The morning news. [volume] (Savannah, Ga.) 1887-1900, 1898-07-11

IA
A financial article in the New York Sun
of recent date gives some interesting in
formation with regard to the English
banking system, and notes several lead
ing points of difference between that svs-
tenn and the American In Great Britain
there is no government supervision of in
corporated banks, as there is in the United
States. In the former country 1t is the
policy to have a few very strong banks.
with many branches, while in the latter
it is the policy to have great number
of Independent bfnks with virtually 10
branches. In England and Wales, leav-
ing Scotland and Ireland out of the con-
eideration, the total number of banks. in
Guiding the Bank of England is 81. Their
aggregate capital and surplus is $40. 600. -
900, making an average for each of a lit
tie more than $4,000. These banks
serve a population of thirty-one millions.
In this country there are about 700 banks.
having total capital and surplus of
81, 600 600, or an average for each of
about 100000. They serve a population
of seventy-five millions. In England ana
Wales there is one bank for each 344 coo
inhabitants, while In this country there
is one bank for each $500 inhabitants
The number of banks, however. does tot
represent England's total banking facili-
ties. Each bank has number of branches
running the total of banks and branches
up to 1856 Thus it appears that in pro-
portion to population there are in the
two countries almost an equal number
| of banking establishments.
The English banks are run much more
| cheaply and have a much stronger flnan-
cial standing than those of the United
| States. 1t is easy to understand how 81
! banks can be directed more expeditiously
| and operated more cheaply than 3,556
could be if all of the branches were separ-
| ate banks requiring a full corps of Off
| GERS and directors. Likewise it is easy 20
| understand why the English banks, hav-
| ing an average capital and surplus >of
! $4,000, are much stronger that would
be the case if the total capital and sur
plus were divided among the greater num-
! Der of Independent banks. Not only Goes
the English system result in profit to the
! institutions, but also TO the borrowers as
| it gives them money cheaper.
The belief, which obtains in some quar-
tiers in this country, that in England
"a great number of small local banks
have out great quantities of their cir
culatng notes." is erroneous. Only
thirty-three banks In England issue cir
culaung notes, including the Bank of Eng
land. The smaller banks, including those
of the whole of the United Kingdom have
out only about $75,OOO,OOo of circulating
notes. All of the remaining notes in The
kingdom are issued by the Bank of Eng
land. The Bank of England, however
does not issue notes in its banking ca
pacity, but in its capacity as the agent
of the British government, and its issue
department is as separate from its bank.
ing department as the treasury of the
| United States is from the American ma
tional banks For a certain proportion
of the issue of notes, the British govern.
ment is responsible; for amounts above
that the bank is responsible and is obliged
by its charter 10 hold for each pounl
sterling a pound in specie, of which four.
hfths must be gold and one-hfth may b,
silver, though as a matter Of practice tn,
bank holds all gold.