SUMMARY OF WEEKLY RETURNS OF BANKS OF ISSUE FOR FOUR WEEKS ENDING AUGUST 26th, 1882. Average Weekly Circulation of these banks for the month ending as above: £1,618,141 1,629,325 . £3,247,466 On comparing these amounts with the Returns for the previous month, they And,as compared with the corresponding month of last year:- Increase in the notes of Joint-Stock Banks Total Increase as compared with the corresponding period of last year £128,531 The following is the comparative state of the circulation as regards the Fized issues: The Private Banks are below their fixed issues The Joint-Stock Banks are below their fixed issues Total below their fixed issues £1,930.025 761,813 £2,691.838 SUMMARY OF IRISH AND SCOTCH RETURNS TO AUGUST 26th, 1882. The Returns of Circulation of the Irish and Scotch Banks for the four weeks ending as above, when added together, give the following as the Average Weekly Circulation of these banks during the past month, viz. :— Average Circulation of the Irish Banks £6,850,068 5,493,647 £12,343,715 On comparing these amounts with the Returns for the previous month, they show Increase in the Circulation of Irish Banks Total Decrease on the month.. £51,987 108,500 £56,513 And as compared with the corresponding month of last year- Increase in the Circulation of Scotch Banks £887.129 143,219 Total Increase as compared with the corresponding period of last year £1,030,368 The Fixed Issues of the Irish and Scotch Banks at the present time, are:- £6,354,494 2,676,350 The Actual Circulation compared with the above gives the following results:-- Total Above fixed issues £9,030,844 £495,574 2,817,297 £3,312,871 Average amounts of Gold and Silver coin held by these banks during the past month : Being an Increase of £15,707 on the part of the Irish Banks, and a Decrease of £592,236 on the part of the Scotch Banks as compared with the Return of the previous month. CIRCULATION OF THE UNITED KINGDOM TO AUGUST 26th, 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 £233,835, an increase in Private Banks of £38,929, and an increase in Joint-Stock Banks of £89,602; in Scotland an increase of £143,219; and in Ireland an increase of £887,129. Thus showing that the month ending August 26th, as compared with the corresponding period last year, presents a decrease of £105,331 in England, and an increase of £925,044 in the United Kingdom. The Returns of the Bank of England for the month ending August 23rd give an average amount of Bullion, in both departments, of £22,105,631. On a comparison of this with the Return for the previous month, there appears to be a decrease of £1,589,285, and a decrease of £2,450,181 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 August 26th was 26,095,974, being a decrease of £576,529 as compared with the Return of the previous month, and a decrease of £215,612 as compared with the corresponding period of last year. THE BANKERS' MAGAZINE AND Journal of the Money Market. NOVEMBER, 1882. SECURITY FOR NOTE CIRCULATION. THE question of giving security for the note circulation of the issuing banks has often been discussed in this country, but has never been brought to any satisfactory conclusion. The great errors in this conduct of their business, which were committed by the banks of this country early in the commencement of this century, caused a deep-rooted, but, we believe to a great extent, unjust prejudice against the practice of issuing notes by private institutions. The state of the law at that time, which, for the benefit of the Bank of England, prohibited the establishment of other joint stock banking institutions in England, tended to keep the banking business of the country in scattered and therefore weak bodies. And when this prohibition was removed and joint stock banks were allowed to be established in England, security for the note circulation was not thought of, or at least was never carried through. Only a few persons had considered the subject. The late Mr. George Warde Norman was one of these. His desire was to see the circulation of the country centered in the Bank of England. But he was willing to allow an alternative. In his pamphlet on "Currency and Banking," originally published in 1833, and republished in 1838-a work which had a considerable influence on the formation of public opinion, and on the leading it in the direction which enabled Sir Robert Peel to carry the Banking law of 1844, Mr. Norman proposed the following alterations with respect to the provincial circulation :-"All joint stock and private banks to give security within two years for the amount of their notes in circulation to a Board of Commissioners to be VOI. XLII. 61 nominated by Parliament, unless they preferred to adopt the circulation of the Bank of England. Joint stock banks of issue to publish their accounts; private banks to publish their circulation and reserve in coin and Bank of England notes." Had these very reasonable proposals of Mr. Norman been adopted their influence on the note circulation, and consequently on the banking business of the country, would have been very considerable indeed, and might even have averted many of the banking troubles which we since have had to deplore. Other counsels, however, prevailed. The Bank of England and Sir Robert Peel were anxious to extinguish the provincial note circulation. The influence of the Government, backed by the most powerful banking institution of the country, had a weight which no body of private persons could withstand. Doubtless also there were differences of opinion among the other banks at that time, as there have been since, about providing security, and about the amount of publicity to be given to their business. The Act of 1844 took its existing form, and the provincial note circulation of the country has remained unsecured, except to the extent that a portion of it has been provided for through the working of recent legislation, which has left the liability of shareholders in joint stock banks of issue unlimited as far as their note issue is concerned. This security, however, was only arranged for through an incidental provision in the Act permitting limitation of liability to banks, and can hardly be considered as arising from any forethought on the part of the English Legislature. We should be very glad to see a practical proposal made by the banks of issue in this country to give security for their circulation. Such a proposal would strengthen their position greatly, and would throw a heavy responsibility on the Chancellor of the Exchequer if he were to decline to accept it. The subject has, however, been very carefully considered in the United States, where banking has gone through many changes and vicissitudes, as was to be expected in a business carried on in a young and highly speculative country which is moving so rapidly onwards in its course, and naturally contains conditions very different from those of a long settled country like Great Britain. The national bank system of the United States, which was established in 1863, and has therefore now stood the test of nearly twenty years' experience, provided amongst other points that the note circulation issued by their banks should always have behind it a deposit of Government bonds sufficient to secure the holder in case of the failure of |