XII

STATE MONOPOLY IN BANKING
August, 1918

Bank Fusions and the State—Their Effects on the Bank of
England—Mr Sidney WebVs Forecast—His Views of the
Benefits of a Bank Monopoly—The Contrast between
German Experts and British Amateurs—Bankers' Charges
as affected by Fusions—The Effects of Monopoly without
the Fact—The " Disinterested Management" Fallacy—
The Proposal to split Banking Functions—A Picture of the
State in Control.

A FEW months ago, writing in this Journal on the
subject of banking amalgamations, I referred to one
of the objections against them, that they tended
towards the creation of monopoly, and so encouraged
hope on the part of those who would Hke to see all
forms of industry managed by the State, that the
banking business might sooner or later be taken over
and worked as a State monopoly. At that time this
danger of monopoly seemed to be still fairly remote,
but since then the progress of amalgamations has
brought it appreciably nearer, and so has vigorously
stimulated, both the hopes and fears of those who
consider that it tends to bring nearer the seizure
of banking business by the State, The fear is
expressed by Sir Charles Addis, manager of the
Hongkong Bank and director of the Bank of England,
in the July number pf the Edinburgh Review, in