New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-10-06
English Banks
Preparing for
Reconstruction
Sir Edward Holden Defends
General Tendency Toward
Amalgamation


London City and Midland Bank and a
member of the financial mission that
came to this country in 1915 on behalf
of the $500,O0O,OO0 Anglo-French loan,
made a strong defence of the tendency
toward banking amalgamations in Eng
land at the annual meeting held re-
Gently in London.
The opinion was expressed by Sir
Edward that stronger banks would be
needed to take care of after-the- war re-
construction and foreign trade devel
opment and to meet German competi-
ton. The concerns which have been
converted from peace production into
munition factories will have to be re-
converted to their original condition,
he observed. and in the case of a num-
Der of those branches of industry
which have continued in their pre-war
occupation, such as those producing for
home consumption and for export, the
plant and machinery have been allowed
tc run down, and it will be necessary to
renovate them and bring them up to
date, and even to better condition
than before the war. Large sums of
Toney will have to be found for the
purchase of raw material, and large
sums will also be required to improve
the trade position generally. 1t is es-
timated that no less than s1,50O,OO0OO0
will be required for these purposes,
and credit will in some way have to be
created for that amount
Another reason given by Sir Edward
why bank amalgamations should be
permitted was that every effort should
be made to retain London as the
financial centre of the world. zone of
our principal competitors in the
future will be Germany" he said.
And just as the Germans made great
preparations for the war by increasing
their armies and supplying themselves
with large amounts of gold and NUM-
tlons of war, so they are at the present
time making their preparations for
after-war trade. These preparations
take the form not only of continual
ton OF the Darehnskassen, but also of
enlarglng and strengthening their
JOINT stock banks by amalga nations
and by the opening of new branches.
AS result Of their amalgamations it
is estimated that the Deutsche Bank
at the present time has over $780,
100000 Of deposits. the Disconto-
l,off
Dresdner over s17O, 100000, in addi-
ton to which it must be remembered
that each of these three banks is
banks, over which they exercise direct
control. and also a number of banks
with which they are indirectly con-
nected. For example, the Deutsche
Bank is at the head Of and directly
controls a banking group consisting of
twenty-five banks with total deposits of
about $3.50, 100000, while the group
of the Disconto Geselchaft is made
up of fourteen banks, with total de-
Dresdner Bank also has a number of
affiliations. These are the three
principal German banks with which we
shall have to compete, and to do so
successfully we must meet them on a
fair equality Of size"
In the opinion Of Sir Edward there
Will be scramble for gold after the
war. for the metal will be in great de-
mand for use as a credit basis. of
we can import gold" said he. land use
that gold as the basis on which credit
can be created. our difficulties will
not be so great, but, as most other
countries will be IN position similar
to ours, it follows that they may also
require to use gold for the same pur-
pose. At the present time America,
Holland, Japan and Spain have really
more gold than they require, and it is
conceivable that some of their gold
may gradually flow away to our coun-
try and to countries in a position like
ours In addition to the gold in for
eign countries which we might hope to
draw upon, we have, of course, the
gold coming from the South African
mines, amounting last year to about
1913, 100000 and the gold from other
parts of the Empire, amounting in
1917 to about f1S,000,000
There will undoubtedly be a great
demand for gold after the war, and
when the South African gold is again
offered Tor sale in London. we should
at all costs retain it in this country
and not allow other countries to take
1T from us. as was done before the
war We repeat that if gold can be
obtained matters may be arranged
without much difficulty, but we must
not overlook the fact that the OUTPUT
of gold is diminishing in consequence
of the increased cost of production,
and we may be called upon to adopt
some measures to assist production
and maintain the output at a high
level. If gold cannot be obtained the
currency note, the Bank Of England
note, and the Bank Of England bal
ancc will have TO be used to take the
place of gold that is to say large ad
vances will have to be made by the
banks. Such advances will create
credits, and the cash balances, which
will have to be used as reserves for
those credits, will not be gold, but
viii be the currency note. the Bank of
England note. and the Bank of Eng
land balance