The Online Library of Liberty

A project of Liberty Fund, Inc.

• Banking In Germany.
• Chapter I.: Non-issuing Credit Institutions.
• Chapter II.: German Banks of Issue.
• History of Banking In Austria-hungary.
• Chapter I.: The Austrian National Bank.
• Chapter II.: Austrian Joint-stock Banks and Banking Associations.
• Chapter III.: Hungarian Joint-stock Banks and Private Credit Institutions.
• Appendix to Banking In Germany and Austria-hungary.
• II.: Statistics of Banking In Austria-hungary.
• Banking In the Netherlands.
• Introduction.
• Chapter I.: Era of Exchange Banks.
• Chapter II.: Period From 1814. Modern Dutch Banking.
• Chapter III.: Period 1814-1863. the Netherlands Bank.
• Chapter IV.: The Netherlands Bank, 1864 to 1895.
• Chapter V.: Banks of Issue In the Dutch Colonies.
• Chapter VI.: “cashiers,” Joint-stock Banks, and Private Bankers.
• Banking In the Scandinavian Nations.
• Part I.: Banking In Denmark.
• Chapter I.: History Previous to the National Bank.
• Chapter II.: The National Bank During the First Half of the Nineteenth Century.
• Chapter III.: Private Banks.
• Part II.: Banking In Sweden.
• Part III.: Banking In Norway.
• Banking and Money In Japan.
• Part I.: The Banking System.
• Chapter I.: Common Banks.
• Chapter II.: The National Banks.
• Chapter III.: The Yokohama Specie Bank. ( Shiokinginko. )
• Chapter IV.: The Bank of Japan. ( Nippon Ginko )
• Chapter V.: Land Mortgage Banks.
• Part II.: The Currency of Japan.
• Chapter I.: The Old Coinage System.
• Chapter II.: The New Coinage Period.
• Chapter III.: The Paper Currency.
• Chapter IV.: Readjustment of the Public Debt.
• Chapter V.: The Future Money Standard.
• Appendices.
• Appendix D.: National Debt In Japan. (from the “british Economic Association Journal” of June, 1895.)
• Banking, Currency and Land Tenure In the Chinese Empire.
• I.: China’s Currencies.
• II.: Chinese Banking: Ancient and Modern.
• III.: Land Tenure and Taxation In China.

CHAPTER VI.

“CASHIERS,” JOINT-STOCK BANKS, AND PRIVATE BANKERS.

SECTION I.

THE information at my disposal is not sufficient for a complete history of the development of the other Dutch banks, but the broad lines of their development can be traced.

In the beginning of the nineteenth century, as we have seen, the cashiers were still of great importance. The Dutch Code of Commerce of October 1, 1838, therefore, contains many regulations concerning them. This code says in article seventy-four: “Cashiers are persons who, for a certain allowance or commission, are intrusted with the keeping and paying out of money.” Then, as before, the cashiers undertook professional cash-keeping for others. Besides this, the cashiers gave credit in Rotterdam, even in blank, to a great extent.* Payments were effected by “cashiers’ papers.” Generally, receipts are given for the sum paid by the cashier, and these receipts take the place of cheques; but assignations also are used.

The Code of Commerce prescribes regulations concerning the “cashiers’ paper and other papers payable to bearer,” in articles 221-229. The signer of such paper, in form of a receipt or of an assignation, is obliged to date the paper and is responsible for payment within ten days after date. Later on, the signer remains responsible if he is not able to prove, and on demand to take an oath, that he has had the amount stated in the paper deposited with the person charged with its payment, within and after these ten days. Though his responsibility may be at an end, the signer is, nevertheless, required to produce proofs which the holder needs to assert his claim against the person obliged to pay. The charges for this collection of proof have to be borne by the holder of the receipt.

