The Sun.
London, England, 1833-06-05 00:00:00

THE BANK CHARTER.

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In pursuance of a resolutio❑ passed at the Special
Meeting of the Proprietors of Bank Stock, held on Friday
last, a copy of some parts of the correspondence that has
taken place between his Majesty's Government and the
Governor and Deputy Governor relative to the renewal of
the Charter has been prep tied, and will be laid before the
adjourned Court c.f Proprietors to be held this day.
The first letter in this correspondence is signed by Lnrd
Althorp, and dated li,wning-street, April 1, 1833. In
this letter his Lordship informs the Governor and Deputy.
Governor of the Bank that he was directed by Government
to propose—l. That the Charter be renewed for ten years
from the Ist of Auqust, 1833. 2. That no bank of more
than six partners should be established within twenty-five
miles from London ; but banks established at a greater
distance may issue notes payable in London. 3. That
Bank of England notes should he a legal tender, except at
the Bank, or its branches. 4. and 5. That bills having
less than three months to run be exempted from the usury
I iws ; that the Batik accounts should be published, &c.
7. That banks of more than six partners should be consi-
dered joint stock banks ; that no such bank shall he
established within twenty-five miles of London, or in any
part of England and Wales, without a charter from the
Crown. 9. That in case joint-stork banks issue their
own notes, the following conditions should be inserted in
the charter :-
Ist. That the partners shall be subject to unlimited liability.
2d. That one half of the subscribed capital shall be paid up
and deposited in Government or other available security
3d. That the firm or corporation of the Bank, as such, shall
not hold any of the shares.
4th. That the account of such joint-stock banks shall be
periodically published.
10th and I I th. That joint-stock banks privileged to issue
their own notes shall have shares of not less than 1001. each.
That in case of private banks of issue of not more than six
partners periodical accounts shall be confidentially sent to the
Chancellor of the Exchequer
12th. All banks to compound for the stamp duty on their
notes.

These proposals Lord Althorn considered as calculated
to improve the system of the paper circulation of the coun-
try, and confer substantial advantages on the Bank; the
Government therefore expected a liberal compensation,
and it proposed to reduce the debt due to the Bank from
14,500,0001. to 7,000,0001 " This will reduce the an-
nual payment from the Government to the Bank from
435,0001. to 210,0001., and will leave a dividend to the
Proprietors of 939,0001., or more than thirteen per cent.
on the remaining funded capital. The actual capital of
the Bank may, however, be stated at 19,000,0001., and
►he dividend 1,161,0001." The Noble Lord then entered
in(o other statements, the result of which is that Govern.
ment would pay the Bank 7,500,0001., and that the
Bank should manage the public debt without receiving
any payment for the performance of this duty. His
Lot tiship further proposed that the Proprietors should re-
ceive a dividend of ten per cent. on the actual capital of
7,000,0001, ; that the accumulation should he divided, one
half to be added to the capital of the Bank, the other to
be deducted from the interest paid as interest to the Bank
by the public.
On the /2tla April, 1833, the Governor and Deputy
Governor replied to this communication, forwarding a
minute of the Court of Directors, dated the day preced-
ing. The Court, in reply to the proposals of Govern-
ment, expressed a wish not to intrude their opinions
" with respect to any general principle which his Ma-
jesty's Ministers may think proper to propose for the due
regulation of the currency."
" The Court limit themselves to two general heads-Ist.
Such of the propositions as immediately affect the public
utility of the Bank. 2d. The compensation proposed to
be required from the Bank for the renewal of the ex-
clusive privileges." The Directors discussed these points
on public grounds, it being evident " that no other
motive than the public good could warrant an expectation
of a renewal of the Charter of the Bank of England."
The Court doubted the policy of fixing the period for so
short a term as ten years. The Court admitted the pro-
priety of securing the country against improper manage-
ment, and of affording Government a fair and just parti-
cipation in the advantages of the connection of the Bank
with the State. The Court recommended the renewal
for twenty•one years, as " frequent interference with the
monetary system, and the channels through which it is ad-
ministered, is an evil of no ordinary magnitude."
The Court considered that if the principle of continuing
the exclusive privileges as the pivot of the whole circula-
tion of the country be sound it could not be desirable to con-
tract its present sphere of action. The Court was impressed
with the helief that the public sustained no inconvenience
from the present limits of its action, and that collision be-
tween the issues of the Bank and other establishments

issuing paper money, is one of the evils of the present
state of things; by contracting the exclusive privileges of
the Bank, the difficulties attached to it will be increased.
The Court expressed considerable doubts on the policy of
reducing the capital to the extent proposed, though the
Chancellor of the Exchequer considered it unnecessarily
large. The Court submitted that the reduction of the

capital at a time when the liabilities or the Bank were

augmented by making- notes a legal tender was a measure

of questionable policy. " At present," the Curt states,
" the credit of the Bank is proverbial, and which can

wdy be attributable to the tolguitude of the capital of
which it is known to be posse-sed. The breath of an

opinion of a contrary character at any time entertained
would shake the whole country to its centre, am! the
Court cannot contemplate the possibility of such an Occur-
r,nee without considerable apprehension." The Court
therefore urged a reconsideration of the proposal.
Upon the momentous point of the publication of the
accounts of the Bank weekly the Court felt the interests
of the public and the Bank as completely identifh d ; but
the Court doubted the safety of publishing the accounts
under the existing collision between the issues of the Bank
and other bodies in the interior of England, Ireland, and
Scotland. The Court admitted the policy of submitting
•uch accounts privately to Government. The converti-
bility of the whole circulation and of the intertst was