1 UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY THE HISTORY, LAW, AND PRACTICE BANKING. M ^ppcubix of StiitutCG. BY CHARLES M. COLLINS, BARRISTER- AT-LAW, FELLOW OF THE INSTITUTE OF BANKERS. ~TeY)i son Ckarlej M^acC^iwIv^ LONDON : JAMES CORNISH & SONS, 297, HIGH HOLBORN, W.C. LiVERroOL : 37, LORD STREET & 42, NORTH' JOHN STREET. Dublin: iS, GRAFTON STREET. 1881. fyy^ Tg^^ V> ?■? PREFACE Many works on the important subject of Banking have been pubHshed, and are before the Public, — Theoretical works of much interest to Economists, and Legal works written and compiled for the Legal Profession : but generally speaking, these are rather too abstruse, or too expensive to attract the ordinary reader or the Bank Official. The aim of the accompanying volume is to supply an ac- knowledged deficiency, and to provide — in a form, simple, con- cise and inexpensive, and divested as far as possible of techni- calities of expression — information of a practical and interesting description, useful and necessary, not only to Officers of Banks, but to the public in general. That the work may commend itself to junior officials, ex- planatory details, otherwise unnecessary, have been incor- porated with the text. London, Km., 1881. CONTENTS PREFACE ------- 111 PART I. THE HISTORY AND PROGRESS OF BANKING. CHAl-TER I. THE EARLIEST RECORDS OF HANKING AND COINAGE 1 I II. EARLY EUROPEAN BANKS - - - " '9 III. EARLY ENGLISH COINAGE - - - "34 IV. EARLY LONDON BANKERS - - - '39 V. THE BANK OF ENGLAND - - - "59 VI, ENGLISH PRIVATE AND JOINT STOCK BANKS - 67 VIL BANKING IN SCOTLAND - - - "7° Vin. EARLY IRISH AND SCOTCH COINAGES - "77 IX. BANKING IN IRELAND EARLY DUBLIN BANKERS - 84 X. IRISH JOINT STOCK BANKS - - - - I02 XI. CONCLUSION - - - - - ^14 PART II. THE LAW AND PRACTICE OF BANNING. 1. THE RELATIONS BETWEEN THE BANKER AND HIS CUSTOMER - - - - - 123 II. DEPOSIT RECEIPTS - - - - - I 27 in. CURRENT ACCOUNT — CHEQUES - - "135 IV. CROSSED CHEQUES - - - - "15^ V. PRESENTATION, PAYMENT, AND DISHONOUR OF CHEQUES - - - - - 161 VL PASSBOOK — OVERDRAWN CURRENT ACCOUNT — RIGHT TO SUE ON CHEQUES - - - " ^ 75 VII. BILLS OF EXCHANGE AND PROMISSORY NOTES - 181 vi Contents. CHAI'TliR I'AGK Vin. PERSOXS INCAPACITATED TO HE PAR'flES TO A BILL OK EXCHANGE - - - "197 IX. THE STAMP DUTIES - - . - 202 X. THE TRANSFER OF BILLS - - - " 213 XL PRESENTATION OF BILLS - - - - 2l6 XIL NOTING AND PROTESTING - - - 22 1 Xin. DISCOUNT — -REBATE BILLS FOR COLLECTION FOREIGN BILLS, ETC. - - - - 229 XIV. bankers' DRAFTS AND POST BILLS — HEN CON- FIDENTIAL REPORTS, ETC. - - - 23H W. DEPOSITS AflAINST ADVANCES, AND FOR SAFE CUSTODY . - . _ - 246 XVL BANK NOTES — L O. U. - - - - 253 XVII. SHARES AND SHAREHOLDERS - - " 271 XVIIl. THE BANKING ACT OF 1 879 DIRECTORS' DUTIES 280 XIX. THE STOCK EXCHANGE AND STOCK-BROKING - 285 A P P !•: N D I X. Al'I'F.N'DIX' h PRINCIPAL JOINT STOCK BANKS OF ENGLAND, NUMBER OF THEIR BRANCHES, SUBSCRIBED CAPITAL, PAID-UP CAPITAL, AND AUTHORISED ISSUE - - - - - - lOl \\. A TABLE OF THE NUMBER OF DAYS FROM ANV DAY IN ONE MONTH TO THE SAME IN ANOTHER 307 111. MARRIED woman's ACCOUNT FORM OF LETTER OF AUTHORITY TO BANKER FORM OF INDEM- NITY ON REPAYMENT OF LOST DEPOSIT RECEIPT, DRAFT, ETC. - - - - "309 W. TABLE IN TEN LANGUAGES OF CARDINAL NUMBERS AND COMMERCIAL TERMS USED IX BILLS OF EXCHANGE - - - - -31° V. STATUTES - - - - "31- INDEX - - - - - - 357 PART I. THE HISTORY AND PROGRESS OF BANKING. THE HISTORY AND PROGRESS OF BANKING. THE EARLIEST RECORDS OF BANKING AND COINAGE. The trade of Banking is one of immemorial antiquity, and its origin is beyond the range of authentic history. It was the natural and necessary outgrowth of the commerce which arose from, and grew with, civilization. Commerce is no more than an exchanging of commodities ; and exchange created the necessity for standards of value that would be generally re- cognised. These were, at length, found in the precious metals, which combined value with facility of carriage and transit. The system of Bills of Exchange grew out of the exigencies of trade. When a commercial community was founded, the inevitable conditions of society being that some members of it were rich and others poor, a trade in money was necessarily established, the richer lent to the poorer for interest — the poorer hired money and paid a wage for the use of it ; and thus arose promises to pay and bonds. Commerce demanded a coinage, and various countries having varying coinages, the trade of money-changing was developed. It was requisite that a dealer in money should have a safe and strong place to protect his 2 — 2 1 2 The History and Progress of Banking. monies and securities against the predatory bands that flourished with comparative impunity of old, when government was un- settled and many held but a precarious tenure of wealth, land, and even life. To those strongly-built places people brought their gold and jewels and valuables and deposited them for better security, paying a fee for the safe custody. Thus origi- nated the system of deposits of money, which has so far altered that the depositor is now paid for his deposit, instead of paying for the privilege of depositing ; and from the custom of depositing money grew the means of drawing it out ; hence our modern Cheques and Banker's Drafts. But the trade of Banking in its various phases — not only in a primitive fashion, but even on a well-developed system and advanced principles — can boast of an extraordinary antiquit)-. The Jews in the infancy of the nation were a pastoral and not a commercial people, though during Christian centuries the greatest and the least of them have been addicted notoriously to money-trading. The early Biblical references to " pieces of silver" in Genesis, do not, in the original, convey the idea of coins, but of weights (shekels). The Mosaic "oblation to God" was half a shekel, and a shekel is explained by Josephus as equal to four Athenian drachmae, or of a value of two shillings and threepence of our money. A coinage with the Jews, as with the Egyptians and Assyrians, was a late institution, preceded by the long-retained custom of treating the metals like other merchandise, exchange- able by weight. The first Jewish coinage under authority was, it is believed, struck by Simon the Maccabee, about the year 140 B.C.* It consisted of shekels and half shekels and had the * "The earliest known genuine Hebrew coin is a unique specimen in " copper, in the Cabinet du Roi, Paris, bearing on the obverse the sacred " seven-branched palm-tree, and the letters forming ' Eliashib,' the name The History and Progress of Banking. 13 pot of manna and Aaron's rod as devices. This coinage, more- over, had its value signified upon it — "schekel Israel"— in Sa- maritan characters. Simon's successors placed their own pro- files upon the coins they issued. But long anterior to the time when there were coins, lending at interest, which seems — notwithstanding the agricultural and pastoral life the nation led — to have been an instinct of the race, was carried on to such a degree that it grew to be an evil, against which Moses had to hurl Divine enactments. These were to the effect that the Hebrew was not to lay " usury upon " the poor ;" " and if thy Brother become poor, thou shalt not " give him thy money upon usury," and so on — "because it is not "just to make advantage of the misfortunes of one of thy own " countrymen : it is thy gain if thou obtainest their gratitude."* The application of these commands seems to have been confined to loans given to relieve distress rather than to loans for the purposes of trade, or by way of capital. The trade of money- lending on usury was, however, recognised in the early Jewish community; and though it was forbidden to be practised on " thy " brothers who were poor," it was, nevertheless, permitted against a stranger. " Unto a foj-eigner" runs the Divine command, "thou mayest lend upon usury;" and Jeremiah (445 B.C.) there- fore rebukes " the nobles and the rulers because they exacted "of the high priest. This name furnishes no definite clue to the date, nor "does that of Eleasar, on another coin of the same archaic type. Under "the Seleucidce there is a copious sequence of Jewish coins, especially "of those bearing the name of Simon. Many pieces have figured on their "face the vessels and instruments of the sanctuary, the candlesticks, the " trumpets, or the golden cup. The list here given closes with the tiny " copper coin weighing about 25 grains, which most probably represents the •'widow's mite [lepton, Mark xii. 41). It bears on the face an anchor, and " on the reverse the Greek word chalkous." — Conder's Handbook to the Bible. * Josephus. 14 The History and Progress of Banking. "usury every one from his brother." But though the trade of money-lending was general, and partly permitted by the Mosaic law, it seems to have fallen into disrepute. David condemns it ; and Jeremiah significantly says — " I have neither lent on " usury, nor have men lent to me -.yet every one of them doth airse me" From the New Testament, however, it seems that trans- actions corresponding to our deposits were usual, and that inte- rest was allowed on money deposited. In the parable of the Talents, in Matthew, the "wicked and slothful slave "is de- nounced, his lord saying to him, " Thou oughtest therefore to " have put my money to the Bankers, and at my coming I should "have received my own with tisiiry" (Matt. xxv. 26); and in Luke, " Why then gavest not thou my silver into the bank, that " at my coming I might have received it with usury " (Luke xix. 23). But beyond this we have little certain knowledge regard- ing the money dealings of the chosen people. Amongst the ancient Brahmans* the law of loans and inte- rest was fair and equitable, and regulated and settled by recog- nised rules. A creditor was to be paid back in full, and the debtors were to pay "as much interest as has been promised by " themselves"; but some idea of the rates of interest is afforded by the provision that the creditor " shall take in the direct order "of the castes two, three, four or five in the hundred by the "month (if no pledge has been given)." The rates here men- tioned are very high ; but there was a limitation to the total amount. The interest on gold was not to rise higher than double the debt ; on grain, to threefold, etc. There is on this subject an inexplicable provision that " on substances from " which spirituous liquor is extracted, on cotton, thread, leather, "weapons, bricks, and charcoal, the interest is unlimited." * See The Instiiities of Vishnv. Vol. VII. of "The Sacred Books of " the East." Edited by Max Miiller. The History and Progress of Banking. 1 5 Double the debt was the ordinary increase, and was to be exacted on all objects unspecified. Coins were made in China, so long ago, it is said, as the year 2250 B.C., but they cannot have been other than portions of metal cast into a portable shape — squares, bars, spikes, or rings — such as were all the earliest monies. Bank Notes, or what would correspond to our Bank Notes, are said to have originated also there, about 120 B.C. But there can be little doubt that notes w^ere issued in China about 1000 a.d., first by a private person and soon after by a duly constituted Joint Stock Bank of Issue. Paper money, it is recorded, was in existence in the dominions of the Mongol Prince, Mangu Khan, in the 'year 1252, and — according to that unreliable historian. Sir John Mandeville — the Emperor of Tartary, in 1322, manu- factured paper and leather money to such an extent that gold and silver fell into disuse. The inexpensiveness and the facility of manufacturing the new circulating medium were such that it was issued profusely, and the Emperor was enabled thereby to spend "enow and outrageously." But, as was to be expected, this reckless and unbounded circulation of an intrinsicall) worthless and irredeemable mock money, led to the evils natu- rally consequent on its depreciation to such an extent that it was valueless. The paper and leather money got into just dis- credit and disrepute, and seem to have disappeared altogether, so that in 1668 a traveller could not find even a " recollection" of them. The issue can scarcely be regarded in its late stages in any other light than the act of an autocrat to enable him to "despende outrageously." The Chinese have, in Banking as in everything else, made little or no progress for thousands of years. Though in the world's infancy they were more advanced in the arts and sciences than the white races, their exclusiveness and con- 1 6 The History and Progress of Banking. servatism have been such, that the Chinese of to-day possess no better system of Banking than their ancestors possessed centuries ago; indeed, their system at present seems to consist solely of issuing Bills and redeeming them ; and the Japanese are even still more backward and primitive in Bank- ing and Finance. Abraham is said to have been " rich in silver and gold ;" but as this statement refers to a period subsequent to his return from Egypt, it has been surmised that he obtained his know- ledge of the values of these metals from the Egyptians, but strange to say, in Egypt, the cradle of civilization and com- merce, there was no imperial coinage. Copper and silver and gold were used, as elsewhere, to indicate values, but they were manufactured into lumps, shaped sometimes like bricks, and, in the case of gold and silver, generally in rings like the ancient Irish money of ten centuries ago ; and they were valued by weight like any other commodity of commercial merchandise. It appears, to use the words of Sir John Lubbock, " almost " inconceivable that a people who created the Sphynx and the " Pyramids, the Temples of Ipsamboul and Karnac, should have " been entirely ignorant of coins. Yet it is certain from the state- " ments of Herodotus and the evidence from the monuments " themselves that such was really the case." The first coinage of money in Egypt with which we are acquainted was struck, not to assist the Egyptians themselves in their commercial dealings, but rather because the foreign merchants with whom they traded, the Greeks and Phoenicians, demanded some value-medium which would have a guarantee of its value apparent on it, and would circulate for that value ; and the satrap Aryandis yielded to the pressure, and thus the honour is with him of having been the first who "struck" the precious metals into circulating authorised coin. The History mid Progress of Banking. 1 7 Turning to the great and ancient empires of Assyria and Babylonia, we find that though they, equally with the Egyp- tians, adhered for ages to the primitive blocks of copper and ingots of silver and gold, and did not evolve an imperial coinage, nevertheless they were possessed of a system of Banking un- expectedly complete and well-developed. Indeed, their Bank- ing practice was so complete, and affords such conclusive evidence of the high stage of commercial knowledge to which they had attained, that while we wonder at their advancement, we wonder also at the fact that their neighbours were so back- ward and primitive in their Banking. Before a coinage was known, the great Banking House of Egibi and Company flour- ished as State Bankers, it is said, for a period of 150 years at least. Founded presumably in the reign of Sennacherib [b.c. 712], we trace it through five generations down to the reign of Darius, and we are informed that it was the Great National Bank of Babylon when Babylon was the greatest city on the earth. From the clay tablets unearthed of late years in and near Nineveh and Babylon, we obtain an insight into the social life of those wonderful peoples, and gather revelations of an astonishing progress from the records of their financial doings and commercial arrangements. The excavations in this old world have given us the originals of many most interesting documents — if that word can be permitted as applied to baked tablets. We have contracts of sales of slaves ; of sale and transfer of lands, with maps and plans attached. We have records of loans on lands and on house property. We have evidences of loans of silver at fixed rates of interest on per- sonal guaranty. "We have receipts and contracts of various kinds. The people among whom, 2,500 years ago, such usages were common, must have been possessed of the highest aptitude for 1 8 The History and Progress of Banking. commercial science ; and a classification of the Banking In- struments in vogue with them — for which we are indebted to M. Le Normant — reads rather as a description of Banking extracted from a treatise written in the 19th century, than a recital of the veritable contracts made and prepared by the subjects of Sennacherib and of Darius the King. M. Le Normant thus classifies these contracts. — i. Simple obligations. 2. Obligations with a penal clause in case of default (he quotes one that had 79 days currency). 3. Obligations with a guarant)- of a third party. 4. Obligations payable to a third party. 5. Drafts drawn upon one place and payable at another. — Of the latter he quotes the following, which dates between 500 B.C. and 600 B.C. : — ■"■ Four minas fifteen shekels of silver (credit) of " Ardu-Nana son of Yakin, upon Mardukabalussur son ot " Mardukbalatirib in the town of Orchoe. Mardukbalatirib will " pay in the month of tibil, four minas fifteen shekels of silver " to Belabahddin, son of Sennaidour, the 14 arakh-samma in "the 2nd year of Nabonidus, King of Babylon." This is a perfect instrument. The date, the time of payment, the payee, the amount, the drawer, and the draw^ee are specified, and further, the parties are identified. These Drafts or Letters of Credit were drawn on the fresh tablet, which was then baked and thus became enduring and negotiable. Frequently the payee's designation was omitted, whereby they became as drafts l)ayable to bearer and freely transferable, for it is evident that being hard and solid they could not be transferred by en- dorsement. It is said that those Drafts must, when drawn, have been notified to the drawee, and this step, being a pre- cautionary device, seems to be a natural development Thus it will be seen that in the time of " Nabonidus, King of Baby- lon," and, extraordinary to contemplate, in a time when there was no such thing as current coin, there were Letters- The History and Progress of Bmtkiug. 19 of Credit, Letters of Cluaranty, Mortgages, and penal obli- gations.* The following is a translation, by Mr. T. G. Pinches, of one of these tablets ; it seems to be a bond for money advanced for twelve months by a member of the house of Egibi &: Son. "i2| manas of silver from Iddin-Marduku son of Basa^ " son of Nur-Sini^ unto Itti-haladhi-Marduku and Nabii-imtsetig- " udda^ sons of Ziri-ya, son of the priest of Gula. For a month, " to (the amount of) i maneh i shekel of silver it increases unto " them ; from the first day of the month Tebet the interest unto " them increases. (In) the month Tisri the silver and its interest " they give (back), their receipt they ask, and afterwards the bond " (?). (Agreed in) the dwelling of Iddhi-Mardnku, the owner (of "the money lent). Whoever, for the completion of the agree- " ment, unto Iddin-Mardiiku his silver and his interest will pay, " notice (?) the two (men) shall send up. Witnessing: Marduhi- " irba, son of Basa, son of Shw-7iiqi-inagir. Gimillu, son of '•'■ Nabu-iddmo, son of the priest of Gula. Itti-Nabibaluadu, " the scribe, son of Mardukit-banai-sumay son of Belu-edhej-u^ " Babylon, month Kislev, day 25th, year ist [or i ith] Kambyses. " King of Babylon ; in this day also Kyrus his father. King of " Countries." To the Lydians, the invention of coining gold and silver is attributed, and the year 862 b.c. is fixed as the era of the in- vention, and a poetic comment on the circumstance is found in the fact that some 300 years after this period Croesus was King of Lydia. But the coins of the period are not very elegant, and beyond the coinage we have no record of any operations of a banking nature. But in Greece — the most illustrious portion of the Western * A recent writer says, however, that these records may not be of a com- mercial character. 20 The History and Progress of Banking. world — Banking was undoubtedly carried on to a considerable extent. Homer speaks of brass money (1184 B.C.), but the term was applied to weights and not coins. The art of coining, invented by the neighbouring Lydians, was soon acquired by the Greeks — the first mint was that of ^4^gina — and was perfected to such a degree, that the ancient Greek coins far surpassed any modern coinage. The original method of coining consisted in placing a given weight of metal, when softened, over a die upon which a national symbol or sacred emblem was engraved, and hammering it into the die till a good impression was obtained. The early coins are therefore rude and battered, and show a die impression on one side only, the other bearing the rough irregular marks of the hammer. The earliest Greek coins are of silver, whereas those of Lydia were of gold. The earliest impressions are of a sacred character,- — symbols and emblems. These were succeeded by representations of the deities. The oldest Athenian coins bear an owl, the type of Athene, and this was followed by a design of the head of the goddess. The earlier Greek coins bore a letter, the initial of the town where they were struck : monograms came later : the first coin upon w^hich a king's name is discernible is one of Alexander I. of Macedon. In the reign of PhiUp of Macedon the coinage had attained perfection. The reverse was now equally artistic as the obverse. The Medal of Syracuse with its head of Proserpine is one of the oldest specimens of this perfect coining, and is remarkably complete. This rapid development is not to be wondered at. The nation who strove after the beautiful in all things, who elevated beauty into a religion, and made human beauty perfect in idealism, manufactured coins on the princijjles of the highest art. On them we see the most lovely faces and the most perfect models of beauty in the entire range of art. Gods and goddesses, kings and heroes, lions and horses, mice, The History and Progress of Banking. 21 bees, roses and ears of wheat, in supreme excellence of design, find places on the old Hellenic coins. The Greeks deve- loped rapidly also their system of Banking ; they changed foreign money, they received money on deposit at interest ; they granted loans. We learn this from Demosthenes, who himself kept a banking account. The rate charged on loans is said to have usually been 36 per cent, but this statement is doubtful. Though those who engaged in the pursuit of Banking in ancient Greece were generally of low origin, being freedmen or aliens, yet they frequently rose to positions of great eminence, and became wealthy members of the State. They therefore en- joyed good credit and repute. One of the most eminent Bankers in Ancient Greece was one Pasion, who, from being a manu- mitted slave, became the greatest Banker of his time. Demos- thenes and contemporary orators frequently make mention of him ; we even get a glance at his business. He is said to have had ^2,6Si in deposit from his customers : to have lent ;^i2,i87 out at interest, and to have owned land worth ^4,875. If this be so we are surprised at the statement that the business was worth only ;^4oo sterling a year. The state was more than once indebted to Pasion's financial support, and he was a man of undoubted integrity, well known and trusted throughout Greece, and enjoying the friendship of the great. So eminent was his reputation and so undoubted his credit that his son Apollodorus boasted that he could obtain money wherever he pleased, because he was the son of Pasion. The Greek Bankers were called Trapezitas from Trapeza, a table (as the Roman were called Mensarii from mensa), because they conducted their business at tables in the public streets and in the temples. The Greeks were acquainted with letters of credit, and knew a method of endorsement, for one Iceratus drew in Athens a bill on his father in Pontus, which was 2 2 The History and Progress of Banking. guaranteed by Pasion the great Banker, and then bought by Stratocles. They seem to have had an instrument corresponding to our cheque, and the Athenian Bankers were the inventors of discounts, i.e., of the system of deducting the interest at the time of making the advance or loan. The Greek Bankers also acted as public notaries and public drawers and witnesses of contracts. Even bottomry bonds were used in their commercial dealings.* The Greeks carried their Banking practices with them in their conquests, and thus Banking in a matured fashion was introduced into Rome. This is proved by the fact that all the expressions bearing on finance used by the early Latin authors are of Greek extraction. In Rome, Servius Tullius stamped copper pieces {as) as early as about 550 B.C., with the image of a sheep (pecus), and hence, the word peainia, the Latin for money. Brass money was in use previous to 269 B.C., when Fabius Pictor coined silver ; and gold was coined 206 B.C. There are three series of early Roman coins : the Republican, the Family, and the Imperial. The Republican was the earliest, and circulated from the time of Servius Tullius till about 80 B.C. The metal used was bronze, and the standard a pound weight, which in the shape of a brick, with the sheep impressed, was, it is said, the coin of Servius Tullius. In course of time the square or rectangular shape was abandoned for the circular, and it is to be noted that the early Roman circular coins were cast, and not hammered into a die, as was the case with the Greek pieces. The first silver coin was the Denarius ( i o ases) equiva- lent in value to the Greek drachma. The earlier gold coin was a Scrupulum ; these had representations of the head of Mars on the obverse, and on the reverse the Roman Eagle with the thunderbolt. The latter coins of this series are very .beautiful. The Family coins superseded the Republican, and * FiV/t Demosthenes, "Against Aphobus," Orat. I. The History and Progress of Banking. 23 were so called because the mastership of the mints was con- fined to certain families who acquired a right of placing their name on the pieces. The name was succeeded by a device of an ancestor's head, and by degrees this was changed to the head of a living person — Julius Caesar being the first thus represented. The Iviperial coinage bore the head of the Emperor or Empress, and the coins of Agrippina, Augustus and others are very beautiful. The Sestertius of Nero is for work- manship and artistic design unequalled in numismatics. The devices on the earlier coinages were, as we have said, the heads of deities or of those to whom divine honours were accorded. The first coin which bore a representation of a human head was one of Lysimachus, which bore a device of the head of Alexander the Great ; he is represented with the ram's horns, which was an indication of his descent from Jupiter Ammon. But though exhibited in the divine character, the circumstance is interesting, as marking the transition from the pure worship of the gods to the compromising worship of the hero. Julius Caesar (48 B.C.) had to obtain the permission of the Senate to impress his own portrait on the coins. The practice has been perpetuated, and the coins of nearly all countries are now adorned with a device of the sovereign's profile. The Romans are said to have invented the science and business of Banking. The first mention of Banking in Rome that we find, refers to the year 352 B.C., when the Plebeians being in great distress, the State appointed certain persons to lend them portions of the public funds on security ; hence sprung an authorised and recognised system of advances made by these Bankers, but their functions were limited merely to lending. There were other descriptions of Bankers which played an important part in the social economy of Rome. Of these there were three principal classes : — 2 4 The History and Progress of Banking. (i.) The Negociatores^ whose chief business consisted in lending money at high rates of interest to the inhabitants of the neighbouring provinces, and as the laws regulating Banking did not extend to the provinces, the Negociatores were enabled to ply an extensive trade at fancy prices, and not being re- strained by any legal restrictions, they seem to have realized large profits. Their system degenerated into usury* and be- came such an evil that at length a law was promulgated to curb their practices — the Lex Sempronia De Fcenore. (2.) The Argentarii. These were private Bankers, with whom individuals kept their private accounts, and who acted as disbursers of their clients' monies. . From Cicero we learn that their chief business lay in attending to the payments due in Rome on account of the citizens dwelling in the country districts. They kept books of their customer's accounts. They sometimes acted as auctioneers. The Argentarii introduced, if they did not invent, perfect documents of the same nature as our cheques. These were called proescriptiones or atiribittiofies, and were written orders by the owners of the money to the holders of it to pay certain amounts to specified persons. (3.) The Mensarii. These were a class of Bankers called into existence by the State, and consisted of the Bankers of the Republic. They were created, Livy tells us, to counteract the usurious practices of the money-lenders and to abate the evils caused thereby to the citizens. This class appears in later years under the Empire to have merged into the Argentarii — at least the two terms are frequently applied to the same individual, for Suetonius speaks of one C. Octavius indis- criminately as Argentariiis and Mensarius. Besides these there was another class, the Nummularii — but * The word usury is said to be derived from Latin usu-ceris (for the use of money). The History and Progress of Banking. 25 they can scarcely be regarded as Bankers. Their duties lay in assaying and weighing moneys, and they were recognized by the State and appointed to test the fineness of the metal and to estimate the current and the intrinsic values. Their nearest approach to Banking was in their business of changing the money thus estimated. The important and prominent position occupied by the Roman Bankers can be judged by the fact that numerous laws were made regulating their practice, and by the frequent re- ferences to them in the Latin authors. There is no doubt that as a body they enjoyed a high reputation for honourable deal- ing in their profession, but nevertheless they were frequently a mark for uncomplimentary allusions in the comedies of the time. Usury, which originally conveyed no more than a pay- ment for the use of money, came to have an opprobrious meaning, because the payment became extortionate, and the lenders extortioners. Nevertheless, outside the Roman Bankers we have described, private individuals were money-lenders at oppressive and ruinous rates. Pompey, Brutus, even Cato himself — perhaps in sustainment of "the dignity of man," — lent money at 50 per cent, interest. And in one of his Satires, Horace speaks of one Furfidius, who, " wealthy in lands and in " money put out at interest," is afraid of having the character of a rake and spendthrift. Furfidius understood his business and saw the advantages of discount. " This fellow," says Horace, " deducts five per cent, from the principal at the time of " lending, and the more desperate in his circumstances any one " is, the more cruelly he pinches him. He hunts out the " names of young fellows just of age." And we are further told that Furfidius notwithstanding his wealth lived meanly, and was "no friend to himself" The rate he charged was five per cent, and if it means five per cent, per annum, which is 26 The History and Progi'css of Banking. doubtful, was remarkably moderate for those days. I^aws against usury were enacted in Rome, as in England, and a legal rate of interest was fixed at 8| per cent. In the time of Cicero, the legal rate was fixed at 12 per cent, and in 528 a.d. the Emperor Justinian reduced it to 4 per cent, for loans to illustrious persons ; 6 per cent, for loans for commercial pur- poses ; and 8 per cent, for loans which did not come under either of these descriptions. One of the legal provisions in regard to Bankers is interesting and perhaps equitable. When a Roman Banker stopped payment, those citizens who had deposited money with him for safe custody alone ranked as preferential creditors, and were to be satisfied before those who lodged money at interest. The law forbade lending money to minors, />., persons under 25 years of age. By a constitution of Alexander Severus, a.d. 224, the abso- lute freedom of transfer of debt, by sale or otherwise, without the consent or knowledge of the debtor, was allowed and made legal. The debt was evidenced by an instrument, and by a simple process this was made transferable ; hence we find in Rome the origin of our modern Bills of Exchange with their chief attribute — freedom of transfer — recognised by the Law. We have reason to gather that foreign letters of credit were also understood by the Romans, as from Cicero again we learn, that when he was sending his son Marcus to Athens to study, he made inquiries as to obtaining in Rome a letter of credit on Athens, in preference to the alternative of Marcus taking money on his person. The inquiry would hardly have been made unless instruments of this nature were issued by the Bankers.* * In the first century we 'i\r\A pcrnntiare and cambirc used to signify " to ,' send a draft or bill fur money." The History and Progress of Banking. 2 7 After the division of the Empire in a.d. 364, the city of Rome was not the pleasantest or most profitable place for Banking. In the 5th century it was thrice taken, pillaged, and devasted, by Alaric, Genseric, and Odoacer. In the 6th, Totila the Goth seized it. In 553 the Senate was abolished, and in 600 the great and ancient " Eternal City " was at its very lowest ebb. During the long Middle Ages, — or as they are more appropriately called the " dark ages," — commerce, like the arts and learning, was little attended to. Where Commerce was moribund there was little field for the development of Banking. But money-lending and money-changing were ever necessary, and the people who had a genius for money-trading — the Jews— established business in many parts of Europe about 800 A.D. It was the Jews of Lombardy, or Lombard Jews, who thus distinguished themselves. Some of these mer- chants were sent into England by Pope Gregory the IX., in 1229, to lend money to the convent communities and private persons who were unable to pay the tithes which in that year were rigorously collected throughout the Kingdom. These emigrants settled in that street in London which to this day is named after them (Lombard Street), and in which at present many Bankers have their offices. The transactions of the Lombard Jews — who are not to be confounded with the de- scendants of those Jews brought over by William the Con- queror — seem to have been conducted in the usual extortionate and usurious fashion, until at length their trade became so pernicious and mischievous, that in Queen Elizabeth's time they were expelled the Kingdom. But though during the dark ages commerce was generally in a very feeble and exhausted condition, nevertheless, Tuscany stands out bright in its pre-eminence in learning, and also in mercantile trading ; and Florence became the centre of the 28 The History and Progress of Banking: money transactions of the commercial word, and great success attended its commercial enterprises. Here Guilds were estab- lished in the 13th century, and so rapidly had the city pro- gressed, that at one time it is said that eighty Bankers flourished and throve in Florence. About the year 1430, an association, formed of seventy-six Bankers, lent 4,865,000 gold Florins to the State. But these were still private Bankers, and though public Banks existed before this period, there was no State Bank there. Macaulay in writing of Florence in the early part of the 14th century, says : — " Four hundred thousand Florins "were annually coined. Eighty banks conducted the com- " mercial operations, not of Florence only, but of all Europe. " The transactions of these establishments were sometimes of a *' magnitude which may surprise even the contemporaries of the " Barings and the Rothschilds. Two houses advanced to " Edward the HI. of England upwards of three hundred thousand " marks, at a time when a mark contained more silver than fifty *' shillings at the present day, and when the value of silver " was more than quadruple what it now is." At this period Litterse Bancales, or Drafts by Banks, had succeeded the Litterse Cambitoriae, or Bills of Exchange, of an earlier century. Italian writers — Genovesi, Galiani, and others — claim, and perhaps justly, for the Italians the honour of " having been the fathers, masters, and arbiters of Commerce, " so that in all Europe they are the Depositaries of Money " and are called Bankers." II. EARL V EUROPEAN BANKS. The earliest public Bank in modern Europe was the Bank of Venice, the formation and establishment of which is said to have taken place in 1157 or 1171. It originated as subse- tiuent National Banks did, in a device of the State to extricate itself from its financial difficulties. Owing to foreign wars and conquests, the State was in an impecunious condition, and it sought relief from its straits in the creation of a Public Loan. It forced the citizens to lend their money, promising them in- terest at the rate of 4 per cent. This Relief Loan Fund, so far, can scarcely be considered a Bank, though to the Venetian State belongs the honour of having created the institution of a permanent National Debt on the funding system. The stock thus forced on the citizens was transferable, and a body of commissioners was appointed to manage the debt — to attend to the payment of the interest and to the transfer of the stock. The usual name by which this Loan and other subsequent similar ones were designated in Italy was Monte, plural Monti. The exact signification of the word is not, in its re- lation to a Bank, very apparent. Blackstone writes : " At "Florence, in 1344, Government owed ;,{^6o,ooo, and being " unable to pay it, formed the principal into an aggregate sum, " called metaphorically a Mount or Bank." The original 30 TJie History and Progress of Banking. Bank of Venice was called Monte Vecchio, and subse- quent Loans established on the same principle was called Monte Nuovo and Monte Nuovissimo. The word Bank has an obvious connection with Monte, and in an Italian dictionary of 1659, the latter word is explained, "a. Standing " Bank or Mount of Money." There were other Monti in Italy, as well as the State ones. There were the Banks of Charity, a species of pawnbroker's shop. Evelyn, in his Diary, under date 1645 (^^ Feb.), writes : "Neere this (the Palace of " Cardinal Spada in Rome) is the Monte Pieta, instituted as " a Bank for the poore, who, if the Sum be not greate, may have " money upon pawns." And subsequently when in Padua, Evelyn observed a similar establishment there : " In the " Piazza is the Podesta and Capitano Grande's Palace, well " built ; but, above all, the Monte Pieta, the front whereof is of " most excellent architecture. This is a foundation of which "there is one in most of the cities of Italy, where there is a con- " tinual banque of money to assist the poorer sort, on any pawn "and at reasonable interest, together with magazines for " deposit of goods till redeemed." The Bank of Venice for centuries seems to have been little more than a body constituted to manage the public debt, for undoubtedly it did not engage in Banking business. It was an authorised mart for the exchange of foreign and clipped and worn coins, which, being assayed, were purchased and paid for in promissory notes payable to bearer. And as these notes were redeemable and not liable to depreciation, they were in high esteem, and bore a premium as compared with the current money. The Bank of Venice does not appear to have engaged in discounts, and it was not till 1587 that it received money on deposit — but, even then, the nature of the deposit was simply safe custody ; the Bank, in fact, was only a The History and Progj^ess of Banking. 3 1 bailee, a money changer, and the manager of the public debt, and cannot be considered ^to have been a true Bank. The Bank of Venice continued to exist until the fall of the Republic in 1797. The Bank of Geneva was founded in 1345, but its functions were so restricted that it, neither, can be regarded as a Bank as we understand the expression. The earliest public National Bank in the modern sense of the term, was the Bank of Barcelona, founded in the year 1401. For some fifty years previous to this date the cloth merchants of Barcelona, then a wealthy community, engaged in Banking, and in 1401 their business as Bankers was consolidated by the Spanish Magistrates into a public Bank under the auspices of the Government. Its liabilities to the public were secured by the city property, which was held in pledge on behalf of the Depositors. The Bank of Barcelona discounted Bills and allowed interest on Deposits, but it did not issue notes, nor does it appear to have been acquainted with cheques. The Bank of Genoa, or as it was called the Bank of St. George, though its constitution was devised in 1345, was not established till 1407. Its operations for a couple of centuries cannot be characterized as Banking, for they were similar to those of the Bank of Venice, and like it, originated in the pecuniary exigencies of the State. The Rei)ublic borrowed from the citizens, consolidated the debt, and appointed eight " protectors," chosen annually by the stockholders, to manage it. However, in 1675, it appears to have extended its opera- tions and engaged in genuine Banking business. The Bank was pillaged by the Austrians when the city was taken by them in 1746, and in 1750 it closed its doors finally. The Bank of Amsterdam was founded in 1609 with the principal object of remedying the disadvantage and inex- o- Thc History and Progress of Banking. pedience arising from the circulation of the clipped foreign coins which circulated amongst the merchants. Its business was to purchase all worn and clipped gold and silver coins at their bullion value, and to give credit to the selling party for such value. On these transactions it charged a small com- mission, and the gold and silver purchased was re-coined. There was a State enactment, aimed at the evil of the de- fective coins, to the effect that all debts of 600 guilders (which was afterwards reduced to 300, equal to 25 guineas) should be paid in the money coined and issued by the Bank. At this period Amsterdam was a great commercial centre ; the Ex- change there was built in 1634. The Bank received moneys on Deposit, and declared that it had bullion in its coffers equi- \alent to the amount of deposits, as it avowedly lent no monej- and discounted no bills. But if these were its principles in the earlier days of the Bank, there was a departure later on, for when Amsterdam opened its gates to the French in 1795, it was ascertained that the Bank had lent a sum equivalent to one million sterling to the States of Friesland and Holland, and this discovery dissipated confidence, and wrought the ruin of the Bank of Amsterdam.* About twenty years later, in 18 14, the Bank of the Netherlands was established to fill the void. The Bank of Hamburg was established in 1619, on the .same basis as the Bank of Amsterdam, and it is still in existence. The other Banking establishments on the conti- nent, worthy to be classed with the National Banks, were the Bank of Rotterdam, founded in 1635 ; the Bank of Stockholm, which, according to the Hume and other authori- ties, was the first that invented Bank Notes in Europe, founded in 1688; the Bank of Copenhagen, in 1736; the Bank ••' Vide Smith's "Wealth of Nations," book iv., chap. 3. The History and Progress of Banking. 33 of Berlin, in 1765; the Caisse D'Escompte (France), in 1776 ; the Bank of St. Petersburgh, in 1786 ; and the Bank of France, which was instituted in 1803, by laws which were approved in 1808, and which, as Napoleon said, was established with the object of providing money at all times at 4 per cent, interest. Since the Joint Stock principle has become understood on the continent, many other Banks have been established under it, which have met with varying success. III. EARLY ENGLISH COINAGE. Amongst the Ancient Britons, as amongst all primitive nations, metals were used as values, — the values being de- termined by weight ; and we learn from a passage in Caesar, that iron in the form of bars was used as money in England B.C. 55. Long previous to this period, however, there appears to have been a coinage in Britain, which is said to have origin- ated about the year 200 b.c., in Kent, and to have spread thence, as far as Devonshire on the one hand and Oxford on the other. At the time of the Roman invasion the Britons had in use silver and brass coins, shaped oblong, square and round. Some of these coins are lettered, one series bearing the letters CVN, which is taken as being intended for Cunobelinus — the Cymbeline of Shakespere — who was King of Britain in the year 4 a.d. Some of the coins of this period seem to be co])ies of the staters of Philip of Macedon, having the chariot and horses on one side, and the head of Apollo on the other — evidently the coinage imposed by the Roman Conquerors. But rude and unintelligible as the majority of the early British coins are, we find, nevertheless, that the race was sufficiently advanced to have acquired the art of manufacturing spurious money. Forgery was a profession amongst the semi-civilized inhabitants, and base metal coins ]>lated with silver, and even The History and Progress of Banking. 35 with gold, have been found. A coinage in tin was struck at a very early period, but immediately relinquished for obvious reasons, though it was re-introduced for a moment by Charles II. The Romans established a Mint at Camulodunum— now Colchester — and it seems that Constantine had a Mint in London. With the departure of the Romans the coinage re- lapsed into its former barbarous condition. The earliest coins we have of the post Roman period are the skeatta of silver and the styca of copper. These appear to have belonged to Northumbria, and are of the rudest description. The silver pennies superseded the skeatta^ and these seem to have been the sole coin in circulation till the reign of Edward III. The coinage, inartistic and debased as it was, was nevertheless under regal authority. Athelstan enacted regulations for the Govern- ment of the Mint and the coinage in 928. In the Anglo-Saxon and early Anglo-Norman Mints the coins were devised and made by the " moneyers," who were officers of the Mint, and who were supervised by an authority called the " reeve." Upon the introduction of Christianity rude attempts at a cross are im- pressed on the coins. The grotesquely designed pennies of King Alfred had a monogram of London, where they were minted, and on the reverse an absurd-looking head supposed to have been his portrait. The portrait was soon abandoned, apparently, for on subsequent pieces the cross re-appears now Avithin a circle. The Cross with three pills at each angle con- tinued to be the design for many centuries, and the coinage made no advance toward artistic beauty till the reign of Edward III. After the conquest, the Royal Mint in London was placed under the jurisdiction of the Court of Exchequer, and the officers and master were sworn into their offices before the Barons of that Court. Henry I. established a Mint at Winchester, in 1 125. But at this period, besides the Royal Mint, there were o 6 The History and Progress of Banking. several other coin manufactories. The Barons and Bishops coined money in Stephen's time, and the privilege of issuing coins was sometimes accorded to the higher monasteries. In King's John's reign there was an episcopal Mint in Chichester. In Henry II.'s reign the moneyers were exempted from taxes, and various concessions were made to them by subsequent monarchs. Coin was made sterling in 1216, and before this time, as Stow informs us, rents were mostly paid in kind, and money was only to be found in the coffers of the Barons ; and he further says that the Royal Mint was kept at this time by Italians, as the English were ignorant of the art of coining. The first English gold coins on reliable record were struck by Henry III. in 1257, and the first entry of gold being brought to the Mint for coinage is under the date 1343 (Edward IIL). To Edward the credit is due of having reformed the coinage and advanced it artistically to a degree of excellence even be- yond that of contemporary States. He struck in addition to pennies, silver halfpennies, farthings, groats, and half groats. On his gi-oats first appeared the legend, "Dei Gratia," and "Rex " Francise," and the motto, " Posui Deum adjutorem meum," which latter continued on the coinages till the reign of Richard IIL Under this Edward's reign gold Florins, six shilling pieces, nobles, and half and quarter nobles were introduced. The noble was value for six and eight pence, and it was this coin that fixed the lawyer's fee, which is still unchanged. The noble had on the obverse a beautifully designed representation of the king in a ship, bearing a shield, upon which the arms of England and France are quartered, and having his sword in his right hand, and on the reverse a cross within an eight-arched circle, and a lion with a crown in each angle. Edward IV. added much to the coinage, both to its utility and its ornate character. In Henry VIII. 's reign the coinage suffered, and became debased The History and Progress of Banking. 37 in value and execution. On his coins the title " Hibernise *' Rex " first appears ; his predecessors had styled themselves " Dominus Hiberniae" only. The coinage was reformed by Edward VI., who coined crowns and half-crowns (1547-53), iind by Elizabeth, who also was a reformer, and who caused all the base coin which was in circulation to be called in and genuine money issued ; but the standard of artistic excellence is not maintained in these reigns. In Elizabeth's reign the mill and screw were introduced, as an improvement on the hammer and punch of former reigns, and her coins are therefore more regularly executed. Under the Stuarts, clipping was a general ])ractice, and debased spurious money was largely circulated, all of which was called in by William III., when the expenses of a new coinage (^.^i, 200,000) were raised by a house duty. The coins of the Stuarts had designs of great variety. James I., on his shillings and minor silver coins, is represented by an armed bust, crowned. On his larger pieces he is on horseback ; and in his reign the harp of Ireland is first quartered as the arms of that kingdom, with the motto, " Quos Deus conjunxit " nemo separet." In his reign also the first copper royal coinage since the Saxon styca was struck. Copper farthings (with a harp on the reverse) were coined for England and Ireland in common. Charles I. coined silver twenty-shilling pieces, a magnificent coin, with the king on horseback represented upon it. In this reign guineas were also first coined, their original value being twenty shillings. They were so called because made of gold brought from Guinea in Africa. The unroyal coins of Cromwell with the legends " The Commonwealth of " England," and "God with us," were succeeded by those bearing his laurelled bust and title of Protector, and on the reverse his own paternal coat of arms, with other designs. In Charles II. 's time the device of Britannia, taken from the Roman 2,S The History and Progress of Banking. British coins, appeared on the copper halfpennies, tlie face and figure of the female having been designed from those of Bar- bara Villiers, his mistress, afterwards Duchess of Cleveland. The same representation is on our modern copper coins. There was great scarcity of coins in this reign, and Evelyn tells us that the practice of clipping — a capital offence, for which many then were hanged — was carried on to such a degree that the coins were not worth one half the amount they pur- ported to represent. In William and Mary's coins the profiles are one over the other, whereas in Philip and Mary's the faces were opposite to each other. In George III.'s reign copper pennies were first coined, and the improvements made in the coinage in his time and since have been of a very doubtful character. The legend " one shilling " is as poor and paltry a design on a coin as can be conceived. English and Irish money were assimilated in 1826. Sovereigns were first coined by the Mint in 1489; shillings in 1504; crowns and half-crowns in 1553 ; one guinea, two guinea, and five guinea pieces in 1664; quarter guinea, in 1716 ; gold seven shilling pieces in 1797 ; silver florins in 1849 ; fourpenny pieces in 1836; and threepennies 1861. The first large copper coinage was made in 1640 to supersede the private leaden tokens in circulation. The amount of current coin of the realm was, in 1 711, valued at ^12,000,000, and in 1853 at ^60,000,000. From the year 1840 to 1878 inclusive, the re- spective amounts of gold, silver and copper coined at the Enghsh Royal Mint were :— Gold ^181,453,645; silver, ^15,216,770; and copper, ^,^1, 630,886 ; making a total of ^198,301,301, or an annual average of ^5,084,648. IV. EARLY LONDON BANKERS. For the early history of Banking in London, we are largel)- indebted to the valuable researches of Mr. Hilton Price, whose most interesting work on the subject, the " Handbook of " London Bankers," has been our authority for many of the following particulars. Mr. Price finds the precursor of the gold- smiths, who developed into Bankers, in one Otto, a Goldsmith, who is quoted in Doomsday Book as holding lands in Essex and Suffolk, and whose lineal descendants continued in the trade for over a century. In the reign of Henry I., Leofstan was at the head of the profession, and a namesake, and presum- ably a descendant, was a Goldsmith and Mayor of London for twenty-four years, from 1189 to 12 13, from which it maybe premised that the trade of Goldsmith was an honourable and enriching pursuit. But these and their successors were not Bankers in any sense of the word. The bankers of the period were Jews, descendants of those brought over by William the Norman. These were not money-changers only; they intro- duced Bills of Exchange and lent out, at the customary usury, large sums to the nobility on the security of landed estates. They accumulated immense wealth by their conscientious ad- herence to the law of Moses, to " take usury from the stranger." Their wealth, real and reputed, made them conspicuous objects 40 The History and Progress of Banking. of persecution. Every Sovereign ill-treated, imprisoned and robbed them. They Avere massacred wholesale on the corona- tion-day of Richard I., at the instigation of the priests; their eyes were torn out and their teeth drawn, and they were cruelly butchered by King John — all in order to extract their treasures from them. But they were supreme extortioners. Stow tells us of a Jew who had lent a Christian twenty shillings, and because he en- forced the payment of a higher interest than 2S. a week there- upon — a modest 400 per cent. — he and seven hundred of his race were slain in London. A Jew was disqualified from en- joying a freehold, and every Jew who was a money-lender at interest was compelled to wear a plate on his breast announcing that he was a usurer ; and failing compliance with this regula- tion he was to quit the Kingdom. The Jews settled in Oxford and extorted 45 per cent, from the students in the colleges, till their trade was repressed by the King (Henry III.). In 1278, two hundred and sixty-seven Jews were hanged and quartered, having been accused of clipping the coin, and the persecution culminated in the year 1290, when Edward I. robbed them of all their hoardings, and banished them, to the number of 16,511 persons, out of the Kingdom. The Lombards, who had been sent over by Pope Gregory IX. some fifty years previously, then became the only Bankers in England. They combined the three lucrative trades of Banker, Pawnbroker,* and Goldsmith, and they settled in Lombard Street. But they do not seem to have been regarded with much favour, and in the reign of Elizabeth their practices had * Their sign Wcos the Three Golden Balls, which is still used by modern pawnbrokers. Our word "lumber" is derived from their name. The room where they kept the goods pledged or pawned with them was known iis the " Lombard Room " — corrupted into lumber-room. The History and Prog7'ess of Banking. 4[ become so detestable and pernicious that they also were banished the Kingdom. The trade of Goldsmith gradually increased in importance and respectability, so much so that Henry VIII. condescended to borrow ;^3oo from Robert Amades — a remarkably constitu- tional course for Henry VIII. to pursue under the circum- stances. In Elizabeth's reign there were 107 enrolled Gold- smiths, of whom 76 resided in " the Chepe," and 31 in " Lum- " berde street," but these seem to have been no more than dealers in bullion and money changers, traders whom we would now term jewellers — and not to have any claim to be considered Bankers. They used to deposit their superfluous cash and bullion in the Tower for safety, until the saintly Charles I., in a moment of need, seized what was lying there, to the amount of ^200,000, and having thus robbed them, commanded them by his Royal authority to consider him their debtor. The creditors Avere, however, ultimately paid, but they trusted the King no longer, and kept their cash in their own houses. Under Cromwell, Banking considerably developed. In fact. Banking in England, as we regard the term, may be said to have commenced under the Protectorate. Then the systems of deposits of money with the Goldsmiths arose, and for those deposits, receipts, or "cash notes," which were also called " Goldsmith's notes," were issued. These were payable on demand, bore interest, and were transferable. A London Goldsmith-Banker, Mr. Samuel Lamb, recommended Crom- well, in 1656, to establish a national public Bank, and re- peated his recommendation in 1658, but his advice was not acted on. Noblemen, country gentlemen, and merchants, learned to deposit their money with these Goldsmiths, and it was received either payable at call or after a certain notice given. There was 4 42 The History and Progress of Banking: no fixed rate of interest allowed, the interest being regulated b}' the length of the period for which it would remain deposited, and the rate and period were a matter of agreement between banker and customer. The practice arose of the depositor drawing jiortion of his money b}- a written order on demand, and the making of such orders constituted the account a "running account," or, as we now term it, a current account, and the orders were the forerunners of our cheques. Then it became a recognised business of the Goldsmiths to lend out on security at interest — usually at a high rate — the sums so de- posited ; and though the security was sometimes of a nature which made the Goldsmith no more than a Pawnbroker, never- theless, the pawnbroking instances are the exception.* Perhaps it was the unsettled state of the country and the fact that the securities were rather unsatisfactory (as the tenure of land was unsteady during these periods of civil commotion), or perhaps it was owing to Royal pressure to hold the funds available for Royal use, but it seems that the profitable private discounting by the Goldsmith-Bankers was curtailed. For we find in Charles the Second's reign that they were in the habit of making advances to the Exchequer, at such a low rate as 5, or perhaps 6, per cent. Charles lived in a chronic .state of impecuniosity, and in 167 1, the pressure for money for the Royal pocket was peremptory. He hesitated to apply to the faithful Commons, fearing that a further demand might be as a last straw and break their patience and forbearance. So he counselled with his ministers as to the best means of obtaining one million and a half sterling, without the humiliation of again applying to Parliament, promising the Lord Treasurership — a * For a veiy interesting account of the doings of money-lenders in London at this period, see an article on "Usurers of the Seventeenth Century," in Disraeli s " Curiosities of Literature." The History and Pi'ogress of Banking. 43 post of much honour and emolument — to the successful in- ventor of a feasible scheme. At this time the Goldsmiths had money deposited in the Exchequer to the amount of ^j^*!, 328,526, on which they received some 5 or 6 per cent, interest, and the device which was to supply the King's needs was, plainly, to rob the Exchequer of this amount. The scheme was the invention of Lord Ashley, but alter tulii ho7iorein. He unguardedly confided his patent plan to Sir Thomas Clifford, who had been made Comptroller of the House- hold on the King's Restoration. Clifford is described by Evelyn as " a bold young gentleman of a small fortune in Devon, " but advanced by Lord ArUngton, to the great astonishment of "all the Court." He unfolded it to the King, who approved of it readily. " 'Odds fish," he said, " I will be as good as my " word to thee." And accordingly the Exchequer was closed,, and payments out of it were suspended by the Royal authorit}" on the 2nd January, 1672. Nearly all the Bankers were beg- gared, their customers were ruined, and Sir Thomas CliiTbrd obtained a peerage — Lord Clifford of Chudleigh — and his Lord High Treasurership. The following are the names of the Bankers thus plundered and the amounts they lost : Banker-Goldsmiths plundered by Charles H ^416,724 13 295,994 16 Sir Robert Vyner Edmund Backwell Gilbert Whitehall Joseph Horneby George Snell Bernard Turner Jeremiah Snow John Colville Robert Welstead 248,866 3 22,548 5 10,894 14 16,275 9 59,780 18 85,832 17 44 The History and Progress of Banking. Thomas Rowe 17,615 17 8 John Portman 76,760 18 2 John Collier 1,784 6 4 Others 64,139 7 3^ The total amount of this plunder was ^1,328,526. The King said he intended to re-open the Exchequer in a year, but it was not re-opened, and no payment of principal or interest was made to the Bankers, However, in 1677, ^ Royal Covenant was made by letters patent to pay interest at the rate of 6 per cent, to them, which covenant Avas fulfilled up to 1 6S3, when it ceased. An Act was passed in 1699, reducing the aggregate claim of the Bankers to ^664,263, i.e., half the debt, and charging the hereditary revenue of excise with interest at the rate of 3 per cent, after 25th December, 1705. This Act was the result of a suit against the Crown, wherein a verdict was given in favour of the Bankers and against the Crown, but which verdict was reversed by the Lord Chancellor Somers. Sir Robert Vyner (or Viner) who heads the foregoing list, has found a place in history. He was the son of a Goldsmith, Sir Thomas Vyner, who was Lord Mayor of London in 1654, was knighted by Cromwell and created a Baronet by King Charles. He had his shop in Lombard Street, on the site of the present Post Office. To Sir Thomas Yiner, Robert Viner, and Daniel BelUngham, Esquires, Goldsmiths, King Charles in 1662 granted a patent for 21 years, to coin silver money for Ireland, from a halfpenny to a fourpenny. This Daniel Bellingham (who was afterwards created a Baronet, and was the ancestor of the Castle Bellingham family), was the first Chief ISTagistrate of Dublin who was honoured with the title of Lord ]\Liyor. Sir Robert, the son of Sir Thomas Vyner, was at the head of his profession ; he made the crown for Charles H. The History and Progress of Banking. 45 at a cost of ^21,000. Like his father, he was Lord Mayor, and the following well-known story related by Grammont, of an incident of the banquet given by him to Charles, at the Guild- hall, has immortalized him. " Sir Robert was a very loyal man, " and if you will allow the expression, very fond of his Sove- " reign ; but Avhat with the joy he felt at heart for the honour " done him by his Prince, and the warmth he was in with con- " tinual toasting healths to the Royal Family, his lordship grew " a little too fond of his Majesty, and entered into a familiarity, " not altogether graceful in so public a place. The King under- ■" stood very well how to extricate himself in all such difficulties, " and, with a hint to the company to avoid ceremony, stole off " and made towards his coach, which stood ready for him in " Guildhall yard. But the Mayor liked his company so well, " and was grown so intimate, that he pursued him hastily, and " catching him fast by the hand, cried out, with a vehement " oath and accent, ' Sire, you shall stay and take t'other bottle !' " The airy monarch looked kindly at him over his shoulder, " and with a smile and a graceful air, repeated this line of the " old song : " ' He that's drunk is as great as a King,' " and immediately returned back and complied with his host's " invitation." Pepys kept his account at Vyner's, and from the Diary we learn that Vyner allowed interest at the rate of 7 per cent, for Pepys left " clear in his hands to call for when I pleased," two thousand pounds, and he received at the end of three months interest amounting to ;^35. Pepys visited him at his mansion at Swakeley, " a very jDleasant place," and there saw the black boy " that had died of a consumption, and being dead, he (Sir 46 The History and Progress of Banking. " Robert) caused him to be dried in an oven, and lies there "entire in a box." Pepys there saw Lady Vyner, who had brought her husband "near ^^100,000, and no man now Uves " in England in greater plenty, and he commands both King "and Council, with his credit he gives them." — This was in 1665, many years before the jjlundering. Vyner was also an acquaintance of Evelyn's. Edward Backwell, or Bakewell, was an Alderman of the city, and had carried on his business of banker and goldsmith for some years at the Sign of the Unicorn in Lombard Street. ]\Ir. Hilton Price identifies the locality as the present No. 69 in the street, and informs us, from an inspection of the Alderman's books that the rate charged varied between 2\ and 10 per cent, but that it was usually 6 per cent. With Backwell Royalty banked. The King, the Queen's mother, the Duke of York, the Duke of Monmouth, the Countess of Castlemaine and many of the nobility, kept their accounts with him. In 1665, the rates of interest allowed by him were : at call, 3! per cent. ; at 10 days' notice, 4 per cent. ; at 14 days' notice, 5 per cent. ; at 20 days' notice, 6 per cent. In the following year he raised his rates by i per cent. He is described by Granger as "a banker of great ability, industry, integrity, and very exten- " sive credit. With such qualifications he, in a trading nation, " would, in the natural event of things, have made a fortune, " except in the days of Charles II., when the laws were overborne " by perfidy, violence, and rapacity." Backwell was a Jeweller and Silversmith as well as Banker. He manufactured Prince Rupert's plate, which " with fashion and engraving " cost 7^960 3s. 9d., and he made silver candlesticks for Pepys. Pepys knew him well, — liked his conversation, and sometimes had a glass of " Lambeth ale " with him. One of the old gossip's allusions to him is worth repeating : " This evening, coniing The History and Progress of Banking. 47 " home, we overtook Alderman Backwell's coach and liis lad)-, " and followed them to their house and there made them the first " visit, where they received us with extraordinary civility and " owning the obligation. But I do, contrary to my expectation, " find her something a i)roud and vain-glorious woman in telling " the number of her servants and family and expenses. He is " also so. But he was ever of that strain. But here he showed " me the model of his houses that he is going to build in Corn- " hill and Lombard Street ; but he hath purchased so much there '' that it looks like a little town, and must have cost him a great '' deal of money." Such was a private banker a few centuries ago. Backwell retired to Holland after the Plundering, and there died in 1679. Of Gilbert Whitehall we know little or nothing. Joseph Horneby kept his place of business at the Sign of tlie Star, in Lombard Street, and notwithstanding his heavy loss, continued his establishment. George Snell's house was at the Sign of the Fox, in Lom- bard Street, and Bernard Turner's, at the Sign of the Fleece, in the same street. The latter continued business with one Samuel Tookie in partnership. Jeremiah Snow was at the Golden Anchor in the Strand at the time of the Royal robbery, but previously, during the Com- monwealth, he had lived in Lombard Street. The closing of the Exchequer was not his first misfortune, aiJ})arently. In the London Gazette of 28th February, 1666, there is the following curious advertisement : — " Whereas, Jeremiah Snow, late of " Lumbard Street, Goldsmith, now living in Broad Street, did " owe divers persons. Anno 1652, eight thousand three hundred " pounds in full, and gave him discharges absolute, (which was " occasioned by the failing of two French merchants, who were, " at the time, indebted to him three thousand four hundred 48 The History and Progress of Banking. " pounds, but never paid him a fifth part, as by the Testimonials " remaining with the Publick notary it may appear), since which " time it hath pleased God to bless his endeavours with some " small Estate ; he, therefore, in gratitude and justice, invites " them to receive the full remainder of their principal money, " excepting such as by his Oath he shall affirm to have j^aid in " part or in whole. And he declares this Publication is not for " vain-glory, (retribution in this kind being indispensable) nor to " get more credit, but because his friends have adjudged it con- " veniently necessary that his vindication might be as Publick, as- " then was the Scandal." He surely deserved a better fate than that with which Charles visited him. Some half-century later. Snow's Bank — then " neere Temple Bar " — attained to a con- siderable reputation for the wonderful sagacity of Thomas Snow in connection with the South Sea Bubble. A panegyrical epistle to him by Dean Swift, " occasioned by his buying and selling "the third South Sea subscriptions, taken in by the Directors at " 1000 per cent," is certainly very creditable to his solvency : " Disdain not, Snow, my humble verse to hear, " Stick thy lilack pen awhile behind thine ear. ■j:- -K- ■;:■ \- ♦ "When credit sank and commeixe gasping lay, " Thou stood'st ; no bill was sent unpaid away ; " When not a guinea chinked on Martin's boards " And Atwill's self was drained of all his hoards, " Thou stood'st — an Indian king in size and hue, " Thy unexhausted shop was our Peru." It is worthy of observation that this high spirit of probity and integrity did not continue to his successors. The bank founded by the upright Jeremiah Snow, became in the progress of a century, the Bank of Strahan, Paul and Bates, the noto- rious collapse of which, in 1856, and the prosecution of Sir The History and Progress of Banking. 49 John Dean Paul and the other partners, have not faded from the memory of the present generation. John Colville, or John Lyndsay, as we have seen the name in some returns — (owing to the fact that Colville's widow married John Lyndsay) — was in Lombard Street also. He was also a Silversmith, for Pepys got " a dozen silver salts " from him, and it is further recorded in the Diary, that his wife " is indeed one of the prettiest, modest black women that I ever saw ;" — and Pepys saw many. It was Colville's note for p^6oo that paid Pepys' sister's portion. He also was "building a very fine "house in Lombard Street" after the Fire. Of Robert Welstead, or Wealstead, we find no parti- culars, Thomas Rowe was at the "George," in Lombard Street. Of Portman and Collier, we have no information. Remembering how the foregoing houses were plundered, we are not surprised that none of them or their successors are to be found amongst the London private Bankers of to-day. But some of the existing Bankers were founded anterior to the Royal robbery. The present Banking House of Child and Co., Fleet Street, had its origin in the Goldsmith's establishment of John Wheeler in " Chepe," whose name is in the books of the Goldsmiths' Company, under the year 1559. His son John moved to Fleet Street, and when he died in 1660 the business was continued by 'William A\'heeler and his son William at the Sign of the "Marygolde," Thence it passed into the hands of their apprentices, Blanchard and Child, Child became Sir Francis Child — relinquished the Goldsmith's business, became a true Banker and "the Father of the Profession," and his descendants own the Bank at present. The offices were for generations beside and over Temple Bar, until its removal in 50 The History and Progress of Banking. 1877. The earlier device of the marigold on the cheque-forms of Messrs. Child, was succeeded by a view of Temple Bar, and now Temple Bar like the marigold is amongst the things of the l)ast. The following celebrated and historical persons kept their Banking accounts with Child and Co. : Oliver Cromwell ; Nell Gwynne ; Stillingfleet ; John Churchill the great Duke of Marlborough, and his Duchess, Sarah ; John Dryden ; King William III. and Queen Mary ; Harley, Earl of Oxford ; the Duke of Tyrconnell ; Archbishop Tenison, The house also possesses, amongst numerous other autographs of extreme interest, that of Dr. Titus Oates — his endorsement on a cheque of the Duke of Bolton. Again, the existing Bank of Messrs. Goslings and Sharpe boasts a respectable antiquity. As early as the year 1650 Henry Pinckney was a Goldsmith in Fleet Street, at the Sign of the Three Squirrels. He is described as " Major" Pinckney in a conveyance of 1667, when his property was being marked out in that year, after his house had been burned down in the great fire of 1666. Pinckney's business was subsequently, in 1693, carried on by a Mr. Chambers, and about the year 1745 it passed into the hands of Messrs. Gosling, who still conduct it, and on whose cheques is still retained the device of the Three Squirrels. Pinckney or Pinkney was an acquaintance ofPepys, for on the ist December, 1660, Pepys called upon him and " he took us to the taverne and gave us a pint of wine." The present Bank of Messrs. Hoare is unique in one respect — the business is to-day carried on by the lineal male descendants of James Hoare, or Hore, who in the year 1677 kept " running cashes " at the " Golden Bottle " in Cheapside, This Hoare was an eminent person ; he was Comptroller of the Mint in 1661, Clerk of the Coins in 1665, and subsequently Warden of the Mint. About 1 690 he removed from Cheapside The History and Progress of Bankmg. 5 1 to Fleet Street, where, ever since, the Bank has been conducted. The early sign of the house is still exhibited over the entrance door, and is retained on the cheques ; and in one place we read that it is a leathern bottle and not a golden one, and that the meaning implied by a leathern bottle is " that it is not easily broken." The Bank of Messrs. Martin and Co. was originally that of Charles Buncombe and Richard Kent, at the sign of the ( Grasshopper (a device of which still adorns their cheques) in Lombard Street. Kent had been established before Charles jjlundered the Exchequer, and Buncombe was an apprentice of Backwell's, and when the latter was ruined entered into partner- ship with Kent, and carried a good many of Backwell's cus- tomers to the new firm. The house evidently had a most successful career. From Evelyn's Biary we learn that in 1696 Buncombe, who a short time before had been but ' a mean goldsmith,' had recently " made a purchase at neere ^90,000," of the Buke of Buckingham's estate of Helmsley, in Yorkshire. '•' On Jan. 25th, 1697-8, Buncombe, then an M.P., was charged with making false endorsements on Exchequer Bills, and was committed to the Tower, where he was detained a close prisoner. He confessed his guilt and was expelled the House. A Bill was brought in in the Commons for a seizure of his estate, and the "punishment of C. Buncombe, Esq.," and was passed by 138 against 103 votes. The Lords, however, refused the Bill, and ordered his discharge from the Tower. On the 31st March the Commons recommitted him, but nothing further seems to have been done towards punishing him. He was knighted in 1 700. The present Earl of Feversham and Viscount * "And Helmsley, once proud Buckingham's delight, " Slides to a Scrivener or a City Knight." — Pope. 52 The History and Progress of Banking. Hclmsley is his descendant, and the estate is now called Dun- combe Park. When Duncombe relinquished the banking busi- ness it was carried on by Richard Smyth, from whom it passed to Messrs. Stone and Martin, and eventually to Messrs. Martin and Co. It is claimed for this Bank that it actually originated with Sir Richard Gresham, the " King's Exchanger " in the reign of Henry VIII., whose son was the celebrated Sir Thomas Gresham, of Elizabeth's reign, and who undoubtedly carried on his business of Goldsmith at the Grasshopper, in Lombard Street, where Messrs. Martin are now located. Messrs. Barnetts, Hoares, and Co., are the successors of Mr. Stokes or Stocks, who was Pepys' " own little Goldsmith," and who moved from Paternoster Row to the Black Horse in Lombard Street, where Humphrey Stocks was established in 1677. The business descended to John Bland and Son, who were the owners in 1740, and they were the immediate prede- cessors of Messrs. Barnetts, Hoares, and Co. Messrs. Coutts — who are now at the head of the private Bankers — are the successors of George Middleton, who was a Goldsmith at the Three Crowns, in St. Martin's Lane, in 1690, and whose business was subsequently moved to Durham Yard, in the Strand, on the site of which the present Banking House is built. The English Royal Family keep their accounts at Coutts', and during the French Monarchy, the French Kings also patronised this establishment. The foregoing are the private Bankers at present existing in London, who can trace a descent from the firms whom we find as Goldsmiths "keeping running Cashes" in the year 1677. A list of these is given in the " Litde London Director)'," re- published by Mr. J. C. Hotten, and is worth here reproducing : John Addis and Co., at the Sun, in Lumbard Street. TJie History and Progress of Banking. 53 John Bolitho and Mr. Wilson, at the Golden Lane, Lumbard Street. John Ballard, at the Unicorn, Lumbard Street. Job Bolton, at the Bolt and Tun,* Lumbard Street. Richardt Blanchard and Child, at the Marygold, Fleet Street. Thos. Cook and Nichs. Carey, at the Griffin, Exchange Alley. Mr. Cuthbert .... Cheapside. Air. Coggs, at the King's Head, Strand. Mr. Churchill .... Strand. Chas. Buncombe and Richd. Kent, at the Grasshopper, Lumbard Street. John Ewing and Ben. Norrington, at the Angel and Crown, Lumbard Street. Mr. East .... Strand. Thomas Fowles, at the Black Lion, Fleet Street. Joseph and Nathl. Hornboy, at the Star, Lumbard Street. John Hind and Thos. Garwood, over against the Exchange, Cornhill. Benjn. Hinton, at the Flower de Luce, Lumbard Street. James Heriot, at the Naked Boy, Fleet Street. James Hore, at the Golden Bottle, Fleet Street. James Johnson, at the Three Flower de Luces, Cheapside. Thos. Kiborne and Capill, at the King's Head, Lumbard Street. Mr. Kenton, at the King's Arms, Fleet Street. Mr. Ketch, at the Black Horse, Strand. Henry Lamb, at the Grapes, Lumbard Street. James Lapley, at the Three Cocks, Cheapside. John Mawson and Co., at the Golden Hind, Fleet Street. Henry Nelthorpe, at the Rose, Lumbard Street. * Possibly a pun on the name. t Should be Robert. 54 TJie History and Progress of Banking. Thos. Price, at the Goat, Lumbard Street. Peter Percefull and Steph. Evens, at the Black Boy, Lum- bard Street. Thomas Pardo, at the Golden Anchor, Lumbard Street. Thomas Ro\ve and Thomas Greene, at the George, Lumbard Street. Humph. Stocks, at the Black Horse, Lumbard Street. John Sweetaple, at the Black Moore's Head, Lumbard Street. John Snell, at the Fox, Lumbard Street. Michl. Shrimpshaw, at the Golden Lion, Fleet Street. Richd. Stayley .... Covent Garden. John Temple and John Scale, at the Three Tuns, Lumbard Street. John Thursby, at the Ball, Lumbard Street. Bar. Turner and Saml. Tookie, at the Fleece, Lumbard Street. Major John Wallis, at the Angell, Lumbard Street Peter Wade, at the Mermaid, Lumbard Street. Peter White and Churchill, at the Plough, Lumbard Street, Thomas White, at the Blew Anchor, Lumbard Street. Thomas "Williams, at the Crown, Lumbard Street. Robt. AVard and John Townley, at the Ram, Lumbard Street. An insight into the manner in which Bills of Exchange were negotiated and Banking conducted in the earlier years of the eighteenth century will be afforded by the following extracts from Swift's " Journal to Stella." Under date, Chelsea, 7th June, 171 1, he writes: "What an old bill (one for ;!^2oo) is that " you sent of Raymond's ! A bill upon one Murry of Chester, " which depends entirely not only upon Raymond's honesty " but his discretion ; and in money matters he is the last man " I would depend on. Why should Sir Alexander Cairnes in The History and Progress of Banking. 