The Sun.
London, England, 1858-06-10 00:00:00

CROSSED CHEQCES.

(From the Times )
A number of communications have been received
on the bill just introduced by the Attorney-General
to give validity to thepractice of crossing cheques.
The feeling of the mercantile public is universally
in favour of the principle of the measure, and there
will be ground for great regret if the bill is not
modified in time to prevent its technical defects
from being used by the bankers as a pretest to de-
feat it altogether. In the days when a crossing
upon a cheque was supposed to give protection the
common practice was for the drawer to write "and
company"
upon it, leaving the person to whom he
paid it to pre fix the special name of his banker, if
he should think fit to do so, as a greater precaution.
According to the wording of the proposed bill,
however, this course will not be available, as no
crossing will have legal force except such as may
have been placed upon the cheque by the drawer
previously to its issue. Out of this a multitude of
complications are certain to arise, some of which
are pointed out in the letters subjoined. The whole
difficulty might perhaps be met by persons drawing
cheques in the following manner :—" Pay to —,
or bearer, through the Bank of ;" leaving the
holder to fill in any special name so as to make it
Bank of England, bank of Messrs. Glyn and Co.,
itebarts and Co., or any other establishment. But
in the present state of the law any such addition
to the body of the document after its issue would
be liable to be treated as a forgery. Apparently
that which is wanted, therefore, is an act to give
the holder of a cheque power to fill up a blank of
this description

" Burton-on-Trent, June 5.
" Sir,—lf you have given the whole of the new bill re-
lating to crossed cheques in your impression of this day,
there will, I foresee,
arise t.o bankers a difficulty of a most
peculiar nature on the passing of the act.
"Every crossing of a cheque done by the drawer himself
or by his authority before the issuing of the same will be
governed by the new Act, whereas all crossings subsequent
to issuing will be controlled by the 19th and 20th of Vic-
toria, cap. 25.
"Owing to this eircumstance, it will be necessary,' when-
ever an informality in presentation takes place, for the
banker on whom the cheque is drawn to identify, as well
as he can, the writing of the crossing before he can know
how to treat it. Suppose, for instance, Banker B has pre-
sented to him by Banker C a cheque crossed with the name
of Banker D. Before deciding what course to take he must
form the beat conclusion in his power as to the date of the
crossing. If crossed by any one under the authority of the
drawer before the issuing of the cheque, the banker is
bound to return the cheque at once to C. If, on the con-
trary, the crossing has been subsequent to the issuing, he
is bound to pay the cheque to C, and is liable to an action
if he does not do so.
" Here is a pretty fix for bungling legislators to got a
poor banker into !

" I am, sir, yours obediently,
" E. B."

" Sir,—lf the Attorney-General's Bill is passed as it
stands now, it will be illegal for the holder of a cheque
crossed in blank to prefix the name of his banker to the
words ' and company,' for to do so would be to add' to
the crossing. It follows also that if the holder does add
the name of his own banker, he will not thereby oblige
the banker on whom the cheque is drawn to pay its
amount to the banker whose name is so added, the cheque
having been originally crossed with the words 'and com-
pany' only. The crossing being now a material part of the
cheque, it might oven be doubted whether a holder who
added the name of his banker to a crossing in blank would
not be indictable for forgery.
" I presume these several consequences are notcontem-
plated, and will be obviated by necessary alterations, but
it isa.pity that so little care should be taken in framing
important Bills.
"I may add that pay such cheque,' although collo-
quilly used, is not good English. What you do is to pay
the amount of the cheque.
6$ W.
" Your obedient servant,
The following note purports to show that bankers
have no means of protecting themselves against the
possibility of the crossings of cheques being oblite-
rated by chemical means. The argument is that
the use of prepared paper could not be enforced, as
some customers do not use printed cheques, but
plain writing paper. Hence a suggestion that if
the new law is passed the bankers must refuse pay-
ing any crossed cheques whatever. Of course it will
he perfectly open for them to do so. The question
they would first have to consider would be whether
new banks would not be immediately started that
would consent to accept the full responsibility thus
attempted to be reAted, and which, after all, is
only such as, until a few years back, was generally
supposed.to exist. It is to be remarked, moreover,
that banks are not compelled to pay upon cheques
drawn on other than their own forms, provided
they choose to make a stipulation to that effect,
which it would be perfectly reasonable for them to
do. Finally, it must be pointed out that the way
in which the banking interest generally have used
their influence to obtain exceptional legislation in
their favour, and to avoid having legitimate respon-
sibility thrown upon them, is neither conducive to
their reputation nor their permanent prosperity.
It was a great error of Parliament to allow a clause
to be introduced in the Penny Receipt Act to ex-
onerate them from the consequences of paying
cheques with forged endorsements. Bankers were
at liberty to refuse to receive accounts except on a
private stipulation that this liability should not be
encountered, and there was consequently no oeca-
swn to alter the general tenour of the law of the
land to meet their convenience. With regard to
thedanger of paying crossed cheques,the experience
of many years can be cited to show that it is little
more than nominal, and the same is the case as
regards forgeries. The loss which to a banking firm
would be of small consideration in their yearly ave-
rage might, 1. owever, be ruinous to an individual
customer, and it is bad policy on their part to
restrict the advantages that may be gained by
resorting to them. Everything that diminishes
the convenience and security of a banking account
must in the end be injurious to those who carry on
the trade ; and there is lees excuse for the narrow
course taken, since, not only would the danger of
the responsibility be of a trifling character, but
there would be the power, by establishing a clear-
ing-house guarantee fund, to reduce it to a mini-
Tyvttm point: If any private or joint-stock bank,
without waning for alterations of the law, would at
once invite customers by a promise not to avail
itself of the exemptions that now can be pleaded
against responsibilities that should naturally fall
upon such concerns, it would deserve to receive
the support of every house interested in the main-
tenance and extension of healthy commercial
usages :

