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THE Speaker took the chair at half-past three.


Mr. NICHOLS presented a petition from certain inhabitants of Sydney against the new


Petition received.


Mr. DARVALL moved for leave to bring in a Hill to give effect to liens on wool, and mort- gages on sheep, cattle, and horses.

Agreed to.


Mr. NICHOLS moved that an Address he presented to His Excellency the Governor General, praying that His Excellency "will be pleased to place upon the estimates of ex- penditure for the year 1853, a sufficient sum of money for the purpose of defraying the ex

pens - of erecting a Public Whaif at the foot of

Erskine-street, in the City of Sydney.-The lion, gentleman made some observations in support of the motion, urging the necessity of aflbruing some landina accommodation for persons crossing to and from Balmain.

The motion having been seconded,

The COLONIAL SECRETARY objected to the motion, on the ground that it was a private object altogether ; and if the Govern- ment acceded to it, it would be opening the door to other similar applications.

After some observations in reply from Mr.


Tlie motton was put and negatived by 17 'to 14.


Mr. MORRIS moved, that a Select Com- mittee be appointed to enquire into the facts

connected with the introiuction of the Scotch Thistle and Bathurst Burr into this colony; the progress these weeds have made in the different districts; the present evil accruing

to the colony from their existence ; and what means (if any) should be had recourse to for their extirpation. That such Committee consist of Mr. W. Macarthur, Mr. M'Leny, Mr. Icely, the Solicitor-General, Mr. Bradley, Mr. Cox, Mr. Flood, Mr. Hughes, Mr. Chis-


The motion was agreed to, the SOLICITOR GENERAL, however, requesting to with- draw his name, on the ground that he had no   time to devote to the subject.


Mr. FLOOD, seeing the hon. the Colo- nial Secretary in his place, begged to enquire whether the Government had received any further account from Gundagai or Wagga Wagga, relative to the recent floods ;

The COLONIAL SECRETARY said no further accounts had been received.

Mr. LAMB was glad to have the opportunity of stating to the House, that instant measures had been taken by the public to afford some relief to the sufferers. A subscription had

been entered into, amounting already to   £386 Is. 10d., and en the 7th ot this month, the Secretary of the Exchange Company had written bv the directions of the Committee to Mr. Davidson and Mr. J. D. Smith, at Gunda- gai, requesting them to be good enough to dis- tribute to tho sufferers by the late floods, flour and warm clothing, and small sums of money to the amount of £150 ; also, to Mr. J. O. Sul- livan, at Goulburn, to hire a dray and forward to Gundogai, 1 t >n of flour, 3 chi'sts of tea, and 6 cwt. of sugar ; also, to the Rev. Mr. Biigstock at Yasi, requesting him to co-operate with the parties appointed to carry out the objects

of the subscribeis. Measures had ulso been

taken to remit sugar, tea, and other articles to the extent of £200 more. (Hear, hear.) He trusted, therefore, that with what the Govern- ment hnd done the distress resulting from the floods would in a jsreut measure be relieved.


, Mr. NICHOLS movrd that an address

be presented to his ExctlL»ncy the Governor Genei'id, praying that his Excellency will be pleased to place on the Estimates of Expendi- ture for the year 1853, a sufficient sum for refunding the amount of duty paid to the Government on all sales by auction of gold the produce of the colony of New South Wules.

The motion was agreed to,


Mr. NICHOLS moved that an address be presented to his Excellency the Governor General, praying that his Excellency will he pleased to cause to be laid upon the table of this House a copy of the petition of certain of the inhabitant« nnd landholders of the county of Cumberland, transmitted by the Chairman, Alderman Ryan,, on the loth day of June, 1852. of a meeting held on the North Snore, praying that a sum of money may be placed on the Estimates to be applied to stumping and clearing a portion of the Lane Cove Road, His object wus to refer the petition to the Committee now sitting upon Internal Commu- nication, for them to repor| on the advisability of repairing this raid.

Mr. DARVALL seconded the motion.,


some observations under the impression that the motion was for placing a sum. on the Eitimatcs for this purpose ; but Mr. NICHOLS having explained that he only wished for a copy of the petition at present, the motion was ngreid to, after a few remarks from Mr. DARVALL in support of the repaiting of the



Mr. WENTWORTH, in moving that the Bill to amend the Act of Incorporation of the Bank of New South Wales be read a second

time, would beg to call the_ attention of the House to the circumstance that a very consi- derable alteration had been made in tt-eBill since its first reading., Tnis alteration would do away with any pretence of 'he specious objection which had been raised to the mea- sure, he (Mr. Wentworth) thought without any foundation, by the hon. member for Cook anti Westmoreland, for he must still contend that the original Bill he had introduced\ievor contemplated the issue of notcB on the eecurity of gold bullion, othfr than that held by the Corporation in the colony.

Mr. MARTIN hi-rerose to a point of order. After the Bill lud been read a first tim-', it was referred to a select committee, and now it was pr iposed to go on with the Bill, though neither the report of that convniitee n-r the evidence on which it was founded,* was'bofore the Coun- cil. It was true that the. duty of a committee ou a private Bill only to declore «hether the preamble was proved or not ; but they had ' a right to know in respet t to this Bdl whether,

the prcample was proved or not, and on what


Mr. WENTWORTH had brought up the report of the select committee, and the House, on his motion, had ordered it to be printed.

Mr. MARTIN: But it ha'd not been pro- duced yet ; at least he and other hon. members had not got it,

Mr WENTWORTH did not think it was requiiitc that the rvpor.'s of select committees on private bills should be printed; but he would road the Tcport of tho Select Committee BO that no lion, member might be surprised. [The hott. member here read a short report stating that the preamble or the Bill \vas satis- factorily pi o ved, and recommended at, altera- tion in the 2nd clause of the Bill, to moke the i*sue dependent on the qumtity of coin or bullion of the bank at tho time in the colon v.] According n> thi< recoin inondation the rtill was altered. It had barn reprinted, and wire now before the Ilmise in ita amended form.

After same further «light discussion, nt the very generally expressed wish of the Hume, the discussion allowed to proceed.

Mr. WENTWORTH resumed: He would,

in the first instance, ho repeated, call the at- tention ot the IIouso to the alteration wh'ch had been made in th^ Bill, and this nitcrntion »as in the sîcond clause. In the amendad

Bill this clause was a* follows :-All promis- sory notes, which by the «aid recited Aet the said Corporation are authorised to make, issue, and circulate, shjll b'>ardite at the cit}*, town, or place nt and from which the snme respec- tively shall be made and issued, and the same respectively shall in all eisen be payable in specie on demand at the place of date. And the total amount of the promissory notes pay- able on demand issued and in circulation Mith- in the colony of New Routh Wales shall not al any one time exceed the amount of the coin, Nillinn, and public uceuriiU-s which «hall for the 4»me being be held by the said Cnpora tion \v»'*hin the »sid colony." The 4th clause of The Act explained the mearing which was implied under the term bullion,

it being that all xinassayed* gold should be taken to be bullion ; " and in the accounts of the said Corporation, and in the statements and general abstract of the assets and liabilities which are required by law to be made out and published, it shall be lawful for the said Cor- poration lo include the same when melted into ingots under tho name of ' bullion.' As he bud explained on a previous occasion, the pro-

visions contained in this bill for the issue of promissory notes were the same as those of the Bank of England. They were identical with the provisions contained in Peel's Aetregulating the issues of the Bank of England. These pro- visions were, first, that the issues should be secured on the Government securities held by the Bank, and secondly, on the amount of coin and bullion held by the'Bank. These conditions,

which were the conditions enforced on the Bank of England in Peel's bill, were precisely the conditions imposed under the present measure. And he did think that it would be incumbent

on the opponents of this measure to prove that these conditions were impolitic and unsafe, in regard to the Bank of England, before they could make out their case against the bill. They should, he repeated, be prepared to make out the proposition, that the banking policy of England under Peel's bill was wrong, before | they could, induce the House to resist the appli-

cation ofthat policy to the Bank of New South Wales. If the opponents of the Bill did not make good a position ot this sort, he should be driven into the necessity of believing that they were actuated in respect to this by other motives than those of the public welfare, and just and wise legislation. Certain comments, indeed, had b en made upon this measure m a

