Wilson: Did many of the depositors demand gold?-Almost none; during the week, after the 10th October, there was a slight demand for gold, and in the country, I believe, there was a very slight demand for gold." Mr. Fleming then gave the figures, shewing that the total demand for gold during the whole month, from the 10th October to the 9th November, was only £44,000, of which more than £6,000 was in exchange for notes, but the total demand for deposits and balances on account was £1,280,000; from which it follows, of course, that the total pressure on the Bank was this

For gold in exchange for notes...
For deposits taken in gold ...

...

For deposits and balances taken in Bank's

notes

...

...

...

...

£6,000
38,000

Now, if the Bank had not issued notes, how would this last item have been demanded? Of course, in gold. So that it is quite clear that the power of the Bank to issue notes saved and lessened the demand for gold to that extent. And we have already shewn that it was not any run for gold which made the Bank stop, but its inability to provide for payment of the adverse balance of exchange. But it may be said-See what followed the next morning. There was undoubtedly a run for gold next morning on some of the other banks. But then there would have been the very same run if there had been no notes at all. And that very run was greatly aggravated, if, indeed, it was not chiefly due to the most unfortunate decision of the other banks to refuse the Western Bank's notes. As soon as the other banks agreed to take the Western's notes, the panic immediately subsided, even though a second bank stopped the same morning. Now, what is the effect we might naturally have expected from a second bank's stopping in the midst of a panic? Clearly that that panic would have been greatly intensified. But in this case it was not so. The City Bank did not open on the Wednesday morning, and yet the whole panic was over by two o'clock that day. The whole demand on the Royal Bank for gold did not exceed £1,000.

Now, without prejudicing the question in any way, whether

the Scotch £1 notes should be suppressed, there is no dispassionate man who can, after reading the details of this crisis, come to the conclusion that they had anything whatever to do with this panic. The great wonder is, that after the unprecedented circumstance of two great banks stopping payment, the panic was so short, and so slight as it was. Does any man who knows London think that, if a similar case had happened there, the consequences would have been so comparatively trifling? The two London banks of most nearly equal magnitude with the Glasgow ones that stopped, are the Union and the London and County. Let us imagine that the Union Bank of London was to stop payment, and two days after the London and County. Does any man who knows London suppose that in such a case the panic would be limited to one day and a half. No man in his senses would think so.

Nor can there, we think, be any reasonable doubt that the refusal of the Edinburgh banks to take the notes of the Western Bank was a most unfortunate one. When the Ayr Bank failed, all the other banks immediately gave notice that they would take its notes at par, because they knew very well that its proprietors were perfectly well able to discharge all the claims upon them. It was perfectly well known that the proprietors of the Western Bank were worth many millions of money, and that there was no possible danger of any ultimate loss. Yet the banks on this occasion decided to refuse their notes, which decision they were afterwards obliged to rescind. And this is a very good proof that it was wrong from the first; and immediately that the notes were taken the panic ceased.

In the years of the great speculations in railways, numbers of persons wished to carry on the game of speculation by buying shares, and then raising money upon them from bankers. The old banks prudently declined this sort of business, and a number of banks were got up, principally for this business-if, indeed, it can be called business at all-as it was, in fact, pure gambling. After a short time, the railway shares went down as fast as they had risen, and all these banks, which were called Exchange Banks, were ruined, some of them under the most disastrous circumstances.

We have said that one of the principal features of the Scotch banking system is to have a small number of very large banks,

with a great number of branches to each. To shew how the system has a natural tendency to become concentrated among a few great establishments, we may compare the existing number of separate institutions, at different periods. In 1826, there were 32 independent banks, of which 13 had less than 10 partners, 10 had less than 100, and the remaining 9 had more than 100. Fourteen of these had no branches, 17 had not more branches than 5, and the highest number that any bank had was 30, which was the Commercial Bank. The total number of offices was 159. In 1848, there were 391 branches; in 1855, there were 462 branches and 17 principal offices; in 1857, there were the same number of head offices, with 666 branches; and in 1859, there were 14 separate banks-one, the Union, having 4 head officesand 597 branches, making, altogether, 615 offices.

The following table exhibits the banks at present existing in Scotland, upon which we shall make some remarks in a future chapter

£664,970

394,000

1825 National Bank

...

91

1,000,000

380,000

297,024

£355,000 £343,418
500,000 216,451 713,035 614,142 10,063,483
350,000 438,024 533,358 219,955 7,703,458
374,880 767,218 506,111
9,267,766
583,103 432,177 10,419,897

£664,970 £413,389 £10,153,828

with a great number of branches to each. To shew system has a natural tendency to become concentrate few great establishments, we may compare the existin of separate institutions, at different periods. In 1826, t 32 independent banks, of which 13 had less than 10 pa had less than 100, and the remaining 9 had more t Fourteen of these had no branches, 17 had not more than 5, and the highest number that any bank had was 3 was the Commercial Bank. The total number of offices In 1848, there were 391 branches; in 1855, there w branches and 17 principal offices; in 1857, there were tl number of head offices, with 666 branches; and in 1859 were 14 separate banks-one, the Union, having 4 head of and 597 branches, making, altogether, 615 offices.

The following table exhibits the banks at present existi Scotland, upon which we shall make some remarks in a f chapter