STAMP DUTIES (DRAFTS ON BANKERS) BILL. (Hansard, 11 May 1855)

THE CHANCELLOR OF THE EXCHEQUER

said, the House might recollect that he stated, on a former occasion, that he should submit to their consideration a proposal for extending the present 456 penny stamp on bankers' cheques to all cheques which were drawn within a distance of less than fifteen miles from the Bank. As soon as his proposition was made public, he received various communications from bankers and others who would be especially affected by the proposed duty. It was represented to him that the operation of the duty would be to discourage, to a great extent, the banking trade, by preventing customers from drawing cheques of small amount; and he learnt that the practice of making small payments by cheque had increased of late years, and that it had been found beneficial to traders, more especially to small traders, who were thus enabled to economise their payments and to keep their accounts in a more regular manner. He confessed that before he received the communications to which he had referred, he was under the impression that the average amount of the cheques drawn upon bankers was considerably above 5l., or even 10l.; but from the evidence laid before him he could not doubt that in London, particularly, the practice of drawing cheques for small sums prevailed to a very great extent, and that it was on the increase. It had been stated to him by gentlemen with whom he had had an interview, that the number of cheques paid by the London and Westminster Bank, and the National Provincial Bank of England, not exceeding 10l., was 33 percent of the whole. It could scarcely be doubted that the imposition of a penny stamp in the case of cheques of that description would operate as a discouragement, and it had therefore been suggested to him to exempt from the proposed duty cheques below 10l. Now, if this suggestion were adopted, a very complex state of the law would arise. With regard to the cheques drawn more than fifteen miles from the Bank, there would be a stamp duty of a penny, whatever might be their amount. On the other hand, with regard to cheques drawn within that distance, there would be a double class; there would be cheques above 10l. with a stamp, and cheques below that sum without one; and this distinction would create great inconvenience, and would be sure to raise the question, whether cheques ought to be subject to a stamp at all. Moreover, a difference with respect to amount would open an easy means of evasion, and persons who were influenced by a desire to save even the small sum of a penny on a cheque might draw several cheques under 457 10l. in order to evade the duty. He thought the House would agree with him that in imposing new charges on the public, it was most important to avoid, if possible, doing anything which would interfere with the operations of trade, or in any way check the production of wealth. Having given the best consideration in his power to the facts and arguments which had been presented to his mind with respect to the probable operation of this small stamp duty on cheques—looking to the present state of the finances, and to the fact that in estimating the Ways and Means to meet the expenditure of the next year, he deemed it prudent to leave a sufficient margin for contingencies, he had come to the conclusion that for the present, at least, it was not desirable that he should persist in his proposition. He had estimated the amount to be derived from the new duty at 200,000l. There were very different opinions on that subject. On the one hand ho had been told that his estimate was greatly under the truth, and that the duty would produce 600,000l. or 700,000l. Gentlemen who took that view of course did not concur in the opinion that it would discourage the practice of drawing small cheques. On the other hand, he had been told that, inasmuch as cheques would be payable, to a great extent, to bearer and not to order, the cheque would, by a simple process, be converted into a receipt, and the public would lose the benefit of the proposed duty—that he should lose in receipts to a greater amount than he should gain in cheques. On the whole, he did not think the present state of the finances of the country made it incumbent on the Government to urge this proposition any further.