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

. (page 9 of 57)
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 9 of 57)
Font size
QR-code for this ebook


notes of the Darlington bankers. Each parcel contained from three hundred to
a thousand guineas, and to lessen the risk of robbery they were sent by various
modes of conveyance to different addresses in London, the agents being duly
advised of the same. I quote a few of the directions —

17th 11th Mo. 1778. — 1000 Guineas per John Wetherell (a Darlington merchant).

8th of 12 Mo. — 400 Guineas per Diligence to York, thence per Coach to the Rose and Crown, St.
John's Street, directed to James Phillips, George Yard, Lombard St., London.

14th of 12th Mo. — 300 Guineas No. 1 per Diligence to York, thence per Coach directed to
Jennings and Kidson, Linen Drapers, London. No. 2. — 300 Guineas per Newcastle Coach, directed as
the other.

17th of 12th Mo. — 300 Guineas.— No. 1 directed to John Hooker, No. 23, Cheapside, per
Diligence to York, thence by Coach. No. 2 directed as above, per Newcastle Coach.

29th of 12.— 500 Guineas per John Pease's Pack to Thomas Stevenson in Queen Street.

2nd of 1 Mo. 1779.— 300 Guineas per Diligence. 300 Guineas per Fly directed to J. Good.

18th of 1 Mo. — 600 Guineas sent in a pack of Edwd. Pease, Jun., directed to Divetts, West-
smithfield. 600 Guineas sent the same day per same conveyance directed to Matthew Stainton,
Aldermanbury.



[Jo] ■

From this time Pease's pack became the favourite mode of conveyance.

After the panic of 1793, a popular idea appears to have existed, that the
private estates of bankers were not hable for their trade debts, but an opinion
given by the Recorder of Hull and Beverley dispelled the illusion, as will be seen
in the account of Messrs. Peirse, Consett, & Co.

The proprietors of the Commercial Bank of Newcastle having declined
business, took prompt measures to wind up their affairs. From time to time they
issued various notices, and fixed a date from which they would pay interest upon
their liabilities, which they eventually discharged in full.

There is very little information to be obtained as to the fate of the banks in
the other towns of the north. An advertisement in the local paper would imply
that Messrs. Richardson & Mowbray of Darlington had been in difficulties, and
that Mr. Richardson had died. In 1794, Mr. Mowbray informs the holders of
notes issued by the late Mr. Richardson and himself, that he will pay the said
notes with interest. Of course the satirist availed himself of the opportunity and
announced " A plea for assisting Public credit both novel and effectual, viz. — That
Gentlemen of all parties and gentlemen who are not of any party, shall forthwith
proceed to discharge their Tradesmen's accounts."

In July of the same year, the partners in the Tyne Bank made overtures to
Messrs. Lambton, " for the union of their interests in the Banking concerns," but
the latter firm did not consider the time opportune for such an amalgamation.

When the agitation caused by the panic had calmed down, trade resumed its
ordinary course. New bankers started, room for their enterprise probably being
made by the retirement of some who had seen enough of the business. The
difficulties and trials of a banker's life are well brought out in one of Hamet
Martineau's series of books upon Political Economy — " Berkeley, the Banker."
It depicts a country gentleman adopting banking as affording a pleasant way of
occupying his spare time, and an absolutely safe investment for his surplus capital.
The story shows the fallacy of both ideas. As Miss Martineau's grandfather,
Robert Rankin, was a partner in the Commercial Bank of Newcastle at the time
of its suspension, and as the well-known authoress had paid many visits to the
town, it is highly probable that family experiences may have suggested the story.

In 1793 the Haughton Paper Mills were busy manufacturing paper for the
Government whereon assignats were printed, but an account of them requires



