ment of the exchange companies has been of great service to this class of persons. Hundreds of persons of moderate means have had their comforts increased, by the increased interest they thus derive from the money, on the produce of which they are obliged to live; and I rejoice to believe, that thousands will yet enjoy similar benefits."

"The Exchange Companies no more compete with banks than, do the river trusts, harbour trusts, railway companies, road trusts, and other public undertakings, who borrow money for lengthened periods. There is, in fact, no possible room for jealousy or competition between banks and exchange companies, for there is no business undertaken by the one which could be accepted of by the other with any safety or propriety. You will yourself acknowledge that the Bank of Scotland could not afford to receive money on deposit for nine months certain at 5 per cent.; and I assure you the Commercial Exchange Company could not afford to give 4 per cent. for money at call,'

"We do not, in the smallest degree, injure or interfere with the prosperity of commercial banking; on the contrary, the establishment of exchange companies must have given a very acceptable apology to prudent bankers for declining to make advances to their customers on securities, which (although quite good in themselves) are as foreign to prudent banking as advancing money on mortgage over land."

"What you call evils are in fact great public benefits. First, by conferring substantial advantages on a certain class of depositors; and secondly, by enabling the internal improvements of the country to be carried out with an ease and rapidity which could not otherwise be attained."

The Exchange Bank and Companies that have been formed in Scotland are the following::

1. The Exchange Bank of Scotland, at Edinburgh. 2. The Commercial Exchange Company, at Glasgow. 3. The Union Exchange Company, at Glasgow. 4. The National Exchange Company, at Glasgow. 5. The Glasgow Exchange Company, at Glasgow. 6. The West of Glasgow Exchange Company, at Glasgow. The following account of these companies appeared in the last edition of this work :

1. The Exchange Bank of Scotland.-This bank has a charter under Sir Robert Peel's Act of 1845. Its paid-up capital is 350,000l., and it has about 400,000l. deposits. It cannot issue notes. In making payments it issues the notes of the City of Glasgow Bank. It has paid a dividend of 6 per cent.

2. The Commercial Exchange Company.-This bank has no charter. It was established before the passing of the Act of 1845, but not registered until after the passing of the Act. It has since registered, and hence the directors consider that they are entitled to carry on business as a bank without a charter. The extracts we have made from the pamphlet of Mr. Kinnear, the manager of this bank, will show the principles on which it is conducted.

3. The Union Exchange Company of Glasgow, does not profess to be a bank at all, and hence avoids the question of a charter. At a special general meeting of shareholders, held in November, 1846, it was resolved "that the word 'banking' be omitted from the name or firm of the Company, as prescribed by the first article of the contract of copartnery, and from the description of companies referred to in the third article of said contract; and that a special declaration be added to the said third clause of the said contract, that it has not been, and does not form any part of the business of the company to make advances simply on personal security, unaccompanied by the collateral security of real or personal property." Its paid-up capital is about 250,000l., on which it has paid a dividend of 7 per cent.

4. The National Exchange Company.-This company has been very unsuccessful. It commenced in the year 1845, and got into difficulties at the end of 1847. Their first paid-up capital was 210,7907. They have since made a call of 21. a-share more, on 57,000 shares, to enable them to meet their liabilities.

5. The Glasgow Exchange Company began business in 1847, and wound up creditably in 1848, returning to their shareholders 4s. per share more than they had paid up.

6. The West of Scotland Exchange Investment Company, is winding up its affairs, and is expected to return to its shareholders nearly the whole of its paid-up capitalabout 120,0002.

The losses that have fallen upon exchange companies seem to have arisen mainly from the great reduction that has taken place in the price of railway shares. The following observations of the directors of the Glasgow Exchange

Company, with reference to the prosecution of their business, appear very just and impartial :

"The directors will first state the negative view of the question. From the nature of the transactions which form the general business of exchange companies, their success depends chiefly upon a high state of the prosperity of the country, and particularly of railway enterprise. The main object of nearly all who enter into such transactions is to realize the benefits of an expected augmentation of the value of the stock; the business, therefore, is necessarily attended with risk, and though that risk may be guarded by what appears an ample margin, recent experience has shown that this has not been a sufficient precaution.

"The directors will now state what has occurred to them in favour of prosecuting the business.

"The magnitude of railway stock in this country is so great, that it may be fairly concluded it will always form a subject of extensive dealings, and that, therefore, there will always be a large field on which business may be cultivated. In ordinary times, the risks attending the business of the company would not be much; and it is not to be expected that a period such as has just been passed, distinguished by extraordinary vicissitudes in the value of public securities, will often occur.