Besides the signer, everyone who pays by means of a cashier’s paper is responsible to the holder for three days. In case of the failure of the signer, the cashier is allowed to pay the amount of the paper out of the money intrusted to him, unless the holder of other paper issued by the same bankrupt, or the trustees of his estate, or other parties interested, enter a protest. Should such a protest be made, or should the cashier discontinue the payment of bills drawn on him, then the funds deposited by the bankrupt have to be kept separate in order to satisfy holders of bills issued before the failure.

The cashiers still exist in Holland. The licensing tax was paid in 1860-61 by 80 cashiers,* in 1878-79 by 216 cashiers, and in 1890-91 by 250 cashiers.

EVOLUTION OF THE “CASHIER” BUSINESS.

Joint-stock companies also have been founded to transact the cashier business. In 1806, the Associatie-Cassa, in Amsterdam, was established, with a capital of one million guilders. Its main purpose was the “receiving, keeping, and paying out of money and valuables for other persons.” Besides this, the company “discounts bills, invests money by granting loans on personal property and stocks, by making advances on security of goods, stocks, and bills, and trades in specie.” Means for giving credit are procured by the company’s own funds, for increasing which a certain part of the profits is reserved, and by the money intrusted to the bank for this purpose.

The bank is not allowed to give credit in blank, to grant loans on security exceeding its own funds, and to trade in goods or stocks for its own account. The company, which still exists, has done very well. Besides a yearly fixed payment of five per cent., extra dividends of ten per cent. were paid in 1818, 1826, 1828, 1831, 1832, 1834, 1836, 1837, 1840, 1843, 1848, 1859, 1862, 1865, 1871, 1874, 1879, 1881, 1884, 1886, 1888, 1890-94; of twenty per cent. in 1855, and of fifty per cent. in 1852.

Four other companies are still in active business, the principal object of which is the cash trade, viz.: (1) The Ontvang en Betaalkas, in Amsterdam, established in 1813, as a limited liability company, and converted into a joint-stock company in 1874; its capital originally amounted to one million guilders, from 1880 to two million guilders, and from 1888 to three million guilders; (2) Rentecassa, in Amsterdam, established in 1864, with a capital of one million guilders; (3) Kasvereeniging, in Amsterdam, established in 1865, with a capital of five million guilders; and (4) Incassobank, in Amsterdam, established in 1891, with a capital of half a million guilders.

Besides the cashier trade, these companies discount bills of exchange, keep money,* and give credit on security. The Ontvang en Betaalkas and the Incassobank are also allowed to make advances on guarantee. These banks retain† in ready money such part of the funds intrusted to them as they require for current payments.

The statutes of the Ontvang en Betaalkas and of the Kasvereeniging expressly forbid the granting of loans on bills of lading and on real property. The Rentecassa does not open deposit accounts,‡ and is in direct connection with the Associate-Cassa. The customers of the latter are empowered to transfer their money from their account, totally or partly, without charge, to an account at the Rentecassa and to retransfer it to their account at the Associatie-Cassa.

At the Ontvang en Betaalkas,§ the annual business in 1894 amounted, on cash account, to 244,890,000 guilders; on current accounts, to 237,880,000 guilders.

The average daily balance was, in 1894

The four companies in question paid the following dividends:

The joint-stock companies for cash trade—existing in Amsterdam only—must be regarded as banks, because they enter into money transactions as well as credit operations; but the cash trade has to be considered, the principal object, and but a few kinds of credit operations are allowed.

PRIVATE BANKS.

Besides the cashiers and the notaries doing banking business, a great number of private bankers and joint-stock banks have sprung up. Concerning the private bankers, the data at my disposal are insufficient, there being no regular publication of their operations and their number.

JOINT-STOCK BANKS.