55 " London pay me a bill drawn by God knows who upon Murry " in Chester ? I was at Cairnes's and they can do no such " thing. I went among some friends who are merchants, and " I find the bill must be sent to Murry, accepted by him and " then returned back, and then Cairnes may accept or refuse it " as he pleases. Accordingly I gave the bill to Sir Thomas " Frankland, who has seYit it to Chester, and ordered the post- " master there to get it accepted and then send it back, and in " a day or two I shall have an answer. Raymond should have " written to Murry at the same time, to desire Sir Alexander " Cairnes to have answered such a bill if it come. But Cairnes's " clerks (himself was not at home) said that 'they had received " ' no notice of it, and could do nothing,' and advised me to "send it to Murry." On the 30th June, he writes thus: "I " believe my ;^2oo will be paid ; but that Sir Alexander " Cairnes is a scrupulous puppy. I left the bill with Mr. Strat- " ford, who is to have the money." And on the 9th July he writes : " I was to-day in the city and dined with Mr. Stratford, " who tells me Sir Alexander Cairnes makes difficulties about " paying my bill. To-morrow I shall have a positive answer. " That Cairnes is a shuffling scoundrel ; and several merchants " have told me so. What can one expect from a Scot and a " fanatick ?" Such was a Bill of Exchange experience of the great grim Dean. This Cairnes was "of Monaghan, Baronet." There is no mention of him in Mr. Hilton-Price's book, though Sheridan describes him as "an eminent banker." The following houses, which are the principal privajte Bank- ing firms at present doing business in London, were subse- quently established : — Glyn, Mills, and Co. — This house, which does the largest business of any London private Bank, was established about the year 1750, as Vere, Glyn and Hallifax, and a Glyn was 56 The History and Progress of Banking. always a chief partner in it. The present Lord Wolverton is the representative of the family and a senior partner in the firm. Barclay, Bevan and Co., commenced business very early in the i8th century, probably about 17 10, at the sign of the Black Spread Eagle in Lombard Street, in the names of Feame and Gould, subsequently Feame and Barclay. Drummond's Bank was founded about 17 12 by Andrew, a son of Sir John Drummond. When George III. quarrelled with Mr. Coutts because he advanced ;^i 00,000 to Sir Francis Burdett for the expenses of the celebrated Westminster Election, he removed his account to Drummond's ; but the Prince Regent returned to Coutts' (where the Royal Family have since banked) because Drummond declined further advances to his Royal Highness. All the partners are Drummonds. Fuller, Banbury, and Co. date from about 1735, when the Bank was established as Atkins, Honeywood and Fuller. Herries, Farquhar, and Co. was founded in 1770 by Robert Herries, who seceded from Coutts' Firm, and to him the honour belongs of having invented " circular notes" for Continental travelling purposes. Sir Walter Farquhar, Bart., is the present head of the Bank. Praeds' London Bank dates from 1803, the partners having previously been bankers at Truro for a considerable period. Mr. Praed, the poet, was a member of this Firm. Prescott, Grote, and Co. was established in 1766 under that title. Mr. George Grote, the historian, was one of the family whose name is in the Firm. Ransom, Bouverie, and Co. was originally founded in 1786 by jMr. Ransom and others. It absorbed Bouverie's Bank in 1856. Lord Byron kept his account at Ransom's, his friend Mr. Kinnaird being a part owner. Lord Kinnaird is head of the house at present. Robarts, Lubbock, and Co. was founded in 1772 by Sir William Lennon and others, and the title of the firm has experienced many mutations. The History and Progress of Banking. 57 Sir John Lubbock, Bart, M.P., whose name is identified with banking, and who is as eminent in the scientific as in the banking world, is a chief partner. Sir Samuel Scott, Bart., and Co. dates from 1825. Smith, Payne, and Smiths was, imder the name Smith and Payne, carrying on business in 1759. Mr. Smith had originally been established at Nottingham, where his grandfather founded, and his descendants still con- duct, a Banking House. Williams, Deacon, and Co., was originally Sir Charles Raymond, Bart, Williams and others, and was established about 1770. Cocks, Biddulph, and Co. dates from 1750, The London Private Bankers con- tinued to issue their own notes till near the end of the last century. Besides these, there are several other private banking firms in London, but we have made mention only of those more notable ones, whose names are familiar to every bank official in this country. The numerous houses, eminent and prosperous in their day, which have been absorbed by, or merged in, other establishments — which have ceased from choice, or stopped from misfortune — we have not referred to, as it is beyond the scope of this sketch. Those curious on these points should consult Mr. Hilton Price's admirable and trustworthy volume, where they may read the histories of the Banks of Hankey ; Jones, Loyd, and Co. ; Strahan, Paul, and Bates ; WiUis, Percival, and Co. ; Price and Co ; Olding's and Co. (where Samuel Rogers the poet, the friend of Byron and the society-father of Lord Beaconsfield, was a partner) ; and many others dead and for- gotten, or still flourishing with vario'us degrees of prosperity and various shares of business. The history of the London private banking firms stands out in strong contrast with those of the Edinburgh and Dublin ones. Several now transacting 5 58 The History and P^'ogress of BanJdn^. business in London, have been established over a century — some over two centuries ; whereas in Dublin, the oldest of the three private banks now existing (Ball and Co.) can show no greater antiquity than about 60 years ; and in Edinburgh a private banker is a thing of the past. V. THE BANK OF ENGLAND. In 1694 the Bank of England was established, having been projected in 1691 by a Scotch merchant, William Paterson, to relieve King William III. from the difficulties experienced in raising supplies to prosecute the war against France, The same year (1694) Paterson also promulgated his plan for the colonization of Darien, for which end a company was formed in 1695, and expeditions set sail. But this project was attended with disastrous results ; the colony had to surrender to the Spaniards, and Paterson narrowly escaped a death by famine and disease. His National Bank project was more successful. He, in conjunction with one Michael Godfrey, influenced forty London merchants to subscribe half a million sterling towards the sum of ^1,200,000, which was to be lent to the Govern- ment at 8 per cent, with a further allowance of ;^4,ooo a year for management, in consideration of the subscribers being incorporated into a bank with certain monopoly privileges. The scheme was violently opposed in Parliament, and also by the private bankers, but the Bill received the Royal assent on the 25th April, 1694, and the Bank obtained its Charter of Incorporation on the 27th July following. On the ist July, Evelyn writes : " The first great Banke for a fund of money "being now established by act of Parliament, was filled 5—2 6o The History and Pj^ogress of Banking. "and completed to the sum of ;^i 20,000, and put under the " Government of the most able and wealthy citizens of London. " All who adventured any sum had 4 per cent, so long as it lay " in the Bank, and had power either to take it out at pleasure *' or to transfer it." The Charter was first granted for eleven years, but it has since been renewed from time to time down to 1844, when Peel's Bank Charter Act renewed it for the usual eleven years, and longer, " if the debt due from the "public to the Bank, ;^i 1,015,100, with interest, be not paid "after due notice." The Bank commenced its business on ist January, 1695, at the Grocers' Hall in the Poultry* — Sir John Houblon being the first Governor and Michael Godfrey the first Deputy-Governor. Houblon was " a French merchant, whose *' father had fled out of Flanders on the persecution of the Duke " of Alva, and who had his house furnished au Prince, and gave " splendid entertainments." At the time of its founding it issued notes for j[^2o and upwards,t and discounted bills at rates vary- ing from 4I to 6 per cent. In 1696 there was a run on the Bank which caused its temporary suspension, when its notes * Dickens' Dictionary of London states that " the business of the Bank " was originally carried on in the Mercer's Hall ; thence it was removed to " the Grocers' Hall ; and thence again to the buildings at the back of the "present Court towards Threadneedle Street, the existing not very satis- " factory pile being the work of .Sir John Soane half a century later." f In the "Bankers' Magazine" for March, 1S45, " R. W. D." writes as follows : — "A gentleman near Aylesbury, it is said, has in his posses- "sion a Bank of England note for 6d. (sixpence) issued in the year 1700, "of which the following is an exact copy : — No. 105. I promise to pay T. Caddel or bearer, on demand, the summe of sixpence. London, Sth day of May, 1700, — 6d. For the Governor and Company of the Bank of England. John Wage." TJic History and Progress of Banking. 6i were at 20 per cent, discount. The capital was then increased by about a milUon, to ^^2, 201, 171 los. In 1710 its capital was further increased to ^5,559,995 los. In 1734 it moved from the Poultry to Threadneedle Street, the present building, which stands in four j^arishes, and is reared on the site of Sir John Houblon's house and many other buildings, including the Church of St. Christopher-le-Stocks, the burial ground* of which is now " the Garden " of the Bank, and is known to every visitor to London. The first erection comprised what con- stitutes the present centre, with the courtyard, hall, and Bullion Court. In 1770 the eastern wing was added ; and in 1804 the western wing, with the Lothbury front was completed- In 1738, the Bank invented and issued Bank Post Bills ; in 1759 it issued f^\o notes ; in 1793 ;^5 notes ; in 1797 J[^x and f^2 notes ; but it relinquished the issue of all notes under ^5 in 1844. In 1826 and 1827, acting under Government advice, it opened its few country branches, and in 1856, its Burlington Gardens Branch. In 17 18 its notes in circulation amounted to ^1,829,930; in 1800, to ;,^i5,45o,ooo. The Charter originally stipulated a payment by the Govern- ment on the amount lent it at the rate of 8 per cent, but at each renewal the Government used the opportunity to reduce the rate, or the Bank took advantage of the Government, and to secure its Charter offered advances at a lower rate, and some- times free of interest. In this way the debt, which was ^1,200,000, increased: in 1708 it stood at ^3,375,000; in 1781 at ^11,686,000; in 1816 at ^14,686,000. Upon the renewal of the Charter in 1833, the Act (3 & 4 William IV., c. 98) provided that the Government should repay one-fourth part of the debt due to the Bank, and it now stands at ^11,0 15,000. * In this burial ground was buried, in the last century, a clerk of the Bank named Jenkins, who was six feet and a half in length, and was in- terred here to save the corpse from the Resurrectionists. 62 TJie History and Progress of Banking. The Bank had certain privileges conferred upon it at the time of its formation, some of which have since been rescinded and some of which are still enjoyed. In 1708 an Act was l)assed forbidding the formation in England or Wales of a Bank having more than six partners, for the issue of notes payable on demand. This was partially repealed in 1826, the restriction then being made to apply only to Banks within a sixty-five mile radius of London. The Bank of England is prohibited from engaging in any commercial undertaking — it must adhere rigidly to its legitimate business of " buying or selling coin, bullion, and bills of Ex- change." It keeps current accounts, but allows no over-drafts. It receives money on deposit, but allows no interest. By the first Charter it was permitted to issue notes to the extent of its then capital, ;^ 1,200,000, and by the Bank Act of 1844, the Issue Department — which is separate and distinct from the Banking Department — could issue to the amountof ;^i4,ooo,ooo against certain securities, of which the Government debt of ^11,015,000 is the chief; and no notes can be issued over and above this ;^i4,ooo,ooo,* except against coin and bullion held by the Bank. The Banking Department was separated from the Issue Department in 1844, the object being to prevent a note issue beyond a certain amount, unless against gold coin held, so that a mixed currency of gold and notes should expand and contract in unison, and thus mitigate financial convul- sions. This idea was based on the assumption that the Bank could issue its notes, and get them into circulation to any amount, that excessive issue meant increased currency and in- creased prices, and ultimately a foreign drain of gold — a theory not supported by experience. The Bank of England has sometimes been in difficulties. It failed in 1696, and in its earlier years it was subjected to * Exclusive of a small addition subsequently referred to. The History and Progress of Banking. 6 o many runs — some organized by the jealous private bankers ; some the result of political causes. The Rebellion of 1745 caused a serious run, during which the Bank notes were re- deemed in silver. In 1797 the jianic caused by the expecta- tion of a French invasion was so great that an Order in Council was issued to protect the Bank. By this order the Bank was prohibited from paying its notes in gold till Parliament had spoken on the subject, and Parliament continued the protec- tion till six months after the signature of a definite treaty of peace between the nations. In i8or, owing to over-issue, the notes of the Bank were at a discount of 10 per cent. In 18 10 they sunk to a discount of 15 per cent., and in 1824 to 25 per cent, from the same cause and sundry disturb' ing anticipations. In 1825, during the great panic which brought down 770 Banks throughout the Kingdom, the Bank found extrication from the difficulties caused thereby in the issue of some ^^i notes, which were found in an old chest, the existence of which had been forgotten, but which was happily discovered at an appropriate time. In 1847, during the panic which arose from the railway mania, the restriction on the issue was suspended by Lord John Russell, but the favour was not used. In 1857, during the panic caused by the American failures, Lord Palmerston sanctioned an addition to the authorised issue, and ^200,000 over the limit were issued. In the panic of 1866 the Bank Act was also suspended. If any country Bank of issue should cease to issue notes, the Bank of England may apply, and will be authorised on such application by an Order in Council, to increase its issue by two-thirds of the authorised issue thus discontinued, but the j^rofits of the increased issue do not belong to the Bank but to the Government. In this way the Bank's issue was, in 1857, increased by ^475,000, and now it can issue, against securities allocated for the purpose, notes to the amount of^i4,475,ooo ; 64 The History and Progress of Banking. but for any amount in excess of this, gold and silver must be held in accordance with the Act of 1844. Bank of England notes are a legal tender in England, except if tendered by the Bank itself The Issue department in the Bank is distinct from the Banking Department, and all the notes issued by the Issue Department must necessarily be either in the Bank- ing Department or in the hands of the public. The amount of those in the Banking Department is known as the " Reserve," and the amount of those in the hands of the public is known as the "Active Circulation." The "Reserve" is the basis upon which the variations of the Bank rate are regulated ; if it be low the rate is increased, and if large the rate is lowered. It increases as the amount of circulation from the Issue Depart- ment increases, and diminishes in sympathy with diminished or restricted out-put. For the ;^ 14,000,000 which the Bank issues by authority, and which represents the sum lent to the Government, it receives interest at the rate of 3 per cent. But this is not clear profit, as it has to pay Government ^180,000 a year as a set-off for its privileges and exemption from stamp duty ; and the cost of production and management of the circulation is estimated at about ;;^i 15,000 a year. Thus the profit on the issue is about ^125,000 a year only. An additional source of profit is the purchase of gold bullion, upon which it clears iM. per ounce. As the Bank allows no interest on Deposit Receipts or on Current Accounts, and permits no over-draft, it has also means of profit which other Banks do not possess. It did not open any branches till 1826; at present it has a dozen offices. There are twent)--four directors who must each hold ;^2,ooo of the stock of the Company ; a Deputy-Governor, who must hold ^3,000 ; and a Governor, who must hold p^4,ooo. An anomalous and remarkable custom prevails whereby Professional Bankers are excluded from the Board, TJie History and Progress of Banking. 65 which is solely composed of eminent merchants ; a custom which, as Mr. Dunning Macleod observes, is indefensible and unsupportable in theory and is fraught with errors in practice. Twelve Directors and the Governor or Deputy-Governor are necessary to form a court, and they meet each Thursday. The Bank of England differs from other Banking establishments in having the management of the Public Debt, upon which it jnys the dividends : in holding the Government Deposits and making advances to the Government : in aiding in the collec- tion of the Revenue, and in being the Banker of all the London Banks. For the management of the Public Debt it receives about ;^ 2 5 0,000 a year, of which about half covers the actual charges in connection therewith. The following, which is the account for the week ending 13th July, 1881, will show the position of this great concern : Issue Department. Debit. Notes Issued ^41,239,015 ;^4i, 239,015 Credit. Government Debt ...;^i 1,015, 100 Other Securities 4,734,900 Gold Coin and Bullion 25,489,0x5 ^41,239,015 Banking Department. Debit. Credit. Proprietors' Capital ...^14,553,000 Government Securities ^16,271,339 Rest 3,326,858 Other Securities 20,195,229 Public Deposits (includ- Notes 13,978,645 ing Exchequer, Sav- Gold and Silver Coin 1,164,728 ings Banks, Commis- sioners of National Debt and Dividend Acts) 4.754,329 Other Deposits 28,716,904 Seven days and other Bills 258,850 ;^5i,6o9,94i ^51,609,941 66 The History and Progress of Banking. The dividend paid by the Bank of England, in 1694, was 8 per cent. ; it rose as high as 9, and fell as low as 4^ (1753), during the i8th century. In 1807, 10 per cent, was paid and maintained till 1822. The present dividend is at the rate of <)\ per cent, per annum. There is one curious circumstance in the History of the Bank of England of which mention has been made — its having stopped payment in 1696. This was owing chiefly to the failure of the National Land Bank, which was projected by a Dr. Chamberlain, and established by Act of Parliament in that year (1696), with the object of advancing money on the security of unencumbered freehold estates. This project, though supported by Lord Sunderland, Harley, and the Tory Ministers, and patronised by the King, who subscribed ;^5,ooo to it, never made any progress. Its capital was not subscribed for, but its rivalry of the Bank of England was of such import, that when it failed the Bank of England stopped payment and the notes fell to a heavy discount. A contemporary fly-sheet announces, " the trial and condemnation of the Land Bank at " Exeter Change for murdering the Bank of England at " Grocer's Hall :" and another gives an epitaph : " Here lies " the body of the Bank of England, who was born in the year "1694 and died 5th May, 1696, in the third year of its age." A complete and most interesting " History of the Bank of " England " has been written by Mr. John Francis, and a perusal of it will amply repay the reader. VI. ENGLISH PRIVATE AND JOINT STOCK BANKS. Before the passing of the Act of 1826, English Banking was confined to the Bank of England, which had the monopoly of issuing notes within a radius of 65 miles ; and to the private Banks scattered extensively over the country. The oldest country Bank is stated in some works to have been Wood's Bank in Gloucester, which was founded in 17 16, but the present Banking House of Samuel Smith and Co., of Not- tingham, claims to have been established so far back as 1688. The origin and history of this veteran establishment is plea- santly told in Mr. F. Martin's book — " Stories of Banks and Bankers " — and therein we learn that it was a grandson of the founder who entered into partnership with Payne, of London, in 1759, and established the eminent firm of Smith, Payne & Co. The History of the English Country Private Banks of the last century that have failed or disappeared, has yet to be written ; but there are at present several establishments which were formed over a century ago, now carrying on business and enjoying valuable connections. Alexanders and Co., of Ipswich and elsewhere, dates from 1744 ;* Beckett and Co., of Leeds, from 1750; Miles, Cave, Baillie and Co., of * It was at the Woodbridge branch of Alexander's Banls, that Bernard Barton, the poet, was a clerk from 1806 till near his death. 68 The History and Progress of Banking. Bristol, from 1750 also; Pease's, of Hull, from 1754 ; Gar- fit and Co., of Boston, from 1755; Wright and Co., of Nottingham, from 1759. The majority of the English private Banks at present existing were founded late in the eighteenth, and early in the present century. Few have been established during the past fifty years ; for the rapid spread of Joint Stock Banks, founded in accordance with the Act of 1826, dis- couraged, if it did not render impracticable, the formation of new private Banks, which could not, unless in exceptional cases, succeed in creating a business, in seducing it from the older private Banks, or in obtaining it in preference to the Joint Stock Banks. The old private Banks could not have more than six partners, but the restriction does not seem to have been an obstacle to the formation of such establishments. In 1792, it is said there were over 350 private Banks in England, of which more than half failed in the panic of 1792-3, consequent on the French War ; but subsequently they increased with amazing rapidity. In 1809 there were no fewer than 782; in 1814, their number was 940 ; but the great panic which shook the country in the winter of 1825 made great havoc amongst them. At that time 770 Banks of all kinds stopped payment, and the following year (1826) the Joint Stock Act was passed. A majority of the private Bankers issued their own Bank notes ; and the Act of 1844 regulated the future issues of these Banks as it did of the public Joint Stock Banks. At present (1881) the number of private Banks in England and Wales is 241, of which 103 issue notes. The total amount of their authorised issue is ^3,548,166, and of their actual issue, about ;,^i, 700,000. The Bank of England monopoly privilege, whereby no bank of more than six partners could issue notes within 65 miles of London, was discussed jjublicly in 1833, and it was decided The History and Progress of Banking. 69 that, as the restriction only appUed to Banks of Issue, Banks on the Joint Stock principle, not being Issuing Banks, could carry on business in and near London ; and thereupon the London and Westminster (1834), the London Joint Stock (1836), the Union of London, and London and County (1839), and other Banks, were established in the Metropolis. In an Appendix is a state- ment of the present position of the English Joint Stock Banks.* * See Appendix I. VII. BANKING IN SCOTLAND. In Scotland the system of private Banking never attained the same proportions that it reached in England and Ireland. This is due chiefly, if not solely, to the earlier formation of Chartered and Joint Stock Banks, and the plentiful establish- ment of branches throughout the country. In this respect Scotland has had a very sensible advantage over the sister countries, and especially over Ireland, where there was no Bank, except the private ones, before 1783, when the Bank of Ireland was founded, and, as will be seen, it did not deign to open a branch till the year 1824. In Scotland it was far different. The first notice of Banking in that country which appears in the Statute Book is in the Act passed in 1695, under which the Bank of Scotland was chartered. To this establishment the exclusive privilege of Banking "within the Kingdom of " Scotland " was granted for a period of twenty-one years from the 17th July, 1695. The following year it commenced opera- tions and opened branches. Its original capital was^i, 200,000 Scots^ in 1,200 shares of _;^ 1,000 Scots each, which was equiva- lent in sterling money to ^100,000, in shares of £,'&i 6s. 8d. each. Unlike the Bank of England and Bank of Ireland, the Bank of Scotland was, by its Charter, prohibited from lending money to the Crown. It commenced its issue of J[^\ notes in TJic History and Progress of Banking. 7 1 1704. In 1774 the capital was increased to ^200,000 sterling, and at present the subscribed capital is ^1,500,000 sterling, of which ;^i, 000,000 is paid up. It will be observed that ^he paid-up capital of all the Scotch Banks, is, in proportion to the subscribed capital, greater than that of the EngUsh and Irish Banks. The Bank of Scotland continued to be the only Bank in Scotland until 1727, in which year a Charter of Incor- poration was granted to the Royal Bank of Scotland. It was formed with a capital equal to ;^i5 1,000 sterling, but now it stands at ;^2, 000,000, of which all is paid-up. The British Linen Company was incorporated in 1746 for the purpose of manufacturing and trading in linen, but the pro- ject, as such, was almost immediately abandoned, and the Company entered upon Banking business solely. Its capital was originally ;^i 00,000 sterling, but it has been increased to ^1,000,000. The foregoing are the three Chartered Banks of Scotland, and in these the liabiUty of the shareholders is in effect limited to the amount of their shares. In 1765 an Act of Parliament was passed whereby it was rendered compulsory on the issuing Banks to make their notes payable on demand ; hitherto they seemed to have retained to themselves the option of paying their notes six months after presentation, allowing legal interest from the date of demand to the date of payment. Notwithstanding the spread of Banking facilities as afforded by these institutions of unquestionable solvency. Private Bank- ing firms were established and enjoyed a fair share of pros- perity. Those of them which were still in existence half a century ago were : — ■ SirWm. Forbes, Bart.,andCo., of Edinburgh, established in 1802. Carrick and Co. ,, Glasgow „ i749- Hunters and Co. ,, Ayr „ i773- 72 The History and Progress of Banking. Ramsay, Bonar, and Co. of Edinburgh established in 1738. Kinnear and Sons* „ do. ,, 1748- Donald Smith and Co.* „ do. „ i773- Robert Allen and Co. ,, do. „ i773- Alexander Allan and Co. ,, do. „ 1776. Of these the most eminent was Forbes's Bank. It merged in the Glasgow Union Bank, which subsequently became the Union Bank of Scotland; Carrick's and Hunter's Banks were also absorbed by the Union Bank ; Ramsay's was wound up ; Kinnear's and Allen's failed. The Private Bank of John McAdam and Co. was founded in Ayr in 1763; this and the firm of Alexander Johnston, Hugh Lawson and Co., of Dumfries, were purchased, in 1771, by Douglas, Heron, and Co., a private bank which was estab- lished in 1770, and which collapsed after a career of three years. About 1765 were started the Merchant Banking Com- pany of Glasgow, and the house of Andrew, George, and Andrew Thompson. The Bank of Aberdeen, founded in 1767, and absorbed by the Union Bank of Scotland in 1854, is an instance of remarkable success. Its paid-up capital at its formation was ;^3o,ooo, in 200 shares of ;^i5o each. The capital was largely augmented from the surplus profits, and in 1836 the shares were worth over ^3,000 each. There were sundry other establishments dignified by the title of Banking "Companies," quasi ^ovcvt Stock concerns, the business of some of which, having commenced during the last century, continued for many years. These, however, were generally in effect Private Banks. They had few partners ; their capital was unknown to the public ; and their constitution ■"^ These two concerns afterwards amalgamated under the title of Kinnears Smith, and Co., and subsequently failed. The History and P^'ogress of Bmiking. / o and the methods and extent of their businesses were only imparted to the members of the partnership. They have mostly failed or been absorbed by the later-established Joint Stock Banks. Of these, the Dundee Bank (1763);* the Fife Bank (i8o2)t; the Leith Bank (1792); the Renfrewshire Bank (1802); the Montrose Bank (1814); the Perth Bank (1766'); the Shetland Bank (1802); and the Stirling Bank (1777) failed ; and of the Joint Stock establishments the most notorious failures of recent years have been those of the Western Bank of Scotland and the City of Glasgow Bank. The Western Bank, which was established in 1832, had a capital of ;^i, 500,000, and an authorised circulation of ;^337,938, about ICO branches, and 1,300 shareholders, stopped payment under circumstances of grave reprehension in 1857. In the Western Bank the following establishments had been merged : — The Dundee Union Bank. The Greenock Banking Company. The Ayrshire Banking Company. The City of Glasgow Bank was established in 1839, and failed in 1878. The cause of stoppage in all these instances was culpable recklessness of management. The Edinburgh and Glasgow Bank, being in difficulties, was taken over by the Clydesdale Bank in 1858. Its authorised issue (^13^)657) went, by arrangement, to increase the issue of the Clydesdale Bank. It consisted of the following companies : — • The Edinburgh and Leith Bank. The Southern Bank of Scotland (Dumfries). The Glasgow Joint Stock Bank. * Paid its creditors in full. t Originally George Dempster and Co., with a capital of ;,^i,26o ; the first bank established in Dundee, was amalgamated with the Royal Bank of Scotland in 1864. 6 74 The History and Progress of Banking. The Royal British Bank, though not strictly a Scotch Bank, was promoted by Scotch gentlemen with the object of transplanting to English soil the peculiar system of Scottish Banking. It was established in 1849, and stopped payment in 1856, under such management that entailed (as in the case of the City of Glasgow Bank failure also) the prosecution and imprisonment of the directors. The following Joint Stock and Private Banking Companies are merged in the existing Union Bank of Scotland : — The Glasgow Union Bank, The Paisley Union Bank, Glasgow Banking Company. Carrick and Co. (The Ship Bank) Glasgow. Sir William Forbes, Bart., and Co. The Thistle Bank, Glasgow. Hunters and Co., Ayr. The Aberdeen Banking Company. In the Commercial Bank of Scotland is merged, The Arbroath Banking Company. In the National Bank of Scotland is merged. The Commercial Bank of Aberdeen. The British Linen Company has absorbed, The.Paisley Bank. Banking, as practised in Scotland, differs in some marked respects from that of England and Ireland. The Banks are all chartered or joint stock companies; they all issue notes, they all have numerous branches. Banking is better understood by the rural population of Scotland than in the sister countries. The smallest town in Scotland has one, and frequently more than one, bank, and the system of "cash credits" which The History and Progress of Banking. 75 obtains there is in accordance with the habits of the people, and is a great impulse to industry and an incentive to thrift. A " cash credit " is simply an advance by way of a debit balance in current account, which advance is secured to the bank by a bond entered into by a couple of solvent parties who are guarantors for the borrower. It was an invention of the Royal Bank, and was designed to get its superfluous capital into circulation by inducing parties to borrow and embark in business. " In the very contracted sphere of Scottish com- " merce at that time," writes Mr. Dunning Macleod, " there " were not sufficient commercial bills to exhaust the credit of " the Banks. They had, as it were, a superfluity of credit on " hand, and the Royal Bank devised a means of getting it into "circulation." This means was the "cash credit." It is no more than an open credit, to be availed of as the party requires, and to be reduced at his convenience. The advance enables the person obtaining it to start or to develop a trade or business — be he shopkeeper or farmer. Thus the industrious poor are sup- plied with capital and enabled to commence life under favour- able conditions, and the profits realised, or surplus moneys re- ceived, are lodged in the bank towards the reduction of the debit balance. It is obviously the policy of the borrower to conduct his business and himself to the satisfaction of his sureties ; and it is his interest to cultivate habits of industry and frugality in order to clear off his debt and save the interest paid thereon. It is unanimously acknowledged that the prac- tice has been of immense advantage to the country materially and morally. Capital is more extensively employed for the benefit of the poorer classes, and labour, thrift, and foresight are encouraged. The enterprise of the nation is exemplified by the fact that the chief offices or headquarters of the Banks are not confined to the metropolis, but various local institutions 6—2 76 TJie History and Progress of Banking. have their directors and chief management in their own dis- tricts. The laws affecting the circulation and note issues are similar in effect to those which apply to Ireland, and, like them, are the result of Sir Robert Peel's legislation. The Scotch and Irish Banks of issue have an advantage over the English, in that the latter cannot, under any circumstances, exceed their authorised issue, while the Banks in Scotland and Ireland can issue to an unlimited extent, on the condition that the amount in excess of the authorised issue is covered by coin held; and of this the amount of silver cannot exceed one-fourth the amount of gold. The following table shows the existing Scotch Banks ; their date of establishment; their head offices; their capital sub- scribed and paid-up ; number of branches ; their authorised circulation; and their average circulation on 22nd November, 1879:— NAME. Date No. of Bran- ches. Head Office. Cap ~^ub-" scribed. ital. Paid-up. Circul Autho- rized. ation. Aver- age. £ £ £ £ Bank of Scotland i6q.S los Edinboro' 1,875,000 1,250,000 343,418 890,130 Royal Bank of Scotland 1727 121 Do. 2,000,000 2,000,000 216,451 831,035 British Linen Company 1746 99 Do. 1,000,000 1,000,000 438,024 696,506 Commercial Bank 1810 105 Do. 1,000,000 1,000,000 374,880 846,182 Aberdeen Town and County... 182s 54 Aberdeen 720,000 252,000 70,133 237,674 National Bank of Scotland ... 1825 96 iEdinboro' 1,000,000 1,000,000 297,024 697,763 Union Bank of Scotland 1830 1-39 1 Glasgow 1,000,000 1,000,000 454,346 818,217 North of Scotland Banking Co. i8s6 • 59 Aberdeen 1,968,000 394.500 154,319 371,514 Caledonian Banking Company i8s8 19 I Inverness 600,000 150,000 53,434 49,237 Clydesdale Banking Company 1838 95 1 Glasgow 1,000,000 1,000,000 274,321 555,462 The total paid-up capital of the Scotch Banks is ^9,046,500, while of the Irish Banks the total is ;^6,984,23o. The total number of branch Banks in Scotland has within the past twenty years increased about 50 per cent. At present there are 882 to a population in round numbers of 3,500,000, whereas in Ireland the total number, including sub-offices, is less than 500 to a population of 5,500,000. VIII. EARLY IRISH AND SCOTCH COINAGES. Gold was known from immemorial times in Ireland, not as an import, but as a native product. In Keating's History of Ire- land we are informed that the first golden mine in Ireland was discovered near the " Liffee," in the reign of Tighermhas, who is said to have begun to reign in the Kingdom in the year 1 1 88 B.C. — from which statement it appears rational to con- clude that the County Wicklow gold mines ought to have been exhausted, if they were not, when mining ceased there some 50 years ago.* When Aldfrid, a Saxon prince, afterwards King of North- umbria, came as a student to the Irish schools, he made a tour of the kingdom, about 684 a.d., and wrote in the Irish language, it is said, a poem, in his " Itinerary," in which he says : "Gold and silver I found, and money." And one Donat, who flourished about 850, sung of Ireland : — " Insula dives opum, ^^einmarum, vestis et auri.''' '■^ These gold mines were unfortunate. In Mr. Richey's "Lectures on Irish History " we read that one of the misfortunes of the country in Henry VIII.'s reign was " the importing of German Protestants to work "the mines of Wicklow, who turned out to be ' idle vagabonds, not worth " their keep." yS The History and Progress of B miking. " exhaustless is her store. Of veiny silver and of golden ore." Gold, of advanced and chaste workmanshij) and design, was undoubtedly in use for personal adornment and religious vessels at a very early period in Ireland ; and it was a standard of value and an exchange medium considerably over i,ooo years ago. It was shapen into rings, and circulated in this form, as it did in many countries at a primitive period ; and it is curious to discover that spurious money was then manufactured. In the Royal Irish Academy are examples of this — base metal carefully coated with gold. The same veracious historian who chronicles the discovery of the "Liffee" gold mine, informs us that St. Patrick erected mints at Ardmagh and Cashel and " coined money for the ser- vice of the State," about the year 450 a.d. If this were so, the art of coinage fell into disuse, for in subsequent years we find gold for ransoms, religious offerings, &c., mentioned as being weighed by ounces and not specified as coins ; and the first reliable record of a coinage in Dublin that we possess is under the year 12 10, when King John, who was then in Dublin, ordered a coinage of pence and farthings. Pope Adrian's Bull to Henry II. in 1155, authorising him to invade Ireland, con- tained a condition that the King should compel every Irish family to pay a carolus to the Holy See, but this stipulation was not fulfilled at the invasion in 11 72, for the simple reasons that the Irish families had not got caroluses, and if they had, it would have been beyond Henry's power to levy the tax. Silver marks, value for 13s. 4d., appear to have been coined also about this time, and in 1251 a new coinage y^'Oi^ stamped in Dublin, bearing on it the King's Head in a triangle with the inscription " Henricus Rex III.," and the name of the Mint-master, " RiCH.\RD ON Dive." The Histoi'y and Progress of Banking. 79 In 1279, Edward I. commanded the coinage to be made in accordance with fixed standards, and in his reign there were four mints in Dublin. Base coin was also manufactured largely and circulated widely, and in 1 300 a King's proclamation was issued, whereby the " base coins called ' pollards and crocards' " were cried down. But though there were the Royal mints, there were also, as in England, other coiners ; but whereas in England these others coined under authority, in Ireland there was apparently no restriction exercised, or, if it were, it was disregarded. The trade of these coiners was "a great hurte and " destruction" to the country, and in 1447 an Act was passed against clipped money, unlawful money, and O'Reyley's money. Who this " O'Reyley," or "Reyley," was, or where he minted his money, we are not aware ; but from this and subsequent enactments, it appears that the " King's money " did not enjoy as large a circulation as clipped money and O'Reyley's coinage. In 1459 brass money was coined at a mint in the Castle, and in 1462, groats, twopennies, pennies, half-pennies, and farthings were issued from the Dublin mint. The public estimate of these coins may be inferred from the fact that the English money was at a premium at this time. Henry VIII. first placed the harp, as the national badge, on Irish coins. In 1540 the Dublin mint coined silver testoons (testers, or sixpennies), two- pennies, and pennies, and in 1548 a new mint was established, "which soon failed for want of bullion." In 1552, a year of great famine, the mint testoon was ordered to pass for two .shillings — four times its value. In 1662, King Charles II. granted, as we have seen, a patent for coining money for Ire- land to the Viners and Daniel Bellingham, and this is the first time money for Ireland was coined in England. The Irish mints, previous to this period, were mere temporary institutions, and the trade of the country was facilitated by frequent issues 8o The History and Progress of Banking. of " tokens" by the traders. These were either brass or copper, and were a kind of transferable promissory note. They bore the maker's name and the value, and were supposed to be re- deemable by him on demand. The issue of tokens was, how- ever, prohibited in 1661 by Charles, and an improvement was effected by the coinage which was minted under the patent granted to Viner and Bellingham. When James II. arrived in Ireland he improved his financial position by a proclamation that all English Guineas — the coin he brought with him — should be current for ^i 4s. in Ire- land, and he granted a patent for coining to Sir John Knox. But when his circumstances grew more shattered he annulled the grant, confiscated Knox's engines and stock of metal, and set up a Mint in Capel Street* and coined the most worthless and debased imperial coinage ever issued to a people. Old bells, old cannon— even pots and pans and kitchen utensils — were molten down, and struck into half-crowns, shillings, and sixpennies. The people were compelled to surrender their gold and their plate, and to take in exchange this wretched dross, the value of which may be estimated from the circumstance that the half-crowns were ordered to circulate as pennies by William III. when he had established his power in Ireland.t The value of the old metals melted down is stated at ;^6,5oo, while the nominal value of the coinage is alleged to have been ^1,496,799. * At No. 28, nearly opposite the Scots' Church. In this house, sub- sequently, Dr. Thos. Sheridan, father of Richard Brinsley, kept his school. t It has been alleged that the word "humbug" is a corruption of the Irish words tiim bog, pronounced " oombug," signifying soft copper, or pewter, or brass, or worthless money, such as was made by James II. at the Dublin Mint, and twenty shillings of which was worth about only one penny sterling. At first applied to worthless coin, the word in time became the general title of anything false and counterfeit. The History and Progress of Banking. 8 1 The grant, or purchase, of the patent for coining ^180,000 in half-pence and farthings for Ireland, which was obtained by William Wood, of Wolverhampton, from the Duchess of Kendal, is remarkable, because of the violent and successful opposition to the coinage which w^as conducted by Dean Swift, and which made him the most powerful and popular man at the time in Ireland. The proposed coinage was stated by the Dean to be " of such base metal and false weight as to be six parts in seven below the real value." An essay by Sir Isaac Newton, however, in 17 24 reported that it exceeded the conditions of the patent in weight and fineness. But the conditions of the patent provided for a very de- preciated coin. Some of Swift's denunciations under the signature of " The Drapier " are of extraordinary violence. For example, in one of those manifestoes he writes : — " For " my own part, who am but a man of obscure condition, I do " solemnly declare in the presence of Almighty God, that I will ■" suffer the most ignominious and torturing death rather than " submit to receive this accursed coin." The outcry against it was so great, and the opposition so overwhelming, that Wood's half-pence never circulated as current coin in Ireland. After this period, the Irish coins were always struck in England, — one of the "wrongs of Ireland" that Swift bitterly inveighs against. " We are denied," he wrote, " the liberty of coining gold, silver, " or even copper. In the Isle of Man they coin their own " silver ; every petty prince, vassal to the Emperor (of Germany) " can coin what money he pleases. In this we are an exception " to all other States or Monarchies that were ever known in the *' world." Tampering with the coinage was a serious crime in the last century in Ireland, and was punished by death in a barbarous and shocking manner, so late as 1750. In Esdalts News Letter, S2 The History and Progress of Banking. under date 14th July, 17 15, we read the following item of horrible intelligence : " Last ^Vednesday, Edward Costelowe and Mary, his wife, " were executed at Stephen's Green (Dublin), for filing and di- " minishing guineas. The man was hung, drawn, a7id quartered, '' and the wo7nan was burnt to ashes." There was a difference in value of the coins of the respective countries, ^i Irish being equivalent to i8s. 5id. English. In 1826, however, the values were assimilated, and at present the same coinage is common to the two countries in every respect. It does not appear that there was in Scotland any native coinage before the nth century, when Somerled, Prince of the Isles, issued a rude money. The early silver pennies are like the early English ones, bearing the name of the " moneyer " and the place where they were minted. The native art and workmanship were much behind the contemporary English — ■ the attempts at portraits are much ruder, and the deteriorated coinage— the billons, or base pennies — which were issued by authority, are poor specimens of a national coinage, even in those ages. Placks, and half-placks, or groats, likewise of billon, were minted by James III., who also issued some rather well- designed and well-executed gold coins, called " unicorns," from an image of that animal upon them. " Riders," so-called from a representation of the King on horseback, were coined by James IV., and the " bonnet-piece " of James V. is a very beautiful coin. The coins of Queen Mary present several different portraits of her — some with a crown, some without ; and some, coined after Francis's death, represent her in a frilled dress and a widow's cap. Pistoles and half-pistoles, made of gold brought from Darien, and equal respectively to about a guinea and half- guinea, were struck in the reign of William III. These, bear- The History and Progress of Banking. 83 ing the inapproi)riate emblem of a rising sun, were the last pieces of gold coined in Scotland. An evidence of the worth of the currency of Scotland is to be found in the fact that upon the junction of the Crowns of England and Scotland in 1605, the relative value of the Scottish and English coins was as 12 to i '. The coinages of the two countries were assimilated in 1707. IX. BANKING IN IRELAND.— EARIY DUBLIN BANKERS. In Ireland, as in England, the Joint Stock Banks were pre- ceded by the Private liankers, and the latter by Goldsmiths, who super-added to their legitimate trade the pursuits of money-changing and money-lending. But apparently before usury was carried on by the Goldsmiths, there was a system of money-lending existent in Ireland, the curious characteristic of which was that there was an intermediary, or touter, who plied a recognised trade, and whose business consisted in introducing the needy borrower to the usurer, and in drawing up and wit- nessing the bonds given in connection with the loan. As early as 1634 the Irish Parliament passed an Act to restrain usury, and one of its provisions is that no " driver of bargains for contracts" — /.^., no person who induced one man to borrow from another — was to charge more than five shillings for pro- airing a loan of ^100 for one year, or more than twelve pence for making the bond in reference to the loan. This Act restricted the rate of legal interest to 10 per cent. It was reduced to 8 per cent, in 1704, to 7 per cent, in 1721, and to 6 per cent in 1737. Private Bankers were established in Dublin in the latter part of the 17th century. Previous to this time Goldsmiths carried on a deposit business, and issued " notes" — as they were called The History and Progress of Banking. 85 — in acknowledgment of such deposits. But it seems that these notes were not transferable, and were merely acknowledgments for deposits, which deposits were to be returned to the depositor only, on application, and were to be returned in the state and form in which they were lodged. The Goldsmiths were no more than safe custodians, and they possessed no power to utilise or convert the deposits with which they were entrusted. In pro- cess of time, these notes were passed from hand to hand, and were treated as negotiable, till some question was raised as to their transferability, and in 1709 an Act of Parliament enacted that notes issued by any " Banker,* Goldsmith, Merchant, or Trader," whether made payable to bearer or order, should be assignable and transferable by delivery or endorsement, and an endorsee could sustain an action on them. Bankers' notes thus became instruments recognized by the Irish Laws, and many subsequent enactments were passed in regard to them. Thus, in 1 72 1, it was enacted that Goldsmiths' or Bankers' notes not paid on demand should carry legal interest from the day of demand; and further, that a Banker's real estate should be liable at his death for his notes current. The more regular Bankers naturally superseded the Gold- smiths. In 1 72 1, a preamble to an Act states that " the trade " of this Kingdom was partly carried on by the means of cash "notes given by Bankers, and that the trade or calling of a " Banker was followed by the keeping of a public shop, house, " or office, for the receipt of the money of such persons as " were willing to deposit the same in their custody." Forgery of Bankers' notes was made a felony in 1729, punishable by burning in the hand and transportation of the convicted party. The most noted of those early Bankers was one John * This is the first mention of the word Banker in an Irish Act of Parlia- ment. 86 The History and Progress of Baulking. Demar or Darner. He had been a captain of a troop of horse under Cromwell in the Civil War, and at the Restoration of Charles II., he sold his estates in .Somerset and Dorset, and settled in Ireland. He plied his trade of usury for many years at a noted tavern in Dublin, called " The London," where " he " touched the pence while others touched the pot," and he died on the 6th July, 1720, at the age of ninety-one. At his death Dean Swift wrote a punning elegy upon him, wherein are described his threadbare cloak and his miserable appearance in public. He was altogether such a dilapidated sight that he seemed as if he were asking alms, reminding us of the Fur- fidius of whom Horace wrote. The following, which constitute the epitaph, are the concluding lines of the Dean's elegy on him : " The sexton shall green sods on thee bestow ; Alas ! the sexton is thy banker now ! A dismal banker must that banker be, Who gives no bills, but of mortality !" He amassed great wealth, and, being childless and un- married, he left most of it to his nephew, John Darner, — from whom the present Earls of Portarlington are descended,— and some in charity ; — Damer's Almshouse is, we believe, still in existence in Dublin. Another of the same class as Damer, who flourished at this time, was James Southwell, who left a large sum for cha- ritable purposes connected with the parish of St. Werburgh's, where he had been born in 1641. There was a temporary run upon the Dublin Bankers in 1720, possibly occasioned by Damer's death, and in the panic some succumbed. The so-called Bankers of this period were, generally speaking, not men of wealth or property, but the exigencies of exchange and trade helped to circulate their notes, and thus put them in credit ; and as there was no restriction on the amount they were The History and Progress of Banking. Z^j allowed to issue, their notes became almost the only circulating medium, and silver and gold became quite scarce in the country. There were no qualifications or licence, or author- ization required in any Banker. Any person so disposed could set up in the business, and the condition of the country was .such that he was sure to get his cash-notes into circulation, and having issued beyond his powers of redemption, they were frequently not redeemed in full, or not redeemed at all. In S)W\{{!?, Short Viezo of the State of Ireland, in 1727, he shows what those Bankers were, and gives a very unmistakable opi- nion of them and their trade : " The lowness of interest, in all "other countries a sign of wealth, is in us a proof of misery, •*' there being no trade to employ any borrower .... Hence '' the daily increase of Bankers, who may be a necessary evil in " a trading country, but so ruinous in ours ; who, for their private *' advantage, have sent away all our silver and one-third of our ^'gold; so that, within three years past, the running cash of the " nation, which was about five hundred thousand pounds, is ^' now less than two, and must daily diminish, unless we have " liberty to coin as well as that important kingdom the Isle of " Man, and the meanest principality in the German Empire.^ " I have sometimes thought that this paradox of the kingdom's ■" growing rich is chiefly owing to those worthy gentlemen the " Bankers, who — except some custom-house officers, birds of ■" passage, oppressive thrifty squires, and a few others who shall "be nameless — are the only thriving people among us. And I "have often wished that a law were enacted to hang up half a ■" dozen bankers every year, and thereby interpose, at least, some " short delay to the further ruin of Ireland." After events fully justify the Dean's bloodthirsty desires. These unrestricted note-issues, by men without capital, be- came such a scandal and serious injury to the trade and com- 88 The History and Progress of Banking. merce of the country, that an endeavour to arrest the business carried on by the Bankers was made in 1720. The Bank of England had been established in London, and maintained an honourable position, and a public establishment in Ireland was deemed advisable. But it was projected on a very different basis. The Earl of Abercorn, Viscount Boyne, Sir Raljjh Gore, and others, petitioned the Crown in that year (1720) for a charter for the institution of a Joint Stock Bank of Issue, the capital of which (_;2r5oo,ooo) was to be invested in land, and the rental of these lands was to form a fund, which fund was to be issued against in notes. The main design was to establish a reliable and solvent currency to supersede the variable, and sometimes worthless issues of the private Bankers. The project was favourably entertained, and leave given in Parliament to introduce the Bill. But it was met by a counter petition from Lord Forbes* and others, for a charter to establish a Bank with a capital of ^j^i, 000,000. This would almost certainly have been granted in preference to Lord Abercorn's project, but it was stated that one of the provisions of the Bill would be to obtain for the Bank a monopoly of Banking in the country : and to ensure the passing of this part of the measure a bribe of ;^5 0,000 was said to have been offered to the Members to influence their votes in favour of it. Unfortunately the Bill was rejected, not on its merits, but through jobbery and scheming, and the business of the Bankers was not interfered with. Some of the early Bankers were very respectable, and appa- rently did a very large business, but the early history of Irisli Banking is a record of failures, windings-up, and runs. And ot all the multitudinous Private Banks established about this period, but one — that of LaTouche and Co. — survived to * Son of the Earl of Granard. The History and Progress of Banking. 89 the latter half of the nuieteenth century, an honourable excep- tion to its ephemeral contemporaries. In 1 731 the Bank of Meade and Curtis failed. Another Bank, which had been established previous to 1700 as Burton and Falkener's Bank, in Castle Street, Dublin, and which at the time of its failure, in 1733, was Burton and Harrison's, failed ignominiously, and the landed estates of the partners were sold in satisfaction of the claims of the creditors, and after the realisa- tion, the liabilities were yet ^65,000 in excess of the assets. This Bank had a great reputation — " as safe as Ben Burton " was a proverb. Burton was Lord Mayor in 1734, and four times M.P. for the City, and Falkener had been Sheriff in 1720. The Marquess Conyngham is descended from Burton, Two years after the failure of Burton's Bank, that is to say in 1735, there were five Private Banking Firms in Dublin — James Swift and Company, of Eustace Street ; Hugh Henry, Esq., of Upper Ormond Quay ; Nuttall and M'Guire, of Tower Ormond Quay ; LaTouche and Kane, of Castle Street ; and Joseph Fade and Co., of Thomas Street. Of these, the firm of LaTouche and Kane was the most eminent. The Bank had been established in 1725, and in this year (1735) it Avas removed to the edifice, still existing, where the business was carried on till 1871, when the Bank merged in the Munster Bank. This house was built by David LaTouche, jun., son of the founder of the firm. Nathaniel Kane, the partner, was Lord Mayor in 1734, and had been accused by Dr. Lucas, M.P., of appropriating some of the City funds, but successfully vindicated himself. LaTouche w^as returned as Member of Parliament for the City, but was unseated on petition. At the termination of Kane's partnership, the firm became David LaTouche and Sons, which was its style and title till its ab- sorption. 7 go The History and Progress of Banking. LaTouche's was one of the three Banks pronounced by a committee of tlie House of Commons, which sat in 1760 to inquire into the state of credit in the country, to have much more than enough funds to suffice for all claims upon them. In 1778 we find it advancing ^20,000 to the Lord Lieutenant, the Marquess of Buckingham, for State emergencies, and de- clining to make a further advance as the security offered was unsatisfactory. LaTouche's Bank never issued a paper cur- rency, but adhered to the legitimate and simple business of receiving money on deposit and current account, and making advances. Five members of the family had seats in Parliament in 1800, and of them, only one voted for the Union. The Union, which terminated the Irish Houses of Lords and Commons, and transferred the Irish Peers and the Parlia- mentary representatives across the Channel, reduced Dublin from a metropolis to a mere provincial city. The Irish Lords and Members of Parliament became chronic absentees, spend- ing their time and their money in London, and their absentee- ism of course wrought detrimentally on LaTouche's Bank, where chiefly they did their banking business. However, previous to the Union, no single Private Bank, in our opinion, transacted the same kind and extent of business that LaTouche's did. It is no exaggeration to say that the entire Irish Peerage and Landed Gentry kept their accounts with substantial balances there.* Names which have become historical and famous are ■-f The following list, which is taken from the Current-account Legers of 1765-1790, and which does not include any of the opulent Commoners who were customers of LaTouche's, will give an idea of the magnitude and respectability of the business done : — Duke of Leinster. Marquess of Cornwallis. ,, Rutland. ,, Lansdowne. Marquess of Buckingham. ,, Westmeath. ,, Headford. ,, Hertford. TJie History and Pi'ogress of Banking. 91 to be found in their books. Lord Edward Fitzgerald, Lord Castlereagh, Flood, Grattan, Curran ; Lord Clare, the Chan- Earl of Clanricarde. ,, Carhampton. ,, Drogheda. ,, Kerry. ,, Athlon e. ,, Antrim. ,, Camden. ,, Desart. ,, Granard. ,, Inchiquin. ,, Kenmare. ,, Leitrim. ,, Longford. ,, Lanesborough. „ Meath. ,, Nugent. ,, Wicklow. ,, Belmore, ,, Belvidere. ,, Cork. ,, Egremont. ,, Upper Ossory. ,, Aldborough. ,, Altamont. ,, Bellamont. ,, Brandon, ,, Carysfort. ,, Courtown. ,, Castlestewart. ,, Clanbrassil. ,, Carrick. ,, Donoughmore. Lord Eyre. ,, Knapton. ,, St. George. ,, Louth. ,, Kilmaine. ,, Cloncurry. Lord Dungannon. Bective. Carbery. Callan. Glentworth. Hawarden. Clifden. Clonbrock. Macartney. Cremorne. Mulgrave. Blayney. Doneraile. Farnham. Grandison. Gormanston. Glandore. Lifford. Loftus. Lismore. Massareene. Maxwell. Muskerry. Mountmorres. Portsmouth. Percy. Ranelagh. Southwell. Sherborne. Sunderlin. Templeton. Dillon. Crosbie. Chas. Fitzgeirald. Henry Fitzgerald. Robert Fitzgerald. etc., etc. etc., etc. 7—2 92 The History and Progress of Banking. cellor ; Foster, the last Speaker of the Irish House of Com- mons ; Lord Norbury, when he was plain John Toler ; Barry Yelverton ; Sir Boyle Roche ; the Countess of Mornington, the Duke of Wellington's mother, were account-holders in LaTouche's in its years of greatest prosperity. An anecdote records a peculiar form of cheque drawn on the bank by Whaley, a noted character in Ireland in the last century, and usually known as Buck Whaley, or Jerusalem AA'haley. It is said he wrote : " Dear Mister LaTouche, Pray open your pouch, And give my heart's darling {i.e. his wife or daughter), One thousand pounds sterling." — a form of cheque more creditable to his heart than his head. LaTouche's was agent for the London firms of Coutts ; Ransom ; Pybus, Call and Co.; and Puget ; and for the Pro- vincial Irish Bankers, Newenham, Pike, and Hewitt — all of Cork \ Newport, of Waterford, etc. In fact, for the space of a century, it was the chief bank of the country. Swift's Bank, originally in Eustace Street, Dublin, moved in 1 741 to Castle Street, to " two houses opposite the Castle gate." It ceased to exist in 1 746, and was succeeded by the Bank of Thomas Gleadowe and Co. William Gleadowe, the head of the firm about 1770, married a IMiss Newcomen, and as- sumed that name in addition to his own. His Bank moved to 19, Mary's Abbey, in 1777, but returned to Castle Street in 1 781, to the edifice now occupied by the Hibernian Bank. In the same year he was created a baronet, and in 1800, as a reward for his vote in Parliament in favour of the Union, he received ^20,000, and his wife was raised to the peerage as Baroness Newcomen, and in 1803 she was advanced to the further dignity of a Viscountess. In 1799 the partners in the The History and Progress of Banking. 9; Bank were registered as Sir A\'illiam Gleadowe-Newcomen, baronet, Arthur Dawson, and Thomas Gleadowe-Newcomen. Joseph Fode and Co., of Thomas Street, took into partnership, in 1738, Isaac or Isacher Willcox and John Willcox, and subsequently John Dawson, and failed on 3rd March, 1755, principally through the dishonesty of Richard Brewer, the cashier. The principal partner in Nuttall and McGuire's Bank, (Nuttall), was Lord Mayor in 1732. Of Hugh Henry we know nothing beyond that he was the ancestor of an existing Kildare family of wealth and position. A Bank was established, in 1739, on Ormond-quay, by William Lennox. He took George French into partnership in 1 75 1, and the Bank ceased in 1755, when both the partners absconded. The creditors were both numerous and respectable, from which we gather that the firm enjoyed a good business. The Bank of Malone and Clements — which, in respect to the brevity of its existence, is unique in the history of banking — was established on the 3rd July, 1758. Its partners were the Right Hon. Anthony Malone, the Right Hon. Nathaniel Clements, and John Gore. It granted receipts payable seven days after demand, with interest at the rate of 10 pence per week for each ^^loo — a little over 2 per cent, per annum — the interest to commence three days after the date of issue. But neither great names, nor terms meant to be alluring, could endow it with solvency or permanency. It died in the first November of its life, aged 4 months. Clements, undeterred, seems to have started on his own account, for a Bank kept by a person of that name failed in 1760. Malone was a celebrated man.* He was Prime Serjeant, and was leading counsel for * Malone, who was son of Richard Malone, of Baronston, a well-known lawyer and orator, was M.P. for Westmeath. He was appointed Prime Sergeant in 1740, dismissed in 1754, and was appointed Chancellor of the 94 ^>^^ History and Progress of Banking. the Earl of Anglesey, in 1743, in the celebrated Annesley Peerage case — a case which has furnished two novelists — Sir Walter Scott and Charles Reade — with the groundwork for two romances. In 1748, in addition to the houses already mentioned, we find in the Dublin Directory : — Richard and Thomas Dawson, of Jervis Street. Kenry Mitchell and J. Macarell* of Ormond Quay, both of which failed in 1760, not, we read, from want of means, but from want of money in the country, wherewith to pay the demands on them. This year (1760) drew down all the Dublin Private Banks, with the exception of LaTouche's and Gleadowe's ; these alone surmounted the crisis and survived the panic, and these were the only firms which did 7iot issue notes. And in 1751 — Theobald Dillon and Sons: afterwards Thomas Dillon, Richard Farrell (or F'errali) and Co., of Inns Quay. This firm failed in 1754. And in 1760 — Thomas Finlay and Co., of Jervis Quay. The public feeling which culminated in the panic of 1760 was not of sudden or intemperate growth. The power to issue notes by the Private Bankers had been grossly and preposter- ously abused, and the disasters consequent on the reckless creation of liabilities that could never be paid came inevitably. I^^ 1 753) ^ Committee of the House of Commons which in- (juired into the condition of Banking, reported that the paper in circulation was largely in excess of the assets of the issuing Exchequer in 1757. He was uncle to Edmund Malone, the well known Shakesperian commentator. Clements (son of the Right Hon. Theophilus Clements, M.P. for the Borough of Cavan, and Teller of the Exchequer in Ireland) was also one of the Tellers of the Exchequer, and was Deputy Vice-Treasurer of Ireland. He was father of the first and ancestor of the present Earl of Leitrim. * Lord Mayor, 1739. The History and Progress of Banking. 95 Bankers ; and the following evidence in respect to the state of Banking in Ireland in this year (1753) was given by Mr, William Colvill, a Director of the Bank of Ireland, before a Parliamentary Committee which sat in 1804 : — "I remember perfectly well that in 1753 the circulation of paper in " Dublin from the Private Bankers was so general and extensive that in " receiving _2^ 1, 000 there was not ;if 10 in gold at that time. I remember " that exchange was near three per cent, above par; the consequence of " which was that the Bankers of Dublin, of whom there were as many as "there are at present (1804) if not more, were in competition with one ' ' another to send their specie over to London and to get Bank bills at four "per cent, above par, bringing a clear profit to that extent. The con- " sequence of this showed itself in the succeeding year; all the Banks " failed except Messrs, LaTouche's and Sir William Newcomen's (under " the name at that time of Gleadowe and Co.) ; and these two Banks paid "off their entire paper.* There followed a total annihilation of Bank- " paper in Ireland at that time, and I remember it was said with triumph "that Ulster, the great seat of our linen manufactory, was safe, because "she had no such think as Bank-paper in that province. The conse- ' ' quences were that exchange fell two or three per cent, under par, and the " whole circulation of Ireland was turned from paper into gold ; but the " result was that multitudes of people were ruined. The convulsion was " exceedingly severe, — many tenants threw up their lands, and there was " no person connected with the three southern provinces of Ireland, that did " not suffer either immediately or remotely." In addition, the commercial morality of the Bankers was at a low ebb. In those days there were few channels for the investment of moneys, and lending it on Discounts was an unsatisfactory trade in a poor and unsettled country. Therefore, we find that the Bankers were addicted to investing all surj^lus cash they held — that is, all their deposits and all received on account of their note issues which was not lent nor used for every day purposes — in land. They purchased estates — and Landed estates were not always an immediately realisable asset ; it was an almost useless asset as far as meeting a run was con- * These were not issuing Bankers. 96 TJie History and Progress of Banking. cerned. This practice of sinking their funds in realty was recognized as an evil that should be counteracted ; and to this end the Banker's Act (33 Geo. III., c. 14), which was the principal enactment for the regulation of Bankers in Ireland, was passed in 1759. The object of the statute was to endea- vour to protect the public against the frauds of Bankers, who used to thus acquire, and then alienate, estates, to the detriment of their creditors ; and to fix the manner of winding up insolvent or bankrupt Bankers. By it all deeds of conveyance executed by Bankers are declared void unless registered within one month after execution, or within three months if executed out of Ireland — except leases not exceeding three lives or 31 years, made at the full improved rent without fine. All grants of real estate or leasehold interest made by Bankers to their children or grandchildren, although made for a good consideration, are void against creditors, and although such creditors were not creditors at the time of the making of such grants ; the receipt of a Banker given after he has stopped payment is no discharge ; and the conveyances of Bankers who have absconded are void, and their estates and effects are subject to their debts, without regard to priority (except in case of debts incurred before they became Bankers, or of those duly registered) ; and the persons of such absconding defaulters are only protected in case they are Peers or Members of Parliament. Within three months after stopping payment a Banker may invest his estates in trustees to be approved by tlie majority of the creditors or by the Lord Chancellor. No person entrusted with the public money was allowed to become a Banker. No Banker was allowed to issue notes bearing interest ; but if the issued notes were not paid on demand, the holder could claim interest until the date of payment. All demands upon Bankers must be made within three years after they have stopped pa)ment or The History and Progress of Banking. 97 ceased to transact business, and if the creditor fails in making his demand within the said three years, he shall be barred from suing in law or equity ; and the Banker, in the event of his being sued by any creditor after the expiration of the said three years, can plead payment and discharge of liability, and give this Act in evidence. But notwithstanding the attempts of the legislature, failures were not prevented. In 1764 we find the Bank of Sir George Colebrooke, Bart., and Co., was doing business in Mary's Abbey. This was a branch of a London Bank of the same name, which, established about 1720 as James Colebrooke and Co., behind the Royal Exchange, was Sir George Colebrooke, Burns, and others, about this period. The Dublin house sus- pended payment in 1770, and the panic engendered thereby grew to such dimensions that the Lord-Lieutenant and a number of the nobility, gentry, and merchants issued a mani- festo wherein the solvency of some of the other Bankers was vouched, and a declaration made of their willingness to receive the notes of these houses in lieu of cash payments. The Banks whose credit was thus guaranteed, and which alone out- lived this panic, were — LaTouche's, Gleadowe's, Finlay's, and Dawson's. In 1797 there were altogether but nine Private Bankers in Ireland, of which three were in Dublin — LaTouche's, Gleadowe's, and Finlay's. Over-issuing had wrought panics ; and panics, and the Rebellion, and the scarcity of coin in the country, had swept the majority of the Private Banking Firms into the limbo of bankruptcy. But unhappily, after the Re- bellion, new establishments called Banks sprung up throughout the country. In Dublin John Claudius Beresford and Co. were, in 1798, established at Beresford Place. This Bank is notable for the circumstance that the populace, to wreak their 98 The History and Progress of Banking. vengeance on the unpopular Beresford, collected all his notes and burned them in order to ruin Mm. Sir Thomas Lighten, Bart., Thomas Needham, and Robert Shaw, was also established in the same year in Foster Place. This firm became Sir Robert Shaw, Bart., and Co., and was ultimately merged in the Royal Bank. In 1804 William Williams and Robert Finn, which had been established in Kilkenny in 1800, moved to Dublin and had its" offices in Dame Street. This establish- ment failed in 1820 for ;^3oo,ooo ; and Sir John Newport, in evidence before the Lords in 1826, positively swore it was never worth a shilling, and had commenced on no capital whatsoever. Lord Ffrench's Bank, and Alexander's Bank — two other Dublin concerns which enjoyed a great business and a great circulation — jilso failed in 1820, Alex- ander's owing half a million. The panic of 1820 made havoc of the Private Bankers throughout Ireland, and a few years later .saw Joint Stock Banks established, and the progress of Joint Stock Banking was fortunately a prevention of the birth of new private firms. In 1826, LaTouche's, Finlay's, Shaw's, and the newly-esta- blished Ball and Co., of Henry Street, were the Private Dublin Banks. Finlay's, which flourished for many years in the office which is now the counting-house of Messrs. Todd and Burns, went under in the panic of 1835-6. Shaw's, as has been said, was purchased in 1836 by the Royal Bank, and LaTouche's by the Munster Bank in 1870. Ball and Co. is now the premier private Bank in Dublin. Boyle and Co., who are Stock- brokers and Notaries as well as Bankers, and Guinness, Mahon, and Co., who are also land agents, were established about 1832; and these three firms are now the sole surviving representatives of Private Banking in Ireland. Private Banking firms were numerous throughout the country The History and Progress of Banking. 99 ■during the latter portion of the last and early in the present ■century. Many of them were extremely respectable — many no better than peddlers in money ; some of them were disreputable — nearly all were extremely insolvent. A history of the Rise iind Fall of Irish Country Banks at this period would be a con- tinuous record of note-issues, panics, failures, and bankruptcies. It is a matter for amazement that the people can have been so credulous as to place any trust in these banks, their failures were so frequent, their note issues so often proven to be worth- less. In 1799 there were seven Banks in Wexford; four in New Ross ; four in Galway — all issuing their notes in careless profusion. Panics were, of course, of frequent occurrence. In 1804, 1 810, and 18 14, numbers of those bankers failed ; and in 1820 the crowning panic occurred which effectually stopped this reckless and dishonest establishment of firms of note- issuers. In 1784a Bank was established in Belfast, the operative prin- ciple of which was to have a very restricted paper currency, and to make its payments almost exclusively in gold. It was suspended in 1798. In 1793 a Banking Company, called the Belfast Discount Company, was founded in the Northern Capital, the partners being Messrs. Thompson, Bradshaw,and M'llwaine, trading under the title of Robert Shaw and Company. The firm changed to the style of Gilbert M'llwaine and Company in 1800. Besides these there were three other Banks in Belfast — the Commercial Bank, the Northern, and the Bel- fast. The joint circulation of these three Companies was estimated at ;^2 25,000, when, owing to the scarcity of gold in the country, they failed in 1797. Among the more respectable Provincial Bankers were Simon Newport and Co., of Waterford, which was established about 1775, and existed till lOO The History and Progress of Banking. In Cork, in 1775, Travers, Sheares, and Travers, was flourishing, and is now remembered because the Sheares of the firm was father of John and Henry Sheares, who were executed during 1798. In 1799 Sir James Cotter, Bart., and Co. and Sir Thomas Roberts, Bart., and Co., were the chief Cork firms. Maunsell's in Limerick (which failed in 1820), and Redmond's in Wexford, were also respectable concerns. In 1800 three more Banks were registered in Cork, Newen- ham's, Roche's, and Pike's ; and in Fermoy, John Anderson's. In 1801 Delacour's in IMallow was re- gistered ; it was the last private provincial Bank ; it failed in 1835. In 1803 Scully's in Tipperary was established. In Tuam, the Hon, Sir Thomas Ffrench's Bank flourished, and subsequently opened an office in Dublin. But besides these there were scores of others, the careers of which were briefer, the positions of less importance, and the memories even more unfortunate. Banking was a pursuit open to all, and not confined to persons of social distinction, personal worth, or financial strength. Humble folks, seeing that a Banker required no capital when he started, and that when he collapsed he was generally wealthier than when he began, adopted the business, and — in addition to the registered Banks which were mainly kept by respectable members of society — most of the little shopkeepers and publicans — more especially in the South — could, and did, issue their I. O. U.'s, call them, with a cunning ignorance of the paradox, " silver money," and call themselves Bankers, and their little shop a Bank. The records of the " Banking " of some of these impostors would be ludicrous, were it not a thinly veiled system of robbery and swindling. They issued "notes" for sums as low as 3d., and, with too much success, deluded the ignorant country folk. But the chiefest evil to the country was wrought by the regularly The Histo7y and Progress of Banking. loi ■constituted registered Banks. One fact will convey much of the condition of the paper issues of Ireland's Bankers in 1803. The total stamp duties paid for the notes and post bills issued that year by 41 firms of Private Bankers were as follows : Three-halfpence. Threepence. Fourpence. 1,110,217. 256,801. 90,265. The three-halfpenny duty was on all notes under three guineas ; if we average the amount at two guineas, the duty repre- sents an issue of ... ... ... ... ;^2, 220,434 Those under ;^io required a threepenny duty. An average of j[^^ per note would be ... 1,284,005 Those under ;^5o required a fourpenny duty. An average of ^20 would represent ... 1,805,300 Or a total note and bill issue by private firms in 41 places of business of ... ... ... ;^5)309j739 The present (June, 1881) issue of all the Irish joint stock banks with about 400 places of issue is ^^6,354,494 A contrast of the two statements is, perhaps the most effective commentary on Irish Private Banking eighty years ago, and is sufficient to cause a regret that Swift's panacea for the country — " hanging a dozen bankers every year " — was not applied when the century was young. X. IRISH JOINT STOCK BANKS. The Bank of Ireland was established by the 21 and 22 George III., cap. 16, an Act passed in 1782, on principles somewhat similar to those upon which the Bank of England was founded. The capital was to be ^600,000, which was to be lent to Government at 4 per cent. The Bank was not to charge more than 5 per cent, for money lent, nor was it to undertake or engage in any business other than Banking as defined in its Charter. The Charter was granted on 15th May, 1783, and by it the Bank obtained a monopoly of Joint-Stock Banking, as it restricted the constitution of all other Banks of issue to six partners each. The individual Stockholders, though not burdened with unlimited liability, are never- theless, under the Act, answerable to the extent of their means to the creditors, in case of the downfall of the establish, ment, in proportion to their subscriptio?is. The Subscribers were to constitute a Corporation, of which there should be a Governor, whose qualification was a holding of ^^4,000 Stock ; a Deputy Governor, with a holding of ^^3,000 ; and fifteen Directors, with an individual holding of ;^2,ooo. The Bank commenced business in Mary's Abbey, Dublin, on 25th June, 1783. The first Governor was David LaTouche, junior, and amongst the Directors were Messrs. John and Peter The History and Progress of Banking. 103 LaTouche, Colvill, D'Olier, Jaffray, Hoffman, &c. In 1791 the capital was increased to ^1,000,000, the additional ^400,000 being also lent to Government. In 1797 it was further in- creased to ;^ 1, 5 00, 000, and in the same year the Bank was allowed to suspend payment of its notes, the circulation at the time being ;^62 2,000. In 1799 it obtained the monopoly to issue notes of amounts from 20s. to f^^. In 1800 the Union was accomplished and the Houses of Parliament were left derelict till 1S02, when the buildings were sold to the Bank for ^40,000 Irish currency. In 1808 the capital was increased to ;^2, 500,000, and by the same Act (48 Geo. III., cap. 103) the management of the public debt was given to the Bank, and it was to pay the dividends thereon without expense to the Government. In 182 1 the capital was further increased to ^3,000,000,* its present figure, and the set-off for the ad- vantage of the augmentation to the capital was the abandon- ment of the monopoly whereby more than six persons were precluded from forming themselves into a Banking Company. But the ostensible abandonment of this monopoly was ac- companied by certain provisions in respect to the partners of any new Banking Company that might be established, of such a character that the concession it appeared to make operated as a confirmation, rather than a reversal, of its monopoly privi- leges ; and when the legal effect of the proceeding was under- stood, the Bank was vigorously denounced for having " broken faith with Parliament and the Public." The Bank had not at this period any Country Branches. For over forty years it enjoyed its monopoly entirely for its own advantage, and not in the interests of the country, and when it did open Branches, its design was not to benefit the people but to try to discourage a rival. We have never seen '"' Irish currency — equivalent to ;[{^2, 769,230 sterling. I04 The History and Progress of Banking. any defence of the Bank's position during the first forty years of its career. It saw the country ruined with the corrupt and valueless issues of the Private Bankers, but it never made any move to protect the people in the provinces from the depreda- tions of these firms. The losses to the people of Ireland from about 1770 to 1820, through the paper money of the Private Banks, has been estimated at ^20,000,000, and the Bank of Ireland, during the greater part of this period, had the mono- poly of that description of Banking which offered some security to the public. Bnt it did not open any Branches, and resented so strongly the opening of country offices by another Bank, that it put in motion all its powers of oppression and suppres- sion to prevent an interference with its privileges. It was the Provincial Bank that fought the Bank of Ireland on the occa- sion, and therefore, to the Provincial Bank we are in a measure indebted for the present position and extent of Banking in Ireland. The circulation of the Bank, which in 1797 amounted to ^621,919, rapidly increased, owing to the failures of the Private Bankers and the withdrawal of their notes from circula- tion. In 1808 it reached ^2,827,000; in 1813, ^^4,212, 600; in 1821, ^5,182,600; in 1825, ^6,309,300. The establish- ment of Joint Stock Banks of Issue throughout the country diminished its circulation considerably. In 1848 it had dwindled down to ^3,100,000, and at present (June 1881), with an authorised issue under the Act of 1844 of ^3,738,428, the actual amount of notes in circulation is about ^2,910,000 only. From 1784 to 1799 the dividend paid oscillated between 5 and 6 per cent. In 1800 it was 7 per cent. From 1809 to 18 14, 7 J- per cent. In 1829, on its capital of ^3,000,000, it paid 10 per cent., and from 1829 to 1835 i*^ distributed 9 per cent. In 1864 the Bank broke through its old rule, and consented to The History and Progress of Banking. 