+-------------------+-------------+----------------+
| | Number of | Number of |
| | Banking | Inhabitants to |
| | Offices. | Each Office. |
+-------------------+------+------+---------+------+
| | 1844.| 1906.| 1844. | 1906.|
| England and Wales | 976 | 5527 | 16,305 | 5885 |
| Isle of Man | ... | 23 | ... | 2417 |
| Scotland | 368 | 1180 | 7,120 | 3790 |
| Ireland | 180 | 777 | 45,417 | 5738 |
+-------------------+------+------+---------+------+
| In United Kingdom | 1524 | 7507 | 17,526 | 5530 |
+-------------------+------+------+---------+------+
In the latter years of the 18th century and the early years of the 19th,
the note circulation was a very important part of the business, but about
that date the deposits began to be, as they have continued since, far more
important. It is unfortunately impossible to give any trustworthy
statistics of the position of banking in the United Kingdom extending back
for more than forty or fifty years. Even the Scottish banks, who have been
less reticent as to their position than the English banks, did not publish
their accounts generally till 1865. The figures of the total deposits and
cash balances in the Irish joint-stock banks were published collectively
from the year 1840 by the care of Dr Neilson Hancock, but it is only of
quite recent years that any statement of the general position other than an
estimate has been possible owing to the long-continued reluctance of many
banks to allow any publication of their balance-sheets. A paper by W.
Newmarch, printed in the _Journal of the Statistical Society_ for 1851,
supplies the earliest basis for a trustworthy estimate. According to this
the total amount of deposits, including the Bank of England, in England and
Wales, Scotland and Ireland, may have been at that date from L250,000,000
to L360,000,000. The estimate in Palgrave's _Notes on Banking_ (1872),
excluding deposits in discount houses and the capitals of banks, was from
L430,000,000 to L450,000,000. The corresponding amounts at the close of
1906 were, in round figures, including acceptances &c., L997,000,000. The
total resources, including capitals and reserves and note circulation (in
round figures L177,500,000), were for 1906:--
England and Wales--
Bank of England and other banks L922,297,000
Scotland 135,042,000
Ireland 73,707,000
Isle of Man 898,000
-------------
L1,131,944,000
The progressive growth in bank deposits since it has been possible to keep
a record of their amounts, affords some means of checking roughly the
correctness of the estimates of 1851 and 1872. Broadly speaking, it may be
said that the bank deposits of the United Kingdom have about doubled since
1872.
[Sidenote: Clearing.]
The purely city banks had associated themselves in a "Clearing House"
certainly by 1776. An entry in the books of the Grasshopper,[4]
namely--"1773 to quarterly charge for use of the Clearing-room of 19/6d.,"
points to an earlier and perhaps less definitely organized system of
settlement. A house was taken for the purpose in 1810, in which year the
number of banking houses who settled their accounts with each other at the
"Clearing House" was forty-six (Gilbart's _History and Principles of
Banking_, p. 78). The Bank of England has never been a member of the
Clearing House, though it "clears on one side," _i.e._ its claim on the
clearing bankers is made through the Clearing House, but the claims of the
clearing bankers on the bank are forwarded direct to Threadneedle Street
twice or thrice daily. Nor did the banks in Fleet Street or at Charing
Cross belong to it. In 1858 the clearing of country cheques was added
through arrangements made by Lord Avebury, then Sir John Lubbock. The
"country clearing" is a great assistance to business, as it enables a
cheque drawn on the most distant village in England to be dealt with as
conveniently as a cheque on London. Of the forty-nine banks in London in
1844, twenty-six were connected with the Clearing House. At that time only
private banks were allowed to be members. In 1854 the joint-stock banks
made their way into that body, and in 1906 the numbers were one private
bank and eighteen joint-stock banks who joined in the clearing--nineteen
banks in all.
Practically at the present time every large transaction in the United
Kingdom is settled by cheque, that is, by a series of ledger transfers,
notes and specie being but the small change by which the fractional amounts
are paid. A large proportion of these transactions are arranged through the
operation of the London Clearing House. This is facilitated by the fact
that every bank in the United Kingdom has an agent in London.
The annual circulation shown by the London Clearing House is more than
L12,000,000,000. No one asks what stock of gold is held by the bank on
which the cheques are drawn, or what the bank itself keeps in reserve. The
whole is taken in faith on a well-founded trust. It is the most easily
worked paper circulation and circulating medium in existence. Like the
marvellous tent of the fairy Paribanou, it expands itself to meet every
want and contracts again the moment the strain is passed. (See the article
by R. H. Inglis Palgrave on "Gold and the Banks," _Quarterly Review_,
January 1906.)
If we add to the returns of the London Clearing House those of the clearing
houses in the large towns of England, Ireland and Scotland, and the
numerous exchanges which occur daily, and the large number which the
different offices of banks with a great many branches settle among
themselves, and the number drawn by one customer of a bank and paid to
another, we may form some notion of the vast amount of the yearly turnover
in cheques. This may be roughly estimated to be at least twice as great as
that registered by the London Clearing House. The earliest authentic
statement as to the clearing is found in the _Appendix to the Second
Report, Committee of House of Commons, Banks of Issue_ (1841).
In 1839 the figures of the London clearings
were L954,401,600, 29 banks.
In 1840 " " " " " 978,496,800, 29 "
In 1899 " " " " " 9,150,269,000, 19 "
In 1900 " " " " " 8,960,170,000, 19 "
In 1906 " " " " " 12,711,334,000, 18 "
[Sidenote: Scottish banks.]
In 1695, shortly after the establishment of the Bank of England, the
Scottish parliament passed an act for the establishment of a public bank.
Amongst the first names is that of Thomas Coutts, a name still commemorated
in one of the most substantial banks in London. The terms of the
establishment were more favourable than those connected with the
establishment of the Bank of England, for they obtained the exclusive
privilege of banking for twenty-one years without giving any consideration
whatever. It may have been the natural caution of the country, or the fact
that William III. was then king, which led to the Bank of Scotland being
prohibited under a heavy penalty from lending money under any circumstances
to the king. It is the only Scottish bank established by act of parliament.
The directors began at a very early period to receive deposits and to allow
interest thereon, also to grant cash credit accounts, a minute of the
directors respecting the mode of keeping the latter being dated so far back
as 1729.
Though the system of branches forms now so marked a feature of banking in
Scotland, a good many years had to pass before they obtained any hold. It
was not till about the year 1700 that the directors of the Bank of Scotland
established branches at Glasgow, Aberdeen, Dundee and Montrose, but so
little encouragement was given to these branches, the expenses far
exceeding the profits arising from them, that the directors resolved to
close them. In 1731 another attempt was made, and agencies were established
at Glasgow, Aberdeen and Dundee. But after a trial of two years they were
discontinued. It was not till 1774 that branches were again established by
the bank.
