The Sun.
London, England, 1860-10-01 00:00:00

ACCOMMODATION BILLS.

Two or three of our contemporaries have lately
been puzzling their heads over the difficult question
of " Accommodation Bills," and have striven hard

with very ltttle effect, to arrive at some definite
conclusion. In sober truth, the question is not an

easy one; and none of the writer; of the articles to
which we are alluding, seemed able to find an
answer to the preliminary inquiry, "What is an

accommodation bill ?"

And for this reason we iee

inclined to join in the discussion, and to endeavour
to advance, if possible, the investigation a step or

,WO.

Strictly speaking, every bill is an accommodation-
bill. More especially is this the case with what
are termed " commercial bills." For these _ arise

from the purchase and sales of goods, which the
buyer prefers to pay for three months hence,
rather than now. The goods are handed over,
but the money is not ready, and the seller says,
"If it will be any accommodation to you I will
draw upon you at three months from the present
day." This boon is accepted, and the practice be-

comes so universal, that now buyers generally
expect " to be drawn upon," and quite lose sight
of the fact, that this three months' bill is concocted
merely for their accommodation.
So unquestionable is this, that we could point
out many great houses, within a quarter of a mile
of St. Paul's, the heads of which are too proud to
accept bills. If they purchase goods on which
they are entitled to three months' credit, they tell
the sellers, " You may come for the money this day
three months ; or, it you prefer it, you may take

off three months' discount, and have the Chelue
now ; but we do not choose to accept bills." We
heard a principal of this class, thank God, not long
since, that " he had never put his name to a bill yet,"
and expressed his hope that he never should. And
this, simply, because, in his eyes, all bills were ac-
commodation-bills.

Equally clear is it, that every bank-note is an
accommodation-bill, and possesses one of the worst
features of the paper system. We all understand,
that the usual meaning attached to the term is, a
bill not resting on a commercial transaction, such
as the purchase and sale of goods ; but one concocted
for the mere purpose of raising money. We all
know, too, that it is a vice of the bill system that
an accommodution-bill is not generally paid off and
annihilated, but is replaced by another which is
made in its room.
And all this is true of a Bank of England note.
When the Bank issues a dozen notes for £lOO
each, it does not give these notes for articles of
merchandise, but lends them to people who want
capital. And when it has issued to the value of
twenty millions of such notes, each of which bears
the words " I promise to pay,"—it does not really
mean to pay them off, and cancel them ; but simply
to replace them by new notes made in their room.
If those who have left deposits in the Bank, and
those who hold its "promises to pay," were all to
go for their money, the Bank itself, though solvent,
would have to stop payment. And this because it,
has issued an immense number of notes which " pro-
mise to pay," without at all meaning to pay those
notes, but with a trust that will be able to send new
ones afloat as fast as the old ones come in. And
this is precisely the course which is followed by all
fabricators of " accommodation bills.''
Here, then, are two different classes of paper
which may strictly be called " accommodation
bills," and yet neither of them receives any blame
or condemnation from the public voice. For the
criminal and objectionable accommodation-paper we
must look elsewhere.
And, in our search after this, we come upon ano-
ther sort of paper which has little moral blame
connected with it. We shall speak of facts which
come under most men's observation; and facts which
are common in every part of every great city. A
and B are two friends, and B has a good balance at
his banker's ; while A, to purchase the lease of his
house, or for some other legitimate end, wants,
just now, rather more money than he has got
by him. He therefore says to B, " Can you
lend me a few hundreds for half a year or
so ?" The other assents and draws a cheque for
£3OO, and says to A, " For how long shall you
want it ?" A replies, " Oh, for six months, or
perhaps a little more." 11, perhaps, dislikes mere
I 0 U's, and therefore takes a stamp and draws a
bill for £307 10s. (the £3OO with interest), which
A accepts. This bill is put awap, and not bent into
circulation. It is merely an acknowledgment that
A has borrowed £3OO, and that it is to be paid on
a certain day. It has none of the objectionable
features of what are commonly styled " accommo-
dation bills." Yet it is unquestionably true that B
has accommodated A with a loan of money, and
that this bill represents that transaction.
The six months run out, and A finds it conveni-

ent to ask for a little longer use of the money. He
mentions it to B, who makes no objection, but
recollects that a mouth before, in making a large
purchase, he paid away this bill, having then only
a few weeks to run, to a merchant in the City. He
tells A, therefore, that the bill must be regularly
paid when presented, but he adds, "If it will be
any convenience to you, I will draw a new bill two
days before the old one becomes due, and give you
a cheque for it ; and then you will be able, without
taxing your own resources, to pay the first bill
when presented, and afterwards you may burn it,
if you like."
Here, then, we have at last just what the com-
mercial world agree to call " an accommodation-
bill." It is a bill drawn merely to be discounted,
in order to raise funds to meet an acceptance which
is falling due. Such are the bills which have re-
cently come to light in the eases of " Streatfeild
and Co." and many others in the leather trade,
and which have conducted so many firms into the
Bankruptcy Court.
And yet, after all, in the case above described,
may it not be asked, " Where is the guilt ?" May
not one friend lend another a few hundreds when
the latter wants it, and the first has it to spare ?
May not the loan be acknowledged in a simple note
of hand, or acceptance, prBmising to pay it by a
certain day ? And when the borrower wishes to
retain the money a few months longer, and the
lender is willing that he should do so, where is the
objection to the making of a new bill and the tear-
ing up of the old one, in order to extend the time
for the repayment ? It is clear that we cannot ob-
ject to these things, except we mean to object to all
borrowing and all lending.
Where, then, does the " accommodation bill" sys-
tem begin ; and where does criminality first show
itself? In our view it begins, to a moderate ex-
tent, when the party professing to lend has not
really got the money wherewith to assist his friend,
but means to raise it by discounting the bill at his
banker's or elsewhere. If B has got the money to
lend to A, who has any right to object to his lend-
ing it ? He may give it him if he pleases. Nor
can we attach the least blame to the mere act of
taking an acknowledgment of the debt on a stamped
piece of paper.
It is when neither A nor B have got the money,
but when they agree to concoct a bill between them,
to be discounted at a bank or at a bill broker's, for
the purpose of raising the money—it is then that
the " accommodation bill system' really begins.
The amount of criminality, however, varies ex-
ceedingly, and is seldom the same in any two
cases. Great bankers have been charged with
issuing large amounts of bills, at times, for special
purposes ; but no one ever imputed much blame
to them, because no one doubted their ability to
pay the whole amount. And in like manner if two
merchants, each possessed of a large capital over
and above his debts, choose to issue half a dozen
bills of £5OO each, for some commercial purpose,
there never will be any blame attached to them,
for the bills will be paid without difficulty or hesi-
tation ; and no one will have any opportunity to
call either of them to account.
The essence of the real criminality, when any
exists, must be the issuing bills, " promising to
pay," when both drawer and acceptor are conscious
that they could not really pay if called upon. And,
whenever this fact could be made clear, the trans-
action would be, in reality, a raising money on
false pretences, and it should be punishable as a
kind of fraud So that, after all, the incurring
debts without a reasonable probability of being
able to pay them is the real crime, or immorality ;
and we feel strongly, that every man who can be
reasonably charged with this offence, ought to be
placed upon his trial, and ought tohave the pri-
vilege of a defence, and of appealing to a jury. For
we believe that there have been cases, even within
the last few months, in which the hue and cry of
" accommodation-bills" has called down a heavy
censure from the Bankruptcy Commissioner; when
it might have been clearly shown on a strict in-
vestigation, that no bill had been given or accepted
Which the parties concerned had not 5 reasonable t