Wood, Mr. B. Carter, Mr. Strutt,
and Mr. Stanley.

The prayer of the country bankers was duly attended to, and several of
their body selected to give evidence before the Committee, Mr. Backhouse, of
Darlington, being one of the number. The Courier of June 28th says: — "We
understand that the country bankers at present likely to be examined by the
Committee on the Bank Charter are Mr. Rickford, of Aylesbury, M.P., and Mr.
Backhouse, of Newcastle."

The Committee of the country bankers met again on July 25th, and resolved : —

" That their Chairman should write to Lord Althorp, urging the claims of Country Bankers to have
their interests duly considered by the Secret Committee, on the ground of justice, as well as on that of
the letter from the Treasury, under the Duke of Wellington's administration, to Sir John Wrottesley,
implying a sort of pledge from the Government that those interests should be duly regarded in any
negotiation, or arrangement, concerning the Renewal of the Charter of the Bank of England."

Various meetings of the Provincial Bankers were held during the time the
Bank Charter was under consideration. Full and interesting accounts of them
will be found in the " Circular to Bankers" of that day.

On July 24th, 1833, a meeting was held at Radley's Hotel. A few of the
resolutions passed will best explain its nature ; —

Moved, etc., etc., " That the thanks of this meeting are also due to the Committee of Country Bankers
for their efficient exertions, in bringing to a successful issue the opposition to the plan lately brought
forward by the Government, for the injury, if not for the annihilation of Country Banking Establish-
ments . . . That the satisfactory result of those exertions whereby the attention of members of the
legislature was awakened to the public benefits arising from Country Banks of Issue, proves the

necessity of continued preparation for defence, and the great value of timely co-operation

That a permanent Association of Country Bankers in England and Wales be now formed, with a
Committee and Secretary, for the purpose of watching over the just rights and privileges of Country
Bankers, and of protecting the important interests connected with their system of Banking and
Currency. . . • That to sustain the expenses which may arise from this Institution, a subscription
of £1 Is. be annually paid by each Banking Firm."

We may presume that the association was numerically large, as 6^6
banking firms took out licenses for that year.

The evidence taken before the Committee of the House of Commons was
most voluminous. Perhaps the most valuable of Thomas Joplin's publications
was " A Digest of the Evidence on the Bank Charter taken before the Committee
of 1832."

In a few years the banking laws again came under the consideration of
Parliament. During the session of 1836, another Secret Committee was appointed
to enquire into the acts regarding joint stock banks.



[no]



CHAPTER XI.

PROVINCIAL BANKING— 1840 to 1894.

Note Issue of Messrs. Lambton withdrawn — Bank of England divided into " Issue "
and "Banking" — Quotations from the Act of Parhament — It fixes the Note
Issue of all Banks — Particulars of Note Issue in the North — Failure of Northern
Joint Stock Banks — Mr, Headlam introduces a Bill to limit the responsibility of
Shareholders in them — Extracts from the Debate — Bill brought in by Mr.
Apsley Pellatt to legalise " Crossing " of Cheques — Suspension of the " District "
Bank — Woods & Co. open — Dale, Miller, & Co. formed — National Provincial
Bank come to Newcastle — North Eastern Bank announced — Bankers' Clearing
Association formed in Newcastle — Early mode of " Clearing " — Present method
— Suggestion for its improvement — Association of Country Bankers re-constituted
— York City and County Bank absorb " Darlington District " and enter
Newcastle — Simpson, Chapman, & Co. join the York Union Banking Company.

IN September of 1840, a note issue that had been familiar to the Newcastle
district for upwards of half a century was withdrawn from circulation,
Messrs. Lambton & Co. having made arrangements to issue only the paper
of the Bank of England.

About this time several alterations occurred in banking premises. The
District Bank having vacated their offices in the middle of Grey Street, they
were purchased in August 1841 by the Governor and Company of the Bank of
England, and added to their adjoining buildings, the whole forming the present
handsome block as now occupied by them. Messrs. Backhouse's old establishment
at the south-east corner of Grey Street was re-built to harmonise with the
surrounding architecture. The premises of the Union Bank in St. Nicholas' Square
were pulled down, and new offices erected. The proprietors of the same bank,
having purchased the buildings at the south-west corner of Pilgrim and Mosley
Streets (for so many years occupied by the Old Bank), " caused the same to be
partially cased with stone."

