Bank Of France Research Articles

Lessons Suggested by the Experience of the French People and of the Bank of France

Lessons Suggested by the Experience of the French People and of the Bank of France

Utilization of Bank Reserves in the United States and Foreign Countries

The cash reserve feature of the banking systems of the United States, state as well as national, is peculiar to this country. Nowhere else is a fixed reserve required against deposits. The central banking institutions of Europe are commonly required to keep a contain minimum metallic reserve against their note issues, although there is a notable exception even to this in the case of the Bank of France, but in all foreign countries the question of a proper cash reserve against deposits is left to the discretion of the banker. The practices and regulations of foreign banking systems are all characterized by this comparative indifference to deposits and emphasis upon the importance of the note issues. On the continent of Europe this may be accounted for in part by the fact that deposit banking is yet undeveloped to any such degree as it is in England or the United States, and the private cheque has not yet taken the place of circulating notes, as it has done to a great extent in these two countries. The common medium of payments in Germany and France is the bank note, while in England and the United States it is the private cheque. The custom of keeping a bank account is much more common in these two countries than anywhere else in the world, and this of course accounts in part for our being more interested in the security for deposits while elsewhere the interest is in security for the circulating notes. But England, although like ourselves in the use of the bank account and cheque, is like the continental countries in its indifference to cash reserves for deposits. There, too, all emphasis is laid upon the convertibility of the bank note. So far is this true that when the constitution of the Bank of England was reformed in 1844 and provision was made that its issues above a certain amount must be fully covered by gold, the authors of the act seem to have thought the bank absolutely fortified against attack, although no provision had been made to meet a run by depositors. This weak(523)

Limit of Note Issue by Bank of France raised

Limit of Note Issue by Bank of France raised

Diagrams Exhibiting the Positions of The Bank of England, The Bank of France, The German Reichsbank, The National Bank of Austria, The Netherlands Bank, The National Bank of Belgium, The National Bank of Italy, and The State Bank of Russia; with Remarks thereon and References to the Note Issue System of the Bank of England

Diagrams Exhibiting the Positions of The Bank of England, The Bank of France, The German Reichsbank, The National Bank of Austria, The Netherlands Bank, The National Bank of Belgium, The National Bank of Italy, and The State Bank of Russia; with Remarks thereon and References to the Note Issue System of the Bank of England

Report upon the Operations of the Paris and other Savings' Banks in France, During the Year 1837.

Report upon the Operations of the Paris and other Savings' Banks in France, During the Year 1837.