[^

some explanation. At the commencement of the great Revolution in France,
1789, Talleyrand proposed in the National Assembly to confiscate all the Church
property, and though much opposed, it was ordered to be carried out. But an
unexpected difficulty arose — purchasers could not be found. The next step of the
Government was to issue paper money called Assignats, " because to the holders
of this paper was assigned a certain lien " upon the Church estates. When war was
declared between England and France, the notion was conceived (it is said by Mr.
Pitt), to forge these assignats, and pay the expenses of the war with them.
Of course the fraud would be found out and would immediately depreciate the
value of the real assignat, as the holders would not be able to distinguish the
genuine from the spurious. At first the representatives of the British Government
denied all knowledge of the forgery, but a trial (Strongitharm v. Lakyn)
Mich. Term 36 Geo. III. upon a Promissory Note proved the case. The
defendant Lakyn showed that the note was given in payment to the plaintiff, an
engraver, " for engraving of copper plates upon which the French assignats were
to be forged, and contended that, as the consideration of the note was a fraud, it
contaminated the whole transaction and rendered the note not recoverable by law.
A witness stated that the defendant, having it in contemplation to strike off
impressions of a considerable quantity of assignats to be issued abroad, applied to
him for the purpose of recommending an engraver, representing to him that they
were for the Duke of York's army. He applied to the plaintiff wiio at first
declined the business totally, but being assured by the witness that it was
sanctioned by Government, at length undertook the work." The local interest in
the matter is this — the paper for the forged assignats was made in this locality.
One writer stated that some of it was made at Langley Paper Mills (near Durham).
A communication from Sir Walter Trevelyan shows that the paper for the forged
assignats was also made on the North Tyne at the Haughton Paper Mills.* The
following statement is interesting : —

" The paper mill on North Tyne was occupied some time by the undersigned, and the owner of the
mill, Mr. Smith, of Haughton Castle, had the mould in his possession from which the paper was made.
On two occasions, Mr. Smith brought it to the mill to have a few sheets made to give to his friends. Of
course it was only blank paper with the French wire mark in it. The notes were sent to a Midland
town to be printed. The object the Government had in view was to get them circulated in Prance, so
as to depreciate the value of French Paper and also to pay the expenses of our army. It apparently
had the desired effect, for the French paper money came down to one fourth of its nominal value, as
stated in the House of Commons by the Chancellor of the Exchequer, November 30, 1794."

T. FOEDYCE, Newcastle.
The mould from which the paper was made is still in existence though much

* See Journal of the Institute of Bankers, May, 1Q94, p. 305.



\._^

dilapidated. I have been favoured with a photograph of the same by Mr. J. P.
Gibson of Hexham.




The forged assignats were evidently issued on different forms and for various
amounts. Paper manufactured from another mould at the Haughton Mills is to

be met with in the
locality. Mr. Simmonds
of Humshaugh pos-
sesses a sheet that was
presented to his grand-
father, the late Mr.
White, by Mr. William
Smith the proprietor
of the mills. The full
sheet was intended to
be divided into four.
The accompanying
block shows the water
mark of one of the
quarters.




[^

It was not long before tightness in the money market again manifested itself.
Many who had gold judged from late experiences that they were the best
custodians of it. Bankers discounted with a caution which crippled trade and
created uneasiness. The nation was involved in an expensive war with France,
and the Government were making enormous demands on the Bank of England.
During 1795 and 1796, constant meetings of the officials were recorded, at
which Prime Minister Pitt was " told that he must not overdraw his account
so largely, or his cheques would be returned." He as constantly promised
amendment, and at the same time asked for larger loans. Fears of an immediate
invasion were abroad. For some months in 1795, the coasts of Northumberland
and Durham were one long camp. At Whitburn were the 8th Regiment of Foot,
Durham Militia, and Durham Fencibles, under the command of General Osborne ;
at Whitley were the 37th Regiment of Foot, Royal Lancashire Volunteers, North
York Militia, and a considerable park of artillery, Lord Mulgrave being in charge.
The " Camp Field " at Whitley — within a stone's throw from where these lines
are penned — is named from the use it was put to at that time. Uncertainty
prevailed, those who had money held it the closer ; those who required money
had great difficulty in procuring any.

In February, 1797, some 1,200 French troops landed in Wales.

" The Government issued general orders to have all the stocks of farmers near the coast inventoried
and driven into the interior. This prudent step, and for the farmers themselves beneficial arrange-
ment, caused great alarm among that class, and those near Newcastle taking the lead, drove their
grain into the town, and sold it at any price they could get, and being paid in Bank notes rushed to
the Banks demanding specie."

