The Sun.
London, England, 1841-09-29 00:00:00

THE RAILWAY SUN,

AND TIIE
PARLIAMENTARY SUN,
ARE NOW RE-PUBLISHED,
PRICE SIXPENCE EACH.
Sun Office, Aug. 30, 1841.

HIGH WATER AT LONDON BRIDGE THIS DAY.
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Parliament, that it may be spread all over
the land.

Instead, too, of listening to the landiards ad-
monition not to excite dissaffection to them
and their iniquities, the Opposition ought to tell
them in Parliament that such a law is con-
trary to the -principle on which men obey Go-
vernments, and that it forfeits the right to the
allegiance of the people. The landlords rely on
the general reverence for law and order to in-
duce the people to submit to their injustice,
and if they were told openly in the House of
Parliament, so that all the people might know
it, that their law ought not to be obeyed, they
would see probably, that to persevere' in main-
taining it would endanger interests, infinitely
more important than those of the owners of rent.

There has lately been published an account of
" the aggregate demands made through the
clearing-house upon the bankers, who use it on
each day in the year 1839, together with the
amount of Bank-notes employed in the clearing-
house on the same day, omitting fractions under
1001." The result stated in this paper is, that in

the year 1839 the mutual aggregate demands Of
the bankers who use the clearing-house on each
other amounted to 954,401,6001., all of which
demands were settled by employing bank-notes
to the amount of 66,275,600/. Payments, there.
fore, to the former amount were, in fact, made
and settled by the latter sum of actual currency.
In other words, the contrivance of the clearing-
house enables men to transact business by means
of one-fourteenth part of the currency they would
require without it. By a sort of magic the
bankers pay fourteen pence by means of one
penny, and their magic saving, of which this in-
dicates only the principle, extends over the
whole community.
Some of our readers may ask what is the clear-
ing-house ? It is simply, we understand, a room,
somewhere near Cornhill, where a clerk from
each of the London bankers who use it attends
every day, and exchanges or balances with the
other clerks all the demands which each of
those bankers has on the other, paying in notes
only those demands which they cannot liquidate
by some counter claim either on the banker who
makes the demand, or on some other who has a
demand on the claimant. The amount thus set-

tied, nearly one thousand millions in the year,
seems enormous, and yet only a portion of the
London bankers use the clearing-house. They
are in number twenty-nine, and the following
are their names :

Barclay, Bevan, Tritton and Co.; Barnard, Dimsdale,
Barnard, and Dimsdale; Barnetts, Hoare and Co.; Bo-
sanquet and Co.; Brown, Janson and Co.; Curries; De-
nison, Heywood, Kennard and Co.; Dorrien, Magens,
Dorrien, Mello and Co.; Fullers and Co.; Glyn (Sir B.
Carr, Bart.), Halifax, Mills and Co.; Hanbury, Taylor,
and Lloyds; Hankeys and Co.; Jones, Lloyd and Co.;
Ladorokes, Kingscote, and Gillman; Lubbock (Sir John
W., Bart.) Forster, Clarke and Co.; Masterman, Peters,
Mildred, Masterman and Co.; Prescott, Grote, Ames,
Baillie, and Grote; Price (Sir Charles, Bart.), Marryatt,
Coleman, and Price; Roberts, Curtis and Co.; Rogers,
Olding, Sharpe, Boycott and Co.; Smith, Payne, and
Smiths; Spooner, Attwoods and Co.; Stevenson, Salt,
and Sens; Stone; Martin, and Stones; Veres, Sapte,
Banbury, Muspratt and Co.; Weston and Young; Whit-
more, Wells, and Whitmore; Williams, Deacon, La-
bouchere and Co.; Willis, Percival and Co.

