2st Oct.
Tue: opening arti¢le in the September issue of Mr. A: J, Wilsdn's always-read able and valuable magazine is headed How long: is Money likely to continue cheap 2," but it is reellly a restatement of Mr. Wilson's case against our present banking system. Mr. Wilson is con vinced that sooner or later. this system must lead to a-financial panic. "'l'venty= one banks in England alone now owe the public about £345,000,000 on deposits, acceptances, and notes in circulation. Four of these, the London and County, the National Provincial, Lioyd's, and the London and West minster, owe about £145,000,000 It-means good to-the borrower without doubt, in that: competition is much better organised and therefore keener, and that the facilities-giveh-to-users of: bankers' money.aré, for this reason alone, greater, but it also implies dangers to our' banking system and' to: the nation. at large, to which attention must once again be drawn." With the great London banks the average proportion between cash and deposits is about 12 percent;'and the' foundation of credit is the belief. that every demand' is. immediately payable, if required, in gold. " Advancing markets and the excessive locking-tp of more capital than we possess in new adventures, are. therefore: drawing the nation towards a domestic banking crisis,.for which neither banker nor-the public are in the least prepatéd—a crisis materially different in character and risks from most of those experi¢nced'in the country since 1825, and: one; when it. does' come;: certain to be far there world-resonnding- in its couseqiences. When face to face with: this crisis, the reserve of the Bank-of England, large as it looms now, may. prove totally inadequate to meet'the demands upon it: A run upon two or three of the great banks would exhaust it ina couple of days; and then the Bavk world -be helpless, because, -itself-unable to meet its'engagements, except by the sale. of securities, for which there would: be no market, or-only a market at a-ruitious loss, it would' be ' hoist- with: its own petard,' and-have to-pay for an-inflation of the market its policy helped to create. Then would come the inevitable suspension of The* Bank: Act: Mr.'Wilson calls this suspension an "essentially
Text read from the printed page and cleaned; old type leaves the occasional error.