certain institution-an inslituilon which took

upon i'self to meddle with all these matters - an institution, too, he would add, which had but very little weight and influence with the puhlic. The comments ho alluded to proceeded from a very obscure quarter, indeed, and it was almost impossible to reilly to the abuse of and resistance to this measure, because the arguments used were perfectly unintelligible to any one acquainted vvith the subject, and he believed must have been unintelligible to the paities who made them themselves. But the object, indeed, .was to'preveut tho Bank of New S.iuth Wales from becoming a purchaser of gold. Now, it was notorious, that the leaders of this opposition to the measure, in the institution he had alluded to, were gold buyers themselves, and it was a fair und rea- sonable inference that they disliked the idea of the Bank of New South Wales becoming rivals to them in this traffic. They know very well that the more purchasers, the more com- petitors to obtain gold, the larger amount of money brought forward to purchase it;' the higher the pr ce paid to the producer would

be7 and the*lower, als", would be the profits to be made upon it. Therefore ii was open to him to behove that at the bottom of the oppo- sition of 'his class of people to this measure was to be found the private interests, or sup- posed private interests, of thii class. In order fairly to judge of the motives of the opponents of this Bill, he thought it was incumbent on the House to constder what these persons ought to have done, if they intended to make a full und constitutional opposition to the measure. According to the Standing Ordirs of the House he found that all private Bills were required to be submitted to a sehet committee, as this Bill had been, and that any opposition to such Bill was required to be made by petition. But it was necessary when this petition was sent in that some one of the petitioners should fork out the sum of £15; but none of these gentlemen had ventured to that ex'ent of liberality. The principle! of the bill were really so harmless

and their opposition to those principles was so I rofen and unsubstantial, that it was ' not worth the venture of £15 upon it, and he did not think that an opposition of this description was deserving of

much consideration on the part of the House. ' But in reference to this patt of the subject, ' there were two parties to bo consulted, It wus not the interest of the gold purchasers which were to be considered, but also the in- terest it would have on the public. If this Bill had been a measure of the description which these gi ntleraen represented it, the public

would have liad something to say in reference ' to it. But the whole tendency of the measure ' was largely to benefit the public. The

giving the bank the privileges it I now sought, would enhance its power to com compste in the purchase of gold. It would inciease the competition for gold, and thus enhance the price, and thus indirectly it would have the eflect of materially influencing the exchanges in favour of the producers. On this account alone he thought the measure was w orthy of the most favourable con«iüeration at the hands of the Hou«e - for any thing which could tend to advance the interests of the pro- ducéis must tend to advance the interests ot the country at large. The more buyers of gold they created, the moro money they would create, and then the price would rise, and with the riso in price the narrower would be- come the margin left to the exporter for profit, and the smaller consequently would be the advances upon it. It had aUo been urged in opposition to this Bill that its privileges ought to be extended to the other colonial banks. Now, it had no dybubt come under the notice of hull, members of that House that the only other purely colonial bank in the colony had given notice of its intention to introduce into the House during the present session a Bill for the alteration of its Act of Incor-

poration." But,he was informed, ^and he fully believed his information to be true, that the directors of ,the othtr colonial bank were not satisfied with the principles of »his Bill. That they wanted the powers given by the measure, not instead of, but in addition to those which they already enjoyed. They coveted to have the power of issuing on gold bullion in addition to that of issuing upon their paid up capital. As, however, they saw there was but little chance of such a measure euliáiing the favourable consideration of the House, they had withdrawn their bill. The provisions of the present measure did not satisfy them, and it was therefore thought to be unworthy of the notire of the "other bank, or at least not worth the trouble and expense of their obtaining. With regard to the two English banks in the colony, the House would bear in mind that one of them, the Bank of Australasia could issue notes to three times the amount of its capital, while the other Anglo-Colonial bank had no re- strictions to its issues whatever. It was- not therefore to be wondered at that these banks

did not seek those privileges seeing that they possessed much wider ones alredy. And

taking this circumstance into consideration I he must say if the object of the opposition to

to this bill were not to crush the Colonial bulks altogether, to force them to go out of tlie trade in money altogether, he could see no possible motive for it at all. Surely if this Dank of New. South Wales, "a Colonial bink, the oldeb ,M,IK ih the colony carne before the G'oun«*il to ask, not fjr more, but for leas prí* ilegcs than were possessed by the Enclish blinks-when also all the privileges it asked for we're identical with those which were enjoyed hythe Bank of England, were based on the principles of Peel'» Act, there could be no possible objection to granting the se privileges ;

.r ;if there were, he could see no ground for these objections, save on an tinj'ist exelusive riess-he now came to the 3rd clause, and ha would state that the printiple of this clause wag not found in the charter of the Bank of England. Theclause was'ts follows : "The total amount of the debts, engagements,

nid liabi'ities o( the said Cvjrnoration. within

the colony of New South Wales, v/heth'-r upon b mdri, bills, promissory notes, or other« i«e contracted, other thun their liabilities on accoun' of the ordinary cash deposits of customers, itttd on account of bills of exchange drawn by or on behalf of the s lid Corporation, upon any banker or banking company in the United Kingdom of Great Britain and Ireland, wiihin the amount or value of remittances made to such banker or b uking company respectively to próvido foi he payment of the said bills ot exchange, may extend to, bu» shall not in any case exceed titree ti nes the amounC of the coin, bullion, and public «counties ivhi"h shall, for the time being, be held b" 'he slid Corporation .timm the suid'o.'wny." , Tne , prin

i.ilc of this clous», hd would repeat, « is not f mud in the charter m" tho Batik of England, nor was «it found in m:v of the Acts or charter« of incorporation </f. «n> v»f the Banks in England, Scot'ind,

or Ireland. But the restriction which this ,

clause contained had been voluntnrily made j by the bank* here ; not indeed to make the

issue safe on theplun proposed,but to guarantee ' the safety of nil their liabiiitii s In fact, this clause went to provide that the totil amount of all the liabilities of the bank should not exceed three-times the amount of coin, bullion, and government securities held by the bank. He might perhaps state why this principle had been introduced into this bill. It was not

because it was a principle of banking or that it was adopted by the Bank of England, or any English, Scotch, or Irish Bank ¡ but because before Peel's Bill passed there was a sort of rule in the Bunk of England that this proportion should be kept up. (The hon. and learned member here quoted an extract from Mr. M'Culloch, stating the existence of a rule

which was formerly as far as po-sible adopted ' by the Bank of England, of keeping at least '

one-third of the amount of their liabilities in' coin or bullion in their coffers, but that in ' practice it was found impossible to carry ' this rule out). But under Peel's Act j any such rule "as this becamr* almost

unnecessary, because it was impossible under ' that Act that the liabilities of the bank could, ' except to a very limited extent, exceed three

times the amount of bullion and coin in its coffers. The bank could only issue to the amount of Government securities, and the amount of gold and Bilver, coin and bullion in its coffers ; and, therefore, it was unlikely that amount would ever fall behind the amount of one-third of

their liabilities. But though the rule was not necessary, it must still be borne in mind that the coin and bullion in England did not amount to anythinglike one-third of the amount of paper issued by the banks. There was for instance the Bank of Scotland. Under Sir Robert Peel's Act, this bank was allowed to issue three millions and a half of notes, without se- curity, but after that amount its issues were I estimated according to the awount of bullion

held. That bank lie found, by late returns, had issued-about £3,256,000 of notes, while the amount of coin and bullion it held was £910,910, or not much more than one-fourth of its issue. Then again, with regard to the Bank of England. Before Peel's Act, the amount of notes issued was £600,00'*, and this issue was allowed to remain out, but over and above that omount was obliged to add a pound in coin or bullion to its funds to every pound note it issued. No n with regard to the state of the deposits in these hunks, be found that the deposits in the Bank of Scotland amounted to £3,000,000 ; and for this large amount of lia- bility they held only £910,000.

