The Press. FRIDAY, MAY 12, 1893. THE BANKING OF THE WORLD.

Press, Volume L, Issue 8481, 12 May 1893, Page 4

The Press. FRIDAY, MAY 12, 1893. THE BANKING OF THE WORLD.

In yesterday's issue we showed that banking operations are to a very large extent based on of credit, depositors trusting the- Banks with their capital and : the «stanks trusting their borrowing customers with the use of the money at a higher rate of interest. But an essential feature of all banking business is that the Bank should always be in a position to meet ail demands made upon it for coin>fts these demands are made. In times of ordinary security this is met by the Banks holding a reserve of coin and bullion whioh experience baa shown to be equal to all the ordinary demands made upon them. At such times deposits will be daily maturing, and in some cases being withdrawn. On the other hand, other deposits will be coming in, so that banks under such circumstances have no difficulty in discharging their obligations as they arise. It depends on local circumstances what tbe proportion of coin to liabilities should be; the principle being that there must) always be in the banks' coffers as much money as there is the least likelihood of being called for by depositors. In Australasia the coin reserve of the banks usually stands about £20,000,000— it was £20,828,743 on December 31st ]aat. Iv other countries the reserve is regulated by the facility with which securities can be converted into cash. In England many of the banks hold their reserve largely in Government stocks, whioh can always be turned into cash, arid which v of course give some return to the Bank at the ame time. When we come to look at the specie reserves of the Banks of all nations, we realise what a comparatively small amount of reserve capital is needed to transact the enormous business of the world, and how largely, as we have said, the business of banking rests upon the basis of confidence and credit. At the end of 1889 the specie reserves of all the Banks in the world was only put down at £367,900,000, and of that amount, notwithstanding t<|e enormous trade she does, the Kingdom only held £28,000,000. The figures are as follows:—

Specie held by Banks. & United Kingdom .„ 28,000,000 France ... .., 101,000,000 Germany... ... 59,000,000 Russia ... ... 33,000,000 Austria ... ... 21,500,000 Italy ... ... 14,000,000 Spain ... ... 9,500,000 Sweden ... .„ 2,700,000 Norway ... .„ 2,500,000 Denmark... ... 3,100,000 Belgium ... ... 4,400,000 Holland ... ... 10,600,000 Switzerland ... 3,900,000 Greece 1,000,000 Total for Europe... £294,200,000 United States ... 34,300,000 Canada ... ... 1,400,000 Australasia .., 19,300,000 Cape Colony ..-, 1,600,000 Argentina ... 4,500,000 Uruguay ... ... 600,000 India ... ... 12,000,000 Graud total ... £367,900,000 The above figure?, as we have said, only represent the specie reserves held by the Banks, which is considered sufficient to meet the demands of the public for coin at any cue time, and baa no relation to the money actually in circulation. That, of course, amounts to a very much larger earn. The currency of the different nations of the world has been the subject of elaborate discussion, and various estimates have been made of its total amount. The following table, how e?«r, may be regard*! aa approxi-

mately accurate. The estimate does not include the depreciated currency of South America, the value of which is only imaginary :— £ Gold currency ... 790.00Q.000 Silver currency ... 801,000,000 Paper currency ... 846,000,000 Total ... £2,437,000,000 Out of the above sum Great Britain, with all her enormous trade aud gigantic commercial transactions, absorbs only £163,000,000, or £4 4s per inhabitant. France requires £443,000,000, or £11 8a per inhabitant, to provide for the trade of the country. Australasia absorbs £30,000,000, or £8 23 per head of population. Canada only takes £10,000,000, or £2 per head. Iα the whole of Europe the currency is stated to stand at £1,441,000,000. The figures of a few of the principal countries of the world are given for the purpose of comparison. As we have already said, the table does not include the depreciated currency of South America. It includes the gold, silver, and paper currency, the latter being, generally speaking, the note issue resting on a metallic basis.

But neither the Bank reserves nor the general currency represents in any degree the extent of the financial operations of the commercial and trading world. The records of the London Clearing House alone show figures which the ordinary reader will hardly pretend to grasp, reaching in one year to as much as £6,500,000,000, and as the same system prevails all over England, the Continent, and the j United States, the aggregate figures ! rise to amounts bewildering in their magnitude. The Clearing House returns of twenty-six cities of the United States in 1889 were as i follows: — United States £11,580,000,000 Berlin ... 3,780,000,000 Paris 2,200,000,000 London 6,500,000,000 And if the figures for all the great commercial centres of the United Kingdom were given, they would probably exceed those even of the United States, -with her 60,000,000 of people.

Ulion .terl mg. Great Britain... France Germany Russia Austria .J ItalySpain ...j Portugal ...j Scandinavia ... Holland Belgium Switzerland ... Turkey Gold. 102 178 122 39 8 22 19 9 6 5 11 3 17 Silver, j 22 I 150 45 14 19 11 24 2 2 13 j 11 3 l 12 Paper. 39 115 71 123 76 57 30 I i; 13 I 17 j 15 I 6 j 9 I Total. 163 443 238 176 103 90 i 73 ! 12 i 21 j 35 I 37 i 12 I 38 ; i ' Totalfor Europe] 541 328 j 572 | 1441 United States... Canada Australasia Japan China India Java Cape Colony ... Egypt A Igeria Cuba Various 141 3 22 19 87 1 2 9 150 170 18 208 6 6 26 436 10 30 54 150 192 18 8 31 8 16 43 - - 10 12 - - 7 27 2 4 14 1 4 3 - 3 12 29 " i Grand Total ..J I 790 801 I 846 ■ 2437