Page:The Economic Journal Volume 1.djvu/565

 NOTES AND MEMORANDA 543 reduced number of City Private Banks that remained were also the largest, and these were content to publish their accounts without any change in their constitution. Later on several country banks followed their example, and were bold enough to publish statements showing comparatively modest totals. From the foregoing sketch of the evolution of our banking system, it is evident that in the c.risis which it is now undergoing three points stand out prominently. First, the increased pressure which has been applied by public opinion in its demand for the publication of accounts. Next, the reduction in the nominal total of Private Banks by the absorption of some of the smaller of them by Joint Stock Banks, and the consequent increase in the preponderance of the Joint Stock over the older system. Lastly, the general tendency to coalition, and the concentration of banking in a few powerful hands. It is to be hoped that the desire to see balance-heets may not be pushed too far. As with a map, so it is with a balance-sheet: it requires some education and training to read the signs conventional in each. It must not be forgotten that all balance-sheets are not to be held to stand or fall as they may or may not be found to adapt themselves to one Procrustean measuring-rod. arying conditions must at all times prescribe varying rules for the conduct of business with prudence and safety: nor even when comparing what is apparently like with like, can we always be certain that we have before us things that are really identical. Furthermore, a sad experience has shown that a fair balance-sheet may cover an unsound position, and in the United States it has been abundantly shown that th5 official examination of the accounts of National Banks is not only insufficient to guarantee solvency, but also that such examin- ation is apt to create a false confidence that defeats the very end and object of the published statement of accounts. There seems therefore some little danger in the proposal submitted to Parliament during the past session, that publication of accounts should be compulsory and uniform. The passage of any such enactment would in all probability give a further impetus to the elimination of the smaller Provincial Banks by absorption into their larger competitors .a process perhaps inevitable, but whose march it is scarcely desirable to accelerate. The Provincial Banks,. under the old system, have done good service to the trade of the country. Intimately acquaint with the needs of their districts, the position and characters of their customers, they have fostered and developed local trade, agriculture, and industries in a manner that might be impossible under new conditions. It has been made a complaint from Scotland that the resources of the country have, since the Scotch banks opened branches in London, been diverted from their legitimate use to the metropolis; and that heavy discount rates are charged locally, while the money is being employed at lower rates in the London money market. The same complaint has here and there