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fore, has been the chief cause of the present distress on the trading part of the nation: their credit being by so many failures rendered doubtful, has withdrawn at once the imaginary stock furnished by them for the carrying on of trade.

It is a difficult matter to restrain an improper use of credit without hurting credit itself, which is so necefsary for the carrying on of an extensive business; but perhaps the following proposals might restrain the private banking within proper bounds.

Let there be a charter bank established in every considerable trading town in Britain, where a capital of 100,000 1. could be employed to advantage in the banking businefs, upon the following conditions.

1. That before they issue any notes for circulation, they shall lodge four fifths of the capital stock contained in their charter in government's hands, at 3 per cent. for the security of the holders of their notes, and at the same time this deposit be admitted as a compensation for the stamp tax; so that their notes or bills be free from that tax, in the same manner as the notes of the bank of England are: that the 4 per cents. shall be taken at par for the whole or any part of the deposit money; for which reason each of these banks fhall be allowed to take in of that stock to the amount of four fifths of their charter capital, either by pur chase at the market price, or by giving stock for them at such rates as they can agree with the stock❤ holders.

2. That the remaining fifth to lie in the bank, be employed in no other trade but the purchase of either bullion or bills of exchange.

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3. That no single person or trading house fhall hold more than 5000 1. stock in any one of these banks (except the bank of England, who may hold a fourth of the capital stock in any of them, if they chuse.)

This article may be understood chiefly for those that shall be erected south of the Tweed; for as the revenue in Scotland is mostly, if not all, collected to Edinburgh, to be transmitted from thence to the treasurey, if the three charter banks in Edinburgh could agree to unite into one, this united bank in E dinburgh might be allowed the same privilege to hold the fourth of the capital stock in all the charter banks erected in any place in Scotland.

4. That the first twelve persons who fhall subscribe for a thousand pounds or upwards, fhall act as directors, till the capital stock is filled up, and for this purpose may apply for a charter, fix the amount of the capital, and as soon as they have obtained their charter, advertise on what terms they will give stock for the 4 per cents. But the subscription money to be lodged either in the bank of England, or bank of Scotland, and to be employed no otherwise but in buying up 4 per cents. till the whole capital contained in the charter be filled up.

5. To prevent the pernicious practice of stockjobbing, that no person subscribing to any of these banks, fhall be allowed either to sell or transfer any part of his stock in the bank, until twelve months after the date of the charter; and even after this, all sales of these bank's stock, fhall be by public sale, after

a fortnight's advertisement in the nearest newspa



6. That as soon as the eapital is made up, and the deposit placed in government's hands, the interim directors fhall appoint a meeting of the proprietors, to chuse their directors, and settle the plan for carrying on their business to the best advantage.

Lastly, As touching the deposite in government's hands, fhould such a run be made on any of these banks as the cash in bank is not sufficient to answer, it fhall be lawful for them to draw on the exchequer to the amount of one fourth part of their deposit money; and if this be not sufficient to answer the run made on them at the end of six weeks, they may draw another fourth part, and so on till the whole of the deposit money be drawn out; but in the mean time they shall cease from ifsuing notes till the whole of the deposit money be paid into the exchequer again, with legal interest for the time it has been out; and if they be not able to do this in twelve months, reckoned from the time of their first draught, their charter shall be forfeited, and the company dif solved.

And if at the same time there be a law made forbidding any promifsary notes to pafs in circulation under gl. sterling in value, the charter banks would in a great measure remove the temptation to private banking, as any person who had stock for that purpose, might be a proprietor in the charter bank most convenient for him; or if his stock was so large he might be a proprie tor severals just as suited his business best, and as

209 the forbidding the circulation of promifsary notes under 51. value, would subject the whole of the private banker's circulation to the stamp tax, it would at least circumscribe their businefs so far as to prevent a few failures amongst them putting a stop to the trade of the nation again, The trading part of the nation wants a supply of real stock to carry on their trade with, instead of the fictitious stock furnished them by the private banks, which is now evanished all at once; and it is only the stockholders or public creditors that can furnish them with this; for amongst the landed men at an average, there are as many borrowers as lenders, and such of them as are in condition to lend, commonly prefer landed security to a merchant's bond; but the public creditors have the stock to lend, and certainly may do it greatly to their own advantage, for they certainly would make rather better than 5 per cent, for the stock that now only yields them four, and as to any rise in the stocks, it is more than probable, that the bank stocks would rise much faster than the four per cents. The greatest hazard is that they should rize too suddenly above the real value, like the South Sea, for which reason I propose forbidding the transferring them for a twelvemonth, by which timẹ the real value may be better ascertained than it can be by any preceding calculation; and should only twenty millions of the four per cents be taken in that way, it would be a saving 200,000l. a year to government, in reducing the interest one per cent, on so much of the public debt, and I am persuaded the VOL. Xvii.


imaginary stock furnished by the private banks, a mounted to much more than that sum; then consider how much safer it would be for the nation to be trading on real than imaginary stock.



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WITHOUT entering minutely into an investigation of all the arguments above, far lefs into a discussion of the practicability of the plan of the bank proposed, there seems to be no room for doubting, that the general principle afsumed by this writer, is well founded, viz. that our manufactures were pushed to an extravagant pitch in point of extent, and that owing to this circumstance alone, sooner or later, a stagnation in respect to sales must have been experienced, which could not fail to produce effects somewhat similar to those which have been lately experienced. And though certain circumstances might have tended to retard or to accelerate this catastrophe, yet in the train we were in, this was certainly unavoidable ; and if so perhaps the sooner the check was experienced, the lefs severely it will be felt in the end. The opinion here given, is grounded on the follow, ing authentic document.

The select committee of the house of commons appointed to take into consideration the state of the export trade from great Britain to the East Indies,

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