Mr. DARVALL : Was the liability of the

Bank a limited or unlimited liability r

Mr. WENTWORTH was not prepared to say, but even if it were an unlimited liability, he did not see it made much difference. Parsing on to ¿he annuity deposil s in the English Bank, he found altogether they amounted to a sum of £84,000,000, and whore was the coin to represent this sum ; they all knew very well that the great mass of coin and bullion in Eng- land, was in the Bank of England. There was very little gold coin kept elsewhere. The other Banks paid their way principally in the notes of the Bank of England. In fact the great value of the B'ink of England was as a Bank of support. In times of necessity it came in aid and rescue of the other Banking institutions of the empire. Ile con- tended therefore that it ivas a matter

capable of the clearest proof that if the banks of England were restricted in the same degree in which it was proposed to restrict this bank, if their liabilities were to be restricted to three-times the amount of coin and bullion they held-they would at once come to a dead stand, they would at onceallbecome in an in- solvent position. But it was impossible that such restrict ons should exist in a great banking country-where the conviction of the whole people was with the opinion that ns little bullion ns possible should be used for banking purposes, but that it should be reserved for occasions when it might be wanted to send away. He could uot thei e fnre see any justice in the opposition to this 'Bill-a bill which voluntarily clothed itself with restrictions which were unknown in England-or which, if known, had only ex- isted in the shape of an impracticable rule i which it had never been able to fulfil. With

these observations ho bagged to move that the

Bill be read a second time.

Mr. OAKES seconded the motion.

Mr. MARTIN was certainly very much sur- prised to hear from the lips of the hon. and learned member who had last addressed the House the prin- ciple which he had concluded by enunciating ; that princip'e in effect was that it was the right principle for the monetary institutions of a country to deal with as little real money as possihle.'and to depend as much as possible on paper money or credit : that the domestic transactions of any country were to be carried on on credit, while the real ninney of the country was sent elsewhere. He was sure the House would not agree with the hon. and learned member in any such principle as this, and he did think, before asserting such a prin- ciple, the hon. and learned member was bound to have shown some argument in support of his position. It was opposed to almost all the authorities who had ever written on the sub- ject. But the absurdity of the principle laid down was so manifest that it could hardly im- pose upon the House. He knew of no reason why banking institutions more than any other trading institutions should be allowed to trade on credit only, and not employ the money they traded in. That they should be allowed to make a profit on banking transactions, by the use of credit alone-a double profit on the money on which those transactions ought to be based by using such money for other pur- poses elsewhere. Any such principle was utterly unsafe and unsound, and ought at once to be repudiated by that House. The hon. and learned member had said that it was difficult'to see any motive to account for the opposition made to this Bill, except the desire to promote the interests of the English banks and the detriment ofthat of the colonial insti- tutions. He could assure the hon. and learned member that his (Mr. Martin's) oppo- sition to the measure was based on no such motive. Ho would gladly see colonial insti- tutions flourish-he would glally Bee, b?ltpv ingashc did, that they had been the fruitful source of »vii to the colony, the English banks put down by legislative enactment, if any such enactment could be fair, and wise, and honest. Gould such n measure be justi- fied by any right principles be should be found

to be one of its warmest supporters. The lion, and learned member had told the House that the Scotch banks were liable to a far greater proportion above the amount of coin they held then was proposed in this bill. This was perfectly true, but the lion, and learned member had forgot to state that the share- holders in the Scotch banks were liable to the full-extent of the liabilities of the bank. That the whole of the property of all the share- holders could bo taken to natisfy those liabilities, while here the liability of the shareholders was limited to twieo the amount of their respective share?. The clauses of the present Bank of New South Waltrs Bill were consistent as they stood one with another, but they would be utterly inconsistent with the present bill. The Cth clause of the old bill limited the ishues of tho bank to the amount of its paid-up capital ; and the 33rd clause limited the liability of the shareholders to twice the amount of their shares, besides the amount ,of capital so paid up. Hore ali was clea]r and intelligible, the shareholders' respon

sibility, together with limit to the issue, mide* the bank safe-the creditor was ptotected fr 'in all danger. But undci this now Act, the bank was empowered to issue to any extent, to ?. million of money if it choose, but still ,th'.' liability of the share- holders wouhl be limited to £400,000, or twice the amount of the paid up capital, in addition to such paid up capital. He did not mean to ¿insure thu Act of Council limiting thi liability of the shareholders. So long as the issues were "united too, and persons knew to what they had to tru«t, there was no harm in this; but give the power of unlimited issue to his bank, and the responsibility of the insti- tution would at once be gone. Nor wou'd he object that the no'es of the bank should b3 to my extent secured on gold, if the gold could at once bo made convertible.' But the gold

lcou.H not be made at on co convertible here j it I

must be sent home to become money - it might be seized on the passage the Insurance Office might refuse to pay-delay might occur, and hundreds mii»ht be irretrievably ruined. It miuht indeed be said that he had put a very improbable contingency ; but however impro- bable, if a'iy such contingency was possible, in a matter so very important as this, it was the duty of the House not to concede a principle involving any such contingency. But the main principle on which he opposed this measure was, that the House ought not to confer on any Company any peculiar rights or privileges in respect to the profits to be made on dealing in gold. The trade in gold ousht to be open to ull alike, or at lenst no exclusive right nor monopoly should be given to any public Company. It was not because he looked with any eye of favour on the dealersin gold and the enormous profits they had made that he voted on this principle, but that to give an exclusive pri- vilege to any trading Company was unsound in principle and could not really relieve any of the defects in the present system. If there were to be any monopoly in this gold trade, let it be granted lo a great public and national institution, thus securing to the producer of gold the very highest price it was worth, while ¡ the profit ma-le out of the trade, if any, would

go into the coffers of the country. But the power* which were asked for in this Bill would, ho contended, give the Bink of New South Wales advantages in buying gold which pri- vate individuals did not possess. It did seem strange to him that this Bill, having been re- ferred to a Select Committee, the report of that Committee and the evidence taken upon it had not been laid before the House. They were told indeed that the Committee haä agreed to the preamble of the Bill, and they were further told that they did so on the sole evidence of the secretary of the institution, and the house could have very little doubt as to what sort of evidence on such a subject, such an officer would give. By the existing act, the Bank of New South Wales was made to pay nil its notes at the various branches from which they were issued, or at the princi- ple banking institution in Sydney. There was no doubt a ' wish to limit this wholesome principle, and in the amended bill ho found that the promissory notes issued by the Banks should bear dato at the cityi town, or place, at and from wlu'ch the same respectively should be made and'issued, and the same respectively should in all cases be payable in suecie " on demand at the place of ,date." Now when any Bill after being laid before the House of Commons received any alteration in a Select Committee, the alterations were printed in italics, but this new principle introduced into the Bill was not distinguished'inaîîy such

way. With regird to the third clause of the' Act as to limiting the lia- bilities of the Bank to three times the «mount of coin and bullion held by the Bank, he admitted that this was the principle which was recognised by the Bank of England. But the clause was so ingeniously worded that the larger the amount'of the liabilities became the larger would be the amount of noteB the Bank would be able to issup, thus increasing the indebtedness of the Bank both ways. Of course the largest portion the liabilites'of the Bank consisted of its deposits, and as a considerable portion of these would be in coin, the larger the amount of deposits became the lurger amount of notes would the Bank be enabled to to issue. So that if £100 of coin were depo- sited in tlie Bank the real amount of liability by MSUO which might b>5 incurred would be £300. Now he would challenge the lion, and learned member to point out any such clause as this in the charter of the Bank of Eng-


Mr. WENTWORTH never said there was. What he did say was the same principle was endeavoured to be adopted as a rule by the Bank of England ; not that it was the


Mr MARTIN d -nied that such was the rule with theBank of England. The increase of the deposits would increase the coin arid bullion, and thus increase the issue and the indebted- ness of the Bank ; so that thi« clause, instead of being restrictive, was actually an enlarge- ment of the power of the Bank." The liabili- ties nnd issues of the of England were restricted on most extraordinary principles, which did not and could not be introduced into a Bill like this. But ho contended that it was quite ab«urd to take the precedent of the Bank of England in this motter. The same principles did not apply in this colon}' as ap- plied in London, the very centre of the trade and commerce of nil the world. There, if the Dank of England had not the money to pay her notes or her liabilities, her credit was high, and she could go to the Bank of France, the Bank of the United States, or the Bank of Scotland, or elsewhere, and borrow it. But in any such dilemma wheie were they to goto here ? were they to be told they must wait for their money for nine or ten months, until the securities of the Bank could be realized upon in England ; and he must say this did appear to him to be one of the numerous fa»es where general * principles were applied to particular cases without_ considering whether the principle applied to the circum- stances or not. Again, although no doubt it would be said that the Banks were the best judges of what was good for themselves, he did think that the Council ought, to some ex- tent, to take care of the interest of the Banks, and not encourage an over-issue of notes, which might be demanded in money at any moment, Riid which the Bank might ,not be able to pay. Supposing for one day this was I to be the case, although the

assets in gold and other things j might make the Bank perfectly solvent, yet if j

it could not poy its notes in money, it would bo mined, and* involve the fortunes of hundreds in its destruction. It seemed, therefore, to him, that the proper course would be to refer this Bill to the Select Committee on Banking, The House hod unanimously ap- pointed a Select Committee to take the subject of Banking and Currency into consideration, and he must say it did not seem a parliament- ary course of proceeding to take one particular Bank out of that enquiry. He did not see how the hon. and learned member could well object to this proposition, as he had himself voted for the Committee, and shou'd thereforo move as an amend- ment, that the Bill be referred to the Select Committee on Banking and Cur-