105 allow interest on money deposited with it — thus assimilating its procedure to the Joint Stock Banks, its rivals. In 1872 the dividend rose to 13^ per cent. ; of late years it has been at the rate of 12 per cent, and in 1879 it was 11 per cent. Over and above the dividends, bonuses to the amount of ^800,000 have been distributed amongst the proprietors. The Bank publishes no Statement of Accounts. The Provincial Bank. — By the 6 George IV., c. 42, the enactment which prevented the formation of Banks with more than six partners to carry on business within fifty miles of Dublin was repealed. Previous to this, however, in 1824, the Provincial Bank was established. It was mainly an English Company, the Directors being chiefly residents in London. Its subscribed capital was ;j^2, 000,000, in shares of ;i^ioo. In May, 1826, it had opened the following branches, all beyond the fifty mile radius from Dubhn — Cork, Limerick, Clonmel, Londonderry, Sligo, Wexford, Belfast, Waterford, and Galway. It issued notes ; and in these early days of antagonism the Bank of Ireland required gold from the Provincial Bank in payment of its Bank notes, but refused to redeem its own notes in gold to the Provincial Bank. Whereupon the Provincial Bank, on 17th August, 1825, in Clonmel, protested a Bank of Ireland- note for ;;^ioo, with the ulterior object of a civil action. These proceedings seem to us now to be childish and petulant on both sides, but undoubtedly the course of oppression pursued by the Bank of Ireland towards the Provincial Bank warranted and necessitated the action of the latter. The Provincial Bank notes were payable in Dublin at LaTouche's Bank, and the Bank of Ireland construed this agency for note paying as a violation of its privileges, and on 5th December, 1823, it brought a vexatious action against the Provincial Bank therefor and obtained a verdict with sixpence damao-es. 8 io6 The History and Progj^ess of Banking. Through the action of the Provincial Bank, the Act which aboUshed notes under ^5 in England was not extended to Ireland. In its earlier years the Provincial Bank paid a dividend of 4 per cent. In 1831 it was increased to 5 per cent. ; in 1833 to 6 per cent. ; in 1834 to 7 per cent. ; in 1835 to 8. In 1836 it had thirty-three branches in operation, and the paid-up capital, which had hitherto been ^^500, 000, was increased tO;^54o,ooo (its present amount) by the creation of 4,000 new shares of ^10 each, which were fully paid up. From 1859 to 1874 a dividend of 20 per cent, was paid ; in 1875 one of 18 per cent. ; in 1876 15 per cent. ; and in 1881 13 per cent, per annum has been distributed. The Provincial Bank does not publish its accounts. The Hibernian Bank was projected in 1824, under the title " Hibernian Joint Stock Loan and Annuity Company," by prominent Catholic Dublin gentlemen, and its object was to provide a Catholic Bank for Catholic customers, and thereby to maintain on their behalf the exclusiveness into which the laws and narrow prejudices of the day drove them. The capital was p^i, 000,000, in ^100 shares, of which J[^2^ is paid up, but was subsequently increased to ^^2, 000,000 — its present figure. It has never issued notes. It did not originally grant interest on money deposited, and it charged discount at the rate of 5 per cent, per annum. It issued no post Bills, nor did it allow interest on cash balances. It paid a dividend of 4 per cent, from its establishment to 1839, when it increased it to 5 per cent, which was paid down to 1848. Twelve per cent, was paid from 1872 to 1876 j 11 in 1878 ; 9 in 1879. The Bank narrowly escaped being wound up in 1827, but surmounted its difficulties and enjoyed a very good business in its sole office (Dublin) for many subsequent years. It had the entire of the The History and Progress of Banking. 107 Catholic business of the city, and had no rivals there, except the Bank of Ireland and the private Bankers, till the establish- ment of the National Bank in Dublin in 1843 ; for the Royal Bank, which was established in 1836, did not interfere much with its exclusive business. The Hibernian purchased the J )ublin and some other offices of the Union Bank of Ireland in 1867. This establishment has become limited under the provisions of the Act of 1879. The National Bank. — The National Bank was formed in 1834, under the title of "The National Bank of Ireland," by Daniel O'Connell and others, with the object of being a Bank for the People, and an engine to assist the movement for Repeal of the Union. With the exceptions of O'Connell, his son Maurice, and Mr. C. Fitzsimon, the Directors were English- men. The notable conditions of the establishment were that a Branch should be formed in each suitable town in Ireland, and that the profits of each Branch should be divided amongst the local shareholders : and until the year 1850 the Carrick-on-Suir and Clonmel Branches were separate establish- ments in almost every particular. There were to be local Directors to each office. The capital was to be ;z^ 1,000,000 in shares of ;^5o each. The first Branch opened was at Carrick- on-Suir on 28th January, 1835. The Dublin office was opened in 1843, ^"d the Bank commenced to issue notes in Dublin in 1845- In 1848 it absorbed the business of the London and DubUn Bank, a Bank established in 1842 by a Mr. Medley. In 1856 it commenced to transact Banking business in London (the office there having hitherto been a mere place of meeting for the Directors, and a Head Office for receiving and checking the accounts of the Branches), and it further opened seven INIetro- politan Branches. The title was then changed to " The 8—2 io8 The History and Progress of Banking. " National Bank," and the paid-up capital increased to ^1,500,000. In the earlier years of its career the return to the shareholders was about 5 per cent. The dividends paid from 1859 to 1867 were at the rate of 13^ per cent. From causes unnecessary to recapitulate, under a new management they fell to 7 per cent, in 1869, and increased to 8 per cent. in 1871, to 9 in 1872, to 10 in 1873, to 11 in 1874, to 12 in 1876. In 1879 II PfiJ" cent, was paid. The National Bank has also become limited under the Banking Act of 1879. The Royal Bank (Limited). — The deed of settlement of the Royal Bank is dated ist September, 1836, and on the 26th September the newly-established concern took over the Private Bank of Sir Robert Shaw, Bart., and Co., which had carried on business in Foster Place since 1799. The Royal Bank was a Bank of Deposit and Discount only. It has no note issue, and originally had no branches, though at present it has four City offices, and one Suburban branch. I'he capital was and is ^1,500,000 in 30,000 shares of ;^5o each, upon which j[^\o per share has been paid up. The Bank rapidly developed a good and prosperous business. In its third year of existence it had over ;^i, 500,000 in discounts, and paid a Dividend at the rate of 5 per cent, per annum on ;^2o8,85o, the amount of the capital paid up at the time. In 1848 the paid-up capital stood at ^209,175 ; the Reserve Fund at ;^45,475 ; the year's net profit was ;^i9,877, of which ;^io,458 was appropriated to a dividend of 5 per cent, per annum. The dividends of late years have been as follows : — 12 per cent, in 1870; 13 in 1872; 15 in 1873 ; 14 in 1875 ; 15 in 1876 ; 14 in 1879. The Royal Bank has registered under the Banking Act of 1879, and become a Limited Bank with a Reserved Liability. The Munster Bank (Limited) was originally projected as The National Investment Company (Limited), in Cork, but The Histoiy and Progress of Banking. 109 was established as a Bank in 1864 with its Head Office in. Cork, and its Directors were exclusively Cork gentlemen. Its Branches were at first confined to the Southern Province, but subsequently were spread over Leinster. It took over the business of the European Bank* in Dublin in 1865, and it purchased some of the country branches of the Union Bank of Ireland in 1867. In 1870 it obtained by purchase the business of LaTouche's Bank. The capital was ^1,000,000, in 100,000 shares of ;^io each, upon which ^3 los. has been paid up, but in 1880 it was increased by ^^500,000 by the issue of 50,000 New Shares. In December, 1865, it paid a Dividend of 6 per cent; in 1870, 8 per cent.; in 1871, 10 per cent.; in 1872, 12 per cent, which rate it continued till 1879, when it relapsed to 10 per cent The Bank has no note issue. It has also registered under the Act of 1879 — the Reserved Liability being ^750,000. The Northern Bank is the oldest Irish Joint Stock Bank. It was originally a Private Bank under the same name, and was incorporated as a Joint Stock concern in 1825. Its early years seem to have been very prosperous, as a bonus of ^5 per share was added to the capital in 1839; a bonus of ^2 per share was distributed amongst the shareholders in 1853; one of j[^\ per share in 1861 ; one of J[^2 in 1864, 1865, and 1866; one of ;£\ 4s. 6d. in 1867, and smaller ones in subsequent years. The dividend has been as high as 18 J [)er cent in 187 1, and latterly it has been at the rate of 15 per cent The Belfast Bank, like the Northern, was formed on a private Bank of the same name. It was founded in 1827, and * A Bank called the English and Irish Bank, which had purchased the business of Gray and Son, private Bankers in College Green, was merged ia the European Bank. no The History and Progress of Banking. incorporated in 1865. Its paid-up capital is but ^250,000 in old and new shares, and a uniform dividend of 20 per cent, has been paid on the old shares for some years. The Belfast Bank issues no public Balance Sheet. The Ulster Bank was established in Belfast in 1836, and a branch was opened in Dublin in 1862. The dividend and bonus paid to shareholders in 1864 was 16 per cent. ; in 1865, 18; in 1866, 1867, 1868, 1869, and 1870, 20 per cent; in 1871, 18 per cent. ; in 1872 and 1873, 22 per cent. ; and since then 20 per cent, has been divided. The following is a table of the Irish Joint Stock Banks; their number of branches ; capital — subscribed and paid-up ; note circulations as authorised by the Act of 1844; and the average circulation during the four weeks ending 17th January, 1880. No. of Capital. Circulation. Date Branches and Sub- NAME. Branches Subscribed Paid-up Authorised Average Bank of Ireland I78.S 59 2,769,230 2,769,230 3,738,428 2,703,97s "■Hibernian ... 1824 52 2,000,000 500,000 — — Provincial 1824 47 2,040,000 540,000 927,677 727,887 Northern 1824 69 961,538 300,000 243,440 443,525 Belfast 1827 57 1,000,000 250,000 281,611 407,719 National 18,35 116 2,500,000 1,500,000 852,269 1,138,054 Ulster 18.36 48 1,200,000 300,000 311,079 610,390 •* Royal i8-,6 5 1,500,000 300,000 — — *Munster 1864 44 1,500,000 525,000 — — The foregoing are the Joint Stock Banks at present estab- lished in Ireland. There have, however, been others founded, which have disappeared. Some have merged in other banks ; some of them have hardly left a memory, they had sucli a transient existence ; while some can never be forgotten, their collapses were so destructive and disgraceful. Want of sujijiort ruined some ; folly and ignorance, more ; fraud, others. * These are not Banks of Issue. The Histoj-y and Progress of Banking. 1 1 r The London and Dublin Bank was founded in 1842 by a Mr. Medley, who was connected with the Provincial Hank. It had a nominal capital of about ;j^i, 000,000. It had branches in Athy, Carrickmacross, Dundalk, Kells, Mullingar, Parsonstown, and Wicklow ; and in 1848 it merged in the National Bank of Ireland. The Union Bank of Ireland, after an unsuccessful career of a few years, was purchased in 1867 — the Southern Branches by the Munster Bank, the DubUn and some of the 1 .einster branches by the Hibernian. The following establishments failed : — The Agricultural Bank. — This concern was projected in 1834 by Mr. Thomas Mooney, a baker in DubUn, Mr. John Chambers, and ]Mr. James Dw7er. The paid up capital was ^1,000,000, in 1,000,000 shares of j[^\ each. Before the end of 1835 it had twenty-two Branches in operation. The general manager was IVIr. ^V^m. Mitchell, who was subsequently connected with the ill-fated ^Vestern Bank of Scotland. The Reports were of a gaudy description and superlatively optimist character. Mismanagement, incompetence, and fraud ruined the concern, and it stopped payment in 1836, hopelessly insolvent. The Southern Bank of Ireland was established in Cork upon the failure of the Agricultural Bank. It commenced operations in July, 1837, and stopped payment two months after. It was a Bank of Issue. The Provident Bank was a creation of ^Ir. Thomas Mooney, the same gentleman who projected the Agricultural Bank, and a Mr. W. H. Holbrooke. It was established in 1837, and stopped payment soon after. The Tipperary Bank. — The Tipperary Bank, better known as Sadlier's Bank, was established upon the foundation 1 1 2 The History and Progress of Banking. of Scully's private Bank, in the year 1839, by Mr. John Sadlier, a young man then aged twenty-seven. His family was respect- able and wealth}-, and was related by marriage to the Scullys. John Sadlier was a solicitor, and practised as such in Dublin, and afterwards in London as a Parliamentary Agent. The Tipperary Joint Stock Bank was an immediate success. Under the auspices of the family connection it obtained a great amount of the deposits of the rich farming classes of the county Tipperary, but the discounting was principally in sums of great magnitude to landowners who could mortgage their propert)'. Mr. John Sadlier, his brother James, and Mr. Wilson Kennedy were the three Directors. A\^hat the capital was we have not ascertained, but in 1848 a dividend at the rate of 6 per cent. was declared, and ^2,513 added to the doubtful debt fund. Mr. John Sadlier was M.P. for Carlow, and subsequently for Sligo, and James was M.P. for Tipperary. John, in the financial world of London, played a prominent part, and occupied a conspicuous position. He became Chairman of the Royal .Swedish Railway Compan}-, Director of the East Kent Railway and of several other enterprises, and Chairman of the London and County Bank. He "was appointed a Junior Lord of the Treasury, and was the cynosure of the "Irish Brigade"' in Parliament. The business done by the bank was large, re- spectable, and remunerative ; but the amount it held from the jiublic was at the disposal of, and disposed by, John Sadlier in his London projects and enterprises, and the available resources were yearly diminishing, until in 1856 they ran dry. In February, 1856, the Tipperary Bank Drafts were dis- honoured by Messrs. Glyn &: Co., the London agents, and a few days after, on the 17th February, John Sadlier's body was found on Hampstead Heath, dead from poison self-administered. The Bank had smashed ; and it was discovered that Sadlier The History and Progress of Banking. 1 1 3 liad been engaged for years in a career of robbery, forgery, and fraud. The defalcations under these frauds were estimated at ^1,250,000, and the deficiency in the assets of the Bank was considerable. It has never been satisfactorily ascertained what became of these vast sums, for John Sadlier lived frugally and unostentatiously. The dividends paid to the creditors (the last of which was paid in 1879) have already reached 7s. iid. in the ^i. The Bank had many Branches, and the excite- ment occasioned a panic which was the greatest that ever (jccurred in Ireland. An article of the London Times published shortly after his death referred to him and his transactions in the following terms: — -"John Sadlier was a national calamity. ''It is not often that an individual rises to a position of such " infamous notoriety ; but the truth is, now that the whole story " of his frauds is beginning to assume shape and form, that the " prosperity of a province has received a severe shock from his " proceedings. He has forged title-deeds of estates, he has forged " private acceptances and securities, and by his connection with " the Tipperary Bank he has contrived to swindle the j)opulation " of the South of Ireland to an amount which is already stated at " ;^4oo,ooo, and which will probably reach the full proportion of *'thc half million." XL CONCLUSION. The existing well-developed system of Banking is the natural amplification and expansion of those primitive practices which were the necessary creation of commerce and money-dealing. A strong and secure place where valuable property could be deposited with safety, where risk and apprehension of plunder and loss were minimised, and where the person depositing remunerated the custodian for the care-taking, has been succeeded by an establishment where the depositor is paid for having his money taken care of, and from which ideas of risk and apprehension are almost eliminated. The Goldsmith and Money-Changing businesses have been relinquished and left to traders and brokers. A Bank is something higher than a mere strong room and a barter house, and usury is replaced by a Bank of England rate. Banking has become a science. The word " Bank " is popularly supposed to be derived from the Italian Banco, a bench*. The root of the word, how- ever, appears in Anglo-Saxon and in all the Latin languages, and the Italian word is said to be derived from the German, and the German from the Low Latin. The original meaning of the word banc in the Anglo-Saxon and Dutch languages was a hillock, a heap. It was transferred to mean any elevated or * See ante pp. 28, 29. The History ami Progress of Banking. 1 1 5 eminent place for sitting, and was applied to express a bank of oars, and a bench of rowers. It thus came to be applied generally to the seats of the moneychangers in the later Roman market-places, as those persons occupied more elevated seats than the common traders. The word was next applied specifi- cally to the tables at which they sat and to their occupation, as Mensarii was the designation of the Bankers in classic Rome, from vunsa., a table. The word Bankrupt is usually deduced from the French banqiieroute^ which is derived from the Italian banco and rotto — a broken Bank. But the old French idiom conveying the expression of bankruptcy is qui font baiique route — translated literally in the first English Bankruptcy Law (34 Hen. VIIL, c. 4) as "such persons as do make bankrupt." This French word route is, however, rendered by vestigium, a track or mark ; and as cart route is the mark which the cart wheel has left, so banque route is the mark which the banque or bench has left. The explanation offered for this derivation is in the circumstance that when in Rome the Banker failed or absconded, he took his bench with him, or else that it was removed by the authorities and nothing left but the route or sign and mark where it had been. Others say that the ab- sconding or failing Banker had his table broken {ruptus) by the exasperated populace. At all events it seems allowed on all sides that banque or ba?tc or banco, meant a bench or table,* and that our modern word Bank is derived therefrom. The functions of a Bank at the present day are not only manifold and of paramount importance, but are of vast benefit to the community individually and to the country at large. A Banker is the intermediary of capital. He borrows money from those who have it — to their advantage — and lends it to those who legitimately require it — to their advantage. By * " Overthrew the tables of the money-changers." — Matt. xxi. 12. 1 1 6 The History and Progress of Banking. his means the numberless sums, large and small, which would be unproductive and unused in the possession of individuals are amassed together, and the Banker employs the amount in lending it at interest, thereby increasing the capital of manu- facturers, traders, and farmers, who utilise it for the purposes of advancing commerce and developing trade. Thus these moneys, which without his intervention would be unused, are gathered together and made to increase the productive capital of the Kingdom. The countrj', if it is not positively so much richer, is negatively so — for it is saved from being so much poorer. He lends out the money deposited with him, at a greater rate than he allows to those from whom he receives it. and the margin constitutes his main profit. It is thus apparent that the common phrase of statisticians — " so many millions in Banks " — is not correct, for the millions are not in the Banks but lent out over the country. Therefore the amount that Banks apparently hold on Deposit Receipt is an unreliable index, or no index at all, of " the wealth of the country." In- directly, however, it is a criterion, for, presumably, if the country was not solvent and prosperous the Banks would not lend out the millions they have on deposit. These sums must be either lent or not lent. If lent in the country, the country is prima facie prospering, for the classes requiring temporary use of capital are solvent ; if not lent, prima facie those classes are not solvent, and thus it is possible that the amount of de- posits in Bank may be greater when the wealth of the country is less. To cite a possible case, and not an extreme one : A. has possessed a certain business, which a few years ago, as a going business, was valued at ^30,000— his then profits being the basis of the estimate. This year, after a few depressed and unsuccessful seasons of trading, he discontinues his busi- ness — sells the interest of it for ;;£"5,ooo, or say ^10,000, The History and Progress of Banking. 117 which amount he places with his Bankers on Deposit Receipt. Statistically, then, the " wealth of the country " has increased ;!^i 0,000. In reality, it has decreased considerably. Again, a more usual case: A., a wealthy person, overdraws his account and lends to B., who places the amount on deposit. Again the " wealth of the country " from a statistician's view-point has increased, though in reality there is no increase. Thus such statistics cannot be deemed to be conclusive on the subject of the national wealth. Besides the amount he has received on Deposit Receipt and Current Accounts, the Banker has the capital of his Bank to trade on. Though the money he holds from the public is repayable always at the call or disposal of the depositor, never- theless, except in special cases (such as during a panic) which are specially provided for, there is but a limited portion daily called for ; and for this portion which he has to surrender each day it is necessary that he should maintain a floating balance of cash and available resources on hands. Banks of Issue possess a source of revenue which is denied to non-issuing establishments. As will be explained in the subsequent pages, some Banks are legally enabled to issue and keep in circulation a greater value in Bank Notes than that of the coin they hold. If they were compelled to hold gold or bullion equivalent to the value of their notes in circulation a note-issue might be a loss ; but when the actual circula- tion is largely in excess of the gold and silver coin held, it is manifest that this excess is a source of profit ; the interest upon this super issue, less the cost of manufacture and main- tenance, is net profit to the Bank. The benefits also to the State and the country conferred by paper issues of solvent Banks are not inconsiderable — by reason of the saving of wear and tear, of the attrition and waste of the coinage. The 1 1 8 The History and Progress of Banking. amount of Bank Notes at present in circulation in the United Kingdom is about fifty millions sterling. A further function of a Bank, and one which is also a source of profit, is to afford a rapid and secure transfer of money from one part of the Kingdom or the world to the other, by means of Letter of Credit, Circular Note or Credit-advice. This por- tion of a Bank's business is usually profitable, rather because of the commission paid on such transactions than that they add to a Bank's productive capital. There are minor functions of a Bank noted subsequently. A consideration of the scientific aspect of Banking is not suited to these pages. A banker, accordingly, is burdened with a grave and serious responsibility, and clothed with a great trust. To his ability, skill, discretion, and honesty is consigned the duty of ad- vancing the prosperity of the country, by assisting legitimate industry, encouraging diligence, and aiding the worthy. In the use he makes of the money entrusted to him he proves whether he is fulfiUing his duty and benefiting society. Gilbart, in speaking of a Banker's position and authority, says : " He " holds out inducements to uprightness, which are not dis- " regarded by even the most abandoned. There is many a " man who would be deterred from dishonesty by the frown "of a Banker, »^hough he might care but little for the admoni- "tions of a Bishop." Whether the frown of a Banker is as omnipotent now as in the days when Mr. Gilbart wrote thus, is a question that need not now be discussed. But there is no doubt that a Banker's powers for good or evil are superlative, and not easily overrated. The advantages bestowed by Banks are now extended to almost every town in the Kingdom, and are appreciated by the public, who regard them in a proper light and manifest their appreciation by extending to them the fullest confidence. It is a long step from Egibi and Son to the The History and Progress of Baitking. 1 1 9 National Provincial Bank and from Pasion to Coutts and Co., but it is a pleasant and assuring circumstance that in all ages and countries Bankers have as a rule enjoyed a good reputation and borne themselves so as to deserve and maintain the con- fidence of the public. It is true that, from time to time, public confidence in our Banking system has been shaken. Such scandalous failures as those of the Western Bank of Scotland, of the Tipperary Bank, and, in later years, of the City of Glasgow Bank — events that occurred not because of outward panic but because of internal mismanagement and fraud, — were calculated to per- manently weaken public reliance on, and trust in, a Banking system under which such occurrences were possible. The effects, however, of such collapses have been of ultimate benefit to Banking, and, notably, the City of Glasgow Bank failure occasioned the passing of a protective Act of Parlia- ment, which, whatever its defects in detail may be, must be regarded as one of large and wide benefit to Shareholders in Banks. It is a frequent complaint that Bank Shareholders are too apathetic in regard to their own position and interests, and exercise too little supervision over the management; but it must be admitted that if interference of this nature were allowable, it would probably degenerate into inquisitiveness and obstruction, and serve no really good end — and, moreover, the Directors of our Banks are, as a rule, chosen from those classes to whom suspicion cannot readily attach. In the selection of proper Directors greater protection lies than in holding the Board under control and supervision. The numerous great men — great in Literature, in Politics, in Science, in Wealth — that have been connected with Banking since the time of Egibi of Babylon; the many failures and accidents since the days when Icetas, the father of Diogenes the I20 The History and Progress of Banking, Cynic, fled, a swindling Banker, from the town of Sinope ; the great, though gradual, progress the Banking of the present shows when compared with the days when Seneca had a sum equal to two millions sterling lent out at usury, and wrote, the while, in praise of poverty, — or with the more modern times in our own country, when in the town of Bury St Edmunds, seven centuries ago, Benedict, the Jew usurer,* a representative Banker of the time, having lent forty marks — some seven and twenty pounds — to the Abbey, prefers at the end of four years or so a claim for "Twelve hundred pounds besides interest" — a circumstance that causes Mr. Carlyle to almost hope this Benedict was one of those who hanged themselves in beleagured York City soon afterwards — these are subjects too large to fully discuss in this volume, but they will claim the attention and interest of all students of Banking, its History and Literature. * Carlyle's Past and Present. PART II. THE LAW AND PRACTICE OF BANKING. THE LAW AND PRACTICE OF BANKING. I. THE RELATIONS BETWEEN THE BANKER' AND HIS CUSTOMER. A Banker is a medium between those who have money and those who require it ; he receives money for temporary keeping from the one class to advance it temporarily to the other. The relations are simply those of debtor and creditor. The Banker does not occupy the position of a trustee. If he did, the remedy, for instance, against him in case of his wrongfully dishonouring A.'s cheque to B. would be a suit in Equity by B., whereas the remedy is a Common Law suit by A. The drawer only of a cheque can proceed against a Banker for wrongful dishonour, because there is no privity or contract, actual or implied, between any parties to a cheque, except the drawer and drawee ; the debtor is liable only to his creditor, and the Banker cannot be the debtor to the bearer or holder of a cheque, being other than the drawer. Neither does the Banker occupy the position of a bailee. If he did, he would be bound to re-deliver to the drawer of a cheque. A, the identical moneys which A, had lodged. Nor is the Banker the 9—2 124 The Laiu and Practice of Banking. agent of his customer ; for if he were, he would be bound to apply the actual money lodged with him only in the manner the person so lodging might direct. The relations, there- fore, are, at law, simply those of debtor and creditor, or borrower and lender. Under some circumstances the Banker pays the depositor for the use of his money, and in almost all cases he charges those who borrow from him a certain rate of interest for the amounts so lent. There is, however, the general distinction between those who deposit with the Banker — i.e., those who lend to him, — and those who borrow from him. The Banker is practically obliged to repay, or account to, the depositor on demand or notice, whereas the borrower does not repay the Banker till the term of the contract between them has been fulfilled. Thus the Banker holds himself liable to an im- mediate call on him to return the funds of others which he holds, while he cannot obtain on demand the sums he has lent for a stated term. Primarily, the extent and nature of a Banker's business are regulated by his capital and the extent and nature of the sums he receives from the conmiunity ; secondarily, the extent and method of his business are regulated by the circumstance that the sums so received are not generally repayable at any certain and stated time, but may be demanded on any day. The ordinary experience of the Banker is, however, that the aggregate amount held from the public varies with circumstances within his knowledge. In rural districts, they diminish in the Spring and in- crease in the Autumn season ; but, as a rule, they seldom decline below a certain line. He thus calculates on retaining a gross permanent amount, estimated by previous experience and a foreknowledge of the consequences of any exceptional occurrences. The Law and Practice of Banking. 125 There are two descriptions of lodgment with a Banker : one, where the amount shall bear interest and be repayable on call, or at a short notice, upon returning the Banker the receipt he lias given for such lodgment ; the other, where the amount shall not bear interest, and shall be repayable on demand from time to time, on written orders from the lodger. The former descrip- tion is known as on Deposit Receipt, the latter as on Curre7it Account. It has been observed that the relations of the Banker to his customer are not fiduciary ; neither is he a legal agent to the customer, nor does the customer occupy the position of a principal. " Money paid into a Bank ceases altogether to be "the money of the person paying it in ; it is the money of the " Banker, who is bound to return an equivalent by paying a "similar sum to that deposited with him, when he is asked for " it. To all intents, it is the money of the Banker to do as he "may please with it ; though it is true that, in a popular sense, "it is spoken of as ' my money at my Banker's ' and ' my " ' balance at my Banker's '; and though no one can doubt that " in ordinary language the term ' ready money ' includes the "speaker's balance at his banker's."* A Banker is arbiter of his own business, and can decline to open an account for, or to receive lodgments from, any indivi- dual. But if an account be opened, the Banker thereby impliedly undertakes to transact the party's Banking business (but not necessarily to discount bills or make advances), and to obey the orders of his customer which are within the scope of a Banker's business as understood in the country and neigh- bourhood. Failing obedience in these respects on the Banker's part, he is liable to his customer, should the customer be in any way damnified, or put to loss, by reason of the neglect or disobedience, notwithstanding that he (the Banker) derives no * Grant. I 26 TJic Laiv and P vac I ice of Banking. profit or benefit from the business. Negligence in transacting the customer's business entails liabiUty, as disobedience does. " A Banker may fairly be considered," says Grant, " to be in a " situation or position in which skill is implied, and therefore- '•an omission to use due skill, even on an occasion of a gra- " tuitous employment, is taken as gross negligence." 11. DEPOSIT RECEIPTS. Unless a Banker expressly stipulates to allow interest on money lodged with him he is under no obligation to do so, nor can he be compelled to do so. Such express stipulation, subject to certain conditions, exists in the case of Deposit Receipts, the usual form for which is as follows : Deposit Receipt. The Anglo-Indian Bank. London. l88i. Received from of the sum of to be accounted for at our Office here. For the Anglo-Indian Bank. _Acct. Manager. On the back of each such Receipt there is a printed memoran- dum of the conditions on which Deposits are received by the Bank, generally to this effect : " Sums deposited for one month " or longer, bear interest at the rate allowed by the directors on "such deposits. Notices of the rate allowed, and of any 128 The Law and Practice of Banking. "variation thereof, are posted from time to time in the public '• offices of the Bank, and no other notice of such variation "will be given to any depositor. When payment of either " Principal or Interest is required, the Deposit Receipt must " be produced, and endorsed by the depositor, and delivered " up to the Bank. Ten days' notice previous to withdrawal is " required to be given by the depositor." The Rate of Interest varies in accordance with the variations in the Bank of England rate, and the interest accrues on the deposit at the varied rates. The ten days' notice of withdrawal is not always and under ordinary circumstances required by a Bank. It can be claimed, however, and has been in times of panic, should there be a " run " on the Bank ; but even in this extreme case it is not always demanded, as the tendency of a regulation to defer payments at such a time would be to increase the panic. The rule dates from the ante- steam and ante-telegraph days, when the transit of coin to meet such emergencies was a matter of a delay of some days. A Deposit Receipt can be issued in two or several names, in which case the endorsement of each is required on repayment. But if the receipt is surrendered by one of the parties, bearing his endorsement only, for the purpose of adding to the amount and obtaining a fresh receipt in the same joint names, the discharge of one will, with the evidence of such an additional deposit, protect the Banker, It can be issued in joint names payable to either or any of them, and as a rule a joint deposit is made accountable to " the survivor." This course is supposed to obviate, in the case of the death of one of the parties, the necessity to take out Letters of Admmistra- tion, a certificate of death being deemed sufficient. But as a matter of law such a precaution is unnecessary, as the parties whose names are joined in a Deposit Receipt are not tenants The Law and Practice of Banking. 1 29 in common, but joint tenants, and, consequently, on the death of one his property in the amount accrues to, and is absorbed by, the survivor. If a Deposit Receipt is lodged by another l)arty in the name of an infant — that is, a minor — it cannot be repaid or withdrawn until the infant attains majority. A Banker is not competent to bind himself by a Deposit Receipt issued to an infant. A Deposit Receipt is a contract between the Banker and depositor ; and not alone is an infant in- capable of entering into a legal contract, but should he be a ]iarty to a contract, he cannot now make it valid by ratification when he is of age, as all infant contracts are absolutely void by the Infant Relief Act, 37 & 38 Vic, c. 62. A Deposit issued in the name of a spinster who subsequently marries, requires her husband's endorsement supplementing her own before repayment can be made. A deposit can be received from a married woman, but unless she alleges at the time of depositing that it is her separate estate, and for her own separate use and enjoyment, and that it is so stated on the receipt ; or that the receipt is issued under the husband's knowledge and consent ; it is necessary that the receipt should bear the husband's endorsement on repayment. The amount of a Deposit Receipt in a married woman's name which is her separate estate, vests at her death, not in her husband, but in her executor or administrator. If a married woman represent herself as a spinster or widow when lodging money on Deposit, and her husband subsequently apprises the Bank that the money so deposited is his property, the Banker should refuse to pay either party, and let a Court of Law decide whether the money was the wife's separate estate, or whether in depositing it she was merely her husband's agent, in which case it would be his property. A Deposit Receipt, though by the American law it is held 1 30 The Law and Practice of Banking. capable of transfer, is not, in this country, intended to be a transferable document ; and where it is not presented for pay- ment by the depositor, but by a second party, payment is not made until the Banker is satisfied that the discharge is bona fide that of the depositor, and that it has been his intention to transfer the amount. As the Banker is in all cases accountable to the depositor, he must satisfy himself as to the identity and botia fides of the person to whom he repays the amount. In the case of payment to a wrongful holder the Banker is liable to the depositor, unless he can prove that the latter has been guilty of fraud or of such negligence that the responsibility for the mispayment attaches thereto. The non-transferability of a Deposit Receipt is, however, in some quarters, still a debatable question. Mr. Dunning Macleod, in his Theory and Practice of Bankings thus expresses himself : — "Formerly these Deposit Receipts were what was termed non-negoti- "able. They were made payable to the Customer himself only, and con- "sequently, if the Customer transferred his Deposit Receipt to anyone " else, the transferee could not sue the Banker, at Law, in his own name, " though he might in the name of the Transferor ; but he might sue him " in Equity. But since the Supreme Court of Judicature Act, which enacts "that the rules of Equity shall prevail over those of Common Lav,-, a " Deposit .Receipt is as transferable as a Bank-note or cheque."* Mr. Macleod does not give any authority for this sudden con- clusion, nor has the Judicature Act, as far as we can learn, caused the Banks to make any distinction in the treatment of their Deposit Receipts, and at no time have they been regarded as transferable as a Bank-note or cheque. In a case (Moore (administratrix of) v. The Ulster Bank), the Irish Courts dis- tinctly affirmed that a Deposit Receipt was not a transferable instrument. In this case. A., shortly before his death, endofsed '^' Third Edition, vol. ii. p. 469. The Lata and Practice of Banking. 1 3 r a Deposit Receipt which was in his name, and delivered it to B., stating that the amount was for his (A.'s) niece C. B. endorsed the document, and after A.'s death, presented it to the Bank, who paid him (B.) the amount. The Bank had not had notice of A.'s death. In an action by the administratrix of A. against the Bank, it was held that the Deposit Receipt was not a nego- tiable instrument passing by endorsement* A Deposit Receipt is not "made payable" to the Depositor. It is a simple con- tract between the customer and the Banker, wherein the latter undertakes to account to the Depositor for his Deposit, and the Banker is strictly within his right in refusing to saddle himself with the responsibility of vouching the bona fides of any transfer of the Receipt — for paying a transferee amounts to vouching for such bona fides. In a will. Deposit Receipts should be specifically mentioned. It has been held that they were not included in a bequest in the following words : "all bonds, promissory notes, and other " securities for money in my hands at the time of my decease, " and all moneys due thereon." A Deposit Receipt, it will be observed, cannot strictly come under any of these terms, and therefore, in this case, the amounts on Deposit passed under a residuary clause. It has happened that a Deposit Receipt has been issued in such a way and under such circumstances and conditions as to cause a double liability of the Bank, as will be seen from the following case of Cochrane v. O'Brien : — " John O'Brien, " father of I )aniel O'Brien and Catherine Callaghan, lodged ";!^i5o in Bank, upon a Deposit Receipt, in his own name. " Upon Daniel's producing the receipt some time afterwards, * It was further held that there hnd been no equitable assignment in this case ; that even if the transaction constituted B. an agent of A., the authority was revoked by A.'s death; and that the transaction did not amount to a lionafio mortis causa. 132 TJic Law and Practice of Banking. " and demanding the interest, he was refused, the Bank paying " only to the depositor in person ; John, upon this, used, for " some time, to come along with Daniel, and receive the " interest, taking the fresh receipt in his (John's) name, on each " occasion ; afterwards he obtained permission that Uaniel " should receive payments upon producing the receipt endorsed " by John. Then Daniel, by his directions, paid an additional " sum of ^5 into the Bank, and obtained a new Deposit " Receipt for the whole amount then in the hands of the Bank, "being ^155, but in the name of Catherine O'Brien (after- " wards Callaghan), Daniel telling the Manager that his father "intended ;:^i55 to be the portion of his daughter Catherine, " hut desired to retam control over it during his life, and that " he 7ciished the Deposit Receipt should be draion in her name. " In a few days afterwards John O'Brien died, Daniel took out " administration testamento annexo, and, as administrator, "claimed the ^155. Shortly after, Catherine married, and " she and her husband demanded payment of this money. "Both Daniel and Catherine, with her husband, commenced " actions against the Bankers, who filed a bill of interpleader " against both ; but the bill was dismissed, this not being the " case of a double demand for one duty, but a case in which " there may be two Habilities : and a mere pretext of conflict- " ing claims will not support a bill of interpleader ; and the " court is bound to see that there is a question to be tried. " Here the transaction created a debt from the Bank to " Catherine, in consequence of the mode of dealing adopted " by the Bankers ; they were not at liberty to resist her demand, "or to treat the case as one of interpleader, because John's " representative, who made the last deposit and took the new " receipt, chose to rescind the whole transaction. It is quite "consistent with this view that John's representative might The Lazv and Practice of Banking. 133 " still be able to recover against the Bankers ; but it was their " own fault if they created a new liability in themselves without " obtaining a sufficient discharge from the original title to the "money in their hands. The Bank in this case applied for "the bill of interpleader; but it was pointed out by the Court " that in so doing they asked it to destroy their own mode of " dealing, for if the cancellation of the old receipt and the " issuing of the new receipt did not create a liability to the " person named in the new receipt, the Bankers' system of " Deposit Receipts was defective."* It frequently happens, especially in country districts, that a Depositor becomes security for a person who is obtaining accommodation from the Bank. In such a case the Banker usually obtains from the guaranteeing depositor his deposit receipt duly discharged; he then has a lien upon it, and is entitled to hold an equivalent to the amount guaranteed. If the Banker has not possession of the receipt, there is nothing to prevent the depositor obtaining payment of the amount of his deposit while the Bill he has secured is running and before it has matured. A Banker's action, however, in this as in many such cases, is to be governed by the character, etc., of the guaranteeing-depositor. A Banker's Deposit Receipt is exempt from stamp duty ; but as it is necessary that the Banker should obtain from the depositor, on repayment, a receipt for the amount repaid, and as there is no corresponding exemption on behalf of the depositor, the receipts issued by the Banks generally bear an impressed receipt stamp. This impost legally falls on the depositor, and on this account the practice obtains in some Banking establishments of deducting the price of the stamp from the amount of interest payable — a practice not in favour * Grant. 134 '-^^^^ Law and Practice of Banking. with the jjublic, who are not aware of the reason of the deduction, or of the right of the IJank to enforce it. Lost Deposit Receipt. — In the event of the loss of a Deposit Receipt, the amount is repaid to the Depositor upon a satisfactory indemnity. 111. CURRENT ACCOUNT.— CHEQUES. A Current Account differs from a Deposit in tloat, as the term conveys, it does not consist of a fixed balance, but varies from day to day, being increased by lodgments and diminished by cheques. The customer lodges with the Banker sums con- sisting of money, cheques, drafts, bills, and other negotiable documents, and the Banker makes repayment upon written orders from the customer. These written orders are called Cheques. The fact of the Banker receiving lodgments on Current Account for his customer creates a contract and engagement on the Banker's part to honour the customer's Cheques to the extent of those lodgments. A Cheque on a Banker is, according to its legal definition, an Inland Bill of Exchange payable on demand. It is an order in writing by the person who has deposited the moneys, or in whose name they have been deposited, for the payment on demand, without interest, of a specified sum, to a person named therein, or to his order, or to the bearer. The person making such order is the Drawer ; the person to whom the order is made payable is the Payee ; the Banker on whom it is drawn is the Drawee. The usual form of an unfilled Cheque is as follows : — o 6 The Lazo and Practice of Banking. No. Pav London, THE ANGLO-INDIAN BANK:. 1 88 or bearer the sum of sterling. £ But it is not requisite that any precise form should be employed.* It is not even absolutely necessary that the Drawer's signature must be subscribed at the foot of an order to pay. One couched, for instance, in the following terms, in the customer's handwriting, is equally a valid Cheque, if fulfilling all the legal requirements as to dating, stamping, etc. : — - " Mr. Henry Wilkinson requires the Anglo-Indian Bank to pay bearer fifty pounds." It seems, however, that the terms of the order must be such that payment of the amount is not asked as a favour but required as a right, that is, that it must be so framed that payment is not at the option of the Drawee, but that it is com- pulsory on him. The Essential Constituents of a Cheque are (i) that the Drawee's name be set forth on it; (2) that it be dated; (3) that it be stamped ; (4) that the amount to be paid be expressed ; (5) that it be payable to the bearer, or to some person or persons, or his or their order ; (6) that it be payable on demand unconditionally; (7) that it be signed by the Drawer, or by an authorised person for him. (I.) The Drawee's Name. — The name of the company, * For convenience in after reference it is to be recommended that a place be indicated on cheque forms, to contain the folio and number which will mark its posting in the Banker's ledger. The Lazu and Practice of Banking: 137 firm, individual, or establishment upon whom the Cheque is drawn, together with the locality where the Cheque is to be presented, are necessary, A Cheque addressed to the " National Provincial Bank " is not sufficient — the office or branch of the Bank must be stated. But presentation at the Bank's Head Office, of a Cheque thus vaguely addressed, is a sufficient presentation. (II.) The Date. — A. Cheque may be dated on any day of the week, Sunday not excepted. If a cheque is undated it is an imperfect instrument, and therefore inoperative ; and the Drawee can decline to honour it on that ground. Further it is possible that an undated cheque may have been issued such a length of time before its presentation as would raise a pre- sumption of viala fides if the date of issue was known to the Banker ; and he is entitled to such an adverse presumption in case the Cheque is undated. It is said to be " post dated " if it bears a date subsequent to the day upon which payment is demanded. A post-dated cheque is not an illegal document, nor does any penalty attach to the maker of it. " It is," says Grant, "a legal, valid, and unimpeachable instrument.'' If a Banker, however, cash such a Cheque before the day of its date, and that the Cheque has been lost or stolen, or fraudulently obtained, the Banker will be liable to the rightful owner. It is doubtful if liability in any shape would attach to a Banker who paid such a Cheque to a bona fide holder, or direct to the Payee, because it is an inherent quality of a Cheque that it is payable on demand, and unconditionally. It is the opinion of some persons that a Cheque, being post-dated, is transformed into a Bill, and requires an ad valorem stamp duty ; but this is an erroneous idea. (III.) The Stamp. — Formerly the stamp duties on cheques were of a varied, complex and confusing character, but now a 10 138 The Law and Practice of Banking. stamp duty of one penny is imposed on each Cheque, irre- spective of its amount. This duty is denoted either by an impressed stamp (which of late years has been reduced from a large unsightly roughness to a neat shape and size), or by an adhesive postage and inland-revenue stamp, affixed and cancelled by the Drawer, or, failing him, by the Drawee. If the affixing and cancellation of the stamp is the act of the Drawee, it operates to make the instrument valid and to protect himself, but not to relieve the Drawer or negotiator. The consequences of negotiating an unstamped cheque, are liability to a penalty of ^10, and inability to sue upon the instrument, unless upon payment of the duty and a penalty. The Stamp Act of 1870 fixed the stamp duty on Cheques payable on demand at one penny ; but by it any Draft or Order drawn by one Banker upon another in payment of any differences, for the purpose of settling or balancing or clearing any account between such Bankers, is exempt from the duty. A subsequent Act extends the exemption to Drafts or Orders drawn by the Paymaster- General. Cheques drawn by Benefit Building Societies and the like are not exempt. (IV.) The Amount. — The sum payable must be set forth in words or figures, or both. It must be denoted in English money. A Cheque may be written for any sum. There is now no restriction of the amount for which it may be drawn. The supposition that Cheques for a less sum than ^i are illegal, is erroneous, as the Act making such a Cheque void and illegal has long since been repealed. If a Cheque has the amount in figures or in writing only, it is yet a valid instrument. If the amount as expressed in words differs from that as ex- pressed in figures, the amount in words is the sum the Bank can pay, irrespective of the circumstance that the figures may be the lesser amount ; but it is open to the Bank to decline The Lazv and Practice of Banking. i 39 payment until the Drawer has indicated which of the two amounts is the correct one, as a Cheque with differing amounts is a contradictory order. It is not essential to a Cheque's validity that the amount should be fully designated as pounds, shillings, and pence. Thus an order to pay "ten, eleven, seven," has been held to mean ten pounds, eleven shillings, and seven pence ; and where an amount so stated is supple- mented by confirmatory figures, no hesitation to pay on the Banker's part is necessary. Altered Amount — Forgery. — The law on the subject of a forged or altered Cheque is that the loss occasioned by the payment of such an instrument falls on the Banker, and not on the Drawer whose signature has been forged or whose Cheque has been altered. A Banker is bound to know his customer's signature and his handwriting ; and therefore, he is bound to know what is not his customer's handwriting. If a Cheque is a forgery in toio, it is manifest it is not the customer's order, and that therefore his account cannot be charged with it. If a Cheque is altered fraudulently, and that the alteration is the result of the Drawer's gross negligence, the loss would probably fall on the Drawer ; but the question of the negligence is one for the jury. In a case where a Cheque was filled for fifty pounds, but in such a manner as to admit of the words " three hundred " and the figure " 3 " being inserted in the body and margin respectively, it was held that the loss should fall on the Drawer, as it was his own negligence induced the fraud. But Bankers should not rely too strongly on this case, as the judgment may have depended on the fact that the body of the Cheque was in the handwriting, not of the Drawer, but of his wife. Had it been apparently in the Drawer's penmanship, it might have been ruled that it was the Banker's duty to know liis customer's handwriting, and that he should have discovered 140 The Law and Practice of Banking. that the added words were not written by him. IJut, of course, if such fraudulently added words or figures were manifestly in a handwriting different from the other words and figures, the Banker would prima facie be guilty of negligence, and would therefore be undoubtedly liable. The rule of law is, that in a case of this kind, where a loss must fall on either of two inno- cent parties, it falls on him whose conduct opened the door and created the opportunity for the fraud, and in case the Drawer cannot be made liable for this, the loss falls on the Banker. In case of a forged endorsement of the Payee's name, the Banker is protected where he has paid the holder without knowledge of the forgery, but the protection does not extend to any other person who takes the cheque upon the faith of such forged endorsement (16 «&: 17 Vic, c. 59, s. 19). Any alteration whatsoever in any material portion of a Cheque requires the confirmation of the Drawer in order to constitute the Cheque valid and negotiable ; in fact it may be laid down as a general rule that no alteration can be made in a Cheque, except by the Drawer, or by liis authority, save in so far as regards altering the tenor of the Cheque from bearer to order, as is subsequently stated. The words "pounds," "shillings," "pence," are not material words, and an alteration, for instance, from a misspelling to a correct spelling of them, or vice versa, is not a material alteration. But such alterations in the number of pounds, shillings, or pence, or in the name of the Payee, or in the date, are material alterations and require the confirmation of the Drawer. An alteration from " bearer " to "order," though a material alteration, does not require the Drawer's initials in confirmation, because its effect is to restrict the negotiability of the Cheque, and being a restriction, the presumption is that it is authentic ; and, besides, it operates also as a protection to the Drawer. Moreover, it is a received The Law and Practice of Banking. 141 opinion that a Payee of a Cheque drawn to "bearer," can, for Ills own protection and security, change it, and make it drawn to "order." But where a cheque drawn to "order" is altered to "bearer," such alteration requires the Drawer's confirmation, for it operates to enlarge the negotiability of the Cheque, and the presumption is against such an act. Therefore, where a restriction is removed by an alteration, the alteration must be authenticated by the maker of the instrument. (VI.) The Payee.' — "Bearer." — A Cheque is called an open Cheque, when it is not crossed. The nature and effect of "crossing" is treated subsequently; at present we deal with uncrossed instruments. A Cheque must be payable to some one. An order filled thus, " Pay twenty pounds " and signed, is not a Cheque, as the Payee is not specified. The Payee may be denominated as the " bearer," or the Cheque may be payable to initials "or bearer," or a number "or bearer," and may be payable to a specified party "or bearer." In all such cases the amount is payable by the Drawee to the presenter of the Cheque, it being an open Cheque and not crossed. The jiresenter is the bearer and it is not incumbent on him to endorse the Cheque. By its nature, as we have seen, a Cheque is payable on demand and unconditionally, and being payable to bearer and not crossed or its negotiability otherwise restricted, the holder is entitled to immediate payment, if the Banker has funds of the Drawer in his possession. The Payee of a Cheque l)ayable to bearer can make it payable to order by altering the word "bearer" to "order." But a Cheque payable on the face of it, " to bearer," cannot have its negotiability restricted and be made by endorsement^ payable to a further party's order. "Order." — Cheques payable to "order" were introduced into the Statute Law by 16 & 17 Vic, c. 59, s. 19. When a cheque is made payable to an individual, or order, it is neces- 142 The Law and Practice of Banking. sary that it should be endorsed, or purport to be endorsed, by him, before it becomes negotiable. The Payee is empowered to endorse it making it payable to the order of a third party, the third to a fourth, and so on ; and it must bear, or purport to bear, the endorsement of each subsequent Payee, the same as if he had been the original Payee. If a Cheque payable to " order " is duly endorsed, or purports to be endorsed, by the Payee, in blank — that is, if he does not limit the negotiability of it by making it payable to another party — it then becomes a cheque payable to bearer, and, as such, is negotiable without further endorsement. A cheque drawn, " Pay vie or my order,"' if presented to the Drawee by the Drawer, and he is known to be the Drawer, can be paid without his endorsement. If he refuses to endorse he cannot be compelled to do so, but a memorandum to the effect that the amount has been paid to him, in the terms of the drawing, is advisable. Making the pay- ment to the drawer in person fulfils his command to " Pay me." " Specially Payable." — A Cheque is said to be specially payable when it is an order, the payment of the amount specified in which is restricted to the Payee alone : this is effected by writing it payable to a party without either of the alternative words " bearer " or " order." In this case the Banker on whom it is drawn is empowered to pay it to the Payee only. Con- sequently its negotiability is limited to the Payee and it ceases to be transferable. The Banker, therefore, must be satisfied that the presenter is the Payee; and in cases where such Cheques are presented to the Drawee by another Bank, the amount is not paid to the presenting Bank unless the endorse- ment is guaranteed. (VI.) On Demand and Unconditionally. — A Cheque, in pursuance of the Stamp Act, 1870, must be payable on de- mand, and payable unconditionall}-. If an instrument be drawn, TJic Law and Practice of Banking. 143 not payable on demand but at a future time, no matter how soon, it is not a Cheque. At sight, is now equivalent to on demajid. It is not essential that the actual words "on de- mand " should be expressed. For instance, a Cheque drawn "Pay Bearer Fifty Pounds" is, in law, a Cheque payable on demand, and any expression equivalent to "on demand" is valid. A Cheque must also be payable unconditionally. If there be any condition attached to the payment of the amount the Banker can refuse to negotiate the Cheque, as it is no part of his business to observe the fulfilment of any duty imposed by the Drawer on the Payee as a condition precedent of payment. (VII.) The Drawer. — Drawer's Signature. — The signature of the Drawer is the authority to the Banker, and is therefore essential. As we have seen, it is not absolutely necessary that the signature should be subscribed at foot of the order, but the instrument must bear the Drawer's name in his own handwriting somewhere on the face of it, and be his order to pay. A marksman, if the mark be duly attested, may draw a Cheque. A Banker is not bound to honour his customer's signature if it should be signed in a manner different from his usual or specimen signature, no matter how clear the evidence is that it is the writing of the customer. For example, if a person who has given his Banker a specimen signature " J. Smith " should sign his Cheque " John Smith," the Banker is not bound to pay it, as the signature differs from that which his customer has instructed him to honour. But if a Banker has evidence that it is, bona fide, his customer's signature, and is satisfied therewith, he may pay it on his own respon- sibility. Should he not pay it, he should be careful to supply the proper motive of refusal, i.c.^ that the Drawer's subscription differs from his usual signature. An Infant — that is a person under 21 years of age — cannot 1 44 The Law and Practice of Banking. keep a Bank account, or draw valid Cheques, A Banker who cashes a Cheque drawn by an infant is not thereby discharged, that is to say, an infant can make him account for the funds paid away on such document. A married woman can keep a Current Account, (i) of her separate moneys (which are defined below) ; (2) by the permission and authority of her liusband, which may be implied as well as written ;* and (3) as lier husband's agent. A married woman's separate estate is defined in the Married Woman's Property Act thus : — " The " wages and earnings of any married woman acquired or gained "by her after the passing of this Act in any employment, occu- "pation, or trade, in which she is engaged or which she carries "on separately from her husband, and also any money or "property so acquired by her through the exercise of any "Uterary, artistic, or scientific skill, and all investments of such "wages, earnings, money, or property, shall be deemed and " taken to be property held and settled to her separate use, " independent of any husband to whom she may be married, "and her receipts alone shall be a good discharge for such "wages, earnings, money, and property." A Banker, who is the Drawee, is not entided to dishonour the Cheque of an idiot or lunatic because the Drawer is believed by him to be an idiot or lunatic. Nor is a Drunken man's Cheque invalid. Cheques drawn on a Current Account which stands in the Banker's books in joint and several names (such as "John " Smith and Thomas Brown "), be they Trustees or otherwise, must be signed by both, or all, parties individually. If an account be held in joint names of trustees, and one of the parties absconds, the Court of Chancery must be applied to to appoint another in his place, or to authorise and make valid the Cheques by the remaining Trustee. In a joint -•' See Appendix for form of authority. The Law and Practice of Bankmg. 145 account in the names of A. and B., the Drawer's signature "for self and A. — B." will not discharge the Banker unless he has A's. authority for such a signature. In a partnership account, the signature or act of one of the known and authorised partners will bind all. In the case of an executors' account, it has been held that the signature of one of the executors will be a sufficient authority to the Banker, but this is not so in the case of an account in the names of administrators or as- signees in bankruptcy. The Cheques of a Company are signed by one or more officers of the company, under the written authority of a quorum of the directors. The Cheques of a Corporation are usually signed by some of the members and officials of the Corporation ; but the authority to the Banker to honour Cheques so signed must be under the Corporate Seal. The Cheques of a Firm are signed in the name of the Firm by any one of the authorised partners or members, and such signature is binding on the other partners. The cheques of a limited company must be signed for the Company by one or more authorised officials. We have seen cheques signed in viamtscrip^ "Johnson & Co., Limited" — an entirely irregular subscription ; a Limited Company has no individuality or personality, and cannot sign its name at the foot of a cheque in this fashion. The Bankers of a duly con- stituted Joint Stock Company, where the Cheques on the Company's account purport to be signed by the Directors, or any of them, are not bound to ascertain that such purport- ing Directors have been legally appointed as Directors, or legally authorised to draw Cheques, provided there is nothing on the face of the Cheque in violation of, or inconsistent with, the Articles of Association of the Company, or nothing to excite suspicion. This was laid down in an action by the East Holyford Mining Company against the National Bank. 146 TJlc Law and Practice of Banking. Endorsement. — A Cheque payable to a person "or order" must bear his endorsement. Endorsement signifies literally a signing on the back, but as applied to Cheques it has the wider signification of discharge or receipt, for the signature of a Payee of a Cheque drawn to order, may be on the face of the Cheque, or anywhere upon it, as long as it operates as a dis- charge to the Banker, h. Cheque payable to " bearer or order" requires the endorsement of the Presenter. It has been pointed out that a Cheque made payable by the Drawer to the bearer, and remaining so, cannot be efficaciously or validly endorsed payable to the order of a further party by the Payee, or any subsequent holder. A Cheque drawn payable to "order," must be endorsed, or purport to be endorsed, by the person in whose favour it is drawn ; and he, in his turn, can make it payable to the order of a third party, and so on.* It is obvious that if the spelling of the surname in the endorsement differs from that of the Payee, the Cheque is not endorsed by the party to whom it is payable. For instance, John Smith, an endorser, is not the same person as John Smyth, the payee. Therefore any variation in the spelling of the surname con- stitutes an irregularity, and the Banker is not discharged in paying such an irregularly-endorsed order upon him. A variation in the spelling of a common Christian name does not constitute an irregularity. A Cheque drawn by an illiterate -■' The 16 & 17 Vic, c. 59, says : — Provided always that any Draft or Order drawn upon a Banker for a sum of money payable to order on demand, which shall, when presented for payment, purport to be endorsed by the person to ivhom the same shall be draioii payable, shall be a sufficient authority to such Banker to pay the amount of such Draft or Order to the bearer thereof; and it shall not be incumbent on such Banker to prove that such endorsement, or any subsequent endorsement, was made by, or under the direction or authority of the person to whom the said Draft or Order was or is made payable, either by the drawer or any endorser thereof. The Law and Practice of Banking. 147 party, and payable to " Gorge Smith," and endorsed " George Smith " is correctly and regularly discharged. As long as the necessary endorsement is regular, the Banker is not bound to ascertain that it is bona fide. The Banker is discharged if the Cheque picrports to be e?idorsed by the Payee. If Thomas Brown fraudulently writes " John Smith " on a Cheque payable to " John Smith or order," the Banker is not liable for the mispayment, as the Cheque purports to be endorsed by John Smith, and it is no part of a Banker's business to ascertain the genuineness of the endorsement. Even should he surmise from a knowledge of the Payee's signature that the endorse- ment is a forgery, he is protected in paying it, because there may be more John Smiths (or any other name) than one. Where, however, the Payee is a person of whom, at the time, there could be no other person of the same name, and that his signature is known to the Banker, and that the endorse- ment is manifestly a forgery, the Banker would be deemed guilty of negligence if he paid the amount, and, presumably, would not be held discharged. For example, if a Cheque is payable to the Duke of St. Albans, and the Banker is acquainted with the Duke's signature, and the endorsement is not, to the Banker's knowledge, in the Duke's handwriting, and does not purport to be done by his authority, there- fore, as there is only one Duke of St. Albans, and only one endorsement possible, the Banker is entitled to decline payment of the Cheque, as the endorsement is to his know- ledge not the endorsement of the Payee ; and if he does pay it he will be held guilty of negligence. An endorsement in pencil is a sufficient discharge. Bankers, as a rule, on the ground of the non-permanency of such writing, require that the Payee should endorse his name in ink, and of course he complies with such a rational request. But in the case of a 148 The Law and Practice of Banking. Payee endorsing in pencil, and transferring the Cheque to a third party, the Banker cannot dishonour the Cheque because the first Payee has given his order in a perishable writing. As has been said by a great authority, the law does not prescribe the material with which a Payee is to write his name, and it is his order equally in perishable pencil-writing as in imperishable ink. If a Payee write Mr. or Mrs. before his or her name, it is an irregular endorsement, for such an addition changes the endorsement from a signature to a mere address. The same rule applies to a title ^mtten before the name. A Payee, how- ever, can write Esquire after his name, as it is but a description of himself sub-added to his signature.''" The same applies to titles, such as Knight, Baronet, &c., and Academical Degrees, &:c., &c. An endorsement per procuration (pp. John Smith, Henry Brown) is regular in law, as it has been laid downt that it purports to be endorsed by the Payee. Some Bankers require per-procuration endorsements to be guaranteed by the presenter, but such guaranty is not necessary, as the Banker is fully and legally discharged by a per-procuration endorsement. However, such an endorsement as " For John Brown, John Smith," is not regular, as in this case John Smith is not empowered, and does not purport to be empowered, to give a discharge for John Brown, whereas in the former he alleges a procuration power, which has been held sufficient for the Banker. In 1868, after the judicial decision as to the validity of per-procuration endorsements, the London Banks agreed amongst themselves to accept such endorsements with- out a guaranty from the presenting Bank. The Irish Banks, since the publication of the first edition of this work, have * This opinion has been contested, but we see no grounds to alter it. t In Cookson v. Bank of England, in Hare :•. Copland (the Royal Bank), and in Charles v. Blackwell. TJie Lait' and Practice of Banking. 149 come to the same understanding. A Cheque payable to "John Smith, Senior," is correctly discharged "John Smith,"' for Senior is a superfluous designation. But one to "John Smith, Junior," must be endorsed "John Smith, Junior." A Payee does not invalidate his endorsement by writing the word " Lodge " over his name ; but the words " Lodged to Account of" will invalidate the discharge, for then the endorse- ment in toto is but a memorandum, and does wot per se purport to be a discharge by the Payee. A Cheque payable to Messrs. Smith is correctly endorsed " A. and B. Smith," but not cor- rectly if endorsed " Smith and Co." A Cheque payable to "Messrs. Smith and Co." is said to be incorrect when endorsed "John Smith and Co.," or "John and James Smith and Co.," but it seems to us that these are both " Messrs. Smith and Co.,' and the Cheque purports, therefore, to bear the Payee's en- dorsement.* A Cheque endorsed by an alleged executor or administrator of the Payee is a sufficient discharge to the Banker ; but it is the usual, but totally needless, custom with some Banks to require a guaranty to such an endorsement. The Banker, however, is apparently protected by the same rule * It is proper to point out that the Council of the Institute of Bankers (London), and the Editor of the Bankers^ Magazine, are of the former opinion on this point, on the ground that the endorsers Joh7i Smith aiid Co., may not be the Payees, Messrs. Smith and Co. There is no legal decision to guide us, and we can rely alone on common sense, and the custom of Bankers. It seems, however, that if this argument were to rule the Practice of Bankers, it would invalidate an endorsement J. Broivn, on a Cheque payable to John Broivn, as the endorser might be James, or Joseph, or Jeremiah, and not John, the Payee. The broad test in these matters, however — seeing that Bankers should act amongst themselves, so as to facilitate and not obstruct every day business — is whether the Drawee is himself protected and his customers' interests guarded by law in paying on such endorsements, and we doubt if a Court would decide that an endorsement such as that in question would be an incorrect, irregular, and insufficient discharge. 1 50 TJie Law and Practice of Banking. of law as applies in a per-procuration case. A Cheque drawn payable to two or more several individuals must be endorsed severally by each of the parties ; but on a Dividend Warrant so drawn the discharge of one of the payees is sufficient. The en- dorsements of Companies and Corporations must purport to be by some authorised officer ; but it is not the Banker's duty, when such Cheques are presented by a Banker, to acquaint himself with the genuineness of the purported authority. For example, in case of a Cheque payable to a Bank, and endorsed for the Bank "John Brown, pro Mgr.," it does not devolve on the Banker to ascertain that John Brown, or any other signatory, whose name, perhaps, he never heard, is a person duly authorized to sign for the Bank. But it would be his duty to satisfy himself as to the endorser's powers in a case where a Cheque is presented for payment through a channel that he is unacquainted with, or under circumstances reasonably to excite suspicion. This does not apply where a Cheque payable to a Company, purports to be endorsed by a quorum of Directors, or in the case of a Corporation, by a member or members under the Corporate Seal. An endorsement purport- ing to be by an Agent of the Payee has been held to be a sufficient discharge. An endorsement, merely by way of acknowledgment to the Drawee, of the receipt of the amount in no way creates a liability on the part of such endorser. But where a Cheque is endorsed by the Payee and transferred for value, and endorsed by the transferee, and dishonoured, the transferee's recourse is against the previous endorser. A Cheque to "bearer" passes by delivery, as one to "order" does by the endorsement of the Payee. IV. CROSSED CHEQUES. A Cheque is said to be crossed when it bears on the face two parallel transverse lines. When it bears the parallel lines only, or the hnes with the words "and Company," or some legible contraction of those words between them, it is said to be crossed generally. When within the lines it bears the name of a Bank, it is said to be crossed specially. If a Cheque is an open Cheque a crossing can be added by any bona fide holder. Crossing operates as a direction to the Banker on whom the Cheque is drawn, to pay the amount in case of a Cheque crossed generally to a Banker only, and in the case of a Cheque crossed specially to the Banker designated in the crossing only. The development of the system and principles of Crossed Cheques will be readily understood from a brief history of the legislation on the question. The Origin of Crossed Cheques is to be found in the custom, which obtained amongst those Bankers who were members of the London Clearing House, of writing or stamp- ing the name of their Bank across the face of the Cheque for purposes of identification and reference. The custom came to be regarded as a safeguard, as it operated by way of notice to the Bank on whom the Cheque was drawn that it was the pro- perty of the Bank whose name was across the face of it ; and 152 The Lazu and Practice of Banking. it thus came to be recognised as the Drawee-Bank's duty to negotiate it for that Bank and for no other. After a while the London merchants and large firms adopted the plan, and crossed the Cheques they sent for lodgment with the name of the Bank where the lodgment was to be made. The next development was the introduction by the mer- chants, when Cheques became a more general mode of pay- ment, of the practice of crossing the Cheques which they remitted to th^ir friends and creditors with the name of that creditor's or friend's Banker, and where the name was not known, of crossing it with two parallel tranverse lines, with the words " and Company " between them, to enable the parties to whom the Cheque was remitted to adopt the safeguard of putting their Banker's name between the lines. The words "and Company" were used, presumably, because the generality of country Banks were, at the period referred to, private firms or companies. If the person in whose favour the Cheque was drawn inserted his Banker's name in the crossing, it was an indication to the Bank on whom the Cheque was drawn that the amount was to be paid only to such Banker whose name was therein, and if no Banker's name was inserted, and that merely the words " and Company," or a contraction of them, were between the lines, it was regarded as an indication to the Drawee to pay the amount to a Banker only, as it was evident that such was the intention of the Drawer. The object and effect of this safeguard are evident. However, where the Drawer had inserted the Payee's Banker's name in the crossing, it was found that such Payee could not transfer the Cheque to a party having a different Banker, and hence it became com- petent for -a subsequent holder to erase the Banker's name with which it was originally crossed, provided he substituted the name of another. This course was, however, found to be The Lazu and Practice oj Banking. 