Soon after the establishment of the Bank of Scotland the directors began to
issue notes, or, as they were then called, bills or tickets, for L100, L50,
L20, L10, and L5. In 1704 L1 notes were issued for the first time. In 1727
the Royal Bank of Scotland was established by a charter of
incorporation,--which granted them "perpetual succession and a common
seal." There was a great rivalry between the two companies. The British
Linen Company was incorporated in 1746 for the [v.03 p.0340] purpose of
undertaking the manufacture of linen, but by 1763 they found it best to
confine their operations to banking transactions. This bank also was
incorporated by charter.
The note circulation was always an important item in the Scottish banks.
Thus in the case of the Bank of Dundee, the receiving money from the public
did not commence till 1792. Up to that time the whole business of the bank
from 1764 onwards, twenty-eight years in all, had consisted in its issue of
notes, which had varied from about L23,000 to L56,000. The Bank of Dundee
was amalgamated with the Royal Bank of Scotland in 1864, when its deposits
amounted in round figures to L700,000 and its note circulation to L41,000.
After 1792, the money deposited with the banks in Scotland rapidly
increased, but the habit of hoarding savings in a chest up to amounts of
L10 or L20 continued to a much later period (_History of the Dundee Banking
Co._).
Private banking never appears to have had any considerable hold in
Scotland. In 1819 eight private banks were in existence. These had all
disappeared by 1844. In 1906 there were only ten banks of issue in
Scotland, which practically carried on the whole business of the country.
There were two other small banks established comparatively recently. These
ten banks had, in 1906, 1180 branches.
The history of the growth and expansion of Scottish banking since 1826 is,
as far as can be traced, as follows:--
+------+---------------+----------------------------------------+
| Date.| Deposits. | Number of Offices. |
+------+---------------+----------------------------------------+
| 1826 | L21,000,000 | 167 = 1 to every 13,170 inhabitants. |
| | | |
| 1841 | 27,000,000 | 380 = 1 to every 6,600 inhabitants. |
| | | |
| 1856 | 63,000,000 | 585 = 1 to every 5,230 inhabitants. |
| | and capital | |
| | | |
| 1872 | 92,000,000 | 790 = 1 to every 4,250 inhabitants. |
| | including all | |
| | liabilities | |
| | and capital | |
| | | |
| 1906 | 135,042,000 | 1,180 = 1 to every 3,790 inhabitants. |
| | including all | |
| | liabilities | |
| | and capital | |
+------+---------------+----------------------------------------+
Against every note issued in excess of the limit allowed by the acts of
1844-1845, gold has to be held at the offices of the issuing banks in
Scotland and Ireland. The amount of the specie to be thus held was, as
explained by Sir Robert Peel in his speech of the 25th of April 1845, to be
ascertained by the average amount of the note-issue for four weeks
preceding. The object of the holding of this amount of specie by the bank
which issued the notes was designed by Sir Robert Peel to cause the
circulating medium of the country, being partly of notes and partly of
specie, to fluctuate in the same manner as if it had been a metallic
circulation only. The specie held in Scotland and Ireland against the
note-issue is not a special security for the note circulation, but is
placed in the banks there for this purpose. The influence ascribed to the
working of the note circulation in the earlier part of the 19th century
accounts for this legislation, which, as Sir Robert Peel stated in his
speech of the 6th of May 1844, was intended to "ensure the uniform
equivalency of bank notes to coin." It is not applicable to the present
position of the circulating medium of the United Kingdom, which now
consists mainly of a circulation of cheques. This differs absolutely from
what was contemplated by Sir Robert Peel; no attempt is or can be made to
cause such a paper circulation to fluctuate as if it were one of specie
only. One result of the limitation of the power of note-issue to the banks
in Scotland which possessed that power in 1845 has been that no important
bank has been established in that country since. Notes are so largely
employed in ordinary business in Scotland that a bank which does not
possess the power, practically cannot carry on business and supply the
needs of its customers. This limitation in the number of the banks has,
however, not been accompanied by any deficiency in the supply of banking
accommodation to the people. There is a larger number of banking offices in
proportion to the population in Scotland than in England and Wales or
Ireland.
The large number of branches must, however, be a cause of great expense,
and in several other respects it is obvious that a business carried on in
such thinly peopled districts as are found in many parts of Scotland, must
be conducted at a disadvantage in comparison with those banks which deal
with more active centres of commerce. Although the profit derived from
their large issue of notes may be thought to be considerable, yet, when we
consider the many expenses incurred in conducting a large note circulation,
the cost of printing, stamp duty, and the charges on importing gold from
London when the circulation exceeds the limit fixed by the act of 1845. no
small deductions must be made from the apparent profit to be derived from
this head, if there is any direct profit at all.
On the other hand, the great number of branches possessed by the Scottish
banks tends beyond doubt to their stability and prosperity. The network of
banks on the surface of Scotland is as important to the development of the
prosperity of the country as the network of the railways. It has caused a
great economy of capital, as the universal practice of people, even of the
most moderate means, is to lodge their money with the banks.
[Sidenote: Irish banks.]
The early history of banking in Ireland was marked by legislation even less
favourable to the formation of a steady and dependable system than in
England, and in 1695 several of the principal merchants in Dublin met
together for the purpose of forming a public bank for Ireland on the model
of the Bank of England. For many years this proposal met with no favour. It
was not till 1783 that the Bank of Ireland was established and commenced
its business. The first governor was David La Touche, junior, and two other
members of his family were amongst the first board of directors. The bank
met with very great success, but the jealousy against rival establishments
was extreme. By the act forming the Bank of Ireland it was enacted that no
company or society exceeding six in number, except the Bank of Ireland,
should borrow or take up money on their bills or notes payable on demand.
In the year 1821 the act was so far modified as to permit the establishment
of banking companies exceeding six in number at a distance of 50 m. from
Dublin. In 1824, in consequence of the ambiguity of that act, an act had to
be passed to explain it. It was not till 1845 that the restriction as to
the 50-m. limit was withdrawn.
The establishment of any other bank but the Bank of Ireland was for a long
time hindered by the legislation on the subject. Some of the restrictions
were so extraordinary that it will be interesting to refer to three of the
more important acts.
1741, 15 Geo. II.--Partnerships authorized for the purpose of trade and
manufacture; but such partnerships were not to exceed nine in number, nor
was the capital stock of such co-partnership to exceed, at any time, the
sum of L10,000.
1780-1781, 21 and 22 Geo. III.--"Anonymous Partnership Act,"--limited
liability not to exceed L50,000, but "business of banking or discounters of
money" expressly excluded.
