Scotland.—In Scotland there are no private banks, the only banks in that portion of the United Kingdom being eight joint-stock banks of issue, and their branches (the Mercantile and Savings not being banks of issue). By the Act of 1845 new banks of issue were prohibited, a monopoly being given to such establishments (nineteen in number) as existed in the year previous to 1st May, 1845. At the same time the issue of each was limited to the amount of its average circulation during that year, together with the specie held at the head office. Any bank issuing notes in excess of this limit is supposed to hold an equivalent amount of gold. The aggregate authorized circulation is now £2,676,350; the average actual circulation is fully £7,000,000. The Bank of Scotland, established by Act of Parliament in 1695, had for its original capital only £100,000, increased to £200,000 in 1744; but it now has a capital of £1,325,000 paid up. It remained the only bank in Scotland till the Royal Bank of Scotland was established in 1727, with an original capital of £151,000, which has grown to £2,000,000 paid up. The British Linen Company was incorporated in 1746, for the purpose of promoting the linen manufacture, but soon became a general banking company; capital, £1,250,000 paid up. These three banks claim to be by their charters banks of limited liability. All the other Scottish banks have been established within the nineteenth century. They are all incorporated by royal charter or Act of Parliament, which enables them to sue and be sued as a corporation, and latterly they have all become banks of limited liability, except that their liability is not to be limited in respect to their note issue. The total paid-up capital of the Scotch banks is £9,300,000. A large number of one-pound notes circulate in Scotland, thus tending to keep the requirements for gold low. From allowing a moderate rate of interest on deposit accounts (although not on current accounts) it is not uncommon for depositors in Scottish banks to lodge their money permanently as an investment; and the habit of keeping an account with a banker is much more general in Scotland than in England, branch offices of the banks being very numerous. Several of the Scotch banks have branch offices in London, but of course they cannot issue their own notes from these offices. The Scotch banks have enjoyed a high reputation for stability, and though public confidence was somewhat shaken by the failure of the Western Bank in 1857, and even more rudely by that of the City of Glasgow Bank in 1878, their shares are generally looked upon as a safe and remunerative investment. Their total deposits amount to fully £107,000,000.
Ireland.—The banks in Ireland consist of one public or national bank, the Bank of Ireland, and of sundry joint-stock and private banks. The authorized note circulation is arranged on the same footing as that of the Scotch banks. If any bank discontinues its issue and issues notes of the Bank of Ireland, the circulation of
the latter may be to an equal amount increased. The authorized circulation is £6,354,494; the actual circulation is sometimes a little above, sometimes a little below. The Bank of Ireland, which was established by charter in 1783 with similar privileges to those granted to the Bank of England, has lent the greater portion of its capital to Government. Its capital is £2,769,230 (or £3,000,000 Irish); it has also a rest or reserve of over £1,000,000. The bank allows interest on deposits when lodged for a stated period.
Banque de France.—The Bank of France is second in importance only to the Bank of England. It was established in the beginning of the nineteenth century, at first with a capital of 45,000,000 francs, and with the exclusive privilege in Paris of issuing notes payable to bearer, a privilege which was extended in 1848 to cover the whole of France. It has numerous branches in the larger towns, a number of these having been acquired in 1848, when certain joint-stock banks of issue were by Government decree incorporated with the Bank of France, the capital of which was then increased to 91,250,000 francs (£3,650,000), in 91,250 shares of 1000 francs each. In 1857 the capital was doubled, and besides this it has a large surplus capital or rest. Like the Bank of England, it is a bank of deposit, discount, and circulation, and is a large creditor of the State. The Government appoints the governor and the two deputy-governors, who are all required to be stockholders. There is also a body of fifteen directors and three censors, nominated by the shareholders. The value of its note circulation in March, 1922, was 36,225,852,000 francs.
British Colonies.—With regard to the banks in British colonies little need be said. All the more important are joint-stock concerns, and they are carried on subject to Acts passed by the respective colonial legislatures. Some of them have their head-quarters in London, and have been established by English capital. In Canada the banks are not allowed to issue notes of lower denominations than five dollars, notes for one and two dollars and higher amounts being issued by the Dominion Government; and the banking laws are such that there is no possibility of holders of bank-notes being losers by them. The total paid-up capital of the Canadian banks is about £20,000,000; their total deposits about £135,000,000.
United States.—The more important of the banks of the United States are what are called national banks, established in accordance with an Act passed in 1863. Associations of this kind at starting must invest at least a third of their paid-up capital in Government bonds, which pay them an interest of 4 per cent more or less. They then obtain from the Government bureau, established for the purpose, 90 per cent of paper-money sheets, which they sign and pay out, this constituting their note circulation. These banks pay no interest to depositors. Besides the notes of these banks a large portion of the currency of the United States consists of Government notes issued from the national treasury. There are also banks chartered by the different States and private banks.
