Peel to Rogers (Permanent Under-Secretary)
Treasury Chambers
13th January 1865
With reference to your letter of the 19th Ult transmitting copy of a Bill presented to the Governor of British Columbia by the Legislative Council of that Colony entitled "An Ordinance for the regulation of Banks," I am directed by The Lords Commissioners of Her Majesty's Treasury to acquaint you for the information of Mr Secretary Cardwell that My Lords approve of the general principle of the proposed Ordinance.TheirManuscript image Their Lordships however doubt the expediency of the 8th and 9th Sections—the former giving a limited power to the Colonial Secretary or other Officer, of inspection of the books of the Company; and the latter imposing a penalty in case of refusal to allow such inspection.
It appears to My Lords that the exception made "of papers securities and documents relating to the current Accounts of the Customers of the Bank" would defeat the object in view. The exception is a proper one in itself, because no Bank could carryManuscript image on business if the transactions of the Customers were subject to official supervision; but on the other hand as the insolvency of Banks generally arises from the insufficiency of its securities, and incautious dealings with individuals, a power of inspection which excludes the examination of Securities would not only be of no use; but would serve to deceive the public by giving a false Official guarantee for the sound condition of a Bank which might in reality be on the brink of insolvency.
My Lords are of opinion that the inspection should be confined to theexaminationManuscript image examination of the Stock of Coin and Bullion, power for which is generally given to Local Governments in Royal Charters for Colonial Banks.
For the rest, no better security can be given to the Public than is afforded by periodical publication of Assets and Liabilities, for the truthfulness of which the Managers of the Banks should be made legally responsible.
My Lords have only further to observe with reference to the 10th Section that the payment of Notes at the principal Establishment, as well as at the place of issue, is generally required, and although there may be difficulty in enforcingsuchManuscript image such a Regulation in the case of British Columbia, My Lords think that there are no reasons for rendering the contrary practice imperative. They would suggest that instead of requiring that the notes "shall be made payable on demand at one place only within the Colony," they should be made payable at the place of issue only, unless they be made payable also at the Principal Establishment.
I am Sir
Your obedient Servant
F. Peel
Minutes by CO staff
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Sir F. Rogers
Accepting the views of the T-y on banking matters as conclusive, though not infallible, I presume that this Bill must be amended in the respects mentioned. Sir F. Rogers will see that there is a question of Govr Seymours about reserving Bills which will require a distinct ansr.
ABd 14 Jany
TFE 16/1
Enclose copy of this Letter and instruct the Govr to submit to his Council the amendments sugggested by the Treasury. State however that as a matter of form it will be better not to submit them in the shape of an amending Orde, but to allow the present Bill to drop—and to pass assent a fresh Ordce with the requisite alterations—that this will be preferable, both because it is convenient that the Law shd be embraced in a single enactment, and because the course pursued in respect of the original Ordce has not been quite correct.
The form of reserving Bills for the signifn of HM's pleasure is a form established by express Law or by usage in certain Colonies possessing Representative Legislatures—but has no existence in Crown Colonies & is not provided for in the Charter of 11 June to wh all Legislative proceedgs shd be conformable.
The proper course wd have been to have required that the Orde shd contain a clause suspending its operation till the Queens pleasure shd be known, & then to have assented to it.
FR 6/1
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For B. Columbia
Mr Jadis
Can you let me see the Order in Council referred to in Page 3 of this draft. Sir F. Rogers's Minute says the "Charter."
TFE 28/1
Mr Elliot
I circulated the Order in Council of 11 June/63 in the first instance—& it is now with the Papers—Sir F. Rogers mentions the "Charter"—but I know of no other Documents than the Order in Council, & the Commission & Instructions which you will find attached.
VJ 30 Jan
Other documents included in the file
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Draft reply, Cardwell to Seymour, No. 5, 2 February 1865.
Minutes by CO staff
Sir F. Rogers
You will see that at page 3 of this draft Mr Jadis has substituted "the order in Council &c" for the "Charter."
Vide his explanation in separate Memo. I suppose that it is right?
TFE 30/1
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Yes. The fact is that an Order in Council giving a Constitution is constantly called a Charter—perhaps incorrectly.