Mr. DARVALL seconded the motion. And

[ he could not do so without expressing his opinion on this most important question. He must say that he was unfavourable to this Bill, particularly under the circumstances of Banks in this colony. If in banking, the

various institutions were left to the fair and I general principle of free trade-if these Com- panies were made liable to the whole extent of their properties for the liabilities of tho Bank, then indeed he did not think it would he needful to impose restrictions upon them. The public would know what they had to trust to, but he thought it was as much the duty of the House t'"» caro for the protection of the public as it was for the proprietors of the banks. If unlimited liabiblity had been the principle of these Banks, then they would have stood in a very different situation, and it must be remembered that they had had institutions of this, nature, and the public had confidence in them. And though through misfortunes, tremendous' liabilities had at- tached to the shareholders, these liabilities

i nod all been paid. Now the Bank of New

| South Wales, as a Company, did not

'.hoose to deal with the public i i this way. They limited the amount of the liability of the shareholders to twice he amount of the shares held by each indi- vidual in addition to the paid-up capital. The Bank took care of itself, and the public had a right to take care of itself also, and he thought it the duty ofthat House to protect the public. He could not therefore appreciate the imputa- tion of motives which had been made by the hon. and learned mover. He had from the firsr to the last of his speech, instead of bring i g forward any p'ain and tangible argument in support of the measure, contented himself with observations deprecatory of ihe argu- ments which he beemed to know would he brought against it. But in ihe course of his observations thehon. and learned rsteinber had dealt in error all along. E«en with regard to ihe p 8sage he had quoted from Mr. M'Cul !nrh, that! gréot. authority said one thine;, while the non. and learned member and his

hill said quite another. But he altogether denied that there was any analogy at nil be. tween two sufh institutes as the Bank of England and the Bank of New South Wales, The Bank of England, in the first instance' traded in £13,000,000 of the debt of the nation to her, a security at once undoubted and supreme-a security to which notbingin this colony could be found as parallel Now this Bill in the third clause piovided " The total amount of the debts, engagements and liabilities of the said Corporation, within the colony of New South Wales, whether upon bonds, bills, promissory notes, or otherwise contracted, otliPr than their liabilities on ac- count of the ordinary cash deposits of cus- tomers, and on account of bills of exchange drawn by or on behalf of the said Corporation upon any Banker or Banking Company in the United Kingdom of Great Britain and Ii eland, within the amount or value of remittances made to such Banker or Banking Company respectively to provide for the payment of the' said bills of exchange, may extend to, but shall not in any case exceed, three times the amount of the coin, bullion, and public secu- rities which shall for the time being be held bv the said Corporation, within the said colony.1' Tlie Bank therefore sought to have privileges which the Bank of England did not possess, But let them look to what were in reality the liabilities of the Bank. They found that the whole amount of liabilities" was £700,000 ; of this nearly £650,000 was composed of deposits, the circulation was £145,000, and yet the se de. posits were subject to payment on demnnd. Now the proportion which the B ink of Eng- land had to keep in coin, was one-third of itj liabilities, as in this Bill; but these liabilities, ¡ as stated in the passage from M'Culloch read by the honorable and learned member, in. eluded the deposits. The linbliliies which it

was proposed here should form the basis . of the amount of coin and bullion to i be kept, did not amount to one

third of the liabilities of the Bank, nil of

which might be demanded at any hour. It . did therefore seem to him to be a piece of monstrous' effrontery to read this passage ns the basis of an argument in support of this clause of the Bill. This morely lodi institu- tion was to have the power of incurring liabili- ties to discharge which the actual money it was bound to keep in its coffers would not pay moro than 12J or 16 per cent. Any such security would be a mere imposition on the public; and he for one would certainly never sanction any measure which did not give per. feet .safety to the public. The amount of de- posits in the Bank was £650,000, the other liabilities were £1 80,000, und one third of this sum-the sum required to

be retained in money was £00,000-and this was all that the Bank wa* to have to answer for its liability of over £700,000. Did any person ever hear of a proposition so monstrous, coming as it did from honorable and learned gentlemen who imputed sinister motive s to those who opposed it ? He agreed, however, that the issue of promissory notes by the Bank was deserving of greoter care on the part of the legislature than the amount of deposits. The notes frequently fell into the hands of ignorant and thoughtless people, who believed them to be money, and did not know that they could ever be dis- honoured. The depositors were generally of a more educated and shrewd class. But to ref.-r to the figures again. The liabilities of the bank were £700,000, the capital was 200,000", the circulation was £146,000: *o that if this circulation was demanded on a very

small loss would leave the bnnk without the means of paying the other liabilities. Even a run on the bank for the payment of its notts would cause this confusion. But suppose a new bank were to be started, and that a large number of the clients of the bank were to withdraw their deposits to the extent of £200,000, it would then l»nve actually nothing for the payment of the notes. He thought therefore the House ought to pause on this matter. It was not right that the property of of the public should be put in jeopardy, but

that the banks should be confined to proper' limits by fair and wholesome restrictions. But why should the circulation be limited to the amount of coin or bullion held by the bank, when the deposits to the bank might bo made ia coin or bullion which might be at any time withdrawn. The case was very different in regard to the Bank of England, which could at convert its bullion into money. But here it would have to be sent home, and a period of nine or ten months might elapse, and during that time any disaster might happen. He could see no reason why deposits shouM ,be excluded from the liabilities in this Bill. They were payable on demand ns promptly at anv others, and why should one description of liability payable on demand be made to bear

proportion to the amount of coin, and not tlie other t Perhaps some honorable member

would show what différence in primiple ex- ' istod between the notes in circlation and the deposits. . They were both payable on de- mand, and, in fact,'the deposits ? wcre more likely to be demanded. The Bill went on to provide that the oecuritr for these notes should be unnssayed gold. What sort of a fccurity would this bo.? it might be unassayed lead, or a heap of old brass candlestick runs together. What tricks mieht not any bank play under a provision like this ? What trader would be content to accept such a security for his money ? He must say he thought the propo sition to refer this Bill to a Select Committee was a good one. As to the Committee to which it had, been referred, it was a mere farce ; and he did think in regard to a measure

of so much importance to the public, that the' good sense and proper feeling of the House should induce it to pause.


The Sergeant-at-Arms announced a message from the Governor-General.

The Messenger having been introduced, de- livered to the Speaker his Excellency's Mes- sage, No. l8, with a Despatch from the Colonial Minister, in answer to the declaration and remonstrance adopted by the late Legis-

lative Council.

Mr. MARTIN moved that the Despatch of

the Secretary of State be read.

Mr. WENTWORTH seconded the motions and the Clerk accordingly read the Despatch,

which was listened to with great attention by - the House. It contended that the Constitu- tional Act was framed on principles which had met with the approval of the colonists, \ and argued at great length that the territorial

revenue belongs to the empire at large, and I not to the colony.

