Evening Republican, Volume 14, Number 170, Rensselaer, Jasper County, 19 July 1910 — BANKING IN ENGLAND. [ARTICLE]

BANKING IN ENGLAND.

Methods in Which Business la Transacted by Engllib Banka. The following report on banks and banking In England is furnished by Consul Frank W. Mahin of Nottingham. In Nottingham, a city of 260,000 population, there are only eight separate and distinct companies doing a general banking business. Only one of these is a purely local company, the others being branches of London banks. As the local company has several branches scattered about the city, there Is no lack of places where banking business may be done. Besides, there are some local savings institutions. Formerly! these London branches were nearly all local banks, but they have been gradually absorbed by companies in the metropolis. Banking conditions elsewhere In this country are about the same. According to statistics going back 30 years, there were then 836 joint stock and private banks in England, excluding foreign and colonial banks, with 1,789 branches. At the end of 1908 the number of banks was 84 and of branches 6,078. Thirty years ago the joint stock banks numbered 118 and the private banks 218. At the end of 1908 the numbers were respectively 50 and 34, showing the passing away of the pri-vate-bank. The general effect of the absorption of a provincial bank by a London co._npany and its conversion into a branch is that the whole of its funds are administered from London and a greater proportion of its funds than formerly Is used in the London money market All Important loans by a branch, it is understood, must be approved by the London bank. This, it is believed, reduces to a minimum speculative or personal favpr loans by local managers. It seems to insure soundness and stability, for as a matter of fact bank failures are practically unknown in England, though this may be primarily due to the generally safe banking methods. It is very seldom, also, that one reads of embezzlements. The local bank in Nottingham issues checks and drafts on foreign banks in the* foreign currency, but the branches send applications for such paper to the London offices, which write them. This is presumably the practice generally throughout Ehgland. Checks are used in thia country, perhaps more than in any other, though each must bear a penny (2c) stamp. Besides the usual custom of paying local accounts by check, it is* the common practice to pay an account due in any other part of the country by a check on one’s local bank instead of buying a bank draft or postal money order as, for instance, would usually be done in the United States. Banking seems to be highly profitable in England, as the reports of the large banks show steady annual dividends of from 15 Ao 25 per cent. The discount rate is low, and interest is usually allowed even upon current deposit accounts. But the banks charge 2s 6d per £IBO (60c per J 486.65), for handling checks, and this generally results in more than the Interest paid on current accounts. Such is the custom in Nottingham, at least.