The year 1844 saw the passing of an Act of Parliament, that made
radical changes in the banking customs of the country. By it the Bank of England



[III]

was divided into two distinct departments, viz., "Issue" and "Banking." An
interesting account of the working of the Bank of England when so divided,
was written by Mr. Thomson Hankey, entitled, " The Principles of Banking, its
utility and economy, with remarks on the Working and Management of the Bank
of England." The fourth edition published in 1887 is ably revised "as regards the
working and management of the Bank," by Mr. Clifford Wigram, one of the
directors.

The part of the Act that most affected the country bankers was that relating
to the note circulation. Virtually it rang the death-knell of all provincial bank
notes and established the Bank of England as the 07ie Bank of Issue. On the
justice and expediency of the Act, great diversity of opinion existed. Lawson in
his " History of Banking " says : —

" The 7 and 8 Vic, cap. 32 was, without doubt, one of the most singular, and in the opinion of many,
the most ill-judged legislative regulations in reference to country bank notes that has ever been passed.
It is called, ' An Act to regulate the Issue of Bank Notes, and for giving to the Governor and Company
of the Bank of England certain privileges for a limited period.' The following are some of the clauses
of the Act : — ' That, from and after the passing of this Act, no person other than a banker, who on the
sixth day of May, 1844, was lawfully issuing his own bank notes, shall make or issue bank notes in
any part of the United Kingdom.'

Section 12 prohibits bankers who may cease to issue notes, thereafter to issue any such notes.

Section l.S provides that existing banks of issue may continue, under certain limitations, to issue.

Section 14. — Where two or more banks unite in one, such united banks may issue notes subject
to the regulations of this Act.

Section 18 enacts that every banker shall render to the Commissioner an account of the amount
of the notes in circulation on such day as may be fixed by the Commissioners of Stamps and Taxes.

Section 19. — The mode of ascertaining the average amount of bank notes of each banker in
circulation during the first four weeks after 10th October, 1844.

Section 21 provides that all bankers in England and Wales shall, on the Ist of January in each
year, make a return to the Commissioners of the residence and occupation of every partner, whether
joint stock or private co-partnership.

Section 22 enacts that every banker issuing notes shall take out a separate license for every
place at which he issues notes or bills."

By the provisions of the bill if any country banker were to cease to issue his
own paper, the Bank of England should be entitled to " issue additional notes to
the amount of two-thirds of the authorised issue of the said banker." Mr. Lawson
adds : —

" We can well understand the placing a wholesome restraint upon the issuers of bank notes, and calling
upon them to prove their ability to pay them ; but why an aggregate amount of notes circulating
through a country during four weeks after the 10th October, 1843, should be the maximum amount



[112]



to be circulated in all time to come, we are really at a loss to imagine. . . . If we may judge from
the proceedings of the Government in the month of October, 1847, when they, by a special letter,
authorised the Bank of England to extend their issue beyond the amount fixed by law, the principle upon
which the limitation of bank notes had been founded was proved to have been unsound."



The issue of notes allowed by the Acts is as follows : —

I Bank of England
196 English Private Banks
Sy English Joint Stock Banks



14,000,000

4,999,444
3,418,277

22,417,721



The note issue thus allowed to the banks within the district that we are



considering was the following : —

Darlington Bank, Backhouse & Co.

Frankland and Wilkinson, Whitby

East Eiding Bank, Bower & Co. . .

Richmond Bank, Roper and Priestman

Scarborough Old Bank, Woodall, Hebden, & Co.

Whitby Old Bank, Simpson, Chapman, & Co.

Darlington District Bank

Newcastle, Shields, and Sunderland Union Joint Stock Bank

Stockton and Durham County Bank

Swaledale and Wensleydale Joint Stock Bank, Richmond



To January, 1894, ^^^ following issues have lapsed : —

Frankland and Wilkinson, transferred to York City
Whitby Old Bank, transferred to York Union
Darlington District Bank, amalgamated with York City
Newcastle, Shields, and Sunderland Union Joint Stock Bank
Stockton and Durham County Bank



86,218

2,076

53,392

6,889

24,813

14,253

26,134

84,130

8,290

54,372

360,572



2,076

14,258

26,134

84,130

8,290



134,888
225,684



Of the five issuing banks left in the present day, four belong to Yorkshire and
one to Durham, Northumberland having ceased to have a note issue.

From "A return of the Quarterly average amount of Promissory Notes
payable to Bearer on Demand in Circulation by Private Banks in each County in
England and Wales from the i8th September, 1841, to the 4th December, 1847,"
the following record is obtained : —

12th Nov., 14th Oct., 7th Deo., 31st Jan., 3rd Jan., 4th Dec,
1842. 1843. 1844. 1846. 1847. 1847.