153 inconvenient, and it led to the general crossing "and Company" being adopted more usually ; as thus, without obliteration or erasion, the Cheque's transferability was not destroyed, and the Payee was apparently j^rotected. It is to be understood that this custom of crossing, at this period, found no recognition in the Statute Law. On the con- trary Avhen the Courts came to deal with the subject it was decided (in the case of Bellamy v. Majoribanks,) that the crossing of a Che(\\iQ. payable to bearer, with a Banker's name, did not restrict its negotiability to that Banker — that in fact it did not restrain its negotiability at all, as it was no niore than a mere memorandum to the holder that he was to present it through that Banker ; and to the Drawee it was but a mere direction to pay it to such Banker, but a direction which it was not legally incumbent on him to follow, and which his not following was no more than a proof of negligence to which no penalty attached, and for which, even in case of fraud, he, the Banker on whom it was drawn, could not be held liable. To make the Drawee liable in such a case, a specific agreement between him and the Drawer of the Cheque to the effect that such crossing with a Banker's name would be regarded as a direction to pay only to that Banker, was necessary. The effect of this judgment was the passing of the 19 and 20 Victoria, c. 25, which briefly enacted that the crossing of a Cheque, whether payable to bearer or order, should be a direction to the Banker on whom it was drawn to pay it to a Banker only. When the enactment came to be considered by the Judges, it was held that it affected the Drawee-Banker only where the crossing appeared on the face of the Cheque when it was presented for payment, and that he was not liable for mispayment when the crossing had been obliterated ; and there was no law to prevent any person, whether a fraudulent holder 1 1 1 54 The Law and Practice of Banking. or not, erasing or obliterating any cross-writing on a Cheque. Tliis judgment, which was pronounced by the Common Pleas and confirmed by the Court of Exchequer, amounted to a ruling that the crossing was not a material or integral portion of the Cheque, but a mere addition, which any person so disposed could remove with impunity. In consequence of this case it was enacted (21 and 22 Victoria, c. 79, s. i), in 1858 that the crossing was to be deemed a material part of the Cheque, and the Banker on whom it was drawn should not pay it to other than the Banker whose name was so crossed, and any person obliterating, alter- ing, or adding to, a crossing on a Cheque or Draft, with intent to defraud, shall be guilty of felony, A bond fide holder of a Cheque crossed with the words " and Company," or any ab- breviation thereof, could, however, add the name of a Banker ; or a holder of an uncrossed Cheque or Draft might cross it, either specially or generally. But (by the 4th Section) it is provided that a Banker (unless he has acted }nala fide or been guilty of negligence) shall not be in any way responsible, or incur any liability, in paying to other than a Banker a Cheque bearing an altered or obliterated or added-to crossing, if the Cheque does not at the time when it is presented for payment plainly appear to be or to have been, crossed, or to have been obliterated, added-to, or altered. It was imagined that the law on the subject was set at rest and permanently defined in these Statutes and judgments of the Courts, and, consequently, the public were somewhat astonished by the further definition of the law, which the cele- brated case of Smith v. U7iion Batik of London occasioned. The facts of this case were as follows : A firm named Mills and Co., being indebted to Smith (the Plaintiff), gave him a Cheque on the Union Bank of London (the Defendants) in The Lazu and Practice of Banking: 155 his favour, and payable to his order. Smith duly received it, and endorsed it, and crossed it with .the name of his Bankers, the London and County Bank. The Cheque was stolen from Smith, but it ultimately came into the possession, bond fide and for value received, of a person who was a customer of the London and Westminster Bank. He, in the ordinary course, paid it into his Bankers, the London and Westminster Bank, who presented it duly to the Drawees, the Union Bank of London — the Defendants. The Union Bank of London paid it, although, being crossed to the London and County Bank, it was presented by the London and Westminster Bank. Smith, the original Payee, from whom it was stolen, then brought this action against the Union Bank of London, treating himself as the rightful owner of the Cheque, and charging the defendants with having wrongfully converted it, and claiming the amount on the ground that the defendants had infringed the 21 and 22 Vic, c. 79, above quoted, which enacted that the Banker upon whom a crossed Cheque is drawn shall not pay it to any other than the Banker named in the crossing ; and that by their infringement of the Act he (Smith) had suffered loss. The action was tried in the Court of Queen's Bench, in April, 1875, ^"^ judgment was given in favour of the defendants. It came on for appeal subsequently and the decision of the Court below was con- firmed — Lord Cairns pronouncing the judgment of the Court. The judgment rested chiefly on the ground that the right of action lay not in Smith but in the Drawers of the Cheque, to whom alone the Union Bank was answerable. Smith had endorsed in blank the Cheque — a very material point — and thereby had made it a negotiable instrument payable to bearer, and it does not appear he took the pre- caution of acquainting the Drawers — Mills & Co. — that it 156 The Lazv and Practice of Banking. had left his possession fraudulently, and requiring them to stop payment of it at the Drawees and give him a duplicate. The right of action against the Union Bank lay only with the Drawers of the Cheque. They could refuse to have their account debited with the amount of a document which was irregularly paid through the oversight or negligence of the Drawee. But again, the mere fact alone of the payment of the Cheque could not in itself damnify or cause a loss to Smith, because the holder could have easily devised means o have it passed through the crossees, the London and County Bank, to the Drawees, who would be bound to pay it, or stand the liability of an action by the Drawers for dis- honouring their draft. The crossing operated only as a caution to the Drawees to be circumspect in the paying of it ; they paid it to the London and Westminster Bank — through oversight, no doubt — but their doing so, did not, in itself, necessarily inflict a direct loss on Smith. This judgment caused the passing of a further enactment on the subject of Crossed Cheques — 39 & 40 Vic, c. 81, known as "The Crossed Cheques Act, 1876," — and it is supposed to have settled the law on the question, — as it doubtless has, until some other unforeseen decision or unexpected exposition of the existing Acts. This Act defines a general crossing and a special crossing, and creates a new species of crossing which is to be effected by the addition to either a general or a special crossing of the words " not negotiable." The 4th section explains general and special crossings. It enacts : " Where a " Cheque bears across its face an addition of the words ' and " Company,' or any abbreviation thereof, between two parallel "transverse lines, or of two parallel transverse lines simply, " and either with or without the words ' not negotiable,' that " addition shall be deemed a crossing, and the Cheque shall be The Law and Practice of Banking. 157 "deemed to be crossed generally. Where a Cheque bears " across its face an addition of the name of a Banker, either "with or without the words 'not negotiable,' that addition shall " be deemed a crossing, and the Cheque shall be deemed to be " crossed specially, and to be crossed to that Banker." The 1 2th section enacts: "A person taking a Cheque crossed " generally or specially, bearing in either case the words ' not " ' negotiable,' shall not have, and shall not be capable of giving, " a better title to the Cheque than that which the person from " whom he took it had. But a Banker who has in good faith " and without negligence received payment for a customer of a " Cheque crossed generally or specially to himself, shall not, in " case the title to the Cheque prove defective, incur any " liability to the true owner of the Cheque by reason only of " having received such payment."* * The construction of sect. 12 was brought before the Court of Common Pleas Division in the case Matthiesscn and Buck v. The London and County Banking Company (41 L. T. Rep. N. S. 35) upon a demurrer to the statement of defence. It was an action by the Payee of three Crossed Cheques against the defendants for a conversion by receiving the proceeds of three Crossed Cheques which had come into their hands with forged endorsements. The statement of claim alleged that the Cheques in question were given to one of their travellers by certain customers of the plaintiffs fur goods ; that they were drawn payable to plaintiffs or their order ; that two of them were crossed with the words "and Co." ; that they were stolen by their traveller, who forged their name on the back of each of them, and were then paid into defendants' bank ; that defendants received payment of them from the Bankers on whom they were drawn, and that by so receiving and dealing with the said Cheques the defendants converted them to their own use, and wrongfully deprived the plaintiffs of the possession of the same, and that by the Act they could not have a better title to them than the person from whom they were received, i.e., the traveller who forged the endorsements, and obtained the amount by fraud. The defendants relied for protection on sect. 12 of the Crossed Cheques Act, 1876, above set out. In the course of the argument the plaintiffs contended that the protection given to Bankers by sect. I2 is only given with respect to Cheques bearing on them 158 The Law and Practice of Bankhtg. The development in the legal aspect of Crossed Cheques has thus been very gradual, and each successive enactment has been the result of a legal judgment which showed that the law was not in accord with the views accepted by the general public. The habit of crossing was in vogue for many years before it obtained legal recognition. The first Act was passed in 1856, and it was to the effect that a Cheque or Draft crossed with a Banker's name was payable only to, or through such the words "not negotiable," and that the section had therefore no application to the case before the court, "It is true," they said, "that " this condition is not expressly mentioned in the latter part of the section " on which the defendants rely, but the first part of the same section deals "with Cheques crossed generally or specially, bearing in either case the "words ' not negotiable.' Then comes the word 'but,' introducing the "provision which was intended to afford a protection to Bankers. This " word ' but ' shows that the two clauses of the section deal witli the same " subject matter. The second clause is in the nature of a provision, and " must be confined to those Cheques only with which the first clause deals." The plaintiffs contended this construction would violate the plain language of the Act, and this was the opinion of the court. In giving judgment for the defendant, Mr. Justice Grove said — " Taking these two clauses as they " appear, by the plain reading and grammatical construction, they apply to "different states of things. The first clause applies to Cheques limited by " the words ' not negotiable' ; the second clause, omitting these words, gives " protection to Bankers with regard to Cheques crossed generally or specially. "The second clause says nothing about the words 'not negotiable.'" With regard to the effect sought to be put on the word " but," he observed that to adopt the construction of the defendants " would be forcing the " words of the .Statute, and virtually making a new section by interpolating '•' words into the second clause which do not occur there, and which he could " not suppose to have been otherwise than intentionally omitted. . . . " It is not irrational to suppose that the Legislature wished to give to collect- " ing Bankers that protection which it was supposed that a previous Statute "(16 & 17 Vic, c. 59, s. 19) had already given, but which turned out in "fact, according to the decision in Ogdcnv. Benas, not to have been given." Mr. Justice Lindley's judgment was to the same effect. He thought that "but " is far too loose a word to control the plain meaning of a section of an Act of Parliament. The Law and Practice of Banking. 159 Banker. This Act was the result of the judgment in the case of Carl 171 V. Ireland, delivered on 12th December, 1855, which declared the law to be, that a general crossing did not affect the negotiability of a cheque, and that any person taking such crossed Cheque, bona fide, for value, was entitled to payment by the Drawees. The next enactment on the subject was with a view to remedy the defect which the case of Simmonds V. Taylor discovered. In this case the crossing had been obliterated, and there was no remedy against the offender, and consequently, in 1858, it was enacted that the crossing was a material part of the Cheque, and a fraudulent alteration or obhteration was constituted a felony. And finally, owing to the decision in Stnilh v. Union Bank of London, the Act of 1876 was passed, defining the two forms of crossing in exist- ence : a general crossing (which consists of two parallel lines alone, or with the words " and Company," or any abbreviation tliereof, between them), and a special crossing (which consists of a name of a Bank between the lines) ; and creating the new species, " not negotiable." The words " not negotiable " do not signify that the Cheque cannot be negotiated or transferred; they operate merely as a warning or direction to any person who receives it, that he, even though he should have received it for value and ^^«a_;f^(?, has yet not any better title to it than any previous holder, negotiator, or transferee. Thus, if a Cheque so crossed be stolen by A., it is obvious that the wrong-doer has no bond fide title to it, and should he negotiate the Cheque with a further party B., that further party B., even though he receives it for value, bona fide, and without any notice or suspicion that it has been wrongfully obtained, can yet have no better title to it — no truer ownership in it, than A. who obtained it fraudulently, and who has therefore no title at all to it. i6o TJic Lau' and Practice of Banking. It is always to be borne in mind, however, that a Banker, although he may have made payment of a "not negotiable" Cheque drawn upon himself, whi( h some previous transferror has wrongfully obtained, is, nevertheless, protected, unless fraud, complicity, or negligence, can be brought home to hun. The remedy against the Banker is, in all cases, in the hands of the Drawer of the Cheque, and not of the Payee or any holder ; for as has been said, the Banker has no privity except with the Drawer. There is, however, an exception to this rule, that the Drawer only can have a right of action against the Drawee. A Cheque is an order payable on demand unt/iouf acceptance^ but if the Banker on whom it is drawn, initial it for future payment, such an initialing is held to amouut to an acceptance, and the holder has a remedy against the Banker in case of dishonour or want of funds of the Cheque so initialled when presented at the appointed time. V. PRESENTATION, PAYMENT, AND DISHONOUR, OF CHEQUES. Time of Presentation. — The strict legal rule as to the time of presentation of a Cheque is, that it must be presented as soon as possible after it has been issued. The ordinary rule is that it must be presented within a reasonable time, and as circumstances contribute to define what this is, the question whether the presentation has been effected within a reasonable time is, in a law suit, one for the jury. The holder of a Cheque defers its presentation for payment at his own risk. This does not convey that the Drawer's liability is voided by any such delay, for unless presentation is delayed for six years or more (when the Statute of Limitations terminates the liability), there is remedy against the Drawer by the Payee or any lawful holder, by an action at law for the amount ; but a Banker will not pay a Cheque, presentation of which has been delayed for a longer period than six calendar months. It means that in the event of the Drawer's death or bankruptcy, the holder may not be allowed to claim under the estate, as he had been negligent in obtaining payment during the lifetime or solvency of the Drawer. Again, in case of the insolvency of the Banker on whom the Cheque is drawn, where the Holder of a Chec^ue did not i)resent it within a reasonable time, the Drawer would be discharged and the Holder would have no recourse to him, or to any previous Endorser, for the amount. By the Law 1 62 The Laiu and Practice of Banking. Merchant and the custom of Bankers, a Cheque becomes stale after six months from the date of issue, and payment, as has been said, is refused by the Drawee, on the grounds that it is a Stale Cheque. The reason of non-payment of a Stale Cheque is, that the delay in presentation raises a presumption of defect or infirmity of the Presenter's title, and the Banker is entitled • to act on the doubt this presumption creates. If, however, it is proven to a Banker that a stale Cheque is bona fide, e.g., that it is presented by the Payee in person, who explains the delay satisfactorily, and that there are sufficient funds to pay it, the Banker is empowered to honour it, and protected in so doing. A Banker (A.) is not entitled to delay presentation of a Cheque on another Bank (B.) lodged by a Customer. The custom of Bankers decides what would or would not be a delay; and in case the Banker (A.) has been guilty of negligence in presenting the Cheque, and that the Drawer die, or be in default ; or that the Drawee fail, and the Customer who lodged it is damnified by such default or failure, the Banker (A.) is liable. Presenta- tion by post, or through one's own Banker is a good presenta- tion. Where the holder is a third party he must not fail to present the Cheque within reasonable time in order to maintain an action against the primary Payee in case of dishonour. Likewise, failure on the part of the last holder to make due presentation, will absolve the previous endorsers from liability. The legal rules of presentation have regard chiefly to the failure of the Drawees, and most of the cases are on this point. In all instances a Cheque must be presented on business days — (not' holidays*) — and during business hours, in order to be a valid presentation. * The Bank Holidays Act (25th May, 1871), cvrrt/i-^the following holidays for English and Irish Banks : — Easter Monday, the Monday in Whitsun week, the first Monday in August, and the 26th day of December if a week- The Law and Practice of Banking. i6 o Payment of Cheques. — In practice, a Banker generally extends to the Presenter of a Cheque the courtesy of consult- ing his wishes as to the manner in which he desires to receive payment, and acceding to these wishes if practicable. But such a course is entirely a courtesy on the part of the Banker, because his legal duty is discharged if he makes or offers pay- ment in what is known as Legal Tender. Legal Tender is defined by the Coinage Act, 1870 (33 Vic, c. 10, s. 4). It consists of Bronze to the limit of one shilling. Silver Coins to the limit of forty shillings, and Gold to any extent. In England payment of sums over ^^5 can be legally tendered in Bank of England Notes, except by the Bank of England itself (3 & 4 William 4th, c. 98, s. 6). But special Acts declare that Bank of England Notes are not to be deemed legal tender in Scotland or Ireland. If a Banker pays a Cheque in forged or worth- less Notes, or in spurious or counterfeit Coin, and that the person to whom the payment is made, accepts such Notes or Coin and makes no objection at the time of the pay- ment, he has, upon discovery of the worthless nature of the Notes or Coin, no recourse against the Banker, except he can prove fraud on the Banker's part, or prove that he (the Banker) was cognisant of the fact that the Notes or Coin he disbursed were worthless. If a Payee consents to accept payment in certain Bank Notes, other than the issue of the paying Bank, and that the day. And a subsequent Act (13th May, 1875) provided that "whenever *' the 26th day of December shall fall on a Sunday, the Monday immediately " next following, that is to say, the 27th December, shall be a holiday." Christmas Day and Good Friday have always been holidays. The Queen's JJirthday (24th May), was observed as a Bank holiday in England and Ireland, before the passing of tlie above Act. It is still a holiday in the Isle of Man. 1 64 The Lazu and Pi'acticc of Banking. Bank whose notes he has thus accepted, stop payment, even on the following day, he cannot hold the Banker from whom he received and accepted the notes liable; nor can he compel him to change them for other notes of full value, as he took them voluntarily, and at his own risk. As in Ireland and Scotland, the only Legal Tenderforsumsbeyond^2 in silver and is. in bronze, is gold, and a Payee is entitled to legal tender ; therefore, if he dispenses with the legal tender and elects to accept payment in Bank Notes of any establishment, he does so entirely at his own peril and must abide the consequences. If he receives gold in payment, he is bound to satisfy himself of its currency and genuineness immediately on payment, and if he neglect so to do, the Banker is free from any liability under a sub- sequent discovery of a spurious coin. The Banker is bound to pay the Cheques drawn on him in the order in which they are presented — -the only priority is the priority of presentation: presenting for initialing or acceptance, is a presentation for payment, because the promise or undertaking to pay amounts to a present withdrawal of funds from the Drawer's account. Once a payment is tendered by a Banker, and accepted by the Presenter of the Cheque, the money when paid becomes the Presenter's property and ceases to belong to the Banker. So that should a Banker pay a Cheque drawn by A., and im- mediately after payment discover that A. had not sufficient funds, or that the Cheque had been stopped, or that it was specially crossed, or some such circumstance — nevertheless the money paid having entered into the possession of the Payee cannot be recalled by the Banker, even though the party re- ceiving the payment had not moved from the Bank counter ; but if the Banker should discover that he had overpaid the Presenter of the Cheque, he could recall the money to the extent of the overpayment. If, however, a Banker takes from The Law mid Practice of Banking. 165 his Customer in lodgment, a Cheque drawn on himself by another Customer, for which Cheque there are not sufficient funds, the non-refusal by the Banker of the Cheque is not a guaranty to pay the amount, and he can return it unpaid on the following day to the Customer who lodged it, provided he (the Banker) did not receive funds from the Drawer before it was returned dishonoured and apply them in payment of sub- sequently presented Cheques. If it is a Banker's regulation to require his Customer to draw Cheques exclusively on the en- graved or printed form of Cheque which he supplies, and that the Customer is made aware either expressly or construc- tively of the regulation, the Banker is justified in refusing to pay orders drawn otherwise than on the form. The Bank of England, for example, will not honour Cheques which are drawn on a form other than that supplied by the Bank, and the re- striction, being of a protective nature, should be enforced by all Bankers.* If payment be refused on this ground, the reason should be explicitly stated. If a Banker, or any authorised official of a Bank, or any official purporting to be authorised, should initial a Cheque for subsequent payment — that is to say, where another Banker presents a Cheque avowedly to be marked for payment upon the following day, the Drawee is bound by the initials. He is bound also by a verbal or written promise to pay. Such marking or initialing, or promising, though it does not amount to a legal acceptance, nevertheless, by the custom of Bankers, which is a portion of the Law * The following notice is printed on the covers of the Cheque Books issued by some Banks : — " In consequence of forgeries and other frauds it is " particularly requested that under no circumstances whatsoever are Cheques "to be given to unknown parties in exchange for cash ; that no blank "Cheques be given to strangers upon any plea ; and thnt no Cheque be " drawn on blank paper or on any form other than that supplied by the Bank. "Tlie Bank does not undertake to pay any Cheques so drawn without " special advice from the Drawer." 1 66 TJie Law and Practice of Banking. Merchant, it operates to bind the Banker who so marks or ])romises to pay the amount on the following day. But if the holder neglects to present the Cheque so marked on the ensuing day, he is guilty of unreasonable delay, and the Banker's engagement to pay is rescinded by such delay. Even should the Drawer die after the initialing or promising, and before presentation for payment, though death under ordinary circum- stances invalidates a Cheque, yet the Banker who has initialed it is bound to pay it, and protected in so doing. A Cheque is transferable by delivery, and bona-fide delivery of it passes the rights and equities in it. A Cheque is not money ; but the amount of unnegotiated Cheques, if in order, may be admitted as money to Probate or Letters of Administra- tion of the effects of a hona-fidc holder. As a Cheque is not money, a Banker is not bound to surrender, or justified in surrendering, a Bill entrusted to him for collection, unless the Cheque is drawn on himself and he has funds of the Drawer to pay it, in which case it is equivalent to money. If a Banker surrender a Bill or documents upon a Cheque, he does so at his own risk ; and if the Cheque is received from a person other than the Drawer, it is questionable whether he would have recourse except to the Drawer, in the event of dis- honour. Stopping Payment of Cheques. — As a Cheque is an order to a Banker to pay, the maker of that order, />., the Drawer, can of course rescind it, and instruct the Banker not to pay a certain Cheque which has been issued by him. This act of countermanding is called stopping the payment. The order to stop payment is an executory order. It should be in writing and signed, and it is as binding on a Banker as the order to pay; so that if a Banker pay a Cheque drawn on him, after the payment thereof has been stopped, he is not dis- The Law and Practice of Banking. 167 charged, and the Drawer's account cannot be debited with the amount. A Drawer is entitled to stop his Cheque if he wishes, and he is not bound to give the Banker his reasons for so doing. The ordinary motives for stopping payment of a Cheque are, that the Cheque has been lost, or stolen ; or fraudulently obtained ; or obtained on certain conditions which are unfulfilled or violated. If payment of a Cheque is refused to the Payee on the ground that it has been stopped, the Payee's remedy is solely against the Drawer, who can remove the stop and withdraw his countermanding order. Dishonour. — -As a Banker is said to honour a Cheque when he obeys the order or command of the Drawer to pay the amount specified on demand, he is said to dishonour it when he refuses to obey. The motive for refusal may be some irre- gularity in the Cheque itself, such, for instance, as an unconfirmed alteration, a variance in the Drawer's signature, or a post-dating ; or it may be because the Cheque is incomplete, by not being dated for instance ; or it may have been mutilated ; or the Banker may refuse payment because the Cheque is crossed. But what is generally understood by the expression dishonour- ing a Cheque is the refusal to pay the amount, because the Banker has not sufficient funds of the Drawer's in his posses- sion to enable him to pay it in full. A Banker is not em- powered to make a part payment on a Cheque: for instance, if A. draws a Cheque for ^50, and his balance at the Drawee's is but ^£^0^ the Drawee is not entitled to pay the ;^3o on account. It has been argued, that a Banker who did so pay on account the Drawer's balance in his hands, that balance being insufficient for the full discharge of the amount of the Cheque, would be protected in any action by the Drawer on the pay- ment ; but it appears to be the better opinion that, in adopting 1 68 The Laiu and Practice of Banking. such a course, the Banker was not complying with the Drawer's order, which was to pay jT^^o ; and there is no middle course between coinpliance and non-compliance. Neither is a Banker empowered to disclose to the Presenter the balance at the credit of the Drawer's account in his hands, thereby to enable the Presenter to lodge to the Drawer's credit the amount deficient, and so provide sufficient funds to meet the Cheque and obtain payment. Making a part payment on a Cheque, as above, would be a disclosure of the Customer's account, and, on no occasion or under no circumstances — except as a witness in some of Her Majesty's Courts of Law or Equity — can a Banker disclose the state of his Customer's account. If he should do so, and that Customer is thereby damnified, an action lies against the Banker by the Customer. A Banker is bound to give verbally a reason for dishonouring his Customer's Cheque. Merely saying he cannot pay it, is not a sufficient answer to a Presenter. Nor is the answer " pre- sent again " (which some Banks are in the habit of making), a sufficient answer, unless the reason for requiring the future presentation is given, as for instance, that the Banker has not had time to realize the funds the Drawer had lodged, which is a justifiable reason for refusing to pay. The usual words of dis- honour are " Refer to Drawer." These generally mean that, as the Banker has not sufficient money of the Drawer's to pay the amount, the holder must present it to the Drawer for redemption. " Refer to Drawer " is usually equivalent to saying there are not enough funds to meet the Cheque, though this is sometimes more plainly expressed by " not Sufficient Funds," or shortly, " N. S.," which is also a general dishonour. This implies that the Drawer has some funds at the Banker's; whereas " no funds " and " no account " are unequivocal forms. " Refer to Drawer " is a comprehensive answer of dishonour. The Lazu and Practice of Banking. 169 and may mean merely that there is an irregularity in the Cheque, or that the payment has been stopped ; it does not necessarily convey or imply that there are insufficient funds, though it is the answer usually given in case of absence of funds or of credit. If a Banker wrongfully dishonour his Customer's Cheque, i.e., refuse to pay it while there are sufficient realized moneys of the Drawer in his hands — no matter if such refusal arise through some error in the Bank Books, whereby the Drawers balance is erroneously stated, — an action by the Drawer will lie against the Banker, and damages be obtainable. Dishonour is, per se, a wrong to the Drawer, and, in case of its being wrong- ful, entitles him to damages in an action against the Banker. But special damages must be proven. The extent of these damages is therefore gauged by the injury done to the Plaintiff's credit and commercial and financial reputation. A Banker is not bound to give notice to the Drawer of a Cheque upon him that the Cheque has been refused payment, for non-compliance with the order to pay is sufficient notice. It is stated by Mr. IVIacleod that, if through the wrongful dishonour of a Cheque the Drawer becomes bankrupt, his assignees in bankruptcy have a right of action against the Bank. If a Cheque is imperfect, i.e., that a material portion is mutilated — even though the pieces be fastened together — the Banker is bound to refuse to negotiate it, because the presumption is that the fact of its having been torn is prima facie evidence that the Drawer in- tended to cancel it. If a Banker pay such a mutilated Checpe on him, and that the Drawer or rightful owner is damnified by such payment (even assuming the mutilation to be unintentional), an action will lie against the Banker for the amount. A Banker, however, is justified in refusing payment of a Customer's Cheque, even though he have funds to pay it, if he have posi- 12 1 70 The Law and Practice of Banking. tive knowledge that it is for an illegal and fraudulent pur- pose, such as the corrupt procurement of a government ap- pointment. Bankers should in all cases keep a record of the Cheques they dishonour, in order to be in a position to refute a false allegation by the Drawers of such Cheques, that the)' were wrongfully dishonoured. The death of a Drawer is reason for non-payment of his Cheque. A Banker cannot pay the Cheque of a Customer who has since died, if he has know- ledge of the death, unless, as has been stated, he has pre- viously initialed it for payment. In this case the initiaUng amounts at the time to a withdrawal from the Drawer's account of funds to the amount of the Cheque so initialed. Upon the death of an individual, his personalty immediately vests in his executors or administrators, and the Banker is accountable to them for the moneys of the deceased. But the death of an Endorser does not affect the negotiability of a Cheque, for the Banker has privity only with the Drawer. The Bankruptcy of the Drawer is also reason sufficient for non-payment of his Cheque ; because on a person's Bankruptcy all his i^ropert)' vests, in the first instance, in his creditors, and subsequently in trustees or assignees, and his Cheque, if paid, would be paid to the detriment of creditors. The Banker, however, must have knowledge of the Death or Bankruptcy of his customer. The knowledge may be by formal notice, in which case it is an actual knoivlcdge ; or, by general report, as in a case such as that of the death of a notable individual, in which case the knowledge would be assumed against him, and it would rest with him to prove that he was not aware of what was a common topic of news. An announcement of death in the newspapers is suflficient notice to the Banker ; and if such announcement is untrue, the Banker is protected if he acted upon it hona-fidc in belief of its truth. If a Cheque be notified to the Banker The Latu and Practice of Banking. 1 7 1 on whom it is drawn, and that after notification, and before presentation, the Drawer die, the holder is entitled to payment. Cheques Incapable of Dishonour. — The Cheque Bank. — An entirely new principle in banking was introduced in 1873 by an establishment called " The Cheque Bank." It was formed " to carry on business not in opposition to, but in " co-operation with, existing Bankers. It was to undertake no " financial business, to discount no bills, and to allow no in- "terest upon deposits." The principle of its operations was that for every sum lodged with it, a number of Cheques avail- able at most for that amount and for no more would be given to the Depositor. Thus for a lodgment of ^100, a party obtained, for instance, one hundred Cheques, each printed and perforated, as being available for one pound or under. The Cheques could be filled in with the name of the payee and with the amount, which could not exceed ^i. Such instru- ments would obviously be a great convenience to those who had numerous small payments and remittances to make, and fraud was precluded by the form and structure of the Cheque. Furthermore, there was no possibility of dishonour, and the documents could be accepted and negotiated without fear of risk ; for, should the Cheques be filled in for Sums under that for which they were available, the balance then lying at the credit of the depositor was not refunded to him until all the Cheques had been presented and paid. There were thus no overdrafts, and no losses incurred. The profits of the Bank were to be derived from the interest on the securities represent- ing its capital and on the balance of deposits in its hands. It issues guaranteed Cheques for even amounts, from ^i to ;^io, to the full amount of every deposit lodged.* The * The same principle of issuing guaranteed cheques for amounts of from £,\ to^fio was also adopted by the Commercial Bank of Manchester, which ■was founded in 1875, ^'^'l l^'^s since gone into liquidation. 12 — 3 172 The Law and Practice of Banking. Bank incurred exceptionally heavy outlay in advertising and other similar expenses during the first few years of its existence, and did not meet with support sufficient to cover them. It was, therefore, reconstructed in 1876, since which time it has progressed somewhat more satisfactorily, although it has not yet realised the hopes of the Founders. The ap- parent reason why the Cheque Bank has not obtained that wide support and exhibited that progress to which it seems to be entitled, is that in the event of the loss and non-presenta- tion of any of the Cheques the amount of such lost Cheque was forfeited by the Depositor. The Cheque would be out- standing, and, as long as it was outstanding, the utmost amount it could represent would be retained by the Bank. L#ost Cheque. — If a Cheque be lost, the Drawer can be compelled to give a duplicate, under proper and sufficient indemnity. Knowledge of Fraud on part of Customers. — If a Banker has actual knowledge, that his Customer has drawn a Cheque for a fraudulent purpose, he is not only entitled to refuse to honour it, but also liable if he does honour it, because in honouring it he would be abetting a fraud. But the know- ledge must not be of a speculative kind, it must be such as does not necessitate any enquiry into the action of the Customer, for a Banker is not entitled to enquire ; and if he is without such positive knowledge, he is bound to perform his obligations to the Drawer and cannot refuse to pay his Cheque. A Banker cannot, knowingly, hold money to be disposed of for illegal or immoral purposes. If he assents to so hold money, which he knows to be illegally applied, he can be indicted for conspiracy. Criminal Offences. — If a person draw a Cheque on a The Law and Practice of Banking. 173 Bank where he has no account, and obtain money or goods for uch Cheque, and that the reason given for the dishonour be " no accotmt" the Drawer of it can be indicted by the 'Holder for obtaining money (or goods) under false pretences — the false pretence being, that he had an account at the Bank. It is not a false pretence, however, if the Drawer really have an account but not sufficient funds, because he can plead that he expected to have funds, &:c. To obtain money on a forged Cheque, knowing it to be forged, is to obtain it under a false pretence. To write the endorsement of a Payee to whose order a Cheque is made payable, with the intent to defraud, is forgery. By Statute, it is forgery to alter the crossing, as it is to alter fraudulently any material part of a Cheque. Paid Cheques.- — A Cheque when paid must be cancelled by the Drawee under a penalty of ;^5o (by the Stamp Act, 1870). It is the property of the Drawer, though it remains in the posses- sion of the Banker on whom it is drawn, until it is delivered to him. As the Cheque is to the Banker the proof that he has paid the money, and is both his authority to debit the Drawer's account and evidence of his having done so, and as, in case of overdraft, it is his right of action to recover the debt, he is not bound to surrender it to the Drawer without a written acknow- ledgment {see page 178). Some Banks return to the Customer his paid Cheques at the termination of each half year when the Bank's accounts are made up and the Books closed, obtaining a receipt acknowledging the correctness of the balance as stated in the Customer's pass-book, and also acknowledging the receipt of the paid Cheques. Others pursue the course of surrendering the paid Cheques at those intervals during the progress of the Customer's account when he obtains his pass-book, written up to date, and of requiring his initials by way of a receipt for the Cheques paid during the time embraced in this periodical 1 74 The Law and Practice of Banking. writing up. If on this periodical delivery the Bank obtained from the Customer a written acknowledgment that the Cheques surrendered were correctly debited to his account, it would be a safe and serviceable proceeding, for thereby the Bank would not only obtain a concurrent ratification of its book-keeping, but it Avould get rid of those vouchers, the accumulation of which is so undesirable. But, when the Customer's initials in the pass-book are only by way of acknowledgment of the re- ceipt of such a mcviher of paid vouchers, it cannot be con- sidered a perfect system. The Cheques, when paid, are to the Drawer pri7na facie proof of payment to his Creditor, the Payee, if endorsed by him. But it is only a proof of payment, and not a sufficient or final proof of a debt. Banker's Books as Evidence. — Formerly (in com- l)liance with the rule of Law that where primary evidence was obtainable it alone would be admitted in Court), in order to prove an entry in a Banker's Ledger, the Book itself should be produced. The manifest inconvenience and inexpedience of this course was obviated by an Act, passed in 1878 (amending one of 1876), through the exertions of Sir John Lubbock, to the effect that a copy of an entry in a Banker's Book, verified by an authorised official of the Bank, shall be received in evidence. And the Act has since been so construed that such copy is evidence even against a person not a Customer of the Bank from whose Books the copy has been made. VI. PASS BOOK— OVERDRAWN CURRENT ACCOUNT— RIGHT TO SUE ON CHEQUES. Pass Book. — The part occupied by a Pass Book in J-Janking practice is thus exhaustively defined by Grant : — " A ' book called a pass book, is delivered by the Bankers to the ' Customer, in which at the head of the first page and there ' only, the Bankers by the name of their firm are described as ' the Debtors, and the Customer as the Creditor in the ac- ' count ; on the Debtor side are entered all sums paid to or ' received by the Bankers on account of the Customer, and ' on the Credit side all sums paid to him or on his account ; ' and these entries being summed up at the bottom of each ' page, the amount of each, or the balance between them is ' carried over to the next folio without further mention of the ' names of the parties, until the book being full, it becomes ' necessary to deliver a fresh one to the Customer. For the ' purpose of having the book made-up by the Bankers from ' their own books of account, the Customer returns it to them ' from time to time ; and the i^roper entries being made by ' them up to the day on which it is left for that purpose, they ' hand it again to the Customer, who thereupon may examine ' it, and if there appears any error or omission, it is his busi- ' ness to send it back to be rectified ; if he does not, his 1 76 The Law and Practice of Banking. " silence is regarded as an admission that the entries are " correct : but no other settlement, statement or delivery of " accounts, or any other transaction which can be regarded as " the closing of an old, or the opening of a new, account, " or as varying, renewing or confirming (in respect of the " persons or the parties mutually dealing) the credit given on " either side, takes place in the ordinary course of business, " unless when the name or firm of one of the parties is altered, " and a new account thereupon opened in the new name or " firm." An entry in a Pass Book of an amount to the credit of the Customer, is evidence, prima facie, of such a lodgment having been made, and the entry binds the Banker unless he can prove that it was made in error. The burden of proof will generally lie on the Banker, and the question at issue is one to be decided by the jury. The difficulty of disproving such an entr}' is apparent, and a verdict may depend on the relative credibility of the plaintiff and defendant. Ivlaking a false entry in a Pass Book with the intention to defraud, is forgery, and punishable as such. Interest on Current Account. — Banks, as a rule, allow interest on the credit balances of their Customers at Deposit rates, when the balance is maintained for a given time at a certain figure, or upon the lowest balance of the period, or upon the average balance — according to the practice of the Bank, or according to special arrangement. In Ireland this practice does not obtain. Generally speaking, however, it is a recognised rule there that all accounts of a charitable or benevolent nature, and those of bodies or societies whose object is to benefit- — intellectually, morally, or socially — their members or the public, are accorded the privilege of receiving interest on their daily balances, usually at Deposit rates. Some The Law and Practice of Banking. 177 public accounts, and private accounts which show a continuous very large credit balance, are also favoured, but in these cases it is a matter of arrangement with the Bank and not a recog- nised right as in the case of charities. Overdrawn Current Account. — An account is said to be overdrawn when the Account-holder has drawn more than the amount of his balance. The relations between the Banker and his Customer are then reversed, for the Banker becomes the Creditor, and the Customer the Debtor. The remedy for recovery of the amount is simply a common-law action for debt. A Banker, in his own protection, generally requires a deposit of securities or a guaranty sufficient to cover the amount he allows his Customer to overdraw, and he charges interest on the actual daily balance owed. An agreement, express or im- plied, on the Banker's part, to allow his customer a stated over- draft, is considered as binding on the Banker, unless there is a failure of the conditions under which such agreement was made, or that the aspect of the position and business of the Customer has altered. If securities are deposited with a Banker, and the Customer is permitted to draw against them in the recognised manner, the Banker cannot dishonour his Customer's Cheque which does not overdraw beyond the value of the securities, without giving notice to that effect ; unless the Customer by so drawing violate an agreement or under- standing, or exceed the limit placed on his overdraft by the Banker. An agent cannot overdraw his principal's account so as to render the principal liable to the Banker, unless knowledge of such overdrawing can be traced to the principal, for know- ledge implies consent. If a Banker, holding securities for an overdraft, realise such securities, he is only entitled to the amount due with reason- I yS The Laiu and Practice of Banking. able simple interest thereon, and any surplus after payment of the amount due to himself, must be held by him for the benefit of the Debtor. In case of overdraft, the interest thereon is computed on the daily balance of the debt A question arose in one of the Colonies as to whether a Bank was entitled to interest on such a balance, after the death of the Debtor, and was decided in favour of the Bank (S. Australian Bank v. Horner). But the right to charge compound interest, i.e.^ interest on interest already charged, ceases with death of the debtor. The Paid Cheques of an Account-holder who maintains a Credit Balance at his Banker's, belong to the Account-holder, and though he may allow them to be retained by the Banker nevertheless they are in his (the Customer's) constructive possession, as he can claim and obtain them at any time ; but, in the case of an overdrawn account, the Banker need not restore the Paid Cheques as long as the Drawer is his Debtor, as they are his vouchers of the payments, and his evidence of the Drawer's indebtednesss ; and, in an action for the balance due, are his proof of the debt. Lodgment for Special Purpose. — If one who is a Debtor on foot of an overdrawn account, give money to the Banker with instructions to api)ly the amount in payment of specified acceptances falling due, or to obtain a Bank Order, or for any purpose other than the credit of his overdraft, the Banker is bound to apply the money as directed, and he cannot apply it in reduction of the Debtor's overdraft. Two Accounts. — It has been laid down and can be accepted as law, that where a person has accounts at two branches of the same Bank, one of which accounts is Debtor and the other Creditor, the Manager of the Branch where the Credit Balance is held can refuse to ])ay a Checjue on such The Laiv and Practice of Banking. 1 79 Credit Balance as long as the Customer is indebted to another branch to the amount of the Credit Balance or more. For this purpose branches of a Bank are considered as the same Bank. Further, by law, the Credit Balance at one branch can be applied in reduction or discharge of the Debit Balance at another branch, even without notice to the Customer. Right to Sue on a Cheque. — The right to sue on a Cheque is in the Holder of the Cheque. His remedy is against the person from whom he received it ; against the previous endorser, if there be such ; and if the Holder be the first Payee, against the Drawer. In the case of a free gift of a Cheque, however, the Payee, in case of its dishonour, has no action against the Drawer, and cannot enforce the payment of the amount. No right of action against the Banker is in any holder, unless the Banker have actually or constructively promised the Holder to pay the amount to him. If a Cheque is wrongfully dishonoured, the Payee has recourse to the Drawer, and the Drawer only can recover damages from the Banker. The reason of this is, that there is no privity except between the Drawer and Drawee, and the Banker owes no duty to the Payee. The principle of privity is well defined in the legal deci- sions. In a case where A. lodges a sum of money at a Banker's to be paid in specified portions to B., C, and D., in case the Banker refuse to honour the Cheque of B., C, or D., for payment of the amounts, they have no action against him — the right of action is in A. But if the Banker had in- formed B., C, and D., that he held, at their disposal, the amount lodged by A., this would create a privity, and give them a right of action against him in case of dishonour. Assent by a Banker to perform certain duties, although those duties be outside his ordinary business as a Banker, binds him. i8o TJie Law and Practice of Banking. and in case of failure in the performance he is liable to his Customer. Assent may be either actual or constructive. If a Banker undertake to make investments, or to collect the coupons or interest due on securities deposited with him for safe custody, he is bound to do so, and can be made liable if he neglect and loss ensue. VII. BILLS OF EXCHANGE AND PROMISSORY NOTES. The Chief Business in Banking is lending out a certain proportion of the moneys held on Deposit Receipt and on Current Account. These loans are mostly by way of Bills of Exchange and Promissory Notes, and are called Discounts. Bills of Exchange are generally believed to have been introduced into Commercial dealings by the Italian Merchants. They were known and in use throughout Europe in the 14th Century, and the origin of them is traced by Montesquieu to the Jews and Lombards, who having been banished from France and England in the 13th Century, invented them as a means of receiving value for the goods and property they had to relinquish in these countries. Blackstone, however, points to their earlier use by the Moguls, and another writer* strives to prove that such an instrument was known to the Athenians. Though there is no reference to them in the Roman code, yet, as we have shown, they appear to have been used by the ancient Romans, but the earliest mention of them in modern times occurs in the middle of the 12th Century. The first case relating to them in the English Law Courts was that of Martin v. Boure, decided in the reign of James the First. At this * Depauw. 1 82 The Law and Practice of Banking. period, however, their use was restricted to the purposes of foreign commerce, and as inland bills they did not obtain till the Reign of Charles II. Evelyn, in his Diary, under date May 6th, 1645, being in Rome, writes, " The Bills of Exchange " I took up from my first entering Italy till I went from Rome, "amounted but to 61G Diicati di Banco." The privilege of using Bills of Exchange was then confined to merchants, and there is a record of an old case tried by the Court of King's Bench in the reign of "William and Mary, where it was decided that an action on one could not be maintained, because the defendant was a gentleman and not a merchant An act of the Scottish Parliament, passed in 1696, placed inland and foreign Bills of Exchange on the same footing ; and the advance of commerce, the exigencies of trade, the wants of intertrafific, and the convenience of the people, gradually obliterated all restrictions, and now any person capable of contracting can be a party to such an instrument. The importance and utility of Bills of Exchange in Com- mercial transactions are paramount. Blackstone's illustration of the practical advantage of the system is as follows : — Let us suppose that B., residing in Liverpool, wishes to receive ;^i,ooo, which awaits his orders in the hands of F. at New York. He applies to D., going from Liverpool to New York, to pay him the above amount, less the usual rate of Discount, and to take his Draft or Bill on F. for the ^1,000 payable at sight. Now, this arrangement may, in truth, accommodate both B. and D., for B. receives the amount of his debt on transferring it to D., and D. carries his money across the Atlantic in the shape of a Bill of Exchange, without danger or risk in the transportation, and, on arriving at New York, he presents his Bill to F. and is paid. The Bill of Exchange operates then in this way, that, if acceded, it effects a transfer The Lazv and Practice of Banking. 183 of the right of action, as against F. (the party originally in- debted), from B. to I). A Bill of Exchange is "a document purporting to be an " instrument of pecuniary obligation for value received, and " which is employed for the purpose of settling a debt in a " manner convenient to the parties concerned." It is a ne- gotiable unconditional written order from A. who is called the Drawer, to B. who is called the Drawee, to pay him, or a third party C. who is called the Payee, a stated sum of money speci- fied therein, "absolutely and at all events." A Cheque is legally and technically an inland Bill of Exchange payable on demand ; but the Bills of Exchange we now deal with are those which are drawn payable at a future stated time. They differ from Cheques in many respects. A Cheque is due whenever it is presented to the Drawee — a Bill is due on a certain day. The Drawer of a Cheque must have money or credit with the Drawee — the Drawer of a Bill need not. The death of a Drawer of a Cheque rescinds the order to the Drawee to pay — not so with a Bill. The Drawer of a Cheque is not discharged to the Payee by want of presentment of the Cheque to the Drawee — the Drawer of a Bill is discharged. The Drawee of a Bill usually gives an undertaking to pay the Bill when it becomes due — this is effected by his writing his name upon it, and when this is done he is called the Acceptor and his act an Acceptance ; — the Drawee of a Cheque does not accept or undertake to pay the amount drawn on him. A Cheque is due when demanded from the Drawee, but the Drawee of a Bill is allowed three days in addition to the date upon which the Drawer orders him to pay (unless it be stated on the Bill that it is drawn " without grace ") ; these days are called the days of grace, and though originally allowed to the Drawee as a favour, they are now settled as his legal right. 1 84 The Law and Practice of Banking. A Bill, like a Checiue, must be dated and located ; must have a Drawee ; must have the amount of money set out in writing ; must be stamped as directed by the Statute. And further, it must be payable " absolutely and at all events," without con- ditions, and independent of contingencies. It must be payable at a certain time which must inevitably come to pass. For in- stance, a Bill drawn "three months after the death of A. B." is a good Bill, because its term is one that must be fulfilled. But a Bill drawn "three months after the realization" of certain goods, is not a good Bill, for the realization is but a contingency, and by no means an inevitable occurrence. A Bill passes by delivery if payable to bearer, and by en- dorsement and delivery if payable to order; but whereas the right of action against the Drawee for non-payment in the case of a Cheque lies solely in the Drawer — in the case of a Bill the right of action is alone in the holder — but he must be a bona- fide holder. A Cheque by being crossed "not negotiable," as has been shown, can be so drawn as to destroy the title of a holder for value, where a previous holder's title has been fraudulent or infirm. But there is no similar provision in respect to the negotiators of Bills of Exchange. A bond-fide holder of a Bill can compel payment, no matter what the infir- mities in an antecedent holder's title may be. A Bill of Ex- change further differs from a Cheque on a Banker, in that if the Drawee, being the Acceptor, pay the amount on an endorse- ment forged by the Holder, he is not discharged or exonerated, as the Drawee of a Cheque is. Endorsement. — A Bill is endorsable similarly as a Cheque — in blank or specially — and, as in the case of a Cheque, in the first instance it becomes payable to the bearer — if a bond-fide holder ; and in the second, only to the special Payee, or to his further order ; and it can be endorsed in blank by any further The Laiu and Practice of Banking. 185 endorsee. The essence of a Bill is, that it is assignable — it is a Bill of Exchange — and the assignability is unlimited, just as the assignability of a Cheque is. A Bill of Exchange is a simple contract ; but it differs from nil other simple contracts, in that it is assignable, and does not require a consideration, as a consideration/r/wa_/a(r/(? exists, and is therefore presumed by law until such a presumption is disproved. But if the acceptance is proved to have been for an immoral or illegal consideration, the instrument is void as against the Acceptor. An acceptance for a gambling debt, for instance, is for an illegal consideration, and though an inno- cent Endorsee can recover from the Drawer, he cannot from the Acceptor ; and if the Acceptor pay the Bill to the Trans- feree, he can recover the amount from the Drawer. Stock- jobbing is a species of gambling, and an acceptance to a Broker for a debt contracted by gambling in Stocks is for an illegal consideration. But except in cases of an acceptance for an illegal or immoral consideration, the Acceptor cannot plead in defence to an action by an Endorsee that there was no con- sideration — that is, that he got no value for the acceptance, and the onus lies on him to prove that the acceptance was actually and absolutely given for an illegal or immoral consideration. Promissory Notes seem to have had their origin in the " Goldsmiths' Notes," of which mention is made in the Intro- duction.* They are not as ancient an instrument as Bills of Exchange, and do not seem to have been regarded as a ne- gotiable security until about the middle of the 17th century. And though at that period they were so recognised by the merchants, the Statute Law did not place them on the same footing as Bills of Exchange till Queen Anne's reign (3 & 4 * Lord Holt says they were " an invention of the Goldsmiths in Lombard "Street." 13 i86 The Law and Pi^actice of Banking. Anne, c. 9) ; and not till the time of Lord Kenyon was it judi- cially fixed that Promissory Notes, like Bills, should be entitled to the three days' grace. A Promissory Note, or note of hand, is a writing, wherein the maker, (i.e., the person who signs it) promises to pay a certain person, or his order, or the bearer, a certain stated sum of money, at a certain time, absolutely and at all events. That time may be upon demand, or at sight (which is equivalent to on demand), or upon a specified date, or a specified number of days or months after sight. There are no fixed forms of Avords in which either a Bill of Exchange or a Promissory Note must be drawn. The usual form of a Promissory Note is as. follows : — [.^5°-] London, lit Novcinbcr, 18S1. \^Thrcc\ vionths (or on demand, or days after sight) j / (or ice, or ive jointly and severally ), promise to fay A. B. or his order, \Fiftyi\ Pounds Sterling. The promissor or promissors sign at the foot. But any writing that contains a promise as above stated is valid in law^ and is a legal instrument if duly stamped. In a Promissory Note, the Maker or Promissor occupies the same position in con- templation of the law as does the Acceptor in a Bill of Exchange — that is to say, he is the primary Debtor, and all the other parties are but collaterally liable — that is, liable in the event of the Promissor's default. A note drawn, " we promise to pay," is called a Joint Note, in which the promissors are liable jointly ; one drawn, "we jointly and severally promise to pay," The Law and Practice of Banking. 187 is a Joint and Several Note, in which the promissors are liable jointly and individually. A Bank Note is a Promissory Note, unstdmped by Statute, but it differs from an ordinary Promissory Note in that it is considered in law as actual money ; whereas an ordinary personal Promissory Note is deemed a security for money only. A person cannot make a Promissory Note to himself, or to himself and another person ; but he can make one to him- self or /lis order and it becomes a negotiable instrument when endorsed by him. A note signed by two or more, and drawn " I promise," is a joint and several note : and in a joint and several note, as has been said, all the promissors are principals, and individually liable. If one of the promissors to a joint or to a joint and several note, pay the entire amount, he may maintain an action against his fellow promissors for their individual contributory share. A Promissory Note can be drawn payable by instalments, but it must bear the stamp duty of the gross amount, and although a Cheque payable " on demand " must be presented for payment without any unreasonable delay, nevertheless, a Promissory Note so drawn may lie out unpresented for any length of time — even for years, as it is an instrument intended only as a continuing security. A Promissory Note, however, is presumed at law to have been discharged if not presented or renewed during twenty years after the making or maturing of it. An Accommodation Bill is one which has been signed by a party, without a consideration, and merely as an act of accommodation to enable the person accommodated to obtain money on the Bill. The peculiarity of it is that it is accepted under an express or implied undertaking that the Acceptor will be indemnified by the Drawer against any claim under it — that the Drawer, not the Acceptor, will provide the funds 13—2 1 88 The Law and Practice of Banking. to meet it. The Drawer is understood to be primarily liable, but the accommodating party, whether Acceptor or not, cannot divest himself of his liability to a bona fide holder. Even a person who has been induced to accept through fraud, is liable to an innocent holder. Accommodation Bills have been called the "plague spot of Commerce," and the successful negotiation of them to an unlimited extent has been the cause of several commercial catastrophes. They are one of the Banker's greatest dangers. They bear all the appearance of reality — i.e., that they represent an actual and bo7id fide com- mercial transaction. But not only are they deceptive in this respect, but they deceive in that there is no means of ascertain- ing what party to the bill is the real Debtor. No value has passed between the parties ; the Acceptor does not prepare to meet the Bill — he is impliedly indemnified by the Drawer whom he accommodates with his signature ; and the Drawer, from the mere fact of his resorting to this device, is presumably of no solvency. No Banker will therefore discount a Bill that he knows to be an Accommodation Bill. The usual form of words used in a Bill of Exchange is as follows : — [;^50.] London 1st November, 1881. (Three) months [or days'] after date* [or aftet ■ sight] pay ' to my order [or to bearer or to a third party] the sum of [Fifty] Pou7ids Sterling, value recei ved. To Mr. William Smith, lO, Tipton Street, Liverpool. [John B) ■own.] * If such an instrument is drawn "on demand," or "at sight," it is known as a cash order, and is payable without acceptance on presentation. The Law and Practice of Banking. 189 The Bill must bear the Statutory Stamp Duty detailed subse- quently. Mr. William Smith, in this case, would accept the Bill, by writing upon it his name, which is generally written across the face of the Bill, but not necessarily, as a Bill can be accepted on the back or at the foot. He probably makes it payable at his Bankers, by writing over or under his name " Payable at the Bank," and such an acceptance amounts to a direction to these Bankers to pay it when it matures or becomes due, which in the above case would be on the 4th of February, 1881, being three months—/.^., calendar months — after the date, the ist November, 1880, together with three days of grace added. A Bill can be drawn^ " after demand " or " after notice." Acceptance. — There are three forms of acceptance — (i) general acceptance, which is an undertaking to pay the amount, not at any Bank, or elsewhere than at the Acceptor's address as named on the Bill and when presented to himself or his representative there; (2) a special acceptance, which is where the Acceptor makes it payable at a Banker's or some specified place, in which case it is incumbent on the Holder — in order to maintain his recourse against previous Endorsers, but not absolutely incumbent, in order to maintain recourse against the Acceptor — to present it at the Banker's, or the place specified, and not to the Acceptor, or at his address ; and (3) a particular acceptance, which is in this form, — e.g.^ "accepted payable at the Anglo-Indian Bank only," or — " and not elsewhere or otherwise," in which case the Holder is limited in his powers of presentation and is bound to present it at the Bank named, and that within Banking hours on the day the Bill matures. In suing an Acceptor who has accepted in the first or second forms, it is not necessary to prove presen- tation either to the Acceptor or at the Bank named, for an 190 The Law and Practice of Banking. Acceptor is bound to discover where his acceptance is, and to pay it. But in suing the Drawer or an Endorser, presentation at the place specified must be proved. But in the case of a particular acceptance (3), in order to sue the Acceptor for non- payment, it is necessary to prove that the Bill of Exchange was ])resented where only payable, that is, in this case, at the Anglo- Indian Bank. If an Acceptor make a Bill payable at his Bankers, and they have sufficient funds of his in their hands to pay it, when it is presented at its maturity, such acceptance is sufficient authority to them to charge it to his account, and no direction or authorization beyond the terms of the acceptance is neces- sary ; and if the Banker, having funds, neglect to pay it, he is liable to an action by the Acceptor for dishonour. But if the Banker pay on a forged endorsement,* he cannot charge the Acceptor's account, and, obviously, if he pay an acceptance which is a forgery, he cannot debit the party whose acceptance it purports to be. Should he pay a Bill bearing a forged en- dorsement, or a forged acceptance, his remedy is against the party to whom he has made the payment. If an Acceptor make a Bill payable at a Bank where he has no account, he cannot compel the Banker to receive money to pay the acceptance ; nor, if at the maturity of the Bill he remit the amount to the Banker, in the absence of assent by the Banker to receive and hold the money and to pay the Bill, the Acceptor cannot make the Banker liable in case of dishonour. Assent, however, may be constructive as well as express. For instance, if the Banker has been in the habit * When there are several Endorsers on a Jj'iW J>nyal>le to bearer, a bond fide Holder is 7iot affected by an intermediate fraud of which he has no cognizance ; nor is he bound to make inquiry as to the validity or bond fides of any preceding endorsements. The Lazu and Practice of Banking. 191 of receiving money from the Acceptor for such a purpose and applying it as directed, that will be deemed a constructive assent on his part, in the absence of notice to the contrary, to do so again. A differing acceptance is where the Acceptor accepts for an amount, or for a term, differing from the amount or term as directed by the Drawer, and the holder can only charge the Acceptor with- the amount he has accepted for, and the maturity to bind the Acceptor is the maturity named in the acceptance. However, in a case where a Bill was dated September the 8th, and drawn at four months, and the Accep- tors wrote over the acceptance, "due nth Dec," it was held that these words did not qualify the acceptance, but were at most an inaccurate descri]3tion of the date of the Bill ; but if the Acceptors had written, "due nth Feb.," and thereby extended the time, it is probable, that such date would be a material part of the Bill. An acceptance must be by the Drawee, and the Drawer himself may be the Drawee. If there are several Drawees, the Bill must be accepted l)y all ; but the fact of its not being accepted by all, does not relieve those who do accept. If a person write his name by way of acceptance upon a blank or unfilled stamp, and deliver it, he is bound by such acceptance; but if a blank •stamp so accepted be stolen or obtained fraudulently, he would not be bound, for liability attaches only on delivery. The Statute Law, before the 41 Vict., c. 13 (1878), declared that an acceptance should be "in writing and signed by the Ac- " ceptor," which necessitated some words of acceptance in writing. But by that Statute the signature alone of the Drawee was declared to be sufficient.* If an unaccepted Bill * The words of the Statute, after declaring that doubts have arisen as to 1 92 The Law and Practice of Banking. be left with the Drawee for acceptance, and that he consent to- accept it, and that subsequently he destroy the Bill or lose it of malice, it is probable he could be made liable to a Holder for value. But if he had, ab miiio, refused to accept, then in the event of the loss or destruction of the instrument he could not be liable. Qualified or Conditional Acceptance. — If a Drawee accept a Bill qualifiedly, and that the Holder agree to such acceptance, he can only charge the Acceptor upon nonpayment after the fulfilment of those qualifying conditions ; but to charge the Drawer and previous Endorsers, he is bound to notice them of the nature of the acceptance, and if they object ta the qualified terms of it, they can refuse to be charged in the event of dishonour. An acceptance is said to be conditional Avhen it is an engagement to pay upon the fulfilment of con- ditions named therein. For example : — " accepted payable oni " surrender of Bill of Lading" — " accepted payable when goods "now consigned to me are sold" — and such like, are con- ditional acceptances, and if the Drawer or Holder consent to such an acceptance, he can only institute an action for the amount when the conditions of the acceptances are exhausted. Though an acceptance can be conditional, an endorsement cannot, or rather, a conditional endorsement is not usual in practice, as it tends to restrict the negotiability of the Bill, and an the true effect and intention of the Mercantile Law Amendment Act (1856), are — l. An acceptance of a bilUof exchange is not and shall not be deemed to be insufficient under the provisions of the said Statute by reason only that such acceptance consists merely of the signature of the drawee written on such bill. 2, Nothing in this Act shall affect the validity or invalidity of any ver- dict or judgment recovered before the passing of this Act. 3. This Act maybe cited for all purposes as the "Bills of Exchange- Act, 1878." The Law and Practice of Banking. 193. endorsement cannot be restrictive. As a Bill drawn after sight begins to run from the time it is sighted or confirmed by the Acceptor, it is therefore necessary that the date of the acceptance should be set forth on the Bill. A Bill "at sight" is payable on demand, whether accepted or not, but the Drawee is bound only in case of acceptance. What Acceptance Admits. — The Acceptor is the primary Debtor to the Holder; but the other parties to it are regarded as securities — to one or any of whom the Holder has recourse. By his act of acceptance the Drawee admits that he is indebted to the Drawer, and he cannot subsequently plead that the Drawer or Payee was a person incapacitated, or that the Drawer's signature is a forgery. But acceptance is no admission in respect to the endorsers, and if an endorse- ment is known to him to be a forgery he can refuse payment. Where the Drawer's name is signed " per-procuration," acceptance is an admission of debt to the principal, and con- sequently the principal's endorsement is necessary, and the Acceptor can refuse to pay on the agent's endorsement " per- " procuration," even though it be so endorsed at the time of acceptance. Therefore, in a Bill drawn payable to the Drawer's order, where his signature, as Drawer, is " per-procuration," some Bankers require that it be endorsed by the -Drawer himself and not by the agent who signed as Drawer. Bills of Exchange or Promissory Notes need not be on paper ; they are valid on any substitutionary substance excejit metal. Nor need they be written in ink, as a bill drawn and signed in pencil is legal and valid.* Nor need they be in any precise form of words as long as the intention to promise * We believe a County Court Judge in Ireland a short while ago dis- missed an action on a Bill of Exchange because it was drav;n on the ivrong side of the stamp, and was, according to him, therefore an illegal document.(!> 194 ^^^^ Laiv and Practice of Banking. or to accept is apparent on the face of the instrument. The constituent features of a Bill of Exchange are — (i) the J)ate, (2) the Amount, (3) the Time when Payable, (4) the Payee, (5) the Drawer's Signature, (6) the Drawee, (7) the Place where payable. The Date. — Though the place where drawn and the date when drawn, are usual and proper in a Bill of Exchange, they are not necessary or essential to its validity. Evidence as to the time of making will fix the date. A Bill, like a Cheque, may be post-dated, but if a Ba7iker issue a Bill under the pro- visions of 9 Geo. IV., c. 23, and post-date it, he is liable to a penalty of ^100. The Amount. — It is necessary that the amount should be specifically stated. The remarks as to the amount as in Cheques apply equally to Bills. The Time when Payable. — If no time is stated, the Bill is payable on demand. '■'■ At sighV'' ?cciA cognate expres- sions are equivalent io '''' on dej?ia?id.'^* After sight on a Bill of Exchange means after acceptance by the Drawee, and not merely after he has seen it ; but the same expression on a Promissory Note necessitates no more than exhibition or presentation to the maker. A Bill or Note may be payable at any time, no matter how distant, provided that the time is definite and inevitable ; but it must be payable at some time or other, and that time must be specified. The Payee. — A Payee must be particularised. It may be the bearer, or some person specially ; or a person or his order ; or persons jointly; or a Company or a Corporation. The Payee can be the Drawer himself But there must be a Payee. A Bill payable to " or order," and so negoti- * Formerly, "at sight" was considered a term entitled to three days' grace after acceptance. The Law and Practice of Banking. 195 ated, was held not to be a Bill of Exchange, as there was no Payee. But if a space is left for the Payee's name, it can be filled in by a lawful Holder with his own name, but he must prove authority from the Drawer so to do. If a Bill is payable specially, that is, to a Payee without the alternative words " or order " or " or bearer," it is not negotiable to other parties, but, like a Cheque, must be paid by the Drawee to the Payee alone. A Bill, like a Cheque, is transferable. If payable to order it passes by endorsement and delivery ; if to bearer, by •delivery. The Drawer's Signature. — The signature of the Drawer of a Bill or maker of a Note is usually at the foot, but not necessarily, for a note drawn : " I, William Jones, promise to " i)ay, &c.," is a good note. A marksman can be a Drawer. The Drawee. — The Drawee must be particularized. His surname must be spelt correctly, for if there is a divergence between the spelling of the names of the Drawee and Acceptor, it may be pleaded that they are not the same person, and therefore that the Bill is invalid. The Place where Payable. — The Acceptor has the power of locating or domiciling a Bill, but if the place is stated in the body of the instrument, and it be accepted generally, it is a part of the contract. It has been the opinion of some Judges, that if a Draiver make a Bill payable at his own place, such an act is evidence that the Bill was an Accom- modation Bill. " Value Received." — These words are not necessary in a Bill. They are either superfluous as between Drawer and Drawee, or ambiguous where the Payee is a third party. Bills of Exchange, because of their paramount utility and necessity in trade and commerce, have been so highly favoured by the law, that a special means of recovering on them has 196 The Law and Practice of Banking. been provided by the Legislature. An action on a Bill or Note, instituted within six months after it shall have become payable, may be commenced by a writ, which instead of ordering the defendant to appear, etc., gives him notice that if within twelve days he do not obtain leave to appear and do appear, judgment will be registered and execution follow. Upon the defendant's appearance he must, if he intends to defend the action, obtain the leave of the Court to defend it ; and this leave will not be granted unless it be made to appear to the Court that the de- fence is in its nature reasonable and bona fide. A defendant, however, is not, by the Court's refusal, deprived of the right to bring his case before a jury. The object of this special pro- cedure in the case of Bills of Exchange, is to prevent defences of a vexatious and frivolous character being entered upon with the object of obtaining a delay, or defrauding a plaintiff— to the ultimate restriction of the free negotiability of these instruments and the consequent injury to commerce. VIII. PERSONS INCAPACITATED TO BE PARTIES TO A BILL OF EXCHANGE. An agent cannot endorse or accept Bills so as to bind his principal unless with the special authority of the principal. Ratification by the principal of the agent's acts, or of similar acts in the past, will bind the principal. The words " per procuration," are an express declaration of a specialty authority, and a person who lakes a Bill so accepted, drawn, or endorsed, is bound to inform himself of the truth and extent of the declared authority. An agent so appointed incurs no personal responsibility in connection with the instruments he so signs under his authority. But if an agent implies an authority which does not exist, he is personally liable. Partners.-^" Partners not in trade cannot bind each other " by Bills. Therefore, an attorney who is partner with another, " has r\oX.,fro7?i that relation alone, power to bind his co-partner, ■" by a Bill or Note. No more have partners carrying on business "as brokers by getting orders on commission and dividing the "expenses."* If a partner act outside his partnership powers, to the knowledge of the other contracting parties, they cannot hold his co-partners liable for the deeds of the one who exceeded his authority. Or where a party takes a Bill with notice that it was * Byles. 198 The Lazo a7id Practice of Banking. accepted in a firm's name, b}- one partner, but without the sanction or knowledge or authority of the other partners, he cannot charge the other partners, although it be for value received. But the other partners would be liable to an in- nocent boiui jide holder for value. If a person be a sleeping or secret partner and unknown to a creditor, he is yet liable to that creditor on the partnership transactions ; and on the other hand, if a person be an ostensible partner, />., that his name appears publicly as a partner, though he derive no benefit from the partnership, he is also liable to a creditor who believed him to be, and treated him as, an active partner, even although a deed of dissolution which had not been pub- lished or notified may have been executed. If dissolution is effected by the death of one of the partners, no notification is necessary. Infants. — By the Infants' Relief Act (37 & 38 Vict, c. 62) all contracts by Infants (/>., persons under the age of twenty- one), to repay money lent, or to be lent, or for goods supplied, or to be supplied, other tha?i contracts for necessaries, are made absolutely void, and, being absolutely void, no action can be brought upon a ratification made after full age of any promise or contract made during infancy ; a contract that is void cannot be ratified, though a voidable one may. An Infant's promise by way of note of hand, or otherwise, to pay for necessaries can be enforced, the jury answering whether the articles were necessaries or not ; but such a note of hand, to be recoverable upon, must be for the exact sum due for the neces- saries, and not a note bearing interest or a penalty. Though he should represent himself as of full age, an Infant is not liable on a Bill of Exchange ; still he can endorse a Bill, and give a good title to the Transferee, but the Transferee or En- dorser has no right of action against the Infant. An Infant The Lazu and Practice of Banking. 1 99 may sue and recover payment through his guardian. The fol- lowing case, though not strictly dealing with Infants' Contracts, may yet well be included under this head. It was one where a Banker discounted a Promissory Note to the Bank, signed by A., who had just ceased to be an Infant, and gave the proceeds unreservedly to B., who represented that it was given in pay- ment of necessaries supplied to A., and though the Bank had such knowledge of the relative position of the parties that it warranted their belief in these representations, yet — B., having misappropriated the money — the Bank was restrained from suing on the note, and the note was declared to be invalid.* It is, however, to be remembered that Infants, though incapable to contract on their own account, may be agents of others who are capable, and as such can bind those others. Lunatics, Idiots, and a Person non compos mentis. — Contracts by a Lunatic, an Idiot, or a person non compos through infirmity or age, are absolutely void. But if the contract be a fair contract, whereby the Lunatic or infirm person has derived benefit, and one where the other contracting party had no notice or knowledge of the incapacity, the con- tract could not be voided by the Lunatic on the ground of his lunacy. Married Women. — The contracts of a married woman are void, unless she contracts under the Married Women's Property Act (33 & 34 Vict., c. 93). Without her husband's authority (express or implied) she cannot render either him or herself liable, not even though she represent herself as un- married. In the latter case an action would lie, not on the contract, but for obtaining under a false pretence. She is liable if she have a separate estate ; or if her husband be transported, or unheard of for seven years ; or if he be an alien who never * Dettniar ;-', RIetropolilan and Provincial Bank. :200 TJie Laiu and Practice of Banking. resided in the Kingdom. A Bill drawn payable to a single woman vests in her husband on her marriage, and his endorse- ment alone is a discharge. But since the passing of the Married Women's Property Act, the husband is not liable on a Bill or Note given by the wife during her spinsterhood. Undue Influence. — If a person give a Bill or Note under the exercise of undue influence, he cannot repudiate the lia- bility to an innocent hona fide holder. His remedy is in a Court of Equity. Drunkenness. — Total Drimhenness^ amounting to a per- version or deprivation of mental power, incapacitates a man from contracting, and it is a good defence to an action on a Bill of Exchange, or Promissory Note. " It is just the same," said Baron Alderson, " as if the defendant had written his name on " the Bill in his sleep in a state of somnambulism." But if an act done during total drunkenness is ratified at a subsequent sober and lucid period, the ratification makes the contract valid. Partial Drunkenness. — It may also be a defence on an action that the defendant signed the Bill or Note while partially drunk. But a defence of this nature differs from the preceding case, inasmuch as it should be proved that the drunkenness was the result of an intentional act or contrivance on the part of him who obtained the signature to the Bill ; or else that the defendant was induced to sign by a person who had knowledge, and took advantage of, his drunken condition. Convicted Felons. — A convicted Felon during the period of his sentence cannot be a contracting party to, or bring an action on, a Bill of Exchange. But he can, through an interim administrator, receive as Endorser the benefit of a Bill maturing during his term of sentence, or take action on one dishonoured. A contract also in favour of an alien enemy, and against a British subject in the British Isles, is void as against the subjec The Law and Practice of Banking. 