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attempt at overturning the monopoly of the Bank of England.

Great advantage sprang from this Restriction Act through its encouragement of sound and enlightened views as to the value of paper money and the nature of credit; but, while it lasted, it also brought serious mischief by its depreciation of the bank note in value to the extent, at one time, of from 25 to 30 per cent. Almost the greatest of the many great benefits conferred on commerce by Sir Robert Peel was his Act of 1819, abolishing the restrictions on gold and silver currency and the forced issue of paper money. The directors of the Bank of England were still allowed to issue as many notes as they chose, but they were compelled to exchange them for gold on demand, and thus were virtually prohibited from giving out more than the public felt it safe to take at the full price of their equivalent in bullion. This was a national avowal of the principle that money, that is, the circulating medium, is not gold and silver alone, but gold, silver, paper, and anything else which can be regarded as a trustworthy agent in the interchange of commodities, and the bartering of capital, labour, and the like.

This was the principle which gave vitality to such concerns as the one of which Samuel Gurney was for a long time the head, and which, not a little through his help, has been great source of extension to modern commerce. 'Credit,' said Daniel Webster, 'has done more a thousand times to enrich nations than all the mines of all the world.' Were we forced now to carry on all our commercial dealings by means of gold and silver, it would only be possible, in spite of the increase of our stores of these metals, to continue a very small portion of our present trade. This, however, no one now attempts to do. The legal currency, whether gold, silver, or banknotes, is only a sort of pocket-money in comparison with the real currency of trade. It serves for the smaller sort of retail purchases, for payments across the counter and the

like; but the great merchant has not in his possession all through his lifetime actual money equal in amount to the paper equivalent of money that passes through his hands every day of the week. All his important business is carried on exclusively by means of bills, bonds, cheques, and the other materials included in the terms commercial debt 'and 'credit.' His ready money is lodged with a banker, as has been the practice since the beginning of the eighteenth century, except that now he draws cheques for so much as he needs for use from time to time, instead of receiving from his banker a number of promissory notes, to be passed to and fro, while the actual deposit was in the banker's hands to be used in whatever safe and profitable way he chose. Now, however, the cheques are in comparatively few cases exchanged for real money, they being piled up by the bankers into whose hands they come and paired off one with another, or in heaps together, while the deposits that they represent are left untouched. In this way the money does double work, being itself available for use by the banker or his agents, while the equivalent cheques are quite as serviceable for all the purposes of trade. And this is only the simplest instance of the modern principle of credit. In all sorts of ways, every bit of money and everything else that can be taken as a representative of wealth, whether actual or prospective, is turned over and over, each turning being a creation, to all intents and purposes, of so much fresh money. A merchant, for example, buys a thousand pounds' worth of goods for export, say to India, China, or Australia. He pays for the same by means of a bill of exchange, accepted as soon as possible, but not payable till two or three months after date. The manufacturer or agent of whom he buys the goods, however, does not wait all that time for his money. In all probability he immediately gets the bill discounted, thereby losing some 15. or 20l., but having the sum of 980l. or 9857. available for appropriation

in other ways, and thus for the acquisition of fresh profits. Betore the original bill falls due he has built perhaps twenty fresh transactions on the basis of the first one, and so, in effect, has turned his 1,000l. into 20,000l., less the 300l. or 400l. that have been deducted by the billbroker as discount. And the same original transaction has been made the groundwork of a number of other transactions on the part of the merchant who bought the goods. He bought them for 1,000l., to sell again for, say 1,200l., part of the difference being his profit, part being absorbed in freight, insurance, and so forth. He is not likely to be paid for the goods in less than six months' time; and he has to pay for them in two or three months. But long before either of those terms expires he has raised part of the money on the security of his bill of lading, and so is enabled to enter on other transactions, just as the manufacturer had done. Or he sends out his bill to some partner, agent, or deputy in the district to which the goods are consigned, and that, being accepted, is available for the payment of debts already contracted in that part or for immediate transmission home, or to some third place, for use in any way that is found desirable. In such ways as these, and they are numberless, a very small amount of actual money goes to the building up, on the one side, of a vast structure of credit, and, on the other, of a vast structure of commerce.

There was a hazy comprehension of this system long centuries ago. 'If you were ignorant of this, that credit is the greatest capital of all towards the acquisition of wealth,' said Demosthenes, 'you would be utterly ignorant.' But the modern theory of credit is very modern indeed, having almost its first exemplification, on a large scale, in the establishment of Overend, Gurney, and Company. This house, as we saw, was established to make a separate business of bill-discounting, much more complete and extensive than the chance trade in bills that had formerly been, and that continued to be, carried on by

bankers, merchants, and all sorts of irregular money-lenders. Very soon after the time of Samuel Gurney's supremacy in it, it began to assume gigantic proportions, and it was, for some thirty or forty years, the greatest discounting house in the world, the parent of all the later and rival establishments that have started up in London and elsewhere. At first only discounting bills, its founders soon saw the advantage of lending money on all sorts of other securities, and their cellars came to be loaded with a constantly varying heap of dockwarrants, bills of lading, shares in railways and public companies, and the like. To do this, of course, vast funds were necessary, very much in excess of the immense wealth accumulated by the Gurneys in Norwich and elsewhere. Therefore, having proved the value and stability of his business, Samuel Gurney easily persuaded those who had money to invest to place it in his hands, they receiving for the same a fixed and fair return of interest, and he obtaining with it as much extra profit as the fluctuations of the money market and the increasing needs of trade made possible. He became, in fact, a new sort of merchant, buying credit-that is, borrowing money on the one hand, and selling credit-that is, lending money -on the other, and deriving from the trade his full share of profits.

