CHEQUES.1 W E trust the Chancellor of the Exchequer will recon-
sider and recast his proposals in regard to an in- creased Stamp-duty on cheques. His suggestion in regard to a rebate of a penny on cheques below 42 was met with loud laughter in the House of Commons, and not unnaturally, for the notion of the householder sorting his cheques once a year and then trudging off to the nearest post-office to be hectored by the young lady " in the cage" as to the number of pennies she is to refund him is sufficiently grotesque. One can picture the scene : the middle-aged British gentleman asking how much longer he is to be kept waiting, and ironically pressing her to finish her talk with her friend as he is, of course, in no sort of hurry ; and the young lady tossing her head, and in revenge making sarcastic remarks sotto roes and over her shoulder, as she sorts and counts the drafts, on the nature and sex of the payees,—' Oh, Miss Ada only gets 25s. this journey ; last cheque she had 41 10s.' ; or, 'I wonder who Sarah Jones is ? She does get a nice lot of little cheques, don't she ? ' But the laughter was not all at the Chancellor's simplicity in thinking the scheme would be appreciated. The greater part of the amusement was occasioned by the thought of the cuteness of the Treasury, and their relying upon the fact that practically only a few old maids and pedantic gentlemen of complete leisure would ever trouble to return the cheques to the post-office and claim their pennies. The House, in other words, was chiefly amused at the notion that though the concession sounded so generous, it practically amounted to nothing. Of course no one can object in principle to Sir Michael Hicks Beach's resolve to lose as little revenue as possible by the concession. He is not being " cute " for his own interests, but for the interests of the nation. Again, he may very well argue; If people won't take the trouble to claim the rebate, how can it be argued that the tax is a great burden ? ' We admit the theoretical force of such an argument, but it seems to us, nevertheless, that the whole question must be looked at on much broader lines.
We know that the present Stamp-duty on cheques works very well, but if it is to be increased, and more revenue is to be extracted therefrom, the problem must be approached in quite a different spirit from that adopted by the Chancellor of the Exchequer. Personally, we should like to see the cheques left alone altogether, and the necessary revenue derived from some perfectly different source. But granted that this is impossible, and that the money must come from stamps on cheques, we hold that it would be much better to get it in a way different from that now proposed. To begin with, we think the proposal to increase the Stamp-duty on dividend warrants not unreasonable. No doubt they are theoretically indistinguishable from other cheques, but practically it would not be difficult to differentiate them, and so to word a clause in the Bill that cheques drawn to pay dividends on stocks of various kinds should bear a twopenny stamp. The companies would not attempt to avoid the extra tax, which would become one of the office expenses, as is the penny stamp. In dealing with ordinary cheques, however, it seems to us that the Chancellor of the Exchequer should start with the assumption that the cheque system is good for the trade of the country, and ought to be encouraged and developed, not restricted. That it is good we have no doubt. It enables through the Clearing House a vast number of pecuniary transactions to be carried out with the minimum of sacrifice, and it limits the amount of money required to be kept in circulation. Again, it is clearly of great advantage to the banks. If A pays his way by small cheques to each individual, he keeps the money required to meet his current expenses in the bank till the last minute. If instead he draws out a large sum at the beginning of each week and then pays his bills in hard cash, it is clear that the money in the bank is for several days diminished by the amount of the big cheque. But if this is going on all over the country, the volume of the deposits left in the banks must clearly be greatly reduced. Hence under a small-cheque system of business the banks benefit. The money is in their hands instead of lying by in sums of 450 or 4100 in innumer- able cashboxes and safes all over the country. Nothing, then, should be done to limit the use of small cheques. Instead, their use should be encouraged by the State as a public benefit. A small cheque is, of course, not easy to define, but clearly nothing over 4100 would be called a small cheque. Taking action from this point of view, why should it not be possible to enact that all cheques for 4100 and under should bear a penny stamp, but that above that amount the stamp should be sixpence. That would probably produce a sum worth collecting, and yet the vexation to the public would not be great. The drawer of a cheque over 4100 would simply add five postage- stamps to the cheque, or, if he omitted to do that, his banker could be obliged within a month after paying the cheque to take it to Somerset House, where it would be sur- charged a shilling, which sum the banker would, of course, charge to his client. No doubt the amount collected would not be very large, but there would virtually be no e incurred in the collection, and any sums secured would go straight to the Treasury.
If, in spite of the twopence on the dividend warrants and the sixpence on cheques over .2100, the Chancellor of the Exchequer declared he must get more money from stamps, would it not be possible to take the receipt-stamp down to sums of £1 and over? As it is, people insist on a stamped receipt, not because it is the law, but because they want to avoid any chance of the bill being sent in again. This influence in favour of the use of the reoeipt-stamp wotdcl operate as strongly in the case of bills of .21 and over as in that of those of ..t2 and over. The source of revenue is the fear of not being able to produce evidence of payment, and has nothing to do with the amount. Hundreds of people would probably not trouble about having their receipts stamped ; but, on the other hand, a great many people would exact it,—probably as many in proportion as exact the stamp in the case of the bill over £2.
But no doubt the officials at the Treasury, if forced to do so by the pressure of public opinion, would be able to suggest many better ways of increasing the stamp revenue. We merely make our suggestions by way of illustration and. to stimulate the nimble brains of Sir Michael Hicks Beach's official advisers. Personally, as our readers know, we cannot admit that there is any need for touching the cheques at all. While the licenses for the sale of intoxicants—i.e., licenses for sharing in a great monopoly—are so low in amount as they now are, and while the fortunes over a million pay no greater Estate - duty than the fortunes over five or ten millions, we cannot agree that the resources of fiscal ingenuity have been exhausted. In our opinion, not till these sources of revenue have been tapped will it be wise or necessary to fidget with cheques. But as 'we have said before, it is the Chancellor of the Exchequer, and not the journalist, -who is responsible for raising the Revenue ; and. if he asserts that he can only raise the money by increasing the Stamp-duty on cheques, we suggest with all respect that he should revise his present scheme. He should make it more rational and more acceptable to the country by modifications of the kind we have named above, modifica- tions which, in our belief, will produce sufficient revenue, and yet will not injure the operations of buying and. selling and wage-paying by limiting the development of the cheque system.
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