The COLONIAL-SECRETARY then moved that his Excellency's Message be printed,



in resuming the debate on the motion of the honorable and learned member for Sydney, ha had no intention of detaining the House with manv observations; nor would ho have spoken at all, but that he considered this a fitting; opportunity to set himself right in reference to some obst rvations which he had made on ths same subject on a former occasion. In a report of his remarks which had appeared in the public prints relative to the minute of His Excellency the Governor of South Aus- tralia, Sir Henry Young, he had been much misrepresented. Nothing could be more at variance with what he had said, than wastho report he alluded to. On that occasion he had fpoken in the highest terms of respect towards that functionary personally, and with refer- ence to the high office which he held ; hut, at the same time he had stated that ho was not

able to agrre entirely with Sir Henry's views on the subject of that minute. The minute he had alluded to was one drawn up by Sir Henry Young in n ply to a memorial from cer- tain inhabitants of the colony over .which ho presided, praying for the establishment of an assay office. The particular passage to which he had referred was the following : -"Thedis' coverer of gold is no more entitltd to claim a mint or an assay office to give a circulating fixed value to his gold than the wool pro- ducer can demand a manufactory fur his raw produce." Now it did appear to him that some difference attached to these matters which the Governor of South Austra- lia had not token into consideration. Gold differed from other commodities in this : thst from its very nature it was capable of being at once converted into a standard value, which

did not apply to any other product. Gold - could at any time be converted into sovereings,

VA was impossible in the case of other ma Wh-Í A.-ain, he had urged that no subject ^iprmitted either to coin money, or to con *?,p ni «rítele a lecal tender; whereas the

'tèctwas"at p'rfec? liberty to convert his

,UjMo cloth or his tallow into candles, if he wool into clotn, o thought it

StghtoSIon0these ground, of différer.,.

ffiwecn Sir Henty Young's opinion and his *nT but he had not done so impertinently or ^'nntlv Now, «ith reference to the mea ^Tforc the House, he had listened with

£ r m what had fallen from honorable

»mh -re in opposition to the motion of his

Ä?e and F&rne« friend, but be confessed ftid not discover any reason to show the ni «ncclicnry of reading this Bil a second time. u[le honorable members had referred to the ire ent state of the law, they would have found Ct the present mensure was far from being so ^nUrous as th-y hud represented. lie 'St of "the pnsent Bill was to enable the

Tiink of New South Wules to issue notes upon

Se secuticy of coin or bullion. Under the

TWurv Minute the Bank was auihons-d to ' &"e notes to the extent of its paul- up capital

»without any reference to coin or bullion at | ' Jl (Hear, hear, from Mr. » Wentworth) whilst by the present. . Bill they sot forth that they were not to issue . ' »aingle note except upon such de posits. This I : must be admitted tobeasafi-r principle than the

' one of the present law, which did not require ¡ - the Bank to hold any bullion nt all. In re- j

íercnceto the obscnaüons of the honorable

and learned member for Cumberland, he I thought it might be safely left to the discretion of the Banks to keep sufficient coin in their | coff rs to meet the probable demand from notes : or deposits. The rule which had generally ob-

tained in banking establishments was, to 'keep from one-third to one-fourth of the

amount of their circulation and deposits ,hi bullion in tluir coffers. There was a great diffen nee of opinion ¡u to the pre

,eist> proportion deairnble; but it was admitted | on all lundi that no system could be devised which should hold against a panic. It was 'impossible for any bank to pay all its liabilities ton a sa 'den call : hut in the periodical publi- cation of the Hal ilitirs and assets of each bank the public had ns good security ns from the nature «if things they could have. It was 1 objected against his lion, and learned friend

'that he had unduly compared the Bank of

Ntw youth Willis to the Bank of JSnr,lnnu; I but he (ihe Colonial Secretary) only under-

stood his lion, and learned friend to refer to ' the practice of the Bank of England as a pre- cedent. In the B-ink ot England, however,

the variations in the financial transactions I were so great, that it was found impossible to adopt un absolute rule for the proportion of einulution to bullion. At the present mo-

ment f r instance, the amount of bullion in j

the bmk was no less than £18,500.000; and recent advices gave reason to expect that it

woul 1 shortly reach the sum of £20,000,000 ; ' ¡which would l°ave the Bank with I jt«clvc or fourteen millions for which it could find no employment. The interest of [money was consequently as low as 2 per cent, [with " a downwnrd tendency, which was liiureisi'd by the large exportation of bullion

Iftom California and Australia, a large part of j which found its way to the coffers of the Bank. IV present production of gold from Russia,

California, and Austrilia was estimated at ' £40,000,000 annually; and doubtless it this I

txtr.inrdinarv production went on it must 8ff ft the price of gold relative to other com jnohtit'S. How far iï was difficult to 6ay ; hut timid y a difference of one per cent, had 'been ere-itcd between the former relative prices of god and silver. In reference to "this, how- ever, it would appear that recent extensive dis overies in Mexico, and the cheaper methods which were now ndopted for extracting silver ¡ore, lyould have the effect of again equalising She prices of the two metals ; but their joint farrease must of course tend to ftreat mone- tary prosperity, which, but for the present mnsottlcd state of Europe, and apprehensiuns «f war, would already have appeared. Perhaps m was not strirtly in order in having referred

io these subjects, (hear, hear) but considering

file interest which attached to them, he poped he should stand excused to the House or the observations he had made. D10 ' honorable member for Cook and West torehind had objected to the argument of his lonnrnble and learned friend that it was an

bject of banking to use as little money as ossible in commercial tran-actions; bat if he *d attended at all to the subject he would ave seen that the economy of bullion was the rinciple object of banking establishment?. Jt rould be impossible, without them, to carry 0 the immense business of the world. In iciidon. nine-tenths of the daily monetary tMisnctinns were settled in the Clearing louse, by the exchange of cheques, and cor tspnnding entries in the ledgers of the ankers ; so that a very small amount of coin (presented transactions of many millions

fclué. But there was another w¿y in which

le economy of coin was effected. The Bank t England, by lier charter, was made the tent centre in whien bullion was kept ; and tr notes being a legal tender all over the

juntrv, the country banka were not obliged i

ih'ilci any bullion at all, but settled all their »reactions hy means of Bank of Englan-1 )tc8 By these means the greatest possible [tnomy of money was ensured. The hon. fmb-i for Cook and Westmoreland would ive done well to pay attention to these facts, Head of finding fault with his honorable and >rnedfriend's argument. The hon. gentleman [d nlso made several remarks in disparagement Ihe English Banks; buthethoughtitsavoured Jpenhat ot ingratitude to turn against these

piiKB now that wo were rich, though in the iys of the colony's poverty we were glad lough of their assistance. (Hear.) The |n. gentleman also objected to this power ling" granted to the Bunk of New Sjuth Iules, because the liability of the share llders was limited ; but it must not be forgot n that this limitation was not n voluntary le-(hear, hear) but imposed by the leasury Minute. There was, however, no IngeT attached to the granting of the power ¡tight by the Bank, because it was by no Bans likely that its transactions would be jtended beyond its probable means. The In gentleman had not, he thought^ made out líase. There was nothing new in making fin and bullion the basis of a paper circuía- lo. He found in a woik of acknowledged ¡thorny on B inking questions. Mr. Ricardo't>, !" 'i lind recently been carefully edited by

{'Culloch, the following passages :

¡rience, however, show» that neither a Stute nor it «¡ver liait thu unrcjitricted powi-r or issuing paper without nl>u*lDjr that potter: in nil State«, thoro h«1 i«»uo of paper Money ought to bo under some rod contrat : anil none Kein« so pro|wr for that ?e ni Hint of subjecting tim issuer* of paper money

obligation nf plying llicir notes cither in gold colu


¡ectire tho public aga'tut any other variations in Ide of currencv than lho*c to which Hie Htandard I« «whjert, and, nt the samo limo, to carry on the uh>a willi a medium Um least expensive, i* to Üie Biost perfect «I ito lo which a currency can be lit, «.«d ive nhoulil powis all tlicso advantage«! hy ting tin-IWiik to the delivery of uncoined gold or

nt the Mint standard and price, in exchange ' ».Ir ntitis, insto vi of tho delivery of guinea» ; lie i mein« paper would never fall below tho value Ilion wltticiit being followed by n reduction of it« ¡ty. TV> prevent the ri^m of paper above the value of n. the Intet nhoulil be alio obliged to give their

In occhanse for M in d Ard gold at the price of £41 ter. outre. Sot to i;ive 'too much trouble lo the , 111" .pnnfitvivf poid lo be demanded in exchange Hapxratt he Mint price ii 17K. lO^d ,or the(|iiantity MP »"M to the Bitifc at C3 17s., fchould never be le.«* ? twenty ounce«. Jn other wonts the «mik should Hwip-'l to jiurchasf anj qutntity of gold tint was ?Millern, not lum (lum twenty ounce*, nt ii\ 17s. JKT ?fe «rod lo «ell .vir qwntity that mirht bo dtuiandi'd WITA. W/A. While they have tho power of t'égala ?|lie. quantity of their (Mjier, there ii no portille iu Knieni» that could malt to thom from ««teh n

itT,UM"b"Y*"»*Mb. «Wen,»! the «mo ItTiA°í,LT,,Ií.CT,!rjr de*ri|'«<>n of bulli««.