1759, 33 Geo. II.--By this act a person while he continued a banker could
not make a marriage settlement on a son or daughter, a grandson or
granddaughter, so as to be good against his creditors, though for a
valuable consideration, and though such creditors were not creditors at the
time the grant was made. This act gave power to creditors over all
conveyances by bankers affecting real estates; and all dispositions after
the 10th of May 1760 by bankers of real or leasehold interest therein to or
for children were made void as against creditors, though for valuable
consideration and though not creditors at the time. No banker to issue
notes or receipts bearing interest after the 10th of May 1760. Some of
these enactments appear to be in force at the present day; suggestions have
been made, though apparently unsuccessfully, for their repeal.
So extraordinary were the views of the common people that a banker in
Dublin of the name of Beresford having made himself very unpopular, a
"large assemblage of ignorant country people having previously collected a
quantity of Beresford's notes, publicly burnt them, crying out with
enthusiasm while the promises to pay on demand were consuming, 'What will
he do now; his bank will surely break.'"
The number of banks which failed in Ireland in earlier times was
extraordinary; thus Sir Robert Peel in his speech of the 9th of June 1845
on the Bank Act of that year, made a quotation "from the report of the
committee of Irish exchanges, which sat in 1804. At that period there were
fifty registered banks, but they all failed, and their failures, I know
personally, led to the most fearful distress." Since the legislation of
1845, however, the business has been carried on with equally extraordinary
steadiness and success, and at the present time is on a footing fully equal
to that of any other part of the United Kingdom.
The earlier history of banking in Ireland pursued very closely the same
process of development as in England. Circulation preceded and fed
deposits. The credit which the banks obtained [v.03 p.0341] by the ready
acceptance of their notes brought customers to their counters, and thus the
existing system, fortunate in excellent managers, was built up gradually
and surely.
Alone in the three kingdoms, Ireland maintains the same limit of authorized
circulation as that established by Peel's Act of 1845. Not one of the six
banks which had the privilege of issue at that period has lost it since.
The names of the banks carrying on business in Ireland, the years when they
were established and their position in 1906, are as follows:--
CAPITAL OF IRISH JOINT-STOCK BANKS IN 1906
+---------------------------+------------+------------+
| | | Rate of |
| Name of Bank and Year | Capital | Dividend |
| when established. | paid-up. | per annum. |
+---------------------------+------------+------------+
| Bank of Ireland 1783 | L2,769,230 | 11 |
| Hibernian Bank* 1824 | 500,000 | 10 |
| Provincial Bank 1825 | 540,000 | 20 |
| Northern Banking Co. 1825 | 500,000 | 18-1/2 |
| Belfast Banking Co. 1827 | 500,000 | 36 |
| National Bank 1835 | 1,500,000 | 8 |
| Ulster Banking Co. 1836 | 500,000 | 18 |
| Royal Bank* 1836 | 300,000 | 12 |
| Munster Bank, Ltd.* 1864 | 200,000 | 8 |
+---------------------------+------------+------------+
* Thus marked are not banks of issue.
[Sidenote: Banking crises]
Banking, like every other business, has to pass through periods of
difficulty. The severity of these in the case of banking is intensified by
the vast number of interests affected. These, on the one hand, are
world-wide in their scope, on the other they touch every home in the
country. The stringency of such a time in England has since the passing of
the act of 1844 been greatly enhanced by a doubt being sometimes felt as to
whether a relaxation of the act of 1844 would be allowed. In any case, some
little time must elapse before the assent of the ministers of the crown to
the request of the Bank of England can be known. Since 1844 there have been
five periods of pressure,--during 1847, 1857, 1866, 1870 and 1890. Of these
in three, 1847, 1857 and 1866, the difficulties reached panic.
The crisis of 1847 was brought on by the speculation in railway enterprise
which had gone on since 1845. So little had the anxieties of the autumn
been anticipated that the bank rate of discount was 3% on the 1st of
January. It was raised to 3-1/2% on the 14th and to 4% on the 21st. It
became 5% on 8th April, 5-1/2% on 5th August, 6% on 30th September and 8%
on 25th October. This was the highest. It was lowered to 7% on 22nd
November, on 2nd December to 6% and on 23rd December to 5%. An announcement
was made on the 1st of October that no advances would be made on public
securities. This was followed by general anxiety and alarm.
The reserve of the bank was rapidly reduced to a very low ebb.
_Bank of England Reserve of Specie._
1847, 16th October .... L3,070,000
" 23rd October .... 1,990,000
" 30th October .... 1,600,000
Meanwhile the anxiety and alarm prevailing were causing a general hoarding
of coin and bank notes, and it really appeared not unlikely that the
banking department of the Bank of England might be compelled to stop
payment while there was more than L6,000,000 of specie in the issue
department. The chancellor of the exchequer (Sir C. Wood, afterwards Lord
Halifax) was urged by many deputations and remonstrances to relax the Bank
Act, but he declined. At last, on the 22nd or 23rd of October, some of the
leading city bankers had an interview with the prime minister (Lord John,
afterwards Earl, Russell), and on their explaining the necessities of the
position, the desired relaxation was given. The official letter (25th
October) recommended "the directors of the Bank of England, in the present
emergency, to enlarge the amount of their discounts and advances upon
approved security." A high rate, 8%, was to be charged to keep these
operations within reasonable limits; a bill of indemnity was promised if
the arrangement led to a breach of the law. The extra profit derived was to
be for the benefit of the public. The effect of the government letter in
allaying the panic was complete.
The crisis of 1857 was the last occasion of an official inquiry. This is
contained in the _Report and Evidence of the Select Committee of the House
of Commons on the Bank Acts_ (1857, 1858). The evidence given by Mr
Sheffield Neave, the governor, and Mr Bonamy Dobree, deputy-governor of the
bank in 1858, gives a vivid picture not only of what occurred, but of what
might be expected to recur on such occasions. The wildest alarm prevailed,
exchequer bills were scarcely saleable, and the bank itself sold L3,000,000
government securities at a considerable loss.
The extreme pressure was relaxed by the letter issued by the government on
the 12th of November 1857, signed by Lord Palmerston, then premier, and Sir
G. C. Lewis, which allowed a temporary relaxation of the Bank Act of 1844.
The public alarm, however, was so great that it was not until the 21st of
November that the severity of the pressure was in any way diminished. On
the 20th of November the notes issued to the public on securities beyond
the statutory limit (then L14,475,000) reached the sum of L928,000. By the
next week the issue was almost down to the limit, and in the week following
it was within the limit. On the 1st of January 1858 the bank rate was
lowered to 8% and the anxiety gradually passed away. Had the treasury
letter been issued earlier, the pressure might not have been so severe, and
the governor of the bank expressed a strong opinion that, if it had been
later, it would not have been sufficient. November 1857 was the only
occasion when the limits of the Bank Act as to issue were actually passed.