201 Corporations and Companies. — "Without a special "authority, express or implied, a Corporation has no power to "make, endorse, or accept Bills or Notes ;"^' and it was decided in a case of Overend, Gurney and Co., against the Mid Wales Railway Company, that a Railway Company can neither accept, draw, nor endorse a Bill of Exchange. A Joint Stock Company, however, can accept by the hands of the Directors, or a quorum of them, and each individual member of the Company will be bound by their act. But if they accept per- sonally in their own names, and not as Directors of the Joint Stock Company, the liability will not extend beyond them personally. Directors of a Joint Stock Company cannot bind the Company as Drawers^ unless there is a special authority to that effect. A joint and several Note signed by Directors will bind only the Directors signing. By the 25 & 26 Vic, c. 9, s. 47, and the 30 & 31 Vic, c 131, if any person on behalf of a Limited Company registered under these ("the Companies") Acts, signs or endorses a Bill, Cheque, or Note on which the name of the Company is not duly mentioned, he is not only made personally responsible to the holder, but liable to a penalty of ^50. Societies. — The contracting powers of Societies, such as Loan and Building and Co-operative Societies and the like, are generally defined in the deeds incorporating them. * Byles. 14 IX. THE STAMP DUTIES. The Stamp Act of 1870 now regulates the mode of writing and stamping, and the duties on, Bills of Exchange. The following are the provisions contained in the Act and Schedule thereto, which relate to Bills of Exchange and Pro- missory Notes : — By sect. 7 (i), Every instrument written upon stamped material is to be written in such manner, and every instrument partly or wholly written before being stamped is to be so stamped, that the stamp must appear on the face of the instrument, and cannot be used for or applied to any other instrument written upon the same piece of material. (2) If more than one instrument be written upon the same piece of mate- rial, every one of such instruments is to be separately and distinctly stamped with the duty with which it is chargeable. By sect. 8, Except where express opinion to the contrary is made by this or any other act — (i) An instrument containing or relating to several distinct matters is to be separately and distinctly charged as if it were a separate instrument, with duty in respect of each such matters. (2) An instrument made for any consideration or considerations in respect whereof it is chargeable with ad valorem duty, and also for any further or other valuable consideration or considerations, is to be charged with duty in respect of such last-named consideration or considerations, as if it were a separate instrument made for consideration or considerations only. By sect. 9(1), A stamp which by any word or words on the face of it is appropriated to any particular description of instrument is not to be used, or, if used, is not to be available, for an instrument of any other description. The Laiv and Practice of Banking. 203 (2) An instrument falling under the particular description to which any stamp is so appropriated as aforesaid is not to be deemed duly stamped unless it is stamped with the stamp so appropriated. By sect, ii, Where an instrument is chargeable with ad. valorem duty in respect of any money in any foreign or colonial currency, such duty shall be calculated on the value of such money in British currency according to the current rate of exchange on the day of the date of the instrument. By sect. 12, Where an instrument is chargeable with ad valorem duty in respect of any stock or of any marketable security, such duty shall be cal- culated on the value of such stock or security according to the average price thereof on the day of the date of the instrument. By sect. 13, Where an instrument contains a statement of current rate of exchange, or average price, as the case may require, and it is stamped in accordance with such statement, so far as regards the subject-matter of such statement, to be deemed duly stamped, unless or until it is shown that such statement is untrue, and that the instrument is in fact insufficiently stamped. By sect. 15 (i). Except where express provision to the contrary is made by this or any other Act, any unstamped or insufficiently-stamped instru- ment may be stamped after the execution thereof, on payment of the unpaid duty and a penalty of ten pounds, and also, by way of further penalty when the unpaid duty exceeds ten pounds, of interest on such duty, at the rate of five pounds per centum per annum from the day upon which the instrument was first executed up to the time when such interest is equal in amount to the unpaid duty. And the payment of any penalty or penalties is to be denoted on the in- strument by a particular stamp. (2) Provided as follows : (a) Any unstamped or insufficiently stamped instrument, which has been first executed at any place out of the United Kingdom, may be stamped, at any time within two months after it has been first received in the United Kingdom, on payment of the unpaid duty only : (b) The commissioners may, if they think fit, at any time within twelve months after the first execution of any instrument, remit the j^enalty or penalties, or any part thereof. By sect. 17, Save and except as aforesaid, no instrument executed in any part of the United Kingdom or relating, wheresoever executed, to any pro- perty situate, or to any matter or thing done or to be done, in any part of the United Kingdom, shall, except in criminal proceedings, be pleaded or given in evidence, or admitted to be good, useful or available in law or equity, unless it is duly stamped in accordance with the law in force at the time when it was first executed. 14—2 204 The Lazo and Practice of Banking. By sect. 23, Except wheie express proviiion is made to the contrary, all duties are to be denoted by impressed stamps only. By sect. 24 (i), An instrument, the duty upon which is required, or per- mitted by law, to be denoted by an adhesive stamp, is not to be deemed duly stamped with an adhesive stamp unless the person required by law to cancel such adhesive stamp cancels the same by v.-riting on or across the stamp his name or initials, or the name or initials of his firm, together with the true date of his so writing, so that the stamp may be effectually can- celled, and rendered incapable of being used for any other instrument, or unless it is otherwise proved that the stamp appearing on the instrument was affixed thereto at the proper time. (2) Every person who, being required by law to cancel an adhesive stamp, wilfully neglects or refuses duly and effectually to do so in the manner afore- said, shall forfeit the sum of ten pounds. By sect. 36, The duty of sixpence upon an agreement may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the agreement is first executed. By sect. 45, The term " banker " means and includes any corporation, society, partnership, and persons, and every individual person carrying on the business of banking in the United Kingdom. The term " bank note" means and includes — (i) Any bill of exchange or promissory note issued by any banker, other than the Governor and Company of the Bank of England, for the payment of money not exceeding one hundred pounds to the bearer on demand : (2) Any bill of exchange or promissory note so issued which entitles or is intended to entitle the bearer or holder thereof, without in- dorsement, or without any further or other indorsement than may be thereon at the time of the issuing thereof, to the payment of money not exceeding one hundred pounds on demand, whether the same be so expressed or not, and in whatever form, and by whom- soever such bill or note is drawn or made. By sect. 46, A bank note issued duly stamped, or issued unstamped by a banker duly licensed or otherwise authorized to issue unstamped bank notes, may be from time to time re-issued without being liable to any stamp duty by reason of such re-issuing. By sect. 47 (i), If any banker, not being duly licensed or otherwise authorized to issue unstamjDed bank notes, issues, or causes or permits to be issued, any bank note not being duly stamped, he shall forfeit the sum of fifty pounds. {2) If any person receives or takes any such bank note in payment or as The Law and Practice of Banking. 205 .1 security, knowing the same to have l^een issued unstamped contrary to law, he shall forfeit the sum of twenty pounds. By sect. 48 (i), The term "bill of exchange" for the purpose of this act indicates also draft, order, cheque, and letter of credit, and any docu- ment or writing (except a bank-note) entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money therein mentioned. (2) An order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promis- sory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be avail- able, or upon any condition or contingency which may or may not be per- formed or happen, is to be deemed for the purposes of this Act a bill of exchange for the payment of money on demand. (3) An order for the payment of any sum of money weekly, monthly, or at any other stated periods, and also any order for the payment by any ]ierson at the time after the date thereof of any sum of money, and sent or delivered by the person making the same to the person by whom the pay- ment is to be made, and not to the person to whom the payment is to be made, or to any person on his behalf, is to be deemed for the purposes of this act a bill of exchange for the payment of money on demand. By sect. 49 (i), The term " promissory note " means and includes any ilocument or writing (except a bank note) containing a promise to pay any sum of money. (2) A note promising the payment of any sum of money out of any par- ticular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, is to be deemed for the purposes of this Act a promissory note for the said sum of money. By sect. 50, The fixed duty of one penny on a bill of exchange for the jiayment of money on demand may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the bill is signed before he delivers it out of his hands, custody, or power. By sect. 51 (i). The ad valorem duties upon bills of exchange and promissory notes drawn or made out of the United Kingdom are to be de- noted by adhesive stamps. (2) Every person into whose hands any such bill or note comes in the United Kingdom before it is stamped, shall, before he presents for pay- ment, or indorses, transfers, or in any manner ^negotiates, or pays such bill or note, affix thereto a proper adhesive stamp or proper adhesive stamps of sufficient amount, and cancel every stamp so affixed thereto. (3) Provided as follows : 2o6 The Law and Practice of Banking. (a) If at the time when any such bill or note comes into the hands of any bond fide holder thereof there is affixed thereto an adhesive stamp effectually obliterated, and purporting and appearing to be duly cancelled, such stamp shall, so far as relates to such holder, be deemed to be duly cancelled, although it may not appear to have been so affixed or cancelled by the proper person. (b) If at the time when any such bill or note comes into the hands of any bond fide holder thereof there is affixed thereto an adhesive stamp not duly cancelled, it shall be competent for such holder to cancel such stamp, as if he were the person by whom it was affixed, and upon his so doing such bill or note shall be deemed duly stamped, and as valid and available as if the stamp had been duly cancelled by the person by whom it was affixed. (4) But neither of the foregoing provisoes is to relieve any person from any penalty incurred by him for not cancelling any adhesive stamp. By sect. 52, A bill of exchange or promissory note purporting to be drawn or made out of the United Kingdom is, for the purpose of this Act, to be deemed to have been so drawn or made, although it may in fact have been drawn or made within the United Kingdom. By sect 53 (i), Where a bill of exchange or promissory note has been written on material bearing an impressed stamp of sufficient amount but of improper denomination, it may be stamped with the proper stamp on pay- ment of the duty, and a penalty of forty shillings if the bill or note be not then payable according to its tenor, and of ten pounds if the same be so payable. (2) Except as aforesaid, no bill of exchange or promissory note shall be stamped with an impressed stamp after the execution thereof. By sect. 54 (i), Every person who issues, indorses, transfers, negotiates, presents for payment, or pays any bill of exchange or promissory note liable to duty and not being duly stamped shall forfeit the sum of ten pounds, and the person who takes or receives from any other person any such bill or note not being duly stamped, either in payment or as a security, or by purchase or otherwise, shall not be entitled to recover thereon, or to make the same available for any purpose whatever. (2) Provided that if any bill of exchange for the payment of money on demand, liable only to the duty of one penny, is presented for payment un- stamped, the person to whom it is so presented may affix thereto a proper adhesive stamp, and cancel the same, as if he had been the drawer of the bill, and may, upon so doing, pay the sum in the said bill mentioned, and charge the duty in account against the person by whom the bill was drawn, or deduct such duty from the said sum, and such bill is, so far as respects the duty, to be deemed good and valid. The Law and Practice of Banking. 207 (3) But the foregoing proviso is not to relieve any person from any penalty he may have incurred in relation to such bill. By sect. 55, When a bill of exchange is drawn in a set according to the custom of merchants, and one of the set is duly stamped, the other or others of the set shall, unless issued or in some manner negotiated apart from such duly stamped bill, be exempt from duty ; and upon proof of the loss or destruction of a duly stamped bill forming one of a set, any other bill of the set which has not been issued or in any manner negotiated apart from such lost or destroyed bill may, although unstamped, be admitted in evi- dence to prove the contents of such lost or destroyed bill. By sect. 96 (i), The duty on a contract note may be denoted by an adhe- sive stamp, which is to be cancelled by the person by whom the note is first executed. {2) Every person who makes or executes any contract note chargeable with duty, and not being duly stamped, shall forfeit the sum of twenty pounds. (3) No broker, agent, or other person shall have any legal claim to any charge for brokerage, commission, or agency, with reference to the sale or purchase of any stock or marketable security of the value of five pounds or upwards mentioned or referred to in any contract note, unless such note is duly stamped. By sect. 2 of 34 Vic, c. 4, The term " foreign security " means and in- cludes every security for money by or on behalf of any foreign or colonial state government, municipal body, corporation, or company, bearing date or signed after the third day of June, one thousand eight hundred and sixty-two, except an instrument chargeable with duty as a bill of exchange or promissory note — (1) Which is made or issued in the United Kingdom ; (2) Which, the interest thereon being payable in the United Kingdom, is assigned, transferred, or in any manner negotiated in the United Kingdom. By sect. 3 of the same act, every person who in the United Kingdom makes, issues, assigns, transfers, or negotiates, or pays any interest upon any foreign security not being duly stamped, shall forfeit the sum of twenty pounds. By sect. 115, The commissioners may at any time, without reference to the date thereof, allow any foreign security to be stamped without the pay- ment of any penalty, upon being satisfied, in any manner that they may think proper, that it was not made or issued, and has not been transferred, assigned, or negotiated within the United Kingdom, and that no interest has been paid thereon within the United Kingdom. By sect. 116, The duty upon a notarial act, and upon the protest by a 2o8 The Law and Practice of Banking. notary public of a bill of exchange or promissory note, may be denoted by an adhesive stamp which is to be cancelled by the notary. By sect. 120, The term "receipt" means and includes any note, memo- randum, or writing whatsoever, whereby any money amounting to two pounds or upwards, or any bill of exchange or promissory note for money amounting to two pounds or upwards, is acknowledged or expressed to have ])een received or deposited or paid, or whereby any debt or demand, or any l)art of a debt or demand, of the amount of two pounds or upwards, is acknowledged to have been settled, satisfied, or discharged, or which signi- fies or imports any such acknowledgment, and whether the same is or is not signed with the name of any person. By sect. 121, The duty upon a receipt may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the receipt is given before he delivers it out of his hands. By sect. 122, A receipt given without being stamped may be stamped with an impressed stamp upon the terms following ; that is to say — (i) "Within fourteen days after it has been given, on payment of the duty and a penalty of five pounds ; (2) After fourteen days, but within one month, after it has been given, on payment of the duty and a penalty of ten pounds ; and shall not in any other case be stamped with an impressed stamp. By sect. 123, If any person — (i) Gives any receipt liable to duty and not duly stamped ; (2) In any case where a receipt would be liable to duty refuses to give a receipt duly stamped ; (3) Upon a payment to the amount of two pounds or upwards gives a receipt for a sum not amounting to two pounds, or separates or divides the amount paid with intent to evade the duty ; he shall forfeit the sum of ten pounds. Schedule to the above Act. Agreement, or any Memorandum of an Agreement, made in England or Ireland under hand only, or made in Scotland without any clause of registration, and not otherwise specifi- cally charged with any duty, whether the same be only evi- dence of a contract, or obligatory upon the parties from its being a written instrument Exemptions. (i) Agreement or memorandum the matter whereof is not of the value of 5/. (2) Agreement or memorandum for the hire of any labourer, artificer, manufacturer, or menial servant. X, ••f- The Law and Practice of Banking. 209 (3) Agreement, letter, or memorandum made for or relating to the sale of any goods, wares, or merchandise. (4) Agreement or memorandum made between the master and mariners of any ship or vessel for wages on any voyage coastwise from port to port in the United Kingdom. Bank Note— For money not exceeding i/. Exceeding i/. and not exceeding 2I. \l. 5/- 10/. 10/. ,, 20/. ,, 20/. 30/- „ 30/. 50/. „ 50/. ,, 100/. £ s. d. 5 10 I 3 I 9 2 3 S 8 6 Bill of Exchange — Payable on demand ... ... ... ... ... ... o Bill of Exchange of any other kind whatsoever (except a bank note) and Promissory Note of any kind whatsoever (except a bank note) — drawn, or expressed to be payable, or actually paid, or endorsed or in any manner negotiated in the United Kingdom : Where the amount of value of the money for which the bill or note is drawn or made does not exceed 5/, ... ... o Exceeds 5/. and does not exceed 10/. ... ... ... o 10/. ,, 25/. o 25/. ,, 50/. o 50/. ,, 75/. o 75/. ,, 100/. o 100/. — for every 100/. and also for any fractional part of 100/. of such amount or value ... ... ... ... ... o Exemptions. (i) Bill or note issued by the Governor and Company of the Bank of England or Bank of Ireland. (2) Draft or order drawn by tiny banker in the United Kingdom, upon any other banker in the United Kingdom, not payable to bearer or to order, and used solely for the purpose of settling or clearing any account between such bankers. (3) Letter written by a banker in the United Kingdom to any other banker in the United Kingdom directing the payment of any sum of money, the same not being payable to bearer or to order, and such letter not being sent or delivered to the person to whom pay- ment is to.be made, or to any person on his behalf. (4) Letter of credit granted in the United Kingdom authorising drafts to be drawn out of the United Kingdom payable in the United Kingdom. 2IO The Law and Practice of Banking. (5) Draft or order drawn by tlie Accountant General of the Court of Chancery in England or Ireland. (6) Warrant or order for the payment of any annuity granted by the Commissioners for the Reduction of the National Debt, or for the payment of any divi- dend or interest on any share in the Government or Parliamentary stock or funds. (7) Bill drawn by the Lords Commissioners of the Admi- ralty or by any person under their authority, under the authority of any Act of Parliament upon and pay- able by the Accountant General of the Xavy. (8) Bill drawn (according to a form prescribed by her Majesty's orders by any person duly authorised to draw the same) upon and payable out of any public account for any pay or allowance of the army or other expenditure connected therewith. (9) Coupon or warrant for interest attached to and issued with any security. Protest of any bill of exchange or promissory note :— £ s. Where the duty on the bill or note does not exceed is. the same duty as the bill or note ... In any other case ... ... ... ... ... ... o i Receipt given for or upon the payment of money amounting to 2/. or upwards ... ... ... ... .. ...00 Exemptions. (i) Receipt given for money deposited in any bank, or with any banker, to be accounted for or expressed to be received of the person to whom the same is to be accounted for. (2) Acknowledgement by any banker of the receipt of any bill of exchange or promissory note for the purpose of being presented for acceptance or payment. (3) Receipt given for or upon the payment of any parlia- mentary taxes or duties, or of money to or for the use of her Majesty. (4) Receipt given by the Accountant General of the Navy, for any money received by him for the service of the navy. (5) Receipt given by any agent for money imprested to liim on account of the pay of the army. (6) Receipt given by any officer, seaman, marine or soldier, or his representatives, for or on account of any wages, pay, or pension, due from the Admiralty or Army Pay Office. (7) Receipts given for the consideration money for the pur- chase of any share in any of the Government or Par- liamentary stocks or funds, or in the stock of the i East Indian Company, or in the stocks or funds of the Secretary of State in Council of India, or of the Governor and Company of the Bank of England, or The Law and Practice of Banking. 2 1 1 of the Bank of Ireland, or for any dividend paid on any share of the said stocks or funds respectively. (8) Receipt given for any principal money or interest due on an Exchequer Bill. (9) Receipt written upon a bill of exchange or promissory note duly stamped. (10) Receipt given upon any bill or note of the governor and company of the Bank of England or the Bank of Ireland. (11) Receipt endorsed or otherwise written upon or contained in any instrument liable to stamp duty, and duly stamped, acknowledging the receipt of the considera- tion money therein expressed, or the receipt of any principal money, interest, or annuity thereby secured or therein mentioned. (12) Receipt given for drawback or bounty upon the expor- tation of any goods or merchandise from the United Kingdom. (13) Receipt given for the return of any duties of customs upon certificates of over entry. (14) Receipt endorsed upon any bill drawn by the Lords Commissioners of the Admiralty, or by any person under their authority, or under the authority of any Act of Parliament, upon and payable by the Account- ant General of the Navy. " It appears," says Byles, " that the following instruments are free from duty under this and previous Statutes : {a) Bills and Notes of the Bank of England and Bank of Ireland. (A) Notes for one pound, one guinea, two pounds or two guineas, payable to bearer on demand issued by the Bank of Scotland, Royal Bank of Scotland, and British Linen Company, (f) Bills or Notes issued by Bankers paying a composition in lieu of stamps. {d) Bills drawn for the expenses of the Navy and Army. {e) Notes of Loan, Friendly and Building Societies. A Bill or Note which is unstamped or stamped im- perfectly or improperly cannot be recovered upon ; nor can it be admitted in evidence, except in criminal cases. A 212 The Law and Practice of Banking. Bill " drawn or made " out of the United Kingdom, requires an ad valorevt Foreign Bill Stamp ; but an Inland Bill which has been negotiated abroad does not require a Foreign Bill Stamp. Thus, a Bill drawn in Manchester on a London Bank or Firm is an Inland Bill, and if it be sent to New York, for instance, and bears evidence of having been negotiated abroad, it does not require a Foreign Bill Stamp in addition to the impressed stamp duty it of necessity bears. A Bill Stamp cannot be used except for the one transaction ; therefore, having been filled on one side and negotiated as a Bill or Note, it cannot be filled for the same purpose on the reverse side, as the stamp duty is exhausted by the one transaction. Nor can a Bill be re-issued and circulated after it has been paid at maturity. The stamp duty on Foreign Drafts payable at sight or on demand^ was reduced, in 1870, to a uniform tax of one penny, to be represented by an adhesive inland revenue stamp, thus super- seding the previous duty, which was one ad valorem. In 187 1 an Act was passed abolishing days of grace on Foreign Drafts at sight, and it is a matter of general regret amongst Bankers that the useless and anomalous days of grace on Bills of Exchange of all descriptions have not also been abolished. By the 44 Vict, c. 12, s. 47, the penny postage stamp was made available for a penny inland revenue«duty, and vice versa ; and since the passing of that Act a penny stamp has been issued which is common to both imposts. X. THE TRANSFER OF BILLS. Bills of Exchange are transferable and assignable as Cheques are. One payable to "order" passes by endorsement and delivery ; one payable to " bearer " by delivery alone ; mere endorsement without delivery does not pass a Bill drawn to "order." But one drawn payable specially, i.e.y "to A. B." and not to " A. B. or order," or " A. B. or bearer " is not assignable as against the Drawee, that is to say, that the Drawee is not bound to pay the amount to a Transferee. If a Bill, thus specially payable, be transferred by the Payee, he (the Payee), is liable to all subsequent Endorsers, even though they took it with notice of its un-assignable nature. But in the case of a promissory note thus specially payable the endorsement on it by one to whom it has not been transferred, and who has not transferred it, will not make him liable on the note. There is no limit to the transferability of a Bill of Exchange. Any Holder can transfer it by endorsement, and each Endorser stands in the position of a new maker. But in a promissory note this is not so, as there is no relation between the positions of the Maker and the Endorsers. If there be not space on a Bill of Exchange for the endorsements, a slip of paper can be attached to it to bear them. This slip of added paper is then part of the Bill, and it requires no additional 2 14 ^-^^^ Lazu and Practice of Banking. Stamp Duty. It is technically called an allojige — (from the French). Every Endorser on a Bill of Exchange is as a new- Drawer, and he is liable to the subsequent Endorsers in case of dishonour by the Drawee, but (as will be shown hereafter), due notice of the dishonour is necessary to the Endorsers. There are, however, some ways in which an Endorser, with- out forfeiting his title, can transfer a Bill of Exchange, and yet divest himself of liability to subsequent Holders and Endorsers : (i.) By writing over his endorsement the words sans recours^ or "without recourse to me." For in this case, subsequent Transferees take the Bill with notice that that Endorser has declined to guarantee the validity or value of the Bill, and that they must take it at their own risk for what it is worth. (2.) By means of a special agreement of immunity entered into with the Transferee. But such a special agreement, while valid as against the party to it, will not avail him or protect him against subsequent Holders who are innocent of the agreement. (3.) Where a transferee B., writes over an endorsement in blank of a former payee A., words transferring it to a subsequent Holder D. In this case the intermediate Endorser avoids incurring a liability to D., as the endorsement by its nature effaces, as it were, those interposing between A. and his direct Transferee D. (4.) Where a Bill is transferred, and re-endorsed to a previous Endorser, the intermediate Endorsers are not liable. A Bill of Exchange can also bear a restrictive endorse- ment which will not bind the persons making it. For instance, if a Payee endorse a Bill "Pay A. B. for my use, C. D.," or some equivalent expression, the endorsement by A. B. does not bind him in regard to subsequent Holders, for by the terms of the writing they have notice that he is but a channel and not _ti. The Law and Practice of Banking. 2 1 5 a Holder for value. But of course A. B. in case of his default, or fraud, or breach of trust, is liable to the Transferor C. D. If a Holder transfer, without his endorsement, a Bill of Exchange, he cannot be made a party to an action OJi the Bill by a Subsequent Holder ; and the un-endorsing Transferor — in the event of the Bill proving worthless — being, for example, a forged or a fraudulent instrument — cannot be held liable, ■except it be proved that he had knowledge of the worthless nature of the Bill — for the Transferee receives it at his own risk. If such knowledge be proven, he, in suppressing the truth, is guilty of a fraud, and so liable. Non-endorsement amounts to a refusal to guarantee the value of the instrument, that is, to guarantee that the parties to it are solvent. But the mere act of delivery, though without endorsement, amounts to a guarantee that the Bill or note is genuine — that is, that it is what it purports to be. A Bill or note once duly paid is ■extinguished, and no longer a transferable Document. But if it be paid before its maturity by a Drawer or Endorser, or even by the Acceptor, it is not an illegal act to put it again into circulation, or assign it before it becomes due. A Bill or Note partly paid can be assigned for the residue. A Bill or Note can now be taken in execution, and to steal or embezzle one is a felony. As with Cheques, so with Bills, an endorsement in blank by a Payee makes the Bill payable to Bearer. But a bond fide holder can convert a blank endorsement into a special one, by writing words of transfer to himself or to a third party over the endorsement in blank. The omission of the words " or order " in a transferring endorsement does not restrict the transferability of a Bill of Exchange, because negotiability is its essence, and a subsequent holder cannot thus destroy the essence of a Bill. A misspelling will not necessarily avoid an endorsement. XL PRESENTATION OF BILLS. Presentation for Acceptance. — As a rule it is unusual for a Banker to discount a Bill which is unaccepted, unless it be one which has been drawn on some Bank by a foreign agent which is also a Bank. Bankers' Bills drawn "afterdate" are usually paid when due without acceptance, and Bank of England Post Bills drawn " after sight " are accepted when issued, and thus the term runs from the day of issue. If, however, he do discount an unaccepted business Bill, it is his. duty to present it for acceptance without delay, not only for his own security but for his Customer's protection. If it be drawn payable many days " after sight " it is manifest that no matter how undoubted the Bill is, it is his interest to have it accepted as soon as possible, for the term will only run from the date of acceptance. A Banker is justified in leaving a Bill for acceptance with the Drawee for a day, to give him time to examine the document and, as has been said, " to deliberate whether he will accept or " not." If, having been discounted unaccepted, the Drawee refuse to accept, or if he retain it in his possession for a longer period than twenty-four hours, the Banker should notify to the parties to the Bill that it is unaccepted. If the Drawee has moved from the address stated on the Bill it is incumbent on The Law and Practice of Bankmg. 2 1 7 the Holder to use " due diligence " to ascertain his whereabouts. A Holder's duty in case of a conditional acceptance has been already stated. It is a usual practice of Banks to send Bills of Lading accompanying Bills sent for acceptance. The party accepting is entitled to an examination of the documents, and to possession of them inikss there are i7istructions to the co7itrary given to the presenting Banker. Possession of the Bill of Lading is, of course, a title to possession of the cargo, and if the Drawer of the Bill permits a surrender of it to the Drawee upon acceptance, he is satisfied with the solvency of the Acceptor, and content with the acceptance as payment. Frequently, however, the Bill of Lading is to be surrendered only upon payment of the Draft. The following case quoted by Grant is on the subject of surrender upon acceptance : — " A Bill of " Exchange was sent by a Bank in the United States to a Bank " in Toronto for collection and remittance, accompanying which "was a Bill of Lading for 10,000 bushels of wheat, which, on "the Bill of Exchange being accepted by the Drawees, was " delivered over to them, they being the consignees named in " the Bill of Lading ; and it was held that it was not the duty of " the Bank in Canada, as the agent of the American Bank, in " the absence of special instructions, to retain the Bill of Lading "until the Bill of Exchange was paid." And this was the decision of the highest Court of Appeal in the Dominion, and would presumably rule a judgment under similar circumstances in this country. Presentation for Payment. — In calculating the maturity of a Bill, " months " are counted as calendar months, and in all cases whether drawn " after date " or " after sight " three days of grace are added. Thus a Bill drawn on the 4th January, at one month after date, matures on the 7th February. So, a Bill drawn on the 31st January, at one month after date, becomes 15 2i8 TJie Law and Practice of Banking, due on the 3rd March, The custom of allowing days of grace exists in almost all mercantile countries, but the number of days varies in different States. When a Bill is due, and not specially or particularly domiciled, it must be presented at the Acceptor's address as on the Bill ; or if he has left that address, at the place which is his address at the time of maturity, and to discover this, "due diligence" is expected from the Holder. If the Acceptor be dead it must be presented to his repre- sentatives. It is not necessary to present the Bill to the AccejDtor in petson. Presentment to any person at the address is deemed sufficient, as it is the Acceptor's duty to take care of his Bill, and leave provision for it when it shall have been presented where payable. But to charge the Endorsers and Drawer, the Bill must be presented. The Bankruptcy or Insolvency of the Drawee does not absolve the Holder from his duty to present ; neither is an intimation or declaration by the Drawee to the effect that he won't pay, any excuse for non- presentation. A Bill or Note must generally, but not necessarily, be presented during the Drawee's or Promissor's business hours. If it be presented at a reasonable time (and 7 or 8 o'clock in the evening has been ruled to be a reasonable time), it is sufficient to bind the parties. The Presenter is bound to' accept money in payment. If he accept a Cheque and surrender the Bill he does so at his own risk, and his doing so discharges the Endorsers and the Drawer. Money lodged in a Bank by an Acceptor for the ex- pressed object of taking up his acceptance, is money paid to the use of the Holder of the Bill, and cannot be otherwise employed than in payment of that Bill. Even if the person so lodging should be indebted to the Bank where he made such lodgment, the Bank is not empowered to appropriate the money so paid in reduction or payment of the indebtedness of the party lodging it. The Law and Practice of Banking. 219 When it is said a Bill must be presented to the Acceptor, it is not to be "understood that failure to present will discharge the Acceptor. It is an Acceptor's duty to find out where his acceptance is and to pay it, and non-presentation to him does not discharge his liability — except the Bill be particularly domiciled, that is, payable at a certain place '■'■and there ofilyy But non-presentation on the Holder's part will discharge the Endorsers and the Drawer, and in order to charge them in an action on the Bill, presentation at the place where payable must be proved, provided that place is specified /;/ the Accept- ance, and not merely in the body of the Bill, or as a memo- randum on it. A Promissory Note, however, must be pre- sented at the place mentioned in the body of the Note. The neglect to duly present a Bill of Exchange or Promissory Note operates to discharge all the antecede7it parties, but the Acceptor is, and continues, liable notwithstanding non-pre- sentation. If a Bill is payable generally in a certain town, presentation at all the Banking houses in the town is sufficient, in order to charge the Endorser and Drawer. A Bill can be paid at any time on the day it is due, and thus a refusal to pay when pre- sented does not disentitle the Acceptor to make payment sub- sequently on the day of maturity ; and a Bill is not therefore strictly a dishonoured Bill until the termination of the day on which it is due. Part Payment by Drawer.— If a Banker hold a Bill on which a part payment has been made by the Drawer, he can proceed against the Acceptor for the full amount of the Bill, and if he recover the entire amount, he is bound to hold the previous payment in trust for the Drawer who made it. The Order of Liability. — As has been said, the Acceptor is the primary, and therefore the principal. Debtor on a Bill of 15—2 220 The Law and Practice of Banking. Exchange, and the Drawer and the previous Endorsers are, in one sense, sureties for the Acceptor. The effect of this is that they are secondarily Uable, that is, hable in case of default by the Acceptor. Each Endorser is liable to a subsequent Endorser, and the Drawer is liable to the first Endorser or the Payee. An Endorser may be a surety merely, and not a Transferor or a Debtor for value, but the extent of his liability to subsequent Endorsers is the same as if he were an Endorser for value. In a Promissory Note the maker or promissor is the Debtor-in-chief, and the position and liabilities of the Endorsers on a Note are the same as those of the Endorsers on a Bill. The Acceptor's liability does not lapse except by operation of the Statute of Limitations, and therefore the Holder can take his own time in suing him on the Bill, but the Drawer and Endorser, in order to maintain a remedy against them, must have been duly noticed of the dishonour or non-payment by the Acceptor. What constitutes a due notice of a dishonour will be explained subsequently. There are cases where a Bank cannot enforce duly made and executed Promissory Notes. A person gave a Promissory Note to a Bank to satisfy a claim for a liability, for which he had been liable, but was discharged at law, but in ignorance of the facts constituting such discharge, and the Bank could not enforce the note, although the maker had means of becoming acquainted with the facts. * * Bell V. Gardiner. XII. NOTING AND PROTESTING. Noting on an inland Bill of Exchange is a mere memo- randum on the Bill by a notary-public, consisting of the date, his initials, and his charges ; and its object seems to be to afford satisfactory evidence to the parties to the Bill, that the Bill is unaccepted, or dishonoured, as the case may be. A protest is superfluous on an Inland Bill and is unknown to the Common Law. A Foreign Bill, however, requires, by the custom of Bankers, to be protested for non-acceptance or non- payment, in order to retain the right to charge the Drawer and Endorsers. The protest is made by a Notary. It is, in form, "a solemn declaration written by the Notary, under a fair " copy of the Bill, stating that payment (or acceptance) has " been demanded and refused, and the reason, if any, assigned ; "and, that the Bill is, therefore, protested." In Scotland a Registered Protest is a judgment or decree of registra. tion under the Scottish system of summary diligence on Bills of Exchange and Promissory Notes. Thus — When a person signs a Bill or Note in Scotland, the law assumes, for the purpose of summary execution, that he has executed a warrant of attorney to sign judgment at its maturity, if not then paid ; and the registration in the books of the proper Court of Notarial Protest, certifying the dishonour, is itself a judgment 22 2 The Law and Practice of Banking. or decree of registration. But execution may be stayed, and often is, on cause shown to the satisfaction of a Judge at Chambers. In this respect alone a registered protest differs from a judgment in an ordinary action at law. In addition to a protest for non-acceptance or non-payment, there is a further form known as " protest for better " security." It is not in general practice, and its advan- tages are problematical. The words ^'^ sans frais" (without charges) or " sans protet " (without protest), on a Bill of Ex- change, are sufficient authority from the Drawer or Endorsers, to the Holder, to dispense with a protest in case of non-pay- ment or non-acceptance. If there be no Notary in the locality where a Bill is payable, a protest can be made by an inhabitant, in the presence of two competent witnesses. There is a species of acceptance which, though known to the Law, is not usual in these countries, called an acceptance " supra protest," or an acceptance by some person not a party to the Bill, who accepts for what is called " the honour " of the Drawee, or perhaps of the Drawer. It is an undertaking to pay if the Drawee do not honour the Bill, and consequently at maturity the amount is first demanded from the Drawee. Payment "supra protest" is a proceeding also known to the Law. Notice of Dishonour. — The duty to give notice of dis- honour of a Bill of Exchange is a most important one, as the neglect to do so operates as a dispensation or discharge of liability as far as those legally entitled to such notice are concerned. Notice of dishonour to the previous Endorser is essential. But it is the usual and more proper course for a Holder for value of a Bill to give notice of dishonour to all the antecedent parties, as the proper sending of such notice will prevent their liability being discharged. There is no par- The Law and Practice of Banking. 223 ticular form of words necessary in such a notice, and Bankers have usually a printed form for the purpose ; but it must be an unequivocal notice of dishonour, and it must contain a de- mand for payment, and convey that the Holder looks to the party so noticed for payment. It must be explicit and describe the dishonoured Bill in such terms that the person receiving it may not be misinformed or misled. The following examples of notices of dishonour — valid and invalid — are quoted from Mr. Justice Byles' work on " Bills of " Exchange," and will exemplify the legal requirements of this important department of Banking. The following have been held insirfficie7it : (i) "The Note for 200/., drawn by H. H., dated i8th July last, payable " three months after date, and endorsed by you, became due yesterday, and " is returned to me unpaid. I therefore request you will let me have the •' amount forthwith." " These facts," says Tindall, C. J., "are compatible " with an entire omission to present the Note to the maker." Boidton v. Welsh, 3 Bing, N. C. 688 ; 4 Scott, 425, S. C. (2) "Sir, A Bill for 30/., dated the i8th August, 1837, at three months, " drawn and endorsed by R. Everett upon and accepted by W. Tuck, and "indorsed by you, lies at my office due and unpaid. I am, &c., S. J. " Sydney." Phillips v. Gould, 8 C. & P. 355. (3) "Messrs. Strange & Co. inform Mr. James Price that Mr. John " Betterton's Acceptance for 87/. 5^. is not paid. As endorser, Mr. Price " is called upon to pay the money, which will be expected immediately. "Swindon, Dec, 1836." Strange v. Price, 10 Ad. and El. 125; 2 Per. & Dav. 278, S. C. (4) " Sir, This is to inform you that the Bill I took of you, ill. 2s. 6d., •' is not took up, and 4^. 6d. expenses ; and the money I must pay imme- ' ' diately. My son will be in London on Friday morning. Wm. Mes- " SENGER." Messenger V. Southcy, 1 Man. & Gr. 76; 1 Scott, N. R. 180, S. C. The following notices of non-payment of six Bills of Ex- change were also held insufficient : (i) "Sir, A Bill for 29/. 17^-. 3(/., drawn by Ward on Hunt, due yester- " day is unpaid, and I am sorry to say the person at whose house it is made 2 24 ^^^^' Z^zc and Practice of Banking. "payable don't speak very favourably of the Acceptor's punctuality. I " should like to see you upon it to-day." (2) "Mr. Maine, Sir, This is to give you notice that a Bill drawn by "you and accepted byjosias Bateman for 47/. i6j-. 9^., due July 19th, " 1835, is unpaid, and lies due at Mr. J. Furze's, 65, Fleet Street." (3) "Sir, Mr. Howard's Acceptance for 21/. £^. £,d., due on Saturday, " is unpaid. He has promised to pay it in a week or ten days. I shall be " glad to see you upon it as early as possible." (4) " Sir, This is to give you notice that a Bill for 176/. \^s.\(id., "drawn by Samuel Maine, accepted by G. Clisby, dated May 7th, 1835, "at four months, lies due and unpaid at my house." (5) " P. Johnson, Esq., Sir, This is to give you notice that a Bill, " 20/. 17J, id., drawn by Samuel Maine, accepted by Richard Jones, dated " May 2ist, 1835, ^t four months, lies due and unpaid at my house." (6) "P. Johnson, Esq., Sir, This is to give you notice that a bill for " 148/. loj., drawn by Samuel Maine, and accepted by G. Parker, dated " May 22nd, 1835, lies due and unpaid at my house." Furze v. Sharwood and Others, 11 L. J., Q. B. 19; 2 Q. B. 388, S, C. But the following have been held to be sufficient notices of dishonour : (i) " Sir, A Bill drawn by you upon and accepted by Mr. Joshua Watson " for 31/. 3^., due yesterday, is dishonoured and unpaid ; and I am desired " to give you notice thereof to request that the same may be immediately "paid. I am, &c., H. D. Rusheury." Woodthorpev. Lawes, 2 M. &W. 109. (2) "Sir, The Bill for £ , drawn by you, is this day returned, with "■^ charges, to which your immediate attention is requested." (Signed by Endorsee.) Grjigeon v. Smith, 6 Ad. & Ell. 499 ; 2 Nev. & P. 303, S. C. (3) " Sir, I am desired by Mr. Hedger to give you notice that a Promis- " sory Note for 99/. i8j-., payable to your order two months after the "date thereof, became due yesterday, and has been returned unpaid, and " I have to request you will please remit the amount thereof, with \s. 6d. " notitig, htQ of postage, by return of post. I am, &c., JONES Spyer." Hedger v. Stevenson, 2 M. & W. 799 ; 5 Dowl. 771, S. C. (4) "Your bill is unpaid ;" *^ noting ^s." Armstrong v. Christiani, 5 C. B. 687; 17 L. J., C. P. 181. (5) "Your note has_ been returned dishonoured," is sufiicient, without the words "your note has been presented for payment." Edmonds v. Cates, 2 Jurist, 183. (6) " Messrs. Houlditch are surprised that Mr, Cauty has not taken up The Law and Practice of Banking. 225 " Chaplin's Bill according to his promise ; are also surprised to hear that " Mrs. Gib's Bill was returned to the Holder unpaid." This notice was followed by a visit from the Endorser to the Holder on the same day, in which he promised to write to the other parties, by whom, or ])y himself, the Bill shall be paid. Hotdditch v. Canty, 4 Bing, N. C. 441; 2 Scott, 209, S. C. (7) " Mr. Gompertz, Sir, The Bill of Exchange for 250/. drawn by S. " Rendall, and accepted by Charles Stretton, and bearing your indorse- " ment, has been presented for payment to the acceptor thereof, and re- " turned dishonoured, and now lies overdue and unpaid with me, as above, "of which I hereby give you notice. I am, &c., C. Lewis." Lnvis v. Gompertz, 6 M. & \V. 400. (8) " 1 beg to inform you that Mr. D.'s Acceptance for 200/., drawn and " indorsed by you, due 31st July, has been presented for payment and re- " turned, and now remains unpaid." Cooke v. French, 10 Ad. & Ell. 131 ; 3 Per. &D. 596, S.C. (9) "Dear Sir, To my surprise I have received an intimation from the " Birmingham and Midland Counties Bank that your draft on A. B. is dis- " honoured, and I have requested them to proceed on the same." Shelton v. Braitlnvaite, 7 M. & W. 436. (10) " Sir, I am instructed by Mr. Molineaux to give you notice that a " Bill (describing it) has been dishonoured," &c. Stocken v. Colin, 9 C. & P. 653; 7M. &W. 51S, S.C. (11) A party sent by the holder of a dishonoured Bill of Exchange, called at the drawer's house the day after it became due, and there saw his wife, and told her that he had brought back the Bill that had been dishonoured. .She said that she knew nothing about it, but would tell her husband of it when he came home. The party then went away, not leaving any written notice : held sufficient notice of dishonour. Honscgo v. Co^vne, 2 M. & W. 348. (12) "James Court's Acceptance, due this day, is unpaid, and I request '^ yonr immediate attention to it," was held sufficient. Bailey v. Porter, 14 M. & W. 44. See the observations on this case in Allett v. Edmimdson, 17 L. J., Exch. 293 ; 2 Exch. 819, S. C. ; and see Paul v. Joel, 3 H. & N. 455 ; 28 L. J., Exch. 143 ; H. and N. 355, affirmed in error. (13) " Your draft upon C, for 50/. due 3rd March, is returned to us un- ' ' paid, and if not taken up this day, jDroceedings will be taken against *'you for the recovery thereof," was held sufficient. Robson v. Ciirlciuis, 2 Q. B. 421. (14) Where the Holder, when the Bill became due, said to the executor of the Acceptor, who was also Indorser, " I have brought a bill from the *• plaintiff; you know what it is ;" and the defendant said, " I am executor 2 26 The Law and Practice of Bajtking. " of the Drawee, you must persuade the plaintiif to let the Bill stand over a " few days, because the Acceptor has been dead only a few days. I shall " see the Bill paid." Notice of dishonour was held to be proved. Catini v. Thompson, i8 L. J., C. P. 125 ; 7 C. B. 400, S. C. (15) " We beg to acquaint you with the non-payment of William Miles's "Acceptance to James Wright's draft of 29th December last, at four "months, 50/., amounting, with expenses, to 50/. 5^. \d., which remit us in " course of post without fail, to pay to Messrs. Everards & Co., Lynn," was held sufficient. Everardw. Watson, I E. & B. 801. In this case Lord Campbell expressed his regret at the decision of Solartc v. Pahncr ; and see Patd v. JocL It is conceived, continues Justice Byles, that the following is the full Form of Notice to be given by the Holder to an Indorser. It may be easily altered and adapted to circum- stances : '''No. I, Fleet Street, Lo7tdon, 26th Sept., 1842. — Sir, Thereby give yoii " notice that the Bill of Exchange, dated 22nd ult., draivn by A. B. of , " on C. D. of ,for 100/., payable one month after date to A. B. or his ^' order, and indorsed by you, has been duly presented for payment, but "was dishonoured, and is unpaid. I reqicest you to pay me the amount "thereof. I am, Sir, your obedient se)-'ant, G. IP. — To Mr. E. F., ' ' of , (Merchant). " The notice must be sent to the places of business or re- sidences of the parties, within a reasonable time after dis- honour, which, in the case of Bankers, means the day after. Sundays and Bank Holidays are die's non. It is general and most satisfactory, though not necessary, to post the notice of dishonour, for though the posting must be proved in an action on the Bill, it is not incumbent to prove the receipt by the noticed party of the letter containing the notice. A notice need not absolutely be in writing ; an oral notification will be sufficient, if it be capable of being proved to have been given. An Acceptor is not entitled to any notice — that is to say, he is not discharged by reason of not having been noticed. In The Law and Practice of Banki7tg. 227 the event of the Bankruptcy of a party to whom notice was necessary, a notice to his Assignees is sufficient; and, if dead, a notice to the representatives of the deceased. A party who has signed a Bill as a mere guarantor is not discharged by reason of not having received a notice of dishonour, unless he can prove that he has been damnified thereby. If the residence of a party requiring notice, be unknown, and cannot be discovered by the exercise of due diligence, the necessity of notice is dispensed with ; but in the event of the address subsequently becoming known, notice must be sent without delay. A promise to pay made by a Drawer or Endorser after a Bill has arrived at maturity is presumed to be an acknow- ledgment on his part that he has received the notice legally requisite, even though such notice may not have been sent, — for the promise acts by way of condonation of the omis- sion. Remedy for Dishonour. — The remedy for dishonour of an acceptance is by an action on the Bill. The Holder, or the person lawfully entitled to the amount, is the only person who can sue. If several parties, as Drawer and Acceptor and previous Endorser for example, are liable, the Holder can select the person against whom he will proceed ; or he can sue all the parties individually in separate actions ; but pay- ment or discharge by any one will discharge all and terminate the suits. If the Holder obtain judgment against all the parties, he can elect which he will execute upon, but he can only execute against one of the parties. The legal procedure on a Bill is defined by the recent Judicature Act, and the writ of summons is to be in a form which is prescribed by the Act. Bankruptcy. — Upon an Act of Bankruptcy by a party, all Bills of Exchange current, though not yet matured, as well 2 28 The Law and Practice of Banking, as those overdue — in fact all debts, can be proved against his estate. But only the one proof on the one debt is admitted ; thus a Bill which has been proved-on against an Acceptor by a Holder, cannot be again proved-on by an Endorser who may have paid it to the Holder. If a Bill which has been proved-on against a Bankrupt Acceptor, be nevertheless paid at maturity by the Drawer, the dividend on the Acceptor's estate received by the Holder, is in trust with him for the payer of the Bill. If more than one of the parties to a Bill, or all of them, be Bankrupt, the Holder can prove under all who are Bankrupt and receive a dividend out of the estates of all. In case of the Holder of a Bill becoming Bankrupt the Bill vests in his Trustees or Assignees, and he must En- dorse it to them as portion of his assets. Overdue Bills. — The question whether a Banker, in the absence of an express authority to that effect, is entitled to debit, or justified in debiting his Customer's account with ac- ceptances made payable at his Bank, but not presented till they have been overdue, has never been, so far as we know, raised in England, though there is a Colonial decision (Wine V. Bank of New South Wales) upon it which has not com- mended itself to the commercial community there. XIII. DISCOUNT. — REBATE. — BILLS FOR COLLECTION. — FOREIGN BILLS, etc., etc. Discount is, as the word implies, an amount deducted or coimted off a sum advanced. It is defined to be a " deduc- " tion made for interest, in advancing money upon a Bill or " Note not due ; payment in advance of interest upon money " loaned. It is equal to the interest which would be acquired " at the given rate for the given time, either by the whole sum " specified to be paid, or by that sum after it is itself deducted ; " in the former case it is called bank discoimt." The rate charged is regulated by the Bank of England rate, and is computed for the number of days the Bill has to run. It is dependent on the nature and class of the Bill discounted, Accommodation Bills being charged a higher rate than true business Bills, and those for a long term higher than those for a short one. The usual course adopted by a Banker in dis- counting approved Bills for his Customer is either to place the entire amount of the Bills to the credit of his account, debiting him with the discount, or else to place the proceeds to his credit. In either case it is manifest that the apparent rate charged is below the real rate, because the customer is charged a percentage on the full amount of the Bill, as if the full amount had been advanced, whereas it is the amount less the discount that the Customer receives, and upon which, 230 The Laiu and Practice of Banking. therefore, he pays interest. Thus, for example, in the case of a Bill drawn at 12 months, for ^1,000, and discounted at 5 per cent., the Customer is paid ;^95o, and the Banker, there- fore, receives ^50 on an advance of ;^95o for 12 months, and this in reality represents somewhat over ^\ per cent. The Banker charges not on the amount actually advanced, but on the amount repayable, and the Banker is by custom, entitled to the advantage of the transaction. A Banker who discounts a Bill, becomes, as it were, the ])urchaser of the Bill, but the rule caveat emptor does not apply to him, as he has recourse against the Endorser, i.e., the seller of it. But when a Bill is discounted and the proceeds held as cash at the disposal of the Customer, the Bill is purchased to this extent by the Banker, that it becomes his entire and absolute property and he can dispose of it as he wishes. There is, however, a difference between giving a Loan on Bills and discounting them. In the former case the Bills are not discounted, they are held as security for the loan made, and only become negotiable by the Banker, and his property, in case of default by the borrower. The Banker has thus a qualified property in such Bills : he shall not surrender them until the loan be satisfied, and if they mature in his hands and be paid, he holds the proceeds for the benefit of his Customer, though he is entitled to apply the amount in payment of the loan should the Customer be in default. But the Banker cannot transfer Bills deposited against a loan in this manner, as his title to them is not absolute. They remain in the con- structive possession of the Customer. Rebate. — Rebate or rebatement can be briefly defined as " a deduction of interest allowed on account of a prompt pay- " ment, or upon a payment made before a debt is due, or has " been stipulated to be paid." In City Banking this allowance The Law and Practice of Banking. 231 is an everyday occurrence. Frequently an Acceptor pays his acceptance before its maturity, generally because of the cir- cumstance that a Bill of lading or a delivery order, authorising the possession of the commodities for which the acceptance is payment, is attached to the Bill, and obtainable only upon pay- ment ; and thus, to obtain his goods, the Acceptor pays before the Bill is due, and claims " Rebate " for the unexpired term. In this case the rate allowed is not always the rate charged ; it generally is the current Bank rate. The " Rebate," which figures in the balance sheet of some Banks, and forms an im- portant item in the profit and loss account, is something other than that claimed by a pre-payer of a Bill. It is generally supposed to be the interest which the Bank has received for that period of the Bills current, which is unexpired. For example, if a Bill for ^1,000 has been discounted on ist June for three months at 5 per cent., the discount, roughly speak- ing, is ;Q\2 los. ; but as at the close of the half 3'ear, on 30th June, when the balance sheet is made up, two of these three months are unexpired, the Bank debits itself with two-thirds of this discount received, i.e., with about ;^8 6s. 8d. — that being the amount the Acceptor could claim, were he to pay the Bill on the ist July. This, we are informed, is the general practice of Banks, and we are further informed that in few is the amount of Rebate calculated with any accuracy, or after any scientific method. When a Banker discounts a Bill, he deducts the discount at once, and places it to his profit and loss account. He is paid in advance, and therefore at the close of his year, on those Bills then outstanding he has the payment on the use of the portion of his capital for periods ahead of the date of his balance sheet. If every Bill discounted, matured on the 31st December, then he could claim for his profit and loss account -o^ The Lazv and P^'actice of Banking. all the discount he had received, because it would legitimately and in its entirety be his. But, on the 31st December, he holds Bills maturing one, two, or three months hence, and it is obvious that the discount, which is the interest on his capital in one way, on those Bills maturing in the next year, belongs to the profits of the next year. The amount of this next year's profits should, therefore, be deducted from the apparent profits of the current year, as these apparent profits embrace payments of interest in advance. The " adjusting account of interest," which is used to define the liability of the Bank for interest accrued and due up to the date of the balance sheet on outstanding deposits, is calculated with exactitude. Each deposit is subjected to separate cal- culation, and there is no lumping or guessing in this respect. It is apparent that a Bank that lumps or guesses at its Rebate, must misrepresent its liabilities somewhat, and submit an erroneous balance sheet. To present a strictly accurate balance sheet, the Rebate on each outstanding Bill should be cal- culated, as the interest on each outstanding deposit is calcu- lated. What should that rate be? Should it be the rate charged upon the Bill ; or the current Bank of England rate ; or a rate according to the fancy or caprice of the management ? The theory, that because in case of the prepayment of a Bill by the Draw^ee, a deduction is allowed him at the same rate for the unexpired term, as was paid for the whole term when the Bill was discounted, therefore a Bank at the close of the year should estimate its Rebate Account on the same principle, is one which would prove to be tedious and unwieldy in execution as it would be false in principle. We will simplify our position by a popular illustration. ^Vhen a trader makes up his yearly balance sheet he takes stock, and in so doing he does not value his stock at what he can sell it The Law and Practice of Banking. 233 for, nor at what he gave for it, but at the present market value of it. A Banker is like any other trader. His Bills on hand are his stock, and his balance sheet should be framed on the stock-taking principle — that is to say, he should estimate their value at their market value, and not at their value to him, or at the price he paid for them. The value-test, therefore, is : At what rate these Bills can be converted into money ; and the difference between the nominal value of them and the pro- ceeds of them at their marketable rate, is the true Rebate which should be shown. If this market rate be higher than the rate he has charged, so much the worse for his balance sheet : if it be lower, so much the better. Undue Bills are a reversionary and not a present asset, and, therefore, a Banker in calculating his assets must bear this in mind. Rebate, therefore, in a word, is the cost of converting a reversionary into a present asset. Bills for Collection. — A Banker generally receives from his Customers Bills which he undertakes to collect in the usual course, and to account to the Customer for the amount, if the Bills be paid. The Banker has at no time a property in the Bills, as they are not transferred to him; though if he has made an advance upon the Bills or allowed an overdraft upon the security of them, he has a lien on them. In case a Bill left for collection be unpaid, the Banker in his Customer's interest can note or protest it unless he is instructed to the contrary, and it is his duty to return it without delay to the party who lodged it for collection, provided he — the Banker — has no lien upon it. It has been decided that should such Bills, which, though in the Banker's hands, are nevertheless not his but his Customer's, be destroyed or lost by accident, and through no negligence on the Banker's part, the loss will fall on the Customer alone. In case of the bankruptcy of the Banker, Bills deposited for coUec- 16 234 l^^'-^ Law and Practice of Banking. tion revert to the Customer, and do not pass to the Banker's assignees. " Short Bills." — The custom of receiving undue Bills, and, as it is technically called, " entering them short " (i.e. short of the cash or credit column of the ledger), whereby they are known by the term " Short Bills " (and by means of which the Depositor of them may obtain a quasi credit on account of them), is a convenience and facility to the Customer. The entry is a memorandum by the Banker that he holds such Bills from his Customer for collection, and that they are to be collected on a certain date. Until they are paid, the amount is not passed to the Credit of his account. The Bills, there, fore, are, until paid, exclusively the Customer's property. They do not pass into the Banker's possession, nor has he any right to them, unless they are as security for a loan. They are at the disposal of him who deposited them, unless in case of his bankruptcy, in which event the Banker can surrender them to the bankrupt's assignees alone. If the Banker should convert or negotiate " Short Bills " he is guilty of an indictable offence. Interest on overdue Bills. — There is no limit in law to the rate of interest which can be charged on a Bill, since the repeal and entire abolition of the Usury Laws by 17 & 18 Vic, c. 90. But Equity would restrain an usurious rate, A Bill can be drawn, with the words " bearing interest " at such a rate, upon the face of it, and that interest, unless it be contrariwise expressed, begins to run from the maturity of the Bill. Usury. — Statutes against usury were enacted in the reign of Henry VIIL, who restricted the legal rate of interest to 10 per cent, and made it a penal offence to take more. Under Edward VI. the taking of any interest whatsoever was pro- The Law and Practice of Banking. 235 hibited. In Elizabeth's reign a contract for the payment of more than 10 per cent, was voided as usurious ; and under successive kings the legal rate was reduced gradually until it reached 5 per cent, in Queen Anne's reign. The latter Statute enacted that any person taking a larger percentage should forfeit treble the money lent, one-half of which penalty enured to the Crown, and the other to " him that will sue for the same ;" and further, that all bonds or contracts whereby a rate above 5 per cent, shall be reserved or taken, shall be utterly void. The repealing enactments are of a later date. In 1834, Bills and Notes not having more than three months to run were exempted from the operation of the laws against usury. In 1837, those not having more than 1 2 months to run were exempted. The 2 & 3 Vic, c. 37, exempted also all contracts for the loan of money above ten pounds, but this act did not extend to loans on landed security. And the Statute now in operation is the 17 & 18 Vic, c. go, which made a clean sweep of the usury laws altogether. Alteration in Bill. — An alteration in a material part of a Bill or Note vitiates the instrument. But if the alteration be made to correct an obvious mistake ; or if it be made in consonance with, or furtherance of, the wishes of the parties, and before the Bill be negotiated — and that such alteration be confirmed by all the parties, the Bill is not thereby voided. Compulsory Signing. — To compel a person by threats or violence to sign a Bill or Note is a felony. To obtain a signature to a Bill or Note by false pretences or fraudulent re- presentations is a misdemeanour. The Statute of Limitations. — The Statute of Limi- tations, which was enacted in the reign of James I. (21 Jac I, c. 16) enacts that "all actions of debt granted on any lending " or contract without specialty, must be brought within six 16 — 2 236 TJie Lazv and Practice of Banking: "years of the cause of such action, and not after." A cause of action on a Bill or Note arises at its maturity, and not at its making. If drawn " on demand " the Statute runs from the date of the instrument. The Statute of Limitations is a suf- ficient plea in a defence to an action for debt. Its effect, in the words of an eminent judge, " is not to destroy the debt, " but only to take away the remedy." A Bill or Note can be taken out of the Statute by part payment, but such part pay- ment must include an admission that more is due. Payment of interest will also prevent a debt lapsing, but by a Statute no part payment endorsed on a Bill by or on behalf of the party to ivhom stick part payment is made shall be deemed sufficient to take the debt out of the Statute of Limitations. It is, there- fore, necessary (unless unquestionable proof of the payment is readily obtainable), that a part payment or a payment of interest should be signed by the debtor, or recorded in his handwriting. Renewal of a Bill will take the debt out of the Statute, as will also an acknowledgment made to the plaintiff of the in- debtedness. In these cases the Statute will run from the renewal, the acknowledgment, the part payment, or the pay- ment of interest. Lost BilL — Formerly no action lay at Common Law on a lost Bill or Note, except perhaps on one that was particularly payable, and, therefore, not negotiable ; and, when a Bill or Note, being lost, had become due, application for payment should have been made to the Drawee, and in case of non- payment, the usual notice of dishonour should have been given to the other parties to the Bill. But an Act of Parliament (9 & 10 Wm. III., c. 17, s. 3) provided tliat the Drawer can be compelled by a lawful Holder, to give, under ])roper and satisfactory indemnity, a Duplicate of the lost Bill. Now, however, by 17 & 18 Vic, c. 125, s. 87, the loss of a Bill or The Law and Practice of Banking. 237 Note cannot be set up as a defence to an action on the Bill, provided a sufficient indemnity has been offered to the Ac- ceptor or Maker. The finder of a lost Bill, has, of course, no title against the true owner. Foreign Bills. — A Foreign Bill is, briefly, one that is drawn or payable, or purporting to be drawn or payable, abroad — />., outside the British Isles. It is frequently drawn in what are called " sets." The definition given by Mr. Justice Byles of " sets " is, " exemplars or parts of the Bill, which are " made on separate pieces of paper, each part referring to the " other parts, and containing a condition that it shall continue "payable only so long as the others remain unpaid." These sets generally circulate together, and constitute but one Bill, one only needing to be accepted or endorsed or stamped. On one class of Foreign Bills — i.e., Bills drawn or negotiated in a Foreign Independent State — the Stamp of the country where they have been made or negotiated is not required to make them valid in this country. If such a Stamp were legally con- sidered requisite, it would entail a necessity of a knowledge of the Stamp Laws and Stamp Duties of these countries, and this necessity would operate as a restriction to the negotiability of Foreign Bills, because no one would receive them if he knew his title could be defeated and the amount lost to him because of an irregular and insufficient Foreign Stamp. But this does not apply to another class of Foreign Bills — i.e., ones drawn or negotiated in some of the Colonies, where the Stamp Duties which obtain in those Colonies are the same as those of the British Isles. The Stamp Duties on Foreign Bills negotiated in this Kingdom, are denoted by adhesive stamps, and are the same as those on Bills of Exchange, as set forth in the Stamp Act ante. XIV. BANKERS' DRAFTS AND POST BILLS— LIEN- CONFIDENTIAL REPORTS, ETC. Bankers' Drafts.— This is the term that distinguishes Drafts which are drawn by a Bank or one of its branches, upon another of its branches or upon its agents, and which are payable on demand, without acceptance, to a specified party or his order. They are a means of remitting money from one place to another, and have all the incidents of Cheques. Bank Post Bills. — All Banks issue Post Bills, which are Bills of Exchange, or promissory notes, payable at a given period after {post) date or sight at one or more given places. If drawn after date they are payable when due, with or without acceptance. They are generally drawn payable at seven days after date. These are, in the majority of instances, redeemed on demand without acceptance. These instruments generally are unstamped, as the Stamp Duty is paid by composition in accordance with certain Acts of Parliament. But as the provisions of the Acts of Parliament are in respect to " Bank " Post Bills of ;£t^ and upwards," it seems that Post Bills for less than £^^^ issued unstamped, would not be embraced in the Composition Duty, and would, therefore, not be legal instru- ments. The power to pay a Composition Duty was established by the 27 & 28 Vic, c. 86, which permitted the composition, but limited it to " a period of three years from the passing of The Lazv and Practice of Banking. 239 "the Act." But the power was made perpetual by 30 & 31 Vic. c. 89 (The Stamp Duty Composition Act of 1867). The power to issue Bank Post Bills payable seven days after sight was conferred on the Scotch Banks by 5 Geo. III., c 49, s. 20. Bank of England Post Bills issued in London are only, by law, payable in London. Bankers in Ireland were (by 9 Geo. IV., c. 81) prohibited issuing Bank Post Bills unless the same were made payable at the place they were issued ; but they might have been made also payable at several places. Bank Post Bills are an old form of remittance, having been issued by the Bank of England as long ago as 1738. Letters of Credit. — A Letter of Credit is an instrument- not a Banker's Draft or Bill of Exchange — whereby a person is enabled to draw money lodged elsewhere for his use. It is, to use Grant's words, " an authority from the Banker who signs it " to the Banker or person to whom it is addressed, upon advice "to honour the Drafts of the person named in it, and who " produces the letter ; and, consequently, he alone is entitled to "draw the Draft or to receive payment." It is adapted for persons who are travelling in continental and foreign countries, and possesses elements of security which an ordinary Banker's Draft does not possess. It is a written direction by a Banker to several correspondents to pay the Drafts on him of the person named in the letter, to a certain extent, within a given period. Each payment is entered on the Letter of Credit, and the correspondents are thus informed if the credit is exhausted before the expiration of the period named. The letter bears the signature of the party in whose favour it is issued, thus providing the identification requisite. But if the Banker on whom the Drafts in connection with the Letter of Credit are drawn, pay any Drafts on a forged signature, he, as in the case 240 The Law and Practice of Banking. of a Cheque, is not discharged to the party whose signature it purports to be. Letters of Credit, granted in the United Kingdom, authorising Drafts to be drawn out of the United Kingdom, payable in the United Kingdom, are, as has been seen, exempt from Stamp Duty by the Stamp Act ; but the Drafts drawn under it are not. Circular Notes are instruments similar to Letters of Credit, /.^., are issued for a similar purpose. They are Bills of Exchange of a certain amount, drawn in French, and accom- panied by a letter called a Letter of Indication, also in French (as the most general language), which is addressed to the foreign correspondents of the issuing Banker, and which con- tains the signature (for identification) of the party for whose favour the notes are issued. The Drawees of these notes are the correspondents specified in the letter, and the notes are payable without acceptance to the party named in the letter. Marginal Letters of Credit. — This is another form of instrument of a somewhat similar nature to the foregoing, but they are not in general use, as far as we are aware. A Lien is defined to be "a right in one to hold and retain " the property of another until some claim of the former is paid "or satisfied." In a Lien, though the Holder of the securities has actual possession, he is not absolutely possessed of them, and his title to the actual possession is qualified, and lapses altogether upon the satisfaction of his claim against the real owner. A General Lien is where securities are deposited generally to cover an indebtedness which may fluctuate from time to time, no matter how that indebtedness may be created, A specific Lien is where securities are deposited to cover a specific indebtedness created in a specified manner. Thus a Lien " to cover the balance due on foot of A.'s current account, The Law and Practice of Banking. 241 "to the extent of ^^500," is specific. A Banker has a general Lien upon all securities he may have in his possession belong- ing to the indebted Customer, which have been lodged with him as securities, actually or constructively. But a Lien does not attach to securities which have been lodged for a special purpose. For instance, a Banker has no Lien for a balance against a Customer, on {e.g.) Exchequer Bills lodged in order that the interest on them may be drawn, or fresh Bills obtained. So a Banker has no Lien on plate deposited with him for safe custody. Nor has he a Lien on securities left at the Bank, casually or by mistake, by his Customer. If a Customer when depositing securities with a Banker, acknowledge that they do not belong to him, the Banker can have no Lien on them ; and if the Banker have made advances upon the securities without any such knowledge, but that subsequently he is informed of the fact, that information is a notice to the Banker not to make further advances, for his Lien may be altogether disputed ; but it cannot be made to cover the advances made after he has had notice that the securities belong wholly, or in part, to a third person ; for that is notice that the Customer had no authority to pledge the securities, or saddle them with a Lien. As a Lien is a power of detention, supported by a power to realise in case of default, and to appropriate the proceeds of the realisation to the debt due by the Customer and interest thereupon, the duty is imposed on Bankers not to realise pre- maturely, or to the detriment of the Customer; and further, to hold any surplus from the realisation, after the satisfaction of the debt, for the benefit of the Customer. If a Banker, having a Lien on securities for a debt, nevertheless takes a distinct security, payable at a distant day, for the same debt, he destroys his rights of a Lien. 242 The Law and Practice of Banking. Liability of Bankers for the conduct of their Cor- respondents. — If a Banker undertake to j^erform for his Customer a Banking duty in a place where there is a branch of his Bank, and that the Branch office is guilty of negligence which damnifies tlie Customer, the Banker is liable, because his Branch Bank is, as it were, himself. And also, if a Banker A. engage to perform a duty in a place where he has no Branch of his own Bank, and employs another Banker B. as his agent to discharge that duty, and this Agent-Banker by his conduct, directly or indirectly, entail a loss, and the question arises upon whom this loss shall fall, the Banker A. is liable to his. Customer, and in all such cases must suffer the loss occasioned' by the act of B., the agent he employed. But he. A., will have, of course, a right of recourse to B., by whose laches he has suffered the loss. Confidential Reports on Customers. — The custom of one Banker giving another a report in confidence of the posi- tion, means, and character of his Customer, has grown from being a matter of courtesy to be a recognised and established duty. So much has it become part of a Banker's business that Banks have usually printed forms for the purpose of asking and answering such inquiries. The form asking for the information alleges the private nature of the inquiry; and that affording the information sought, bears the avowal that it is given without responsibility on the part either of the Bank or the writer personally. Banks make these inquiries, either for their own information, or on behalf of their Customers, and the informa- tion they elicit must be taken for what it is worth. Notwith- standing the printed notice on the reply-forms, to the effect that the information is given on the understanding that no responsi- bility is entailed by the giver, nevertheless, if it be proved that The Law mid Practice of Banking. 