"The prejudice which exists against such companies at present, time may remove, for it does not appear to the directors that the grounds of that prejudice rest on any principle that would not apply to any other joint-stock company; but it is not to be concealed that the existence of this prejudice will be an obstacle, for a time, to the facility of increasing the paid-up capital, and the increase of loans from the public, both essential to the profitable results of the business."

exist.

Such was the state of the Exchange Banks and Companies in the year 1849, when the last edition of this work was published. Since that period they have all ceased to What amount of capital was returned in each case I do not know, but the losses were very great, and in some instances they were increased by the determination of the shareholders to sell their securities at any price, and divide among them the capital which remained. The above record of the rise and fall of these Exchange Associations will furnish an illustration of the previous excitement and the frightful reaction that marked the year 1847. At some future time similar societies may possibly be formed under more favourable circumstances.

SECTION VII.

THE BANKS OF IRELAND.

THE last Act of Parliament for regulating banks in Ireland is the 8 & 9 Vict. cap. 37, passed in the year 1845.

This Act recites that by the Act 21 & 22 Geo. III. an Act was passed for establishing a bank by the name of the Governor and Company of the Bank of Ireland; and which prohibited any other company consisting of more than six persons to issue notes payable on demand or within any time less than six months. That by the Act 1 & 2 Geo. IV. cap. 72, other companies consisting of more than six partners might issue notes payable on demand, at a greater distance than fifty miles (Irish) from London. And that by 6 Geo. IV. cap. 42, and 1 Wm. IV. cap. 32, such co-partnerships of bankers might transact certain matters of business by agents in Dublin, including the payment though not the issue of notes.

The Act farther recites that the Bank of Ireland had at various times advanced for the public service, the several sums of 600,000l., 500,000l. and 1,250,000l. late Irish currency; and that by the 48 Geo. III cap. 103, the charter of the Bank of Ireland was extended to the 1st

day of January, 1837-upon twelve months' notice to be published in the Dublin Gazette, and after the repayment of the above-mentioned sums. And that by the Act 1 & 2 Geo. IV. cap. 72, the Bank of Ireland had agreed to advance a farther sum of 500,000l., and the bank was empowered to enlarge their capital to 3,000,0007.; making the total advances 2,850,0007. late Irish currency, equal to 2,630,7697. 4s. 8d. sterling money of the United Kingdom of Great Britain and Ireland; on which, by the Act 3 & 4 Vict. c. 75, the bank received an annuity from the Government of 115,3847. 12s. 4d. sterling, payable on the 5th of January and 5th of July in each year, redeemable upon six months' notice, to be given after January 1st, 1841, and after payment of the above-mentioned sums.

The Act farther recites, that the above annuity of 115,3847. 12s. 4d. has, with the consent of the said

governor and company, been reduced to 92,0767. 188. 5d., being at the rate of 34 per cent. per annum on the capital sum of 2,630,7691. 4s. 8d., which capital sum shall not be repaid until the expiration of six months' notice, to be given after January 1st, 1855; and that, during such term, the said governor and company shall manage the public debt free of all charge. The company is to continue a corporation, for the purpose of carrying on the business of banking, but not to have any exclusive privileges. The charter to continue until the expiration of twelve months' notice to be given, and published in the Dublin Gazette, after January 1st, 1855, and upon repayment of the sums due from the Government to the bank.

The Act removes, from the 6th day of December, 1845, all restrictions upon banks having more than six partners issuing notes and carrying on business in Dublin, and within fifty miles thereof. But no bank shall issue any larger amount of notes than the average amount he had in circulation during the year ending the 1st day of May, 1845, (which amount shall be certified by the Commissioners of Stamps,) and the amount of gold and silver coin he may have in his hands, in the proportion of not more than one-fourth of silver to that of gold.

In case two banks should unite, the new bank to have the power of issue to the amount of both the united banks. Any bank may arrange with the Bank of Ireland to give up its issue; and in that case the Bank of Ireland may increase its issue to that amount. But the bank that thus contracts shall not afterwards resume its issue. All notes for a fractional part of a pound are prohibited. Each bank issuing notes is required to send to the Stamp-office weekly returns, stating the amount of notes in circulation on each Saturday, distinguishing those below 5l.; and also the amount of gold and silver coin held at each of the head offices or principal places of issue in Ireland. And from these returns the Commissioners of Stamps and Taxes shall make a monthly return, which shall be published in the Dublin Gazette. This monthly average must not exceed the amount certified by the commissioners and the amount of gold and silver on hand.