The Sun.
London, England, 1831-12-08 00:00:00

PROPOSED PAPER CIRCULATION.

(From the Morning Herald.)
A correspondent at Manchester has favoured us with
some remarks on " A paper circulation by bills to fall due
at fixed dates, to the exclusion of all paper payable on de-
mand after the Bank charter expires, when banking should
become as open and free as other modes of employing
money." We are inclined to agree with our correspondent
that " banking should be as open and free as other modes
of employing money," but we find that be, instead of
having it open and free, would clog it with regulation`
totally unknown to all other callings. A', however,
the question is one of great interest at this time, we
have extracted the particulars of our correspondent's plan;
" Were our paper circulation confined to hills at fixed
dates to fall due, and the stamp duty taken eff all amounts
up to about 301., and graduated in a better degree for all
sums above, they would, at three to twelve months' dare,
circulate with every desirable convenience, and be as avail-
able to all purposes as the present paper payable on demand.
Bankers would thus know accurately what they had day by
day to provide for. No panic could reach them—more
metal would not eventually be required than was safe and
proper to encourage—our quality of bills would be of the
best kind, put forth for circulation chiefly by bankers, to
answer the objects of their customers after the discount of
the bills lodged with them. A first indorser would give the
same facility to their currency as is now the case of Bank
post bills, and in the event of loss or theft they would be
easier traced and recovered. All persons giving change,
or taking them to account, would get interest for the un-
expired time ; there could then be no loss of interest to
any one, excepting the actual holder of money, who would
be restless to get it into use. Metal gaining the best by
circulation, hoarding would be tie least resorted to in a
market well filled with the kind of bills spoken of, and
bankers could then, as now, perform their settlements
with each other through the clearing-house by cheques ;
and when foreign trading was pushed beyond the desii eor
power of barter in commodities to go further on such
principle, and a run o❑ the bank for metal set in for ex-
change purposes, the call on the banks could not be more
rapid than their bills afloat became due, or than the ba-
lances of account, that they are in course always liable to,
were drawn from them.

" Were bankers to keep their accounts with the public
with a charge of commission, and the setting up of a reci-
procal interest account, they woulol, it may be presumed,
bgqiiiore prudent than when speculating on the greater
apparent gain, but more fallacious result, of money paper,
attended with no other cost than the paper and price paid
to an engraver ; while its never-failing tendency is to
paralyse and place in the most questionable doubt the
issue of every transaction it gives birth to. The
Bank of England can, by a steady eye to the ex-
changes and price-currents, escape safely ; but the mo-
ment it narrows its discounts the country bankers
are inconvenienced, and the customers of all the banks,
when panic-runs occur, fall like grass before the mower,
and their work-people, in the same manner, to endure
ruin, or the greatest strippings and disgrace. At such
crises there is no labour to be performed, however low its
wages, but what, becoming additional to previous over-
stock, makes bad worse ; and, if kept out of a poor rate,
is a heavy and unjust tax on all persons living out of trade ;
for although they get clashing cheaper, they are made to
endure and wade through the altered condition of things
under the most demoralized state of society, and an aug-
mented population proportioned to the false impulse given
to every kind of laborious industry."