During the crisis of May 1866 L4,000,000 left the bank on one day in notes
and coin, and the reserve of the bank was reduced in the return of the 1st
of June of that year to L415,000. The bank rate was raised to 10% and
permission was given by the government to suspend the act. This, however,
was not done. Tradition says that the bank asked the bankers, during the
period of heaviest pressure of that terrible crisis--pressure more severe
than anything that had taken place before or that has occurred since, to
pay in every night the notes they had drawn out in the morning which were
still in their tills at the close of the day, and that hence the legal
limit was never exceeded. But it was not till the 6th of August that the
rate was reduced to 8%.
The effect of the crisis of October 1890 was far less severe. This was due
to the judgment and skill displayed by the governor (Mr Lidderdale) and the
directors of the bank, who imported L3,000,000 in gold from Paris. The
reserve in that year never dropped below L10,000,000, and before the end of
November the anxiety had greatly passed away. "Caution prevailed, but not
panic, and the distinction is a very clear one." (See arts. on "Crises,"
_Dictionary of Political Economy_, vol. i.)
The most important requirement of banking in the United Kingdom is still
the establishment of an efficient specie reserve. The reserve in the
banking department of the Bank of England averaged:--
L8,500,000 in 1845. L11,600,000 in 1875.
8,400,000 in 1855. 15,100,000 in 1885.
8,000,000 in 1865. 29,900,000 in 1895.
L23,500,000 in 1906.
[Sidenote: The "Reserve" question.]
This provides but a narrow basis for the whole business requirements of the
country. Though much larger than in several previous years, it cannot be
regarded as adequate. The figures fluctuate more severely than these
decennial averages show, and the progress has not been one of uniform
increase. Thus the L15,100,000 in 1885 was followed by L12,700,000 in 1888.
The L29,900,000 of 1895 was followed by L34,600,000 in 1896 and L21,200,000
in 1899.
Beyond, or side by side with, the reserve of the Bank of England there are
the reserves held by the other banks. Part of these are held in the form of
balances at the Bank of England, part in specie and bank notes in their own
tills. The latter, hence, are not unlikely to be estimated twice over. The
published figures on this point are meagre.
The expectations expressed by Sir Robert Peel in his speech [v.03 p.0342]
on the bank charter and the currency of the 6th of May 1844 have not yet
been fulfilled. "I rejoice," he said, "on public grounds, in the hope that
the wisdom of parliament will at length devise measures which shall inspire
just confidence in the medium of exchange, shall put a check on improvident
speculations, and shall ensure the just reward of industry and the
legitimate profit of commercial enterprise conducted with integrity and
controlled by provident calculation."
The extreme measures which have been required since the act af 1844 point
out for themselves the necessity for reform. Three times since the date of
the Bank Act of 1844 it has been needful to give permission for the
suspension of that act which forms the very foundation of the monetary
system of Great Britain. This, whenever it has occurred, has exercised a
very injurious effect on credit abroad, as well as on prosperity at home.
The British money-market, the clearing-house of the world, is, in
consequence of the smallness of its reserve, exposed to greater
fluctuations than that of any other country. These fluctuations may arise
from the need of meeting the requirements of other countries for specie or
those arising from domestic trade. The recorded excess of imports over
exports, L147,000,000 in 1906, though the difference is eventually balanced
by the "invisible" exports, gives foreign nations at times a power over the
British money-market greater than has ever previously been the case. The
current must always have a tendency to flow outwards; this is enhanced by
the great increase in the number of foreign banks which have branches in
England. The need of providing sufficient reserves to meet requirements
thus occasioned is obvious.
[Sidenote: British banking abroad.]
As regards the banks in which British interests are concerned in British
colonies and other countries we can only speak briefly. It must not be
overlooked that in the Dominion of Canada there are 29 banks, many of them
large, managed much on the Scottish principle with capitals of nearly
L19,000,000 and deposits of about L140,000,000. These banks have more than
1200 offices. In Australia and New Zealand there are 24 banks with capitals
of nearly L18,000,000 and deposits of about L130,000,000. The number of
offices is nearly 1700. There are, including the three Presidency banks,
about 15 banks doing business mainly in India--in some cases connecting
neighbouring countries and places like Bangkok, Hong-Kong and Zanzibar.
These banks have capitals of more than L5,000,000 and deposits of fully
L36,000,000 and over 210 offices. There are at least 8 banks in South and
West Africa with capitals of nearly L5,000,000, deposits of nearly
L50,000,000 and nearly 370 offices. There are 5 banks, including the
Colonial Bank, in other British territories with capitals of about
L1,000,000 and deposits of L3,300,000, and about 25 offices. There are
thus, besides many private firms doing very considerable business, more
than 80 joint-stock British banks working in the colonies with capitals
amounting to L48,000,000, deposits L360,000,000 and offices 3505. Outside
British territories there are 6 banks, principally in South America, with
nearly L4,000,000 capital, L36,000,000 deposits and about 60 offices. There
are 6 large banks doing business principally in the East with more than
L6,700,000 capitals, L77,000,000 deposits and 106 offices: and 7 other
banks, including Barings, with about L4,500,000 capitals and L22,000,000
deposits There are thus about 20 British banks doing business in foreign
countries with capitals amounting to L15,200,000, deposits L135,000,000 and
offices 173.
In this statement we have included only the more important banks, which
collectively wield about L63,000,000 capital and more than L495,000,000
deposits--in all about L560,000,000 of resources operating at about 3700
offices situated in places as different from each other and as widely
separated as California and Hong-Kong, Constantinople and New Zealand.
_France_.--In France the first bank of issue, originally called the _Banque
Generale_, was established in 1716 by John Law, the author of the
_Mississippi Scheme_ and the _Systeme_. Law's bank, which had been
converted into the _Banque Royale_ in 1718, and its notes guaranteed by the
king (Louis XV.), came to an end in 1721; an attempt at reconstruction was
made in 1767, but the bank thus established was suppressed in 1793. Other
banks, some issuing notes, then carried on operations with limited success,
but these never attained any real power. There were many negotiations on
the subject of the establishment of a bank in 1796. The financial
difficulties of the times prevented any immediate result, but the advice of
those engaged in this plan was of great assistance to Napoleon I., who,
aided by his minister Mollien, founded in 1800 the Bank of France, which
has remained from that time to the present by far the most powerful
financial institution in the country. The objects for which it was
established were to support the trade and industry of France and to supply
the use of loanable capital at a moderate charge. These functions it has
exercised ever since with great vigour and great judgment, extending itself
through its branches and towns attached to branches over the whole country.