Durham and Northumberland 73,499 66,107 76,612 80,910 82,6^8 69,030



[113]



A return of the Average Circulation of Branch Bank of England notes in
each year from 1842 to 1847 inclusive, may prove interesting : —

BANK OF ENGLAND.— BRANCH CIRCULATION.

An Account of the Average Circulation of Branch Bank Notes in 1832, and in each Year from 1842

to 1847 inclusive ; distinguishing the Amount from each Branch Bank.





1832.


1842.


1843.


1844.


1845.


1846.


1847.


Gloucester

Manchester

Swansea

Birmingham ....

Liverpool

Bristol


£

56,068

1,315,296

49,428

403,622

377,144

113,320

199,005

51,146

59,272

30,245

3*1*154


£

278,239

1,604,054

84,235

555,496

777,838

168,407

297,082

498,704

80,486

19,369

254,623

267,424

"eei


£

121,917

1,780,994

83,681

605,095

919,047

252,744

325,774

543,287

89,137

55,738

291,995

867,377

'"610


£

103,731

2,154,502

96,113

600,900

1,241,467

324,696

322,372

598,290

98,826

65,980

364,817

417,521

127,205

564


£

90,897

2,398,540

99,150

592,107

1,367,365

436,426

403,292

666,086

124,523

30,752

851,402

383,557

183,507


£

83,290

2,323,185

106,869

608,589

1,129,299

446,027

396,204

695,130

122,582

12,290

382,058

343,203

174,910


£

71,975

2,129,062

106,634

658,231

1,118,691

421 500


Leeds


369,595
742,628
112,039
10,553
811,480
317,332
168,020


Newcastle

Hull


Norwich

Plymouth

Portsmouth

Leicester

♦Exeter








2,695,700


4,886,618


5,437,396


6,516,984


7,127,604


6,773,636


6,527,740



♦ N.B.— This Branch was removed to Plymouth, 1st May, 1843.

In 1846 and 1847 sundry changes took place. The private firm of Clark,
Richardson, & Co., of Whitby, transferred their business to the York City and
County Bank. The Stockton and Durham County Bank handed their establish-
ment over to the National Provincial. In January, 1846, the Newcastle Joint
Stock Bank came to an untimely end. In March, 1847, the North of England Joint
Stock Bank (whose head office was in Newcastle) did the same. In October the
Newcastle, Sunderland, and North and South Shields Union Bank suspended
payment, and a few years later, the Sunderland Joint Stock Bank followed suit.
The Northumberland and Durham District Bank was hard pressed, but the Bank
of England, the foe that the merchants and country bankers so much feared in
1827, now proved the salvation of the commercial credit of the North of England,
as the timely aid afforded by Mr. Grote, the agent of the Newcastle Branch,
allayed the panic.

At this time an immense amount of money was withdrawn from circulation.
One writer says "that the failure of the three Joint Stock Banks caused the
withdrawal of four millions of money." Mr. Mewburn in his diary writes : —

" I learn from a banker that the late panic was most injurious to country bankers, especially in the
North, even to those upon whom there was no apparent run ; for their circulation was reduced more
than one-third during the panic. Timid men who did not like going to the banks for notes or gold in
lieu of those issued, paid them to their bankers first, and a day or two afterwards asked for gold or
notes (Bank of England), under various pretexts ; really frightened fellows demanded the gold or notes



[114]

instanter, and kept their money secreted in their houses until they could get securities. In all the
panics I have known, I think the late produced the greatest difficulty in obtaining money on securities,
especially on bonds even of the most unexceptional kind."

The inconvenience and distress caused by the failures was most terrible,
alike to the clients of the banks, to the depositors, and to the enormous
number of shareholders whose liability being imlimited, were subject to " call "
upon "call"; until many found rest in the Bankruptcy Court, and some were
driven to commit suicide. Many tradesmen determined to return to the
customs of pre-banking days — to make the iron safe in their own warehouse their
Banker.

One of the results of these numerous failures was the contemplation of a
limited liability for investors in bank shares. In 1849 Thomas Emerson Headlam,
M.P. for Newcastle, introduced a bill, the object of which was to limit the
responsibility of shareholders in joint stock banks. He delivered an able speech
on the subject, on May 8th, which was subsequently published in pamphlet form,
together with an account of the alterations proposed. He stated that the terrible
sufferings caused by the failure of banks in the district which he represented led



Online LibraryMaberly PhillipsA history of banks, bankers, & banking in Northumberland, Durham, and North Yorkshire, illustrating the commercial development of the north of England, from 1755 to 1894, with numerous portraits, facsimiles of notes, signatures, documents, &c → online text (page 14 of 57)