More information is at my disposal concerning the joint-stock banks, but none referring to the time before the sixties. In the first six decades of the nineteenth century only a few joint-stock banks apparently existed, because in the beginning of the sixties we find a total number of not more than seven joint-stock banks. The Dutch Statistical Society has published a statement on joint-stock companies, from 1861-62 till 1880-81, based upon the trade tax-lists.* According to this statement, Holland had the following number of joint-stock companies for money and cashier trade, banking operations, administration offices, etc.:

This table includes the above-mentioned joint-stock companies for the cashier trade, the Netherlands Bank, and the Surinam Bank. The mortgage banks, however, are not included. Joint-stock banks were established (exclusive of mortgage banks):†

These figures show the increasing importance of joint-stock banks.

Joint-stock banks (inclusive of the Netherlands Bank, the Surinam Bank, and the five joint-stock companies for cash trade, but exclusive of mortgage banks) existed in Holland:†

From 1861-62 till 1893-94, the number of joint-stock banks has been increased tenfold, and the share capital paid in increased at the same time by more than 350 per cent. It was principally small joint-stock banks that were established during this period.

Deducting the capital of the Netherlands Bank, we find an average capital of

The average capital of the joint-stock banks established since 1882 is much smaller.

The dividends were very moderate in the first two years, 1864 and 1865. The highest dividend, 15.81 per cent., was reached in 1873. In 1866-67, 12.59 per cent.; in 1878-79, 11.08 per cent. were paid. After 1879-80, the dividend only once (in 1883-84) exceeded ten per cent.

The development of the Dutch joint-stock banks clearly shows a certain tendency toward the formation of special groups, to be described later on.

The following are the only banks with an extensive sphere of action in 1895:

(1) Twentsche Bankvereeniging,* in Amsterdam, founded in 1861; (2) Rotterdamsche Bank, established in 1863; (3) Amsterdamsche Bank, in 1871; (4) Eindhovensche Bank, in 1872; (5) Gorinchemsche Bank, in 1873; (6) Friesche Handelsbank, at Leeuwarden, in 1873; (7) Wissel en Effectenbank, at Rotterdam, in 1879; (8) Noordbrabantsche Bank, at Hertogenbosch, in 1884; (9) Crediet en Depositobank, Rotterdam, in 1884; (10) Stichtsche Bank, Utrecht, in 1884; (11) Utrechtsche Bankvereeniging, in 1887; (12) Hollandsche Credietbank, Amsterdam, in 1890; (13) Oostersche Discontobank, Amsterdam, in 1890 (in liquidation since the end of 1894); (14) Disconto Maatschappij, Rotterdam, in 1891; (15) Handelsbank, Rotterdam, in 1891; (16) Bank en Handelsvereeniging (voorden, P. F. Berger), Venlo, in 1893; (17) Bank voor Effecten en Wissel, at the Hague, in 1893; (18) Nederlandsch-Indische Crediet en Bankvereeniging, Amsterdam, in 1894; (19) Noorder Bank, Alkmaar, in 1895; (20) Geldersche Bank, Arnhem, in 1895.

SCOPE OF BUSINESS.

The sphere of action of these banks is such that they have to do bill and banking (partly, also, commission) business in the widest sense of the word. The several branches of the licensed business only are stated in the constitution of the banks numbered 6, 8, 11, 13, 17, and 18.

The Oostersche Discontobank (see No. 13) intends to operate in Eastern Asia, especially in the Straits Settlements. It discounts bills and other commercial paper, and invests money in loans; with the Bank Commissioner’s consent, the Bank is allowed to invest disposable funds for a time also in other safe ways, and to receive and to place money on deposit.

The object of the Nederlandsche-Indische Crediet en Bankvereeniging (see No. 18) is to do bill and banking business, to grant loans on produce, merchandise, and stocks, to make advances on security of exported goods, and on account current to lend on mortgage—all in the Dutch East Indies. The Bank is not, however, allowed to trade in produce and goods, to take shares in exploration companies, or buy its own shares, or to grant loans on them.