Great help came to his moneymaking and to his commercial influence from the panic of 1825. That panic arose partly from the financial disorganization consequent on the enforcement of Sir Robert Peel's Act of 1819, very good in itself but promotive of much trouble until it had brought matters into a healthy condition. Its more immediate cause, however, was the excessive speculation in joint-stock companies at home as well as in continental mines, American cotton, and other branches of foreign commerce.* Several London banks

*This is an enumeration of the jointstock companies projected in 1824 and 1825, the great years of joint-stock company mania:

failed, and at least eighty country banks fell to the ground, the Bank of England itself being only saved by the accidental finding of two million one-pound notes that had been packed away and lost sight of some time before. Even Joseph John Gurney, much more of a philanthropist than a banker, suffered from the pressure. Business has been productive of trial to me,' he wrote in characteristic way in his journal,' and has led me to reflect on the equity of God, who measures out His salutary chastisement, even in this world, to the rich as well as the poor. I can certainly testify that some of the greatest pains and most burdensome cares which I have had to endure have arisen out of being what is usually called a "monied man."'

His brother, however, was much more mixed up in the turmoil. 'Knowing intimately as he did the sufferings which awaited those who could no longer command credit or obtain supplies from other quarters,' said one of Samuel Gurney's old friends, 'his anxiety was felt more on others' account than his own,'-the fact being that his own financial dealings were so sound that he had no fear for himself, and only had to settle how to make most money with most secondary advantage to those he dealt with.

'His desire,' it is added, 'was to act fairly and justly to his fellow-creatures, as well as to himself; and thus did he move onwards cautiously and step by step through those troublous times, lest he should lead any into

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error by his judgment. It was a remarkable sight to witness him plunge day by day into the vortex of City business and return thence to his own domestic hearth without any trace of a mammon-loving spirit.' We can well believe that the honest Quaker was reasonably free from the 'mammon-loving spirit;' but he knew well how to seek and secure his own advancement, and this he did very notably, by lending to many houses money enough to enable them to ride through their difficulties, and so bringing to himself much fresh favour and much new custom during the following years. From this time forth he came to be known as a banker's banker, taking the place, for many, of the Bank of England. Hundreds of private banks fell into the way of sending him, from time to time, their surplus cash, finding that they were as sure of getting it back whenever they wanted it, as if they had lodged it in the Bank of England, and that in the meanwhile they were getting higher interest for it than the Bank would have granted. 'We do not feel the slightest dependence upon the Bank of England,' said one of the number, Mr. Robert Carr Glyn, before the Bank Charter Committee in 1832, 'nor do we feel the slightest obligation to it in any way.'


Samuel Gurney was thus the cause of an injury to the Bank of England for which he was not easily forgiven. And in other ways the old Bank privileges were being assailed during these years. 1826 an Act was passed sanctioning the establishment of joint-stock banks throughout the country, except in London and within a distance of sixty-five miles thereof. The present system of law as to banks, said Lord Liverpool, in supporting the measure, must now be altered in one way or another. It is the most absurd, the most inefficient legislation; it has not one recommendation to stand upon. The present system is one of the fullest liberty as to what is rotten and bad, but of the most complete restriction as to all that is good. By it a cobbler, or a cheesemonger,

may issue his notes, without any proof of his ability to meet them, and unrestricted by any check whatever; while, on the other hand, more than six persons, however respectable, are not permitted to become partners in a bank with whose notes the whole business of the country might be transacted. Altogether the whole system is so absurd, both in theory and practice, that it would not appear to deserve the slightest support if it was attentively considered even for a single moment.' It would certainly have been altered long before, but for the influence of the Bank of England directors, eager to have as much of a monopoly as possible in their own hands. This bill, permitting joint-stock banks at a distance, however, was passed in 1826, and a few years later the wonderful discovery was made that joint-stock banks were legal even in London, and had been so from the beginning. James William Gilbart, having begun life as a banker's clerk in 1813, and after twelve years so spent, having gained fresh experience and influence in Ireland, pointed out that the Act of 1709, while forbidding joint-stock banks of issue, offered no obstacle to joint-stock banks of deposit. The consequence was the immediate formation of the London and Westminster Bank in 1833. Before that bank was fairly established, however, Parliament had complied with the demands of the free traders in money and passed a bill intended to give legal countenance to the institutions against which it was found that there was no legal prohibition. Therein it was declared and enacted that any body politic or corporate, or society, or company, or partnership, although consisting of more than six persons, might carry on the trade or business of banking in London or within sixtyfive miles thereof.' That was a full concession of the grand point at issue. Other matters of dispute arose, and for the first four years of its history the London and Westminster Bank was in constant altercation and litigation. But at last common sense prevailed, and


the London and Westminster Bank not only entered itself upon a career of wonderful prosperity, but also became the parent of a number of other joint-stock banks, destined in due time, we may fairly believe, altogether to supersede the older private banks.

