Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: XI CONTRAST BETWEEN AMEKICAN AND EUROPEAN SYSTEMS OF BANKING In the issue of the New York " Commercial Advertiser" of July 21, 1899, there is a closely reasoned and able article bearing the title " Banks and Finance." For the purpose of promoting the discussion on this important subject, and not in a spirit of criticism, it may be opportune to consider the trend of that article and to base thereon a contrast between American and European systems of banking, from the standpoint of the former and not of the latter. The article in question may be condensed as follows: The writer says that general European experience approves a single governmental bank, in which the functions of issuing notes and lending money are united, which gives the bank the power to check credit speculation automatically; that " public inexperience and distrust have so far prevented the adoption of this system in the United States," but the " natural operation of economic forces " has brought about something resembling it in the voluntary association of our banks; and that the fundamental objection of scientific students to our banking system has been that the separation of the two banking functions of issuing notes and lending money has deprived it of the automatic check found in the European systems. An approval of the European system of a single governmental bank similar to that contained in this statement is often met, and should be fairly considered. At the start it must be said that the real ground for the approval is not that the European government bank is single, or that it is governmental, but that it possesses the function of note issue on banking assets, and is thereby enabled to support not only the popular banks which do not have that privilege, but all commerce and trade. The approval,...