The constitution of the Friesche Handelsbank (see No. 6), of the Utrechtsche Bankvereeniging (see No. 11) and of the Bank voor Effecten en Wisselfaken (see No. 17), all of the same tenor, fix the range of operations as follows: (1) Buying, selling, and discounting bills and other commercial paper; (2) buying and selling home and foreign coupons, dividend warrants, coin, and precious metals; (3) making advances on bills of lading and on goods not subject to deterioration; (4) receiving money on deposit; (5) buying stocks on commission; (6) current account business, cashing, and paying out for another’s account; (7) administering and keeping money and securities* for another’s account; (8) issuing letters of credit; (9) subscribing to loans for account of third parties.

Furthermore, the Friesche Handelsbank is allowed to give credit and to procure bankers’ credit. The by-laws of the Noordbrabantsche Bank and the Utrechtsche Bank mention the making of advances on certain terms. In the by-laws of the Friesche Handelsbank and the Bank voor Effecten en Wisselfaken, we also find the granting of advances on consignments and on bills of lading, and the insurance of specie and bonds, etc. With the latter, these banks go beyond the limits generally observed by banks. The Disconto Maatschappij and the Handelsbank, both in Rotterdam, also undertake insurance business.

The following table gives the principal data in regard to these banks:

STOCK CAPITAL AND DIVIDENDS.

The small amount of capital paid in excites surprise. The Dutch Code of Commerce not prescribing a minimum installment on shares, we often find very moderate sums paid in. The share capital is frequently divided into several series, and not seldom only one series is at first subscribed. The Code of Commerce only prescribes that the company’s promoters have to take possession of one-fifth of the authorized capital, and that a term has to be fixed up to which all shares have to be subscribed.

A large capital is to be found only in the Disconto Maatschappij, the Twentsche Bankvereeniging, the Rotterdamsche Bank, and the Amsterdamsche Bank, the transactions of which are very extensive.

The following are the principal items in the balance-sheet of the Disconto Maatschappij (Discount Company) in Rotterdam:

The Rotterdamsche Bank (Rotterdam Bank), in the beginning especially intended to operate in the Dutch East Indies, soon exceeded these limits. In the first years, hazardous speculations disturbed the Bank’s development and caused many fluctuations of the dividends.

The principal items in the balance-sheets have been as follows:

According to the report for 1894, the total transactions were:

The sphere of action of the Twentsche Bankvereeniging is very extensive, and in consequence of its relations with the cotton manufacture, the Bank also keeps a branch establishment in London.

The following are the principal items in the balance-sheet (in guilders):

The Amsterdamsche Bank (Amsterdam Bank), like the Rotterdamsche Bank and the Twentsche Bankvereeniging, takes part in syndicates to a great extent. The principal items in the balance-sheet are (in guilders):

The other banks are of slight importance compared with those above mentioned.

The dividends in general have been moderate. Only the Eindhovensche Bankvereeniging has paid very high dividends—as I suppose, principally in consequence of the small share capital (50,000 guilders paid in), which bears an insignificant proportion to the Bank’s transactions.

The current account balances on December 31, 1894, amounted to 504,027.61 guilders, i. e., ten times the amount of the capital; the reserve fund amounted to 50,000 guilders, i. e., to 100 per cent. of the capital, so that nothing further need be added to the reserves. This also facilitates the payment of high dividends.

SECTION II.

SPECIAL GROUPS OF BANKS.

CREDIT ASSOCIATIONS—MORTGAGE BANKS.

I HAVE already said that a tendency to the formation of special groups is found in the Dutch banking world, and this treatise would be incomplete without a brief description of these.