It was really to atone for that apparent infringement of the Bank's monopoly, though ostensibly, according to the Chancellor of the Exchequer of the day, to prevent as much as possible fluctuations in the currency, of the nature of those which have, at different times, occasioned hazard to the Bank and embarrassment to the country,' that the Bank Charter Act of 1844 was passed. Sir Robert Peel entered heartily into the work, thinking that thus he would complete the financial reform begun by his Act of 1819, and in some of the wealthiest bank directors he had very eloquent and persuasive guides. Part of the new Charter was unquestionably beneficial. By it the Bank was separated into two distinct establishments, one solely for issuing bank-notes, the other for transacting ordinary business. The banking department is only a huge joint-stock bank, and deals with the public just in the same way as do the London and Westminster, or Coutts's or Child's banks. The issue department, subsidised by Government, receives all the bullion intended to be held in reserve and promulgates an exact equivalent for it in bank-notes, issuing also paper money, for which there is no corresponding bullion, to the extent of 14,650,000l. on the security of Government debts and other securities produced by Government. Whether the Bank Charter has on the whole been helpful to the progress of commerce need not here be discussed. It has been, beyond all question, very helpful to the Bank and to the many wealthy men whose wealth has brought them into connection with it.

Among these, though as wealthy as any, Samuel Gurney was not reckoned. His house was too much in rivalry with one branch of the Bank of England's business for him

to have more connection with it than was necessary. He took no prominent part, therefore, either in favour or in disapproval of the reconstruction of the Bank Charter in 1844. But he was as zealous as any of the men in office in Threadneedle Street in his opposition to the movement in favour of jointstock undertakings. It may be that in this he was somewhat influenced by his anticipations of the rivalry that would come through them to the vast business that he had formed. The only rivals that appeared during his lifetime, however, were private speculators. Of these, the first was Richard Sanderson, originally a clerk of his own. After learning the mystery of succesful money-lending in the house of Overend, Gurney, and Company, Sanderson started in business for himself. He married a daughter of Lord Canterbury's, and became a Member of Parliament, thus advancing his social position, but perhaps damaging his commercial prospects. He failed in 1847; soon revived the business in partnership with a Mr. Sandeman, and therein prospered for a few years, to fail again in 1857. More uniformly successful was another and younger bill-broker, a Mr. Alexander, who had for some time been a clerk in the bankinghouse of Robarts, Curtis, and Company. In 1856, the year of Samuel Gurney's death, it was estimated that Överend, Gurney, and Company held deposits amounting to 8,000,000l., while Alexander and Company were in possession of documents valued at 4,000,000l., and Sanderson and Sandeman of 3,500,000l. worth of paper; the wealth of the three houses together being no less than 15,500,000l.

During many years before that, Samuel Gurney had had very little to do with the business, its chief management being then in the hands of Mr. David Barclay Chapman. While he was young and vigorous, Gurney made money-getting his one grand business. It is said of him that when once an elder friend warned him against too close attention to the things of this

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world, he replied that he could not help himself; he could not live without his business. During the last ten or twelve years of his life, however, he left nearly all the management in the hands of others, and found his occupation in enjoyment of his princely fortune and application to various charitable and philanthropic undertakings. Charitable he had been all through his life. Many are the solid remembrances of the more prominent features of Mr. Gurney's charities,' says his very friendly biographer; 'but besides those deeds more generally known to the public, there were many lesser streams of silent benevolence still flowing from the fountain of love to God and man, which spread refreshment around. We have already alluded to his kindly aid to many members of his large family connection, but it might be said that not only there, but elsewhere, he was wonderfully gifted, not only with the will, but with the power to help. Besides his efficiency in action, his very presence seemed to impart strength, courage, and calm in any emergency, whilst his practical wisdom, his clear and decisive mind and noble spirit of charity led many to bring cases of difficulty before him, knowing from experience how sure and effective was his aid. It may be truly said of Samuel Gurney that he loved to do good service, whether by advice or money-by his sound judgment or well-apportioned aid. He really took trouble to serve his fellow-creatures, and a narration of his mere alms-giving, extensive as it was, would give a very limited idea of the good he effected during the journey of life.' During many years of his life he is reported to have spent 10,000l. a year in charities, and one year, it is said, the amount exceeded 16,000l.

Many are the records of his kindly disposition, shown in little ways and great.

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One afternoon,' says one of his clerks, as Mr. Gurney was leaving Lombard Street, I saw him taking up a large hamper of game, to carry to his carriage. I immediately came forward and took it from him.

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