Q. As a matter of fact, a large part of the commercial banking in England is done by about a dozen institutions, is it not?
A. In Liverpool and Manchester there are very important local banks. However, it is no doubt the fact that four or five banks do about half the banking business.
Q. In the main you believe that the banking situation is stronger and better and the country is better served through the system of branches than through the independent banks?
A. I am quite convinced of that, if only for one reason, that I do believe the indiscriminate granting of credits to the individual is injurious to himself, the private bankers being too much in the habit of regarding old family associations and not so careful as the joint-stock company would be, and he has accustomed people to trade on the credit that they get from the banker. I do not think that is banking business. The bank ought never to supply the trader with working capital. I think it is bad for the trader.
Q. Is it not quite essential to the success of a financial institution doing a commercial business to become a member of the Clearing House if it is to meet with a large degree of success?
A. No. After all, there are only seventeen banks, I believe, now in the Clearing House, but there are a great many other institutions who are not members of the Clearing House and who do not suffer from that fact. Scotch banks with branches here who do a large banking business are not members of the Clearing House. There are all the colonial banks with head offices or branches in London and other large institutions; those are not members of the Clearing House. There are Barings and Rothschilds; they are not members of the Clearing House.
Q. Would you say the Bank of England is in any way a competitor of the other banks in England?
A. Yes. That is a source of very grave complaint by the other banks.
Q. The Bank of England do not pay interest on any accounts?
A. No; but in some cases they act as intermediaries for lending money. It is a very subtle distinction.