The sun., 1919-08-19
BRITISH STIRRED BY
.S.BANKS' ACTIVITY
Moves Made to Extend Greatly
Their Operations in For
eign Fields.
ARMS IN ALL DIRECTIONS
Mergers and Purchasing Of
Stock of Financial Institu-
lions Are Features.

LONDON, Aug. 1s.-Prompted largely
py the vision of strong competition from
the big banks Of the United States in
Foreign felds there have been many
moves made lately by British bankers
toward participating in International
finance to greater extent than ever
This new development IL showing itself
In various ways.
The formation Of the institution de-
signed to promote trade between this
country and Italy was followed by the
organization Of the British Trade Cor
poration, whose object In the promoting
OF trade with all countries In the world
Then came the British Overseas Bank,
which purposes to develop the trade of
the British Empire A feature OF the
extensive programme II the growing con-
nection between the big joint stock banks
ana banking companies operating over
seas.
Capital of overseas banks Ia being OBJ
tained In large amounts by British
banks. Confirmation OF the report that
Lloyds Bank had purchased a block of
shares OF tho Bank OF British West
Africa preceded by a short time only the
acquisition Of substantial interest In
the Bank of New Zealand. Last year
virtually the entire capital stock OF the
River Plato Bank was bought In the
Barclays OF many shares OF the Colonial
Bank.
These purchases are outside the work.
ing arrangements that have been made
by various British, Colonial and Anglo
Foreign banks, such as one completed
recently between the National Provincial
and the London and Brazilian Bank.
More Purchases Expected.
Announcements Of q similar kind are
expected to be made soon.
Notwithstanding that the persons be-
hind the deals number among them some
OF the leaders of finance in Great Brit
ain there has been some criticism Of the
moves. coming. too. from persons who
stand high in public regard in financial
circles. For instance. the interlocklng
directorates that result, which were put
under ban in the United States. IL q
mark aimed at by those who suspect
dangers ahead. Then 1t is noted that a
certain amount of the banks capital Is
being locked up in a manner that would
not admit OF ready realization II such a
measure should become necessary.
When all the capital of a bank has
been obtained II IL commended that II
would be almost impossible in case OF
emergency for the parent bank to realize
tHc b55tt Ny ulSpObAl III tHo Opcn thAThct-
To get the full price even in a normal
market Is doubtful, It is said.
Such contingency was guarded
against by the London Joint City and
Midland Bank. which In acquiring the
whole OF the Belfast Banking Company
wrote OF good will from the price, thus
eliminating possibility of the shares
standing on the books at an inflated
valuation. The purchasing company
in It's balance sheet shows a net invest
ment in the subsidiary OF about $1,6s0.-
900 less than the capital. reserve and
undivided profits of the Belfast bank.
In some other banks. however, the re-
verso was the case, as shown by their
latest published reports. In these In
stances the shares OF the acquired banks
appeared on the books of the purchasing
Institution at figures in excess OF the
capital, reserve and undivided profits OF
the affiliated banks.
Added Liability OF Banks.
As bank shares in England in a great
number Of instances. carry a considerable
liability for uncelled capital. the con-
trolling institution thus has to assume
contingent liability In respect Of the
hank shares which II holds.
Large clearing banks have opened
branches in other European countries.
especially in France and Spain. and
lately in Belgium. Some critics md
fault with the policy also. saying that
other In Institutions refrain from doing II