They were so persistent, that once again all the banks had to take united action.
They held a meeting on Saturday, February i8th, and unanimously agreed that if
the demand for gold was as great on Monday morning as it had been during the
week, they would all suspend payment until more specie could be obtained. An
account written at the time says : —

" The inevitable consequences of the present ruinous war, which we' have all along predicted, have
lately become so obviously apparent, that an alarm arising from the absurd measures of the ministry
in causing returns to be made to Government of grain, live stock, carts, defensive instruments, etc.,
has created amongst the farmers a great degree of suspicion, and apprehension of the stability of the
different Banking houses in the Country ; amongst others those of this town, by persons who consult
nothing but their fears, have experienced so great and unusual a demand for specie as no probable
prediction could have induced them to provide for, and in consequence the four banks of this town
have thought it expedient to delay the payment of their notes now in circulation till a.n adequate
supply of cash can be obtained from the ample means of resources to which they have at all times the
power of recurring, without the fear of disappointment, and we have little doubt that the numerous
signatures of the merchants will evince to those less intimately connected or interested in extensive
pecuniary negotiations, that their property cannot be placed in more advisable or perfect security.



[^

Convinced as we are of the extensive individual property of the gentlemen concerned in the different
Banks of this town, their known probity, enables us to state to our readers, that we think their security
equal to any in the kingdom, the Bank of England not excepted. The farmers who have made this
extraordinary demand for cash will, we are well assured, immediately feel, to their loss, the injurious
consequences of their attempt to hoard up the necessary current specie of the country, by the
depreciation of every article they produce, and we are farther authorised to say, that the principal
gentlemen of landed property in this neighbourhood, instead of granting the usual indulgence
respecting the payment of their rents, have determined that all the rents due at Martinmas shall be
immediately paid, in order that the cash they hold may be returned to the Banks, and again thrown
into the usual channel of circulation."

The banks thus closed, the usual steps were taken to try and restore confidence.
This being the third occasion of the kind, the inhabitants must have become
quite accustomed to the proceedings.

A notice was issued of a meeting to be held at Farmer's Inn, February 20th :

" To consider the most proper means of removing the inconvenience that may be experienced in trade
during the temporary suspension of payment in specie at the different Banks."

The meeting was duly held (the same day that the banks suspended), Robert
Rankin presiding. At the time of the last panic he was a partner in the Commer-
cial Bank. A resolution was passed : " That we whose names are hereunto
subscribed will receive the Notes of All the Banks here, in Payment as usual."
The Bankers issued the following notice : —

" As the very Great Demand for Gold which has continued for some time to be pressed upon all the
Banks in this Town makes it necessary that an extraordinary Quantity of Specie should be brought
into the Country.

Messbs. Ridley, Widdbington, & Co.

,, SUBTEES, BUEDON, & Co.

,, LOBAINE, BaKEE, & Co.

,, Ralph J. Lambton, J. Bdlman, & Co.
Respectfully inform the public, that they intend to take immediate measures for that Purpose, and
they earnestly hope that any further call upon them for Gold will be suspended in the meantime, till
they can obtain a supply adequate to the occasion."

On the next day a meeting was held at Sunderland, and a resolution passed
" To receive in payment as usual the several Notes issued by the Banks of Sun-
derland, Newcastle, and Durham." A meeting was held in the Town Hall,
Durham, February 22nd, John Starforth, Esq., Mayor, in the Chair, when
resolutions were passed, ■ supporting the notes of Messrs. Mills, Hopper, & Co.,
and also the Banks of Newcastle and Sunderland. The same day action was
taken at North Shields :—

" At a meeting of the Gentlemen, Ship-owners, Merchants, and Tradesmen of Dockwray Square, North
Shields, Tynemouth, and Places adjacent, held this day at Mrs. Carr's, the Half-Moon, in North
Shields, in pursuance of Public Advertisement, John Walker, Esq., in the Chair : — It was unanimously
Resolved that we whose names are hereunto subscribed, will receive in Payment the Notes of all the
Newcastle Banks as usual." 107 names appear on the list.



[65_J

At South Shields a meeting was held in the Town Hall, R. Green, Esq., in
the Chair, February 23rd, when it was recorded : —

•'This Meeting being exceedingly concerned that the Country should have discovered so great a want
of Confidence in the neighbouring Banks, and lamenting that many People should exchange Bank
Notes for specie in order to lock up the same (a measure highly injurious to Commerce and which if
generally adopted may greatly injure the Country). Do unanimously Resolve : — That the Banks in
Newcastle, Sunderland, and Durham are entitled to the confidence of the Public : and that the
undersigned will receive in Payment the Notes of any of the above-mentioned Banks and recommend
to others to do the same." 193 signatures are attached.

