Perth Amboy evening news., 1923-08-14
BRITISH BANKS AND TRADE
TOLD OF BY MIR. HASKIN
Daily Letter by Frederic ,. Haskip

WASHINGTON, Aug. 14:-To
study the foreign trade of the world
inevitably means to study the trade
of Great Britain and that, as in
evitably, means TO study the affairs
of the great British banking insti-
tutions.
Banks in England means some
thing different from banks in the
United States. In this country, the
banking business is a highly COM
petitive pursuit, carried on along
very democratic lines. Any live per-
sons can start a national bank, under
the national banking laws, provided
they can put up the prescribed min
lmum of $4,000 in capital and pro-
vided the Comptroller of the Curren-
cy thinks that the city or town in
which it Is proposed to start the
bank has not too many such insti-
tutions already. Such an opinion
on his part Is the rare exception.
1t is even easier to start a State
chartered bank and less money Is
required.
The result is that there are more
than 10000 banks operating in the
United States. Great Britain pre-
sents a sharp contrast. The system
there is wholly different. Compared
to the 10000 American banks, Great
Britain has nearer 80 banks. In
fact there are but five banks which
dominate the British banking field,
doing practically all the banking
business. They operate a large num-
Der of branches. The head offices of
the big five are in London, located
in what is known as the City, hat Is
the old section of London which
used to be surrounded by a wall.
Most of the banking institutions are
on Lombard Street, or Threadneedle
Street. Th~readneedle Street is the
Wall Street of England. The Bank
of England is popularity referred to
the THE Old Lady of Threadneedle
Street,
These five big banks have branches
In all the industrial cities of Great
Britain and even in the smaller
towns. In this way they bring their
facilities to every section of the coun-
try, so that the parson at Gretna
Green, through his local bank branch
has equal banking facilities with
the Industrial capitalist in London
or Manchester. The head office is,
theoretically, the whole, and each
branch is, theoretically the whole.
The same banking solidity stands
back Of the transactions of the small
est branch that stands back of the
million pound dealings of the Lon
don office.
The story is told of a cautious old
lady who went into one of these
branches to arrange a deposit &C
count. She said she had 500 pounds
and she wanted to deposit 100 pounds
in each of the five branches, so that
If one failed, she would not lose the
rest. She did not believe, she said,
in carrying all her eggs in one bas-
ket. The fact was that If one branch
closed it's doors, the whole system
would do so, SO her money was no
safer in FIVE branches than concen-
trated in one.
The Big Five Banks
The Big Five Banks of Great Brit
ain are Barclays Bank, the London
Joint City and Midland Bank, Lloyd's
Bank, the National Provincial and
Union Bank and the Westminster
Bank. Each of these has been bull
up through the amalgamation OF
numerous smaller institutions. Each
of these banks is larger than any
American bank.
Nearly every one of the Big Five
has deposits Of $1,000, 900 900. This
is an enormous sum for one banking
institution to have on deposit. Ii
represents the aggregate of the de-
posts in the many branches of the
parent bank.
These mighty centralized banking
institutions are a big factor in Brit
ish trade. In addition to the domes-
tic branches, they maintain branch
es in foreign countries. They make
a speciality of serving the needs OF
importers and exporters. They assist
these traders in collecting their bills
and in paving the way for orders OF
merchandise. They gather credit in
formation on prospective customers
and by financing purchases increase
the volume of sales of British goods
abroad.
These institutions are conservative
They do not go in for wildcat pro-
motion schemes, but by standing BY
the side of the importers and tx.
porters, year in and year out, they
gradually build up greater and great.
Ter trade.
The men at the head of these in.
stitutions are great figures in Great