cheque paid across the counter, which it appeared had been crossed, but from which the crossing had been skilfully erased by the person into whose hands it had improperly fallen. The first bill was intended to make the crossing by the issuer or drawer of the cheque a material part of it, instead of a mere direction to pay only through a banker; the effect would obviously have been to make the banker responsible, not only for the payment of the cheque to the particular banker with whose name it might be crossed, but also for any fraudulent alteration or obliteration of the crossing, although so skilfully effected as to escape detection when presented for payment; but it does not appear to have occurred to the framers of the bill that it was necessary the banker should have some means of knowing whether the crossing was on the cheque when issued, and so not to be altered or added to, or whether placed by a holder who would have the power to add to or alter the name on the crossing. Clause No. 2 was therefore introduced, and any "lawful holder" was empowered to do that, which the law had never before recognized-make a material addition to the cheque binding on the banker, and this notwithstanding it is alleged "The Attorney-General, adopting the simple and intelligible view of the relation between bankers and customers, undertook to render the crossing of a cheque a substantive part of the document, so that the agent should remain responsible for compliance with the distinct directions of his principal." At this point, the bankers, albeit but little accustomed to co-operative measures, resisted the new responsibility so coolly intended to be thrust upon them by this patchwork legislation, and Clause 4 was introduced in the name of Mr. Bovill, but really by the Attorney-General.

We shall now proceed to point out some of the blunders still existing in the Act. By Clause 1 a cheque issued crossed "and Company" must have two transverse lines, or it appears the crossing does become a material part of the cheque; but Clause 2 dispenses with the transverse lines, when such a crossing is made by a "lawful holder;" so also it seems that a cheque which has been issued uncrossed, and afterwards by a lawful holder crossed with "and Company," cannot have the name of a banker inserted by a subsequent holder, the first holder having exhausted the permissive powers of the Act. But the most serious and culpable omission is in not providing for the payment to the agent of a country banker such cheques as may be crossed to the county bank, although payable at a different place, the words of the Act being precise:-"The banker shall not pay such cheque or draft to any other than the banker with whose name such cheque or draft shall be so crossed." The attention of the Attorney-General was, we understand, drawn to this before the bill had been in Committee, and he is stated to have admitted the defect, and promised to remedy it, but, with that strange infirmity of purpose which led him to approve one day what he condemned the next, and almost to pledge himself to oppose his own bill in its passage through the Lords, the promised remedy was conveniently forgotten.

THE CURSE OF THE CURRENCY CURED; OR, A SOUND SCHEME FOR SECURING A SAFE AND STEADY SUPPLY OF THE CIRCULATING MEDIUM. BY A LATE M.P.

I KNOW that I must not be tedious, or these pages will not be read. I therefore abstain from quotations, though a volume might be filled with appropriate ones.

I ask then at once, what is it that causes panics in the money markets?-There can be but one answer.

The money dealers, either from the state of the "exchanges" or from the diminishing amount of bullion in the Bank of England, foreseeing a higher price for the interest of their money, begin to be chary of ac commodation; in fact, begin to hoard. At the same time prudent men engaged in commerce keep a tight hand on their resources, in order to meet their forthcoming liabilities, and these circumstances combined, cause a locking up of money, and what is called a "scarcity of money" follows; not that there is a real deficiency of money in the country, but practically there is a scarcity, as those who require at that time the ordinary facilities for the legitimate carrying on of their business find to their cost.

As this state of circumstances continues, the gold in the Bank becomes still more and more diminished.

The Restriction Act compels the Bank to draw in as much value in notes as will cover or meet this diminution. That cause still further contracts the circulation, and makes money really, not merely practically, still more and more scarce. These causes act and react one on the other, the price of hiring money becomes excessive, and many a fair trader of capital is put to enormous unnecessary loss, if he be not even obliged to suspend his payments.

I am not intending to cast blame on the Bank. The Directors dare but issue notes, first to the extent of the loan made to the nation of fourteen millions, and then to the extent of the gold they may happen

to hold.

