S^y''* msf BOUGHT WITH THE INCOME FROM THE SAGE ENDOWMENT FUND THE GIFT OF Henrg 1®. Sage 1S91 A4nn jo!mL'"^"''' lwSl'?llll'inr'iY^''^'T^ LIBHaST" 3 1924 092 584 22(5 Cornell University Library XI The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924092584220 HISTORY OF BANKING IN ALL THE Leading Nations. A HISTORY OF BANKING IN \LL THE LEADING NATIONS; COMPRISING THE UNITED STATES; GREAT BRITAIN; GERMANY; AUSTRO- HUNGARY; FRANCE; ITALY; BELGIUM; SPAIN; SWITZER- LAND; PORTUGAL; ROUMANIA; RUSSIA; HOLLAND; THE SCANDINAVIAN NATIONS; CANADA; CHINA; JAPAN; COMPILED BY THIRTEEN AUTHORS. EDITED BY THE EDITOR OF THE JOURNAL OF COMMERCE AND COMMERCIAL BULLETIN. IN FOUR VOLUMES. VOLUME IV. PUBLISHED BY THE JOURNAL OF COMMERCE AND COMMERCIAL BULLETIN, 19 Beaver Street, New York. london agents: EFFINGHAM WILSON, 1 1 Royal Exchange, E. C, Md JOHN JONES, 1 1 TOKENHOUSE Yard, E. C. 1896. 155-1 COPYRIGHT, 1090, BY THE JOURNAL OF COMMERCE AND COMMERCIAL BULLETIN, NEW YORK. ; ; ; TREATISES "IN VOL. IV. ON THE HISTORY OF BANKING IN GERMANY AND AUSTRIA-HUNGARY, BY MAX WIRTH IN THE NETHERLANDS, BY Professor Dr. RICHARD VAN DER BORGHT IK 'THE SCANDINAVIAN NATIONS, BY ADOLPH JENSEN IN JAPAN, BY JUICHI SOYEDA; IN CHINA, BY Hon. THOMAS R. JERNIGAN. NEW YORK. 1896. CONTENTS, BANKING IN GERMANY. CHAPTER I. NON-ISSUING CREDIT INSTITUTIONS. Origins of Banking—The First Bank of Issue—Land Credit Associations—Joint-Stock Mortgage Banks—Credit Mobilier Institutions—Prussian Maritime Association 1-12 CHAPTER II. GERMAN BANKS OF ISSUE. SECTION I. The Bank of Prussia. The Act of October, 1846—Regulation of the Bank's Note Issues—The Bank's Profits, Manage- ment, and Progress 13-21 SECTION II. Banking Under the Several States 23-27 SECTION III. Currency Reforms. Imperial Bank Notes 38—31 SECTION IV. The German Imperial Bank. (Die Deutsche Reichsbank.) Working Regulations of the Imperial Bank— Discount Business—Collections—Loans—Available Paper Securities—Cheques—Negotiation of Commercial Paper—Custody of Valuable Securi- ties—Sealed Deposits—Amount of the Bank's Transactions—Coin Reserve—The Reichsbank Qearing-House—Periodical Statements of the Reichsbank—Coin Reserve—Fate of Private Banks of Issue under Act of 1875 3^-57 — xii CONTENTS. SECTION V. The Prussian Maritime Association. Business Results—Private Non-Issuing Banks in the Latter Part of the Nineteenth Century—Ger- man Mortgage Banks— German Co-operative Financial Societies 58-66 BANKING IN AUSTRIA-HUNGARY. CHAPTER I. THE AUSTRIAN NATIONAL BANK. SECTION I. Origin of the Bank. Renewals of the Bank's Charter—The Austrian Silver Standard—Suspension of Specie Payments in "859 69-75 SECTION II. Working Arrangements Between the Bank and the State. The State's Debt to the Bank—Financing Between Bank and State—Consolidation of the State Debt—Status of the State Debt 74-77 SECTION 111. The Bank and Financial Events, 1850 to 1876. Troubles Following the Revolution of February, 1848— Institution of a Mortgage Department Branch Banks and Loan Offices—Resumption of Specie Payments Fails—A New State Loan of 200,000,000 Florins— Reduction of Share Liabilities and Speculative Transactions—The Crisis of 1873—Increase of Discounts—Mortgage Bonds—Suspension of the Bank Act The New Gold Reserve—Remarkable Sales of Silver 78-85 SECTION IV. Reorganization of the Bank. Attitude of the Hungarians—Unmerited