At its establishment and for some time subsequently the operations of the
bank did not extend over the whole of France. Departmental banks with the
privilege of issue had been formed under a law adopted in 1803. At the
close of 1847 there were nine of these banks existing in as many of the
larger towns. In 1848, however, they were absorbed into the Bank of France,
which has since possessed an exclusive privilege of issue, and in 1863 took
over the Bank of Savoy after that province was united to France.
The Bank of France has successfully surmounted many political as well as
financial troubles both during and since the times of Napoleon I. The
overthrow of the government of Louis Philippe in 1848, the war with Germany
in 1870, the many difficulties that followed when the Commune reigned in
Paris in 1871, the payment of the war indemnity--not completed till
1873--were all happily overcome. Great pains, too, have been taken,
especially of recent years, to render services to large and small
businesses and to agricultural industry. In 1877 the offices of the Bank of
France were 78 in number; in 1906 they were 447, including the towns
"connected with the branches"--an arrangement which, without putting the
bank to the expense of opening a branch, gives the place connected many of
the advantages which a branch confers. The quantity of commercial paper
discounted is very large. More than 20,000,000 bills were discounted in
1906, the total amount being L559,234,996. The advances on securities were
in the same year L106,280,124. The rate of discount in Paris is as a rule
lower and the number of alterations fewer than in London. From May 1900 to
January 1906 there was no change, the rate remaining uniformly at 3%. Bills
as low as 4s. 2d. are admitted to discount, including those below 8s.;
about 232,000 of this class were discounted in 1906. Since the 27th of
March 1890 loans of as small an amount as L10 are granted. In most cases
three "names" must be furnished for each bill, or suitable guarantees or
security given, but these necessary safeguards have not to be furnished in
such a manner as to hamper applicants for loans unduly. In this manner the
Bank of France is of great service to the industry of the country. It has
never succeeded, however, in attracting deposits on anything like the scale
of the Bank of England or the banks of the English-speaking peoples, but it
held, as stated in the balance-sheet for the 23rd of December 1906, about
L35,000,000 in deposits, of which L14,000,000 was on account of the
treasury and L21,000,000 for individuals, and the amount held in this
manner gradually increases. The report for 1904 says "each year the
movement in these increases, and this economical and safe mode of effecting
receipts and payments is more and more appreciated by the public." In one
respect the Bank of France stands at a great advantage in connexion with
this branch of its business. The average amount held in this manner for
individuals during 1906 was about L23,000,000. As the accounts numbered
77,159 the average for each account was comparatively small. Accounts so
subdivided give a great probability of permanence. The figures of the
accounts for 1904 were as follows:--
11,178 current accounts, with power of discount.
4,576 simple current accounts.
26,709 current accounts, with advances.
24,106 accounts, deposits.
Total 66,569 accounts, against 59,182 at the end of 1903.
At the present time the Bank of France operates chiefly through its
enormous note circulation (averaging in 1906 L186,300,000), by means of
which most business transactions in France are carried on.
The limits of the circulation of the Bank of France and the dates when it
has been extended are as follows:--
+--------------------------+-------------+-------------------+
| Dates | Millions of | Converting the |
| | Francs | Franc as 25 = L1. |
+--------------------------+-------------+-------------------+
| 15th March 1848 | 350 | L14,000,000 |
| 27th April, 2nd May 1848 | 452 | 18,000,000 |
| 2nd December 1849 | 525 | 21,000,000 |
| 12th August 1870 | 1800 | 32,000,000 |
| 14th August 1870 | 2400 | 96,000,000 |
| 29th December 1871 | 2800 | 112,000,000 |
| 15th July 1872 | 3200 | 128,000,000 |
| 30th January 1884 | 3500 | 140,000,000 |
| 25th January 1893 | 4000 | 160,000,000 |
| 17th December 1897 | 5000 | 200,000,000 |
| In 1906 | 5800 | 232,000,000 |
+--------------------------+-------------+-------------------+
[v.03 p.0343] Most business transactions in France are liquidated, not in
cheques as in England, but in notes of the Bank of France. These, owing to
their convenience, are preferred to specie. This is accumulated in the
vaults of the Bank of France, which in 1906 held on average L115,000,000
gold and L42,000,000 silver. The gold held by the Bank of France is
generally considerably larger in amount than that held by the Bank of
England, which in the autumn of 1890 had to borrow L3,000,000 in gold from
the Bank of France at the time of the Baring crisis. The large specie
reserve of the bank has given stability to the trade of France, and has
enabled the bank to manage its business without the numerous fluctuations
in the rate of discount which are constantly occurring in England. It is
true that the holding this very large amount of specie imposes a very heavy
burden on the shoulders of the shareholders of the bank, but they do not
complain. The advantage to business from the low rate of interest which has
to be paid for the use of borrowed capital in France is a great advantage
to the trade and industry of that country.
The mass of the reserve in France is so great that the movements of the
precious metals, when they are the result only of natural causes, are
allowed to go on without corresponding movements in the discount rate. But
it must be remembered that this large reserve is held in part against a
gigantic note issue, and also that the trade activity and enterprise of the
French people are less intense than in either the United Kingdom or
Germany; thus it is much easier for the Bank of France to maintain a steady
rate of discount.
Besides the Bank of France, several great credit institutions carry on
business in the country; as the _Banque de Paris et des Pays-Bas_ (capital
and reserve, L3,729,000; other liabilities, deposits, &c., L14,842,000),
the _Banque Francaise pour le Commerce et l'Industrie_ (L2,450,000; and
L3,505,000), the _Credit Lyonnais_ (L14,000,000; and L82,570,000), the
_Comptoir National d'Escompte de Paris_ (L6,772,000; and L47,593,000), the
_Societe Generale pour favoriser le developpement du Commerce et de
l'Industrie en France_ (L7,469,000; and L45,800,000), and the _Societe
Generale de Credit Industriel et Commercial_ (L1,600,000; and L10,060,000).
There is also the _Credit Foncier de France_ with a very considerable
capital, but the business done is so largely that of mortgages that it can
hardly be included among banks, though it carries on in some measure the
business of banking.
Besides the six important joint-stock banks mentioned above, there exists
in France a large number of banks, principally in the provinces, carrying
on a very considerable business. Little is known as to their deposits, but
their business appears to be conducted with great prudence and discretion.
One hundred and eighty-two of these firms were members of the French
Country Bankers' Association in 1898. They carry on business in 66 out of
the 86 departments into which France is divided. More than one of these
banks has several offices--one possessing 18, including the head office.
These branches are situated in the small towns in the vicinity. In this the
business follows more the English method of small branches. The French
Country Bankers' Association holds its meetings in Paris, where matters of
interest to bankers are discussed. (See _Bankers' Magazine_, July 1898.)
