The Sun.
London, England, 1844-12-20 00:00:00

844.

MONEY MARKET and CITY NEWS.
FAO3I THE MORNING PAPERS OP THIS HAY.
CIIFY, THURSDAY EVENING.
TIMES.—We have heard to-day of a plan adopted
in some of the iron districts for evading the new banking
law, entirely different from any of the various schemes
that have been from time to time noticed under this head.
A t certain periods the proprietors of iron-works require
advances to pay wages, or for some purpose of the
kind, and they address theniselves, in the first instance,
to the neighbouring bankers. In some cases the bankers
have already issued all the paper that the new law allows,
and, at the same time, are anxious to afford the desired
accommodation. To do this they give a credit to some
party—probably a tradesman—in the vicinity, and in-
form their applicants that, although they (the bankers)
cannot assist them, this party can accommodate them
with small cheques. Of course there is nothing in the
law that can hinder a person keeping a drawing account
with a banker from drawing cheques for any small
amount he pleases, and as the signature is perfectly well
known in the district, such cheques perform all the func-
tions of a local issue.
This scheme seems of all that we have heard the most
difficult to be dealt with by the Legislature, should some
supplementary Act be considered necessary to prevent
the different evasions. The difficulty would be to esta-
blish a legal distinction between these cheques, drawn
by a party who is a
.mere creature of the bankers to
enable them to: extend their accommodation, and the
cheques drawn by a bona fide depositor in the regular
way of business, so as to prevent the former without in-
terfering with the latter. There is this, however, against
the scheme, that it is not likely to be very widely -spread.
Indeed, it seems only possible in small localities, where
the parties are perfectly well known to each other.
There is also the risk that the party appointed by the
banker may abuse the confidence placed in him, and
commence drawing on his own account.
That the scheme has obtained a firm footing in some
districts, there seems no doubt ; indeed, we understand
that the bankers have been known to supply the draw-
ing party with cheques ready printed for the purpose
required.
To avoid that jobbing and speculation in railway
shares which mast be the consequence of any partial in-
formation come to by the Board of Trade, a correspon-
dent throws out the following hint:—
" I beg leave to suggest that the Board of Trade, in
making their report on railways, should give notice to
the public a week before they publish it, and that the
Chairman of each Board of Directors should have a copy
transmitted to him, but all by the same post."
It was to be anticipated that the remarks quoted yes-
terday respecting the dealing in shares at the Stock
Exchange would provoke much observation from the
members of that i' stitution. The annexed letter has
been first selected, as it appears to enter the most deeply
into the discussion, which has been invited solely from
the belief that the public, in their dealings in that de-
scription of securities, are not at present so fully pro.
tected as they ought to be :
" Your correspondent whose letter you quote in this
day's Times, does not, with all his boasted experience of
thirty years, seem clearly to understand the difference
between middlemen' and ' brokers ' and 'jobbers.'
What have brokers always been but 'middlemen,' and
jobbers but bona fide' fundholders like himself ? Ile
would fain persuade us that a 'new class 'of operators has
sprung up, combining both 'share brokers' and share
dealers in one and the same person, and thus brokers
constitute themselves ' middlemen' to the prejudice,
and dishonestly too, of the public.' No doubt it
does sometimes happen that a broker may have two
clients, one of whom is willing to buy what the other
wishes to sell, and if in such a cive the transfer is
effected at the market price of the day, of what
has your correspondent to complain ? If he thinks a
new and very extensive branch of business can be carried
on in the old-fashioned way,' be is very much mis-
taken. Shares are not like Console,' which can be
bought and transferred the same day, and there's an
end of it.' There are such things as stamps, transfer
fees, local offices,' &c. ; and if the jobbers' were the
bona fide holders, they would have to travel far and
wide, and in their turn pay these stamps and transfer
fees and travelling expenses, all out of the 'turn of the
market' that your correspondent speaks about. Now, I
cannot but imagine, if such were the principles of busi-
ness, these etceteras would not only be destructive' of
the great facilities' which a general currency in the
open market would afford, but, under the present system
of transfer by deed, would turn out a loss both to the
jobber and the public. I dare say if your correspondent,
can suggest any better plan than that which is the pre-
sent practice—namely, the 14-day settlings, when the
names of bona fide buyers are passed from hand to hand
until each finds a corresponding seller, in all which
there is a vast deal of difficulty, the jobbers and the
brokers, of whom he speaks so disparagingly, will feel
greatly indebted to him.
" I do not doubt that the sweeping accusation ho
brings against all share-brokers, charging them with
oftentimes taking a little more than their commission
from the one or other party, and sometimes from both,
arises out of the circumstance of these travelling tickets
alluded to, and from which the transfers are made out,
differing in price, perhaps, both of buyer and seller ; in
the latter case it may be a lower price ; this is passed
over by such men as your correspondent, but it may
sometimes happen to bear a higher price, and when it
dues so the broker, who is bound to follow the price
upon the ticket, of course has robbed such an one of
the difference. Perhaps when your Correspondent has
had some thirty more years' experience ho will under-
stand these matters more fully. Nothing can facilitate
the interchange of railway property but central offices
for transfer without a Government stamp, or Registered
Scrip Shares to pass from hand to hand like Exchequer-
bills."
Another Correspondent, a broker, writes as follows:
‘• With reference to the observations in your City
Article' of this day, respecting the mode of dealing be-
tween brokers and jobbers in shares, I beg to observe
that the imputation is much too general. The public, I
believe, are frequently injured by certain brokers, who
transact business under the general agreed rate of com-
mission, and then compensate themselves for the differ-
ence of the charge in the price rendered to their prin-
cipals, at their own discretion."
SUN.—There was no change in English Stocks from the
morning. Consols were 1004 4 ; Exchequer Bills, 575.
to 595. premium ; and New Three-and-a-Quarter per
Cents., 103 - 4. Bank Stock closed at 2081.
The Foreign Market was not active. Spanish Five
per Cents. realised 25i 4, and the Three per Cents. 37i1 t.
Chilian were 99 to 100, and Colombian 144 4. French
Scrip was 14, and Belgian 4 premium. Dutch Five per
Cents. were 994.
The additional transactions in Railway Shares have
been these : —Bristol and Gloucester were 6i ; Dublin
and Belfast, 14 ; Dublin and Galway, ; Great
Southern and Western (Ireland), 44 to 5 ; Hull and
Selby, 19 ; Birmingham, 127 ; Brighton, 14 ; South
Western, ex New, 34i ; Midland, 12 to 13 ; Newcastle
and Darlington, 374 4 ; Ditto and Berwick, 6 to 64 ;
North Kent, 4 ; Richmond and West-end Junction, 14 i;
South Devon, 1 ; Trent Valley, 61 ; York and North
Midland, Selby Scrip, 46 ; Ditto, Extension, 12 ; and
Orleans and Bordeaux, 54 1 premium. Eastern Counties
have been 101 4 ; Midland and Birmingham and Derby,
64 ; and Strasbourg and Bale, 14 discount.