Here, I cannot but stop to ask a question, which I am sure can never be satisfactorily answered. Why should these two amounts* constitute the currency?

Suppose the money lent by the Bank to the State had been twice what it is, or had been half what it is, then, if it be right to issue a su of £14,000,000 upon that loan in notes now, of necessity it would have been wrong in either of the cases supposed. The amount allowed to be issued is therefore an accident or a mere piece of guess work. The two bases were not fixed upon because they were sure to meet the wants of the people, but merely because they afforded a security for the paper issued, partly by the gold, partly by the State debt.

What an anomaly it is, that if at any time there shall be two or three millions of gold less in the Bank than usual (not a human being all the

* I pass by the issues of country banks, which in this sense, do not affect the question.

while able to say that the said deficiency is not in the hands of individuals), the selling value of the property of the people in lands, funds, stocks, goods, &c. should be, for the time, reduced several hundred millions yet such is the effect of the law.

"After a storm comes a calm." People get tired of frightening one another: the money dealers, tempted by the high rate of interest, bring out their hoards; the money market is quoted as "less tight;" then "easier;" and so on, until we are set all right again, but not without many having been ruined by the panic, and no one individual benefited by the loss but the speculator in gold.

Next come cheaper and cheaper terms for money; all kinds of wild schemes are set on foot, and speculating gamblers, without capital and without principle, get all sorts of indulgences; money is "as cheap as dirt." The Bank discounts good bills at two per cent.; they are full of deposits, and they naturally desire to make a dividend. Do they not, to keep out the money, when good bills are not offered at even that rate, make advances on funds at 1 or even 1 per cent. ? and it is certain that the tone in the discount market is taken from the Bank, whether it be high or low. I need not pursue this subject much further; imports are excessive-wild schemes are as thick as blackberriesforeign things, to pay better interest, are fostered-when, alas! the exchanges turn once more against us, and the inevitable cycle comes round again.

There are plenty of people who will say, "It is very well that panics should happen now and then, to drive the wild unprincipled speculator out of the market." I humbly think that it would be far better to contrive some check against his getting into it; for you cannot eject him without distressing the honest merchant and manufacturer who by pressure are necessarily forced to sell their goods at a loss, and if manufactures are stopt, even for a short time, the poor artizan suffers and is without bread.

Money should, if possible, be kept alike from becoming too cheap or too dear. But as these are terms without definite meaning, I may naturally be asked, what fixed standard of price can you set up? I reply we have a national debt ten times larger than the currency, bearing a certain rate of interest, and that rate forms a datum line, therefore something added to that rate for labour, risk and profit is a good criterion of the proper medium value at which money should always stand. If money could be kept hovering about 4 per cent. per annum, it would be a great advantage to lender and borrower. But can that desideratum be achieved under the Bank Restriction Act? Experience shows that it cannot. On two occasions, with an interval of only ten years between them, the Government has been compelled to relax the provisions of that Act, and to apply to Parliament to indemnify them; and, although the relaxation was only to the extent of two millions on the last occasion, the panics were at once arrested, and the normal state of the money market speedily attained; but, alas! how many millions were squandered and lost uselessly during their continuance!-how many families reduced

from real affluence to beggary! How serious and how lasting their effects upon the trade of the country, and upon the comforts and necessities of the poor!

If the present Bank law be thus imperfect, the question arises, can it be so altered as to accomplish that end, and its note issue still continue to be, as now, perfectly safe? I think not.

What then is the remedy? If it be not safe or wise to allow the Bank more discretion as to its paper issue, what shall we do? I answer, let Parliament by a resolution in the first place, and then by law, buy the whole of the Bank Stock. On the day on which the resolution passes, Bank Stock is quoted at £- then if we add to that 10 per cent.

for compulsory purchase, we arrive at a fair value at which the Stock might be taken. Nobody is injured by this, there is no particular affec. tion for a particular stock; it is not like taking away a man's domicile in which he may delight, and even that is taken (and paid for) if the public service require it.