1« crlt«lT^ .W.fMr l0*°3 ftn'1 l**ue* °r PfiW KSenriI?.n?.'Ch,1 ,,,!lT0 «° oftcn «n-ntloncd,!

g»iW)luli.,,uan«ty of paper In circulation.

§£?'* not necessary he should trouble gBoufle cn that point, but he would quote a

§gc,hom Mr. M'Çulloch himsclt. in whtoh

»mp. view was taken :

te-aîl'Vtl^10 "''J,ecl' Mr- nicanlo propos«!

KrtHif u b.T ^iïy m^ín« l convertible into ?N¿OTJMVS?**."!!*'."«*»> '«currency it Kully Ä & «""""ff '«to !clr«iUtlon, nud HMIS* tia 'J^ST*** of «»¿»ge. wl «ho

^~f", »na low «coln,. Mr,, RlcsrdV» proposal

.was recommended hy the Committees of the Houses of Lord* and Commons appointed, in 18VJ, to consider Hie cxiKMliency of the Bunk of England resuming « aiU payments ; and was afterwards adopted in the bill for their resumption introduced by Mr, (now Sir Itqberl) Peel. In practice it wis found completely- to answer the object or checking over-issue. Hut Inasmuch an it nxfuirc'l that the of soveroUns «hould bo filled with «mo pound notes, the forgery of the latter begun to be exU'iisixely carried on; and it w.w wisely judged better to incur the expense of recurring to and keeping up a mixed currency, Ulan to continne a pim which, though produrtitc of a largo saving, held out an nil hut irresistible temptation to crime.

So that this principle had existed from IS 19 for four yearp, and lind only been abandoned on account of the facility of forging one pound notes, which " had led to many executions, forging being then a capital offence, and the numerous capitil !

punishments which ensued rendered it neces- j

sary that the temptation should be removed. In this colony that argument did not apply, first, because forgery was no longer a capital crime, and although theie existed a lmge cir-

cuí ilion of £1 notes, only very few prosecu-| tiona had been instituted for forgery. In another part of the work he found the follow- ing passages : -

That plan was to make the Bank liable to the pay- ment of n certain largo and fixed amount of their notés in gold bullion at tho Mint prico of £117s. lOj^d. an ounce, instead of payment in gold coin. If that plan lind been adopted, not a partiólo of gold would have been used in the circulation,-.-all our ninney must havo

consisted of paper, excepting tho silver coln necessary for

payment under tho value of a pound. In that case it is domoustrablo, that tho valu« of money could only havo heen raised 5 per cent, by reverting to tho fixed ancient standard, for that was tho whole difference between tho value of gold and paper. TbSrö was nothing in tho plan which could causo a riso In tho value of gold,'for no additional ([iiantlty of gold would have boon required, and therefore 5 per cent, would havo been the full oxtent of tho rise .in the value of money. Mr. I'eel's bill adopted this plan for four years, after which payments In coin «ero to be established. If for the time specified by the bill the Dank Directors had managed their affairs with tho skill which tho public interest required, they would have been satisfied with so regulating their issues, nflirAfrj Pool's bill .passed, thal the exchange should continuo at par, and consequently no importation of gold could havo taken place ; but tho Bank, who always expressed a decided aversion to tho plan of bullion pay- ments, immediately commenced preparations for specie payments. Their issues woro so regulated, that the exchange became extremely favourable to this country; gold flowed into it in n continued stream, and all that «?arno the Hank eagerly purchased at £3 17s. lOJ^d. per ounce, auch a demand for gold could not fail to elevate its value compared with the value of all commodities. Not only, then, hod wo to elevate the value of our cur- rency 6 per cent., the amount of the difference between the value of paper and gold before those operations com- menced, but we had still farther In to the. new value to which gold Itself was raised by the injudicious purchaj>CB which the Bonk made of that metal. It can- not, I think, bo doubted, that if bullion payments had been fairly triod for three out of the four years between 1810 and 1828, and had been found fully to answer all the objects of a currency regulated by gold at a fixed value, the same system would have been continued, and we should have escaped the further pressure which the country has undoubtedly undergone from the effects of the great demand for gold which sped« payments haye entailed upon us.

Tho » ink Directors urgo In «lofence of tho measures which they have pursued the complaints which woro made against them on account of tho frequent execution!) for forgory, which rendered it ¡ndispens ible that thoy should withdraw the one-pound notes from circulation for tho purpose of replacing them with coln. If they could not substituto a note better calculated to provent forgory than the one which thi'y have hitherto used, this plea is a valid one, for the sacrifice of a small pecuniary Interest could not bo thought too groat If it took «way tho temptation to the crime of forgery, for which so many unfortunate persons were anuually executed; but this excuse comes with a bad graco from the Bank o England, who did uot discover the importance of pre- venting forgory by the issue of coin till 1821, after they had lindo such large purchases of gold that thoy were under the necessity of applying to Parliament for a bill to enable them to issue coin in payment of thoir notes, which, by Mr. Peel's bill, they were prevented from doing till 1823. How comes it that they did not make this discovery in 1811), when the committees of the fjords and Commons were sitting on bank payment»? Instead of being cagor at that period to comm«nce specie payments, they remonstrated, in a manner which many thought unbecoming, against any pi m or metallic payments which did not leavu the uncontrolled power of ¡ncreising or diminishing the amount of tho currency in their hands. It Burely is not forgotten, that on an application by tho Lord's Committee to tho Bank, dated tho 24th March, 1819, asking if " the Bank had any and what objections to urge against tho passing a law to require it should pay its notes in bullion on demand, but in sums not les* lu amouut than £1(10, £201), or £-100, at £3 17s. lOJ^d., and to buy gold bullion at £3 17s. 6d. by an issue of its notes, the said plan to coin meneo after a period to bo fixed for that purpose;" the Directors answered, " the Bank has taken Into considera- tion the question sent by tho Committee ot tho House of Lords under date of the 24th March, and Is not aware of any difficulty in exchanging, for a fixed amouut of bank notes, gold bullion ol a certain weight, provided It be melted, assayed, and stomped by his Mnjesty's


By the present law, the Bank was compelled to purchase all gold of standard value at £3 17s. 9d" but had the power of selling it again to the Mint at £3 17s. 10¿d. But he found by luto accounts that it was not compulsory for the Bank to buy such gold unless its standard value had been previously ascertained ; trie Bank having in a recent dispute allowed that us they could only take standard gold to the Mint, it was not reasonable that they should bo at the expense of reducing any ingots brought to them to their standard value. In conclusion, as the princip'e of a coin and bul- lion hasis for a currency had existed in Eng- land for many year-», he thought it was per- fectly sound policy to follow such a precedent. He should therefore vote for the second read- ing of the Bill.

Mr. LAMB had listened with attention to the remarks of the several speakers who had taken part in this debate, but íegnrdedthe question as one still of such great difficulty,

that if he had been fre1! to vote upon it - which ' being a shareholder in the Bank he was not- I he should have taken the alternative of retiring I from the Council Chnmber during the division. I He deemed it his duty nevertheless to nffer u few observations for the consideration of the House The object of the directors and Bnare holders of this Institution was to place them- selves in the same position as the English banks, and more particularly in the position of the Union Bank. This latter institution vi as not restricted as to issue ; but it must be borne in mind also, that there was an equal absence of any restriction as to the liabilities of its

shareholders (Hear, hear.) Much might no I

doubt be said in favour of such a basis as was

proposed to be created by this Bill, but there were many objections apparent on thcface of the measure. The public securities were liable to a fluctuation in value. Gold was liable to

still greater fluctuations in its value, .having already ranged from sixty to sixty-se ven shillings per ounce. Now unless some fixed

value was placed upon this commodity by the.) Legislature, it would bo difficult to take an account of it with any degree of accuracy, and although such a creation of such a fixed value had been proposed, he questioned very much whether the present juncture was one favour- able to the adoption of such a measure. , He was one of those who thought that in a mea- sure of value they might with greater safety

resort to a silver basis, and on a former o.:cu- 1

j sion he had advocated an adoption in this way J I of the course already pursued by Holland and j j Belgium. The exclusion of the cash deposits ' , from ¡ the estimate ha 1 very properly been

pointed outas an exclusion which mi^ht extend I to n greater amount than all the coin, bullion, ' aud securities really calculated upon. In the i event of any panic arising amone the deposi- j tors, and a run upon the bank being the con- ' sequence, the proposed basis of the currency '

would in such a case cease to be a sife one. He admitted that, practically speaking, the

change might be safely absented lo The ex- | treme caution which had been created in bank I I parlours by the disastrous results of misma-

nagement in the case of the Bank of Austra- [ Ho. would be pretty certain to operate as a

safeguard to the public, as well as to the share- I holders, but they had a right to look to the possibilities of a contrary result, and he was not prepared to say that, notwithstanding the apparent safety of a paper currency based upon bullion, n better security was not afforded by the princi do laid doun in the Treasury inmute of limiting the amount of the notes to that of the paid up capital. (Hear, hear.)