243 misleading information was given by malicious design, and in consequence of such information credit was given to the party- reported on, which entailed a loss, the Banker giving such deliberately wrong information will be held liable. But it would be extremely difficult to prove malice in such a case. Except in undoubted and unquestionable cases, Bankers generally reply to these queries in a somewhat ambiguous fashion ; for instance, " A. is believed to be respectable, and "is considered good in a business transaction for ;^ioo." This is done, perhaps, with a view of shirking a possible re- sponsibility — though all responsibility is patently disclaimed ; but it cannot be considered a satisfactory method of answering business inquiries. Guaranties by Third Parties. — By the celebrated Statute of Frauds passed in the reign of Charles II., it is enacted by Sec. 4 : That 110 action shall he brojig/if whereby to charge the defendant upon any special promise to answer for the debt, default, or miscarriage of another person, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be ' charged therewith, or by some other person thereunto by him lawfully authorised. A Guaranty is a special promise to answer for the payment of another's debt, and therefore must be in writing to sustain an action upon it. Formerly, to constitute a valid Guaranty, a good consideration to the Guarantor should have existed, but by the 19 & 20 Vic. c. 97, s. 3, the absence of a consideration in writing " shall not be deemed invalid to support an action." It is evident, therefore, that a mere verbal Guaranty, agreement, or undertaking, to be liable for the debt or default of another person is legally valueless. In addition to being in 244 The Law and Practice of Banking. writing it is necessary also that a Guaranty should bear the statutory stamp duty requisite for an agreement. Guaranties may be general or specific. In the latter case, the terms, amount, and duration of the Guaranty are speci- fied, and any violation of the terms without the Guarantor's knowledge and consent, and which may be to his prejudice, or which may amount to constituting a new agreement, will discharge him. A Guaranty for a stated time lapses, of course, on the expiration of the time specified. If a Guaranty {e.g.^ for ^5,000) be given to a Banker by A., for advances made to E., "'■provided they do not exceed f^^^^ooo" and that the Banker exceeds that figure, and makes advances to the extent of ^10,000 to B., the Guaranty-Bond is not vacated, but is valid to its extent, that is to ;^5,ooo. The reason of this is, seem- ingly, that it is not in a Guarantor's power to restrict the power of a Banker to make advances; and if a Banker do exceed the Guarantor's limit, he does so on some security and responsi- bility other than the Guaranty by A. A general Guaranty is of the nature of a collateral and continuing security for fluctuat- ing liabilities. A Guaranty may be ^vithdrawn or determined at any time by the Guarantor, provided that, at the time, the withdrawal is not to the prejudice of the Banker, or injurious to his interests. Giving time to a Debtor who is guaranteed, without the assent of the Guarantor, is done at the risk of the Banker- Creditor. " Giving time " means giving indulgence more than the law and the custom of Bankers prescribes, and such undue indulgence, in the absence of an express stipulation, or of the consent of the Guarantor, will discharge him. Taking a fresh and distinct Guaranty does not absolve or discharge the old surety, unless it be made and given with that intent. A Guarantor is released if the Banker is guilty of negli- The Law and Practice of Banking. 245 gence or laches, which are detrimental to him, the Guarantor. Guaranties should be as simple, and general, and absolute as possible. Bankers should be careful to have no provisoes or trusts in a Guaranty, and they should remember that, in ob- taining a Guaranty from a party, any suppression or misre- presentation on the part of the Banker of the real state of the affairs of the party being guaranteed — or any concealment with the intent to mislead, will render the Guaranty vitiate and invalid against the Guarantor. In Guaranties made before the 29th July, 1856, it was legally requisite that a good consideration should appear on the face of the instrument; but since that date (by 19 & 20 Vic, c. 97, s. 3), that necessity no longer exists, provided that all such undertakings " be in writing, and signed by the party to be "charged therewith, or some other person by him thereunto " lawfully authorised." XV. DEPOSITS AGAINST ADVANCES, AND FOR SAFE CUSTODY. Policies — Shares — Title Deeds — Goods — Etc. The Object of deposits of securities with a Banker is to )jrotect the Banker against advances made to his Customer. Where the security deposited is one wherein the property will not pass by mere delivery, but by assignment, the property will remain in the Depositor. The Banker will have no more than a lien upon it, unless it be duly assigned, and proper notice given of such assignment. Thus, in the case of a Policy of Assurance, an assignment to the Bank must be made, and the company noticed thereof in order to vest the property in the Banker — otherwise in case of the Bankruptcy of the Customer the Policy would vest in his trade assignees ; and notice to an agent of the Assurance Company is not deemed notice to the company, except in special cases where the agent is employed to receive such notices. This assignment, with notice of it, is chiefly of importance in the case of the Bankruptcy of the ] )ebtor who has deposited the Policy. In ordinary cases, the mere deposit of the Policy will give the Banker a lien upon it, because the possession of it under the circumstances will con- stitute him an equitable mortgagee : but it is the most approved and satisfactory course to obtain an assignment in all cases. The Law and Practice of Banking. 2^"/ It is to be observed that a Policy which becomes void if the assured commit suicide, is, nevertheless, valid in the hands of an assignee, if it be assigned a reasonable time before the act of suicide. A concise and effectual form of an absolute as- signment is given below.* Shares and Stock. — In the same way, in order that the Banker should obtain a property in Shares or Stock lodged by his Customer, it is usual to have the Shares or Stock transferred into the joint names of some of the officers of the Bank ; but such transfers must be in accordance with the constitution of the Bank. A mere deposit of the certificates of Shares or Stock should be accompanied by a letter from the Depositor to the effect that they are lodged as security for advances. But even with such letter of deposit there is a risk run in accepting a deposit of the scrip or certificates of Shares as a security. *3. of in consideration of the sum of Plve .Shillings, do BANK, their Successors of Assurance irranted by hereby assign and Assigns, unto THE the Policy on the life of numbered and dated for the sum of_ In Witness whereof, this I have hereunto set my hand and seal day of 18 SEAL. presence of l_ Signed in the I acknowledge to have received the Five Shillings consideration men- tioned above. 248 The Lazv and Practice of Banking. The mere possession of these documents does not entitle the holder, be he a Banker or a private individual, to the possession of the Shares, that is to say, to a transfer into his own name. It is necessary, therefore, for the perfect protection of a Bank making advances on such securities, that a duly executed deed of transfer to the Bank should be completed, so that the Bank shall have absolute power of disposal in the event of the default of the Debtor. Such absolute transfer, made on the stipulation, freely given by all Bankers, that the Stock and Shares shall not be disposed of, or used, except in case of default, and that a re-transfer to the owner shall be made when the indebtedness terminates, is a complete security, A mort- gage on Shares, secured by deed, is an unsatisfactory security, and only one degree better than the bare deposit of the certi- ficates. Refusal or negligence on the part of the mortgagor in performing the covenants of a deed of mortgage will imperil the security. It may be accepted as a rule that an advance on Shares or Stock, otherwise than under a complete and absolute transfer of such Shares and Stock to the Bank, is bad Banking, for it involves a venture or a risk Avhich no Banker, in ordinary circumstances, is bound to undertake. Even in ac- cepting a transfer of the Shares he may become liable for future calls : so that advances should not as a rule be made on Shares other than fully paid-up Shares in a limited company of the highest standing and solvency. Bills of Lading and Dock Warrants. — As these documents, when duly endorsed, give the holder of them the right to the goods named therein, the property passes without further assignment, and they are good securities in the hands of the Banker. The distinction between Bills of Lading and Bills of Exchange has been happily defined by Mr. Macleod : one represents goods, the other represents Debt. The Law and Practice of Banking. 249 Title Deeds. — A mere deposit of Title Deeds constitutes the Banker an equitable Mortgagee; nevertheless, a letter of deposit is advisable, and such letter does not require to be . > "• stamped. A deposit of a Lease conveys an equitable mortgage ^i*^-?^ on all fixtures and improvements in the premises, though they '^'' '>'" be added or effected subsequently to the deposit, except they are improvements or fixtures which are the property of a Sub- Lessee. But the deposit of a Lease of a house does not carry a charge on the furniture, etc., therein ; but if it be a Licensed house, the Mortgagee has a charge on the goodwill of the License. A Banker holding a Lease as a mere equit- able Mortgagee is not liable for the covenants of the Lease. " Where Bankers take a mortgage as security, the principal "point to be considered," says Grant, "is that the lands, etc., "meant to be charged, shall be precisely specified or desig- " nated." It is true that the intent to give a general charge upon all the property of the Mortgagor may be explained aliunde, but the shortest, safest, and the least troublesome and expensive mode of effecting an arrangement of this kind is, to have care taken that the mortgage deed is made as complete as possible within itself, so as to require no subsequent propping up ; and he quotes the following case to show how needful is attention to this point : — A Customer being indebted to his Bankers, sent to them certain Title Deeds, with a letter in which he stated that he thereby pledged his grant of coal under an estate, which he specified, as a security for the money advanced, and also as a general cover for his Banking Ac- count with them. There were other estates belonging to the Customer comprised in the Deeds sent, but the Court held that the Bankers could only claim a Lien in respect to the estate particularised in the letter. Goods Deposited. — It is not usual for a Banker in 17 250 TJie Law and Practice of Banking. ordinary transactions to accept a deposit of goods as security for advances, for not alone would such a practice be incon- venient and troublesome, but, further, it would degrade Bank- ing to the low level of Pawnbroking. But in a case of necessity, where no other security is obtainable, it is possible a Banker would be bound, in order to protect himself, to take a deposit of goods as security, in preference to having no security whatsoever. In such a case, his chief care is to assure himself that the goods so deposited are really the disposable property of the Debtor or the Guarantor, otherwise the Banker can, perhaps, be compelled to surrender them to the lawful owner, for it is apparent that if the depositor had no title in them he could give no title to the Banker. And, having satisfied himself on this point, he should obtain a letter o deposit, with a power of sale if the security should be goods which are not deposited ; the deposit should be accompanied by a Bill of Sale, duly executed and registered in compliance with the Law. A security deposited to secure a specific amount, or a specific debt, cannot be otherwise applied; and securities must be surrendered to the Debtor or Guarantor on the quittance of the debt, and if realised, the surplus, if any, must be given over to the Depositor, or to his representatives if he be dead ; or to his Assignees if he be a Bankrupt. Realisation of Securities. — A Banker has an indis- putable right to repledge or sell any securities deposited with him against advances — but only to an amount co-extensive with his claim. The 24 & 25 Vic, c. 96, s. 75, says that nothing in the Section shall restrain any Banker "from selling, *' transferring or otherwise disposing of any securities or effects " in his possession upon which he shall have any Lien, claim, " or demand entitling him by law to do so," unless such sale, The Law and Practice of Banking. 251 etc., shall extend to a greater number or part of such securities, etc., than shall be requisite for satisfying such Lien, etc. But a Banker has no Lien on securities or effects deposited with him for safe custody ; or with him as Trustee; or for purposes of realisation, or collection. " Safe Custody."— Where a Customer of a Bank gives the Banker boxes containing, or said to contain, plate, jewellery, deeds, or valuables or security of any description, not by way of security, but in order that they should be safely kept, and the Banker consents to receive them, the act is said to be a deposit for safe custody. The Banker is bound to surrender such articles on the application of the Depositor. As a rule. Bankers make no charge for thus accommodating their Customers ; and though an opinion seems to prevail that the Banker should not thus give the use of his strong rooms and safes to his Customers gratuitously, it must be remembered that if he should undertake the custody for hire he would clothe himself with a liability not attaching to him as a gratuitous custodian. The acceptance by the Banker for safe custody of his Customer's Box being for the Customer's convenience and accommodation, and not being done for re- ward, the Banker is not liable for any loss occasioned by robbery, fire, destruction, etc., as long as he has taken ordinary care of the articles so deposited, because he is but a gratuitous bailee. Ordinary Care is described in a judgment by the Privy Council (England) in a safe-custody suit, as " that ordinary " diligence which a reasonably prudent man takes of his own " property of the like description." Further, if the valuables deposited should be stolen, or converted by a clerk or servant in the Bank, the Banker will not be liable, unless he has been guilty of gross and culpable negligence, or that he has retained 17 — 2 252 The Law and Practice of Banking. the clerk in the service of the Bank with a knowledge that he is a dishonest servant. Nevertheless, Byles gives it as his opinion, that in cases of deposits for safe custody, accepted by the Banker without reward, " the Banker can hardly be regarded as acting "gratuitously for his Customer, such custody being an z'fidr/ce- " menf held out to attract Customers, by the use of whose "balances the Banker is paid." But this reasoning could hardly be made applicable to Banks that do not invite such deposits. A Banker's liability for deposits for safe custody does not lapse by time, and in case of the death of the Depositor, the Banker becomes the Trustee (to the extent of the deposit) for the representatives of the deceased. If a Banker, entrusted with securities deposited for safe custody, shall, in violation of good faith, and contrary to the purpose for which such deposit was made, " sell, negotiate, " transfer, pledge, or in any way convert to his own use or " benefit, or the use or benefit of any person other than the " person by whom he shall have been so entrusted," such pro- perty or security, or any part thereof, he shall be guilty of a misdemeanor, and on conviction is liable to penal servitude for a term not less than five years, and not more than seven years; or to imprisonment, with or without hard labour, for any term not exxeeding two years. XVI. BANA' yOTES.—I. 0. U. A Bank Note is a promissory note issued by a Banker and made payable to the bearer on demand, which circulates as, and is equivalent to, money. It differs from other promissory notes in that it can be re-issued, and the mere possession gives a property in it. It further entitles the Holder to the amount without endorsement. Bank Notes are the descendants of the old Deposit Notes, called " Goldsmiths' Notes," issued by the early Goldsmiths who were the precursors of Bankers in London. A Bank which issues such notes is called a Bank of Issue, and "circulation" is the term applied to the aggregate n otes of a Bank in the hands of the public. The privilege of issuing Bank Notes is not possessed by all Banks, and it cannot now be obtained by those that do not possess it, nor by any new establishment. The rights and extent of the note issues ,o,f those Banks which are entitled to make and issue Bank Notes are now defined and regulated by the Statute Law. The 3 & 4 Will. IV., c. 98, enacted that no Bank of more than six persons shall issue in London, or within sixty-five miles thereof, Bills or Notes payable on de- mand, saving the rights of Country Bankers to make their notes payable in London. This Act determined the issues of Bank Notes by the London jirivate Bankers, though, as a 2 54 The Laiv and Practice of Banking. matter of fact, they had long before ceased to cu-culate their notes. In the early days of Banking, there was no restriction in the individual or collective amount of the notes issued by the Bankers throughout England — private or joint-stock ; and it is to be observed that the instances are comparatively fe\V where they, by fraudulent design, over-issued their notes. Not so in Ireland. There, as has already been shown, every private firm calling itself a Bank could, and did, issue notes unrestrainedly, to an almost incredible extent, sometimes with- out any security or even possibility of redeeming them, and the evils wrought to the country by this unlimited issue of worthless notes by Bankrupt Firms were such, that the Legisla- ture interfered, though tardily, to protect the public and ensure them some security that the notes which should circulate as money from hand to hand should not prove worthless. By the 55 Geo. III., c. 184,* (an Act passed on nth July, 18 15), it was provided that Bankers, duly constituted and licensed, might issue and re-issue certain promissory notes, payable to bearer on demand, for any sum not exceeding ;!{7ioo, on unstamped paper. The license was granted by the Commissioner of Stamps, and was charged with a Stamp Duty of ^3°! ^nd though a separate license was required for every place where notes were issued, yet no more than four licenses were needed, as the fourth embraced, as one place, all the towns over and above the three for which the three preceding licenses were issued. The license lapsed in a year, so that the duty of £,2P was an annual charge. One of the conditions precedent to the obtainment of the License, was the execution of a bond by the Banker, to keep a true record of the notes issued and cancelled, and a true account of the amount of the notes in circulation. On the average amount in circulation * Vide Appendix. The Law and Practice of Banking. 255 each six months, a duty of is. 6d. per ^100 was payable as composition, in Ueu of the duty on each note hitherto charge- able. Similar provisions in regard to Ireland were contained in the 9 Geo. IV., c. 23, The 9 Geo. IV., c. 65 (passed on 15th July, 182S), enacted that after 5th April, 1829, no Banker shall issue in England notes of an amount under ^5, or any under that amount which shall have been issued in Ireland or Scotland. But the Statute which now regulates the issue of Bank Notes in England is the 7 & 8 Vic, c. 32, commonly known as the Bank Act of 1844, and in Ireland is the 8 & 9 Vic, c. 37. The former provides for the management of the Issue Depart- ment of the Bank of England. The 13th sec. places other Note Issues on the basis on which they now stand. It is as follows: "That every Banker claiming to be entitled to issue " Bank Notes in England or Wales shall, within one month " next after the passing of this Act, give notice in writing to " the Commissioners of Stamps and Taxes, at their head office " in London, of such claim, and of the place and name and " firm at and under which such Banker has issued such Notes ''during the year next preceding the 27th day of April, 1844 " and thereupon the said Commissioners shall ascertain if such " Banker was, on the 6th day of May, 1844, carrying on the " business of a Banker, and lawfully issuing his own Bank Notes " in England and Wales, and if it shall so appear, then the " said Commissioners shall proceed to ascertain the average " amount of the Bank Notes of such Banker, which were in " circulation during the said period of one year preceding the " 6th day of May, 1844, according to the returns made by such " Banker, in pursuance of the Act passed in the 4th and 5th *' years of the reign of her present Majesty, intituled ' an Act " ' to make further provisions relative to the returns to be made 256 The Law and Practice of Banking. *' ' by Banks of the amount of their notes in circulation,' and " the said Commissioners, or any two of them, shall certify " under their hands to such Banker the average amount, when " so ascertained as aforesaid, omitting the fractions of a pound, " if any ; and it shall be lawful for every such Banker to con- " tinue to issue his own Bank Notes after the loth day of " October, 1844, to the extent of the amount so certified, and " of the amount of the gold and silver coin held by such " Banker, in the proportion and manner hereinafter mentioned, "but not to any further extent; and from and after the loth "day of October, 1844, it shall not be lawful for any Banker " to make or issue Bank Notes in England or Wales, save " and except only such Bankers as shall have obtained " such certificate from the Commissioners of Stamps and " Taxes." This Statute was effectually prohibitory, and no person other than a Banker, who, on the 6th day of May, 1 844, was lawfully issuing his own Bank Notes, could thereafter — unless the Law- was repealed — make or issue Bank Notes in any part of the United Kingdom. It is evident the Banks then issuing notes had a prescriptive right to their issue — a vested interest of which they could not be deprived without a proper compen- sation. The powers of the Bank of England in regard to its Note issue have been already described {ante p. 62), and the regula- tions under which the other Banks are entitled to issue Notes are contained in the 7 & 8 Vic, c. 32, above quoted, by which, in brief, no person, other than a Banker, who on 6th May, I §44, was lawfully issuing his own Bank Notes, sliall make or issue Bank Notes in any part of the United Kingdom ; and those that were then Banks of Issue, shall render an account of The Law and Practice of Banking. 257 the amount of their notes in circulation during the twelve weeks preceding the antecedent 27th April, and the average issue shall be computed therefrom ; and after the passing of the Act, if the monthly average circulation of Bank Notes of any Banker shall at any time exceed the amount which such Banker is authorised to issue and have in circulation, such Banker shall in every case forfeit a sum equal to the amount by which the average monthly circulation shall have exceeded the amount he was, under the Act, authorised to issue. The Scotch and Irish Banks do not rest under this restriction, as shall be presently shown. The Banks entitled to issue Notes under this Act were empowered to relinquish the same in favour of the Bank of England, but having once relinquished, they ■could not resume it. The Acts regulating the Scotch and Irish Issues are the 8 & 9 Vic, c. 38, and 8 1A9^ The Provincial Bank of Ireland ... ... 10,706 The Belfast Banking Company ... ... 3,467 The Northern Banking Company ... ... 4,756 The Ulster Banking Company ... ... 6,517 The National Bank ... ... ... 15,091 The following table represents the corresponding figures in the Scotch Banks of Issue : The Law and Practice of Banking. 26, .Surplus of Circula- tion over Coin held, 27th August, 1881. Interest thereon at 3 per cent. Bank of Scotland £ 218,815 58.533 299,178 192,702 198,691 300,110 26,466 81,562 194,842 37,177 £ 6,564 1,756 8,975 5,781 5,960 9,003 793 2,446 5,845 1,115 Royal Bank of Scotland British Linen Company Commercial Bank of Scotland National Bank of Scotland Union Bank of Scotland Aberdeen Town and County Bank ... North of Scotland Banking Company Clydesdale Banking Company Caledonian Banking Company But the expenses attendant on the issue of Notes is some- thing considerable. The cost of producing them is not much, but special officers have to be employed to cancel the old Notes, to keep all the records attendant on the circulation, to deal with lost, mutilated, and halves of Notes. Nevertheless, an issue is a source of material profit to a Bank. The Bank of Ireland is the only other Bank authorised to have its Notes signed by machinery similarly to the Bank of England. It also, like the Bank of England, manufactures its Bank Note paper and prints and numbers its Notes. Though Bank Notes are only representatives of money, nevertheless, if they have been accepted as cash by a party, they are regarded as money by the Law, and they pass under a will as money, and are included in " goods and chattels," and can be taken in execution under a writ of fieri facias. A Banker must pay his Notes in legal tender if recjuircd, and if he refuse to pay the bearer on demand in accordance with the promise contained in the Note, the bearer or holder can note or protest the Bank Note so refused. This was actually done 264 The Law and Practice of Banking. on one occasion to the Bank of Ireland, when it declined to pay one of its Notes in gold to the Provincial Bank. Refusal is an act of insolvency, and the party so refused can file a petition in Bankruptcy against the Bank, on the strength of its having dishonoured its Promissory Note. It is evident, therefore, that a Bank cannot " stop payment " of any of its Notes with impunity ; should it adopt this course it should get an indemnity from the party at whose instance it stops the payment — for stopping payment is a dishonouring. A bona fide Holder of a Note is entitled to payment of the amount of it by the Bank that made it, notwithstanding fraud on the part of any previous Holder, and a Banker must pay it, unless he have actual Jznotvledge that the Presenter is in the fraud, or privy to it. A Bank Note being payable to Bearer, passes by delivery, and the person transferring it is under no liability on it, as it does not bear or require his endorsement, and the Transferee takes it at his own option and risk, it not being a legal tender. Further, a transfer of a Note for a consideration, not a debt already due, amounts to a sale of the Note, and such sale does not convey or imply a guarantee of the solvency of the Banker that issued it. The result, however, would be different if fraud, or knowledge of the insolvency of the Bank can be proved against the Transferor. But in an ordinary case, where A. gives change to B. for a Note which proves worthless, A. can recover the amount from B., unless he is proved guilty of delay, negligence, or laches in acquainting B. of the fact that it is a worthless Note. If a Bank give a Customer a receipt for money lodged, which lodgment is composed of, or includes, forged or worthless Notes, it can debit the Customer's account with the amount of such worthless Notes, if it is in a position to prove the receipt from the Customer. Forged Notes are not money, and though The Law and Practice of Banking. 265 the Banker give a receipt for money, if he can prove that the receipt is given under the supposition that the Notes were genuine, and on the Customer's implied representation that they were genuine, he can recover the amount from the Customer. But if the Customer pay into his Banker Bank Notes issued by a Bank which fails soon after such paying in, and that the Banker has allowed a reasonable time to elapse without presenting them to the Issuing Bank, and that when presented they are found not to be value, he cannot then recover from his Customer, for due diligence in presenting them had not been exercised. Half- Notes. — Lost -Notes. — For convenience and security in making remittances. Notes are frequently cut in halves, the parts being remitted at different times, or by different channels. The practice of cutting is not illegal, though in Scotland it is not usual, and is discountenanced by the Scotch Banks. Where one half of a Note has been lost, the Bank will pay the full amount on the production of the other half upon affidavit and indemnity, provided the amount has not already been paid to a previous applicant. A Bank can also be compelled now to pay the amount of a lost Note upon a satisfactory indemnity being given. Thus, if a Note be totally destroyed, the lawful owner of it, knowing its number, ■ etc., can obtain payment from the Bank, provided he tenders a satisfactory indemnity ; and in an action against the Banker for the amount of such loss, he, the Banker, cannot plead the loss and non-production as a defence. Bank Notes do not lapse, nor does the Statute of Limitations apply to them. It is specially enacted that all Bank Notes shall be deemed to be in circulation from the time they shall have been issued until they be returned to the Issuing Bank, and, therefore, as long as they are outstanding, they are 18 266 The Law and Practice of Bankmg. current and negotiable. In Morse's " Treatise on Banks and " Banking," it is said on this subject : " Every time a Note is " re-issued by the Bank, the promise is renewed, and it must " usually be impossible in the case of any particular Bill to say " how often it has passed into, and again has been paid out by " the Bank, or when it was last so paid out. But even if in any " individual case it could be shown that the last issue was at a " time so long past that the period of the Statute has since " elapsed, yet another objection, which goes to the root of the " matter, still remains behind. For lapse of time, in the case of "these instruments, affords no presumption of their having been " paid. On the contrary, their existence in other hands than " those of the Bank, is at least prwia facie evidence of non- " payment, since they are never paid, and, generally speaking, " payment can never be enforced upon them at Law, unless " they are surrendered to the Promissor. Further, as already " shown, a new cause of action is created by each transfer, so " that the Statute could begin to run only from the time when " the last Holder came into possession." In an article in the Money Market Review for November 9, 1867, page 482, the following remarks occur with reference to this subject : *' Country Bank Notes, as well as the Notes of the Bank of " England, vcco. promissory 'Koie.'x,, payable to the bearer on demand^ " and as to them, the promise to pay may be regarded as a " promise which is renewed from time to time, and every time " t/ie note changes hands, and may thus be subsisting for any " number of years, until the Note is either cancelled or paid. " The Statute of Limitations must be specially pleaded, and " the Banker or maker of the Note, in pleading the Statute, *' would have to plead that he had not made the promise at any " time within the six years, and he could not prove that i)lea " against the evidence of a Note in the hands of the Bearer, The Law and Practice of Banking. 267 " which became a new and distinct promise to him the moment " he became the Holder or Bearer of it." Forgery of Bank Notes. ^By the 24 & 25 Vic, c. 98, s. 12, it is enacted that to forge or alter; or offer, utter, or dispose of; or put off, knowing the same to be forged or altered, any Note or Bill of Exchange of any Banker, com- monly called a Bank Note ; or a Bank Bill of Exchange, or a Bank Post Bill, or any endorsement or assignment of such, with intent to defraud, is a felony, and it is punishable on con- viction by penal servitude for life, or for a term not exceeding five years, or imprisonment not exceeding two years with or without hard labour. Purchasing or receiving forged Bank Notes, with knowledge that they are forgeries, is a felony equal with uttering. It is also a felony to fraudulently engrave plates of Bank Notes, or to fraudulently, or without authority, manufacture Bank Note paper, on which the watermark or other distinguishing characteristics are imitated. An I.O.U. (a contraction for the words " I owe you ") is a mere acknowledgment of a debt, without a promise expressed to pay at any specified time. If such promise be expressed, the instrument is a Promissory Note requiring the Statutable ad valorem stamp. An I.O.U. is generally made in the well- known form : — London, \stOcf., l88i. John Smith, Esq., I.O.U. Tiocnty Pounds. ^20 John Broivu. Usually an I.O.U. expresses the date, the Creditor's name, l8~2 268 The Laiu and Practice of Banking. the acknowledgment of indebtedness, the amount, and the signature. A date is not absolutely necessary, as evidence is admissible to prove the time the I.O.U. was made. Neither is the Creditor's name now absolutely necessary, as the possession and production of the I.O.U. v^ prima facie evidence that the Possessor is the Creditor. The words (or letters) expressing indebtedness are necessary, as is also the amount ; and initials may be sufficient for the Debtor's signature. As long as the instrument is no more than an acknowledgment of indebtedness, it is legally an I.O.U. An I.O.U., therefore, being a mere memorandum, and no more than an evidence of a debt, and not coming within the scope of a Bill of Exchange or Promissory Note, or an agreement to pay, does not require any stamp. An I.O.U., though evidence of a debt, is not evidence of money lent, and if it be given for an illegal or an immoral purpose, the debt of which it is evidence cannot be recovered at law. An I.O.U. cannot be transferred, or circulated and negotiated as a Promissory Note. The Clearing House. — The "Clearing House" was esta- blished in 1 775 to meet the requirements for an organised method of interexchange of cheques, bills, etc., by the London Private Banks, whereby a saving would be effected in time and labour, but chiefly in the amount of floating capital, which, if the Banks did not act in concert, would reach a sum of great mag- nitude. The facilities to business, and the curtailment of money payments effected by the Clearing House, will best be shown by a description of its working. Frequently during the day, at stated times, each Bank which has the privilege of the establishment transmits to the Clearing House all cheques and The Lazu and Practice of Bankmg. 269 bills payable at other Banks, taking into account all cheques and bills payable with itself. The accounts are closed at 4 o'clock, and each bank has up to 4.45 o'clock wherein to return dis- honoured cheques and unpaid bills. The balances between all the houses are then struck, and these show who has to pay and who has to receive, by means of an account like the fol- lowing : GLYN & CO. Debtors. Dr. Balance Cr. Balance. Creditors. 120,000 Robarts, Lubbock, & Co. 20,000 140,000 100,000 20,000 Smith, Payne, & Co. 80,000 60,000 Baixlay. 20,000 80,000 200,000 Union. 20.000 220,000 1 80, COO 60,000 London Joint. 120,000 ;,^80,000 ;^60,000 Thus Glyns' would have to pay at the Clearing House to some Banker who claimed a balance, a sum of ;^2o,ooo to settle their day's transactions ; and this payment is made by a species of cheque on the Bank of England called a transfer ticket, which is duly vouched by the Clearing House official, and is available for the next day's exchange. In this manner transactions amounting to millions are daily settled without any cash payments ; and a fair estimate of what a saving this is to the Banks may be gathered from the fact that the London and Westminster Bank, before it obtained connection with the Clearing House, had to keep in hand a balance of ;^i5o,ooo for the purposes of settling its exchanges. A sum of this mag- nitude lying unproductive was a considerable loss to the Bank. The enormous extent of the Clearing House working will be seen from the subjoined returns to the year ending 30th April, 1881, since the year x868, when first these statistics were com- piled : 270 The Law and Practice of Banking. 1 867-1 868 1 868- 1 869 1869-1870 1 870- 1 87 1 1871-1872 1872-1873 1873-1874 1874-1875 1875-1876 1876-1877 1S77-1878 1878-1879 1879-1880 I 880- I 88 r Total for the Year. £ 3,257,411,000 3,534,039.090 3,720,623,000 4,018,464,000 5,359,722,000 6,003,335,000 5,993,586,000 6,013,299,000 5,407,243,000 4,873,000,000 5,066,533,000 4,885,091,000 5,265,976,000 5,909,989,000 On Fourths of the Month. £ 147,113,000 161,861,000 168,523,000 186,517,000 229,629,000 265,965,000 272,841,000 265,950,000 240,807,000 231,630,000 224,190,000 212,241,000 218,477,000 240,822,000 On Stock Exchange Account Days. £ 444,443,000 550,622.000 594,763,000 635,946,000 942,446,000 1,032,474,000 970,945,000 1,076,585,000 962,595,000 718,793,000 745,665,000 811,072,000 965,533.000 1,205,197,000 On Consols Settling Days. £ 132,293,000 142,270,000 148,822,000 169,141,000 233,843,000 243,561,000 260,072,000 260,338,000 242,245,000 223,756,000 233,385,000 221,264,000 233,143,000 265,579,000 XVII. SHAJ^ES AND SHAREHOLDERS. Though England, unlike Scotland and Ireland, still through- out its Provinces contains numerous private Banking Establish- ments, the majority of the Banks are Joint Stock Banks. All the Irish and Scotch Banks are likewise Joint Stock. A Joint Stock Company is a certain kind of partnership entered into by a number of persons for the purpose of carrying on some trade or business for individual profit. It differs from an ordinary partnership in many respects. The Members, individually, take no part in the business ; they are merely those who contribute to the Capital of the Company, or who purchase the contributions of others. The Capital is divided into a number of equal portions, which are called Stock in the case of the Bank of England and Bank of Ireland, and Shares in every other Joint Stock Bank. One or more of these Shares are held by each Member, and he is entitled to a divi- sion of the profits in proportion to his holding, but he can take no direct part in the management. The management of the Bank is vested in a limited number of Members, who are delegates of the Shareholders, and who are called Directors. These are subject to the control of the general body of Share- holders, or a certain majority of them, exercised at proper mie etings. The Directors only can bind the Company, and the 2/2 TJie Latv and Practice of Banking. Directors only are liable, should the Company engage in fraudulent transactions. Beyond the acts and resolutions passed at duly convened meetings of the body of Members in prescribed order, the Shareholders have no power to bind the Company, or even to interfere in its management. The capital of a mercantile firm generally means the accumulated sum with which the business is commenced. But in a Bank, or other Joint Stock Companies, this is usually but a portion of the amount that the Members have subscribed to pay, and that they may be called on to pay. The entire capital available for the business is called the Subscribed Capital. Of this a portion only generally is called for, in order to commence operations ; this is called the Paid-up Capital, and on this amount only a dividend or division of profits is paid to the Members. In the Banks and Companies called Limited, that is established under the Limited Companies Act, or registered under the Banking Act of 1879, the Shareholder is in no event liable to be called on for more than the amount unpaid or uncalled on each Share. Thus, if the Capital be ;^i, 000,000, and it be divided into 100,000 parts, or Shares of ;^io each, and if, of this ^10, half or J[^^ only be paid up on each Share, in the event of the failure or Bankruptcy of the Bank, or of a further call to develop the business of the con- cern, the Shareholder can only be called on for the balance unpaid, that is, ^5 on each Share he holds, and no more, whether the amounts so called should be enough to satisfy the claims against the Bank or not. But in an Unlimited Bank the case is different. A Shareholder in an UnUmited Bank is primarily liable for the amount remaining uncalled on his Shares, and secondarily for the unsatisfied debts of the Bank ; and this being so, he may possibly be delivered of every atom The Law and Practice of Banking. -/J of property he possesses. But under the Banking Act of 1879, an Unlimited Company can be registered as Limited, and the liability attaching to each Share can be divided — a portion of it constituted an immediate or primary liability, and the balance a deferred or secondary liability. Thus, e.g., if the Share be ;!^ 100, and ^20 be paid up, the Company registering under the Act of 1879, limits the liability to the uncalled balance of ^80 per Share. The constitution of the Company can then be altered so that of that p^So per share liability, £,-^0 only (e.g.) per Share can be available for further call; except in case of the Bankruptcy or winding-up of the Estab- lishment, when the remaining ;^5o per Share is available for the benefit of the Creditors. The liability, however, in respect to Notes in circn/ation, does not become limited by registration under this Act. The Shares are transferable, and if the Bank be successful, the Shares become of more value than the amount originally paid on them. This extra value is called a premitwi, and is regulated by the public estimate of the Shares. The Shares are purchasable on the Stock Exchanges, and being freely transferable, any person who can purchase can become a Shareholder. The Company's assent or permission is not required, nor can a Company refuse to transfer Shares to any person who has purchased them. The formation of Joint Stock Comijanies is regulated by Acts of Parliament, — The Joint Stock Companies Acts of 1856 arid 1857. By these it is provided that any seven or more persons associated for any lawful purpose, may, by subscribing their names to a memorandum of association, and registering in the terms of the Act, form themselves into an incorporated company. A List of the Shareholders in each Company formed under these Acts, or under the Companies Act of 1862, 2 74 ^-^^ Law and Practice of Banking. must be furnished annually to the Registrar of Joint Stock Companies, and it is open to public inspection. The liability respectively of a Shareholder in a Limited and an Unlimited Company has been pointed out; and in case of sale or transfer of Shares, in a Limited Company, the Transferor can, in case of default or failure of the Bank without actual or callable Assets, be held liable for one year after he has transferred his Shares ; and in case of an Unlimited Company, for three years after he has transferred them ; but the liability does not extend to debts contracted since the transfer. The object of this law is to prevent a Member divesting himself of liability, in the presence and with the knowledge of a collapse, and transferring that liability thus knowingly to, perhaps, indigent persons, from whom, to the detriment of the Creditors, nothing could be recovered. If a company of more than twenty persons unite for trade ])urposes, and do 'not register under the Acts of Parliament, each Member can be sued individually for the debts of the Company. Shares in a Bank are personal property. In a Company formed under the Companies Act of 1862, they are expressly declared by the Act to be so ; and in Banking Companies formed otherwise they are so at the Common Law. Sub- scribers to, or Members of, a Company, obtain a Certificate of the number of Shares they hold and of their name as Holder or Proprietor, and the Transferor of Shares must produce and surrender this Certificate to the Company upon the transfer of the Shares from his name to another's. Thus the possession of the Certificate is evidence of proprietorship. Such Certificate can be pledged for advances, and no notice of such pledging is necessary in order to give an equitable lien to the holder of it, />., the person with whom it has been lodged as a pledge or security. The Law and Practice of Banking. 275 But in case of the Bankruptcy of a Shareholder who is indebted to the Bank wherein he is a Proprietor, the Bank lias a lien on his Shares for his indebtedness, and this lien is not destroyed or alienated by the fact that the Certificate is deposited with another Creditor, whether that Creditor be a Banker or not. But a Stockbroker entrusted with Scrip or Cer- tificates for the purposes of sale of the Stock and Shares cannot pledge it with his Banker for his own private debt : this would amount to a fraudulent conversion, and on discovery of the fraud the real owner of the Shares can recover the scrip from the Bank. Joint Stock Banks are obliged to exhibit to a Proprietor, w^ho applies for it during business hours, the list of Shareholders, and to supply him with a copy thereof, upon his paying a prescribed fee. The Bank of England and Bank of Ireland, however, are exempt from this provision. By the Act known as Leeman's Act, a Contract for the sale of Bank Shares will be null and void, unless it shall set forth the numbers of the Shares, as registered in the Bank Books, and if there be no such register, the name of the Proprietor who is the seller ; and to insert false numbers or a false name is a misdemeanour. But the Act is comparatively a dead letter. Its provisions are never complied with, as com- pliance with them would obstruct the free sale of the Shares. But any Stockbroker purchasing Bank Shares can demand from the seller the numbers of the Shares and the name of the Proprietor. All contracts for the sale or purchase of Shares, when the value is ^^ or upwards, require a penny stamp duty. Once a Purchaser has accepted a transfer, he cannot repudiate the transaction, or divest himself of his liability as a Shareholder, unless he has been induced to become a Pro- prietor by false or fraudulent representations, by Directors or others, as to the position, financially, of the Bank. Upon a 2/6 The Law and Practice of Bankmg. discovery that such representations are false or fraudulent, he can recover the amount paid by him, from the j)arties deceiving him. If the name of a lawful Holder has been forged to a transfer deed, and the transfer duly registered in the Books of the Bank, he can compel the purchaser, though he be a bond fide Purchaser, to redeliver the Shares to him, and the Bank to cancel the transfer. Bank Directors are sometimes empowered by the Deed of Settlement to refuse to transfer Shares to a person who is not of means sufficient to pay any calls unpaid, which may yet be callable ; but the power is not exercised, as the exercise of it would possibly involve the Bank in a suit which they could not successfully maintain, so that practically and legally there is no limit to the assignability of Shares. Transfers are effected by a Deed, in a prescribed form, the signatures of Transferor and Transferee being duly witnessed. The registered lists of Proprietors is prima facie evidence of pro- prietorship. Shares can be held jointly in two or more names, but no trusts are recognised, nor are Bankers compelled to regard them. A Deed of Transfer to A. and B. as Trustees for C. makes A. and B. the legal Shareholders, with the rights and liabilities attaching thereto; and being joint Holders, survivor- ship operates ; that is to say, if A. dies, B. becomes the Share- holder, witliout any act except proof of death of A. This is the case if A. and B. were wife and husband. A Married Woman can purchase Shares in her own name, if out of her separate estate, but she and her separate estate are alone liable in case of Bankruptcy of the Bank. Clergymen, though they may be Shareholders, cannot be The Law and Practice of Banking. 277 Directors or Managers in a Banking Company, nor can they be Partners in a Private Bank. It has been pointed out that a Bank has a lien on the Shares of a Member who is indebted to the Company, and this doctrine is so well defined that it has been ruled that it has a lien on the Dividends on such shares also 3 and further, that where a Shareholder was a party to a Bill, and before the maturity thereof, a transfer of his Shares was presented to the Bank for registration, it was held that the Bank was justified in refusing to register it, the Master of the Rolls (England) saying that there was a debt existing, though the remedy for its recovery was suspended until the Bill had matured and was dishonoured. Directors are Delegates chosen from the Contributors or Shareholders, for the purpose of directing or managing the acts or transactions of the Company, or, as it is frequently expressed, "to superintend, order, conduct, regulate, and " manage all the affairs and business of the Company."' A certain holding of Shares in the Company, which holding is designated in the Articles of the Company, are the usual quali- fications for a seat on the Board, but a capacity to take part in the management and an attentive superintendence are requisite attributes of a Director. Directors can, at discretion, restrict the business of a Company, but they cannot extend it into paths not contemplated by, or provided in, the Deed of In- corporation. A Banking Company, though a Corporation, can contract otherwise than under its Seal. The Companies Act of 1867 provides that a Contract to bind a Company can be signed by any person acting under the authority of the Company. A Banking Company cannot purchase its own Shares, 2/8 The Law and Practice of Baulking. nor can it supply the Bank's Funds to parties for the purchase of them, especially if the Bank is in a critical position ; because such an action would, by creating a demand for the Shares, augment their market price, and thus, the act would be one to deceive the Shareholders and the public ; and " no cir- " cumstances of embarrassment, no difficulty, can excuse por- " traying in false and delusive colours the condition of the "affairs of the Bank entrusted to the charge of the Directors."* And it has been distinctly ruled that " Directors representing, " with the intent to raise the shares of the Company in price, " in their reports, and by their Agents, that the affairs of the " Company are in a very prosperous state, and declaring large " Dividends at a time when those affairs are greatly embar- " rassed, and thereby inducing a person to purchase Shares, " may be made criminally responsible for their conduct." (Grant). Again, it is by law a gross fraud for Directors to pay a Dividend derived from other sources except the bo7ia fide profits of the Company. The declaration of a Dividend is a declaration that the Company has made profits to pay it, and, therefore, if a Dividend is paid which does not come out of the profits, it is a fraud, and the Directors can be punished. And if a person buys Shares on the strength of such represen- tations, or rather misrepresentations, he has an action against the Directors, and even if he have not legally suffered any injury, he can, nevertheless, indict them for conspiracy. But the wilful offence must be proven at the time, and a person cannot avoid his purchase or contract on such grounds because subsequently a Bank stops payment, and it is discovered that the previous Report was a misrepresentation ; otherwise it would be in the power of all purchasers to repudiate liability *'■ In re Grant. The Law and Practice of Banking. 279 at the time of the Company's Bankruptcy, to the injury of the Creditors. The 24 & 25 Vic, c. 69, deals with criminal offences by Directors. To fraudulently use or appropriate the Bank's Funds to his own use ; to make or cause to be made false entries ; to falsify Accounts or destroy Documents ; to publish Balance Sheets, false to his knowledge in a material particular, with intent to deceive, are, if fraudulently done, misdemeanours, and punishable as such. It is further to be observed that any Bank Director who traffics in the Shares of his Bank, and makes a profit thereby, cannot lawfully obtain that profit, but can be com- pelled to apply it to the uses of the Shareholders. He is in the position of a Trustee, and profits made in this manner belong to the ceshii que trust. Thus, if a Director, acting on special information, acquired at a meeting of his Board or otherwise, buys Shares in his Bank with the knowledge that, owing to a coming action by the Board, these Shares will in- crease in value, and that he sells Shares so bought, at the enhanced price, the profit he thus makes belongs lawfully not to him, but to the Shareholders, and it can be recovered from him by an Equity Suit. XVIIL THE BANKING ACT OF iS>-]().— DIRECTORS' DUTIES. The Most Notable event in Banking Legislation since the passing of the Peel Acts, was the enactment of the statute known as "The Banking Act of 1879," ^^e text of which will be found in the Appendix. It permitted a mild revolution in the constitution of Joint Stock Banks, and inaugurated a method whereby in Banks and all Joint Stock Companies, Shareholders with unlimited liability attached to their Shareholdings could limit their liability, and those in Limited Companies could qualify their liability. The Act is due to the failure of the City of Glasgow Bank, to the startling revelations of its management, and to the ruin occasioned by its collapse, — occurrences too fresh in the public mind to require a recapitu- lation of the history of the wreck of that Establishment. From a personal point of view the ruin which overwhelmed the mass of the Shareholders convinced the public that a Share pro- prietorship, to which possible beggary was linked, was not desirable ; even a good dividend in the present was no compensation for contingent ruin in the future ; and therefore wealthy Shareholders — those who had something to lose beyond their Shares — got outside the pale of a prospective calamity by selling their Shares. Their places on the register as Proprietors were filled by less wealthy classes; and thus the fact of a Bank being a company of unlimited liability, instead of making its position stronger and its solvency more im- The Lazv and Practice of Banking. 281 pregnable, operated in the opposite direction. From a public point of view then, unlimited liability did not mean unlimited security, and thus, in a period of panic or financial uneasiness, the public and Shareholders alike were inclined to turn away from an unlimited concern. Though panics and the causes and consequences of panics pass quickly from the public mind, yet investors will not lose sight of their own responsibilities, when these responsibilities mean a possible penury. Putting aside the social aspect of the failure of an unlimited Bank, it would become a public, — indeed, a national, — calamity, if the moneyed classes should exclude themselves from a Shareholding connection with Banking Institutions. When the Proprietary deteriorates, the security to the public and the customers of the Bank deteriorates also. The Act of 1879 was designed to remedy the evils attached to unlimited liability, and it has already been adopted by many important establishments. The effect of its operations can be adjudged to be advantageous to both the Banks themselves and to their Customers. By it an unlimited Company may register itself as a limited one, and may increase its nominal Capital ; — or may provide that a portion of the uncalled Capital shall be set apart, and the liability to pay it be reserved — but no part of the increased Capital or of the reserved Capital can be called up, except in the event of the winding-up of the Company ; and the Company being thus limited, the Shareholders have no liability beyond the nominal Capital. Before this Act Shareholders in an unlimited Company were liable as far as their last penny. A Company already limited under previous Acts of Parliament can likewise set apart a portion of its uncalled Capital, to be callable only in the event of the Company being wound up. The limitation of the liability under this Act does not extend to the liability to the public on account of the Company's Bank Notes in circu- 282 The Law and Practice of Banking. lation. The Act {q.v}) has further provisions for Audit, intended to be a protection to the public, but of little real value. It will be seen, then, that under this Kct the Share- holders can divorce themselves from unlimited liability, while the security offered to the public is not really diminished. The Act, which was an improved edition of one projected previously but withdrawn, though modest in aim and title, contained the germs of a complete revolution. It was not compulsory in its principal clauses, but merely provided that unlimited Banks might re-register themselves as limited, and it insisted on an audit of accounts of such as did register. The change to limited liability has been thus effected in a way to retain all the confidence of Depositors, since in every instance already adopted a very large reserve liability, only to be called up under the terms of the Act in the event of liquidation, remains. That the movement will become general may now perhaps be taken for granted. The objections urged against the new Act were principally that it was Panic Legislation ; that the security it offered to the public was more apparent than real, while a change in the constitution of the Bank, and the publication of the word " Limited," as a portion of the Bank's title, would disturb the public mind, that might not fully comprehend its effect ; that it was impolitic to legislate for such a nervous system as the Banking public because one Bank had been proven to be fraudulently and incompetently managed. These arguments have had but little effect, and the strongest proof of the value of the Act, and of its appreciation by both Banks and public, is to be found in the number of establishments which have already adopted it. Nevertheless, taking into consideration the different positions of the Joint Stock Banks in this country and of the Colonial The Laia and Practice of Banking. 283 Banks which can transact business here, it is anticipated that further legislation which will tend to secure uniformity in the constitutions of the Companies is necessary. The Chartered Banks of Scotland, which occupy an excep- tional position, have petitioned for special legislation, and the Lords of the Treasury, in their reply, seem to admit that the question of the constitution of our Banks is not yet finally settled, and that it must be soon a matter for discussion in Parliament. * Powerful and useful, however, as legislation of this character may be, yet the best safeguard to both Shareholders and De- positors in Banks lies in the appointment as Directors of men of undoubted financial ability, high character, and good posi- tion. Re spectability without capacity is of little value, and capacity without character is dangerous in the extreme. The essential knowledge of Finance is not acquired in a moment, nor mastered at a glance. The responsibilities of Directorship are very grave. A Director is entrusted with the lending and disposition of other people's money, and as he can select those to whom he lends he is under the serious duty of knowing how to estimate the borrowers' characters — which enter largely into the consideration of loaning — and of being able to judge not alone of the present, but of the prospective solvency of the borrower. There is also the moral duty, of which mention * The law relating to Banking is in a very unsatisfactory state, and it is a matter for regret that the Bill introduced recently by Sir John Lubbock, and designed to consolidate and declare the law relating to Bills of Ex- change, Promissory Notes, and Cheques, did not get time for discussion and lead to a practical result. This Bill was prepared by the Association of Chambers of Commerce and the Institute of Bankers — to the latter of which, although but a young institution, the commercial public and the Banking Profession are under many obligations for the ability and intelli- gence with which it treats the important subjects that come within its scope. 19 — 2 284 The Lazu and Practice of Banking. has been made already, of employing the great sums at the command of the Board in such a manner that the industrious and honest will be encouraged and assisted, and the trade and interest of the country developed and fostered — a duty that the unwise or incompetent cannot adequately discharge. If the position of Bank Director is lightly undertaken and without a full sense of the necessary attributes and qualifications of the post, it is possible the difficult and delicate duties may be lightly discharged. The effect of the exposures of the management of the City of Glasgow Bank, and of others, has been to teach Shareholders that these duties are sometimes neglected, and the obligations of a Directorship forgotten com- pletely. Audits and Acts of Parliament are effective as far as they go, but they do not and cannot go far enough to ensure perfect management ; nor yet to secure men of perfect integrity and perfect ability as Directors. To effect this latter. Shareholders must look to themselves rather than to Parlia- ment. XIX. THE STOCK E XCHANGES AND STOCK-BROKING. The term " Stock Exchange," from having signified a building where dealings in Stocks and Shares were transacted, has now come to be applied to an association of persons called Stock- brokers, who effect purchases or sales in these commodities, and who are governed by certain recognised usages, forms, and regulations. A Share in a Joint Stock Company is one of a certain number of equal portions into which the invested capital of a concern is divided, and Stock is generally applied to Govern- ment Funded Debts, and to those Funds which are con- solidated, and purchasable in divisible quantities. A Share is indivisible ; one must purchase one or two or any given number of Shares. But of Stock one can purchase it in divided amounts, such as ^20 or ;^3o of it The prices .quoted in Stock Lists are the prices of the individual Share, and of the Stock per ^100. The word broker means simply an agent, and is variously derived.* The rapid and stupendous growth of enterprises and industries has opened and created * The Latin abrocator, a negotiator ; brocarins, a Ijroker. From the old English word broc, a badger (one who buys corn in one place, and sells it in another, so called from the animal that carries away his store of corn from th e cornfields), came the old English word broggcr, one who deals in corn. 286 The Laiu and Practice of Banking. such a multitude of channels for investments, that markets for the sale and purchase of such investments are a necessity of the age ; and that these markets should be organised and con- ducted by fixed rules and regulations, and that the negotiators should be men of stability and reputation, are also essentials to public convenience and public safety. Hence the kingdom has various such organizations, London being the parent of the provincial bodies. In England there are Stock Exchanges at Liverpool, Manchester, Birmingham, Leeds, Bristol, Hull, and Newcastle ; in Scotland, at Edinburgh, Glasgow, and Aberdeen; and in Ireland at Dublin. These Stock Exchanges are all independent bodies, formed and governed by their own rules, and \vith the exception of the great London prototype, are of such recent establishment that they are almost without any history. The public funding system which originated in Venice about 1173, and was introduced into Florence in 1340, was begun in London about 1690. Previous to this period there was practi- cally no such thing as an investment of superfluous capital. The well-known story of Pope's father carrying ^20,000 in gold — the profits of a trading life in London — in a box, from the metropolis to his country retreat, to be spent as occasion demanded, is well known. The bankers of the day, as has been already said, were safe custodians merely, who took charge of wealth and valuables, and distributed them in obedience to the written orders of the depositors. There were no public or Joint Stock Companies, and money was unprofitably stored. Such a condition of stagnation of wealth could have none other than the obvious result — that some enterprise would be discovered, some industry created, for its employment. The long period of ino[)erative capital was succeeded by a fever of investing-excitement, engendered and fostered by crowds of The Law and Practice of Banking. 287 promoters of all kinds of schemes. The coffee-houses, especi- ally Garraway's and Jonathan's, were the centres where those who had money to invest, charmed by the promises and hopes of rapid enrichment, met those who professed to invest it for them, in projects, some real and feasible, some preposterous and knavish. This occurred about 200 years ago, before the funding of the National Debt, and to this time are due those Stock-jobbers, the precursors of the Stock-brokers of to-day. The National Debt was created in 1693, and consisted then of ;;^i, 000,000 raised by means of life annuities, at 10 per cent, till 1700, and 7 per cent, thereafter; and the existence of a Government debt gave life to the Stock-jobbing trade, and gave it a raison d'etre. Originally these agents or jobbers conducted their business in the streets near the Bank of England, and ultimately fixed on a meeting-place in the locality thence known as Change Alley. From this the body moved to Sweeting's Alley, to a building they called the "Stock Exchange," and at the beginning of this century it had risen in numbers and im- portance to such a degree that a new place of business was necessary. Thus, on the i8th of May, 1801, the foundation- stone of the present Stock Exchange in Capel Court was laid on the site of the residence of Lord Mayor Sir William Capel (Anno 1504). On the day of the ceremony the public debt was ;;^552, 730,924, having been increased, by the seven years' war, and the American and French wars, by over _;^5oo,ooo,ooo during the space of a century. Beyond the celebrated hoax for which Lord Cochrane, Johnstone, and others were wrong- fully convicted in 1S14, no further incident of Capel Court has become a matter of history. Its daily business, though it may affect the credit of nations, and the wealth of miUions, is not of a description to make history. Its constitution, and its methods of business, seeing that its members deal with the 288 The Law and Practice of Banking. earnings and redundant moneys of the entire Kingdom nearly, should be more familiar than they are to the public. The London Stock Exchange belongs to a Joint Stock Company, the proprietary of which may or may not be members of the Exchange. The capital is about ;^2oo,ooo, and the revenue is popularly believed to pay at present between 30 and 40 per cent, thereupon. The Stock Exchange is " a "voluntary association of from 1,600 to 2,000 members, sub- "ject to the committee, and responsible to each other as "amongst themselves." The committee is composed of 30 members selected by ballot annually by the body, and a five years' standing is the sole quaUfication for a nomination to serve upon it. The principal qualifications for membership are as follows : The applicant must be twenty-one years of age or over ; must be a British subject, and if a foreigner, must have been naturalized for two years ; must not engage in any other business than that of the Stock Exchange ; if married, his wife must not be engaged in business; must not be a partner of any person except a member of the Stock Exchange ; must not be a member of any other institution where dealings in stocks and shares are negotiated. — The regulations in this regard are specially directed towards maintaining the respectability of the members. The requirements for admission as a member are more than formalities. They are of two descriptions : those for an applicant who has already been a clerk in the building, and those for an applicant who has not. In the latter case the applicant must be recommended by three solvent and reputable members of four years' standing each, who individually must undertake to pay ^^500 to the creditors of the applicant in case of his default within four years' from the date of his entrance, and must individually give their assurance that in case of a mulct for such default they are not in any way in- The Lazu and Practice of Banking. 289 demnified. These guaranteeing members are also individually required to express their readiness to take the applicant's •cheque for ^3,000 in the way of business. The entrance fee in this case is 150 guineas, and the annual subscription in all cases is 21 guineas. An applicant who has already been a clerk of four years' standing in the Exchange is required to produce two guarantors only, in the sum of ;^3oo each, and his entrance fee is 75 guineas. The clerks here spoken of have a locus standi on Change ; they are admitted by the com- mittee, and are subject to certain rules framed to govern their conduct and to fix their responsibilities. The names of the clerks are posted in the building, and their admission has to be sanctioned by the governing body. They are not permitted to transact any business till they have had two years' experience, and have attained the age of t\yenty years. A clerk may be a member, but no person can become a clerk until he has obtained an engagement in the service of a member ; and a member cannot apply to the co.mmittee for the admission of his clerk to the Exchange as an " authorised clerk " without first obtaining the consent of his — the member's — sureties. As a rule, those who aspire to be Brokers begin by fulfilling the duties of an authorised cjerk ; by this apprenticeship a knowledge of the complications and intricacies of Stock- jobbing and Stock-broking are acquired, and a personal acquaintance with the Brokers is established — two adjuncts which are essential to a successful trading as a Stock-broker in the great association which swarms daily in Capel Court. The members of the London Stock Exchange consist of two classes — Stock-brokers and Stock-jobbers. The Broker deals with the public, and the Jobber is the intermediary between broker and broker. Jobbers can deal in Stocks on their own account ; but it is supposed to be against the etiquette of the 290 The Law and Practice of Banking. Stock Exchange for Brokers to buy or sell for themselves. The Jobbers, therefore, are the speculators, and as speculation is attended with risk, the trade of jobbing demands more know- ledge, shrewdness, and circumspection than that of broking. It is necessary that a Broker should obtain a license from the Lord Mayor and Aldermen of the City of London, which license costs ^5 and is payable yearly. A Jobber requires no license, but if he transacts the business of a Broker he is liable to a penalty of ^100, which can be sued for and recovered by the Chamberlain of the City of London. A Broker is re- munerated according to a scale of fees authorised by the Com- mittee of the Stock Exchange. These are as follows : Government Funds — British or Foreign, ^th, or 2s. 6d. per cent, on the price. Exchequer Bills IS. >> Colonial and American Government Stock and Railway Bonds IS. 5J Shares — under ^5 IS. per share over ^5 and under ^10 IS. 6d. „ over^^io andunder^25 2S. j> over;;^25 andunder^5o 5s- )> over ^50 I OS. per cent. But, notwithstanding this regulated scale, a Broker can con- tract with his client to effect transactions at a special rate of commission, and in the event of such a contract the foregoing Stock Exchange terms are abrogated. A client's business can, therefore, be "lumped" and effected for a given fee, quite irrespective of the ordinary scales of charges. In this respect, the London Brokers have more latitude than those of some The Law and Practice of BanJdng. 291 other exchanges — the Dublin, for example, where any depar- ture from the fixed rate is not permissible. The remuneration of the Jobber, however, is not subject to any regulation scale. His legitimate business is, as has been said, to bring the buying Broker and the selling Broker together, and his remuneration is the difference between the buying and selling price. This is one-eighth per cent, in Consols, but in respect to other Stocks and Shares it fluctuates, and is not regulated by any rule. In the old days, the line of demarcation between the two classes of members was very distinct. The Brokers alone had the entree of the Stock Exchange. They alone could enter the Temple, while the Jobbers frequented and dealt in the Courts, so to speak. This distinction has, with other rights and privi- leges, long since been blotted out, either by express Acts or by the levelling influence of Time. Stock-broking and Stock- brokers have, from time to time, attracted the attention of Parliament. Some Acts were directed towards preventing Brokers dealing on their own account, and in 1734 a special Act was passed prohibiting jobbing in the English Funds, and in Indian Securities. The term " Sworn Brokers " that we still find appended to the names of sundry members of the Stock Exchange, refers to a restriction — now abolished — enforced by " The Lord Mayor, Citizens, and Commonwealth of London," whereby each Broker was bound to swear that he would not buy or sell on his account, and to give security for the fulfil- ment of his oath. Though this oath is no longer imposed, its spirit remains in the usages of the body, and it is regarded as a violation of the etiquette of the society that one should enter into speculation or any irregular dealing on his own ac- count. Each Broker, however, is arbiter of his own business, and hie own honesty and discretion regulate his actions as to such transactions. It is to be stated, that, as a rule, noblesse 292 The Law and Practice of Banking. oblige, in the Stock Exchange as elsewhere, is a more effectual safeguard than any written rules and laws, and thus Stock- brokers as a body act in a manner to maintain their high and honourable reputation. If a Broker, being possessed of private information regard- ing any securities, should purchase for himself such securities entrusted to him to sell by a client, he is liable to refund to the client any profit he may have netted on the transaction. If, in any case, he acts to the prejudice of the client, by conceal- ing knowledge he is possessed of, or misleading by representa- tions knowingly false, and becomes a purchaser or seller on his own account to the detriment of the client, he is liable on dis- covery to forfeit and refund any profit that may have accrued to him by his act. Frauds by Stock Brokers are defined and punished by the 24 & 25 Vic, c. 96, s. 75. "Whosoever, having been en- " trusted, either solely or jointly with any other person, as • " a banker, merchant, Broker, attorney, or other agent, " with any money or security for the " payment of money, " with any direction in writing to apply, pay, or deliver • " such money or security or any part thereof respectively, "or the proceeds or any part of the proceeds of such " security, for any purpose, or to any person specified in " such dii"ection, shall, in violation of good faith, and contrary " to the terms of such direction, in anywise convert to his " own use or benefit, or the use or 'benefit of any person other " than the person by whom he shall have been so instructed, " such money, security, or proceeds, or any part thereof re- " spectively ; and whosoever, having been entrusted, either " solely or jointly with any other person, as a banker, merchant, " BROKER, attorney, or other agent, with any chattel or valuable " security, or any power of attorney for the sale or transfer of The Law and Practice of BankiJig, 293 " any share or interest in any public stock or fund, whether of " the United Kingdom or any part thereof, or of any foreign *' state, or in any stock or fund of any body corporate, com- " pany, or society, for safe custody or for any special purpose, " without any authority to sell, negotiate, transfer, or pledge, " shall, in violation of good faith, and contrary to the object or " purpose for which such chattel, security, or power of attorney "shall have been entrusted to him, sell, negotiate, transfer, " pledge, or in any manner convert to his own use or benefit, " or the use or benefit of any person other than the person by " whom he shall have been so entrusted, such chattel or security " or the proceeds of the same, or any part thereof, or the share " or interest in the stock or fund to which such power of "attorney shall relate, or any part thereof, shall be guilty of a " misdemeanour, and being convicted thereof shall be liable, " at the discretion of the court, to be kept in penal servitude " for any term not exceeding seven years and not less than " three years, or to be imprisoned for any term not exceeding " two years, with or without hard labour, and with or without " solitary confinement ; but nothing in this section contained "relating to agents shall affect any trustee in or under any " instrument whatever, or any mortgagee of any property, real " or personal, in respect of any act done by such trustee or " mortgagee in relation to the property comprised in or affected "by any such trust or mortgage; nor shall restrain any banker, " merchant, Broker, attorney, or other agent from receiving any " money which shall be or become actually due and payable " upon or by virtue of any valuable security, according to the " tenor and effect thereof, in such manner as he might have " done if this Act had not been passed; nor from selling, trans- " ferring, or otherwise disposing of any securities or effects in "his possession upon which he shall have any lien, claim, or 294 '^^^^ Lazu and Practice of Banking. "demand entitling him by law so to do, unless such sale, " transfer, or other disposal shall extend to a greater number or " part of such securities or effects than shall be requisite for " satisfying such lien, claim, or demand." A Broker cannot at law recover moneys expended in the pur- chase of shares in an illegal company, or in one formed for immoral purposes, and he is liable to his client for any loss or damages the client may sustain through his neglect, incapacity, or ignorance. A Broker is at law presumed to know his busi- ness, but he is not expected to depart from the ordinary course of deaHngs, and if a client finds that his Broker buys at the dearest and sells at the cheapest price of the day, there is no remedy for any loss sustained by such dealings, whether it arise from want of judgment or not. A Broker deals for his client or principal at the client's risk entirely, and the client is liable to him for any loss or default, unless where the transactions are of a speculative or gambling nature. Such contracts cannot be enforced at law, and the Broker, if he should undertake them, does so at his own risk, relying on his client's solvency and honour. Jobbers are liable to Brokers for the due fulfilment of their contracts, such as the proper transfer and delivery of Stocks and Shares ; and thus a Jobber, in the case of a pur- chase, is bound to acquaint himself with the status and ability of the ostensible purchaser, and deals under the responsibility of seeing that the transferee or purchaser is not a disqualified jjcrson, such as an infant, etc. A transfer to an infant, or to a party incapacitated to be a shareholder, is not a good transfer, and in such a case the Jobber is liable to the Broker with whom he has negotiated the sale. A Jobber can deal unrestrictedly for himself, and is not bound to disclose his principal, if he has one, and he, as a rule, restricts his operations to some The Lazv and Practice of Banking. 295 particular branch of securities in which he makes himself a master. Thus, Jobbers are frequently more proficient in special knowledge than Brokers. The inducements to, gamble and speculate are, therefore, stronger with the Jobber, consequently they run greater risks, while they may make larger profits than Brokers, and in many instances a Jobber's career, if he be a wild dealer — a " plunger " — is suddenly cut short by some un- lucky speculation, and he passes away out of the charmed body where he has shone like a meteor. The position of the members of " the Society of the Stock " Exchange" in Dublin varies in many fundamental particulars from that of the London Stock Exchange. In Dublin each person seeking to be a member has to obtain from the Lord Lieutenant a license to act as a Government Stock-broker, pursuant to 39 George IIL, cap. 60, and 56 George IIL, cap. 98. The nature of this license is an authority to buy and sell Government Stock. To buy and sell and traffic and deal in every other species of Stocks and Shares requires no license in theory, but as the body of members would not negotiate with any other than a member, a person to deal in such commodi- ties on commission must, in practice, be duly licensed. This license costs ;^ioo, and is usually granted as a matter of course, upon a letter of recommendation signed by the Secre- tary of the Bank of Ireland, the President of the Stock Exchange, and the President of the Chamber of Commerce. The applicant for admission must give the President of the Stock Exchange ten clear days' notice of his intention to apply to the Viceroy, and such notice is placed before the members, and posted in the Stock Exchange. The Committee report on the applicant, who, being duly (qualified and approved of, obtains the recommendatory signature of the President to his letter of application to the Lord Lieutenant. The preliminaries to membership are as follows : — 296 The Laiv and Practice of Banking. 1. The Applicant must provide two solvent Sureties in the sum of ^1,000 each, to continue for three years from date of admission. 2. He must satisfy the Committee that he is the bona fide owner of ^,{^2,000 unencumbered. 3. He must declare he is not a member of a partnership. 4. He must not be a Bill-broker or Discounter, or en- gaged in any trade incompatible with Stock-broking. His wife — if he has one — must not be engaged in trade. 5. He must not have been a Bankrupt or Insolvent, or one who has compounded with his creditors, unless he have paid his debts in full. There is a special disqualification to this effect: "No person " shall be admissible as a member if he shall have been in the "employment of any member within one year previously to " his application, unless entering into partnership with his " employer " — the drift of which is not very apparent. But the other rules for admission are necessary, like those of the London body, to assure the public of the solvency, and to maintain the respectability, of the members. The annual sub- scription is twenty guineas. There are no Jobbers — specially so called — as on the London Stock Exchange, on the D ublin Stock Exchange ; nor is there the third class of " authorised " clerks " of which we have spoken. Stock -broking is by some regarded as a very simple busi- ness, and one which does not demand any study or apprentice- ship. But it is a science full of subtleties, and mastered only by study ; it is a pursuit wherein the knowledge and wisdom, obtainable only from a pre-acquaintanceship with the methods of the money market, are needful, and have daily opportunities of being displayed. The Laiu and Practice of Banking. 