Savings-banks are banks established for the receiving of small sums, so as to be taken advantage of by the poorer classes, and they are carried on entirely for the benefit of the depositors. They are of comparatively recent origin, one of the earliest having been an institution in which small sums were received, and interest allowed on them, established by Mrs. Priscilla Wakefield, at Tottenham, near London, in 1803. The first savings-bank in Scotland was formed in 1810 by the Rev. Henry Duncan, of Ruthwell, Dumfriesshire. In 1814 the Edinburgh savings-bank was established on the same principles, and the system soon spread over the kingdom. The first Act relating to savings-banks was passed in 1817. By it all deposits in savings-banks, as soon as they reached £50, were placed in the hands of the National Debt Commissioners, who allowed interest on them. In 1824 it was enacted that the deposits for the first year should not exceed £50, nor those in subsequent years £30, the total deposits being limited to £150, and interest ceasing to be paid when accrued interest made the total £200. By the Act of 1893 the limit of annual deposit was raised to £50, and the interest is now rather less than 3 per cent. An Act of 1833 had provided for the purchase of Government annuities by depositors either for life or for a term of years; and an annuity of any amount up to £100 may now be obtained. Depositors in savings-banks (by an Act of 1880) can also have their money invested for them in Government stock, the banks collecting and paying the dividends; and when accrued interest raises an account above £200 the excess is now so invested for the depositor. The total amount invested by one person in Government stock is not to exceed £500, nor £200 in one year. These banks are managed by local trustees having no personal interest in the business, and by certain paid officers. A new class of savings-banks, namely, Post Office Savings-banks, was established in Britain in connection with the money-order department of the Post Office in 1861. Any sum not less than a shilling is received, provided that the total amount banked does not exceed £50 in one year, or more than £200 in all; the excess of accrued interest above this being invested in Government stock. Interest is paid on every complete pound at the rate of 2½ per cent. For the deposits the Government is
responsible, and they may be drawn from any Post Office Savings-bank in the kingdom. These savings-banks have become very numerous, and much of the funds formerly in the trustees' savings-banks has been transferred to them. The total amount deposited in the old banks is now about £52,000,000, in the new about £157,600,000. The regulations regarding the purchase of Government stock and annuities correspond with those given above. Savings-banks are now well known in all civilized countries, and the good they have done is incalculable. In the United States there is an enormous amount of money deposited in them. Post Office Savings-banks have been proposed to be established in the States, but have not yet been so. In Canada, Australia, and other British colonies they are established, as well as savings-banks of several other kinds. School savings-banks are the most recent institutions of this kind, and have had a marked effect for good.
Bank Holidays, in England and Ireland, Good Friday, Easter Monday, Whit Monday, first Monday in August, Christmas and following day, or 27th (if next day is a Sunday); in Scotland, New-Year's Day, first Monday of May and August and Christmas.
Bankrupt (from It. banca rotta 'bank broken' or 'bench broken'. Dr. Johnson said that the word originated from the Italian custom of breaking the bench of an insolvent money-changer; but rotta also means 'interrupted' or 'stopped', and is here used more in the sense of our colloquial word broken, and means 'insolvent'), a person whom the law does or may take cognizance of as unable to pay his debts. Properly it is of narrower signification than insolvent, an insolvent person simply being unable to pay all his debts. In England up till 1861 the term bankrupt was limited to an insolvent trader, and such traders were on a different footing from other insolvent persons, the latter not getting the same legal relief from their debts. In all civilized communities laws have been passed regarding bankruptcy. At present bankruptcy in England is regulated by the Bankruptcy Acts of 1883 and 1890, which have as one chief feature the intervention of the Board of Trade in the proceedings, with the object of obtaining full official supervision and control. A bankruptcy petition may be presented either by a creditor or a debtor. A creditor's petition must be founded on a debt of not less than fifty pounds, due to one or more creditors, and on an 'act of bankruptcy' committed by the debtor within three months before the presentation of the petition. A debtor commits an act of bankruptcy if he makes a conveyance of his property to a trustee for the benefit of his creditors; if he makes a fraudulent transfer of any part of his property; if, to defeat or delay his creditors, he conceal himself either at home or abroad; if execution issued against him has been enforced by seizure and sale of his goods under process in an action in any court; if he files in court a declaration of inability to pay his debts, or presents a bankruptcy petition against himself; if a creditor has obtained a final judgment against him for any amount and he fail to pay the judgment debt without satisfactory reason; or if the debtor gives notice to any of his creditors that he has suspended, or is about to suspend, payment of his debts. In London jurisdiction in bankruptcy now rests with the High Court of Justice, while the county courts continue to have jurisdiction in bankruptcy outside the London district. When the court is satisfied as to the petition, a 'receiving order' is issued to protect the debtor's estate by constituting the official appointed by the Board of Trade receiver of the debtor's property, and to stay the remedies of all creditors until the meeting of creditors. The debtor must make out a full statement of his affairs, accounting as best he can for his insolvency. The official receiver summons the meeting of creditors, a summary of the debtor's affairs being sent to each creditor with the notice of the meeting, which is also advertised in the London Gazette. The creditors must send to the official receiver, one day before the meeting, sworn proofs of their claims to enable them to vote. At the meeting the creditors (unless the debtor's proposal for a composition or scheme be entertained) pass a resolution adjudging the debtor bankrupt, and appoint a trustee of the bankrupt's property, with a committee of inspection selected from their own body to superintend the administration of the bankrupt's property by the trustee, who divides the available realized assets amongst all creditors who have sent sworn proofs of claims. Rates, assessments, and taxes, and all wages or salary of a clerk, servant, labourer, or workman during four months before the date of the receiving order not exceeding £50 are paid in priority to all other debts. The trustee is required to give satisfactory security to the Board of Trade, by which his accounts are audited not less than twice in each year. All moneys received by the trustee under the bankruptcy must be paid forthwith to an account kept at the Bank of England by the Board of Trade, called the 'Bankruptcy Estates Account'. The debtor is bound to be publicly examined upon oath in court, and any creditor who has tendered a proof, or his representative, may take part in the examination. Until the debtor has passed his public examination he cannot apply for an order of discharge, and upon proof of misdemeanour the court refuses or