Ireland, 6 Joint-Stock Banks Scotland, 10 Joint-Stock Banks The Fized Issues of the Irish and Scotch Banks at the present time, are: The Actual Circulation compared with the above gives the following results:-- £842,346 2,908,956 Being a Decrease of £76,564 on the part of the Irish Banks, and a Decrease of £377,310 on the part of the Scotch Banks as compared with the Return of the previous month. Average amounts of Gold and Silver coin held by these banks during the past month: CIRCULATION OF THE UNITED KINGDOM TO JANUARY 14th, 1882. Average Weekly Circulation for the month ending as above, as compared with the previous month: As compared with the corresponding period of last year, the returns show a decrease in the Bank of England circulation of £937,805, a decrease in Private Banks 01 £63,381, and a decrease in Joint-Stock Banks of £22,437; in Scotland an increase of £97,330; and in Ireland an increase of £416,243. Thus showing that the month ending Jan. 14th, as compared with the corresponding period last year, presents a decrease of £1,023,623 in England, and a decrease of £510,050 in the United Kingdom. The Returns of the Bank of England for the month ending Jan. 11th give an average amount of Bullion, in both departments, of £20,394,852. On a comparison of this with the Return for the previous month, there appears to be a decrease of £299,479, and a decrease of £3,949,368 as compared with the corresponding period last year. The average amount of Coin held by the Banks of Issue in Scotland and Ireland during the month ending Jan. 14th was £6,964,639, being a decrease of £453,874, as compared with the Return of the previous month, and an increase of £17,019, as compared with the corresponding period of last year. THE BANKERS' MAGAZINE AND Journal of the Money Market. APRIL, 1882. THE NOTE CIRCULATION OF ENGLAND. THE tables which follow at the end of this paper give a complete summary of the history of the note circulation in England. from the year 1834, ten years before the Bank Act was passed, to the close of the year 1881. A few years earlier than 1834, the provincial note circulation had been far larger than it has ever subsequently been. There is a reason, however, for taking the year 1834 in this case as the starting point for our inquiry, as the total note circulation of England and Wales was nearly the same in 1834 as it was in 1881, the amount in the first year named having been £29,100,000, and in the latter £29,630,000. But the division of the circulation between the provincial banks and the Bank of England was very different indeed at the two dates. The provincial circulation was in the earlier date onethird of the whole note circulation of the country. It is now barely one-tenth of it, although the whole of the system of joint stock banking has risen up during that time. The tables which contain the circulation from 1834 to 1843 are derived from Tooke and Newmarch's "History of Prices." When we compare the amount of the provincial circulation and those of the Bank of England during those years we are better able to understand the importance which is ascribed to it. Not only was the provincial note circulation considerably larger fifty years ago than it is now, but its relative importance to the trade of the country was infinitely greater. We can gauge this in a rough way by comparing the amounts of the exports and imports of the London Clearing House returns with the note circulation. We will select the years 1844 and 1881 for the VOL. XLII, 21 comparison, as at any earlier date the Clearing House returns were not available, and they are indeed only a matter of estimate in 1844; the regular weekly publication to which we are now so thoroughly accustomed having been an arrangement of a far later date. EXPORTS AND IMPORTS, CLEARING HOUSE RETURNS AND NOTE CIRCULATION IN ENGLAND AND WALES FOR 1844 AND 1881. If we take the amounts under their separate heads at the earlier date to equal 100, the comparison will work out as follows: = 1844 Exports and Imports together 100. Clearing House Returns Circulation 100. 1881 Exports and Imports together-437. Circulation 105. = 100. Clearing House Returas = 425, The increase in the Clearing House returns has been in some degree proportionate to that in the exports and imports, but the growth in the note circulation has been but trivial. Several reasons have conduced to this. Notes are not used now for several purposes for which they formerly were regularly employed. The clearing bankers' balances are no longer settled in bank notes, the admission of the joint stock banks to the Clearing house has also assisted in economising the use of notes. Bank notes are now far less employed in the payments for estates and large purchases than they used to be. Arrangements have likewise been made in several of our great commercial centres, such as Liverpool and Manchester, whereby the use of bank notes is economised. These causes have not any of them been without their influence, but the most powerful of all which has had the widest influence in bringing In this about has been the change in the habits of the people. The keeping an account with a banker is now a regular and habitual thing among many classes who would never have dreamed of doing such a thing forty years ago. It might not have been easy to them to open an account with a bank if they desired it. The number of branches of banks was small at that time; it has since been greatly extended. Branch banks were not very common at that date, and were not looked on with favour, even where they existed, by many. Thus we find Sir Robert Peel saying, in his speech on the Bank Act of 1844, "I doubt the policy which some banks have pursued of establishing very numerous branches. I doubt whether banks having fifty or sixty branches, some in very small towns, renting expensive houses and appointing agents with considerable salaries, can derive profit from such a course." expressing this opinion, Sir Robert Peel reflected, no doubt, the policy of the London bankers of that date. The possibility of extending their business by bringing business facilities nearer their customers never suggested itself to them. No body of men engaged in a business ever had a better opportunity of extending it than the London bankers had some forty years ago. Hardly any country bank ever had such a field to work in as many districts in London itself, and even many of the suburbs of London, present. Bayswater, Brompton, Hackney, Hammersmith, Islington, Kensington, Marylebone, to name some only of the important cities, as they would be designated at once if they were separate communities instead of forming part of the vast "province covered with houses," as the metropolis has been well called, were all scarcely worked in a banking sense comparatively a few years ago. These districts are, however, all occupied now by the enterprise of joint stock associations, who have found in them an almost inexhaustible supply of deposits. Deposit banking and cheques drawn against accounts have so completely superseded the use of notes in the larger transactions of ordinary business, that it is not easy for those who have been accustomed to the existing methods of procedure alone to realise the system which preceded it. Some idea of the importance attributed by the provincial bankers to the possession of a note issue can be obtained from reading the speech of Sir Robert Peel on the Bank Act of 1844, to which we have alluded before. Throughout that speech the advantages of the privilege of a note issue, and the mode in which the circulation itself was to be regulated, are constantly brought forward. It has always seemed to us a |