_Germany_.--Besides the Imperial Bank of Germany, the "Reichsbank," there
are about 140 banks doing business in the states which form the German
empire. These credit and industrial banks with their large resources have
had an immense influence in bringing about the astonishing industrial
development of their country. Five banks possess the right of uncovered
note-issue; these are:--
The Imperial Bank of Germany with right of issue L23,641,450
The Bank of Saxony " " " 838,500
The Bank of Bavaria " " " 1,600,000
The Bank of Wuerttemberg " " " 500,000
The Bank of Baden " " " 500,000
-----------
L27,079,950
At the Bank of Germany the coin and bullion held is sometimes larger than
at the Bank of England. The statement of the specie in the weekly accounts
includes silver. The amounts held in gold and silver are only separated
once a year, when the balance-sheet is published. The figures of the
balance-sheet for the 31st of December 1906 showed in round numbers
L24,000,000 gold and L9,000,000 silver. As far as the capital is concerned
the L18,000,000 of the Bank of England considerably exceeds the L9,000,000
of the Bank of France and the L12,200,000 of the Bank of Germany. The note
circulation of both the other banks is considerably larger than that of the
Bank of England, that of the Bank of France being L186,300,000, and of the
Imperial Bank of Germany L69,000,000 in 1906.
The capitals and reserves of the German banks, including those of banks
established to do business in other countries, as South America and the Far
East, and of the Bank of Germany, are about L133,000,000, with further
resources, including deposits, notes and mortgage bonds, amounting to fully
L414,000,000. The amount of the capital compares very closely with that of
the capitals of the banks of the United Kingdom. The deposits are
increasing. The deposits, however, are not the whole of the resources of
the German banks. The banks make use, besides, of their acceptances in a
manner which is not practised by the banks of other countries, and the
average note circulation of the Reichsbank, included in the statement given
above, is between L60,000,000 and L70,000,000.
A large and apparently increasing proportion of the resources of the German
banks is employed in industrial concerns, some of which are beyond the
boundaries of the empire. The dangers of this practice have called forth
many criticisms in Germany, among which may be quoted the remarks of Caesar
Strauss and of Dr R. Koch, the president of the Reichsbank. Dr Koch
especially points out the need of the development of powerful banks in
Germany unconnected with speculative business of this kind. The object of
employing their funds thus is the higher rate of interest to be obtained
from these investments than from discounting bills or making loans at home.
But such an employment of the resources of a bank is opposed to all regular
rules of business and of banking tradition, which abstains from making
fixed investments of any large part of the resources of a bank. On the
other hand, Dr Koch observes that the risks of the one "reserve system"
mentioned by Bagehot are not to be feared in Germany.[5] The recent
movement in favour of concentration among the banks has been described by
Dr E. Depitre and Dr Riesser, who give particulars of the business done by
these banks, which does not correspond with banking as practised in the
United Kingdom, being more of an industrial character.
There are also many private banking firms in Germany which do a
considerable amount of business.
The Reichsbank, by far the most powerful banking institution in Germany, is
managed by the bank directory appointed by the chancellor of the empire.
The shareholders join in the management through a committee, of which each
member must be qualified by holding not less than three shares. The
government exercises complete powers of control through the chancellor of
the empire. The influence of the Imperial Bank now permeates, by means of
its branches, all the separate kingdoms of the empire--the uniformity of
coinage introduced through the laws of 1871-1873 rendering this possible.
The Imperial Bank assists business principally in two ways--first, through
the clearing system (_Giro-Verkehr_), which it has greatly developed, and
secondly, through the facilities given to business by its note circulation.
The Imperial Bank also receives deposits, and cheques are drawn against
these, but in Germany notes are principally used in payments for ordinary
business.
Before the Reichsbank was established, Hamburg was the first, and for a
long time the only, example of a clearing in Germany. This was taken up by
the Reichsbank when it established its office in Hamburg in the
time-honoured building which had belonged to the Hamburg Clearing House.
Similar business had long been undertaken by the Bank of Prussia. This was
absorbed and developed by the Reichsbank in 1876. Through the "clearing
system" money can be remitted from any of the 443 places in which there is
an office of the Reichsbank, to any of these places, without charge either
to the sender or the receiver. It is sufficient that the person to whom the
money is to be remitted should have an account at the bank. Any person
owing him money in the remotest parts of the empire may go to the office of
the bank which is most convenient to him and pay in the amount of his debt,
which is credited on the following day at the office of the bank, without
charge, to the account of his creditor wherever he may reside. The person
who makes the payment need not have any account with the bank. The impetus
given to business by this arrangement has been very considerable. It
practically amounts to a money-order system without charge or risk of loss
in transmission. From Hamburg and Bremen to the frontiers of Russia, from
the shores of the Baltic to the frontiers of Switzerland, the whole of the
empire of Germany has thus become for monetary purposes one country only.
The amount of these transfers for the year 1906 exceeded L1,860,000,000.
The note circulation is also a powerful factor of the business of the
Reichsbank. It is governed by the law of 1875 and the amending law of 1899,
corresponding in some degree to Peel's act of 1844, which regulates the
note circulation of the Bank of England. An uncovered limit, originally
L12,500,000, increased to L14,811,450 by the lapse of the issues of other
banks allowed to it, has been extended by these and by the act of the 5th
of June 1902 to L23,641,450. Against the notes thus issued which are not
represented by specie, treasury notes (_Reichskassenscheine_, the legal
tender notes of the [v.03 p.0344] empire)[6] and notes of the issuing banks
which are allowed to be reckoned as specie or discounted bills, must be
held--maturing not later than three months after being taken--with, as a
rule, three, but never less than two, good indorsements. There is also a
provision that at least one-third of the notes in circulation must be
covered by current German notes, money, notes of the imperial treasury, and
gold in bullion or foreign coin reckoned at L69, 12s. per pound fine. The
Reichsbank is bound by law to redeem its notes in current German money. It
is stated that this may be gold coin or silver thalers, or bar-gold at the
rate of 1392 marks (L69, 12s. reckoning marks as 20 = L1) the pound fine of
gold. In practice, however, facilities have not always been given by the
Reichsbank for the payment of its obligations in gold, though the
importance of this is admitted. In the balance-sheet for 1906 the bills
held amounted to L67,000,000, and the loans and advances to L14,200,000.
The notes issued averaged for the year L69,000,000. The gold held amounted,
30th December 1906, to L24,069,000. If the condition of business requires
that the notes in circulation should exceed the limits allowed by the law,
the bank is permitted to do this on the payment of 5% on the surplus. In
this respect the German act differs from the English act, which allows no
such automatic statutory power of overpassing the limit of issue. Some good
authorities consider that this arrangement is an advantage for the German
bank, and the fact that it has been made use of annually since 1895 appears
to show that it is needed by the business requirements of the country. Of
late years the excess of issue of the Reichsbank has been annual and large,
having been L25,267,000 on the 29th of September 1906 and L28,632,000 on
the 31st of December of the same year. The amount of the duty paid on the
excess issue in the year 1906 was L184,764, and the total amount paid thus
from 1876 to 1906 was L839,052. The increase of the uncovered limit
(untaxed limit of issue called in Germany the "note reserve") has not been
sufficient to obviate the need for an excess of issue beyond the limit.