Removal of Von Lucam—Branch Banks—The Bank's Rate of Interest—The Silver Crisis 86-91 SECTION V. The Consolidation Act of 1878. Union of the Austrian and Hungarian Banks—Business Operations—Accessory Branches Corres- pondents—The Bank Directory— Principles Observed in Granting Credit—Loans—Appro- priations of Working Resources— Discounts—Loans—Kinds of Security Accepted—Minor Items of Business—The Mortgage Department—The Bank's Working Capital 92-104 — CONTENTS. xiii SECTION VI. Constitutional Provisions Governing the Austro-Hungarian Bank. Regulations of the Mortgage Department lo-.i i© SECTION VII. Steps Toward Resumption of Specie Payments. Currency Reforms—Coinage Changes—The Procurement of Gold for Resumption—Rise in Austrian Securities—The Speculative Reaction—Suspension of the India Coinage—Relations of the Bank to the State—Proposed Restoration of Bank of Hungary's Independence—The Bank's Profits 'n'895 111-121 CHAPTER II. AUSTRIAN JOINT-STOCK BANKS AND BANKING ASSOCIATIONS. The Vienna Clearing-House—The Giro und Cassen-Verein—Austrian Credit Bank for Trade and Industry—Lower Austrian Discount Company—Anglo-Austrian Bank—Austrian Territoiial Bank—General Austrian Mortgage Bank—The Union Bank—Vienna Banking Association - General Survey of Other Austrian Banks—Austrian Associations or Co-operative Societies — Savings-Banks 122-138 CHAPTER III. HUNGARIAN JOINT-STOCK BANKS AND PRIVATE CREDIT INSTITUTIONS. The Era of Private Banking—Hungarian Mortgage Banks—Hungarian Credit Organizations in 1892 —Hungarian General Credit Bank—Hungarian Co-operative Societies—Hungarian Savings- Banks—The Post Savings-Bank—Austro-Hungarian Insurance Companies 139-148 APPENDIX TO BANKING IN GERMANY AND AUSTRIA-HUNGARY. I. STATISTICS OF BANKING IN GERMANY. Non-Issuing Banks—Comparison of Private Banks with the Reichsbank— Banks of Deposit—Mort- gage or Land Banks—Reports of German Non-Issuing Banks for 1895 149-168 II. STATISTICS OF BANKING IN AUSTRIA-HUNGARY. The Austro-Hungarian Bank—The Austrian Credit Bank—The Austrian Credit Bank for Trade and Industry—The Vienna Union Bank—The Austrian Territorial Bank—The Vienna Banking Association—The General Austrian Mortgage Bank—The Anglo-Austrian Bank—The Lower Austrian Discount Company—Vienna Giro und Cassen-Verein—Imperial and Royal Austrian Post Savings-Bank—The First Austrian Savings-Bank—The Savings-Banks of Austria—Hun- garian General Credit Bank—Hungarian Commercial Bank—Hungarian Mortgage Bank Hungarian Mortgage Credit Institution 169-187 — xiv CONTENTS. BANKING IN THE NETHERLANDS. Introduction—Money-Changers Licensed i9'-'95 CHAPTER 1. ERA OF EXCHANGE BANKS. (JVisselbanken.) Period 1609-1814. SECTION 1. Their First Organization. Creation of the Amsterdam Wisselbank— Modifying the Bank Monopoly—Extension of the Wis- selbank System 196-202 SECTION II. Exchange Banks in the Seventeenth and Eighteenth Centuries. The Regulating Influence of " Bank Money "—The Coin Premium and the Needs of Commerce " Bank Money " and the Currency—The Development of a Loan and Currency System—The City of Amsterdam and the Bank—The Rotterdam Bank—The Middelburg Wisselbank Failure — Development of the Receipt System— Valuation of Coin and Bullion 203-214 SECTION 111. Decadence and End of the Exchange Banks. The Antecedents of a Crisis— Difficulties of the East India Company—The Evils of Secret