the House would assent to the second reading of the Bill, leaving such amendments ai it might require to be made in Committee. The proposed change in the law as to the basis of the issue of notes would render thit issue safer. At present it was regulated by the amount of the paid-up capital; but in the event of that paid-up capital being lost, as in the ease of the Bank of Australia, the issue would bo without any substantial hasi» what- ever. The proposed substitution of coin and securities was consequently an improvement j and the security being thus improved, nil that was necessary to recommend the Bill to the House had been done. The House bad no

right to enquire into the private transactions j of the Banks. The dealings of thess institu- ¡ lions with their customer* were nt all times matters rather of private confidence than

detail to be legislated upo-i. Baj'k notes, how- '

ever, which had to pass from hand to hand, and to answer the purposes of coin, must bo based upon a foundation so stable as that they would at all timc3 be taken wiib confidence; and it was the duty of the Legiblature to see that this was the case. There was here the necessary stability. (Hear, hear.) The enterprise nnd tbe trading skill of the Bank Directors might be safely lett to guard their interests in the smaller matters which had been leferred to. They might perhaps occa- sionally be imposed upon and suffer loss, but

never to such an extent as that their IOSSPS

should affect the security of the public. There | were besides, in the peculiar cons itution of i this bank certain securities against error or

imposition which did not appertain to any I other colonial institution of the same nature, j It was made imperative by Legislative enact- ment that auditors should be appointed who

should make sworn returns of the assets, &c, I and these auditors were not only liable to fine, I but even to the pains and penalties of wilful

and corrupt perjury, in the event of neglecting >

their duty or rendering a false report. j 1 Mr. DARVALL remarked that by returns ' ¡ of this nature one colonial institution hid ap- ' peared to be in a state of solvency when in ' realitv it was ruined. I

The SOLICITOR-GENERAL pointed out1

I that there was not in that case the same Le- '

gislaiive safeguards to ensure correct returns ' as in this. Thes.' precautions were in fact I wholly peculiar to the institution, and afforded ' an additional argument in favour of the chingo ' sought for. Whatever amendments the Bill

required might easily bo made when it carne ' to be considered in committee ; but after so

many discussions as had taken place in that ' I House on questions of Banking and currency, '

the House was quite as capable of dealing I with the principle at once as it could be after I a reference to a Select Committee. Such' a

reference therefore would be simply nn unne- I cessary delay of the Bill. (Hear, hear.) |

Mr. DONALDSON admitted that the qucs- ' lion was one of great difliculy, but denied that any Member of the House would be justified in refraining from rcem-ding his vote upon one side or the other. The plain duty of every member would be alter the best consideration he could give the question, to vote in favour of that course which might seem to him the least fraught with danger to the community. '(Hear, hear.-) He saw nothing in the argu- ments of the Solicitor-General but those of an advocate for the Bill, and nothing which had been said either by that gentleman or by any other of its advocates, had convinced him of this, that the measure, if not absolutely dan- gerous, was uncertain in its tendency. (H -tir, hear.) Ile for one, would rather re-

main subject to the dangers with which they j were ocquainted than fly to others that they knew not of. He would not say thnt a basis of circulation such as wis proposed would not be a wise one in England, but there were circumstances here which he would not detain them by dwelling upon which rendered what might be suitable there, less suitable here. If private interests were at issue with public sifety, the former must give way. If this Bank wished to make a fundamental change in the basis of its circulation, it should come before the House with a new Bill, shorn of its charter, and a liability of all the property of its shareholders to the demands upon it (Hear.) The quotations from Ricardo and other writers had no real bearing upon the question for determination. The question was not as to the principles of Banking generally, or as to the security of the colonial Banks under the pre- sent system, but whether the Bill then under

discussion should be lead a second time. Con-

ceiving that, under the circumstances, no ad- vantage would accrue from further delay, he

should vote for the amendment.

Mr. CAMPBELL should support the amendment, but with no desire of furthering English interests. Great stress had been laid upon the security given by the system of audit- ing, but this auditing would not give the real value of the assets. The auditors would report the presence of bills and other securities, but the value of theso bills and securities they could not give. This valuation was (he pro- vince of the Directors. The Bill, seeking as it did, to change the basis of the paper cur

rency issued by the Bank, should be regarded with jea'ousy. The principle laid I down by the Secretary of State was a very fur one, ns far as it went, and should not be de- parted from but upon good ground and with great caution. The issue under the changed system might be upon an amount of assets which it would be difficult to realise. The i accumulation of coin in England ought not to ' affect this question-for it only showed an ac-

cumulation of wealth from the increased and increasing prosperity of Britain and her Colonies. The principle of a curroncy based upon bullion was a good one ; and had the banks acted upon this principle, ns they ought to have done, much inconvenience and loss would have been guarded against. By pur- chasing gold a depreciation in its value might have been prevented, and the ruinous fluctua- tions of the 'Exchange, which were so loudly and so properly complained of, would not have tnken place. One great objection m the de- tails of the Bill was, that althoug' * vas quite true that an over issue was prohibited, still there was no penalty whatever to enforce the prohibition, and it would consequently be useless. (Hear, hear.)

Mr. PARKER : If the amendment was car-

ried, it would have the effect of shelving the Bill for the present session ; for the Committee w.ould not bring up its report in time to admit of the measure being proceeded with. (Hear, hear.) All that the House had a right to look to in this matter was the security of the public. If i without impairing this security any sub- stantial nid could be given to the Bank of New South Wales, it was their duty to grant this aid. Grear stress had been laid upin the'esi clusion of the deposits, but, upon reference to the present New South Wales B ink Act, it would be found that, in this respect at least, there was no change. By comparing the two measures it would b» sepn that the security proposed to be given to the public for the issue of pip 'r, wa* far more favourable than the se- curity which was at present afforded. There

was at present no compulsion whatever upon ' this Bank to keep specie in its coffers. It was j

only necessary to provide for the payment in specie from time to time of such notes as were

presented. TJnder'the new system there must | be a retention proportionate to the amount of, the issue. It must be borne in mind that the ' privileges of tire English banks were very great. . rio far ns he was conversant with banking, he must say this, that if the legis- ¡ lature was to tie up and restrict the j

banks in their commercial operations, it would be fur better for them to have no Acts at all, hut to go back to the position of Joint Stock Companies. (Hear, hear.) The Union Bank was subjected to no restriction whatever as to its i«sue of notes. It was true that thrre was no limit to the respon- sibility of the shareholders, and he admitted that the public were entitled to this kind of liability when tho issue was thus unrestricted. In the Bill before the House, however, care was taken so to regulate the issue as to protect the public, and under these cucumstances it would be unfair to reject it, (Hoir, hear.)