Besides these there are about twenty-eight
bankers in the metropolis who have no connec-
tion with the clearing-house, and amongst them
the extensive houses of COUTTS, DRUMMOND,
HERRIES and Co., the London and Westminster
Bank, SCOTT and Co., &c. &c., who transact an
immense deal of business, and settle their mu-

tual demands on each other by individual com-
munication. Although their mode is not so con-
venient, perhaps, nor so striking in its imme-
diwe results as the clearing-house, yet do they,
by mutual communication like the other bankers,
balance large demands on each other, or effect
great payments by means of proportionably small
sums of bank-notes. What takes place in these

instances, however, occurs through every part
of society, and payments are made in the aggre-
gate of several thousand million pounds sterling
by means of paper and banking, which no
amount of gold and silver could liquidate.
But this is by no means the only mode of
economising the use of currency which has

lately come into vogue, or been much extended.
Every person must have observed that the prac-
tice of keeping accounts at bankers has of late
years very much extended. Almost all trades-
men, however humble, now keep an account at
a banker's; and a great number of private indi-
viduals, who a few years ago never thought of
such a thing, now keep a banker's book. The
consequence is, that whereas they formerly kept
a stock of cash always in their houses, 201., 301.,
or 50/., as might be, in gold, or bank-notes, they
now only keep a banker's book, and a sovereign
or two, and pay all demands on them by checks.
The result is that a much less amount of cur-
rency than formerly, whether it consist of gold
or bank-notes, now suffices to carry on the busi-
ness of society.

There are some statements on this subject in

the evidence of Mr. KENNEDY, the Manager of

the Ayrshire Bank, given before the Committee
of the House of Commons on Banks of Issue,
the truth of which must be apparent to every-
body, and which we shall now quote :

" Since 1825 (he said) the number of Banks (in Scot-

land) has diminished ; 'in 1825 there were 32 Banks of

Issue, and by the last return there were only 29 ; but
the number of agencies in agricultural districts,
the remote and poor districts, has been increased
very much. In my own district, in 1825, there
were only seven banks and branches, and
there are now 27, but those are placed in small towns
and villages, chiefly in the pastoral and agricultural
parts of the country, and they are for the purpose of
drawing in as much as we possibly can of the savings of
this description of population, and that we may also
give out in such sums as suit that description of people,
the capital which is accumulated by their industry."
" Has any increase taken place in! the circulation
of Bank-notes in Scotland in comparison with the in-
crease of the banking establishments ?"—" I should say
(was the answer) that there is a diminution in the amount
of Bank-notes circulated."
Again Mr. Kennedy was asked by Mr. Clay—" The
explanation which you would give of the circulation di-
minishing subsequently to, or in consequeice of, the esta-
blishment of Branch Banks is, that in the localities

where the branches have been instituted the persons swho
.formerly kept the notes now hare a deposit account with
those branches ?"—" Certainly," is the answer.
" That extension of banking accommodation supersedes
the note circulation ?"—" Yes, I think it 19oks as though it
woull do away with our circulation altogether beyond one-
pound notes."
" The banking facilities, in fact, discharge the function
of a note circulation ?"—" To that extent I should think
they do."

This is remarkable evidence, because in Scot-

land the one-pound circulation is continued, and
the contraction of the circulation of notes in
England, which we shall advert to immediately,
has not, therefore been the 'consequence of the
abolition of the one-pound notes, as some per-
sons might suppose.

The conclusion, from these circumstances,
which appears to us perfectly natural and just,
is so contrary to the common run of assertions
that it requires the reader to remember con-
tinually that " banking facilities discharge the
functions of a note circulation," in order to
believe it.

" Then (said Mr. Gisborne) you do-not think that free
competition, and the multiplication of banks and
branches has a tendency to increase the amount of ' cir-
culation ?"—" I think it the reverse."
Free trade in banking, therefore, facilitates
the increase of banks and banking accommoda-
tion, and checks the amount of circulation, con-
trary to the assertions of most of the persons
who have written on the subject.
The evidence we have quoted seems to us to
be a tolerably correct description of what has
taken place in every part of the kingdom, viz.,
a vast increase in banking facilities which
discharge the functions of a note circulation, and
tend to extinguish it altogether. This is a
somewhat remarkable termination (euthanasia)
of that system of issuing notes, promising to
pay on demand, which just now engages the at-
-tention of politicians who, with their usual fore-
sight, are about to make a mint of money by
monopolizing the right of issuing promises to
pay on demand, which really has ceased to be of
importance, and seems likely to come to au end.
The increasing facilities of banking explain
the remarkable diminution in the aggregate

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