First of all, the crediet-vereenigingen (or credit associations) demand remark. These joint-stock banks are first to be found in 1853, and in a short time became of great importance. The crediet-vereenigingen do the ordinary cashing, depositing, account current, discounting, and partly, also, loan business, of banks. The companies established since 1880 also engage, for the most part, in commission business in stocks. Their characteristic feature is that they have, besides shareholders, crediet-trekkende leden, i. e., members enjoying credit, who bring in a certain share of capital and are responsible only up to the amount paid in. Credit is given to these members in blank or against security or guarantee, mostly up to the amount of their contribution to the capital. In some companies they have a share in the net profits. Some of these banks also receive savings. For the advance the member has received, a promissory note, issued to order, and with a term of three or three and one-half months, has to be given to the bank. By discounting such notes at the Netherlands Bank, or some other bank, new means for giving credit are procured. Other means for this purpose are provided by the account current and depositing business and by the funds of the bank itself.

According to written information given by Dr. N. G. Pierson, the crediet-vereenigingen are not exclusively, even not principally, intended to satisfy the demands for credit of the lower classes, but rather to extend credit on a small scale. It can hardly be doubted that a want for these companies existed, and, therefore, they quickly became popular.

The Crediet-Vereeniging, in Amsterdam, established in 1853, was the pioneer company. Later on, the following were founded: In 1865, Het Onderling Crediet, in Rotterdam; in 1866, the Geldersche Crediet-Vereeniging, at Arnhem; in 1868, the Crediet en Deposito Kas, at Utrecht; in 1871, the Dordrechtsche Onderlinge Crediet-Vereeniging, at Dordrecht; in 1872, the Limburgsche Crediet-Vereeniging, at Maastricht; in 1876, the Zuidhollandische Crediet-Vereeniging, in the Hague; in 1880, the Gravenhagsche Crediet-Vereeniging en Deposito Kas, in the Hague; in 1883, the Utrechtsche Credietbank, at Utrecht; in 1887, the Noordhollandsche Landbouw-Crediet, at Alkmaar; in 1890, the Utrechtsche Landbouw-Bank, at Utrecht, and the Zuidhollandsche Landbouw-Crediet, in the Hague; and in 1894, the Nederlandsche Crediet-Vereeniging, at Utrecht.

The above-mentioned Twentsche Bankvereeniging also conducts a crediet-vereeniging besides its other operations. All these fourteen companies still exist, and their operations are very extensive.

The following statement* shows their condition on December 31, 1894. The totals are in thousands of guilders:

In the main, the dividends are not low, and in the case of the Crediet en Deposito Kas in Utrecht, even very high in comparison with the small amount of capital paid in.

MORTGAGE BANKS

The hypotheekbanken, i. e., mortgage banks, form a second special group, which is of great importance in Holland. For this purpose joint-stock banks first appeared in 1861, viz., the National Mortgage Bank (Amsterdam) and the Netherlands Mortgage Bank.* In 1864, the Rotterdam Mortgage Bank and the Inland Mortgage Bank, in Rotterdam, were established; in 1865, the Netherlands Land Mortgage Bank, in Amsterdam.

Before the beginning of the eighties, the number of morgtage banks† remained small, but from 1882 their number quickly increased, and from 1882 till 1895 twenty-five mortgage banks were founded, and only one of them was dissolved. In the several years there were established‡ the following:

We may assume that the rapid growth of mortgage banks was caused by the fact that the encumbrance of landed property with mortgages increased considerably after the middle of the seventies. According to the “Jaarcijfers,” the amount of registered mortgages was:

The great increase of encumbrance by mortgages presented many prospects of success to banks specially created to satisfy the demands for this form of credit, and the large profits of the existing mortgage banks encouraged capitalists to establish new ones. Their number from 1883 till 1893 increased from ten to thirty-three.

According to authentic information,* there were:

The average dividends are not excessive, which is principally due to the fact that among the new mortgage banks a few only had a marked success.

