Star.
London, England, 1818-04-15 00:00:00

STOCK

The proposed Act of Par Hamel.
Banks, appears to be an important
.as well as a tempting bonus to the
were it not founded on a principle
injustice and oppression, confined
body of the commercial interest.
The operation of the plan appears to be that of per-
manently taking out of circulation, and consequently
out of the market, about 24 millions of ExCheqese,
Bills, or 48 millions of Stock ; or, in other words,
be lent to, the Minister by the Country Bankers.
most certainly, for many reasons, is no bad financial,
measure at this moment, if it could be realised, pse.,
ticularly as it now appears, after the disasters of this
last 20 years, those Country Bankers, who have proms
their solidity by having weathered the storm, are, fie
public security, to be excluded by this Bill from en-
joying any part of that confidence which every other
man in the kingdom, of fair character, is at least en-
titled to claim. It is proposed, that on all Notes un-1
der 51. the amount of their issue shall be deposited
with Government, at interest of S per cent.; but-not
for Notes above 51. unless they prefer to have the
".Security Stamp" of Government on them.; but it
requires no discernment to discover if the public are
to have the addition of Government security on all
Notes under 51. that no others will be taken without I
it, and consequently, supposing the circulation of
Notes above Si. be as great as those under that sum,
by stamping them also, 48 millions: of Exchequer
Bills, or 96 millions of Stock would be taken out of
the market. To-elucidate the above calculation, let
us reckon six hundred Country Banks in England
and Ireland, which issue Notes, the circulation of
Notes under Si. may be reckoned with some at one
hundred thousand pounds ; some above that sum, and
others so low as 20 or' 30,000 L—let us take a me-
dium of 40,0001. each ; should this calculation be,
over-rated, it does not alter the principle.
By reckoning 600 Banks, it produces 21,000,000,
Exchequer Bills, or 48,000,000 of Stock; or 48 mil-
hots of Exchequer and 96 millions of Stock, if they
continue the issue of Notes at-mad above 5L Let us
now see how the profit stands with the Country Ban-
ker of 40,0001. circulation. This sum he does no more
or less than lend to Government, by depositing their
Exchequer Bills for the liberty of deriving the profit
of interest, which the public confidence is pleased to
grant from the circulation of these Notes. Had the
Minister at once declared that the exclusive privileges
which the Bank of England already possess, are not
adequate to the benefits which Government derive
from that body, and cannot be continued without is
more exteasive monopoly, then'he may fairly say, you
Bankers o: the. colon' y shall no longer issue Now,
unless you advance to Government 20 to 30,000,0064
at 3 per cent. interest ; otherwise the Bank of Eng,
land shall exclusively have the circulation of the Em-'
pire. I beg, however, to state, that although lam
not informed of the extent of accommodation which
Government derive from the Bank of England, I shall
endeavour to prove that the Country Bankers contri-
oute,,
by the issue of their Notes, no small ratio to'
that of the Bank of Englani, whatever it may be. I
admit, with all men of observation, that the enormous
forced circulation of some Country Banks is an evil,
which ought, if possible, to be checked ; but I do not
perceive why, if we hang a highwayman we must
also hang every man who travels the road where the
crime is committed.
To pursue the subject, we will now see how the ac-
count will stand with the Bankers who are to lock up,
at lend this 24.,000,000 of money. Let us see how the
profit will appear or. a note of 1!. and then decide
if such a measure can mean any thing less than a pro-
hibition. Suppose this one pound note will last in cir-
culation for two years, the profit, at the price of their
deposited E' chequer Bills, namely 3 per cent. is
something about Is. 2d.; now you may be surprisei
to find that of this profit about one half will go to
Government, 4to the Bank of England, and to
the Country Brinker; with this giffvrence only, th it
the two sleeping partners take their division of 4,
subject to no risqr.e or deductions, while the acting
partner take.~ the chance of bad debts, forgery, avid
all expenses!
To prove this statement, first with respect to Go-
vernment—a stamp of sd. is paid on every one pond
note, which is calculated to last two years ; we there-
fore take the profit for two years—now I believe the
fact is, that if the greater part of these notes were to
remain in circulation even 1 S months, they would be
reduced to their original, re-r. TniF being the fact,
the stamp in two years will .`ms cost something
above 6d. it is also proposed to add 4 per cent. per
-annum to Gae-„Tr.ment for permission to deposit these
Exchequer Bills!! and Is. pec cent, on redeeming
them. To this add postages, duties on clerks, taces,&c.
Paid to Government, as also a license, which like
hawkers and pedlars, every Country Banker must
take, and for which he pays annually 301. these will
make together at least another Id. namely Id. on
every note of It. With respect.to the 4 share of pro-
fit which goes to the Bank of England—every one
knows these promissory notes are payable on demand
.—and no Banker who does not mean to stop pay-
ment, would remain daily liable to be called on for
the amount of his notes in circulation, without having
always locked up, unemployed, a certain proportion
of their amount to meet sudden alarms.
It would be a low calculation in saying a pru-
dent Banker, who is not at a very short distance from
London, would at least reserve 4 the amount in Bank
paper, for this exclusive purpose, as guineas now-a-
days are out of the question ; we will however go to
I the fearful limit of 4th, namely, 50001. which for two
years, at 5 per cent. is 5001. sunk lot the Banker, nad
gained by the -Bank of England. The division of
profit will then run thus :
Profit on 40,000 E circulated for two years, at the inte- •
rest received on Exchequer Bilk, a per cent. - it'll,4oo
Deduct, expenses of circulation, paper, salary of clerks,
rent, die. say only id. is 186
Which is thus divided, 5e11,234
To Government for stamps and duties oc 40,8 M notes,
a 7d. as explained
1,166
To the Bank of England, locked up to meet cumin-
rendes, 50001. for two years - - - 600
Prat of two years, to be divided acme the Partners
of a Country Bank, whose respectability and Ml*
mums enable k to circulate 40,0001. 568

Let us now suppose, what occurs in numerousia-
stances, that two or three residents in a small country
district retired from active life, having obtained an

TES. ,wedoabted lickpendent property, are
sequence of the great difficulty of a
rent respeet!ngCountrTastit, of England Notes, and the r
rant financial measure, taking them, are solicited by their
the Bank of En land, form a Bank, and issne their Notes. 1
eiple of unpraedented a Bank of this description to have in
fined to one particular lation* Notes to the amount of 20,001
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