Manage- ment—The Beginning of the End—Bank Money Below Par—The End of the Amsterdam Bank —Fate of the Rotterdam Bank—The Middelburg Bank—A Novel System of Control A Late Survival but Final Collapse 215-223 CHAPTER II. Period From 1814. MODERN DUTCH BANKING. The Bank Note System—Early Substitutes for Bank Notes—Founding of the Bank of the Nether- lands—The Java Bank—The Surinam Bank 224-228 — CONTENTS. XV CHAPTER III. Period 1814-1863. THE NETHERLANDS BANK. SECTION I. Its Legal Position, Organization, and Objects. The Method of Management—The Bank's Monopoly of Note Issues—The Bank's Functions, Privi- leges, and Restrictions—Increased Publicity of Operations—The Bank and the Government- Limits of the Bank's Independence—The Amount of Note Issues—Expanding the Circula- *'0" 229-239 SECTION II. Working Arrangements of the Bank. Hov/ the Rate of Interest Varied—The Bank as a Regulator— International Monetary Conditions— The Loan and the Discount Rate—Accounts Current Operations—Note Circulation—Decline in the Paper Circulation—Changes in the Coinage— Difficulties of Recoinage—A New Open- ing for the Bank's Notes—Expansion of the Note Circulation—The Bank's Metallic Reserve— The Bank's Profits 240-259 CHAPTER IV. THE NETHERLANDS BANK, 1864 TO 1895. SECTION 1. New Legal Status of the Bank—The Government's Relation to the Bank—Extension of the Bank's Sphere—The Bank's Capital and Reserve— Rules of Management—Compounding for Treasury Service—The Latest Extension of the Charter—An Enlarged Sphere of Operations—Modified Methods of Management 260-269 SECTION II. Its Operations—Increased Use of Bank Remittances—Deposit Account Balances—Charges on Private Deposits—The Volume of Note Issues—The Question of a Monetary Standard—Coin for Circulation and Export—The Note Circulation—Dealings in Bullion—Silver Purchases and Coinage—The Safe Deposit Business—The Discount Business—Loans on Securities—Loans on Merchandise— Loans on Specie and Bullion—The Discount Business—Decline in Volume of Discounts—Fluctuation of the Rate of Discount—The Crisis of 1866—A Transition Period Ten Years of Changeful Conditions—The Crisis of 1890—The Difficulties of 18^3—Reserve, Earnings, and Dividends 270-324 — xvi CONTENTS. CHAPTER V. BANKS OF ISSUE IN THE DUTCH COLONIES. SECTION I. The Java Bank. The Bank's Sphere of Action—Dutch Colonial Currency—Conflict Between the Government and the Bank—Inadequate Coin Reserve—The Process of Recovery—New Banking Regulations Reforming the Currency—The Bank's Development—The Question of a Maximum Note Issue—A New Plan of Bank JVlanagement—Increasing Business and Note Issues—The Bank Under Pressure 325-342 SECTION II. The Surinam Bank. Early Reorganization and Renewal of the Charter 343-348 CHAPTER VI. "CASHIERS," JOINT-STOCK BANKS, AND PRIVATE BANKERS. SECTION I. Evolution of the " Cashier" Business—Private Banks—Joint-Stock Banks—Scope of Business—Stock Capital and Dividends 349-360 SECTION II. Special Groups of Banks. Credit Associations—Mortgage Banks—Other Agricultural Credit Institutions—Savings Institu- tions— Finance Companies 361-371 CONTENTS. xvii BANKING IN THE SCANDINAVIAN NATIONS. PART I. BANKING IN DENMARK. CHAPTER I. HISTORY PREVIOUS TO THE NATIONAL BANK. The Courantbank—Attempts at Currency Reform—A New Bank and War Finance—New Royal Bank and Repudiation—New National Bank 375-379 CHAPTER II.