Mixed Banks Research Articles

Chance and no change: survival of Backhouse material in the north-east of England

The northern Quaker family of Backhouse — flaxmillers, bankers and nurseymen of Darlington and York in the eighteenth and nineteenth centuries — made a substantial contribution to natural history within and beyond their region. This work has been little recognised even by their biographers or in the standard work by Raistrick.1 They mixed banking with botany; they explored remote habitats in the antipodes and near at home; they mixed the pioneer cultivation of new and exotic plants with the excavation of old and new bones in caves in northern England and on the continent. One, James Backhouse, passed from expository missionary to exploratory botanist; another from clerk to ornithological taxonomist.

Chance and no change: survival of Backhouse material in the north-east of England

ABSTRACT The northern Quaker family of Backhouse — flaxmillers, bankers and nurseymen of Darlington and York in the eighteenth and nineteenth centuries — made a substantial contribution to natural history within and beyond their region. This work has been little recognised even by their biographers or in the standard work by Raistrick.1 They mixed banking with botany; they explored remote habitats in the antipodes and near at home; they mixed the pioneer cultivation of new and exotic plants with the excavation of old and new bones in caves in northern England and on the continent. One, James Backhouse, passed from expository missionary to exploratory botanist; another from clerk to ornithological taxonomist.

Struktur des Bankensystems und Geldpolitik

Structure of the Banking System and Monetary Policy Starting out from the investment preferences of banks and nonbanks, the increase in the formation of money substitutes by entities other than moneycreating banks is interpreted as a permanent improvement of the economy’s liquidity concomitant with specialization in the banking field. In labour-dividing systems as in the U.S. A. and Great Britain, the moneycreating banks are uniformly subject to central bank control on account of the “control criterion”” - money creation. The decline in the significance of central bank money is accompanied by a decline in the significance of money supply policy. Institutions which make money substitutes available are not immediately affected by the central bank’s control measures. A mixed-banking institution is subject to central bank control in respect of its money creation and of its (own) money substitutes which are held in lieu of cash and those which it offers to replace cash held by nonbanks. In a system of institutions with mutually complementary functions, only the commercial deposit banks are subject to the direct control of the central bank. The liquidity effects caused by formation of money substitutes by other financial institutions are not susceptible of direct control. The efficiency of the central bank’s interest policy, which influences the liquidity effects, is greater in a mixed banking system than in a labourdividing system, if the flows of money market and capital market funds that are to be regulated converge in that system and disgruent financing predominates (criterion of maturity transformation). To the extent that the trend towards congruent financing runs parallel to the labour-dividing system, that is, the degree of maturity transformation diminishes, the effectiveness of the central bank’s liquidity policy also decreases. Maturity transformation in the mixed-banking institution is, so to speak, a built-in stabilizer which supports the liquidity policy of the central bank.

MIXED BANKING AND ECONOMIC GROWTH: THE GERMAN CASE*

s of Doctoral Dissertations 559 banks were forced to combine into even larger institutions. Thus there was an interrelationship between the concentration movement in industry and in banking, closely connected with and indeed originating in the intimate relations between industry and the banks. These relations are analyzed in detail. The pivot of the association of banks with industry was the current-account connection, from which most other banking functions were emanating. The banks' direct contribution of funds to industry has probably been overemphasized, but it is estimated that they were more heavily engaged in the direct financing of industry in the 1920's than prior to World War I. In the process of the rapid transformation of Germany from a predominantly agricultural nation into an industrial world power, significant structural changes took place in the German bank balance sheets. Deposit liabilities increased very substantially as a result of the growth of branch banking and the concomitant endeavors of the banks to encourage the use of deposit facilities. At the same time, a clear secular decline in deposit turnover took place, thereby adding to bank resources. The relative importance of capital and reserves fell, and cash reserves were gradually reduced, reflecting the transformation of the banks into large branch systems. The amounts written off to cover losses on loans by a sample of banks in the 1920's seem to indicate a deterioration in the quality of the loan portfolio compared with the pre-World War I period. It is concluded that the German financial structure greatly facilitated the high rate of economic growth during the period of industrialization. The role of the German mixed banks in founding and encouraging new enterprise was particularly valuable. Bank lending gaps which developed because of the preoccupation with industrial finance were adequately filled by non-bank financial institutions, such as the credit co-operatives, the savings banks, and the mortgage institutions. The banking system experienced relatively few failures, and losses to depositors were small compared with other countries, in particular the United States. The crisis of 1931 was precipitated by factors outside the financial system, but the banks aggravated the crisis through their use of volatile foreign short-term funds to finance fixed-asset expansion of industry. Means of payment were provided by a number of different financial institutions which served different economic sectors. The existence of these alternatives probably resulted in a better payments mechanism than if all non-currency money had been provided by the banking system. This content downloaded from 157.55.39.141 on Mon, 18 Jul 2016 05:22:14 UTC All use subject to http://about.jstor.org/terms