The Sun.
London, England, 1829-01-08 00:00:00

NEW SYSTEM OF BANKING.

We have before mentioned that the late casualties
in the banking business of London have turned the
attention of many persons to the consideration
whether it is not capable of such improvements as
Would prevent their recurrence in future, or, if not,
Whether some entire change in the system now in
use ought not to be recommended, and, if necessary,
enforced by some legal provisions. Av this is a
question beset on all sides by great difficulties, it may
be useful to state in what they consist, in order that
no time may be wasted on projects which never cam,
in the present state of the law, be carried into effect.
So far as greater security to the depositors in
banks is to be deduced from an extension of the
number of partners, or the formation of joint stock
banking companies in London, the charter of the
Bank of lingland presents in itself an insurmount-
able obstacle. It is the opinion of many that the
Bank charter does not prevent such an establish-
n2entbeing formed, provided it confines itself to re-
ceiring deposits, and does not issue notes or accept
bills this opinion is formed on the wording of the
Passage of the Act of Parliament, which describes
the only privilege the Bank is understood to possess,
Which is thus expressed, viz.—That no company
with more than six partners shall be allowed to
" borrow; owe, or take up any sum or sums of money
on their bills or notespa yable on demand, or at any
less time than six months." But if the parties who
Hay propose to firm these banks rely upon the
Bank of England confining its pretensions to the
terms of this clause, they will probably find
themselves mistaken. '1 his clause was first in-
troduced into the Acts for securing the exclu-
4ive privilege of the Bank some fifty or sixty
!,:ears ago; and is the only clause, we believe, that
has been repeated in the Acts for the same pur-
Pose subsequently passed. But there is another
clause in an Act of William and Mary, which the
Bank contend is yet in force, which expresses that
no other-institution shall be established in the nature
of a. Bank, or to that effect. Upon this ground
the Bank opposed the establishment of the Provincial
Bank of Ireland, as an infringement of that Act;
and to satisfy its scruples, a clause -was inserted in
an Act obtained by that company for the regulation
of copartnerships of Bankers in Ireland, to the effect
that the Provincial Bank of Ireland was legally an
Irish Bank, or a copartnership of persons united
in Ireland.. It is probable, therefore, that no sort of
arrangement can be formed under which it would
belegal for a Bank with more than six partners to
do any .kind of banking busiees, in London ; and
that any attempt to form a company for such
PorPose,.until the Batik charter has expired or is
altered, would be premature.
While. this continues to be the state of the law
with respect to banking in London, it will be useless
to bestow any further consideration on points of re-
Form above adverted to. There is, however, a pro-
lect onfosit of another description, the aim of which-
teemS to be to produce all the immediate good with
regard to banking that the present
.state of the law
will allow, and to prepare the way, by the time the
Bank charter eiPiree, for the improvement of banking
in London itself: The late modifications in that
charter take limitations in the number of
Partneri, provided the bank is formed at the distance
of 65 'miles or more from the metropolis, but do not
allow them to form any establishment for banking
business,. n London.. This is the basis of the new
project, which it is conceived may be carried into
effect .itr the existing state of the laws, and of which
the following is an outline :
.4' Li-That• atank be formed in London with an ade-
quate capital, obe raibed as it is wanted.

"2L' That it shall take the proper steps to establish a
separate bank, with a suitable capital, in every town in
England, 65 miles from London, where one can be formed
with advantage.
3. That the bank in London shall subscribe one-half
of the• Capital of each local bank, and that the other half be
subscribed on the'spot.
"4.: That the capital subscribed by the parent bank be
left in its hands, as a fund to be applied to in ease of
emergency.

"6. That each bank shall be managed by a board of
directeVs, chosen by the local shareholders, the same as if it
Lad no connection with the London Company ; but that
such returns shall be furnished to the Court of Directors in
London as shall give them at all times a complete view of
its situation and management. That the parent bank shall
also send inspectors, from time to time, to examine into
and report upon the state of each bank mote minutely;
and possera such powers of controill and interference as
shall hereafter be deemed heat calculated :to secure both safe
and successful management.
"6. That any hank losing 25 per cent. of its capital,
shall be dissolved. ipso facto."

Much argument has been adduced on the part of
the projectors, to show that this plan obviates all
the difficulties usually attaching to such undertak-
ings, the consideration of which would, however,
carry us too far beyond the usual limits of this
article. • It will be sufficient to say, that at present
it exists merely in the shape of n project, and has to
take its chance for acceptance among the monied
men of the city, respecting which great doubts, we
should imagine, may be rationally entertained.—
Morning- Paper.

LTTtRATuttr.

QUARTERLY 3.;ArITAZINE,
1,2!).

We know Icw mAern literary Npc,ula:ions
which deserve a ntwie libeial and e-:.t€ en-
couragement than the present. it it; an attempt
tO supply a desideratum in our current litera-
ture, viz. a full and impartial biography of all
those whose deaths have taken place within the
intervals of publication, and who have suffi-
ciently distinguished themselves during life to
justify such a memoir. We have merely to add
that this desideratum is tilled up by the present
work, which blends*utility with ornament; and
so far as price is concerned, is within the reach
of all classes.

PUBLIC CHARACTERS. LONDON, 1929

If an ably condensed Memoir of some of the
leading public characters of the day be likely to
obtain► popularity, this little work, w e think, may
very securely look forward to it. It is a well-
written, well-digested publication, with no strong
political bias, but conceived and executed in a
spirit of impartiality that cannot tail to gain .the
suffrages of all parties. The different embellish-
ments that accompany the volume are of a supe-
rior order, as regards both finish and resemblance ;
Lord Eldon's, in particular, is a truly forcible
portrait.