In accordance with a law passed in 1906 the Imperial Bank issues notes
(_Reichsbanknoten_) of the value of 20 marks (L1), and 50 marks (L2, 10s.)
in addition to the 5, 10, 100 and 1000 mark notes (5s., 10s., L5, L50)
previously in circulation. Imperial paper currency of the value of 20 or 50
marks (L1 and L2, 10s.) had previously existed only in the form of treasury
notes (_Reichskassenscheine_); these will in consequence be withdrawn from
circulation.
The amendment of the banking law of Germany, passed in 1899, not only
affects the position of the Reichsbank, but that of the four other
note-issuing banks. The capital of the Reichsbank has been raised by the
bill of that year to L9,000,000. The reserve fund has been raised out of
surplus profits to L3,240,000. This exceeds the amount required by the act
of 1899, which was L3,000,000. The amending act further diminishes the
dividend receivable by the stockholders of the Reichsbank and increases the
share which the government will obtain.
The arrangement with the four note-issuing banks is designed to cause them
to work in harmony with the Reichsbank when the Reichsbank has to raise its
bank-rate in order to protect its gold reserves. The official published
rate of discount of the Reichsbank is to be binding on the private
note-issuing banks after it has reached or when it reaches 4%. At other
times they are not to discount at more than 1/4% below the official rate of
the Reichsbank, or in case the Reichsbank itself discounts at a lower rate
than the official rate, at more than 1/8% below that rate. If the
Reichsbank discounts below the official rate, it is to announce that fact
in the _Gazette_.
The subject being important, we quote from the amending act the sections
governing the discount rate:--_Gesetz, betreffend die Abaenderung des
Bankgesetzes vom 14. Maerz 1875; vom 7. Juni 1899, Artikel 7, S. 1_. The
private note-issuing banks are bound by _Artikel 7, S. 2_, after the 1st of
January 1901:--"(1) Not to discount below the rate published in S. 15 of
the bank law, so long as this rate attains or exceeds 4%, and (2) moreover,
not to discount at more than 1/4% below the Reichsbank rate, published in
S. 15 of the bank law, or in case the Reichsbank itself discounts at a
lower rate, not to discount at more than 1/8% below that rate."
It remains to be seen whether the note-issuing banks will find these
conditions too onerous, and rather than be bound by them will give up their
right of issuing notes. The object of the enactment is apparently to
protect the specie reserve of the Reichsbank, but it may be doubted
whether, considering the importance of the other banks of Germany--none of
which is bound by similar conditions--relatively to the note-issuing banks,
the restrictions put on the note-issuing banks will have any practical
effect.
Since 1870 banking has made immense progress in Germany, but it may be some
time before the habit of making payments by cheque instead of specie or
notes becomes general.
AUTHORITIES.--_Parliamentary Papers: Report, together with Minutes of
Evidence and Accounts, from the Select Committee on the High Price of Gold
Bullion_, House of Commons, 8th of June 1810; _Reports, Committee of
Secrecy on Bank of England Charter_, House of Commons, 1832; _Select
Committee on Banks of Issue_, House of Commons, 1840; _First and Second
Reports, Select Committee on Banks of Issue_, House of Commons, 1841;
_First and Second Reports, Secret Committee on Commercial Distress_, House
of Commons, 1848; _Report, Select Committee on Bank Acts_, House of
Commons, 1857; _Report, Select Committee on Bank Acts_, House of Commons,
1858; _Report, Select Committee on Banks of Issue_, House of Commons, 1875;
_Report from Secret Committee of the House of Lords on the Causes of the
Distress which has for some time prevailed among the Commercial Classes,
and how far it had been affected by the Laws for regulating the Issue of
Bank Notes payable on demand_, session 1847-1848; _Analysis of the Minutes
of Evidence taken before the Select Committee of the House of Commons on
Banks of Issue, 1875, with a selection from the evidence_, by R. H. Inglis
Palgrave, London, 1876 (printed for private circulation).
GENERAL INFORMATION.--Articles on banking, &c., _Dictionary of Political
Economy_, edited by R. H. Inglis Palgrave (Macmillan & Co., 1894-1906);
_Handwoerterbuch der Staatswissenschaften_, edited by Conrad, Elster, Lexis
and Loening, 1899; _Woerterbuch der Volkswirthschaft_, 2 vols. (ed. Elster,
1898); _Dictionnaire des finances_, edited under the direction of Leon Say,
by L. Foyot and A. Lanjalley (1889); _Dictionnaire du commerce, de
l'industrie et de la banque_, edited by A. Raffalovich and Yves Guyot;
_Bankers' Magazine_, commenced 1844, to present time; _Journal of the
Institute of Bankers_, commenced 1879, to present time; _Bankers' Magazine_
(New York); _Economist_ newspaper, commenced 1843, to present time;
_Banking Almanac_, commenced 1845, to present time; _Reports of the
Comptroller of the Currency_ (Washington).