At a meeting held at the Town Hall, Berwick, March 7th, 1797, it was agreed
to take the notes of the Bank of England, and those of Messrs. Surtees, Burdon,
Embleton, & Co. A meeting was also held at Northallerton, where the notes
of its bank (Peirse, Consett, & Co.) were guaranteed in the usual manner.

The Duke of Northumberland being one of the largest landowners in the
north, it was very important to get his sanction for his agents to accept the notes
of the local banks at the approaching audit. On March 4th and i ith, the following
announcement appeared in the northern papers : —

To the Tenants of the Duke of Northumberland.
THE DUKE OF NORTHUMBERLAND having received the following Letter from the
Proprietors of the Banks at Newcastle, and wishing, as much as in him lies, to alleviate the Distress
which the Circumstances mentioned in their Letter must occasion in the Country, has directed his
Auditors to receive their Notes in Payment of his Rents at the approaching Audit.

London, 25th February, 1797,

MY LORD DUKE,

A very extraordinary and unforseen Call having taken Place upon the Banks at Newcastle, the
Proprietors found it impossible for them to supply the Demand immediately, and were therefore under
the Necessity of reserving their Specie to supply the Payments to the Collieries and great Manu-
factories of the Country. The Merchants, and the Coal-Owners and many of the Gentlemen of the
County, having entered into an Agreement to receive the Notes in all Payments as before, we are
induced to hope that the Alarm which caused the Distress will speedily subside. As we cannot but
sensibly feel how very much the Influence of your Grace must tend to produce this Effect, we are
induced earnestly to solicit your Favour and Support, and to intreat that your Grace would have the
Goodness to direct your Agents to receive, at the ensuing Audit, their Notes in Payment of your Grace's
Rents as usual ; and should they be so fortunate as to meet with your Grace's Indulgence, they would
further request that you would take the Trouble to communicate your kind Intention to your Tenants
as soon as convenient, as, under the Sanction of your Grace's Support, the Proprietors flatter them-
selves that the Preparations they are maljing will enable them to open their Houses for the general
Accommodation, at a very early Period.

We have the Honor to be.

My Lord Duke,
Your Grace's most obedient and most humble Servants,
Signed— MATTHEW WHITE RIDLEY, for Self and Co.

ROWLAND BURDON, for Surtees, Burdon, and Co.
For Self, Baker, Pearson, Maude, and Co., WILLIAM LORAINE.
RALPH JOHN LAMBTON, for Self, J. Bulman, Chambers, and Co.

I



w

Earl Tankerville and Lord Charles Aynsley also publicly announce that they
will receive notes in payment for their rents.

The inconvenience of the stoppage of all the banks is brought before us by the
following letter from Mr. Charnley, the noted bookseller of Newcastle, to Mr.
John Todd, who was in the same line of business at York : —



'^t^



U*-,.^^^ t^/^s*—*- ^ie^^^^<>^h^ /*^~i9^<s;<^'C 0^^>7^t^^^^^/t-^9^ /^^>e^ Jk^-^m ■^z.-'

I have previously referred to the perplexity the Governor and Directors of
the Bank of England were in regarding the frequent applications of Mr. Pitt, and
to their repeated remonstrances thereupon. The large sums supplied to the
Government had crippled the Bank's resources and compelled them to curtail
advances to an alarming extent.

" On the 9th February, 1797, the Court of Directors ordered the Governor of the Bank to tell Mr. Pitt
that under the present state of the Bank's advances to Government, to agree to his request of making
a further advance of £1,500,000, as a loan to Ireland, would threaten ruin to the Bank, and most
probably bring the Directors under the necessity of shutting up their doors. These several
remonstrances to the Ministers seem to have had little or no effect ; and the result anticipated, viz,, a
stoppage of the Bank of England, took place even at an earlier period than the Directors themselves
calculated upon. The run — to speak in commercial phraseology — commenced upon some of the
country bankers, and the great demand for specie to supply them induced the Directors to lay the
state of their affairs before the Ministers, in consequence of which the following results took place : —
At a meeting of the Privy Council held at Whitehall, February 26th, 1797, an order was issued
for the Bank of England to suspend its cash payments. It is the unanimous opinion of the Board
that it is indispensably necessary for the public service that the Directors of the Bank should forbear
issuing any cash in payment until the sense of Parliament can be taken on that subject, and the
proper measures adopted thereupon for maintaining the means of circulation, and supporting the
public and commercial credit of the Kingdom at this important juncture."