The dividends of the Northwestern and Pacific Mortgage Company, however, were very high in several years. This bank, established in Amsterdam in 1889, principally operates in the United States, and in the first four years of its existence yielded eleven and three-quarters, forty-four, thirty-six, and thirty-three per cent., but in 1893 only six per cent., and in 1894 nothing. The other mortgage banks operating abroad could not pay such high dividends. The Oostersche Hypotheekbank, founded in 1888 and operating in East Asia, principally in the Straits Settlements, during half the time of its existence was not able to pay any dividend. The Nederlandsch Zuid Africaansche Hypotheekbank has since its establishment (1889) paid no dividends, and the Pretoria Hypotheek Maatschappij, founded in the same year, only moderate dividends.† The Nederlandsch-Amerikaansche Hypotheekbank, established in 1893, and operating in the United States and in British North America also, has commenced with very moderate profits.

According to the annual publications of A. H. Van Nierop and E. Baak, concerning the Dutch joint-stock companies, the dividends of twenty-eight mortgage banks are stated in the following table:

The figures relating to the amount paid on the stock prove that the mortgage banks work with very small capital. The share capital of these banks must be regarded chiefly as an insurance fund, and therefore may be moderate. The banks giving first mortgages on the best securities run but little risk. They pay the mortgages to the debtor in mortgage bonds issued up to an amount not exceeding the total of the granted loans. This mode of operating and the small amount of share capital do not expose the banks to any risk as long as they avoid dealings which bring with them liabilities to be met at short notice. The amount of loans on mortgage granted by the greater number of the banks in question is to be found in the “Jaarcijfers,” from which the following figures are taken:

The total amount of loans on mortgage granted by the twenty-one banks is 13.3 per cent. of the amount of all mortgages registered on December 31, 1894, in Holland. The three oldest of the existing mortgage banks reach the highest amount of loans, and have also steadily paid the highest dividends. The Amsterdam mortgage bank nearly comes up to these, and shows on December 31, 1894, loans to the amount of 12,130,000 guilders, while the other banks do not reach 10,000,000 guilders.

OTHER AGRICULTURAL CREDIT INSTITUTIONS.

Besides these, other banks endeavored to help farmers by credit, but without assuming the character of mortgage banks. We find among such the Beemster Bank, established in 1872,* the object of which is to meet the farmers’ temporary demands for credit and to put out at interest the farmers’ money, but without excluding other operations. The same object is aimed at by the Spaar Inleg en Voorschotbank at Eibergen (established in 1880),† and at the Landbouw Crediet Fexel (founded in 1890).‡ The latter’s operations are limited to farmers and cattle-breeders. Other particulars concerning these small banks are not at my disposal, but I imagine that their profits are moderate.

The Beemster Bank, for instance, from 1872 to 1881 has paid an average dividend of two and one-half per cent., and from 1882 to 1892, once fifty, once ten and three-quarters, once ten and one-half, once six and one-half per cent., and five times nothing.

In another way, the Algemeene Waarborg Maatschappij, in Amsterdam (established in 1890), tries to solve the problem. Its object is to procure loans on mortgage, to issue mortgage bonds, and to administer mortgage loans and bonds, and for this purpose it had in 1893 20,000 guilders of capital paid in. Its dividends were, from 1890 till 1893, one, two and one-half, four, and four and one-half per cent. The Nederlandsche Trust Maatschappij, in Amsterdam (established in 1891), seeks, besides other operations, to use its good offices in the granting of mortgage loans; and, further, to protect the interests of creditors on mortgages procured by the bank. Its shares paid up amounted, in 1893, to 25,000 guilders, and its dividends from 1892 till 1894 to 7.62, 7.62, and 6.93 per cent.

The Boskoopsche Spaar, Deposito, en Hulpbank (established in 1890), grants loans on mortgage and other securities, issues mortgage bonds to bearer, collects and discounts commercial paper, takes charge of money, and does a commission business in stocks—all this with 40,000 guilders shares paid in.

The Maatschappij voor Gemeente Crediet, in Amsterdam (established in 1870),§ and the Noordbrabantsche Maatschappij voor Gemeente Crediet, at Hertogenbosch (established in 1882),∥ form another special group. They grant loans to Dutch corporations, and for this purpose issue bonds. The former bank has succeeded, while the latter’s profits are very moderate.

