JOINT-STOCK BANKING SYSTEM. 537 



restricted to six by the existing laws ; and a measure was brought 

 forward under the patronage of the late Lord Liverpool and the 

 present Lord Ripon (then Mr. Robinson) and with the consent of 

 the Bank of Englancf, which when carried into effect Banctioned the 

 formation of joint-stock banks with power to issue note* on condition 

 that such banks were to be at least sixty-five miles distant from the 

 metropolis. By the Act 3 and 4 of the present reign, c. 98, which 

 settled many questions of importance to the country joint-stock banks, 

 the establishment of joint-stock banks, with all privileges except that 

 of issuing notes, was legalized, even within the limits of the Bank of 

 England's exclusiveness. Of this latter description is the London 

 and Westminster bank, whose disputes with the Bank of England 

 respecting the legality of accepting short bills of exchange have 

 during the last few days excited much public interest. The settle- 

 ment of this point will decide a question that has been much dis- 

 cussed among bankers. ? 



Such were the chief legislative enactments which gave birth to the 

 system, whose healthy action may be productive of so much national 

 good, but whose abuse may plunge us into the deepest distresses, 

 and involve even a general bankruptcy. That suspicions have arisen 

 as to the existence of these abuses, and that these suspicions have not 

 been altogether without ground, is clear from the results of the Par- 

 liamentary inquiry set on foot at the suggestion of Mr. Clay, the 

 Member for the Tower Hamlets. We shall now venture a very few 

 observations on these alleged abuses, then consider their reality, 

 and subsequently state what we conceive to be their remedy. 



The business of the banker consists of two separate departments, 

 Jirst, the collection, and secondly, the distribution of monied capital. 

 Every bank is, to a certain extent, one of circulation as well as 

 deposit; but with a large class the circulation is confined to the 

 monies of depositors ; and these are called banks of deposit. Nu- 

 merous other banks, however, at the head of which is the all-import- 

 ant Bank of England, do not confine themselves merely to the cir- 

 culation of money deposited by their own customers, but issue notes 

 or promissory bills on their own security and credit. The joint- 

 stock banks (sixty-five miles from London) legalized in 1826, are of 

 this class ; and so likewise are all the country private banks to a 

 certain extent. On the security and convenience that have resulted 