297 Purchases and sales are of two descriptions — for cash or for account. For cash, means for present delivery ; for account, for delivery on the day called the account day. Two such days are appointed by the committee in each month — one at the middle, and the other at the end of the month. Each account day is preceded by the name day — i.e., the day upon which the name of the purchaser or seller is delivered, in order to have the deed of transfer filled. If Shares and Stock are not delivered within ten days after the time for delivery, the purchaser can buy in, at the then market price, on the eleventh day, and the defaulting member is liable for any loss contracted. The following days are observed as holidays on both tlie London and Dublin Stock Exchanges : ist January. ^Vhit Monday. Good Friday. First Monday in August. Easter Monday. ist November, ist May. Christmas Day. 26lh December. If any of the foregoing fall on Sunday, the ensuing Monday is observed ; and, in addition to these, the committee can, by giving three days' notice, appoint any day a holiday. The London Exchange is closed on the Derby Day. The following are the technical expressions in use on the Stock Exchange which refer to the business procedure : Scrip, is frequently but erroneously applied to certificates of shares, or any writing alleging property in Shares. It pro- perly signifies the memorandum given to an original allottee, and is contracted from subscription., of which subscription the memorandum is an acknowledgment. 298 The Law and Practice of Banking. Contango, is the payment made, by way of fine, by a purchaser who is unable or indisposed to honour his contract, and requires time to complete it \ in which case the delivery to him of his purchase is deferred to a further account day, and for this " carrying over " he pays a stipulated sum, called a contango. On the other hand, when a seller is not in a position to honour his contract, and to deliver, the purchaser sanctions the delay and exacts a " Backwardation." Options are payments made by A. for the purchase or sale of the option of buying from or selling to B. certain specified Stocks or Shares at a certain specified future time. If the movements in the prices of these Stocks would prove dis- advantageous to B., he is content to lose his option money and not effect the purchase. An option to sell is a "put." An option to buy is a " call." An option to sell or to buy is a " put and call." Par, is the no7ninal value of Stocks and Shares. A par price in stocks is ^^ 100; in shares, a price equal to the amount paid up on each share. Discount is the amount below par, when the price is below the nominal value. Premium^ the amount above par, when the price is above the nominal value. Bear, is a speculator who operates for a fall — one who contracts to deliver, at a specified future time, stocks which he does not own.* -'' The origin of this term is to be found in the proverb, " Selling the "skin before the bear was caught," and came into use in its present signi- fication at the time of the South Sea Speculation. In a letter dated 19th June, 1 714* from Thomas Ilarle)', cousin of Lord Treasurer Oxford, to Dean Swift, this passage occurs : " You never heard such bellowing about "the town of the state of the nation, especially amongst the sharpers, ^^ sellers of bearskins, and the rest of that kind." Bull seems to have been invented as a companion phrase to Bear, and to have been hit upon because of the fancied derivation of bear from the animal who jDulled down — bull being an animal which sends upwards with his horns. The Law and Practice of Banking. 299 Bull, is a speculator who operates for a t-ise in the market l)rice — one who contracts to take a Bear's sales. It has been argued that in this advanced and radical age such institutions as Stock Exchanges, which are close boroughs to which few are admitted, and whicli make their own terms with the public, should be abolished, and the sale and purchase of Stocks and Shares be as free and unrestricted as the sale and purchase of a ])ound of tea. But it is to be remem- bered the Stock Exchange dealings fix the public estimate, and therefore the public value of the various interests which are daily sold and bought, and the community is daily apprised of the position of all investments in public opinion. Every transaction is recorded — there is no underbidding — no hole- and-corner dealing. A purchaser or seller entrusts the sale or [purchase of his property to honourable, astute, and qualified men. If each man dealt with his neighbour there would not only be scope for endless over-reaching, but there would be constant anxiety that the buyer could not consummate his pur- chase, or that the seller's title was infirm. In fact, open sale and transfer can be effected without the interposition of a Broker, but equally in fact the i)ublic prefer to forget that such a transfer is possible, and surrender their business with all its attendant details to the hands of the Brokers. APPENDIX. APPENDIX I. Principal Joint Stock Banks of England, Number of their Branches, Subscribed Capital, Paid-up Capital, and Authorised Issue. Ban'k and Year Established. c Amount Sub- scribed. Amount Paid-up- Authorised Issue. London Banks. £ £ £ Alliance Bank (Lim.)... 1862 3', 2,00O,OCO 1 Soo,coo Bank of England 1694 II 14,553,000 t4. 553. 000 15,000,000 Central of London {Lim.) ... 1863 S 200,000 100, oco City Bank [L.){byRoy.Cha7-ter) 1855 7 3,200,000 600,000 Consolidated Bank (Z/;;/.) ... 1863 4 2,000,000 800,000 Imperial Bank [Lim.) 1862 2,250,000 675,000 London and Co. Bkg. Co. {L. ) 1836 155 8,000,000 1,500,000 London Joint Stock Bank ... 1836 S 4,000,000 1 1,200,000 London and Provincial (Lim.) 1864 76 500,000 250,000 London and Sth-Western (L.) 1862 37 1,000,000 200,000 London & Westminster B. [L.) 1834 7 10,000,000 2,000,000 London and Yorkshire (Z/;w.) 1872 i3'- 551,000 144.337 Merchant Bk. Co. of Lon.(Z,.) 1863 1,500,000 375,000 Midland Banking Co. (Lim.) 1863 40 1,380,000 255,000 National Provincial Bank of England (Lim.) 1833 147 12,037,500 1,850,000 Union Bank of London 1839 4 4,500,000 1. 3 95. oco English Country Banks. Adelphi Bkg. Company (Lim.) i86i I 260,220 130,110 Ashton, Stalybridge, Hyde and Glossop liank 1836 — 125,000 50,000 Bank of Bolton (Lim.) 1836 4 989,000 353.040 Bank of Liverpool 1831 5,000,000 625,000 Bank of W'nioreland iKcndal) 1833 I 214,000 25,680 12,225 Bank of Whitehaven (Lim.)... 1837 s 295.590 98.530 32,681 Barnsley Banking Company 1832 I 294,800 47,168 9.563 Birmingham and Midland B. (Li7n.) 1836 3 1,440,000 300, 000 Birmingham Bank (Lim.) ... 1866 I 2,860,000 286,000 Birmingham Joint Stock Dank (Lim.) 1861 - 3,ooo,coo 300, 000 ;o4 Appendix I. Amount Sub- Amount Authorised Bank and Year Established. 6 c scribed. Paid-up. Issue. English Countky Banks— Cont. £ £ £ Birmingham, Dudley & District Banlcing Co. iLit)i.) 1836 7 1,425,000 285,000 Bradford Banking Co. (Lim.) 1827 1,360,000 408,000 49,292 Bradford Commercial B. C.(A.) 1B33 — 1,116,000 279,000 20,084 Bradford District Bank (L.) 1862 I 851,100 297,885 Bradford Old Bank (/Lzw.) ... 1S64 10 1,250,000 500,000 Bucks & 0.\on Union B. (L.) {Aylesbnry) 1866 8 400,000 80,000 Burton, Utto.xeter and Asli- bourne Union Bank [Lim.) 1839 2 650,000 130,000 60,701 , Bury Banking Co. [Lim.) 1836 — 750,000 150,000 Capital and Counties [Lim.) 53 1,750,000 350,000 Carlisle City & District B. (Z..) 1837 5 400,000 80,000 19,972 Carlisle & Cumberland Bkg. Company {Lim.) ... 1836 6 400,000 100,000 25,610 Commercial Bank of Liverpool {l-i»^-) 1832 — 700,000 350,000 County of Gloucester Bank- ing Co. [Lim.) 1836 II 800,000 181,100 144.352 County of Stafford — 120,000 60,000 9,418 Coventry Union Banking Co. 1836 I 200,000 56,000 16,251 Craven Bank {Lim.) 1791 — - 750,000 175,000 Crompton and Evans Union {Lim.) 7 1,000,000 200,000 Cumberland Union Banking Co. (Lim.) ( Workington) ... 1829 21 600,000 250,000 35-395 Darlington District Bkg. Co. 1831 7 400,000 48,000 26, 134 DL-rby & Derbyshire B. Co. ( L. ) 1833 4 250,000 62,500 20,093 Devon & Cornwall Bankg. Co. {Plymoutli) 1832 22 400,000 160,000 Exchange & Discount {Leeds), {Lim.) I 200,000 100,000 Glamorganshire Banking Co. {.S-Lvansea) ... 1836 6 351.900 300,000 Gloucestershire Banking Co. {Gloucester) 1831 36 1,000,000 450,000 155,920 Halifax Commercial Bkg. Co. {Lim.) 1836 3 300,000 150,000 13.733 Halifax Joint Stock Banking Co. {Lim.) 1829 2 500,000 200, coo 18,534 Halifax & Huddersfield Union Banking Co. 1836 I 500,000 250,000 44.137 Huddersfield Banking Co. ... 1827 4 1,700,000 414.525 37.354 Hull Banking Co. {Lim.) ... 1833 3 693,000 121,275 29.333 Knaresborough & Claro Bkg. Company 1831 6 213,700 42,740 28,059 Lancashire and Yorkshire (Z,.) 16 600,000 300,000 Lancaster Banking Co. 1826 21 275,000 275,000 64,311 Appendix I. 305 Bank and Year Established. P3 Amount Sub- scribed. Amount Paid-up. Authorised Issue. English Country Banks— Com/. £ £ £ Leamington Priors & Warwick- shire Bank [Lim.) 1835 3 200,000 40,000 13.875 Leeds & County Bank {Lim.) 1862 5 920,000 230,000 Leicestershire Banking Co. [Lim.) [Leicester) ... ... 1829 T3 1,000,000 316,667 86,060 Lincoln and Lindsey Bank (/1. 1 1833 12 326,950 114.432 51,620 Lloyds' Banking Co. (Lim.) [Birmingham') ... ... 1865 43 3,000,000 480,000 Manchester & County B. [L.) 1862 34 4,400,000 660,000 Manchester & Salford Bank... 1836 16 1,750,000 700;0oo Manchester & Liverpool Dis- trict Banking Co. (Lim.)... 1829 54 5,430,000 905,000 Manchester Joint Stock (L.) I 341,000 102,300 ».. Moore & Robinson's Notting- hamshire Banking Co. (Z.) 1836 — 507.750 203,800 35.813 National B. of Liverpool (L.) 1863 4 600,000 300,000 National Bank of Wales [L.) 218,690 51,102 North Eastern (A/ot.) ... 1858 26 806,500 255.950 Northamptonshire B. Co. [L.) 1836 4 466,925 93.385 2'.1,40I Northamptonshire Union Bkg. Co. [Lim.) 1837 4 900,000 176,562 84.356 North and South Wales Bank [Lim.) [Liverpool) 1836 50 2,000,000 500,000 63.951 North- Western Bank [Lim.) [Liverpool) 1864 — 1,080,000 405,000 Nottingham Joint Stock Bank [Limited) ... ... ... 1865 6 500,000 100,000 Nottingham & Notts Bkg. Co. 1834 8 407,000 203 ,500 29.477 Pares' Leicestershire B. Co. (Z,.) 1836 S 1,000,000 330,000 59.300 Parr's Banking Co. [Lim.) ... 1865 21 2,461,500 492,300 Preston Banking Co 1844 10 100,000 100,000 Sheffield Union Banking Co. 1843 6 300,000 180,000 Sheffield & Rotherham B. C. [L.) 1836 s 1,200,000 192,000 52,496 Sheffield Banking Co. [Lim.) 1831 3 952,500 332.832 35.843 Sheffield & Hallamshire Bank 1836 840,000 210,000 23.524 Southport & West Lancashire (Lim.) 3 500,000 190,410 Staffordshire Joint Stock Bk. (Lim.) 1864 II 875,000 175,000 Stamford, Spalding & Boston Banking Co. (Lim.) ... 1832 19 825,000 275.000 55721 Stuckeys' Banking Co. ... 1826 39 603,800 301,900 356.976 .Svvaledale & Wensleydale B. Co. [Richmond) 1836 4 400,000 63,000 54.372 Swansea (Lim.) 3 574.960 201,236 Three Towns Bkg. Co. (Lim.) I 75,000 25,000 Union B. of Birmingham (L.) 1878 — 415,200 103,800 Union Bank of Liverpool ... 1835 I 600,000 600,000 ;o6 Appendix I. ox Amount Sub- Amount Authorised Bank and Year Established. c c P5 scribed. Paid-up. Issue. English Country Banks— CowA £ £ £ Union Bk. of Manchester (Z,.) 1836 29 1,000,000 440,000 Wakefield &. Barnsley Union Bank 1832 2 400,000 104,000 14.604 West Riding Union Banking Co. (Hndiiersfield) 1832 2 3,160,600 316,060 34,029 Whitehaven Joint Stock Bank 1829 5 300,000 45,000 31.916 Wilts and Dorset Banking Co. [Salisbury) 1835 64 450,000 300,000 76,162 Wolverhampton and Stafford- shire Banking Co 1832 — 500,000 100,000 35.373 Worcester City & County B. [Urn.) 1840 20 1,000,000 250,000 6,848 York City and County Bank 1830 23 698,000 174,500 94.695 Yorkshire Bkg.Co. i,L.){Lecds) 1843 24 1,500,000 250,000 122,532 York Union Banking Co. ... 1833 II 660,000 165,000 71,240 APPENDIX II. pi C p O P . o cr a. 11 ►" (TJ Ss,^ — 3 — ^ C D O 3 r->-M -< H" 5 ?L!> "' & •-^ <; t/i n ft ._j p -• I— j tn ,-. P o • tn 3 S" P n P re re_ < — 1 p 3 p o cr re re re 1 p ^ cn »-« ^ — fO to to OJ (jj OJ I— 1 P OO On VO to Ln /) 4i- --I o (.,j ON to (■J Oj 4 ^ -J ^ Kn Ol ON 4^ Oi ^ i-< „ to to to OJ t/j OJ ^ C^ Ol oo 1-1 ^ > -4 f> OJ c^ to <-n ;i3 O o "" to c. *J t '■" 4. 4^ Ol oo O ^ ^ _l „ M to hO t ^, OJ OJ > to Ul 00 1— 1 4- > -J 1 OJ ) t ON OJ ON (■/5 to •^ " tJ to OJ - l^ - 1^ Ol O ■O o ^ M In) K) OJ t JJ c ^ ^ 3 CO hH 4^ ^I O 1 ^ 3S OJ UN \o to Or M K> OJ OJ 4- I. J-i V .n to U " re M M to OJ OJ (. Jj ^ „ KH ,_^ t-t 4^ ^J o OJ rjN 1 jj 0^ VO to Ut 00 Vi OJ Oj OJ oi ; .n. ^ " to o ^ M K> OJ (»J OJ ^ ^ ^ to > -1^ -^ n O.) c^ 1 jJ ON vn to (-n CO UJ Oi ^^ 4^ o. '^ to to OJ to ffq N Oj o^ Oj ^ ^ ^ to to cr- »-J O OJ CA 0-. :^ V ij Ol CO ^ 4^ 4^ <-/! U\ to 10 Oj Oj to OJ OJ C/J OJ „ „ „ to to to O o OJ . or OJ 4^ Oi „ ^ „ to to to OJ OJ n o\ t*J CT. vO M .JT oo 4>. »-4 o OJ re <-a o to ^J 4^ 4>- t^ OJ 4» 1-3 l> bd lr< o W !25 O ^ 1-3 o W !^ w na w !z! a H o Hi M O 02 ^ u l-H CO !z! hj > O fed o H W 5> w fej ?^ K O f> *. ►- covb 'o MvO OvD ©"O o ^ OOOOO'-'-iMCOrOTj- .^vo On O coO Os O O O O O O 00OO00OOOOOOOO«i-ii-< OOOOOOOOOOOOOOO-'i- ro Tt-vO t^iri -«' Ht "Wl .-P' H'M XlT - 000000000000000"i-i"fl't"^t^^ OOOOOOOOOOOOOOOOi-ii-iN0 Os O ro^ "oOGOOOOOOOOOOOOw-N "• oouoooo>-<"--'Np<'*-t^cr>oo 000000000000000"fl ^ N rn -"t ""I'O CnOOO^OvOOO^OOvOO^OOOOOO ^;000000"-i"f)ri'"'^corj-u-)t^0r)u-ir^000000 S?0000000000000000000>-^^'■OT:)-"^0 APPENDIX III. MARRIED WOMAN'S ACCOUNT. -FORM OF LETTER OF AUTHORITY TO BANKER. i8 To the__ Bank. I approve of my wife, Mrs. having an account in her own Name in your Books, and I beg that you will, at all times, honour her Drafts and follow her directions in reference thereto, placing to her credit whatever sums may be remitted or paid to you by her or on her behalf; and that you will carry to her Account, the Dividends on any Stock or other Securities which may from time to time be standing in her name, following her sole directions as to such Stock or Securities, and as to any Boxes, Parcels, and other things she may deposit with you for safe Custody. FORM OF INDEMNITY ON REPAYMENT OF LOST DEPOSIT RECEIPT, DRAFT, etc. To the Bank. i88 Gentlemen, In consideration of your paying the amount [of Draft on Demand], [with interest accrued, of Deposit Receipt], issued at your Office, on the__^ .and Numbered , in favour of ' for the sum of £ , which [Draft] [Deposit Receipt] has been lost, stolen, or mislaid, hereby indemnify The Bank, Limited, and all or any of its officers, against ail damages, losses or charges which they or any of them may incur, directly or indirectly, by reason of such payment, or in case of payment of said [Draft] [Deposit Receipt] by the Bank or its Officers, in error or through oversight ; and having now received the amount of it, to wit, f, [with interest due, to wit, £ ] should the above-described [Draft] [Deposit Receipt] hereafter come into possession. hereby undertake to deliver it to the Bank. Your obedient Servant, Witness, APPENDIX TABLE IN TEN LANCUAGES OF CARDINAL NUMBERS AND I English. French. German. Spanish. Italian. One Un Ein Uno Uno 2 Two Deux Zwei Dos Due 3 Three Trois Drei Tres Tre 4 Four Quatre Vier Cuatro Quattro 5 Five Cinq Fiinf Cinco Cinque 6 Six Six Sechs Seis Sei 7 Seven Sept Sieljen Siete Sette 8 Eight Huit Acht Ocho Otto 9 Nine Neuf Neun Nueve Nove lO Ten Dix Zehn Diez Dieci II Eleven Onze Elf Once Undici 12 Twelve Douze Zwolf Doce Dodici 13 Thirteen Treize Dreizehn Trece Tredici 14 Fourteen Quatorze Vierzehn Catorce Quattordici 15 Fifteen Quinze Fiinfzehn Quinze Quindici .16 Sixteen Seize Sechzehn Diez y seis Sedici 17 Seventeen Dix-sept Siebzehn Diez y siete Diciassette i8 Eighteen Dix-huit Achtzehn Diez y ocho Diciotto 19 Nineteen Dix-neuf Neunzehn Diez y nueve Diciannove 20 Twenty Vingt Zvvanzig Viente Venti 21 Twenty-one Vingt-et-un Ein und Zwanzig Viente y uno Vent'uno 30 Thirty Trente Dreiszig Treinte Trenta 40 Forty Quarante Vierzig Cuarente Quarenta 50 Fifty Cinquante Fiinfzig Cinquenta Viaquanta . 60 Sixty Soixante Sechzig Sesenta Sessanta 70 Seventy Soixante-dix Siebenzig Setenta Settanta 80 Eighty Quatre-vingt Achtzig Ochenta Ottanta 90 Ninety Quatre-vingt- dix Cent Neunzig Noventa Novanta TOO Hundred Hundert Cien Cento 1006 Thousand Mille Tausend Mil Mille Day Jour Tag Dia Giorno Week Semaine Woche Semana Settimana Month Mois jMonat Mes Mese Year Annee Jahr Alio Anno On demand A presenta- Nach sicht, A presenta- A presenta- tion or,bei Vor- cion zione zeigung At sight A vue A vista A la vista A vista After sight Ajoursde vue Nachsicht A. .dias vista Dopo vista After dale A jours de Nach dato, or A ... dias Dopo data date nach heute fecha Pay to the Payez a Fiir mich, or A la 6rden Pagate a I'or- order I'ordre uns an die ordre dine I promise to Je payerai Werdeich, or Pagare ■ Pagare pay werden wir bezahlen With interest Avec intcrcts Mit zinsen Con intcres Con interesse IV. COMIVIERCIAL TERMS USED IN BILLS OF EXCHANGE . Portuguese. Dutch. Russian. Danish. Swedish. I Hum, M. Huma, F. Een Odun En En 2 Doue, M. Duas, F. Twee Dba To Twa 3 Tres Drie Tza Tre Tre 4 Quatro Vier Tschetire Fire Fyra 5 Cinco Vyf Piat Fem Fem 6 Seis Zes Schest Sex Sex 7 Sete Zeven Sem Syv Sju 8 Outo Acht Votem Otte Atta 9 Nove Negen Deviat Ni Nio lO Dez Tien Desat Ti Tio II Onze Elf Odinnatzat Elleve EUva. 12 Doze Twaalf Dvenzat Tolo Tolf 13 Treze Dertien Trenazat Tretten Tretton 14 Quatorze Veertien Cheterinazat Fiorten Fjorton 15 Quinze Vyftien Paznatzat Femten Femton 16 Dezaseis Zestien Schesnadzat Sexten Sexten 17 Dezasette Zeventien Semnatzat Sytten Sjutton 18 Dezocto Aclitien Vosemnatzat Atten Aderton 19 Dezaneve Negentien Davetnazat Nitten Nitton 20 Vinte Twintig Dvatzat Tyve Tjugu 21 Vinte hum Enen Twin- tig Dvatzat - od- nar En og Tyve Tjugu en 30 Trinta Dertig Trudzat Tredive Trettio 40 Quarenta Veertig So role Fyrgetive P'yrtio 50 Cincoenta Vyftig Piatdesat Halvred sin- dative Femtio 60 Secenta Zestig Schestdesat Tredsind- styve Sextio 70 Setenta Zeventig Semdesat Halfierd ind- styve Sjuttio 80 Oitenta Tachtig Vosemdesat Fiirsindstyve At tio 90 Noventa jSfegentig Devianosto Halvemsind- styve Nittio 100 Cem Honderd Sto Hundred re Ett hundra 1000 Mil Duizend Tizatz Tusinde Ett tusen Dia Dag Den Dage Dag Semana Week Nedela Uger Weeka Mez INIaanden Mesatz Moaned Manad Anno Jaar God Aar Ar A presenta- Op vertoon Po bziskam Paa anford- Pa anford- 5ao rierg riug A vista Op sight a vista Poprediavieni A vista Vid sigt A..dias vista Dagen na zigt Po prediavieni Efta sigt Efter sigt A . . dias Dagen na Gato Efter dato Fran dato data dato Pagase a Voor my aan NIat it order Behag at, be- Behagar att, ordem de Older tale til odre betala til ordre Pagarei Ik necm aan la obetschai Je forpligter Jag forpligtai lebetalen mig at be- tale mig att be- tala Com inte- 'Met interest Is prozen- Med reute Med rauta reses tamu APPENDIX V. jtattttc0. THE BANKING COPARTNERSHIP REGUIA- TION ACT, 1826. 7 Geo. 4, c. 46. (The Act Authorising Joint Stock Banks.) An Act for the better regulating Copartnerships of certain Baiikers in England, and for amending so much of an Act of the Thirty-7iitith and Fortieth Years of the Reign of His late Majesty King George the Third, intituled '^ An Act ^^for establishing an Agreement with the Governor and " Company of the Bank of England, for advancing the Sum " of Three Jllillions towards the Supply for the Service of " the Year 1800," as relates to the same. [26th May, 1826.] \Yhereas an act was passed in the 39th and 40th years of the reign of his late Majesty King George the Third, intituled 39 and 40 Geo. 3, " An Act for establishing an agreement with the Governor "and Company of the Bank of England, for advancing the " sum of three millions towards the supply for the service of " the year 1800;" and whereas it was, to prevent doubts as to the privilege of the said governor and company, enacted and declared in the said recited act, that no other bank should be erected, established or allowed by Parliament ; and that it should not be lawful for any body politic or corporate what- soever, erected or to be erected, or for any other persons united or to be united in covenants or partnership, exceeding the number of six persons, in that part of Great Britain called England, to borrow, owe or take up any sum or sums of money on their bills or notes payable on demand, or at any less time than six months from the borrowing thereof, during the continuance of the said privilege to the said governor and company, who were thereby declared to be and remain a corporation, with the privilege of exclusive banking, as before recited ; but subject nevertheless to redemption on the tenns and conditions in the said act specified ; and whereas the Governor and Company of the Bank of England have con- sented to relinquish so much of their exclusive privilege as Appendix V. 313 prohibits any body politic or corporate, or any number of persons exceeding six, in England, acting in copartnership, from borrowing, owing or taking up any sum or sums of money on their bills or notes payable on demand, or at an\ less time than six months from the borrowing thereof ; pro- vided that such body politic or corporate, or persons united in covenants or partnerships, exceeding the number of six persons in each copartnership, shall have the whole of their banking establishments and carry on their business as bankers at any place or places in England exceeding the dis- tance of 65 miles from London, and that all the individuals composing such corporations or copartnerships, cariying on such business, shall be liable to and responsible for the due payment of all bills and notes issued by such corporations or copartnerships respectively : be it therefore enacted, etc., Copartnerships that from and after the passing of this act it .shall and may ;,^ number mav^ be lawful for any bodies politic or corporate erected for the carry on business , , , . , , - .. , . as bankers in purposes of bankmg, or for any number of persons umtea m Kn<^land 65 covenants or coi^artnership, although such persons so united "J^i'ss from , . , , ,, ■ r , ■ London, or carrymg on business together shall consist of more than six provided they in number, to carry on the trade or business of bankers in ^^^^ "° . , . r 1 ^ estabhshment as England, in like manner as copartnerships of bankers con- bankers in sisting of not more than six persons in number may lawfully London, and do ; and for such bodies politic or corporate, or such persons jnember shall so united as aforesaid, to make and issue their bills or notes „ t / '11 ' _ _ payment ot all at any place or places in England exceeding the distance of bills, &c. 65 miles from London, payable on demand, or otherwise at some place or places specified upon such bills or notes ex- ceeding the distance of 65 miles from London, and not else- where, and to borrow, owe or take up any sum or sums of money on their bills or notes so made and issued at any such place or places as aforesaid : provided always that such cor- porations or persons carrying on such trade or business of bankers in copartnership shall not have any house of business or establishment as bankers in London, or at any place or places not exceeding the distance of 65 miles from London ; and that every member of any such corporation or copartner- ship shall be liable to and responsible for the due payment of all bills and notes which shall be issued, and for all sums of money which shall be borrowed, owed or taken up by the corporation or copartnership of which such persons shall be a member, such person being a member at the period of the date of the bills or notes, or becoming or being a member before or at the time of the bills or notes being payable, or 21 .14 Appendix V. being such member at the time of the borrowing, owing or taking up of any sum or sums of money upon any bills or notes by the corporation or copartnership, or while any sum of money on any bills or notes is owing or unpaid, or at the time the same became due from the corporation or copartner- ship ; any agreement, covenant or contract to the contrary notwithstanding. This act not to 2. Provided always, that nothing in this act contained authorize shall extend or be construed to extend to enable or authorise copartnerships to issue, within the any such corporation, or copartnership exceeding the number limits mentioned, j- gj^^ persons, SO carryinsf on the trade or business of bankers any biUs payable . . ^ s> on demand ; nor as aforesaid, either by any member of or person belonging to vipon^any' ^ ^"Y ^'^^'^ corporation or copartnership, or by any agent or partner, &c., so agents, or any other person or persons on behalf of any such resident, for less .. i !_• ^ • • • t i than /so; corporation or copartnership, to issue or re-issue in London, or at any place or places not exceeding the distance of 65 miles from London, any bill or note of such corporation or copartnership, which shall be payable to bearer on demand, or any bank jDOst bill ; nor to draw upon any partner or agent, or other person or persons who may be resident in London, or at any place or places not exceeding the distance of 65 miles from London, any bill of exchange which shall be payable on demand, or which shall be for a less amount than ;^50: provided also, that it shall be lawful, notwithstanding anything herein or in the said recited act contained, for any such corporation or copartnership to draw any bill of ex- change for any sum of money amounting to the sum of ;^5o or upwards, payable either in London or elsewhere, at any period after date or after sight, nor to borrow 3. Provided also, that nothing in this act contained shall uo'or^' ^^ Ku extend or be construed to extend to enable or authorise any of exchange, such corporation, or copartnership exceeding the number of provisk^s^of the ^^^ persons, SO carr>-ing on the trade or business of bankers recited act, ex- in England as aforesaid, or any member, agent or agents of provided.^*^^"^ '^"7 -^'^^^ corporation or copartnership, to borrow, owe or take up in London, or at any place or jDlaces not exceeding the distance of 65 miles from London, any sum or sums of money on any bill or promissory note of any such corporation or copartnership payable on demand, or at any less time than six months from the borrowing thereof, nor to make or issue any l)ill or bills of exchange or promissory note or notes of such corporation or copartnership contrary to the provisions of the said recited act of the 39th and 40th years of King George the Third, save as provided by this act in that be- Appendix V. 315 half : provided also, that nothing herein contained shall ex- tend, or be construed to extend, to prevent any such cor- poration or copartnership, by any agent or person authorised by them, from discounting in London or elsewhere any bill or bills of exchange not drawn by or upon such corporation or copartnership, or by or upon any person on their behalf. 4. That before any such corporation, or copartnership Such copartner- exceeding the number of six persons, in England, shall beein ?'^1P^ shall, '^ r » t> > t> before issuing to issue any bills or notes, or borrow, owe or take up any any notes, &c money on their bills or notes, an account or return shall be <^'^''^^'' ^ ^^. ■' _ ^ ' stamp oiTice m made out, according"; to the form contained in the Schedule London an marked (A) to this acted annexed [a), wherein shall be set f^gX^namSf' forth the true names, title or firm of such intended or existing the firm, &c. [a) SCHEDULE referred to 1>y this Act. Schedule (A). Return or account to be entered at the Stamp Office in London, in pursuance of an Act passed in the seventh year of the reign of King George the Fourth, intituled [here insert the title of this act\ viz. : Firm or name of the banking corporation or copartnership, viz. [set forth the firm or name]. Names and places of abode of all the partners concerned or engaged in such corporation or copartnership, viz. [set forth all the nanus and places of abode\ Names and places of the bank or banks established by such corporation or copartnership, viz. [set forth all the names and places]. Names and descriptions of the public officers of the said banking corporation or copartnership, viz. [set forth all the names and descriptions]. Names of the several towns and places where the bills or notes of the said banking corporation or copartnership are to be issued by the said corporation or copartnership, or their agent or agents, viz. [set forth the names of all the logons and places], A. B. of secretary [or other officer, describing the office] of the above corporation or copartnership, maketh oath and saith, that the above doth contain the name, style, and firm of the above corporation or copartner- ship, and the names and places of the abode of the several members thereof, and of the banks established by the said corporation or copartnership, and the names, titles, and descriptions of the public officers of the said corporation or copartnership, and the names of the towns and places where the notes of the said corporation or copartnership are to be issued, as the same respectively appear in the books of the said 21 — 2 3i6 Appendix V. Account to be verified by secretary. corporation or copartnership, and also the names and places of abode of all the members of such corporation, or of all the partners concerned or engaged in such copartnership, as the same respectively shall appear on the books of such corporation or copartnership, and the name or firm of every bank or banks established or to be established by such corpo- ration or copartnership, and also the names and places of abode of two or more persons being members of such corporation or copartnership, and being resident in England, who shall have been appointed public officers of such corporation or copartnership, together with the title of office or other de- scription of every such public officer respectively, in the name of any one of whom such corporation shall sue and be sued as hereinafter provided, and also the name of every town and place where any of the bills or notes of such corporation or copartnership shall be issued by any such corporation, or by their agent or agents ; and every such amount or return shall be delivered to the commissioners of stamps, at the stamp office in London, who shall cause the same to be filed and kept in the said stamp office, and an entry and registry thereof to be made in a book or books to, be there kept for that purpose by some person or persons to be appointed by the said commissioners in that behalf, and which book or books any person or persons shall from time to time have liberty to search and inspect on pajmient of the sum of i^-. for every search. 5. That such account or return shall be made out by the secretary or other person, being one of the public officers appointed as aforesaid, and shall be verified by the oath of such secretary or other public officer, taken before any justice of the peace, and which oath any justice of the peace is hereby authorised and empowered to administer ; and that such account or return shall, between the 28th day of February and the 25th day of March in every year, after such corpora- tion or copartnership shall be formed, be in like manner delivered by such secretary or other public officer as aforesaid to the commissioners of stamps, to be filed and kept in the manner and for the purposes as hereinbefore mentioned. corporation or copartnership, and to the best of the information, knowledge and belief of this deponent. Sworn before me, the day of at in the county of C. D. justice of the peace in and for the said county. Appendix V. 317 6. That a copy of any such account or return so filed or Certified copies kept antl registered at the stamp office, as by this act is evidence of the directed, and wliich copy shall be certified to be a true copy appointment of ,,,,,,_ r ^ •• t"<^ public under the hand or hands of one or more of the commissioners officers, &c. of stamps for the time being, upon proof made that such, certificate has been signed with the handwriting of the person or persons making the same, and whom it shall not be neces- sary to prove to be a commissioner or commissioners, shall in all proceedings, civil or criminal, and in all cases whatsoever, lie received in evidence as proof of the appointment and authority of the public officers named in such account or return, and also of the fact that all persons named therein as members of such corporation or copartnership were members thereof at the date of such account or return. 7. That the said commissioners of stamps for the time Commissioners being shall, and they are hereby required, upon application certified' Vi^'^f made to them by any person or persons requiring a copy affidavits, on certified according to this act, of any such account or return P^^"^"' ° '°^- as aforesaid, in order that the same may be produced in evidence or for any other purpose, to deliver to the person or persons so applying for the same such certified copy, he, she, or they paying for the same the sum of los. and no more. 8. Provided also, that the secretary or other officer of every Account of new such corporation or copartnership shall, and he is hereby bfrsTn the'coiirse required, from time to time, as often as occasion shall render of any year to be it necessary, make out upon oath, in manner hereinbefore ™^ ^' directed, and cause to be delivered to the commissioners of stamps as aforesaid, a further account or return according to the form contained in the schedule marked (B) to this act annexed («), of the name or names of any person or persons (rt) SCHEUULE referred to by this act. Schedule (B). Return or account to be entered at the Stamp Office in London, on behalf of \ttame ilic corporation or copart- nerships in pursuance of an act passed in the seventh year of tiie reign of King George the Fourth, intituled [insert the title of this act\ viz.: Names of any and every new or additional public officer of the said corporation or copartnership, viz. : A. B. in the room of C. D. deceased or removed [as the case may /'t'] [set forth ei'ery name]. Names of any and every person who may have ceased to be a member of such corporation or copartnership, viz. [set forth every >ianie\. o 18 Appendix V. who shall have been nominated or appointed a new or addi- tional public officer or public officers of such corporation or copartnership, and also of the name or names of any person or persons who shall have ceased to be members of such corporation or copartnership, and also of the name or names of any person or persons who shall have become a member or members of such corporation or copartnership, either in addition to or in the place or stead of any former member or members thereof, and of the name or names of any new or additional town or towns, place or places, where such bills or notes are or are intended to be issued, and where the same are to be made payable ; and such further accounts or returns shall from time to time be filed and kept, and entered and registered at the stamp office in London, in like manner as is hereinbefore required with respect to the original or annual account or return hereinbefore directed to be made. Copartnerships 9. That all actions and suits, and also all petitions to found sued fn the\iamc ^^^ commission of bankruptcy against any person or persons of their public who may be at any time indebted to any such copartnership carrying on business under the provisions of this act, and all proceedings at law or in equity under any commission of bankruptcy, and all other proceedings at law or in equity to Names of any and every person who may have become a new member of such corjaoration or copartnership \set forth rveiy name]. Names of any additional towns or places where bills or notes are to be issued, and where tlie same are to be made jDayable. A. B. of secretary \_oy other officer] of the above- named corporation or copartnership, maketh oath and saith, that the aljove doth contain the name and place of abode of any and every person who hath become or been appointed a public officer of the above corpora- tion or copartnership, and also the name and place of abode of any and every person who hath ceased to be a member of the said corporation or copartnership, and of any and eveiy person wlio hath become a member of the said copartnership since the registry of the said corporation or copartnership on the day of last, as the same respectively appear on the books of the said corporation or copartnership, and to the best of the information, knowledge, and belief of this deponent. Sworn before me, the day of at in the county of C. D. justice of the peace in and for the said county. Appendix V. 319 be commenced or instituted for or on behalf of any such copartnership against any person or persons, bodies politic or corporate, or others, whether members of such copartner- ship or otherwise, for recovering any debts or enforcing any claims or demands due to such copartnership, or for any other matter relating to the concerns of such copartnership, shall, and lawfully may, from and after the passing of this act, be commenced or instituted and prosecuted _in the name of any one of the public officers nominated as aforesaid for the time being of such copartnership, as the nominal plaintiff or petitioner for and on behalf of such copartnership ; and that all actions or suits, and proceedings at law or in equity, to be commenced or instituted by any person or persons, bodies or corporate, or others, whether members of such copartner- ship or otherwise, against such copartnership, shall and lawfully may lie commenced, instituted and prosecuted against any one or more of the public officers nominated as aforesaid for the time being of such copartnership, as the nominal defendant for and on behalf of such copartnership ; and that all indictments, informations and prosecutions by or on behalf of such copartnership, for any stealing or embezzlement of any money, goods, effects, bills, notes, securities, or other property of or belonging to such copartnership, or for any fraud, forgery, crime, or offence committed against or with intent to injure or defraud such copartnership, shall and lawfully may be had, preferred and carried on in the name of any one of the public officers nominated as aforesaid for the time being of such copartnership ; and that in all indict- ments and informations to be had or preferred by or on behalf of such copartnership against any person or persons whom- soever, notwithstanding such person or persons may happen to be a member or members of such copartnership, it shall be lawful and sufficient to state the money, goods, effects, bills, notes, securities, or other property of such copartnership, to be the money, goods, effects, bills, notes, securities, or other property of any one of the public officers nominated as afore- said for the time being of such copartnership ; and that any forgery, fraud, crime, or other offence committed against or with intent to injure or defraud any such copartnership, shall and lawfully may in such indictment or indictments, notwith- standing as aforesaid, be laid or stated to have been com- mitted against or with intent to injure or defraud any one of the public officers nominated as aforesaid for the time being of such copartnership ; and any offender or offenders 320 Appendix V. Not more than one action for tli recovery of onf, demand. Decrees of a vSurt of equity against the public officer tn take effect against the copartnership. Judgments against suci' may llicrcupon be lawfully convicted for any such forgery, Iraud, crime or offence ; and that in all other allegations, indictments, informations, or other proceedings of any kind whatsoever, in which it otherwise might or would have been necessary to state the names of the persons composing such copartnership, it shall and may be lawful and sufficient to state the name of any one of the public officers nominated as aforesaid for the time being of such copartnership ; and the death, resignation, removal, or any act of such public officer, shall not abate or prejudice any such action, suit, indictment, information, prosecution or other proceeding commenced against or by or on behalf of such copartnership, but the same may be continued, prosecuted and carried on in the name of any other of the public officers of such copartnership for the time being. 10. That no person or persons, or body or bodies politic or corporate, having or claiming to have any demand upon or against any such corporation or copartnership, shall bring more than one action or suit, in case the merits shall have been tried in such action or suit, in respect of such demand ; and the proceedings in any action or suit, by or against any one of the public officers nominated as aforesaid for the time being of any such copartnership, may be pleaded in bar of any other action or actions, suit or suits, for the same demand, by or against any other of the public officers of such co- partnership. 11. That all and every decree or decrees, order or orders, made or pronounced in any suit or proceeding in any court of equity against any public officer of any such copartnership carrying on business under the provisions of this act, shall have the like effect and operation upon and against the pro- perty and funds of such copartnership, and upon and against the persons and property of every or any member or members thereof, as if every or any such members of such copartnership were parties members before the court to and in any such suit or proceeding ; and that it shall and may be lawful for any court in which such order or decree shall have been made, to cause such order and decree to be enforced against every or any member of such copartnership, in like manner as if every member of such copartnership were parties before such court to and in such suit or proceeding, and although all such nienifjers are not before the court. 12. Tint all and every judgment and judgments, decree or ■Iccrec-s, which shall at any time after the passing of this act Appendix V. 321 be had or recovered or entered up as aforesaid, in any action, public officer ,. . , ., . . , ,. shall operate suit, or proceedings in law or equity against any public against the officer of any such copartnership, shall have the like effect copartnership, and operation upon and against the property of such. co- jjartnership, and upon and against the property of every such member thereof as aforesaid, as if such judgment or judgments had been recovered or obtained against such copartnership ; and that the bankruptcy, insolvency, or stopping payment of any such public officer for the time being of such copartnership, in his individual character or capacity, shall not be nor be construed to be the bankruptcy, insolvency, or stopping payment, of such copartnership ; and that such copartnership, and every member thereof, and the capital stock and effects of such copartnership, and the effects of every member of such copartnership, shall in all cases, notwithstanding the bankruptcy, insolvency, or stop- ping payment of any such public officer, be attached and attachable, and be in all respects liable to the lawful claims and demands of the creditor and creditors of such copartner- ship, or of any memlier or members thereof, as if no such bankruptcy, insolvency, or stopping payment of such public officer of such copartnership had happened or taken place. 13. That execution upon any judgment in any action Execution upon obtained against any public officer for the time being of any Judgment niay 1 . , . a J issued against such corporation or copartnership carrying on the business of any member of banking under the provisions of this act, whether as plaintiff 'h'r ^opanner- or defendant, may be issued against any member or members for the time being of such corporation or copartnership ; and that in case any such execution against any member or members for the time being of any such corporation or copartnership shall be ineffectual for obtaining payment and satisfaction of the amount of such judgment, it shall be lawful for the party or parties so having obtained judgment against such public officer for the time being, to issue execution against any person or persons who was or were a member or members of such corporation or copartnership at the time when the contract or contracts or engagement or engagements in which such judgment may have been obtained was or were entered into, or became a member at any time before such contracts or engagements were executed, or was a member at the time of the judgment obtained : provided always, that no such execution as last mentioned shall be issued without leave first granted, on motion in open court, by the court in Appendix V. Officer, &c., in such cases indemnified. Governor and Company of the Bank of England may empower agents to carry on banking business at any place in Eng- land. which such judgment shall have been obtained, and when motion shall l>e made on notice to the person or persons sought to be charged, nor after the expiration of three years next after any such person or persons shall have ceased to be a member or members of such corporation or copartnership. 14. Provided always, that every such public officer in whose name any such suit or action shall have been commenced, prosecuted, or defended, and every person or persons against whom execution upon any judgment obtained or entered up as aforesaid in any such action shall be issued as aforesaid, shall always be reimbursed and fully indemnified for all loss, damages, costs, and charges, without deduction, which any such ofhcer or person may have incurred by reason of such execution, out of the funds of such copartnership, or in failure thereof, by contribution from the other members of such copartnership, as in the ordinary cases of copartnership. 15. And to prevent any doubts that might arise whether the said governor or company, under and by virtue of their charter, and the several acts of parliament which have been made and passed in relation to the affairs of the said governor and company, can lawfully carry on the trade or business of banking, otherwise than under the immediate order, manage- ment and direction of the court of directors of the said governor and company ; be it therefore enacted, that it shall and may be lawful for the said governor and company to .authorise and empower any committee or committees, agent or agents, to carry on the trade and business of banking, for and on behalf of the said governor and company, at any place or places in that part of the united kingdom called England, and for that purpose to invest such committee or committees, agent or agents, with such powers of management and super- intendence, and such authority to appoint cashiers and other officers and servants as may be necessary or convenient for carrying on such trade and business as aforesaid ; and for the same purpose to issue to such committee or committees, agent or agents, cashier or cashiers, or other officer or officers, servant or servants, cash, bills of exchange, bank post bills, bank notes, promissory notes, and other securities for pay- ment of money; provided always, that all such acts of the said governor and company shall be done and exercised in such manner as may be appointed by any bye-laws, constitu- tions, orders, rules, and directions from time to time hereafter to be made by the general court of the said governor and company in that behalf, such bye-laws not being repugnant Appendix V. },2i to the laws of that part of the United Kingdom called England ; and in all cases where such bye-laws, constitutions, orders, rules, or directions of the said general court shall be wanting, in such manner as the governor, deputy-governor, and directors, or the major part of them assembled, v.'hereof the said governor or deputy-governor is always to be one, shall or may direct, such directions not being repugnant to the laws of that part of the United Kingdom called England ; anything in the said charter or acts of parliament, or other law, usage, matter, or thing to the contrary thereof notwithstanding : provided always, that in any place where the trade and Ijusiness of banking shall be carried on for and on behalf of the said governor and company of the Bank of England, any promissory note issued on their account in such place shall be made payable in coin in such place as well as in London. i6. That if any corporation or copartnership carrying on Copartnerships the trade or business of bankers under the authority of this "^^mped notc'^ act shall be desirous of issuing and re-issuing notes in the on giving bond. nature of bank notes, payable to the bearer on demand, without the same being stamped as by law is required, it shall lie lawful for them so to do on giving security by bond to his ]\Iajesty, his heirs and successors, in which bond two of the directors, members, or partners of such corporation or copartnership, shall be the obligors, together with the cashier or cashiers, or accountant or accountants employed by such corporation or copartnership, as the said commissioners of stamps shall require ; and such bonds shall be taken in such reasonable sums as the duties may amount unto during the period of one year, with condition to deliver to the said commissioners of stamps, within 14 days after the 5th day of January, the 5th day of April, the 5th day of July, and the icth day of October, in every year, whilst the present stamp duties shall remain in force, a just and true account, verified upon the oaths or afifnmations of two directors, members, or partners of such corporation or copartnership, and of the said cashier or cashiers, accountant or accountants, or such of them as the said commissioners of stamps shall require, such oaths or affirmations to be taken before any justice of the peace, and which oaths or affirmations any justice of the peace is hereby authorised and empowered to administer, of the amount or value of all their promissory notes in cir- culation on some given day in every week, for the space of one quarter of a year prior to the quarter day immediately 3^4 Appendix V. No corporation compelled to take out more than four licences. Penalty on copartnership neglecting to send returns, Penalties for making false returns. preceding the delivery of sucli account, together with the average amount of value thereof according to such account ; and also to pay or cause to be paid into the hands of the receivers general of stamp duties in Great Britain, as a composition for the duties which would otherwise have been payable for such promissory notes issued within the space of one year, the sum of 7s. for every ^^loo, and also for the fractional part of ^{^loo of the said average amount or value of such notes in circulation, according to the true intent and meaning of this act ; and on due performance thereof such bond shall be void ; and it shall be lawful for the said com- missioners to fix the time or times of making such payment, and to specify the same in the condition to every such bond ; and every such bond may be required to be renewed from time to time, at the discretion of the said commissioners or the major part of them, and as often as the same shall be forfeited, or the party or parties to the same, or any of them, shall die, become bankrupt or insolvent, or reside in parts beyond the seas. 17. Provided always, that no such corporation or co- partnership shall be obliged to take out more than four licences for the issuing of any promissory notes for money payable to the bearer on demand, allowed by law to be re-issued in all for any number of towns or places in England ; and in case any such corporation or copartnership shall issue such promissory notes as aforesaid, by themselves or their agents, at more than four different towns or places, in England, then after taking out three distinct licences for three of such towns or places, such corporation or copartnership, shall be entitled to have all the rest of such towns or places included in a fourth licence. 18. That if any such corporation or copartnership exceed- ing the number of six persons in England, shall begin to issue any bills or notes, or to borrow, owe, or take up any money on their bills or notes, without having caused such account or return as aforesaid to be made out and deliver in the manner and form directed by this act, or shall neglect or omit to cause such account or return to be renewed yearly and every year between the days or times hereinbefore ap- pointed for that purpose, such corporation or copartnership so ofl'ending shall, for each and every week they shall so neglect to make such account and return, forfeit ^^500 ; and if any secretary or other officer of such corporation or copartnership shall make out or sign any false account Appendix V. O-D or return or any account or return which shall not truly set forth all the several particulars by this act required to be contained or inserted in such account or return, the corpora- tion or copartnership to which such secretary or other officer so offending shall belong shall for every such offence forfeit the sum of ;^500, and the said secretary or other officer so offending shall also for every such offence forfeit the sum of ;^ioo; and if any such secretary or other officer making out or signing any such account or return as afore- said, shall knowingly or wilfully make a false oath of or False oath per- concerning any of the matters to be therein specified and ^^''^' set forth, every such secretary or other officer so offending and being thereof lawfully convicted, shall be subject and liable to such pains and penalties as by any law now in force persons convicted of wilful and corrupt perjury are subject and liable to. 19. That if any such corporation or copartnership exceed- Penalty on co- ing the number of six persons, so carrying on the trade or j^^suhig'^bilis '^°^ business of bankers as aforesaid, shall, either by any member payable on of or person belonging to any such corporation or copartner- ' ship, or by any agent or agents, or any other person or persons on behalf of any such corporation or copartnership, issue or re-issue in London, or at any place or places not exceeding the distance of 65 miles from London, any bill or note of such corporation or copartnership which shall be payable on demand ; or shall draw upon any partner or or drawing bills . ,t_ 1. 1 -J i • of exchange pay- agent or other person or persons who may be resident in .^j^ig ^^^ demand London, or at any place or places not exceeding the distance or for less than of 65 miles from London, any bill of exchange which shall ' be payable on demand, or which shall be for a less amount than fifty pounds ; or if any such corporation or copartner- borrowing or ship exceeding the number of six persons, so carrying on the "J^^gp^ °s herein trade or business of bankers in England as aforesaid, or any provided. member, agent or agents of any such corporation or co- partnership, shall borrow, owe, or take up in London, or at any place or places not exceeding the distance of 65 miles from London, any sum or sums of money on any bill or promissory note of any such corporation or copartnership payable on demand, or at any less time than six months from the borrowing thereof, or shall make or issue any bill or bills of exchange or promissory note or notes of such corpora- tion or copartnership contrary to the provisions of the said recited act of the 39th and 40th years of King George the Third, save as provided by this act, such corporation or 326 Appendix V. copartnership so offending or on whose account or behalf any such offence as aforesaid shall be committed, shall for every such offence forfeit the sum of £,y:>. Not to afiect tlic 20. Provided also, that nothing in this act contained shall rights of Bank extend or be construed to extend to prejudice, alter, or affect of England, . . ^ -^ except as herein any of the rights, powers, or privileges of the said Governor specially altered. ^^^ Company of the Bank of England ; except as the said exclusive privilege of the said governor and company is by this act specially altered and varied. 21. That all pecuniary penalties and forfeitures imposed by this act shall and may be sued for and recovered in his Majesty's Court of Exchequer at Westmitister, in the same manner as penalties incurred under any act or acts relating to stamp duties may be sued for and recovered in such court. (Repealed by 36 & 37 Vict., c. 91). Penalties, how recovered. Short title. Commencement of .-ict. Prohibition of partnerships exceeding certain number. Certain com- panies to publish statement entered in schedule. THE COMPANIES ACT, 1862, SO FAR AS APPLI- CABLE TO BANKS. 25 & 26 Vict., c. 89. An Act for the Incorporation, Regulation and Winding-7ip of Trading Companies and their Associations. [7th August, 1S62.] 1. This act may be cited for all purposes as "The Com- panies Act, 1862." 2. This act . . . shall not come into operation until the 2nd day of November, 1862, and the time at which it comes into operation is referred to as the commencement of this act. 4. No company, association or partnership consisting of more than 10 persons shall be formed, after the commence- ment of this act, for the purpose of carrying on the business of banking, unless it is registered as a company under this act, or is formed in pursuance of some other act of parlia- ment, or of letter-patent. 44. Every limited banking company . . . shall, before it commences business, and also on the first Monday in February and first Monday in August in every year during which it carries on business, make a statement in the form marked (D) in the first schedule hereto {a), or as near thereto {a) Form (D.) is as follows :- The capital of the company is each. divided into shares of Appendix V. 327 as circumstances will admit, and a copy of such statement shall be put up in a conspicuous place in the registered office of the company, and in every branch office or place where the business of the company is carried on ; and if default is made in compliance with the provisions in this section, the company shall be lialile to a penalty not exceeding ;^5 for every day during which such default continues, and every director and manager of the company who shall knowingly and wilfully authorise or permit such default shall incur the like penalty. Every member, and every creditor of the company, shall be entitled to a copy of the above-mentioned statement on payment of a sum not exceeding 6d. 205. After the commencement of this act there shall be re- Repeal of acts, pealed the several acts specified in the first part of the third schedule hereto, with this qualification, that so much of the said acts as is set forth in the second part of the said third schedule shall be hereby re-enacted and continued in force as if unrepealed. SALE AND PURCHASE OF SHARES IN JOINT STOCK BANKING COMPANIES. 30 VrcT., c. 29. (Leeman's Act.) An Act to ainoid the Laiv in respect of tlie Sale and Purchase of Shares in Joint Stock Banking Companies. [17th June, 1867.] Whereas it is expedient to make provision for the prevention of contracts for the sale and purchase of shares and stock in joint stock banking companies of which the sellers are not possessed or over which they have no control : be it enacted, etc. The number of shares issued is Calls to the amount of pounds per share have been made, under which the sum of pounds has been received. The liabilities of the company on the first day of January (or July) were — Debts owing to sundry persons by the company — On judgment, £, On specialty, £ On notes or bills, £ On simple contracts, £ On estimated liabilities, £ The assets of the company on that day were :^ Government securities [stating them], £ Bills of exchange and promissory notes, £ Cash at the Bankers, £ Other securities, £ Appendix V. Contracts for sale, &c., of shares to be void unless the numbers by which such shares are dis- tinguished are set fortli in con- tract. Registered share- holders may see lists. Kxtentof act limited. 30 and 31 Vic. c. 131. 1. That all contracts, agreements, and tokens of sale and purchase which shall, from and after the ist day of July, 1867, be made or entered into for the sale or transfer, or purporting to be for the sale or transfer, of any share or shares, or of any stock or other interest, in any joint stock banking company in the United Kingdom of Great Britain and Ireland constituted under or regulated by the provisions of any act of parliament, royal charter, or letters patent, issuing shares or stock transferable by any deed or written instrument, shall be null and void to all intents and purposes whatsoever, unless such contract, agreement, or other token shall set forth and designate in writing such shares, stock, or interest by the respective numbers by which the same are distinguished at the making of such contract, agreement, or token on the register or books of such banking company as aforesaid, or where there is no such register of shares or stock by distinguishing numbers, then unless such contract, agree- ment, or other token shall set forth the person or persons in whose name or names such shares, stock, or interest shall at the time of making such contract stand as the registered proprietor thereof in the books of such banking company ; and every person, whether principal, broker, or agent who shall wilfully insert in any such contract, agreement, or other token any false entry of such numbers, or any name or names other than that of the person or persons in whose name such shares, stock, or interest shall stand as aforesaid, shall be guilty of a misdemeanor, and be punished accordingly, and, if in Scotland, shall be guilty of an offence punishable by fine or imprisonment. 2. Joint stock banking companies shall be bound to show their list of shareholders to any registered shareholder during business hours, from ten of the clock to four of the clock. 3. This act shall not extend to shares or stock in the Bank of Enijland or the Bank of Ireland. COMFANIES ACTS AMENDMENT. 40 & 41 Vict. c. 26. (Reduction of Capital.) All Act to ai/iciid the Ccmpanies Act qfi?>62 and 1867. [23rd July, 1877.] Whereas doubts have been entertained whether the power given by the Companies Act, 1S67, to a company of reducing its capital extends to paid-up capital, and it is expedient to remove such doubts : Appendix V. 329 Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assem- bled, and by the authority of the same, as follows : 1. This Act may be cited for all purposes as the Companies Short title. Act, 1867. 2. This Act shall, so far as is consistent with the tenor Construction of thereof, be construed as one with the Companies Acts, 1S62 J^^^^^ ^6 Vic. and 1867, and the said Acts and this Act may be referred to c. 8g. as "The Companies Acts, 1S62, 1867, and 1877." I'^^^f^ ^' ^'"'• 3. The word "capital "as used in the Companies Acts, Construction 1867, shall include paid-up capital ; and the power to reduce and powers to capital conferred by that Act shall include a power to cancel reduce capital r -' 1 1 -1 1 1 contained in any lost capital, or any capital unrepresented by avauable 50 and 31 Vic assets, or to pay off any capital which may be in excess of '^* '3i« the wants of the company ; and paid-up capital may be reduced either with or without extinguishing or reducing the liability (if any) remaining on the shares of the company, and to the extent to which such liability is not extinguished or reduced it shall be deemed to be preserved, notwithstanding anything contained in the Companies Act, 1867. 4. The provisions of the Companies Act, 1867, as amended Application of ,..,,, , 1 • -^ -1 1 provisions of by this Act, shall apply to any company reducmg its capital 30 ^nd 31 Vic. in pursuance of this Act and of the Companies Act, 1867, as c- 131- amended by this Act : Provided that where the reduction of the capital of a com- pany does not involve either the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital. (i,) The creditors of the company shall not, unless the Court otherwise direct, be entitled to object or required to consent to the reduction ; and (2.) It shall not be necessary before the presentation of the petition for confirming the reduction to add, and the Court may, if it thinks it expedient so to do, dispense altogether with the addition of, the words "and reduced," as mentioned in the Companies Act, 1867. In any case that the Court thinks fit so to do, it may 30 and 31 Vic. require the company to publish in such manner as it thinks ^' ^^^' fit the reasons for the reduction of its capital or such other information in regard to the reduction of its capital as the Court may think expedient with a view to give proper infor- mation to the public in relation to the reduction of its capital 22 330 Appendix V. Power to reduce capital by the cancel- lation of unissued shares. Reception of certified copies of documents as legal evidence. 25 and 26 Vic. c. 89. 30 and 31 Vic. c. 131. 40 and 41 Vic. C. 26. by a company, and, if the Court thinks fit, the causes which led to such reduction. The minute required to be registered in the case of reduc- tion of capital shall show, in addition to the other particulars required by law, the amount (if any) at the date of the regis- tration of the minute proposed to be deemed to have been paid up on each share. 5. Any company limited by shares may so far modify the conditions contained in its memorandum of association, if authorized so to do by its regulations as originally framed or as altered by special resolution, as to reduce its capital by cancelling any shares which, at the date of the passing of such resolution, have not been taken or agreed to be taken by any person ; and the provisions of " The Companies Act, 1867," shall not apply to any reduction of capital made in pursuance of this section, 6. And whereas it is expedient to make provision for the reception as legal evidence of certificates of incorporation other than the original certificates, and of certified copies of or extracts from any documents filed and registered under the Companies Act, 1862 to 1877 : Be it enacted, that any certificate of the incorporation of any company given by the registrar or by any assistant registrar for the time being shall be received in evidence as] if it were the original certificate ; and any copy of or extract from any of the documents or part of the documents kept and registered at any of the offices for the registration of joint stock companies in England, Scotland, or Ireland, if duly certified to be a true copy under the hand of the registrar or one of the assistant registrars for the time being, and whom it shall not be necessary to prove to be the registrar or assistant registrar, shall, in all legal proceedings, civil or criminal, and in all cases whatsoever, be received in evidence as of equal validity with the original document. BANKING AND JOINT STOCK COMPANIES BILL (1879). A Bill intituled an Act to amend the Law with respect to the Liability of Members of Banking and other Joint Stock Companies ; and for other purposes : — Be it enacted by the Queen's most excellent Majesty, by and with the advice and consent of the Lords Spiritual and Appendix V. 331 Temporal, and Commons, in this present Parliament as- sembled, and by the authority of the same as follows : — 1. This Act may be cited as the Companies Act, 1879. short title. 2. This Act shall not apply to the Bank of England. . 3. This Act shall, so far as is consistent with the tenor Construction thereof, be construed as one with the Companies Acts, 1862, of Act. 1S67, and 1877, and those Acts together with this Act may be referred to as the Companies Acts, 1862 to 1879. .4. Subject as in this Act mentioned, any company regis- Registration tered before or after the passing of this Act as an unlimited ^d compTn'ras company may register under the Companies Acts, 1862 to limited company. 1S79, as a limited company, or any company already regis- tered as a limited company, may re-register under the provi- sions of this Act. The registration of an unlimited company as a limited company in pursuance of this Act shall not affect or prejudice any debts, liabilities, obligations, or contracts incurred or entered into by, to, with, or on behalf of such company prior to registration, and such debts, liabilities, contracts, and obli- gations may be enforced in manner provided by Part VII. of the Companies Act, 1S62, in the case of a company register- ing in pursuance of that Part. 5. An unlimited company may, by the resolution passed by Capital ofun- the members when assenting to registration as a limited a™e'nttng°to'^^"^ company under the Companies Acts, 1862 to 1S79, and for register as a the pivpose of such registration or otherwise, increase the '™'"'^ comp.any. nominal amount of its capital by increasing the nominal amount of each of its shares. Provided always, that no part of such increased capital shall be capable of being called up, except in the event of and for the purpose of the company being wound up. And, in cases where no such increase of nominal capital may be resolved upon, an unlimited company may, by such resolution as aforesaid, provide that a portion of its uncalled capital shall not be capable of being called up, except in the event of and for the purpose of the company being wound up. A limited company may by a special resolution declare that any portion of its capital which has not been already called up shall not be capable of being called up, except in the event of and for the purpose of the company being wound up ; and thereupon such portion of capital shall not be capable of being called up, except in the event of, and for the purposes of the company being wound up. Appendix V Unlimited 6. Section one hundred and eighty-two of the Companies liability of Bank , or • , , , , , • , , r ■ ■ of Issue in re- -^ct, 1 002, IS hereby repealed, and in place thereof it is spect of Notes, enacted as follows : — A bank of issue registered as a limited company, either before or after the passing of this Act, shall not be entitled to limited liability in respect of its notes ; and the members thereof shall continue liable in respect of its notes in the same manner as if it had been registered as an unlimited company ; but in case the general assets of the company are, in the event of the company being wound up, insufficient to satisfy the claims of both the noteholders and the general creditors, then the members, after satisfying the remaining demands of the noteholders, shall be liable to contribute towards payment of the debts of the general creditors, a sum equal to the amount received by the note- holders out of the general assets of the company. For the purposes of this section the expression "the general " assets of the company " means the funds available for pay- ment of the general creditor as well as the noteholder. It shall be lawful for any bank of issue registered as a limited company, to make a statement on its notes to the eflect that the limited liability does not extend to its notes, and that the members of the company continue liable in respect of its notes in the same manner as if it had been registered as an unlimited company. Audit of accounts »_ /■jx Qnce at the least in every year the accounts of everv of Banking com- ' \ ' iri • ri-« panies. banking company registered after the passing of this Act as a limited company, shall be examined by the auditor or auditors who shall be elected annually by the company in general meeting. (2.) A director or officer of the company shall not be capable of being elected auditor of such company. (3.) An auditor on quitting office shall be re-eligible. (4 .) If any casual vacancy occurs in the office of any auditor the surviving auditor or auditors (if any) may act, but if there is no surviving auditor, the directors shall forthwith call an extraordinary general meeting for the purpose of supplying the vacancy or vacancies in the auditorship. (5.) Eveiy auditor shall have a list delivered to him of all books kept by the company, and shall at all reasonable times have access to the books and accounts of the company ; and any auditor may, in relation to such books and accounts, examine the directors or any other officer of the company, pro- vided that if a banking company has branch banks beyond the limits of Europe, it shall be sufficient if the auditor is allowed Appendix K ZZZ access to such copies of and extiacts from the books and ac- counts of any such branch as may have been transmitted to the head office of the banking company in the United Kingdom. (6.) The auditor or auditors shall make a report to the members on the accounts examined by him or them, and on every balance sheet laid before the company in general meeting during his or their tenure of office ; and in every such report shall state whether, in his or their opinion, the balance sheet referred to in the report is a full and fair balance sheet pro- perly drawn up, so as to exhibit a true and correct view of the state of the company's affairs, as shown by the books of the company; and such report shall be read before the company in general meeting. (7.) The remuneration of the auditor or auditors shall be fixed by the general meeting appointing such auditor or auditors, and shall Ije paid by the company. 8. Every balance sheet submitted to the annual or other Signature of meeting of the members of every banking company registered ^^ '^'"^^ ^ ^^' after the passing of this Act as a limited company shall be signed by the auditor or auditors, and by the secretary or manager (if any), and by the directors of the company, or three of such directors at least. 9. On the registration, in pursuance of this Act, of a com- pany which has been already registered the registrar shall make provision for closing the former registration of the com- pany and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company ; but, save as aforesaid, the registration of such a company shall take place in the same manner and have the same effect as if it were the first registration of that company under the Com- panies Acts, 1862 to 1879, and as if the provisions of the Acts under which the company was previously registered and regulated had l)een contained in different Acts of Parliament from those under which the comjoany is registered as a limited company. 10. A company authorised to register under this Act may Pi-ivilegcs of Act register thereunder and avail itself of the privileges conferred ^^^il^hsuiulim^' by this Act, notwithstanding any provisions contained in any constitution of Act of Parliament, Royal charter, deed of settlement, contract '^°'"P^"y* of co-partnery, cost book, regulations, letters patent, or other instrument constituting or regulating the company. 334 Appendix V. Draft crossed with Banker's name, &c., to be payable only to or through some Banker. Construction. The crossing to be deemed a material part of a cheque or draft, &c. CROSS-WRITTEN DRAFTS OR CHEQUES. 19 & 20 Vict. c. 25. Alt Act io amend the Law relating to Drajts on Bankers. [231x1 June, 1856.] Whereas doubts have arisen as to the obligations of bankers with respect to cross-written drafts ; and whereas it would conduce to the ease of commerce, the security of property, and the prevention of crime, if drawers or holders of drafts on bankers payable to bearer or to order on demand were en- abled effectually to direct the payment of the same to be made only to or through some banker ; be it therefore en- acted, &c. 1. In every case where a draft on any banker, made pay- able to bearer or to order on demand, bears across its face an addition, in written or stamped letters, of the name of any banker orof the words "and company," in full or abbreviated, either of such additions shall have the force of a direction to the bankers upon whom such draft is made, that the same is to be paid only to or through some banker, and the same shall be payable only to or through some banker. 2. In the construction of this act the word " banker " shall include any person or persons, or corporation, or joint stock or other company acting as a banker or bankers. CROSSING CHEQUES OR DRAFTS ON BANKER S 2.\ &.2.2 Vict. c. 79. An Act to amend the Law relating to Cheques or Drafts on Baiikers. [2nd August, 1S58.] Whereas it is expedient to amend the law relating to cheques on bankers, be it therefore enacted as follows : — I. Whenever a cheque or draft on any banker, payable to bearer or to order on demand, shall be issued, crossed with the name of a banker, or with two transverse lines with the words "and company," or any abbreviation thereof, such crossing shall be deemed a material part of the cheque or draft, and except as hereafter mentioned, shall not be ob- literated or added to oraltered by any person whomsoever after the issuing thereof; and the banker upon whom such cheque or draft shall be drawn shall not pay such cheque or draft to any other than the banker with whose name such cheque or Appendix V. 335 draft shall be so crossed, or if the same be crossed as aforesaid without a banker's name, to any other than a banker. 2. Whenever any such cheque or draft has been issued un- The lawful -' ' ,, holder of a crossed, or shall be crossed with the words and company, cheque un- or any abbreviation thereof, and without the name of' any ^J!°^gg^'u ^„j banker, any lawful holder of such cheque or draft, while the company," may same remains so uncrossed, or crossed with the words "and "["^^t'^e^^ame of "company," or any abbreviation thereof, without the name of banker, any banker, may cross the same with the name of a banker ; and whenever any such cheque or draft shall be uncrossed, any such lawful holder may cross the same with the words "and company," or any abbreviation thereof, with or with- out the name of a banker ; and any such crossing as in this section mentioned shall be deemed a material part of the cheque or draft, and shall not be obliterated or added to or altered by any person whomsoever after the making thereof, and the banker upon whom such cheque or draft shall be drawn shall not pay such cheque or draft to any other than the banker with whose name such cheque or draft shall be so crossed as last foresaid. 3- («). 4. Provided always, that a banker paying a cheque or draft Banker not to be , . , , , . , . . , c responsible for which does not, at the time when it is presented lor payment, paying a cheque plainly appear to be or to have been crossed as aforesaid, or ^^hjcli does not r J irr i i r planily appear to to have been obliterated, added to or altered as aforesaid, have been shall not be in any way responsible or incur liability, nor shall ^^^^ '^^ such payment be questioned by reason of such cheque having been so crossed as aforesaid, or having been obliterated, added to or altered as aforesaid, and of his having paid the (a) Section 3 is repealed by 24 &: 25 Vict. c. 95, and the following section is substituted by 24 & 25 Vict. c. 98 : — 25. Whenever any cheque or draft on any banker shall be Obliterating crossed with the name of a banker, or with two transverse crossings on lines with the words "and company," or any abbreviation'' ^l"^*' thereof, whosoever shall obliterate, add to, or alter any such crossing, or shall offer, utter, dispose of, or put off any cheque or draft whereon any such obliteration addition or alteration has been made, knowing the same to have been made, with the intent, in any of the cases aforesaid, to defraud, shall be guilty of felony, and being convicted thereof shall be liable at the discretion of the court to be kept in penal servitude for life, or for any term not less than five years (27 & 28 Vict. c. 47, s. 2), or to be imprisoned for any term nor exceeding two years, with or without hard labour, and with or without iolitary confinement. 2>2>^ Appendix V. .same to a person other than a banker, or than the banker with whose name such cheque or draft shall have been so crossed, unless the banker shall have acted malii fide, or been guilty of negligence in so paying such cheque. Interpretation of 5- I" the construction of this Act the word "banker" shall include any person or persons, or corporation, or joint stock company, acting as a banker or bankers. the word " banker. Short title. Repeal of Acts in schedule. Interpretation. General and special crossing. Crossing after issue. J HE CROSSED CHEQUES ACT. An Act for amending the Laio relating to Crossed Cheques. [15th August, 1876.] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament as- sembled, and by the authority of the same, as follows : 1. This Act may be cited as The Crossed Cheques Act, 1876. 2. The Acts described in the schedule to this Act are hereby repealed, but this repeal shall not effect any right, interest or liability acquired or accrued before the passing of this Act. 3. In this Act — " Cheque " means a draft or order on a banker payable to bearer or to order on demand, and includes a warrant for payment of dividend on stock sent by jjost by the Governor and Company of the Bank of England or of Ireland, under the authority of any Act of Parliament for the time being in force : "Banker" includes persons or corporation or company acting as bankers. Where a cheque bears across its face an addition of words "and company," or any abbreviation thereof, between two parallel transverse lines, or of two parallel transverse lines simply, and either with or without the words "not negotiable," that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed generally. Where a cheque bears across its face an addition of the name of a banker, either with or without the words " not "negotiable," that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed specially, and to be crossed to that banker. 5. Where a cheque is uncrossed, a lawful holder may cross it generally or specially. 4- the Appendix V. oo. material part of Where a cheque is crossed generally, a lawful holder may cross it specially. Where a cheque is crossed generally or specially, a lawful holder may add the words "not negotiable." Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker, his agent for collection. 6. A crossing authorised by this Act shall be deemed a Crossing 11 1 r , c material ' material part of the cheque, and it shall not be lawful for any cheque. person to obliterate or, except as authorised by this Act, to add to or alter the crossing. 7. Where a cheque is crossed generally, the banker on Payment to whom it is drawn shall not pay it otherwise than to a banker. Where a cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed, or to his agent for collection. 8. Where a cheque is crossed specially to more than one Cheque crossed , , , ^ , , specially more banker, except when crossed to an agent tor the purpose 01 than once not to collection, the banker on whom it is drawn shall refuse pay- '^^ P^'d- ment thereof. 