" 1 4, Lower Berkeley-street, June 7.
" Sir,—ln your article to-day about crossed cheques
you say, If they (bankers) were to suffer from crossings
being obliterated by chemical means, it would simply be
from their own neglect in not having their cheques printed
on paper that would preclude the possibility of their being
tampered with.' As customers are not obliged to have
printed cheques, and often write them on plain writing
paper, if bankers are to be responsible for not finding out
an undiscoverable obliteration as above, they will be
obliged, in order to protect themselves, to refuse paying
any crossed cheques whatever.—l am, Sir, your obedient
servant,

" T. RAIKEg."
AnnexEd is anot'er communication on banking
matter=, which indicates that the resort to legal
pleas by bankers to escape reasonable responsibility
is not generally regarded as creditable, and deser-
vedly points to th' quarter whence the most con-
spicuous instance of the kind has proceeded :

"London, June 5.
Sir,—ln the city article of the 2inies of to day an
observation is made with reference to the proposed new
law regarding crossed cheques, to the effect that private
bankers might perhaps refuse to receive accounts if any
additional responsibility were thrown on them; but that
the joint-stock banks certainly would not do so. Permit
me to observe that only ono case has as yet been brought
before the public in which a bank paid a cheque crossed
' awl Co.,' to a private person, and denied its liability to
loss iu consequence, and in that case a joint-stuck bankicg
company were the defendants.— I am, Sir, your obedient
fiervaxt, " A PRIVATE BANKER."
Another correspondent makes the following
practical remarks on the loose recommendations
lately given with respect to non-cluipliance with
the letter of the law iu the mode of cancelling
cheque stamps :
" Sir,—The Chancellor of the Exchequer has announced
the practice followed by the Bank of England in regard to
the cancelling of adhesive stamps, and has expressed a
hope that the other banking establishments will follow the
example. It is very desirable, however, that law and
practice should correspond, particularly where the former
gives so explicit directions as to require that the names or
initials written across the stamp shall be the mode of dis-
charging it.
" In the case of a cash credit on which draughts have
been passed, and the adhesive stamp may not have been
crossed, except in some such manner as that the date or
amount in .figures has been marked on it, and where the
principal on the cash credit bond has afterwards become
bankrupt, the securities, when called on to pay up the
amount, will find legal groutads for disputing their liability
for the debt incurred by such draughts. Persons in their
position are not unfrequently inclined to take advantage
of such deviations from the law, and it is not fair towards
our jades, when the legal enactment is special, to ask
them to admit the authority of practice.
The suggestion that the mode of cancelling draught
'4"npanity for
should be enlarged was so reasonable, and the
opprt
bn
pareod y the Att doing so in the bill which is being pre-
if the Chancello7neY-General so tit, that it would be well
eubjeet. of the Exchequer would reconsider the
" Therois
atlotrhadie
another point in reference to draughts ,on
bankers, which p
approve. It is, that it should so far as I can learn, would
uld be enacted that all draughty
wherever or however drawn,_..alivoeuld be subject to the Cuty
withoutltr tjg .
tecomr. There are two reasons
any exemption
firs tis that waa
intact or complete in itself. In commercial Imyoucher should be
presentation, which has been authorised in
by personal
in r E.
lions may arise long after—at the instance, ao-lce, ques-
who are securities on a cash credit bond'. B ofpersons
pnte the personal presentation, and legal proofs be dis-
easy to establish it. The second reason is that it is doubt-
ful if the personal presentation of a cheque on a cash
cre-
dit, whereby a debt is contracted, and not money of the
drawer's own taken, would be legal without a stamp.
Could not this also be remedied in the bill now being pre-
pared by the Attorney-General by it being required that
all draughts shall, without exception, bear the stamp ?
I am, sir, your most obedient servant,
A BANJUL

" Scotland. June 4."