SAVINGS INSTITUTIONS.

A few other banks must be regarded as savings-banks, viz., the Amsterdamsche Voorschotbank (established in 1863), the Spaarbank-Vereeniging, at Zutphen (established in 1866); the Spaar en Voorschotbank, at Groenlo, etc. But it is not within the scope of this treatise to describe the Dutch savings-bank system, highly developed as it is, and these institutions must therefore be passed over.

At last we find a special group of “banks,” the object of which is to establish and to promote manufacturing and other enterprises, and to take a share in such enterprises, and, besides this, to conduct bank operations. They must be regarded as financial companies (crédits mobiliers) rather than banks.

FINANCE COMPANIES.

The oldest and most important among them is the Nederlandsche Handels Maatschappij. The sphere of action of this company (established in 1824) embraces the trade in merchandise as well for its own account as on commission; the trade in money, bills of exchange, and precious metals, as well as all banking transactions; the granting of advances on securities, procuring working capital for and the participation in agricultural, fishing, manufacturing, commercial, shipping, and land transporting enterprises, and the establishment of such enterprises in the Dutch transmarine possessions and colonies.* The share capital amounted on December 31, 1894, to 35,783,000 guilders. The balance-sheet for the year ending December 31, 1894, shows, for instance:

The dividends fluctuated from 1835 till 1844, from 2 to 8½ per cent.; from 1845 till 1854, from 3 to 8 per cent.; from 1855 till 1864, from 4.3 to 12.9 per cent.; from 1865 till 1874, from 0.3 to 11.5 per cent.; from 1875 till 1884, from 4 to 7 per cent.; from 1885 till 1894, from 2½ to 9 per cent.

Besides the Nederlandsche Handels Maatschappij, five other financial companies are now in existence which also chiefly operate in the Dutch East Indies, viz.: (1) Nederlandsch-Indische Handelsbank, in Amsterdam, established in 1863. The capital—in the beginning, 12,000,000 guilders—is now 7,200,000 guilders. The dividends fluctuated from 1864 till 1874, from 3.7 to 10 per cent.; from 1875 till 1884, from 0 to 12 per cent.; from 1885 till 1894, from 0 to 7½ per cent. (2) Koloniale Bank, in Amsterdam, established in 1881. The authorized capital amounts to 10,000,000 guilders, the paid-up capital to 5,000,000 guilders. The bank has not been successful. The dividends were, in 1881-82, one per cent.; in 1882-83, five per cent; in 1891, four and one-half per cent. for preference shares; in 1892, five per cent. for preference and ordinary shares; in 1893, five per cent. for preference shares, and three and one-half per cent. for ordinary shares. In the other years no dividends were paid. (3) Soerabayasche Bank en Handels-Vereeniging, in Amsterdam, established in 1882 as a limited liability company, since 1892 a joint-stock company. The authorized share capital amounted to 4,000,000 guilders, the paid-up capital at the end of 1894 to 2,000,000 guilders. Seven per cent. dividend was paid in 1892, three per cent. in 1893, and three per cent. in 1894. (4) Finantiecle Maatschappij voor Nijverheids-Ondernemingen, in Amsterdam, established in 1883. The authorized share capital amounts to 1,000,000 guilders. On December 31, 1893, 500,000 guilders’ worth of shares had been issued, on which 250,000 guilders were paid up on above date. (5) Crediet en Handels-Vereeniging Banda, in Amsterdam, established in 1886, and operating specially in the Banda Islands. The capital amounts to 1,000,000 guilders. The dividends paid from 1886 to 1894 were: six per cent., eight and one-half per cent., eight and five-eighths per cent., nine per cent., nine and one-half per cent., ten per cent., ten per cent., ten per cent., and nine per cent. The dividends are high in comparison with the other financial companies.