The Bank Stock may be paid for in notes, or a new Stock may be created bearing the same rate of interest as the average paid on Bank Stock for the last seven years, or by an arranged equivalent in any other Government security.

This being all settled, then the Bank, the books, the bullion, the notes, all belong to the State. The debt of £14,000,000 is cancelled.

The clerks and officers are still retained to pay the dividends on the funds, and to do all the duties they now perform, except one, to be hereafter spoken of. All the machinery for transfer of stock remains; it is now as perfect against fraud as human ingenuity, aided by long experience, can contrive.

Let a reserve-say £10,000,000 of gold-always remain in the cellar, not to be touched, except on such an emergency as may never happen. The Bank will remain as it now does, as a safe place of deposit for individuals, as well as for the Government business and that of the Courts of Law; but no bills called commercial bills are to be discounted for anybody; navy bills, or other state bills having time to run, may be discounted, if convenient.

The House of Commons should twice in each year, perhaps at the beginning and close of each session of Parliament, vote how much shall be the issue of notes and the rate of interest thereon for the ensuing half-yearly period.

Having gone thus far, let us suppose for the sake of argument, that the vote has been for twenty-four millions of pounds, with a margin of two millions and four millions as under.

Then how, it may be asked, is this twenty-four millions to be kept out? Kept out it cannot be entirely; but how is it to be allowed to go out-to go out if wanted by the public?

I will assume, that the following are the prices of the interest. The twenty-four millions are to be lent, or rather that proportion of it which is lent, at the rate of 3 per cent. per annum. When the issue exceeds twenty-four millions and does not exceed twenty-six millions, then the price of all loans shall be at the rate of 3 per cent. Beyond the latter issue the rate charged shall be 4 per cent. up to twenty-eight millions.

When I speak of this lending, I mean only of such surplus notes as are in the Bank from time to time, and are not wanted by the State; for example, the taxes and revenues coming in at expected, or rather at known periods, being estimated, the dividends, the payment of troops, &c., also taken into account, a certain amount kept in hand to meet the deposits-all these having been calculated, it is found that there are so many millions not wanted, and therefore may be lent, for a certain number of months, or part can be spared for one period and part for another.

I will suppose that a Board of Directors, or a Committee, will be retained, or be set up, whose business it will be to see what money (notes) can be spared to be lent out.

A notice is put up in the rotunda (?) every day, or oftener if necessary, stating what sums, and for what periods, and at what price, they are to be lent out.

Then any fund holder who has power to sell his funds, shall be at liberty, according to priority of application, to take up money on his stock or funds, at the rate of say 90 per cent. of their value, calculated at the market price of the day before. In other words, he mortages his stock or funds to the State, paying for the advance at the rate of 3, 34, or 4 per cent., as the case may be.

The machinery for this is obvious enough, the same proofs of identity as for the sale of stock will be resorted to. If the owner do not personally apply, he must sign a power of attorney bearing, I hope, a less stamp than now in use, but still a stamp by way of fee, for the work done, and this fee, or a still smaller one, may be payable by him if he apply in person.

Advances are also supposed to be made on Exchequer bills, and to their full amount, less the accruing interest; the discount or hire of the money being paid by the borrower at the time of borrowing. The bills to be deposited with a solemn declaration that they are his own property; an officer can be appointed to take the solemn declaration. In case the party applying be not the owner, then a solemn declaration may be made before a Justice by the owner that he allows the bearer to take up money on the bills. This may not be the best way, but a way could be found to prevent fraudulent borrowing; a clause in the Act could

settle the matter.

Here I must digress one moment to say that Exchequer bills would become a much more coveted security than they now are, and might be issued at a less price per diem, other circumstances being the same.

This mode of lending out notes, whether on funds or Exchequer bills, is absolutely a safe one, for you lend to the very man to whom you are debtor.

The understanding will, of course, be, that if the borrowing party do not repay on the fixed day, or renew the loan, if convenient to the Bank, any case paying up the interest, the funds or Exchequer bills, as the case may be, will be sold to recoup the Bank.

In the case of funds you have the 10 per cent. margin, on Exchequer