There was a difference of opinion in the City on this proceeding. Some men
thought they saw national ruin staring them in the face, others welcomed the
prospect of an increase of money though it only came in bank notes. A meeting



m

of the merchants was speedily called, and now they had to testify their willingness
to receive in payment the notes of the Bank of England, in the same manner that
they had seen so many in the pro\inces supporting the notes of the local bankers.
Opinions still widely differ as to the wisdom or justice of the suspension. Doubtless
meetings in support of the notes of the Bank of England and those of the country
bankers, were held in all large towns throughout the kingdom. I have note of
such gatherings at York, Doncaster, and Kingston-upon-Hull.

So strictly did the Bank of England act up to the order of Council, that many
London bankers could not procure coin sufficient to pay sums under £^. After
the panic in 1797, to obviate the difficulty of getting change, an Act was passed,
allowing an issue in England of notes under ^5, and in Scotland of notes under £1.

By March loth, £1 and £2 notes of the Bank of England were ready for use.
The new issue was not altogether acceptable. One writer says : —

" They (Bank of England) now insult the public by offering notes of twenty shillings as substitutes for
the metal we have long been accustomed to consider as intrinsic, and what tends still more to
depreciate the Public Credit is the notification of the Chancellor of the Exchequer that manufacturers
should be empowered to issue notes for small sums, a measure which, should it ever be adopted, would
render all bank paper of little more estimation than common waste paper."

Various stinging articles appeared in the northern papers ; jokes, quips, and
sarcastic remarks of all kinds, were hurled at the banks. The effect of the
suspension of cash pa3'ments upon the various stocks was most lamentable.
Lawson informs us that the highest price the funds had ever reached, prior to
1797, was the following : — Three per cent. Consols, 97^ ; Four per cent. Consols,
105!; Five percent. Consols, 120; Bank Stock, 219. A month after the panic
they stood : Three per cent. Consols, 47! ; Four per cent. Consols, 6o| ; Five per
cent. Consols, 72 J ; Bank Stock, 12 if.

But time the great healer passed on. Money was wanted, which anybody
by calling himself a banker could create, so that before the close of the century
numerous new banks sprang up, and money in the shape of notes was more
plentiful than ever. It is estimated that prior to the panic of 1797, there were 280
country bankers, but as licenses were not then required, no accurate return can be
obtained. By 18 13 they were said to number upwards of 900.

Towards the closing days of the eighteenth century, the Old Bank of
Newcastle was troubled with the forgery of its notes. The particulars of the
chase and capture of the culprit will be found in the account of the bank.



[68]



CHAPTER VII.

PROVINCIAL BANKING— 1800 to 1810.

New Banks opened — Letter from Thomas Bewick— Suspension of Surtees, Burdon, & Co.
— Panic of 1803 — Bankers' Notes again guaranteed — The original document —
Wear Bank in difficulties — Its notes supported — Cook, Robinson, & Co. suspend
payment — Shadforth, Batson, & Co. dissolve partnership — List of public holidays
— Alteration of Stamp Act.

At the close of the previous chapter, we remarked upon the number of new
J^~\^ banks that commenced business about this time. The following firms
opened in the north : — Messrs. Cook, Robinson, & Co., and Goodchild,
Jackson, & Co., at Sunderland ; Hutton, Other, & Co., at Richmond ; Miles,
Wells, & Co., at Whitby ; Hammond, Hirst, & Co., at Northallerton ; Lister,
& Co., at Scarborough ; Smith, Elstob, & Co., at Stockton ; and Bower & Co.,
at Malton. When we consider that each of these bankers as well as those
previously existing were floating their paper as fast as they could, there certainly
must have been plenty of money in quantity if the quality were only satisfactory.

At this period, Thomas Bewick, the reviver of the art of carving in wood, was
the principal note engraver in the north. Robinson's "Life of Bewick" has the
following interesting letter : —

Tynemouth, Tuesday Night, 13th Oct., 1801.
Dear Aunty,

I have just now received a letter from Luke (Clennel) informing me that the Newcastle Bank

wants a number of Bills printed immediately, therefore as soon as you receive this letter you must go

along to the shop with the key of the Desk which you will find in my Pocket Book, in my night cap



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 9 of 57)