EARLY.--_De Monetarum Augmento, variatione et diminutione, Tractatus varii_
(1509); _A proposal to supply His Majesty with twelve or fourteen Millions
of Money (or more if requir'd)_, by A. D. of Grey's Inn, Esq., and some
Others, his Friends (1697); Hayes' _Negociators' Magazine of Monies and
Exchanges_, 1730; Lord King, _Thoughts on Bank Restrictions_ (1804); _The
Theory of Money with considerations on the Bank of England_ (1811); William
Cobbett, _Paper against Gold and Glory against Prosperity_, 2 vols. (1815);
_Circulating Credit with Hints for improving the Banking System of Britain,
by a Scottish Banker_ (1832); W. Leckie, _Bank Restriction_ (1841);
_Debates in the House of Commons on Sir R. Peel's Bank Bills of 1844 and
1845_, reprinted verbatim from "Hansard's Parliamentary Debates," 1875;
_Gilbart's Works_, 6 vols. (1865); _The History, Principles and Practice of
Banking_, by J. W. Gilbart, edited and revised by A. S. Michie, 1882;
Thomson Hankey, _Principles of Banking_ (1867); Walter Bagehot, _Lombard
Street_ (1873), a brilliant picture of the city at that date (new ed.,
1906); A. S. Cobb, _Threadneedle Street, a reply to "Lombard Street"_
(1891); John Dun, _British Banking Statistics_ (1876); R. H. Inglis
Palgrave, _Notes on Banking_; George Rae, _The Country Banker_ (1886), and
several editions later (many sound hints on practice); J. George Kiddy,
_The Country Banker's Handbook_, 4th ed. (1903); C. F. Dunbar, _Chapters on
the Theory and History of Banking_ (1891); Charles Gairdner, _The Making of
the Gold Reserves_ (1891); J. B. Attfield, _English and Foreign Banks_
(1893) (refers to management of banks); T. B. Moxon, _English Practical
Banking_, 10th ed. (1899); A. Crump, _The Key to the London Money Market_
(1872); W. Y. Duncan, _Notes on the Rate of Discount in London_, 3 vols.,
1822-1856, 1856-1866, 1866-1873, privately printed, Edinburgh, 1856, 1867
and 1877; R. H. Inglis Palgrave, _Bank Rate and the Money Market in
England, France, Germany, Holland and Belgium_, 1844-1900 (1903); Ernest
Seyd, _The Bank of England Note Issue and its Error_ (1874); Ernest Seyd,
_London Banking and Bankers' Clearing House System_; Ernest Seyd, _The
Silver Question in 1893_; Walter Bagehot, _Depreciation of Silver_ (1877);
Ernest Seyd, _Bullion and the Foreign Exchanges_ (1868); Clare, _The A B C
of the Foreign Exchanges_ (1895, 2nd ed. 1895); _Tracts_, by Lord Overstone
(1837-1857); _Select Tracts on Money, &c._, reprinted privately by Lord
Overstone, 1856-1859 (containing much valuable and interesting information
on early history); A. Crump, _A Practical Treatise on Banking, Currency and
the Exchanges_ (1866); Bonamy Price, _Currency and Banking_ (1876) (the
interest of this volume to the student of banking is found mainly in the
correspondence between Mr Henry Hucks Gibbs (Lord Aldenham) and Professor
Bonamy Price on the reserve of the Bank of England); R. H. Inglis Palgrave,
_On the Influence of a Note Circulation in the Conduct of Banking
Business_, read before the Manchester Statistical Society, 1877; Edgar
Jaffe, _Das englische Bankwesen_ (Leipzig, 1905); _A History of Banks_
(1837); D. Hardcastle, _Banks and Bankers_ (1843); W. J. Lawson, _The
History of Banking_ (1850); R. Baxter, _The Panic of 1866_ (1866); F. G. H.
Price, _A Handbook of London Bankers_ (1876); Conant, _History of Modern
Banks of Issue_ (New York, 1896); _History of Banking in all Leading
Nations_, 4 vols. (New York, 1896); Viscount Goschen, _Essays and Addresses
on Economic Questions, 1865-1893_ (1905), (arts. on "Seven per cent," "Two
per cent," "Our cash reserves and central stock of gold"); C. F. Dunbar,
_Economic Essays_, edited by O. M. W. Sprague (1904), (containing many
articles on banking, particularly in the United States).
BANK OF ENGLAND.--T. Fortune, _A Concise and Authentic History of the Bank
of England_ (1802); John Francis, _History of the Bank of England_ (1847);
J. E. Thorold Rogers, _The First Nine Years of [v.03 p.0345] the Bank of
England_ (1887); B. B. Turner, _Chronicles of the Bank of England_ (1897);
T. A. Stephens, _Bibliography of the Bank of England_ (1897); A. Andreades,
_Histoire de la banque d'Angleterre_ (1904; Eng. trans., 1909); Sir F.
Schuster, _The Bank of England and the State_ (1906).
HISTORY OF BANKING HOUSES.--L. H. Grindon, _Manchester Banks and Bankers_
(1877); J. B. Martin, _"The Grasshopper" in Lombard Street_ (1892); M.
Phillips, _Banks, Bankers, and Banking in Northumberland, Durham and North
Yorkshire_ (1894); C. H. Cave, _History of Banking in Bristol_ (1899);
Bidwell, _Annals of an East Anglian Bank_ (1900); Richardson, _Coutts &
Co., Bankers, Edinburgh and London_; H. T. Easton, _History of a Banking
House_ (Smith, Payne & Smiths) (1903); J. Hughes, _Liverpool Banks and
Bankers, 1760-1837_ (1906).
SCOTLAND.--W. H. Logan, _The Scottish Banker_ (1847); Robert Somers, _The
Scotch Banks and System of Issue_ (1873); W. Mitchell, _Scotch Banks and
Limited Liability_ (1879); A. W. Kerr, _History of Scotch Banking_ (1884);
A. W. Kerr, _Scottish Banking, 1865-1896_ (1898); Boase, _A Century of
Banking in Dundee_ (1867).
IRELAND.--Malcolm Dillon, _History and Development of Banking in Ireland_
(1889).
BRITISH COLONIES.--Edward B. Hamilton, _A Manual of the Law and Practice of
Banking in Australia and New Zealand_ (1880); _Banking in Australasia_
(1883); _The Canadian System of Banking and the National Banking System of
the United States_ (Toronto, 1890); _Journal of the Canadian Bankers'
Association_ (Montreal).
FRANCE.--Annuaire-Chaix, _Les Principales Societes par actions_ (1905); A.
Raffalovich, _Le Marche financier_ (1905).
GERMANY.--Dr W. Scharling, _Bank Politik_ (Jena, 1900); _Die Reichsbank,
1876-1900_ (a history and description of the operations of the bank); Dr
Adolf Weber, _Depositenbanken und Spekulationsbanken, Ein Vergleich
deutschen und englischen Bankwesens_ (Leipzig, 1902); Dr Felix Hecht, _Die
Mannheimer Banken, 1870 bis 1900_ (Leipzig, 1902); Siegfried Buff, _Das
Kontokurrentgeschaft im deutschen Bankwerbe_ (Stuttgart and Berlin, 1904);
Dr Riesser, _Zur Entwicklungsgeschichte der deutschen Grossbanken mit
besonderer Rucksicht auf die Konzentrationsbestrebungen_ (1905); G. M.
Boissevain, _Duitsche en Engelsche Deposito-Banken_ (1905).
ITALY.--_La Banca Popolare di Milano_ (1881).
AUSTRIA.--Compass, _Finanzielles Jahrbuch fuer Oesterreich-Ungarn_
(Vienna).
JAPAN.--_The House of Mitsui_ (Tokio); _The Law and the By-Laws of the
Nippon Kogyo Ginko (The Industrial Bank of Japan)_ (1903).
H. W. Wolff, _People's Banks_ (1893). (On systems worked by
Schulze-Delitzsch, Raiffeisen, Luzzatti, Banche Popolari, Dr Wollemborg,
Popular Banks in Belgium, Switzerland, France, England).
(R. H. I. P.)