The Bridgeport evening farmer., 1910-04-04

3 'rWhat steps taken are most effectiv 3 in attracting gold or in preventing it s overfloW?'' Sir Felix replied thus: f"The raising of the discount rat' and not only of the nominal Bank C England rate, but of the market rat 8 as we'll You often have conditio
 | which you describe as the open marke
 rate, that is 1 to per cent lower tha; that of the bank rate. What tn , tions, if they wish to attract gol
 and prevent it's leaving is to pay nor
 in the market for money than othe people would; they must artifcia1l , raise the value of money outside; the:
 mnediately become borrowers an sweep up all the floating supplies "a would pay us. They do not do i
 themselves. In one instance they hay done it direct, but in most eases the.
 employ a broker. They give securit.
 they sweep up the surplus funds, am
 that becomes effective in raising tn discount rate; That again has aa I It is the foreign exchanges that reg u1ate the outflow or influx of golt and foreign exchanges can only b. | regulated by the value of money T ROYAL BANKS OF SCOTLAND. | Dependence of Scotland upon tn. Bank of England for gold in case os need was one of the salient feature. brought out in the inquiries in regart 1 to the Scotch banking system. Inter views with the chief officers of tht Royal Bank of SoctIand,lthe Bank os | Scotland. the Union Bank, and the
 ator Aldrich, MT. vreeland and other
 members of the commission in the
 summer of 1909. The answers given al
 each institutfon in respect to the
 methods of Scotch banking were sub Stantially similar
 | The circulation in Scotland 1S is-
 sue sued by eight banking 3a l.' 1nstieqtions ut | istence in 1845, when the British Par lament forbade the creation Of any | more banks of issue and fixed the Him. the authorized circulation of the Scotch banks. is only &2,676, $50, or
 about $13, COG, GOO Above this amount however, notes may be issued without for pound by gold, and the actual circulation ranges up to about E7,- 800. 900. The Scotch law differs from the English law in allowing notes to be issued as low as G1 sterling, while the minimum in England Is G5. It was explained to the commission by of the Royal Bank, that weekly nuc- t1Iations in the circulation are chiefly due to the payment of wages. The seasonal fluctuations are at harvest time, at Christmas, and New Year, and to a much large extent at the half yearly terms of Whit Sunday (May) rents are paid, interest on mortgages is collected. and half yearly wages are paid.
 The system of cash credits, which of the chief features of the Scotch system, is still employed, but not ap- Ptaf parently bx on M so 5age that scale 9t ms may apply to be allowed to overdraw such amount as he may require from time to time up to specified amount, and he and two or three ,suretfes joint ly and several1y become bound to re- pay the amount that may at any time be owing, with interest, on demand being made on them. Each obHgant is liable to pay the whole sum, leav- ing him to obtain repayment from his co-obligants.
 upon a basis independent of that of England, it's policies are governed largely by those of the big British bank. It was stated by MT. Tait that 'tthe Scotch banks all allow the same rate and charge the same rates for discounts and overdrafts. and these England rate.'' The Royal Bank, he declared, had an account with the Bank of England which had been in pE19a pnera91oIl @ c 5lnGe 45zS' o, + ana % Goscss land all over Scotland. This subject was set forth somewhat more fully in Sir George Anderson, general manager of the Bank of Scotland, who said:
 fsIn common with most Of the other banks in London, all the Scottish banks represented there keep accounts
 
 operations are made as required, a minimum balance being usually left | in the hands of the Bank of England | to recoup them for trouble in keep | sts between the Bank of England and | the Bank of Scotland for drawing | documents, and the former act .as clearing agents in London for the | Bank of Scotland.
 '.The Bank of England is the banker l q ic< f17n Ia icS-E 5uer of notes, issuing it's notes when | required in exchange for gold bullion, | and paying notes in gold coin; and ! being the bankers bank, the weekly | 'eturns as to it's position form the pest possible barometer of the state | of trade and credit in the country. | Bank of England from time to time serves as a guide to the other banks throughout the country in fixing their .ates for loans and deposits
 The Scotch system, with it's eight arge banks. is essentially a system of concentrated control at the center ar ,ranebss The eotcS re6 Blanks 6age ,175 offices or branches, or an average if 1 for every 4,000 inhabitants. Econ
 my in the circulation of gold which, it was declared by MT. Blyth. general manager of the Union Bank, la enabled the banks to dispense with keeping large balances in actual coin F tt the branches. The managers of the branches are known in Scotland as gents, and have power to grant ad- 7ances, but subject to the approval of he head office. It was declared by Ir. Bogie, general manager of the Commercial Bank:
 'HThe discretion allowed is dependent m the size of the branch and the na,- ure of the business and the class of and on the record of the gent. By our system of reports on Idvances (weekly, monthly and guar er1yl we keep in close touch with the .dvances and means of borrowers. The London branch is, of course, on ifferent lines, and our manager there las greater powers than an agent at branch in Scotland.''