Page:1902 Encyclopædia Britannica - Volume 26 - AUS-CHI.pdf/142

 BANKING

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We may compare this amount with the circulation, January 1901 :— £29,795,599 Bank of England. 344,760 Private banks 825,009 Joint stock banks £30,965,368 Total in England 8,565,743 Scotland 7,288,360 Ireland United Kingdom

£46,819,471

—an apparent increase of £8,800,000 since 1844. The decrease of the country circulation in England and the increase of the Scottish and Irish circulations may be set off against each other. The increase is practically in the notes of the Bank of England; in 1901 about£8,800,000 more than at the earlier date. It is probable that a large part of this amount is held in the reserves of the banks in England and Wales, and that the active note circulation of the United Kingdom is but little larger now than half-acentury since The Government received from the note circulation in 1897, the latest statement to handBank of England, out of the profits of the issue, £175,065, 10s.; composition for duties on bills and notes, etc., £123,211, 9s. 3d. ; and a small sum for bankers’ licenses not exceeding £2500 a year. With respect to the other banks in England, the London banks first claim our attention. In 1844 there were 49 banks in London, 26 connected with the Clearing House. At that time only private banks were allowed to be members. Gradually the joint stock banks made their way into that body, and in 1901 the numbers were 3 private banks and 16 joint stock banks who joined in the clearing,—19 banks in all. The diminution in the numbers of the banks has been mainly the result of amalgamations. In London, Child’s Bank and Hoare’s of Hanks Fleet Street, and among the provincial banks, Smith’s of Nottingham, claim an antiquity greater than that of the Bank of England, the last claiming to have been founded in 1688. The old Bank of Bristol (Bailey, Cave and Co.) was founded in 1750. The business still exists amalgamated with Prescott and Co. Limited, of London. The Hull Old Bank (Pease and Co.) dated from 1754. This business also still continues (amalgamated, 1894, with the York Union Banking Co. Limited). The banks of Gurney and Co., in the eastern counties principally, established more than a century since, have with numerous other banks of similar standing amalgamated with the firm of Barclay and Co. Limited, of Lombard Street. Of recent years amalgamation has been active among English banks. The banks in England and Wales are believed to have been 350 in number in 1792. Those registered from 1826 to 1842 were :— Private. Joint Stock. 554 1826 6 465 1827 35 416 1833 311 118 1842 The effect of the panic of 1826 is shown by the reduced number in 1827. Since that date the diminution in the number of the banks has gone on regularly. At the present time the banking business of England is carried on practically by 22 private and 103 joint stock banks, some of which are more properly private firms under joint stock forms of organization. Though the number of banks has diminished the offices have increased greatly. In 1858 there were 2008 in the United Kingdom. In 1900 there were 6521, divided as follows :—

[britlsh

England and Wales .... 4741 Isle of Man ..... 21 Scotland ...... 1081 Ireland ... . . 678 6521 In Scotland and Ireland a different form of organization from that in use in England has long prevailed. The private form of partnership in both countries gradually died out during the 19th century, and all existing banks there are now organized as joint stocks. The earliest was the Bank of Scotland in 1695. There are in Scotland at the present time 10 banks. All these banks possess the right of issuing notes. They are permitted by the Act of 1844 to issue £2,676,350 without any restriction on what was to be held against the notes in circulation and to any extent beyond on the deposit of bullion. The return of 17th March 1900 showed £7,286,709 circulation and £5,834,104 bullion held. In Ireland a very similar state of matters exists. The earliest bank was the Bank of Ireland, founded 1783. The same clause as in the case of the Bank of England, limiting the partners of any other bank to six, was inserted in the Act to the great disadvantage of Irish banking. This restriction was afterwards rescinded. At present six banks are allowed to issue £6,354,494 against securities and anything further that is required on bullion. On 17th March 1900 the return was £6,651,392 circulation and £3,200,385 bullion held. Though the note circulation is the feature in banking which attracts most attention from those unacquainted with the real working of the business, it is virtually a trivial detail in comparison with the deposits. It is, unfortunately, impossible to give any trustworthy statistics of the position of banking in the United Kingdom extending back for any considerable time. It is only of recent years that any statement of these other than an estimate has been possible owing to the long-continued reluctance of banks to allow any publication of their balance sheets. A paper by the late-Mr Newmarch, printed in the journal of the Statistical Society for 1851, supplies a basis for an 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 £250,000,000 to £360,000,000. The estimate in Palgrave’s Notes on Banking, 1872, excluding deposits in discount houses and the capitals of the banks, was from £430,000,000 to£450,000,000. The corresponding amounts at the close of 1900 were, in round figures, including acceptances, etc., £920,000,000. The total resources, including capitals and reserves (in round figures, £130,000,000) and note circulation, were for 1900 :— Banks in England and Wales (including £844,259,000 Bank of England) .... 137,182,000 Scotland .... 67,988,000 Ireland ..... 1,001,000 Isle of Man .... £1,050,430,000 The progressive growth in bank deposits since it has been possible to keep a record of their amounts, affords some means for 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 doubled since the latter date. 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 fractional amounts are settled. A large proportion of these are arranged through the operation of the London Clearing House. This is facilitated by