Mr. WENT WORTH: If the House was as nauseated with the discussion as himse f, hon- orable members would bo very glad at his cut- ting the matter short. He was not only anxious to tci minute the debate, but he felt that all the objections which had been started by the opponents of the Bill had been fully met by the arguments of those who had supported it. Much had been s-iid about limited and unlimited liability,

I but where, he would ask them, 1 was the liability of the English banks, and in ' what did it consist ? In the event of failure, t the claimants might avail themselves of any ' a«sets within the colony, but if this was insuffi ' dont to meet their demands, they might I whistle for the remainder. (Hear, hear, and I laughter.) Were they to go to England in

order to hunt out the individual shareholders

1 and bargain with them ? They could not do this,

and he would repeat in effect that tho assets in the colony was nil the security which the colo-

nists could look for from these banks. It was easy to talk about bringing up n new Bill en- tailing upon tho shareholders an unlimited liability, but this would be to change the whole principio of tho measure, which could not be done without fresh meetings and consultation, which would occupy a long time. The reason of this application was that

tho Bank desired to enlarge its operations at once, and by delav this object

would be wholly defeated. (Hear, hear.) ' Acrimonious and ungenerous observations had j been made by one or two gentlemen «ho were

connected, either na lar.te shareholders or as ' directois, with other Binks. Suppose the' issue was even to extend to three, four, or oven f lue tune« its present amount, what would be

the result ? That there would be gold in the ' Bank coff-rs to sustain that issue. And what j better s»curify could they ha\e ? The value of | the cold would be estimated upon its cost to ' the Bank, and a safe reliance might he placed , upon this cost not exceeding us true value. ( Even, therefore, if the gold was to be

exported, there would be no fear of any failure ' in the amount of the security, but if his lion. ¡ friend opposite should introduce his measure

for giving a stamp of value to colonial gold, it j

did not follow that it would he exported at all. It was the inU rest of a considerable

body of persons to keep up this exporta ion, ' and hence had been all the difficulties against which they had to contend. The liabilities of

the Banks to losses at sea, &c, were liabilities ' common to every class of commercial enter- j prise, and would usually be compensated fur by the insurances ; but the House must look at the general rule itself, and not at those matters which formed un exception to it. The substantial question was, whether or not this institution should be placed upon an equal footing with the English Banks, or Bhould be crushed. (Hoar, hear, and No, no.) This was the result to be arrived at ; for if the power of the Colonial Banks to oblige their customers was restricted, the latter would be compelled to resort to those insiitn'ions which, haning a power of unlimited issue, could ghe them the necessary aid. None of the speakers who had assailed the principle of this proposed issue had

shown that it was not the same as that of the

Bank of England, nnd there the extent of the Bank's private dealings were deemed so im- material that Peel's Act contained no provision for their regulation. AU that the House had to see was that the notes placed in circulation were paid on demand, and that the means of making this payment were provided. He ad-

mitted that he was in error as to the old rule

of the Bank of England, with reference to deposits ; but the consequence of this rule in the compulsory resort to the Bank of France for assistance, proved its fallacy. To show how superior the proposed new basis of paper cur- rency was to that which at present existed, it was only necessary to refer to the history in matters of currency ol theUnited'States, where the Banks, before resorting to a bullion foun- dation were so rotten, that they deranged not only the commercial nffiirsof America itself, but of Europe. (The speaker here read an extract with reference to an American Bink, which, 'to present the appearance of haning in its

coffers a paid up capital of 60,000 dollars, managed, by collusion with another Bank, to borrow that amount of coin for a time, and thus to procure a false, but sworn, return of the actual presence of this coin.) No one could wish that piinciples 6o rotten as these should be maintained, and General Jackson, in placing the currency upon a me- tallic basis, conferred a benefit upon his coun- try and upon the world, which ought to transmit his name to posterity as a benefactor, notwithstanding the temporary confu-

sion to which this change gave

rise. He hoped that the House would allow the Bill to be read a second time, making afterwards such amendments in its details ns might be deemed necessary, for to send it to a,, Select Committee would be, in

1 effect, to kick it out altogether.

¡ The Council then divided, with the follow-

ing result, upon the question as to whe

| ther the words proposed to be omitted by Mr.

Martin's amendment should " stand part of the question."

j Ayes 15. Noes 15.

The Col. Secretary Mr. Alick Osborne

¡ Attorn ey- Generd Flood

The Solicitor-General Campbell

The Auditor-General Wm. Macarthur Mr. Cox . Jeffrey*

1 Wentworth Capt. King

Oakes ' The Colonial Treasurer ' Henry Osborne Mr. J. Macarthur Postmaster-General Darvall

Mr.j Parker ' Cowper

Inspector Gen. Police Donaldson Dr. Douglass ' ',' Smart , Chief C. Crown Lands Jones

Mr. Holroyd, and » Martin, and 1

Morris ' J Nichols J

Tellers Tellers.

The Speaker voted with the noes-substan- tially for the reference of the B.ll to the com- mittee, and the formal motions for this pur posé were'put and passed without further



Dr. DOUGLASS moved the substitution,of Mr. j William Macarthur for Mr. James Mac- arthur on the committee for the Improvement

of Internal Communication

M. HOLROYD seconded the motion. Carried.


Mr. HOLROYD postponed his motion for leavb to bring in a Bill to enahle the Trustees and Executors under the will of the late Robert

Campbell, Esq., to do certain things, until Thursday next ; and his motion for leave to bring in a Bill to enable the Trustees of Christ Church church and the Parsonage to sell, lease, or exchange the same, until this day




Mr. CO'^VPER- moved that the Standing Orders in reference to Private Bi'ls be sus- pended, with a view to the introduction of a Bill to incorporate a certain Company, to bo called the Clarence Steim Navigation Com- pany. * M *

Mr. DONALDSON seconded the motion. Carried. '


The.SQLICrrOR-GENERAL moved for leave to bring in a Bill to enable the President, the Senior Vice-Prpsident, and the Treasurer, of the Sydney Mechanics' School of Arts, to dell the land belonging to the Institution in Georgc-str«et South, and to purchase other land and erect new buildings in a situation more convenient for the purposes of the Insti-


The ATTORNEY-GENERAL seconded the motion.

The motion was adopte 1 without opposition, and the mover and seconder wern appiinted a Committee to preiare and brin? in the Bill.


The order of the day for the second reading of the Destitute Children Bill having been called on,

Mr. MARTIN said, that ns the Committee of gentlemen who had orignated the Destitute Children's Asylum were desirous that the Bill should be examined by His II mor the Chief Justice, who having but recently returned from Moreton Bay, had not yet had an oppor- tunity of doing so, he begged" leave to postpone the second seading of the Bill until Tuesday



Dr. DOUGLASS moved that the considera- tion in Committee of the Limited Partnerships Bill should stand an ordT of the day for Tues- day next ; and it was so ordeicd.


Mr. NICHOLS moved, that the Masters and Servants Bill be now read a second time. As it was simply a re-enacting, or a continua- tion of the law at present in forco in the colony, and understood that it would not meet with any opposition, he would not trouble the House with any observations on the subject.

The Bill was read a second time, and its committal ordered to stand an order of the day

for Friday text. I


j On the motion of Mr. Cowper, the Audit Bill was read a second time, its consideration in Committee to stand an order of tho day for ] Friday next.


Mr. NICHOLS moved, that the report of the Committee of the whole House on the Lot- tery Bill be adopted.

Mr. CAMPBELL moved as an amendment, that the Bill be re-coramittcd for the reconsi- deration of the proviso which nt the sugges- tion of the Attorney-General ho-fl been added to the last clause of ihe Bill, whereby liberty was given to the conductors of Bazaars on' account of charitable institutions to indulge n this (¡rime for tho disposition of their goods,

That amendment, he thought, involved matter

of very grave consideration, inasmuch as it,

seemed to indicate the temper of the House to j make a différence in the legislation for the rich and for the poor. He hoped that hon. members would reconsider the matter, and that however charitable they may bo, they would scorn to make exceptions in favour af any charitable institution, allowing it to adopt practices which, if indulged by a poor man, would subject him to pains and penalties.

Mr. D AIIVALL seconded the motion fir the reconsideration of the proviso in «îurstion, b?càuse bj* that proviso the whole scope and effect of the Bill was encroached upon. He could not at the same time coin- cide with the remarks of the honorable mem- ber for Sydney, inasmuch as the House would remember that the protection of the poor man was the sole object of the Bill.

Mr. NICHOLS said that the amendment

placed him rather in a lix ; for he was opposed in Committee to the proviso objected to by the honorable member for Sydney, but he was outvoted by the Committee, ne could not vote for the amendment, although he approved

of it, because thereby he would vote against I his own motion for the adoption of the repoit.

The amendment was put and negatived.

Hie original motton was then put and


The Bill was ordered to be engrossed, and to be read a third tim" on Friday,


The COLONIAL SECRETARY informed the House that in order to meet the conveni- ence of honorable members it was not his intention to bring forward the Tariff Bill to-morrow for the second reading, but when that order of the day should be called on he would move that it be postponed for a week.

The House adjourned at eight o'clock, until this day at three o'clock.

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