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Full text of "War-time financial problems"

164    STATE MONOPOLY  IN BANKING

a very interesting article on the " Problems of British
Banking/'   Sir Charles observes that:

" It may even be questioned whether the gigantic
size they have already attained does not constitute a
menace to the predominant position which the Bank of
England has hitherto enjoyed as the bankers' bank. How
will the Bank of England be able to maintain its supre-
macy and control the money market, surrounded by
banks individually greater and more powerful than
itself, especially when the object in view is by raising
the rate of interest to prevent an internal or external
drain upon our gold reserve ? It is even conceivable
that the finance of the State may be threatened, and
it is probably for this reason that in Germany the
Prussian Minister is said to be considering a State
monopoly of banking. Nor can the psychological effect
of these great aggrandisements of capital in the hands
of a few banks be ignored. They are virtually Govern-
ment-guaranteed institutions. The insolvency of one
of the great banks would involve such widespread
disaster that no Government could stand aside. They
would be compelled to make use of the national resources
in order to guarantee the solvency of private banks.
From Government guarantee to Government control is
but a step, and but one step more to nationalisation.
We are playing into the hands of Mr Sidney Webb and
the Socialists/'

As it happens, in the July number of the Con-
temporary Review, Mr Sidney Webb was developing
the same theme, namely, the inevitability of banking
monopoly and the necessity, as he conceives it, of
defeating private monopoly for th£ sake of profit,
by State monopoly to be worked, as he hopes, in
the public interest. His article is headed by the
rather misleading title, " How to Prevent Banking