Finally, in 1888, the Nederlandsche Banken Crediet-Vereeniging voor Zuid Africa, in Amsterdam, was founded, which intends to do business as a financial company in South Africa. The authorized shares of this Bank now amount to 4,800,000 guilders (originally to 2,400,000 guilders), the shares issued to 1,930,800 guilders. The dividends paid from 1888 were: 0 per cent., six per cent., three per cent., four per cent., four per cent., four per cent., and five per cent.

The working of financial companies requires them to deal largely in produce.* The bank closes a contract with the planter to whom a loan is granted, so that the planter is obliged to assign his crops to the bank. The bank, by selling these crops, gets back the capital advanced.

Means for giving credit in former times were mostly procured by drawing bills on the Dutch offices. After the credit crisis in the Dutch East Indies (in 1884), however, that was no longer done, partly in consequence of the Netherlands Bank’s treatment of these bills. Now the necessary funds are chiefly procured by the issue of bonds.

However limited is the information at my disposal for the two last chapters, it is clearly proved that Dutch banking during the nineteenth century has developed far beyond the narrow sphere of former times.

Not only have banks of issue been founded and enabled to work on liberal, sound, and correct principles, but other banks also have developed into real credit banks, and have adapted themselves to various business needs.

Compared to the size of the country, credit institutions must be said to be plentiful in Holland, though this cannot excite surprise when we consider the important rôle which international trade and the wants of the colonies have played in the development of Dutch banking.

A History of Banking

IN

THE SCANDINAVIAN NATIONS;

BY

ADOLPH JENSEN,

secretary of the statistical laboratorium in the university of copenhagen.

TRANSLATED BY

WILLIAM PRICE, B.A.,

yale university.

NEW YORK.

1896.

BANKING IN THE SCANDINAVIAN NATIONS.

[* ] According to written information given by Dr. N. G. Pierson, at the Hague, the former president of the Netherlands Bank, and later Dutch Minister of Finance.

[* ] According to the “Jaarcijfers” of 1894, pp. 116, 117. Other particulars have not been published.

[* ] The Ontvang en Betaalkas and the Kasvereeniging also keep other valuables.

[† ] According to written information given by Dr. N. G. Pierson, in the Hague.

[‡ ] According to written communications received from Dr. N. G. Pierson.

[§ ] For the other companies, corresponding dates are wanting.

[* ] The Hague, 1882.

[† ] This statement is based upon the annual publication “De Nederlandsche Naamloofe Vermootschappen,” edited by A. H. Van Nierop and E. Baak.

[† ] The statement is based upon the “Jaarcijfers” and upon written information readily given by Dr. Verrijn-Stuart, secretary of the Statistical Committee in the Hague.

[* ] Limited shareholder company.

[* ] Except the Utrechtsche Bankvereeniging.

[* ] According to the “Jaarcijfers” and to written communications received from Dr. Verrijn-Stuart, in the Hague, Secretary of the Dutch Statistical Central Committee.

[* ] Mentioned by Wirth, “Handbuch des Bankwesens,” and dissolved in the meantime.

[† ] The statistical statements mention these banks as a special group.

[‡ ] According to A. H. van Nierop and E. Baak, “De Nederlandsche Naamloofe Vermootschappen.”

[* ] From Dr. Verrijn-Stuart (in the Hague).

[† ] These two banks give mortgages on real estate in South Africa.

[* ] Shares paid in, 13,050 guilders in 1893.

[† ] Shares paid in, 5000 guilders in 1893.

[‡ ] Shares paid in, 9200 guilders in 1893.

[§ ] Shares paid in, 1,030,000 guilders in 1894.

[∥ ] Shares paid in, 20,000 guilders in 1893-94.

[* ] See A. H. van Nierop and E. Baak, “De Nederlandsche Naamloofe Vermootsckappen,” 1894.

[* ] According to written communications given by Dr. N. G. Pierson.