THE END

One can imagine the enthusiasm and the satisfaction with which the majority returned home. One anticipates a triumphant report in the Bailiff’s best vein; and expects that the banks will in future have to confine themselves to the operations permitted to English banks, while the States restore equilibrium by causing the withdrawal of superfluous notes and confining future issues, once again entirely in their own hands, to quantities proportioned to the needs of the island.

With surprise, the subsequent proceedings are found to be on quite different lines. Truth is stranger than fiction. The prosaic facts are as follows:

The Bailiff in presenting his Billet d’Etat to the States Meeting, 29th March, 1837, reported on the arrangement made by the Committee with the two Banks. He brought forward no proposition on the matter on which the States should deliberate. He simply states that:

“After some preliminary conferences the Committee received the following letter:

’To D. De Lisle Brock, Esq.,
Bailiff, etc., etc., etc.,
Guernsey, 8th Oct., 1836.

Sir,

To settle the differences now existing between the States and the Banks, and to promote an amicable adjustment between them, we propose:

That the States should withdraw immediately L15,000 of their Notes, nor have at any time more than L40,000 in circulation, give up all Banking transactions, and cease to collect the notes of the Banks.

In consideration thereof the Banks engage whenever they draw bills either on London or Paris, to take States’ Notes for one half at least of their amount and to pass them to the public as their own.

The Banks further engage to supply the States annually with L10,000 in cash, each bank to provide for one half, by payments of L250 at a time, and this free of expence and in exchange for States’ Notes.

The above agreement to remain in force until three months notice be given by either party to the others to annul the same.

We remain respectfully, Sir,

Signed for Priaulx, Le Marchant & Co.
Thomas D. Utermarck,
Abraham J. Le Mesurier.

For the Commercial Banking Co.,
H. D. G. Agnew }
T. De Putron } Managers.’

“And asked M. Le Bailiff to reply as follows:

’Court House, Guernsey,
9 Oct., 1836.

Gentlemen,

The Committee named by the States on the 21st September for the purpose of conferring with the Banks which you represent, on the subject of the one pound notes current in this island, have taken into consideration the proposals which you have transmitted to them, under yesterday’s date, 8th Oct.

The Committee adopt those proposals as the basis of the arrangement so desirable to be entered into, and from this day to be in force between the States and the Banks. They do so, because the States may at any time, within 3 months, release themselves from the obligations which that arrangement imposes; and above all, because the sacrifice of pecuniary gain on the part of the States which it may deem to occasion, will be more than compensated by the harmony and good feeling which it will tend to promote among the inhabitants, and which constituting the chief happiness of a well regulated community, can hardly be too highly estimated.

With sentiments of a like friendly nature, sincerely entertained by the Committee towards yourselves, and the rest of their fellow citizens,

I have the honour to be, Gentlemen,

Your obedient humble servant

Daniel De Lisle Brock,
President of the States’ Committee.’

“In consequence of this arrangement the Committee decided that L10,000 sterling of the total one pound notes in circulation on account of Fountain Street should be withdrawn as a Savings Bank loan at an interest of 3 per cent. per annum. Also that five thousand of those forming part of the old debt, called the Permanent Debt, should be withdrawn to be converted into obligations at 3 per cent. per annum.”

In the discussion at the States Meeting on a proposition to authorise the payment of a sum spent on repairs to the coasts, there were references by three Members of the States to the fact that the expenditure of the States would be increased by having to pay interest on the 15,000 L1 notes withdrawn from circulation.

The same fact is alluded to in a few words by Daniel De Lisle Brock himself in his Billet d’Etat to the States, 20th September, 1838. Commenting on the Finance Committee’s Report, he tabulates five items of annual loss, among which is found the terse remark, “The founding of the commercial banks causes an annual loss of L450.”

Although the States thus agreed not to issue any more Notes, to complete the history it should be recorded that these L40,000 to be perfectly accurate the total amount in 1906 was L41,318 are still in circulation in the Island.