9. Where the banker on whom a crossed cheque is drawn Protection of has in good faith and without negligence paid such cheque, ^^^"^^.gr where if crossed generally to a banker, and if crossed specially to cheque crossed the banker to whom it is crossed, or his agent for collection ■'^P^'^'^ '^■ being a banker, the banker paying the cheque and (in case such cheque has come to the hands of the payee) the drawer thereof shall respectively be entitled to the same rights, and be placed in the same position in all respects, as they would respectively have been entitled to and have been placed in if the amount of the cheque had been paid to and received by the true owner thereof. 10. Any banker paying a cheque crossed generally other- Banker paying wise than to a banker^ or a cheque crossed specially otherwise [^ pJovisions o?' than to the banker to whom the same shall be crossed, or Act to be liable his agent' for collection, being a banker, shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid, 11. Where a cheque is presented for payment, which Relief of banker does not at the time of presentation appear to be crossed, or [j'/j'P "n^°'^g to have had a crossing which has been obliterated, or to have cases. Ijeen added to or altered otherwise than authorised by this Act, a banker paying the cheque, in good faith and without negligence, shall not be responsible or incur any liability, nor ■shall the payment be questioned, by reason of the cheque 33^ Appendix V. having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as author- ised by this Act, and of payment being made otherwise than to a banker or the bankers to whom the cheque is or was crossed, or to his agent for collection being a banker (as the case may be). Title of holder 12. A person taking a cheque crossed generally or specially,, speciaUy! "°^^^ bearing in either case the words " not negotiable," shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had. But a banker who has in good faith and without negligence received payment for a customer of a cheque crossed gene- rally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such pay- ment. BANK NO TES AND BILLS COMPOSITION STAMP' DUTIES. 9 Geo. 4, c. 23. An Act to enable Bankers in England to issue certain un- stamped Promissory Notes and Bills of Exchange, tipon Payment of a Composition in lien of the Stamp Duties thereon (a). [19th June, 1S28.] Whereas it is expedient to permit all persons carrying on the business of bankers in England (except within the city of London or within three miles thereof), to issue their promis- sory notes payable to bearer on demand, or to order within a limited period after sight, and to draw bills of exchange payable to order on demand, or within a limited period after sight or date, on unstamped paper, upon payment of a com- position in lieu of the stamp duties which would otherwise be payable upon such notes and bills respectively, and sub- Certain bankers ject to the regulations hereinafter mentioned; be it therefore may issue un- enacted, etc., that from and .ifter the ist day of Tuly, 1828, stamped prom IS- .,,,,, ^ , ^ • ,, scry notes and it shall be lawful for any person or persons carrymg on the bills of exchange, business of a banker or bankers in England (except within regulations the city of London, or within three miles thereof), having me^ntroned ^''^'- *^"^y obtained a licence for that purpose, and given (rt) By the Statute Law Revision Act, 1S73, 36 & 37 Vict.,. c. 91, ss. 16 and 17 are repealed. Appendix V. ZZy security by bond in manner hereinafter mentioned, to issue, on unstamped pajDer, promissory notes for any sum of money amounting to £^ or upwards, expressed to be payable to tlie bearer on demand, or to order, at any period not exceeding seven days after sight ; and also to draw and issue, on un- stamped paper, bills of exchange, expressed to be payable to order on demand, or at any period not exceeding seven days after sight, or twenty-one days after the date thereof; provided such bills of exchange be drawn upon a person or persons carrying on the business of a banker or bankers in London, Westminster, or the borough of Southwark, or provided such bills of exchange be drawn by any banker or bankers at a town or place where he or they shall be duly licensed to issue unstamped notes and bills under the authority of this act, upon himself or themselves, or his or their co-partner or co-partners, payable at any other town or place where such banker or bankers shall also be duly licensed to issue such notes and bills as aforesaid. 2. That it shall be lawful for any two or more of the com- Commissioners . . ^ ,1 • »i of stamps may missioners of stamps to grant to all persons carrymg on the g^ant licences to business of bankers in Endand (except as aforesaid), who issue unstamped , „ , ,. ° , . . , notes and bills. shall require the same, licences authorising such persons to issue such promissory notes and to draw and issue such bills of exchange as aforesaid, on unstamped paper ; Avhich said licences shall be and are hereby respectively charged with a stamp duty of ;^30 for every such licence. 3. That a separate licence shall be taken out in respect of A separate every town or place where any such unstamped promissory ^^^^ ^ut; notes or bills of exchange as aforesaid shall be issued or for every place , -111 .1 , ■!_ 11 i_ where such notes drawn ; provided always, that no person or persons shall be ^r bills shall be obliged to take out more than four licences in all for any issued, but not , . ,.„,,,. to exceed four number of towns or places in England ; and in case any licences for any person or persons shall issue or draw such unstamped notes number of such ■^ . * . . places, or bills as aforesaid, at more than four different towns or places, then, after taking out three distinct licences for three of such towns, or places, such person or persons shall be entitled to have all the rest of such towns or places included in a fourth licence. 4. That every licence granted under the authority of this Regulations re- act shall specify all the particulars required by law to be specified in licences to be taken out by persons issuing promissory notes payable to bearer on demand, and allowed to be re-issued ; and every such licence which shall be granted between the lolh day of October and the llth day specting licences. ;40 Appendix V. Commissioners may cancel licences already taken out, and grant licences under this act in lieu thereof. Bankers while licensed under this act shall not issue, for the first time, notes on stamped paper. Bankers licence to issue un- stamped notes or bills shall give security by bond, for the due per- formance of the aonditions herein contained. of November in any year shall be dated on the nth day of October, and every such licence which shall be granted at any other time shall be dated on the day on which the same shall be granted ; and every such licence shall (notwith- standing any alteration which may take place in any copartnership of persons to whom the same shall be gi-anted) have effect and continue in force from the day of the date thereof until the loth day of October then next following, both inclusive, and no longer. 5. Provided always, that where any banker or bankers shall have obtained the licence required by law for issuing promissory notes payable to bearer on demand, at any town or place in England, and during the continuance of such licence shall be desirous of taking out a licence to issue at the same town or place unstamped promissory notes and bills of exchange under the provisions of this act, it shall be law- ful for the commissioners of stamps to cancel and allow as spoiled the stamp upon the said first-mentioned licence, and in lieu thereof to grant to such banker or bankers a licence under the authority of this act ; and every such last- mentioned licence shall also authorise the issuing and re- issuing of all promissory notes payable to the bearer on demand, which such banker or bankers may by law continue to issue or re-issue at the same town or place, on paper duly stamped. 6. Provided always, that if any banker or bankers, who shall take out a licence under the authority of this act, shall issue, under the authority of either this or any other act, any unstamped promissory notes for payment of money to the bearer on demand, such banker or bankers shall, so long as he or they shall continue licensed as aforesaid, make and issue on unstamped paper all his or their promissory notes for payment of money to the bearer on demand, of whatever amount such notes may be ; and it shall not be lawful for such banker or bankers, during the period aforesaid, to issue for the first time any such promissory note as aforesaid, on stamped paper. 7. That before any licence shall be granted to any person or persons to issue or draw any unstamped promissory notes or bills of exchange under the authority of this act, such person or persons shall give security, by bond, to his Majesty, his heirs and successors, with a condition, that if such person or persons do and shall from time to time enter or cause to be entered in a book or books to be kept for that purpose, an Appendix V. 341 account of all such unstamped promissory notes and bills of exchange as he or they shall so as aforesaid issue or draw, specifying the amount or value thereof respectively, and the several dates of the issuing thereof ; and in like manner also, a similar account of all such promissory notes as having l^een issued as aforesaid, shall have been cancelled, and the dates of the cancelling thereof, and all such bills of exchange as, having been drawn or issued as aforesaid, shall have been paid, and the dates of the payment thereof; and do and shall from time to time, when thereunto requested, produce and show such accounts to, and permit the same to be examined and inspected by, the said commissioners of stamps, or any officer of stamps appointed under the hands and seals of the said commissioners for that purpose ; and also do and shall deliver to the said commissioners of stamps half-yearly, (that is to say,) within fourteen days after the 1st day of January and the ist day of July in every year, a just and true account in writing, verified upon the oaths or affirmations, (which any justice of the peace is hereby empowered to administer,) to the best of the knowledge and belief of such person or persons, and of his or their cashier, accountant, or chief clerk (a), or of such of them as the said commissioners shall require, of the amount or value of all unstamped promissory notes and bills of exchange, issued under the provisions of this or any former act in circulation within the meaning of this act on a given day, (that is to say,) on Saturday in every week, for the space of half a year jjrior to the half-yearly day immediately preceding the delivery of such account, together with the average amount or value of such notes and bills so in circulation, according to such account ; and also do and shall pay or cause to be paid to the receiver-general of stamp duties in Great Britain, or some other person duly authorised by the commissioners of stamps to receive the same, as a composition for the duties which would otherwise have been payable for such promissoiy notes and bills of exchange issued or in circulation during the past half year, the sum of three shillings and sixpence for every one hundred pounds, and also for the fractional part of one hundred pounds, of the said average amount or value of such notes and bills in circulation, according to the true intent and meaning of this (a) The manager of the bank may make the affidavit. Reg. V. Greenland, i L. R., C.C. 65 ; 36 L. J., M. C. 37. 342 Appendix V. For what period notes and bills are to be deemed in circulation. Regulations re- specting the bonds to be given pursuant to this act. Fresh bonds to be given on alterations of copartnership. act ; and on due performance thereof such bonds shall be void, but otherwise the same shall be and remain in full force and virtue. 8. That every such unstamped promissory note payable to the bearer on demand, issued under the provisions of this act, shall, for the purpose of payment of duty, be deemed to be in circulation from the day of the issuing to the day of the can- celling thereof, both days inclusive, excepting nevertheless the period during which such note shall be in the hands of the banker or bankers who first issued the same, or by whom the same shall be expressed to be payable : and that every unstamped promissory note payable to order, and every unstamped bill of exchange so as aforesaid issued, shall for the purpose aforesaid be deemed to be in circulation from the day of the issuing to the day of the payment thereof, both days inclusive : provided always, that every such promissory note payable to order, and bill of exchange as aforesaid, which shall be paid in less than seven days from the issuing thereof, shall, for the purpose aforesaid be included in the account of notes and bills in circulation on the Saturday next after the day of the issuing thereof, as if the same were then actually in circulation. 9. That in every bond to be given pursuant to the direc- tions of this act the person or persons intending to issue or draw any such unstamped promissory notes and bills of exchange as aforesaid, or such and so many of the said persons as the commissioners of stamps shall require, shall be the obligors ; and every such bond shall be taken in the sum of one hundred pounds, or in such larger sums as the said commissioners of stamps may judge to be the probable amount of the composition or duties that will be payable from such person or persons, under or by virttie of this act, during the period of one year ; and it shall be lawful for the said commissioners to fix the time or times of payment of the said composition or duties, and to specify the same in the condition of every such bond ; and every such bond may be required to be renewed from time to time, at the discretion of the said commissioners, and as often as the same shall be forfeited, or the parties to the same, or any of them, shall die, become bankrupt or insolvent, or reside in the parts beyond the seas. 10. That if any alteration shall be made in any copartner- ship of persons who shall have given any such security by bond as by this act is directed, whether such alteration shall Appendix V. 343 be caused by the death or retirement of one or more of the partners of the firm, or by the accession of any additional or new partner or jDartners, a fresli bond shall be given by the remaining partner or partners, or the persons composing the new copartnership, as the case may be, which bond shall be taken as a security for the duties which may be due and owing, or may become due and owing, in respect of the unstamped notes and bills which shall have been issued by the persons composing the old copartnership, and which shall be in circulation at the time of such alteration, as well as for duties which shall or may be or become due or owing in respect of the unstamped notes and bills issued or to be issued by the persons composing the new copartnership ; provided that no such fresh bond shall be rendered necessary by any such alteration as aforesaid in any copartnership of persons exceeding six in number, but that the bonds to be given by such last mentioned copartnerships shall be taken as securities for all the duties they may incur so long as they shall exist, •or the persons composing the same, or any of them, shall carry on business in copartnership together, or with any other person or persons, notwithstanding any alteration in such copartnership ; saving always the power of the said commissioners of stamps to require a new bond in any cnse where they shall deem it necessary for better securing the payment of the said duties. 11. That if any person or persons who shall have given Penalty on security, by bond, to his Majesty, in the manner hereinbefore l^-''"^'^!-'^ neglect- ■^ ' -' J J ' iiig to renew directed, shall refuse or neglect to renew such bond when for- their bonds. feited, and as often as the same is by this act required to be renewed, such person or persons so offending shall for every such offence forfeit and pay the sum of ;^ioo. 12. That if any person or persons who shall be licensed Penalty for post- under the provisions of this act shall draw or issue, or cause stamped^otcs to be drawn or issued, upon unstamped paper, any promis- or bills. sory note payable to order, or any bill of exchange which shall bear date subsequent to the day on which it shall be issued, the person or persons so offending shall, for every such note or bill so drawn or issued, forfeit the sum of ;^ioo. 13. That nothing in this act contained shall extend or be This act not to construed to extend to exempt or relieve from the forx'eitures ^■'''^'"P' ^"^""^ ^ . penalties any or penalties imposed by any act or acts now m force, upon persons issuing persons issuing promissory notes or bills of exchange not duly "" ^iib n^'J in°"^ - stamped as the law requires, any person or persons who cordance here- under any colour or pretence whatsoever shall issue any un- ^^'' ' 544 Appendix V. stamped promissory note or bill of exchange, unless such' person or persons shall be duly licensed to issue such note or bill under the provisions of this act ; and such note or bill shall be drawn and issued in strict accordance with the regu- lations and restrictions herein contained. Recovery of 14. That all pecuniary forfeitures and penalties which may pena les. ^^^ incurred under any of the provisions of this act shall be recovered for the use of his Majesty, his heirs and successors, in his Majesty's Court of Exchequer at Westminster, by action of debt, bill, plaint or information, in the name of his Majesty's attorney or solicitor-general in England. Not to affect 1 5- Provided always, that nothing in this act contained the privileges of g^all extend or be construed to extend to prejudice, alter or the Bank of ;. England. affect any of the rights, powers or privileges of the Governor and Company of the Bank of England. 16. [Where any bankers taking out licenses under this act shall have stamps in their possession which will become use- less, the commissioners may cancel such stamps, and make allowance for the same, if application be made within six calendar months next after the passing of the act.] STAMP DUTIES ON BILLS, NOTES, CHEQUES, PROTESTS AND RECEIPTS, AND THE CAN- CELLATION OF ADHESIVE STAMPS. 33 & 34 Vict. c. 97. An Act for granting certain Stamp Duties in lieu of Duties of the same kind no^o payable u?ider various Acts, and con- solidating and amending Provisions relating thereto. (For provisions relating to Bills of Exchange, see ante, page 181.) [loth August, 1870.] Short title, and I- This Act may be cited as "The Stamp Act, 1870," commencement ^^^ ^^\ come into operation on the ist day of January, 1S71, °^ '^"" which date is hereinafter referred to as at the commencement of this Act. All duties to be 6. (i.) All stamp duties which may from time to time be paid according to charo-eable by law upon any instruments are to be paid and thfs'S?andthe°^ denoted according to the general and special regulations in schedule to be jj^-g ^^^ contained. Jhfs act.^'''" ° (2.) The said schedule, and everything therein contained, is to be read and construed as part of this Act. Appendix V. 345 16. (i.) Upon the production of an instrument chargeable Terms upon . , , . , . , r • -1 ■ J- 1 ■ which unstamped With any duty as evidence in any court ot civil judicature m or insufficiently any part of the United Kinjrdom, the officer whose duty it is stamped instm- ■^ ' . , r 1 • J ments may be to read the instrument shall call the attention of the judge to received in evi- any omission or insufficiency of the stamp thereon, and if the dence m any instrument is one which may legally be stamped after the execution tliereof, it may, on payment to the officer of the amount of the unpaid duty, and the penalty payable by law on stamping the same as aforesaid, and of a further sum of ^i, be received in evidence, saving all just exceptions on other grounds. 25. Any person who— Penalty for _ , \ -r- 1 1 T , , r frauds in relation (I.J l^raudulently removes or causes to be removed irom to adhesive any instrument any adhesive stamp, or affixes any stamps, or to any adhesive stamp which has been so removed to any other instrument with intent that such stamp maybe used again, (2.) Sells or offers for sale, or utters, any adhesive stamp which has been so removed, or utters any instrument having thereon any adhesive stamp which has to his knowledge been so removed as aforesaid ; (3.) Practises or is concerned in any fraudulent act, con- trivance, or device not specially provided for, with intent to defraud her Maj'esty, her heirs or successors of any duty, shall forfeit, over and above any other penalty to which he may be liable, the sum of ^^50. [An unauthorised defacement of adhesive stamps subjects a As to defacement person to a penalty oi£l. By the Stamp Duties Management sta^pf*^'^^ Act, 1870, 33 & 34 Vict. c. 98, s. 25, every person who by any writing in any manner defaces any adhesive stamp before it is used shall forfeit the sum of ;!^5 : provided that any person may, with the express sanction of the commissioners, and in the manner and in conformity with the conditions which they may prescribe, write upon an adhesive stamp before it is used for the purjDose of identification thereof.] PA YMENT OF BILLS AND NO TES PA YABLE A T SIGHT, AND STAMP DUTY. 33 & 35 Vict. c. 74. An Aci to abolish Days of Grace in tJw case of Bills of Ex- -3 146 Appendix V. Short title. Bills payable at sight or on pre- sentation to be payable on demand. Definition of terms. Admissibility in e\ idence of past bills. change and Froinissory Notes payable at Sight or on Pre- sentation. [14th August, 1 87 1.] Whereas doubts have arisen whether by the custom of merchants a bill of exchange or promissory note purporting to be payable at sight or on presentation is payable until the expiration of a certain number of "days of grace :" And whereas it is expedient that such bills of exchange and promissory notes should bear the same stamp and should be payable in the same manner as bills of exchange and pro- missory notes purporting to be payable on demand : Be it enacted, &c. , as follows : 1. This act may be cited as "The Bills of Exchange Act, "1871." 2. Every bill of exchange or promissory note, drawn after this act comes into operation and purporting to be payable at sight or on presentation, should bear the same stamp and shall, for all purposes, whatsoever, be deemed to be a bill of exchange or promissorj' note payable on demand, any law or custom to the contrary notwithstanding. 3. For the purposes of this act, the terms "bill of ex- " change " and "promissory note" shall have the same meanings as are given to them in "The Stamp Act, 1870." 4. A bill of exchange purporting to be payable at sight and drawn at any. time between the ist day of Januaiy, 1871, and the day of the passing of this act, both inclusive, and stamped as a bill of exchange payable on demand, shall be admissible in evidence on payment of the difference between the amount of stamp duty paid on such bill and the amount which would have been payable if this act had not passed. 16 and 17 Vic. 63. COMPOSITIONS FOR STAMP DUTY ON BANK POST BILLS OF £s AND UPWARDS. 27 & 28 Vict. c. 86. An Act to permit fora Limited Period Compositions for Stamp Duty on Baniz Post Bills 0/ £^ and zip7i'ards in Ireland. [29th July, 1864.] Whereas by an act passed in the i6th and 17th years of her Majesty's reign, chapter 63, the commissioners of her Ma- jesty's treasury are authorized and empowered to compound and agree with all or any bankers in Scotland or elsewhere for a composition in lieu of the stamp duties payable on the bills of exchange of such bankers : and whereas it is ex- Appendix V. 347 pedient to permit bankers in Ireland for a limited period to compound for the stamp duties payable on their bank post bills as well as on their bills of exchange : be it enacted, &c., as follows : I. It shall be lawful for the commissioners of her Majesty's Power to treasury and they are hereby authorized and empowered to compound with compound and agree with any banker in Ireland for a com- l^ankers m •••,•?, 1 • 1, , , , Ireland for the position in lieu of the stamp duties payable on the bank post stamp duty on bills to be made or drawn by such banker at any time during J?'"^"^ P°^'- j'"j ^ _ ; ° ior a period ot the period of three years from the passing of this act, for any three years. sum of money amounting to ;^5 or upwards, and such com- position shall be made on the like terms and conditions and with such security as the said commissioners are by the said act empowered to require in the case of compounding for the stamp duties on bills of exchange ; and upon such composi- tion being entered into by such banker it shall be lawful for him, during the period aforesaid, to make, draw, and issue all such bank post bills, for which composition shall have been made, on unstamped paper, anything in any act con- tained to the contrary notwithstanding. COMPOSITIONS FOR STAMP DUTY ON BANK POST BILLS OF £i, AND UPWARDS. 30 & 31 Vict, c. 89. An Act to render perpetual an Act passed in the Session holden in the 2']th and 2%th Years of her present Majesty, inti- tuled ''An Act to permit for a limited Period Compositions " for Stamp Duty on Bank Post Bills of £^ and ttpwards ''in Ireland,'''' [I2th August, 1S67.] Whereas by an act passed in the session holden in the 27th g^ ^"'^ ^^^ '"•' "'" and 2Sth years of the reign of her present Majesty, chapter 86, intituled "An Act to permit for a limited period com- "positions for stamp duty on bank post bills o^ £i^ and "upwards in Ireland," the commissioners of her Majesty's treasury are empowered to compound and agree, in manner therein mentioned, with any banker in Ireland for a compo- sition in lieu of the stamp duties payable on the bank post bills to be made or drawn by such banker at any time during the period of three years from the passing of the said act for any sum of money amounting to ;^5 and upwards : and 23—2 148 Appendix V. Powers of 27 and 28 Vic.jC. 86,: made perpetual. Short title. Section 18 of 55 Geo. 3, c. 184, prohibiting the issuing of bankers' notes with printed dates, repealed. Drafts on bankers for less than 20s. to be lawful. whereas it is expedient to make perpetual the powers con- ferred by the said act : be it enacted, (Sic, as follows : 1 . The powers conferred by the said act of the session of the 27th and 28th years of the reign of her present Majesty shall be perpetual, and the said act shall be construed as if the words " during the period of three years from the passing of this act" had been omitted therefrom. 2, This act may be cited for all purposes as "The Stamp Duty Commission (Ireland) Act, 1S67." VALIDITY OF CHEQUES OR DRAFTS FOR LESS THAN 20 s. 23 & 24 Vict. c. hi. An Act for gTantingto her Majesty certain Duties on Stamps, and to amend tJie Laws relating to the Stamp Duties {a). [28th August, 1S60.] 19. Whereas by s. 18 of the 55 Geo. 3, c. 184, the issuing of promissory notes payable to bearer on demand with printed dates therein is prohibited, and such prohibition is an unnecessary restriction ; be it enacted, that the said section shall be and is hereby repealed : provided always, that, not- withstanding anything in any act of parliament contained to the contrary, it shall be lawful for any person to draw upon his banker, who shall bona fide hold money to or for his use, any draft or order for the payment to the bearer or to order on demand, of any sum of money less than 20s. SPIRITUAL PERSONS PROHIBITED BEING MEMBERS OF JOINT STOCK BANKS. 4 Vict. c. 14. An Act to make good certain Contracts ivhich have been or may be entered into by certain Banking and other Co- partnerships (/'). [18th May, 1 84 1.] Whereas divers associations and copartnerships, consisting (a) 33 & 34 Vict. c. 99, repeals sects, i to iS, both in- clusive, and the schedule. {b.) This statute is a re-enactment of i Vict. c. 10, originally temporary and limited in operation, and repealed by the Statute Law Revision Act, 1S61, 24 & 25 Vict. c. lOi. Appendix V. 349 of more than six members or shareholders, have from time to time been fonnecl for the purpose of being engaged in and carrying on the business of banking and divers other trades and dealings for gain and i^roiit, and have accordingly for some time past been and are now engaged in carrying on the same by means of boards of directors or managers, com- mittees or other officers, acting on behalf of all the members or shareholders of or persons otherwise interested in such associations or copartnerships : and whereas divers spiritual persons, having or holding dignities, prebends, canonries, benefices, stipendiary curacies, or lectureships, have been and are members or shareholders of or otherwise interested in divers of such associations and copartnerships : and whereas it is expedient to render legal and valid all contracts entered into by such associations or copartnerships, although the same may now be void by reason of such spiritual per- sons being or having been such members or shareholders or otherwise interested as aforesaid ; be it therefore enacted, No association . . , . , or copartnership. (XC, that no such association or copartnership already or contract formed or which may be hereafter formed, nor any contract entered into by ^ "^ any ot them to either as between the members, partners, or shareholders be illegal or composing such association or copartnership for the purpose ^°^^ ^^ reason ^ thereof, or as between such association or copartnership and persons being other persons, heretofore entered into, or which shall be "^embers thereof, entered into by any such association or copartnership already formed or hereafter to be formed, shall be deemed or taken to be illegal or void, or to occasion any forfeiture, what- soever, by reason only of any such spiritual person as afore- said being or having been a member, partner, or shareholder of or otherwise interested in the same, but all such associ- ations and copartnerships shall have the same validity and all such contracts shall and maj' be enforced in the same manner to all intents and purposes as if no such spiritual No spiritual person had been or was a member, partner, shareholder of P^''^°" ^'^".^*^"'^ •^ . . _ ' r ' or performing or interested in such association or copartnership ; jDrovided ecclesiastical always, that it shall not be lawful for any spiritual person ^"j-ector"^' '^* holding any cathedral preferment, benefice, curacy, or lectureship, or who shall be licensed or allowed to perform the duties of any ecclesiastical office, to act as a director or managing partner, or to carry on such trade or dealing as aforesaid in person. ;5o Appendix V. Bills due on bank holidays to be due on the following day. Provision as to notice of dis- honour and pre- sentation for honour. BANK B OLID A YS. 34 Vict. c. 17, An Act to maJ;e provision for Bank Holidays, and respecting Obligations to make Payments and do other Acts on such Bank Holidays, [25th May, 1S71.] Whereas it is expedient to make provision for rendering the day after Christmas Day, and also certain other days bank holidays, and for enabling bank holidays to be ap- pointed by royal proclamation : Be it enacted, &c., as follows : 1. After the passing of this act, the several days in the schedule to this act mentioned {a) and which days are in this act hereinafter referred to as bank holidays, shall be kept as close holidays in all banks in England and Ireland and Scotland respectively, and all bills of exchange a1fid pro- missory notes which are due and payable on any such bank holiday shall be payable, and in case of non-payment may be noted and protested, on the next following day, and not on such bank holiday ; and any such noting or protest shall be as valid as if made on the day on which the bill or note was made due and payable ; and for all the purposes of this act the day next following a bank holiday shall mean the next following day on which a bill of exchange may be lawfully noted or protested. 2. When the day on which any notice of dishonour of an unpaid bill of exchange or promissory note should be given, or when the day on which a bill of exchange or promissory note should be presented or received for acceptance, or accepted or forwarded to any referee or refereesj is a bank holiday, [a) Schedule. Bank Holidays in England and Ireland. Easter INIonday. The Monday in Whitsun week. The first Monday in August. The 26th day of December, if a week day. Bank Holidays in Scotland. New Year's Day. Christmas Day. If either of the above days fall on a Sunday the next following Monday shall be a bank holiday. Good Friday. The first Monday of May. The first Monday of August. Appendix V. 351 such notice of dishonour shall be given and such bill of ex- change or promissoiy note shall lie presented or forwarded on the day next following such bank holiday. 3. No person shall be compellable to make any payment As to any pay- or to do any act upon such bank holidays which he would not hdidays" ^" be compellable to do or make on Christmas Day or Good Friday; and tlie obligation to make such payment and do such act shall apply to the day following such bank holiday ; and the making of such payment and doing such act on such following day shall be equivalent to payment of the money or performance of the act on the holiday. 4. It shall be lawful for her Majesty," from time to time Appointment of as to her Majesty may seem fit, by proclamation, in the man- hoHdays by'^roval ner in which solemn fasts or days of public thanksgiving may proclamation. l)e appointed, to appoint a special day to be observed as a bank holiday, either throughout the United Kingdom or in any part thereof, or in any county, city, borough or district therein, and any day so appointed shall be kept as a close holiday in all banks within the locality mentioned in such proclamation, and shall, as regards bills of exchange and promissory notes payable in such locality, be deemed to be a bank holiday for all the purposes of this act. 5. It shall be lawful for her Majesty in like manner, from time Day appointed . ,. 1 •. • 1 , . 1 TIT • ^ ■ ..for bank holiday to tnnc, when it is made to appear to her Majesty m council may be altered in any special case that in any year it is inexpedient that a day t>y °''der in by this act appointed for a bank holiday should be a bank holiday, todeclare that such day shall not in such year be abank holiday, and to appoint such other day as to her Majesty in council may seem fit to be a bank holiday instead of such dayj and thereupon the day so appointed shall in such year be substituted for the day so appointed by this act. 6. The powers conferred by sections 3 and 4 of this act on Exercise of , -./r- 7 -V-Tij c 1.,^ powers conferred her Majesty may be exercised in Ireland, so far as relates to by sections 4 and that part of the United Kingdom, by the Lord Lieutenant of 5 in Ireland by ^ ^ •' Lord Lieutenant Ireland in Council. («). 7. This act may be cited for all purposes as " The Bank ^'^°" ^"'^• Holidays Act, 1871." {a) The exercise of the powers conferred by sects. 4 and 5 will render unnecessary the passing of a special act of parlia- ment, as in the case of the public funeral of the Duke of Wellington, 16 & 17 Vict., c. I, and on the occasion of the entry of the Princess Alexandrina of Denmark into London, 26 & 27 Vict., c. 2. 152 Appendix V. When 26th Dec. falls on a Sun- day, Monday to be the holiday. HOLIDAYS EXTENSION ACT (1875). 2. Whenever the twenty-sixth day of December shall fall on a Sunday, the Monday immediately next following, that is to say, the twenty-seventh day of December, shall be a Holiday under this Act, and also under the Holidays Act of 1871. Short title. Repeal of Act. Mode of proof of entries in bankers' books. Proof that book is a banker's book. BANKERS' BOOKS EVIDENCE ACT (1878). A Bill to amend the Law of Evidence with respect to Bankers' Books. Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament as- sembled, and by the authority of the same, as follows : 1. This Act may be cited as the Bankers' Books Evidence Act, 1878. 2. The Bankers Books Evidence Act, 1S76, shall be re- pealed as from the passing of this Act, but such repeal shall not affect anything which has been done or happened before such repeal takes effect. 3. Subject to the provisions of this Act, a copy of any entry in a banker's book shall in all legal proceedings l)e received as prima facie evidence of such entry, and of the matters, transactions, and accounts therein recorded, and a bank or any officer thereof shall not in any legal proceedint; be compellable to produce any of the books of the bank except by order of a court or judge. Provided that in any proceeding to Mhich the bank is a party such a copy shall not be received in evidence in favour of the bank under this Act except by consent or by order of a court or judge, and on such terms, if any, as the court or judge thinks just. 4. A copy of an entry in a banker's book shall not be re- ceived in evidence under this Act unless it be first proved that the book was at the time of the making of the entry one of the ordinary books of the bank, and that the entry was made in the usual and ordinary course of business, and that the book is in the custody or control of the bank. Such proof may be given by one of the partners or ofiicers of the bank, and may be given orally or by an affidavit Bworn before any commissioner or person authorised to take affidavits. Appendix V. 353 5. A copy of an entry in a banker's book shall not be re- Verification of ceived in evidence under this Act unless it be further proved that the copy has been examined with the original entry and is correct. Such proof shall be given by some person who has ex- amined the copy with the original entry, and may be given either orally or by an affidavit sworn before any commissioner or person authorised to take affidavits. 6. A banker or officer of a bank shall not, in any legal Evidence shall proceeding to which the bank is not a party, be compellable 1111.? Act except to produce in evidence any banker's book the contents of where otherwise . . ordered, and which can be proved under this Act, unless by order of a judge except where made for special cause ; and no summons or other process '""^ ''^"'^ '-'^ •'' shall issue or be enforced against a banker or officer of a bank to compel such production without such an order in a legal proceeding to which the bank is not a party ; and de- fault by a party to the proceeding in giving the notices re- quired by this Act shall not be deemed to be special cause for such an order. 7. On the application of any party to a legal proceeding a Court or judge court or judge may order that such party be at liberty to in- ^ection^&c. spect and take copies of any entries in a banker's book for any of the purposes of such proceedings. An order under this section may be made either with or without summoning the bank or any other party, and shall be served on the bank three clear days before the same is to be obeyed, unless the court or judge otherwise directs. 8. The costs of any application to a court or judge under Costs. or for the purposes of this Act, and the costs of anything done or to be done under an order of a court or judge made under or for the purposes of this Act shall be in the discre- tion of the court or judge who may order the same or any part thereof to be paid to any party by the bank, where the same have been occasioned by any default or delay on the part of the bank. Any such order against a bank may be enforced as if the bank were a party to the proceeding. 9. In this Act the expressions "bank" and "banker" Interpretation means any person, persons, partnership, or company carrying "bankers' ""'^ on the business of bankers and having duly made a return to books." the Commissioners of Inland Revenue, and also any savings bank certified under the Acts relating to savings banks. It shall not be necessary to prove that a bank has made a return, or that a savings bank has been certified, as in this section mentioned, unless such proof is required by written 154 Appendix V. Interpretation of "legal pro- ceeding," "court," "judge." Computation of time. notice by the party against whom the evidence is proposed to be given under this Act. Such written notice must be given to the other party two clear days before the day on which the evidence is proposed to be given. Where such proof is re- quired, it may be given in the case of a savings bank by an office or examined copy of its certificate, and in the case of any other bank by production of a copy of its return verified by the affidavit of a partner or officer of the bank, or by tire production of a copy of a newspaper purporting to contain a copy of such return published by the Commissioners of In- land Revenue. Expressions in this Act relating to "bankers' books " in- clude ledgers, day books, cash books,, account books, and all other books used in the ordinary business of the bank. 10. In this Act — The expression "legal proceeding" means any civil or criminal proceeding or inquiry in which evidence is or may be given, and includes an arbitration ; The expression " the court " means the court, judge, arbi- trator, persons, or person before whom a legal proceed- ing is held or taken ; The expression" a judge " means with respect to England a judge of the High Court of Justice, and with respect to Scotland a lord ordinary of the Outer House of the Court of Session, and with respect to Ireland a judge of the High Court of Justice in Ireland ; The judge of a county court may with respect to any action in such court exercise the powers of a judge under this Act. 11. Sunday, Christmas Day, Good Friday, and any bank holiday shall be excluded from the computation of time under this Act. INDEX INDEX. I'AGE Abercorn, The Earl of : His project for an Irish Bank S8 Aberdeen, Bank of . 72, 74 Acceptance— ..... . 183, 189 "Differing" 191 For ganil)ling debt . 1S5 For illegal or immoral purposes 185 For stock-jobbing debt 185 ' ' For honour " of drawee . 222 " General " , 1 89 On blank stamp 191 "Particular" . 189,219 Presentation for 216 " Qualified " or " conditional " 192 "Special" .... 189 Suing on . 1S9 " Supra protest " . 222 \Vhat it admits 193 Words of acceptance now unnecessary 191 Acceptor— When his liability is discharged 220 Not discharged by non-presentation . 219 Not entitled to notice of dishonour . 222 Primarily liable 220 Accommodation Bill .... 1S7 " Account Day " on Stock E.xchange . 297 Administrator's current account 145 Endorsement 149 "After Sight" ..... . 216,217 Agent — Cannot bind his principal in bill 197 Cannot overdraw principal's current account 177 Endorsement by . , . . 150 Agricultural Bank (Ireland) . . . . III ;5« Index. Alexander the Great, Coinage of Alexander's Bank (Dublin) Alexanders & Co. (Ipswich) Alien Enemy as party to a bill . Allan, Alexander & Co. (Edinburgh) . Allen, Robert & Co. (Edinburgh) Allonge ..... Alteration in bill in cheque Amades, a Goldsmith, lends to Henry VIII. "And Company" Crossing, Origin of Anderson's Bank (Ireland) Arbroath Banking Co. . Argciitarii, Ancient Roman Bankers Aryandis, the Satrap of Egypt, First who struck coins Ashley, Lord — His plan to close the Exchequer Assent by a Banker, Consequences of Assignee's Current Account . Assignment of Policy . Assimilation of English and Scotch Coinages Assyria, Ancient Banking in '•At Sight" . . . . Attorney- Partnership in Respect to Bills Atlributioiics, Ancient Roman Cheques . "Authorised Clerk" on Stock Exchange Babylonia, Ancient Banking in . ' ' Backwardation " . Backwell, Edward— A London Goldsmith Balance Sheets, False Ball & Co.'s Bank (Dublin) . Bank, Derivation of the word Functions of a . Bank Holidays . Bank Notes Acts regulating issues of Antiquity of Do not lapse Invented in Europe . Forged or worthless For 30s, and;,^2 .Scotch and Irish Issues of Differ from English Profits on I'AGE 20 94 66 200 72 72 214 235 140 41 151 100 74 24 16 43 179 145 247 S3 17 143. 193. 194 197 24 289 17 29S 46 27S 98 114 115 162 187, 253 253 15 265 32 264, 267 260 257 76, 260 262, 263 28, 29 Index. ;59 PAGE Bank Notes (Continued) Halved .... 265 Lost .... 265 Protested .... . 83, 263 Stopping payment of 264 Under ^i, abolished 260 Bank of Amsterdam .... 31 Barcelona .... 31 Berlin ..... 32 Copenhagen .... 32 Bank of England .... 59 Authorised issue of . 61, 62 Banking department of 62 Dates when various notes were issuec 61 Differs from other Banks 65 Directors' qualifications 64 Founded 59 Garden of . 61 Government debt to . 61 Issue Department 62 Notes issued by- 60, ('/ seq. Notes not legal tender in Ireland 163 Opens branches 61 Panics affecting 63 Post Bills 61, 216, 23S "Reserve" . 64 Suspends payment 60, 66 Bank of France .... 33 Geneva .... 31 Genoa . . . . . 31 Hamburg .... 32 Ireland 102, Ct SCq. the Netherlands 32 Rotterdam . . . . . 32 Scotland . . . . . 70 St. George . . . . 31 St. Petersburg . . . . 32 Stockholm . . . . . 32 Venice . . . . . 29 Bank Post Bills . . . . . 61, 216, 238 Bank Post Bills under ^5 . . . . 238 Banker and Customer, relations between 123 Bankers' Bills ...... 216 ;6o Index. PAGt; Bankers' Books as Evidence .... 174 Bankers' Drafts ..... 238 Bankers' License ..... 254 Bankers Plundered by Charles II. 43 Banking, Antiquity of . II, ct seti. in Ireland ..... 84 in Scotland ..... 70 Reference to in New Testament 14 Science of, invented by Romans 23 Banking Act of 1879 (See Appendix) . . 273, 280 Bankruptcy, derivation of the word "5 Bankruptcy of Acceptor of Bill . . • ' 218, 227 of Drawer of cheque 170 of Party to Bill .... 227 Banks of Issue , . . • • 117 Barclay, Bevan & Co. .... 56 Barnetts, Hoares & Co. .... 52 Barons & Bishops in England as Coiners 36 Barton, Bernard — a bank clerk 67 "Bear" on Stock Exchange .... 298 " Bearer," cheques payable to . 141 Beckett & Co. (Leeds) .... 67 Belfast Bank ...... . 99, 100 Belfast Discount Co. ...... 99 Bellamy v. Majoribanks, what it decided 153 Beresford, John Claudius & Co.'s Bank (Dublin) 97 Billon, a Scotch coin ..... 82 Bills of Exchange (see also Acceptance) 181 Acceptor on . . . 183 Accommodation Bills 187 Advantages of . . . . 182 Alteration in ... . 235 Amount in . 194 Can be taken out of Statute of Limitations 236 Compulsory signing of . . . 23s Constituent features of . 194 Date on . 194 Definition of ... . 183 " Differing " acceptance 191 Differ from Cheques I S3 Discount . . . . . 229 Dishonour of ... . 322 Do not require a consida-alioii 185 Index. ;6i PACK Bills of Exchange (Continued). Drawee .... 195 Drawer . . . , 195 Drawn in sets 237 Early .... 26, 28, 181 Endorsement on . . IS4, 214 foreign .... . 213, 237 In foreign Languages, tables of translation s 310 Introduced into commerce . 181 Introduced into England 39 Left for acceptance 46 Liability on, how avoided . 214 order of 219 Loan on . 230 Lodged for collection 233 Lost Bill .... 236 Need not be on paper 193 Need not be written in ink . 193 Non-endorsement of 215 Notice of Dishonour of 220 Origin of . 26, 181 Payable at Acceptor's Bankers 190 Payable at Bank where acceptor has n( account 190 Payee .... 194 Payment and part payment of . 215,219 Persons incapacitated to be parties to 197 Place where payable 19s Post Bills .... 238 Post-dated Bill 194 Presentation for acceptance 216 payment . 217 Re-issue of . 212 Several Drawees on 191 Special means of recovering on 195 Specially payable . . . . 213 Stamp duties on . 202 Suing on . 190, 195 Time when payable 194 Transfer of . 213 Usual form of . . . . iSS " Value received ;" the words 195 When dishonoured . . . . 219 24 ;62 Index. pa<;e Bills of Lading ...... 217 As security .... 24S Bills of Sale, when required by Banker 250 Bill Stamp, exhausted by one transaction 212 Blackstone quoted ..... 29 his illustration of utility of Bills of Exchange 182 Bonnet-piece, a Scotch coin .... 82 Boyle, Low, Murray & Co. (Dublin) . 98 Brahmans, Banking amongst the ancient 14 Brass Money, coined in Dublin 79, 80 England 34 Britain (Ancient) 34 Greece (Ancient) 20 Rome (Ancient) 22 British Linen Company's Bank 71. 74 Britannia, on English coins .... 37 Britons, Coinage of Ancient .... 34 Brokers (partners) position of in respect to Bills 197 (See Stockbroker) .... Brutus, reference to .... . 25 "Bull"' on Stock Exchange .... 299 Burton and Falkener's Bank (Dublin) 89 Caesar quoted ...... 34 Cairnes, Sir Alexander, a Banker . . . . 55 Caisse D'Escompte (France) .... 32 " Cannot Pay," Insufficient answer of dishonour 168 Capital ....... 271 " Paid up "..... 272 " Subscrilied " ..... 272 Carlin v. Ireland ..... 159 Carrick & Co. (Glasgow) . . . . . 71. 74 " Cash Credit " ...... 74 " Cash Notes" ...... . 41 Cash Order ....... 1 88 Cato, referred to as a usurer . . . . . 25 Certificate of Shares ...... 274 Pledging 274 Do by Stockbroker . 275 Charles \. seizes the Goldsmiths' Moneys 41 Charles n. robs the Exchequer . . . . 43 Tin coined by . . . ; 35 Cheque Bank, The ...... 171 Cheques Index. Z^l TAGK es ....... 135 Alteration in . 139, 140 Amount in ..... . 138 Are not money ..... 166 Criminal offences by means of . 172 Crossed ...... 151 Date on . 137 Death of Drawer of . 170 Delay in jDresentation of . . . . 162 Dishonour of . 167, 169 Drawee ....... 136 Drawer's signature .... 143 Drawn by Administrator . . . . 145 Assignees in Bankruptcy 145 Company .... 145 Corporation 145 Directors .... 145 Drunken man 144 Executors .... 145 Firm .... 145 Idiot .... T44 Infant .... 143 Joint account holders 144 Lunatic .... 144 Marksman . . . . . »43 IMarried Woman 144 Partners . . . . . 145 Trustees .... 144 Essential constituents of . . . 136 Forgery of . 139 Form of ..... 136 Free gift of . 179 For illegal or immoral purposes 170 Known by ancient Grecian bankers 22 Roman bankers 24 In lodgment ..... 165 In payment of Bill of Exchange 166, 21S Initialing for payment .... 165 Lost ...... 172 ^Mutilated ..... " Not negotiable " .... 159 On engraved forms .... 165 Originate in England .... ^2 -4- ;64 Index. PAGE Cheques (Continued). Payable to "Bearer" ..... 141 "Order" . 141 Part payment of 167 Payee ..... 141 Payment of . 163 Postdated .... 137 Presentation of . 161 Right to sue on . 179 " Specially Payal)le" 142 "Stale" .... 162 Stamp on . 137 Stopping payment of 166 Under ;{,'"i 136 ^\^len paid .... 173, 178 Which are incapable of Dishonour 171 Wrongful dishonour of , 169 Child & Co 49 China, Ancient banking in . 15 Cicero, reference to . 24,29 Circular Notes ..... 240 Circulation .... 253 Of Irish Banks 259 Of Scotch Banks 260 Profits of . 262 City of Glasgow Bank 73 " Clearing House " 268 Method of working . 268 Returns 1867 to 1881 270 Clergrymen, Cannot be Directors of Bank 276 Clifford, Sir Thomas, referred to 43 CUpping Coin ..... 37, 38, 39 Cochrane v. O'Brien 130 Cocks, Biddulph & Co. 57 Coin, Current and manufactured (1840 — 1878) 38 Made Sterling 36 To be held against note issues 257 Coinage, Ancient Chinese 15 ,, Egyptian 16 ,, Grecian 19 ,, Jewish 12 ,, Lydian 19 ,, Roman 22 Early English 3. Index. ;65 Coinage — (Coutimied). Early Irish , , Scotch Colchestef, Jvoman mint at Collateral Securities . l-'olicies o Shares and Stocks ]5ills of Lading Uock Warrants Title Deeds Cioods Colebrooke, Sir George & Co.'s Bank (Dubl Collier, John, a London Banker Colville, John, a London Banker Commercial Bank (Aljerdeen) (Belfast) of Scotland Company, Cheques Drawn by . Endorsement by As party to a Bill of Exchan Composition Duties on Notes Compulsory Signing of Bill . Conditional Acceptance Conditional Endorsement Confidential Reports by Bankers Consideration, not necessary to Bill of Exchan, not requisite in Guaranty "Contango" .... Contract by Banking Company Convicted Felons, as parties to Bill of Exchanj Copper Coined by Servius TulJius in England Corporations, Cheques drawn by Endorsement by . As parties to Bill of Exchange Cotter & Co.'s Bank (Cork) Counterfeit Coin, payment in . Coutts & Co. .... Credit, Letters of . . . Margmal Criminal Offences, by means of Cheques Criminal Offences by Directors Stock Brokers •' Crockards " a base Irish coin n) 77 35 246 246 247 248 248 249 249 97 49 49 74 99 74 145 150 201 255 235 192 192 242 185 245 298 277 200 y:)': 37 145 150 201 100 163 52 239 240 172 70, 292 292 79 366 Index. J'AC;e Cromwell, Banking iintler . . - - - 41 Coinage under ----- 37 Crowns and Half-Crowns Coined - - - - 37 Crossed Cheques - - - - - - ^S^ Origin of - - - - - 151 '"Generally" . - . - 151 " Specially " . - - - 151 " Not negotiable " - - - - 159 Current Account ----- 42, 125, 135 Difters from deposit account - - - 135 Interest on - - - - - 17^ Overdrawn - - - - - 177 Compound interest on overdraft - - 178 At two branches of same bank - - 178 Date on Cheque - - - - - - -137 on LiU ------- 194 Dawson's Bank (Dublin) . . - - - 94 Days of Grace ------ 1S3, 212, 217 Death of Acceptor ------ 227 of Drawer of Cheque - - - - - i/O of Endorser - - - - - - 17^ Debts, I'-arly Roman law as to transfer of - - - 26 Deed of Transfer ..---- 235 Deeds as Securities ------ 249 Delacour's Bank (Ireland) ----- 100 Delay in Presentation of Cheque - - - - 162 Demar or Darner, a Dublin usurer - - . - S6 Dempster & Co., John (Fife Bank) . - - - 73 Demosthenes, reference to - - - - - 21 Dcimrius -------- 22 Deposit for safe custody - - - - - 12, 41, 251 Letter of ------ 247 of goods ------ 249 of securities ..---- 246 Depositor, as guarantor or security . - . - 131 Deposit Receipt .... - 41.125,127 Case of double liabihty of bank under a, - 131 Exempt from stamp duty - - - I33 In joint names - - - - 128 In name of Infant - - - - 129 Married Woman - - - 129 Spinster - - - - 129 Index. 367 Deposit Receipt — continued. In several names - - - - 128 Lost - - - - - . - 134 Not transferable - - - - 130 Deposits of Money, originate in England - - . 41 Ireland - - - 84 Dillon's Bank (Dublin) ..... 94 Directors of joint stock companies and their powers - - 271,277 Acceptance by - - - - - 201 Bill drawn by - - - - - - 201 Cheque drawn by - - - - - 145 Traffic in Shares by - - - - - 279 Clergymen cannot be - - - - - 276 Criminal offences by - - - - - 279, 292 Duties and qualifications of .... 277, 283 False or fraudulent representations by - - 278 Disclosure of Customer's Account - - - - 168 Discount .....-- 229 Principle of, known in Ancient Greece - - 22 „ ,, „ Rome - - 25 Dishonour of acceptance ..... 190 Notice of ----- - 220, 222 Remedy for - - - - - - 227 of cheque .-.--- 167, i6y "Cannot pay'' .... 168 "No account"' .... 168 "No funds" - - - - 168 " N. S.," or " not sufficient funds" - 168 " Present again " - - - - 168 " Refer to Drawer " ... 168 Notice of - - - - - 169 Remedy for - - - - I79 Wrongful - - - - - 169 Dividend, Payment of unearned .... 27S Dock Warrants as Security - ... - 248 Documents with Bills, Duty of Banker in regard to - - 217 Douglas, Heron & Co. ..... 72 Drafts, Bankers' ----- 238 Known by ancient Babylonian Bankers - 18 ,, Grecian Bankers - - - 21 ,, Roman >» ' " ' ~^- '^'^ Drawee's Name on Bill of Exchange - - - - 191. 195 on Cheque - - - - - ij4 368 Index. Drawer of Cheque, who can be - - - - 1 43 Drawer's Signature on Bill of Exchange - - - 1 95 on Cheque - - - - 143 Drummond's Bank .-..-. 56 Drunkenness of party to Bill of Exchange - - - 200 Dublin Bankers, Early ..... S4 Dublin Mints, Old ...... 78 Duncombe & Kent's Bank - - - - -51 Dundee Bank -.--.-- 73 Edinburgh and Glasgow Bank .... 73 Edinburgh and L'eith Bank ----- 73 Edward I. banishes Jews from England ... 40 Egibi & Co., the great Babylonian Bankers - - - 17 Egypt, -Vncient banking in . - - . . 16 Endorsement, What it is - - - - - 146 By administrator .... j^g By agent - - - - - i 50 By companies and corporations - - 150 By executor ..... j^g By two or more payees - - - - 150 By way of acknowledgment - - - 150 " Esquire " in an .... j^^g For the payee . - . . . 148 In pencil - . . . . 147 "Lodge," or "lodged to account," in an - 149 On cheque payable to " Messrs." - - 149 ,, "Mr." or "Mrs." - 148 ,, " Senior " or "Junior " - 149 On bill ...... 184, 214 Per procuration - - - - - 148 Restrictive - - - - - 214 When regular and irregular - - - 146 Endorser, on Bill of Exchange, liability of - - - 214,219 As surety ... . . . . 220 England, Bank of (See Bank of England) English and Irish Bank, The - . - - - 109 Enquiries, Confidential ---.-. 242 Entry in Bank Pass Book - - - - - 176 False ... - 176 Erasure of Crossing on Cheque - . - . 154 European Bank (Dublin) ..... 109 Index. 369 I'AGE Evelyn ([uoted - - - - - 3°) 3^. 43. 51. 59. 182 Exchange, Bill of (See Bills of Exchange) Exchequer closed Ijy Charles II. - - . - - 43 Executors' Current Account ----- 145 Executors, Endorsement by - - - - - 149 Fade & Co.'s Bank (Dublin) - - - - - 89. 93 Failure to Present Bill of Exchange - - - 218, 219 False Entries : — Pass Book - - - - - 176 in Bank Balance Sheet . » - . 278 Farthings, First coined in Dublin .... 78 Felons as parties to Bill of Exchange - - - . 200 Ffrench's Bank (Dublin and Tuam) .... 98 Fife Bank -..--.. 73 Finlay's Bank (Dublin) . . _ . . ^4 Firm, Cheques drawn by - ... - 14^ Florence, Banks of ----- - 27 Florins .---.--- 36 Forbes' (Lord), Bank project (Ireland) - . - gg Sir William & Co. 's Bank -71,74 Foreign Bills - - - - - - 212, 237 Stamp on - - - - - 212 Protest of . . - . . 222 Translation of Terms used in - - . 310 Foreign Letters of Credit in Ancient Greece - - - 21 Rome - - - 26 Forged Bank Notes --...- 264 Passed to banker - - - . 264 Forged Endorsement ----- 147, 173^ igo Forgery of Cheque - - - - - 173 of Bank-notes ---.-- 267 of Drafts drawn under letter of Credit - - 240 of Transfer of Shares ----- 276 Fourpenny Pieces first coined ----- 38 Fraudulent Purpose, Cheque for - - - - 172 Fuller, Banbury & Co. ------ 56 Furfidius, A Koman Money-lender . . - . 25 Gambling Debt, Acceptance for - - . - |g^ Garfit & Co. (Boston) ------ g^ •' General Acceptance" . - . - . jgg o/' Index. I'ACiE Gift of Cheque ----- - - 179 " Giving Time " .... - - 244 Glasgow Banking Co. - 74 Glasgow Bank, City of - - - - ^ Glasgow Joint Stock Bank - . - 73 Glasgow Union Bank - 74 Gleadowe & Co. "s Bank (Dublin) - - 92 Glyn, Mills, & Co. - - - 55 Godfrey, Michael, A founder of Bank of England - 59 Gold and Silver Coin held against note issues - - 259. etc. Gold Coins, l-irst English . 36 Gold in Ancient Ireland - - n " Golden Bottle," sign of Iloare's Bank . 50 Goldsmiths, Early Dublin . . 84 Early London - - 39, 5- London, in Elizabeth's reign - 41 Plundered by Charles I.- . - 41 Charles II. - 43 Goldsmith's Notes .... - 41, S4, 18s, 253 Goods, -\s securities . - . . - , 249 Goslings and Sharpe - . - - - - 50 Grace, Days of - - 183, 212, 217 Grammont quoted . . . . - 45 Greece, Banking and Coinage of Ancient - - 19^ Gresham, Sir Tliomas .... . . 52 Guaranties by third parties - - 243 Guarantie, Defarition of - - - . . 243 Consideration not necessary - 245 General .... . - 244 Giving time under - . - 244 Limit of by Guarantor - - 244 Specific .... - - 244 Verbal .... - - 243 When invalidated - 244 Withdrawal of - - - . . 244 Guarantor of Bill .... - - 227 Release of - - . 244 Guineas first coined . . .■ . . - 37 Punishment for "sweating" - - 82 Guinness, Mahon & Co. (Dublin) - - 98 Half Notes . 265 Harp of Ireland, first quartered on coinage - - 37 Index. 2)1 "^ Henry's (Hugh) Bank (Dublin) .... 89 Henry VIII. a borrower from a goldsmith ... 41 Herries, Farquhar & Co. ----- 56 Hibernian Bank - - - - - - 106 Hoare's Bank - ----- - 50 Holidays, Bank - - - - - 162 on Stock Exchange ----- 297 Homer's reference to Brass money - . - - 20 Horace, His character of Furfidi.'.s the money-lender - - 25 Horneby, Joseph . - . . - 47 Houblon, Sir John, I*"irst governor of Bank of England - 60 Hunters & Co. (Ayr) - - - - - - 71, 74 Humbug, derivation of wonl ----- 80 I. O. U. 267 Does not require stamp duty - - - - 268 Is not transferable ----- 268 Idiot, Cheque drawn by . - - . . 144 As party to a Bill of Exchange - - - - 199 Illegal or Fraudulent Purpose, Acceptance for - - 185 Cheque for - - - 170 Indemnity, Letter of, for lost instrumeiu . . . 309 Infant, As Depositor - - - - - - 129 As Drawer of Cheque ... - - 143 As Endorser on Bill of Exchange - - - 198 As party to Bills of Exchange - - - - 198 As agent ...... 199 Initialing Cheque for future payment - - - i6o, 165, 170 Instalments, Promissory Note payable b}- - - - 187 Interest allowed by early Goldsmiths - - - - 41 on Current Accounts - - - 176 Deposit Receipts . . - 128 Charged on overdue Bills . - . . 234 Irish Banks, Early .-.-.- 84 Irish Banks of Issue, 1 -aw regulating - - - - 257 Irish Coinage, Early ...-.- 77 irish Joint Stock Banks - - - - - 102, 110 Failed - - - - iii Irish Money assimilated to Englisli - - - - 38, 82 Iron used for money ,-.... 34 James II., his Brass Money - - _ . 80 61-^ Index. VAGE Jews, Banished l)y Edward I. - - - - - 40 Banished by Elizabeth - - - - - 27, 40 Banking amongst the Ancient . - . - 12 Established Banking Houses in Europe - - - 27 Examples of usurious practices of - - - 40 Lombard - - - - - - -27, 40 Only Ijankers in England . - . . ^9 Persecution and plundering of - - - - 40 Sent to England by Pope (Gregory IX. . - - 40 Johnston, Lawson & Co. (Dumfries) - - - - 72 Joint and Several Promissory Note - - - - 186,201 Joint Current Account, Cheques drawn on - - - 144 Joint Names in Deposit Receipt . . . . 128 Joint Promissory Note . . , . . 186 Joint Stock Banks in England .... 67 Ireland .... 102 Joint Stock Company, as party to Bill - - - 201 Definition of - - - - 271 Acts of, 1856 and 1857 - - 273 Julius Caesar's Coinage . . - - . 23 "Junior " in an Endorsement - ... - 149 Justinian's regulation of rates of discount ... 26 Kane (a Dublin Banker) .... - 89 Kinnear & Sons (Edinburgh) .... - 72 Knox, Sir John, Patent for Irish coining granted to - - 80 Lamb, Samuel — A London Banker - - - - 41 La Touche's Bank (Dublin) - - - - - 88, 89 Law Regulating Irish Note Issues - - - - 257 Laws to regulate Banking in Ancient Rome ... 24, 26 Leases as Securities ------ 249 Leather Money in Ancient China - - - - 15 *• Leeman's Act " ...... 275 Legal Tender ------- 163 Leith Bank .-.--.- 73 Lennox's Bank (Dublin) . . . - - 93 Leofstan, a London Goldsmith ... - 39 Letters of Credit ...... 239 Known in Ancient Babylon ... 18 ,, ,, Greece - - - 21 ,, ,, Rome ... 26 Index. 2>1^:y Liability, Endorser can divest himself of - - - 214 on Promissory Notes , . . . 220 order of, on Bill of Exchange - - - 219 of Bank Shareholders .... 274 of Bankers for conduct of Agents and Correspondents 242 for false reports on customers - - 242 for goods deposited for safe custody - 251 under forged or worthless Bank Notes - 264 License, Banker's ...... 254 Licensed Houses, Lease of, as securitj - - - 249 Lien, what it is - - - - - - - 240 General --..--- 240 How extinguished - - - - - 241 On Bills lodged for collection .... 233 On policy of Assurance ... - - 246 Specific -....-- 240 Where a Banker has no lien .... 241 On shares ...... 275 On Dividends ------ 277 Lighten, Needham & Shaw's Bank (Dublin) - - 98 Limitations, Statute of - - - - - . 235 Limited Companies ------ 272 As parties to Bills of Exchange - - 201 Limited Liability ...... 272, 281 List of Shareholders, must be exhibited - - - 273 Litter a: Bancales ....-- 28 l.ittem Cambitoruv ...... 28 Livy, reference to ----- - 24 Loan on Bills of Exchange .... - 230 " Lodge " and " Lodged to Account " in an Endorsement - 149 Lodgment with Banker, two descriptions of - - - 123 for special purpose - - - 178 Lombard Jews sent to England - - - - 27, 40 Lombard Street - - - - - - 27, 41 London and County Bank ..... 69 London and Dublin Bank - - - - - 1 1 1 London and Westminster Bank . - - . 69 London Bankers, ]^arly ..... 39 London Joint Stock Bank ----- 69 Loss or Destruction of Bills lodged for collection - - 233 of goods deposited for safe custody - 251 Lost Bank Notes ----- 265 Lost Bill of Exchange . . - . . 236 ;74 Index. )'A(;e Lost Cheque - - - - - - 172 (See also Appendix for form of Letter of Indemnity.) Lunatic, as party to a Bill - - - - - 199 Cheque drawn by - - - - - 144 Lydians, The inventors of coinage - . - . 19 Lyndsay, John, a London Banker . . . . 49 Macaulay quoted ...... 28 Malone & Clement's Bank (Dul)lin) - . . . ^■^ Marginal Letters of Credit . . . . . 240 Marks, coined in Dublin - . - . . 78 Marksman as drawer of Cheque .... 14-5 Married Woman as Depositor - - - - - 129 as drawer of Cheque - - - . 144 as party to a Bill ... 199 as Shareholder .... 276 (See also Appendix.) Martin & Co. (London) - - - - - 51 Maiiin v. Bourc ...... jgi " Marygojde," sign of Child's Bank . . _ . 49 IMattJticsson and An. v. London and County Bank - - 157 Maturity of a Bill of Exchange, How computed - - 217 Maunsell's Bank ( Limerick) - ... - 100 McAdam, John & Co. (Ayr) ----- 72 Meade and Curtis's Bank (Dublin) - - - - 89 A/iiisai-ii, Ancient Roman Bankers - - - - 24 Merchant Banking Co. of Glasgow . - _ - 72 " Messrs.," l-'ndorsement of Cheque payable to - - 149 Miles, Cave, Baillie & Co. (Bristol) - - - - 67 '' Milling "' on coins first introduced . . - . ^7 Mints, Dublin --.--.- 78 Crecian --.-.-. 20 Early Irish --.-.. 78 Roman, in England . . . - . j^ ]\oyal and other English - . - - ^5 .Saxon ------- ^c Misrepresentations Ijy Directors - - . . 278 by Banker to Guarantor - - - 245 Mitchell and Macarell's Bank (Dublin) - . . 94 "Moneyers" ---.-.. 3^ Money in payment of Bill - , . . . 218 Money-Lending among the Jews . . - . 12 Monti, the early Italian Loan Bank.s - - - . 29 Index. 375 PAGE Montrose Bank ...... 73 Moses, Laws of, against usury - . . . 13 " Mr." or " Mrs.," ill an Endorsemenl - .- - 148 Munster Bank ------- 108 Mutilated Cheque ..-.-- 169 " Name Day," on Stock Exchange - . - - 297 National Bank (of Ireland) ----- 107 National Debt, First European .... 29 National Land Bank of England . . . . 66 Necessaries, Infant's acceptance for . . . . jgg Nci^ociatorcs, Ancient Roman Bankers - - - - 24 Newcomen's Bank (Dublin) ----- 92 Newenham's Bank (Cork) ... - - 100 Newport & Co.'s Bank (Waterford) - - - - 99 " No Account " ...--- 168 "No Funds" ------- 168 Nobles Coined ...... 36 Non-Acceptance, Notice of - - - - - 216 Non Compos Mentis, Party to a Bill of Exchange - - 199 Non-endorsement of Bill by Transferor - - - 215 Non-Presentation, When it relieves Acceptor - - 219 Northern Bank (Belfast) - - - - - 99. io9 " Not Negotiable," Crossing ... - - 156 What it means - - - - 159 '' Not Sufficient Funds " ----- 168 Note, Promissory (see Promissory Note) ... 186 Note (Bank), Definition of - - - - . 253 Note-issue, A source of profit . . - - - 262 Difference between English, Scotch, and Irish - 76, 260 Note-issues of Irish Banks ----- 259 of Scotch Banks . . - - . 260 Note of Hand (see Promissory Note) . - - . 186 " Notes," for threepence (Ireland) - . - - 100 Notes burned by populace (Ireland) - -. - - 98 Notice of Dishonour of Bill of Exchange ... 220 Examples of sufficient ... 224 ,, insufficient - - - 223 Byles' form of - - - - 226 of non-acceptance - - - - - - 226 of withdrawal of Deposits ... - 228 to acceptor ... - - - - 226 to Drawer and Endorsers - - - 192,220,222 ;76 Index. rAGE Notice to guarantor on Bill . . - . . 227 Noting - - - - - - - » 221 NuJiiDtiilarii, Ancient Roman Bankers - - - - 24 Nuttall & McGuire's Bank (Dublin) - - - - 89 Obligations of Banker to his Customer - - - 125 Obliteration of crossing on a Cheque - - - - 154 O'Connell (Daniel), Founder of National Bank of Irelau'l - 107 " Options " on Stock Exchange .... 298 " Order, " Cheque payable to - ' - - - - 141, 146 " Ordinary Care " of safe custody deposits - - - 251 OReyley's Money (Ireland) ----- 79 Origin of Crossed Cheques ----- 151 Ostensible Partners - - - - - - - 198 Otto, The first English Goldsmith - . - - 39 Overdrawn Current Account - - - - - 177 Overdue Bills ------- 228 Interest on . - . _ . 234 Over-payment by Banker ----- 164 Paid Bill of Exchange . - . - . 215 Paid Cheques ------- 173 Surrender of - - - - - I73. 17S " Paid-up ■■ Capital ------ 272 Paisley Bank ------- 74 Paisley Union Bank ------ 74 Paper Money, in Ancient China .... i^ Modern - - - - - 187, 253 "Par" -------- 298 Part Payment of Bill of Exchange . - . - 215,219 of cheque - - - - - 167 Particular Acceptance - - - - - - 189, 219 Partners, Ostensible - - - - - - 198 Powers of, in respect to Bills of Exchange - - 197 Secret .--... 198 Partnership Current Account ----- 145 Pasion, The great Grecian Banker - - - - 21 Pass Book ..--..- 175 Effect of Entry in - - - - - 176 Past Due Bills, Interest upon ----- 234 Patent for Irish Coinage, Granted by Charles IT. - - 79 Granted to Wood - - - 81 Paterson, William — Founder of Bank of England - - 59 t Index. 01 / PAGR Paul, Sir John Dean, failure of his Bank 48 Payee of Bill ...... 194 of Cheque ..... 141 Payment of Bill, I'resentation for 217 by money .... 21S by cheque .... 218 Payment of Cheques ..... 163 Cannot be recalled 164 Stopping 166 in Bank Notes . . 163 in forged, or worthless notes 163 in legal tender 163 in spurious coin . 163 Pease's Bank (Hull) 67 Pectmia, Derivation of . 22 Pencil, Bill of Exchange written in . 193 Endorsement in . 147 Pennies, Copper, first coined . 38 Silver 35 first coined in Ireland . 78 Pepys (Samuel), quoted 45. 46, 49, 50. 52 " Per Procuration," Bills drawn 193 Cheques endorsed 1 48 Persons incapacitated to be parties to Bills of Exchange 197 Perth Bank ...... 73 " Pieces of Silver," Jewish .... 12 Pike's Bank (Cork) ..... 100 Pistoles coined in Scotland . . . . . 82 Place where payable, on Bill of Exchange 195 Plack, a Scotch coin ..... 82 Policy of Assurance as Collateral Security 246 Form for assignment of . 247 "Pollards" — a base Irish coin .... 79 Pompey — a usurer 25 Portman, John . . 49 Portraits of Kings on coins 23 Post Bills 238 Post dated Bill of Exchange 194 Post dated Cheque 137 Praed's Bank . 56 PrcBscriptiones 24 Premium on shares . 273 o/' Index. Presentation of Bills of Exchange : — For acceptance For payment Presentation of Cheques : Delay in Time of Presentation of Promissory Notes " Present again," insufficient answer of dishonour Prescott, Grote & Co. Price's (Mr. Hilton) Book on London Bankers Private Bankers Dublin (early) ,, (present) English ,, issues of London (early) ,, (present) in Scotland Private Enquiries "Privity" .... Profits from Scotch and Irish note circulation Project to establish a National Irish Bank (1720) Promissory Notes Definition of Joint . Joint and several Order of liability on Origin of Payable by instalments Presentation of To one's self Specially payable When not enforceable Usual form of Protesting " For better security" Registered Protest Provident Bank of Ireland Provincial Bank Qualified or Conditional Acceptance Railway Company as party to a Bill of Exchange Ramsay, Bonar & Co. (Edinburgh) . 216 217 162 161 219 168 56 39 84 98 67 68 43 49 71 242 123, 179 262 88 185 186 186 187 220 18S 187 219 187 213 220 186 221 222 221 III 105 192 201 72 Index. 179 Ransom, Bouverie & Co. Rate of Discount Actual rate charged is in excess of apparcn rate . Rate of Interest Charged in Ancient Greece . in Ancient Rome . by Ancient Brahmans Early legal regulations (Ireland) Ratification by Principal of Agent's Act of acts done while drunk . of Infants' contracts Realisation of Securities . . . .177 Rebate on Bills .... How a Banker should compute it for his yearly Balance Sheet . Redmond's Bank (Wexford) " Refer to Drawer " Refusal to Accept Refusal to Transfer Shares Relations between Banker and Customer Release of Guarantor . Remedy for Dishonour of Bill of Exchange of Cheque Renfrewshire Bank Reports on Customers, Banker's Restrictive Endorsement on Bill of Exchange Richard I. massacres Jews Rider, a Scotch Coin Right to Sue on Bill of Exchange . . .184, on Cheque Robarts, Lubbock & Co. Roberts & Co.'s Bank (Cork) . Roche's Bank (Cork) Rogers, Samuel, referred to Roman Coinage, Ancient Rome, Bankers in Ancient Royal Bank of Ireland Royal British Bank Rowe, Thomas, a London Goldsmith . " Running Account," origin of Sadlier, John, M.P. (The Tipperary Bank) " Safe Custody "... 241, I'AGE 229 229 21 26 14 84 197 200 198 250 2^0 231 ICO 168 192 276 123 244 227 179 73 242 214 40 82 189, 220 179 56 100 ICO 57 22 22 108 73 49 42 III 251 25- ;8o Index. r'AGK Sans Frais ...... 222 Sans Protet ...... 222 Sans Recoiu's . ..... 214 Scotch Banking, Differs from English and Irish 74 Scotch Banks, Table of existing 76 Law regulating Issues of 259 Scotch Coinage, Early ..... 77 Scotland, Banking in . 70 Bank of .... . 70 Royal Bank of .... 71 Private Banking in . 71 Scott, Sir Samuel & Co. 57 Scrip ....... 297 Scruptdum ...... 22 Scully's Bank (Ireland) ..... 100 Secret Partners ..... 198 Securities, Deposits of . 246 Realisation of by Banker . . .17 7, 241, 250 " Senior," in an Endorsement .... 149 Separate Estate, a married woman's 144 Sets, Bills of Exchange drawn in . . . 237 Several Drawees on Bill of Exchange 191 Severus', constitution of, in reference to transfer of debts 26 Shares and Shareholders .... 271 and Stock, Deposit of . 247 Transfer of .... , 273 Definition of . 285 Shares (Bank) Forgery of transfer 276 Held by mamed woman 276 Held jointly .... 276 Lien on . 276 Purchase of by Bank itself 277 Refusal to Transfer 276 Traffic in by Directors . 278 Are personal property . 274 Broker's contract for purchase of 275 Liability of seller of 274 Shareholders, Liability of ... . 274 Lists of . 273 Shaw(Sir Robert) & Co. (Dublin) . 98 Shekel, Jewish ...... 12 Shetland Bank 73 Shillings first coined . . 38 Index. ;8i " Short Bills " . Sight, At . . . After Signature of Drawer of Bill of Cheque Signing on Compulsion Silver Coinage for Ireland, the Patent to Vyn Silver Pennies . Simiiwnds v. Taylor Skeatta and Styca — Early British Coins Skill, want of, in transacting customer's business Smith and Co. (Samuel), Nottingham Smith, Donald & Co. (Edinburgh) Smith, Payne and Smiths Smith V. Union Bank of London Snell, George .... Snow, Jeremiah Societies, as parties to Bills of Exchange Southern Bank of Ireland Scotland Southwell, James — A Dublin usurer . Sovereigns first coined Special Acceptance Special Lodgment "Specially Payable" Specific Lien Spinster as a Depositor Spurious Coinage by Ancient Britons Irish in William IIL's Spurious Notes, payment in Squirrels (Three), Sign of Gosling's Bank St. Patrick coins money " Stale Cheque "... Stamp Act, 1870 Stamp Duties .... Instruments Exempt from On Bank Notes . On Foreign Bills T^aid by early Irish Private Ban! Statute of Limitations Does not apply to Bank Notes Sterling, coins first styled 143: -ign 2J4 194 194 195 143 235 44 35 J95 35 126 67 72 57 154 47 47 201 III 73 86 38 189 178 142 240 129 34 78 163 50 78 162 202 202 211 255 237 loi 235 265 36 3S2 Index. Stirling Bank '* Stock," definition of Stock-jobbing' Debt, acceptance for Stopping Payment — of Bank Notes of Cheques Stock Broker Frauds by Qualifications of . Stock Exchange (London) :— History of Constitution of Mode of dealing on Stock Exchange (Dublin) Stock-jobbers Strahan, Paul & Bates " Subscribed " Capital Sue on a Bill, right to Cheque, right to Surrender of Bills of Lading Stow quoted . "Sweating" the Coin, punishment in Ireland for Swift & Co's Bank (Dublin) . Swift, Dean, his attacks on Wood's halfpence Elegy on John Damer . Lines on Snow, tlie Banker A Banking Experience of On the Irish Coinage On the Irish Bankers (1727) " Sworn Broker " Testoons coined in Dublin Thistle Bank (Glasgow) Thomson, A. G. & A. (Glasgow) Threepenny Pieces first coined . Tin, coinages of Tipperary Joint Stock Bank . Time w^hen payable, of Bill of Exchange Title Deeds as securities *' Tokens " in Ireland . Transfer of Bank Shares Trapezitae — The Bankers of Ancient Greece Travers, Sheares and Travers (Cork) Trusts not recognised in shareholdings 73 285 185 264 166 285, 289 292 288, 296 286. 288. 289, 294. 29s 289 48 272 184, 189, 220 179 21-7 40 &2 89, 92 81 86 48 54 81 87 291 79 74 72 38 35 III 194 249 80 275, 276 21 100 276 Index. o"o Trustees, Cheques drawn by Turner, Bernard Tuscany, Banking in the Middle Ages in . Two Current Accounts kept by one person Ulster Bank Undated Cheque Undue Influence, Bill or note given under Unicorn, a Scotch coin Union Bank of Ireland London Scotland Unfilled Stamp, Acceptance on . Unlimited Companies Unlimited Liability Unstamped Bill of Exchange . Usury, derivation of word Usury Laws Abolished Usury, Laws Against : — English Early Irish Mosaic Roman (Ancient) "Value Received " Vyner, Sir Robert Sir Thomas Welstead, Robert, a London Goldsmith Western Bank of Scotland Whitehall, Gilbert, a London Goldsmith Wicklow Goldmines . Williams and Finn, Dublin Bankers Williams, Deacon & Co. Winchester, Mint at . Wood's Bank (Gloucester) . Wood's Halfpence (Ireland) Words of Acceptance on Bill of Exchange Worthless Bank Notes, Liability under Wright & Co. (Nottingham) Wrongful Dishonour of Bill of Cheque 144 47 27 178 110 137 200 82 III 69 72, 74 191 272 72, 281 211 24(«.) 235 234 24, 25, 26 195 44 44 49 73 47 77 98 57 35 67 Si 191 264 67 190 169 384 Index. STATUTES. The Banking Copartnerships Regulation Act (1826) , , (The Act Authorising Joint Stock Banks) The Companies Act (1862) . . . . Sale and Purchase of Shares in Joint Stock Banking Companies ("Leeman's Act ") . . . . The Companies Acts Amendment Act (1877) The Banking and Joint Stock Companies Bill {1879) . Act relating to Crossed Cheques (1856) Do. (1858) . Do. (1876) . Bank Notes and Bills Composition Stamp Duties (1828) Stamp Duties (1870) An Act to abolish "Days of Grace " on Bills at Sight {x'i'ix) Compositions for Stamp Duty on Bank Post Bills (1864) Do. Validity of Cheques or Drafts for less than £\ Clergymen as ■Members of Joint Stock Banks Bank Holidays Act (1 87 1) Holidays Extension Act (1875) • Bankers' Books (Evidence) (1867) (i860) (1841) 326 327 328 ZIP 334 334 336 338 344 345 346 347 348 348 350 352 352 THE END. JAMES CORNISH AND SONS, 297, HIGH HOLBORN,,W.C. KELLY'S KEYS TO THE CLASSICS. Literal English Translations of thi; Latin and Grkkiv L'la^^k>. GREEK. . J on the Crown, and^Eschines. BvK. Mongan 'J (t EURIl'IDKS' Medea. Literally translated by R. Mongan, B. A. 1 EURIPIDES' Hecuba. Litcrallytranslatcd by R. Mongan, B.A. 1 (t EURIPIDES' PhoBmssaj. Lit. trans, by R. Mongan, B.A. -1 (i EURIPIDES' Aloestis. Lit. trans, by Roscoe Mongan, B.A. - 1 EURIPIDi;s' Ion. Lit. trans, by Roscoe Mongan, B.A. - - 1 li HOMER'S Iliad(Books 1 to 8). Lit. trans, by C \V. Bateiuan - li (• HOMER'S Iliad (Books 1 to 4) Translated literally into Eng- lish prose, with original notes, etc., by C. W. Bateman - 1 (J HOMER'S Iliad (Books 5 to S). By C. \V. Bateman - - - 1 i; HOMER'S Iliad (Books 9 to 12). Lit. ti-an.s. by R. Mongan - 1 (i HOMER'S Iliad (Books 1.3 to 16). Lit. trans, by R. Mongan - 1 C HOIMEKS Iliad (Books 17 to 20). Lit. trans, by R. Mongan - 1 C HOMERS Iliad (Books 21 to 24). Lit. trans, by R. Mongan - 1 (1 HOSIER'S (Jdyssey (Books 1 to t>). Lit. trans, by R. Mongan 2 o HOSIER'S Odyssey (Books 7 to 12). Lit. trans, by R. Jlongan 2 o HOMER'S Orlvssey (Books 13 to IS). Lit. trans, by R. Jlongan 2 o HOMER'S ( )dyssey (Books 10 to 24). Lit. trans, by R. Mongan 2 (i HOSIER'S (_)dyssey (Complete). Lit.trans.byR.Mongan - !! (i PLATO. The Apology of Socrates and Crito, with the Pluedo. Literally translated by J. Ecoleston, B.A. - - - -2 SOPHOCLES' CEdipus Tyrannus. Lit.trans.byR.Mongan- 1 SOPHOCLES' Antigone. Lit. trans, by Roscoe Mongan, B.A. 1 SOPHOCLES' .Vjax. Lit. trans, by Roscoe Mongan, B.A. - 1 o SOPHOCLES' Philoctetes. Literally tran.slated by R. Mongan 1 XENOPI ION'S Anabasis (Books 1 to S). By T. J. Arnold -1 f. XENOPHOX'S Anaba.sis(Books4and.5). By T. J. Arnold -1 (! XEXOPIK )X'S Anabasis (Books 6 and 7). By T. J. Arnold - 1 C XENOPIIOX'S Analxisis (Complete). Lit. trans, by T. J. Arnold 3 (i XENOPHON'S Hellenics (Books 1 to 3). Literally translated by Roscoe Mougan, B.A. 2 (i XENOPHON'S Cyropajdia (Books 1, 2, 3). Lit. trans, by R. Mongan -----2(i XENOPHON'S Cyropwdia (Books 4, 5, 6). Literally translated 2 XENOPHC )N'S CyropaMia (Books 7 and S). Literally translated 2 (i XENOPHON'S Agesilaus. Lit. trans, by K. Jlnngau, B.A. - 2 Kelly's Keys to the Frencli Classics. CORNEILLE'S Cinna. Lit. trans, by Roscoe Mongan, B.A.- 1 (i CORNEILLE'S Le Cid. Lit. trans, by Roscoe Mougan, B.A. 1 (; CORNEILLE'S La Suite du Mentcur. By R. Mongan, B.A. - 1 CORNEILLE'S Horace. Lit. trans, by Roscoe Mongan, B.A. 1 (> MOLIERE'S Tartuffc. Lit. trans, by Roscoe Mongan, B.A. - I (i MOLIERE'S Le Malade Imaginairc. By R. Mongan, B.A. - 1 ti RACINE'S Athalie. Lit. trans, by Roscoe Mongan, B.A. - 1 RACINE'S Phedre. Lit. trans, by Roscoe Mongan, B.A. - 1 (• London: JaMES CORNISH & SONS, -''"- High Holbom, W.C. IS, GrciJ'ton St., Dublin, andSl, LordSt., andii. North Jolin St., [Jverpoo!. BH. GII.ES'S KEYS TO THE CLASSICS. GREEK. £s. d, Aristotle's Xic'iia;iclxoan Ethics — Books I. to V. - -COO ^schylus, i'lNjuietlieiis, iiiid Suppliants, vfith the ■Seven against Thebes, au'l the Persians Agamemnon, Chfei>liorus, and Enmenidcs Euripides, Phtenissa?, and Medea - Hecaiba, and Orestes Homer's Iliad— Books I. to VI. - ■ Books VII. to XII. - - . . — Books XIII. to XV. - - . - Books XVI. to XVIII. - - - . Books XIX. to XXI. - . - . Books XXII. to XXIV. (in tlie press) - Odyssey— Books I. to VI. Books VII. to XII Book XVII. ( )dyssey— Books XIII. to XVIII. Books XIX. to XXIV. Longinus on tlie Sublime Pindar's < )des— Part I. (Olympics and Pythians) Part II. (The Xemeans and Istlimians) Plato's Apoloi^y of Socrates and Crito - - - . Xenophoil's Auabasis^Books I. and II. - - - Books III., IV., and V. - Books VI., VII. Memorabilia — Books I. and II. Books III. and IV. .'J :; •2 ti tJ 6 3 (i s () ti 6 •J (i 2 t> •2 () ?. 3 1 6 3 3 2 6 2 1 6 2 2 3 2 6 2 6 2 6 1 1 S 2 G 10 2 6 2 6 2 f. 2 6 10 The New Testament. Complete, '2 vols., cloth - ■ — . bound in calf- Parts to be hud sciiaratelv, as follows : — St. Matthew, St. Mark, St. Luke, St. Jolin, each The Four Gospels. Bound in 1 vol., cloth . - - - The Acts of the Apostles The Epistles of St. Paul— Part I. (Romans to Corinthians) ■ — Part II. (Galatians to Hebrews) The General Epistles and The Revelation of St. John - Tlio above four books bound in 1 vol., cloth ... \r The set complete of Dr. Giles's Keys to the Classics, in 04 volumes, price £c> 16s. 6d., makes both a useful and valuable addi- tion to any Library. EASY METHOD OF LEARNING THE MODERN LANGUAGES. O/i the HasisoJ"" I)r. Criles's Keys to the Classics." Key to German— Schiller's Revolt of the Xetherlands. Chaii. I. to IX. - Thirty Years Wars, Bonk I. Key to Italian — I Promes.si Sposi. Chapters I. to IV. Key to French— St. John's Gospel. French-English - Voltaire's Charles XII. Books I. to IV. 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